The proposed rule revisions update the Water Quality Credit Trading Rule in Chapter 62-306, F.A.C., pursuant to Chapter 2013-146, Laws of Florida. Chapter 62-306 was adopted in 2010 to establish the requirements for a pilot water quality credit ...

 

DEPARTMENT OF ENVIRONMENTAL PROTECTION

RULE NOS.:RULE TITLES:

62-306.100Scope and Intent

62-306.200Definitions

62-306.300General Requirements

62-306.400Eligibility for Generation of Credits

62-306.500Credit Generation and Validation

62-306.600Use of Credits and Credit Adjustments

62-306.700Water Quality Credit Trade Tracking

62-306.800Compliance with Trade Provisions

PURPOSE AND EFFECT: The proposed rule revisions update the Water Quality Credit Trading Rule in Chapter 62-306, F.A.C., pursuant to Chapter 2013-146, Laws of Florida. Chapter 62-306, F.S. was adopted in 2010 to establish the requirements for a pilot water quality credit trading (WQCT) program among pollutant sources in the Lower St. Johns River Basin. Chapter 2013-146, Laws of Florida, revised Section 403.067, F.S. to, among other things, eliminate the requirement that WQCT water quality credit trading be limited to the Lower St. Johns River Basin and authorized the Department to implement WQCT in basins with adopted basin management action plans (BMAPs) or reasonable assurance plans (RAPs). This rulemaking is intended to amend Chapter 62-306, F.A.C., consistent with the statutory changes, as well as update the rules to reflect knowledge gained during implementation of the pilot program.

In addition to expanding the scope of the program, the proposed rule revisions 1) allow trades between two nonpoint sources, in which case trades are authorized by revision of the applicable BMAP or RAP, 2) require that, to allow trading, the BMAP or RAP include detailed allocations to point sources and detailed or categorical allocations to nonpoint sources, 3) allow trading within the boundaries of hydrologically-connected BMAPs or RAPs, 4) establish a process for credit generators to submit information to obtain pre-approval of the generation of credits, and 5) clarify that Uncertainty Factors are not required when estimating credits if the nutrient reduction capability of the proposed activity has been established in the BMAP or RAP.

SUMMARY: Water Quality Credit Trading is a voluntary program that provides entities the option of meeting their required pollutant load reductions under BMAPs or RAPs in a more effective, cost efficient manner by purchasing credits from other sources that have reduced their load by more than required under the BMAP or RAP. Credits are only generated when a water quality credit seller’s load is reduced below the baseline allocation established for the entity. Sellers of water quality credits are responsible for achieving the load reductions on which the credits are based and complying with the terms of their permit, if applicable, and any trading agreements into which they may have entered. Buyers of water quality credits are responsible for complying with all terms of their permit, and in the event that credits purchased are determined to be invalid, the invalidation of credits shall be addressed pursuant to paragraph 403.067(8)(g), F.S.

The Department conducted an initial set of public workshops on August 20 and August 27, 2014, in Tallahassee and Palm Bay, respectively, followed by public workshops on January 14 and January 15, 2015, in Orlando and Tallahassee, respectively.

SUMMARY OF STATEMENT OF ESTIMATED REGULATORY COSTS AND LEGISLATIVE RATIFICATION: The Agency has determined that this will not have an adverse impact on small business or likely increase directly or indirectly regulatory costs in excess of $200,000 in the aggregate within one year after the implementation of the rule. A SERC has not been prepared by the Agency.

Under the rule, generation of water quality credits and the purchase of those water quality credits are voluntary. It is completely left to the discretion of the parties whether they will undertake a water quality credit trade. Therefore, the Agency has determined that the proposed rule is not expected to require legislative ratification.

Any person who wishes to provide information regarding a statement of estimated regulatory costs, or provide a proposal for a lower cost regulatory alternative must do so in writing within 21 days of this notice.

RULEMAKING AUTHORITY: 403.067(9) FS.

LAW IMPLEMENTED: 403.067(8)-(10) FS.

IF REQUESTED WITHIN 21 DAYS OF THE DATE OF THIS NOTICE, A HEARING WILL BE SCHEDULED AND ANNOUNCED IN THE FAR.

THE PERSON TO BE CONTACTED REGARDING THE PROPOSED RULE IS: Eric Shaw, Water Quality Standards Program, Florida Department of Environmental Protection, 2600 Blair Stone Road, MS 6511, Tallahassee, FL 32399-2400, telephone: [phone], email [e-mail].

 

THE FULL TEXT OF THE PROPOSED RULE IS:

 

 

62-306.100 Scope and Intent.

(1) This chapter establishes the requirements for a pilot program for water quality credit trading between pollutant sources to reduce or eliminate nutrient or nutrient-related impairments among the pollutant sources to the Lower St. Johns River (LSJR) Basin pursuant to Section 403.067, F.S.

(2) The generation, registration, and trading of water quality credits provided for in this chapter are intended to provide flexibility among pollutant sources to meet the nutrient reduction requirements of an adopted the LSJR Basin Management Action Plan (BMAP) or Reasonable Assurance Plan (RAP), as adopted by Secretarial Order on October 14, 2008. Copies of the LSJR BMAP and RAP documents may be obtained from the Department’s internet site at http://www.dep.state.fl.us/water/watersheds, or by writing to the Florida Department of Environmental Protection, Bureau of Assessment and Restoration Support, 2600 Blair Stone Road, MS 3510 3560, Tallahassee, FL 32399-2400.

(3) A The LSJR BMAP provides for the implementation of Total Maximum Daily Loads (TMDL) for Total Nitrogen and Total Phosphorus adopted by the Department in Chapter 62-304 subsections 62-304.415(1) and (2), Florida Administrative Code (F.A.C.). A RAP, pursuant to Rule 62-303.600, F.A.C., provides for the restoration of impaired waters. The following parts of the LSJR BMAP, which are hereby incorporated by reference, will be used to implement the trading program in the LSJR Basin:

(a) Figure 1, which identifies and delineates the watershed boundaries of the LSJR in which trading may occur;

(b) Point and nonpoint source baseline allocations (Tables 9-14) or management practices for sources that may generate, use, or trade credits in the plan area; and

(c) Tables 22 and 23, which provide Location Factors.

(4) This chapter does not address aggregation of wasteload allocations by an entity with multiple wastewater facilities, which may Aggregate load allocations will be implemented via an aggregate permit that limits the total allocated nutrient TMDL load for the entity.

(5) Nothing in this rule is intended to limit any actions by federal, state, or local agencies, affected persons, or citizens pursuant to other rules or regulations.

Rulemaking Authority 403.067(9) FS. Law Implemented 403.067(8)-(10) FS. History–New 9-6-10, Amended .

 

62-306.200 Definitions.

(1) “Act” means the Florida Watershed Restoration Act, as codified under Section 403.067, F.S.

(1)(2) “Baseline” means the annual nutrient load from a pollutant source after performing all required pollution control activities, below which water quality credits may be generated. The baseline will be set forth in the permit, BMAP or RAP. The baseline for a point source is the entity’s annual wasteload allocation under the BMAP or RAP, or a water quality-based effluent limitation established in a permit, whichever is more stringent. The baseline for a non-agricultural nonpoint source is the entity’s individual annual load allocation or the applicable categorical load allocation under the BMAP or RAP. The baseline for an agricultural nonpoint source is the entity’s annual load allocation or applicable categorical load allocation, if specified in the BMAP or RAP, or the nutrient load expected following the entity’s implementation of applicable Department of Agriculture and Consumer Services (DACS) adopted BMPs pursuant to Section 403.067, F.S. For a concentrated animal feeding operation, the baseline is defined by the entity’s comprehensive nutrient management plan, or its allocation under the BMAP or RAP, whichever is more stringent. pollutant-specific point source discharge or nonpoint source load allowable under the TMDL or BMAP.

(2)(3) “Best management practices (BMPs)” means a practice or combination of practices adopted by rule by DACS the Department of Agriculture and Consumer Services, the Department of Environmental Protection, or the applicable Water Management District as an the most effective and practicable means for reducing nutrient inputs and improving water quality, taking into account economic and technological considerations.

(4) “Clean Water Act” means the Federal Water Pollution Control Act, commonly referred to as the Clean Water Act, 33 U.S.C. §1251 et seq.

(3)(5) “Credit” means the amount of an entity’s nutrient the pollutant-specific point source load reduction below the baseline that will be available for trading purposes pursuant to the requirements of this chapter or nonpoint source load reduction that is generated and may be used or traded as water quality credits (WQCs). A credit may only be generated when pollutants loads are reduced below the baseline load allowable under the TMDL or BMAP. Credits shall be in either the units of pounds per year or kilograms per year.

(6) renumbered (4) No change.

(5)(7) “Estimated credit credits” means a credit for nutrient load reductions from nonpoint sources that are used for credit trading but which cannot be reasonably measured through direct monitoring where treatment methods do not reasonably allow influent and effluent water quality to be measured. All credits that are not measured credits are estimated credits.

(6)(8) “Location Factors” (LFs) means adjustments to credits made by the Department the WBID-specific numbers, as listed in the LSJR BMAP Tables 22 and 23, that are used to ensure that trades do not result in localized water quality impacts on the river. Location Factors represent the relative impact a given unit of nitrogen or phosphorus discharged at one location has on the water quality in the impaired waterbody compared to the same amount of nitrogen or phosphorus discharged at another location. at a WBID has on water quality in the worst case WBID compared to the same amount of nitrogen or phosphorus discharged directly to the worst case WBID. LFs are used in trades to provide reasonable assurance that the seller’s credits are functionally equivalent in protecting the water quality of the waterbody water body or water segment.

(9) “Lower St. Johns River (LSJR)” means the main stem of the St. Johns River that flows between the mouth of the Ocklawaha River and the mouth of the St. Johns River.

(7)(10) “Measured credit credits” means a credit for nutrient load reductions from point sources that are used for credit trading that can be directly monitored using water quality, including effluent, samples.

(8) “Municipal separate storm sewer system” or “MS4” has the same meaning as in Rule 62-624.200, F.A.C.

(9)(11) “Nonpoint source” means a source those sources of pollutants that discharged discharge to surface or ground water, generally in response to rainfall events, that is not a point source and which are not defined as point sources and do not have a point source permit.

(12) “NPDES permit” means a surface water discharge permit issued by the Department under Section 403.0885, F.S., or by the U.S. Environmental Protection Agency pursuant to the National Pollutant Discharge Elimination System (NPDES) under Section 402 of the Clean Water Act.

(10)(13) “Permit” means an authorization issued by the Department pursuant to Chapter 403, F.S., to discharge into surface or ground waters issued by the Department pursuant to Chapter 403, F.S.

(14) “Person” means a person as defined by Section 403.031(5), F.S.

(11)(15) “Point source” means a point source as defined by subsection 62-620.200(37) pollutant discharge requiring a National Pollutant Discharge Elimination System permit pursuant to Chapter 62-620, F.A.C.

(16) “TMDL” means the total maximum daily load for nutrients for the LSJR adopted in subsections 62-304.415(1) and (2), F.A.C.

(12)(17) “Trading Registry” means the water quality credit database created and maintained by the Department to register for the purpose of registering the generation and trading of water quality credits (WQCs).

(13)(18) “Technology-Based Effluent Limitation” (TBEL) means a minimum waste treatment requirement adopted established by the Department based on treatment technology.

(14)(19) “Uncertainty Factor” (UF) means the ratio of the estimated number of pounds or kilograms of nutrient load reduction by a nonpoint source to the number of pounds or kilograms of credit that will be authorized. The UF reflects the uncertainty associated with estimated credits estimates of nonpoint source pollutant reductions.

(15) “Wastewater facility” means a facility that accepts and treats domestic wastewater or industrial wastewater as those terms are defined in Rule 62-620.200, F.A.C.

(16) “WQBEL” means a Water Quality-Based Effluent Limitation developed pursuant to Chapter 62-650, F.A.C.

(17)(20) “Water Quality Credit Trading” means the exchange of credits pursuant to the requirements of this chapter between nutrient point and nonpoint sources in the LSJR Basin to achieve or maintain the TMDL.

(18)(21) “WBID” means a the unique waterbody identification unit that was used by the Department to divide a waterbody into discrete segments for purposes of assessment and restoration under Section 403.067, F.S. the Lower St. Johns River Basin into water assessment polygons, as shown in LSJR BMAP Figure 1.

(22) “Worst case WBIDs” means the WBIDs in the marine and freshwater portions of the river where adverse impacts due to nutrient loadings were greatest, and which controlled the maximum allowable nutrient loading to the LSJR.

Rulemaking Authority 403.067(9) FS. Law Implemented 403.067(8)-(10) FS. History–New 9-6-10, Amended .

 

62-306.300 General Requirements.

(1) Credits may be traded only within the boundaries of a BMAP or RAP, or within the boundaries of BMAPs or RAPs addressing hydrologically-connected waters, that includes detailed allocations to point sources and detailed or categorical allocations to nonpoint sources. To be eligible to generate and trade credits between point and nonpoint sources, the following must be met:

(2)(a) Credits generated by a point source, other than an MS4, must be confirmed by effluent monitoring, which for the pollutant subject to the trade. This monitoring must be undertaken and provided to the Department throughout the life effective period of the trade.

(3)(b) Credits generated by a nonpoint source or an MS4 must can either be measured where treatment methods allow influent and effluent water quality to be measured, or, where direct measurement cannot reasonably be accomplished, they may can be estimated for the type of operation. When estimating credits for nonpoint source pollution control activities, the estimate shall be the long-term average expected reduction. If However, if credits are estimated, the Department will use applicant must provide reasonable assurance, using peer reviewed literature-based estimates of removal efficiency, that the estimate is scientifically defensible, and any applicable uncertainty factors, as applicable, to adjust the credits available for trading shall be applied.

(c) At least one of the trading parties must have an individual wastewater or stormwater permit. The activities necessary to generate credits must be authorized under the appropriate point source stormwater or wastewater NPDES permit. The permit application shall describe how the activities necessary to achieve the load reductions required to generate the credits will be implemented and monitored.

(4)(a)(d) An individually permitted wastewater facility Wastewater or stormwater facilities that proposes to purchase or sell credits must obtain a new or revised Department permit revise their existing NPDES permit or acquire a new NPDES permit if necessary, to authorize the use or sale of such credits. The NPDES permit shall reflect the amount by which the permitted nutrient load has been adjusted by the purchase or sale of credits or, if no load was identified in the previous permit, the new or revised permit must reflect the new permitted load, the baseline load, and the basis for the load reduction associated with the trade.

(b) For trades not involving an entity required to obtain an individual wastewater permit, the Department shall authorize the use and sale of credits in a BMAP or RAP, which will reflect the baseline nutrient load and the basis for the nutrient load reduction associated with the credits.

(e) Credits are only generated when a source’s load is reduced below the baseline established for the entity, which is the wasteload allocation for point sources. For a trade involving credits generated by a nonpoint source, the loading from the nonpoint source must be less than that expected following implementation of applicable BMPs and any additional reductions required for the nonpoint source category under the BMAP.

(f) Credits must be used in the same calendar year in which they are generated.

(5)(2) Credits are not available for trading until the Department has authorized the credits in a permit, BMAP or RAP. However, activities completed before the adoption of the applicable BMAP or RAP are eligible to generate credits if the nutrient reductions resulting from the activities are not part of the baseline that is subsequently adopted in the BMAP or RAP. Credits are expressed as annual loading of nitrogen or phosphorus and cannot be rolled over or aggregated from year to year. A credit retains its environmental value only as long as the activity resulting in its creation continues to provide at least the same level of nutrient load reduction below the baseline load authorized by the Department in the BMAP, RAP or permit, and the Department’s authorization for the credit remains in effect. A credit included in an ongoing Department-authorized trade is not available for another trade. The Department will maintain the accounting of credits in its Trading Registry. No facility or activity may generate or use water quality credits until such time as all required permits have been obtained. Facilities that meet their TMDL obligations via trading must demonstrate that their discharge, including any trades, will not cause or contribute to violations of water quality standards. Credits generated under this part shall not be used to offset violations of a discharge permit or to comply with any applicable technology-based effluent limits (TBELs).

(6)(3) A water Water quality credit trades shall not cannot result in a an net increase increased in the total nutrient load to a nutrient impaired waterbody or localized violations of water quality standards, nor shall it be used to offset violations of a discharge permit or to comply with any applicable TBELs above the LSJR TMDLs.

(4)Nothing in this rule is intended to limit any actions by federal, state, or local agencies, affected persons, or citizens pursuant to other rules or regulations.

Rulemaking Authority 403.067(9) FS. Law Implemented 403.067(8)-(10) FS. History–New 9-6-10, Amended .

 

62-306.400 Credit Eligibility for Generation of Credits.

(1)For discharge or load reductions to be generated and registered as credits, a credit generator shall meet each of the following conditions:

(a)The pollutant load reduction shall continue to be generated after the effective date of this chapter.

(b) Reasonable assurance shall be provided that discharge or load reductions will result in credits.

(c) Applicable control devices or best management practices must be fully implemented and properly maintained throughout the period of the trade.

(1)(2) Activities that are potentially eligible to generate credits include, but are not limited to:

(a) Installation or modification of water pollution control equipment or activities that are not required to meet TBELs, or WQBELs, or other pollution control obligations, and reduce nutrient loads below the baseline.

(b) Operational changes or the modification of a process or process equipment that reduce the quantity of water discharged through reuse, recycling, water conservation, or other measures and thereby reduce the load of nutrients discharged. Credits may be generated when a permitted surface water discharge facility closes its operations or ceases discharging to surface waters, but the credits shall only be valid while the permit remains in effect.

(c) No change.

(d) Installation, operation and maintenance of new drainage projects designed to treat control stormwater as part of a city or county drainage improvements.

(e) Implementation by agricultural operations of soil or water treatment technologies or water-quality enhancing production practices or systems that are confirmed in writing by DACS to reduce nutrient loads below the baseline.

(f)(e) Other similar pollution controls, technologies or management practices with a demonstrated ability to reduce nutrient loads below the baseline established in a BMAP or RAP the load of nutrients discharged.

(g) A documented change in land use that goes beyond normal crop rotations or other standard agronomic practices that results in a reduction of nutrient loads below the baseline land use in the TMDL, BMAP or RAP.

(2)(3) Activities that are not eligible to generate credits include:

(a) A reduction in nutrient loading that is required under a regulatory program, including a BMAP or RAP. However, reductions beyond those required under a regulatory program shall be eligible to generate credits.

(b) A change in land use, including taking agricultural lands out of production and changes in crops grown, unless the change results in post development pollutant loading being equal to or less than loading under natural conditions for the property.

(b)(c) Implementation of BMPs that are required under a permit or the adopted BMAP or RAP LSJR BMAP.

(3) For estimated credits, the Department will calculate the number of credits generated using the same method used to calculate nutrient loading during TMDL, BMAP or RAP development. For an agricultural nonpoint source, the entity must undergo an onsite assessment to identify the specific BMPs that are applicable to the agricultural operation from the suite of adopted BMPs for the type of agricultural operation, assisted by DACS ; submit to DACS a BMP checklist and a signed Notice of Intent to implement the applicable BMPs; and fully implement the BMPs as required under 403.067, F.S., before the Department will authorize credits for reductions beyond those expected from the applicable BMPs.

(4) An entity must fully comply with its baseline nutrient load to be eligible for credits resulting from management actions that reduce the nutrient load below the baseline. For an entity that is not a source of nutrients and is not covered by an individual or categorical load allocation, the entity may generate credits if it demonstrates in accordance with this chapter that it will reduce nutrient loads to the waterbody.

Rulemaking Authority 403.067(9) FS. Law Implemented 403.067(8)-(10) FS. History–New 9-6-10, Amended .

 

62-306.500 Pre-Approval of Credit Generation and Validation.

(1) To obtain Department pre-approval of the number of credits expected to be generated from a project before executing an agreement on a water quality credit trade, the credit generator must submit information to the Department describing in detail the activities that will generate the credits and the expected nutrient load reduction below the generator’s baseline. The credit generator must submit the information to the Department on a signed Form 62-306(1), “Affidavit for Pre-Approval of Water Quality Credits Generated” effective September 2015, which is adopted and incorporated by reference herein. Copies of the form may be obtained by writing to the Florida Department of Environmental Protection, 2600 Blair Stone Road (MS 3510), Tallahassee, Florida, 32399.

(2) The Department will notify the credit generator within thirty days of receipt of the signed form if the credit generator has not provided the information needed to determine how many credits are expected to be generated. After the credit generator provides all of the required information, the Department will timely notify the credit generator of the maximum number of credits that could potentially be authorized for the project. The Department will determine the number of credits expected to be generated from the activities in accordance with this chapter. The number of credits generated and approved may be modified by the Department if the project specifications are altered between the date of pre-approval issuance and the actual generation of credits. The number of credits needed for a given trade will be dependent on the specific circumstances of the trade, including the location of the buyer of the credits.

(1) Point Sources.

(a) The baseline for point sources, including both wastewater and stormwater dischargers, shall be the source’s wasteload allocation under the LSJR BMAP, unless a lower water quality-based effluent limitation has been established for the discharge.

(b) Credits shall only be generated by point sources after the entity provides reasonable assurance that it can meet an effluent loading limit that is lower than its baseline allocation and the source’s applicable permit limits are revised to reflect the reduced load.

(2) Nonpoint Sources.

(a) The baseline for nonpoint sources shall be the source’s load allocation specified under the LSJR BMAP or, for nonpoint sources that are covered under categorical load allocations, shall be the load expected following implementation of applicable BMPs and the additional reductions required for agricultural sources.

(b)Credits shall only be generated by nonpoint sources if the source reaches an agreement with a permitted point source and the activity generating the credits is incorporated into the point source’s permit.

Rulemaking Authority 403.067(9) FS. Law Implemented 403.067(8)-(10) FS. History–New 9-6-10, Amended .

 

62-306.600 Use of Credits and Credit Adjustments.

(1) Wastewater Facilities.

(a) The use of credits must be authorized in the buyer’s permit. At the time of permit application, the A credit buyer must submit to the Department information on an affidavit, signed by the buyer and seller, disclosing the term of the trade, the number of credits traded, documentation to calculate the credits generated for the trade, the date when the credits will be generated, the timeframe the credits will be applied under the trade, the unit price for each purchased credit, and the amount of any state funding used to generate the credits traded. The credit buyer must submit the trade information to affidavit used by the Department for Water Quality Credit Trading, on Form 62-306(2), “Water Quality Credit Trading Affidavit” effective September 2015 9-6-10, which is hereby adopted and incorporated by reference herein. Copies of the form, which must be signed by the credit seller and credit buyer, may be obtained from the Department’s internet site at http://www.dep.state.fl.us/water/tmdl, the Northeast District Office, or by writing to the Florida Department of Environmental Protection, Bureau of Assessment and Restoration Support, 2600 Blair Stone Road (MS 3510 3560), Tallahassee, FL 32399.

(b) The Fact Sheet or Statement of Basis for the buyer’s permit shall note that the permit authorizes a trade and identify the source of the credits purchased.

(c) If the buyer subsequently decides to change the source of credits during the permit cycle, the buyer must submit a new Water Quality Credit Trading Affidavit pursuant to paragraph (1)(a) and apply for a permit revision. The Department will evaluate the permit revision and determine whether the seller has credits available in accordance with Rules 62-306.300, 62-306.400, and 62-306.500, F.A.C.

(2) The Department will determine whether the seller has credits available in accordance with this chapter.

(3) The Department will notify the buyer within thirty days of receipt of the signed Form 62-306(2) if the buyer has not provided the information required to determine the number of credits available for the trade. After the buyer provides all of the required information, the Department will determine in accordance with this chapter whether the seller has a sufficient number of credits available for the trade.

(4) A water quality credit trade will become effective once the trade is authorized in the BMAP, RAP, or individual wastewater permit.

(2) Municipal Separate Storm Sewer Systems (MS4s) and Nonpoint Sources.

(a) The buyer must submit a Water Quality Credit Trading Affidavit, signed by the buyer and seller, disclosing the term of the trade, the number of credits traded, the date when the credits will be generated, the unit price, and the amount of any state funding used to generate the credits traded. The Department will determine whether there is reasonable assurance that the seller has credits available. The Department shall notify the buyer within thirty days if the buyer has not provided reasonable assurance that the seller has credits available.

(5)(b) If the buyer subsequently proposes decides to change the source of credits, the buyer must submit a new Water Quality Credit Trading Affidavit and obtain so that the Department’s Department written authorization can evaluate whether the buyer has provided reasonable assurance that the proposed seller has sufficient credits available. The Department shall notify the NPS within thirty days if the NPS has not provided reasonable assurance that the seller has credits available.

(6) Credit sellers shall maintain records demonstrating that the control devices and systems, technologies, BMPs, land use changes, or other management actions upon which credits are based continue to be fully implemented and properly operated and maintained throughout the period of the trade. The records shall be retained for five years after conclusion of the period covered by the trade. Each seller shall allow the Department, or an agent of the Department, to inspect the records and the control devices and systems, technologies, BMPs, land use changes, or other management actions during regular business hours.

(3) If the seller of credits is a nonpoint source, the buyer must provide information about the nonpoint source activity that will generate the credits, including the baseline loading for the type of operation, a description of the management activities that will generate the reduction, and calculations, signed and sealed by a Professional Engineer, supporting the credit generation.

(a) If the credits to be traded are based on measured credits, the point source permittee must propose monitoring locations and submit monthly discharge monitoring reports to validate the generation of the credits.

(b) If the credits purchased are estimated, the permittee must:

1. Provide information describing the basis for the estimates, including references or models used, calculations showing the amount of credits generated, and any needed adjustment factors to address uncertainty pursuant to subsection (4);

2. Keep detailed records demonstrating they are in compliance with any applicable BMP requirements; and

3. Agree to be subject to inspections at the nonpoint source activity.

(7)(4) Use of Location Factors to Adjust Credits.

(a) For trades where the seller and buyer discharge to different WBIDs, the amount of credits proposed to be traded shall be adjusted by the applicable LF Location Factors to provide reasonable assurance that the proposed trade does not result in localized adverse impacts to the waterbody water body or water segment.

(b) through (c) No change.

(8)(5) Use of Nonpoint Source Uncertainty Factors to Adjust Credits Ratios.

(a) For proposed trades involving estimated credits for nonpoint sources, the Department shall use default UF Uncertainty Factor (“UF”) ratios of 2:1 for urban stormwater (if 2 pounds or kilograms of removal are estimated, 1 pound of credit will be created) and 3:1 for agricultural runoff, unless the Department established the nutrient reduction capability of the activity in the applicable BMAP or RAP, excluding any nutrient reduction capabilities identified as provisional in the BMAP or RAP. However, a buyer or seller an applicant may propose and document the basis for a lower UF ratio to the Department if justified by site-specific considerations.

(b) Any Ssite-specific UF will must be based on the Department’s best professional judgment, taking into account the scientific support for the estimate, the level of confidence that the BMP will be properly designed, installed, maintained, and the potential for failure of the BMP, and the level of uncertainty that the estimated load reduction will be achieved.

Rulemaking Authority 403.067(9) FS. Law Implemented 403.067(8)-(10) FS. History–New 9-6-10, Amended .

 

62-306.700 Water Quality Credit Availability and Trade Tracking.

(1) The Department shall track all credit generation pre-approvals and all credits traded credits generated or trades authorized in permits, and shall post the information about trades and available credits on its the Department’s website at http://www.dep.state.fl.us/water/watersheds.

(2) Information tracked related to credits and trades will credit generators and sellers shall include, at a minimum:

(a) The generator or seller’s names, and street addresses address of all parties, locations location of discharges, receiving water (WBID), and the nutrient involved pollutant being traded;

(b) The generator’s generator or seller’s baseline, permit number for permit authorizing the credit generation, the new permit limit authorizing a reduced discharge level, and the amount of credits generated;

(c) No change.

(d) Effective date of the permit, Tthe date when credits will initially start to be generated and applied under the trade, and the effective period duration of the credits;

(e) The amount of credits traded to date and any adjustments for location or uncertainty; and

(f) The unit price of the credits, including the amount of any public funding used to generate the credits.

(3) Information tracked related to buyers of credits shall include:

(a) The buyer’s name, location, permit number, receiving water (WBID), and pollutant being traded;

(b) The description of the source of the credits, including permit number of seller if applicable, the amount of credits purchased;

(c) The new permit limit authorizing an increased discharge level, effective date of the permit, and the date when credits will be available for use; and

(f)(d) The unit price of the credits, including the amount of any state public funding used to generate the credits; and

(g) The date of the most recent inspection by DACS or the Department to verify implementation of activities generating estimated credits.

Rulemaking Authority 403.067(9) FS. Law Implemented 403.067(8)-(10) FS. History–New 9-6-10, Amended .

 

62-306.800 Compliance with Trade Provisions.

(1) The seller shall certify and document to the Department annually during the life of the trade that the control devices and systems, technologies, BMPs, land use changes, or other actions on which the credits are based, continue to be fully implemented and properly operated and maintained throughout the life of the trade, and for measured credits, that nutrient load reductions below the baseline continue to be achieved at the authorized level.

(2)(1) If the credits traded are measured credits, the seller permittee shall report to the Department the quantity of the Total Nitrogen or Total Phosphorus discharged on a monthly basis to demonstrate fulfillment of the nutrient load reduction resulting in credits compliance with the effluent limitations, and monitoring and reporting requirements specified in their NPDES permit. If applicable, a permittee Permittees may use the precoded Discharge Monitoring Report form provided by the permitting office to the permit holder at the time of permit issuance to report the amount of Total Nitrogen or Total Phosphorus discharged.

(3)(2) If the credits traded are estimated credits, the seller permittee shall submit a quarterly report to the Department quarterly providing the following information:

(a) The name and location of the activity generating the credits site;

(b) No change.

(c) The BMPs implemented or, in the case of concentrated animal feeding operations, the activities conducted under a comprehensive nutrient management plan;

(d)(c) The control devices installed or management practices implemented and date completed, and information on their proper operation and maintenance;

(e)(d) The linear feet or acres for which BMPs or other management measures or controls or management practices have been completed; and

(e) renumbered (f) No change.

(4)(3) Liability:

(a) A seller Sellers of water quality credits is are responsible for achieving the load reductions on which the credits are based and complying with the terms of its their permit, or the BMAP or RAP, if applicable, and any trading agreements into which it has they may have entered.

(b) A buyer Buyers of water quality credits is are responsible for complying with all terms of the trade and the BMAP, RAP or their permit. In the event the Department determines the purchased credits are invalid because the seller fails to achieve the load reductions on which the that credits are based, purchased are determined to be invalid but the buyer otherwise meets its applicable regulatory requirements permit limit, the invalidation of credits shall not be a violation by the buyer of the buyer’s permit. In such cases, the Department shall allow re-open the permit and issue an Administrative Order requiring the buyer, within a reasonable amount of time, to obtain credits from another source, increase treatment, or otherwise reduce the discharged load to meet its allocation baseline load, and the Department will reflect this fact in the BMAP, RAP, permit, or Administrative Order, as appropriate. Failure to meet its allocation within a reasonable time after the invalidation of credits shall subject the buyer to enforcement in accordance with the provisions of Sections 403.061 and 403.121, F.S.

Rulemaking Authority 403.067(9) FS. Law Implemented 403.067(8)-(10) FS. History–New 9-6-10, Amended .

 

NAME OF PERSON ORIGINATING PROPOSED RULE: Tom Frick

NAME OF AGENCY HEAD WHO APPROVED THE PROPOSED RULE: Jonathan P. Steverson

DATE PROPOSED RULE APPROVED BY AGENCY HEAD: August 4, 2015

DATE NOTICE OF PROPOSED RULE DEVELOPMENT PUBLISHED IN FAR: July 17, 2014