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Senate of Pennsylvania
Session of 2017 - 2018 Regular Session

MEMORANDUM

Posted:	June 20, 2017 11:36 AM
From:	Senator Richard L. Alloway, II
To:	All Senate members
Subject:	Pennsylvania Clean Water Procurement Program

I am introducing legislation to create a program for Pennsylvania municipalities and municipal separate storm sewer systems (MS4s) to meet their taxpayer funded Chesapeake Bay nutrient reduction mandates. In January 2013, the PA Legislative Budget & Finance Committee issued a report that projected a competitively-bid verified nutrient procurement program would reduce overall compliance costs by up to 80 percent. In the process, we can save taxpayers billions, while improving drinkable water within the Chesapeake Bay watershed, which has been threatened through years of poor cleanup efforts. Pennsylvania’s taxpayers, in spite of having invested billions in municipal and agricultural Chesapeake Bay restoration efforts, face unprecedented costs in meeting Chesapeake Bay total maximum daily load (TMDL) pollution requirements under the existing Department of Environmental Protection sector allocation approach. Simply put, meeting the 2025 Chesapeake Bay mandate under the existing approach will be the single largest tax increase that the taxpayers of the Susquehanna watershed have seen in their lifetime. The impact of allowing these crushing costs to continue unabated will have a devastating effect on these communities and significantly impact the long term social and economic health of these communities. This legislation will replace the existing allocation approach, which is not cost focused, with a competitive-bidding program that focuses on the securing the most cost-effective solution. This will include risk assessment and valuing local quantifiable environmental benefits and their impact on the community. The program is designed to transfer performance risk from the taxpayer to the successful bidder by requiring that the projects be private-sector funded. Payment for nutrient reductions will be after the Department of Environmental Protection has certified the nutrient reductions. Perhaps most important, the combination of requiring private-sector funding and payment in arrears eliminates the risks for taxpayers. Under the existing approach, taxpayers fund the solution and assumes the risk. The legislation will provide relief to MS4s from nitrogen and phosphorus requirements, and establish a structure to help ensure municipalities can implement lowest-cost compliance with Bay TMDLs through consistent long-term purchases of nutrient credits that meet EPA’s verified standard as Bay offsets. This will save taxpayers billions -- and finally help Pennsylvania solve its Chesapeake Bay cleanup challenges.

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