Division of Legislative Services > Legislative Record > 2005

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.


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.


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.

Secretary Murphy 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.


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 significant dischargers.

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 other nutrient
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.


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.


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.

Vice Chairman:
The Hon John H. Chichester

For information, contact:
Marty Farber, David Rosenberg, or Mark Vucci
DLS Staff



Division of Legislative Services > Legislative Record > 2005 

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