                                 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.