Maryland agencies outline Chesapeake Bay restoration funding, Conowingo work and new LEAF farm incentives

Maryland natural-resources and environmental officials told the Transportation and the Environment Subcommittee on Feb. 5 that Chesapeake Bay restoration work is shifting focus from wastewater fixes to agricultural and living‑habitat strategies and that budget choices and new programs will shape progress beyond 2025.

The committee heard a Department of Legislative Services overview that framed the restoration effort around the Environmental Protection Agency’s total maximum daily load (TMDL) targets, state watershed implementation plans and two‑year milestones. DLS highlighted recent changes in sectoral contributions to nitrogen loads and recommended narrative reporting and long‑term trust‑fund planning.

“Big picture, Chesapeake Bay restoration process is guided by the total maximum daily load,” DLS analyst Andrew Gray said, summarizing the modeling and monitoring tools that guide where Maryland targets money and work.

DLS and agency witnesses said that improvements at the Back River and Patapsco wastewater treatment plants reduced wastewater’s share of nitrogen loads, moving the largest remaining reductions to agriculture — especially on the Eastern Shore — and prompting a greater focus on farming practices and living‑habitat work such as oyster restoration and living shorelines.

Deputy Secretary Suzanne Dorsey of the Maryland Department of the Environment said Maryland’s recent monitoring and modeling prompted the shift. “We had the highest grade that the Bay has gotten in over 20 years. It’s a C‑plus,” Dorsey said, adding that Maryland met 18 of 31 outcomes from the 2025 agreement and is leaning into innovations such as pay‑for‑performance projects and whole‑watershed partnerships to amplify results.

What agencies presented and DLS emphasized - Funding picture: DLS noted about an $83,000,000 decrease between the fiscal 2025 working appropriation and the fiscal 2026 allowance in the aggregated Chesapeake Bay restoration numbers reported to the committee; some changes reflect how Maryland Department of Transportation line items were counted. DLS asked the administration to describe long‑term plans for the Chesapeake and Atlantic Coastal Bays 2010 Trust Fund. - Whole Watershed Act pilot: The administration reported a $5,000,000 allocation from the 2010 trust fund, $5,000,000 from the Bay Restoration Fund and $1,500,000 from the Waterway Improvement Fund to support a five‑watershed, multi‑year RFP process that will provide permitting help and implementation support. The agencies told the committee they received nine applications and expect to select five watersheds by March 31 to begin multi‑year assistance. - Shifting outcomes and science: Agencies said monitoring shows some nutrient and sediment improvements but ongoing problems with temperature, chlorophyll a and water clarity. The Chesapeake Executive Council’s recent charge to reexamine outcomes and streamline partnerships is informing Maryland’s 2026 budget and program design. DLS recommended the administration describe how that charge affects the fiscal 2026 budget. - Conowingo/Conowingo Dam watershed work: DLS reported on pay‑for‑success RFP results in the Conowingo watershed and flagged an RFP winner whose cost per pound removed was unusually low ($6 per pound reported by Rose Tree Consulting). DLS recommended the administration comment on relicensing and water‑quality certification timing after a Nov. 21, 2024 Federal Energy Regulatory Commission (FERC) rule establishing a roughly one‑year expectation for state water‑quality certification.

Agriculture incentives and the LEAF program Maryland Department of Agriculture Secretary Kevin Atticks described a new Maryland Leadership and Environmentally Engaged Farming (LEAF) program included in legislation referenced to the committee (Sen. Bill 428; House Bill 506). The governor’s fiscal 2026 budget includes roughly $900,000 for LEAF. MDA said LEAF is designed as a voluntary, scored incentive program for farmers — modeled in concept on building “LEED” standards — to reward conservation, community engagement and other best practices.

“Think of LEAF as akin to the LEED building code standard,” Kevin Atticks said, describing LEAF as a suite of practices that generate points and incentives for participating farms.

Funding questions for LEAF: MDA and DLS noted a potential mismatch between the $900,000 appropriation in the governor’s budget and a separate provision in the budget reconciliation and financing act that would reduce Tree Solutions Now Act funding available for agricultural work from $2,500,000 to $500,000. MDA said the LEAF program is expected to draw on three streams: the governor’s appropriation, Bay‑Legacy–related authority (the Bay Legacy Act reference to tree‑related funds) and Tree Solutions Now Act funds; the department asked the committee for clarification and recommended restricting certain outlays pending a program report.

Oyster aquaculture credits and living habitats DLS and agency witnesses noted that oyster aquaculture can now generate water‑quality credits when oysters remove nutrients and are harvested. Agencies called that development an incentive for aquaculture practices that remove nitrogen from the Bay.

Requested follow‑ups and oversight items DLS recommended committee narrative requiring the administration to report on the 2010 trust fund’s long‑term plan, and to provide a report with the fiscal 2027 allowance describing whole‑watershed pilot activities and results. DLS also asked agencies to explain how the Chesapeake Executive Council’s charge affects Maryland’s fiscal 2026 spending and to comment on Conowingo relicensing and use of the $200,000,000 Exelon agreement funds.

Why it matters Maryland officials said the state retains regionally significant leadership tools — dedicated funds like the Bay Restoration Fund and the 2010 trust fund and an active agricultural cost‑share program — but face growing pressures from population, development and climate‑driven precipitation changes that could erode gains. The committee’s requests for narrative reporting and the agencies’ proposal to concentrate work geographically reflect a shift from single‑practice grants to bundled, watershed‑scale projects intended to maximize leverage and private and federal matches.

What the committee will see next Agencies told the committee they will provide the written clarifications DLS requested on trust‑fund planning, the Conowingo water‑quality certification timeline and the LEAF funding mix. The administration agreed to include the whole‑watershed pilot progress in future budget narratives and to answer detailed questions about the RFP results and Conowingo project costs.