Title of Regulation: 18VAC160-20. Board for Waterworks and Wastewater Works Operators and Onsite Sewage System Professionals Regulations (amending 18VAC160-20-102).

Statutory Authority: § 54.1-201 of the Code of Virginia.

Public Hearing Information:

June 11, 2015 - 10:30 a.m. - Department of Professional and Occupational Regulation, Perimeter Center, 9960 Mayland Drive, Suite 200, Board Room 2, Richmond, Virginia 23233

Public Comment Deadline: July 31, 2015.

Agency Contact: Trisha Henshaw, Executive Director, Board for Waterworks and Wastewater Works Operators and Onsite Sewage System Professionals, 9960 Mayland Drive, Suite 400, Richmond, VA 23233, telephone (804) 367-8595, FAX (866) 350-5354, or email waterwasteoper@dpor.virginia.gov.

Basis: Section 54.1-113 of the Code of Virginia (Callahan Act) requires regulatory boards to periodically review and adjust fees, subdivision 4 of § 54.1-201 of the Code of Virginia provides the authority to regulatory boards to levy and collect fees, subdivision 3 of § 54.1-304 of the Code of Virginia describes the authority of the Department of Professional and Occupational Regulation (DPOR) to collect and account for fees, and § 54.1-308 requires costs to be paid by regulatory boards. All of these provisions of the Code of Virginia are mandatory.

Purpose: The intent of the proposed amendments is to increase licensing fees for regulants of the board. The board must establish fees adequate to support the costs of board operations and a proportionate share of DPOR's operations. By the close of the next biennium, fees will not provide adequate revenue for those costs.

DPOR receives no general fund money but, instead, is funded almost entirely from revenue collected for license and certificate application fees, renewal fees, examination fees, and other licensing fees. DPOR is self-supporting and must collect adequate revenue to support its mandated and approved activities and operations. Fees must be established at amounts that will provide that revenue. Fee revenue collected on behalf of the various boards funds DPOR's authorized special revenue appropriation.

The board has no other source of revenue from which to fund its operations.

Substance: The proposed amendment to 18VAC160-20-102 increases the license renewal fee from $80 to $100, is based on projected revenues and expenses, and meets the requirements of the applicable statutes while being the least burdensome to the regulant population.

Issues: The primary issue for the proposed fee increase is DPOR's statutory requirement to comply with the Callahan Act.

Further issues to be addressed as regulations are developed include:

The Callahan Act required DPOR to review each board's expenditures at the close of each biennium and to adjust fees if necessary. The board is expected to incur a deficit of $36,121 by the end of the 2016-2018 biennium and a Callahan Act percentage of (-5.2%).

The regulatory review process generally takes a minimum of 18 months, so it is essential to consider fee increases now to avoid a greater deficit than currently projected. In order to address the deficit as currently projected, new fees will need to become effective by late in fiscal year 2016, otherwise the board's deficit will increase to the point that new fees would be inadequate to provide sufficient revenue for upcoming operating cycles, which could result in the board having to consider additional fee increases in the near future.

The advantage of these changes is that the regulatory program will be able to continue to function in order to protect the public. The disadvantage is that these changes will increase the cost of the license to the regulated population; however, the impact of the proposed amendment on the income of the regulated population should not be of a great significance compared to their level of income.

Department of Planning and Budget's Economic Impact Analysis:

Summary of the Proposed Amendments to Regulation. The Board for Waterworks and Wastewater Works Operators and Onsite Sewage Systems Professionals (Board) proposes to increase their license renewal fee.

Result of Analysis. There is insufficient information to ascertain whether benefits will outweigh costs for this regulatory program.

Estimated Economic Impact. Currently, individuals who are licensed by the Board pay an initial licensure fee of $100 and a license renewal fee of $80. These fees were last increased 12 years ago. The Board now proposes to increase the license renewal fee from $80 to $100. This fee increase will allow the Board to avoid a future funding deficit (the Board estimates that by 2016 expenditures will outstrip revenues).

Individuals who renew their licenses after this regulatory change is fully promulgated will incur an additional biennial cost of $20. There is insufficient information to ascertain whether the benefits that may accrue to the public on account of the Board being able to maintain these programs in their current state will outweigh the costs incurred by regulated entities.

Businesses and Entities Affected. Board staff reports that this proposed regulation will affect any individuals working as licensed waterworks operators, licensed wastewater works operators and licensed onsite sewage systems professionals who renew Board issued licenses. Board staff further reports that 2,215 renewals were processed last year.

Localities Particularly Affected. No localities will be particularly affected by these proposed regulatory changes.

Projected Impact on Employment. This regulatory action will likely have little impact on employment in the Commonwealth.

Effects on the Use and Value of Private Property. This regulatory action will likely have no effect on the use or value of private property in the Commonwealth.

Small Businesses: Costs and Other Effects. No affected small business is likely to incur costs on account of these proposed regulations unless they choose to pay renewal fees for their employees.

Small Businesses: Alternative Method that Minimizes Adverse Impact. No affected small business is likely to incur costs on account of these proposed regulations unless they choose to pay renewal fees for their employees.

Real Estate Development Costs. This regulatory action will likely have no effect on real estate development costs in the Commonwealth.

Legal Mandate. General: The Department of Planning and Budget (DPB) has analyzed the economic impact of this proposed regulation in accordance with § 2.2-4007.04 of the Code of Virginia and Executive Order Number 17 (2014). Section 2.2-4007.04 requires that such economic impact analyses determine the public benefits and costs of the proposed amendments. Further the report should include but not be limited to:

• the projected number of businesses or other entities to whom the proposed regulation would apply,

• the identity of any localities and types of businesses or other entities particularly affected,

• the projected number of persons and employment positions to be affected,

• the projected costs to affected businesses or entities to implement or comply with the regulation, and

• the impact on the use and value of private property.

Small Businesses: If the proposed regulation will have an adverse effect on small businesses, § 2.2-4007.04 requires that such economic impact analyses include:

• an identification and estimate of the number of small businesses subject to the proposed regulation,

• the projected reporting, recordkeeping, and other administrative costs required for small businesses to comply with the proposed regulation, including the type of professional skills necessary for preparing required reports and other documents,

• a statement of the probable effect of the proposed regulation on affected small businesses, and

• a description of any less intrusive or less costly alternative methods of achieving the purpose of the proposed regulation.

Additionally, pursuant to § 2.2-4007.1, if there is a finding that a proposed regulation may have an adverse impact on small business, the Joint Commission on Administrative Rules is notified at the time the proposed regulation is submitted to the Virginia Register of Regulations for publication. This analysis shall represent DPB's best estimate for the purposes of public review and comment on the proposed regulation.

Agency's Response to Economic Impact Analysis: The board concurs with the analysis completed by the Department of Planning and Budget.

Summary:

The proposed amendment increases the license renewal fee for regulants of the Board for Waterworks and Wastewater Works Operators and Onsite Sewage System Professionals.

18VAC160-20-102. Fees.

A. All fees shall be nonrefundable.

B. The date of receipt of the fee by the board or its agent is the date that shall be used to determine whether the fee is timely received.

C. The following fees shall apply:

1. The license application fee shall be $100.

2. The license renewal fee shall be $80 $100.

3. The license renewal late penalty fee shall be $25, in addition to the license renewal fee.

4. The fee for examination or reexamination is subject to charges to the department by an outside vendor based on a contract entered into in compliance with the Virginia Public Procurement Act (§ 2.2-4300 et seq. of the Code of Virginia). Fees may be adjusted and charged to the candidate in accordance with this contract.