PRINTER'S NO. 4138

THE GENERAL ASSEMBLY OF PENNSYLVANIA

HOUSE BILL

No.

2430

Session of

2015

INTRODUCED BY TALLMAN AND MOUL, OCTOBER 26, 2016

REFERRED TO COMMITTEE ON ENVIRONMENTAL RESOURCES AND ENERGY,

OCTOBER 26, 2016

options for reducing nutrient and sediment pollution and for

the powers and duties of the Pennsylvania Infrastructure

Investment Authority.

The General Assembly of the Commonwealth of Pennsylvania

hereby enacts as follows:

Section 1. Short title.

This act shall be known and may be cited as the Pennsylvania

Nutrient Credit Trading Act.

Section 2. Legislative findings; declaration of policy.

The General Assembly finds and declares that nutrient and

throughout this Commonwealth to lower the cost of complying

with the Federal Water Pollution Control Act (62 Stat. 1155,

33 U.S.C. § 1251 et seq.) and National Pollutant Discharge

Elimination System requirements.

encourage the use of competitive markets to develop cost-

effective options by municipalities, public and private

entities and other parties required to reduce pollution under

Total Maximum Daily Load Plans and to implement the National

Pollutant Discharge Elimination System requirements.

metrics.

purchased by participating entities to be eligible for

funding under the Pennsylvania Infrastructure Investment

Authority and other State water infrastructure funding

programs.

Authority to develop the necessary policy, guidance and

regulations to establish trading of nutrient and sediment

credits for municipal separate storm sewer systems and the

incentivize private sector activity by providing the

framework, parameters and rules of engagement for long-term

trading of nutrient and sediment credits.

Section 3. Definitions.

The following words and phrases when used in this act shall

have the meanings given to them in this section unless the

context clearly indicates otherwise:

"Board." The board of the Pennsylvania Infrastructure

Investment Authority.

"Department." The Department of Environmental Protection of

the Commonwealth.

watershed or catchment.

"Interstate trading." Trades and sales of nutrient credits

by four-digit hydrologic unit codes across contiguous state

lines.

"River basins." The Lake Erie Basin and the Delaware,

Genesee, Ohio, Potomac, Susquehanna, Elk, Bush and Gunpowder

River Basins.

"Nutrients." Nitrogen or phosphorus.

"Nutrient and sediment reduction credit." An offset or

tradeable credit created pursuant to the provisions of 25 Pa.

nutrients and sediment under the provisions of a Total Maximum

Daily Load Plan required by the Federal Water Pollution Control

Act (62 Stat. 1155, 33 U.S.C. § 1251 et seq.) or to implement

the National Pollutant Discharge Elimination System requirements

to reduce pollution caused by nutrients or sediment. The term

includes other National Pollutant Discharge Elimination System

point source permittees.

"PennVEST." Pennsylvania Infrastructure Investment

Authority.

"Program." The Market-Based Nutrient and Sediment Reduction

Program established by this act.

establish a Market-Based Nutrient and Sediment Reduction Credit

Program to help participating entities develop the most cost-

effective options for complying with nutrient and sediment

reduction requirements under the Federal Water Pollution Control

Act (62 Stat. 1155, 33 U.S.C. § 1251 et seq.) and to implement

the National Pollutant Discharge Elimination System requirements

to control storm-water discharges from municipal separate storm

sewer systems in this Commonwealth.

(b) Credit certification.--

system shall be designed to help participating entities

purchase credits to meet their nitrogen and phosphorus

discharge limits for the compliance year and control storm-

water discharges from municipal separate storm sewer systems.

Participating entities include developers and other

operations, including public and private waste water

treatment plants and concentrated animal feeding operations,

that are required to implement the provisions of the

following:

administration.

(c) Credit markets.--As part of this program, PennVEST shall

help to establish a fair and open market for promoting the sale

and offering of nutrient and sediment reduction credits created

under the program through an appropriate competitive

mechanism. PennVEST shall establish a forward-looking nutrient

and sediment reduction credit auction to promote the trading of

credits.

(d) Consultation.--PennVEST shall consult with the

department, the Department of Agriculture, the State

the act of June 22, 1937 (P.L.1987, No.394), known as The Clean

Streams Law, and all implementing regulations and policies,

including those for nutrient and sediment reduction credit

programs in 25 Pa, Code Ch. 96 (relating to water quality

standards implementation).

(f) Federal compliance.--The program developed shall meet

the requirements of the Federal Water Pollution Control Act (62

Stat. 1155, 33 U.S.C. § 1251 et seq.) and all implementing

regulations and policies, including those for nutrient and

sediment reduction credit programs.

Section 5. Request for proposal process

1251 et seq.) or to implement the National Pollutant Discharge

Elimination System requirements. The requests for proposals

shall be for a term of at least 10 years.

(b) Competitive proposals.--

proposal issued under this section may be for the eligible

portion of the nutrient and sediment urban storm-water load

reduction credits required to implement a Total Maximum Daily

Load Plan under the Federal Water Pollution Control Act (62

Stat. 1155, 33 U.S.C. § 1251 et seq.) or to implement the

enter into an agreement with other municipal separate storm

sewer system permittees within the same four-digit hydrologic

unit code to collectively meet the sum of waste load

allocations that may be established by a permit.

(c) Lowest cost option.--Except as provided in subsection

(d), a participating entity shall pick the lowest cost option

presented by the results of the request for proposal process and

the analysis of other options for complying with nutrient and

sediment reductions to meet the participating entity's

obligations under a Total Maximum Daily Load Plan and to

(c), an analysis justifying the decision may be submitted to

PennVEST within 30 days of the decision. The analysis shall

include, but not be limited to, economic and environmental

considerations that give a detailed explanation for the decision

not to accept the lower cost option.

(e) Family farm participation.--A participating entity

issuing a request for proposal under this section shall solicit

proposals from family farms and companies utilizing advanced

manure treatment technologies to reduce nutrient loading.

(f) Spatial limitation.--PennVEST, in consultation with the

(g) Hydrologic unit limitation.--An application responding

to a request for proposal issued under this section shall be

within the same four-digit hydrologic unit code or in the

adjacent four-digit hydrologic unit code as the National

Pollutant Discharge Elimination System.

Section 6. Funding eligibility.

(a) Scope.--Credits created under this act and bought by

participating entities under the request for proposal process

outlined in section 5 shall be eligible for funding under

agricultural, conservation and water infrastructure funding

programs administered by the Commonwealth Financing Authority,

reduction credit purchased by a participating entity under this

act.

Section 7. Regulations.

(a) Promulgation.--The board shall promulgate regulations to

carry out the provisions of this act.

(b) Consideration of regulations.--The board shall consider

proposed regulations implementing the provisions of this act no

later than 60 days after the effective date of this section.

Section 8. Effective date.