PRINTER'S NO. 3791
No. 2441 Session of 2008
INTRODUCED BY PERRY, BARRAR, BENNINGHOFF, CAUSER, CLYMER,
CREIGHTON, CUTLER, DALEY, DENLINGER, DePASQUALE, EVERETT,
FAIRCHILD, FLECK, GABIG, GEIST, GRELL, HARRIS, HERSHEY,
JAMES, KAUFFMAN, M. KELLER, MACKERETH, MAJOR, R. MILLER,
MOUL, MUSTIO, MYERS, NAILOR, PETRONE, PICKETT, QUINN, SAYLOR,
SONNEY, STERN, SWANGER, TRUE, WATSON AND YOUNGBLOOD,
MAY 20, 2008
REFERRED TO COMMITTEE ON ENVIRONMENTAL RESOURCES AND ENERGY,
MAY 20, 2008
AN ACT
1 Establishing the Chesapeake Bay Watershed Nutrient Reduction
2 Infrastructure Program; providing for certain indebtedness by
3 the Commonwealth; establishing the Chesapeake Bay Watershed
4 Nutrient Reduction Fund; providing for a resource enhancement
5 and protection tax credit; establishing the Resource
6 Enhancement and Protection Program, the Resource Enhancement
7 and Protection Tax Credit Fund, the Nutrient Credit Trading
8 Program, the Nutrient Credit Trading Program Board and the
9 Chesapeake Bay Advisory Council; and providing for their
10 powers and duties.
11 The General Assembly of the Commonwealth of Pennsylvania
12 hereby enacts as follows:
13 Section 1. Short title.
14 This act shall be known and may be cited as the Chesapeake
15 Bay and Watershed Improvement Act.
16 Section 2. Legislative findings.
17 The General Assembly finds that:
18 (1) The Chesapeake Bay and its tributaries are an
19 important natural resource. The Chesapeake Bay watershed
1 encompasses more than 14,000,000 acres within this
2 Commonwealth which represents 35% of the total area of the
3 watershed.
4 (2) The Commonwealth is a party, along with Maryland,
5 Virginia, Washington, D.C., the Chesapeake Bay Commission and
6 the United States Environmental Protection Agency, to the
7 Chesapeake Bay Program, whose duty it is to restore the
8 environmental integrity of the Chesapeake Bay.
9 (3) The Commonwealth has entered into several multistate
10 agreements, most recently in 2000, to set standards and goals
11 to curtail nutrient and sediment pollution into the
12 Chesapeake Bay from various sources in this Commonwealth.
13 (4) Many of these standards were based on the Federal
14 Water Pollution Control Act (62 Stat. 1155, 33 U.S.C. § 1251
15 et seq.) requirements necessary to remove the Chesapeake Bay
16 from the Federal list of "impaired" waters and to avoid the
17 United States Environmental Protection Agency's development
18 of a total maximum daily load for the Chesapeake Bay.
19 (5) The 2000 Bay Agreement resulted in the preparation
20 of the Pennsylvania Chesapeake Bay Tributary Strategy by the
21 Department of Environmental Protection. This document
22 released in 2005 sets standards and goals for nutrient and
23 sediment reduction from Pennsylvania point and nonpoint
24 sources.
25 (6) The Chesapeake Bay Tributary Strategy was further
26 refined in 2006, to include a nutrient credit trading program
27 and a phased approach for point source dischargers to meet
28 nutrient reduction goals.
29 (7) The capital cost of these projects, at 184
30 identified sewage treatment plants, is estimated to be
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1 between $620,000,000 and $1,000,000,000, and with more than
2 40,000 farm properties in the Chesapeake Bay watershed
3 drainage area of this Commonwealth, aggressive steps must
4 also be taken to control nutrient and sediment runoff from
5 agricultural operations, and a series of financial incentives
6 will be necessary to engage farmers in nutrient reduction
7 techniques and methods.
8 (8) Funding and technical assistance is needed to
9 facilitate the implementation of upgrades to wastewater
10 treatment facilities and to install agricultural best
11 management practices to reduce the level of nutrients and
12 sediments entering Commonwealth waterways and making their
13 way to the Chesapeake Bay.
14 (9) There is a need to ensure the implementation and
15 availability of a viable nutrient credit trading program to
16 serve as an alternative to wastewater treatment plant
17 upgrades and to allow for continuing economic growth and
18 development within the Commonwealth's portion of the bay
19 watershed.
20 (10) Additional accountability and oversight is
21 necessary to ensure the methods used to attain the standards
22 and goals are implemented in a fair and cost-effective manner
23 so that meeting the strategy standards and goals does not
24 place an unrealistic financial burden on Commonwealth
25 taxpayers and does not inhibit economic growth and
26 development by limiting future wastewater capacity.
27 (11) Legacy sediments eroded from behind old breached
28 mill dams have been documented as a substantial source of the
29 sediment impacting the Chesapeake Bay.
30 (12) Recent research conducted in this Commonwealth
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1 calls into question existing stream restoration practices
2 throughout the Mid-Atlantic region and contends that future
3 stream restoration must consider the widespread impact of
4 17th to 19th century mill dams and the degree to which they
5 altered stream forms and functions from their presettlement
6 conditions.
7 Section 3. Definitions.
8 The following words and phrases when used in this act shall
9 have the meanings given to them in this section unless the
10 context clearly indicates otherwise:
11 "Agricultural nutrient and sediment reduction project." A
12 project undertaken by a person operating an agricultural
13 operation to establish, implement or improve a best management
14 practice recognized by the department or by the Environmental
15 Protection Agency as reducing the levels of nitrogen, phosphorus
16 or sediment entering surface water or groundwater from
17 Pennsylvania farms. The term includes design, construction,
18 reconstruction, erection, equipping, expansion, improvement,
19 installation, rehabilitation, renovation or repair of
20 infrastructure, buildings, structures, equipment and fixtures to
21 facilitate nutrient or sediment reduction.
22 "Applicant." A municipality or municipal authority.
23 "Authority." The Pennsylvania Infrastructure Investment
24 Authority.
25 "Best management practice." A practice or combination of
26 practices recognized as effective and practical in the
27 management or reduction of nutrients or sediment to protect
28 surface water or groundwater, considering technological,
29 economic and institutional factors.
30 "Chesapeake Bay tributary strategy." A state-specific plan
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1 outlining a combination of actions that can be utilized to
2 address nutrient reductions entering the Chesapeake Bay and its
3 tributaries from various sources.
4 "Commission." The State Conservation Commission established
5 by the act of May 15, 1945 (P.L.547, No.217), known as the
6 Conservation District Law.
7 "Conservation district." A public body as defined in and
8 created under the act of May 15, 1945 (P.L.547, No.217), known
9 as the Conservation District Law.
10 "Cost of a nutrient reduction project." Any of the
11 following:
12 (1) Costs and expenses of acquisition of interests in
13 land, infrastructure, buildings, structures, equipment,
14 furnishings, fixtures and other tangible property which
15 comprise a nutrient reduction project.
16 (2) Costs and expenses of construction, reconstruction,
17 erection, equipping, expansion, improvement, installation,
18 rehabilitation, renovation or repair of infrastructure,
19 buildings, structures, equipment and fixtures which comprise
20 a nutrient reduction project.
21 "Department." The Department of Environmental Protection of
22 the Commonwealth.
23 "Fund." The Chesapeake Bay Watershed Nutrient Reduction Fund
24 established under section 5.
25 "Legacy sediment." Sediment that meets all of the following
26 conditions:
27 (1) Was eroded from upland areas after the arrival of
28 early Pennsylvania settlers and during centuries of intensive
29 land use.
30 (2) Was deposited in valley bottoms along stream
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1 corridors behind mill race dams or other similar-type dams
2 located along the Susquehanna River and its tributaries,
3 burying presettlement streams, floodplains, wetlands and
4 valley bottoms.
5 (3) Altered and continues to impair the hydrologic,
6 biologic, aquatic, riparian and water quality functions of
7 presettlement and modern environments.
8 "Municipal authority." A public authority established under
9 53 Pa.C.S. Ch. 56 (relating to municipal authorities) or the
10 former act of May 2, 1945 (P.L.382, No.164), known as the
11 Municipality Authorities Act of 1945, which supplies water or
12 provides wastewater services to the public for a fee.
13 "NPDES." The National Pollutant Discharge Elimination
14 System.
15 "Nutrient reduction credit." A pound of reduction of
16 discharge of nitrogen, phosphorus or sediment to the Chesapeake
17 Bay watershed as recognized by the Nutrient Reduction Credit
18 Trading Program Board.
19 "Nutrient Reduction Credit Trading Program." A program
20 designed to improve water quality using public and private
21 market mechanisms and which permits entities exceeding certain
22 statutory and regulatory requirements to generate credits for
23 nutrient reduction strategies that can be purchased and used by
24 other entities to produce nutrient reductions and to meet
25 regulatory requirements.
26 "Nutrient reduction project." A project undertaken by a
27 publicly owned wastewater treatment plant to remove either
28 nitrogen or phosphorous during the treatment process to meet
29 nutrient reduction goals established to reduce the levels of
30 these nutrients that enter the Chesapeake Bay and its
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1 tributaries.
2 "Wastewater system." A system for the collection, treatment
3 or disposal of wastewater, including industrial waste.
4 "Wastewater treatment facility." A facility designed and
5 operated for the sole purpose of treating wastewater for
6 discharge into the environment. The term includes a wastewater
7 treatment plant and any part thereof, including an expansion,
8 addition and modification to an existing wastewater treatment
9 facility.
10 Section 4. Chesapeake Bay Watershed Nutrient Reduction
11 Infrastructure Program.
12 (a) Establishment.--The Chesapeake Bay Watershed Nutrient
13 Reduction Infrastructure program is established to provide
14 financial assistance in the form of single-year or multiyear
15 grants to municipalities or municipal authorities to construct,
16 expand or improve the nutrient reduction capabilities of
17 wastewater infrastructure and which are subject to the
18 requirements to reduce nutrient levels in wastewater being
19 discharged into the waters of the Chesapeake Bay watershed.
20 (b) Application.--A municipality or municipal authority may
21 submit an application to the authority requesting financial
22 assistance for a nutrient reduction project. The nutrient
23 reduction project may be a proposed project, a project currently
24 under construction or a project completed within three years
25 prior to the effective date of this section. The application
26 must be on the form required by the authority and include or
27 demonstrate all of the following:
28 (1) The name and address of the applicant.
29 (2) A statement of the type and amount of financial
30 assistance sought, provided that the amount does not exceed
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1 50% of the cost of the nutrient reduction project.
2 (3) A statement describing the nutrient reduction
3 project, including a detailed statement of the cost of the
4 nutrient reduction project.
5 (4) A financial commitment from a responsible source for
6 any cost of the nutrient reduction project in excess of the
7 amount requested. The financial commitment may not be in the
8 form of a grant from a Commonwealth agency.
9 (5) Proof that the wastewater system is required by the
10 department to reduce nutrients to the Chesapeake Bay and that
11 the wastewater system has a current NPDES permit limiting
12 pounds of nitrogen or phosphorus in its discharge.
13 (6) Confirmation through plans certified by a
14 professional engineer registered in this Commonwealth that
15 the wastewater system is designed for the necessary upgrades
16 to remove nutrients.
17 (7) Information regarding current user rates and a
18 projection of how rates may be impacted as a result of the
19 addition of the nutrient reduction project.
20 (8) Any other information required by the authority.
21 (c) Review and approval of grant applications.--
22 (1) The authority, in conjunction with the department,
23 shall review the application to determine all of the
24 conditions under subsection (b) are met.
25 (2) The authority shall conduct, as part of the
26 application review, an affordability analysis to determine if
27 current and future user rates meet affordability criteria
28 established by the authority.
29 (3) Upon being satisfied that all program requirements
30 have been met, the authority may approve the application
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1 consistent with all of the following:
2 (i) The grant may not exceed $10,000,000 per
3 nutrient reduction project.
4 (ii) The aggregate amount of grants awarded under
5 this subsection shall not exceed $500,000,000 over a
6 seven-year period.
7 (iii) The authority has received notice from the
8 Secretary of the Budget that the nutrient reduction
9 project satisfies the Federal tax status requirements of
10 any bonds used to fund the grant.
11 (4) The authority shall make a determination of the
12 completeness of an application within 30 days of its receipt.
13 If the authority deems the application complete, it shall
14 render a decision on funding the application within 60 days
15 of the receipt of the completed application.
16 (5) An applicant shall, within 30 days of a
17 determination by the authority that the application was
18 deficient, provide to the authority the necessary information
19 to complete the application. The authority shall not be
20 required to make a determination under paragraph (3) if the
21 applicant fails to provide the required information.
22 (6) If the authority approves the application, the
23 authority shall notify the applicant of the amount approved
24 and enter into a contract with the applicant.
25 Section 5. Indebtedness.
26 (a) General rule.--In order to facilitate the implementation
27 of nutrient reduction projects, the Commonwealth shall, by
28 December 31, 2008, incur:
29 (1) Not less than $50,000,000 nor more than $120,000,000
30 of the debt authorized under the act of February 12, 2004
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1 (P.L.72, No.10), known as the Water and Wastewater Treatment
2 Project Bond Act.
3 (2) Not less than $5,000,000 nor more than $12,000,000
4 from the debt authorized under the act of March 16, 1992
5 (P.L.10, No.5), known as the Small Water Systems Assistance
6 Act.
7 (3) Not more than $152,000,000 from the debt authorized
8 under section 17 of the act of March 1, 1988 (P.L.82, No.16),
9 known as the Pennsylvania Infrastructure Investment Authority
10 Act.
11 (b) Transfer of bond proceeds.--
12 (1) Proceeds from the sale of bonds required under
13 subsection (a) shall be transferred to the authority.
14 (2) The authority shall use the proceeds from the sale
15 of bonds required under subsection (a) to finance projects in
16 accordance with section 4, and the use of the proceeds shall
17 be consistent with the provisions of section 10(e) and (f) of
18 the act of March 1, 1988 (P.L.82, No.16), known as the
19 Pennsylvania Infrastructure Investment Authority Act.
20 (c) Chesapeake Bay Watershed Nutrient Reduction Fund.--
21 (1) The Chesapeake Bay Watershed Nutrient Reduction Fund
22 is established as a restricted fund in the State Treasury.
23 (2) The fund shall be used to construct wastewater
24 infrastructure utilizing nutrient reduction technology.
25 (d) Interfund transfers from the State Stores Fund and State
26 Gaming Fund.--
27 (1) The Secretary of the Budget shall transfer from the
28 State Stores Fund to the authority the amount of $41,000,000
29 annually for fiscal year 2008-2009 through fiscal year 2014-
30 2015.
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1 (2) The Secretary of the Budget shall transfer from the
2 State Gaming Fund and the authority the amount of $41,000,000
3 annually for fiscal year 2008-2009 through fiscal year 2014-
4 2015. These funds shall be from the balance in the State
5 Gaming Fund remaining after all other statutorily mandated
6 requirements for the use of these funds are met.
7 (3) (i) In any year in which the balance in the State
8 Stores Fund is insufficient to make the transfer required
9 under paragraph (1) and the transfer required under
10 section 6(b)(1), then the balance in the State Stores
11 Fund shall be divided so that the amount of each transfer
12 shall be equal to one-half of the balance in the State
13 Stores Fund.
14 (ii) In any year in which the balance in the State
15 Gaming Fund is insufficient to make the transfer required
16 under paragraph (2) and the transfer required under
17 section 6(b)(2), then the balance in the State Gaming
18 Fund shall be divided so that the amount of each transfer
19 shall be equal to one-half of the balance in the State
20 Gaming Fund.
21 (4) The funds transferred under this subsection shall be
22 used to support the construction of wastewater treatment
23 infrastructure utilizing nutrient reduction technology.
24 (5) The General Assembly may transfer additional
25 appropriations to the fund as deemed necessary, but in no
26 event shall the funds be reduced from the amounts specified
27 in paragraph (1).
28 (e) Disbursement schedule.--The program funds provided for
29 under subsections (c) and (d) shall be allocated under the
30 following schedule:
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1 (1) For each fiscal year 2008-2009, 2009-2010 and 2010-
2 2011, a total of $100,000,000.
3 (2) For each fiscal year 2011-2012 through and including
4 fiscal year 2014-2015, a total of $50,000,000.
5 Section 6. Resource enhancement and protection tax credit.
6 (a) Resource enhancement and protection tax credit
7 program.--For fiscal years 2008-2009 through and including
8 fiscal year 2012-2013, a total of $50,000,000 annually shall be
9 made available for use under Article XVII-E of the act of March
10 4, 1971 (P.L.6, No.2), known as the Tax Reform Code of 1971,
11 establishing the Resource Enhancement and Protection Tax Credit
12 for best management practices.
13 (b) Proportionate share of funds.--
14 (1) (i) The tax credits authorized under subsection (a)
15 shall be administered in such a manner so as to provide
16 at least 60% but not more than 70% of total annual amount
17 of tax credits authorized for agricultural nutrient and
18 sediment reduction projects and legacy sediment
19 remediation projects in the Chesapeake Bay watershed.
20 (ii) The requirements of this subsection shall not
21 apply for any year in which the commission determines
22 proportionate share of tax credits prescribed in this
23 subsection cannot be feasibly met.
24 (2) A total of 10% of these funds shall be transferred
25 to the Conservation District Fund and shall be made available
26 to county conservation districts through the State
27 Conservation Commission to assist in the implementation of
28 the provisions of this act.
29 (c) Legacy sediments.--Projects which:
30 (1) remove legacy sediments and restore floodplains and
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1 which provide environmental benefits, including, but not
2 limited to: groundwater recharge, reduction of local impacts
3 due to storm water runoff and flooding; and
4 (2) demonstrate multiple economic benefits;
5 shall be eligible for tax credits under the resource enhancement
6 and protection tax credit program.
7 (d) Controlling sediment releases.--The department shall
8 develop a process for identifying the positive and negative
9 effects of the existence of mill race dams in controlling
10 sediment and nutrient releases into the Chesapeake Bay and its
11 tributaries. The department may not demolish or direct the
12 removal of any mill race dam until such time as the effects of
13 mill race dams are fully realized and there are procedures in
14 place to address the appropriate disposition of the sediments
15 behind mill race dams.
16 (e) Interfund transfers from the State Stores Fund and State
17 Gaming Fund.--
18 (1) The Secretary of the Budget shall transfer from the
19 State Stores Fund to the Resource Enhancement and Protection
20 Tax Credit Fund, which is hereby established in the State
21 Treasury, an amount of $25,000,000 annually for fiscal year
22 2008-2009 through fiscal year 2012-2013.
23 (2) The Secretary of the Budget shall transfer from the
24 State Gaming Fund to the Resource Enhancement and Protection
25 Tax Credit Fund, which is hereby established in the State
26 Treasury, the amount of $25,000,000 annually for fiscal year
27 2008-2009 through fiscal year 2012-2013. These funds shall be
28 from the balance in the State Gaming Fund remaining after all
29 other statutorily mandated requirements for the use of these
30 funds are met.
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1 (3) (i) In any year in which the balance in the State
2 Stores Fund is insufficient to make the transfer required
3 under paragraph (1) and the transfer required under
4 section 5(d)(1), then the balance in the State Stores
5 Fund shall be divided so that the amount of each transfer
6 shall be equal to one-half of the balance in the State
7 Stores Fund.
8 (ii) In any year in which the balance in the State
9 Gaming Fund is insufficient to make the transfer required
10 under paragraph (2) and the transfer required under
11 section 5(d)(2), then the balance in the State Gaming
12 Fund shall be divided so that the amount of each transfer
13 shall be equal to one-half of the balance in the State
14 Gaming Fund.
15 (4) The funds transferred under this subsection shall be
16 used to support the activities required under subsections (a)
17 and (c).
18 Section 7. Phase-in schedule.
19 (a) Establishment.--The department shall establish a
20 multiphased nutrient reduction compliance schedule for
21 wastewater treatment facilities required to reduce nutrient
22 levels within the Chesapeake Bay watershed.
23 (b) Procedures and requirements.--
24 (1) The department shall, at a minimum, develop a
25 program for wastewater treatment facilities to reduce
26 nutrient levels within the Chesapeake Bay watershed in the
27 following manner:
28 (i) All plants identified by the department with
29 flows over 400,000 gallons per day which are not
30 presently under annual nutrient load limits as part of
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1 their operating permit shall be given annual nutrient
2 load limits based upon an average of 6 mg/l of total
3 nitrogen and 0.8mg/l of total phosphorous at the annual
4 average design flow of each wastewater facility.
5 (ii) In an effort to achieve nutrient reduction
6 compliance levels, a three-tiered compliance schedule
7 shall be used. The department shall place each wastewater
8 treatment plant in one of three tiers to ensure all
9 facilities will be deemed in compliance over a seven-year
10 period beginning on July 1, 2008, and ending June 31,
11 2015.
12 (2) Nothing in this subsection shall be construed to
13 prohibit the right of appeal to NPDES permit conditions by a
14 permittee.
15 (c) New construction.--
16 (1) A new wastewater treatment facility at which
17 construction commences on or after January 1, 2008, shall
18 meet nutrient load limits based upon an average of 4 mg/l
19 total nitrogen and 0.3 mg/l total phosphorus at the annual
20 average design flow. A new system constructed to the limits
21 in this section shall make a one-time monetary assessment to
22 the nutrient reduction credit bank identified under section
23 8(d)(3). The assessment contribution shall be determined by
24 the Nutrient Credit Trading Program Board established under
25 section 8(b). The assessment shall, at a minimum, be based
26 upon the difference in treatment level between 4 mg/l of
27 nitrogen and 0.3 mg/l of phosphorus and the zero net
28 discharge limit applied to new facilities through the
29 department under the strategy.
30 (2) The purchase of nutrient credits shall be recognized
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1 as an alternative method to meet the zero net discharge limit
2 applied to new facilities that do not meet the criteria in
3 paragraph (1). The purchase of nutrient credits shall also be
4 recognized as an alternative method to meet the zero net
5 discharge limit applied to expansion of existing plants.
6 (3) In the event of an addition, expansion or
7 modification to a wastewater facility, the mass discharge
8 limits contained in this subsection shall apply only to the
9 increase in the annual average design flow, resulting from
10 the addition, expansion or modification.
11 Section 8. Nutrient Reduction Credit Trading Program.
12 (a) Establishment.--The department shall establish the
13 Nutrient Reduction Credit Trading Program for the Chesapeake Bay
14 watershed and shall administer it in accordance with this
15 section.
16 (b) Program board.--
17 (1) The Nutrient Reduction Credit Trading Program Board
18 is established. The purpose of the board shall be to manage
19 and provide oversight to the Nutrient Reduction Credit
20 Trading Program.
21 (2) The board shall consist of:
22 (i) The Secretary of Environmental Protection, or a
23 designee.
24 (ii) The Secretary of Agriculture, or a designee.
25 (iii) The Executive Director of the authority, or a
26 designee.
27 (iv) One representative from county conservation
28 districts appointed by the State Conservation Commission.
29 (v) One representative from municipal authorities
30 representing wastewater treatment facilities chosen by
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1 the Pennsylvania Municipal Authorities Association.
2 (vi) One representative of the housing industry
3 chosen by the Pennsylvania Builders Association.
4 (vii) One water quality engineer appointed by the
5 chairman of the Joint Legislative Air and Water Pollution
6 Control and Conservation Committee.
7 (viii) One representative from the agricultural
8 sector appointed by the Secretary of Agriculture.
9 (ix) One representative from an environmental
10 organization representing an environmental organization
11 related to the Chesapeake Bay appointed by the Secretary
12 of Environmental Protection.
13 (x) Three representatives of local government, one
14 representing boroughs, one representing townships and one
15 representing cities. These representatives shall be
16 chosen by their respective Statewide organizations.
17 (xi) One representative from the Pennsylvania
18 delegation to the Chesapeake Bay Commission appointed by
19 members of the Pennsylvania delegation to the commission.
20 (xii) One representative from the United States
21 Department of Agriculture Natural Resources Conservation
22 Service appointed by the service's State conservationist
23 for Pennsylvania.
24 (c) Chairperson.--The board shall elect a chairperson from
25 among its members.
26 (d) Powers and duties.--The board will adopt policies and
27 implement programs necessary to manage the Nutrient Reduction
28 Credit Trading Program for the Chesapeake Bay watershed. The
29 board shall have the following specific duties and
30 responsibilities:
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1 (1) To purchase nutrient reduction credits from
2 wastewater treatment facilities or agricultural or other
3 sources. The board shall utilize $50,000,000 in funds
4 provided by the Environmental Protection Agency and
5 previously approved by the authority board of directors for
6 use in the establishment of a nutrient credit trading
7 program. Credits shall be available for purchase only after
8 department certification that nutrient and sediment
9 reductions have occurred or will occur upon implementation of
10 the proposed nutrient reduction project. The board shall
11 cooperate with the department and the Department of
12 Agriculture or their agents to verify credits from wastewater
13 treatment facilities and agricultural and other sources.
14 (2) To offer for sale nutrient reduction credits to
15 wastewater treatment facilities, developers, municipalities,
16 nonpoint source entities and others required to meet nutrient
17 reductions.
18 (3) (i) To establish a nutrient reduction credit bank
19 to provide for the purchase and sale of credits within
20 the Nutrient Reduction Credit Trading Program. The board
21 will establish procedures and set monetary assessments to
22 generate a system of nutrient credits that can be used by
23 wastewater treatment facilities and others to reach
24 compliance with nutrient reduction requirements
25 identified by the department and to allow for new growth.
26 (ii) Nothing in this subsection shall be construed
27 to prohibit the private purchase and sale of credits
28 within the trading market.
29 (4) For wastewater treatment facilities, to establish
30 phased payment schedules, provided the payment amounts will
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1 fund all annual reductions that are necessary to meet
2 nutrient reduction requirements identified by the department
3 as follows:
4 (i) The payment amounts for new facilities shall be
5 sufficient to fund all necessary annual reductions given
6 the facilities' anticipated design flow and connections
7 schedule so that zero net discharge requirements are met.
8 (ii) The bank shall use these funds to provide
9 grants to the agricultural sector to support projects
10 that will implement the highest value nutrient reduction
11 best management practices.
12 (iii) Preference shall be given to those nutrient
13 reduction best management practices that provide the
14 greatest nutrient reductions for the least amount of cost
15 and that, once implemented, generate credits on a
16 continuing annual basis.
17 (iv) Excess credits generated from the transactions
18 shall be made available for purchase by wastewater
19 treatment facilities, upon request, if needed to meet
20 nutrient effluent limits.
21 (5) To offer for sale excess credits held by the bank
22 identified under paragraph (3), but shall hold a minimum
23 percentage of credits as a reserve balance to offset any
24 failures or loss of nutrient reduction credits within the
25 bank. In addition to this reserve, the board shall hold a
26 minimum percentage of credits in reserve for new growth. The
27 board shall set these reserves at percentages it deems
28 necessary, but in no instance shall the reserve for new
29 growth be lower than 5% of all credits held by the bank.
30 (6) To process credits on a continual basis. The board
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1 shall establish and update as necessary the selling price of
2 nutrient reduction credits and post the information regarding
3 cost and methods of purchasing and selling credits on the
4 Internet website of the authority. The board shall post on
5 the Internet website of the authority a list of those
6 projects that have been certified to generate credits by the
7 department.
8 (7) To establish overall time frames for the use of
9 nutrient reduction credits purchased through the bank
10 necessary to meet the compliance requirements established by
11 the department. The board shall develop and implement a
12 process that allows credits to be purchased in advance of
13 when they may be needed to ensure compliance with the
14 requirements established by the department.
15 (8) To establish a subcommittee to provide technical
16 assistance to entities proposing credit-generating projects.
17 Members of the subcommittee shall be appointed by the board
18 and shall have appropriate technical training and experience.
19 The subcommittee shall conduct a technical review of credit
20 proposals consistent with the department's existing guidance
21 on credit proposal reviews and make a recommendation
22 regarding credit certification. Proposals that have undergone
23 technical review by the subcommittee and are recommended by
24 the subcommittee for certification shall be submitted by the
25 board to the department for review. The department shall
26 render a decision on the proposal within 60 days of receipt
27 of the submission from the board. A proposal on which the
28 department fails to act within this time period shall be
29 deemed approved.
30 (9) To establish procedures to allow the nutrient
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1 reduction credit bank to act as a clearinghouse and make
2 available information on the availability of nutrient
3 reduction credits from public and private sector
4 organizations other than the nutrient reduction credit bank.
5 (e) Regulations.--The authority, the department and the
6 Department of Agriculture may jointly develop regulations as
7 necessary to implement the provisions of this act. The
8 regulations shall be promulgated in accordance with the act of
9 June 25, 1982 (P.L.633, No.181), known as the Regulatory Review
10 Act.
11 (f) Administration.--The authority shall provide all
12 necessary administrative and technical support for the operation
13 of the Nutrient Reduction Credit Trading Program and the
14 Nutrient Reduction Credit Trading Board. The authority may enter
15 into contracts to assist in administration of the bank, provide
16 technical assistance to entities proposing credit-generating
17 projects and provide all other necessary technical and
18 administrative support to the board.
19 Section 9. Accountability.
20 (a) Evaluation.--The department shall annually evaluate
21 progress toward meeting the needed reductions in nutrients and
22 sediments entering the Chesapeake Bay watershed. This evaluation
23 shall consist of a quantitative and qualitative analysis on the
24 progress made in reaching the nutrient reduction goals for all
25 point and nonpoint sources delineated in the Chesapeake Bay
26 tributary strategy. In conducting the evaluation, the department
27 shall annually review and estimate the costs and benefits
28 related to compliance with the Chesapeake Bay tributary strategy
29 by all affected economic sectors.
30 (b) Contents of evaluation.--The evaluation shall include,
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1 but may not be limited to:
2 (1) The number and type of nutrient reduction credit
3 transactions.
4 (2) A description of the methods that have been
5 implemented by the various sectors toward achieving
6 compliance with the established nutrient reduction goals.
7 (3) A review of any changes to the financial resources
8 and regulatory requirements that other states in the
9 Chesapeake Bay watershed have implemented in regard to the
10 nutrient reduction goals.
11 (c) Submittal of evaluation.--The evaluation shall be
12 submitted with the annual report required under section 11.
13 (d) Program changes.--The department shall identify any and
14 all substantive changes that may be necessary to ensure
15 compliance with the nutrient reduction requirements needed. The
16 department shall present recommendations to the General Assembly
17 for any substantive changes needed to the nutrient and sediment
18 reduction requirements, storm water management reduction
19 requirements, stream loading or other requirements as deemed
20 necessary.
21 Section 10. Chesapeake Bay Advisory Council.
22 (a) Establishment.--The Chesapeake Bay Advisory Council is
23 established as an advisory body to the department.
24 (b) Composition.--The advisory council shall be composed of
25 individuals representing the State Conservation Commission,
26 local governments, environmental organizations, county
27 conservation districts, Federal and State agencies, educational
28 institutions, agricultural organizations, businesses, watershed
29 organizations and other groups as deemed appropriate by the
30 Secretary of Environmental Protection. Advisory council
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1 membership shall not be limited to a specific number, but shall
2 be determined by the department.
3 (c) Duties.--The advisory council shall:
4 (1) Advise the department in all matters relating to the
5 Chesapeake Bay and its tributaries and in the implementation
6 of methods designed to provide for nutrient reductions
7 entering the bay and its tributaries.
8 (2) Provide citizen input to the department on the
9 Commonwealth's efforts to meet its commitments in the
10 Chesapeake 2000 Agreement, as well as future agreements.
11 (3) Advise the department and provide input on the
12 Commonwealth's tributary strategies.
13 (4) Advise the department on agricultural and other
14 appropriate nonpoint source issues within the Chesapeake Bay
15 watershed.
16 (5) Advise the department on the implementation of
17 programs under the Chesapeake Bay Nonpoint Source Pollution
18 Abatement Program.
19 (6) Provide recommendations to the department for
20 communicating with watershed groups, Federal and State
21 agencies, local governments and others in an effort to build
22 further support for the Chesapeake Bay Program.
23 (7) Provide input, comments and recommendations to the
24 department on educational strategies targeted to the needs of
25 local citizens, businesses, schools, communities, local
26 governments and watershed groups.
27 (8) Report to and advise the department on emerging
28 issues and trends pertinent to the Chesapeake 2000 Agreement
29 and other issues relating to the Chesapeake Bay and its
30 tributaries and offer recommendations to the department to
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1 enhance or modify program activities.
2 (9) Provide general comment to the department and remain
3 apprised of water quality and resource management issues that
4 are addressed by the Chesapeake Bay Program task forces and
5 committees.
6 (10) Provide input to the department on the overall
7 implementation of the Chesapeake Bay tributary strategy,
8 including assistance in annually evaluating the costs,
9 benefits and specific implementation methods used to meet the
10 nutrient reduction goals.
11 (d) Evaluation.--
12 (1) The advisory council, in conjunction with the
13 citizens advisory council to the department, shall review the
14 results of the department's evaluation of the progress toward
15 meeting the needed reductions of nutrients and sediments
16 entering the Chesapeake Bay and its tributaries.
17 (2) The department shall forward all information for
18 review to the advisory council and the citizens advisory
19 council within 30 days of the department's finalization of
20 the results.
21 (3) The advisory council and the citizens advisory
22 council shall issue the results of their findings in an
23 annual report to the chairman and minority chairman of the
24 Environmental Resources and Energy Committee of the Senate
25 and the chairman and minority chairman of the Environmental
26 Resources and Energy Committee of the House of
27 Representatives no later than March 15 of each year.
28 Section 11. Report to standing committees.
29 (a) Content.--
30 (1) The authority and the department shall submit a
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1 joint annual report to the chairman and the minority chairman
2 of the Environmental Resources and Energy Committee of the
3 Senate, the chairman and minority chairman of the
4 Environmental Resources and Energy Committee of the House of
5 Representatives and the Pennsylvania delegation of the
6 Chesapeake Bay Commission no later than July 1 following the
7 first fiscal year or any portion thereof in which the program
8 is in effect and no later than July 1 for all succeeding
9 fiscal years in which the program is in effect.
10 (2) The report shall include:
11 (i) A list of all of the recipients of loans or
12 grants awarded by the authority in the previous fiscal
13 year.
14 (ii) The amount of the loans or grants awarded.
15 (iii) A description of the nutrient reduction
16 project and the public purposes that it advances.
17 (iv) The documentation submitted by the applicant
18 demonstrating that the nutrient reduction project met at
19 least one of the criteria under section 9(b). The report
20 shall include the results of the evaluation and
21 recommendations required under section 9.
22 (v) A description of all activities conducted by the
23 Nutrient Reduction Credit Trading Board for that
24 reporting period.
25 (b) Publication.--The authority shall post a copy of the
26 report to the standing committees on the Internet websites of
27 the authority and the department. The reports shall remain on
28 the sites until the reports for the next year are posted.
29 Section 12. Effective date.
30 This act shall take effect immediately.
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