Controversial legislation that would provide a new way of financing Susquehanna River and Chesapeake Bay cleanups cleared the Pennsylvania Senate last week after it was paired with another bill to increase funding for a variety of other conservation efforts.

Legislation that would expand Pennsylvania's Growing Greener Fund and provide new funding for water-quality improvements passed the Senate - but without any funding source identified.

But the senators didn’t include any new money with the measure, prompting environmentalists to warn that the legislation is an “empty shell” that could merely thin already underfunded conservation and cleanup efforts.

The Pennsylvania Clean Water Procurement bill passed, 47 to 2, on Wednesday after senators amended it and tacked on another measure, the Growing Greener III bill. That bill creates a new financing framework for the state’s Growing Greener Fund, which pays for conservation and cleanup projects statewide.

As originally introduced, the Clean Water Procurement bill would have allowed Pennsylvania municipalities to avoid reducing stormwater pollution in their communities by paying instead into a $50 million fund that would finance pollution reductions elsewhere through the state’s nutrient pollution trading program. It was introduced by Sen. Richard L. Alloway II, a Republican from Chambersburg who is a member of Pennsylvania’s delegation to the Chesapeake Bay Commission, an advisory panel made up of lawmakers from around the region.

Alloway argued that taxpayers could be spared the massive financial burden of meeting the Chesapeake Bay pollution diet by putting nutrient reduction projects out to bid to the private sector. But local officials proved cool to the idea, and some environmentalists objected.

When the original bill was introduced in June, several environmental, agricultural and municipal organizations expressed concerns about the program’s favoring large technical solutions, its accountability and its requiring municipalities to pay into the fund.  Many discussions between the bill’s backers and the groups led to revisions, making payments optional rather than mandatory, as well as reducing the pot to $20 million.

Senate leaders then imported language from the Growing Greener bill, which would restructure and reauthorize a popular fund that has paid for a wide range of conservation projects and programs since its inception in 1999. 

In the process of merging the two bills, senators also specified that a greater share of the funds money be spent in the Chesapeake watershed. But as passed, the bill doesn’t specify how either program is to be funded.

The bill is awaiting action by the House of Representatives Environmental Resources and Energy Committee.

Its passage about a week before Gov. Tom Wolf is to release his proposed budget for 2018–19, makes it clear that the Senate wants to see these efforts funded, said Chad Reichard, legislative director for Alloway. But Reichard said spelling out a funding source in the bill now would doom it in the House, where a key bloc of members is vehemently opposed to generating any new revenue.

“We passed them the legislation,” Reichard said. “If they agree with it, they can work with us and the governor to figure out how to fund it.”

The two initiatives prioritize water quality and the Bay, but that’s where the similarities end. Growing Greener III would renew the closest thing Pennsylvania has to funds in Maryland and Virginia that are dedicated to paying for Bay restoration. Growing Greener underwrites farm preservation, stream bank restoration, forest conservation and more.

Equipment in the floor of Kreider Farms’ dairy barn collects manure. Unable to generate sufficient revenue, the project to convert cattle waste into energy and other byproducts has shut down. (Bion Environmental Technologies)Backers of the Clean Water Procurement bill say it would reduce pollution more cost-effectively by guaranteeing an income stream to private companies that would build and operate large-scale nutrient reduction projects targeting farm animal manure.

The original procurement bill was drafted by Bion Environmental Technologies, a Colorado-based company that builds large manure treatment facilities on farms. A Bion subsidiary is in default of a $7.8 million state loan it received in 2009 to construct and operate a pilot manure-treatment facility on a Lancaster County dairy farm. Bion CEO Dominic Bassani has repeatedly asserted that the project foundered because of flaws in Pennsylvania’s nutrient trading program. The facility has been shuttered for three years, a move Bassani said was needed to stop losing $25,000 a month in operating costs.

As passed, the bill specifies that companies would bid on nutrient reduction opportunities in impaired watersheds in the Chesapeake Bay portion of the state. If awarded a contract, the companies would be under a contract with the state for 10 years to provide those services. The state would pay credits to the company per pound of nitrogen or phosphorus reduced, which in theory would allow enough profit to pay for the operation and construction of the facility.

Environmental advocates lauded the passage of the Growing Greener portion of the bill, while expressing concern about overall funding and the procurement section.

The Pennsylvania Environmental Council, a statewide advocacy group that had earlier voiced concerns about the procurement bill, said they still wanted “full vetting to ensure that the methodology truly sets a level playing field, and constitutes verifiable use of taxpayer money.”

In a letter to Senate leaders, the council also said it wanted “safeguards to ensure the new nutrient credit procurement program would not hamper existing, proven programs that benefit farmers and water quality.” And they urged setting it up initially as a pilot “that is limited in scope and duration, and subject to ongoing evaluation to ensure it is helping Pennsylvania meet its federal mandates.”

The council likewise expressed reservations about the Growing Greener portion of the bill, warning that “without new, significant sources of funding to support this initiative, the bill stands as an empty shell that could prove detrimental.” The council called on Senate leaders to work with Wolf and their counterparts in the House to come up with a “dedicated and sustainable funding source”

David Hess, a former secretary of environmental protection during the early days of the Growing Greener program, said the bill adds too many programs to the fund that were once paid for with state general funds or from agency budgets. It is a struggle to get existing programs funded during a time when environmental budgets have been cut repeatedly, he added.

“They are making major changes to the way the program works,” said Hess, who is now a lobbyist whose clients include Pennsylvania Environmental Council. “Whatever money was in the pot before is now being sliced and diced 24 different ways.”

The Growing Greener Coalition — an alliance of conservation, recreation and preservation groups — thanked the Senate leadership for getting behind legislation it had sought to expand the range of conservation programs eligible for support via the Growing Greener Fund.

Andrew Heath, the coalition’s executive director, said in a statement that once Growing Greener is fully funded, it will be the largest investment ever made by the commonwealth to meet its commitment to restoring the Chesapeake Bay.

But Heath voiced doubts about whether the procurement program can assure “real, tangible, cost-effective results,” and he pointed out that the bill doesn’t identify funding sources for either program.

Growing Greener has been funded in a variety of ways over the last 19 years, including bond issues and a garbage-hauling tipping fee. The Growing Greener Coalition had identified more than $300 million in annual conservation and environmental needs, but the program’s pot has dwindled from $200 million in the early 2000s to roughly $57 million last year.

“We acknowledge that this is a process,” Heath said, “and the coalition is committed to working with the General Assembly and the governor to ensure that additional funding needed for the program can be achieved this year.”