The Virginia Water Quality Improvement Act of 1997 (VA CODE Section 10.1-2117 through 2134) was enacted by the Virginia General Assembly in response to the need to finance the nutrient reduction strategies being developed for the Chesapeake Bay and its tributaries.

Pursuant to the Act, the Commonwealth established in the State treasury a special permanent, nonreverting fund, known as the "Virginia Water Quality Improvement Fund." The Act directs the Department of Environmental Quality to assist local governments and individuals in reducing point source nutrient loads to the Chesapeake Bay with technical and financial assistance made available through grants provided from the fund.  Section 10.1-2129.B. of the Act directs the Secretary of Natural Resources to develop written guidelines that (i) specify eligibility requirements; (ii) govern the application for and distribution and conditions of WQIF grants; and (iii) list criteria for prioritizing funding requests. 

Legislation passed during the 2006 General Assembly session amended the WQIF guidelines with respect to several point source issues and in response the Office of the Secretary of Natural Resources published revised guidelines (Nov. 2006) based on those changes and public comments.  

Eligibility

Currently, project eligibility is limited to design and installation of nutrient reduction technology at Chesapeake Bay watershed publicly owned wastewater treatment plants.  The DEQ Director is required to sign an agreement with all eligible applicants with one exception.  The Director may defer a grant if it is determined that the use of nutrient credits in accordance with the Chesapeake Bay Watershed Nutrient Credit Exchange Program (§ 62.1-44.19:12 et seq.) would be significantly more cost-effective than the installation of nutrient controls for the facility in question.

WQIF Application Processing

Applicants for WQIF grants must first submit a grant Application during a solicitaion period. In order to process the applications in a fair and equitable way and also establish a prioritization, DEQ developed guidance memorandum (GM) #06-2012 (guidance memorandum). 

To develop a draft agreement, DEQ relies on: the application, external information (such as water billing records and Census information), a Preliminary Engineering Report (PER), bid information (i.e. schedule of values) from the contractor and the engineering agreement with scope of work.  Once a draft agreement for construction is ready for public review, a review period is posted and public comments are solicited during a comment period of at least 30 days at the following link: draft/public-noticed agreements.  Draft agreements may be viewed at the DEQ central office.

Following this period, a project will then be listed on the website as signed grant agreements.

As required by the Act, all point source construction grants must be governed by a legally binding, enforceable agreement that includes provisions to: govern design and installation of facility upgrades; require long-term operation, maintenance and monitoring; require periodic reporting; and include stipulated penalties for non-performance.

Summary of Appropriations by Fiscal Year

WQIF Status (August 2012)

The 2012 General Assembly appropriated an additional $87.57 million to the WQIF Point Source Program.  These funds became available on 7/1/12, and will primarily be used to cover current grant commitments under signed agreements.  It is estimated these funds will be totally expended before the end of FY2014, accounting for existing grant balances and new grant awards expected over the next year.  Unless additional appropriations are made in upcoming budgets a funding short-fall will likely result in FY2014, but the amount cannot be accurately predicted until the new grant awards have been made.

The practice of pro-rating grant reimbursements (begun in FY2011 to equitably distribute limited funds available) was discountinued this past spring, and nearly all grantees that had payments deferred have been paid the full amounts owed.  The WQIF will continue to fully fund the "hardship" grantees into the future, but it is expected these projects will be completed before any short-fall occurs.