An official website of the United States government.

This is not the current EPA website. To navigate to the current EPA website, please go to www.epa.gov. This website is historical material reflecting the EPA website as it existed on January 19, 2021. This website is no longer updated and links to external websites and some internal pages may not work. More information »

Texas SIP: 101.350-101.363. Mass Emissions Cap and Trade Program; SIP effective 2009-09-14 (TXd105) to 2014-02-02

Regulatory Text: 
Texas Chapter 101 - General Air Quality Rules

SUBCHAPTER H: EMISSIONS BANKING AND TRADING

DIVISION 3: MASS EMISSIONS CAP AND TRADE PROGRAM
As approved by EPA January 2, 2014 (79 FR 00057) effective February 3, 2014 (TXd145)

Outline:
§101.350. Definitions. G-88, TXd145
§101.351. Applicability. G-88, TXd145
§101.352. General Provisions. G-74, TXd79
§101.353. Allocation of Allowances. G-84, TXd105; G-88, TXd145
§101.354. Allowance Deductions. G-84, TXd105
§101.356. Allowance Banking and Trading. G-76, TXd79
§101.357. Use of Emission Reductions Generated from the Texas Emissions Reduction Plan (TERP). G-71, NOT in SIP
§101.358. Emission Monitoring and Compliance Demonstration. G-66, TXd31
§101.359. Reporting. G-76, TXd79
§101.360. Level of Activity Certification. G-84, TXd105
§101.363. Program Audits and Reports. G-70, TXd31

GH3 §101.350. Definitions.
As adopted by TCEQ March 10, 2010 effective April 1, 2010 (G-88), and submitted to EPA April 6, 2010 (TX-286)
Approved by EPA January 2, 2014 (79 FR 00057) effective February 3, 2014 (TXd145)
TX147 Regulations.gov docket EPA-R06-OAR-2013-0387

      The following words and terms, when used in this division (relating to Mass Emissions Cap and Trade Program), will have the following meanings, unless the context clearly indicates otherwise.
      (1) Adjustment period--A period of time, beginning on the first day of operation of a facility and ending no more than 180 consecutive days later, used to make corrections and adjustments to achieve normal technical operating characteristics of the facility.
      (2) Allowance--The authorization to emit one ton of nitrogen oxides, expressed in tenths of a ton, during a control period.
      (3) Authorized account representative--The responsible person who is authorized, in writing, to transfer and otherwise manage allowances.
      (4) Banked allowance--An allowance that is not used to reconcile emissions in the designated year of allocation, but that is carried forward for up to one year and noted in the compliance or broker account as "banked."
      (5) Broker--A person not required to participate in the requirements of this division (relating to Mass Emissions Cap and Trade Program) who opens an account under this division for the purpose of banking and trading allowances.
      (6) Broker account--The account where allowances held by a broker are recorded. Allowances held in a broker account may not be used to satisfy compliance requirements for this division (relating to Mass Emissions Cap and Trade Program).
      (7) Compliance account--The account where allowances held by a facility or multiple facilities at a single site are recorded for the purposes of meeting the requirements of this division (relating to Mass Emissions Cap and Trade Program).
      (8) Control period--The 12-month period beginning January 1 and ending December 31 of each year. The initial control period begins January 1, 2002.
      (9) Existing Facility--A new or modified facility that either has submitted an application for a permit under Chapter 116 of this title (relating to Control of Air Pollution by Permits for New Construction or Modification) that the executive director has determined to be administratively complete before January 2, 2001, or has qualified for a permit by rule under Chapter 106 of this title (relating to Permits by Rule) and commenced construction before January 2, 2001.
      (10) Houston-Galveston-Brazoria (HGB) ozone nonattainment area--As defined in §101.1 of this title (relating to Definitions).
      (11) Level of activity--The amount of activity at a facility measured in terms of production, fuel use, raw materials input, or other similar units.
      (12) Person--For the purpose of issuance of allowances under this division (relating to Mass Emissions Cap and Trade Program), a person includes an individual, a partnership of two or more persons having a joint or common interest, a mutual or cooperative association, or a corporation.
      (13) Site--As defined in § 122.10 of this title (relating to General Definitions). 
      (14) Uncontrolled design capacity to emit--The maximum capacity of a facility to emit nitrogen oxides without consideration for post-combustion pollution control equipment, enforceable limitations, or operational limitations. The owner or operator of a stationary diesel engine may use the lower of 876 hours or a federally enforceable limitation on total hours of operation to calculate uncontrolled design capacity to emit if the engine would otherwise be exempt from Chapter 117, Subchapter D, Division 1 of this title (relating to Houston-Galveston-Brazoria Ozone Nonattainment Area Minor Sources) under §117.2003(a)(2)(I) of this title (relating to Exemptions) except that the engine does not meet the emission standard requirements of §117.2003(a)(2)(I)(ii) of this title.

***end tx 101.350***G-88*** EPA-R06-OAR-2013-0387***TX147***TXd145***uzw***


GH3 §101.351. Applicability.
As adopted by TCEQ March 10, 2010 effective April 1, 2010 (G-88), and submitted to EPA April 6, 2010 (TX-286)
Approved by EPA January 2, 2014 (79 FR 00057) effective February 3, 2014 (TXd145)
TX147 Regulations.gov docket EPA-R06-OAR-2013-0387

      (a) This division applies to sites in the Houston-Galveston-Brazoria ozone nonattainment area that:
           (1) Meet the definition of a major source of nitrogen oxides (NOx), as defined in §117.10 of this title (relating to Definitions), with facilities subject to §117.3 10 or §117.1210 of this title (relating to Emission Specifications for Attainment Demonstration); or
           (2) do not meet the definition of a major source of NOx, as defined in § 117.10 of this title, and have facilities subject to § 117.2010 of this title (relating to Emission Specifications) with a collective uncontrolled design capacity to emit from these facilities of ten tons or more per year of NOx.

      (b) A site that met the definition of major source as of December 31, 2000, must always be classified as a major source for purposes of this chapter. A site that did not meet the definition of major source (i.e., was a minor source, or did not yet exist) on December 31, 2000, but that at any time after December 31, 2000, becomes a major source, must from that time forward always be classified as a major source for purposes of this chapter.

      (c) Once a site becomes subject to the requirements of this division, the site will remain subject to this division until the site has been' permanently shut down.

***end tx 101.351***G-88*** EPA-R06-OAR-2013-0387***TX147***TXd145***uzw***


§101.352.  General Provisions.
As adopted by TCEQ December 13, 2002 effective January 17, 2003 (G-74).
Approved by EPA September 6, 2006 (71 FR 52664) effective October 6, 2006 (TXd79).

     (a)  Allowances are valid only for the purposes described in this division and cannot be used to meet or exceed the limitations of any annual emission limitation authorized under Chapter 116, Subchapter B, of this title (relating to New Source Review Permits), or any other applicable rule or law.

     (b)  Beginning March 1, 2003, and no later than March 1 following the end of every control period, each site shall hold a quantity of allowances in its compliance account that is equal to or greater than the total emissions of nitrogen oxides emitted during the control period just ending.  Compliance with this division will begin with the initial control period beginning January 1, 2002.

     (c)  An owner or operator of a facility subject to this division may certify reductions from the facility as emission reduction credits, provided that:
          (1)  an enforceable and permanent reduction of annual allowances is approved by the executive director; and
          (2)  all applicable requirements of Division 1 of this subchapter (relating to Emission Credit Banking and Trading) are met.

     (d)  Allowances cannot be used for netting requirements under Chapter 116, Subchapter B, Divisions 5 and 6 of this title (relating to Nonattainment Review and Prevention of Significant Deterioration Review).

     (e)  Allowances may be used simultaneously to satisfy the correlating one to one portion of offset requirements for new or modified facilities which do not meet the definition of an existing facility, as defined in §101.350 of this title (relating to Definitions), subject to federal nonattainment new source review requirements as provided in Chapter 116, Subchapter B, Division 7 of this title (relating to Emission Reductions:  Offsets).

     (f)  An allowance does not constitute a security or a property right.

     (g)  All allowances will be allocated, transferred, or used in tenths of tons.  To determine the number of allowances, the number of allowances will be rounded down to the nearest tenth when determining excess allowances and rounded up to the nearest tenth when determining allowances used.

     (h)  One compliance account shall be used for multiple facilities required to participate under this division and located at the same site and under common ownership or control.

     (i)  The commission will maintain a registry of the allowances in each compliance account.  The registry will not contain proprietary information.

Adopted December 13, 2002, Effective January 17, 2003 (G-74).
***end tx101.352***G-74***EPA-R06-OAR-2005-TX-0023***TX029***TXd79***h32***
 

GH3 §101.353. Allocation of Allowances.
Paragraphs (b) and (c) as adopted by TCEQ March 10, 2010 effective April 1, 2010 (G-88), and submitted to EPA April 6, 2010 (TX-286).
Approved by EPA January 2, 2014 (79 FR 00057) effective February 3, 2014 (TXd145)
TX147 Regulations.gov docket EPA-R06-OAR-2013-0387
Rest of section as adopted by TCEQ July 25, 2007 effective August 16, 2007 (G-84).
Approved by EPA July 16, 2009 (74 FR 34503) effective September 14, 2009 (TXd105).
TX072 Regulations.gov docket EPA-R06-OAR-2007-0905

     (a)  Allowances will be deposited into compliance accounts according to the following equation except as provided in subsection (b) or (h) of this section.

Figure: 30 TAC §101.353(a)

                    LAHA * EFfinal
A = [B] - X [ B - (--------------)]
                       2000


Where:
          (1)  A = number of allowances rounded to tenths of tons;

          (2)  B = the facility’s baseline emission rate and is calculated as follows:

               (A)  For facilities in operation prior to January 1, 1997:


    (LA97 * EF97) + (LA98 * EF98) + (LA99 * EF99)
B = -----------------------------------------
                     3(2000)


Where: 

LA97 = the facility’s level of activity, as certified by the executive director for 1997;

LA98 = the facility’s level of activity, as certified by the executive director for 1998;

LA99 = the facility’s level of activity, as certified by the executive director for 1999;

EF97 = the facility’s emission factor for 1997 or the emission specifications under §§117.310, 117.1210, and 117.2010 of this title (relating to Emission Specifications for Attainment Demonstrations; and Emission Specifications) (ESAD) whichever is higher, in pounds per unit of activity, (not to exceed any applicable federal or state regulation, rule, or permit limit), as certified by the executive director;

EF98 = the facility’s emission factor for 1998 or the emission specifications under ESAD, whichever is higher, in pounds per unit of activity, (not to exceed any applicable federal or state regulation, rule, or permit limit), as certified by the executive director;

EF99 = the facility’s emission factor for 1999 or the emission specifications under ESAD, whichever is higher, in pounds per unit of activity, (not to exceed any applicable federal or state regulation, rule, or permit limit), as certified by the executive director.


               (B)  For existing facilities not in operation prior to January 1, 1997 and that have been in operation less than five complete consecutive calender years beginning after the end of the adjustment period and have not established two years of baseline data:

     LAAllowable * EFAllowable
B = --------------------
            2000

Where:

LAAllowable = The level of activity authorized by the executive director until such time two consecutive calendar years of actual level of activity data is available;

EFAllowable = The emission factor or the emission specifications under ESAD, whichever is higher, authorized by the executive director until such time two consecutive calendar years of actual emission data is available.

               (C)  For existing facilities not in operation prior to January 1, 1997, and that have established two consecutive calendar years of baseline data out of the first five years of operation following the end of the adjustment period:

     (LAYear - 1  * EFYear - 1) + (LAYear - 2 * EFYear - 2)
B = ----------------------------------------
                     2(2000)


Where:

LAYear-1 = the facility’s level of activity, as certified by the executive director, for the first of any two consecutive years within the first five years of operation;

LAYear-2 = the facility’s level of activity, as certified by the executive director, for the second of any two consecutive years within the first five years of operation;

EFYear-1 = the facility’s emission factor or the emission specifications under ESAD, whichever is higher, in pounds per unit of activity, (not to exceed any applicable federal or state regulation, rule, or permit limit), as certified by the executive director, for the first of any two consecutive years within the first five years of operation;

EFYear-2 = the facility’s emission factor or the emission specifications under ESAD, whichever is higher, in pounds per unit of activity, (not to exceed any applicable federal or state regulation, rule, or permit limit), as certified by the executive director, for the second of any two consecutive years within the first five years of operation.


          (3)  X = reduction factor, where:
               (A)  For all boilers, auxiliary steam boilers, and stationary gas turbines (including duct burners used in turbine exhaust ducts) within an electric power generating system, as defined in §117.10(14)(A) of this title (relating to Definitions), located in the Houston- Galveston- Brazoria nonattainment area:

                    (i) for January 1, 2002 through March 31, 2003, X = 0.00;

                    (ii)  for April 1, 2003 through March 31, 2004, X = 0.50;

                    (iii)  on or after April 1, 2004, X = 1.00;

               (B)  For facilities subject to the emission specifications under §117.310(a)(1)(A) and (B), (2)(A), (5), (8)(A)(i), (8)(B), (9)(A)(ii), (10), or (11) of this title:

                    (i)  for January 1, 2002 through March 31, 2004, X = 0.00;

                    (ii)  for April 1, 2004 through March 31, 2005, X = 0.47;

                    (iii)  for April 1, 2005 through March 31, 2006, X = 0.80;

                    (iv)  for April 1, 2006 through March 31, 2007, X = 0.93;

                    (v)  on and after April 1, 2007, X = 1.00;

               (C)  For all other facilities:

                    (i)  for January 1, 2002 through March 31, 2004, X = 0.00;

                    (ii)  for April 1, 2004 through March 31, 2005, X = 0.389;

                    (iii)  for April 1, 2005 through March 31, 2006, X = 0.667;

                    (iv)  for April 1, 2006 through March 31, 2007, X = 0.778;

                    (v)  on and after April 1, 2007, X = 1.00;

               (D)  Alternatively, facilities subject to the reduction factors under subparagraph B of this paragraph may elect to comply with the following:

                    (i)  for January 1, 2002 through March 31, 2005, X=0.00;

                    (ii)  on and after April 1, 2005, X=1.00.

               (E)  Election to comply with the alternative reduction schedule under subparagraph (D) of this paragraph shall be made by letter to the executive director no later than April 1, 2003.

               (F)  For calendar years which include two different reduction factors, the reduction factor shall be adjusted using the appropriate ratio to reflect the number of months covered by each reduction factor.

          (4)  LAHA = historical average level of activity, where:

               (A)  For facilities in operation on or before January 1, 1997, the average level of activity, as certified by the executive director, for 1997, 1998, and 1999; or

               (B)  For existing facilities which began operation after January 1, 1997, LAHA is:

                    (i)  the level of activity authorized by the executive director until such time two consecutive calendar years of actual level of activity data is available, beginning after the end of the adjustment period; or
                    (ii)  when two complete consecutive calender years of actual level of activity data is available, beginning after the end of the adjustment period, the level of activity becomes the average of the facility’s actual level of activity over those two consecutive calendar years of actual level of activity data.

          (5)  EFfinal = emission factor, as listed in §§117.310, 117.1210, or 117.2010 of this title.

          (6)  For facilities using alternative emission specifications as allowed in §117.310(a)(17) or §117.2010(c)(6) of this title, the level of activity for any formula will be the lowest of the level of activity as calculated in variables (2)(A), (2)(B), or the level of activity limited by an enforceable limit or commitment necessary to qualify for an alternative emission specification in §117.310(a)(17) or §117.2010(c)(6) of this title.


End Figure: 30 TAC §101.353(a)

     (b) The owner or operator of the following facilities shall acquire allowances for each control period or the annual allocation rights from facilities already participating under this division in accordance with §101.356 of this title (relating to Allowance Banking and Trading):
           (1) new and/or modified facilities that have submitted, under Chapter 116 of this title (relating to Control of Air Pollution by Permits for New Construction or Modification), an application that the executive director has not determined to be administratively complete before January 2, 2001;
           (2) new and/or modified facilities that qualified for a permit by rule under Chapter 106 of this title (relating to Permits by Rule) and have not commenced construction before January 2, 2001;
           (3) facilities in operation prior to January 1, 1997, located at a site defined on or before December 31, 2000, as a major source of nitrogen oxides (NOx), as defined in §117. 10 of this title (relating to Definitions), that have not submitted an ECT-3 Form, Level of Activity Certification, in accordance with §101.360(a)(1) of this title (relating to Level of Activity Certification) by March 30, 2010;
           (4) new and/or modified facilities located at a site defined on or before December 31, 2000, as a major source of NOx, as defined in § 117.10 of this title, that submitted a permit application that was determined administratively complete before January 2, 2001, but have not submitted an ECT-3 Form in accordance with §101.360(a)(2) of this title by March 30, 2010; and
           (5) new and/or modified facilities located at a site defined on or before December 31, 2000, as a major source of NOx, as defined in § 117.10 of this title, that qualified for a permit by rule and commenced construction before January 2, 2001, but have not submitted an ECT-3 Form in accordance with §101.360(a)(2) of this title by March 30, 2010.

      (c) If actual emissions of NOx during a control period exceed the amount of allowances held in a compliance account on March 1 following the control period, allowances for the next control period will be reduced by an amount equal to the emissions exceeding the allowances in the compliance account plus an additional 10%. This does not preclude additional enforcement action by the executive director.

     (d)  Allowances will be allocated by the executive director, who will deposit allowances into each compliance account:
          (1)  initially, by January 1, 2002; and
          (2)  subsequently, by January 1 of each following year.

     (e)  The annual deposit for any control period may be adjusted by the executive director to reflect new or existing state implementation plan requirements.

     (f)  Allowances may be added or deducted by the executive director from compliance accounts following the review of reports required under §101.359 of this title (relating to Reporting).

     (g)  The owner or operator of a facility may, due to extenuating circumstances, request a baseline period more representative of normal operation as determined by the executive director.  Applications for extenuating circumstances must be submitted by the owner or operator of the facility to the executive director:
          (1)  no later than June 30, 2001 to request an alternative three consecutive calendar year period for facilities in operation prior to January 1, 1997;
          (2)  no later than 90 days after completion of the baseline period to request up to two additional calendar years to establish a baseline period for facilities whose baseline as described by variable (2)(C) listed in the figure contained in subsection (a) of this section is not complete by June 30,2001; or
          (3)  at any time as authorized by the executive director.

     (h)  Allowances calculated under subsection (a) of this section will continue to be based on historical activity levels, despite subsequent reductions in activity levels.  If allowances are being allocated based on allowables and the facility does not achieve two complete consecutive calendar years of actual level of activity data, then allowances will not continue to be allocated if the facility ceases operation or is not built.

***end tx 101.353***G-84***EPA-R06-OAR-2007-0905***TX072***TXd105***m8j***
***end tx 101.353***G-88*** EPA-R06-OAR-2013-0387***TX147***TXd145***uzw***


§101.354.  Allowance Deductions.
G-84: As adopted by TCEQ July 25, 2007 effective August 16, 2007 (G-84).
Approved by EPA July 16, 2009 (74 FR 34503) effective September 14, 2009 (TXd105).

     (a)  Allowances will be deducted in tenths of a ton from a site's compliance account for a control period based upon the monitoring and testing protocols established in §§117.335, 117.340, 117.1235, 117.1240, and 117.2035 of this title (relating to Initial Demonstration of Compliance; Continuous Demonstration of Compliance; and Monitoring and Testing Requirements).

     (b)  In the event that the monitoring and testing data required under subsection (a) of this section is missing or unavailable, the facility may report actual emissions for that period of time using the following equation or other listed methods in the following order to determine actual emissions: continuous monitoring data; periodic monitoring data; testing data; manufacturer's data, and EPA “Compilation of Air Pollution Emission Factors” (AP-42), September 2000.  When reporting actual emissions as required under this subsection, the facility must also submit the justification for not using the methods in subsection (a) of this section and the justification for the method used.

Figure: 30 TAC §101.354(b) (No change.)

    LACP*EFCP
A = --------
     2000

Where:

A = Allowances to be subtracted from the compliance account in tenths of tons

LACP = the level of activity during the control period

EFCP = the emission factor for the control period in pounds of nitrogen oxides (NOx) per unit of activity

End Figure: 30 TAC §101.354(b)


     (c)  If the protocol used to show compliance with this section differs from the protocol used by the commission to establish the allocation of allowances under §101.353 of this title (relating to Allocation of Allowances), the executive director may recalculate the number of allowances allocated per year for consistency between the methods.

     (d)  When deducting allowances from a site's compliance account for a control period, the executive director will deduct the allowances beginning with the most recently allocated allowances before deducting banked allowances.

     (e)  Allowances shall be deducted from a site's compliance account in an amount equal to the nitrogen oxides (NOx) emissions increases from facilities not subject to an emission specification under §117.310 or §117.2010 of this title (relating to Emission Specifications for Attainment Demonstration; and Emission Specifications) which result from changes made after December 31, 2000, to facilities subject to this division and §117.310(e)(3) or §117.2010(f) of this title.  Documentation detailing these increases in NOx emissions shall be included with the submittal of the ECT-1 Form, Annual Compliance Report.

     (f)  Allowances allocated in accordance with the variables in (a)(2)(B) listed in the figure contained in §101.353(a) of this title may only be used by the facility for which they were allocated and may not be used by other facilities at the same site during the same control period.

     (g)  On March 1 after every control period, a site shall hold a quantity of allowances in its compliance account that is equal to or greater than the total NOx emissions emitted during the prior control period.

Adopted July 25, 2007, Effective August 16, 2007 (G-84).
***end tx 101.354***G-84***EPA-R06-OAR-2007-0905***TX072***TXd105***m8j***


§101.356.  Allowance Banking and Trading.
As adopted by TCEQ November 10, 2004 effective December 2, 2004 (G-76).
Approved by EPA September 6, 2006 (71 FR 52664) effective October 6, 2006 (TXd79).

     (a)  Allowances not used for compliance at the end of a control period may be banked for use in the following control period in compliance with §101.354 of this title (relating to Allowance Deductions) or traded except as provided in subsection (g) of this section.

     (b)  Allowances that have not expired or been used may be traded at any time during a control period after they have been allocated except as provided in subsection (g) of this section.

     (c)  Only authorized account representatives may trade allowances.

     (d)  Trades involving individual allowances may be made in accordance with the following.
          (1)  Submit a completed ECT-2 Form, Application for Transfer of Allowances.
          (2)  The completed ECT-2 Form must include the price paid per allowance, except for transfers between sites under common ownership or control, and shall be submitted to the executive director at least 30 days prior to the allowances being deposited into the transferee’s broker or compliance account.
          (3)  ECT-2 Forms involving the transfer of allowances needed for compliance with a control period must be submitted on or before January 30 of the following control period.
          (4)  All information regarding the quantity and sales price of allowances not exempt from reporting under paragraph (2) of this subsection must be immediately made available to the public.
          (5)  The executive director will issue a letter to the purchaser and seller reflecting this trade.  The trade is final upon issuance of this letter.

     (e)  The owner or operator of a site receiving allowances on an annual basis may permanently transfer ownership of the allowances allocated to individual facilities at that site to any person in accordance with the following requirements.
          (1)  A request for transfer of ownership shall be reviewed for approval by the executive director following the submission of a completed ECT-4 Form, Application for Permanent Transfer of Allowance Ownership.
          (2)  The ECT-4 Form must include the price paid per allowance, except for transfers between sites under common ownership or control, and shall be submitted to executive director at least 30 days prior to the allowances being deposited into the transferee’s broker or compliance account.
          (3)  All information regarding the quantity and sales price of allowances not exempt from reporting under paragraph (2) of this subsection must be immediately made available to the public.
          (4)  The executive director will issue a letter to the purchaser and seller reflecting this transaction.  The transfer is final upon issuance of this letter.

     (f)  Trades involving the transfer of individual future year allowances to be allocated to individual facilities at a site must be made in accordance with the following.
          (1)  The application for trade shall be reviewed for approval by the executive director following the submission of a completed ECT-5 Form, Application for Transfer of Individual Future Year Allowances.
          (2)  The completed ECT-5 Form must include the price paid per allowance, except for transfers between sites under common ownership or control.
          (3)  All information regarding the quantity and sales price of allowances not exempt from reporting under paragraph (2) of this subsection must be immediately made available to the public.
          (4)  The executive director will issue a letter to the purchaser and seller reflecting this trade.  The transfer is final upon issuance of this letter.

     (g)  The banking for future use or trading of allowances not used for compliance during a control period shall be restricted in accordance with the following.
          (1)  Allowances that were allocated in accordance with the variables in (2)(B) listed in the figure contained in §101.353(a) of this title (relating to Allocation of Allowances) may not be banked for future use or traded.
          (2)  Allowances that were allocated prior to January 1, 2005 in accordance with the variables in (3)(D) listed in the figure contained in §101.353(a) of this title may not be banked for future use or traded.

     (h)  Sites may use nitrogen oxides (NOx) discrete emission reduction credits (DERC) or mobile discrete emission reduction credits (MDERC) that have been generated and acquired in accordance with Division 4 of this subchapter (relating to Discrete Emission Credit Banding and Trading) in place of allowances for compliance with this division in accordance with paragraphs (1) - (9) of this subsection.  Sites may use volatile organic compound (VOC) DERCs or MDERCs that have been generated and acquired in accordance with Division 4 of this subchapter, in place of allowances for compliance with this division in accordance with paragraphs (1) - (9) of this subsection provided that demonstration has been made and approved by the executive director and the United States Environmental Protection Agency to show that the use of VOC DERCs or MDERCs is equivalent, on a one to one basis or other ratio, to the use of NOx allowances in reducing ozone.
          (1)  MDERCs may be used in lieu of allowances at a ratio of one MDERC for one allowance.
          (2)  Prior to January 1, 2005, DERCs generated prior to January 1, 2005 may be used at a ratio of one DERC for one allowance.
          (3)  DERCs generated prior to January 1, 2005 may be used in lieu of allowances for compliance with this division for the control period beginning January 1, 2005 through December 31, 2005 at a ratio of four DERCs for one allowance.
          (4)  DERCs generated prior to January 1, 2005 may be used in lieu of allowances for compliance with this division for the control period beginning January 1, 2006 through December 31, 2006 at a ratio of seven DERCs for one allowance.
          (5)  DERCs generated prior to January 1, 2005 may be used in lieu of allowances for compliance with this division for the control period beginning January 1, 2007 and all subsequent control periods at a ratio of ten DERCs for one allowance.
          (6)  DERCs generated on or after January 1, 2005 may be used in lieu of allowances at a ratio of one DERC for one allowance.
          (7)  Beginning January 1, 2005, no more than 10,000 DERCs may be used in any combination totaled over all sites in the Houston/Galveston ozone nonattainment area during a single calendar year in accordance with paragraph (10) of this subsection.  This restriction does not apply to MDERCs.
          (8)  The 10% environmental contribution and the 5% compliance margin of Division 4 of this subchapter shall not apply.
          (9)  DERCs or MDERCs submitted with a DEC-2 Form, Notice of Intent to Use Discrete Emission Credits, for the purpose of compliance with this section, shall be submitted to the executive director on or before October 1 of the control period for which the DERCs or MDERCs will be used and must be accompanied by an original DERC or MDERC certificate.  In addition, a DEC-3 Form, Notice of Use of Discrete Emission Credits, must be submitted by March 31 along with the site’s ECT-1 Form, Annual Compliance Report.
          (10)  Beginning January 1, 2005, DERCs shall be approved for use with this division according to the following.
               (A)  Approval will be given to use 250 or less DERCs per site, per control period.
               (B)  If a site requests the use of more than 250 DERCs in a control period, the amount in excess of 250 may be reduced so that the total amount of all DERCs used by all sites does not exceed 10,000.  For all requests in excess of 250, the excess DERCs up to the 10,000 DERC limit may be apportioned based on the percentage of DERCs in excess of 250 requested for use by those sites relative to the total amount of DERCs available up to the 10,000 DERC limit.

     (i)  Emission reduction credits (ERC) may be converted into a yearly allocation of allowances at the rate of one ERC to one allowance per year only if they were generated prior to December 1, 2000 and provided that:
          (1)  the ERC is quantifiable, real, surplus, enforceable, and permanent as required in §101.302 of this title (relating to General Provisions) at the time the ERC is converted;
          (2)  the ERC was generated in the Houston/Galveston area;
          (3)  the ERC was generated from a reduction in NOx;
          (4)  the ERC has not expired; and
          (5)  the owner of the ERC has prior approval from the executive director.

Adopted November 10, 2004, Effective December 2, 2004 (G-76).
***end tx101.356***G-76***EPA-R06-OAR-2005-TX-0023***TX029***TXd79***h32***


§101.357.  Use of Emission Reductions Generated from the Texas Emissions Reduction Plan (TERP). 
Adopted by TNRCC March 13, 2002, effective April 4, 2002 (G-71).
NOT in Texas SIP


§101.358.  Emission Monitoring and Compliance Demonstration.
As adopted by TNRCC December 6, 2000, effective January 18, 2001 (G-66).
Approved by EPA November 14, 2001 (66 FR 57260) effective December 14, 2001 (TXd31).

     (a)  Monitoring data or other emission quantifications for facilities required to monitor or quantify emissions under any other federal or state program shall be used to show compliance with this division.

     (b)  Facilities not required to monitor or quantify nitrogen oxides emissions shall calculate emissions using good engineering practices, including calculation methodologies in general use and accepted in new source review permitting.

Adopted December 6, 2000, Effective January 18, 2001 (G-66)
**** end tx 101.358 adopted by TNRCC 12/06/2000 (G-66)**TXd31*ebze***c1b**


§101.359.  Reporting.
As adopted by TCEQ November 10, 2004 effective December 2, 2004 (G-76).
Approved by EPA September 6, 2006 (71 FR 52664) effective October 6, 2006 (TXd79).

     (a)  Beginning March 31, 2003, for each control period, facilities under each compliance account shall submit a completed ECT-1 Form, Annual Compliance Report, to the executive director by March 31 of each year detailing the following:
          (1)  the amount of actual nitrogen oxides (NOx) emissions during the preceding control period;
          (2)  the method of determining NOx emissions, including, but not limited to, any monitoring protocol and results, calculation methodology, level of activity, and emission factor;
          (3)  a summary of all final trades for the preceding control period; and
          (4)  detailed documentation supporting the reported activity level and emission factor for each facility equivalent in kind and detail to that submitted with an ECT-3 Form, Level of Activity Certification.  It is acceptable to reference documentation supporting an emission factor if previously submitted with an ECT-1 Form or an ECT-3 Form.

     (b)  For sites failing to submit an ECT-1 Form by the required deadline in subsection (a) of this section, the executive director may withhold approval of any proposed trades from that site involving allowances allocated for the control period for which the ECT-1 Form is due or to be allocated in subsequent control periods.

Adopted November 10, 2004, Effective December 2, 2004 (G-76).
***end tx101.359***G-76***EPA-R06-OAR-2005-TX-0023***TX029***TXd79***h32***


§101.360.  Level of Activity Certification.
G-84: As adopted by TCEQ July 25, 2007 effective August 16, 2007 (G-84).
Approved by EPA July 16, 2009 (74 FR 34503) effective September 14, 2009 (TXd105).

     (a)  The owner or operator of any facility subject to this division shall certify, no later than June 30, 2001, its historical level of activity by submitting to the executive director a completed ECT-3 Form, Level of Activity Certification, along with any supporting information such as usage records, testing or monitoring data, emission factors, and production records as follows:
          (1)  for facilities in operation prior to January 1, 1997, the level of activity averaged over 1997, 1998, and 1999;
          (2)  for new and modified facilities not in operation prior to January 1, 1997 and either have submitted, under Chapter 116 of this title (relating to Control of Air Pollution by Permits for New Construction or Modification), an application which the executive director has determined to be administratively complete before January 2, 2001, or have qualified for a permit by rule under Chapter 106 of this title (relating to Permits by Rule) and have commenced construction before January 2, 2001, the level of activity authorized by the executive director; and
          (3)  for new and modified facilities not in operation prior to January 1, 1997, that are subject to emission specifications under §117.310, 117.1210, or 117.2010 of this title (relating to Emission Specifications for Attainment Demonstration; and Emission Specifications) that were first adopted after April 1, 2001, and either have submitted under Chapter 116 of this title an application which the executive director has determined to be administratively complete within 90 days of the effective date of this emission specification, or have qualified for a permit by rule under Chapter 106 of this title and have commenced construction within 90 days of the effective date of the emission specification, the level of activity authorized by the executive director.

     (b)  The owner or operator of any facility subject to this division who has certified a facility's allowable level of activity under subsection (a)(2) of this section shall:
          (1)  certify no later than 90 days from the end of the fifth year of operation the actual level of activity and actual emission factors for the two complete consecutive calendar years chosen as a baseline by submitting to the executive director a completed ECT-3 Form, Level of Activity Certification, along with any supporting information such as usage records, testing or monitoring data, and production records; and
          (2)  receive no benefit of allowances allocated based on actual operation until January 1 of the control period following the certification in paragraph (1) of this subsection.

     (c)  Owners or operators of a site or facility that becomes subject to this division on or after April 1, 2001 shall certify the level of activity, as determined by the executive director, in accordance with subsections (a) and (b) of this section.  Such certification shall be submitted no later than 90 days from the date the site or facility becomes subject to this division or no later than 90 days from the effective date of this rule, whichever is later.

Adopted July 25, 2007, Effective August 16, 2007 (G-84).
***end tx 101.360***G-84***EPA-R06-OAR-2007-0905***TX072***TXd105***m8j***


§101.363.  Program Audits and Reports.
As adopted by TNRCC September 26, 2001, effective October 18, 2001 (G-70).
Approved by EPA November 14, 2001 (66 FR 57260) effective December 14, 2001 (TXd31).

     (a)  No later than three years after the effective date of this division, and every three years thereafter, the executive director will audit this program.
          (1)  The audit will evaluate the impact of the program on the state's ozone attainment demonstration, the availability and cost of allowances, compliance by the participants, and any other elements the executive director may choose to include.
          (2)  The executive director will recommend measures to remedy any problems identified in the audit.  The trading of allowances, discrete emission reduction credits (DERCs), and/or mobile discrete emission reduction credits (MDERCs) may be discontinued by the executive director in part or in whole and in any manner, with commission approval, as a remedy for problems identified in the program audit.
          (3)  The audit data and results will be completed and submitted to the EPA and made available for public inspection within six months after the audit begins.

     (b)  No later than June 30 following the end of each control period, the executive director shall develop and make available to the general public and EPA, a report that includes:
          (1)  number of allowances allocated to each compliance account;
          (2)  total number of allowances allocated under this division;
          (3)  number of actual nitrogen oxides (NOx) allowances subtracted from each compliance account based on the actual NOx emissions from the site; and
          (4)  a summary of all trades completed under this division.

Adopted September 26, 2001, Effective October 18, 2001 (G-70)
*****end tx 101.363***G-70*************************************d31***c1b****
*************end texas chapter 101 subchapter h division 3***TXd105***m8j***