Florida Senate - 2013                                     SB 754
       By Senator Grimsley
       21-00279C-13                                           2013754__
    1                        A bill to be entitled                      
    2         An act relating to water quality credit trading;
    3         reenacting s. 373.4595(1)(n), F.S., relating to water
    4         quality credit trading, to incorporate the amendments
    5         made to s. 403.067, F.S., in a reference thereto;
    6         amending s. 403.067, F.S.; authorizing the department
    7         to implement water quality credit trading in adopted
    8         basin management action plans on an ongoing basis;
    9         deleting a requirement that voluntary trading of water
   10         credits be limited to the Lower St. Johns River Basin;
   11         authorizing additional water quality protection
   12         programs to participate in water quality credit
   13         trading; revising provisions relating to rulemaking
   14         for water quality credit trading programs; eliminating
   15         a requirement that water quality credit trading be
   16         limited to the Lower St. Johns River Basin as a pilot
   17         project; deleting a required report; making technical
   18         changes; reenacting s. 403.088(2)(e), F.S., relating
   19         to water pollution operation permits, to incorporate
   20         the amendments made to s. 403.067, F.S., in a
   21         reference thereto; providing an effective date.
   23  Be It Enacted by the Legislature of the State of Florida:
   25         Section 1. For the purpose of incorporating the amendment
   26  made by this act to section 403.067, Florida Statutes, in a
   27  reference thereto, paragraph (n) of subsection (1) of section
   28  373.4595, Florida Statutes, is reenacted to read:
   29         373.4595 Northern Everglades and Estuaries Protection
   30  Program.—
   31         (1) FINDINGS AND INTENT.—
   32         (n) It is the intent of the Legislature that the
   33  coordinating agencies encourage and support the development of
   34  creative public-private partnerships and programs, including
   35  opportunities for water storage and quality improvement on
   36  private lands and water quality credit trading, to facilitate or
   37  further the restoration of the surface water resources of the
   38  Lake Okeechobee watershed, the Caloosahatchee River watershed,
   39  and the St. Lucie River watershed, consistent with s. 403.067.
   40         Section 2. Paragraphs (a) and (b) of subsection (7) and
   41  subsections (8) through (14) of section 403.067, Florida
   42  Statutes, are amended to read:
   43         403.067 Establishment and implementation of total maximum
   44  daily loads.—
   47         (a) Basin management action plans.—
   48         1. In developing and implementing the total maximum daily
   49  load for a water body, the department, or the department in
   50  conjunction with a water management district, may develop a
   51  basin management action plan that addresses some or all of the
   52  watersheds and basins tributary to the water body. Such a plan
   53  must integrate the appropriate management strategies available
   54  to the state through existing water quality protection programs
   55  to achieve the total maximum daily loads and may provide for
   56  phased implementation of these management strategies to promote
   57  timely, cost-effective actions as provided for in s. 403.151.
   58  The plan must establish a schedule for implementing the
   59  management strategies, establish a basis for evaluating the
   60  plan’s effectiveness, and identify feasible funding strategies
   61  for implementing the plan’s management strategies. The
   62  management strategies may include regional treatment systems or
   63  other public works, where appropriate, and, in the basin listed
   64  in subsection (10) for which a basin management action plan has
   65  been adopted, voluntary trading of water quality credits to
   66  achieve the needed pollutant load reductions.
   67         2. A basin management action plan must equitably allocate,
   68  pursuant to paragraph (6)(b), pollutant reductions to individual
   69  basins, as a whole to all basins, or to each identified point
   70  source or category of nonpoint sources, as appropriate. For
   71  nonpoint sources for which best management practices have been
   72  adopted, the initial requirement specified by the plan must be
   73  those practices developed pursuant to paragraph (c). Where
   74  appropriate, the plan may take into account the benefits of
   75  pollutant load reduction achieved by point or nonpoint sources
   76  that have implemented management strategies to reduce pollutant
   77  loads, including best management practices, before prior to the
   78  development of the basin management action plan. The plan must
   79  also identify the mechanisms that will address potential future
   80  increases in pollutant loading.
   81         3. The basin management action planning process is intended
   82  to involve the broadest possible range of interested parties,
   83  with the objective of encouraging the greatest amount of
   84  cooperation and consensus possible. In developing a basin
   85  management action plan, the department shall assure that key
   86  stakeholders, including, but not limited to, applicable local
   87  governments, water management districts, the Department of
   88  Agriculture and Consumer Services, other appropriate state
   89  agencies, local soil and water conservation districts,
   90  environmental groups, regulated interests, and affected
   91  pollution sources, are invited to participate in the process.
   92  The department shall hold at least one public meeting in the
   93  vicinity of the watershed or basin to discuss and receive
   94  comments during the planning process and shall otherwise
   95  encourage public participation to the greatest practicable
   96  extent. Notice of the public meeting must be published in a
   97  newspaper of general circulation in each county in which the
   98  watershed or basin lies not less than 5 days nor more than 15
   99  days before the public meeting. A basin management action plan
  100  does shall not supplant or otherwise alter any assessment made
  101  under subsection (3) or subsection (4) or any calculation or
  102  initial allocation.
  103         4. The department shall adopt all or any part of a basin
  104  management action plan and any amendment to such plan by
  105  secretarial order pursuant to chapter 120 to implement the
  106  provisions of this section.
  107         5. The basin management action plan must include milestones
  108  for implementation and water quality improvement, and an
  109  associated water quality monitoring component sufficient to
  110  evaluate whether reasonable progress in pollutant load
  111  reductions is being achieved over time. An assessment of
  112  progress toward these milestones shall be conducted every 5
  113  years, and revisions to the plan shall be made as appropriate.
  114  Revisions to the basin management action plan shall be made by
  115  the department in cooperation with basin stakeholders. Revisions
  116  to the management strategies required for nonpoint sources must
  117  follow the procedures set forth in subparagraph (c)4. Revised
  118  basin management action plans must be adopted pursuant to
  119  subparagraph 4.
  120         6. In accordance with procedures adopted by rule under
  121  paragraph (9)(c), basin management action plans, and other
  122  pollution control programs under local, state, or federal
  123  authority as provided in subsection (4), may allow point or
  124  nonpoint sources that will achieve greater pollutant reductions
  125  than required by an adopted total maximum load or wasteload
  126  allocation to generate, register, and trade water quality
  127  credits for the excess reductions to enable other sources to
  128  achieve their allocation; however, the generation of water
  129  quality credits does not remove the obligation of a source or
  130  activity to meet applicable technology requirements or adopted
  131  best management practices. Such plans must allow trading between
  132  NPDES permittees, and trading that may or may not involve NPDES
  133  permittees, where the generation or use of the credits involve
  134  an entity or activity not subject to department water discharge
  135  permits whose owner voluntarily elects to obtain department
  136  authorization for the generation and sale of credits.
  137         7. The provisions of the department’s rule relating to the
  138  equitable abatement of pollutants into surface waters do not
  139  apply shall not be applied to water bodies or water body
  140  segments for which a basin management plan that takes into
  141  account future new or expanded activities or discharges has been
  142  adopted under this section.
  143         (b) Total maximum daily load implementation.—
  144         1. The department shall be the lead agency in coordinating
  145  the implementation of the total maximum daily loads through
  146  existing water quality protection programs. Application of a
  147  total maximum daily load by a water management district must be
  148  consistent with this section and does shall not require the
  149  issuance of an order or a separate action pursuant to s.
  150  120.536(1) or s. 120.54 for the adoption of the calculation and
  151  allocation previously established by the department. Such
  152  programs may include, but are not limited to:
  153         a. Permitting and other existing regulatory programs,
  154  including water-quality-based effluent limitations;
  155         b. Nonregulatory and incentive-based programs, including
  156  best management practices, cost sharing, waste minimization,
  157  pollution prevention, agreements established pursuant to s.
  158  403.061(21), and public education;
  159         c. Other water quality management and restoration
  160  activities, for example surface water improvement and management
  161  plans approved by water management districts or basin management
  162  action plans developed pursuant to this subsection;
  163         d. Trading of water quality credits or other equitable
  164  economically based agreements;
  165         e. Public works including capital facilities; or
  166         f. Land acquisition.
  167         2. For a basin management action plan adopted pursuant to
  168  paragraph (a), any management strategies and pollutant reduction
  169  requirements associated with a pollutant of concern for which a
  170  total maximum daily load has been developed, including effluent
  171  limits set forth for a discharger subject to NPDES permitting,
  172  if any, must be included in a timely manner in subsequent NPDES
  173  permits or permit modifications for that discharger. The
  174  department may shall not impose limits or conditions
  175  implementing an adopted total maximum daily load in an NPDES
  176  permit until the permit expires, the discharge is modified, or
  177  the permit is reopened pursuant to an adopted basin management
  178  action plan.
  179         a. Absent a detailed allocation, total maximum daily loads
  180  must shall be implemented through NPDES permit conditions that
  181  provide for a compliance schedule. In such instances, a
  182  facility’s NPDES permit must allow time for the issuance of an
  183  order adopting the basin management action plan. The time
  184  allowed for the issuance of an order adopting the plan may shall
  185  not exceed 5 years. Upon issuance of an order adopting the plan,
  186  the permit must be reopened or renewed, as necessary, and permit
  187  conditions consistent with the plan must be established.
  188  Notwithstanding the other provisions of this subparagraph, upon
  189  request by an NPDES permittee, the department as part of a
  190  permit issuance, renewal, or modification may establish
  191  individual allocations before prior to the adoption of a basin
  192  management action plan.
  193         b. For holders of NPDES municipal separate storm sewer
  194  system permits and other stormwater sources, implementation of a
  195  total maximum daily load or basin management action plan must be
  196  achieved, to the maximum extent practicable, through the use of
  197  best management practices or other management measures.
  198         c. The basin management action plan does not relieve the
  199  discharger from any requirement to obtain, renew, or modify an
  200  NPDES permit or to abide by other requirements of the permit.
  201         d. Management strategies set forth in a basin management
  202  action plan to be implemented by a discharger subject to
  203  permitting by the department must be completed pursuant to the
  204  schedule set forth in the basin management action plan. This
  205  implementation schedule may extend beyond the 5-year term of an
  206  NPDES permit.
  207         e. Management strategies and pollution reduction
  208  requirements set forth in a basin management action plan for a
  209  specific pollutant of concern are shall not be subject to
  210  challenge under chapter 120 at the time they are incorporated,
  211  in an identical form, into a subsequent NPDES permit or permit
  212  modification.
  213         f. For nonagricultural pollutant sources not subject to
  214  NPDES permitting but permitted pursuant to other state,
  215  regional, or local water quality programs, the pollutant
  216  reduction actions adopted in a basin management action plan must
  217  shall be implemented to the maximum extent practicable as part
  218  of those permitting programs.
  219         g. A nonpoint source discharger included in a basin
  220  management action plan must demonstrate compliance with the
  221  pollutant reductions established under subsection (6) by either
  222  implementing the appropriate best management practices
  223  established pursuant to paragraph (c) or conducting water
  224  quality monitoring prescribed by the department or a water
  225  management district. A nonpoint source discharger may, in
  226  accordance with department rules, supplement the implementation
  227  of best management practices with water quality credit trades in
  228  order to demonstrate compliance with the pollutant reductions
  229  established under subsection (6).
  230         h. A nonpoint source discharger included in a basin
  231  management action plan may be subject to enforcement action by
  232  the department or a water management district based upon a
  233  failure to implement the responsibilities set forth in sub
  234  subparagraph g.
  235         i. A landowner, discharger, or other responsible person who
  236  is implementing applicable management strategies specified in an
  237  adopted basin management action plan may shall not be required
  238  by permit, enforcement action, or otherwise to implement
  239  additional management strategies to reduce pollutant loads to
  240  attain the pollutant reductions established pursuant to
  241  subsection (6) and shall be deemed to be in compliance with this
  242  section. This subparagraph does not limit the authority of the
  243  department to amend a basin management action plan as specified
  244  in subparagraph (a)5.
  246         (a) Water quality credit trading must be consistent with
  247  federal law and regulation.
  248         (b) Water quality credit trading must be implemented
  249  through permits, including water quality credit trading permits,
  250  other authorizations, or other legally binding agreements as
  251  established by department rule.
  252         (c) The department shall establish the pollutant load
  253  reduction value of water quality credits and is shall be
  254  responsible for authorizing their use.
  255         (d) A person who that acquires water quality credits
  256  (“buyer”) shall timely submit to the department an affidavit,
  257  signed by the buyer and the credit generator (“seller”),
  258  disclosing the term of acquisition, number of credits, unit
  259  credit price paid, and any state funding received for the
  260  facilities or activities that generate the credits. The
  261  department may shall not participate in the establishment of
  262  credit prices.
  263         (e) Sellers of water quality credits are responsible for
  264  achieving the load reductions on which the credits are based and
  265  complying with the terms of the department authorization and any
  266  trading agreements into which they may have entered.
  267         (f) Buyers of water quality credits are responsible for
  268  complying with the terms of the department water discharge
  269  permit.
  270         (g) The department shall take appropriate action to address
  271  the failure of a credit seller to fulfill its obligations,
  272  including, as necessary, deeming the seller’s credits invalid if
  273  the seller cannot achieve the load reductions on which the
  274  credits were based in a reasonable time. If the department
  275  determines duly acquired water quality credits to be invalid, in
  276  whole or in part, thereby causing the credit buyer to be unable
  277  to timely meet its pollutant reduction obligations under this
  278  section, the department shall issue an order establishing the
  279  actions required of the buyer to meet its obligations by
  280  alternative means and a reasonable schedule for completing the
  281  actions. The invalidation of credits does shall not, in and of
  282  itself, constitute a violation of the buyer’s water discharge
  283  permit.
  284         (h) The department may authorize water quality trading in
  285  adopted basin management action plans. Entities that participate
  286  in water quality credit trades shall timely report to the
  287  department the prices for credits, how the prices were
  288  determined, and any state funding received for the facilities or
  289  activities that generated the credits. The department may not
  290  participate in the establishment of credit prices.
  291         (9) RULES.—The department may is authorized to adopt rules
  292  pursuant to ss. 120.536(1) and 120.54 for:
  293         (a) Delisting water bodies or water body segments from the
  294  list developed under subsection (4) pursuant to the guidance
  295  under subsection (5).
  296         (b) Administering of funds to implement the total maximum
  297  daily load and basin management action planning programs.
  298         (c) Water quality credit trading among the pollutant
  299  sources to a water body or water body segment. By September 1,
  300  2008, rulemaking must be initiated which provides The rules must
  301  provide for the following:
  302         1. The process to be used to determine how credits are
  303  generated, quantified, and validated.
  304         2. A publicly accessible water quality credit trading
  305  registry that tracks water quality credits, trading activities,
  306  and prices paid for credits.
  307         3. Limitations on the availability and use of water quality
  308  credits, including a list of eligible pollutants or parameters
  309  and minimum water quality requirements and, where appropriate,
  310  adjustments to reflect best management practice performance
  311  uncertainties and water-segment-specific location factors.
  312         4. The timing and duration of credits and allowance for
  313  credit transferability.
  314         5. Mechanisms for determining and ensuring compliance with
  315  trading procedures, including recordkeeping, monitoring,
  316  reporting, and inspections.
  318  At the time of publication of the draft rules on water quality
  319  credit trading, the department shall submit a copy to the United
  320  States Environmental Protection Agency for review.
  321         (d) The total maximum daily load calculation in accordance
  322  with paragraph (6)(a) immediately upon the effective date of
  323  this act, for those eight water segments within Lake Okeechobee
  324  proper as submitted to the United States Environmental
  325  Protection Agency pursuant to subsection (2).
  326         (e) Implementation of other specific provisions.
  327         (10) Water quality credit trading shall be limited to the
  328  Lower St. Johns River Basin, as defined by the department, as a
  329  pilot project. The department may authorize water quality credit
  330  trading and establish specific requirements for trading in the
  331  adopted basin management action plan for the Lower St. Johns
  332  River Basin prior to the adoption of rules under paragraph
  333  (9)(c) in order to effectively implement the pilot project.
  334  Entities that participate in water quality credit trades shall
  335  timely report to the department the prices for credits, how the
  336  prices were determined, and any state funding received for the
  337  facilities or activities that generated the credits. The
  338  department shall not participate in the establishment of credit
  339  prices. No later than 24 months after adoption of the basin
  340  management action plan for the Lower St. Johns River, the
  341  department shall submit a report to the Governor, the President
  342  of the Senate, and the Speaker of the House of Representatives
  343  on the effectiveness of the pilot project, including the
  344  following information:
  345         (a) A summary of how water quality credit trading was
  346  implemented, including the number of pounds of pollutants
  347  traded.
  348         (b) A description of the individual trades and estimated
  349  pollutant load reductions that are expected to result from each
  350  trade.
  351         (c) A description of any conditions placed on trades.
  352         (d) Prices associated with the trades, as reported by the
  353  traders.
  354         (e) A recommendation as to whether other areas of the state
  355  would benefit from water quality credit trading and, if so, an
  356  identification of the statutory changes necessary to expand the
  357  scope of trading.
  358         (10)(11) APPLICATION.—The provisions of this section are
  359  intended to supplement existing law, and may not nothing in this
  360  section shall be construed as altering any applicable state
  361  water quality standards or as restricting the authority
  362  otherwise granted to the department or a water management
  363  district under this chapter or chapter 373. The exclusive means
  364  of state implementation of s. 303(d) of the Clean Water Act,
  365  Pub. L. No. 92-500, 33 U.S.C. ss. 1251 et seq. shall be in
  366  accordance with the identification, assessment, calculation and
  367  allocation, and implementation provisions of this section.
  368         (11)(12) CONSTRUCTION.—Nothing in This section does not
  369  limit shall be construed as limiting the applicability or
  370  consideration of any mixing zone, variance, exemption, site
  371  specific alternative criteria, or other moderating provision.
  373         (a) The department may shall not implement, without prior
  374  legislative approval, any additional regulatory authority
  375  pursuant to s. 303(d) of the Clean Water Act or 40 C.F.R. part
  376  130, if such implementation would result in water quality
  377  discharge regulation of activities not currently subject to
  378  regulation.
  379         (b) Interim measures, best management practices, or other
  380  measures may be developed and voluntarily implemented pursuant
  381  to paragraph (7)(c) for any water body or segment for which a
  382  total maximum daily load or allocation has not been established.
  383  The implementation of such pollution control programs may be
  384  considered by the department in the determination made pursuant
  385  to subsection (4).
  386         (13)(14)RULE CHALLENGES.—In order to provide adequate due
  387  process while ensuring timely development of total maximum daily
  388  loads, proposed rules and orders authorized by this act are
  389  shall be ineffective pending resolution of a s. 120.54(3), s.
  390  120.56, s. 120.569, or s. 120.57 administrative proceeding.
  391  However, the department may go forward prior to resolution of
  392  such administrative proceedings with subsequent agency actions
  393  authorized by subsections (2)-(6) if, provided that the
  394  department can support and substantiate those actions using the
  395  underlying bases for the rules or orders without the benefit of
  396  any legal presumption favoring, or in deference to, the
  397  challenged rules or orders.
  398         Section 3. For the purpose of incorporating the amendment
  399  made by this act to section 403.067, Florida Statutes, in a
  400  reference thereto, paragraph (e) of subsection (2) of section
  401  403.088, Florida Statutes, is reenacted to read:
  402         403.088 Water pollution operation permits; conditions.—
  403         (2)
  404         (e) However, if the discharge will not meet permit
  405  conditions or applicable statutes and rules, the department may
  406  issue, renew, revise, or reissue the operation permit if:
  407         1. The applicant is constructing, installing, or placing
  408  into operation, or has submitted plans and a reasonable schedule
  409  for constructing, installing, or placing into operation, an
  410  approved pollution abatement facility or alternative waste
  411  disposal system;
  412         2. The applicant needs permission to pollute the waters
  413  within the state for a period of time necessary to complete
  414  research, planning, construction, installation, or operation of
  415  an approved and acceptable pollution abatement facility or
  416  alternative waste disposal system;
  417         3. There is no present, reasonable, alternative means of
  418  disposing of the waste other than by discharging it into the
  419  waters of the state;
  420         4. The granting of an operation permit will be in the
  421  public interest;
  422         5. The discharge will not be unreasonably destructive to
  423  the quality of the receiving waters; or
  424         6. A water quality credit trade that meets the requirements
  425  of s. 403.067.
  426         Section 4. This act shall take effect July 1, 2013.