2004 - 1 

(Adopted October 15, 1993)(Amended December 7, 1995)(Amended July 12, 1996)

(Amended May 11, 2001)(Amended April 6, 2007) 

RULE 2004. REQUIREMENTS

(a) Purpose 

 The purpose of this rule is to establish the requirements for operating under the 

RECLAIM program. The rule includes provisions pertaining to permits, 

Allocations, reporting, variances, and breakdowns. 

(b) Compliance Period and Certification of Emissions 

 (1) The compliance year shall be divided into four quarters for emission 

reporting and certification purposes. The 30 calendar days after the 

conclusion of each of the first three quarters shall be a reconciliation 

period. During the reconciliation period, the Facility Permit holder shall 

calculate the facility's total emissions for the quarter, acquire and have 

credited to the facility, pursuant to Rule 2007 - Trading Requirements and 

Rule 2020 – RECLAIM Reserve, any RTCs necessary to reconcile the 

Allocation to the emissions, and except as provided under paragraph 

(b)(6), submit to the Executive Officer a Quarterly Certification of 

Emissions. In addition, to reconcile the Allocation to the emissions, 

power producing facilities may utilize the Mitigation Fee Program 

specified in subdivision (o) of this rule. 

 (2) The Quarterly Certification of Emissions shall be made in the manner and 

form specified by the Executive Officer and shall be certified for accuracy 

by the highest ranking management official with responsibility for 

operation of equipment subject to the Facility Permit, except as provided 

under paragraph (b)(6). The Quarterly Certification of Emissions shall be 

calculated as required by Rules 2011 - Requirements for Monitoring, 

Reporting and Recordkeeping for Oxides of Sulfur (SOx) Emissions, and 

2012 - Requirements for Monitoring, Reporting and Recordkeeping for 

Oxides of Nitrogen (NOx) Emissions, and Facility Permit conditions 

applicable to the facility. 

 (3) Upon receipt of the certified Quarterly Report, the Executive Officer will 

debit the RTC Listing for the submitting facility by the amount certified in 

the report. 
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 (4) The 60 calendar days following the last day of each compliance year shall 

be the reconciliation period for the last quarter. On or before the last day 

of such reconciliation period, the Facility Permit holder shall calculate the 

facility's total emissions for the last quarter, acquire and have credited to 

the facility, pursuant to Rule 2007 and Rule 2020, any RTCs necessary to 

reconcile the Allocations to the emissions, and except as provided under 

paragraph (b)(6), submit an Annual Permit Emissions Program (APEP) 

report, as prescribed by the Executive Officer, for the purpose of 

compliance reporting, permit review, and determination of fees. As part 

of the APEP report, the Facility Permit holder shall accurately report the 

information specified in Rule 2015 subparagraph (b)(1)(C), (b)(1)(D), and 

(b)(1)(H) for the District's annual audit. 

 (5) Except as provided in subdivision (c), the reconciliation period following 

the end of a quarter shall be used to reconcile the Allocation only with 

emissions from that quarter. 

 (6) The Facility Permit holder of a facility that does not have any NOx or SOx 

emitting sources located at the facility (including, but not limited to, 

permitted equipment, non-permitted equipment pursuant to Rule 219, 

rental or leased equipment, or equipment operated by contractors) shall 

not be required to submit Quarterly Certification of Emissions pursuant to 

paragraphs (b)(1) and (b)(2) and APEP reports pursuant to paragraph 

(b)(4) provided that the Facility Permit holder: 

 (A) submits an application for permit amendment; 

 (B) demonstrates to the satisfaction of the Executive Officer that there 

are no NOx or SOx sources located at the facility; and 

 (C) receives an amended Facility Permit containing permit conditions 

to ensure that there are no NOx or SOx emissions from the facility 

at all times. 

 (7) A Facility Permit holder which has submitted an application for permit 

amendment pursuant to paragraph (b)(6) for exemption from the reporting 

requirements of paragraphs (b)(1), (b)(2), and (b)(4) shall not locate or 

operate NOx or SOx sources at the facility unless such application has 

been cancelled or denied or the permit has been amended to allow 

construction and operation of NOx or SOx sources. Once the Executive 

Officer has issued a permit amendment allowing construction and 

operation of a NOx or SOx source, the facility shall no longer be exempt 
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under this paragraph. If the Facility Permit holder is found in violation of 

any permit condition issued pursuant to paragraph (b)(6), the facility shall 

be assessed a single separate violation of this rule for each source and each 

day the source was on the premises. For purposes of determining 

emissions from each violating source, on each and every day that the 

source was on the premises, emissions shall be calculated assuming the 

source was uncontrolled and operated at maximum capacity for 24 hours a 

day. 

(c) Correction of Quarterly Certification of Emissions 

 (1) The Facility Permit holder may, at any time prior to the end of the 

reconciliation period for the last quarter of the compliance year, make 

corrections to any quarterly certification of emissions, provided that the 

Facility Permit holder demonstrates that: 

 (A) emissions were inaccurately certified due to an error caused by 

conditions beyond the reasonable control of the Facility Permit 

holder; and 

 (B) the corrected information is accurate; and 

 (C) the Facility Permit holder has made the correction within thirty 

days of discovering the error necessitating the correction or within 

thirty days of when the error reasonably could have been 

discovered, whichever is earlier. 

 (2) If a correction is made to a Quarterly Certification of Emissions: 

 (A) the certification requirements set forth in paragraph (b)(2) shall 

apply to the correction; and 

 (B) the RTC Listing will be amended to show the corrected amount. 

 (C) the Facility Permit holder shall, within 30 days of the correction of 

the Quarterly Certification of Emission, but no later than the end of 

the reconciliation period for the last quarter, acquire any RTCs as 

necessary pursuant to Rule 2007 and Rule 2020 to reconcile the 

Allocation to the revised certification, and for a Facility Permit 

holder of a Power Producing Facility, comply with subdivision (o) 

of this rule. 
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(d) Prohibition of Emissions in Excess of Annual Allocation 

 (1) Emissions from a RECLAIM facility from the beginning of a compliance 

year through the end of any quarter shall not exceed the annual emissions 

Allocation in effect at the end of the applicable reconciliation period for 

such quarter. Except as provided in paragraph (d)(2), or subdivision (o), 

any such emissions in excess of the Allocation shall constitute a single, 

separate violation of this rule for each day of the compliance year (365 

days). 

 (2) In the event of a violation of paragraph (d)(1), the Facility Permit holder 

may, pursuant to this paragraph, establish a number of violations less than 

that set forth in paragraph (d)(1) above. The number of violations under 

this paragraph shall be the number of days or portion thereof, during 

which any source of the subject RECLAIM pollutant operated after the 

Allocation was exceeded, plus one violation for each 1,000 pounds, or 

portion thereof, emitted in excess of the Allocation. In order to establish 

the number of violations under this paragraph, the Facility Permit holder 

shall have the burden of establishing the number of days, or such lesser 

period as can be established, that the cumulative facility emissions were 

less than the annual emission Allocation. If the Facility Permit holder is 

not able to establish the number of days or period during which the 

cumulative facility emissions were less than the annual emission 

Allocation, the facility shall be in violation pursuant to paragraph (d)(1) of 

this rule. 

 (3) If the average annual price of RTCs exceeds $8,000 dollars per ton then 

for purposes of paragraph (d)(2) of this rule, one violation per 500 pounds 

or portion thereof, of excess emissions shall be used in lieu of one 

violation per 1,000 pounds or a portion thereof, of excess emissions. The 

average annual price of RTCs will be the price most recently determined 

pursuant to Rule 2015 (b)(1)(E). 
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 (4) For purposes of this rule, emissions from the facility shall be determined 

solely pursuant to methods and procedures specified in Regulation XX - 

Regional Clean Air Incentives Market (RECLAIM) and the Facility 

Permit, if applicable. 

(e) Prohibition of Submission of an Inaccurate Quarterly Certification of Emissions 

 (1) Any Quarterly Certification of Emissions determined by the Executive 

Officer to be inaccurate, shall constitute a violation of this rule, unless the 

report was corrected by the Facility Permit holder in accordance with the 

requirements of paragraph (c)(1). 

 (2) A violation of this subdivision shall constitute a single, separate violation 

of this rule for each day in the quarter. 

(f) Permit Requirements 

 (1) The Facility Permit holder shall, at all times, comply with all rules and 

permit conditions applicable to the facility, as specified in the Facility 

Permit. 

 (2) A person shall not build, erect or install a new source or a modification as 

defined in Rule 2000 - General, without first complying with Rule 201 - 

Permit to Construct. 

(g) Emissions in Excess of a Concentration Limit 

 (1) In the event emissions exceed a concentration limit, as established by a 

source test, the days of violation shall be presumed to include the date of 

the source test and each and every day thereafter until the Facility Permit 

holder establishes that continuous compliance has been achieved, except 

to the extent the Facility Permit holder can prove that there were 

intervening days during which no violation occurred or that the violation 

was not continuing in nature. 

 (2) In the event emissions exceed a concentration limit, as established by a 

source test, the emissions from the source to which the concentration limit 

applies shall be calculated using the higher concentration for purposes of 

determining compliance with the facility's Allocation until the Facility 

Permit holder demonstrates that it is in compliance with the concentration 

limit set forth in the Facility Permit. 
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(h) Federal Requirements for the Use of Clean Fuels or Advanced Control 

Technology 

 Effective November 15, 1998, each new, modified, and existing electric utility 

and industrial and commercial boiler which emits more than 25 tons per year of 

Oxides of Nitrogen shall: 

 (1) burn as its primary fuel natural gas, methanol, or ethanol (or a comparably 

low polluting fuel); or 

 (2) use advanced control technology, such as catalytic control technology or 

other comparably effective control methods, for reduction of emissions of 

Oxides of Nitrogen. 

 For purposes of paragraph (h)(1), the term "primary fuel" means the fuel which is 

used 90 percent or more of the operating time. This subdivision shall not apply 

during any natural gas supply emergency as defined in Title III of the Natural Gas 

Policy Act of 1978. 

(i) Breakdown Provisions 

 (1) Reporting Requirements 

 (A) The Facility Permit holder shall report any breakdown which 

results in: 

 (i) a violation of any rule or permit condition not specified in 

subparagraph (i)(2)(B); or 

 (ii) a request of excess emissions not be counted in 

determining compliance with the RECLAIM facility’s 

annual allocations. 

 Such breakdown shall be reported by telephone, or other Districtapproved method to the Executive Officer within one hour of such 

breakdown or within one hour of the time the Facility Permit 

holder knew or reasonably should have known of its occurrence. 

Such report shall identify the time, specific location, equipment 

involved, responsible party to contact for further information, and 

to the extent known, the causes of the breakdown and the 

estimated time for repairs. In the case of emergencies that prevent 

a person from reporting all required information within the onehour limit, the Executive Officer may extend the time for the 

reporting of required information provided such person has 
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notified the Executive Officer of the breakdown within the onehour limit. 

 (B) Within seven (7) calendar days after the breakdown has been 

corrected, but no later than thirty (30) calendar days from the 

initial date of the breakdown, unless an extension has been 

approved in writing by the Executive Officer, the Facility Permit 

holder shall submit a Breakdown Emissions Report to the 

Executive Officer which contains all of the following: 

 (i) an identification of the equipment involved in causing or 

suspected in having caused or having been affected by the 

breakdown; 

 (ii) the duration of the breakdown; 

 (iii) the date of correction and information demonstrating that 

compliance is achieved; 

 (iv) an identification of the types of emissions, if any, resulting 

from the breakdown; 

 (v) a quantification of the emissions in excess of those 

occurring under normal operating conditions (“excess 

emissions”), if any, resulting from the breakdown using a 

District-approved method consistent with the 

requirements of Rules 2011 and 2012 and Appendix A for 

each rule; 

 (vi) information substantiating that the breakdown did not 

result from operator error, neglect or improper operation 

or maintenance procedures; 

 (vii) information substantiating that steps were immediately 

taken to correct the condition causing the breakdown and 

to minimize the emissions, if any, resulting from the 

breakdown; 

 (viii) a description of the corrective measures undertaken and/or 

to be undertaken to avoid such a breakdown in the future; 

and 

 (ix) pictures of the equipment which failed, if available. 
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 (2) Compliance During Breakdown 

 (A) Any rule or permit condition not specified in subparagraph 

(i)(2)(B) shall be inapplicable to a violation directly caused by a 

breakdown, provided that all of the following criteria are met: 

 (i) the Facility Permit holder meets the reporting 

requirements specified in paragraph (i)(1); 

 (ii) the breakdown did not result from operator error, neglect, 

or improper operation or maintenance procedures; 

 (iii) steps are immediately taken to correct conditions leading 

to the breakdown, and emissions caused by the breakdown 

are mitigated to the maximum extent feasible; and 

 (iv) the equipment in violation is shut down by the end of an 

operating cycle, or within twenty-four hours from the time 

the Facility Permit holder knew or reasonably should have 

known of the breakdown, whichever is sooner. 

 For the purpose of this rule, an operating cycle means a period of 

time within which a round of regularly recurring events is 

completed, and cannot be stopped without the risk of endangering 

public safety or health, causing material damage to the equipment 

or product, or cannot be stopped due to technical constraints. 

Economic reasons alone will not be sufficient to extend this time 

period. The operating cycle includes batch processes that may start 

and finish several times within a twenty-four hour period, in which 

case each start to finish interval is considered a complete cycle. 

 (B) Subparagraph (i)(2)(A) shall not apply to the following District 

Regulations, Rules and permit conditions: 

 (i) Regulations I, IX, X, XIV, XVII, XXX, and XXXI; 

 (ii) Rules 402, 2004 (b), (d), (e), (j), and (l), 2011, and 2012; 

 (iii) any permit condition which implements any Rule or 

Regulation specified in clause (i) or (ii). 

 (C) If a violation of any rule or permit condition not specified in 

subparagraph (i)(2)(B) is likely or suspected as a result of a 

reported breakdown, the Executive Officer will promptly 

investigate and determine whether the occurrence constitutes a 

breakdown in accordance with the criteria set forth in 
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subparagraph (i)(2)(A). If the Executive Officer determines that 

the occurrence did not constitute a breakdown, no relief shall be 

granted under subparagraph (i)(2)(A). 

 (D) Equipment may be operated beyond the time limit in clause 

(i)(2)(A)(iv), provided that a petition for an emergency variance 

has been filed with the Clerk of the Hearing Board in accordance 

with Regulation V. In the event that the breakdown occurs or the 

time limit in clause (i)(2)(A)(iv) ends outside of the normal 

District working hours, the intent to file for an emergency variance 

shall be transmitted to the District in the manner and form 

prescribed by the Executive Officer. 

 (3) Excess Emissions and Annual Allocations 

 (A) The Facility Permit holder meeting the reporting requirements 

specified in paragraph (i)(1) may request that excess emissions not 

be counted in determining compliance with the RECLAIM 

facility’s annual Allocation pursuant to the requirements specified 

in subparagraphs (i)(3)(B) or (i)(3)(C). 

 (B) Excess emissions occurring within the first 24 hours after the 

breakdown shall not be counted in determining compliance with 

the RECLAIM facility's annual Allocation if the Breakdown 

Emissions Report specified in subparagraph (i)(1)(B) contains the 

following additional information, and the Executive Officer 

approves the Breakdown Emissions Report: 

 (i) the names of operators of the identified equipment, their 

immediate supervisors, and the managers responsible for 

the operation and/or maintenance of the identified 

equipment; and 

 (ii) the names of any other witnesses to the breakdown, if any. 

 (C) Excess emissions occurring beyond the first 24 hours and up to 

thirty (30) calendar days after the breakdown shall not be counted 

in determining compliance with the RECLAIM facility's annual 

Allocation if the Breakdown Emissions Report specified in 

subparagraph (i)(1)(B) contains the additional information 

specified in subparagraph (i)(3)(B) and the following additional 

information, and the Executive Officer approves the Breakdown 

Emissions Report: 
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 (i) information substantiating that it was beyond the 

RECLAIM Facility Permit holder's reasonable control to 

correct the breakdown condition within 24 hours; and 

 (ii) information substantiating that the RECLAIM Facility 

Permit holder was unable to provide on-site offsets for the 

excess emissions resulting from the breakdown. 

 (D) The Executive Officer will notify the RECLAIM Facility Permit 

holder, in writing, within thirty calendar days of submission of a 

Breakdown Emissions Report, regarding whether the report is 

approved or disapproved. If approved, the notification shall 

specify the duration during which the excess emissions resulting 

from the breakdown shall not be counted in determining the 

RECLAIM facility's annual Allocation, and the type and amount of 

emissions so exempt. If the Executive Officer does not respond 

within thirty days, the Facility Permit holder may deem the report 

denied for appeal purposes. 

(j) Tampering 

 A person shall not tamper or interfere with, alter or adjust any monitoring or other 

equipment used to detect the amount, concentration, rate or other characteristic of 

emissions emanating from any source in a RECLAIM facility in any way which 

conceals or disguises the type and quantity of any such emissions. 

(k) Compliance Dates 

 The failure to comply with any requirement in this regulation within the time 

specified shall constitute a separate violation for each day until such requirement 

is satisfied. 

(l) Variances 

 No variance may be granted from the following provisions of this 

regulation: 

 (A) any provisions which require Permits to Construct or which set 

forth requirements for Permits to Construct; 

 (B) subdivision (n) of this rule or the missing data provisions of 

Appendices A to Rules 2011 and 2012; and 

 (C) subdivisions (b) and (d) of Rule 2004, and any permit conditions 

which state annual Allocations. 
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(m) Emergencies 

 In the event that responses to national, regional, or local emergencies require 

increased emissions in excess of Department of Defense (DoD) facility 

Allocations, such emissions shall not be counted for purposes of determining 

compliance with Rule 2004 (d)(1). The DoD facility will notify the Executive 

Officer, in writing, within one week after the start of increased emissions caused 

by emergency operations as listed above. 

(n) Missing Data Provisions for Recordkeeping and Reporting 

 (1) In the event the Executive Officer determines that the emissions data 

developed or reported by the Facility Permit holder are inaccurate or 

incomplete or not derived in the manner required by this regulation or the 

Facility Permit, the missing data provisions set forth in Rules 2011 and 

2012, Appendices A shall be used for the purpose of calculating emissions 

for recordkeeping, reporting, certification, and compliance with 

Allocations. 

 (2) In the event a facility does not meet the monitoring requirements, 

emissions shall be determined pursuant to the missing data provisions of 

the applicable Rule 2011 or 2012 Appendices A for purposes of 

determining compliance with Rule 2004 (d)(1). 

(o) Emission Mitigation Fee Program for Power Producing Facilities 

 (1) The mitigation fee program specified in Rule 2020 may be used through 

the 2004 compliance year by power producing facilities that emit greater 

than their annual allocations provided the facility or any facility under 

common ownership has not transferred or sold RTCs to any other entity 

(other than facilities under common ownership) or the District since 

January 11, 2001 for any compliance year during which the mitigation fee 

program is used. 

 (2) The Executive Officer will: 

 (A) deduct RTCs in accordance with paragraphs (b)(3) and (b)(4) of 

Rule 2010; and 

 (B) replace the amount of deducted RTCs on a prorated basis 

according to the amount of RTCs generated, but not to exceed the 

original amount of RTCs deducted, no later than the compliance 

year during which RTCs are deducted. 
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 (3) Notwithstanding the provisions of paragraphs (b)(3) and (b)(4) of Rule 

2010, if the RTCs required to reconcile emissions pursuant to Rule 2004 

(b)(1) is: 

 (A) less than the amount requested from the Mitigation Fee Program, 

then the difference between RTCs deducted from the future year 

allocation and RTCs required to reconcile emissions shall be 

refunded to the facility; or 

 (B) greater than the amount requested from the Mitigation Fee 

Program, then the facility shall be subject to the provisions of 

subdivision (d) of this rule, and paragraph (b)(1) and subdivisions 

(c) and (d) of Rule 2010, for the emissions in excess of the amount 

requested from the Mitigation Fee Program. 

(p) RECLAIM Air Quality Investment Program (AQIP) 

 Emission reductions from the RECLAIM AQIP may be used through the 2004 

compliance year by RECLAIM facilities that meet the definition of Structural 

Buyer, as defined in Rule 2000 (c)(74). 

(q) Modeling Requirements 

 (1) If actual NOx or SOx emissions for any compliance year from a 

RECLAIM facility exceed its initial allocation provided by the District for 

that facility by forty (40) tons per year or more, the Facility Permit holder 

shall conduct modeling to analyze the potential impact of the increased 

emissions. 

 (2) The modeling analysis shall be submitted within 90 days of the end of the 

compliance year. 

 (3) Analysis shall be conducted for all equipment identified as a major source, 

as defined by Rule 2011 and Rule 2012 for the RECLAIM pollutants 

subject to the requirement in paragraph (q)(1), pursuant to the 

methodology in Rule 2005, Appendix A, consistent with applicable 

portions of 40 CFR Part 51, Appendix W, or other method approved by 

AQMD, CARB, and EPA.