Title of Regulation: 2VAC5-320. Regulations for the Enforcement of the Endangered Plant and Insect Species Act (amending 2VAC5-320-10).

Statutory Authority: §§ 3.2-1002 and 3.2-1005 of the Code of Virginia.

Public Hearing Information:

August 7, 2012 - 2 p.m. - Alson H. Smith, Jr. Agricultural Research & Extension Center, 595 Laurel Grove Road, Winchester, VA

Public Comment Deadline: August 31, 2012.

Agency Contact: Erin Williams, Policy and Planning Coordinator, Department of Agriculture and Consumer Services, P.O. Box 1163, Richmond, VA 23218, telephone (804) 786-1308, FAX (804) 371-7479, TTY (800) 828-1120, or email erin.williams@vdacs.virginia.gov.

Basis: Section 3.2-1002 of the Code of Virginia authorizes the Board of Agriculture and Consumer Services to adopt regulations listing threatened or endangered plant and insect species, their taking, quotas, seasons, buying, selling, possessing, monitoring of movement, investigating, protecting, or any other related action. As a result of research conducted by the Commissioner of Agriculture and Consumer Services, recommendations received regarding candidate species from the Director of the Department of Conservation and Recreation, and from other sound, scientific data, the board may approve proposed plant or insect species to be added to or deleted from the list of threatened and endangered species, or to be transferred from one list to the other.

Section 3.2-1005 of the Code of Virginia authorizes the board to adopt regulations to permit and control the commercial harvest of certain threatened species that would prevent the species from becoming endangered or extinct.

Purpose: This regulation seeks to protect those plants and insects found in Virginia that are of aesthetic, ecological, educational, scientific, economic, or other value and whose global populations are imperiled. The regulation also provides for the development and implementation of biologically sound and economically feasible protection, recovery, and conservation measures that seek to ensure the survival of listed species while at the same time allowing citizens and entities to conduct their business or pursue construction projects in the most economical and least disruptive manner.

Benefits of this regulation include (i) the establishment of science-based, reasonable restrictions on the take and trafficking of listed species, (ii) promotion of greater voluntary conservation efforts through recognition of a species imperiled status, (iii) providing impetus for the establishment of programs for the management and conservation of listed species, and (iv) providing for the lawful harvest and export of listed species through approved management plans. Restrictions on the take and trafficking of listed species protect the landowner on whose property a listed species occurs from the unauthorized collection or taking of a species from his property, thereby protecting, in part, the landowner’s safety and welfare.

Substance: The Virginia Department of Agriculture and Consumer Services recommends the regulation be amended by (i) removing one plant species from the regulation and (ii) adding three plant species and one insect species to the threatened or endangered lists.

Issues: The primary advantage of the proposed regulatory action is the protection of threatened or endangered plant and insect species that are of aesthetic, ecological, educational, scientific, economic, or other value and whose global populations are rare and imperiled. Once plants or insects are listed as threatened or endangered, the regulation enables the Virginia Department of Agriculture and Consumer Services to collaborate with landowners, at the landowner's discretion, to develop management plans that would support construction projects and other economic development activity on the landowner's property while minimizing the impact on these valuable, imperiled natural resources. Moreover, when good cause is shown and when necessary to alleviate damage to property, impact on progressive development, or to protect human health, the Virginia Endangered Plant and Insect Species Act includes a provision allowing for the removal or destruction of a state listed species.

Department of Planning and Budget's Economic Impact Analysis:

Summary of the Proposed Regulation. The Virginia Department of Agriculture and Consumer Services (VDACS) proposes to amend its Rules and Regulations for the Enforcement of the Endangered Plant and Insect Species Act to: 1) remove one plant species from listing in these regulations, 2) add one plant species (Millboro Leatherflower) to the threatened list and 3) add two plant species (Valley Dolls Daisy and Virginia Quillwort) and one insect species (Thomas Cave Beetle) to the endangered list.

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

Estimated Economic Impact. Pursuant to § 3.2-1002 of the Code of Virginia, the Virginia Department of Agriculture and Consumer Services (VDACS) maintains lists of endangered and threatened plant and insect species in Virginia, and under certain circumstances requires developers of public and private lands to take specified actions to avoid the destruction of the listed endangered and threatened plant and insect species. Any major construction projects conducted on public lands or on private lands for the primary benefit of third party developers (cell phone companies building towers on private land, for example) are subject to review by VDACS to determine whether the proposed construction would take place on land that is within an area that is known to have species on the endangered or threatened lists in the vicinity. VDACS also conducts reviews on private lands where such reviews are required or recommended as part of a larger review of private land use conducted by the Department of Environmental Quality (DEQ) at the behest of the State Corporation Commission (SCC) or conducted by the federal Fish and Wildlife Service (FWS) primarily at the behest of the Army Corp of Engineers.

According to the agency, less than one percent of the over 1,000 proposed construction projects presented to VDACS annually are deemed to be on land that is within an area that is known to have species on the endangered or threatened lists in the vicinity. For these projects, the developer must hire a qualified individual¹ to conduct a survey for the endangered and threatened species on the site of the proposed construction. These surveys typically cost several hundred dollars.² Less than one percent of these surveys detect protected plants or insects that require the developer to incorporate mitigating practices into their project.³

According to VDACS, the following are examples of circumstances where mitigating practices are necessary and implemented. A locality or the Virginia Department of Transportation (VDOT) is in the early planning stages concerning the construction of a new road. Several routes are considered. It is determined by the process described above that one of the routes would harm an endangered or threatened species. The locality or VDOT chooses a different route for the road. Or if no viable route avoids the endangered or threatened species, then an accommodation such as an overpass may be built to minimize the harm. Another example would be that of a private developer where it is determined by the process described above that development that primarily benefits a third party developer would harm an endangered or threatened species. In such a circumstance VDACS would likely strike an agreement with the developer so that part of the land would be preserved, while the rest could be developed.⁴ For reviews that are conducted on private lands as part of a larger DEQ or FWS review, private land owners would likely be required by the SCC to implement VDACS recommendations. For instance, a DEQ representative reports that when land use reviews are conducted on private land at the behest of the SCC, it would likely be mandated that the private land owner follow VDACS recommendations for protecting endangered plants and insects in order to get SCC approval for the larger project involved.

VDACS proposal to remove one plant species from, and add 4 new species to, the lists of endangered and threatened species may or may not increase the frequency that developers must hire surveyors to determine the presence of endangered or threatened species, and the frequency endangered or threatened species are found on the site proposed for development. There is a large degree of uncertainty on this because, according to the agency, the known populations of the plants and insect that are being added to the lists are located in only five rural counties in the Commonwealth and are either located in national forests or on land that is not easily developed or both. Nevertheless, for any additional developers who must hire surveyors due to the species added to the lists, the proposed list additions will cost several hundred dollars and potentially significantly more if the survey shows endangered or threatened species on the site to be developed. For example, the private developer would lose the potential profits garnered from developing the land that he must leave undeveloped due to his agreement with VDACS.

In addition to the direct costs that some developers may incur, this regulatory action has the potential to adversely impact other individuals. First, adding species to the endangered and threatened lists makes it a class one misdemeanor for most individuals⁵ to possess those species. Although VDACS reports that they know of no cases where an individual has been charged with this crime, individuals can be subject to a fine of up to $2,000 and/or a jail sentence of up to 12 months. VDACS reports that individuals who have a good reason to want to possess species covered by these regulations, educators or botanists for instance, can get a permit to do so. Second, VDACS reports that listing species on a state level can serve as one factor that may lead to them being listed on the federal endangered or threatened species lists. A federal listing of a plant species does not automatically trigger the level of intervention in the use of private lands, and the perverse results⁶, that a listing of an animal species does. Some individuals may, however, incur costs if this regulatory action leads to a federal listing. Specifically, any development projects on federal land, or on private lands that are funded partly or completely with federal monies, are subject to the provisions of the federal endangered species act which can make development much more costly.

The benefits of adding species to the lists involve the value placed on the preservation of endangered or threatened species, and the species contributions to their ecosystems. As designed, the program does seem to reduce the likelihood that endangered or threatened species will be driven to extinction or at least may slow that trend. Whether the costs incurred by public and private developers, and potentially passed on to taxpayers and consumers through potentially higher taxes, reduced services, or higher housing or commercial rental costs, exceed the benefits associated with reducing the negative pressures on endangered or threatened species populations depends upon how much value is placed on the preservation of endangered or threatened species. Since little or no data exists concerning the magnitude of the expected costs or benefits, it is not possible to draw any reliable conclusion about the net economic impact of this change.

Businesses and Entities Affected. Since these regulations are only directly enforceable when public lands are developed or when private lands are developed by someone other than the land owner, the developers of these projects, as well as entities that contract for such development, will be directly affected by the proposed changes. VDACS reports that they review approximately 1,000 requests for information on anticipated impacts on proposed projects per year. To the extent that any such review adds costs to public projects, taxpayers in the Commonwealth will also be affected. Since listing species at a state level is one factor that is considered when the FWS makes decisions about which species are candidates for federal listing, development of federal lands or development projects that are partly or completely paid for with federal monies may be affected at some point in the future.

Localities Particularly Affected. The proposed changes to the endangered and threatened species lists will particularly affect five counties in the Commonwealth: Amelia, Halifax, Prince Edward, Augusta, and Scott counties now have, or have had, known populations of the candidate plant or insect species within their borders.

Projected Impact on Employment. Individuals qualified to survey for endangered and threatened plant and insect species may receive a small additional amount of work due to the proposed changes. Even with the net additions to the lists, occurrences where mitigating actions are required appear to still be very infrequent. Thus, beyond the surveyors, employment should not be significantly affected by the proposed changes.

Effects on the Use and Value of Private Property. Individuals qualified to survey for endangered and threatened plant and insect species will likely earn some additional revenue. Developers that will need to employ these surveyors will see their costs rise commensurately. In the rare occasions where developers must take mitigating actions, the commercial net value of their property will be negatively affected.

Small Businesses: Costs and Other Effects. Although VDACS does not collect information on affected entities small business status, it seems likely that at least some of the affected developers would qualify. Affected developers will likely incur additional costs on account of this regulatory action.

Small Businesses: Alternative Method that Minimizes Adverse Impact. There is likely no alternate method for meeting VDACS legislative mandate that would further minimize costs.

Real Estate Development Costs. Developers that will need to employ surveyors to assess the effects of their planned development will see their costs increase. In the rare occasions where developers must take mitigating actions, the commercial net value of their property will be negatively affected.

Legal Mandate. 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 Administrative Process Act and Executive Order Number 21 (02). Section 2.2-4007.04 requires that such economic impact analyses include, but need not be limited to, the projected number of businesses or other entities to whom the 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. Further, if the proposed regulation has adverse effect on small businesses, § 2.2-4007.04 requires that such economic impact analyses include (i) an identification and estimate of the number of small businesses subject to the regulation; (ii) the projected reporting, recordkeeping, and other administrative costs required for small businesses to comply with the regulation, including the type of professional skills necessary for preparing required reports and other documents; (iii) a statement of the probable effect of the regulation on affected small businesses; and (iv) a description of any less intrusive or less costly alternative methods of achieving the purpose of the regulation. The analysis presented above represents DPBs best estimate of these economic impacts.

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¹The United States Fish and Wildlife Service (USFWS) and the Virginia Department of Conservation and Recreation, Division of Natural Heritage maintain a list of qualified individuals.

²Source: VDACS

³Ibid

⁴Ibid

⁵Private land owners are allowed to possess endangered species that originate on their land.

⁶Recent empirical studies, "Preemptive Habitat Destruction Under the Endangered Species Act" by Dean Lueck and Jeffrey Michael and "Is the Endangered Species Act Endangering Species" by John List, Michael Margolis and Daniel Osgood, indicate that publication of the intent to list a species in a given area accelerates habitat destruction in that area.

Agency's Response to Economic Impact Analysis: The Department of Agriculture and Consumer Services concurs with the analysis of the Department of Planning and Budget.

Summary:

The proposed regulatory action amends the regulation to (i) remove the species that are no longer considered globally rare and (ii) add those threatened or endangered plant and insect species that are considered to be globally rare.

2VAC5-320-10. Listing of endangered and threatened plant and insect species.

A. The Board of Agriculture and Consumer Services hereby adopts the following regulation in order to protect designated plant and insect species that exist in this Commonwealth. All designated species are subject to all sections of the Virginia Endangered Plant and Insect Species Act (§ 3.2-1000 et seq. of the Code of Virginia).

B. The following plant and insect species are hereby declared an endangered species:

1. Boltonia montana, valley doll's-daisy.

1. 2. Cardamine micranthera, small-anthered bittercress.

2. 3. Carex juniperorum, juniper sedge.

3. 4. Corallorhiza bentley, Bentley's coralroot.

4. 5. Fimbristylis perpusilla, Harper's fimbristylis.

5. 6. Helenium virginicum, Virginia sneezeweed.

6. 7. Helonias bullata, swamp-pink.

7. 8. Ilex collina, long-stalked holly.

8. 9. Iliamna corei, Peter's mountain Mountain mallow.

10. Isoetes virginica, Virginia quillwort.

9. 11. Isotria medeoloides, small whorled pogonia.

10. 12. Neonympha mitchellii, Mitchell's satyr butterfly.

11. Nestronia umbellula, nestronia.

13. Pseudanophthalmus holsingeri, Holsinger's cave beetle.

14. Pseudanophthalmus thomasi, Thomas' cave beetle.

12. 15. Ptilimnium nodosum, harperella.

13. 16. Puto kosztarabi, Buffalo Mountain mealybug.

14. Pseudanophthalmus holsingeri, Holsinger's cave beetle.

15. 17. Scirpus ancistrochaetus, Northeastern bulrush.

16. 18. Sigara depressa, Virginia Piedmont water boatman.

17. 19. Spiraea virginiana, Virginia spiraea.

18. 20. Trifolium calcaricum, running glade clover.

C. The following plant and insect species are hereby declared a threatened species:

1. Aeschynomene virginica, sensitive-joint vetch.

2. Amaranthus pumilus, seabeach amaranth.

3. Arabis serotina, shale barren rock cress rockcress.

4. Cicindela dorsalis dorsalis, Northeastern beach tiger beetle.

5. Clematis viticaulis, Millboro leatherflower.

5. 6. Echinacea laevigata, smooth coneflower.

6. 7. Juncus caesariensis, New Jersey rush.

7. 8. Lycopodiella margueritiae, Northern prostrate clubmoss.

8. 9. Nuphar sagittifolia, narrow-leaved spatterdock.

9. 10. Platanthera leucophaea, Eastern prairie fringed orchid.

10. 11. Pyrgus wyandot, Appalachian grizzled skipper.

11. 12. Rhus michauxii, Michaux's sumac.

12. 13. Scirpus flaccidifolius, reclining bulrush.

Title of Regulation: 2VAC5-460. Rules and Regulations for the Enforcement of the Virginia Petroleum Products Franchise Act (repealing 2VAC5-460-10, 2VAC5-460-20, 2VAC5-460-30).

Statutory Authority: §§ 59.1-21.11 and 59.1-21.16:2 of the Code of Virginia.

Effective Date: August 1, 2012.

Agency Contact: Erin Williams, Policy and Planning Coordinator, Department of Agriculture and Consumer Services, P.O. Box 1163, Richmond, VA 23218, telephone (804) 786-1308, FAX (804) 371-7479, TTY (800) 828-1120, or email erin.williams@vdacs.virginia.gov.

Summary:

Chapter 351 of the 2012 Acts of Assembly, which amended the Virginia Petroleum Products Franchise Act, eliminated the requirement for this regulation. Therefore, this regulation is being repealed.

Title of Regulation: 8VAC103-10. Museum and Grounds Use and Access (amending 8VAC103-10-10, 8VAC103-10-20, 8VAC103-10-30).

Statutory Authority: § 23-253.4 of the Code of Virginia.

Effective Date: June 15, 2012.

Agency Contact: Jessica Ferey, Administrative Assistant to Director, Virginia Museum of Fine Arts, 200 North Boulevard, Richmond, VA 23220, telephone (804) 340-1500, FAX (804) 340-1502, or email jessica.ferey@vmfa.museum.

Summary:

The amendments update the regulations and establish specific rules regarding dogs, bicycles, and skateboards on museum grounds.

8VAC103-10-10. Definitions.

The following words and terms when used in this chapter shall have the following meanings unless the context clearly indicates otherwise:

"Director" means the Director of the Virginia Museum of Fine Arts or the director's designee.

"Museum" means the Virginia Museum of Fine Arts.

"Museum building" means, but is not limited to, the primary building facing the Boulevard and Grove Avenue in Richmond, Virginia, and any additions housing the Virginia Museum of Fine Arts, its collections, office spaces and assembly spaces, including but not limited to the Pauley Center, which faces Sheppard Street, Richmond, Virginia, and the office building that faces the Boulevard at the eastern corner of Grove Avenue, Richmond, Virginia.

"Museum grounds" means property including but not limited to streets, driveways, sidewalks, gardens, parking lots areas, and other open spaces deemed to be owned, rented, controlled, or otherwise controlled used by the Virginia Museum of Fine Arts, as shown in the diagram below:

Title of Regulation: 9VAC5-80. Permits for Stationary Sources (amending 9VAC5-80-310 through 9VAC5-80-350, 9VAC5-80-2250 through 9VAC5-80-2290; adding 9VAC5-80-2310 through 9VAC5-80-2350; repealing 9VAC5-80-2300).

Statutory Authority: § 10.1-1308 of the Code of Virginia; federal Clean Air Act (§§ 110, 112, 165, 173, 182, and Title V); 40 CFR Parts 51, 61, 63, 70, and 72.

Effective Date: July 1, 2012.

Agency Contact: Gary E. Graham, Department of Environmental Quality, 629 East Main Street, P.O. Box 1105, Richmond, VA 23218, telephone (804) 698-4103, FAX (804) 698-4510, or email gary.graham@deq.virginia.gov.

Summary:

This regulatory action amends the fee requirements for funding the Title V permit program. Specifically:

1. Article 2 (9VAC5-80-310 et seq.) of 9VAC5-80 (Permits for Stationary Sources) requires that permit program fees be paid by sources subject to Title V of the federal Clean Air Act on the basis of air pollutant emissions. The name of the annual permit program fee in Article 2 is changed to clarify that these fees are emissions fees and not application fees or maintenance fees. The base amount for calculating annual permit program emission fees is increased from $25 per ton of emissions to $31.22 per ton, resulting in an initial emission fee rate increase of less than 30% over current rates. Various other changes made to Article 2 (i) remove outdated provisions; (ii) correct the minimum threshold for payment; (iii) correct references and format; (iv) allow other modes of payment; and (v) clarify certain actions under the regulation.

2. Article 10 (9VAC5-80-2250 et seq.) of 9VAC5-80 (Permits for Stationary Sources) requires that application fees be assessed for certain types of air permit applications. Permit application fees are expanded to include fees for all types of permits that make a stationary source subject to permit requirements under Title V and all types of permits that would remove a stationary source that is otherwise subject to Title V permit requirements from applicability under Title V. A method of making annual adjustments to the application fees for changes in the Consumer Price Index (CPI) is added and the annual permit program emission fee credit for the cost of the permit application fees is removed. The types of permits to which permit application fees apply and the process for paying the fees has been clarified.

3. Annual permit maintenance fees are established in a new Article 11 (9VAC5-80-2310 et seq.) of 9VAC5-80 (Permits for Stationary Sources) for (i) all stationary sources operating under either permit requirements or a permit application shield issued pursuant to Title V or (ii) all sources operating under federally enforceable permits issued to keep a stationary source from applicability under permit requirements of Title V. The method of determining and adjusting the permit maintenance fee amounts annually for changes in the CPI is specified. The process for assessing, billing, and paying the fees is also specified.

Article 2
Permit Program Emissions Fees for Stationary Sources

9VAC5-80-310. Applicability.

A. Except as provided in subsection C of this section, the provisions of this article apply to the following stationary sources:

1. Any major source.

2. Any source, including an area source, subject to a standard, limitation, or other requirement under § 111 of the federal Clean Air Act.

3. Any source, including an area source, subject to a standard, limitation, or other requirement under § 112 of the federal Clean Air Act.

4. Any affected source.

5. Any other source subject to the permit requirements of Article 1 (9VAC5-80-50 et seq.) or Article 3 (9VAC5-80-360 et seq.) of this chapter part.

6. Any source that would be subject to the permit requirements of Article 1 (9VAC5-80-50 et seq.) of this chapter part in the absence of a permit issued under 9VAC5-80-40 Article 5 (9VAC5-80-800 et seq.) of this part.

B. The provisions of this article apply throughout the Commonwealth of Virginia.

C. The provisions of this article shall not apply to the following:

1. All sources and source categories that would be subject to this article solely because they are subject to the provisions of 40 CFR Part 60, Subpart AAA (standards of performance for new residential wood heaters), as prescribed in Article 5 (9VAC5-50-400 et seq.) of 9VAC5 Chapter 50 9VAC5-50 (New and Modified Stationary Sources).

2. All sources and source categories that would be subject to this article solely because they are subject to the provisions of 40 CFR 61.145 (national emission standard for hazardous air pollutants for asbestos, standard for demolition and renovation), Subpart M, as prescribed in Article 1 (9VAC5-60-60 et seq.) of 9VAC5 Chapter 60 9VAC5-60 (Hazardous Air Pollutant Sources).

3. Any source issued a permit under the new source review program that began initial operation during the calendar year preceding the year in which the annual permit program emissions fee is assessed.

4. That portion of emissions in excess of 4,000 tons per year of any regulated air pollutant emitted by any source otherwise subject to an annual permit program emissions fee.

5. During the years 1995 through 1999 inclusive, any affected source under § 404 of the federal Clean Air Act (phase I sulfur dioxide requirements).

6. 5. Any emissions unit within a stationary source subject to this article that is identified as being an insignificant activity in Article 4 (9VAC5-80-710 et seq.) of this chapter part.

7. 6. All sources and source categories that would be subject to this article solely because they are subject to regulations or requirements under § 112(r) of the federal Clean Air Act.

8. 7. Any source deferred by the provisions of subsection D of this section provided the source is not part of a major source.

D. Sources shall be deferred from initial applicability as follows.

1. Area sources subject to this article under subdivision A 2 or A 3 of this section shall be deferred from the obligation to pay fees under this article except as follows.

a. In cases for which EPA has promulgated a standard under § 111 or § 112 of the federal Clean Air Act and has declared that the facility or source category covered by the standard is subject to the Title V program, the facility or source category shall be subject to this article.

b. In cases for which EPA has promulgated a standard under § 111 or § 112 of the federal Clean Air Act after July 21, 1992, and has failed to declare whether the facility or source category covered by the standard is subject to the Title V program, the facility or source category shall be subject to this article.

2. The following sources shall not be deferred from the obligation to pay fees under this article:

a. Major sources.

b. Solid waste incineration units subject to the provisions of 9VAC5 Chapter 40 (9VAC5-40-10 et seq.) 9VAC5-40 (Existing Stationary Sources) and 9VAC5 Chapter 50 (9VAC5-50-10 et seq.) 9VAC5-50 (New and Modified Stationary Sources) as adopted pursuant to § 129(e) of the federal Clean Air Act.

3. Any source deferred under subdivision 1 of this subsection may apply for a permit under Article 1 (9VAC5-80-50 et seq.) or Article 3 (9VAC5-80-360 et seq.) of 9VAC5 Chapter 80 this part. If the source applies for a permit, the source shall be subject to this article and shall pay fees accordingly.

E. Particulate matter emissions shall be used to determine the applicability of this article to major sources or to determine actual emissions only if particulate matter (PM₁₀) emissions cannot be quantified in a manner acceptable to the board.

9VAC5-80-320. Definitions.

A. For the purpose of applying this article in the context of the Regulations for the Control and Abatement of Air Pollution and subsequent amendments or any orders issued by the board related uses, the words or phrases terms shall have the meanings given them in subsection C of this section.

B. All As used in this article, all words and phrases terms not defined in subsection C of this section shall have the meanings given them in 9VAC5 Chapter 10 (9VAC5-10-10 et seq.) 9VAC5-80-5 or 9VAC5-10 (General Definitions), unless otherwise required by context.

C. Terms defined.

"Actual emissions" means the actual rate of emissions in tons per year of any regulated air pollutant emitted from a source subject to this article over the preceding calendar year. Actual emissions may be calculated according to any method acceptable to the department provided such calculation takes into account the source's actual operating hours, production rates, in-place control equipment, and types of materials processed, stored, or combusted during the preceding calendar year. Any regulated pollutant which could be classed in more than one category shall be classed in only one category.

"Affected source" means a source that includes one or more affected units.

"Affected unit" means a unit that is subject to any federal acid rain emissions reduction requirement or acid rain emissions limitation under 40 CFR Parts 72, 73, 75, 77 or 78.

"Area source" means any stationary source that is not a major source. For purposes of this section, the phrase "area source" shall not include motor vehicles or nonroad vehicles.

"Hazardous air pollutant" means any air pollutant listed in § 112(b) of the federal Clean Air Act, as amended by 40 CFR 63.60.

"Major source" means:

a. For hazardous air pollutants other than radionuclides, any stationary source that emits or has the potential to emit, in the aggregate, 10 tons per year or more of any hazardous air pollutant or 25 tons per year or more of any combination of hazardous air pollutants. Notwithstanding the preceding sentence, emissions from any oil or gas exploration or production well (with its associated equipment) and emissions from any pipeline compressor or pump station shall not be aggregated with emissions from other similar units, whether or not such units are in a contiguous area or under common control, to determine whether such units or stations are major sources.

b. For air pollutants other than hazardous air pollutants, any stationary source that directly emits or has the potential to emit 100 tons per year or more of any air pollutant (including any major source of fugitive emissions of any such pollutant). The fugitive emissions of a stationary source shall not be considered in determining whether it is a major stationary source, unless the source belongs to one of the following categories of stationary source:

(1) Coal cleaning plants (with thermal dryers);

(2) Kraft pulp mills;

(3) Portland cement plants;

(4) Primary zinc smelters;

(5) Iron and steel mills;

(6) Primary aluminum ore reduction plants;

(7) Primary copper smelters;

(8) Municipal incinerators capable of charging more than 250 tons of refuse per day;

(9) Hydrofluoric, sulfuric, or nitric acid plants;

(10) Petroleum refineries;

(11) Lime plants;

(12) Phosphate rock processing plants;

(13) Coke oven batteries;

(14) Sulfur recovery plants;

(15) Carbon black plants (furnace process);

(16) Primary lead smelters;

(17) Fuel conversion plant;

(18) Sintering plants;

(19) Secondary metal production plants;

(20) Chemical process plants;

(21) Fossil-fuel boilers (or combination thereof) totaling more than 250 million British thermal units per hour heat input;

(22) Petroleum storage and transfer units with a total storage capacity exceeding 300,000 barrels;

(23) Taconite ore processing plants;

(24) Glass fiber processing plants;

(25) Charcoal production plants;

(26) Fossil-fuel-fired steam electric plants of more than 250 million British thermal units per hour heat input; or

(27) Any other stationary source category regulated under § 111 or § 112 of the federal Clean Air Act for which the administrator has made an affirmative decision under § 302(j) of the federal Clean Air Act.

c. For ozone nonattainment areas, any stationary source with the potential to emit 100 tons per year or more of volatile organic compounds or nitrogen oxides in areas classified as "marginal" or "moderate," 50 tons per year or more in areas classified as "serious," 25 tons per year or more in areas classified as "severe," and 10 tons per year or more in areas classified as "extreme"; except that the references in this definition to 100, 50, 25, and 10 tons per year of nitrogen oxides shall not apply with respect to any source for which the administrator has made a finding that requirements under § 182(f) of the federal Clean Air Act (NO_x requirements for ozone nonattainment areas) do not apply.

d. For attainment areas in ozone transport regions, any stationary source with the potential to emit 50 tons per year or more of volatile organic compounds.

"Permit program costs" means all reasonable (direct and indirect) costs required to develop, administer, and enforce the permit program; and to develop and administer the Small Business Technical and Environmental Compliance Assistance Program established pursuant to the provisions of § 10.1-1323 of the Code of Virginia.

"Potential to emit" means the maximum capacity of a stationary source to emit any air pollutant under its physical and operational design. Any physical or operational limitation on the capacity of a source to emit an air pollutant, including air pollution control equipment and restrictions on hours of operation or on the type or amount of material combusted, stored, or processed, shall be treated as part of its design if the limitation is state and federally enforceable.

"Regulated air pollutant" means any of the following:

a. Nitrogen oxides or any volatile organic compound;.

b. Any pollutant for which an ambient air quality standard has been promulgated except carbon monoxide;.

c. Any pollutant subject to any standard promulgated under § 111 of the federal Clean Air Act;.

d. Any pollutant subject to a standard promulgated under § 112 (hazardous air pollutants) or other requirements established under § 112 of the federal Clean Air Act, particularly §§ 112(b), 112(d), 112(g)(2), 112(j), and 112(r); except that any pollutant that is a regulated pollutant solely because it is subject to a standard or regulation under § 112(r) of the federal Clean Air Act shall be exempt from this article.

"Research and development facility" means all the following as applied to any stationary source:

a. The primary purpose of the source is the conduct of either (i) research and development into new products or processes or into new uses for existing products or processes or (ii) basic research to provide for education or the general advancement of technology or knowledge;

b. The source is operated under the close supervision of technically trained personnel; and

c. The source is not engaged in the manufacture of products in any manner inconsistent with clause a (i) or (ii) of this definition.

An analytical laboratory that primarily supports a research and development facility is considered to be part of that facility.

"Stationary source" means any building, structure, facility or installation which emits or may emit any regulated air pollutant. A stationary source shall include all of the pollutant-emitting activities which belong to the same industrial grouping, are located on one or more contiguous or adjacent properties, and are under the control of the same persons (or persons under common control). Pollutant-emitting activities shall be considered as part of the same industrial grouping if they belong to the same "major group" (i.e., if they have the same two-digit code) as described in the Standard Industrial Classification Manual (see 9VAC5-20-21). Any research and development facility shall be considered a separate stationary source from the manufacturing or other facility with which it is co-located.

9VAC5-80-330. General.

A. The owner of any source subject to this article shall pay an annual permit program emissions fee.

B. Permit program emissions fees collected pursuant to this article for sources subject to Article 1 (9VAC5-80-50 et seq.) or Article 3 (9VAC5-80-360 et seq.) of this chapter part shall not be used for any purpose other than as provided in Title V of the federal Clean Air Act and associated regulations and policies.

C. The owner shall be exempt from paying the annual permit program emissions fee for any year during which the total actual emissions are less than 10 tons or less.

9VAC5-80-340. Annual permit program emissions fee calculation.

A. The annual permit program emissions fee shall not exceed the base year amount as specified in § 10.1-1322 B of the Virginia Air Pollution Control Law and shall be of $31.22 per ton of emissions, as provided in subsection B of Item 365 of the 2012 Appropriation Act adjusted annually by the Consumer Price Index as provided in § 10.1-1322 B of the Virginia Air Pollution Control Law Title V of the federal Clean Air Act and associated regulations and policies.

1. The annual permit program emissions fee shall be increased (consistent with the need to cover reasonable costs) each year by the percentage, if any, by which the Consumer Price Index for the most recent calendar year ending before the beginning of such year exceeds the Consumer Price Index for the calendar year 1989. The Consumer Price Index for any calendar year is the average of the Consumer Price Index for all urban all-urban consumers published by the U.S. Department of Labor, as of the close of the 12-month period ending on August 31 of each calendar year.

2. The revision of the Consumer Price Index which is most consistent with the Consumer Price Index for the calendar year 1989 shall be used.

B. The annual permit program emissions fee described in subsection A of this section and the amount billed to the owner as provided in subsection A of 9VAC5-80-350 for a given year shall be calculated in accordance with the following formulae:

B =	(A)(F)
F =	X(1 + ∆CPI)
∆CPI =	CPI - 122.15
	122.15

where:

B = the amount billed to the owner during the year after the year in which the actual emissions occurred, expressed in dollars

A = actual emissions covered by permit fees, expressed in tons

F = the maximum adjusted fee per ton for the calendar year in which the actual emissions occurred, expressed in dollars per ton

X = 25 31.22, expressed in dollars per ton

∆CPI = the difference between the CPI and 122.15 (the average of the Consumer Price Index for all-urban consumers for the 12-month period ending on August 31, 1989).

CPI = the average of the Consumer Price Index for all-urban consumers for the 12-month period ending on August 31 of the year in which the emissions actually occurred, expressed as a percentage

C. The actual emissions covered by the permit program emissions fees for the preceding year shall be calculated by the owner and submitted to the department by April 15 of each year. The calculations and final amount of emissions are subject to verification and final determination by the department.

D. If the assessment of the annual permit program emissions fee calculated in accordance with subsections A, B, and C of this section results in a total amount of fee revenue in excess of the amount necessary to fund the permit program costs, a lesser annual permit program emissions fee shall may instead be calculated and assessed according to the formula specified in subsection E of this section. Any adjustments made to the annual permit program emissions fee shall be within the constraints of 40 CFR 70.9 and § 10.1-1322 of the Virginia Air Pollution Control Law.

E. The lesser annual permit program emissions fee shall be calculated according to the following formula: the lesser annual permit program emissions fee is equal to the estimated permit program costs divided by the estimated actual emissions = lesser annual permit program fee. The estimated permit program costs and estimated actual emissions shall be determined from the data specified in subdivisions 1 and 2 of this subsection, incorporating any anticipated adjustments to the data.

1. The current permit program costs shall be determined from the most recent available annual expenditure record of the amount spent by the department on permit program costs.

2. The current actual emissions shall be determined from the most recent available annual emissions inventory of the actual emissions for each regulated pollutant subject to fees from all sources subject to the annual permit program emissions fee.

9VAC5-80-350. Annual permit program emissions fee payment.

A. Upon determining that the owner owes an annual permit program emissions fee, the department shall mail a bill for the fee to that owner no later than August 1, or in the case of the initial bill no later than 60 days after federal program approval, unless the governor determines that fees are needed earlier for Virginia to maintain primacy over the program, as provided in § 10.1322 B of the State Virginia Air Pollution Control Law.

B. Within 30 days following the date of the postmark on the bill, the owner shall respond in one of the following ways:

1. The owner shall may pay the fee in full.

2. The owner may elect to pay the fee in equal quarterly payments and shall pay one quarter of the fee. The first payment shall be accompanied by a written statement that the second quarter of the fee shall be paid no later than December 1 of the year of the issuance of the bill, the third quarter of the fee shall be paid no later than March 1 of the year following the issuance of the bill, and the fourth quarter of the fee shall be paid no later than June 1 of the year following the issuance of the bill. If an owner fails to pay a quarterly payment by the deadline, the department may, in addition to other remedies available under the law, issue to the owner a notice of failure to pay. The notice shall will require payment of the entire remainder of the annual fee payment within 30 days of the date of the notice, or inform the owner that he shall be the owner is ineligible to opt for the quarterly payment schedule established in this subdivision until eligibility is reinstated by written notice from the department, or both.

3. The owner may file a request that the fee amount be revised if he the owner can document that the emissions estimate on which the fee was based is in error. This request shall include appropriate source identification data, the revised emissions estimate, the revised fee amount, adequate supporting documentation, and other information as the board department may require. The owner shall file the request with the appropriate regional office in a form acceptable to the board department. If the department approves the request, the revised fee amount shall be paid in one of two ways:

a. In full within 30 days of the date of approval; or

b. In quarterly payments, with the first payment being paid within 30 days of the date of approval and the other payments being paid according to the schedule set out in subdivision 2 of this subsection.

C. The annual permit program emissions fee shall be paid by check, draft, or money order made payable to the Treasurer of Virginia and mailed to the address specified by the department.

Article 10
Permit Application Fees for Stationary Sources

9VAC5-80-2250. Applicability.

A. Except as provided in subsection C of this section, the provisions of this article apply to permit applications as follows:

1. For permit Permit applications subject to review under the provisions of Article 1 (9VAC5-80-50 et seq.) or Article 3 (9VAC5-80-360 et seq.) of this part.

2. Permit applications subject to review under the provisions of Article 5 (9VAC5-80-800 et seq.) of this part.

3. Permit applications subject to review under the provisions of Article 6 (9VAC5-80-1100 et seq.) of this part, the provisions of this article shall apply to any of the following:.

a. Permit applications for the construction of a major stationary source at an undeveloped site.

b. Permit applications for the construction of a major source, as defined in 40 CFR 63.2 at an undeveloped site.

c. Applications for coverage of a major stationary source (or portion thereof) or a major source (or portion thereof) under a general permit issued for a stationary source category, if the source is to be located at an undeveloped site.

d. Permit applications for the reactivation of any major source or major stationary source that was shut down in accordance with 9VAC5-20-220.

2. For permit 4. Permit applications subject to review under the provisions of Article 7 (9VAC5-80-1400 et seq.) of this part, the provisions of this article apply to permit applications for the construction of a major source at an undeveloped site.

3. For permit 5. Permit applications subject to review under the provisions of Article 8 (9VAC5-80-1700 (9VAC5-80-1605 et seq.) or Article 9 (9VAC5-80-2000 et seq.) of this part, the provisions of this article apply to any of the following:.

a. Permit applications for the construction of a major stationary source at an undeveloped site.

b. Permit applications for the reactivation of any major stationary source that was shut down in accordance with 9VAC5-80-1930 or 9VAC5-20-220.

6. Permit applications subject to review under the provisions of 9VAC5-85 (Permits for Stationary Sources of Pollutants Subject to Regulation).

B. The provisions of this article apply throughout the Commonwealth of Virginia.

C. The provisions of this article shall not apply to the following:

1. Applications for permits for reconstruction of all or part of any stationary source, providing that the application is not otherwise subject to permit application fees pursuant to the provisions of subsection A of this section.

2. 1. Applications that are deemed complete received by the appropriate regional office prior to July 1, 2004 July 1, 2012, except that applications that are received prior to July 1, 2012, and are amended on or after July 1, 2012, may be subject to the permit application fee due as if the application was received on or after July 1, 2012, less any permit application fee amount paid for that application prior to July 1, 2012. The provisions of 9VAC5-80-2290 apply to amended permit applications.

2. Applications for an administrative permit amendment or an administrative permit modification to an existing permit.

3. Applications for permits or changes to permits for a true minor source.

D. The department shall make any final determinations required by this article, including, but not limited to:

1. The applicability of this article;

2. Any applicability determinations required pursuant to Articles 1 (9VAC5-80-50 et seq.), 3 (9VAC5-80-360 et seq.), 5 (9VAC5-80-800 et seq.), 6 (9VAC5-80-1100 et seq.), 7 (9VAC5-80-1400 et seq.), 8 (9VAC5-80-1700 (9VAC5-80-1605 et seq.) and 9 (9VAC5-80-2000 et seq.) of this part and pursuant to 9VAC5-85 (Permits for Stationary Sources of Pollutants Subject to Regulation) that affect the applicability of this article; and

3. The amount of permit application fees owed.; and

4. The applicability of words or terms to a particular stationary source or permit application.

9VAC5-80-2260. Definitions.

A. For the purpose of applying this article in the context of the Regulations for the Control and Abatement of Air Pollution and subsequent amendments or any orders issued by the board related uses, the words or phrases terms shall have the meaning meanings given them in subsection D of this section.

B. All As used in this article, all words and phrases terms not defined in subsection D of this section shall have the meaning meanings given them in Article 6 (9VAC5-80-1110 C) Article 7 (9VAC5-80-1410 C) Article 8 (9VAC5-80-1710 C) or Article 9 (9VAC5-80-2010 C) of this part 9VAC5-80-60 C, 9VAC5-80-370, 9VAC5-80-810 C, 9VAC5-80-1110 C, 9VAC5-80-1410 C, 9VAC5-80-1615 C, 9VAC5-80-2010 C, 9VAC5-85-30 C, 9VAC5-85-50 C, or 9VAC5-85-70 C, as may apply, unless otherwise required by context.

C. All words and phrases terms not defined in subsection D of this section and not defined in applicable subsections of Article 6 (9VAC5-80-1110 C), Article 7 (9VAC5-80-1410 C), Article 8 (9VAC5-80-1710 C) or Article 9 (9VAC5-80-2010 C) of this part as provided in subsection B of this section shall have the meaning meanings given them in 9VAC5 Chapter 10 9VAC5-80-5 or 9VAC5-10 (General Definitions), unless otherwise required by context.

D. Terms defined.

"Complete" means, in reference to an application for a permit, that the application contains all of the information necessary for processing the application. Designating an application complete for the purposes of permit processing does not preclude the board from requesting or accepting any additional information.

"Reactivation" means beginning operation of an emissions unit that has been shut down.

"Undeveloped site" means any site or facility at which no emissions units are located.

"Major new source review permit" or "major NSR permit" means a permit that is issued under the major new source review (major NSR) program or a permit that is issued pursuant to the minor new source review (minor NSR) program in which one or more of the provisions have been combined from a permit issued under the major NSR program. A major NSR permit may contain provisions that are subject to the requirements of the minor NSR program.

"Major new source review (major NSR) program" means a preconstruction review and permit program (i) for new major stationary sources or major modifications (physical changes or changes in the method of operation); (ii) established to implement the requirements of §§ 112, 165, and 173 of the federal Clean Air Act and associated regulations; and (iii) codified in Article 7 (9VAC5-80-1400 et seq.), Article 8 (9VAC5-80-1605 et seq.), and Article 9 (9VAC5-80-2000 et seq.) of this part and Part III (9VAC5-85-40 et seq.) of 9VAC5-85 (Permits for Stationary Sources of Pollutants Subject to Regulation).

"Minor new source review permit" or "minor NSR permit" means a permit that is issued pursuant to the minor new source review (minor NSR) program in which none of the provisions have been combined from a major NSR permit.

"Permit amendment" means (i) a change to a permit that was issued pursuant to Article 5 (9VAC5-80-800 et seq.), Article 6 (9VAC5-80-1100 et seq.), Article 7 (9VAC5-80-1400 et seq.), Article 8 (9VAC5-80-1605 et seq.), or Article 9 (9VAC5-80-2000 et seq.) of this part; (ii) an administrative change to a permit issued pursuant to Article 1 (9VAC5-80-50 et seq.) or Article 3 (9VAC5-80-360 et seq.) of this part; or (iii) a change to a permit issued pursuant to Part III (9VAC5-85-40 et seq.) or Part IV (9VAC5-85-60 et seq.) of 9VAC5-85 (Permits for Stationary Sources of Pollutants Subject to Regulation).

"Permit modification" means a change, other than an administrative permit amendment, to a permit that was issued pursuant to Article 1 (9VAC5-80-50 et seq.) or Article 3 (9VAC5-80-360 et seq.) of this part or pursuant to Part II (9VAC5-85-20 et seq.) of 9VAC5-85 (Permits for Stationary Sources of Pollutants Subject to Regulation).

"State major permit" means a minor NSR permit that is issued for a stationary source having the potential to emit 100 tons per year or more of any air pollutant, considering the state enforceable and federally enforceable permit limits in that permit.

"State operating permit" means a permit issued pursuant to Article 5 (9VAC5-80-800 et seq.) of this part or Part IV (9VAC5-85-60 et seq.) of 9VAC5-85 (Permits for Stationary Sources of Pollutants Subject to Regulation).

"Synthetic minor permit" means a permit that is issued under the provisions of Article 5 (9VAC5-80-800 et seq.) or Article 6 (9VAC5-80-1100 et seq.) of this part or Part IV (9VAC5-85-60 et seq.) of 9VAC5-85 (Permits for Stationary Sources of Pollutants Subject to Regulation) for a stationary source that would otherwise be subject to permit requirements under Article 1 (9VAC5-80-50 et seq.) or Article 3 (9VAC5-80-360 et seq.) of this part or Part II (9VAC5-85-20 et seq.) of 9VAC5-85 (Permits for Stationary Sources of Pollutants Subject to Regulation) except for state enforceable and federally enforceable permit limits in that permit.

"Title V permit" means a federal operating permit issued pursuant to Article 1 (9VAC5-80-50 et seq.) or Article 3 (9VAC5-80-360 et seq.) of this part or Part II (9VAC5-85-20 et seq.) of 9VAC5-85 (Permits for Stationary Sources of Pollutants Subject to Regulation).

"Title V general permit" means a general permit issued pursuant to the provisions of 9VAC5-80-120.

"True minor source" means a stationary source that would not be subject to permit requirements under Article 1 (9VAC5-80-50 et seq.) or Article 3 (9VAC5-80-360 et seq.) of this part or Part II (9VAC5-85-20 et seq.) of 9VAC5-85 (Permits for Stationary Sources of Pollutants Subject to Regulation) even without considering any state enforceable or federally enforceable permit limitations.

9VAC5-80-2270. General.

A. Any person submitting a permit application subject to this article shall pay a permit application fee in the amount determined in accordance with 9VAC5-80-2280.

B. Permit application fees collected pursuant to this article for sources subject to Article 1 (9VAC5-80-50 et seq.) or Article 3 (9VAC5-80-360 et seq.) of this part or subject to Part II (9VAC5-85-20 et seq.) of 9VAC5-85 (Permits for Stationary Sources of Pollutants Subject to Regulation) shall not be used for any purpose other than as provided in Title V of the federal Clean Air Act and associated regulations and policies.

9VAC5-80-2280. Permit application fee calculation.

A. The amount of the permit application fee shall be the sum of the following, as applicable:

1. Permit applications subject to review pursuant to the provisions of Article 9 (9VAC5-80-2000 et seq.) of this part shall be subject to a permit application fee of $20,000.

2. Permit applications subject to review pursuant to the provisions of Article 8 (9VAC5-80-1700 et seq.) of this part shall be subject to a permit application fee of $30,000.

3. Permit applications subject to review pursuant to the provisions of Article 7 (9VAC5-80-1400 et seq.) of this part shall be subject to a permit application fee of $15,000.

4. Permit applications subject to the provisions of Article 6 (9VAC5-80-1100 et seq.) of this part (other than applications for coverage under general permits issued under 9VAC5-80-1250) shall be subject to a permit application fee of $5,300.

5. Applications for coverage under a general permit pursuant to the provisions of Article 6 (9VAC5-80-1250) of this part shall be subject to a permit application fee of $300.

B. The total amount of the fee for a single permit application shall not exceed $30,000.

Each permit application subject to this article shall be subject to a permit application fee. The amount of the application fee shall be calculated as follows:

1. The amount of the permit application fee shall be the largest applicable base permit application fee amount from Table 8-10A, adjusted annually by the change in the Consumer Price Index (CPI) as specified in subdivision 2 of this subsection.

TABLE 8-10A BASE PERMIT APPLICATION FEES FOR STATIONARY SOURCES
Application for:		Base Permit Application Fee Amount
Sources subject to Title V permitting requirements:
	Major NSR permit	$30,000
	Major NSR permit amendment (except administrative)	$7,000
	State major permit	$15,000
	Minor NSR permit (that is not also a state major permit)	$1,500
	Minor NSR permit amendment (except administrative)	$750
	Title V permit	$20,000
	Title V permit renewal	$10,000
	Title V permit modification (except administrative)	$3,500
	State operating permit	$7,000
	State operating permit amendment (except administrative)	$3,500
	Title V General Permit	$500
Sources subject to the requirements of a synthetic minor permit:
	Minor NSR permit	$500
	Minor NSR permit amendment (except administrative)	$250
	State operating permit	$1,500
	State operating permit amendment (except administrative)	$800

2. The annual adjustment of the permit application fees shall be based upon the annually adjusted permit application fee amounts for the preceding calendar year and the change in the CPI value published by the U.S. Department of Labor for all-urban consumers over the 12-month period ending on August 30 of the calendar year preceding the calendar year in which the application is first received by the appropriate regional office of the department.

a. The CPI for all-urban consumers published by the U.S. Department of Labor may be obtained online from the Bureau of Labor Statistics' website at http://www.bls.gov/cpi/home.htm.

b. There is no CPI adjustment for applications received prior to January 1, 2013.

3. The amount of the annually CPI-adjusted permit application fee shall be rounded down to the nearest whole dollar.

9VAC5-80-2290. Permit application fee payment.

A. The permit application fee required by this article is due on the date that the permit application is received by the appropriate regional office of the department. The permit application fee is nonrefundable. Incomplete payment shall be deemed as nonpayment.

B. The permit application shall not be considered complete until a permit application fee for the proper amount is received. Review of the application will not proceed past an initial applicability determination until a permit application fee for the proper amount is received.

C. The permit application fee shall be paid by check, draft, or postal money order made payable to the "Treasurer of Virginia" and shall be sent mailed to the Department of Environmental Quality, Receipts Control, P.O. Box 10150, Richmond, Virginia 23240 address specified by the department. When the department is able to accept electronic payments, payments may be submitted electronically.

D. The permit application should be mailed to the appropriate regional office of the department.

9VAC5-80-2300. Annual permit program fee credit. (Repealed.)

The amount of the permit application fee paid by the owner shall be credited towards the amount of annual permit program fees owed pursuant to Article 2 (9VAC5-80-310 et seq.) of this part as follows:

1. The amount of the credit applied shall not exceed the amount of annual permit program fees owed during the first two years of the source's operation.

2. The credit shall be applied as follows:

a. A portion of the permit application fee shall be credited toward the annual permit program fee owed for the first year of operation, up to the full amount of the permit application fee or up to the full amount of the annual permit program fee owed, whichever is less.

b. Any remainder of credit for the permit application fee shall be applied to the annual permit program fee owed for the second year of operation, up to the amount of those annual permit program fees. Any amount of the permit application fee remaining after applying credit for the first two years of operation shall not be carried forward as credit for annual permit program fees for a third year of operation or any later year.

c. In the event that the proper credit for the permit application fee is not reflected in the annual permit program fee billed to the owner, the owner shall request that the bill for the annual permit program fee amount be revised in accordance with 9VAC5-80-350 B 3. Failure to request such a revision shall not be grounds for applying remaining credit to annual permit program fees owed for the third year of operation or any later year.

Article 11
Annual Permit Maintenance Fees for Stationary Sources

9VAC5-80-2310. Applicability.

A. Except as provided in subsection C of this section, the provisions of this article apply to any stationary source that has begun normal operation and:

1. The stationary source is subject to the provisions of a permit issued pursuant to Article 1 (9VAC5-80-50 et seq.) or Article 3 (9VAC5-80-360 et seq.) of this part or pursuant to Part II (9VAC5-85-20 et seq.) of 9VAC5-85 (Permits for Stationary Sources of Pollutants Subject to Regulation);

2. The stationary source is subject to the permit requirements of Article 1 (9VAC5-80-50 et seq.) or Article 3 (9VAC5-80-360 et seq.) of this part or Part II (9VAC5-85-20 et seq.) of 9VAC5-85 (Permits for Stationary Sources of Pollutants Subject to Regulation), and is operating under an application shield under the provisions of 9VAC5-80-80 F or 9VAC5-80-430 F; or

3. The stationary source would be subject to the permit requirements of Article 1 (9VAC5-80-50 et seq.) or Article 3 (9VAC5-80-360 et seq.) of this part or Part II (9VAC5-85-40 et seq.) of 9VAC5-85 (Permits for Stationary Sources of Pollutants Subject to Regulation) in the absence of a permit issued under Article 5 (9VAC5-80-800 et seq.) or Article 6 (9VAC5-80-1100 et seq.) of this part or Part IV (9VAC5-85-60 et seq.) of 9VAC5-85 (Permits for Stationary Sources of Pollutants Subject to Regulation).

B. The provisions of this article apply throughout the Commonwealth of Virginia.

C. The provisions of this article shall not apply to the following:

1. Any stationary source that began normal operation during the calendar year for which the annual permit maintenance fee is assessed.

2. Any synthetic minor source that is not a synthetic minor 80% source and is not otherwise subject to the permit requirements of Article 1 (9VAC5-80-50 et seq.) or Article 3 (9VAC5-80-360 et seq.) of this part or Part II (9VAC5-85-20 et seq.) of 9VAC5-85 (Permits for Stationary Sources of Pollutants Subject to Regulation).

D. The department shall make any final determinations required by this article, including but not limited to:

1. The applicability of this article;

2. The amount of permit maintenance fees owed; and

3. The applicability of terms to a particular stationary source or permit.

9VAC5-80-2320. Definitions.

A. For the purpose of applying this article in the context of the Regulations for the Control and Abatement of Air Pollution and related uses, the words or terms shall have the meanings given them in subsection D of this section.

B. As used in this article, all words and terms not defined in subsection D of this section shall have the meanings given them in 9VAC5-80-60 C, 9VAC5-80-370, 9VAC5-80-810 C, 9VAC5-80-1110 C, 9VAC5-80-1410 C, 9VAC5-80-1615 C, 9VAC5-80-2010 C, 9VAC5-85-30 C, 9VAC5-85-50 C, or 9VAC5-85-70 C as may apply, unless otherwise required by context.

C. All words and terms not defined in subsection D of this section and not defined as provided in subsection B of this section shall have the meanings given them in 9VAC5-80-5 or 9VAC5-10 (General Definitions), unless otherwise required by context.

D. Terms defined.

"Area source" means any stationary source that is not a major source. For purposes of this article, the phrase "area source" shall not include motor vehicles or nonroad vehicles.

"Normal operation" means, for the purposes of this article, any operation of a stationary source or part of a stationary source after the testing and shakedown operations following the construction of the stationary source or following the first phase of the phased construction of a stationary source.

"Synthetic minor source" means a stationary source whose potential to emit is constrained by state enforceable and federally enforceable limits, so as to place that stationary source below the threshold at which it would be subject to permit or other requirements governing major stationary sources in regulations of the board or in the federal Clean Air Act and associated regulations.

"Synthetic minor 80% source" or "SM-80 source" means a synthetic minor source that emits or has the potential to emit a regulated pollutant at or above 80% of the major source threshold for that pollutant.

"Title V complex major source" means, for the purposes of this article, a major source that is subject to a total of seven or more subparts in 40 CFR Parts 60, 61, and 63 that contain standards applicable to that stationary source.

"Title V major source" means, for the purposes of this article, a major source that is subject to a total of less than seven subparts in 40 CFR Parts 60, 61, and 63 that contain standards applicable to that stationary source.

"Title V source by rule" means for the purposes of this article, an area source that is subject to permitting requirements under Article 1 (9VAC5-80-50 et seq.) or Article 3 (9VAC5-80-360 et seq.) of this part because it is subject to a standard, limitation, emission guideline, or other requirement under § 111 or 112 of the federal Clean Air Act.

9VAC5-80-2330. General.

A. The owner of any stationary source subject to this article shall pay an annual permit maintenance fee.

B. Annual permit maintenance fees collected pursuant to this article for sources subject to Article 1 (9VAC5-80-50 et seq.) or Article 3 (9VAC5-80-360 et seq.) of this part or subject to Part II (9VAC5-85-20 et seq.) of 9VAC5-85 (Permits for Stationary Sources of Pollutants Subject to Regulation) shall not be used for any purpose other than as provided in Title V of the federal Clean Air Act and associated regulations and policies.

9VAC5-80-2340. Annual permit maintenance fee calculation.

A. Each stationary source subject to this article shall be assessed an annual permit maintenance fee.

B. The amount of the permit maintenance fee shall be calculated as follows:

1. The amount of the annual permit maintenance fee shall be the largest applicable base permit maintenance fee amount from Table 8-11A, adjusted annually by the change in the Consumer Price Index (CPI) as specified in subdivision 2 of this subsection.

TABLE 8-11A BASE PERMIT MAINTENANCE FEES FOR STATIONARY SOURCES
Stationary Source Type	Base Permit Maintenance Fee Amount
Title V Complex Major Source	$10,000
Title V Major Source	$3,500
Title V Source By Rule	$1,500
Synthetic Minor 80% Source	$1,000

2. The annual adjustment of the permit maintenance fees shall be based upon the annual permit maintenance fee amount for the preceding calendar year and the change in the CPI value published by the U.S. Department of Labor for all-urban consumers over the 12-month period ending on August 30 of the calendar year preceding the calendar year in which the permit maintenance fee is assessed.

a. The CPI for all-urban consumers published by the U.S. Department of Labor may be obtained online from the Bureau of Labor Statistics' website at http://data.bls.gov/cgi‑bin/surveymost?cu.

b. No CPI adjustment shall be made for annual permit maintenance fees assessed in calendar year 2012.

3. The amount of the annual permit maintenance fee shall be rounded down to the nearest whole dollar.

9VAC5-80-2350. Annual permit maintenance fee payment.

A. Upon determining that the owner of a stationary source owes an annual permit maintenance fee, the department will mail a bill for the fee to that owner no later than August 1.

B. Within 30 days following the date of the postmark on the bill, the owner shall respond in one of the following ways:

1. The owner may pay the fee in full.

2. The owner may request that the fee amount be revised if the owner can document that the status of the permits on which the fee was based is in error. This request shall include appropriate source identification data, copies of all valid air permits, the revised fee amount, adequate supporting documentation, and other information as the department may require. The owner shall file the request with the appropriate regional office in a form acceptable to the department. If the department approves the request, the revised fee amount shall be paid in full within 30 days of the date of approval.

C. The annual permit maintenance fee shall be paid by check, draft, or money order made payable to the Treasurer of Virginia and mailed to the address specified by the department.

Title of Regulation: 12VAC5-630. Private Well Regulations (amending 12VAC5-630-460; adding 12VAC5-630-271, 12VAC5-630-272).

Statutory Authority: § 32.1-176.4 of the Code of Virginia.

Public Hearing Information: No public hearings are scheduled.

Public Comment Deadline: August 1, 2012.

Effective Date: August 16, 2012.

Agency Contact: Allen Knapp, Director, Division of Onsite Sewage, Water Services, Department of Health, 109 Governor Street, Richmond, VA 23219, telephone (804) 864-7458, or email allen.knapp@vdh.virginia.gov.

Basis: Section 32.1-176.4 of the Code of Virginia requires the board to adopt regulations pertaining to the location and construction of private wells in the Commonwealth. Chapters 105 and 710 of the 2009 Acts of Assembly require the board to adopt the proposed amendments.

Purpose: The first of these two amendments is intended to improve the welfare of the citizens of the Commonwealth by reducing costs associated with construction of geothermal well systems. The amendment establishes an express geothermal permit which allows construction of wells used solely for closed loop geothermal heating systems via a streamlined process. Public health and safety are preserved by allowing VDH an opportunity to inspect well construction. Fees for these wells are also reduced. Prior to the 2009 legislation VDH charged an application fee for each group of 10 wells. The amendment provides that VDH will charge one fee for each geothermal heating system, regardless of the total number of wells constructed.

The second amendment protects public health and welfare by establishing minimum well yield and storage requirements for residential drinking water wells. These minimum requirements will assure an adequate supply of drinking water and water for essential activities such as toilet flushing, bathing, and cooking. There have been several cases where a home buyer has learned of a low-yield well only after purchasing and moving into a new home. Prior to the 2009 legislation the board’s regulations contained only recommended minimum yield and storage requirements. Setting minimum well yield and storage requirements further protects the welfare of citizens of the Commonwealth by reducing potential financial burdens associated with homes that have an inadequate supply of water.

Rationale for Using Fast-Track Process: The enabling legislation (Chapters 105 and 170 of the 2009 Acts of Assembly) and the language of the amendments tracks the language in the Code of Virginia as closely as possible. VDH worked closely with the Virginia Water Well Association (VWWA) in drafting these amendments and believes that the amendments adopted September 25, 2009, accomplish the minimum requirements of the 2009 legislation.

In October 2010, while this regulatory action was under Executive Review, the VWWA expressed concerns about the regulatory language regarding minimum well yield and storage. VDH worked with the VWWA to adjust the proposed regulation and believes that the adjusted language accomplishes the minimum requirements of the 2009 legislation.

Substance: In drafting the geothermal heating system amendments, VDH followed the specific requirements spelled out in the 2009 legislation, which include:

1. The well must be constructed by a contractor properly licensed pursuant to Chapter 11 of Title 54.1 of the Code of Virginia;

2. The licensed contractor must provide a registration statement to VDH prior to construction certifying compliance with the well regulations;

3. The registration statement must include accurate property location information, a description of the geothermal heating system construction, contact information for the contractor, and a detailed site plan (drawn to scale) that shows any sources of contamination;

4. VDH will only charge a single application fee for a geothermal heating system; and

5. Once a complete application is submitted, construction may begin immediately.

In drafting the yield and storage requirements, VDH followed the specific requirements of the 2009 legislation, which requires VDH to consider the suggested minimum requirements currently contained in the well regulations. The amendment converts the recommended minimum requirements to mandatory requirements.

Issues: The express geothermal permitting process will reduce processing times and allow contractors to begin construction immediately upon submitting a proper registration statement, thereby reducing costly construction delays. Application fees for most geothermal systems will be reduced. No disadvantages have been identified at this time.

Department of Planning and Budget's Economic Impact Analysis:

Summary of the Proposed Amendments to Regulation. Pursuant to Chapter 710 of the 2009 Virginia Acts of Assembly, the State Board of Health (Board) proposes to establish requirements for express geothermal well permits. Also, pursuant to Chapter 105 of the 2009 Virginia Acts of Assembly, the Board proposes to establish minimum well storage capacity and yield requirements for residential drinking water wells. Further, the Board proposes to repeal other aspirational language.

Result of Analysis. The benefits likely exceed the costs for all proposed changes.

Estimated Economic Impact. Prior to the 2009 legislation the Virginia Department of Health (VDH) charged a $205 permit application fee for each group of ten geothermal wells. Under the proposed language VDH will charge one $205 fee for each geothermal heating system, regardless of the total number of wells constructed. For permit applications where there are ten or fewer wells in the geothermal heating system, the fee is $205 under both the current and proposed regulations. For permit applications where there are more than ten wells in the geothermal heating system, the applicant will pay a lower fee under the proposed regulations. For example, a permit applicant would pay $410 for a geothermal heating system with 20 wells under the current regulations, but would only pay $205 under the proposed regulations. Also, the express geothermal well permitting system shortens the permitting process by approximately five to ten days,¹ allowing sooner completion of projects. The proposed express geothermal well system produces a net benefit for the Commonwealth.

Chapter 105 of the 2009 Acts of Assembly mandates that the Board's regulations include minimum storage capacity and yield requirements for residential drinking wells. The statute also mandates that water well systems providers certify the storage capacity and the yield of the well on a form provided by VDH at the time the well is completed. Similar language is currently contained in the regulation; however, based on the statutory change the regulatory text would change from should to shall. The yield numbers themselves would remain the same. Changing should to shall causes the minimum storage capacity and yield requirements to be requirements rather than recommendations.

According to VDH, there have been several cases where a home buyer has learned of a low-yield well only after purchasing and moving into a new home. The amendments regarding well yield are intended to assure home buyers that an adequate supply of water exists. Thus the proposal can be beneficial to homebuyers. In some cases the minimum yield and storage requirements will result in multiple wells, storage tanks, or pumps and timers being required to meet the minimums which will raise costs. In very limited cases where adequate well yield is not found, building lots may be rendered unusable. Thus, the proposed requirement can help prevent homebuyers from being unwittingly stuck with properties that have insufficient well yield.

Businesses and Entities Affected. There are approximately 540 licensed water system providers in the Commonwealth. There are an estimated 330 water well companies. Almost all of these are considered small businesses.²

Localities Particularly Affected. There are no identified localities with disproportionate material impact by the adoption of the proposed amendments to the regulations.

Projected Impact on Employment. The proposed amendments will not likely significantly affect employment.

Effects on the Use and Value of Private Property. The proposed express geothermal well permitting system will save dollars and time for water well professionals and contractors. The proposed minimum well storage capacity and yield requirements will help protect private property owners.

Small Businesses: Costs and Other Effects. The proposed express geothermal well permitting system will save dollars and time for small water well professionals and contractors.

Small Businesses: Alternative Method that Minimizes Adverse Impact. The proposed amendments do not adversely affect small businesses.

Real Estate Development Costs. The proposed express geothermal well permitting system will moderately reduce real estate development costs.

Legal Mandate. 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 Administrative Process Act and Executive Order Number 36 (06). Section 2.2-4007.04 requires that such economic impact analyses include, but need not be limited to, the projected number of businesses or other entities to whom the 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. Further, if the proposed regulation has adverse effect on small businesses, § 2.2-4007.04 requires that such economic impact analyses include (i) an identification and estimate of the number of small businesses subject to the regulation; (ii) the projected reporting, recordkeeping, and other administrative costs required for small businesses to comply with the regulation, including the type of professional skills necessary for preparing required reports and other documents; (iii) a statement of the probable effect of the regulation on affected small businesses; and (iv) a description of any less intrusive or less costly alternative methods of achieving the purpose of the regulation. The analysis presented above represents DPBs best estimate of these economic impacts.

_____________________________________

¹Data Source: Virginia Department of Health

²Ibid

Agency's Response to the Economic Impact Analysis: The agency concurs with the economic impact analysis submitted by the Department of Planning and Budget.

Summary:

The proposed amendments establish (i) requirements for express geothermal permits and (ii) minimum well yield requirements for residential drinking water wells.

12VAC5-630-271. Express geothermal well permits.

A. The issuance of an express geothermal permit is contingent upon proper registration and payment of application fees and applies to the construction of wells used solely for a closed-loop geothermal heating system.

B. A single application and a single fee are required for any geothermal well system. The fee is the same as for a single private well. A registration statement for closed loop construction permitting shall be made on a form provided and approved by the division. The registration shall include the following information:

1. The property owner's name, address, and telephone number;

2. The address of and directions to the property;

3. The proposed use of the well;

4. The name, address, telephone number, and contractor license number of the well driller;

5. A statement signed by the property owner granting the department access to the site for the purpose of inspecting the property and the well during and after the well installation until the well is approved by the department or any required corrections are made;

6. A site plan, drawn to scale, showing the proposed well site or sites, property boundaries, recorded easements, and accurate locations of actual or proposed sources of contamination (including but not limited to those listed in Table 3.1 of 12VAC5-630-380) within 100 feet of the proposed well site or sites; and

7. A statement signed by the licensed well driller that the location and construction of the well or wells will comply with the requirements of this chapter.

C. A single application fee is required for any geothermal well system, regardless of the number of wells included in the system. The fee is the same as for a single private well.

12VAC5-630-272. Issuance of express geothermal well construction permit, inspection, and final approval.

A. Issuance of the express geothermal well permit. Upon receipt of a complete registration statement and the appropriate fee, the department will acknowledge receipt of the registration statement and issue the permit with a copy given to the contractor. The construction of the geothermal heating system may begin immediately upon submission of a complete registration statement and counter-signature denoting receipt by the department.

B. Inspection. The department, at its sole discretion, may inspect the closed-loop geothermal well any time after acceptance of the registration statement until after the installation is approved. If, upon inspection of the well, it is found that the well location does not comply with the minimum separation distances or any other provision of this chapter, no inspection statement shall be issued until the deficiencies have been corrected.

C. Final approval. Upon receipt of the Uniform Water Well Completion Report, as required in 12VAC5-630-440, and completion of any inspections deemed necessary to ensure compliance with this chapter, or unless the department has evidence to indicate that the well is not in compliance with the requirements of this chapter, the local health department will provide the owner with a statement that the wells are approved for use.

12VAC5-630-460. Recommended well Water system yields for residential use wells.

A. All private drinking water systems that utilize one or more Class III wells should shall be capable of supplying water in adequate quantity for the intended usage. Failure to provide adequate capacity may cause intermittent flows and negative pressures which may cause contamination of the system through cross connections or other system deficiencies. All Class III wells should such systems, with a capacity less than three gallons per minute, shall have a capacity to produce and store 150 gallons per bedroom per day and be capable of delivering a sustained flow of five gallons per minute per connection for 10 minutes. The system should be capable of providing at least 500 gallons per hour for at least one hour if lawns or other residential areas are to be irrigated. In general, residential use wells with yields less than 3 gallons per minute require additional storage to provide uninterrupted service during peak water use times. Systems with a capacity of three gallons per minute or more do not require additional storage.

B. The certified water well systems provider shall certify the storage capacity and the yield of the well on the Uniform Water Well Completion Report.

FORMS (12VAC5-630)

Application for Sewage Disposal and/or Water Supply Permit.

Water Supply and/or Sewage Disposal System Construction Permit.

Application for: Sewage System - Water Supply, AOSE Form D (rev. 7/07).

Application for Express Class IV Well Construction Permit.

Record of Inspection - Private Water Supply System.

Uniform Well Completion Report.

Uniform Water Well Completion Report.

Registration Statement for Express Geothermal Well Permit (eff. 06/12).

Title of Regulation: 14VAC5-41. Rules Governing Advertisement of Life Insurance and Annuities (amending 14VAC5-41-40).

Statutory Authority: §§ 12.1-13 and 38.2-223 of the Code of Virginia.

Effective Date: July 1, 2012.

Agency Contact: James Young, Manager, Special Projects, Bureau of Insurance, State Corporation Commission, P.O. Box 1157, Richmond, VA 23218, telephone (804) 371-9612, FAX (804) 371-9944, or email james.young@scc.virginia.gov.

Summary:

The amendments clarify the disclosure language required for advertisements of certain life insurance policies and annuities. There were no further changes to the rules as proposed.

AT RICHMOND, JUNE 11, 2012

COMMONWEALTH OF VIRGINIA, ex rel.

STATE CORPORATION COMMISSION

CASE NO. INS-2012-00044

Ex Parte: In the matter of
Amending the Rules Governing
Advertisement of Life Insurance
and Annuities

ORDER ADOPTING RULES

By Order to Take Notice entered March 30, 2012, all interested persons were ordered to take notice that subsequent to May 4, 2012, the State Corporation Commission ("Commission") would consider the entry of an order to adopt amendments to the Commission’s Rules Governing Advertisement of Life Insurance and Annuities, 14VAC5-41-10 et seq., specifically set forth at 14VAC5-41-40, General disclosure requirements. These amendments were proposed by the Bureau of Insurance ("Bureau"). The Order to Take Notice required that on or before May 4, 2012, any person objecting to the amendments to 14VAC5-41-40 shall have filed a request for hearing with the Clerk of the Commission ("Clerk").

The Order to Take Notice also required all interested persons to file their comments in support of or in opposition to the amendments to 14VAC5-41-40 on or before May 4, 2012.

No request for a hearing was filed with the Clerk. Comments in support of the proposed amendments to 14VAC5-41-40 were timely filed by Settlers Life Insurance Company, National Guardian Life Insurance Company, Atlantic Coast Life Insurance Company, and Great Western Life Insurance Company. Comments in opposition to the proposed amendments to 14VAC5-41-40 were timely filed by the American Council of Life Insurers. The Bureau filed a Statement of Position concerning the filed comments with the Clerk on May 31, 2012.¹

The Bureau recommends that the Commission adopt the amendments to 14VAC5-41-40 as proposed. The amendments to subsection H of 14VAC5-41-40 are necessary to clarify that the disclosure requirements contained in this subsection only apply to an advertisement of a life policy or annuity that includes a listing, summary, description or comparison of actual or estimated costs of funeral goods or services. Advertisements for policies used to fund a preneed funeral contract are exempt from this requirement.

NOW THE COMMISSION, having considered this matter and the Bureau's recommendation to amend 14VAC5-41-40, is of the opinion that the amendments to 14VAC5-41-40 should be adopted as proposed, effective July 1, 2012.

Accordingly, IT IS ORDERED THAT:

(1) The amendments to Chapter 41 of Title 14 of the Virginia Administrative Code entitled Rules Governing Advertisement of Life Insurance and Annuities specifically set forth at 14 VAC 5-41-40, which are attached hereto and made a part hereof, are hereby ADOPTED effective July 1, 2012.

(2) AN ATTESTED COPY hereof, together with a copy of the adopted amendments to 14VAC5-41-40, shall be sent by the Clerk of the Commission to Althelia P. Battle, Deputy Commissioner, Bureau of Insurance, State Corporation Commission, who forthwith shall give further notice of the adopted amendments to 14VAC5-41-40 by mailing a copy of this Order, including a clean copy of the amendments to 14VAC5-41-40, to all companies licensed by the Commission to write life insurance or annuities in the Commonwealth of Virginia, as well as all interested parties.

(3) The Commission's Division of Information Resources shall cause a copy of this Order, together with the adopted amendments to 14VAC5-41-40, to be forwarded to the Virginia Registrar of Regulations for appropriate publication in the Virginia Register of Regulations.

(4) The Commission's Division of Information Resources shall make available this Order and the attached adopted amendments to 14VAC5-41-40 on the Commission's website: http://www.scc.virginia.gov/case.

(5) The Bureau of Insurance shall file with the Clerk of the Commission an affidavit of compliance with the notice requirements of Ordering Paragraph (2) above.

^{___________________________________________________________________________}

¹The Statement of Position represents that the American Council of Life Insurers acknowledged and understood the Bureau staff's position and explanation regarding the proposed amendments and was satisfied with the Bureau staff’s response to its concerns. Statement of Position at 2.

14VAC5-41-40. General disclosure requirements.

A. The information required to be disclosed by this chapter shall not be minimized, rendered obscure, or presented in an ambiguous fashion or intermingled with the text of an advertisement so as to confuse or mislead.

B. If an advertisement uses the terms "nonmedical," "no medical examination required," or similar terms where issue is not guaranteed, these terms shall be accompanied by a further disclosure of equal prominence and juxtaposition to the effect that issuance of the policy may depend upon the answers to the health questions contained in the application.

C. An advertisement shall not contain figures, dollar amounts, or statistical information unless it accurately reflects recent and relevant facts. The source of any figures, dollar amounts, or statistics used in advertisements shall be identified therein.

D. An advertisement for a life insurance policy containing graded or modified benefits shall prominently display any limitation of benefits. If the premium is level and coverage decreases or increases with age or duration, that fact shall be commonly disclosed. An advertisement of or for a life insurance policy under which the death benefit varies with the length of time the policy has been in force shall accurately describe and clearly call attention to the amount of minimum death benefit under the policy.

E. Any advertisement that mentions or refers to universal life insurance premiums shall indicate that it is possible that coverage will expire when either no premiums are paid following the initial premium, or subsequent premiums are insufficient to continue coverage, if true.

F. An insurer or agent shall advise a prospective applicant who is considering replacing a policy that under the existing policy the period of time during which the existing insurer could contest the policy or deny coverage for death caused by suicide may have expired or may expire earlier than it will under the proposed policy.

G. An advertisement for life insurance or an annuity that is to be used to fund a preneed funeral contract shall disclose that fact.

H. An advertisement for of a life insurance policy or an annuity in which the face amount or any part of the face amount is based on the that will not fund a preneed funeral contract and that includes a listing, summary, description, or comparison of actual or estimated cost costs of funeral goods or services shall contain the following disclosure:

"This is (life insurance or an annuity). "This (life insurance or annuity) does not specifically cover funeral goods or services, and may not cover the entire cost of your funeral at the time of your death. The beneficiary of this (life insurance or annuity) may use the proceeds of this (life insurance or annuity) for any purpose, unless otherwise directed. The face amount of this (life insurance or annuity) is not guaranteed to increase at the same rate as the costs of a funeral increase."