26.08.11.04

.04 Maryland Water Quality Trading Program Framework.

A. Pollutants Eligible for Trading. Nitrogen, phosphorus, and sediment are the only pollutants eligible for credit trading and may be traded independently or in any combination.

B. Maryland Trading Regions.

(1) Any trade shall occur within the same trading region.

(2) The Department has established the following trading regions:

(a) Potomac River Basin;

(b) Patuxent River Basin; and

(c) Eastern Shore and Western Shore River Basins, including the Maryland portion of the Susquehanna Basin.

C. Program Participation.

(1) A person may only use credits generated and sold within the State to:

(a) Comply with the applicable nitrogen, phosphorus, and sediment load or wasteload allocations of the Maryland portion of the Chesapeake Bay TMDL, local TMDLs, or NPDES permit requirements; or

(b) Improve water quality.

(2) Other than persons generating credits under the provisions of COMAR 15.20.12, a person generating credits under the Maryland Water Quality Trading Program shall:

(a) Meet appropriate baseline requirements in accordance with Regulation .05 of this chapter;

(b) Implement a BMP approved by the Chesapeake Bay Program that is acceptable to the Department;

(c) Demonstrate a load reduction below the baseline requirements that is acceptable to the Department and calculate credits in accordance with Regulation .06 of this chapter; and

(d) Submit a Certification and Registration form to the Department for credit certification in accordance with Regulation .07 of this chapter.

(3) A person's ability to generate credits is based on the performance of each individual facility or best management practice and their ability to comply with Regulation .07 of this chapter.

D. Limitations.

(1) This chapter does not apply to wastewater point source to wastewater point source trading.

(2) No credit shall be offered for trade except in compliance with the provisions of this chapter.

(3) Except those BMPs implemented in conformance with Special Conditions III.A.1.f of General Permit No. 12SW, Stormwater Associated with Industrial Activities, any BMP implemented to satisfy regulatory requirements, including those related to new development and redevelopment, prior to the effective date of this chapter, may not be used to generate a credit.

(4) Credits may be traded only after they have been certified, verified, and registered in accordance with this chapter or, for agricultural credits, in accordance with COMAR 15.20.12.

(5) For the purposes of this chapter, public funding may not be used to generate a credit, except:

(a) A wastewater treatment plant upgraded to ENR that accepts BRF grant funding for operation and maintenance to achieve a nitrogen discharge of 3mg/l and a phosphorus discharge of 0.3 mg/l may generate credits for performance below 3mg/l of nitrogen and below 0.3mg/l of phosphorus; or

(b) Unless otherwise prohibited by the terms and conditions of the public funding, the credits generated by any other nonagricultural BMP funded in part by public funding shall be prorated based on the ratio of nonpublic funding used to generate the credit to the total cost incurred to generate the credit.

(6) The Department is not responsible or liable for the performance of a credit-generating project certified pursuant to the requirements of this chapter.

(7) The acquisition of credits for compliance purposes does not eliminate any requirement to comply with local water quality standards, permits, or other legal requirements.

E. Water Quality Trading Program Registry.

(1) The Department, in consultation with the Maryland Department of Agriculture, shall establish and maintain the Registry.

(2) Pursuant to this chapter and COMAR 15.20.12, all certified credits shall be posted on the Registry.

(3) The inclusion of credits on the Registry or the Marketplace is not a representation by the Department or the credit seller that the credits will satisfy the specific regulatory requirements of the credit buyer.