HJR 640: Joint Subcommittee to Study Options to Provide a Long-Term
Funding Source to Clean Up Virginia's Polluted Waters, Including the Chesapeake
Bay and its Tributaries
May 12, 2005
The Joint Subcommittee
to Study Options to Provide a Long-Term Funding Source to Clean up Virginia's
Polluted Waters, Including the Chesapeake Bay and its Tributaries, held
its first meeting on May 12, 2005.
The members of the
joint subcommittee are: Delegate Vincent F. Callahan, Jr., Senator John
H. Chichester, Delegate Harry J. Parrish, Delegate M. Kirkland Cox, Delegate
L. Scott Lingamfelter, and Senator Charles R. Hawkins. Secretary of Natural
Resources, W. Tayloe Murphy, Jr., and Secretary of Agriculture, Robert
S. Bloxom are ex-officio members of the joint subcommittee. The first
order of business was the nomination and election of Delegate Vincent
F. Callahan, Jr. as Chairman, and Senator John H. Chichester as Vice Chairman.
FUNDING FOR CLEANUP
OF VIRGINIA'S WATERS
The meeting began
with an overview of the Water Quality Improvement Fund, the primary source
for moneys to clean up Virginia's waters created by the General Assembly
during the 1997 Session. Current law dedicates 10 percent of any year-end
revenue surplus and 10 percent of any year-end unreserved general fund
balance to the Fund. Moneys in the Fund are used to provide grants to
local governments, soil and water conservation districts, and state agencies,
as well as individuals for cleanup of point and nonpoint sources of pollution.
Due to the economic
recession, no deposit was made into the Fund in Fiscal Years 2002 through
2004, because there were no year-end revenue surpluses or balances. For
Fiscal Year 2005, the General Assembly appropriated $15 million in addition
to the year-end revenue
surplus, making the total fiscal year deposit to the Fund $22.7 million.
For Fiscal Year 2006, the General Assembly appropriated $65 million in
addition to the year-end revenue surplus, making the total fiscal year
deposit to the Fund $97.4 million. Of this additional $65 million, $50
million is dedicated for wastewater improvement.
ADDRESS BY SECRETARY
Secretary Murphy spoke to the members regarding issues raised by House
Joint Resolution No. 640, the joint resolution that created the study.
Secretary Murphy stated that plans and strategies are in place to clean
up Virginia's waters, but the Commonwealth lacks the funding needed to
execute these plans. Funding for natural resources hovers at or below
1% of the state budget on an annual basis.
explained that in 1999 the Environmental Protection Agency (EPA) added
the Chesapeake Bay and its tributaries to the list of impaired waters
because of increased amounts of nitrogen and phosphorus. The EPA established
new water quality standards for the Bay and its tributaries. These standards
form the basis for nutrient and sediment reduction goals. Secretary Murphy
indicated that Virginia is required to reduce the nitrogen discharge into
the Bay and its tributaries from 77 million pounds to 51.4 million pounds
per year and the phosphorus discharge from 10 million pounds to 6 million
pounds per year. Agricultural activities are the
largest source of nonpoint pollution in the Commonwealth. In Fiscal Year
2006, the Department of Conservation and Recreation will have $30 million
for grants to reduce nonpoint sources of pollution. Secretary Murphy emphasized
that Virginia's economic prosperity is directly linked to the health of
its natural resources.
MR. RUSSELL W. BAXTER
Russell W. Baxter,
Assistant Secretary of Natural Resources for Chesapeake Bay Coordination,
began his presentation by discussing 2004 State water quality assessment.
Water quality sampling revealed that 6,900 out of 13,200 stream miles;
89,900 out of 109,000 acres of lakes; and 1,810 out of 2,500 square miles
of estuaries were impaired by pollution. Mr. Baxter discussed provisions
of House Bill No. 2862/Senate Bill No. 1275, passed during the 2005 Session
of the General Assembly. The legislation requires the State Water Control
Board to issue to significant pollution dischargers a Watershed General
Permit authorizing point source discharge loads for total nitrogen and
total phosphorus. A significant discharger can meet the maximum load authorized
by acquiring nitrogen and phosphorus allocations and credits from other
Mr. Baxter discussed
provisions of House Bill No. 2777/Senate Bill No. 1235/Senate Bill No.
810, also passed during the 2005 Session of the General Assembly, which
provided an additional $50 million deposit to the Water Quality Improvement
Fund. The additional funding will be used solely to finance the costs
of design and installation of biological nutrient removal facilities or
removal technology at publicly owned treatment plants.
Mr. Baxter next provided
the members with the latest estimated costs for cleaning up the Chesapeake
Bay and other impaired Virginia waters. The total cost to meet nutrient
reduction commitments for all wastewater treatment plants located in the
Commonwealth was estimated at $1.1 billion. Of the 120 treatment plants
statewide, 100 are publicly owned plants, and the total cost to meet nutrient
reduction commitments at these plants was estimated to be $1.014 billion.
Mr. Baxter concluded with an estimate of the total costs for cleaning
up impaired waters of $12.5 billion, a cost to be shared by the Commonwealth,
local governments, agricultural producers, developers, as well as other
entities and individuals.
OF THE CHESAPEAKE BAY WATERSHED BLUE RIBBON FINANCE PANEL
Dr. Jack Greer of
the Environmental Finance Center at Maryland Sea Grant College presented
the recommendations of the Chesapeake Bay Watershed Blue Ribbon Finance
Panel (the Panel), which was formed pursuant to Chesapeake Executive Council
Directive No. 03-02. The Panel was charged with identifying funding for
cleanup of the Chesapeake Bay, as well as facilitating removal of the
Bay from the EPA's list of impaired waters by 2010.
The Panel recommended
the creation of a Chesapeake Bay Financing Authority which would be capitalized
through revenue appropriations from the Bay states and the federal government.
The Financing Authority, as an independent entity, could direct funds
to Bay watershed projects that would provide the greatest amount of return
in terms of nutrient and sediment reductions. The Panel recommended that
the federal government provide 80 percent of the Fund's capitalization,
with the Bay states contributing 20 percent.
The Panel also recommended
that the Bay states establish revolving loan funds to provide ongoing
funding for Bay cleanup. Agricultural producers will need financial assistance
in the form of federal and state grants and other subsidies to institute
best management practices for nutrient reduction. The Panel noted that
imposition of sewer and septic fees by the State of Maryland for cleanup
of the Chesapeake Bay serves as a funding model for wastewater treatment
improvements and other cleanup efforts.
OF THE CHESAPEAKE BAY FOUNDATION
Anne Jennings, Virginia
Executive Director of the Chesapeake Bay Foundation, was the final speaker.
Ms. Jennings stated that the Foundation and Virginia's citizens support
the $50 million commitment made by the General Assembly (House Bill 2777/Senate
Bill 1235/Senate Bill 810) for cleanup of Virginia's waters. The results
of a recent professionally administered poll revealed that Virginia citizens
consider pollution of the Chesapeake Bay to be a serious problem- more
of a problem than the economy, public safety, education, or taxes. The
Foundation supports the need for a stable, consistent funding source for
Bay cleanup, but any new tax or fee that may be imposed for that purpose
should provide an exemption for low-income households. Collection of a
tax or fee should be as administratively simple as possible. Ms. Jennings
concluded by saying that Virginians are willing to pay their share of
the bill to restore the health of the Chesapeake Bay.
The next meeting
of the joint subcommittee is scheduled for July 20, 2005, at 10:00 a.m.
in the General Assembly Building in Richmond.
The Hon. Vincent
F. Callahan, Jr.
The Hon John H.
Marty Farber, David
Rosenberg, or Mark Vucci