                                 CODE OF VIRGINIA

NUTRIENT CREDIT CERTIFICATION (§ 62.1-44.19:20)

A. The Board may adopt regulations for the purpose of establishing procedures
for the certification of point source nutrient credits except that no
certification shall be required for point source nitrogen and point source
phosphorus credits generated by point sources regulated under the Watershed
General Virginia Pollutant Discharge Elimination System Permit issued pursuant
to &#xA7; 62.1-44.19:14. The Board shall adopt regulations for the purpose of
establishing procedures for the certification of nonpoint source nutrient
credits.

B. Regulations adopted pursuant to this section shall:

   1. Establish procedures for the certification and registration of credits,
   including:
   				a. Certifying credits that may be generated from effective nutrient
   controls or removal practices, including activities associated with the types
   of facilities or practices historically regulated by the Board, such as water
   withdrawal and treatment and wastewater collection, treatment, and beneficial
   reuse;
   				b. Certifying credits that may be generated from agricultural and urban
   stormwater best management practices, use or management of manures, managed
   turf, land use conversion, stream or wetlands projects, shellfish aquaculture,
   algal harvesting, and other established or innovative methods of nutrient
   control or removal, as appropriate;
   				c. Establishing a process and standards for wetland or stream credits to
   be converted to nutrient credits. Such process and standards shall only apply
   to wetland or stream credits that were established after July 1, 2005, and
   have not been transferred or used. Under no circumstances shall such credits
   be used for both wetland or stream credit and nutrient credit purposes;
   				d. Certifying credits from multiple practices that are bundled as a
   package by the applicant;
   				e. Prohibiting the certification of credits generated from activities
   funded by federal or state water quality grant funds other than controls and
   practices under subdivision B 1 a; however, baseline levels may be achieved
   through the use of such grants;
   				f. Establishing a timely and efficient certification process including
   application requirements, a reasonable application fee schedule not to exceed
   $10,000 per application, and review and approval procedures;
   				g. Requiring public notification of a proposed nutrient credit-generating
   entity; and
   				h. Establishing a timeline for the consideration of certification
   applications for land conversion projects. The timeline shall provide that
   within 30 days of receipt of an application the Department shall, if
   warranted, conduct a site visit and that within 45 days of receipt of an
   application the Department shall either determine that the application is
   complete or request additional specific information from the applicant. A
   determination that an application for a land conversion project is complete
   shall not require the Department to issue the certification. The Department
   shall deny, approve, or approve with conditions an application within 15 days
   of the Department&#8217;s determination that the application is complete. When
   the request for credit release is made concurrently with the application for a
   land conversion project certification, the concurrent release shall be
   processed on the same timeline. When the request for credit release is from a
   previously approved land conversion project, the Department shall schedule a
   site visit, if warranted, within 30 days of the request and shall deny,
   approve, or approve with conditions the release within 15 days of the site
   visit or determination that a site visit is not warranted. The timelines set
   out in this subdivision shall be implemented prior to adoption of regulations.
   The Department shall release credits from a land conversion project after it
   is satisfied that the applicant has met the criteria for release in an
   approved nutrient reduction implementation plan.

   2. Establish credit calculation procedures for proposed credit-generating
   practices, including the determination of:
   				a. Baselines for credits certified under subdivision B 1 a in accordance
   with any applicable provisions of the Virginia Chesapeake Bay TMDL Watershed
   Implementation Plan or approved TMDLs;
   				b. Baselines established for agricultural practices, which shall be those
   actions necessary to achieve a level of reduction assigned in the Virginia
   Chesapeake Bay TMDL Watershed Implementation Plan or approved TMDLs as
   implemented on the tract, field, or other land area under consideration;
   				c. Baselines for urban practices from new development and redevelopment,
   which shall be in compliance with postconstruction nutrient loading
   requirements of the Virginia Stormwater Management Program regulations.
   Baselines for all other existing development shall be at a level necessary to
   achieve the reductions assigned in the urban sector in the Virginia Chesapeake
   Bay TMDL Watershed Implementation Plan or approved TMDLs;
   				d. Baselines for land use conversion, which shall be based on the
   pre-conversion land use and the level of reductions assigned in the Virginia
   Chesapeake Bay TMDL Watershed Implementation Plan or approved TMDLs applicable
   to that land use;
   				e. Baselines for other nonpoint source credit-generating practices, which
   shall be based on the Virginia Chesapeake Bay TMDL Watershed Implementation
   Plan or approved TMDLs using the best available scientific and technical
   information;
   				f. Unless otherwise established by the Board, for certification within the
   Chesapeake Bay Watershed a credit-generating practice that involves land use
   conversion, which shall represent controls beyond those in place as of July 1,
   2005. For other waters for which a TMDL has been approved, the practice shall
   represent controls beyond those in place at the time of TMDL approval;
   				g. Baseline dates for all other credit-generating practices, which shall
   be based on the Virginia Chesapeake Bay TMDL Watershed Implementation Plan or
   approved TMDLs; and
   				h. Credit quantities, which shall be established using the best available
   scientific and technical information at the time of certification;

   3. Provide certification of credits on an appropriate temporal basis, such as
   annual, term of years, or perpetual, depending on the nature of the
   credit-generating practice. A credit shall be certified for a term of no less
   than 12 months;

   4. Establish requirements to reasonably assure the generation of the credit
   depending on the nature of the credit-generating activity and use, such as
   legal instruments for perpetual credits, operation and maintenance
   requirements, and associated financial assurance requirements. Financial
   assurance requirements may include letters of credit, escrows, surety bonds,
   insurance, and where the credits are used or generated by a locality,
   authority, utility, sanitation district, or permittee operating an MS4 or a
   point source permitted under this article, its existing tax or rate authority.
   In lieu of long-term management fund financial assurance mechanisms
   established or required by regulation for projects generating credits from
   stream restoration, a third-party long-term steward approved by the
   Department, such as a public agency, nongovernmental organization or private
   land manager, may hold long-term management funds in a separate
   interest-bearing account to be used only for the long-term management of the
   stream restoration project. Notwithstanding any release schedule set out in
   regulations of the Board, the Department may accelerate the release of a
   maximum of 50 percent of nutrient credits from a stream restoration project
   based on (i) a determination that the level of risk for restoration failure is
   low, (ii) the provision of additional financial assurance in an amount
   adequate to cover the cost of project repair or replacement in the event of
   failure, and (iii) the experience of the applicant or the applicant&#8217;s
   agents who will implement the stream restoration project;

   5. Establish appropriate reporting requirements;

   6. Provide for the ability of the Department to inspect or audit for
   compliance with the requirements of such regulations;

   7. Provide that the option to acquire nutrient credits for compliance purposes
   shall not eliminate any requirement to comply with local water quality
   requirements;

   8. Establish a credit retirement requirement whereby five percent of nonpoint
   source credits in the Chesapeake Bay Watershed other than controls and
   practices under subdivision B 1 a are permanently retired at the time of
   certification pursuant to this section for the purposes of offsetting growth
   in unregulated nutrient loads; and

   9. Establish such other requirements as the Board deems necessary and
   appropriate.

C. The Board shall certify (i) credits that may be generated from effective
nutrient controls or removal practices, including activities associated with the
types of facilities or practices historically regulated by the Board, such as
water withdrawal and treatment and wastewater collection, treatment, and
beneficial reuse, using the best available scientific and technical information
and (ii) credits that are located in tributaries outside of the Chesapeake Bay
watershed as defined in &#xA7; 62.1-44.15:35, using an average of the nutrient
removal rates for each practice identified in Appendix A of the
Department&#8217;s document &#8220;Trading Nutrient Reductions from Nonpoint
Source Best Management Practices in the Chesapeake Bay Watershed: Guidance for
Agricultural Landowners and Your Potential Trading Partners &#8220;; however, in
the certification and recertification of credits under this subsection, the
Department may substitute a delivery factor that is deemed by the Director to be
based on the best available scientific and technical information appropriate for
the tributaries located outside of the Chesapeake Bay watershed as an
alternative to any delivery factor derived from the application of the
Chesapeake Bay Program watershed model.

D. The Department shall establish and maintain an online Virginia Nutrient
Credit Registry of credits as follows:

   1. The registry shall include all nonpoint source credits certified pursuant
   to this article and may include point source nitrogen and point source
   phosphorus credits generated from point sources covered by the general permit
   issued pursuant to &#xA7; 62.1-44.19:14 or point source nutrient credits
   certified pursuant to this section at the option of the owner. No other
   credits shall be valid for compliance purposes.

   2. Registration of credits on the registry shall not preclude or restrict the
   right of the owner of such credits from transferring the credits on such
   commercial terms as may be established by and between the owner and the
   regulated or unregulated party acquiring the credits.

   3. The Department shall establish procedures for the listing and tracking of
   credits on the registry, including but not limited to (i) notification of the
   availability of new nutrient credits to the locality where the
   credit-generating practice is implemented at least five business days prior to
   listing on the registry to provide the locality an opportunity to acquire such
   credits at fair market value for compliance purposes and (ii) notification
   that the listing of credits on the registry does not constitute a
   representation by the Board or the owner that the credits will satisfy the
   specific regulatory requirements applicable to the prospective user&#8217;s
   intended use and that the prospective user is encouraged to contact the Board
   for technical assistance to identify limitations, if any, applicable to the
   intended use.

   4. The registry shall be publicly accessible without charge.

E. The owner or operator of a nonpoint source nutrient credit-generating entity
that fails to comply with the provisions of this section shall be subject to the
enforcement and penalty provisions of &#xA7; 62.1-44.19:22.

F. Nutrient credits from stormwater nonpoint nutrient credit-generating
facilities in receipt of a Nonpoint Nutrient Offset Authorization for Transfer
letter from the Department prior to July 1, 2012, shall be considered certified
nutrient credits and shall not be subject to further certification requirements
or to the credit retirement requirement under subdivision B 8. However, such
facilities shall be subject to the other provisions of this article, including
registration, inspection, reporting, and enforcement.

HISTORY: 2012, cc. 748, 808; 2013, cc. 756, 793; 2016, c. 653; 2022, cc. 422,
526; 2023, c. 723.