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Solution for Environment & Economic Development (SEED)

​The purpose of the Solution for the Environment and Economic Development (SEED) program is two-fold: 1) provide regulatory flexibility to industry, and 2) fund innovative technologies that achieve emission reductions beyond the commitments in state and federal air quality attainment plans. Under the program, businesses and other entities borrow emission reduction credits (ERCs) held by the Sac Metro Air District. Revenue obtained from loans fees is disbursed to innovative emission reduction projects that are recommended by the Air Pollution Control Officer and approved by the Board of Directors.

Rule 205 – Community Bank and Priority Reserve Bank governs the issuance of ERC loans and disbursement of revenue. ERC loans may be used to provide offsets under Rule 202 – New Source Review, to comply with specified prohibitory rules under Rule 107 – Alternative Compliance, to comply with a conformity determination under Rule 104 – General Conformity, to use as mitigation under the California Environmental Quality Act (CEQA) or a functionally equivalent program pursuant to Public Resources Code section 21080.5.

Priority Reserve Bank

The Priority Reserve Bank consists of two accounts. The Essential Public Services Account provides ERC loans to sources considered to be essential public services, such as schools, hospitals, prisons and sewage treatment plants. The Military Base Account provides ERC loans for use or reuse of a military base.

Community Bank

The Community Bank provides loans of ERCs to public and private entities that are not essential public services and not for use or reuse of a military base.

Obtaining a SEED Loan

Applicants for ERC loans from the Priority Reserve Bank or Community Bank must submit a loan application form. The application is then evaluated and prioritized.

Application Priority


  • Essential Public Services Account: Priority is given to applications with the earliest date that the associated Authority to Construct application is deemed complete.  The Board of Directors may determine that a specific project be given priority.
  • Military Base Account: Priority is assigned by the Board of Directors, with the recommendation of the Air Pollution Control Officer.
  • Community Bank: First priority is given to loans for alternative compliance under Rule 107, with small businesses and small loans taking precedence over large businesses and large loans. Second priority is given to loans used to meet the offset requirements of Rule 202, with small businesses and small loans taking precedence over large businesses and large loans. Third priority is given to loans used to meet general conformity or CEQA mitigation requirements. 

Application Approval

Once prioritized, loans are considered for approval. Loans from the Community Bank with pollutant amounts that exceed 900 pounds per quarter of any pollutant or with terms longer than five years and all loans from the Military Base Account require approval by the Board of Directors. Other loans may be approved by the Air Pollution Control Officer.

SEED Loan Costs

Loan costs include three categories of fees:

  • Administrative Fee: The applicant must pay the actual cost of staff time to evaluate and process the application. This is billed at the hourly rate shown in section 315 of Rule 301 – Permit Fees - Stationary Source (currently $254 per hour).
  • Base Loan Fee: This fee depends on the amount of ERCs leased from the bank and the term of the loan. The current base loan rates for each pollutant are shown in the table below. The base loan rates are for loans with 30-year terms. The fee is prorated if the loan term is less than 30 years.
  • Annual Renewal Fee: The borrower must pay this fee each year that the loan remains active. The current annual renewal fee is $1,941.

Current Base Loan Rates


​Pollutant ​

​Base Loan Rate ($/ton) ​
​Major Sources​Non-Major Sources
​Reactive Organic Gases (ROG)​$27,906​$16,440
​Nitrogen Oxides (NOx)​$31,920​$31,920
​Particulate Matter (PM10)​$33,685​$31,416
​Sulfur Oxides (SOx)​$5,000​$5,000
​Carbon Monoxide (CO)​$20,000​$2,500


Loan Disbursement

If approved, loans from the Priority Reserve Bank and the Community Bank may be disbursed only after a final action document (usually an Authority to Construct or a Permit to Operate) has been issued and the applicant has paid the fees. Loans from the Military Base Account and the Community Bank are dispersed only on the first Wednesday of each calendar quarter.

SEED Loan Contact Information


Marc Cooley

Associate Air Quality Engineer



Kevin J. Williams, Ph.D.​
Program Supervisor


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