SJR 351

Joint Subcommittee Studying Economic Incentives to Promote Virginia's Shipbuilding Industry

November 19, 2001, Richmond

During its last meeting of 2001, the joint subcommittee heard testimony on the history of tributyltin (TBT) environmental regulations and current levels of TBT in Virginia’s waters. The joint subcommittee also considered and recommended several legislative proposals for the 2002 Session of the General Assembly.

TBT Environmental Regulations

Representatives of the Department of Environmental Quality (DEQ) testified that Virginia’s water quality standard for TBT, 1 part per trillion (1 ppt), was adopted in 1988. The standard has been approved by the federal Environmental Protection Agency (EPA), and as a result, cannot be changed under Virginia law without the concurrence of the EPA.

Virginia’s water quality standard for TBT is more stringent than the standard supported by EPA (10 ppt), because TBT has an adverse impact on certain marine organisms very common to the waters of the Commonwealth. The Virginia Institute of Marine Science conducted a study identifying several organisms residing in Virginia’s waters that are severely impacted by TBT (e.g., hard-shell clams). Only South Carolina and California have a water quality standard for TBT comparable to Virginia’s.

The permits issued to Virginia’s shipyards contain requirements for meeting Virginia’s standard for TBT. Between 1988 and 1993, these requirements were in the form of best management practices, a series of required steps and procedures that shipyards were to adhere to when handling TBT. These required steps and procedures were included in shipyard’s permits in the effort to meet the 1 ppt water quality standard for TBT. Best management practices, however, are not numerical effluent limitations.

Beginning in 1994, the EPA required Virginia to include in the permits issued to shipyards a numerical effluent limitation of 50 ppt for TBT, which replaced the best management practices. At the time of this requirement, and even today, it is unclear whether the 50 ppt effluent limitation can be consistently achieved under current science and technology. Nonetheless, the permits issued to Virginia’s shipyards require them to comply with this numerical effluent limitation by December 2002.

DEQ testified that based upon current water quality information, it is unlikely that the EPA will approve a reduction in Virginia’s standard for TBT. Thus, Virginia’s shipyards could face significant fines and penalties if compliance with the 50 ppt numerical effluent limitation cannot be achieved by December 2002.

Current Levels of TBT in Virginia’s Waters

Representatives of the Virginia Institute of Marine Science (VIMS) testified that over the last few years water samples have been collected from 18 different sites in the Elizabeth River and Hampton Roads to determine the level of TBT in Virginia’s waters. The samples disclosed that at all testing sites located in the Elizabeth River TBT levels exceeded Virginia’s 1 ppt water quality standard. At testing sites located at marina locations, however, the samples disclosed that TBT levels have declined. Representatives of VIMS concluded that (i) TBT in the Elizabeth River does not appear to be decreasing, and (ii) Virginia’s 1988 standard for TBT has helped to reduce TBT levels at marina locations.

Legislative Recommendations

The joint subcommittee made the following legislative recommendations for the 2002 Session of General Assembly:

1. The study of Virginia’s shipbuilding industry should continue in 2002. Industry representatives stated that further study was needed to explore and to develop recommendations in regard to issues affecting the industry.

2. A budget amendment should be introduced to provide funding in an amount of $500,000 to the Center for Advanced Ship Repair and Maintenance (CASRM). CASRM is a § 501 (c) (3) organization that has been retained to develop a water treatment process that can lead to compliance with Virginia’s Standard for TBT. In 1999, the Commonwealth contributed $500,000 to CASRM to support its efforts in developing a water treatment process for TBT.

3. SB 831, which would have established a program providing grants to shipyards making capital investments, should be re-introduced in the 2002 Session. Capital investments generally result in an increase in productivity or efficiency. Under the program, a minimum capital investment of $50,000 is required for grant eligibility. In general, the amount of the grant equals 10 percent of the cost of the capital investment. The program contains limitations on the maximum amount of grants that may be received by an individual shipyard company and the maximum amount of grants that may be outstanding at any one time. The intent of the program is to provide financial incentives for shipyard companies to invest in infrastructure and new technology.

4. A budget amendment should be introduced to fund scholarships for shipyard workers attending an apprenticeship program at Tidewater Community College. HB 2121, passed by the 2001 General Assembly and signed by the Governor, established a three-year apprenticeship program, consisting of classroom study and on-the-job training, for Virginia shipyard workers. A degree will be conferred on persons successfully completing the program. HB 2121 also created a fund, subject to appropriation, from which shipyard workers could receive scholarships. The intent of the program is to increase the skill levels of shipyard workers, resulting in a better-trained workforce and a decrease in the employee turnover that is currently plaguing the industry.

5. Finally, legislation should be introduced to change the date by which shipyards must comply with Virginia’s water quality standard for TBT from 2002 to 2008, to coincide with the effective date of an international treaty banning the use of TBT. In the interim, the Commonwealth and the shipyard industry should continue to make a good faith effort to develop a water treatment process that ultimately will result in compliance with Virginia’s standard for TBT.

The Honorable Thomas K. Norment, Jr., Chairman
Legislative Services contacts: Mark J. Vucci,
                                            John A. Garka


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