(writing what I wrote in an E-mail that had the same questions ... some repetition with what Jason wrote)
Bruce,
CYA is usually only reduced through water dilution such as splash-out, carry-out, rain overflow, backwashing and intentional partial or full drain/refill.
CYA does slowly get oxidized by chlorine, but that process results mostly in nitrogen gas, carbon dioxide gas, and water. Nitrates are a minor side reaction to most chlorine reactions oxidizing nitrogenous components including ammonia and urea from sweat and urine. Yes, nitrates do form, but not that much, though they do accumulate.
The effectiveness of chlorine in the presence of CYA gets reduced by ANY CYA in the water, not just 60 ppm. It's a chemical equilibrium between chlorine being bound to CYA vs. chlorine being unbound. Most of the chlorine is bound to CYA. In a pool with pH 7.5, FC 3 ppm and CYA 30 ppm, 97.2% of the chlorine is bound to CYA while 1.4% is the active killing form of chlorine hypochlorous acid and 1.4% is the less active form called hypochlorite ion. A rough approximation of the equivalent amount of active chlorine is the FC/CYA ratio where with 3 ppm FC and 30 ppm CYA this is roughly equivalent to a pool with 3/30 = 0.1 ppm FC and no CYA. So you can see that as the CYA level increases, the FC level must proportionately be increased to maintain the same level of sanitation/disinfection and rate of oxidation. This has absolutely nothing to do with nitrates.
A small amount of the chloramine in water supplies will end up as nitrates when oxidized by chlorine in the pool, just as with any nitrogenous source that chlorine then oxidizes. For example, for chlorine oxidation of ammonia at typical levels, 89% of the nitrogen ends up as nitrogen gas while around 10% results in nitrate and less than 1% results in nitrogen trichloride. So yes, nitrates do form and they do accumulate, but they really are not an issue.
Yes, linear quat and PolyQuat algaecides will also break down and they too will form mostly nitrogen gas, but also some nitrates.
Why all this concern with nitrates? They are not a problem. Nitrates and phosphates are food for algae, but chlorine alone can kill algae faster than it can grow even in the presence of lots and lots of phosphates and nitrates. My pool has had 2000-3000 ppb phosphates and though is very reactive if the FC/CYA ratio gets too low, so long at the proper level is maintained algae does not grow.
[EDIT] Remember that most chlorine usage is from breakdown from the UV in sunlight. The amount used to oxidize bather waste and other organics in the pool is probably less than 0.5 ppm FC per day in most cases. This would roughly mean the equivalent of around 0.05 ppm ammonia and would result in 0.005 ppm nitrates as ppm-N or around 0.022 ppm nitrate as ppm nitrate. So over time, clearly nitrates can build up, though this is rather slow -- 4.0 ppm nitrate over 6 months in a residential pool with no water dilution (and this is conservative). Again, nitrates are not a problem just as phosphates are not a problem. Chlorine alone can kill algae faster than it can reproduce even in the presence of all the phosphates and nitrates it could ever use -- algae growth is then limited by sunlight and temperature. [END-EDIT]
Richard