AQ-2024-008-RULE 203-REPORT TO THE BOARD OF SUPERVISORS.PDF

Maricopa County — Formal (2024-11-06)

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Air Quality Department
301 W. Jefferson St., Suite 410
Phoenix, Arizona 85003
P: 602-506-6010
E: AQMail@maricopa.gov

Executive Summary of the Report to the Board of Supervisors
Prepared by Maricopa County Air Quality Department
Board Hearing Date:
December 11, 2024
Case Number/Title:
AQ-2024-008-Rule 203 (Emission Reduction Credit (ERC) General
Requirements)
Agenda Item:
(Pending)
Supervisor Districts:
All Districts
The Maricopa County Air Quality Department (MCAQD) complied with all statutory and county
policies throughout this rulemaking process. Per the Enhanced Regulatory Outreach Program
(EROP) Policy: “In addition to the required staff report, an executive summary of the report
including an overview of stakeholder input and staff responses will be provided to the Board
of Supervisors at least one week prior to any Board of Supervisors’ public hearing.”
Overview of the Report to the Board of Supervisors:
In response to a shortage of ERCs in Maricopa County, MCAQD recently revised Rule 204
(Emission Reduction Credit (ERC) Generation, Certification, and Use) and created Rule 205
(Emission Offsets Generated by Voluntary Mobile Source Emission Reduction Credits). The
purpose of the Rule 204 revision and the Rule 205 creation was to implement mechanisms for
the generation and certification of ERCs from nontraditional (non-permitted) sources in
Maricopa County. While the two rules regulate different nontraditional sources of ERCs they
contain many similar provisions that address general ERC requirements. In an effort to
consolidate general ERC requirements into one rule MCAQD is proposing to create a new rule,
Rule 203 (Emission Reduction Credit (ERC) General Requirements).
MCAQD is proposing to include general use, fee, and Arizona Emissions Bank registration
requirements in Rule 203. In addition, MCAQD is proposing to include the application and
certification provisions for ERCs created through traditional (permitted) sources in Rule 203.

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Currently, these provisions are contained in Rule 204. Removing them from Rule 204 and
incorporating them into Rule 203 will improve the overall county ERC program. Rules 204 and
205 will include ERC provisions for nontraditional sources while Rule 203 will include ERC
provisions for traditional sources.
Overview of Stakeholder Input and Staff Responses:
To date, MCAQD has not received any written comments from stakeholders.

Maricopa County
Air Quality Department
Planning and Analysis Division
Report to the
Board of
Supervisors

Rule 203 (Emission
Reduction Credit (ERC)
General Requirements)
December 2024

Board of Health Meeting Date:
July 22, 2024
Board Hearing Date:
December 11, 2024
Case Number/Title:
AQ-2024-008-Rule 203 (Emission Reduction Credit (ERC)
General Requirements)
Agenda Item:
(Pending)
Supervisor Districts:
All Districts
Applicant:
Staff
Request:
Approve creation of Maricopa County Air Pollution Control
Regulations, Rule 203 (Emission Reduction Credit (ERC)
General Requirements)
In response to a shortage of ERCs in Maricopa County, the
Maricopa County Air Quality Department (MCAQD) recently
revised Rule 204 (Emission Reduction Credit (ERC)
Generation, Certification, and Use) and created Rule 205
(Emission Offsets Generated by Voluntary Mobile Source
Emission Reduction Credits). The purpose of the Rule 204
revision and the Rule 205 creation was to implement
mechanisms for the generation and certification of ERCs
from nontraditional (non-permitted) sources in Maricopa
County. While the two rules regulate different nontraditional
sources of ERCs they contain many similar provisions that
address general ERC requirements. In an effort to
consolidate general ERC requirements into one rule MCAQD
is proposing to create a new rule, Rule 203 (Emission
Reduction Credit (ERC) General Requirements).
MCAQD is proposing to include general use, fee, and Arizona
Emissions Bank registration requirements in Rule 203. In
addition, MCAQD is proposing to include the application and
certification provisions for ERCs created through traditional
(permitted) sources in Rule 203. Currently, these provisions
are contained in Rule 204. Removing them from Rule 204
and incorporating them into Rule 203 will improve the overall
county ERC program. Rules 204 and 205 will include ERC
provisions for nontraditional sources while Rule 203 will
include ERC provisions for traditional sources.
Support/Opposition:
To date, MCAQD has not received any written comments
from stakeholders.
Staff
Recommendation:

Approve
Maricopa County • Air Quality Department • Rule 203 Report to the Board of Supervisors
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Board of Health
Recommendation:
Approve
Additional Comments:
This regulatory change is following the Enhanced Regulatory
Outreach Program (EROP) Policy and workflow process. The
County Manager briefed the Board of Supervisors regarding
this rulemaking in June 2024. Stakeholder Workshops were
held on July 8, 2024, and September 17, 2024.
The Board of Health approved an expedited rulemaking
process for Rule 203 on July 22, 2024 and the Notice of
Proposed Rulemaking was posted on the EROP website on
October 4, 2024.
A newspaper notice of the Board of Supervisors public
hearing will be published in the Arizona Business Gazette on
November 7, 2024, and November 14, 2024. This regulatory
change will take effect immediately upon approval by the
Board of Supervisors.
Presented By:
Philip A. McNeely, R.G., Director
Prepared By:
Planning and Analysis Division
Attachments:
Preamble required by Arizona Revised Statutes (A.R.S.) §
49-471.07 (See the Draft Notice of Final Rulemaking)
Summary of the proposed regulatory change (See Item 4 of
the Draft Notice of Final Rulemaking)
Analysis of input received during the process and how that
input was responded to (See Item 9 of the Draft Notice of
Final Rulemaking)
Language of proposed regulatory change or amendment
(See the Draft Notice of Final Rulemaking)
Minutes from Board of Health meeting
Maricopa County • Air Quality Department • Rule 203 Report to the Board of Supervisors
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Maricopa County
Air Quality Department
Planning and Analysis Division
Draft Notice of
Final
Rulemaking
Rule 203
(Emission Reduction
Credit (ERC) General
Requirements)
December 2024

Draft Notice of Final Rulemaking
Maricopa County Air Pollution Control Regulations
Regulation II – Permits and Fees
Rule 203 (Emission Reduction Credit (ERC) General Requirements)
The Maricopa County Air Quality Department (MCAQD) is proposing to create Rule 203
(Emission Reduction Credit (ERC) General Requirements). The Control Officer is posting this
Draft Notice of Final Rulemaking on the Maricopa County Enhanced Regulatory Outreach
Program (EROP) website as part of the Report to the Board of Supervisors, in accordance with
the Maricopa County EROP Policy. This notice includes the preamble, as prescribed in Arizona
Revised Statute (A.R.S.) § 49-471.05, and the full text of the rule, including the intended actions
to make new sections or amend, repeal, or renumber the sections of the rule. This notice also
includes a list of all previous notices posted on the Maricopa County EROP website addressing
the proposed rule and the concise explanatory statement prescribed in A.R.S. § 49-471.07(B).
Preamble
1.
Statutory authority for the rulemaking (A.R.S. § 49-471.05(1)):
A.R.S. §§ 49-112, 49-474, 49-479 and 49-480
2.
Name and address of department personnel with whom persons may communicate
regarding the rulemaking (A.R.S. § 49-471.05(2)):
Name:
Will Adrian or Kimberly Butler
Maricopa County Air Quality Department
Planning and Analysis Division
Address:
301 W. Jefferson St., Suite 410
Phoenix, AZ 85003
Telephone:
602-506-6010
Fax:
602-506-6179
Email:
AQPlanning@maricopa.gov
Online:
Submit a Comment
3.
Rulemaking process (A.R.S. § 49-471.05(3)):
This rulemaking is following procedures identified in state statutes and the Maricopa
County EROP Policy.
County Manager Briefing:
June 13, 2024
Return to list of attachments
Maricopa County • Air Quality Department • Rule 203 Report to the Board of Supervisors
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Stakeholder Workshops:
July 8, 2024
September 17, 2024
Board of Health Meeting to Approve Expedited
Process Rulemaking:
July 22, 2024
Notice of Proposed Rulemaking:
October 4, 2024
Board of Supervisors Formal Meeting to Set
the Public Hearing:
November 6, 2024
Board of Supervisors Public Hearing:
December 11, 2024
4.
Explanation of the rule, including the control officer's reasons for initiating the
rulemaking (A.R.S. § 49-471.05(4)):
In response to a shortage of emission reduction credits (ERC) in Maricopa County,
MCAQD recently revised Rule 204 (Emission Reduction Credit (ERC) Generation,
Certification, and Use) and created Rule 205 (Emission Offsets Generated by Voluntary
Mobile Source Emission Reduction Credits). The purpose of the Rule 204 revision and
the Rule 205 creation was to implement mechanisms for the generation and
certification of ERCs from nontraditional (non-permitted) sources in Maricopa County.
While the two rules regulate different nontraditional sources of ERCs they contain many
similar provisions that address general ERC requirements. In an effort to consolidate
general ERC requirements into one rule MCAQD is proposing to create a new rule, Rule
203 (Emission Reduction Credit (ERC) General Requirements).
MCAQD is proposing to include general use, fee, and Arizona Emissions Bank
registration requirements in Rule 203. In addition, MCAQD is proposing to include the
application and certification provisions for ERCs created through traditional (permitted)
sources in Rule 203. Currently, these provisions are contained in Rule 204. Removing
them from Rule 204 and incorporating them into Rule 203 will improve the overall
county ERC program. Rules 204 and 205 will include ERC provisions for nontraditional
sources while Rule 203 will include ERC provisions for traditional sources.
5.
Studies relied on in the control officer's evaluation of or justification for the rule and
where the public may obtain or review the studies, all data underlying the studies, any
analysis of the studies and other supporting material (A.R.S. § 49-471.05(5)).
No studies were relied on in the control officer’s evaluation of the rule.
6.
An economic, small business and consumer impact statement (A.R.S. § 49-
471.05(6)):
The following discussion addresses each of the elements required for an economic,
small business and consumer impact statement, as prescribed by A.R.S. §§ 41-1055,
subsections A, B and C, and 41-1035:
Return to list of attachments
Maricopa County • Air Quality Department • Rule 203 Report to the Board of Supervisors
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An identification of the proposed rulemaking, including all of the following (A.R.S. §
41-1055(A)(1)):
This rulemaking is proposing to create Rule 203. Participation in the generation,
certification, and utilization of ERCs is voluntary.
(a) The conduct and its frequency of occurrence that the rule is designed to change
(A.R.S. § 41-1055(A)(1)(a)).
MCAQD is proposing to consolidate general ERC requirements under Rule 203 to
improve the consistency and clarity of the MCAQD Emission Reduction Credit
Program.
(b) The harm resulting from the conduct the rule is designed to change and the
likelihood it will continue to occur if the rule is not changed (A.R.S. § 41-
1055(A)(1)(b)).
MCAQD is proposing to consolidate general ERC requirements under Rule 203 to
improve the consistency and clarity of the MCAQD Emission Reduction Credit
Program.
(c) The estimated change in frequency of the targeted conduct expected from the rule
change (A.R.S. § 41-1055(A)(1)(c)).
MCAQD is proposing to consolidate general ERC requirements under Rule 203 to
improve the consistency and clarity of the MCAQD Emission Reduction Credit
Program.
A brief summary of the information included in the economic, small business and
consumer impact statement (A.R.S. § 41-1055(A)(2)).
This rulemaking is anticipated to have an overall positive impact on Maricopa County’s
economy. The generation and certification of ERCs will allow more businesses wishing
to construct new major sources or make major modifications to existing major sources
in Maricopa County to meet the emission offset requirement of the CAA.
Name and address of agency employees who may be contacted to submit or request
additional data on the information included in the economic, small business and
consumer impact statement (A.R.S. § 41-1055(A)(3)).
Name:
Will Adrian or Kimberly Butler
Maricopa County Air Quality Department
Planning and Analysis Division
Address:
301 W. Jefferson St., Suite 410
Phoenix, AZ 85003
Telephone:
602-506-6010
Maricopa County • Air Quality Department • Rule 203 Report to the Board of Supervisors
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Fax:
602-506-6179
Email:
AQPlanning@maricopa.gov
Online:
Submit a Comment
An identification of the persons who will be directly affected by, bear the costs of or
directly benefit from the proposed rulemaking (A.R.S. § 41-1055(B)(2)).
Participation in the generation, certification, and utilization of ERCs is voluntary;
however, the generation, certification, and utilization of ERCs must be done in
compliance with the applicable provisions of Rule 203.
The proposed rulemaking does not introduce any significant ERC requirements that
would present any new costs for participating in MCAQD’s Emission Reduction Credit
Program. MCAQD is proposing to consolidate general ERC requirements under Rule
203. The proposed rulemaking will benefit the MCAQD Emission Reduction Credit
Program through improved consistency and clarity.
A cost benefit analysis of the following:
(a) The probable costs and benefits to the implementing agency and other agencies
directly affected by the implementation and enforcement of the proposed
rulemaking (A.R.S. § 41-1055(B)(3)(a)).
The cost incurred by MCAQD to review ERC applications and certify ERCs has been
accounted for by the ERC application processing (for certification) fee under § 402
Fees of this rule. The cost incurred by MCAQD to inspect and verify compliance of
the traditional generator with Rule 203 has been accounted for by permit revision
costs incurred through § 301.1 Application of this rule and Rule 280 (Fees).
The cost to the Arizona Department of Environmental Quality (ADEQ) of
administering the Arizona Emissions Bank has been, and is expected to continue to
be, minimal as stated in ADEQ’s Notice of Final Rulemaking (25 A.A.R. 1433, June
14, 2019).
(b) The probable costs and benefits to a political subdivision of this state directly
affected by the implementation and enforcement of the proposed rulemaking
(A.R.S. § 41-1055(B)(3)(b)).
MCAQD is proposing to consolidate general ERC requirements under Rule 203 to
improve the consistency and clarity of the MCAQD Emission Reduction Credit
Program. Participation in the generation, certification, and utilization of ERCs is
voluntary. MCAQD’s Emission Reduction Credit Program implements a market-
based strategy, i.e. emissions trading, to achieve an air quality objective, and thus
allow for a natural cost and benefit balance to be achieved through natural trading
market forces.
Maricopa County • Air Quality Department • Rule 203 Report to the Board of Supervisors
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(c) The probable costs and benefits to businesses directly affected by the proposed
rulemaking, including any anticipated effect on the revenues or payroll
expenditures of employers who are subject to the proposed rulemaking (A.R.S. §
41-1055(B)(3)(c)).
MCAQD is proposing to consolidate general ERC requirements under Rule 203 to
improve the consistency and clarity of the MCAQD Emission Reduction Credit
Program. Participation in the generation, certification, and utilization of ERCs is
voluntary. MCAQD’s Emission Reduction Credit Program implements a market-
based strategy, i.e. emissions trading, to achieve an air quality objective, and thus
allow for a natural cost and benefit balance to be achieved through natural trading
market forces.
A general description of the probable impact on private and public employment in
businesses, agencies and political subdivisions of this state directly affected by the
proposed rulemaking (A.R.S. § 41-1055(B)(4)).
The probable impact on private and public employment in businesses directly affected
by the proposed rulemaking is expected to be positive. The generation of more ERCs
will allow more businesses to locate and expand in Maricopa County, thereby increasing
the overall economic growth and expansion.
A statement of the probable impact of the proposed rulemaking on small businesses.
The statement shall include:
(a) An identification of the small businesses subject to the proposed rulemaking
(A.R.S. § 41-1055(B)(5)(a)).
Participation in the generation, certification, and utilization of ERCs is voluntary;
however, the generation, certification, and utilization of ERCs must be done in
compliance with the applicable provisions of Rule 203.
Small businesses subject to Rule 203 include permitted stationary sources who
voluntarily choose to generate ERCs in compliance with Rule 203.
(b) The administrative and other costs required for compliance with the proposed
rulemaking (A.R.S. § 41-1055(B)(5)(b)).
Participation in the generation, certification, and utilization of ERCs is voluntary;
however, when a source chooses to generate, certify or utilize ERCs they must do so
in compliance with the applicable provisions of Rule 203.
Administrative Costs: Small business choosing to generate and certify ERCs must
comply with the application and recordkeeping requirements of the rule.
Other Costs: Small business that voluntarily choose to generate and certify ERCs will
bear costs associated with the cost to replace or add equipment necessary to
reduce qualified emissions.
Maricopa County • Air Quality Department • Rule 203 Report to the Board of Supervisors
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(c) A description of the methods that the agency may use to reduce the impact on
small businesses (A.R.S. § 41-1055(B)(5)(c)).
MCAQD has a business assistance (BA) program that provides administrative and
technical assistance to business owners related to air quality rules and regulations.
Courtesy site visits, on-site training, rule interpretation, and compliance assistance
are offered to small businesses at no charge.
i. Establish less stringent compliance or reporting requirements in the rule for
small businesses (A.R.S. § 41-1035(1)).
Participation in the generation, certification, and utilization of ERCs is voluntary;
however, when a source chooses to generate, certify or utilize ERCs they must do
so in compliance with the applicable provisions of Rule 203. MCAQD is not aware
of any less stringent compliance or reporting requirements.
ii. Establish less stringent schedules or deadlines in the rule for compliance or
reporting requirements for small businesses (A.R.S. § 41-1035(2)).
Participation in the generation, certification, and utilization of ERCs is voluntary;
however, when a source chooses to generate, certify or utilize ERCs they must do
so in compliance with the applicable provisions of Rule 203. MCAQD is not aware
of any less stringent schedules or deadlines for compliance or reporting
requirements.
iii. Consolidate or simplify the rule's compliance or reporting requirements for
small businesses (A.R.S. § 41-1035(3)).
Participation in the generation, certification, and utilization of ERCs is voluntary;
however, when a source chooses to generate, certify or utilize ERCs they must do
so in compliance with the applicable provisions of Rule 203. MCAQD is not aware
of any way to consolidate or simplify the rule’s compliance or reporting
requirements.
iv. Establish performance standards for small businesses to replace design or
operational standards in the rule (A.R.S. § 41-1035(4)).
Participation in the generation, certification, and utilization of ERCs is voluntary;
however, when a source chooses to generate, certify or utilize ERCs they must do
so in compliance with the applicable provisions of Rule 203.
v. Exempt small businesses from any or all requirements of the rule (A.R.S. § 41-
1035(5)).
Participation in the generation, certification, and utilization of ERCs is voluntary;
however, when a source chooses to generate, certify or utilize ERCs they must do
so in compliance with the applicable provisions of Rule 203.
Maricopa County • Air Quality Department • Rule 203 Report to the Board of Supervisors
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(d) The probable cost and benefit to private persons and consumers who are directly
affected by the proposed rulemaking (A.R.S. § 41-1055(B)(5)(d)).
This rulemaking will not impose any costs to private persons or consumers. The
citizens and visitors to Maricopa County will benefit through the reduction of air
pollutants and economic growth.
A statement of the probable effect on state revenues (A.R.S. § 41-1055(B)(6)).
The rulemaking will not impose increased monetary or regulatory costs on other state
agencies, political subdivisions of this state, persons, or individuals so regulated.
Without costs to pass through to customers, there is no projected change in consumer
purchase patterns and, thus, no impact on state revenues from sales taxes.
A description of any less intrusive or less costly alternative methods of achieving the
purpose of the proposed rulemaking, including the monetizing of the costs and
benefits for each option and providing the rationale for not using nonselected
alternatives (A.R.S. § 41-1055(B)(7)).
MCAQD is not aware of any less intrusive or costly methods to achieve the purpose of
this rulemaking.
A description of any data on which a rule is based with a detailed explanation of how
the data was obtained and why the data is acceptable data (A.R.S. § 41-1055(B)(8)).
Not applicable.
7.
The proposed effective date of the rule (A.R.S. § 49-471.05(7)):
The proposed effective date of this rulemaking is December 11, 2024.
8.
Such other matters as are prescribed by statute and that are applicable to the county
or to any specific rule or class of rules (A.R.S. § 49-471.05(8)):
Under A.R.S. § 49-479(C), a county may not adopt a rule or ordinance that is more
stringent than the rules adopted by the Director of the Arizona Department of
Environmental Quality (ADEQ) for similar sources unless it demonstrates compliance
with the applicable requirements of A.R.S. §49-112.
§ 49-112 County regulation; standards
§ 49-112(A)
When authorized by law, a county may adopt a rule, ordinance or regulation that is more
stringent than or in addition to a provision of this title or rule adopted by the director or
any board or commission authorized to adopt rules pursuant to this title if all of the
following requirements are met:
1. The rule, ordinance or regulation is necessary to address a peculiar local condition.
2. There is credible evidence that the rule, ordinance or regulation is either;
Maricopa County • Air Quality Department • Rule 203 Report to the Board of Supervisors
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(a) Necessary to prevent a significant threat to public health or the environment that
results from a peculiar local condition and is technically and economically
feasible.
(b) Required under a federal statute or regulation, or authorized pursuant to an
intergovernmental agreement with the federal government to enforce federal
statutes or regulations if the county rule, ordinance or regulation is equivalent to
federal statutes or regulation.
3. Any fee or tax adopted under the rule, ordinance or regulation does not exceed the
reasonable costs of the county to issue and administer the permit or plan approval
program.
§ 49-112(B)
When authorized by law, a county may adopt rules, ordinances or regulations in lieu of a
state program that are as stringent as a provision of this title or rule adopted by the
director or any board or commission authorized to adopt rules pursuant to this title if
the county demonstrates that the cost of obtaining permits or other approvals from the
county will approximately equal or be less than the fee or cost of obtaining similar
permits or approvals under this title or any rule adopted pursuant to this title. If the state
has not adopted a fee or tax for similar permits or approvals, the county may adopt a
fee when authorized by law in the rule, ordinance or regulation that does not exceed the
reasonable costs of the county to issue and administer that permit or plan approval
program.
MCAQD is in compliance with A.R.S. §§ 49-112(A) and (B). This rulemaking does not
create ERC requirements more stringent than those in the ERC rules adopted by ADEQ.
9.
List of all previous notices posted to the Maricopa County EROP website addressing
the proposed rule and a concise explanatory statement, as prescribed by A.R.S. § 49-
471.07(B):
(a) List of all previous notices posted to the Maricopa County EROP website
addressing the proposed rule:
Notice
Date of Posting
Briefing Notification to County Manager:
June 20, 2024
Notices of Stakeholder Workshops:
June 24, 2024
September 3, 2024
Notice of Board of Health Meeting to Approve
Expedited Process Rulemaking:
July 8, 2024
Notice of Proposed Rulemaking:
October 4, 2024
(b) The following discussion addresses each of the elements required for a concise
explanatory statement, as prescribed by A.R.S. § 49-471.07(B):
i. A description of any change between the proposed rule or ordinance, the final
rule or ordinance or notice of final supplemental rule or ordinance.
Maricopa County • Air Quality Department • Rule 203 Report to the Board of Supervisors
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No changes were made after the Notice of Proposed Rulemaking was published
on October 4, 2024.
ii. A summary of the comments and arguments for and against the notice and the
county’s response to the comments and arguments.
To date, MCAQD has not received any written comments from stakeholders.
Exact Wording of the Rule
MARICOPA COUNTY AIR POLLUTION CONTROL REGULATIONS
REGULATION II – PERMITS AND FEES
RULE 203 (EMISSION REDUCTION CREDIT (ERC) GENERAL
REQUIREMENTS)
INDEX
SECTION 100 – GENERAL
101
PURPOSE
102
APPLICABILITY
SECTION 200 – DEFINITIONS
201
ACCOUNT HOLDER
202
ARIZONA EMISSIONS BANK
203
BASELINE EMISSIONS
204
CERTIFIED CREDIT
205
CREDIT USER
206
EMISSION REDUCTION CREDIT (ERC)
207
ENFORCEABLE
208
GENERATOR
209
OFFSET-CREATION RULE
210
OFFSETS
211
PERMANENT
212
QUALIFYING EMISSIONS
213
QUANTIFIABLE
214
REAL
Return to list of attachments
Return to list of attachments
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215
REGULATORY GENERATOR
216
SURPLUS
217
TRADITIONAL GENERATOR
SECTION 300 – STANDARDS
301
CERTIFICATION OF QUALIFYING EMISSION REDUCTIONS BY A TRADITIONAL
GENERATOR
302
VOLUNTARY REGISTRATION OF EMISSION REDUCTION CREDITS IN THE ARIZONA
EMISSIONS BANK
303
USE OF EMISSION REDUCTION CREDITS AS OFFSETS
SECTION 400 – ADMINISTRATIVE REQUIREMENTS
401
GENERATOR IMPLEMENTATION NOTIFICATION
402
FEES
SECTION 500 – MONITORING AND RECORDS
501
RECORDKEEPING AND RECORDS RETENTION
502
INSPECTIONS
503
TRADITIONAL GENERATOR RECORDKEEPING

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MARICOPA COUNTY AIR POLLUTION CONTROL REGULATIONS
REGULATION II - PERMITS AND FEES
RULE 203 (EMISSION REDUCTION CREDIT (ERC) GENERAL
REQUIREMENTS)
SECTION 100 – GENERAL
101
PURPOSE: To facilitate the issuance and trading of emission reduction credits (ERCs) for
use as offsets by providing a process for:
101.1 Generating emission reduction credits for reductions achieved by traditional
generators.
101.2 Certifying qualifying emission reductions as meeting offset requirements prior to
issuance of an ERC certificate.
101.3 Issuance of ERC certificates.
101.4 Registering ERCs in the Arizona Emissions Bank.
101.5 Using ERCs registered in the Arizona Emissions Bank as offsets to comply with the
New Source Review (NSR) requirements of Rule 240 (Federal Major New Source
Review) of these rules.
101.6 Using ERCs not registered in the Arizona Emissions Bank as offsets to comply with
the NSR requirements of Rule 240 of these rules.
102
APPLICABILITY: The provisions of this rule apply to the following persons and entities:
102.1 A traditional generator.
102.2 A regulatory generator.
102.3 The owner or operator of any new major stationary source or major modification to
an existing major stationary source that intends to use ERCs as offsets to obtain or
revise a MCAQD stationary source permit (credit user permit).
SECTION 200 – DEFINITIONS: For the purpose of this rule, the following definitions shall
apply in addition to those definitions found in Rule 100 (General Provisions and Definitions) of
these rules. In the event of any inconsistency between any of the Maricopa County Air Pollution
Control Regulations, the definitions in this rule take precedence.
201
ACCOUNT HOLDER: Any person or entity who has opened an account with the Arizona
Emissions Bank.
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202
ARIZONA EMISSIONS BANK: The system created by the Arizona Department of
Environmental Quality (ADEQ) to record and make publicly available information on the
issuance, certification, transfer, retirement, and use of emission reduction credits.
203
BASELINE EMISSIONS: The average rate, in tons per year as rounded down to the nearest
one tenth (1/10) of a ton, at which the generator actually emitted the pollutant during the
two preceding calendars years, or two calendar years more representative of normal
emissions within the 5-year period immediately before the reduction in qualifying emissions.
204
CERTIFIED CREDIT: A MERC or ERC that has met the criteria in these rules for certification
and has been issued by the Maricopa County Air Quality Department (MCAQD).
205
CREDIT USER: The applicant for a stationary source permit or permit revision (credit user
permit) that intends to use ERCs as offsets for compliance with federal New Source Review
requirements pursuant to Rule 240 of these rules.
206
EMISSION REDUCTION CREDIT (ERC): A reduction in qualifying emissions, expressed in
tons per year as rounded down to the nearest one tenth (1/10) of a ton issued by MCAQD.
ERCs do not have property rights associated with them.
207
ENFORCEABLE: Specific measures for assessing compliance with an emissions limitation,
control, or other requirement established in a permit or in this rule in a manner that allows
compliance to be readily determined by, but not limited to, an inspection of records and
reports.
208
GENERATOR: Any permitted source or other activity that has made or proposes to make
reductions in qualifying emissions.
209
OFFSET-CREATION RULE: A Maricopa County Air Pollution Control Regulation that has
been approved into the State Implementation Plan (SIP) and provides a method for allowing
emission reductions from specific activities to qualify as offsets.
210
OFFSETS: Reductions in actual emissions required under Rule 240 (Federal Major New
Source Review (NSR)) of these rules.
211
PERMANENT: A reduction in qualifying emissions used to offset emissions increases that
are enduring for the life of the corresponding emissions increase.
212
QUALIFYING EMISSIONS: Emissions of any conventional air pollutant, other than elemental
lead, or any precursor of a conventional air pollutant from any activity when generated within
the Maricopa County portion of any nonattainment area associated with the conventional air
pollutant.
213
QUANTIFIABLE: With respect to emissions, including the emissions involved in equivalent
emission limits and emission trades, capable of being measured or otherwise determined in
terms of quantity and addressed in terms of character. Quantification may be based on
emission factors, stack tests, monitored values, operating rates, and averaging times,
materials used in a process or production, modeling, or other reasonable measurement
practices.
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214
REAL: A reduction in actual emissions previously released to the air resulting from a
physical change or change to the method of operations by a generator.
215
REGULATORY GENERATOR: A generator that has achieved reductions in qualifying
emissions by compliance with an offset-creation rule.
216
SURPLUS: A reduction in qualifying emissions below the emission limitations and
standards used to comply with any otherwise federally applicable requirements, including a
required attainment plan, provided that the reduction is not relied upon to meet any
requirements in the State Implementation Plan (SIP).
217
TRADITIONAL GENERATOR: A generator that is an owner or operator of a stationary source
subject to a MCAQD permit (generator permit) and that intends to generate a reduction in
qualifying emissions.
SECTION 300 – STANDARDS
301
CERTIFICATION OF QUALIFYING EMISSION REDUCTIONS BY A TRADITIONAL
GENERATOR:
301.1 ERC Application:
a. A traditional generator may apply for ERCs for reductions in qualifying emissions
at any time after filing either of the following with the Control Officer:
(1) An application for a generator permit revision seeking the imposition of
conditions to make the reductions in qualifying emissions permanent and
federally enforceable; or
(2) A notice of generator permit termination seeking to make the shutdown of a
stationary source and the resulting reductions in qualifying emissions
permanent and federally enforceable.
b. An application for ERCs shall be filed with the Control Officer on the form
prescribed by the MCAQD and shall include:
(1) Information on the identity, type, ownership, and location of the traditional
generator.
(2) A description of the actions that have resulted or will result in the reductions
in qualifying emissions;
(3) Information on the amount of and methodology for calculating the reductions
in qualifying emissions for each pollutant subject to the application;
(4) Other information necessary to verify that the reductions in qualifying
emissions qualify as permanent, quantifiable, surplus, federally enforceable,
and real;
(5) The actual date or anticipated date of the reductions in qualifying emissions,
as applicable; and
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(6) A signed statement by a responsible official, as defined in Rule 100 (General
Provisions and Definitions), certifying the truthfulness and accuracy of all
information provided in the application.
301.2 Action on ERC Application: The Control Officer shall review the application for ERCs
and:
a. Issue one ERC for each ton, as rounded down to the nearest one tenth (1/10) of a
ton, per year of reduction that qualifies as permanent, quantifiable, surplus,
enforceable, and real; and
b. Provide the applicant with an ERC certificate representing the number of ERCs
issued.
c. If no emission reductions qualify to be certified, then no ERCs will be issued.
302
VOLUNTARY REGISTRATION OF EMISSION REDUCTION CREDITS IN THE ARIZONA
EMISSIONS BANK: ERCs may be registered in the Arizona Emissions Bank but registration
is not required.
302.1 Owner or Operator: The owner of operator of a generator shall:
a. Indicate on the MCAQD emission reduction credit application their plan to register
the ERCs in the Arizona Emission Bank; and
b. Open an Arizona Emissions Bank account per A.A.C. R18-2-1206.A.
302.2 Control Officer: The Control Officer shall notify the ADEQ in writing of the number of
ERCs issued to the generator.
303
USE OF EMISSION REDUCTION CREDITS AS OFFSETS:
303.1 ERCs Registered in the Arizona Emissions Bank:
a. An account holder who intends to use the ERCs under this rule held in its account
as offsets shall file an application to use the ERCs on the form prescribed by the
ADEQ.
b. On approval of the application by the ADEQ, the Control Officer shall review the
ERCs under Section 303 of this rule and either:
(1) Approve the use of the ERCs as offsets under Rule 240 of these rules and:
(a) Notify the user of the number of ERCs that may be used as offsets
included in the credit user permit or permit revision application; and
(b) If there are any remaining available ERCs, the Control Officer will reissue
the ERC certificate with a sequential revision number. This will provide
documentation on the availability of the remaining ERCs.
(2) Deny the use of a portion, or all of the ERCs for offsets under Rule 240 of
these rules and:
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(a) Provide written notification of the reason for denying the use of the ERCs
as offsets; and
(b) If there are any remaining available ERCs, the Control Officer, as
applicable, will return the ERC certificate to the owner or operator of the
stationary source or reissue the ERC certificate with a sequential revision
number. This will provide documentation on the availability of the
remaining ERCs.
c. The Control Officer shall provide notice to the ADEQ in writing of the final action
on the application for a credit user permit or for a credit user permit revision and
of any changes in the quantity of ERCs.
d. Reductions in qualifying emissions reflected in the quantity of ERCs shall be
implemented before actual operation of the new stationary source or
modification begins.
303.2 ERCs Not Registered in the Arizona Emissions Bank:
a. The owner or operator of a stationary source who intends to use ERCs that are
not registered in the Arizona Emissions Bank as offsets shall:
(1) Notify the MCAQD of the intention to use the ERCs as an offset to meet
emission limits; and
(2) Submit the ERC certificate of issued ERCs to the MCAQD in conjunction with a
stationary source permit application or permit revision.
b. The Control Officer shall review the ERCs under Section 303 of this rule and
either:
(1) Approve the use of the ERCs as offsets under Rule 240 of these rules and:
(a) Notify the user of the number of ERCs that may be included in the credit
user permit or permit revision application; and
(b) If there are any remaining available ERCs, the Control Officer will reissue
the ERC certificate with a sequential revision number. This will provide
documentation on the availability of the remaining ERCs.
(2) Deny the use of a porition, or all of the ERCs for offsets and:
(a) Provide written notification of the reason for denying the use of the ERCs
as offsets; and
(b) Return the certificate of issued ERCs to the owner or operator of the
stationary source.
c. Reductions in qualifying emissions reflected in the quantity of ERCs shall be
implemented before actual operation of the new stationary source or
modification begins.
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303.3 First In, First Out Accounting: The owner or operator of the stationary source using
ERCs must use the oldest credits in their possession first.
SECTION 400 – ADMINISTRATIVE REQUIREMENTS
401
Generator Implementation Notification: The generator shall provide written notification
to the Control Officer and credit user within 48 hours of completing implementation of the
qualifying emission reductions for which an ERC certificate was issued under this rule.
402
FEES
402.1 A fee may be charged for the following:
a. Preliminary ERC Calculations Review: For all time required by the Control Officer
to review the ERC calculations, at a rate of $149.20 per hour and adjusted
annually under § 402.2 of this rule. When review of ERC calculations is complete
the Control Officer shall send an itemized invoice. The invoice shall indicate the
total cost of reviewing ERC calculations and the balance due.
b. ERC Application Processing:
(1) The minimum fee due shall be an application fee of $200.
(2) For all time required by the Control Officer to review an ERC application, at a
rate of $149.20 per hour and adjusted annually under § 402.2 of this rule.
When application processing is completed the Control Officer shall send an
itemized invoice. The invoice shall indicate the total cost of evaluating and
acting upon the application, and the balance due.
c. Generator Permit: Permit fees applicable to either §§ 301.1a. or b. of this rule, as
set forth in Rule 280 (Fees) of these rules.
402.2 Fee adjustments: The Control Officer shall adjust the hourly rate in §§ 402.1a. & b.
every January 1, to the nearest 10 cents per hour, beginning on January 1, 2018. The
Control Officer will multiply $149.20 by the Consumer Price Index (CPI) for the most
recent year and then divide by the CPI for the year 2016.
SECTION 500 – MONITORING AND RECORDS
501
RECORDKEEPING AND RECORDS RETENTION: The records and data required by this
section shall be:
501.1 Kept on site at all times by the generator in a consistent and complete manner, in
either electronic or paper format.
501.2 Made available to the Control Officer no later than five business days upon verbal or
written request by the Control Officer.
501.3 Unless otherwise specified, maintained for five years after the record is created.
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501.4 Maintained without falsification.
501.5 Made available to the Control Officer upon written request by members of the public
using the County’s public records request process.
502
INSPECTIONS: A generator shall provide the Control Officer with access to the premises for
the purpose of conducting an inspection to verify compliance with this rule. An inspection
may include, but is not limited to, a review of records and reports.
503
TRADITIONAL GENERATOR RECORDKEEPING: The traditional generator shall maintain
information and records necessary to verify that the reductions in qualifying emissions
remain permanent, surplus, and real.

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NOTICE OF ACCOMMODATIONS: Individuals with disabilities. Assistive listening devices, large-printed materials, special
parking arrangements, and other accommodations are available with 72 hours advance notice. If you require
accommodations to participate in the above meeting, please contact Nicole Harden at the Public Health
Administration Department. (480) 281-8374.
BOARD OF HEALTH MEETING MINUTES
July 22, 2024 | 3:00-5:00 pm
4041 N. Central Avenue, 14th Floor, Phoenix, AZ
Legal Advice - A.R.S. §38-431.03(A)(3)
The Board may vote to go into Executive Session for the purpose of discussion or consultation for legal advice with the
attorney or attorneys of the Board on any matter listed on the agenda pursuant to A.R.S. §38-431.03 (A)(3). Members of
the Board of Health will attend either in person or by telephone conference call. Members attending telephonically will
be announced at the meeting. Agendas are available within 24 hours of each meeting in the Public Health
Administration office at 4041 N. Central Ave., 14th floor, Monday through Friday between 8:00 a.m. and 5:00 p.m.
ITEM
TOPIC/ACTION
TYPE
PRESENTER
1.
Call to Order
A. Roll Call
Members Present: Debra Baldauff, Matthew Farber, Cynthia Hardy,
Veronica Oros, Joanne Osborne, Lorenzo Sierra, Stefanie Schroder
Absent members: Supervisor Bill Gates, Robert MacMillan, Mary
Schraven
A quorum of (6) members was confirmed.
B. Call to the Public: There were no requests to speak.
Action
President
Osborne
2.
Approval of Minutes
President Osborne asked the Board for a motion to approve the April
22, 2024 minutes.
•
Motion: Stefanie Schroder
•
Second: Cynthia Hardy
Motion status: Approved unanimously
Discuss/
Action
President
Osborne
3.
Bylaws
Request the Board of Health for a vote of support and concurrence to
move the updated Bylaws to the Board of Supervisors (BOS) for
approval
President Osborne asked the Board for a motion to approve the
current bylaws.
•
Motion: Stefanie Schroder
•
Second: Cynthia Hardy
Motion status: Approved unanimously
Discuss/
Action
President
Osborne
4.
Acknowledgment of Officers
Acknowledge the term of current officers through July 2025
Discuss/
Action
President
Osborne
Return to list of attachments
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President Osborne nominated Dr. Matthew Farber.
Discuss/
Action
President
Osborne
6.
Environmental Services Dept. Fee Waiver Applications
Request the Board of Health approve fifteen (15) waiver applications

This quarter, we reviewed fifteen (15) fee waiver applications. Of the
applications reviewed, staff determined that all meet the criteria
outlined in the Maricopa County Environmental Health Code.

As a reminder, only an operator of a charitable nonprofit
establishment which operates to provide relief predominantly for the
poor, distressed, or underprivileged may apply to the Board of Health
for a waiver of a permit fee. A waiver of a permit fee may be granted
only to the operator of an establishment, which maintains a current
501(c)(3) tax-exempt designation from the Internal Revenue Service
and who demonstrates to the Board of Health that payment of said
fee will cause financial hardship.

Applications for waivers of Temporary Food Establishment fees will
be processed on a first come, first served basis in accordance with
Chapter I, Regulation 5 a. of the Environmental Health Code. The
Department shall only present a maximum of twenty-five (25) of such
applications per event to the Board of Health.

In addition, a waiver of fees associated with the administering and
issuance of a food employee certificate (in compliance with A.R.S. §
41-1080) may be granted to the operator of an establishment which
maintains a current 501(c)(3) tax-exempt designation from the
Internal Revenue Service or to a current student enrolled in a K-12
culinary arts school program or similar curriculum-based program
requiring food employee certificates. The organization or sponsoring
school district must demonstrate to the Board of Health that payment
of said fee will cause financial hardship.

Again, all fee waiver applications reviewed this quarter appear to
meet the criteria.
Discuss/
Action
Robert
Stratman
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I am happy to answer questions or if the Board has no questions, I
respectfully request approval of the applications on the Fee Waiver
Application Summary Sheet labeled P1 through P14 and C1.

President Osborne asked the Board for a motion to approve the fee
waiver applications.
•
Motion: Debra Bauldauff
•
Second: Stefanie Schroder
Motion status: Approved unanimously

7.
Air Quality Department

A. Air Quality Overview
President Osborne asked if Maricopa County looks at the health of
the residents every 5 years.
Philip McNeely responded that the EPA reviews data every 5 years at
a national level, not city or county level.

President Osborne asked what our smart devices are really telling us
when we receive notifications regarding the air.
Philip McNeely responded that the notifications are basically telling
us April through September the ozone is being affected more and try
to stay indoors as much as possible. October through March the
notifications are regarding the PM (particle matter) 2.5 levels (smoke
and soot).

President Osborne asked if there is a new air pollutant standard is
coming.
Philip McNeely responded the EPA is currently re-evaluating the
2015 ozone standard and could lower it or keep it the same.

President Osborne asked for clarification of the lack of submission of
the SIP (State Implement Plan) regarding Ozone NAAQS because they
couldn’t find a model that would move the needle.
Philip McNeely responded that MAG did not submit the SIP because
they have to conduct air modelling to show EPA that the region will
meet the 70 ppb ozone standard at the monitors. Currently, their
model does not show that so they did not submit the SIP. We need
more scientific data from EPA to determine how to reduce the ozone
concentrations.
Discuss/
Action
Philip
McNeely

Gregory
Verkamp &
Kimberly
Butler
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President Osborne asked if the chip manufacturing falls into any of
the current rules being presented today.
Philip McNeely responded that one of the rules being presented
today was to reduce VOC and NOX at chip manufacturers.

President Osborne asked if a lot of the new manufactures will have
to keep in alignment with the new rules being presented today.
Philip McNeely responded that yes but good news is RACT is only
Reasonable Available Controlled Technology and Intel uses a higher
standard. They have to comply with current standards.

B. Approve expedited rulemaking process for the following
rule:

AQ-2024-008
Rule 203 (Emission Reduction Credit (ERC) General
Requirements)

The Maricopa County Air Quality Department (MCAQD) is proposing
to create Rule 203 in an effort to consolidate general ERC
requirements into one rule. In addition, MCAQD is proposing to
include the application and certification provisions for ERCs created
through traditional (permitted) sources in Rule 203.

President Osborne asked the Board for a motion to approve Rule 203
(Emission Reduction Credit (ERC) General Requirements)
•
Motion: Dr. Matthew Farber
•
Second: Debra Bauldauff
Motion status: Approved unanimously

C. Make a recommendation to the Board of Supervisors to
approve the creation of the following rule:

AQ-2023-002
Rule 326 (Steelmaking Operations: Electric Arc Furnaces)

MCAQD is proposing a new rule to implement reasonably available
control technology (RACT) controls to limit the discharge of volatile
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President Osborne asked the Board for a motion to approve Rule 326
(Steelmaking Operations: Electric Arc Furnaces)

•
Motion: Stefanie Schroder
•
Second: Cynthia Hardy
Motion status: Approved unanimously

D. Make a recommendation to the Board of Supervisors to
approve the proposed revisions of the following rules:

AQ-2022-004
Rule 330 (Volatile Organic Compounds)

MCAQD is proposing to revise Rule 330 to clarify the applicability of
the rule and update and restructure the rule.

AQ-2023-003
Rule 331 (Solvent Cleaning)

MCAQD is proposing to revise Rule 331 to remove a RACT deficiency
identified by the U.S. Environmental Protection Agency so Rule 331
can be approved into the Arizona State Implementation Plan as
meeting RACT.

AQ-2023-004
Rule 338 (Semiconductor Manufacturing)

MCAQD is proposing to revise Rule 338 to incorporate RACT controls
for nitrogen oxide emissions generated during the semiconductor
manufacturing process. In addition, MCAQD is proposing to revise
some of the volatile organic compound controls in the rule to ensure
the controls continue to implement RACT.

President Osborne asked the Board for a motion to approve AQ-
2022-004, Rule 330 (Volatile Organic Compounds), AQ-2023-003
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•
Motion: Debra Bauldauff
•
Second: Stefanie Schroder
Motion status: Approved unanimously

8.
Public Health Updates

A. 2024 Arizona Legislative Session Summary and Budget
Overview
Lorenzo Sierra asked what percentage of the overall funds are
represented.
Kellie MacDonald-Evoy responded that it’s approximately 1 billion
Jeanene Fowler also responded that all cities and counties in the
state sign the Want Arizona Agreement which determines how money
can be used.

Lorenzo Sierra requested website information on Opioid Settlement
funds be sent to him. (An email with the link was sent to the Board Members on
Tuesday, July 23, 2024.)

B. Tobacco Update
President Osborne asked when new data on the Arizona Youth Risk
Behavior Survey will be released.
Michael Wydra responded the information will be available
September 2024.

President Osborne asked for clarification of age to purchase
cigarettes.
Michael Wydra confirmed the age is 21.

President Osborne asked if vapes are taxed same as cigarettes.
Michael Wydra responded they are not, but the topic would have to
go back to legislature in order to be included.

President Osborne asked if there is anything Maricopa county can do
to find more or better solutions for prevention and/or cessation.
Michael Wydra responded to just keep working on getting the word
out as much as possible.

Discuss

Jeanene
Fowler

Kellie
MacDonald-
Evoy

Michael
Wydra

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Action
President
Osborne

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Maricopa County
Air Quality Department
Planning and Analysis Division
Maricopa.gov/AQ