MACo Reaches Agreement on Governor’s Clean Water Commerce Act

The Maryland Department of the Environment (MDE) in consultation with numerous stakeholders including MACo, reached agreement on a set of amendments to allay local government and environmentalist concerns over SB 314 – the “Clean Water Commerce Act of 2017.” The bill was sponsored by the Administration of Governor Larry Hogan.

As introduced, SB 314 would allow MDE to use up to $10 million a year from the Bay Restoration Fund (BRF) Wastewater Account to purchase nitrogen and phosphorus nutrient credits in support of restoring the Chesapeake Bay. MDE must adopt regulations regarding the use of BRF funds in conjunction with the Maryland Departments of Agriculture and Natural Resources.

MACo was still in an oppose position at the hearing for SB 314 before the Senate Education, Health, and Environmental Affairs Committee on February 14, 2017, but Knapp indicated that amendments provided to MACo by MDE the night before the hearing appeared to alleviate MACo’s concerns. MACo’s Legislative Committee formally moved to a support with amendments positions on February 15 after Secretary of the Environment Benjamin Grumbles spoke with the Committee about the bill’s proposed amendments. From the MACo testimony at the bill hearing:

MACo has been supportive of establishing a nutrient credit trading program in Maryland – giving the State, local governments, and other stakeholders another “tool in the toolbox” to help meet our Bay restoration goals. MACo also appreciates the desire to “jumpstart” such a market. However, the bill’s provisions are broad and ill-defined.

There are no limits placed on when and where MDE may purchase credits or what projects the credits apply to. There is also no prioritization of the use of the monies, meaning that a highly cost-effective county or municipal project may not get funded over the purchase of a nutrient credit that yields a more modest return.

Additionally, MACo and other affected stakeholders would have no role in helping to develop regulations that will affect what has been to date a reliable source of support for local Bay restoration goals. These are critical details that must be addressed in advance before MACo would be comfortable supporting such a proposal.

Amendments include: a 4-year sunset on the bill, a requirement that wastewater treatment plant upgrades retain a higher priority, a prohibition on using the $10 million to purchase agricultural nutrient credit trading credits, a requirement that the $10 million must be awarded based on cost-effectiveness as part of a competitive submission process, and a requirement that MDE consult with public and private stakeholders (including MACo) as it develops regulations to implement the bill. Several additional amendments relating to the total funding amount are also under consideration.

The Maryland Municipal League and Chesapeake Bay Foundation also supported the bill with the amendments. The Chesapeake Bay Commission and Clean Water Action testified in opposition to the bill but stated they were willing to consider the amendments.

The bill’s cross-file (HB 417) is scheduled for a hearing before the House Environment and Transportation Committee on February 22.

Useful Links

SB 314 of 2017

MACo Testimony on SB 314

Governor Hogan Webpage

MACo Bill Tracking Tool