Develop water quality trading guidelines all you want, but you could just as easily sell an insurance instrument for nutrient loads not to exceed "X".  

Otherwise, this scheme reads like an application for a pollution line of credit, putting up the natural capital of the Commonwealth as collateral.  Problem is that water flows downstream and to what effect will credit-generating activity upstream even contribute to improving impaired waters downstream?

If one can retrofit a septic tank, so that they can trade their "improvement" to someone else buying a nutrient credit in order to keep using their inefficient septic tank, how will this ever translate into measurable nutrient reduction goals for the Chesapeake Bay and its environs?

There are many ways to incentivize investment in restoring the environment, but this one appears counter-productive to that purpose.  If you want to clean up the Bay, it might be better to ask, why is every poultry operator a violator every time a significant rain event occurs?