WES MOORE, Governor Ch. 501
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Chapter 501
(Senate Bill 1144)
AN ACT concerning
Clean Water Commerce Account – Contracts for the Purchase of Environmental
Outcomes
FOR the purpose of requiring, in entering into a certain contract under the Clean Water
Commerce Account for the purchase of a certain environmental outcome, the
Department of the Environment to allow certain nonuniform payment schedules and
include certain financial incentives for certain purposes; authorizing the Department
to require a certain payment or certain financial protections for contracts of a certain
size to ensure certain outcomes; and generally relating to the Clean Water Commerce
Account.
BY repealing and reenacting, without amendments,
Article – Environment
Section 9–1605.4(a)(1), (2), and (6), (b), (c), (f)(1), (m), and (n)
Annotated Code of Maryland
(2014 Replacement Volume and 2023 Supplement)
BY repealing and reenacting, with amendments,
Article – Environment
Section 9–1605.4(o)
Annotated Code of Maryland
(2014 Replacement Volume and 2023 Supplement)
SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF MARYLAND,
That the Laws of Maryland read as follows:
Article – Environment
9–1605.4.
(a) (1) In this section the following words have the meanings indicated.
(2) “Account” means the Clean Water Commerce Account.
(6) “Environmental outcome” means nitrogen load reductions that can be
directly measured or modeled using the Chesapeake Bay Program Models.
(b) There is a Clean Water Commerce Account.
(c) The purpose of the Account is to purchase environmental outcomes in support
of the State’s efforts to achieve the Chesapeake Bay TMDL. Ch. 501 2024 LAWS OF MARYLAND
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(f) (1) Subject to the provisions of this subsection, the Account may be used
only for the purchase of cost–effective environmental outcomes that:
(i) Support the State’s efforts to achieve the Chesapeake Bay
TMDL; and
(ii) Have an expected life of at least 10 years.
(m) An environmental outcome purchased under this section shall:
(1) Result from a new project or practice designed and established
following the selection of a proposal and the execution of a contract in accordance with this
section;
(2) Be in addition to any load reduction required by any federal, State, or
local law, regulation, policy, or permit, including any applicable total maximum daily load;
and
(3) Be consistent with the Chesapeake Bay Program Models so as to ensure
the load reductions will count toward the achievement of the Chesapeake Bay TMDL.
(n) A contract entered into by the Department under this section may be funded
for the expected life of the project or practice yielding the environmental outcome, not to
exceed 20 years.
(o) (1) [A] SUBJECT TO PARAGRAPH (2) OF THIS SUBSECTION , A contract
entered into by the Department under this section shall:
[(1)] (I) Require the owner of the project or practice to periodically submit
status updates in accordance with the quantification plan for the environmental outcomes
of the project or practice;
[(2)] (II) Require that payment for environmental outcomes be
conditioned on the achievement and verification of the environmental outcomes in
accordance with the quantification plan;
[(3)] (III) Include a schedule of payments that will be made as
environmental outcomes are achieved and verified; and
[(4)] (IV) Require reporting on the amount of nitrogen and, to the extent
that it can be feasibly determined without significant expense, phosphorus and sediment
that are removed annually by the project or practice.
WES MOORE, Governor Ch. 501
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(2) (I) IN ENTERING INTO A CO NTRACT FOR A PROJECT THAT
INCLUDES CONSTRUCTIO N, RECONSTRUCTION , OR REHABILITATION , ON REQUEST,
UNDER THIS SECTION , THE DEPARTMENT SHALL :
(I) FOR THE PURPOSE OF RE DUCING FINANCING COS TS FOR
THE OWNER OF A PROJE CT OR PRACTICE AND T HE STATE, ALLOW NONUNIFORM
PAYMENT SCHEDULES THAT TAKE INTO ACCOU NT THE UPFRONT CAPIT AL
INVESTMENT NEEDED IN ORDER TO GENERATE TH E INITIAL ENVIRONMEN TAL
OUTCOMES OF A PROJECT OR PRACTICE ; AND THAT ALLOW FOR A COS T–PER–POUND
OF NITROGEN REDUCED THAT VARIES WITH THE ACHIEVEMENT OF PERFO RMANCE
MILESTONES, AS AGREED UPON BY BO TH PARTIES TO THE CO NTRACT.
(II) THE FIRST PERFORMANCE MILESTONE MAY NOT OC CUR
EARLIER THAN THE TIME THAT THE CONSTR UCTION, RECONSTRUCTION , OR
REHABILITATION IS CO MPLETE.
(II) INCLUDE FINANCIAL INC ENTIVES TO ENSURE TH E OWNER’S
COMMITMENT TO THE OP ERATION AND MAINTENA NCE OF THE PROJECT O R
PRACTICE FOR ITS PRO POSED EXPECTED LIFE .
(3) IN ORDER TO ENSURE THE ACHIEV EMENT OF ENVIRONMENT AL
OUTCOMES AGREED TO I N A CONTRACT, THE DEPARTMENT MAY REQUIR E:
(I) A MINIMUM FINAL PAYMEN T; AND
(II) FOR A CONTRACT AWARD GREATER THAN $500,000,
ADDITIONAL FINANCIAL PROTECTIONS , INCLUDING A LETTER O F CREDIT,
INSURANCE INSTRUMENT , OR PERFORMANCE BOND .
SECTION 2. AND BE IT FURTHER ENACTED, That this Act shall take effect July
1, 2024.
Approved by the Governor, May 9, 2024.