(Adopted September 8, 1995)(Amended July 10, 1998)

RULE 1620. CREDITS FOR CLEAN OFF-ROAD MOBILE EQUIPMENT

(a) Purpose

The purpose of this rule is to provide opportunities to generate NOx, VOC, CO,

PM, and SOx mobile source emission reduction credits (MSERCs) that can be

used as an alternative means of compliance with District regulations. These credits

would be generated based on voluntary emission reductions created by the

operation of low- or zero-emission off-road equipment within the jurisdiction of

the District that result in emission reductions beyond those required by local, state,

and federal regulations.

(b) Applicability

This voluntary rule becomes effective January 1, 1996 and applies to any off-road

mobile equipment or vehicle for which emission standards have been adopted by

the ARB or U.S. EPA and for which optional emission standards have been

specified in the ARBts Mobile Source Credit Guidelines. The equipment and

vehicles subject to this rule are used primarily off the highways to propel, move, or

draw persons or property in construction, commercial, industrial, mining,

agricultural, or forestry applications within the boundaries of the District and

include equipment such as dozers, loaders, tractors, scrapers, graders, off-highway

trucks, forkli±Is, and utility service vehicles. This nile does not apply to utility and

lawn and garden equipment, off-road motorcycles, all-terrain vehicles, go-karts,

golf carts, marine vessels, aircraft and locomotives. References to the ARB’s

Mobile Source Credit Guidelines correspond to the version of the applicable

guidelines which are in effect at the time ofinitial application for MSERCs.

(c) Definitions

For purposes ofthis rule, the following definitions shall apply:

(1) BASELINE EMISSION STANDARDS means the ceiling emission

standards for off-road mobile equipment engines pursuant to the ARB’s

Mobile Source Credit Guidelines, or the actual emission level of the

existing off-road mobile equipment pursuant to paragraph (d)(6). For

spark-ignition Otto-cycle internal combustion engines, hydrocarbon (HC),

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Rule 1620 (Cont.) (Amended July 10, 1998)

carbon monoxide (CO), and NOx emissions shall not exceed the most

stringent District, ARB, or U.S. EPA baseline emission standard

requirements applicable for the type of engine and the year in which the

engine is being used to generate credits. For these engines, the baseline

emission standards for VOC and NOx shall be based on the combined

VOC+NOx emission standard prorated by certification emission values of

each pollutant provided by ARB.

(2) CERTIFIED ENGINE means an ARB-certifled engine or an off-road

engine which has been upgraded to the configuration of an ARB-certified

on-road engine in accordance with the ARB~s Mobile Source Credit

Guidelines.

(3) CERTIFIED CONVERSION KIT means any alternative. ffiel or add-on

hardware conversion (retrofit) kit which has been certified by ARB to meet

the optional emission standards in accordance with the ARB’s Mobile

Source Credit Guidelines.

(4) EQUIPMENT means any Self-propelled off-road mobile equipment or

vehicle which is targeted for repowering, retrofitting, or permanent

replacement.

(5) EQUIPMENT OPERATOR means any entity who leases for at least one

year or owns off-road mobile equipment, and controls the operation of off

road mobile equipment within the boundaries of the South Coast Air

Quality Management District.

(6). LOAD FACTOR means the ratio ofthe engine power output during typical

operating conditions to the engine rated horsepower.

(7) LOW-EMISSION EQUIPMENT means equipment uflhi~ing ARB-certifled

engines or conversion kits, or which has been retrofitted to meet one of the

optional emission standards.

(8) MAJOR ENGINE OVERHAUL means a complete rebuilding of a lowemission equipment engine such that the engine is returned to a condition

that is equivalent in operation, durability, and emissions performance to the

originally certified engine or conversion kit, by cleaning, adjustment, repair,

and major component replacement ofthe engine which are considered to be

beyond routine maintenance procedures.

(9) MOBILE SOURCE EMISSION REDUCTION CREDIT (MSERC) means

real, quantified emission reductions in accordance with the ARE’s Mobile

Source Credit Guidelines, approved by the Executive Officer or designee,

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Rule 1620 (Cont.) (Amended July 10, 1998)

that can be used to comply with District Regulations pursuant to

subdivision (g), and are surplus to emission reductions required by U.S.

EPA, ARB or District regulations.

(10) NITROGEN OXIDES (NOx) means the sum of nitric oxides and nitrogen

dioxides emitted, calculated as nitrogen dioxide.

(11) NON-POLLUTING ALTERNATWES means methods or processes

which are used to replace existing off-road equipment and do not directly

generate any air pollution.

(12) OPTIONAL EMISSION STANDARDS means the applicable equipment

engine emission standards, as specified by the ARB’s Mobile Source Credit

Guidelines, which are more stringent than the baseline emission standard.

Zero-emission equipment and non-polluting alternatives shall be assigned

an optional emission standard of zero. grams per brake horsepower-hour.

(13) PERMANENT REPLACEMENT means to permanently remove existing

off-road equipment which has been in continuous active operation from

service, such that the equipment will not be operated within the District,

and to replace it with non-polluting alternatives. Equipment which is

scrapped, or permanently relocated or sold outside the District, and is

demonstrated not to be brought back or sold back into the District, will be

considered to be permanently removed.

(14) REPOWER means to replace the existing off-road equipment engine with a

certified engine to meet one ofthe optional emission standards.

(15) RETROFIT means to modify the existing off-road equipment engine with a

certified conversion kit to meet one of the optional emission standards.

Retrofit may also mean to modify the existing off-road equipment with onroad emission control technologies, tested in accordance with the ARB’s

test procedures for off-road equipment engines specified in Title 13,

California Code of Regulations, to meet one of the optional emission

standards, subject to the approval of the Executive Officer or designee in

consultation with the ARB.

(16) USEFUL LIFE means the life (in hours) that the equipment retrofitted with

alternative fuel conversion kits is expected to meet one of the optional

emission standards and is equivalent to the durability period of the certified

conversion kit.

(17) VOLATILE ORGANIC COMPOUND (VOC) is any volatile compound of

carbon; excluding methane, carbon monoxide, carbon dioxide, carbonic

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Rule 1620 (Cont.) (Amended July 10, 1998)

acid, metaffic carbides or carbonates; ammoniurn carbonate, and exempt

compounds as defined in District Rule 102.

(18) ZERO-EMISSION EQUIPMENT means any equipment which produces

zero emissions of any criteria pollutants utider any and all possible

operational modes and conditions.

(d) Equipment Operator Requirements

In order to generate MSERCs, an equipment operator shall:

(1) implement one or more of the following projects: purchase new low- or

zero-emission equipment; or repower, retrofit, or permanently replace

existing equipment to meet one of the optional emission standards.

Equipment using alternative-fuel or add-on hardware retrofit kits shall

become eligible for ciedit generation once ARB has approved applicable

certification procedures and the retrofit kit is ARB-certified to meet an

optional emission standard.

(2) for projects involving permanent replacement,

(A) submit an Off-Road MSERC Application, as specified ‘in

subdivision (e), within 90 days of the completion of any permanent

replacement which occurs after rule effective date. For projects

involving permanent replacement completed prior to rule effective

date, the equipment operator shall submit an Off-Road MSERC

Application, as specified in subdivision (e), within one year of the

rule effective date.

(B) annually renew the MSERCs by notifying the Executive Officer or

designee in writing of the continued operation of the non-polluting

alternative one year following the approval of the Off-Road

MSERC Application and every year thereafter.

(3) for projects not involving permanent replacement,

(A) submit an Off-Road MSERC Application, as specified in

subdivision (e), within 90 days subsequent to the initial service date

of the low- or zero-emission equipment, for projects involving

purchasing, repowering, or retrofitting after rule effective date.

(B) submit an Off-Road MSERC Application, as specified in

subdivision (e), within one year subsequent to rule effective date,

for projects involving purchasing prior to rule effective date.

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Rule 1620 (Cont.) (Amended July 10, 1998)

(C) following approval of the Off-Road MSERC Application,

demonstrate the operation of the low- or zero-emission equipment

to the satisfaction of the Executive Officer or designee by

submitting the actual operating hours for the six-month period from

the initial service date, and the projected operating hours for the

subsequent six-month period.

(D) annually renew the MSERCs by submitting the actual operating

hours for each preceding twelve-month period and the projected

operating. hours for each subsequent six-month period.

(B) verify that the operation •of new, repowered, or retrofitted

equipment shall not increase emissions of other pollutants, including

VOC, CO, PM, and smoke beyond the standards specified in Title

13, California Code of Regulations.

(4) notify the Executive Officer or designee in writing within 90 days following

retirement of the low- or zero-emission equipment or the non-polluting

alternative or removal of the equipment from service for an engine

replacement or a major engine overhaul. The equipment operator shall

ensure that engine replacements and major engine overhauls are performed

in accordance with specifications and procedures required by the engine

and/or conversion kit manufacturer(s). The equipment operator shall also

be responsible for maintaining the engines or conversion kits, meeting

optional emission standards, within manufacturer(s)’ specifications

throughout the credit life.

(5) use only manufacturer approved facilities for the installation of certified

conversion kits (“Manufacturer” refers to the certified conversion kit

manufacturer).

(6) in lieu of using baseline emission standards specified in the ARB’s Mobile

Source Credit Guidelines, submit emissions test data in accordance with

ARB’s applicable test procedures and protocols to demonstrate the actual

emission level of the existing equipment, subject to the approval of the

Executive Officer or designee in consultation with the ARB. The

maximum baseline emission levels allowable for credit when using actual

emissions level testing procedures for piston-type diesel internal

combustion engines are as follows.

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Rule 1620 (Cont.) (Amended July 10, 1998)

(A) Engines greater than 50 horsepower (hp) but less than 117 hp shall

not exceed NOx emissions of 10.5 grams per brake-horsepowerhour (g/bhp-hr).

(B) Engines greater than or equal to 117 hp but less than 400 hp shall

not exceed NOx emissions of 10.0 g/bhp-hr.

(C) Engines greater than or equal to 400 hp shall not exceed NOx

emissions of 7.0 g/bhp-hr.

(e) Off-Road MSERC Application

(1) In order to obtain MSERCs, an equipment operator shall submit an OffRoad MSERC Application. The purpose ofthe Application is to document

the purchase, retrofit, repowering or permanent replacement project as well

as the operation of the low- or zero-emission equipment or the nonpolluting alternative following the initial service date. The Off-Road

MSERC Application shall contain specific information including, but not

limited to:

(A) a description of the repowering, retrofitting, purchasing or

permanent replacement project, including at minimum the

equipment type, equipment and engine manufacturer, equipment

and engine model, engine model year, equipment identification

number, or any non-polluting alternative methods or processes

which will be used;

(B) proof of purchase or lease of the low- or zero-emission equipment

or non-polluting alternative, and proof of purchase for certified

engines and conversion kits;

(C) the initial service date of each low- or zero-emission equipment or

the non-polluting alternative;

(D) for projects involving permanent replacement, historical records of

annual operating hours and fuel consumption for the existing

equipment which is permanently replaced, and proof of permanent

replacement to the satisfaction ofthe Executive Officer or designee;

(B) load factor for each low-emission equipment supported by actual

fuel consumption data;

(F) emission test results for existing off-road mobile equipment from

equipment operators seeking to establish baseline emission standard

based on actual emission levels;

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Rule 1620 (Cont.) (Amended July 10, 1998)

(G) written statement from the equipment operator to verify that the

Repowering, retrofitting, or upgrading of existing off-road

equipment engine was conducted in accordance with engine or

conversion kit manufacturerts specifications and procedures;

(H) identification ofthe legal owner of the MSERCs to be issued by the

Executive Officer or designee; and

(I) intended use ofMSERCs pursuant to subdivision (h), if known.

(2) For projects involving retrofit kits not certified to an optional emission

standard, the Off-Road MSERC application may be processed concurrently

with pending ARB action to approve the retrofit kit and shall become

eligible for credit generation pursuant to paragraph (d)(l).

(3) The Executive Officer or designee shall approve or disapprove the OffRoad MSERC Application in writing.

(4) For the purposes of assessing fees, the Off-Road MSERC Application shall

be deemed a plan, and the fees shall be assessed in accordance with the

provisions ofRule 309.

(f) Issuance ofMSERCs

(1) For projects not involving permanent replacement, MSERCs shall be issued

after approval of the Off-Road MSERC Application by the Executive

Officer or designee and upon submittal and verification by the Executive

Officer or designee of the actual and projected operating hours for each

low- or zero-emission equipment as specified in paragraph (d)(3) and in

accordance with the MSERC calculation methodology specified in

subdivision (g). For projects involving purchasing prior to rule effective

date, MSERCs shall be issued based only on the operation of the low- or

zero-emission equipment which occurs following the submittal of the OffRoad MSERC Application.

(2) For projects involving permanent replacement, MSERCs shall .be issued

upon approval of the Off-Road MSERC Application by the Executive

Officer or designee and submittal and verifcation by the Executive Officer

or designee of the annual written notifications ofthe continued operation of

the non-polluting alternative as specified in paragraph (d)(2) and in

accordance with the MSERC calculation methodology specified in

subdivision (g). For projects involving permanent replacement prior to rule

effective date, MSERCs shall be issued based only on the operation of the

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Rule 1620 (Cont.) (Amended July 10, 1998)

non-polluting alternative which occurs following the submittal of the OffRoad MSERC Application.

(3) For all projects, MSERCs shall be issued by the Executive Officer or

designee:

(A) for NOx, VOC, CO, and PM, in accordance with paragraph (g)(l),

if mandatory emission standards have been adopted by the ARB or

U.S. EPA, and optional emission standards have been specified in

the ARB’s Mobile Source Credit Guidelines, or if compliance with

applicable optional emission standards can be demonstrated,

according to ARB1s certification test methods, as approved by the

Executive Officer or designee.in consultation with the ARB; and

(B) for SOx, in accordance with the MSERC calculation methodology

specified in paragraph (g)(2).

(4) For all projects, MSERCs shall be issued by the Executive Officer or

designee based on continued demonstration of the actual operation of each

low- or zero-emission equipment or non-polluting alternative. This

demonstration shall start when the equipment or non-polluting alternative is

first placed into service, but shall end when the euipment or non-polluting

alternative is retired or removed from service for an engine replacement.

However, for projects involving purchasing or permanent replacement

prior to rule effective date, MSERC generation shall start when the OffRoad MSERC Application is submitted. In addition, MSERC generation

shall start for equipment using retrofit kits when MSERC eligibility

requirements pursuant to paragraph (d)(l) are satisfied, and MSERC

generation shall end when the useffil life ofthe kit expires.

(g) MSERC Calculation

(1) The total amount ofNOx, VOC, CO, and PM MSERCs generated when an

equipment is permanently replaced, repowered, retrofitted, or when a new

low- or zero-emission equipment is purchased shall be calculated by the

Executive Officer or designee for each year according to the following

formula:

MSERC = IXSbase - S opt) X (RRS X HP X LF)j/(454 X DF)

where:

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Rule 1620 (Cont.) (Amended July 10,. 1998)

MSERC = Mobile source emission reduction credits per unit (pounds

per year)

Sbase = Baseline emission standards (grani~Ibhp-hr)

~ = Optional emission standards (grams/bhp-hr) for

repowered, retrofitted, or new equipment engine

HRS = Annual hours of operation, as specified in paragraph (g)(2)

HP = Rated horsepower (hp)

LF = Load factor

DF = Discount factor, for the purpose of generating credits,

equal to 1.0.

Equipment operators should contact the District or ARB to confirm the

applicable baseline and optional emission standards before submitting the

Off-Road MSERC Application.

(2) MSERCs issued for SOx emission reductions shall be calculated by the

Executive Officer or designee according to the following formula:

MSERC = 2 X ((Fbase X Sbase) - (Fopt X S0pt))/DF

where

MSERC Mobile source emission reduction credits (pounds per

year)

Fbase = amount offuel used to power equipment targeted for

repowering, retrofitting, or permanent replacement

(gallons or standard cubic feet per year)

Sbase = sulfur concentration in fuel used to power equipment

targeted for repowering, retrofitting, or permanent

replacement (pounds per gallon or pounds per standard

cubic foot)

Fopt = amount of fuel used to power low-emission equipment

(gallons or standard cubic feet per year)

S0~~ = sulfur concentration in fuel used to power low-emission

equipment (pounds per gallon or pounds per standard

cubic foot)

DF = Discount factor, for the purpose of generating credits,

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Rule 1620 (Cont.) (Amended July 10, 1998)

equaltol.O.

Sbase and S0~~ shall be obtained from the Executive Officer or designee

and shall be representative of average sulfur concentrations for applicable

fuels used within the boundaries of the District. Fbase and F0~t shall be

submitted by the equipment operator at the same time that annual operating

hours are submitted to the Executive Officer or designee pursuant to

paragraphs (d)(2) or (d)(3).

(3) For projects not involving permanent replacement,

(A) the MSERCs for the first year after initial service date shall be

calculated by the Executive Officer or designee based on the actual

operating hours for the six-month period following the initial

service date and the projected operating hours for the subsequent

six-month period. For projects involving purchasing prior to rule

effective date, the initial service date shall be the submittal date of

the Off-Road MSERC Application.

(B) for all subsequent years, the MSERCs shall be based on the actual

operating hours for each preceding twelve-month period and the

projected operating hours for each subsequent six-month period.

The projected operating hours shall not be 50% greater than the

actual operating hours for the previous six-month period unless the

equipment operator can demonstrate to the satisfaction of the

Executive Officer or designee that the projected operating hours

shall occur.

(C) the MSERCs shall be adjusted every year to reflect any difference

between the. projected operating hours reported in the previous year

and the actual operating hours for the same period.

(4) For projects involving permanent replacement, MSERCs shall be calculated

by the Executive Officer or designee based on historical records of

operating hours of the replaced equipment. For the first year, MSERCs

shall be issued upon approval of the Off-Road MSERC Application. For

all subsequent years, MSERCs shall be issued upon submittal of written

notification ofthe continued operation ofthe non-polluting alternative. For

projects involving permanent replacement prior to rule effective date, the

initial service date shall be the submittal date of the Off-Road MSERC

Application.

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Rule 1620 (Cont.) (Amended July 10, 1998)

(5) MSERCs shall expire two years after the date ofissuance.

(h) Use ofMSERCs

(1) MSERCs may be used for any ofthe following applications:

(A) As RECLAIM Trading Credits. The Executive Officer or designee

shall convert MSERCs to RTCs upon submission of MSERCs by

the user.

(B) As an alternative method of compliance with District Regulation Xl

rules that have ffiture compliance dates. MSERCs shall not be used

to• offset emission increases caused by the removal of emission

control equipment or replacement of compliant with noncompliant

materials subject to Regulation XI. MSERCs must be in existence

and designated as an alternative method of compliance in advance

ofthe compliance date.

(C) As an alternative method of compliance with District Regulation

XXII rules that allow the use ofMSERCs.

(1)) As New Source Review (NSR) offsets for emission increases at

new or modified facilities that are subject to Rule 1303 (b)(2) in.

accordance with the provisions of Regulation XIII. Pursuant to

Rule 504, no variance or series of variances, including emergency

and interim variances, shall be granted for a period in excess of 90

days from the initial granting of a variance, from a permit condition

implementing a Regulation XIII offset requirement if such permit

condition is based upon the use of MSERCs.

(B) For voluntary retirement of MSERCs for air quality benefits.

(F) As an alternative method of compliance with any District

regulations which specifically authorize the use of MSERCs.

(2) For the purpose of using MSERCs pursuant to subparagraphs (h)(1)(A)

and (h)(l)(B), a discount factor equal to 1.2 shall be applied except that a

discount factor of 1.0 shall be applied for operation of zero-emission

equipment. For other uses pursuant to paragraph (h)(1), a discount factor

equal to 1.0 shall be applied unless specified otherwise in District

regulations.

(3) MSERCs shall only be consumed in the air basin where the equipment

operator is based.

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Rule 1620 (Cont.) (Amended July 10, 1998)

(4) In order to use MSERCs for the applications listed in subparagraph (l)(B)

ofthis subdivision, the user shall submit a compliance plan to the Executive

Officer or designee. The purpose of the compliance plan is to demonstrate

compliance with rule requirements, and specify the use ofMSERCs.

(5) The compliance plan shall contain the following information:

(A) Total MSERCs (attach certificates);

(B) Identification of the specific rule for which the alternative method

of compliance is sought;

(C) The period oftime for the alternative method of compliance;

(D) Number of MSERCs used to substantiate the alternative method of

compliance;

(B) A quantification of emissions that would result from noncompliance

with the rule identified in subparagraph (h)(5)(B), and

documentation supporting the emissions quantification.

(6) Supporting documentation (applicable for MSERC usage for Regulation

XI rules) shall include, but is not limited to:

(A) a listing of equipment or materials that are the source of

noncompliant VOC, NOx, CO, PM, or SOx emissions associated

with the rule identified in subparagraph (h)(5)(B).

(B) a description and operating conditions of equipment listed in

subparagraph (h)(6)(A) or composition and rate of use of materials

listed in subparagraph (h)(6)(A).

(C) emission rates associated with the use of equipment or materials

listed in subparagraph (h)(6)(A).

(D) a listing of equipment or materials that would result in compliance

with the rule identified in subparagraph (h)(5)(B).

(F) a description and operating conditions of equipment listed in

subparagraph (h)(6)(D) or composition and rate of use of materials

listed in subparagraph (h)(6)(D).

(F) emission rates associated with the use of equipment or materials

listed in subparagraph (h)(6)(D).

(7) The compliance plan shall be written on a form to be specified by the

Executive Officer or designee.

(8) The Executive Officer or designee shall approve or disapprove the

compliance plan. The plan shall be disapproved unless it demonstrates that

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Rule 1620 (Cont.) (Amended July 10, 1998)

an equivalent amount of emissions reductions are obtained through the

alternative method of compliance.

(9) MSERCs may not be used as an alternative method of compliance with

Regulation Xl rules until the Executive Officer or designee has approved

the compliance plan.

(10) The user must renew the compliance plan prior to the expiration of

MSERCs upon which the plan is based.

(i) Recordkeeping Requirements

(1) Equipment operators shall be responsible for storing and maintaining data

records for each low- or zero-emission equipment which generates

MSERCs. The data records shall contain operating data (monthly hourmeter logs obtained from non-resettable hour-meters), fuel consumption

data (monthly fuel usage logs), maintenance and repair records, and any

other necessary data.

(2) Equipment operators shall maintain a copy of data records described in

paragraph (i)(1) for the two most recent years of operation for each lowor zero-emission equipment which generates MSERCs.

(j) Compliance Auditing and Enforcement

(1) The Executive Officer or designee shall be afforded access in the District to

audit any files or records created to comply with recordkeeping

requirements, specified in subdivision (i), or require equipment operators to

submit such records to the Executive Officer or designee upon request.

(2) The Executive Officer or designee shall be afforded access upon request to

inspect the low- or zero-emission equipment, or non-polluting alternative at

equipment operators’ facilities. The Executive Officer or designee may

require emissions testing at a designated emission test facility, at the

District’s expense, to determine compliance with Rule 1620 requirements

for the generation of MSERCs.

(3) Violation of any provision of this rule, including falsification of information

in the Off-Road MSERC Application or annual operating data shall be

grounds for the Executive Officer to disallow or void any MSERCs

resulting from or associated with the violation, by disapproving or seeking

revocation of the Off-Road MSERC Application, and shall be subject to

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Rule 1620 (Cont.) (Amended july 10, 1998)

the penalties specified in the Health and Safety Code for violation of

District rules.

(k) Requirements for Public Notice

Following a completeness determination of the Off-Road MSERC .Application for

the use of MSERCs as NSR offsets only, as provided in subparagraph (h)(l)(D),

the Executive Officer or designee shall:

(1) perform the evaluations required .to determine compliance with this

regulation and make a preliminary written decision, as appropriate, as to

whether or not MSERCs, to be used as emission reduction credits (ERCs),

should be approved or disapproved. The decision shall be supported by a

succinct written analysis; and

(2) publish a notice by prominent advertisement in at least one newspaper of

general circulation in the District stating the preliminary decision of the

Executive Officer or designee and where the public may inspect the

information. The notice shall provide 30 days from the date of publication

for the public to submit written comments on the preliminary decision, and

(3) at the time notice of the preliminary decision is published, make available

for public inspection at the District office the information submitted by the

applicant, the supporting analysis for the preliminary decision, and the

preliminary decision to grant or deny MSERCs and the reasons therefore.

The conñdentiality of trade secrets shall be considered in accordance with

Section 6254.7 ofthe Government Code.

(1) Appeal ofDisapproval ofMSERC Issuance

An applicant may, within 30 days of receipt of notice of disapproval, request the

hearing board to hold a hearing on whether the Off-Road MSERC Application was

properly refused.

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