March 16, 2015

Ms. Debra Harris

Virginia Department of Environmental Quality

629 East Main Street

P.O. Box 1105

Richmond, Virginia 23218

RE: CBNLT Public Comment on 9VAC25-900 "Certification of Nonpoint Source Nutrient Credits"

Dear Ms. Harris,

Chesapeake Bay Nutrient Land Trust, LLC (CBNLT) is an owner and manager of nutrient credit generating facilities in Virginia and was an active stakeholder participant on the Nutrient Credit Certification Regulatory Advisory Panel in 2013.  As part of that role, CBNLT has provided both written and verbal comment on the draft regulation on multiple occasions.  In an effort to continue a cooperative approach toward reaching consensus on the regulatory language, CBNLT is hereby submitting public comments on the draft regulations entitled Certification of Nonpoint Source Nutrient Credits (9VAC25-900).

1. 9VAC25-900-10 Definitions - "Management Area"

Comment - The proposed definition of "Management Area" includes "all contiguous parcels deeded to the same landowner".  Some landowners have large tracts of land that may be well-suited for nutrient credit generation, but this over-reaching language may create a disincentive to participation in the Commonwealth's nutrient trading programs.

Proposed Solution - The definition of Management Area should be specific to the type of credit generating practices taking place within the parcel(s).  Specifically, for land conversion projects generating perpetual credits, the Management Area should be limited to those areas undergoing conversion.  Those areas are further subject to financial assurances, legal mechanisms designed to protect the implemented nutrient reductions, and monitoring and maintenance requirements as further outlined in the regulation.

2. 9VAC25-900-90 Nutrient Credit Release and Registration

Part B - "Schedule of release of nutrient credits"

Comment - A staged release is redundant and costly if the Applicant has already demonstrated that a minimum number of trees have been planted and financial assurances are in place should subsequent monitoring indicate that an insufficient density of planted/volunteer woody stems is present.  In addition, should DEQ find that a nutrient credit facility is not in compliance with the regulation, the department has the authority to suspend the ability of that facility to exchange credits.   

Proposed Solution - Nutrient credit release terms for perpetual credits should remain consistent with practices DEQ currently has in place.  Under current DEQ guidelines, once a project has received approval, the Applicant must provide documentation of financial assurances, restrictive covenants/easement and evidence that the nutrient reduction practices (i.e., land conversion) have been implemented.  Upon meeting those criteria, the credits are released for transfer.

Part C - "Registration of nutrient credits"

Comment - The discussion of how credits are "exchanged" has exceeded the intent of these regulations.  The purpose of these regulations is to establish criteria for the certification of nutrient credits and the projects generating those credits.  Regulatory requirements regarding the establishment of nutrient limitations or the mechanics of nutrient credit acquisition are found in existing statute and are not integral to the establishment of credit certification criteria.

Proposed Solution - Under Part C of this section, strike all language following the statement: "Only credits released by the department are available for exchange."

3. 9VAC25-900-120 Implementation Plan

Comment - Part C.2 - The proposed language states that "Survival of planted deciduous trees shall not be established until the start of the second complete growing season following planting.  Survival of planted evergreen trees may be established after completion of the first complete growing season following planting."  The requirement that 75% of the credits are not released until 2 growing seasons have passed for hardwoods is over-reaching.  Even the wetland program administered by DEQ only requires monitoring for one growing season in order to demonstrate successful establishment of the woody vegetation.  We would argue that even a full year is not necessary, given the high likelihood that if a parcel of land in Virginia is planted in trees and protected from agricultural and development activity, it will rapidly develop forested conditions.  In addition, financial assurances are in place in the event that the minimum stem count is not established in the conversion areas. 

Proposed Solution - As mentioned in an earlier comment, nutrient credit release terms for perpetual credits should remain consistent with practices DEQ currently utilizes.  Credits are released upon demonstration that the land conversion activities have been completed and that both the financial assurances and the protective covenants on the land conversion areas have been put in place.

4. 9VAC25-900-330 Insurance

Comment - Part F - The proposed language states that "The insurance policy shall provide that the insurer may not cancel, terminate, or fail to renew the policy except for failure to pay the premium."  It is extremely difficult, if not impossible, for a nutrient credit bank owner to obtain an insurance policy for a structural BMP if that policy is to remain in effect in perpetuity.

Proposed Solution - The language should require that the policy remain in effect for a specified amount of time, for example a 10 year term policy.

In an attempt to keep these comments focused and brief, we have touched on the more critical aspects of the draft regulation.  However, there are numerous other questions and comments that CBNLT would like addressed.  Based on the number and importance of outstanding comments regarding this draft regulation, we recommend reconvening the Regulatory Advisory Panel, which would allow additional stakeholder input and opportunity for consensus.  We appreciate the Department of Environmental Quality's review of these comments and encourage you to contact our office if you have any questions.                      

Thank you,

Brent L. Fults

Brent L. Fults, LA

Managing Member

Chesapeake Bay Nutrient Land Trust, LLC