SJVUAPCD 3170 - 1 5/19/11 RULE 3170 FEDERALLY MANDATED OZ ONE 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 requi rements specified in Section 185 and Section 182(f) of the 1990 amendments to the fede ral Clean Air Act (C AA) by utilizing an alternative fee-equivalency prog ram consistent with the prin ciples of Section 172(e) of

the CAA.

2.0 Applicability

This rule applies to any major source of NO x or VOC. The fees required pursuant to this section shall be in addition to permit fe es and other fees requi red under other Rules and Regulations. The fees esta blished 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 Jo aquin Valley Air Basin shall have met the

revoked federal one-hour am bient air quality standa rd for ozone upon EPA’s determination, through notice-and-comment rulemaking, of concurrence with a demonstration by the APCO a nd the California Air Resour ces Board that the average number of days per cal endar 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 av ailable quality assured monitoring data,

calculate at each monitor the average number of days over th e standard per year during a three-year period according to the proce dures found in 40 CFR Part 50 Appendix H, and show that the improvement in air qua lity is due to perman ent 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 sh all be one of the following periods:

3.2.1 Calendar year 2010; or

3.2.2 An alternative baseline period refl ecting the average of at least two consecutive years within 2006 thro ugh 2010, if those years are determined by the APCO as more representative of normal source operation.SJVUAPCD 3170 - 2 5/19/11 3.3 Billing Year: the year in which a partic ular 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 fo rwarded 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 Sect ion 40612 to be expend ed on establishing and implementing incentive-based programs, such as the District’s Emissions Reductions Incentive Program, to achi eve surplus emissions reductions to remediate air pollution harms created by motor vehicles an d that are intended to

achieve and maintain state and federal ambi ent air quality standards. These fees

shall therefore be used in programs designed to reduc e NOx and VOC emissions in the San Joaq uin Valley.

3.5 Clean Emissions Un it: an emission s unit that the APCO ha s 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 l east 95% (or at least 85% for leanburn, internal com bustion engines); or

3.5.2 The unit is equipped with emis sion control technol ogy that meets or exceeds the requirements for achieved-i n-practice Best Available Control Technology as accepted by the APCO during the period from 2006 through 2010.

3.6 Fee Assessment Basis Y ear: the year in which em issions occurred for which

fees are assessed under Sec tion 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.SJVUAPCD 3170 - 3 5/19/11 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 accor dance with Section 1 85 (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 NO X 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 NO X during the baseline period, or the average annual emissions al lowed by the facility’s permit during the baseline period, whiche ver is lower, in tons pe r 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 ba seline 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 Pri ce Index for all-urba n consumers, in

accordance with Section 502(b)(3)(B)(v) of the fede ral 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 emissi ons of VOC during the baseline period, or the average annual emissions al lowed by the facility’s permit during the baseline period, whiche ver is lower, in tons pe r 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 ba seline 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 NO x 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.SJVUAPCD 3170 - 4 5/19/11 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 assess ed fee shall be calcu lated 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 b een 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 increas ed fees by July 30 may re sult in suspension of the facility’s Permit(s) to Operate.

6.0 Emissions Reporting

6.1 All major sources subject to this ru le 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 informati on must include all necessary baseline period actual emissions data for VOC and NOx from each permitted emissions unit, and justification of any proposed alternativ e 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 cal endar year from each permitted emissions unit. Such stat ements shall be submitted in accordance with the format established by the Dist rict 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 appli cable 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 equa l to or greater than the total penalty fee that would be collected under a direct implementation of the

federal ozone nonattainment fee, codified in Secti on 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 alternativ e baseline period,SJVUAPCD 3170 - 5 5/19/11 7.1.2 All emissions data reported in th e 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 pr epare an Annual Fee Equivalency Demons tration 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 F ee Equivalency Demonstration Report, and

7.2.1.2 The total California vehicle code fees collected that have not been used to demonstrate equi valency in a prior Annual Fee Equivalency Demonstr ation Report.

7.2.1.3 The total Section 185 fees that would be collected under a direct implementation of the federal oz one nonattainment fee, codified

in Section 185 of the federal Cl ean Air Act. For the purposes of this report, the fee that w ould 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 federa l 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 Dem onstration Report demonstrates a

shortfall in total fees co llected compared to the f ees that woul d have beenSJVUAPCD 3170 - 6 5/19/11 collected under a direct implementa tion of the Section 185 penalty fee requirement, the District shall assess and i nvoice, within 90 days following the demonstration of the shortf all, sufficient fees to recover the

entire amount of the shortfall.

7.3.1.1 The shortfall fee described in S ection 7.3.1 shall be collected from major sources of NOx or VOC for which a fee was calculated according to Secti on 5.1 through 5.3 for the fee assessment basis year for whic h there was a shortfall in fee collection, and shall be asse ssed 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 respectiv e fee assessment basis year.

7.3.1.3 Emissions from units for whic h a fee was already paid under this rule for the respec tive fee assessment ba sis year shall not be

included in the emissions-w eighting described above.

7.3.1.4 Within 270 days of demonstrati ng a shortfall in an annual fee equivalency demonstr ation report, a shor tfall remedy report
shall be submitted to EPA demons trating the implementation of

this section and that the reme dy was successful in collecting

sufficient fees to r ecover the entire amount of the shortfall.

7.3.2 If all fees due from an individual fa cility under this sec tion have not been paid by within 60 days of the invoice date, the fee shall be increased in

accordance with th e schedule provided in Rule 3010 Section 11.0 (Late Fees). Nonpayment of the increased f ees within 90 days of the original invoice date may result in suspensi on of the facility’s Permit(s) to Operate.