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RULE 3170 FEDERALLY MANDATED OZONE NONATTAINMENT FEE (Adopted 

May 16, 2002; Amended July 17, 2003; Amended May 19, 2011) 

1.0 Purpose 

The purpose of this rule is to satisfy requirements specified in Section 185 and Section 

182(f) of the 1990 amendments to the federal Clean Air Act (CAA) by utilizing an 

alternative fee-equivalency program consistent with the principles of Section 172(e) of 

the CAA. 

2.0 Applicability 

This rule applies to any major source of NOx or VOC. The fees required pursuant to 

this section shall be in addition to permit fees and other fees required under other Rules 

and Regulations. The fees established by this rule shall cease to be applicable when the 

San Joaquin Valley Air Basin (SJVAB) has met the revoked federal one-hour ambient 

air quality standard for ozone. 

For the purposes of this rule, the San Joaquin Valley Air Basin shall have met the 

revoked federal one-hour ambient air quality standard for ozone upon EPA’s 

determination, through notice-and-comment rulemaking, of concurrence with a 

demonstration by the APCO and the California Air Resources Board that the average 

number of days per calendar year with maximum hourly average concentration above 

0.12 ppm is less than or equal to one (1), for each monitor. To make this 

demonstration, the APCO will, using all available quality assured monitoring data, 

calculate at each monitor the average number of days over the standard per year during 

a three-year period according to the procedures found in 40 CFR Part 50 Appendix H, 

and show that the improvement in air quality is due to permanent and enforceable 

emissions reductions. 

3.0 Definitions 

3.1 Actual Emissions: as defined in Rule 2201 (New and Modified Stationary 

Source Review Rule). 

3.2 Baseline Period: for each major source, the Baseline Period shall be one of the 

following periods: 

3.2.1 Calendar year 2010; or 

 

3.2.2 An alternative baseline period reflecting the average of at least two 

consecutive years within 2006 through 2010, if those years are 

determined by the APCO as more representative of normal source 

operation. 
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3.3 Billing Year: the year in which a particular Rule 3170 fee is invoiced, generally 

the year following the fee assessment basis year. 

3.4 California Vehicle Code Fees: those fees collected by the California Department 

of Motor Vehicles to be forwarded to the District as required under Vehicle Code 

Section 9250.17 and Health and Safety Code Section 40610-40613, which fees are 

required by Health and Safety Code Section 40612 to be expended on establishing 

and implementing incentive-based programs, such as the District’s Emissions 

Reductions Incentive Program, to achieve surplus emissions reductions to 

remediate air pollution harms created by motor vehicles and that are intended to 

achieve and maintain state and federal ambient air quality standards. These fees 

shall therefore be used in programs designed to reduce NOx and VOC emissions in 

the San Joaquin Valley. 

3.5 Clean Emissions Unit: an emissions unit that the APCO has determined meets one 

of the following criteria: 

3.5.1 The unit is equipped with an emissions control technology with a 

minimum control efficiency of at least 95% (or at least 85% for leanburn, internal combustion engines); or 

3.5.2 The unit is equipped with emission control technology that meets or 

exceeds the requirements for achieved-in-practice Best Available Control 

Technology as accepted by the APCO during the period from 2006 

through 2010. 

3.6 Fee Assessment Basis Year: the year in which emissions occurred for which 

fees are assessed under Section 5.0 of this rule. 

3.7 Major Source: as defined in Rule 2201 (New and Modified Stationary Source 

Review Rule). 

3.8 NOx: any nitrogen oxide compounds. 

3.9 VOC: any Volatile Organic Compound, as defined in Rule 1020 (Definitions). 

4.0 Exemptions 

 

4.1 Any unit that is a clean emissions unit for NOx shall not be subject to the NOx 

fee requirements of this rule. 

4.2 Any unit that is a clean emissions unit for VOC shall not be subject to the VOC 

fee requirements of this rule. 
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5.0 Fee Requirements 

5.1 Each major source of NOx or VOC will be assessed an annual fee payable to the 

District. The fee shall be the sum of the NOx Fee and the VOC Fee, which 

shall be calculated as follows, in accordance with Section 185 (b) of the federal 

Clean Air Act. 

NOx Fee (in $) = [A – (0.8 x B)] x C 

VOC Fee (in $) = [D – (0.8 x E)] x C 

Where: 

A = The total amount of NOX emissions actually emitted from permitted 

emissions units at a major NOx source during the applicable fee 

assessment basis year, in tons per year. 

B = The actual average annual emissions of NOX during the baseline period, 

or the average annual emissions allowed by the facility’s permit during 

the baseline period, whichever is lower, in tons per year. B shall be set 

equal to zero (0) if the unit was not permitted during the baseline period, 

except for units replaced since the baseline period, B shall represent the 

emissions during the baseline period of the unit replaced. 

C = The fee rate of $5,000 per ton of pollutant, in 1990 dollars, adjusted by 

the U.S. City Average Consumer Price Index for all-urban consumers, in 

accordance with Section 502(b)(3)(B)(v) of the federal Clean Air Act. 

D = The total amount of VOC emissions actually emitted from permitted 

emissions units at a major VOC source during the applicable fee 

assessment basis year, in tons per year. 

E = The actual average annual emissions of VOC during the baseline period, 

or the average annual emissions allowed by the facility’s permit during 

the baseline period, whichever is lower, in tons per year. E shall be set 

equal to zero (0) if the unit was not permitted during the baseline period, 

except for units replaced since the baseline period, E shall represent the 

emissions during the baseline period of the unit replaced. 

5.2 In the equation for NOx Fee in Section 5.1, if A is less than or equal to 80% of 

B, the fee assessment for NOx shall be set to zero. 

5.3 In the equation for VOC Fee in Section 5.1, if D is less than or equal to 80% of 

E, the fee assessment for VOC shall be set to zero. 
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5.4 By May 1, 2012, and each May 1 thereafter, the APCO shall assess a fee on 

each agency or person subject to this rule for emissions in the previous calendar 

year. The assessed fee shall be calculated in accordance with Section 5.1. 

5.5 By June 30, 2012, and each June 30 thereafter, each agency or person shall 

remit the assessed fee to the District. 

5.6 If all fees due have not been paid by June 30, the fee shall be increased in 

accordance with the schedule provided in Rule 3010 Section 11.0 (Late Fees). 

Nonpayment of the increased fees by July 30 may result in suspension of the 

facility’s Permit(s) to Operate. 

6.0 Emissions Reporting 

6.1 All major sources subject to this rule must provide baseline period actual 

emissions information within 60 days of the District’s request, or by the due 

date of the initial annual emissions statement required under Section 6.2, 

whichever is earlier. This information must include all necessary baseline 

period actual emissions data for VOC and NOx from each permitted emissions 

unit, and justification of any proposed alternative baseline period. 

6.2 All major sources subject to this rule must provide annual emission statements 

that report actual emissions of VOC and NOx for the prior calendar year from 

each permitted emissions unit. Such statements shall be submitted in accordance 

with the format established by the District before March 31 of each year. 

6.3 Operators of a clean emissions unit must distinguish in their annual emission 

statements which units are claimed as clean emissions units, and include a 

justification of that claim. Referencing of an applicable District-published clean 

unit determination suffices for such justification. 

7.0 Fee Equivalency Demonstration System 

7.1 Actual Emission Tracking System 

The APCO shall implement a system for tracking all information necessary to 

make an annual demonstration that the sum of fees collected under this rule, 

plus all California vehicle code fees collected, is equal to or greater than the 

total penalty fee that would be collected under a direct implementation of the 

federal ozone nonattainment fee, codified in Section 185 of the federal Clean 

Air Act, including, but not limited to, the following: 

7.1.1 All baseline period calculations, including documentation of any 

approved alternative baseline period, 
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7.1.2 All emissions data reported in the annual emissions statements required 

under this rule, 

7.1.3 The identification and justification of any clean emissions unit exempted 

from paying a fee under this rule, 

7.1.4 The NOx and VOC emissions and corresponding fee amount excluded 

from payment based on the clean emissions unit determination. 

7.2 Annual Fee Equivalency Demonstration Report 

On or before November 1 of each year, the APCO shall prepare an Annual Fee 

Equivalency Demonstration Report. 

7.2.1 The report shall document: 

7.2.1.1 The total fees collected under this rule that have not been 

reported in a prior Annual Fee Equivalency Demonstration 

Report, and 

7.2.1.2 The total California vehicle code fees collected that have not 

been used to demonstrate equivalency in a prior Annual Fee 

Equivalency Demonstration Report. 

7.2.1.3 The total Section 185 fees that would be collected under a direct 

implementation of the federal ozone nonattainment fee, codified 

in Section 185 of the federal Clean Air Act. For the purposes 

of this report, the fee that would have been collected under 

Section 185 shall be calculated using the fee calculations of 

Section 5.1 through 5.3 of this rule, and calendar year 2010 

shall be used as the baseline period. 

7.2.2 The report shall demonstrate whether the sum of the total Rule 3170 fees 

identified under Section 7.2.1.1, plus the total California vehicle code 

fees identified under Section 7.2.1.2, is equal to or greater than the total 

penalty fee that would be collected under a direct implementation of 

Section 185 of the federal Clean Air Act. 

7.2.3 The report shall be made available to the public and mailed to the federal 

EPA no later than November 1 of each billing year. 

7.3 Remedy for Fee Collection Shortfall 

7.3.1 If any Annual Fee Equivalency Demonstration Report demonstrates a 

shortfall in total fees collected compared to the fees that would have been 
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collected under a direct implementation of the Section 185 penalty fee 

requirement, the District shall assess and invoice, within 90 days 

following the demonstration of the shortfall, sufficient fees to recover the 

entire amount of the shortfall. 

7.3.1.1 The shortfall fee described in Section 7.3.1 shall be collected 

from major sources of NOx or VOC for which a fee was 

calculated according to Section 5.1 through 5.3 for the fee 

assessment basis year for which there was a shortfall in fee 

collection, and shall be assessed on an emissions-weighted 

basis. 

7.3.1.2 The emissions-weighted basis for the shortfall fee shall be based 

on the emissions for which a fee was calculated per Section 5.1 

through 5.3 during the respective fee assessment basis year. 

7.3.1.3 Emissions from units for which a fee was already paid under 

this rule for the respective fee assessment basis year shall not be 

included in the emissions-weighting described above. 

7.3.1.4 Within 270 days of demonstrating a shortfall in an annual fee 

equivalency demonstration report, a shortfall remedy report 

shall be submitted to EPA demonstrating the implementation of 

this section and that the remedy was successful in collecting 

sufficient fees to recover the entire amount of the shortfall. 

7.3.2 If all fees due from an individual facility under this section have not been 

paid by within 60 days of the invoice date, the fee shall be increased in 

accordance with the schedule provided in Rule 3010 Section 11.0 (Late 

Fees). Nonpayment of the increased fees within 90 days of the original 

invoice date may result in suspension of the facility’s Permit(s) to 

Operate.