SAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DI STRICT

Appendix D: Manual of Procedures January 31, 2014

D-1 Final Staff Report with Appendices for Proposed Rule 9610 

# Appendix D

Manual of Procedures for Proposed Rule 9610 (State Implementation Plan C redit for Emission Reductions Generated through Incentive Pro grams)

June 20, 2013SAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DI STRICT

Appendix D: Manual of Procedures January 31, 2014

D-2 Final Staff Report with Appendices for Proposed Rule 9610 This page intentionally blank.SAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DI STRICT

Appendix D: Manual of Procedures January 31, 2014

D-3 Final Staff Report with Appendices for Proposed Rule 9610 Manual of Procedures for Proposed Rule 9610 (State Implementation Plan C redit for Emission

Reductions Generated through Incentive Programs

Pursuant to Section 3.3 of Proposed Rule 9610, the District will develop and maintain a

Manual of Procedures for SIP-creditable incentive-b ased emission reductions claimed through this rule. The Manual of Procedures assure s that all incentive program guidelines used for SIP creditability are publicly available, and maintained in a

centralized location on the District’s website. To increase public understanding and awareness of the guidelines and the role they play in SIP-creditable of emission reductions, the website will also contain a descrip tion of how each incentive program guideline ensures that the incentive program emissi on reductions are SIP-creditable.

The following is the design and contents of the Man ual of Procedures web page that will be presented and maintained on the Districts websit e after adoption of the proposed

rule.



### Manual of Procedures

The on-going mission of the San Joaquin Valley Unif ied Air Pollution Control District (District) is to improve air quality and p rotect the health of residents in the San Joaquin Valley air basin (Valley). Incentive p rograms achieve emission reductions beyond those achieved by regulations alo ne by accelerating the adoption of cleaner technologies. Since 1992, the District’s incentive programs have provided over $500 million in incentive funds, resulting in over 100,000 tons

of lifetime emission reductions.

SIP-Creditability of Incentive-Based Emission Reduc tions

When given State Implementation Plan (SIP) credit, incentive-based emission reductions can be used to complement regulatory-bas ed emission reductions to assist meeting federal Clean Air Act (CAA) requirem ents. District Rule 9610 (State Implementation Plan Credit for Emission Redu ctions Generated through Incentive Programs) establishes a process through w hich incentive-based

emission reductions can receive federal SIP credit. For incentive-based emission reductions to receive SIP-credit, the Dist rict must demonstrate that the emission reductions are Surplus, Quantifiable, Enfo rceable, and Permanent.

The following is a brief discussion of each of thes e elements as applicable to the

District and incentive-based emission reductions.SAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DI STRICT

Appendix D: Manual of Procedures January 31, 2014

D-4 Final Staff Report with Appendices for Proposed Rule 9610 Surplus The District funds incentive projects based on ince ntive program guidelines that ensure that the resulting emission reductions are not otherwise required by any federal, state, or local regulation or other legal mandate. The

emission reductions must also be in excess of the S IP baseline emission inventories underlying a SIP demonstration; meaning the base year, attainment year, and interim year emissions invento ries as reported in a SIP that serve as a primary starting point for modeling and other SIP analyses.

Quantifiable The District evaluates the potential reductions tha t would be achieved by replacing the old equipment with the new equipment using the established calculation methods and emissions factors in the ap propriate program guidelines. To be quantifiable, emission reduction s must be reliably determined and replicated through the use of well-e stablished emission factors and calculation methodologies, as outlined in applicable incentive program guidelines. Using well-established emissio n factors and calculation methodologies ensure that the emission reductions c an be replicated.

Enforceable

Emission reductions are enforceable if the incentiv e programs include the following provisions:

o The emission reductions must be independently and practicably verifiable for the duration of the project life thr ough inspections, monitoring, and/or other mechanisms;

o Incentive program violations are defined through l egally binding contracts, including identifying party or parties r esponsible for ensuring that emission reductions are achieved;

o Grantees are obligated to provide all records need ed to demonstrate that emission reductions are achieved; and

o The public has access to all emission-related info rmation for reductions claimed in the annual demonstration report.

Permanent For purposes of SIP-creditability of incentive-base d emission reductions, permanent is defined as permanent for the lifetime of the project. Permanence is ensured by actions taken to physicall y destroy or permanently disable, existing or baseline equipment, practices, or vehicles.

Mobile Sources

A large portion of the projects that are currently being funded are from mobile sources. These projects provide a unique challenge in that they may opreate onlySAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DI STRICT

Appendix D: Manual of Procedures January 31, 2014

D-5 Final Staff Report with Appendices for Proposed Rule 9610 a percentage of time within the San Joaquin Valley. To ensure that SIP-creditable emissions reductions are only reported for the amou nt occuring in the San Joaquin Valley, the District requires that percent use in the District is reported at the time an application for funding is submitted. This information is also reported by the grantee each year during the project life th rough the annual Usage Report Surveys that every grantee is contractually require d to complete and submitt to

the District.

Each program guideline addresses California operati on within it’s specific methodology but percent use in the San Joaquin Vall ey is not adjusted for within the program guideline methodolgies. The District us es the percent use in the San Joaquin Valley reported by the grantee to adjust th e total emissions reductions for each project prior to reporting SIP-creditable emis sions reductions with Rule 9610. The formula for adjusting for percent use in the San Joaquin Valley is as

follows:

Total Lifetime NOx Reduced (tons) * (Percent Operat ion in SJV/100) = NOx

Lifetime Reduced Adjusted Percent Operation (tons)

(5.59 tons/life) * (90%/100) = 5.03 tons

The formula is repeated for each pollutant being re ported.

Incentive Program Guidelines

Carl Moyer Memorial Air Quality Standards Attainmen t Program Guidelines

The Carl Moyer Memorial Air Quality Standards Attai nment Program (Carl Moyer Program) has been successfully implemented th rough the cooperative efforts of the California Air Resources Board (ARB) and air districts in California. As directed by the California Health a nd Safety Code (CH&SC), ARB’s role is to oversee the Carl Moyer Program by managing program funds, developing and maintaining guidelines, and d etermining costeffectiveness methodologies. Air districts use the Carl Moyer Program Guidelines to select, fund, and monitor projects in their jurisdiction by providing grants to public and private entities for the incremental cost of cleaner-than-required engines and/or equipment.

The guidelines include robust administrative requir ements to ensure that

emission reductions are enforceable and are achieve d throughout the life of a project. The District has used the Carl Moyer Prog ram Guidelines to develop the practices that are currently in place to ensure all emissions are surplus, quantifiable, enforceable, and permanent, and that emission reductions are

SIP-creditable.SAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DI STRICT

Appendix D: Manual of Procedures January 31, 2014

D-6 Final Staff Report with Appendices for Proposed Rule 9610 Carl Moyer Guidelines:

• 2011 Carl Moyer Program Guidelines (approved 4/28/ 2011): http://www.arb.ca.gov/msprog/moyer/guidelines/curre nt.htm

.

o Applicable project type chapters include 4, 5,7,9, and 10

o Sample Calculations: http://www.arb.ca.gov/msprog/moyer/guidelines/2011g l/suppdoc s/examcalcs2011.pdf

• 2008 Carl Moyer Program Guidelines (approved 3/27/ 2008): http://www.arb.ca.gov/msprog/moyer/guidelines/curre nt.htm

o Applicable project type chapters include 3, 4, 5, and 10

o Sample Calculations (Appendix E): http://www.arb.ca.gov/msprog/moyer/guidelines/cmp_g uidelines _part4.pdf

• 2005 Carl Moyer Program Guidelines (approved 11/17 /2005): http://www.arb.ca.gov/msprog/moyer/archive/archive. htm

o Applicable project type chapters include 1, 2, 5, and 10

o Sample Calculations (Appendix D): http://www.arb.ca.gov/msprog/moyer/archive/2005_Car l_Moyer _Guidelines_Part4.pdf

The following is a summary of how Carl Moyer Guidel ines ensure emissions

reductions are SIP-creditable.

Surplus The Carl Moyer Program Guidelines ensure that proje cts are surplus to regulations by only allowing projects to be selecte d that are not required by any federal, State or local regulation, memorandum of agreement/understanding with a regulatory agency, s ettlement agreement, mitigation requirement, or other legal mandate. Fo r example, the guidelines have accounted for each adopted regulation to deter mine the compliance dates of any affected engines and emission benefits claimed by each regulation have been determined. Minimum project l ives are established in each component to ensure that the program does not fund actions taken to comply with regulatory deadlines. The minimum proj ect life requirement also ensures the overall cost-effectiveness of the progr am and that the emission reductions are real for the life of the project. T he below summary provides more detail about how the Carl Moyer Program Guidel ines ensure that the SIP-creditability integrity criteria of “Surplus” i s fulfilled:

• Requirement that emission reductions generated by i ncentive programs are not required by other regulation

o (Moyer Guidelines Chapter 2, Project Criteria A, H , I, MM).SAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DI STRICT

Appendix D: Manual of Procedures January 31, 2014

D-7 Final Staff Report with Appendices for Proposed Rule 9610 • Protocols for quantifying maximum project life and maximum emission reductions which account for upcoming regulatory de adlines for a given source category

o (Moyer Guidelines Chapter 2, Project Criteria B, I and MM).

• Assurance that baseline equipment was in use

o (Moyer Guidelines Chapter 3, Section Z.6(B) and AA .2.).

• Assurance that new/upgraded equipment is not alread y accounted for in future-year inventories underlying a SIP attainm ent demonstration by natural fleet turnover, finite equipment life or incentives

o The definition of surplus in the Moyer guidelines requires that the emission reductions achieved are above and beyo nd those required under existing regulations that are incorp orated into a SIP. As part of the SIP development process, ARB r eviews the Moyer project mix to ensure that the amount of emis sion reductions credited to program are not included in the future year inventories specific to each individual attain ment
demonstration.

• Procedures that ensure that old equipment was used in the geographic

area of interest

o (Moyer Guidelines, Chapter 2, Section S and Chapte r 3, Section Z.6.(B)).

Quantifiable The District evaluates the potential reductions tha t would be achieved by replacing the old equipment with the new equipment using the established calculation methodologies and emissions factors in the program guidelines. The calculation methodology, including calculation formulas, assumptions, emission factors and sample calculations are part o f the Carl Moyer Program Guidelines and have been approved through a public process. To ensure that real, quantifiable emission reductions are achieved over the life of a project, the program guidelines require that emission contro l technologies be certified or verified by ARB (certification or verification b y the EPA or International Maritime Organization may be allowed for some sourc e categories for which ARB does not have a certification or verification p rogram). The below summary provides more detail about how the Carl Moy er Program Guidelines ensure that the SIP-creditability integrity criteri a of “Quantifiable” is fulfilled:

• Emissions data needed to calculate emission reducti ons must be publicly available current and accurate. This shou ld include appropriate emission factors, load factors, and oth er conversion

factors.

o Moyer Guidelines, Appendix D (Publicly Available) and Chapter 1, Section E.7 (Allows ARB Executive Officer to mod ify the Guidelines under a public process, to keep them eff ective and up-to-date.)SAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DI STRICT

Appendix D: Manual of Procedures January 31, 2014

D-8 Final Staff Report with Appendices for Proposed Rule 9610 • Guidelines include necessary formulas and instructi ons to calculate emissions based on above data, and explicit instruc tions to ensure appropriate data are used in calculations

o Moyer Guidelines, Appendix C (contains formulas an d instructions)

o Moyer Guidelines, Supplemental document, “Sample Calculations” (contains formulas and instructions)

o Requirement Moyer Guidelines, Appendix C, Section B.5, and Supplemental document, “Sample Calculations” (conta ins explicit instructions regarding inputs)

• Requirement to provide activity data sufficient to determine actual

emission reductions.

o Moyer Guidelines, Chapter 3, Section Z.6.(B)

• Requirement to demonstrate the percentage of emissi on reductions that occur in the geographic area of interest, and are therefore SIP

creditable

o Moyer Guidelines, Section S.

o Moyer Guidelines, Section Z.6.(B)

• Requirement to periodically audit completed project s to verify emission reduction projections are fulfilled

o Moyer Guidelines Chapter 2, Sections Z.10.

o Moyer Guidelines Chapter 3, Sections EE.

Enforceable Emission reductions and other required actions are enforceable if: they are independently verifiable; program violations and th ose liable are defined;

information needed to determine emission reductions is available to the public; and they are practicably enforceable in acc ordance with other EPA guidance on practicable enforceability. The below s ummary provides more detail about how the Carl Moyer Program Guidelines ensure that the SIPcreditability integrity criteria of “Enforceable” i s fulfilled:

• Require grantees to provide all necessary recordkee ping and reporting needed to verify emissions reductions

o Moyer Guidelines, Chapter 3, Section Z.9 and DD

• Require inspections to ensure incentive program inf ormation is consistent with actual operating equipment

o Moyer Guidelines Chapter 3, Sections AA and BB.

• Identify liable parties and liability associated wi th contract noncompliance

o Moyer Guidelines Chapter 3, Section Z.11.

Permanent

To ensure that the SIP-creditable emissions reducti ons are permanent, actions such as pre-inspections and post inspection s of the new equipment and verification that the baseline equipment has be en destroyed through theSAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DI STRICT

Appendix D: Manual of Procedures January 31, 2014

D-9 Final Staff Report with Appendices for Proposed Rule 9610 required process as described in the program guidel ines are performed. The below summary provides more detail about how the Ca rl Moyer Program Guidelines ensure that the SIP-creditability integr ity criteria of “Permanent” is

fulfilled:

• Data needed to determine and track location of acti vity

o Moyer Guidelines, Chapter 3, Section DD

• Provisions for ensuring that the project was comple ted, including the verification of disposition of baseline equipment.

o Moyer Guidelines Chapter 3, Sections AA and BB

Proposition 1B Goods Movement Guidelines

Proposition 1B Goods Movement Guidelines were devel oped by ARB in consultation with stakeholders, including: air dist ricts, metropolitan planning organizations, port authorities, shipping lines, ra ilroad companies, trucking companies, harbor craft owners, freight distributor s, terminal operators, local port community advisory groups, community interest groups, and airports. The guidelines include robust administrative requir ements to ensure that emission reductions are surplus, quantifiable, enfo rceable, and permanent.

Proposition 1B Guidelines:

• 2013 Proposition 1B: Goods Movement Emission Reduc tion Program Guidelines (approved 1/25/2013): http://www.arb.ca.gov/bonds/gmbond/gmbond.htm.

o Applicable Project Types include Appendix A

o Sample Calculations For year 4 projects

 Solicitation 1 http://www.arb.ca.gov/bonds/gmbond/docs/calculator_ dir ections_trucks_2013_14.pdf

 Solicitation 2 http://www.arb.ca.gov/bonds/gmbond/docs/calculator_ dir ections_trucks_2013_14_solicitation_2.pdf

o Project calculator in Excel format for year 4 proj ects:

 Solicitation 1 http://www.arb.ca.gov/bonds/gmbond/docs/prop_1b_goo ds_movement_2013_14_trucks_calculator_solicitation_ 1.

xlsm

 Solicitation 2 http://www.arb.ca.gov/bonds/gmbond/docs/prop_1b_goo ds_movement_2013_14_trucks_calculator_solicitation_ 2.

xlsmSAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DI STRICT

Appendix D: Manual of Procedures January 31, 2014

D-10 Final Staff Report with Appendices for Proposed Rule 9610 • 2010 Proposition 1B: Goods Movement Emission Reduc tion Program Guidelines (approved 03/25/2010): http://www.arb.ca.gov/bonds/gmbond/archives/archive s.htm

o Applicable Project Types include Appendix A

o Sample Calculations For year 2- 3 projects http://www.arb.ca.gov/bonds/gmbond/docs/prop_1b_goo ds_mo vement_2008-09_calculator_directions.pdf

o Project calculator in Excel format for year 2 – 3 p rojects: http://www.arb.ca.gov/bonds/gmbond/docs/prop_1b_goo ds_mo vement_2008-09_trucks_calculator.xlsx

• 2008 Proposition 1B: Goods Movement Emission Reduc tion Program Guidelines (approved 02/28/2008): http://www.arb.ca.gov/bonds/gmbond/archives/archive s.htm

o Applicable Project Types include Appendix A and B

o Sample Calculations For year 1 projects http://www.arb.ca.gov/bonds/gmbond/docs/calculator_ directions _031108.pdf

o Project Calculator in Excel format for year 1 proje cts: http://www.arb.ca.gov/bonds/gmbond/docs/truck_bondc alculator _031108_v2.xls

The following is a summary of how Proposition 1B Gu idelines ensure emissions

reductions are SIP-creditable.

Surplus The Proposition 1B program supplements ARB’s diesel regulations by funding early compliance or providing extra emission reduct ions beyond those required by current rules. The program guidelines require that the District ensure all trucks being considered to receive fundi ng have had ARB verify compliance with the state’s diesel regulations and further require that any

trucks under contract with the district be noted as such in the state’s online regulation reporting database. This ensures that t he new truck will not be used towards compliance during the project life ens uring that the emissions reductions are surplus. Chapter 6 Section E discusses the requirements that fleets remain in compliance with the Truck and Bus Regulation and that program funded equipment cannot be used towards com pliance with the regulation.

Quantifiable The District evaluates the potential reductions tha t would be achieved by replacing the old equipment with the new equipment using the ProjectSAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DI STRICT

Appendix D: Manual of Procedures January 31, 2014

D-11 Final Staff Report with Appendices for Proposed Rule 9610 Benefits Calculator created by ARB. The calculator is available to the public

on ARB’s website at http://www.arb.ca.gov/bonds/gmbond/gmbond.htm and is updated by ARB on a regular basis. Chapter 2 Section C Discusses Proposition 1B program emission reduction calculati ons.

Enforceable The District has created enforceable contracts, bas ed on requirements in the Proposition 1B Program guidelines, which are signed by both District management and the grantee to ensure that projects are fully accomplished and the integrity criteria are met. The legally bi nding contracts include, but are not limited to, usage reporting requirements fo r the grantee, operating location requirements for the new vehicle, the dest ruction requirements of the baseline equipment/engine, and an allowance for the District to conduct an audit of the project at any time during the project life. Appendix A of Proposition 1B Program guidelines details contract requirements for truck projects.

Permanent

To ensure that the SIP-creditable emissions reducti ons are permanent, actions such as post inspections of the new equipme nt and verification that the baseline equipment has been destroyed through t he required process as described in the program guidelines are performed. Chapter 4 Section A of the Proposition 1B program discusses scrap and post inspection requirements.

United States Department of Agriculture Natural Res ource Conservation Service Combustion System Imrpovement of Mobile Engines Gui delines

The United States Department of Agriculture (USDA) Natural Resource Conservation Service (NRCS) Combustion System Impro vement of Mobile Engines Guidelines (Guidelines) implements robust a dministrative requirements for incentive projects based on those in the Carl Moyer Program

Guidelines to ensure that emission reductions are s urplus, quantifiable, enforceable, and permanent. Although the Guideline s provide for multiple types of combustion system improvements, only those that can be classified as off-road mobile agricultural equipment replaceme nt projects are being

claimed for SIP credit at this time.

NRCS Guidelines Documents:

NRCS General Manual

• NRCS General Manual, Title 450, Part 401 – Conserv ation Practice Standards (approved October 18, 2009): http://directives.sc.egov.usda.gov/viewerFS.aspx?hi d=19430SAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DI STRICT

Appendix D: Manual of Procedures January 31, 2014

D-12 Final Staff Report with Appendices for Proposed Rule 9610 • NRCS General Manual, Title 440, Part 512 – Conserv ation Program Contracting (amended October 2006) : ftp://ftpfc.sc.egov.usda.gov/VA/Programs/440_CPM_512_Compile d.pdf

• NRCS General Manual, Title 450, Part 407 – Documen tation, Certification, and Spot Checking (amended October 2 009): http://directives.sc.egov.usda.gov/RollupViewer.asp x?hid=25728

NRCS Conservation Practice Standard 372

• NRCS Conservation Practice Standard 372 – Combusti on System Improvement (approved September 2010): http://efotg.sc.egov.usda.gov/references/public/CA/ 372-std-09- 2010.pdf

• NRCS Combustion System Improvement 372 Operation & Maintenance (approved August 2013): http://efotg.sc.egov.usda.gov/references/public/CA/ 372B-OM-ca-8-

13.doc

• NRCS Combustion System Improvement 372 Operation & Maintenance (approved September 2010): http://efotg.sc.egov.usda.gov/references/public/CA/ 372-OM-09-10.doc

• NRCS Conservation Practice Standard 372 – Environm ental Quality Incentive Program California Air Quality Emission R eductions from Replacing Engines FY 2012 Guidelines, Policies, and Procedures (approved December 2011, updated May 2, 2012): ftp://ftpfc.sc.egov.usda.gov/CA/programs/AQI/2012_Combustion _Systems_Im provement_Policy_and_Procedures.pdf

• NRCS Conservation Practice Standard 372 – Workshee ts: calculation, emission factors, certification, and destruction ce rtification: ftp://ftpfc.sc.egov.usda.gov/CA/programs/EQIP/2013/2013_EQIP _Air_Quality _Initiative_Attachments.pdf

• NRCS Conservation Practice Standard 372 – Conserva tion Practice Specification (approved September 2010): http://efotg.sc.egov.usda.gov/references/public/CA/ 372-spec-09-

10.doc

• NRCS Conservation Practice Standard 372 – Conserva tion Practice Specification (approved November 2013): http://efotg.sc.egov.usda.gov/references/public/CA/ 372-spec-11-

13.docSAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DI STRICT

Appendix D: Manual of Procedures January 31, 2014

D-13 Final Staff Report with Appendices for Proposed Rule 9610 NRCS Conservation Practice Standard 723

• NRCS Interim Conservation Practice Standard 723 – Combustion System Air Emission management (approved May 2009): http://efotg.sc.egov.usda.gov/references/public/CA/ CA-Interim-723- Combustion-Systems-AQ-Management_May_2009.pdf

Additional Documents

• NRCS Environmental Quality Incentives Program (EQI P) FY 2013 EQIP Program Information. National Air Quality Ini tiative: ftp://ftpfc.sc.egov.usda.gov/CA/programs/EQIP/2013/2013_EQIP _Air_Quality _Initiative_ProgDesc.pdf

.

• NRCS Environmental Quality Incentive Program Conse rvation Innovation Grants (b) Agricultural Emissions Reduct ions Guidelines, Policies, and Procedures (approved April 2009) LINK HERE

• NRCS Environmental Quality Incentive Program CIG ( b) Air Quality – Fiscal Year 2010 – Guidelines, Policies, and Proced ures - Combustion Systems Air Emissions Management Code 723 (approved January 2010) LINK HERE

• NRCS Environmental Quality Incentive Program Calif ornia Air Quality Emission Reductions from Replacing Engines – Fiscal Year 2011 – Guidelines, Policies, and Procedures - Combustion S ystems Improvement Code 372 (approved November 2010) LINK HERE

The following is a summary of how NRCS Guidelines e nsure emissions

reductions are SIP-creditable.

Surplus Under the NAQI, page 3 of the CA-NRCS program guide lines specifies that

SIP creditable emissions reductions are “achieved f rom contracts or parts of contracts funded under the air quality initiative [ that] are not required by any federal, state, or local regulation, settlement agr eement, mitigation requirement, or other legal mandate.” A rule or re gulation does not currently exist for off-road mobile agricultural equipment, s o the emission reductions resulting from replacing existing mobile off-road a gricultural engines funded under the NAQI per Conservation Practice Standard ( CPS) 372 - Combustion Systems Improvement are surplus. The FY 2013 Natio nal Air Quality Initiative Programs Description is posted on-line a t: ftp://ftpfc.sc.egov.usda.gov/CA/programs/EQIP/2013/2013_EQIP _Air_Quality_Initiati ve_ProgDesc.pdf . The 2012 CA-NRCS program guidelines are posted o nline at: ftp://ftpfc.sc.egov.usda.gov/CA/programs/AQI/2012_Combustion _Systems_Improve ment_Policy_and_Procedures.pdfSAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DI STRICT

Appendix D: Manual of Procedures January 31, 2014

D-14 Final Staff Report with Appendices for Proposed Rule 9610 Quantifiable The District provided technical assistance to CA-NR CS in developing their calculation methodologies. The methodologies from the Carl Moyer Program are the basis for components included in CPS-372 an d its supporting documents for the NAQI, including the CA-NRCS progr am guidelines. The District provided technical assistance to CA-NRCS i n developing their calculation methodologies, which are consistent wit h the Carl Moyer Program. The NRCS Field Office Technical Guide places a ten- year lifespan for projects implemented under CPS 372 – Combustion Sys tem Improvement, which is also consistent with the Carl Moyer progra m. A conservation practice lifespan is the minimum time (in years) th e implemented practice is expected to be fully functional for its intended pu rpose (NRCS General Manual, Title 450, Part 401.15) http://directives.sc.egov.usda.gov/viewerFS.aspx?hi d=19430

.

A list of California NRCS practice standard life-sp ans are posted on-line at: http://efotg.sc.egov.usda.gov/references/public/CA/ List_of_Practices_Lifespa ns_2012-12_CA_Numeric.xlsx

The emission reductions for each project, including projects with multiple old units for one new unit, are calculated using the me thodologies outlined in the Carl Moyer Guidelines. Additionally, all equipment engines are inspected to verify they are certified to ARB standards before t hey are paid out. All equipment engines are cross-referenced against an A RB executive order that verifies the emission of every equipment engine. T he NRCS calculation worksheets and emission factors are posted on-line at: ftp://ftpfc.sc.egov.usda.gov/CA/programs/EQIP/2013/2013_EQIP _Air_Quality_Initiati ve_Attachments.pdf

Enforceable The NRCS inspects equipment in proposals prior to c ontract development to verify the existing mobile off-road agricultural eq uipment is operational per CPS-372 specifications. Destruction of existing e quipment is certified by the disposal operator and participant and date-stamped photos are provided. Certification worksheet is posted on-line at: ftp://ftpfc.sc.egov.usda.gov/CA/programs/EQIP/2013/2013_EQIP _Air_Quality_Initiati ve_Attachments.pdf. On an annual basis NRCS reviews at least 5% of all active projects. From these project reviews NRCS v erifies that the new equipment is still operational. http://directives.sc.egov.usda.gov/RollupViewer.asp x?hid=25728 . Per Subpart C, 512.22, participants have control of the land for the length of the proposed contract through deed, lease, or other wri tten authorization. If the applicant does not own the land, the landowner must give written consent to install, operate, and maintain the practice through the lifespan of the practice.SAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DI STRICT

Appendix D: Manual of Procedures January 31, 2014

D-15 Final Staff Report with Appendices for Proposed Rule 9610 This is conducted through a partnership with the US DA Farm Service Agency, who is responsible for program eligibility support.

Subpart F covers Contract Administration and provid es for recovering liquidated damages for certain deviations to a cont ract. Handling contract violations are addressed in Subpart H where violati ons of contract terms must be corrected by the participant within a reasonable period of time to comply. If the violation continues, the contract may be ter minated and future program participation deferred.

Permanent NRCS eligibility is based on the county that the tr actor resides in; in this case the tractor has to reside within one of the eight c ounties of the San Joaquin Valley. Under the NAQI, the NRCS prioritizes appli cations based on a county’s non-attainment designation within Californ ia. Applications received from attainment areas are not eligible. Currently, only the emission reductions originating from within the eight San Jo aquin Valley counties are seeking SIP credit under this proposal. The destru ction of the existing mobile off-road engines and equipment are verified per CPS 372 specifications, posted on-line at: http://efotg.sc.egov.usda.gov/references/public/CA/ 372- spec-09-2010.doc . Destruction certification worksheets are posted on-line at:ftp://ftpfc.sc.egov.usda.gov/CA/programs/EQIP/2013/2013_EQIP _Air_Quality_Initiati ve_Attachments.pdf. The NRCS also has a stipulation that the tractor ha s to be tied to the land where it is in use. This requi res that the tractor be used 100% of the time in the San Joaquin Valley. Under the NAQI, NRCS staff verifies by site visit the operational condition of the existing mobile off-road agricultural equipment. Destruction of the existin g equipment and emissions certification verifications are performed to determ ine contract compliance.

The NRCS Combustion Systems Improvement of Mobile E ngines incentive program is unique from other incentive programs in that NRCS is explicitly prohibited from identifying grantees by name. As d irected by the Farm Bill (Food Security Act of 1985 (7 U.S.C. § 608d(2))), NRCS mu st maintain the confidentiality of information provided by an agric ultural producer participating in the NRCS Combustion Systems Improvement of Mobile E ngines incentive program. The information is exempt from mandatory disclosure and may not be used in judicial or administrative proceedings with out the consent of the person

involved.SAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DI STRICT

Appendix D: Manual of Procedures January 31, 2014

D-16 Final Staff Report with Appendices for Proposed Rule 9610 Terminology

Each program guideline varies in the use of terms f or calculation methodolgies and project information. The following table ident ifies the variations between Rule 9610 terminology and the program guideline terminol ogy.

Rule 9610 Prop 1B Moyer NRCS Description

Project

Identification Project

Name Project

Identification Project

Identification Unique identification number

given to a project by the implementing agency

Project Type Project

Option Component,

Component Option, and Primary Function Primary

Function Describes the type of project

and equipment being funded

Old Engine

Year Engine

Model Year Model Year Engine Year (baseline) Manufacturers model year of

the old engine

Annual Miles CA VMT Miles Traveled N/A Miles travel per year for on-road

vehicles

New GVWR GVWR GVWR N/A Gross Vehicle Weight Rating applicable to on-road vehicles only

Cost New Equipment/

Vehicle Total Project

Cost ($) Cost of Reduced

Technology Cost of New

Engine or Equipment The total amount of money to

purchase the new replacement vehicle, engine or equipment.

Does not account for amount of grant funding.

Funding

Amount Prop 1B

Investment Funding Amount Payment Amount of grant money provided to implement incentive project.

Previously Submitted Annual Demonstration Reports

The District’s annual demonstration report submitte d to EPA and ARB serves as the reporting mechanism to claim credit in the SIP for incentive-based emission reductions in the Valley that are surplus, quantifi able, enforceable, and permanent. The draft annual demonstration report i s made available to the public and presented to the District Governing Boar d prior to submittal to EPA and ARB no later than August 31 of each year.

The annual demonstration report provides a descript ion of program guidelines

used and how each ensures emission reductions are S IP-creditable, accounting of emission reductions achieved through implemented incentive projects, provides a summary of SIP commitments for which SIP -creditable emission reductions will be used to satisfy; provides projec t specific information, summaries of District project monitorng and enforce ment activities; and a retrospecitve evaluation of the District’s incentiv e program performance with recommendations for improvements as appropriate.SAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DI STRICT

Appendix D: Manual of Procedures January 31, 2014

D-17 Final Staff Report with Appendices for Proposed Rule 9610 2013 Draft Annual Demonstration Report

Additional Resources

Proposed District Rule 9610

Proposed Staff Report with Appendices for adoption of Rule 9610

District Grant and Incentive ProgramsSAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DI STRICT

Appendix D: Manual of Procedures January 31, 2014

D-18 Final Staff Report with Appendices for Proposed Rule 9610 This page intentionally blank.