Addressing Nitrate in California’s Drinking Water Technical Report 8: Regulatory and Funding Options for Nitrate Groundwater Contamination

In the long-term, many regulatory options could reduce nitrate contamination from nonpoint sources, but some are preferable to others in terms of abatement costs; monitoring and enforcement costs; information requirements; and the ability to raise revenue. Overall, regulation of fertilizer is easier to design, administer, and enforce than regulation of diffuse nitrate leachate discharges to groundwater.

Market-based regulatory approaches (of fertilizer application or of nitrate leachate) often can achieve a water quality target at a lower cost than prescriptive standards. However, no regulatory option is without its drawbacks: e.g., regulation of fertilizer may not achieve the drinking water quality objective at all drinking water systems.

Despite the existence of funding programs for safe drinking water, additional funding sources are needed. A fertilizer fee is a promising funding source that also creates incentives for dischargers to use fertilizer and water more efficiently. Farmers are currently exempt from a sales tax on fertilizer (if applied to land used for food or for feed for food animals) (CA State Board of Equalization 2004), so if this fee were set at a sales tax rate of 7.5% on the cost of nitrogen, it has the potential to raise an estimated $28 million annually, 12 nearly enough to provide alternative water supplies to the highly susceptible populations in the study area.