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HB386 • 2026

Chesapeake Bay Pay for Outcomes Fund; established.

<p class=ldtitle>A BILL to amend the Code of Virginia by adding in Article 1 of Chapter 3.1 of Title 62.1 a section numbered 62.1-44.6:2, relating to Chesapeake Bay Pay for Outcomes Fund established.</p>

Water
Enacted

This bill passed the Legislature and reached final enactment based on the latest official action.

Sponsor
Krizek
Last action
2026-02-18
Official status
Failed
Effective date
Not listed

Plain English Breakdown

The bill's effective date is currently unknown.

Chesapeake Bay Pay for Outcomes Fund

This bill establishes a fund called the Chesapeake Bay Pay for Outcomes Fund to provide outcome-based payments for verified reductions in nutrient and sediment pollution from nonpoint sources within the Chesapeake Bay watershed.

What This Bill Does

  • Creates the Chesapeake Bay Pay for Outcomes Fund to provide outcome-based payments for verified reductions in nutrient and sediment pollution from nonpoint sources within the Chesapeake Bay watershed.
  • The Department of Environmental Quality will manage the fund and establish a competitive solicitation process for awarding payments from the Fund.
  • Projects must show evidence of new, incremental outcomes that would not occur under existing regulatory, funding, or conservation programs to receive money from the fund.
  • Moneys in the Fund shall be used solely for environmental investments that meet specific criteria and contribute to meeting Chesapeake Bay Total Maximum Daily Load (TMDL) requirements.

Who It Names or Affects

  • People who live or work near the Chesapeake Bay watershed
  • Environmental organizations working on pollution reduction projects

Terms To Know

nonpoint sources
Pollution that comes from many different places, not just one specific source.
TMDL
Total Maximum Daily Load - the maximum amount of a pollutant that can be in a water body without violating clean water laws.

Limits and Unknowns

  • The bill does not specify how much money will go into the fund.
  • It is unclear which specific projects will receive funding from the Fund.
  • Details about the competitive solicitation process are left to be determined by the Department of Environmental Quality.

Bill History

  1. 2026-02-18 House

    Left in Committee Appropriations

  2. 2026-02-10 House

    Fiscal Impact Statement from Department of Planning and Budget (HB386)

  3. 2026-01-28 Agriculture, Chesapeake and Natural Resources

    Reported from Agriculture, Chesapeake and Natural Resources and referred to Appropriations (22-Y 0-N)

  4. 2026-01-26 Chesapeake

    Subcommittee recommends reporting and referring to Appropriations (10-Y 0-N)

  5. 2026-01-19 Chesapeake

    Assigned HACNR sub: Chesapeake

  6. 2026-01-12 House

    Prefiled and ordered printed; Offered 01-14-2026 26105043D

  7. 2026-01-12 Agriculture, Chesapeake and Natural Resources

    Referred to Committee on Agriculture, Chesapeake and Natural Resources

Official Summary Text

Chesapeake Bay Pay for Outcomes Fund established.
Establishes the Chesapeake Bay Pay for Outcomes Fund to provide outcome-based payments for verified reductions in nutrient and sediment pollution from nonpoint sources within the Chesapeake Bay watershed of the Commonwealth. The Department of Environmental Quality is directed to administer the Fund and to establish a competitive solicitation process for awarding payments from the Fund.

Current Bill Text

Read the full stored bill text 
A BILL to amend the Code of Virginia by adding in Article 1 of Chapter 3.1 of Title 62.1 a section numbered
62.1-44.6:2
, relating to Chesapeake Bay Pay for Outcomes Fund established.

Be it enacted by the General Assembly of Virginia:

1. That the Code of Virginia is amended by adding in Article 1 of Chapter 3.1 of Title 62.1 a section numbered
62.1-44.6:2
as follows:

§
62.1-44.6:2
. Chesapeake Bay Pay for Outcomes Fund.

A.
There is hereby created in the state treasury a special
, permanent,
nonreverting fund to be known as th
e Chesapeake Bay Pay for Outcomes
Fund, referred to in this section as "the Fund." The Fund shall be established on the books of the Comptroller. All funds appropriated for such purpose and any gifts, donations, grants, bequests, and other funds received on its behalf shall be paid into the state treasury and credited to the Fund. Interest earned on moneys in the Fund shall remain in the Fund and be credited to it. Any moneys remaining in the Fund, including interest thereon, at the end of each fiscal year shall not revert to the general fund but shall remain in the Fund. Moneys in the Fund shall be used solely for the purposes
established in subsection B and for program administration, including
entering into
contracts

pursuant to subsection
E
. Expenditures and disbursements from the Fund shall be made by the State Treasurer on warrants issued by the Comptroller upon written request signed by
the Director
.

B. The purpose of the Fund shall be to provide outcome-based payments for verified reductions in nutrient and sediment pollution from nonpoint sources within the Chesapeake Bay
watershed of the Commonwealth. Priority shall be given to projects that
(i)
contribute to meeting Chesapeake Bay Total Maximum Daily Load (TMDL) requirements
, (ii) contribute to meeting local nutrient impaired stream TMDLs, and (iii) occur in high nutrient loss areas.
Moneys in the Fund shall be used solely for outcomes-based environmental investments that meet the following criteria:

1. Projects shall provide evidence of verified, measurable reductions in nutrient and sedi
ment
loads that are supported by empirical data, monitoring, or third-party validation
;

2. Projects shall provide evidence of new, incremental outcomes that would not occur under existing regulatory, funding, or conservation programs, or in the absence of such projects; and

3. Projects shall provide supporting rationale that pollutant reductions are unlikely to be offset by corresponding increases elsewhere in the Chesapeake Bay watershed.

C.

1.
The Department shall establish a competitive solicitation process for awarding payments from the Fund. The Department shall develop technical guidelines for quantifying assurance and load reductions and verifying projects in consultation with subject matter experts, par
tner agencies, and stakeholders. The Department shall consider innovative restoration techniques not currently recognized under traditional best management practice
s
or water quality program protocols.

2. Awards shall be based upon a scoring rubric that prioritizes
the following criteria in order of greatest to least importance: (
i
) assurance of nut
rient load reductions and cost-effectiveness, (
ii
) the total quantity of nutrient load reduction
achieved by a project, (
iii
) the readiness to proceed for a project, and (
iv
) incentives for habitat and resilience benefits.

3.
For the purposes of this sub
section
:

"Additionality" means environmental benefits that would not occur under e
xisting regulatory, funding, or conservation programs, or in the absence of a project
under this section.

"
A
ssurance" means
(i) empirical or quantitative evidence that nutrient load re
ductions are achieved
and
(ii)
demonstration of additionality and minimal leakage.

Empirical or quantitative evidence that goes beyond modeling of nutrient reductions shall constitute a
higher level of assurance.

"Leakage" means pollutant reductions that risk being offset by corresponding pollutant increases elsewhere.

D. The Department, in partnership with the Department of Conservation and Recreation, Virginia Polytechnic Institut
e and State University, and other stakeholders as the Department deems necessary, shall pursue incorporation of
nutrient
load reductions resulting from projects funded by the Fund into the Chesapeake Bay Program accountability framework for the Chesapeake Bay TMDL
.

E. The Department may enter into contracts with subject matter experts, academic institutions, nonprofit organizations, or third-party verifiers to assist in the design, implementation, monitoring, and evaluation of projects funded pursuant to this section.