GOVERNING BOARD

Skip Barwick, Chair

Councilmember, City of Tulare 

Hub Walsh, Vice Chair

Supervisor, Merced County

Oliver L. Baines III

Councilmember, City of Fresno

Tony Barba

Supervisor, Kings County

Sally J. Bomprezzi

Councilmember, City of Madera

Dennis Brazil

Mayor, City of Gustine

Judith G. Case

Supervisor, Fresno County 

David Couch

Supervisor, Kern County

Bob Elliott

Supervisor, San Joaquin County

Harold Hanson

Councilmember, City of Bakersfield

William O’Brien

Supervisor, Stanislaus County

Alexander C. Sherriffs, M.D.

Appointed by Governor

Tom Wheeler

Supervisor, Madera County

J. Steven Worthley

Supervisor, Tulare County

Seyed Sadredin

Executive Director

Air Pollution Control Officer

Northern Region Office

4800 Enterprise Way 

Modesto, CA 95356-8718

(209) 557-6400 • FAX (209) 557-6475

Central Region Office

1990 East Gettysburg Avenue

Fresno, CA 93726-0244

(559) 230-6000 • FAX (559) 230-6061

Southern Region Office

34946 Flyover Court

Bakersfield, CA 93308-9725

(661) 392-5500 • FAX (661) 392-5585

www.valleyair.org

DATE: June 20, 2013

TO: SJVUAPCD Governing Board

FROM: Seyed Sadredin, Executive Director/APCO

Project Coordinator: Samir Sheikh/Todd DeYoung

RE: ITEM NUMBER 10: ADOPT PROPOSED RULE 

9610 AND RECEIVE AND FILE THE 2013 ANNUAL 

DEMONSTRATION REPORT

RECOMMENDATIONS:

1. Adopt Proposed Rule 9610 (State Implementation Plan Credit 

for Emission Reductions Generated through Incentive 

Programs);

2. Authorize the Chair to sign the resolution for new Rule 9610; 

and 

3. Receive and File the 2013 Annual Demonstration Report, and 

authorize the Executive Director/APCO to submit the report to 

the California Air Resources Board (ARB) and U.S. 

Environmental Protection Agency (EPA). 

BACKGROUND:

The San Joaquin Valley Air Pollution Control District (District) currently 

operates one of the largest and most well-respected incentive 

programs in California. 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. Each District incentive 

investment is matched by investments on the part of the participating 

businesses, public agencies, and residents, who together have also 

invested over $400 million on these projects. These combined efforts 

have accelerated the adoption of cleaner technologies beyond what is 

achieved by stringent regulations alone, and in sectors for which the 

District has limited regulatory authority (mobile sources). The 

significant reductions seen through these voluntary incentive programs 

have resulted in significant improvements to air quality and public 

health, and have advanced the San Joaquin Valley Air Basin (Valley) 
SJVUAPCD Governing Board

ITEM NUMBER 10: ADOPT PROPOSED RULE 9610 AND RECEIVE AND FILE THE 2013 ANNUAL 

DEMONSTRATION REPORT

June 20, 2013

2

towards attainment of increasingly stringent federal air quality standards.

The District’s incentive programs have been developed around several core principles, 

including cost-effectiveness, integrity, effective program administration, excellent 

customer service, the efficient use of District resources, fiscal transparency and public 

accountability. As a result of focused efforts, the District has become a statewide leader 

in incentive programs with programs held as models for other air districts throughout 

California. The ARB has routinely called upon the District to administer statewide 

incentive programs on their behalf and on behalf of other local air districts. 

The District is regularly audited by independent outside agencies including professional

accountancy corporations on behalf of the federal government, ARB, the California

Department of Finance and the California Bureau of State Audits. These 

comprehensive and rigorous independent audits focus on every aspect of the District’s

incentive programs including programmatic and fiscal controls. These audits are 

conducted to ensure that the public funds to which the District has been entrusted are 

spent appropriately and in the manner in which they were intended. In these audits, the 

District’s incentive program has been lauded as a “shining example” for efficiency and 

streamlining. In the most recent audit, ARB noted that the District’s incentive program is 

“efficiently and effectively achieving their emission reduction objectives.”

In addition to locally-generated funding sources, support from federal and state sources 

has been critical in bringing much-needed incentive funds to the Valley. Other public 

agencies, including ARB and the United States Department of Agriculture (USDA) 

Natural Resources Conservation Service (NRCS), also implement effective incentive 

programs to reduce emissions in the Valley. Since 2009, the District has successfully 

partnered with the NRCS to fund the replacement of mobile agricultural equipment 

within the Valley. This partnership between the District, NRCS and Valley agricultural 

stakeholders addresses the commitment made by ARB in their 2007 San Joaquin 

Valley 8-Hour Ozone State Implementation Plan of achieving emission reductions of 5-

10 tons per day of oxides of nitrogen (NOx) from mobile agricultural equipment in the 

Valley by 2017 to accelerate progress towards attainment of EPA’s 1997 ozone 

standard. Due to this partnership and the investment of Valley agricultural 

stakeholders, the programs are on pace to exceed this commitment several years in 

advance of the 2017 target. 

As part of developing new incentive programs aimed at reducing emissions from 

agricultural equipment, the District and NRCS collaborated to ensure that both 

agencies’ incentive programs achieve emission reductions that can be credited in state 

implementation plans (SIPs). Towards that end, in December 2010, the District, EPA, 

ARB, and NRCS signed a memorandum of understanding (MOU) committing to 

establish a framework for providing such SIP credit. All agencies agreed to work 

collaboratively to develop a mechanism to provide SIP credit for emission reductions 

from federal, state, and local incentive programs that meet the federal criteria of

Surplus, Quantifiable, Enforceable, and Permanent. 
SJVUAPCD Governing Board

ITEM NUMBER 10: ADOPT PROPOSED RULE 9610 AND RECEIVE AND FILE THE 2013 ANNUAL 

DEMONSTRATION REPORT

June 20, 2013

3

NRCS and EPA continued to work together to develop a mechanism pursuant to the 

federal Clean Air Act (CAA) to quantify SIP credit for emission reductions from farm 

equipment, achieved through voluntary incentive programs at the state/local level. 

As a result of these continued efforts, EPA and NRCS signed Implementation 

Principles for Addressing Agricultural Equipment under the Clean Air Act, in July 

2012. 

Proposed Rule 9610 provides an administrative mechanism to formally recognize future 

emission reductions from incentive programs in attainment plans. The District has been 

working closely with EPA throughout the development of Proposed Rule 9610 to ensure 

that the rule is consistent with current EPA guidance and satisfies applicable CAA 

requirements. 

DISCUSSION: 

In the 2007 Ozone Plan, recognizing the need for additional emission reductions from 

sources outside of the District’s regulatory authority, the District and ARB called for a 

significant increase in funding for incentive programs to accelerate attainment. Since 

then, the District has seen a ten-fold increase in funding for the incentive programs. For 

regulatory measures contained in attainment plans, the District is able to incorporate 

future reductions that are projected through implementation of such measures into the 

plans. A similar mechanism has been lacking for projected reductions achieved through 

incentive-based measures. With the significant growth in the District’s incentive-based 

programs and diminishing opportunities for further reducing emissions through 

regulatory measures on stationary sources, the lack of a similar SIP-creditability 

mechanism for incentive-based measures is now a major deficit in developing 

attainment plans.

The incentive programs are operated with adequate safeguards to ensure quantifiable, 

permanent, enforceable, and surplus emission reductions and result in real air quality 

benefits. Therefore, incentive-based emission reductions must be eligible for use to 

meet federal CAA requirements. These safeguards have been the cornerstone of the 

District’s incentive programs and are now incorporated into the administrative 

mechanism under Proposed Rule 9610.

Proposed Rule 9610

The purpose of Rule 9610 is to serve as an administrative mechanism for the District to 

receive credit towards SIP requirements for emission reductions achieved in the Valley 

through incentive programs administered by the District, NRCS, and ARB. These

incentive-based emission reductions satisfy EPA’s four integrity principles (as defined in 

Section 2.0):
SJVUAPCD Governing Board

ITEM NUMBER 10: ADOPT PROPOSED RULE 9610 AND RECEIVE AND FILE THE 2013 ANNUAL 

DEMONSTRATION REPORT

June 20, 2013

4

 Surplus: emission reductions are not otherwise required by any federal, state, or 

local regulation or other legal mandate. These emission reductions must also be 

in excess of the baseline inventories underlying a SIP attainment demonstration. 

 Quantifiable: emission reductions can be reliably determined through the use of 

well-established, publicly available emission factors and calculation 

methodologies. 

 Enforceable: based on the following:

 The emission reductions are independently and practicably verifiable 

through inspections, monitoring, and/or other mechanisms; 

 Incentive program violations are defined through legally binding contracts, 

including identifying the party or parties responsible for ensuring that 

emission reductions are achieved; 

 Grantees are obligated to provide all records needed to demonstrate that

emission reductions are achieved; and 

 The public has access to all emission-related information for reductions 

claimed in the annual demonstration report, as outlined in Section 4.0 of 

Rule 9610. 

 Permanent: for the lifetime of the project, assured by actions taken to physically 

destroy, or permanently disable baseline equipment or vehicles, or to 

permanently amend practices to ensure the reduction of emissions for the 

duration of the project life.

Incentive Program Guidelines

SIP-creditable emission reductions will be quantified in accordance with incentive 

program guidelines that provide SIP-creditable emission reductions. Section 3.0 of Rule 

9610 identifies specific incentive program guidelines and associated project types 

approved by EPA as meeting SIP-creditability requirements; including specific programs 

under the Carl Moyer Program Guidelines, NRCS Combustion System Improvement 

Practice Standard 372 and associated NRCS Program Combustion System 

Improvement of Mobile Engine Guidelines, and specific programs under Proposition 1B 

Goods Movement Emission Reduction Program Guidelines. Rule language also allows 

for future development and approval of additional incentive program guidelines, 

provided the District submits to EPA a demonstration that such guidelines ensure 

emissions reduced are SIP-creditable. 

Manual of Procedures

Pursuant to Section 3.3, the District’s Manual of Procedures website provides an 

increased level of transparency by ensuring 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 the SIP-creditability of emission reductions, the 

website will also contain a description of how each incentive program guideline ensures 
SJVUAPCD Governing Board

ITEM NUMBER 10: ADOPT PROPOSED RULE 9610 AND RECEIVE AND FILE THE 2013 ANNUAL 

DEMONSTRATION REPORT

June 20, 2013

5

that the incentive program emission reductions are SIP-creditable. Additionally, 

previously submitted District annual demonstration reports will be maintained and made 

available on the Manual of Procedures website. The draft Manual of Procedures 

website is available as Appendix D of the final draft staff report. 

Annual Demonstration Reports

Pursuant to Sections 4.0 and 5.0 of the rule, the District will submit annual 

demonstration reports to ARB and EPA to quantify incentive-based emission reductions

available for use to meet SIP commitments. The annual demonstration reports will 

provide all emissions-related information for reductions claimed in the report, allowing 

for independent verification of claimed emission reductions. The report also will 

compare the total emission reductions from SIP-creditable incentive programs to 

applicable SIP commitments to verify that all attainment plan needs associated with 

Rule 9610 have been met. Specifically, the annual demonstration report will include the 

following: 

 Identification of incentive program guidelines with a description of how those 

guidelines ensure that emission reductions claimed are SIP-creditable.

 A summary of SIP-creditable emission reductions generated through incentive 

programs, summarized by pollutant, years, cost effectiveness, funding amount, 

project type, and guideline used. 

 Any adjustments and a description for the cause of adjustments, to the emission 

reductions claimed in prior annual demonstration reports, as needed.

 Identification of SIP commitments identified in District adopted SIPs by year, 

pollutant, and magnitude which the District has satisfied, in whole or in part 

through SIP-creditable emission reductions. 

 Project-specific information, including identification, location, type, life, 

implementation date, funding amount, incentive program guideline(s) used, 

quantified emission reductions, and descriptions of the make and model, 

horsepower or rating, model year, and historical and projected annual usage. 

 A summary of project monitoring and enforcement activities, including the 

identification of project audits, usage reports, inspections, and other project 

monitoring activities, and a list of actions taken to enforce emission reductions.

 The District‘s retrospective evaluation of overall incentive program performance 

with any associated recommendations for future enhancements.

The draft annual demonstration report will be released to the public and presented to 

the District Governing Board prior to submittal to ARB and EPA for concurrence no later 

than August 31 of each year. 
SJVUAPCD Governing Board

ITEM NUMBER 10: ADOPT PROPOSED RULE 9610 AND RECEIVE AND FILE THE 2013 ANNUAL 

DEMONSTRATION REPORT

June 20, 2013

6

Recordkeeping

Recordkeeping requirements are unique to each incentive program guideline; as such, 

Section 6.0 of Proposed Rule 9610 requires that all records created and/or used for the 

annual demonstration report be kept and maintained as required by the applicable 

incentive program guidelines. Consistent with the California Public Records Act and 

other related requirements, such records shall be made available for public review. 

Records related to the implementation of NRCS Program Combustion System 

Improvement of Mobile Engines incentive program are prohibited from mandatory 

disclosure, pursuant to the Federal Food Security Act of 1985 (7 U.S.C. §608d(2)). 

Rule 9610 and SIP Commitments

In individual SIPs, the District may identify specific amounts of SIP-creditable emission 

reductions (if any) for a particular year or years to be used to satisfy CAA SIP 

requirements, including, but not limited to, demonstration of attainment, reasonable 

further progress, rate of progress, contingency measures, and “black box” reductions. 

This enforceable SIP commitment would identify incentive program guidelines to be 

used and identify an amount of emission reductions not to exceed the amount projected 

to be achieved through the use of secured or reasonably anticipated incentive program 

funding as well as the estimated availability of emission reductions projects and willing 

participants, based on historical participation and estimates of remaining equipment. 

The commitment for incentive-based emission reductions would be accounted for in 

subsequent annual demonstration reports as SIP-creditable emission reductions are 

claimed through Rule 9610. If either the District or EPA finds that there is a SIP shortfall 

for a particular year, the District will adopt and submit to EPA, by specified dates, 

substitute rules or measures that will achieve equivalent emission reductions as 

expeditiously as practicable and no later than any applicable implementation deadline in 

the CAA or other EPA implementing regulations. 

2013 Annual Demonstration Report

Pursuant to Sections 4.0 and 5.0, the District has prepared the 2013 Draft Annual 

Demonstration Report, which includes SIP-creditable incentive-based emission

reductions for projects implemented from 2009 through May 13, 2013 (included as 

Attachment E). This report documents significant emission reductions in future years 

that will greatly assist the District in meeting federal SIP commitments. 

Table 1 - SIP-creditable emission reductions achieved in the Valley

Pollutant Emissions Reduced (tons per day)

2013 2014 2015 2016 2017 2018 2019 2020

NOx 15.59 12.85 10.90 9.31 6.92 6.68 5.60 3.64

PM 0.57 0.48 0.44 0.38 0.29 0.28 0.24 0.16

ROG 1.23 1.03 1.00 0.98 0.97 0.95 0.76 0.50
SJVUAPCD Governing Board

ITEM NUMBER 10: ADOPT PROPOSED RULE 9610 AND RECEIVE AND FILE THE 2013 ANNUAL 

DEMONSTRATION REPORT

June 20, 2013

7

Table 2 – District-administered SIP-creditable emission reductions

Project Type Incentive 

Funding 

Grantee 

Investment

Emissions 

Reduced (tons)

Off-Road Mobile Equipment

Replacement/Repower/Retrofit $34,599,330 $28,836,008 7106.03

New Off-Road Mobile Equipment $82,822 $193,296 3.94

Agricultural Pump Repower $25,945,807 $8,035,811 8086.21

New Electric Agricultural Pump $335,144 $1,463,625 387.81

Truck Replacement $89,409,800 $118,119,558 10593.76

Locomotive Repower $16,919,908 $4,509,370 1805.24

Rule 9610 Development Process

The District worked closely with EPA, ARB, and NRCS to develop Proposed Rule 9610 

and supporting components such as the annual demonstration report and the Manual of 

Procedures web page. 

Public Workshop for Rule 9610

The District hosted a public workshop to present, discuss, and hear comments on the 

draft rule and draft staff report on April 9, 2013. The draft rule and staff report were 

made available on the District’s website prior to the public workshop, and a two week 

comment period followed the public workshop. All comments received on or before 

April 23, 2013 were considered and incorporated into the draft rule or staff report.

Public Hearing for Rule 9610

In accordance with California Health and Safety Code (CH&SC) Section 40725, the 

proposed rule and final draft staff report were publicly noticed prior to the Governing 

Board public hearing to consider adoption of Proposed Rule 9610. The proposed rule, 

final draft staff report, and other supporting documents were made available for public 

comment on May 21, 2013. No comments were received during the subsequent twoweek comment period. The public is also invited to provide comments during the public 

hearing for proposed adoption of this rule. 

FISCAL IMPACT:

No fiscal impacts are anticipated from this project. 

Attachments:

Attachment A: Resolution for Proposed Rule 9610 (5 pages)

Attachment B: Addendum to Proposed Rule 9610 (1 page)

Attachment C: Revised Proposed Rule 9610 (10 pages)

Attachment D: Final Draft Staff Report with Appendices for Proposed Rule 9610 (70 pages)

Attachment E: 2013 Draft Annual Demonstration Report (242 pages)