Calling the Chesapeake Bay "one of our most precious natural resources," Virginia Gov. James Gilmore pledged support for a $63 million package to control nutrient pollution in his first State of the Commonwealth Address.

"For generations, we neglected proper care and attention to the Bay," Gilmore said in his address. "Over the past decade, Virginia and all states bordering the Bay and its tributaries have made monumental commitments to restore it to a healthy body of water. Generations of neglect require at least a generation of critical care to the Chesapeake Bay.

"Fund the $63 million dollar Chesapeake Bay budget initiative and we will be the generation known for passing on a cleaner Bay to the next generation."

The package, funded by a surplus in state revenue, was first proposed by former Gov. George Allen at the annual Chesapeake Executive Council meeting in October to help the state meet its turn-of-the-century nutrient reduction goal.

Gilmore not only endorsed the proposal, but also called for the state to "strengthen our environmental enforcement" and to give the state attorney general's office more power to "aggressively prosecute those who violate the laws that protect our natural resources."

The nutrient reduction money, which requires approval from the state General Assembly, is largely intended to help Virginia meet its 40 percent nutrient reduction goal in the Potomac River basin.

If approved, the money would be a huge increase from the $15 million provided for the current fiscal year, which began last July 1.

Also, even though the $63 million is provided for in the state's two-year budget cycle which begins this July, the entire amount would be deposited in the state's Water Quality Improvement Fund this year - something that officials say could clear the way for an additional deposit in 1999. The law creating the fund stipulates that a portion of the state's excess revenue be deposited in the account unless - as is the case this year - a specific appropriation is made into the fund.

Of the $63 million, $43 million is earmarked for nutrient reductions at wastewater treatment plants in the Potomac and Shenandoah river drainages. The remaining $20 million would be used to support runoff control programs in agricultural, suburban and urban areas. Of that, $13 million would go to the Potomac and Shenandoah drainages. The remaining $7 million would be split between other Bay tributaries, and areas of Virginia not within the Chesapeake watershed.

The wastewater treatment money will be used in a variety of ways to speed up nutrient reductions, said Alan Pollock, program manager for the Virginia Department of Environmental Quality's Chesapeake Bay Office.

Much of the money will be used to provide 50 percent matching grants to wastewater treatment plants that upgrade to remove more nutrients, particularly nitrogen, from their effluent.

But the money will also be used in a variety of ways to accelerate nutrient reductions and encourage plant operators to voluntarily do more than the state would normally require.

For example, Pollock said, the state will offer "challenge grants" to facilities that either accelerate construction to bring nutrient removal technologies online by 2000, or which commit to reducing the nitrogen concentration in their effluent below the 8 milligrams per liter being sought by the state.

By making such commitments, facilities may be eligible to receive a higher percentage grant from the state, Pollock said. In exchange, plant operators will sign "grant agreements" with the state under which they might have to pay back some portion of their state funding if the facilities fail to live up to their agreement.

"Under traditional permits, there's no incentive for them to do more," Pollock said. "If the limit is 10 and they're at 9.9, they're fine; there's no incentive to do five and reduce pollution even more. Under this program, we're trying to give people that incentive."

Pollock said the idea of providing incentive opportunities may help to establish a market framework within which treatment plants could trade nutrient reduction credits in a way that achieves the nutrient goal for the whole river at an overall lower cost.

Plants capable of doing more than is required could be reimbursed for any added expenses either from the state or from other treatment plants operating less effectively. Virginia plans to follow a public process to develop guidelines governing the use of these types of incentives.

As part of the new funding package, Virginia would use the concept with the massive Blue Plains wastewater treatment plant that handles wastewater from the District of Columbia and several adjacent Maryland and Virginia suburbs.

Nitrogen removal technologies at the plant have shown themselves to be capable of removing even more nitrogen than originally planned, although doing so is more expensive. Pollock said the state wants to negotiate a deal with the plant in which Virginia would pay for additional nitrogen removal to help meet the year 2000 goal. "This would be a great example of a cooperative approach to cleaning up the Bay and its rivers that is promoted under the interstate Chesapeake Bay Program," he said.