DEPARTMENT OF ENVIRONMENTAL QUALITY
SURFACE WATER QUALITY DIVISION
WATER RESOURCES PROTECTION

(by authority conferred on the department of environmental quality by
sections 3103 and 3106 of 1994 PA 451, MCL 324.3103 and 324.3106)

Part 30. Water Quality Trading

R 323.3001 Definitions. Rule 1. As used in this part: (a) "Act" means part 31, water resources protection, 1994 PA 451, MCL 324.3101 et seq. (b) "Administrator" means the administrator of the United States environmental protection agency. (c) "Applicable requirement" means any of the following: (i) A standard of performance, management practice, effluent limitation, total maximum daily load, recordkeeping, monitoring, or reporting requirement established by the clean water act, 40 C.F.R. §25 (2000), 40 C.F.R. §117 (2000), 40 C.F.R. §121 (2000), 40 C.F.R. §122 (2000), 40 C.F.R. §123 (2000), 40 C.F.R. §124 (2000), 40 C.F.R. §125 (2000), 40 C.F.R. §129 (2000), 40 C.F.R. §130 (2000), 40 C.F.R. §131 (2000), 40 C.F.R. §132 (2000), 40 C.F.R. §133 (2000), 40 C.F.R. §135 (2000), 40 C.F.R. §136 (2000), 40 C.F.R. §140 (2000), 40 C.F.R. subchapter n (2000), 40 C.F.R. 471 (2000), 40 C.F.R. subchapter o (2000) or part 31, water resources protection, 1994 PA 451, MCL 324.3101 et seq. and rules promulgated under the act. (ii) A national permit issued or order entered by the department. (iii) A consent judgement entered in, or an order issued by, a court of competent jurisdiction. (iv) A watershed management plan approved by the department pursuant to this part. (v) A plan developed and funded under a grant administered by the department under section 319 of the clean water act. (d) "Attainment area" means a waterbody, a receiving water, or watershed where water quality standards are being met. (e) "Banked credits" means credits for total phosphorus and total nitrogen that are generated and that have been registered prior to the time period during which they are used or traded under this part. (f) "Baseline" means the pollutant-specific point source discharge or nonpoint source loading level below which reductions must be made to generate a credit. (g) "Best management practices" means structural, vegetative, or managerial practices that reduce or prevent the detachment, transport, and delivery of point and nonpoint source pollutants to the surface waters. (h) "Calendar year" means the time period from January 1 until December 31 inclusive for a given year. (i) "Cap" means the combined total allowable pollutant-specific point source discharges and nonpoint source loadings established by a total maximum daily load or specified in a watershed management plan which has been approved under this part. (j) "Clean water act" means the federal water pollution control act, commonly referred to as the clean water act, Public Law 92-500, as amended by Public Law 95-217, Public Law 95-576, Public Law 96-483, Public Law 97-1171, and Public Law 100-4, 33 U.S.C. §1251 et seq. (k) "Closed trading" means the exchange of credits among or between point and nonpoint sources in a watershed or receiving water for which a pollutant-specific cap and allocations have been established to achieve or maintain a water quality standard or to implement a watershed management plan approved under this part. (l) "Contemporaneous" means that the generation of credits occurs during the same day, week, month, season, calendar year, or other specified time period during which the credits are used to comply with an applicable requirement. (m) "Credit" means the pollutant-specific point source discharge reduction or nonpoint source load reduction, minus the water quality contribution, that is generated and entered into the water quality trading registry and which may be used or traded under this part. (n) "Cross-pollutant trading" means the use of discharge or load reductions generated for one pollutant to be used to compensate for an increase in the discharge or loading of a different pollutant. (o) "Department" means the Michigan Department of environmental quality. (p) "Directionality" means an upstream discharge or load reduction to compensate for a downstream use of credits. (q) "Director" means the director of the department. (r) "Discharge reduction" means the difference between the baseline and the reduced discharge level that constitutes the surplus pollutant-specific reduction generated by a point source. (s) "Discount factor" means a trading ratio different than 1:1 that is applied to different sources or different pollutants to provide equivalency or address uncertainty. (t) "Intra-plant trading" means the generation and use of credits between multiple outfalls discharging into the same receiving water from a single facility that has been issued a national permit. (u) "Lakewide management plan" means a plan developed and implemented to address critical pollutants pursuant to the Great lakes water quality agreement of 1978, as amended. (v) "Load allocation" means the portion of a receiving water's loading capacity that is attributed to a nonpoint source or group of nonpoint sources under a total daily maximum load or a watershed management plan approved under this part. (w) "Loading capacity" means the greatest amount of pollutant loading that a receiving water can receive without violating water quality standards. (x) "Load reduction" means the difference between the baseline and the reduced loading level that constitutes the surplus pollutant-specific reduction generated by a nonpoint source. (y) "National permit" means a national pollutant discharge elimination system permit, or equivalent document or requirements, issued by the department to a discharger pursuant to part 31, water resources protection, 1994 PA 451, MCL 324.3101 et seq. for discharges into surface waters, and "permitted" refers to this permit. (z) "Nonpoint source" means a source of pollutant loading to the surface waters of the state other than a source defined as a point source. (aa) "Nutrient trading" means the generation and use of total phosphorus or total nitrogen credits among and between point and nonpoint sources. (bb) "Open trading" means the exchange of credits among or between point and nonpoint sources in a watershed or receiving water for which a total maximum daily load or a pollutant-specific cap and allocations have not been established by an applicable requirement. (cc) "Person" means an individual, partnership, association, corporation, industry, municipality, state agency, or interstate body. (dd) "Point source" means a discharge that is released to the surface waters of the state by a discernible, confined, and discrete conveyance, including any of the following from which wastewater is or may be discharged: (i) A pipe. (ii) A ditch. (iii) A channel. (iv) A tunnel. (v) A conduit. (vi) A well. (vii) A discrete fissure. (viii) A container. (ix) A concentrated animal feeding operation. (x) A vessel or other floating craft. (ee) "Pollution prevention" means source reduction and environmentally sound on-site or off-site reuse or recycling. Pollution prevention includes equipment or technology modifications, substitution of raw materials, process or procedure modifications and improvements in housekeeping, maintenance, or inventory control. Pollution prevention does not include a practice applied after a waste or wastewater has been generated and does not promote, include, or require incineration. Waste treatment, control, management, or disposal are not considered pollution prevention. (ff) "Quantifiable" means that the amount, rate, and characteristics of a discharge reduction or increase can be determined or measured through an accurate, reliable, and replicable method, procedure, or set of calculations established by an applicable requirement or approved by the department or the administrator. (gg) "Real" means a change that results in a point source discharge or nonpoint source load reduction. (hh) "Reasonable further progress" means incremental point source discharge or nonpoint source load reductions to achieve water quality standards or to implement a total maximum daily load established pursuant to section 303(d) of the clean water act. (ii) "Reduced discharge level" means the real, surplus, and quantifiable pollutant-specific discharge reduction achieved by a point source. (jj) "Reduced loading level" means the real, surplus, and quantifiable pollutant-specific load reduction that is achieved by a nonpoint source. (kk) "Remedial action plan" means a plan developed and implemented to address an area of concern pursuant to the Great lakes water quality agreement of 1978, as amended. (ll) "Responsible individual" means, for the purposes of signing and certifying as to the truth, accuracy, and completeness of a notice and certification required by this part, any of the following: (i) For a corporation, then a president, secretary, treasurer, or vice-president in charge of a principal business function, or any other person who performs similar policy or decision making functions for the corporation, or an authorized representative of that person if the representative is responsible for the overall operation of 1 or more manufacturing, production, or operating facilities. (ii) For a partnership or sole proprietorship, then a general partner or the proprietor. (iii) For a county or municipality or a state, federal, or other public agency, then either a principal executive officer or ranking elected official. For this purpose, a principal executive officer of a federal agency includes the chief executive officer having responsibility for the overall operations of a principal geographic unit of the agency. (mm) "Source reduction" means any practice which reduces either of the following: (i) The amount of any hazardous substance, pollutant, or contaminant entering any wastestream or otherwise released into the environment before recycling, treatment, or disposal. (ii) Hazards to public health and environment associated with the release of a substance, pollutant, or contaminant. (nn) "Surface waters of the state" means all of the following, but does not include drainage ways and ponds used solely for wastewater conveyance, treatment, or control: (i) The Great Lakes and their connecting waters. (ii) All inland lakes. (iii) Rivers. (iv) Streams. (v) Impoundments. (vi) Open drains. (vii) Other surface bodies of water within the confines of the state. (oo) "Surplus" means a point source discharge or nonpoint source load reduction greater than that required by an applicable requirement. (pp) "Total maximum daily load" means the maximum amount of a specific pollutant that a waterbody can assimilate and still meet applicable water quality standards and which has been established pursuant to section 303(d) of the clean water act or R 323.1207. (qq) "Trade" means the purchase, sale, conveyance, or other transfer of a registered credit from one person or source to another person or source under this part. (rr) "Trading activities" means all requirements established and all activities regulated by this part. (ss) "True-up" means to correct or make whole an insufficient quantity of discharge reductions and credits that are generated and registered, used, or traded. (tt) "Unregulated source" means any point or nonpoint source for which performance standards, effluent limitations, work practices, and monitoring requirements have not been established by an applicable requirement. (uu) "Use" means the application of a credit to comply with a water quality-based effluent limitation or other applicable requirement or the retirement of a credit to provide a water quality benefit. (vv) "Water quality-based effluent limitation" means a discharge limit developed for a national permit that will ensure that the level of water quality to be achieved by the point source complies with all applicable water quality standards. (ww) "Water quality standards" means R323.1041 et seq. developed under part 31, water resources protection, 1994 PA 451, MCL 324.3101 to 324.3119. (xx) "Wasteload allocation" means the pollutant-specific allocation for an individual point source, which ensures that the level of water quality to be achieved by the point source complies with all applicable water quality standards. (yy) "Watershed" means an area of the land that drains to a common lake, pond, river, stream, or other surface waters of the state delineated and designated as a trading area under this part. (zz) "Watershed management plan" means a comprehensive water resource plan approved by the department under this part and that includes a cap, point and nonpoint source allocations, responsible parties, management strategies to improve water quality or achieve and maintain water quality standards in a specific receiving water or watershed. History: 2002 MR 21, Eff. Nov. 22, 2002. Back to top R 323.3002 Purpose. Rule 2. (1) The purpose of this part is to establish a voluntary statewide water quality trading program which has all of the following goals: (a) Improving water quality and optimizing the costs of achieving and maintaining water quality standards. (b) Creating economic incentives for voluntary nonpoint source load reductions, point source discharge reductions beyond those required by the clean water act, implementation of pollution prevention programs, wetland restoration and creation, and the development of emerging pollution control technologies. (c) Facilitating the implementation of total maximum daily loads, urban storm water control programs, and nonpoint source management practices required under the clean water act. Nothing in this part shall be construed to obviate the requirement to develop a total maximum daily load for waters that do not meet water quality standards as required by section 303(d) of the clean water act or to delay implementation of a total maximum daily load that has been approved by the department and the administrator. (d) Providing incentives for the development of new and more accurate and reliable quantification protocols and procedures. (e) Providing greater flexibility through community-based, nonregulatory, and performance-driven watershed management planning. History: 2002 MR 21, Eff. Nov. 22, 2002. Back to top R 323.3003 Applicability. Rule 3. (1) This part shall apply to all persons and sources that participate in water quality trading. (2) This part shall apply to the generation, registration, use, banking, and trading of credits and all trading activities that occur under this part. History: 2002 MR 21, Eff. Nov. 22, 2002. Back to top R 323.3004 General requirements. Rule 4. (1) The generation, use, and trading of credits among and between point and nonpoint sources shall occur within the same receiving water or watershed designated under this part. (2) Credits shall be generated before or contemporaneously with the time they are used or traded. (3) The generation, use, and trading of credits and all trading activities approved under this part shall be consistent with the following, if applicable: (a) A total maximum daily load established pursuant to section 303(d) of the clean water act. (b) A remedial action plan. (c) A lakewide management plan. (d) A watershed management plan approved by the department under this part. (4) Credits used to comply with a daily, weekly, monthly, or seasonal effluent limitation established to achieve or maintain water quality standards in a stream or a lake with a retention time of less than 1 year shall be generated during the same time period for which the effluent limitation applies. History: 2002 MR 21, Eff. Nov. 22, 2002. Back to top R 323.3005 Prohibitions and restrictions. Rule 5. (1) The use of credits that would cause a violation of water quality standards is prohibited. (2) Credits generated in one watershed shall not be used or traded in a different watershed. This rule shall not prohibit credits generated in a nonattainment area being used in an attainment area within a watershed designated in a watershed management plan approved by the department under this part. (3) Trading activities for any bioaccumulative chemical of concern listed below are prohibited: (a) Chlordane. (b) 4,4'-ddd. (c) 4,4'-dde. (d) 4,4'-ddt. (e) Dieldrin. (f) Hexachlorobenzene. (g) Hexachlorobutadiene. (h) Hexachlorocyclohexanes. (i) Alpha-hexachlorocyclohexane. (j) Beta-hexachlorocyclohexane. (k) Delta-hexachlorocyclohexane. (l) Lindane. (m) Mercury. (n) Mirex. (o) Octachlorostyrene. (p) Polychlorinated biphenyls (pcbs). (q) Pentachlorobenzene. (r) Photomirex. (s) 2,3,7,8-tcdd. (t) 1,2,3,4-tetrachlorobenzene. (u) 1,2,4,5-tetrachlorobenzene. (v) Toxaphene. (4) Except as provided under 40 C.F.R. §420.03 (2000), and other types of trades approved by the department and the administrator, credits shall not be used to comply with a technology-based effluent limitation. (5) Nothing in this part shall be construed to obviate the need to obtain a national permit or a permit modification required by an applicable requirement. A point source is prohibited from participating in trading under this part unless a national permit has first been obtained as required under the clean water act. (6) Nothing in this part shall be construed to prohibit a municipality or regional sewerage authority from developing and implementing its own pretreatment trading program for the purposes of complying with local limitations and to comply with federal technology-based categorical standards to the extent allowed under federal regulations. (7) The use of banked credits shall occur in a manner consistent with this part, shall be approved by the department before any such activity occurs, and shall be restricted to the following: (a) Complying with a 1 milligram per liter water quality-based effluent limitation established under R 323.1060(1). (b) Complying with a water quality based effluent limitation for a source that discharges into a lake or other water body with a retention time of more than 1 year. (8) Banked credits shall not be used to comply with a daily, weekly, monthly, or seasonal water quality-based effluent limitation by a source that discharges into a stream or a lake with a retention time of less than 1 year. History: 2002 MR 21, Eff. Nov. 22, 2002. Back to top R 323.3006 Eligibility requirements for generation of point source discharge and nonpoint source load reductions and credits. Rule 6. (1) For discharge or load reductions to be generated and registered as credits, all of the following conditions shall be met: (a) The discharge or load reductions shall be generated after the effective date of this part. (b) The discharge or load reductions shall be real, surplus, and quantifiable. (c) The control devices or management practices that have been installed or implemented have been fully and properly maintained from the time they were established and remain so for the time they are registered to generate credits. (2) Discharge or load reductions to generate credits may be created by any of the following: (a) Installation or modification of water pollution control equipment. (b) Operational changes and the modification of a process or process equipment. (c) Reformulating raw materials or products. (d) Implementation of pollution prevention programs. (e) Implementation of energy conservation programs. (f) Implementation of early discharge or load reductions before a compliance date specified by an applicable requirement defined in R 323.3001(c)(i); but not for early compliance with a schedule resulting from violations of applicable requirements defined in R 323.3001(c)(i). (g) Implementation of nonpoint source management practices. (h)Implementation of storm water controls or management practices. (i) Restoring or creating and maintaining a wetland. (j) The installation of equipment or implementation management practices at orphan sites of environmental contamination to control discharges to the waters of the state by a person or party that is not responsible for the contamination or liable for response activities under state and federal regulations. (k) The installation, operation, and maintenance of drainage projects designed to control storm water as part of a county drain improvement project. (l) Implementation of streambank erosion controls. (m) Other pollution controls or management practices approved by the department. (3) Discharge or load reductions required to achieve compliance with a technology-based effluent limitation established by an applicable requirement shall not be eligible to generate credits under this part. (4) A source that generates discharge or load reductions and credits to be used or traded shall discharge directly or otherwise be connected to the receiving water or watershed in which the credits are used or traded. (5) Discharge or load reductions made by a source in violation of a monitoring, recordkeeping, or reporting requirement applicable to the specific pollutant for which the discharge or load reduction has been made shall not be eligible to generate credits under this part. (6) The implementation of management practices or the installation of control structures required to eliminate the discharge of manure or runoff containing manure or other animal wastes from agricultural operations shall not be eligible to generate credits after 5 years from the effective date of this part. (7) Generally accepted agricultural management practices required to abate a nuisance complaint referred to the department under the Michigan right to farm act, 1981 PA 93, MCL 286.471 et seq., shall not be eligible to generate a discharge reduction credit under this part. (8) Nonpoint source load reductions which result from implementation of management practices or the installation of control structures under programs administered by the United States department of agriculture, natural resource conservation service, shall be eligible to generate credits in direct proportion to the percent local match and any contribution greater than the local match required under these federal programs. (9) Nonpoint source load reductions which result from implementation of projects or programs funded by 1998 PA 288, MCL 324.19601 et seq. and §319 of the clean water act shall not be eligible to generate credits under this part. (10) Nothing in this rule shall be construed to prohibit or restrict a municipality from generating credits by installing controls or implementing management practices under publicly funded projects or programs implemented within the same jurisdiction. (11) Sources that install control devices or implement management practices to control streambank erosion or storm water or agricultural runoff as part of a pilot project conducted with approval by, or involving the active participation of, the department shall be eligible to generate credits that may be used for trading under this part if all of the following conditions are met: (a) The control devices have been installed or the management practices implemented within the 18-month period immediately proceeding the effective date of this part. (b) The control devices or management practices have been installed or implemented in a manner that is consistent with all applicable provisions of this part. (c) All applicable requirements established under this part shall be fully complied with, including the requirements to establish baselines, load reductions and reduced loading levels and the submittal of notices and annual reports. (d) The notice and certification required under R 323.3019(1) shall be submitted to the department within 6 months of the effective date of this part. History: 2002 MR 21, Eff. Nov. 22, 2002. Back to top R 323.3007 Nutrient trading; contemporaneous upstream reduction requirements; credit use. Rule 7. (1) Open nutrient trading may occur in an attainment area or other area where a total maximum daily load has not been established and a watershed management plan has not been approved for purposes of trading under this part if either of the following conditions is met: (a) There is a contemporaneous upstream generation of credits to compensate for a use of credits to comply with a water quality-based effluent limitation or other applicable requirement. (b) The source using credits to comply with a water quality-based effluent limitation or other applicable requirement discharges to the same receiving water or watershed either upstream or downstream of the source which generates the credits and both of the following conditions are met: (i) The generation of credits is contemporaneous with the use of credits. (ii) The sources which generate and use credits are upstream of the site in the receiving water or watershed for which the applicable water quality-based effluent limitation has been established to meet water quality standards. (2) The use of credits pursuant to subdivisions (a) and (b) of this subrule shall not be construed to constitute a lowering of water quality pursuant to R 323.1098(8)(k). (3) The use of credits by a point source to increase the discharge of total phosphorus or total nitrogen under the provisions of R 323.3020 shall be limited to a 20% increase above the discharge level authorized in a national permit, unless a greater use of credits is specifically authorized by special conditions in the permit or by a formal permit modification approved by the department in accordance with federal and state permit regulations and the provisions of this part. The 20% increase of total phosphorus and total nitrogen above the discharge level shall be authorized in the point source national permit before the point source can use credits. History: 2002 MR 21, Eff. Nov. 22, 2002. Back to top R 323.3008 Nutrient trading in areas for which a total maximum daily load or a watershed management plan has been established. Rule 8. (1) Closed nutrient trading may occur within a receiving water or in a watershed where water quality standards are not being met for the pollutant that is being traded if all of the following conditions are met: (a) A total maximum daily load for the nutrient to be traded has been approved by the department and the administrator pursuant to section 303(d) of the clean water act. (b) The point sources and nonpoint sources that generate, use, or trade credits shall be located in the same nonattainment area and included in the inventory upon which the total maximum daily load is based. (c) The nutrient cap, point source waste load allocations and nonpoint source load allocations shall constitute the respective baselines for the generation, use, and trading of credits. (d) The generation, registration, use, and trading of credits shall be consistent with the total maximum daily load and this part. (2) Closed nutrient trading may occur within any receiving water or in a watershed for which a watershed management plan has been prepared for the purpose of trading if all of the following conditions are met: (a) The watershed management plan has been approved by the department pursuant to the provisions of R 323.3023. (b) The point sources and nonpoint sources that generate, use, and trade credits shall be located in the same receiving water or watershed and included in the inventory upon which the watershed management plan is based. (c) The nutrient cap and point source wasteload allocations, and nonpoint source load allocations specified in the watershed management plan to achieve or maintain water quality standards shall constitute the respective baselines for the generation and use of credits. (d) The generation, registration, use, and trading of credits shall be consistent with the approved watershed management plan and this part. History: 2002 MR 21, Eff. Nov. 22, 2002. Back to top R 323.3009 Other types of trading; trading of pollutants other than nutrients; intra-plant trading; cross-pollutant trading; trading under a remedial action or lakewide management plan. Rule 9. (1) Except for the provisions in R 323.1005(3), nothing in this part shall be construed to prohibit the department from approving other types of water quality-based trades that are not specifically provided for in this part. Trades that are not specifically provided for in this part, including trading of pollutants other than total phosphorus and total nitrogen, intra-plant trading, and cross pollutant trading, must be authorized in national permits. (2) Trading of pollutants other than total phosphorus and total nitrogen, intra-plant trading, cross pollutant trading, trading under a remedial action or lakewide management plan, and any other types of trades shall occur in a manner consistent with all applicable requirements of this part and shall be approved by the department before any such activity occurs. (3) A person or source seeking to engage in other types of trades under subrule (2) of this rule shall do either of the following: (a) Demonstrate that social or economic development and the benefits to the area in which the receiving waters are located would be forgone if the use of credits is not allowed in accordance with the provisions of R 323.1098(4). (b) Show that the use of credits does not constitute a lowering of water quality pursuant to R 323.1098(8) or (9). (4) Other types of trades that are embodied in or affect a national permit shall be subject to final approval by the United States environmental protection agency. History: 2002 MR 21, Eff. Nov. 22, 2002. Back to top R 323.3010 Baselines; general requirements. Rule 10. (1) Baselines shall be established by using the most accurate, representative, and reliable process and operational information, flow and monitoring data, discharge and loading data, and records that are available. The baseline and discharge and load reductions shall be calculated using methods and procedures specified by an applicable requirement where they exist. (2) Unless specified otherwise by an applicable requirement, the baseline for all sources, except storm water sources regulated under a national permit for which a numerical effluent limitation has not been established, shall be established by using the information and data representative of the 3?year period before the date that a change is made to generate a discharge or load reduction. A different time period that is more representative of historical operations and provides more accurate and reliable actual discharge or existing loading data may be used if approved by the department. (3) The baseline for storm water sources regulated under a national permit for which a numerical effluent limitation has not been established shall be the pollutant-specific loading achieved through implementation of management practices specified in or approved under a national permit at the time a change is made to generate a discharge or load reduction. (4) Unless specified otherwise by an applicable requirement, baselines for agricultural, industrial, urban, and residential storm water runoff shall be calculated by using the meteorological information and precipitation data for a 10-year period or the period-of-record, whichever is longer. This information and data shall be obtained from the nearest national weather service station unless a different location or source is approved by the department. History: 2002 MR 21, Eff. Nov. 22, 2002. Back to top R 323.3011 Baseline for point sources other than storm water; reduced discharge level; generation of discharge reductions and credits. Rule 11. (1) The point source baseline shall be the actual or allowed discharge level that complies with the most protective of any of the following: (a) A water quality-based effluent limitation established by an applicable requirement. (b) A cap and wasteload allocation specified under a total maximum daily load. (c) A cap and wasteload allocation specified in a watershed management plan approved by the department under this part. (d) A cap and wasteload allocation determined by the department to be consistent with water quality standards and specified in a remedial action plan or lakewide management plan. (2) Margins of safety achieved in practice shall be maintained by using the actual discharge flows and concentrations to calculate the baseline under subrule (3) of this rule. (3) The point source baseline shall be expressed in the pounds of a specific pollutant discharged per day and calculated by using the following equation:

B = f x c x k where: B = the baseline f = flow expressed in million gallons per day (mgd) c = pollutant concentration expressed in milligrams per liter (mg/l) k = a unit conversion constant of 8.346 liter pounds per million gallons milligrams. (4) The reduced discharge level (RDL) which will result after changes or methods and procedures have been implemented to generate discharge reductions shall be calculated by using the following equation:

RDL = f_r x c_r x k

RDL = reduced discharge level F_r = flow after changes have been made to generate discharge reductions, expressed in million gallons per day (mgd) C_r = pollutant concentration after changes have been made to generate discharge reductions, expressed in milligrams per liter (mg/l) k = a unit conversion constant of 8.346 liter pounds per million gallons milligrams. (5) The quantity of discharge reductions generated shall be determined by subtracting the reduced discharge level calculated under subrule (4) of this rule from the baseline calculated under subrule (3) of this rule. (6) The quantity of credits generated and which may be registered under R 323.3019(1) shall be the quantity of discharge reductions calculated under subrule (5) of this rule minus the water quality contribution required under R 323.3016(1). (7) The same methods and procedures shall be used to calculate the baseline, reduced discharge level, discharge reductions generated, and credits. The baseline, reduced discharge level, and quantity of discharge reductions generated shall be expressed in the same units. History: 2002 MR 21, Eff. Nov. 22, 2002. Back to top R 323.3012 Baseline for sources of storm water regulated under a national permit; reduced discharge or loading level; generation of discharge or load reductions and credits. Rule 12. (1) The baseline shall be the numerical effluent limitation or the pollutant-specific loading achieved after implementation of management practices specified in or approved under a national permit. (2) The baseline, reduced discharge level, generation of discharge reductions, and credits for storm water sources with numerical effluent limitations specified by a national permit shall be calculated by using R 323.3011(2), (3), (4), (5), (6), and (7). (3) The baseline, reduced loading level, generation of load reductions, and credits for storm water sources controlled through the implementation of management practices specified by national permit shall be calculated by using R 323.3013(2), (3), (4), (5), and (6). (4) Monitoring data and actual measurements of load reductions achieved in practice from changes in land use, pollution control facilities, and implementation of management practices shall be used where required by a permit; and, otherwise, may be used where such information is available. History: 2002 MR 21, Eff. Nov. 22, 2002. Back to top R 323.3013 Baseline for unpermitted nonpoint sources of storm water runoff other than agriculture, reduced loading level, and generation of load reductions and credits. Rule 13. (1) The storm water runoff baseline shall be either of the following: (a) For nonpoint sources that are not subject to an applicable requirement, the pollutant-specific loading associated with existing land uses and management practices, if any. (b) For nonpoint sources that are subject to an applicable requirement, the most protective of any of the following: (i) A pollutant-specific cap and loading allocation specified in a total maximum daily load. (ii) A pollutant-specific cap and loading allocation or the management practices specified in watershed management plan approved by the department under this part. (iii) A pollutant-specific cap and loading allocation or the management practices determined by the department to be consistent with water quality standards and specified in a remedial action plan or lakewide management plan. (2) If not otherwise specified by an applicable requirement, the storm water runoff baseline shall be calculated by using the equations in this subrule. (a) The pollutant-specific loading factor (ml) shall be computed for each land use (l) within a watershed or drainage area by the following equation 1: M_L = EMC_L x R_L x K where: M_L = pollutant-specific loading factor for land use L (lbs/ac/yr). EMC_L= event mean concentration of storm water runoff from a specific land use L (mg/l) as specified in table 1 or as approved by the department on a case-by-case basis. R_L = total average annual storm water runoff from land use L computed from equation 2 (in/yr). K = 0.2266, a unit conversion constant, for all parameters.

Table 1. Event mean concentrations

Land use category (non-site specific)	Percent Impervious	TSS (mg/l)	BOD (mg/l)	TP (mg/l)	DP (mg/l)	TKN (mg/l)	NO₂₊₃ < /p> (mg/l)	Pb (ug/l)	Cu (ug/l)	Zn (ug/l)	Cd (ug/l)
Forest/rural open	N/a	51	3	0.11	0.027	0.94	0.80	0.0 < o:p>	0.0 < o:p>	0.0 < o:p>	0.0
Urban open	0.5%	51	3	0.11	0.03	0.94	0.80	14.2	0.0 < o:p>	40.2	0.8
Agricultural	N/a	145 < o:p>	3	0.37	0.09	1.92	4.06	0.0 < o:p>	0.0 < o:p>	0.0 < o:p>	0.0
Low density residential	10.0%	70	38	0.52	0.27	3.32	1.83	56.9	26.2	161.1	3.9
Medium density residential	30.0%	70	38	0.52	0.27	3.32	1.83	56.9	26.2	161.1	3.9
High density residential	N/a < o:p>	97

Michigan Water Quality Trading Rules