Beveridge & Diamond

Maryland Environmental Regulatory Update - June 2010

Beveridge & Diamond, P.C., June 7, 2010

Nutrient Trading on Agricultural Land

Maryland now has a law governing its market-based nutrient trading program.  On June 1st, House Bill 974 became effective. That measure codified the Maryland Department of Agriculture’s (MDA) ongoing efforts to develop a nutrient trading program for agricultural land.  Nutrient trading is a market-based approach to environmental protection that involves: (1) establishing a total amount, or “cap,” of allowable nutrient pollution in a specified area, (2) allocating the allowable amount of nutrients among sources, and (3) allowing the sources to trade their allowances, or “credits,” so that reductions in pollution are achieved in the most cost-effective manner.  Md. Code Ann., Agric. §§ 8-901 – 8-904.

In 2006, the Maryland Department of the Environment (MDE) began developing a state-wide policy for nutrient trading among point sources in Maryland’s Chesapeake Bay Watershed, and MDE rolled out its formal policy on April 17, 2008.  Recognizing that there was also an opportunity for nutrient trading with non-point sources, in 2008, MDA also issued draft guidelines for the generation and exchange of credits by agricultural non-point sources. 

Since then, MDA has continued to develop an agricultural nutrient trading program and has acquired a $512,000 Conservation Innovation Grant from the U.S. Department of Agriculture for the implementation of the program.  The General Assembly measure, House Bill 974, primarily codifies the General Assembly’s intent that MDA retain authority for establishing the requirements for nutrient trading on agricultural land.  In addition, it formally authorizes MDA to establish: (1) application and eligibility requirements for the certification of nutrient credits on agricultural land; (2) standards for quantifying nutrient credits resulting from existing and proposed agronomic, land use, and structural practices; (3) requirements for the duration and maintenance of credits; and (4) a credit registry that is accessible to the public.  Although the measure does not set forth substantive requirements, by formalizing this aspect of nutrient trading it may jump start increased acceptance and pursuit of this pollutant reduction strategy. 

Smarter Transportation

On October 1st, House Bill 1155, a General Assembly measure promoting “smart” transportation in Maryland will go into effect. The measure sets new environmental requirements for “major capital projects” and changes the process by which the State reviews and approves such projects.  As defined by the measure, major capital projects include new or significantly expanded or improved transportation facilities or services that receive State funding.

Project proponents, defined under the measure as a government agency or political subdivision, will now have to submit a purpose and need statement for major capital projects.  The statement must describe the project’s necessity, compare the project to existing land use plans, and explain how the project will satisfy new criteria to be developed by the Maryland Department of Transportation (MDOT).  The measure requires MDOT to develop the criteria in a manner consistent with the goals of the Maryland Transportation Plan. These goals include a reduction of GHG emissions, development of Smart Growth objectives, and preservation of historic resources.  MDOT must also consider the impact of transportation funding on the environment and rank project submissions based on how they meet the foregoing goals.

Purpose and need statements and consideration of environmental impacts are hallmarks of the review process required under the National Environmental Policy Act (NEPA).  NEPA applies only to federally-funded projects or those requiring federal approval or permitting.  While many states have NEPA analogs, Maryland does not.  With respect to future transportation projects, only time will tell whether House Bill 1155 serves as a first step toward full NEPA-like review in Maryland.  At a minimum, it will alter the State’s transportation planning process for the foreseeable future, giving greater public prominence to environmental factors and requiring more fulsome justification of project impacts.  The Governor approved the final version of House Bill 1155 on May 20, and it is now codified at Md. Code Ann., Transp. § 2-103.1.

Stormwater Management Update

Maryland’s stormwater management program continues to evolve quickly, with the implementation of new legislation, regulations, and most recently a new set of emergency regulations. 

As background, in 2007, Maryland enacted new stormwater management legislation that required MDE to adopt regulations and a model ordinance establishing the use of environmental site design (ESD) as the primary method for controlling stormwater runoff, sediment, and erosion from development and redevelopment projects.  See Stormwater Management Act of 2007, Md. Code Ann., Envir. §§ 4-201 and 4-203.  ESD involves small-scale stormwater management practices, nonstructural techniques, and better site planning to mimic natural hydrologic runoff characteristics and minimize the impact of land development on water resources.

MDE adopted stormwater management regulations on May 5, 2009, in accordance with the 2007 legislation.  These regulations require the use of ESD to the maximum extent practicable and establish a three-stage comprehensive review and approval process for project development.  COMAR 26.17.02.  The regulations also redefine redevelopment and increase from 20 to 50% the amount of existing impervious area required to be reduced.  The new requirements were to apply to all development projects that did not have final approval for erosion and sediment control and stormwater management plans by May 4, 2010. 

The absence of any meaningful transition period, and the program’s impact on redevelopment and smart growth, prompted significant concern.  In response, in March, 2010, MDE submitted emergency regulations to the General Assembly’s Joint Committee on Administrative, Executive, and Legislative Review.  These emergency regulations staved off legislative action (including House Bills 964, 1125, and 1408), and now grandfather some development projects that are in the pipeline.  The emergency regulations allow local governments to grant an administrative waiver to a development that received preliminary project approval, but not final approval, prior to May 4, 2010.  The approval must be a documented action by a local jurisdiction following a review of a developer’s submitted material, rather than merely an acknowledgement of the receipt of that material.  The emergency regulations also provide local governments with greater flexibility in addressing the new requirements for redevelopment projects by providing for alternative stormwater management measures under specified conditions. MDE has indicated that it plans to propose final regulations before the emergency regulations expire on October 4th.

For more information, please contact Pamela Marks at or (410) 230-1315.  This alert was prepared with the assistance of Jayni Lanham, Heidi Knight, and William Sinclair. 




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