Authority: Title 10.1, Chapters 1, 5, 6, 7, and 21.1, Code of Virginia.

A. Included in the amounts for Assistance to Soil and Water Conservation Districts is $200,000 the first year and $50,000 the second year from the general fund for the Soil and Water Conservation District Dam Maintenance, Repair, and Rehabilitation Fund (§ 10.1-611.1, Code of Virginia) to address needs of dams operated by Soil and Water Conservation Districts.

B. The funds provided in this Item for the Soil and Water Conservation Districts shall be distributed to the greatest extent possible to the districts in accordance with program, financial and resource allocation policies established by the Soil and Water Conservation Board. The June 30, 2005 and June 30, 2006, unexpended general fund balances in Assistance to Soil and Water Conservation Districts are hereby reappropriated.

C. Included in the amount for Statewide Non-Point Source Pollution Control, are $685,473 the first year, and $685,473 the second year from the general fund as the Commonwealth's statewide match for participation in the federal Conservation Reserve Program. Any unexpended general fund balance designated for Virginia's Conservation Reserve Enhancement Program remaining on June 30, 2005, and June 30, 2006, shall be reappropriated.

D.1. Out of the amounts for Statewide Non-Point Source Pollution Control, $9,417,500 the first year and $30,164,600 the second year is appropriated from the general fund to be deposited to the Virginia Water Quality Improvement Fund established under the Water Quality Improvement Act of 1997, Title 10.1, Chapter 21.1, Code of Virginia. Of this amount, a minimum of $5,000,000 the first year and $20,000,000 the second year shall be allocated by the Director of the Department of Conservation and Recreation to agricultural best management practices programs; however, beginning July 1, 2005, no more than 60 percent of these amounts shall be allocated for use within the Chesapeake Bay watershed. Of the total amount deposited $226,616 the first year and $3,399,690 the second year shall be transferred to the Virginia Water Quality Improvement Fund Reserve established pursuant to Item 378 of this act.

2.  Out of the amounts for Statewide Non-Point Source Pollution Control, $39,608,800 the second year from the general fund shall be deposited to the Virginia Water Quality Improvement Fund established under the Virginia Water Quality Improvement Act of 1997, Title 10.1, Chapter 21.1, Code of Virginia.  No more than 60 percent of this amount shall be allocated for use within the Chesapeake Bay Watershed.  Of the total amount deposited, $5,712,250 shall be deposited to the Virginia Water Quality Improvement Fund Reserve pursuant to Item 378 of this Act.  This appropriation meets the mandatory deposit requirements associated with FY 2005 excess general fund revenue collections and discretionary year-end general fund balances and is made pursuant to § 10.1-2129, Code of Virginia, and assumes the additional appropriation for the Virginia Water Quality Improvement Fund included in House Bill 30 (2006 Session).

2.3. The Department shall review Soil and Water Conservation District (SWCD) operations and identify potential improvements in water quality and soil erosion programs. The review shall consider the relative needs of the various Districts, practices that offer the most cost-effective use of nonpoint source funding, and practices that are most appropriate given the characteristics of the various districts. The review shall incorporate the most recent findings on best management practice effectiveness. Based on the findings of the review, the Department shall propose changes in SWCD practices, staffing and funding, including the potential for performance-based funding, to improve the Commonwealth's nonpoint source programs. The Department shall coordinate this review with the requirements of House Joint Resolution 72 of the 2004 Session and any planned reviews of its nutrient management regulations. Copies of an interim report shall be provided to the Chairmen of the House Committees on Appropriations, and Agriculture, Chesapeake and Natural Resources, and the Senate Committees on Finance, and Agriculture, Conservation and Natural Resources by December 31, 2004. The final report including recommendations for SWCD practices and funding shall be provided by December 31, 2005.

E. It is the intent of the General Assembly that all interest earnings of the Water Quality Improvement Fund shall be spent only upon appropriation by the General Assembly, after the recommendation of the Secretary of Natural Resources, pursuant to § 10.1-2129, Code of Virginia.

F. If the Rappahannock River Basin Commission elects as its chairman a member of the General Assembly, the Division of Legislative Services is hereby authorized to provide reasonable staff and technical assistance to the Commission. The Commission shall report to the Secretary of Natural Resources and the Chairmen of the Senate Finance and House Appropriations Committees on the Commission's activities and accomplishments by November 5 of each year.

G. Notwithstanding § 10.1-552, Code of Virginia, Soil and Water Conservation Districts are hereby authorized to recover a portion of the direct costs of services rendered to, and for use of district-owned conservation equipment used by, landowners within the district. Such recoveries shall not exceed the amounts expended by a District on these services and equipment.

H. The Department of Conservation and Recreation is authorized to develop a cost recovery system, the funds from which shall be used to support the direct costs of providing inspections, plan review, administrative review, and certifications of non-Soil and Water Conservation District dams. The system shall employ a sliding scale, if practical, and shall be based on factors that directly relate to the costs of the dam inspection program. Total costs recovered from the new system shall not exceed 90 percent of the actual program cost.

I. In conjunction with other reporting requirements included in this item, the Soil and Water Conservation Board shall prepare annual statistics, by District, that include the number of farmers, the number of acres in farms and in agricultural production (by product type), the number of farmers participating in District programs by program, the number of acres by product under each type of agricultural best management practice, the budgeted and expended funds for each agricultural best management practice, and other information needed by the Department of Conservation and Recreation to evaluate the quantitative impact of Soil and Water Conservation District practices and funding on Virginia's water quality and land conservation goals. This information shall be provided to the Director of the Department of Conservation and Recreation in a timely manner for the Department to complete its annual reporting requirements under this item.

J.1. Out of the amounts for Land Management, $1,400,121 the first year and $1,212,684 the second year is appropriated from the general fund to effect the consolidation of the Chesapeake Bay Local Assistance Department and the Department of Conservation and Recreation. The Department of Conservation and Recreation shall continue to use these resources, including the former agency's staff, to provide technical and financial assistance to localities pursuant to the Chesapeake Bay Preservation Act (§ 10.1-2100, et seq., Code of Virginia). The Chesapeake Bay Local Assistance Board shall be continued as a collegial body.

2.a. The Secretary of Natural Resources shall prepare an agency reorganization plan for submission to the Chairmen of the House Appropriations and Senate Finance Committees by August 31, 2004. In developing this plan, the Secretary shall consult with Tidewater localities and Tidewater Soil and Water Conservation Districts.

2. The plan submitted by the Secretary of Natural Resources shall include any necessary steps to ensure that the purposes of the Chesapeake Bay Preservation Act are implemented by DCR, indicate whether former CBLAD resources and personnel will constitute a new division within DCR or a component of an existing division, and identify any positions that will be eliminated or other actions needed to achieve the policy goals and cost savings.

3. It is the intent of the General Assembly that legislation be introduced in the 2005 Session to effect this merger. This legislation shall ensure that the core operations of the Chesapeake Bay Local Assistance Department and Chesapeake Bay Local Assistance Board shall continue.

K.1. The amounts provided to localities and planning district commissions for financial assistance in implementing the Chesapeake Bay Preservation Act shall be distributed on a competitive basis. Consideration shall be given to the availability of local resources, with more funding provided to localities with the greatest needs and where the greatest water quality benefits can be achieved.

2. Of the amounts in the Land Management program, the Department may expend a portion of its general fund appropriation for a water quality monitoring project in Caroline County.

L. Out of the amount provided for Natural Heritage Resource Preservation and Management is appropriated $300,000 in the second year from the general fund to be used for improved public access and enhanced wildlife management in the natural area preserve system.

M.  Out of the appropriation for Land Management, $439,433 the first year and $352,021 the second year from special funds derived from the sale of "Friend of the Chesapeake" license tags is allocated to carry out the recommendations of the Chesapeake Bay Restoration Fund Advisory Committee.

N.  Out of the amounts appropriated for Urban Non-Point Source Pollution Control, $125,000 the second year from the general fund is provided to add two positions within the Department of Conservation and Recreation's Erosion and Sediment Control Program.  These positions will be responsible for reviewing the adequacy of local erosion and sediment control programs.