SOUTH COAST AIR QUALITY MANAGEMENT DISTRICT (Adopted September

8, 2006)(Re-Adopted August
3, 2007) (Repealed January

8, 201 0)(Adopted February

4, 2011) RULE 1315. FEDERAL NEW SOURCE REVIEW TRACKING SYSTEM (a) Purpose The purposeof this rule is to: (1) Maintain the District’s ability tocontinue through December 31, 2030 to issue permits to major sourcesthat obtain offset credits from the Priority Reserve under Rule 1309.1 and/or that are exemptfrom offsets under Rule 1304; (2) Memorialize

in rule form the procedures

tobe followed by the Executive Officer for: (A) Establishing the District’s NSR program equivalency with federal NSR offset requirements
for such major sources;and (B) Demonstrating that sufficient emission reductions, including previously-untracked emission reductions, existed beyond regulatory requirements under federal law tobe used asoffset credits toestablish that the District’s NSR program

is equivalent with federal NSR offset requirements
for major sourcesthat are exempt from offsets under Rule 1304 orobtain offset credits from the Priority Reserve under Rule 1309.1. (b) Definitions (1) COMMUNITY BANK meansthe Community Bank asestablished
by Rule 1309.1—Community Bank, as adopted June 28, 1990 and by Rule 1309.1—Community Bank And Priority Reserve,
asamended May 3, 1991, and became unavailable

to applications deemed complete after the December

7, 1995 amendments

toRule 1309.1—Priority Reserve, which eliminated the Community Bank. )J11’ V1tTQ1CK1 rklrD

I’ A Q1 +k.

...

i.-.. emit from permitted major and minor stationary sourcesof
a nonattainment

air contaminant subject to tracking pursuant
to paragraph (c)(2) of this rule that areoffset from the Priority Reserve or exempt from offsets pursuant
toRule 1304 minus the aggregate emissions reductions
of 1315-1Rule 1315 (Cont.)

(Adopted February

4, 2011) the same nonattainment

air contaminant tracked purGuant
to paragraph (c)(3) of this rule over the same time period. (3) OFFSET RATIO means the ratio of the quantity of offset credits provided (in pounds per day) to the increase
in potential emissions (in pounds per day) requiring offsets. (4) ORPHAN REDUCTION means any reduction
in actual emissions from
a permitted source within the District resulting from

a physical change to the source and/or

a change to the method of operation of the source provided the change

is reflected
in a revised permit for the source and provided such reduction

is not otherwise required by rule, regulation, law, approved Air Quality Management Plan Control Measure,
or the State Implementation

Plan and does not result in issuance of an ERC. (5) ORPHAN SHUTDOWN means any reduction

in actual emissions from

a permitted source within the District resulting from removal of the source from service and inactivation

of the permit without subsequent reinstatement

of such permit provided such reduction

is not otherwise required by rule, regulation, law, approved Air Quality Management Plan Control Measure,
or the State Implementation Plan and does not result in issuance of an ERC. (6) PRIORITY RESERVE means the Priority Reserve
as established
by the June 28, 1990 adoption of Rule 1309.1— Community Bank and as amended by the May 3, 1991 amendments

to Rule 1309.1— Community Bank and Priority Reserve and by the December

7, 1995 and subsequent amendments

to Rule 1309.1— Priority Reserve. (7) SHORTFALL means

a negative net balance
in any of the District offset accounts described

in paragraph (c)(1) of this rule as demonstrated through an FDE prepared pursuant
to paragraph (d)(3) of this rule or ‘projected pursuant
to subdivision
(e) of this rule. (c) Offset Accounts for Federal NSR Equivalency (1) District Offset Accounts for Federal Nonattainment Air Contaminants The Executive Officer shall maintain

a separate District offset account for each federal nonattainment

air contaminant excluding PM2.5. The District offset accounts were established

as of October

1, 1990 with valid emission reductions that had occurred prior to that date, as reflected
in various facilities’ negative NSR account balances and that were 1315-2Rule 1315 (Cont.)
(Adopted February

4, 2011) aggregated

asthe initial account balances listed in Table A for each nonattainment

air contaminant. Any portions of the initial account balances identified
in Table A remaining

in the District offset accounts

at the end of calendar year2005 wereremoved from the District offset accounts
asanenvironmental benefit by the Executive Officer and arenot used for purposesof demonstrating equivalency between federal NSR offset requirements and the District’s NSR program.Additional District offset accountsaretobe established
by the Executive Officer
in the event that additional federal nonattainment

air contaminants other than PM2.5 or their precursorsbecome subject tofederal nonattainment NSR offset requirements, unless by rule the District establishes that Rule 1304 and Rule 1309.1 do not apply tosuch contaminants

ortheir precursors.

If the United States Environmental Protection Agency (EPA) re-designates
the District’s attainment status from nonattainment

toattainment for a specific air contaminant the Executive Officer maydiscontinue tracking and reporting the associated District offset accountfor that air contaminant provided there is a showing
in the maintenance plan that the continued use of emissions offsets for that air contaminant

is not necessary

tomaintain attainment for that air contaminant. The District’s NSR programshall be considered equivalent

tofederal nonattainment NSR offset requirements for anonattainment
air contaminant

so long asthe procedures specified

in this rule arefollowed and the balance
in the District offset account for that air contaminant remains positive. TABLE
A Initial District Offset Account Balances Air Contaminant
Initial Account Balance (tons per day) Volatile Organic Compounds (VOC) 38.46 Nitrogen Oxides (NOx)

23.92 Sulfur Oxides (SOx)

8.04 Carbon Monoxide (CO)

8.45 Particulate Matter (PMIO)

2.67 1315 -3

## Rule 1315 (Cont.)

(Adopted February

4, 2011) (2) Tracking of Offset Account Debits for Federal NSR Equivalency The Executive Officer shall track the amount of emissions and debit from the District offset accounts for the following types of offset allocations
or exemptions provided from the District offset accounts for sources located at major polluting facilities and that are not exempt from the offset requirements
of federal nonattainment NSR: (A) Emission offsets from the Priority Reserve or Community Bank pursuant
to Rule 1309.1; and (B) Exemptions from the offset requirements

of Rule 1303— 

## Requirements pursuant
to Rule 1304— Exemptions. The applicable offset ratios for offsets tracked by the Executive Officer pursuant
to this paragraph

is 1.2-to-I
.0 for extreme nonattainment

air contaminants and their precursors and is 1.0-to-1.0 for all other nonattainment
air contaminants. (3) Tracking of Offset Account Credits for Federal NSR Equivalency (A) The Executive Officer shall track and verify the amount of the following types of emission reductions that have occurred since October

1, 1990 to the District offset accounts: (i) Orphan shutdowns; (ii) Orphan reductions; (iii) ERCs provided
as emission offsets for sources located
at minor facilities; (iv) The difference between the quantity of ERCs provided for a source located at a major polluting facility
at a 1.2-to-i.0 offset ratio pursuant
to Rule 1303(b)(2)(A) and the quantity of ERCs required
to offset the emission increases

at a ratio of

1 .0-to-i
.0 for all non-attainment

air contaminants except extreme nonattainment

air contaminants and their precursors. (v) The amount of emission reductions associated with

a facility’s NSR balance, Community

Bank and Priority Reserve allocations, and offset exemptions that is subtracted from the emission reductions quantified pursuant to Rule 1306(c)
as part of the Executive Officer’s evaluation
of an ERC banking application; and 1315-4Rule 1315 (Cont.)
(Adopted February

4, 2011) (vi) The difference between the actual daily emission reductions calculated pursuant
toRule 1306(c) with and without the BACT adjustment required
in Rule

I 306(c)(2) as partof the Executive Officer’s evaluation
of anERC banking application. This clause applies only in cases where the Executive Officer demonstrates and EPA concursthat the subtracted amount

is not otherwise required by rule, regulation, law, approved Air Quality Management Plan Control Measure,
orthe State Implementation Plan. This clause
is not applicable

to emission reductions that occurin the Riverside County portion of the Salton Sea Air Basin (SSAB) orthe non-Palo Verde, Riverside County portion of the Mojave Desert Air Basin (MDAB). (B) The Executive Officer shall quantify and deposit emission reductions that aretracked pursuant
to subparagraph (c)(3)(A) of this rule into the District offset accounts according

tothe following procedures: (i) From orphan sourcestracked pursuant

toclauses (c)(3)(A)(i)

or (c)(3)(A)(ii)
of this rule at eighty percentof the total or change in the source’s NSR permitted emission levels, respectively; and (ii) From ERCs tracked pursuant
toclauses (c)(3)(A)(iii), (c)(3)(A)(iv), (c)(3)(A)(v), and (c)(3)(A)(vi)
of this rule in the amounts specified pursuant
tothose clauses. (C) The Executive Officer maychoose nottotrack all potential sources of credits
in any reporting period
if the Executive Officer determines that sufficient credits remain
in the District offset accounts
to demonstrate equivalency

in each reporting period. (4) Surplus
atthe Time of Use All credits deposited into the District offset accounts pursuant
toclauses (c)(3)(A)(i), (c)(3)(A)(ii), and (c)(3)(A)(vi)
of this rule shall be discounted by the Executive Officer toensurethat they remain surplus
atthe time of use.Such discounting shall be performed annually and shall be based on the percentage reduction

in overall permitted emissions projected
tobe achieved
asaresult of implementation

of control requirements that 1315

-5

## Rule 1315 (Cont.)

(Adopted February

4, 2011) became effective during the previous calendar year for each specific nonattainment
air contaminant within the District. (5) Tracking Sequence The tracking elements described

in paragraphs (c)(2) through (c)(4) of this rule shall be carried out separately for each District Offset Account
in the following sequence for each reporting period as defined
in paragraph (d)(1) of this rule: (A) Apply the surplus
at the time of use discount described

in paragraph (c)(4) of this rule to the offsets tracked pursuant
to subparagraph (c)(3)(A) of this rule remaining

in the District Offset Account,
if any; (B) Subtract
as much of the aggregate District Offset Account debits tracked and quantified pursuant
to paragraph (c)(2) of this rule from the unused Table A initial balance remaining

in the corresponding

District Offset Account,
if any, as possible without resulting
in a negative District Offset Account balance; (C) Subtract the aggregate District Offset Account debits tracked and quantified pursuant
to paragraph (c)(2) of this rule remaining after conducting the subtraction specified
in subparagraph (c)(5)(A) of this rule, if any, from the corresponding

District Offset Account balance; and (D) Add the emission reductions tracked pursuant
to subparagraph (c)(3)(A) of this rule for the current reporting period to the corresponding

District Offset Account Balance. The PDE for each reporting period through the 2005 reporting period shall follow the tracking sequence identified

in subparagraphs (c)(5)(A), (c)(5)(B), and (c)(5)(C) and the PDE for each reporting period commencing

with the 2006 reporting period shall follow the tracking sequence identified

in subparagraphs (c)(5)(A) and (c)(5)(C). The FDE for each reporting period shall be completed
by adding the results of subparagraph (c)(5)(A) tracking
to the PDE results for the same reporting period. (6) Federal Offset Criteria Offset account credits used to offset debits pursuant
to Rule 1304 or Rule 1309.1,
as specified

in paragraph (c)(2), are real as specified

in subparagraphs (c)(3)(A) and (c)(3)(B), surplus as specified
in paragraphs 44



## 1315-6Rule 1315 (Cont.)
(Adopted February

4, 2011) (b)(4), (b)(5), and (c)(4), permanent

as specified
in paragraphs (b)(4) and (b)(5) and subparagraph (c)(3)(A), quantifiable

as specified
in paragraphs (c)(1), (c)(3), (c)(4), and (c)(5), and enforceable

as specified
in paragraphs (b)(4), (b)(5), and (c)(3). (d) Federal NSR Equivalency Determination Reports (1) Reporting Periods The Executive Officer shall aggregate and track offsets debited from and offsets deposited

tothe District offset accounts into the following reporting periods for purposesof making periodic determinations

of equivalency: (A) October

1, 1990 through July31, 1995; (B) Each of the consecutive twelve-month periods commencing with August 1995 through July 1996 and concluding with August 2003 through July 2004; (C) August 2004 through December 2005; (D) Each calendar yearfrom 2006 through 2009; and (E) Each calendar yearfrom 2010 through 2030. (2) Preliminary Determinations

of Equivalency Commencing with the calendar year2010 reporting period, and for each reporting period thereafter, the Executive Officer shall, nolater than twelve months after the completion
of the reporting period, complete

a Preliminary Determination

of Equivalency (PDE) with federal nonattainment NSR offset requirements. The Executive Officer shall reportthe PDE tothe District’s Governing Board and EPA nolater than the second regularly-scheduled monthly Governing Board meeting after the completion deadline for the PDE. The PDE is aconservative assessment
of the District offset account balances without accounting for orphan and other credits that become available during the subject reporting period. Each PDE shall include the debit accounting elements identified in paragraph (c)(2) of this rule and the running balances
in the District offset accounts
atthe beginning and atthe end of the subject reporting period. (3) Final Determinations

of Equivalency Commencing with the calendar year2010 reporting period, and for each reporting period thereafter, the Executive Officer shall complete

aFinal 1315-7Rule 1315 (Cont.)

(Adopted February

4, 2011) 

## Determination

of Equivalency (FDE) with federal nonattainment NSR offset requirements
for each District Offset Account. The FDE for each account shall be completed
no later than eighteen months after the completion
of the subject reporting period. The Executive Officer shall report the FDE to the District’s Governing Board and EPA no later than the second regularly-scheduled monthly Governing Board meeting after the completion deadline for the FDE for any account(s) for which the PDE did not demonstrate equivalence. Each FDE shall include both the debit and the credit accounting elements identified

in paragraphs (c)(2) and (c)(3) of this rule, respectively, and the running balances
in the District offset accounts
at the beginning and at the end of the subject reporting period. The Executive Officer shall report the FDE for any account(s) for which the PDE did demonstrate equivalence
no later than the reporting deadline for the subsequent reporting period’s PDE specified
in paragraph (d)(2) of this rule. (4) Early FDE Subsuming PDE In lieu of preparing both
a PDE and an FDE for a single reporting period, the Executive Officer may opt to include the PDE in the FDE for the same reporting period. Such FDEs are subject to the same completion and reporting deadlines
as are the PDEs that they subsume. (e) Projections
of District Offset Account Balances Each PDE report and each FDE report the Executive Officer prepares and presents
to the Governing Board and EPA shall also include projections
of the District offset account balances
at the end of each of the two subsequent reporting periods. The Executive Officer shall make the projections
of the District offset account balances based upon the average of the total annual debits and the average of the total annual credits for the five reporting periods most recently included
in a PDE or an FDE. Although these projections are to be reported with the results of the PDEs and FDEs, they are separate from the determinations

of equivalency and do not constitute
an element of the determinations

of equivalency. 1315-8Rule 1315 (Cont.)
(Adopted February

4, 2011) (f) Equivalency Backstop Provisions (I) Funding of the Priority Reserve and Issuance of Permits If the mostrecentDistrict offset account balances determined
by anFDE pursuant
to paragraph (d)(3) of this rule demonstrate

ashortfall for anyair contaminant, the Executive Officer shall: (A) Discontinue funding the Priority Reserve for anyair contaminant that the mostrecentFDE has demonstrated does nothave

a positive balance
in its District offset accountnolater than the completion deadline for the FDE specified
in paragraph (d)(3) of this rule. The Executive Officer mayresume funding the Priority Reserve upon completion
of anFDE demonstrating that the shortfall no longer exists. (B) Discontinue issuing permits
toconstruct and permits
to operate that are subject to paragraph (c)(2) Offset Account debits resulting in the further useof Rule 1304 exemptions

or Priority Reserve offsets from Rule 1309.1 for the air contaminant that has ashortfall tosourcesthat are major sourcesof that air contaminant commencing

nolater than the completion deadline for the FDE demonstrating
the shortfall. Additionally,
the Executive Officer shall place all major source applications that would otherwise qualify for anoffset exemption pursuant
toRule 1304 ortoaccess the Priority Reserve for the air contaminant that has ashortfall on hold until the results of anFDE demonstrating that the shortfall has been rectified have been reported
toand approved by the Governing Board unless the applicant elects to provide sufficient ERCs tooffset the emissions increase pursuant
toRule 1303(b)(2). The Executive Officer mayresumeissuance of such permits upon completion
of anFDE demonstrating that the shortfall no longer exists. (2) Report tothe Governing Board: Rectification
of aShortfall If anFDE demonstrates that
ashortfall exists in anyof the District offset accounts,
orthe mostrecent projected District offset balances calculated pursuant
to subdivision
(e) of this rule predict that such
ashortfall will exist, the Executive Officer shall prepare

a reporttothe Governing Board recommending appropriate action to rectify the shortfall. The Executive Officer shall presentthis reporttothe Governing Board nolater than six 1315-9Rule 1315 (Cont.)
(Adopted February

4, 2011) months after the paragraph (d)(2) or (d)(3) completion deadline for the PDE projecting
or the FDE demonstrating

or projecting the shortfall. The report shall either recommend implementing one or more of the following backstop provisions

as needed to correct the shortfall
or include an explanation
of why it is not necessary
to implement any of the following backstop provisions
by making

a demonstration that the District remains in compliance with federal nonattainment NSR offset requirements

on an aggregate basis: (A) Provide additional credits to the District offset account(s) that have a shortfall within six months of the FDE that demonstrated
the shortfall
or the subdivision
(e) projection that predicted

it. The Executive Officer may obtain such credits by purchasing them, by funding emission reduction projects using quantification protocols approved by EPA, by applying BACT (federal LAER)
in excess of federal requirements,

or by other methods approved by EPA; and/or (B) Propose amendments

to Rule 1304 and/or Rule 1309.1 to eliminate certain offset exemptions
or to eliminate certain sources’ eligibility to receive offsets from the Priority Reserve, respectively. The report shall also include

a proposed timeline for implementation

of the actions

it recommends. (g) California Environmental Quality Act Backntop Provinionn (1) Net Emiion Increasc

at Major and Minor Facilitien

-l l In addition
to the tracking

aernis provided
to noureen
at major polluting facilities pursuant
to paragraph (c)(2) of thin rule, the Executive Officer shall track all increases
in potential to emit that occur at major and minor facilities pursuant
to Rule 1304 or Rule 1309.1. Increases
in potential
to emit at minor facilities tracked pursuant
to thin paragraph shall not constitute debits from the District offset ac (B) Calculation
of Net Emission Inc The Executive Officer shall calculate the cumulative net emission increase of each nonattainment

air contaminant that is tracked pursuant
to paragraphs (c)(2) and (c)(3) of thin rule from [date of 1315-10Rule 1315 (Cont.)
(Adopted February

4, 2011) adoption] through the end of the calendar year201

I reporting period and through the end of each subsequent reporting period no later then the FDE completion deadline for each such reporting period specified
in paragraph (d)(3) of this rule. (C) Reporting Net Emission Increases The Executive Officer’s reporttothe Governing Board of each FDE commencing with the FDE for the calendar year2011 reporting period ha11 include the cumulative net omission increases from [date of adoption] through the end of the reporting period analyzed by the FDE calculated pursuant
to paragraph (d)(3) of this rule. In cases where, pursuant
to paragraph (d)(3) of this rule, the Executive Officer reports the credit accounting elements identified
in paragraph (c)(3) of this rule with the PDE for the subsequent reporting period, the Executive Officer shall also reportthe cumulative netemission increase(s) for the sameair contaminant(s) with the PDE for the subsequent reporting period. Although net emission increases aretobe reported with the results of the FDEs, they are separate from the FDEs and do notconstitute anelement of the FDEs. (2) Projections
of Cumulative Net Emission Increases Each PDE report and each FDE reportthe Executive Officer preparesand presents
tothe Governing Board and EPA commencing with the reports analyzing the 2011 reporting period shall also include projections
of the cumulative net emission increases
atthe end of each of the two subsequent reporting periods. The Executive Officer shall make the projections
of the cumulative net emission increases from both major sourcesand minor sourcesbased uponthe averageof the aggregate increase
in potential
to emit of each nonattainmont
air contaminant subject to tracking pursuant
to paragraph (c)(2) of this rule and the averageof the aggregate emissions reductions
of the samenonattainment

air contaminant
for the five reporting periods most recently included
in aPDE oranFDE oreach of the reporting periods commencing with the 2011 reporting period, whichever

is fewer reporting periods. Although those projections aretobe reported with the results of the PDEs and FDEs, they ro separate from the determinations

of equivalency and do not constitute
anelement of the 1315-11

## Rule 1315 (Cont.)

(Adopted February

4, 2011) 3+ If the cumulative net emission increase of a nonattainment

air contaminant,

as tracked pursuant
to subparagraph (g)(1)(B) of this rule and reported with an FDE pursuant
to subparagraph (g)(1)(C) of this rule, exceeds the paragraph (g)(4) threshold
or is projected pursuant
to paragraph (g)(2) of this rule to exceed the paragraph (g)(4) threshold for that air contaminant, the Executive Officer shall discontinue issuing permits to construct and permits to operate that rely on further use of Rule 1301 exemptions

or Rule 1309.1 Priority Reserve offsets for that air contaminant

to major and mmor sources of that air contaminant Such permit itmunce shall cease no later than the paragraph (d)(2) PDE completion deadline
or the paragraph (d)(3) FDE completion deadline applicnble
to the PDE or FDE with vhioh the paragraph (g)(4) threshold exceedane-
or projected oxceodanco will be reported
to the Governing Board. Te Executive Officer shall not resume issuing such permits unless and until the corresponding

cumulative net emission increase returns to a level nt least ten percent below the threshold for the venr in rp fl VV11II* SALIIAbb&12

aij a,1 IA
1..T.. ——4. 

## cumulative .L 

## emission merease tflresfloiu uuu upuu rn 

## grov’tfl assumptions

in the 2007 AQMP for [date of adoption] through December of 2011 and each subsequent year through 2030 are presented
in Table B.,

## TABLE

B Cumulative Net Emission Increase Thresholds (tons per day) [date of adoption] VOC NO* PMIO through December
of 2011

OO4 O24 2 28

OO O4O 2013 394 2-l4

444 444 0.-74 1315-12Rule 1315 (Cont.)
(Adopted February

4, 2011) [date of adoption]

PIvIlO through December of 2015

G5 044 0790 2046

04 048 409 2017 &85 0768 072-1- -h29 204-8 10.12 0.-6 0724 1,48 2019

1 1.39 0784 072 2020 12.67 0792 040 4-.86 2021 13.94 4-700 04 2705 2022 15.21 4-08 046 244 2023 16.48 4-45 049 2024 17Th 4-2 042 276 2025 18.98 4-739 445 28 2026 20.23 4- 048 03 2027 21.49 4-62 054 2028 22--71 4- 045 2029 23.99 445 0 2034 25.24 -96 061 !1.s Q+.-.+ i.,-....1. +;,-.., oi,.... Q..i.....;÷÷,.i., i,..., m.r’ ,I-.nI1 ,xeuuuve

.uomi paragraphs (b)(2) or3ubdiviion
(g) and (hnfthi’ ruip tnthA CaliforniaMr Roource Board ortoEPA for inciuion

“ -. +h V÷+ T...,,,i.,... (i) Sunset Date for Permit issuance This rule shall expire on January

1, 2031. 1315

-13 •1-•‘.