                                 CODE OF VIRGINIA

NUTRIENT OFFSET FUND; PURPOSES (§ 10.1-2128.2)

A. There is hereby created in the state treasury a special nonreverting fund to
be known as the Nutrient Offset Fund, referred to in this section as &#8220;the
Subfund,&#8221; which shall be a subfund of the Virginia Water Quality
Improvement Fund and administered by the Director of the Department of
Environmental Quality. The Subfund shall be established on the books of the
Comptroller. All amounts appropriated and such other moneys as may be made
available to the Subfund from any other source, public or private, shall be paid
into the state treasury and credited to the Subfund. Interest earned on moneys
in the Subfund shall remain in the Subfund and be credited to it. Any moneys
remaining in the Subfund, including interest thereon, at the end of each fiscal
year shall not revert to the general fund but shall remain in the Subfund.
Moneys in the Subfund shall be used solely for the purposes stated in subsection
B. Expenditures and disbursements from the Subfund shall be made by the State
Treasurer on warrants issued by the Comptroller upon written request of the
Director of the Department of Environmental Quality.

B. The Director of the Department of Environmental Quality shall use moneys in
the Subfund only to acquire nutrient credits or allocations from point or
nonpoint sources that achieve equivalent point or nonpoint source reductions in
the same tributary beyond those reductions already required by or funded under
federal or state law or the Watershed Implementation Plan prepared for the
Chesapeake Bay Total Maximum Daily Load pursuant to &#xA7; 2.2-218. The Director
of the Department of Environmental Quality may enter into long-term contracts
with producers of nutrient credits to purchase such credits using moneys from
the Subfund. Credits in the Subfund shall be listed in a registry maintained by
the Department of Environmental Quality.

C. The Department of Environmental Quality shall establish a procedure to govern
the distribution of moneys from the Subfund that shall include criteria that
address (i) the annualized cost per pound of the reduction, (ii) the reliability
of the underlying technology or practice, (iii) the relative durability and
permanence of the credits generated, and (iv) other such factors that the
Department deems appropriate to ensure that the practices will achieve the
necessary reduction in nutrients for the term of credit.

D. The Director of the Department of Environmental Quality shall make nutrient
credits acquired pursuant to subsection B available for sale to owners or
operators of new or expanded facilities pursuant to &#xA7; 62.1-44.19:15, and to
permitted facilities pursuant to &#xA7; 62.1-44.19:18. The Director shall
consider recommendations of the Secretary of Commerce and Trade consistent with
the requirements of the State Water Control Law (&#xA7; 62.1-44.2 et seq.) in
the sale of nutrient credits to new or expanding private facilities.

E. For the purposes of this section, a &#8220;nutrient credit&#8221; means a
nutrient reduction certified by the Department of Environmental Quality as a
load allocation, point or nonpoint source nitrogen credit, or point or nonpoint
source phosphorus credit under the Chesapeake Bay Watershed Nutrient Credit
Exchange Program (&#xA7; 62.1-44.19:12 et seq.).

HISTORY: 2011, c. 524; 2017, c. 540.