Chapter 900. Certification of Nonpoint Source Nutrient Credits
Part I
Definitions
9VAC25-900-10. Definitions.
The following words and terms when used in this chapter shall have the following meanings unless the context clearly indicates otherwise:
"300 animal units" means the term as defined in 9VAC25-192-10.
"Act" means the Chesapeake Bay Watershed Nutrient Credit Exchange Program, Article 4.02 (§ 62.1-44.19:12 et seq.) of Chapter 3.1 of Title 62.1 of the Code of Virginia.
"Animal feeding operation" means the term as defined by 9VAC25-31-10.
"Applicant" means the person who submits an application to the department for nutrient credit certification pursuant to this chapter.
"Bankfull event" means the storm event that corresponds with the stream stage at its incipient point of flooding. The bankfull discharge associated with the bankfull event is the flow that transports the majority of a stream's sediment load over time and thereby forms and maintains the channel dimension, pattern, and profile.
"Baseline" means the practices, actions, or levels of reductions that must be in place before credits can be generated. The best management practices to be implemented for achieving baseline are provided in 9VAC25-900-100.
"Best management practice," "practice," or "BMP" means a structural practice, nonstructural practice, or other management practice used to prevent or reduce nutrient loads reaching surface waters or the adverse effects thereof.
"Board" means the State Water Control Board. When used outside the context of the promulgation of regulations, including regulations to establish general permits, "Board" means the Department of Environmental Quality.
"Certification of nutrient credits" or "nutrient credit certification" means the approval of nutrient credits issued by the department as specified in 9VAC25-900-80. Nutrient credit certification does not include the certification of point source credits generated by point sources regulated under the Watershed General Virginia Pollutant Discharge Elimination System Permit issued pursuant to § 62.1-44.19:14 of the State Water Control Law.
"Chesapeake Bay Watershed" means the land areas draining to the following Virginia river basins: the Potomac River Basin, the James River Basin, the Rappahannock River Basin, the Chesapeake Bay and small coastal basins, or the York River Basin.
"Concentrated animal feeding operation" means the term as defined by 9VAC25-31-10.
"Cropland" means land that is used for the production of grain, oilseeds, silage or industrial crops not defined as hay or pasture.
"DCR" means the Department of Conservation and Recreation.
"Delivery factor" means the estimated percentage of a total nitrogen or total phosphorus load delivered to tidal waters as determined by the specific geographic location of the nutrient source. For point source discharges the delivery factor accounts for attenuation that occurs during riverine transport between the point of discharge and tidal waters. For nonpoint source loads the delivery factor accounts for attenuation that occurs during riverine transport as well as attenuation between the nutrient source and the edge of the nearest stream. Delivery factors values shall be as specified by the department. In the Chesapeake Bay Watershed, the Chesapeake Bay Program Partnership's approved delivery factors shall be used.
"Department" means the Department of Environmental Quality.
"Director" means the Director of the Department of Environmental Quality or his designee.
"Exchange" means the transaction in which a person acquires released nutrient credits produced by a nutrient credit-generating project.
"Field office technical guide" or "FOTG" means technical guides about conservation of soil, water, air, and related plant and animal resources and are the primary scientific reference for the U.S. Department of Agriculture's Natural Resource Conservation Service. These guides are used in each field office and are localized so that they apply specifically to the geographic area for which they are prepared.
"Hayland" means land that is used to grow a grass, legume, or other plants such as clover or alfalfa, which is cut and dried for feed.
"Highly erodible soils" means land that is defined as highly erodible by the Sodbuster, Conservation Reserve, and Conservation Compliance parts of the Food Security Act of 1985 (P.L. 99-198) and the Food, Agriculture, Conservation, and Trade Act of 1990 (P.L. 101-624). Lists of highly erodible and potential highly erodible map units are maintained in NRCS field office technical guide.
"HUC" means the hydrologic unit code.
"Impaired waters" means those waters identified as impaired in the 305(b)/303(d) Water Quality Assessment Integrated Report prepared pursuant to § 62.1-44.19:5 of the State Water Control Law.
"Implementation plan" means a plan that has been developed to meet the requirements of 9VAC25-900-120 and is submitted as part of the application.
"Invasive plant species" means non-native plant species that are contained on DCR's Virginia Invasive Plant Species List.
"Innovative practice" means practices or BMPs not approved by the Chesapeake Bay Program Partnership or the Virginia Stormwater BMP Clearinghouse. Nutrient credits generated by innovative practices may only be certified as term credits.
"Landowner" means any person or group of persons acting individually or as a group that owns the parcel on which a nutrient credit-generating project is sited including: (i) the Commonwealth or any of its political subdivisions, including localities, commissions, and authorities; (ii) any public or private institution, corporation, association, firm, or company organized or existing under the laws of this or any other state or country; or (iii) any officer or agency of the United States.
"Land use controls" means legal measures or instruments that restrict the activity, use, and access to property.
"Land use conversion" means a change from a more intensive to less intensive land use resulting in nutrient reductions.
"Management area" means all contiguous parcels deeded to the same landowner that includes the site of the nutrient credit-generating project within its boundaries. The term contiguous means the same or adjacent parcels that may be divided by public or private right-of-way. For a public entity that owns or operates an MS4 and generates credits within the MS4 service area, the management area is the MS4 service area.
"Mitigation" means sequentially avoiding and minimizing impacts to the maximum extent practicable and then compensating for remaining unavoidable impacts of a proposed action.
"Mitigation bank" means a site providing off-site, consolidated compensatory mitigation that is developed and approved in accordance with all applicable federal and state laws or regulations for the establishment, use and operation of mitigation banks and is operating under a signed mitigation banking instrument.
"Mitigation banking instrument" means the legal document for the establishment, operation, and use of a stream or wetland mitigation bank.
"MS4" means a municipal separate storm sewer system as defined in 9VAC25-875-20.
"MS4 service area" means (i) for Phase I MS4 permittees, the service area delineated in accordance with the permit issued pursuant to 9VAC25-875-950 A; and (ii) for Phase II MS4 permittees, the term as described in 9VAC25-890.
"Non-land use conversion" means practices, except for land use conversion, that are used by a nutrient credit-generating project to produce nutrient reductions.
"Nonpoint source pollution" or "nonpoint source" means pollution such as sediment, nitrogen, phosphorus, hydrocarbons, heavy metals, and toxics whose sources cannot be pinpointed but rather are washed from the land surface in a diffuse manner by stormwater runoff.
"NRCS" mean the U.S. Department of Agriculture's Natural Resource Conservation Service.
"Nutrient credit" or "credit" means a nonpoint source nutrient reduction that is certified pursuant to this chapter and expressed in pounds of phosphorus and nitrogen either (i) delivered to tidal waters when the credit is generated within the Chesapeake Bay Watershed or (ii) as otherwise specified when generated in the Southern Rivers watersheds. Nutrient credit does not include point source nitrogen credits or point source phosphorus credits as defined in § 62.1-44.19:13 of the Code of Virginia.
"Nutrient credit-generating entity" means an entity that implements practices for the generation of nonpoint source nutrient credits.
"Nutrient credit-generating project" or "project" means a project developed to reduce the load of nitrogen and phosphorous nonpoint source pollution in order to generate nutrient credits for certification pursuant to this chapter.
"Nutrient reductions" means the reduction in the load of nitrogen and phosphorous nonpoint source pollution.
"Owner" means the Commonwealth or any of its political subdivisions, including sanitation district commissions and authorities and any public or private institution, corporation, association, firm, or company organized or existing under the laws of this or any other state or country, or any officer or agency of the United States, or any person or group of persons acting individually or as a group that owns, operates, charters, rents, or otherwise exercises control over or is responsible for any nutrient credit-generating project.
"Pasture" means land that supports the grazing of domesticated animals for forages.
"Performance standards" means the minimum objectives or specifications required of a particular management practice by the department in order to assure predicted nutrient reductions will be achieved.
"Perpetual nutrient credits" or "perpetual credits" mean credits that are generated by practices that result in permanent nutrient reductions from baseline and certified as permanent in accordance with this chapter.
"Person" means any individual, corporation, partnership, association, state, municipality, commission, or political subdivision of a state, governmental body, including a federal, state, or local entity as applicable, any interstate body or any other legal entity.
"Potential nutrient credits" means the possible credits generated by a nutrient credit-generating project as calculated pursuant to 9VAC25-900-110. These potential nutrient credits shall be expressed in terms of the estimated number of phosphorus and nitrogen credits generated.
"Redevelopment" means a project that includes new development on previously developed land.
"Registry" means the online Virginia Nutrient Credit Registry established and maintained by the department in accordance with § 62.1-44.1.19:20 D of the Code of Virginia.
"Released nutrient credit" means credits that the department has determined to be eligible for placement on the Virginia Nutrient Credit Registry.
"Restoration" means the reestablishment of a wetland, stream, or other aquatic resource in an area where it previously existed. Wetland restoration means the reestablishment of wetland hydrology, soils, and vegetation in an area where a wetland previously existed. Stream restoration means the process of converting an unstable, altered, or degraded stream corridor, including adjacent areas and floodplains, to its natural conditions.
"Retrofit" means a project that provides improved nutrient reductions to previously developed land through the implementation of new BMPs or upgrades to existing BMPs.
"Site" means the physical location within the management area where the nutrient credit-generating project and its associated practices, both baseline and credit-generating, are located.
"Site protection instrument" means a deed restriction, conservation easement, or other legal mechanism approved by the department that provides assurance that the credits will be maintained in accordance with this chapter and the certification requirements.
"Southern Rivers watersheds" means the land areas draining to the following river basins: the Albemarle Sound, Coastal; the Atlantic Ocean, Coastal; the Big Sandy River Basin; the Chowan River Basin; the Clinch-Powell River Basin; the New Holston River Basin (Upper Tennessee); the New River Basin; the Roanoke River Basin; or the Yadkin River Basin.
"State waters" means all water, on the surface and under the ground, wholly or partially within or bordering the Commonwealth or within its jurisdiction, including wetlands.
"Steward" or "long-term steward" means any person who is responsible for implementation of the long-term management plan of a perpetual nutrient credit-generating project.
"Structural BMPs" means any man-made stormwater control measure or feature that requires routine maintenance in order to function or provide the hydrologic, hydraulic, or water quality benefit as designed. Structural practices include bioretention, infiltration facilities, wet ponds, extended detention, wet and dry swales, permeable pavement, rainwater harvesting, vegetated roofs, underground or surface chambers or filters, and other manufactured treatment devices (MTDs).
"T" means the soil loss tolerance rate as defined by the NRCS.
"Term nutrient credit" or "term credit" means nutrient reduction activities that generate credits for a determined and finite period of at least one year but no greater than five years.
"Total maximum daily load" or "TMDL" means the sum of the individual wasteload allocations (WLAs) for point sources, load allocations (LAs) for nonpoint sources, natural background loading, and a margin of safety. TMDLs can be expressed in terms of either mass per time, toxicity, or other appropriate measure. The TMDL process provides for point versus nonpoint source trade-offs. TMDLs in Virginia are expressed as both a daily load and an annual load. For nutrient trading, annual loads are most often utilized.
"Tributary" means those river basins for which separate tributary strategies were prepared pursuant to § 2.2-218 of the Code of Virginia and includes the Potomac, Rappahannock, York, and James River basins, and the Eastern Coastal Basin, which encompasses the creeks and rivers of the Eastern Shore of Virginia that are west of Route 13 and drain into the Chesapeake Bay. For areas outside of the Chesapeake Bay Watershed, "tributary" includes the following watersheds: Albemarle Sound, Coastal; Atlantic Ocean, Coastal; Big Sandy; Chowan; Clinch-Powell; New Holston (Upper Tennessee); New River; Roanoke; and Yadkin.
"Urban lands" means lands characterized by developed areas with buildings, asphalt, concrete, suburban gardens, and a systematic street pattern. Classes of urban development include residential, commercial, industrial, institutional, transportation, communications, utilities, and mixed urban. Undeveloped land surrounded by developed areas, such as cemeteries, golf courses, and urban parks is recognized as urban lands.
"VACS BMP Manual" means the Virginia Agricultural Cost Share BMP Manual.
"VESMP authority" means a Virginia erosion and stormwater management program authority as defined in 9VAC25-875-20.
"Virginia Chesapeake Bay TMDL Watershed Implementation Plan," "Watershed Implementation Plan," or "WIP" means the Phase I watershed implementation plan strategy submitted by Virginia and approved by the U.S. Environmental Protection Agency (EPA) in December 2010 to meet the nutrient and sediment allocations prescribed in the Chesapeake Bay Watershed TMDL or any subsequent revision approved of EPA.
"Virginia Erosion and Stormwater Management Program" or "VESMP" means a program established by a VESMP authority for the effective control of soil erosion and sediment deposition and the management of the quality and quantity of runoff resulting from land-disturbing activities to prevent the unreasonable degradation of properties, stream channels, waters, and other natural resources. The program shall include such items as local ordinances, rules, requirements for permits and land-disturbance approvals, policies and guidelines, technical materials, and requirements for plan review, inspection, and enforcement consistent with the requirements of the Virginia Erosion and Stormwater Management Act (§ 62.1-44.15:24 et seq. of the Code of Virginia).
"Virginia Pollutant Discharge Elimination System permit" or "VPDES permit" means a document issued by the department pursuant to the State Water Control Law authorizing, under prescribed conditions, the potential or actual discharge of pollutants from a point source to surface waters and the use or disposal of sewage sludge.
"Virginia Stormwater Management Program" or "VSMP" means a program established by the department pursuant to § 62.1-44.15:27.1 of the Code of Virginia on behalf of a locality on or after July 1, 2014, to manage the quality and quantity of runoff resulting from any land-disturbing activity that (i) disturbs one acre or more of land or (ii) disturbs less than one acre of land and is part of a larger common plan of development or sale that results in one acre or more of land disturbance.
"Virginia Water Protection permit" or "VWP permit" means an individual or general permit issued by the department under § 62.1-44.15:20 of the Code of Virginia that authorizes activities otherwise unlawful under § 62.1-44.5 of the Code of Virginia or otherwise serves as Virginia's Section 401 certification.
"VPA" means Virginia Pollution Abatement.
"VPDES" means Virginia Pollutant Discharge Elimination System.
"VSMP authority" means a Virginia stormwater management program authority as defined in 9VAC25-875-20.
"VWP" means Virginia Water Protection.
"Water body with perennial flow" means a body of water that flows in a natural or man-made channel year-round during a year of normal precipitation as a result of groundwater discharge or surface runoff. Such water bodies exhibit the typical biological, hydrological, and physical characteristics commonly associated with the continuous conveyance of water.
"Water Quality Guide" means Virginia's Forestry Best Management Practices for Water Quality.
"Wetlands" means those areas that are inundated or saturated by surface or groundwater at a frequency and duration sufficient to support, and that under normal circumstances do support, a prevalence of vegetation typically adapted for life in saturated soil conditions. Wetlands generally include swamps, marshes, bogs, and similar areas.
Statutory Authority
§ 62.1-44.19:20 of the Code of Virginia.
Historical Notes
Derived from Virginia Register Volume 36, Issue 23, eff. September 1, 2020; amended, Virginia Register Volume 38, Issue 26, eff. September 14, 2022.
Part II
General Information
9VAC25-900-20. (Repealed.)
Historical Notes
Derived from Virginia Register Volume 36, Issue 23, eff. September 1, 2020; repealed, Virginia Register Volume 38, Issue 26, eff. September 14, 2022.
9VAC25-900-30. Purpose and applicability.
A. The purpose of this chapter is to establish standards and procedures pertaining to the certification of nutrient credits that will be placed on the registry for exchange.
B. This chapter applies to all persons who submit an application for and to all persons that receive a certification of nutrient credits from the department in accordance with the Act and this chapter.
C. Nutrient credits from stormwater nonpoint nutrient credit-generating projects in receipt of a Nonpoint Nutrient Offset Authorization for Transfer letter from the department prior to September 1, 2020, shall be considered certified nutrient credits and shall not be subject to further nutrient credit certification requirements or to the credit retirement requirements of this chapter. However, such projects shall be subject to all other provisions of this chapter, including registration of nutrient credits under 9VAC25-900-90 and the requirements of Part IV (9VAC25-900-140 et seq.) of this chapter including inspection, reporting, and enforcement.
D. This chapter does not apply to the certification of point source nutrient credits that may be generated from effective nutrient controls or removal practices associated with the types of facilities or practices historically regulated by the board or department, such as water withdrawal and treatment and wastewater collection, treatment, and beneficial reuse.
E. This chapter does not apply to stream or wetland restoration projects constructed prior to July 1, 2005, as no usable nutrient reductions are deemed to be generated from these projects and, therefore, no nutrient credits can be certified.
Statutory Authority
§ 62.1-44.19:20 of the Code of Virginia.
Historical Notes
Derived from Virginia Register Volume 36, Issue 23, eff. September 1, 2020; Errata, 36:25 VA.R. 2379 August 3, 2020; amended, Virginia Register Volume 38, Issue 26, eff. September 14, 2022.
9VAC25-900-40. Relationship to other laws and regulations.
A. Specific requirements regarding the use of nutrient credits are found in the following regulations and statutes:
1. Virginia Erosion and Stormwater Management Regulation ( 9VAC25-875).
a. Individual VPDES Permits for Discharges from Construction Activities. As specified in § 62.1-44.19:21 B of the Act, those applicants required to comply with water quality requirements for land-disturbing activities operating under a construction individual permit issued pursuant to 9VAC25-875 may acquire and use perpetual nutrient credits placed on the registry for exchange.
b. Individual Permits for Municipal Separate Storm Sewer Systems. As specified in § 62.1-44.19:21 A of the Act, an MS4 permittee may acquire, use, and transfer nutrient credits for purposes of compliance with any wasteload allocations established as effluent limitations in an MS4 individual permit issued pursuant to 9VAC25-875. Such method of compliance may be approved by the department following review of a compliance plan submitted by the permittee that includes the use of nutrient credits and is in accordance with the provisions of § 62.1-44.19:21 A.
2. General VPDES Permit for Discharges of Stormwater from Construction Activities (9VAC25-880). As specified in § 62.1-44.19:21 B of the Act, those applicants required to comply with water quality requirements for land-disturbing activities operating under a general VPDES permit for discharges of stormwater from construction activities issued pursuant to 9VAC50-880 may acquire and use perpetual nutrient credits placed on the registry for exchange.
3. General VPDES Permit for Discharges of Stormwater from Small Municipal Separate Storm Sewer Systems (9VAC25-890). As specified in § 62.1-44.19:21 A of the Act, an MS4 permittee may acquire, use, and transfer nutrient credits for purposes of compliance with any wasteload allocations established as effluent limitations in an MS4 general permit issued pursuant to 9VAC25-890. Such method of compliance may be approved by the department following review of a compliance plan submitted by the permittee that includes the use of nutrient credits and is in accordance with the provisions of § 62.1-44.19:21 A.
4. Virginia Pollutant Discharge Elimination System (VPDES) Permit Regulation (9VAC25-31). As specified in § 62.1-44.19:21 C of the Act, owners of confined or concentrated animal feeding operations issued individual permits pursuant to 9VAC25-31 may acquire, use, and transfer credits for compliance with any wasteload allocations contained in the provisions of a VPDES permit. Such method of compliance may be approved by the department following review of a compliance plan submitted by the permittee that includes the use of nutrient credits.
5. Virginia Pollutant Discharge Elimination System (VPDES) Permits for Discharges of Storm Water Associated with Industrial Activity. As specified in § 62.1-44.19:21 D of the Act, owners of facilities registered for coverage under 9VAC25-151 for the general VPDES permit or issued a VPDES permit regulating stormwater discharges that requires nitrogen and phosphorus monitoring at the facility may acquire, use, and transfer credits for compliance with any wasteload allocations established as effluent limitations in a VPDES permit. Such method of compliance may be approved by the department following review of a compliance plan submitted by the permittee that includes the use of nutrient credits.
6. General Virginia Pollutant Discharge Elimination System (VPDES) Watershed Permit Regulation for Total Nitrogen and Total Phosphorus Discharges and Nutrient Trading in the Chesapeake Bay Watershed in Virginia (9VAC25-820). Nutrient credits certified pursuant to this chapter may be acquired to offset mass loads of total nitrogen or total phosphorus discharged by new or expanded facilities regulated by 9VAC25-820.
B. This chapter shall not be construed to limit or otherwise affect the authority of the department to establish and the department to enforce more stringent water quality-based effluent limitations for total nitrogen or total phosphorus in permits where those limitations are necessary to protect local water quality. The exchange or acquisition of credits pursuant to this chapter shall not affect any requirement to comply with such local water quality-based limitations.
Statutory Authority
§ 62.1-44.19:20 of the Code of Virginia.
Historical Notes
Derived from Virginia Register Volume 36, Issue 23, eff. September 1, 2020; amended, Virginia Register Volume 38, Issue 1, eff. September 29, 2021; Volume 38, Issue 26, eff. September 14, 2022; Errata, 39:2 VA.R. 53 September 12, 2022.
9VAC25-900-50. Appeal process.
Any person applying to establish a nutrient credit-generating entity or an owner of a nutrient credit-generating entity aggrieved by any action of the department taken in accordance with this chapter, or by inaction of the department, shall have the right to review in accordance with the provisions of the Administrative Process Act (§ 2.2-4000 et seq. of the Code of Virginia).
Statutory Authority
§ 62.1-44.19:20 of the Code of Virginia.
Historical Notes
Derived from Virginia Register Volume 36, Issue 23, eff. September 1, 2020.
9VAC25-900-60. Limitations, liability, and prohibitions.
A. Except to the extent it may be an owner as defined by this chapter, none of the following shall have responsibility or liability for the performance of practices at a nutrient credit-generating project evaluated using the procedures established in this chapter: (i) the department, (ii) a VESMP authority, or (iii) any political subdivision of the Commonwealth.
B. Those persons with whom the department contracts, including those serving as technical evaluators on an advisory committee, are advisors to the department, and the department remains solely responsible for decisions made regarding implementation of this chapter.
C. For the purposes of this chapter, the certification of nutrient credits that are generated from practices funded in part or in whole by federal or state water quality grant funds is prohibited other than controls and practices under § 62.1-44.19:20 B 1 a of the Act; however, establishing baseline as specified in 9VAC25-900-100 may be achieved through the use of such grants.
D. The option to acquire nutrient credits for compliance purposes shall not eliminate any requirement to comply with local water quality requirements, including such requirements lawfully imposed by a locality or local MS4.
E. The issuance of a nutrient credit certification under this chapter does not convey any property rights of any sort or any exclusive privilege.
F. The issuance of a nutrient credit certification under this chapter does not authorize any injury to persons or property or invasion of other private rights, or any infringement of state or local law or regulations.
G. Nutrient credit certifications are not transferable except in accordance with 9VAC25-900-180. The department may require modification or revocation and reissuance of nutrient credit certifications to change the name of the owner of the nutrient credit-generating project and incorporate such other requirements as may be necessary under the State Water Control Law or the Clean Water Act.
H. No person shall offer for exchange nutrient credits except in compliance with the provisions of this chapter.
I. No nutrient credit shall be generated by practices previously implemented to comply with: (i) the requirements for a VPDES (9VAC25-31), VPA (9VAC25-32), VWP (9VAC25-210), or VPDES construction general permit (9VAC25-880); (ii) erosion and sedimentation control requirements pursuant to 9VAC25-875; or (iii) the requirements of the Chesapeake Bay Preservation Act pursuant to § 62.1-44.15:67-79 of the Code of Virginia.
J. Nutrient credit generation and use shall be contemporaneous with the applicable permit's compliance period.
Statutory Authority
§ 62.1-44.19:20 of the Code of Virginia.
Historical Notes
Derived from Virginia Register Volume 36, Issue 23, eff. September 1, 2020.
9VAC25-900-70. [Reserved].
Statutory Authority
§ 62.1-44.19:20 of the Code of Virginia.
Historical Notes
Reserved, Virginia Register Volume 36, Issue 23, eff. September 1, 2020.
Part III
Administrative and Technical Criteria
9VAC25-900-80. Procedure for application for certification of nutrient credits.
A. An applicant requesting certification of nutrient credits shall submit an application to the department in accordance with this part. Applicants requesting a renewal of a certification of term nutrient credits shall submit an application to the department at least 60 days prior to the expiration of the nutrient credit term. If the renewal application is not received by the department at least 60 days prior to the expiration of the nutrient credit term, the application will be deemed a new application. The application or renewal application shall be in the form required by the department including signature in accordance with 9VAC25-900-130 and shall include the following elements:
1. A brief narrative description of the nutrient credit-generating project.
2. Contact information for the applicant including name, address, and telephone number.
3. Contact information for the nutrient credit-generating project, including the project's mailing address, street address, telephone number, and the contact person's name and email address.
4. Status of the applicant as owner, co-owner, operator, or lessee of the nutrient credit-generating project or the site on which the project is located. The applicant shall provide documentation of the applicant's right to exercise control of the nutrient credit-generating project and the site on which it is located for the purposes of generating and maintaining the proposed nutrient credit-generating project via a title, deed, grant, lease, or easement agreement. Evidence of such documentation must be recorded in the property chain of title and must identify contact information for the applicant or long-term steward for perpetual credits. If the applicant cannot demonstrate control, those parties who singularly or in conjunction with the applicant exercise control over the nutrient credit-generating project or the site on which it is located shall be required to jointly apply for nutrient credit certification with the applicant.
5. The name, mailing address, telephone number, and responsibilities of all known contractors responsible for any operational or maintenance aspects of the nutrient credit-generating project.
6. The number and type of potential nutrient credits to be generated and supporting information including (i) a description of the baseline practices in place within the management area and the nutrient credit-generating project's practices that may result in generation of nutrient credits beyond baseline requirements; (ii) the potential nutrient credit calculation including the efficiencies and factors used; and (iii) the associated documentation supporting the potential nutrient credits calculation. Baseline shall be determined in accordance with the requirements of 9VAC25-900-100. The number of potential nutrient credits shall be as calculated in accordance with 9VAC25-900-110.
7. A topographic map, survey, or another type of map deemed acceptable by the department that delineates the property boundary of the management area and clearly shows the location of all practices, including nutrient credit-generating projects and any baseline practices.
8. A description of current site conditions with photographs.
9. The 8-digit, 10-digit, and 12-digit HUC in which the nutrient credit-generating project is located.
10. For land use conversion projects, documentation of the condition of the land and land use controls in place as of the date specified in 9VAC25-900-100 E noting any changes in the condition of the land or land use controls since that date.
11. An implementation plan that meets the requirements of 9VAC25-900-120.
12. For structural BMPs or restoration projects required to submit and maintain financial assurance in accordance with 9VAC25-900-230, the draft financial assurance documents and financial assurance cost estimate calculated pursuant to Part VI (9VAC25-900-230 et seq.) of this chapter. As required by the schedule of release provisions of subsection B of 9VAC25-900-90, prior to the release of nutrient credits all required financial assurance mechanisms shall be established per Part VI (9VAC25-900-230 et seq.) of this chapter and approved by the department.
13. The appropriate fee required pursuant to Part V (9VAC25-900-190 et seq.) of this chapter.
14. For perpetual credits, a draft of the proposed site protection instrument for the site on which the nutrient credit-generating project is located. If the landowner is not an individual, documentation will be required establishing that the person executing the protection instrument has the authority to do so.
15. A description of other permits and approvals that may be necessary to operate the nutrient credit-generating project.
16. A description of any state or federal water quality grants received for water quality actions in the management area.
17. For perpetual credits, demonstration by the applicant that the site on which the nutrient credit-generating project is located is held with title free from all defects, liens, and encumbrances that would interfere with or be in conflict with the establishment and operation of the nutrient credit-generating project. The demonstration may include documentation of the subordination of property interests (e.g., mineral rights, mortgages, easement) if the department determines that the property interest would interfere with or be in conflict with the establishment and operation of the nutrient credit-generating project.
18. For term credits, the desired term of the credit shall be submitted; however, the term shall not exceed five-years.
19. A tax map showing the management area and adjacent parcels.
20. For nutrient credit-generating projects using innovative practices, the department may request submittal of additional information in order to review the innovative practice. This additional information may include application provisions that are deemed relevant to the innovative practice.
21. Any other information deemed necessary by the department.
B. Applications for certification of nutrient credits based on nutrient reductions from practices other than land conversion shall be processed in accordance with this subsection.
1. Administrative review. Upon receiving an application pursuant to subsection A of this section, the department shall perform a cursory review of the application within 30 calendar days of receipt. If the application does not contain all the necessary elements in accordance with subsection A of this section, the department shall notify the applicant of the missing elements. Otherwise, the department shall notify the applicant that the application will be evaluated for nutrient credit certification.
2. Public notification. After receipt of an application, the department shall post a public notification of the proposed nutrient credit-generating project on its website. The public notification shall include the name of the nutrient credit generating entity that proposes to generate nonpoint source nutrient credits, the location of the nutrient credit-generating project, and a description of the practices utilized. The public notification shall also include the name and contact information for a department staff person.
3. Technical evaluation. Once the application contains all the required elements, the department shall perform a technical evaluation of the application. As part of the evaluation, additional information may be required and the department shall, if warranted, perform a site visit of the proposed nutrient credit-generating project. Additionally, the department may convene a certification advisory committee to provide input regarding the review of an application such as those which incorporate the use of innovative practices by the nutrient credit-generating project. Within 120 days of the department's notification that the application will be evaluated, the department shall notify the applicant of the status of the evaluation of the application and, for innovative practices, provide a projected processing timeline for the application.
4. Completeness. The nutrient credits shall not be certified until the application is complete; however, a determination that an application is complete shall not require the department to issue the nutrient credit certification.
a. An application for nutrient credit certification is complete when the department receives an application in accordance with subsection A of this section, and the application and any supplemental information fulfills the application requirements to the department's satisfaction.
b. For applications for certification of nutrient credits generated from innovative practices, a second public notification shall be provided after the application is complete and prior to the issuance of the nutrient credit certification. The department shall post on its website a public notification of its intent to issue a nutrient credit certification, and the notification shall include the name of the applicant, the location of the nutrient credit-generating project, a description of the innovative practice, and the proposed quantity of term nutrient credits to be certified. The public notification shall also include the name and contact information for a department staff person.
5. Nutrient credit certification. Once the application is deemed complete, the department shall either (i) deny the application and notify the applicant that the nutrient credit-generating project does not qualify for any certified credits pursuant to the requirements of this chapter or (ii) approve the application by issuance of a nutrient credit certification and provide any applicable conditions including the schedule of release and retirement of nutrient credits in accordance with 9VAC25-900-90.
C. Applications for nutrient credit certification based on nutrient reductions solely from land conversion practices shall be processed in accordance with this subsection.
1. Application review. Within 30 days of receipt of an application, the department shall, if warranted, conduct a site visit. Within 45 days of receipt of an application, the department shall either determine that the application is complete or request additional specific information from the applicant. A determination that an application for a land conversion project is complete shall not require the department to issue a nutrient credit certification.
2. Public notification. After receipt of the application, the department shall post a public notification of the proposed nutrient credit-generating project on its website. The public notification shall include the name of the nutrient credit generating entity that proposes to generate nonpoint source nutrient credits, the location of the nutrient credit-generating project, and a description of the land conversion practice. The notification shall also include the name and contact information for the department staff person.
3. Nutrient credit certification. Within 15 days of the department's determination that the application is complete pursuant to subdivision 1 of this subsection, the department shall either (i) deny the application and notify the applicant that the nutrient credit-generating project does not qualify for any certified credits pursuant to the requirements of this chapter or (ii) approve the application by issuance of a nutrient credit certification and provide any applicable conditions including the schedule of release and retirement of nutrient credits in accordance with 9VAC25-900-90.
Statutory Authority
§ 62.1-44.19:20 of the Code of Virginia.
Historical Notes
Derived from Virginia Register Volume 36, Issue 23, eff. September 1, 2020.
9VAC25-900-90. Nutrient credit release and registration.
A. Retirement of credits.
1. Pursuant to the requirements of § 62.1-44.19:20 of the Act, 5.0% of the total credits certified will be retired by the department at the time of nutrient credit certification and will not be placed on the registry for exchange.
2. When phosphorus credits are acquired in accordance with 9VAC25-875-610, the associated nitrogen credits generated by the nutrient credit-generating project will be retired and removed from the registry by the department.
3. When nitrogen credits are acquired for purposes other than compliance with 9VAC25-875-610, the associated phosphorus credits generated by the nutrient credit-generating project shall not be available for compliance under 9VAC25-875-610.
4. Except as limited by this subsection, associated nitrogen and phosphorus credits generated by a nutrient credit-generating project may be exchanged independently.
B. Schedule of release of nutrient credits. The department shall establish a schedule for release of credits as follows:
1. For nutrient credit-generating projects using land use conversion, 25% of the credits will be released by the department after the department has verified completion of the conditions of the nutrient credit certification. For afforestation projects, an additional 25% of credits will be released by the department after the site has been planted with a minimum of 400 woody stems per acre. The remaining balance of credits will be released by the department after it is satisfied that the implementation plan's performance criteria required pursuant to 9VAC25-900-120 has been achieved. When a request for credit release is made concurrently with the application for nutrient credit certification from land conversion practices, the concurrent 25% initial release, and additional 25% release if planting has occurred, shall be processed on the same timeline as the application as provided in 9VAC25-900-80 C. When the request for credit release is from a previously approved land conversion project, the department shall schedule a site visit, if warranted, within 30 days of the request and shall deny, approve, or approve with conditions the release of the remaining 75% of the nutrient credits within 15 days of the site visit or determination that a site visit is not warranted.
2. For nutrient credit-generating projects using wetland or stream restoration, after construction 25% of the credits may be released by the department after the department has verified completion of the conditions of the nutrient credit certification. Every monitoring year thereafter, 25% of the credits may be released if all performance standards are met, the area or channel is stable, and, for streams, evidence is presented that a bankfull event occurred within the monitoring year. For streams, if a bankfull event did not occur, but performance standards are met and the channel is stable, 10% of the credits may be released. No additional credits will be released after the fourth monitoring year until a bankfull event has occurred. After the fourth monitoring year, if a bankfull event occurs, the channel is stable, and all performance standards are met, 25% of the credits may be released that monitoring year, not to exceed the remaining credits available. The schedule for release of credits shall also require, prior to the release of credits, the approval of any required financial assurance mechanism established pursuant to Part VI (9VAC25-900-230 et seq.) of this chapter. The department may accelerate the release of a maximum of 50% of nutrient credits from a stream restoration project based on (i) a determination that the level of risk for restoration failure is low; (ii) the provision of additional financial assurance in an amount adequate to cover the cost of project repair or replacement in the event of failure; and (iii) the experience of the applicant or the applicant's agents who will implement the stream restoration project.
3. For nutrient credit-generating projects using practices other than land use conversion or wetland or stream restoration, the schedule for release of credits will be determined by the department on a case-by-case basis and provided to the applicant with the nutrient credit certification. For projects using structural BMPs, the schedule shall also require, prior to release of credits, the approval of any required financial assurance mechanism established pursuant to Part VI (9VAC25-900-230 et seq.) of this chapter.
C. Registration of nutrient credits. Credits will be placed on the registry and classified as term or perpetual credits by the department. The registry will also indicate the number of credits that have been released for exchange. Only credits released by the department are available for exchange.
Statutory Authority
§ 62.1-44.19:20 of the Code of Virginia.
Historical Notes
Derived from Virginia Register Volume 36, Issue 23, eff. September 1, 2020; amended, Virginia Register Volume 40, Issue 6, eff. December 6, 2023.
9VAC25-900-91. Exchange of credits.
A. Exchange of a credit released by the department is subject to the provisions of § 62.1-44.15:35, 62.1-44.19:15, or 62.1-44.19:21 of the Code of Virginia.
B. Where necessary to ensure compliance with local water quality requirements, the exchange of a credit released by the department is conditioned as follows:
1. Within the Chesapeake Bay Watershed, the exchange of credits within an area subject to an approved local TMDL for total phosphorus or total nitrogen with allocations more stringent than the Chesapeake Bay Watershed TMDL shall be limited to those credits generated upstream of where the discharge reaches impaired waters.
2. Within the Southern Rivers watersheds, the exchange of credits within an area subject to an approved local TMDL for total phosphorus or total nitrogen shall be limited to those credits generated upstream of where the discharge reaches impaired waters.
3. Within an area with waters impaired for dissolved oxygen, benthic community, chlorophyll-a, or nutrients but with no approved local TMDL, the exchange of credits shall be limited to those credits generated in accordance with the following hierarchy:
a. Upstream of where the discharge reaches impaired waters if credits are available;
b. Within the same 12-digit HUC if credits are available;
c. Within the same 10-digit HUC if credits are available;
d. Within the same 8-digit HUC if credits are available;
e. Within an adjacent 8-digit HUC within the same tributary if credits are available; or
f. Within the same tributary.
C. The hierarchy of subdivision B 3 of this section shall not apply when:
1. The department determines through issuance of a VPDES permit that local water quality cannot be protected unless exchange of credits are restricted to upstream of where the discharge reaches impaired waters; or
2. It has been demonstrated to the department's satisfaction that:
a. The water quality impairment is not likely caused by nutrients; or
b. The use of credits would not reasonably be considered to cause or contribute to the impairment.
Statutory Authority
§ 62.1-44.19:20 of the Code of Virginia.
Historical Notes
Reserved, Virginia Register Volume 36, Issue 23, eff. September 1, 2020; amended, Virginia Register Volume 37, Issue 3, eff. January 1, 2021.
9VAC25-900-100. Establishing baseline.
A. Practices for establishing baseline must be in place prior to the generation of any credits by a nutrient credit-generating project except in the case of land use conversion as described in subsection E of this section. The practices for establishing baselines, as provided in this section, shall be implemented and properly maintained for each type of operation within the management area. Baselines are applicable statewide for nutrient credit-generating projects including those located in either the Chesapeake Bay Watershed or the Southern Rivers watersheds. Baseline practices are, at a minimum, in accordance with the requirements of the WIP or an approved TMDL, whichever is more stringent.
B. Cropland, hayland, and pastures. Baselines for cropland, hayland, or pastures within the management area shall be established in accordance with subdivision 1, 2, or 3 of this subsection.
1. The owner holds a valid Certificate of Resource Management Plan Implementation for the management area that has been issued pursuant to the Resource Management Plans regulation (4VAC50-70).
2. If the owner does not hold a valid Certificate of Resource Management Plan Implementation for the management area, the owner shall implement the following practices for establishing baseline:
a. Soil conservation. Soil conservation practices for the management area shall be implemented and maintained to achieve a maximum soil loss rate not to exceed "T" and to address gross erosion when it is present as gullies or other severely eroding conditions.
b. Nutrient management. Implementation and maintenance of the nutrient management practices required by the nutrient management plan written by a certified nutrient management planner pursuant to the Nutrient Management Training and Certification Regulations (4VAC50-85).
c. Riparian buffer. A woodland or grass riparian buffer shall be installed and maintained around all water bodies with perennial flow within the management area and shall be installed and maintained along all water bodies with perennial flow bordering the management area. The riparian buffer shall be a minimum width of 35 feet as measured from the top of the channel bank to the edge of the cropland, hayland, or pasture and in accordance with DCR Specifications for NO. FR-3 or DCR Specifications for NO. WQ-1 contained in the VACS BMP Manual.
d. Cover crop. For croplands, cover crops shall be planted to meet the standard planting date and other specifications in accordance with DCR Specifications for NO. SL-8B contained in the VACS BMP Manual. This requirement applies to all croplands where summer annual crops are grown and the summer annual crop receives greater than a total of 50 pounds per acre of nitrogen application from any nutrient source; however, if the cropland is planted to winter cereal crops for harvest in the spring, then cover crops do not need to be planted on these croplands during that production year.
e. Livestock water body exclusion. For pastures or when livestock are present within the management area, livestock exclusion fencing shall be placed around perennial streams, rivers, lakes, ponds, or other water bodies having perennial flow. This exclusionary fencing shall be constructed in accordance with DCR Specification NO. WP-2W contained in the VACS BMP Manual in order to restrict livestock access to the water body. Livestock shall be provided with an alternative watering source. The livestock exclusion fencing shall be placed at least 35 feet from the top of the channel bank and this exclusion zone shall contain the riparian buffer required by subdivision 2 c of this subsection. Access points for livestock watering or crossing over a water body shall be a hardened surface constructed to DCR Specifications for NO. WP-2W contained in the VACS BMP Manual and shall be fenced to limit livestock access to the water body at the crossing point. Ponds that have been specifically built for the purpose of livestock watering and that do not have perennial flow through an overflow pipe or spillway are not required to meet the provisions of this subdivision 2 e.
3. The department may approve a load-based baseline determination equivalent to full implementation of the practices identified in subdivision 2 of this subsection.
C. Agricultural animal feeding operations. Baselines for agricultural animal feeding operations within the management area shall be established in accordance with either subdivision 1 or 2 of this subsection:
1. The animal feeding operation is in compliance with a valid VPDES or VPA permit in compliance with the board's regulations.
2. For animal feeding operations excluded from or not required to hold a VPDES or VPA permit under the board's regulations, the practices for establishing baseline shall be implemented and properly maintained as required in this subdivision 2.
a. Implementation and maintenance of the nutrient management practices required by the nutrient management plan written by a certified nutrient management planner pursuant to the Nutrient Management Training and Certification Regulations (4VAC50-85).
b. For animal feeding operations, except confined poultry operations, a storage facility designed and operated to prevent point source discharges of pollutants to state waters except in the case of a storm event greater than a 25-year/24-hour storm and to provide adequate waste storage capacity to accommodate periods when the ground is frozen or saturated, periods when land application of nutrients should not occur due to limited or nonexistent crop nutrient uptake, and periods when physical limitations prohibit the land application of waste shall be implemented and maintained.
c. For confined poultry operations, storage of poultry waste according to the nutrient management plan and in a manner that prevents contact with surface water and groundwater. Poultry waste that is stockpiled outside of the growing house for more than 14 days shall be kept in a facility or at a location that provides adequate storage. Adequate storage management practices shall meet the following minimum requirements:
(1) The poultry waste shall be covered to protect it from precipitation and wind.
(2) Stormwater shall not run onto or under the area where the poultry waste is stored.
(3) The ground surface of the poultry waste storage area shall have a minimum of two feet separation distance to the seasonal high water table. If poultry waste is stored in an area where the seasonal high groundwater table lies within two feet of the ground surface, the storage area shall be underlain by a low-permeability, hard-surfaced barrier such as concrete or asphalt.
(4) For poultry waste that is not stored inside or under a roofed structure, the storage area must be at least 100 feet from any surface water, intermittent drainage, wells, sinkholes, rock outcrops, and springs.
D. Urban practices. Achievement of baseline for new development, redevelopment, or retrofits to existing development shall be required prior to generation of credits. These baselines are:
1. For new development and redevelopment, baseline shall be achieved through compliance with the post-construction water quality design criteria requirements of the Virginia Erosion and Stormwater Management Regulation under 9VAC25-875-580. Additionally, for development in a locality with a local stormwater management design criteria more stringent than 9VAC25-875-580, baselines shall be achieved through compliance with the local stormwater management ordinance.
2. For retrofits within the Chesapeake Bay Watershed, baseline shall be at a level necessary to achieve the nutrient reduction assigned in the urban sector of the WIP or the approved local TMDL, whichever is more stringent.
3. For retrofits within the Southern Rivers watersheds and within a watershed with an approved TMDL with total phosphorus or total nitrogen allocations, baselines shall be at a level necessary to achieve reductions of the approved TMDL. For all other retrofits within the Southern Rivers watersheds, baseline shall be achieved through compliance with the post-construction water quality design criteria requirements for development on prior developed lands pursuant to 9VAC25-875-580 A 2.
4. No credits may be certified for a nutrient credit-generating project owned by an MS4 permittee and located within the permittee's MS4 service area until the level of nutrient reduction required by the WIP or approved TMDL, whichever is more stringent, is achieved for the entire MS4 service area. MS4 permittees generating credits for exchange shall have an accounting system demonstrating that the exchanged credits are not used to satisfy the MS4 permit requirements.
E. Land use conversions. Baselines for land use conversion shall be established using the preconversion land use. The preconversion land use shall be based on the land use as of (i) July 1, 2005, for a nutrient credit-generating project located within the Chesapeake Bay Watershed; (ii) the date of the approved TMDL for a nutrient credit-generating project located within a TMDL watershed but not within the Chesapeake Bay Watershed; or (iii) July, 1, 2009, for a nutrient credit-generating project not within an approved TMDL watershed or the Chesapeake Bay Watershed.
F. Stream or wetland restoration. Baseline for stream restoration shall be established using the pre-restoration condition of the stream. Baseline for wetland restoration shall be established on a case-by-case basis, depending on the current land use of the proposed wetland restoration area.
G. Other nutrient credit-generating projects. The department shall establish baselines for other nutrient credit-generating projects not otherwise regulated by subsections B through F of this section. The practices necessary for establishing baseline at these other nutrient credit-generating projects shall be in accordance with the requirements of the WIP or the approved TMDL and shall utilize the best available scientific and technical information regarding the practices.
Statutory Authority
§ 62.1-44.19:20 of the Code of Virginia.
Historical Notes
Derived from Virginia Register Volume 36, Issue 23, eff. September 1, 2020.
9VAC25-900-110. Credit calculation procedures.
A. Pursuant to this section, the applicant shall calculate the potential nutrient credits generated by the practices implemented at the nutrient credit-generating projects. The applicable delivery factors, dependent upon the tributary in which the nutrient credit-generating project is located, shall be applied when calculating the potential credits generated.
B. For agricultural practices, except land use conversion, the potential nutrient credits shall be calculated using removal efficiencies for practices approved by the department. In the Chesapeake Bay Watershed, these practices shall be approved by the department based on the efficiencies assigned by the Chesapeake Bay Program. In the Southern Rivers watersheds, these practices shall be approved by the department based on submitted calculations and demonstrations. The standards and specifications for implementation of the practices will be established by the department and shall be in accordance with the VACS BMP Manual or the FOTG, as applicable.
C. For urban practices, the potential nutrient credits shall be calculated using the applicable removal efficiencies pursuant to 9VAC25-875-590 or using the best available scientific and technical information available at the time of nutrient credit certification as approved by the department. Limitations on potential nutrient credits from certain BMPs are:
1. In the Chesapeake Bay Watershed, nutrient load reductions from practices in place prior to July 1, 2005, may not be used to generate credits. Removal efficiencies shall be based upon those efficiencies approved by the Chesapeake Bay Program partnership where applicable. These efficiencies shall be reviewed at the time of certification renewal and adjusted as necessary based upon changes made by the Chesapeake Bay Program Partnership.
2. In the Southern Rivers watersheds, nutrient load reductions from practices in place prior to July 1, 2009, may not be used to generate credits.
D. For land use conversions, conversion of land to a more intensive land use activity will not generate nutrient credits. The number of potential nutrient credits shall be determined by calculating the nutrient credits per acre and multiplying that number by the total acreage that will undergo land use conversion. The nutrient credits per acre is equal to the amount calculated by subtracting the load per acre of nutrient nonpoint source pollution for the proposed land use after conversion from the load per acre for the preconversion land use. The values used for the loadings per acre in this calculation shall be based on the applicable loading levels provided in the WIP or the approved TMDL, where applicable. The preconversion land use shall be based on the land use as of the date specified in 9VAC25-900-100 E. The load per acre for the preconversion land use shall reflect the implementation of any applicable baseline practices necessary to comply with 9VAC25-900-100 B, C, and D. No credits shall be generated from the conversion of land within 35 feet of a water body with perennial water flow as measured from the top of the channel bank.
E. For wetland or stream restoration, an existing conditions assessment survey will be completed prior to restoration activities to use as a pre-restoration condition (baseline pursuant to of 9VAC25-900-100 F) and will be used for comparison to post-restoration conditions. The potential number of credits shall be determined by applying protocols or guidance on a case-by-case basis using the best available scientific and technical information, as approved by the department.
F. For a practice not previously approved by the department, the department will perform a case-by-case review in order to calculate the number of potential nutrient credits generated. The owner shall submit the removal efficiency calculation information for the practice and the calculation of the potential number of credits generated using that efficiency. The department may also request that the submittal include requirements for demonstration projects, the collection of sufficient data to evaluate the results, and any other information the department deems necessary to determine the validity of the credits. In the Chesapeake Bay Watershed, for a practice not approved by the Chesapeake Bay Program Partnership, the department will perform a case-by-case review in order to calculate the number of potential nutrient credits generated on a term basis.
G. In the certification and recertification of credits, the department may substitute a delivery factor that is deemed by the director to be based on the best available scientific and technical information appropriate for the tributaries located outside of the Chesapeake Bay Watershed as an alternative to any delivery factor derived from the application of the Chesapeake Bay Program watershed model.
Statutory Authority
§ 62.1-44.19:20 of the Code of Virginia.
Historical Notes
Derived from Virginia Register Volume 36, Issue 23, eff. September 1, 2020; amended Virginia Register Volume 40, Issue 4, eff. November 8, 2023.
9VAC25-900-120. Implementation plan.
A. The implementation plan submitted pursuant to 9VAC25-900-80 shall provide information detailing how the nutrient credit-generating project will generate credits for the term of the credits. The implementation plan will include the applicable information as required in subsections B through J of this section.
B. For all nutrient credit-generating projects, the implementation plan shall include:
1. An operation and maintenance plan that provides a description and schedule of operation and maintenance requirements and detailed written specifications and process diagrams for the practices used at the nutrient credit-generating project. The plan must be adhered to for the term of the credits and shall include a description of site management activities to be performed after meeting all performance standards to ensure long-term sustainability of the site.
2. The performance standards that shall be used to evaluate whether the nutrient credit-generating project is generating credits as calculated in 9VAC25-900-110.
3. Applicable requirements for the project required pursuant to Part IV (9VAC25-900-140 et seq.) of this chapter.
C. For nutrient credit-generating projects utilizing managed afforestation land use conversion, the implementation plan shall also include:
1. A project plan submitted in the form required by the department and prepared by a person trained in (i) forestry management, (ii) nutrient management, or (iii) other applicable land management training that includes an understanding of whole land management planning. The project plan shall include (i) methods for invasive plant species control and eradication if woody invasive plant species impacts 5.0% or more of the nutrient credit-generating project's acreage; (ii) a requirement that any harvesting of timber shall adhere to best management practices as set forth by Department of Forestry's Water Quality Guide and any other applicable local, state, or federal laws or requirements; (iii) the land management goals; (iv) a statement that no fertilizer is to be used on the nutrient credit-generating project's land conversion acreage for the term of the credit generated; (v) a planting plan to include size, species, and spacing of trees; and (vi) any planting phases planned for the project if the area will not be planted all at one time, but will be planted in different phases. Additionally, if timbering is planned within the land conversion area, a copy of the timbering plan shall be submitted to the department at least 90 days prior to the occurrence of any land disturbance or timbering.
2. Provisions for planting forests to achieve an initial survival density of a minimum of 400 deciduous tree or evergreen tree woody stems per acre including any noninvasive volunteers. 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. Survival of mixed specie plantings with a minimum of 200 evergreen trees per acre may be established after completion of the first complete growing season following planting.
3. A description of agricultural baseline requirements implemented in accordance with 9VAC50-900-100 B and C that apply to any remaining portions of the management area that are not undergoing land use conversion.
4. Performance standards and reporting procedures demonstrating ongoing compliance with the baseline requirements of 9VAC25-900-100 B and C.
D. For nutrient credit-generating projects utilizing natural succession land use conversion, the implementation plan shall also include provisions for:
1. Forests to achieve an initial density of a minimum of 400 noninvasive woody stems per acre.
2. Invasive plant species control and eradication if woody invasive plant species impacts 5.0% or more of the nutrient credit-generating project's acreage.
3. A description of agricultural baseline requirements implemented in accordance with 9VAC25-900-100 B and C that apply to any remaining portions of the management area not undergoing land use conversion.
4. Performance standards for demonstrating ongoing compliance with the agricultural baseline requirements of 9VAC25-900-100 B and C.
E. For nutrient credit-generating projects utilizing other land use conversion not subject to either subsection C, D, or G of this section, the implementation plan shall also include:
1. Description of the land use conversion project and its implementation and maintenance criteria.
2. Description of the applicable baseline practices implemented in accordance with 9VAC25-900-100 for the management area including the nutrient credit-generating project.
3. Performance standards and reporting procedures demonstrating ongoing compliance with the baseline practices requirements of 9VAC25-900-100.
F. For nutrient credit-generating projects utilizing non-land use conversion agricultural practices, the implementation plan shall also include:
1. A description of the entire management area. This description shall include (i) the acreage and use including descriptions for the proposed practices of the nutrient credit-generating project and baseline area; (ii) water features including all streams, ponds, lakes, and wetlands; (iii) environmentally sensitive sites as defined in 4VAC50-85-10; (iv) areas with highly erodible soils; and (v) the current agricultural operations, crops, or animal facilities.
2. Copies of the current nutrient management plans developed by a certified nutrient management planner and approved by the department and any soil conservation plans completed by a certified conservation planner.
3. Information on the location and status of all existing and proposed BMPs including implementation schedules, lifespan, and maintenance procedures for each BMP that constitutes the baseline requirements.
G. For nutrient credit-generating projects utilizing approved wetland and stream mitigation projects pursuant to § 62.1-44.15:23 of the Code of Virginia, the implementation plan shall also include:
1. A copy of the approved mitigation banking instrument.
2. A plan view map clearly delineating and labeling areas to be considered for credit conversion.
3. A spreadsheet or table listing each labeled area. For each labeled area, the table shall include:
a. The type of eligible land use conversion or restoration practice;
b. The acreage or linear feet of the area;
c. The available mitigation credits;
d. The potential nutrient credits; and
e. The ratio of mitigation credits to nutrient credits.
4. Documentation that complies with the department-approved procedure to ensure credits are not used for both wetland or stream credit and nutrient credit purposes.
5. Documentation shall include written approval from the Interagency Review Team, which oversees stream and wetland mitigation projects pursuant to 33 CFR 332.8 and § 62.1-44.15:23 of the Code of Virginia, to establish a nutrient credit generating site within an approved mitigation bank.
H. For nutrient credit-generating projects utilizing proposed new wetland or stream restoration projects not subject to 33 CFR 332.8 and § 62.1-44.15:23 of the Code of Virginia, the implementation plan shall also include, where appropriate to the type of restoration and project:
1. Certification that the owner will obtain all appropriate permits or other authorizations needed to construct and maintain the restoration activities, prior to initiating work in state waters.
2. An initial wetland restoration plan, which shall include the following:
a. The goals and objectives in terms of proposed nutrient reductions and restoration activities;
b. A detailed location map (e.g., a U.S. Geologic Survey topographic quadrangle map) including latitude and longitude to the nearest second and the hydrologic unit code (HUC) at the center of the site;
c. A description of the surrounding land use;
d. A hydrologic analysis, including a draft water budget based on expected monthly inputs and outputs that will project water level elevations for a typical year, a dry year, and a wet year;
e. The groundwater elevation data or, if not available, the proposed location of groundwater monitoring wells to collect this data;
f. Wetland delineation confirmation and data sheets and maps for existing surface water areas on the proposed site;
g. A preliminary grading plan;
h. A preliminary wetland planting scheme, including suggested plant species and zonation of each vegetation type proposed;
i. Descriptions of existing soils, including general information on topsoil and subsoil conditions, permeability, and the need for soil amendments;
j. A preliminary design of any water control systems or structures for wetland restoration or establishment;
k. Depiction of any land conversion or other buffer areas associated with the nutrient credit-generating entity;
l. A description of any structures or features necessary for the success of the site; and
m. A preliminary schedule for site construction.
3. An initial stream restoration plan, which shall include the following:
a. The goals and objectives in terms of proposed nutrient reductions and restoration activities;
b. A detailed location map (e.g., a U.S. Geologic Survey topographic quadrangle map), including the latitude and longitude (to the nearest second) and the hydrologic unit code (HUC) at the center of the site;
c. A description of the surrounding land use;
d. The preliminary proposed stream segment restoration locations, including plan view, profile, and cross-section sketches;
e. The existing stream deficiencies that need to be addressed;
f. The proposed restoration measures to be employed, including channel measurements, proposed design flows, types of instream structures, and conceptual planting scheme for streambank plantings;
g. Reference stream data, if available;
h. Depiction of any land conversion or other buffer areas associated with the nutrient credit-generating project; and
i. A preliminary schedule for site construction.
4. Prior to construction of the restoration site, the following final plans shall be submitted where appropriate to the type of restoration:
a. The final wetland restoration plan, which shall include all of the items listed in subdivision H 2 of this section and the following:
(1) A summary of the type and acreage of existing stream and wetland impacts anticipated during the construction of the restoration site and the proposed compensation for these impacts;
(2) A site access plan;
(3) An erosion and sediment control plan meeting the requirements of 9VAC25-875;
(4) The final construction schedule; and
(5) A monitoring plan as detailed in subdivision H 4 c of this section.
b. A final stream restoration plan, which shall include the items listed in subdivision H 3 of this section of this section and the following:
(1) A summary of the type and acreage or linear feet of impacts to state waters anticipated during the construction of the restoration site and the proposed compensation for these impacts;
(2) A detailed plan view, profile, and cross-section sketches with the location of proposed restoration measures;
(3) A site access plan;
(4) An erosion and sediment control plan meeting the requirements of 9VAC25-875;
(5) The final construction schedule; and
(6) A monitoring plan as detailed in subdivision H 4 c of this section.
c. A monitoring plan, which shall include: (i) monitoring goals; (ii) proposed performance standards; (iii) parameters to be monitored; (iv) methods of monitoring; (v) length of monitoring period; (vi) monitoring and reporting schedule; (vii) reporting requirements; and (viii) projects responsible for monitoring and reporting.
(1) Performance standards for wetland or stream restoration shall include specific, measureable parameters for determination of performance in comparison to as-built conditions. For wetland restoration, performance standards may include applicable parameters to demonstrate characteristics of wetland formation and stability for the type of wetland restored, including hydrology, soils, vegetation, and stability of any water control structures or berms. For stream restoration, performance standards may include applicable parameters to demonstrate characteristics of channel stability, including dimension, pattern, profile, materials, and stability of the channel and any structures.
(2) Monitoring methods and parameters shall be selected based on type of wetland or stream restoration, the implementation plan, and performance standards of the nutrient credit-generating project, and will be outlined in the monitoring plan. For wetland restoration, the monitoring plan shall include the location and number of photo stations, monitoring wells, vegetation sampling points, other monitoring equipment, and reference wetlands, if available. For stream restoration, the plan shall include the location and number of stations utilized for photo-monitoring, cross-sections, profiles, pattern measurements, streambank stability measurements, streambank vegetation surveys, bank pins, scour chains, stream gages, rain gages, other monitoring equipment, and reference streams, if available.
(3) The monitoring and reporting schedule shall include an as-built survey conducted directly following construction and at least six monitoring and reporting events over a 10-year monitoring period following construction. All monitoring activities shall occur during the growing season, with the exception that after year three, physical monitoring of stream condition (cross-section, profiles, pattern) may be conducted outside the growing season. For any year in which planting was conducted, monitoring of woody vegetation shall take place no earlier than October and at least six months following planting. If all performance standards have not been met in the 10th year, then a monitoring report shall be required for each consecutive year until two sequential annual reports indicate that all performance standards have been successfully satisfied. The extent of monitoring may be reduced, upon approval by the department, on a case-by-case basis, in response to exceptional attainment of performance standards. Submittal of a final monitoring report, typically prepared the 10th growing season following construction completion, shall be required as a baseline for long-term management.
5. A long-term management plan, which shall include:
a. Restoration projects shall include minimization of active engineering features (e.g., pumps) that require long-term management and appropriate site selection to ensure that natural hydrology and landscape context will support long-term sustainability;
b. Long-term management and maintenance shall include basic management as necessary to ensure long-term sustainability of the nutrient credit-generating project such as long-term repair or replacement, maintenance of water control or other structures, or easement enforcement;
c. The owner shall designate a responsible long-term steward in the plan. The owner of the nutrient credit-generating project is the default long-term steward and is responsible for implementing the long term management plan and management of the financial assurance. However, the owner may transfer the long-term management responsibilities and management of the long-term financial assurance to a long-term steward or land stewardship project, such as a public agency, nongovernmental organization, or private land manager, upon review and approval by the department;
d. Long-term management needs, annual cost estimates for these needs, and identifying the funding mechanism that will be used to meet these needs shall be included.
I. For nutrient credit-generating projects utilizing urban practices, the implementation plan shall also include:
1. A description of the contributing drainage area (CDA) for the proposed nutrient credit-generating project's BMP. This description shall include (i) the acreage and land covers (e.g., impervious, forest or open space, managed turf); (ii) water features including all streams, ponds, lakes, and wetlands; (iii) identification of all impaired waters and approved TMDLs; and (iv) identification or mapping of the soil types within the CDA, by USDA hydrological soil group.
2. A list of all of the current urban nutrient management plans developed by a certified nutrient management planner and being implemented within the CDA.
3. Information on the location and description of existing BMPs within the CDA. For BMPs that constitute the baseline requirements include implementation schedules, lifespan, and maintenance procedures.
4. For development and redevelopment projects, the implementation plan shall include the erosion and sediment control plan and the stormwater management plan developed in accordance 9VAC25-875.
5. For retrofits, the implementation plan shall include relevant credit calculations and documentation as deemed appropriate by the department.
J. For other types of activities or projects not presented in subsections C through I of this section, the implementation plan shall include information as deemed appropriate by the department in order to evaluate the credits for nutrient credit certification.
Statutory Authority
§ 62.1-44.19:20 of the Code of Virginia.
Historical Notes
Derived from Virginia Register Volume 36, Issue 23, eff. September 1, 2020.
9VAC25-900-130. Signature requirements.
A. All applications for certification of nutrient credits shall be signed as follows:
1. For a corporation, the application shall be signed by a responsible corporate officer. For the purpose of this section, a responsible corporate officer means a president, secretary, treasurer, or vice-president of the corporation in charge of a principal business function or any other person who performs similar policy-making or decision-making functions for the corporation or the manager of the nutrient credit-generating project provided the manager is authorized to make management decisions that govern the operation of the project;
2. For a partnership or sole proprietorship, the application shall be signed by a general partner or the proprietor, respectively; or
3. For a municipality, state, federal, or other public agency, the application shall be signed by either a principal executive officer or ranking elected official. For purposes of this section, a principal executive officer of a federal agency includes the chief executive officer of the agency or a senior executive officer having responsibility for the overall operations of a principal geographic unit of the agency.
B. All reports required by this chapter and other information requested by the department shall be signed by a person described in subsection A of this section or by a duly authorized representative of that person. A person is a duly authorized representative only if:
1. The authorization is made in writing by a person described in subsection A of this section;
2. The authorization specifies either an individual or a position having responsibility for the overall operation of the project; and
3. The written authorization is submitted to the department.
C. If an authorization under subsection B of this section is no longer accurate because a different individual or position has responsibility for the overall operation of the project, a new authorization satisfying the requirements of subsection B of this section shall be submitted to the department prior to or together with any reports or information to be signed by an authorized representative.
D. Any person signing a document under subdivision A or B of this section shall make the following certification: "I certify under penalty of law that this document and all attachments were prepared under my direction or supervision in accordance with a system designed to assure that qualified personnel properly gather and evaluate the information submitted. Based on my inquiry of the person or persons who manage the system or those persons directly responsible for gathering the information, the information submitted is to the best of my knowledge and belief true, accurate, and complete. I am aware that there are significant penalties for submitting false information including the possibility of fine and imprisonment for knowing violations."
Statutory Authority
§ 62.1-44.19:20 of the Code of Virginia.
Historical Notes
Derived from Virginia Register Volume 36, Issue 23, eff. September 1, 2020.
Part IV
Compliance and Enforcement
9VAC25-900-140. Inspections and information to be furnished.
A. The owner of the nutrient credit-generating entity project shall allow the director or an authorized representative, including an authorized contractor acting as a representative of the department, upon presentation of credentials, to:
1. Enter the management area including the premises where the nutrient credit-generating entity project is located and where records are kept in accordance with this chapter or the nutrient credit certification. Records to be retained include the approved implementation plan, operations and maintenance plan, and, if required, confirmation of financial assurance documents.
2. Have access to and copy, at reasonable times, any records that must be kept under the conditions of this chapter, the approved plans listed in subdivision A 1 of this section, or as otherwise required by the nutrient credit certification. The owner will make available any records requested by the department that detail nutrient credit-generating entity project operations, status, records of transactions, or other actions that demonstrate the status of credits and operations of the nutrient credit-generating entity project including records required to be kept under any implementation plan, operations and maintenance plan, or financial assurance documents;
3. Inspect at reasonable times any entities projects, equipment, practices, or operations regulated or required under the provisions of this chapter, the approved plans listed in subdivision A 1 of this section, or as otherwise required by the nutrient credit certification; and
4. Sample or monitor at reasonable times, for the purposes of assuring compliance with the provisions of this chapter, the nutrient credit certification, or as otherwise authorized by state law or regulation.
B. For purposes of this section, the time for inspection shall be deemed reasonable during regular business hours. Nothing in this section shall make an inspection unreasonable during an emergency when applicable.
C. The owner of the nutrient credit-generating entity project shall furnish to the department, within a reasonable time, any information that the department may request to determine (i) whether cause exists for suspension of nutrient credit exchange, modifying, revoking and recertifying, or terminating nutrient credit certification or (ii) compliance with the provisions of this chapter or the implementation plan, operations and maintenance plan, or financial assurance approved under this chapter. The department may require the owner of the nutrient credit-generating entity project to furnish, upon request, such plans, specifications, and other pertinent information as may be necessary to determine the effect of the operation of the nutrient credit-generating entity project on the quality of state waters, or such other information as may be necessary to accomplish the purposes of the law. The owner of the nutrient credit-generating entity project shall also furnish to the department, upon request, copies of records required to be kept under the provisions of this chapter or the nutrient credit certification including the approved implementation plan, operations and maintenance plan, or proof of financial assurance records.
Statutory Authority
§ 62.1-44.19:20 of the Code of Virginia.
Historical Notes
Derived from Virginia Register Volume 36, Issue 23, eff. September 1, 2020.
9VAC25-900-150. Recordkeeping and reporting.
A. The owner of the nutrient credit-generating project shall maintain all records relevant to the management, operations, and maintenance of the nutrient credit-generating project, including copies of all reports required by this chapter, the nutrient credit certification or the implementation plan, operations and maintenance plan, or financial assurance approved under this chapter. Records of all data used to complete the application for certification of nutrient credits shall be kept. All records shall be maintained for at least five years following the final exchange of any credits. This period of retention shall be extended automatically during the course of any unresolved litigation regarding the regulated activity or regarding control standards applicable to the owner of the nutrient credit-generating project, or as requested by the department.
B. All applications, reports, or information submitted to the department shall be signed and certified as required by 9VAC25-900-130.
C. Reporting requirements.
1. The owner of the nutrient credit-generating project shall give advance notice to the department as soon as possible of any planned physical alterations or additions to the project when the alteration or addition could change the amount of nutrient reductions generated.
2. The owner of the nutrient credit-generating project shall give advance notice to the department of any planned changes in the project that may result in noncompliance with the Act, this chapter, or the nutrient credit certification.
3. Reports of compliance or noncompliance with or any progress reports on achieving conditions specified in the nutrient credit certification shall be submitted no later than 14 days following each schedule date.
4. Where the owner of the nutrient credit-generating project becomes aware that incorrect information has been submitted in an application for nutrient credit certification or in any report to the department, the owner shall promptly submit the corrected information.
5. Each owner shall submit an annual report on the status of the nutrient credit-generating project operations including credit-generating practices, confirmation of the continued implementation and maintenance of practices required to establish baseline in accordance with 9VAC25-900-100, statement of financial assurances, and an up-to-date credit ledger detailing credits available for exchange, credits exchanged, and associated purchaser information. This report shall contain recent photographs of any structural BMPs implemented to achieve baseline or for nutrient credit generation. The report shall cover the period from July 1 through June 30 of each year and be submitted annually by August 15 unless an alternative reporting period and submittal date are provided for in the nutrient credit certification.
6. In addition to the annual report detailed in subdivision 5 of this subsection, nutrient credit-generating projects utilizing wetland or stream restoration shall conduct post-construction monitoring and submit monitoring reports, according to the monitoring plan approved as part of the implementation plan pursuant to 9VAC25-900-120.
7. Exchange of credits shall be recorded on the registry. The exchange of credits by the owner of the nutrient credit-generating project shall be reported to the department within 14 calendar days of the date of the exchange. This report shall include:
a. The identification for the credits exchanged;
b. The name of and contact information for the buyer;
c. The name of the seller;
d. The amount of credits exchanged; and
e. If applicable, the name of the facility and the associated permit number that shall use the purchased credits.
Statutory Authority
§ 62.1-44.19:20 of the Code of Virginia.
Historical Notes
Derived from Virginia Register Volume 36, Issue 23, eff. September 1, 2020; amended, Virginia Register Volume 38, Issue 26, eff. September 14, 2022.
9VAC25-900-160. Enforcement and penalties.
The department may enforce the provisions of this chapter utilizing all applicable procedures under the State Water Control Law.
Statutory Authority
§ 62.1-44.19:20 of the Code of Virginia.
Historical Notes
Derived from Virginia Register Volume 36, Issue 23, eff. September 1, 2020; amended, Virginia Register Volume 38, Issue 26, eff. September 14, 2022.
9VAC25-900-170. Suspension of credit exchange.
A. If the department tentatively decides to suspend the ability of an owner of a nutrient credit-generating project to exchange credits, the department shall issue a notice of its tentative decision to the owner. If the department determines that suspension is appropriate, it will also remove the ability for the owner to show credits for exchange on the registry. The ability to exchange credits shall remain suspended until such time as the owner brings the nutrient credit-generating project into compliance with this chapter and the nutrient credit certification to the department's satisfaction.
B. The following are causes for the department to suspend the exchange of credits:
1. Noncompliance by the owner of the nutrient credit-generating project with any condition of the nutrient credit certification or any plans approved under or required by the nutrient credit certification or this chapter;
2. Failure of the owner of the nutrient credit-generating project to disclose fully all relevant material facts or, the misrepresentation of any relevant material facts in applying for certification of nutrient credits or in any other report or document required under the law, this chapter, the nutrient credit certification, or any plans approved or required under the nutrient credit certification;
3. A change in any condition that results in a temporary or permanent elimination of the best management practices approved as part of the nutrient credit certification; or
4. There exists a material change in the basis on which the nutrient credit certification was issued that requires either a temporary or permanent elimination of activities controlled by the nutrient credit certification necessary to protect human health or the environment; however, credit quantities established using the best available scientific and technical information at the time of certification may not be reduced.
Statutory Authority
§ 62.1-44.19:20 of the Code of Virginia.
Historical Notes
Derived from Virginia Register Volume 36, Issue 23, eff. September 1, 2020.
9VAC25-900-180. Nutrient credit certification transfer, modification, revocation and reissuance, or termination.
A. Nutrient credit certifications may be modified, revoked and reissued, or terminated either at the request of the party holding the certification or upon the department's initiative for cause. The filing of a request by the holder of the nutrient credit certification for a modification, revocation and reissuance, or termination of a certification, or a notification of planned changes or anticipated noncompliance with regulatory requirements does not stay any condition of a nutrient credit certification.
B. If the department decides that a request for modification, revocation and reissuance, or termination is not justified, it shall send the requester a brief response giving a reason for the decision.
C. If the department tentatively decides to modify or revoke and reissue a nutrient credit certification, it may request the submission of a new application.
D. If the department tentatively decides to terminate a nutrient credit certification and the owner of the nutrient credit-generating project objects, the department shall issue a notice of intent to terminate and shall contemporaneously notify any known buyers of the project's nutrient credits of its intent to terminate.
E. A certification of nutrient credits may be modified, revoked and reissued, or terminated for cause.
1. Causes for modification. The following are causes for modification, revocation, and reissuance of a certification of nutrient credits:
a. There are material and substantial alterations or additions to the nutrient credit-generating project that occurred after certification of nutrient credits and that justify the application of conditions that are different or absent in the existing nutrient credit certification.
b. The department has received new technical information that would have justified the application of different conditions at the time of issuance; however, credit quantities established using the best available scientific and technical information at the time of certification may not be reduced.
c. The department determines good cause exists for modification of milestones within the nutrient credit certification.
d. To correct technical mistakes, such as errors in calculation, or mistaken interpretations of law made in determining nutrient credit certification conditions.
e. The department has received notification of a proposed transfer of ownership of the nutrient credit-generating project.
2. Causes for termination. The following are causes for terminating a nutrient credit certification during its term or for denying an application for certification of nutrient credits after notice and opportunity for an informal fact finding proceeding in accordance with § 2.2-4019 of the Administrative Process Act:
a. The owner of the nutrient credit-generating project has violated any regulation or order of the board or department, any provision of the law, or any order of a court, where such violation results in a release of harmful substances into the environment or poses a substantial threat of release of harmful substances into the environment or presents a hazard to human health or the violation is representative of a pattern of serious or repeated violations that, in the opinion of the department, demonstrates the owner's disregard for or inability to comply with applicable laws, regulations, or requirements;
b. Noncompliance by the owner of the nutrient credit-generating project with any condition of the nutrient credit certification or any plans approved under or required by the nutrient credit certification or this chapter;
c. Failure of the owner of the nutrient credit-generating project to disclose fully all relevant material facts or the misrepresentation of any relevant material facts in applying for a certification of nutrient credits or in any other report or document required under the law, this chapter, the nutrient credit certification, or any plans approved or required under the nutrient credit certification;
d. A determination that the credit-generating activity endangers human health or the environment and can only be regulated to acceptable levels by modification or termination of the nutrient credit certification;
e. A change in any condition that results in a permanent elimination of any of the best management practices approved as part of the nutrient credit certification; or
f. There exists a material change in the basis on which the nutrient credit certification was issued that requires either a temporary or a permanent elimination of activities controlled by the nutrient credit certification necessary to protect human health or the environment; however, credit quantities established using the best available scientific and technical information at the time of certification may not be reduced.
g. Failure of the owner of the nutrient credit-generating project to operate and maintain the required baseline practices throughout the management area.
F. Except as provided in subsection G of this section, a nutrient credit certification may be transferred to a new owner or operator only if the certification has been modified or revoked and reissued to identify the new owner or operator and incorporate such other requirements as may be necessary under the Act and this chapter.
G. As an alternative to transfers under subsection F of this section, any certification of nutrient credits may be automatically transferred if:
1. The current holder of the certification of nutrient credits notifies the department at least 30 days in advance of the proposed transfer date in subdivision 2 of this subsection;
2. The notice includes a written agreement between the existing and new owners containing a specific date for transfer of responsibility, coverage, and liability for the nutrient credit-generating project between them; and
3. If the department does not notify the existing holder of the certification of nutrient credits and the proposed holder of its intent to modify or revoke and reissue the nutrient credit certification within the 30 days of receipt of the holder's notification of transfer, the transfer is effective on the date specified in the agreement mentioned in subdivision 2 of this subsection.
Statutory Authority
§ 62.1-44.19:20 of the Code of Virginia.
Historical Notes
Derived from Virginia Register Volume 36, Issue 23, eff. September 1, 2020.
Part V
Fees
9VAC25-900-190. Purpose and applicability of fees.
A. The purpose of this part is to establish a schedule of fees collected by the department in the support of its programs under this chapter and as permitted under the Act.
B. This part applies to all persons who submit an application for a certification of nutrient credits in accordance with 9VAC25-900-80. The fees shall be assessed in accordance with this part.
Statutory Authority
§ 62.1-44.19:20 of the Code of Virginia.
Historical Notes
Derived from Virginia Register Volume 36, Issue 23, eff. September 1, 2020.
9VAC25-900-200. Determination of application fee amount.
A. Each nutrient credit-generating project application and each nutrient credit-generating project modification application is a separate action and shall be assessed a separate fee. The amount of such fees is determined on the basis of this section.
B. Perpetual nutrient credit certifications.
1. An applicant for certification of perpetual nutrient credits is assessed a base fee as shown in Table 1 of 9VAC25-900-220 A.
2. An applicant is assessed a supplementary fee based on the number of potential nutrient credits of phosphorus generated in addition to the base fee specified in subdivision 1 of this subsection. The supplementary fees are shown in Table 1 of 9VAC25-900-220 A.
3. Modifications of approved perpetual nutrient credit certifications will be assessed the base fee only unless the modifications generate additional perpetual credits then a supplementary fee based on the number of additional potential nutrient credits of phosphorus will be assessed in addition to the base fee as specified in subdivision 2 of this subsection.
4. The total fee (base fee plus supplementary fee) shall not exceed $10,000. If the calculated fee is greater than $10,000 then the applicant shall only pay $10,000.
C. Term nutrient credit certifications.
1. An applicant for certification of term nutrient credits is assessed a base fee plus a supplementary fee based on the number of potential term credits and the requested term of those credits as shown in Table 2 of 9VAC25-900-220 A.
2. A modification of an approved term nutrient credit certification is assessed a base fee plus a supplementary fee based on the number of term credits and the requested term of those credits as shown in Table 2 of 9VAC25-900-220 A.
3. A renewal will be assessed a base fee plus a supplementary fee based on the number of renewing term credits as shown in Table 3 of 9VAC25-900-220 A if there are (i) no changes to the site or practices that were submitted with the previously approved nutrient credit certification application; (ii) the renewal application submitted does not contain any new practices and is substantial the same as the previously approved nutrient credit certification; and (iii) the application is submitted at least 60 days prior to the end date of the term credits for which renewal is sought. If the renewal application includes changes to the site, changes to practices, or new practices or is submitted less than 60 days prior to the end date of the term credits, the application shall be deemed a new application and shall be assessed a fee as provided in subdivision 1 of this subsection.
4. The total fee (base fee plus supplementary fee) shall not exceed $10,000. If the calculated fee is greater than $10,000 then the applicant shall only pay $10,000.
Statutory Authority
§ 62.1-44.19:20 of the Code of Virginia.
Historical Notes
Derived from Virginia Register Volume 36, Issue 23, eff. September 1, 2020.
9VAC25-900-210. Payment of application fees.
A. Due date. All application fees are due on the day of application and must accompany the application.
B. Method of payment. Fees shall be paid by check, draft, or postal money order made payable to "Treasurer of Virginia" and shall be sent to the Department of Environmental Quality, Receipts Control, P.O. Box 1104, Richmond, VA 23218. When the department is able to accept electronic payments, payments may be submitted electronically.
C. Incomplete payments. All incomplete payments will be deemed nonpayments.
D. Late payment. Pursuant to 9VAC25-900-80, no applications will be deemed to be complete until the department receives the fee paid in full.
Statutory Authority
§ 62.1-44.19:20 of the Code of Virginia.
Historical Notes
Derived from Virginia Register Volume 36, Issue 23, eff. September 1, 2020.
9VAC25-900-220. Application fee schedule.
A. Fees.
| Table 1. Perpetual Nutrient Credits Certification Application Fees | |
| Base Fee | $3,000 |
| Supplementary Fees – Total Number of Perpetual Phosphorus Credits (X) |
|
| X ≤ 30 | $1,000 |
| 30 < X ≤ 60 | $3,000 |
| 60 < X ≤ 90 | $5,000 |
| X > 90 | $7,000 |
| Table 2. Term Nutrient Credits Certification Application Fees | |
| Base Fee | $3,000 |
| Supplementary Fees | $/(Credit*Term Years) |
| 1st 100 term nutrient credits (1 to 100) | $4.00 |
| 2nd 100 term nutrient credits (101 to 200) | $3.00 |
| 3rd 100 term nutrient credits (201 to 300) | $2.00 |
| 4th 100 term nutrient credits (> 300) | $1.00 |
| Table 3. Renewal Term Nutrient Credits Certification Application Fees | |
| Base Fee | $1,000 |
| Supplementary Fees | $/(Credit*Term Years) |
| 1st 100 term nutrient credits (1 to 100) | $4.00 |
| 2nd 100 term nutrient credits (101 to 200) | $3.00 |
| 3rd 100 term nutrient credits (201 to 300) | $2.00 |
| 4th 100 term nutrient credits (> 300) | $1.00 |
B. Illustrative examples.
1. Example 1. The applicant is submitting an application for nutrient credit certification of a nutrient credit-generating project that will generate perpetual credits. The number of potential perpetual credits calculated is 150. The required fee is calculated as follows:
| Base fee | $3,000 |
| Supplementary fee for 150 perpetual P credits | +$7,000 |
| Total fee | = $10,000 |
2. Example 2. The applicant is submitting an application for nutrient credit certification of a nutrient credit-generating project that generated credits with a five-year term. The number of potential nutrient credits calculated is 275. The required fee is calculated as follows:
| Base fee | $3,000 |
| Supplementary fee for 1 to 100 credits | +(100*5*$4)=$2,000 |
| Supplementary fee for 101 to 200 credits | +(100*5*$3)=$1,500 |
| Supplementary fee for 201 to 275 credits | + (75*5*$2)= $750 |
| Total fee | = $7,250 |
3. Example 3. The applicant is submitting a renewal application for annual credits generated at a nutrient credit-generating project for a five-year term. The number of annual credits being renewed for another term is 165. The required fee is calculated as follows:
| Base fee | $1,000 |
| Supplementary fee for 1 to 100 credits | +(100*5*$4)=$2,000 |
| Supplementary fee for 101 to 200 credits | +(65*5*$3)=$975 |
| Total fee | = $3,975 |
4. Example 4. The applicant is submitting an application for nutrient credit certification of a nutrient credit-generating project that generates credits with a five-year term. The number of potential nutrient credits calculated is 1000. The required fee is calculated as follows:
| Base fee | $3,000 |
| Supplementary fee for 1 to 100 credits | +(100*5*$4)=$2,000 |
| Supplementary fee for 101 to 200 credits | +(100*5*$3)=$1,500 |
| Supplementary fee for 201 to 300 credits | +(100*5*$2)=$1,000 |
| Supplementary fee for 301 to 1000 credits | +(700*5*$1)=$3,500 |
| Total Total fee | = $11,000 = $10,000 (fee cannot exceed $10,000) |
Statutory Authority
§ 62.1-44.19:20 of the Code of Virginia.
Historical Notes
Derived from Virginia Register Volume 36, Issue 23, eff. September 1, 2020.
Part VI
Financial Assurance
9VAC25-900-230. Financial assurance applicability.
A. An owner of a nutrient credit-generating project that utilizes structural BMPs for the generation of perpetual credits shall submit and maintain financial assurance in accordance with this part. The financial assurance mechanism shall be submitted to and approved by the department prior to the release of credits.
B. An owner of a nutrient credit-generating project that utilizes structural BMPs for the generation of term credits with terms that exceed one year shall submit and maintain financial assurance in accordance with this part. However, an owner of a nutrient credit-generating project that utilizes structural BMPs for the generation of term credits with terms that exceed one year shall not be required to submit and maintain financial assurance in accordance with this part, provided that the department annually approves the generation of the term nutrient credits prior to release of the credits. In accordance with 9VAC25-900-90 B, the financial assurance mechanism shall be submitted to and approved by the department prior to the release of credits. For the purposes of this part, term credit shall refer to credit with a term greater than one year but not perpetual.
C. An owner of a nutrient credit-generating project using proposed new wetland or stream restoration practices not subject to 33 CFR 332.8 and § 62.1-44.15:23 of the Code of Virginia for the generation of perpetual credits shall be required to submit and maintain financial assurance in accordance with this chapter. In accordance with 9VAC25-900-90 B, the financial assurance mechanism shall be submitted to and approved by the department prior to the release of credits. The following financial assurances shall be provided for these new wetland or stream restoration projects:
1. A monitoring plan financial assurance mechanism shall be established to ensure implementation of the monitoring plan pursuant to 9VAC25-900-120 for any nutrient credits generated from wetland or stream restoration. When the owner conducts the required monitoring and submits a complete monitoring report as specified in the monitoring plan and report requirements, then the owner may request a reduction of the required financial assurance amount equivalent to the cost of one year of monitoring, subject to department approval. If any funds remain in the financial assurance mechanism after the monitoring period, the mechanism shall be maintained until the final monitoring report is submitted and approved, at which point the mechanism shall be released by the department;
2. A long-term management fund financial assurance mechanism shall be established in support of required long-term management plan tasks pursuant to 9VAC25-900-120 for any nutrient credits generated from wetland or stream restoration. Long-term management funds shall be placed in a separate interest bearing trust account in an appropriate financial institution and may be funded from a sufficient percentage of all credit sale proceeds, a single lump sum payment, or an approved schedule of payments, subject to department approval. No long-term management funds shall be used to finance any expense or activity other than those specified in the long-term management plan unless approved by the department. Responsibility for and access to the long-term management fund is given to the owner or long-term steward and may be transferred to any new long-term steward that is designated by the owner and approved by the department; and
3. In lieu of the long-term management fund trust account for stream restoration projects established in subdivision 2 of this subsection, a third-party long-term steward approved by the department, such as a public agency, nongovernmental organization, or private land manager, may hold long-term management funds in a separate interest-bearing account to be used only for the long-term management of the stream restoration project.
D. When the nutrient credits are generated or used by a locality, authority, utility, sanitation district, or owner operating an MS4 or a point source permitted under 9VAC25-875, the existence of tax or rate authority may be used by such entity at its option in satisfaction of the financial assurance required pursuant to this part.
Statutory Authority
§ 62.1-44.19:20 of the Code of Virginia.
Historical Notes
Derived from Virginia Register Volume 36, Issue 23, eff. September 1, 2020; amended, Virginia Register Volume 38, Issue 26, eff. September 14, 2022.
9VAC25-900-240. Suspension of nutrient credit exchange.
Failure to provide or maintain adequate evidence of financial assurance in accordance with this part shall be cause for the department to suspend the exchange of credits in accordance with 9VAC25-900-170 or terminate the nutrient credit certification in accordance with 9VAC25-900-180.
Statutory Authority
§ 62.1-44.19:20 of the Code of Virginia.
Historical Notes
Derived from Virginia Register Volume 36, Issue 23, eff. September 1, 2020.
9VAC25-900-250. Cost estimates for perpetual and term credit nutrient credit-generating projects.
A. The owner of a nutrient credit-generating project shall prepare for approval by the department a detailed written cost estimate providing the cost of repairing or restoring, as appropriate, and operating and maintaining any structural BMPs required to submit and maintain financial assurance pursuant to 9VAC25-900-230. This written cost estimate shall be submitted as part of the application in accordance with 9VAC25-900-80 and shall include:
1. For structural BMPs generating perpetual nutrient credits, the cost estimate shall equal the full cost for repairing or restoring, as appropriate, the structural BMPs plus the cost for fifty years of operation and maintenance of the structural BMPs in accordance with the implementation plan.
2. For structural BMPs generating term nutrient credits, the cost estimate shall equal the full cost for repairing or restoring, as appropriate, the structural BMPs plus the cost for the operation and maintenance of the structural BMPs in accordance with the implementation plan for the term of the credits or for five years, whichever is less.
3. The cost estimate shall be based on and include the costs of hiring a third party to either repair or restore and operate and maintain the structural BMPs generating nutrient credits. The third party may not be either a parent corporation or subsidiary of the owner.
B. The owner of the nutrient credit-generating project utilizing proposed new wetland or stream restoration practices not subject to 33 CFR 332.8 and § 62.1-44.15:23 of the Code of Virginia will develop a separate written cost estimate for each of the applicable financial assurance requirements provided in 9VAC25-900-230 D. All cost estimates shall be submitted as part of the application in accordance with 9VAC25-900-80.
1. Monitoring plan financial assurance cost estimates shall be sufficient to hire another qualified entity to monitor and report on performance standards for the nutrient credit-generating project in the event of noncompliance with this chapter.
2. Long-term management fund financial assurance cost estimates shall be based on the size and complexity of the implementation plan, long-term management plan tasks, and any other factors that the department deems appropriate and will state the total dollar amount required to fund this financial assurance.
C. For a nutrient credit-generating project generating perpetual credit, the cost estimate shall be updated by the owner and submitted to the department for its review for sufficiency at least once every five years.
Statutory Authority
§ 62.1-44.19:20 of the Code of Virginia.
Historical Notes
Derived from Virginia Register Volume 36, Issue 23, eff. September 1, 2020.
9VAC25-900-260. Financial assurance requirements for term credits.
A. For a nutrient credit-generating project generating term credits and required to submit and maintain financial assurance pursuant to 9VAC25-900-230, the owner shall demonstrate financial assurance using any one or a combination of the mechanisms specified in 9VAC25-900-290 through 9VAC25-900-330.
B. The financial assurance mechanism shall provide funding for the full amount of the cost estimate at all times.
C. The financial assurance mechanism used to provide evidence of the financial assurance shall ensure that the funds necessary will be available whenever they are needed.
D. The owner shall provide continuous financial assurance coverage for the term credit nutrient credit-generating project in accordance with this part until released by the department.
E. After submittal of a complete financial assurance mechanism, the department shall notify the owner of the tentative decision to approve or reject the financial assurance mechanism.
F. A financial assurance mechanism must be in a form that ensures that the department will receive proper notification in advance of any termination or revocation. The owner may, at their discretion and with prior approval of the department, replace the financial assurance or financial institution that issued the financial assurance. The owner shall provide the department with prior notice of its desire to replace the issuing institution and a draft of the new mechanism for review. The provisions of the new mechanism shall conform to the provisions of the former mechanism and this part.
Statutory Authority
§ 62.1-44.19:20 of the Code of Virginia.
Historical Notes
Derived from Virginia Register Volume 36, Issue 23, eff. September 1, 2020.
9VAC25-900-270. Financial assurance requirements for perpetual credits.
A. Subject to the requirements and limitations outlined in this section, the owner shall demonstrate financial assurance for the nutrient credit-generating project generating perpetual nutrient credits using any one or combination of the mechanisms specified in 9VAC25-900-290 through 9VAC25-900-330. However, for restoration projects, the owner may only use a trust fund as provided in 9VAC25-900-290 to demonstrate financial assurance for the long-term management fund as described in 9VAC25-900-230 C 2, unless a third-party long-term steward is approved by the department in accordance with 9VAC25-900-230 C 3.
B. The financial assurance mechanism used shall provide funding for the full amount of the cost estimate or of the sum of all cost estimates at all times.
C. The owner may only establish or continue to use insurance, as outlined in 9VAC25-900-330, to demonstrate financial assurance for that portion of the total cost estimate that does not include credits that have been exchanged. On an annual basis, the owner shall either establish or increase the noninsurance mechanism outlined in 9VAC25-900-290 through 9VAC25-900-320 in an amount to be determined in accordance with the following formula:
CE/TCIAS * CEDAAP
where:
CE = Cost Estimate
TCIAS = Total Number of Credits Initially Available for Exchange
CEDAAP = Number of Credits Exchanged During the Applicable Annual Period
D. The owner shall establish or increase the mechanism as required by subsection C of this section no later than 30 days after the current anniversary date of the nutrient credit certification. The applicable annual period for credits exchanged is the one culminating on the anniversary date of the nutrient credit certification.
E. The financial assurance mechanisms used to provide evidence of the financial assurance shall ensure that the funds necessary will be available whenever they are needed.
F. After submittal of a complete financial assurance mechanism, the department shall notify the owner of the tentative decision to approve or reject the financial assurance mechanism.
G. A financial assurance mechanism must be in a form that ensures that the department will receive proper notification in advance of any termination or revocation. The owner may, at its discretion and with prior approval of the department, replace the financial assurance or financial institution that issued the financial assurance. The owner shall provide the department with prior notice of its desire to replace the issuing institution and a draft of the new mechanism for review. The provisions of the new mechanism shall conform to the provisions of the former mechanism and this part.
Statutory Authority
§ 62.1-44.19:20 of the Code of Virginia.
Historical Notes
Derived from Virginia Register Volume 36, Issue 23, eff. September 1, 2020; amended, Virginia Register Volume 38, Issue 26, eff. September 14, 2022.
9VAC25-900-280. Allowable financial mechanisms.
A. Subject to the limitations and requirements outlined in 9VAC25-900-260 and 9VAC25-900-270, an owner of nutrient credit-generating project using structural BMPs to generate term or perpetual nutrient credits and required to submit financial assurance pursuant to 9VAC25-900-230 may use any one or combination of mechanisms listed in 9VAC25-900-290 through 9VAC25-900-330 to meet the financial assurance requirements of this chapter.
B. Subject to the limitation and requirements outlined in 9VAC25-900-270, an owner of a nutrient credit-generating project utilizing wetland or stream restoration practices to generate perpetual credits and required to submit financial assurance pursuant to 9VAC25-900-230, may use any one or combination of mechanisms listed in 9VAC25-900-290 through 9VAC25-900-330 to meet the financial assurance requirements for the monitoring plan; however, only a trust fund may be used to meet the financial assurance requirements for the long-term management fund, unless a third-party long-term steward is approved by the department in accordance with 9VAC25-230 C 3.
Statutory Authority
§ 62.1-44.19:20 of the Code of Virginia.
Historical Notes
Derived from Virginia Register Volume 36, Issue 23, eff. September 1, 2020; amended, Virginia Register Volume 38, Issue 26, eff. September 14, 2022.
9VAC25-900-290. Trust.
A. An owner may satisfy the requirements of this part by establishing a trust fund that conforms to the requirements of this section and by submitting an originally signed triplicate of the trust agreement to the director. The owner shall also place a copy of the trust agreement into the nutrient credit-generating project's operating record. The trustee for the trust fund shall be a bank or financial institution that has the authority to act as a trustee and whose trust operations are regulated and examined by a state or federal agency.
B. Payments into the trust fund shall be made by the owner whenever necessary under the requirements of 9VAC25-900-260 or 9VAC25-900-270.
C. During any annual period when a payment into the fund is necessary under the applicable requirements outlined in 9VAC25-900-260 and 9VAC25-900-270, the owner must submit the following information to the director no later than the anniversary date of the initial approval by the department of the release of credits for exchange:
1. The calculation for determining the appropriate payment amount into the trust; and
2. A statement from the trustee indicating the amount of the currently required deposit into the trust fund and the subsequent balance of the fund.
D. The owner shall compare the cost estimate with the trustee's most recent annual valuation of the trust fund:
1. Annually, at least 60 days prior to the anniversary date of the initial approval by the department of the release of credits for exchange. If the value of the fund is less than the amount of the cost estimate, the owner shall, by the anniversary date of the initial approval by the department of the release of credits for exchange, deposit a sufficient amount into the fund so that its value after payment at least equals the amount of the cost estimate, or obtain other financial assurance as specified in this part to cover the difference. If the value of the trust fund is greater than the total amount of the cost estimate, the owner may submit a written request to the director for release of the amount that is in excess of the cost estimate; and
2. Whenever the cost estimate changes. If the value of the fund is less than the amount of the new cost estimate, the owner shall, within 60 days of the change in the cost estimate, deposit a sufficient amount into the fund so that its value after payment at least equals the amount of the new estimate, or obtain other financial assurance as specified in this part to cover the difference. If the value of the trust fund is greater than the total amount of the cost estimate, the owner may submit a written request to the director for release of the amount that is in excess of the cost estimate.
E. The department shall withdraw funds from the trust when the owner has failed to monitor, operate and maintain, perform long-term maintenance for, or repair or replace, as applicable, the practices utilized by the nutrient credit-generating project in accordance with this chapter and the nutrient credit certification. The department shall use the funds to pay for the performance of monitoring, operation, and maintenance, or the performance of long-term maintenance, or repair and replacement, as applicable, of the practices utilized by the nutrient credit-generating project.
F. Subject to the limitations and requirements outlined in 9VAC25-900-260 and 9VAC25-900-270, if the owner substitutes other financial assurance as specified in this part for all or part of the trust fund, the owner may submit a written request to the director for release of the amount in excess of the current cost estimate covered by the trust fund.
G. Within 60 days after receiving a request from the owner for release of funds as described in subsections F and H of this section, the director shall instruct the trustee to release to the owner such funds as the director deems appropriate, if any, in writing.
H. The director shall agree to terminate the trust when:
1. The owner substitutes alternate financial assurance as specified in this part; or
2. The director notifies the owner that the owner is no longer required by this part to maintain financial assurance for the nutrient credit-generating project.
I. The trust agreement shall be worded as described in 9VAC25-900-350, except that instructions in parentheses are to be replaced with the appropriate information and the parentheses deleted, and the trust agreement shall be accompanied by a formal certification of acknowledgment and Schedules A and B.
Statutory Authority
§ 62.1-44.19:20 of the Code of Virginia.
Historical Notes
Derived from Virginia Register Volume 36, Issue 23, eff. September 1, 2020.
9VAC25-900-300. Surety bond.
A. An owner may satisfy the requirements of this part by obtaining a surety bond that conforms to the requirements of this section and by submitting an originally signed duplicate of the bond to the department. The surety company issuing the bond shall be licensed to operate as a surety in the Commonwealth of Virginia and be among those listed as acceptable sureties on federal bonds in the latest Circular 570 of the U.S. Department of the Treasury.
B. Under the terms of the bond, the surety shall become liable on the bond obligation when the owner fails to perform as guaranteed by the bond.
C. The bond shall guarantee that the owner or any other authorized person shall perform all or any of the following activities for which the bond is used to satisfy the requirements of this part:
1. Operate and maintain, monitor, repair, or replace any practices for achieving nutrient reductions at the nutrient credit-generating project in question and in accordance with the nutrient credit certification; or,
2. Operate and maintain, monitor, repair, or replace any practices following an order to do so that has been issued by the department or by a court.
D. The owner shall compare the cost estimate with the penal sum of the bond:
1. Annually, at least 60 days prior to the anniversary date of the initial approval by the department of the release of credits for exchange. If the penal sum of the bond is less than the amount of the cost estimate, the owner shall, by the anniversary date of the initial approval by the department of the release of credits for exchange, increase the penal sum of the bond so that its value at least equals the amount of the cost estimate, or obtain other financial assurance as specified in this part to cover the difference. If the penal sum of the bond is greater than the total amount of the cost estimate, the owner may submit a written request to the director for permission to reduce the penal sum of the bond to the amount of the cost estimate; and
2. Whenever the cost estimate changes. If the penal sum of the bond is less than the amount of the new cost estimate, the owner shall, within 60 days of the change in the cost estimate, increase the penal sum of the bond so that its value at least equals the amount of the new estimate, or obtain other financial assurance as specified in this part to cover the difference. If the penal sum of the bond is greater than the total amount of the cost estimate, the owner may submit a written request to the director for permission to reduce the penal sum of the bond to the amount of the cost estimate.
E. The surety bond shall guarantee that the owner shall provide alternate evidence of financial assurance as specified in this part within 60 days after receipt by the department of a notice of cancellation of the bond from the surety.
F. The bond shall remain in force for its term unless the surety sends written notice of cancellation by certified mail to the owner and to the department. Cancellation cannot occur, however, during the 120 days beginning on the date of receipt of the notice of cancellation by the department as shown on the signed return receipt. The surety shall provide written notification to the department by certified mail no less than 120 days prior to the expiration date of the bond that the bond will expire and the date the bond will expire.
G. The department shall cash the surety bond:
1. When it is not replaced 60 days prior to expiration with alternate evidence of financial assurance acceptable to the department; or
2. If the owner has failed to monitor, operate and maintain, or repair or replace, as applicable, the practices utilized by the nutrient credit-generating project in accordance with this chapter and the nutrient credit certification. The department shall use the funds from the surety bond to pay for the performance of monitoring, operation, and maintenance or repair and replacement, as applicable, of the practices utilized by the nutrient credit-generating project.
H. The department shall return the original surety bond to the surety for termination when:
1. The owner substitutes acceptable alternate evidence of financial assurance; or
2. The director notifies the owner that the owner is no longer required by this part to maintain evidence of financial assurance for nutrient credit-generating project.
I. The surety bond shall be worded as described in 9VAC25-900-350, except that instructions in parentheses are to be replaced with the relevant information and the parentheses deleted.
Statutory Authority
§ 62.1-44.19:20 of the Code of Virginia.
Historical Notes
Derived from Virginia Register Volume 36, Issue 23, eff. September 1, 2020.
9VAC25-900-310. Letter of credit.
A. An owner may satisfy the requirements of this part by obtaining an irrevocable standby letter of credit that conforms to the requirements of this section and by submitting an originally signed duplicate of the letter of credit to the department. The issuing institution shall be an entity that has the authority to issue letters of credit in the Commonwealth of Virginia and whose letter-of-credit operations are regulated and examined by a federal agency or the Virginia State Corporation Commission.
B. The letter of credit shall be irrevocable and issued for a period of at least one year. The letter of credit shall provide that the expiration date will be automatically extended for a period of at least one year. If the issuing institution decides not to extend the letter of credit beyond the current expiration date, it shall, at least 120 days before the expiration date, notify both the owner and the department by certified mail of that decision. The 120-day period will begin on the date of receipt of letter of credit's notice of cancellation by the department as shown on the signed return receipt. If the letter of credit is canceled by the issuing institution, the owner shall obtain alternate evidence of financial assurance to be in effect prior to the expiration date of the letter of credit.
C. The owner shall compare the cost estimate with the face amount of the letter of credit:
1. Annually, at least 60 days prior to the anniversary date of the initial approval by the department of the release of credits for exchange. If the face amount of the letter of credit is less than the amount of the cost estimate, the owner shall, by the anniversary date of the initial approval by the department of the release of credits for exchange, increase the face amount of the letter of credit so that its value at least equals the amount of the cost estimate, or obtain other financial assurance as specified in this part to cover the difference. If the face amount of the letter of credit is greater than the total amount of the cost estimate, the owner may submit a written request to the director for permission to reduce the face amount of the letter of credit to the amount of the cost estimate; and
2. Whenever the cost estimate changes. If the face amount of the letter of credit is less than the amount of the new cost estimate, the owner shall, within 60 days of the change in the cost estimate, increase the face amount of the letter of credit so that its value at least equals the amount of the new estimate or obtain other financial assurance as specified in this part to cover the difference. If the face amount of the letter of credit is greater than the total amount of the cost estimate, the owner may submit a written request to the director for permission to reduce the face amount of the letter of credit to the amount of the cost estimate.
D. The issuing institution may cancel the letter of credit only if alternate evidence of financial assurance acceptable to the department is substituted as specified in this part or if the owner is released by the department from the requirements of financial assurance.
E. The department shall cash the letter of credit when:
1. The issuing institution has provided proper notification, as outlined in subsection B of this section, of its intent not to renew the letter of credit, and the owner has not, within 30 days prior to expiration, replaced the letter of credit with alternate evidence of financial assurance acceptable to the department; or
2. The owner has failed to monitor, operate, and maintain or repair or replace, as applicable, the practices utilized by the nutrient credit-generating project in accordance with this chapter and the nutrient credit certification. The department shall use the funds from the letter of credit to pay for the performance of monitoring, operation, and maintenance or repair and replacement, as applicable, of the practices utilized by the nutrient credit-generating project.
F. The department shall return the original letter of credit to the issuing institution for termination when:
1. The owner substitutes acceptable alternate evidence of financial assurance; or
2. The department notifies the owner that the owner is no longer required by this part to maintain evidence of financial assurance for the nutrient credit-generating project.
G. The letter of credit shall be worded as described in 9VAC25-900-350, except that instructions in parentheses are to be replaced with the relevant information and the parentheses deleted.
Statutory Authority
§ 62.1-44.19:20 of the Code of Virginia.
Historical Notes
Derived from Virginia Register Volume 36, Issue 23, eff. September 1, 2020.
9VAC25-900-320. Certificate of deposit.
A. An owner may satisfy the requirements of this chapter, wholly or in part, by obtaining a certificate of deposit and assigning all rights, title, and interest in the certificate of deposit to the department, conditioned so that the owner shall perform the applicable monitoring, operation, and maintenance or repair or replacement for the practices utilized by the nutrient credit-generating project. The issuing institution shall be an entity that has the authority to issue certificates of deposit in the Commonwealth of Virginia and whose operations are regulated and examined by a federal agency or the Virginia State Corporation Commission. The owner must submit the originally signed assignment and the originally signed certificate of deposit, if applicable, to the department.
B. The owner shall compare the cost estimate with the amount of the certificate of deposit:
1. Annually, at least 60 days prior to the anniversary date of the initial approval by the department of the release of credits for exchange. If the amount of the certificate of deposit is less than the amount of the cost estimate, the owner shall, by the anniversary date of the initial approval by the department of the release of credits for exchange, increase the amount of the certificate of deposit so that its value at least equals the amount of the cost estimate, or obtain other financial assurance as specified in this part to cover the difference. If the amount of the certificate of deposit is greater than the total amount of the cost estimate, the owner may submit a written request to the director for permission to withdraw funds from the certificate of deposit to the amount of the cost estimate; and
2. Whenever the cost estimate changes. If the amount of the certificate of deposit is less than the amount of the new cost estimate, the owner shall, within 60 days of the change in the cost estimate, increase the amount of certificate of deposit so that its value at least equals the amount of the new estimate or obtain other financial assurance as specified in this part to cover the difference. If the amount of the certificate of deposit is greater than the total amount of the cost estimate, the owner may submit a written request to the director for permission to withdraw funds from the certificate of deposit to the amount of the cost estimate.
C. The owner shall be entitled to demand, receive, and recover the interest and income from the certificate of deposit as it becomes due and payable as long as the market value of the certificate of deposit used continues to at least equal the amount of the current approved cost estimate.
D. The department shall cash the certificate of deposit if the owner has failed to monitor, operate, and maintain or repair or replace, as applicable, the practices utilized by the nutrient credit-generating project in accordance with this chapter and the nutrient credit certification. The department shall use the funds from the certificate of deposit to pay for the performance of monitoring, operation, and maintenance or repair and replacement, as applicable, of the practices utilized by the nutrient credit-generating project.
E. The department shall return the original assignment and certificate of deposit, if applicable, to the issuing institution for termination when:
1. The owner substitutes acceptable alternate evidence of financial assurance as specified in this part; or
2. The department notifies the owner that the owner is no longer required by this part to maintain evidence of financial assurance.
F. The assignment shall be worded as described in 9VAC25-900-350, except that instructions in parentheses shall be replaced with the relevant information and the parentheses deleted.
Statutory Authority
§ 62.1-44.19:20 of the Code of Virginia.
Historical Notes
Derived from Virginia Register Volume 36, Issue 23, eff. September 1, 2020.
9VAC25-900-330. Insurance.
A. An owner may demonstrate financial assurance for applicable costs for monitoring, repair, or replacement or operation and maintenance by obtaining insurance that conforms to the requirements of this section. The insurance shall be effective before the credits are released by the department for exchange. The insurer must be licensed pursuant to Chapter 10 (§ 38.2-1000 et seq.) of Title 38.2 of the Code of Virginia. The owner shall provide the department with a signed copy of the insurance policy. The department shall be listed as an additional insured on the policy, but the department shall not be obligated for payment of the premium in any manner.
B. The insurance policy shall guarantee that funds will be available to fund (i) for projects using wetland or stream restoration, the cost for fulfilling the requirements of the monitoring plan or (ii) for projects using structural BMPs, the reasonable and necessary cost of repair, replacement, or operation and maintenance or any combination of these activities.
C. The owner shall compare the cost estimate with the liability limit of the insurance policy:
1. Annually, at least 60 days prior to the anniversary date of the initial approval by the department of the release of credits for exchange. If the liability limit of the insurance policy is less than the amount of the cost estimate, the owner shall, by the anniversary date of the initial approval by the department of the release of credits for exchange, increase the liability limit of the insurance policy so that it at least equals the amount of the cost estimate, or obtain other financial assurance as specified in this part to cover the difference. If the liability limit of the insurance policy is greater than the total amount of the cost estimate, the owner may submit a written request to the director for permission to lower the liability limit of the insurance policy to the amount of the cost estimate; and
2. Whenever the cost estimate changes. If the liability limit of the insurance policy is less than the amount of the new cost estimate, the owner shall, within 60 days of the change in the cost estimate, increase the liability limit of the insurance policy so that it at least equals the amount of the new estimate or obtain other financial assurance as specified in this part to cover the difference. If the liability limit of the insurance policy is greater than the total amount of the cost estimate, the owner may submit a written request to the director for permission to lower the liability limit of the insurance policy to the amount of the cost estimate.
D. The insurance policy shall be issued and maintained for an overall liability limit at least equal to the current cost estimate for applicable activities covered under the policy (i.e., monitoring, repair, and replacement or operation and maintenance). The term "overall liability limit" means the total amount the insurer is obligated to pay under the policy. Actual payments by the insurer will not change the overall liability limit although the insurer's future liability will be lowered by the amount of the payments.
E. The insurance policy shall provide that the insurer shall pay, as applicable, for the monitoring, repair, or replacement or operation and maintenance of the nutrient credit-generating project's practices. Justification and documentation of the expenditures must be submitted to and approved by the director. Requests for payment will be granted by the insurer only if the remaining value of the policy is sufficient to cover the remaining costs of monitoring, repair, or replacement or operation and maintenance of the nutrient credit-generating project's practices, or if the director approves the payment. The insurer shall notify the director when a payment has been made.
F. Each policy shall contain a provision allowing assignment of the policy to a successor owner. Such assignment may be conditional upon consent of the insurer, provided that such consent is not unreasonably refused.
G. The insurance policy shall provide that the insurer may not cancel, except for failure to pay the premium. In addition, the policy shall provide that, subject to payment of premium, it will automatically renew on an annual basis for a period of up to 10 years. The automatic renewal of the policy shall, at a minimum, provide the insured with the option of renewal at the face amount of the expiring policy. If there is a failure to pay the premium, the insurer may cancel or terminate the policy by sending notice of cancellation or termination by certified mail to the owner and to the department 120 days in advance of cancellation or termination. Within 60 days of receipt of notice from the insurer that it intends either to cancel or terminate the policy, the owner shall obtain alternate financial assurance and submit it to the department.
H. The owner may cancel the insurance policy only if alternate financial assurance is substituted as specified in this part, or if the owner is no longer required to demonstrate financial responsibility.
I. Within 10 days after commencement of a voluntary or involuntary proceeding under Title 11 (Bankruptcy) of the United States Code, naming an owner as debtor, the owner shall notify the director by certified mail of such commencement.
J. The wording of the insurance endorsement shall be identical to the wording specified in 9VAC25-900-350. ACORD Certificates of Insurance are not valid proof of insurance.
Statutory Authority
§ 62.1-44.19:20 of the Code of Virginia.
Historical Notes
Derived from Virginia Register Volume 36, Issue 23, eff. September 1, 2020.
9VAC25-900-340. Incapacity of financial providers or owner.
A. An owner that fulfills the requirements of this part by obtaining a trust fund, a letter of credit, a surety bond, or an insurance policy shall be deemed to be without the required financial assurance in the event of bankruptcy of the trustee or issuing institution, or a suspension or revocation of the authority of the trustee institution to act as trustee or of the institution issuing a surety bond, letter of credit, or insurance policy to issue such mechanisms. The owner or operator shall establish other financial assurance within 60 days of such event.
B. An owner shall notify the director by certified mail of the commencement of a voluntary or involuntary proceeding under Title 11 (Bankruptcy) of the United States Code, naming the owner or operator as debtor, within 10 days after commencement of the proceeding.
Statutory Authority
§ 62.1-44.19:20 of the Code of Virginia.
Historical Notes
Derived from Virginia Register Volume 36, Issue 23, eff. September 1, 2020.
9VAC25-900-350. Wording of the financial assurance mechanism.
A. The wording of the financial assurance mechanisms shall be as provided in this section.
B. Wording of trust agreements.
(NOTE: Instructions in parentheses are to be replaced with the applicable information for the nutrient credit-generating project's practices (i.e., structural BMPs or wetland/stream restoration) and the non-relevant information and parentheses deleted.)
TRUST AGREEMENT
Trust agreement, the "Agreement," entered into as of (date) by and between (name of the owner), a (State) (corporation, partnership, association, proprietorship), the "Grantor," and (name of corporate trustee), a (State corporation) (national bank), the "Trustee."
Whereas, the State Water Control Board has established certain regulations applicable to the Grantor, requiring that the owner of a nutrient credit-generating project must provide assurance that funds will be available when needed for (operation and maintenance and/or repair or replacement of the project's structural BMPs) (monitoring and/or long-term maintenance of the project's wetland/stream restoration),
Whereas, the Grantor has elected to establish a trust to provide (all or part of) such financial assurance for the project identified herein,
Whereas, the Grantor, acting through its duly authorized officers, has selected the Trustee to be the trustee under this agreement, and the Trustee is willing to act as trustee,
Now, therefore, the Grantor and the Trustee agree as follows:
Section 1. Definitions. As used in this Agreement:
A. The term "fiduciary" means any person who exercises any power of control, management, or disposition or renders investment advice for a fee or other compensation, direct or indirect, with respect to any moneys or other property of this trust fund, or has any authority or responsibility to do so, or who has any authority or responsibility in the administration of this trust fund.
B. The term "Grantor" means the owner who enters into this Agreement and any successors or assigns of the Grantor.
C. The term "Trustee" means the Trustee who enters into this Agreement and any successor Trustee.
Section 2. Identification of Project and Cost Estimates. This Agreement pertains to project(s) and cost estimates identified on attached Schedule A.
(NOTE: On Schedule A, for each project, list, as applicable, name, address, and the current cost estimates for operation and maintenance and/or repair or replacement for the project's structural BMPs; or the current cost estimates for the monitoring and/or long-term maintenance of the project's wetland/stream restoration, or portions thereof, for which financial assurance is demonstrated by this Agreement.)
Section 3. Establishment of Fund. The Grantor and the Trustee hereby establish a trust fund, the "Fund," for the benefit of the Department of Environmental Quality, Commonwealth of Virginia. The Grantor and the Trustee intend that no third party have access to the Fund except as herein provided. The Fund is established initially as property consisting of cash or securities, which are acceptable to the Trustee, described in Schedule B attached hereto. Such property and any other property subsequently transferred to the Trustee is referred to as the fund, together with all earnings and profits thereon, less any payments or distributions made by the Trustee pursuant to this Agreement. The Fund will be held by the Trustee, IN TRUST, as hereinafter provided. The Trustee undertakes no responsibility for the amount or adequacy of, nor any duty to collect from the Grantor, any payments to discharge any liabilities of the Grantor established by the Commonwealth of Virginia's Department of Environmental Quality.
Section 4. Payment for (operation and maintenance and/or repair or replacement for the project's structural BMPs) (monitoring and/or long-term maintenance for the project's wetland/stream restoration). The Trustee will make such payments from the Fund as the Department of Environmental Quality, Commonwealth of Virginia will direct, in writing, to provide for the payment of the costs of (operation and maintenance and/or repair or replacement for the project's structural BMPs) (monitoring and/or long-term maintenance for the project's wetland/stream restoration) of the project covered by this Agreement. The Trustee will reimburse the Grantor or other persons as specified by the Department of Environmental Quality, Commonwealth of Virginia, from the Fund for (operation and maintenance and/or repair or replacement for the project's structural BMPs) (monitoring and/or long-term maintenance for the project's wetland/stream restoration) expenditures in such amounts as the Department of Environmental Quality will direct, in writing. In addition, the Trustee will refund to the Grantor such amounts as the Department of Environmental Quality specifies in writing. Upon refund, such funds will no longer constitute part of the Fund as defined herein.
Section 5. Payments Comprising the Fund. Payments made to the Trustee for the fund will consist of cash or securities acceptable to the Trustee.
Section 6. Trustee Management. The Trustee will invest and reinvest the principal and income of the Fund and keep the Fund invested as a single fund, without distinction between principal and income, in accordance with investment guidelines and objectives communicated in writing to the Trustee from time to time by the Grantor, subject, however, to the provisions of this Section. In investing, reinvesting, exchanging, selling and managing the Fund, the Trustee or any other fiduciary will discharge his duties with respect to the trust fund solely in the interest of the beneficiary and with the care, skill, prudence, and diligence under the circumstances then prevailing which persons of prudence, acting in a like capacity and familiar with such matters, would use in the conduct of any enterprise of a like character and with like aims; except that:
A. Securities or other obligations of the Grantor, or any other owner of the project, or any of their affiliates as defined in the Investment Company Act of 1940, as amended, 15 USC § 80a-2(a), will not be acquired or held, unless they are securities or other obligations of the federal or a state government;
B. The Trustee is authorized to invest the Fund in time or demand deposits of the Trustee, to the extent insured by an agency of the federal or state government; and
C. The Trustee is authorized to hold cash awaiting investment or distribution uninvested for a reasonable time and without liability for the payment of interest thereon.
Section 7. Commingling and Investment. The Trustee is expressly authorized in its discretion:
A. To transfer from time to time any or all of the assets of the Fund to any common, commingled or collective trust fund created by the Trustee in which the Fund is eligible to participate subject to all of the provisions thereof, to be commingled with the assets of other trusts participating herein. To the extent of the equitable share of the Fund in any such commingled trust, such commingled trust will be part of the Fund; and
B. To purchase shares in any investment company registered under the Investment Company Act of 1940, 15 USC § 80a-1 et seq., or one which may be created, managed, underwritten, or to which investment advice is rendered or the shares of which are sold by the Trustee. The Trustees may vote such shares in its discretion.
Section 8. Express Powers of Trustee. Without in any way limiting the powers and discretions conferred upon the Trustee by the other provisions of this Agreement or by law, the Trustee is expressly authorized and empowered:
A. To sell, exchange, convey, transfer or otherwise dispose of any property held by it, by private contract or at public auction. No person dealing with the Trustee will be bound to see to the application of the purchase money or to inquire into the validity or expediency of any such sale or other dispositions;
B. To make, execute, acknowledge and deliver any and all documents of transfer and conveyance and any and all other instruments that may be necessary or appropriate to carry out the powers herein granted;
C. To register any securities held in the fund in its own name or in the name of a nominee and to hold any security in bearer form or in book entry, or to combine certificates representing such securities with certificates of the same issue held by the Trustee in other fiduciary capacities, or to deposit or arrange for the deposit of such securities in a qualified central depository even though, when so deposited, such securities may be merged and held in bulk in the name of the nominee of such depository with other securities deposited therein by another person, or to deposit or arrange for the deposit of any securities issued by the United States government, or any agency or instrumentality thereof with a Federal Reserve Bank, but the books and records of the Trustee will at all times show that all such securities are part of the Fund;
D. To deposit any cash in the fund in interest-bearing accounts maintained or savings certificates issued by the Trustee, in its separate corporate capacity, or in any other banking institution affiliated with the Trustee, to the extent insured by an agency of the Federal or State government; and
E. To compromise or otherwise adjust all claims in favor of or against the Fund.
Section 9. Taxes and Expenses. All taxes of any kind that may be assessed or levied against or in respect of the Fund and all brokerage commissions incurred by the Fund will be paid from the Fund. All other expenses incurred by the Trustee in connection with the administration of this Trust, including fees for legal services rendered to the Trustee, the compensation of the Trustee to the extent not paid directly by the Grantor, and all other proper charges and disbursements of the Trustee will be paid from the Fund.
Section 10. Annual Valuation. The Trustee will annually, at the end of the month coincident with or preceding the anniversary date of establishment of the Fund, furnish the Grantor and to the director of the Department of Environmental Quality, Commonwealth of Virginia, a statement confirming the value of the Trust. Any securities in the Fund will be valued at market value as of no more than 30 days prior to the date of the statement. The failure of the Grantor to object in writing to the Trustee within 90 days after the statement has been furnished to the Grantor and the director of the Department of Environmental Quality, Commonwealth of Virginia will constitute a conclusively binding assent by the Grantor, barring the Grantor from asserting any claim or liability against the Trustee with respect to matters disclosed in the statement.
Section 11. Advice of Counsel. The Trustee may from time to time consult with counsel, who may be counsel to the Grantor, with respect to any question arising as to the construction of this Agreement or any action to be taken hereunder. The Trustee will be fully protected, to the extent permitted by law, in acting upon the advice of counsel.
Section 12. Trustee Compensation. The Trustee will be entitled to reasonable compensation for its services as agreed upon in writing from time to time with the Grantor.
Section 13. Successor Trustee. The Trustee may resign or the Grantor may replace the Trustee, but such resignation or replacement shall not be effective until the Grantor has appointed a successor trustee and this successor accepts the appointment. The successor trustee shall have the same powers and duties as those conferred upon the Trustee hereunder. Upon acceptance of the appointment by the successor trustee, the Trustee will assign, transfer and pay over to the successor trustee the funds and properties then constituting the Fund. If for any reason the grantor cannot or does not act in the event of the resignation of the Trustee, the Trustee may apply to a court of competent jurisdiction for the appointment of a successor trustee or for instructions. The successor trustee and the date on which he assumes administration of the trust will be specified in writing and sent to the Grantor, the director of the Department of Environmental Quality, Commonwealth of Virginia, and the present trustees by certified mail 10 days before such change becomes effective. Any expenses incurred by the Trustee as a result of any of the acts contemplated by this section will be paid as provided in Section 9.
Section 14. Instructions to the Trustee. All orders, requests and instructions by the Grantor to the Trustee will be in writing, signed by such persons as are designated in the attached Exhibit A or such other designees as the Grantor may designate by amendment to Exhibit A. The Trustee will be fully protected in acting without inquiry in accordance with the Grantor's orders, requests and instructions. All orders, requests, and instructions by the Director of the Department of Environmental Quality, Commonwealth of Virginia, to the Trustee will be in writing, signed by the Director and the Trustee will act and will be fully protected in acting in accordance with such orders, requests and instructions. The Trustee will have the right to assume, in the absence of written notice to the contrary, that no event constituting a change or a termination of the authority of any person to act on behalf of the Grantor or the Commonwealth of Virginia's Department of Environmental Quality hereunder has occurred. The Trustee will have no duty to act in the absence of such orders, requests and instructions from the Grantor and/or the Commonwealth of Virginia's Department of Environmental Quality, except as provided for herein.
Section 15. Notice of Nonpayment. The Trustee will notify the Grantor and the Director of the Department of Environmental Quality, Commonwealth of Virginia, by certified mail within 10 days following the expiration of the 30-day period after the anniversary of the establishment of the Trust, if no payment is received from the Grantor during that period. After the pay-in period is completed, the Trustee is not required to send a notice of nonpayment.
Section 16. Amendment of Agreement. This Agreement may be amended by an instrument in writing executed by the Grantor, the Trustee, and the Director of the Department of Environmental Quality, Commonwealth of Virginia, or by the Trustee and the Director of the Department of Environmental Quality, Commonwealth of Virginia, if the Grantor ceases to exist.
Section 17. Irrevocability and Termination. Subject to the right of the parties to amend this Agreement as provided in Section 16, this Trust will be irrevocable and will continue until terminated at the written agreement of the Grantor, the Trustee, and the Director of the Department of Environmental Quality, Commonwealth of Virginia, or by the Trustee and the Director if the Grantor ceases to exist. Upon termination of the Trust, all remaining trust property, less final trust administration expenses, will be delivered to the Grantor.
Section 18. Immunity and Indemnification. The Trustee will not incur personal liability of any nature in connection with any act or omission, made in good faith, in the administration of this Trust, or in carrying out any directions by the Grantor or the Director of the Department of Environmental Quality, Commonwealth of Virginia, issued in accordance with this Agreement. The Trustee will be indemnified and saved harmless by the Grantor or from the Trust Fund, or both, from and against any personal liability to which the Trustee may be subjected by reason of any act or conduct in its official capacity, including all expenses reasonably incurred in its defense in the event the Grantor fails to provide such defense.
Section 19. Choice of Law. This Agreement will be administered, construed and enforced according to the laws of the Commonwealth of Virginia.
Section 20. Interpretation. As used in the Agreement, words in the singular include the plural and words in the plural include the singular. The descriptive headings for each section of this Agreement will not affect the interpretation of the legal efficacy of this Agreement.
In witness whereof the parties have caused this Agreement to be executed by their respective officers duly authorized and their corporate seals to be hereunto affixed and attested as of the date first above written. The parties below certify that the wording of this Agreement is substantively identical to the wording specified in 9VAC25-900-350 B, as such regulations were constituted on the date shown immediately below.
(Signature of Grantor) | |
By: (Title) | (Date) |
Attest: | |
(Title) | (Date) |
(Seal) | |
(Signature of Trustee) | |
By | |
Attest: | |
(Title) | |
(Seal) | (Date) |
Certification of Acknowledgment:
COMMONWEALTH OF VIRGINIA
STATE OF __________
CITY/COUNTY OF __________
On this date, before me personally came (owner) to me known, who being by me duly sworn, did depose and say that she/he resides at (address), that she/he is (title) of (corporation), the corporation described in and which executed the above instrument; that she/he knows the seal of said corporation; that the seal affixed to such instrument is such corporate seal; that it was so affixed by order of the Board of Directors of said corporation, and that she/he signed her/his name thereto by like order.
(Signature of Notary Public)
C. Wording of surety bond guaranteeing performance or payment.
(NOTE: Instructions in parentheses are to be replaced with the applicable information for the nutrient credit-generating project's practices (i.e., structural BMPs or wetland/stream restoration) and the non-relevant information and parentheses deleted.)
PERFORMANCE OR PAYMENT BOND
Date bond executed: __________
Effective date: __________
Principal: (legal name and business address) _____________
Type of organization: (insert "individual," "joint venture," "partnership," or "corporation") _____________
State of incorporation: __________
Surety: (name and business address) _____________
Name, address, and cost estimate or estimates for the project: _____________
Penal sum of bond: $________
Surety's bond number: __________
Know all men by these present, That we, the Principal and Surety hereto are firmly bound to the Department of Environmental Quality, Commonwealth of Virginia, (hereinafter called the Department) in the above penal sum for the payment of which we bind ourselves, our heirs, executors, administrators, successors and assigns, jointly and severally; provided that, where the Surety(ies) are corporations acting as co-sureties, we, the Sureties, bind ourselves in such sum "jointly and severally" only for the purpose of allowing a joint action or actions against any or all of us, and for all other purposes each Surety binds itself, jointly and severally with the Principal, for the payment of each sum only as is set forth opposite the name of such Surety, but if no limit of liability is indicated, the limit of liability shall be the full amount of the penal sum.
Whereas, said Principal is required to have from the Department of Environmental Quality, Commonwealth of Virginia, in order to own or operate the, nutrient credit-generating project identified above, and
Whereas, said Principal is required to provide financial assurance for (operation and maintenance and/or repair or replacement for the project's structural BMPs) (monitoring and/or long-term maintenance for the project's wetland/stream restoration) of the project as a condition of an order issued by the department,
Now, therefore the conditions of this obligation are such that if the Principal shall faithfully perform (operation and maintenance and/or repair or replacement of structural BMPs) (monitoring wetland/stream restoration), whenever required to do so, of the project identified above in accordance with the order or the (operation and maintenance and/or repair or replacement of structural BMPs) (monitoring wetland/stream restoration) submitted to receive and other requirements of as such plan and may be amended or renewed pursuant to all applicable laws, statutes, rules, and regulations, as such laws, statutes, rules, and regulations may be amended,
Or, if the Principal shall faithfully perform (operation and maintenance and/or repair or replacement of structural BMPs) (monitoring wetland/stream restoration) following an order to begin (operation and maintenance and/or repair or replacement of structural BMPs) (monitoring wetland/stream restoration) issued by the Commonwealth of Virginia's Department of Environmental Quality or by a court, or following a notice of termination of the permit,
Or, if the Principal shall provide alternate financial assurance as specified in the Department's regulations and obtain the director's written approval of such assurance, within 90 days of the date notice of cancellation is received by the Director of the Department of Environmental Quality from the Surety, then this obligation will be null and void, otherwise it is to remain in full force and effect for the life of the nutrient credit-generating project identified above.
The Surety shall become liable on this bond obligation only when the Principal has failed to fulfill the conditions described above. Upon notification by the Director of the Department of Environmental Quality, Commonwealth of Virginia, that the Principal has been found in violation of the requirements of the Department's regulations, the Surety must either perform (operation and maintenance and/or repair or replacement of structural BMPs) (monitoring wetland/stream restoration) in accordance with the approved plan and other requirements or forfeit the (operation and maintenance and/or repair or replacement of structural BMPs) (monitoring wetland/stream restoration) amount guaranteed for the nutrient credit-generating project to the Commonwealth of Virginia.
Upon notification by the Director of the Department of Environmental Quality, Commonwealth of Virginia, that the Principal has been found in violation of an order to begin operation and maintenance and/or replacement) the Surety must either perform (operation and maintenance and/or repair or replacement of structural BMPs) (monitoring wetland/stream restoration) in accordance with the order or forfeit the amount of the (operation and maintenance and/or repair or replacement of structural BMPs) (monitoring wetland/stream restoration) guaranteed for the nutrient credit-generating project to the Commonwealth of Virginia.
The Surety hereby waives notification of amendments to the operation and maintenance and/or replacement, orders, applicable laws, statutes, rules, and regulations and agrees that such amendments shall in no way alleviate its obligation on this bond.
For purposes of this bond, (operation and maintenance and/or repair or replacement of structural BMPs) (monitoring wetland/stream restoration) shall be deemed to have been completed when the Director of the Department of Environmental Quality, Commonwealth of Virginia, determines that the conditions of the approved plan have been met.
The liability of the Surety shall not be discharged by any payment or succession of payments hereunder, unless and until such payment or payments shall amount in the aggregate to the penal sum of the bond, but the obligation of the Surety hereunder shall not exceed the amount of said penal sum unless the Director of the Department of Environmental Quality, Commonwealth of Virginia, should prevail in an action to enforce the terms of this bond. In this event, the Surety shall pay, in addition to the penal sum due under the terms of the bond, all interest accrued from the date the Director of the Department of Environmental Quality, Commonwealth of Virginia, first ordered the Surety to perform. The accrued interest shall be calculated at the judgment rate of interest pursuant to § 6.2-302 of the Code of Virginia.
The Surety may cancel the bond by sending written notice of cancellation to the owner and to the Director of the Department of Environmental Quality, Commonwealth of Virginia, provided, however, that cancellation cannot occur (1) during the 120 days beginning on the date of receipt of the notice of cancellation by the director as shown on the signed return receipt; or (2) while an enforcement action is pending.
The Principal may terminate this bond by sending written notice to the Surety, provided, however, that no such notice shall become effective until the Surety receives written authorization for termination of the bond by the Director of the Department of Environmental Quality, Commonwealth of Virginia.
In witness whereof, the Principal and Surety have executed this Performance Bond and have affixed their seals on the date set forth above.
The persons whose signatures appear below hereby certify that they are authorized to execute this surety bond on behalf of the Principal and Surety and I hereby certify that the wording of this surety bond is substantively identical to the wording specified in 9VAC25-900-350 C as such regulations were constituted on the date shown immediately below.
Principal
Signature(s): __________
Name(s) and Title(s): (typed)__________
Corporate Surety
Name and Address: __________
State of Incorporation: __________
Liability Limit: $___
Signature(s): __________
Name(s) and Title(s): (typed)__________
Corporate Seal:
D. Wording of irrevocable standby letter of credit.
(NOTE: Instructions in parentheses are to be replaced with the applicable information for the nutrient credit-generating project's practices (i.e., structural BMPs or wetland/stream restoration) and the non-relevant information and parentheses deleted.)
IRREVOCABLE STANDBY LETTER OF CREDIT
Director
Department of Environmental Quality
P.O. Box 1105
Richmond, Virginia 23218
Dear (Sir or Madam):
We hereby establish our Irrevocable Letter of Credit No...... in your favor at the request and for the account of (owner's name and address) up to the aggregate amount of (in words) U.S. dollars $____, available upon presentation of
1. Your sight draft, bearing reference to this letter of credit No ____ together with
2. Your signed statement declaring that the amount of the draft is payable pursuant to regulations issued under the authority of the Department of Environmental Quality, Commonwealth of Virginia.
The following amounts are included in the amount of this letter of credit: (Insert the nutrient credit-generating project name and address, and the appropriate cost estimate or estimates, or portions thereof, for which financial assurance is demonstrated by this letter of credit.)
This letter of credit is effective as of (date) and will expire on (date at least one year later), but such expiration date will be automatically extended for a period of (at least one year) on (date) and on each successive expiration date, unless, at least 120 days before the current expiration date, we notify you and (owner or operator's name) by certified mail that we decide not to extend the Letter of Credit beyond the current expiration date. In the event you are so notified, unused portion of the credit will be available upon presentation of your sight draft for 120 days after the date of receipt by you as shown on the signed return receipt or while a compliance procedure is pending, whichever is later.
Whenever this letter of credit is drawn on under and in compliance with the terms of this credit, we will duly honor such draft upon presentation to us, and we will pay to you the amount of the draft promptly and directly.
I hereby certify that I am authorized to execute this letter of credit on behalf of (issuing institution) and I hereby certify that the wording of this letter of credit is substantively identical to the wording specified in 9VAC25-900-350 D as such regulations were constituted on the date shown immediately below.
Attest:
(Print name and title of official of issuing institution) (Date)
(Signature) | (Date) |
This credit is subject to the most recent edition of the Uniform Customs and Practice for Documentary Credits, International Chamber of Commerce Publication No. 600, and any subsequent revisions thereof approved by a congress of the International Chamber of Commerce and adhered to by us. If this credit expires during an interruption of business as described in Article 36 of said Publication 600, the bank hereby specifically agrees to effect payment if this credit is drawn against within thirty (30) days after resumption of our business.
E. Assignment of certificate of deposit account.
City _______________________ ____________, 20___
FOR VALUE RECEIVED, the undersigned assigns all right, title and interest to the Virginia Department of Environmental Quality, Commonwealth of Virginia, and its successors and assigns the Virginia Department of Environmental Quality the principal amount of the instrument, including all moneys deposited now or in the future to that instrument, indicated below:
This assignment includes all interest now and hereafter accrued.
Certificate of Deposit Account No. _____________________
This assignment is given as security to the Virginia Department of Environmental Quality in the amount of _______________________ Dollars ($_____________).
Continuing Assignment. This assignment shall continue to remain in effect for all subsequent terms of the automatically renewable certificate of deposit.
Assignment of Document. The undersigned also assigns any certificate or other document evidencing ownership to the Virginia Department of Environmental Quality.
Additional Security. This assignment shall secure the payment of any financial obligation of the (name of owner) to the Virginia Department of Environmental Quality for (operation and maintenance and/or repair or replacement of structural BMPs) (monitoring wetland/stream restoration) at the (project name) located (physical address).
Application of Funds. The undersigned agrees that all or any part of the funds of the indicated account or instrument may be applied to the payment of any and all financial assurance obligations of (name of owner) to the Virginia Department of Environmental Quality for (operation and maintenance and/or repair or replacement) (monitoring) at the (project name and address). The undersigned authorizes the Virginia Department of Environmental Quality to withdraw any principal amount on deposit in the indicated account or instrument including any interest, if indicated, and to apply it in the Virginia Department of Environmental Quality's discretion to fund (operation and maintenance and/or repair or replacement) (monitoring) at the (project name) or in the event of (owner) failure to comply with the 9VAC25-900. The undersigned agrees that the Virginia Department of Environmental Quality may withdraw any principal and/or interest from the indicated account or instrument without demand or notice. (The undersigned) agrees to assume any and all loss of penalty due to federal regulations concerning the early withdrawal of funds. Any partial withdrawal of principal or interest shall not release this assignment.
The party or parties to this Assignment set their hand or seals, or if corporate, has caused this assignment to be signed in its corporate name by its duly authorized officers and its seal to be affixed by authority of its Board of Directors the day and year above written.
SEAL | |
(Owner) | |
(print owner's name) | |
SEAL | |
(Owner) | |
(print owner's name) |
THE FOLLOWING SECTION IS TO BE COMPLETED BY THE BRANCH OR LENDING OFFICE:
The signature(s) as shown above compare correctly with the name(s) as shown on record as owner(s) of the Certificate of Deposit indicated above. The above assignment has been properly recorded by placing a hold in the amount of $ _______________________ for the benefit of the Department of Environmental Quality.
The accrued interest on the Certificate of Deposit indicated above shall be maintained to capitalize versus being mailed by check or transferred to a deposit account.
(Signature) | (Date) |
(print name) | |
(Title) |
F. Wording of insurance endorsement.
ENDORSEMENT.
(NOTE: Instructions in parentheses are to be replaced with the applicable information for the nutrient credit-generating project's practices (i.e., structural BMPs or restoration) and the non-relevant information and parentheses deleted.)
Name: (name of each covered location )
Address: (address of each covered location )
Policy number:
Period of coverage: (current policy period )
Name of Insurer:
Address of Insurer:
Name of insured:
Address of insured:
Endorsement:
1. This endorsement certifies that the policy to which the endorsement is attached provides insurance covering the (operation and maintenance and/or repair or replacement of the nutrient credit-generating project's structural BMPs) (monitoring of the nutrient credit-generating project's wetland/stream restoration) in connection with the insured's obligation to demonstrate financial responsibility under the 9VAC25-900).
(List the name(s) and address(es) of the nutrient credit-generating project(s)) for (the operation and maintenance and/or repair or replacement of the nutrient credit-generating project's structural BMPs) (monitoring of the nutrient credit-generating project's wetland/stream restoration) in accordance with and subject to the limits of liability, exclusions, conditions, and other terms of the policy;
The limits of liability are (provide the dollar amount of the operation and maintenance, monitoring, and/or repair or replacement), exclusive of legal defense costs, which, if applicable, are subject to a separate limit under the policy. This coverage is provided under (provide the policy number). The effective date of said policy is (insert the effective date).
2. The insurance afforded with respect to such occurrences is subject to all of the terms and conditions of the policy; provided, however, that any provisions inconsistent with subsections (a) through (d) for occurrence policies and (a) through (e) for claims-made policies of this paragraph 2 are hereby amended to conform with subsections (a) through (e):
a. Bankruptcy or insolvency of the insured shall not relieve the insurer of its obligations under the policy to which this endorsement is attached.
b. The insurer is liable for the payment of amounts within any deductible applicable to the policy to the provider of monitoring, operation and maintenance and/or repair or replacement, with a right of reimbursement by the insured for any such payment made by the insurer. This provision does not apply with respect to that amount of any deductible for which coverage is demonstrated under another mechanism or combination of mechanisms as specified in 9VAC25-900.
c. Whenever requested by the Department of Environmental Quality, Commonwealth of Virginia, the insurer agrees to furnish to the Department of Environmental Quality, Commonwealth of Virginia, a signed duplicate original of the policy and all endorsements.
d. The insurer may not cancel or terminate the policy during the policy period except for failure to pay the premium. The policy shall automatically renew at the department's discretion on an annual basis for a period of up to ten years. The automatic renewal of the policy shall, at a minimum, provide the insured with the option of renewal at the face amount of the expiring policy.
e. The insured may cancel the insurance policy only if alternate financial assurance is substituted as specified in 9VAC25-900, or if the owner is no longer required to demonstrate financial responsibility in accordance with 9VAC25-900.
f. Cancellation for nonpayment of premium or misrepresentation by the insured will be effective only upon written notice and only after expiration of a minimum of 120 days after a copy of such written notice is received by the insured and the Department of Environmental Quality, Commonwealth of Virginia.
(Insert for claims made policies: )
g. The insurance covers claims otherwise covered by the policy that are reported to the insurer within six months of the effective date of cancellation or nonrenewal of the policy except where the new or renewed policy has the same retroactive date or a retroactive date earlier than that of the prior policy, and which arise out of any covered occurrence that commenced after the policy retroactive date, if applicable, and prior to such policy renewal or termination date. Claims reported during such extended reporting period are subject to the terms, conditions, limits, including limits of liability, and exclusions of the policy.
I hereby certify that the wording of this endorsement is in no respect less favorable than the coverage specified in 9VAC25-900. I further certify that the insurer is licensed to transact the business of insurance or eligible to provide insurance as an excess or surplus lines insurer in the Commonwealth of Virginia.
(Signature of authorized representative of insurer)
(Name of the person signing)
(Title of the person signing), authorized representative of (name of the insurer)
(Address of the representative)
(Title of person signing)
Signature of witness or notary:
(Date)
Statutory Authority
§ 62.1-44.19:20 of the Code of Virginia.
Historical Notes
Derived from Virginia Register Volume 36, Issue 23, eff. September 1, 2020; amended, Virginia Register Volume 38, Issue 26, eff. September 14, 2022.
Documents Incorporated by Reference (9VAC25-900)
Virginia's Forestry Best Management Practices for Water Quality Technical Manual, Fifth Edition 2011, Department of Forestry. Available at http://www.dof.virginia.gov/infopubs/BMP-Technical-Guide_pub.pdf.
Field Office Technical Guide, Natural Resources Conservation Service, United States Department of Agriculture, Washington, D.C. (Web-based document available at the following internet address: https://efotg.sc.egov.usda.gov/#/details)