Virginia has established a new program to fund flood mitigation and coastal resiliency. House Bill 22 renamed and repurposed the Shoreline Resiliency Fund to be the Community Flood Preparedness Fund. The fund will make loans and grants available to localities for coastal and riverine flood prevention and mitigation projects. For the first time, a source of revenue has been identified to support this type of program. Based on HB 981, proceeds from Virginia’s participation in the Regional Greenhouse Gas Initiative (RGGI) will be allocated to the Community Flood Preparedness Fund. RGGI is a market-based program in the New England and Mid-Atlantic states designed to reduce greenhouse gas emissions by capping carbon dioxide emissions from the power sector.
The legislation authorizes the Department of Environmental Quality (DEQ) to implement an auction to sell energy allowances. Companies with carbon dioxide emissions can purchase credits at the auction to meet their compliance goals. The auction proceeds will be divided as follows:
DEQ estimates that Virginia’s annual revenue in 2021 from the RGGI program will be over $104 million, with annual revenue potentially reaching over $110 million by 2030. Therefore, roughly $50 million per year would be allocated to the Community Flood Preparedness Fund. It should be noted that the revenue collected through RGGI is dependent upon the final auction price for carbon emissions allowances, which is likely to be impacted by the current economic slowdown. The fund will be administered by the Virginia Department of Conservation and Recreation (DCR). The legislation tasked DCR with establishing guidelines regarding the distribution and prioritization of loans and grants including support for studies of state wide or regional significance. No less than 25% of the money disbursed each year must be used for projects in low income geographic areas. Low income is defined as a locality or community with a median household income not greater than 80% of local median household income or designated as a qualified opportunity zone. Also, priority will be given to projects to implement community scale hazard mitigation and that use nature-based solutions to reduce flood risk.