Title of Regulation: 1VAC75-30. Regulations Governing Escheats (amending 1VAC75-30-10, 1VAC75-30-40, 1VAC75-30-60, 1VAC75-30-70, 1VAC75-30-90, 1VAC75-30-110, 1VAC75-30-120; repealing 1VAC75-30-20, 1VAC75-30-30).

Statutory Authority: § 55.1-2439 of the Code of Virginia.

Public Hearing Information: No public hearing is scheduled.

Public Comment Deadline: February 16, 2022.

Effective Date: March 3, 2022.

Agency Contact: Brad Earl, Director of Unclaimed Property, Department of the Treasury, James Monroe Building, 101 North 14th Street, 4th Floor, Richmond, VA 23219, telephone (804) 807-0073, FAX (804) 786-4653, or email bradley.earl@trs.virginia.gov.

Basis: Pursuant to § 55.1-2439 of the Code of Virginia, the State Treasurer shall adopt any necessary regulations to carry out the provisions of Chapter 24 (§ 55.1-2400 et seq.) of Title 55.1 of the Code of Virginia.

Purpose: The purpose of this revision to the escheats regulations is to update renumbering and language to conform regulations to Chapter 712 of the 2019 Acts of Assembly, which recodified Title 55 to Title 55.1. The Department of the Treasury affirms that the consistency between statute and the regulation is important to the public health, safety, and welfare with regard to the escheat regulations.

Rationale for Using Fast-Track Rulemaking Process: Outside of the renaming of the statute and several minor semantic changes, there were no substantive changes to the statute; therefore, it is deemed to be noncontroversial.

Substance: The Department of the Treasury has amended 1VAC75-30 to conform the regulation per Chapter 712 of the 2019 Acts of Assembly, the recodification of Title 55 as Title 55.1.

Issues: The primary advantages of the regulatory update for the public and agency are that the changes will eliminate potential confusion by the public concerning outdated statutory citations. There are no primary advantages and disadvantages to the agency or the Commonwealth.

Department of Planning and Budget's Economic Impact Analysis:

The Department of Planning and Budget (DPB) has analyzed the economic impact of this proposed regulation in accordance with § 2.2-4007.04 of the Code of Virginia (Code) and Executive Order 14 (as amended, July 16, 2018). The analysis presented represents DPB's best estimate of these economic impacts.¹

Summary of the Proposed Amendments to Regulation. As the result of a period review² and a legislative mandate,³ the State Treasurer proposes to amend 1VAC75-30 Regulations Governing Escheats (regulation) to update Code of Virginia citations that are no longer valid and remove obsolete or otherwise unnecessary information.

Background. Pursuant to a recommendation of the Virginia Code Commission, Chapter 712 of the 2019 Acts of Assembly⁴ created in the Code of Virginia Title 55.1 (Property and Conveyances) as a revision of the then existing Title 55 (Property and Conveyances). The Escheat⁵ Generally Statute was in Title 55 prior to the legislation, but is now in Title 55.1 and renamed Escheats. The regulation currently contains citations to the old Escheat Generally Statute using what are now obsolete numbers. The proposed action would update the regulation by revising the name of the statute and the Title 55.1 citations. Also, the proposed action revises an outdated reference to the Virginia Freedom of Information Act to the current correct citation.

An example of the obsolete or otherwise unnecessary information that is proposed to be removed is as follows: the State Treasurer proposes to strike the section titled "General," which contains information about statutory authority, because that information is already contained at the bottom of each section in the Virginia Administrative Code.

Estimated Benefits and Costs. Updating citations to the Code of Virginia would be beneficial because it helps enable readers of the regulation to find relevant information. Otherwise, the proposed amendments would not have any substantive impact in practice.

Businesses and Other Entities Affected. The proposed amendments affect readers of the regulation. People who are interested in becoming an escheator,⁶ auctioneer for an escheat auction, or a bidder at an escheat auction, may be particularly interested in reading the regulation.

The Code of Virginia requires DPB to assess whether an adverse impact may result from the proposed regulation.⁷ An adverse impact is indicated if there is any increase in net cost or reduction in net revenue for any entity, even if the benefits exceed the costs for all entities combined. The proposed amendments do not produce an adverse impact.

Small Businesses⁸ Affected.⁹ The proposed amendments do not adversely affect small businesses.

Localities¹⁰ Affected.¹¹ The proposed amendments neither disproportionally affect any particular localities nor affect costs for local governments.

Projected Impact on Employment. The proposed amendments do not affect employment.

Effects on the Use and Value of Private Property. The proposed amendments do not affect the use and value of private property or real estate development costs.

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¹Section 2.2-4007.04 of the Code of Virginia requires that such economic impact analyses determine the public benefits and costs of the proposed amendments. Further the analysis should include but not be limited to: (1) the projected number of businesses or other entities to whom the proposed regulatory action would apply, (2) the identity of any localities and types of businesses or other entities particularly affected, (3) the projected number of persons and employment positions to be affected, (4) the projected costs to affected businesses or entities to implement or comply with the regulation, and (5) the impact on the use and value of private property.

²See https://townhall.virginia.gov/l/ViewPReview.cfm?PRid=2006

³See https://townhall.virginia.gov/l/viewmandate.cfm?mandateid=1238

⁴See https://lis.virginia.gov/cgi-bin/legp604.exe?191+ful+CHAP0712

⁵According to the Department of the Treasury, "escheat" is "a process by which the state acquires title and/or custody of real or personal property which is unclaimed by, undistributed to, or presumed abandoned by the rightful owner."

⁶The current regulation defines "escheator" as any individual who has been appointed and qualified, and who continues in service in accordance with §§ 55-168 through 55-170 of the Code of Virginia. The proposed regulation updates the citation to §§ 55.1-2401, 55.1-2402, and 55.1-2403.

⁷Pursuant to Code § 2.2-4007.04 D: In the event this economic impact analysis reveals that the proposed regulation would have an adverse economic impact on businesses or would impose a significant adverse economic impact on a locality, business, or entity particularly affected, the Department of Planning and Budget shall advise the Joint Commission on Administrative Rules, the House Committee on Appropriations, and the Senate Committee on Finance. Statute does not define "adverse impact," state whether only Virginia entities should be considered, nor indicate whether an adverse impact results from regulatory requirements mandated by legislation.

⁸Pursuant to § 2.2-4007.04, small business is defined as "a business entity, including its affiliates, that (i) is independently owned and operated and (ii) employs fewer than 500 full-time employees or has gross annual sales of less than $6 million."

⁹If the proposed regulatory action may have an adverse effect on small businesses, § 2.2-4007.04 requires that such economic impact analyses include: (1) an identification and estimate of the number of small businesses subject to the proposed regulation, (2) the projected reporting, recordkeeping, and other administrative costs required for small businesses to comply with the proposed regulation, including the type of professional skills necessary for preparing required reports and other documents, (3) a statement of the probable effect of the proposed regulation on affected small businesses, and (4) a description of any less intrusive or less costly alternative methods of achieving the purpose of the proposed regulation. Additionally, pursuant to Code § 2.2-4007.1, if there is a finding that a proposed regulation may have an adverse impact on small business, the Joint Commission on Administrative Rules shall be notified.

¹⁰"Locality" can refer to either local governments or the locations in the Commonwealth where the activities relevant to the regulatory change are most likely to occur.

¹¹§ 2.2-4007.04 defines "particularly affected" as bearing disproportionate material impact.

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

Summary:

The amendments (i) update citations to the Code of Virginia that changed due to the recodification of Title 55 to Title 55.1 pursuant to Chapter 712 of the 2019 Acts of Assembly; (ii) remove obsolete text and a form; and (iii) update a reference to the Administrative Process Act.

1VAC75-30-10. Definitions.

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

"Agency" means the Department of the Treasury.

"Escheator" means any individual who has been appointed and qualified, and who continues in service in accordance with §§ 55-168 through 55-170 §§ 55.1-2401, 55.1-2402, and 55.1-2403 of the Code of Virginia.

1VAC75-30-20. General. (Repealed.)

These regulations are promulgated pursuant to the authority set forth in § 55-200.1 55.1-2439 of the Code of Virginia which requires the State Treasurer to adopt any necessary rules and regulations in accordance with the Administrative Process Act to carry out the provisions of the Escheat Generally Statutes Chapter 10 (§ 55-168 et seq.) of Title 55 of the Code of Virginia.

1VAC75-30-30. Effective date. (Repealed.)

This chapter shall be effective on and after July 1, 1992.

1VAC75-30-40. Annual reporting requirement for local government treasurers.

An Annual Escheat Report shall be submitted by each local government treasurer, director of finance, or other designated local government official to the appointed escheator for that locality and to the agency by May 31 of each year for the calendar year just ended. This report is required even if there are no real property parcels to be reported. The report shall be prepared on the appropriate form, or in an approved format, and shall be submitted on either hard copy or an acceptable diskette in a file layout and format approved by the agency. The report shall be certified as to its accuracy by the commissioner of revenue or designated local official prior to the May 31 submission date.

The local government treasurer, director of finance, or other designated local government official shall include in the Annual Escheat Report all real properties pursuant to § 55-171 § 55.1-2404 of the Code of Virginia.

1VAC75-30-60. Required bond for escheators.

Each escheator shall give bond for the judicial circuit for which he is appointed in the circuit court for the locality in which he resides. The bond in the amount of $3,000 must shall be obtained within 60 days of confirmation of the appointment and a copy of such bond should be provided to the Treasurer of Virginia State Treasurer. This bond shall remain in force as long as the escheator shall continue in office until removed or until a successor is duly appointed and qualified.

If property in another locality within the judicial circuit escheats to the Commonwealth at the inquest hearing, the escheator shall give additional bond pursuant to the requirements in § 55-169 § 55.1-2402 of the Code of Virginia.

1VAC75-30-70. Escheator's responsibility for collection of sale proceeds and remittance to State Treasurer.

The escheator shall be responsible for the collection of all moneys during the escheat process. Any and all moneys collected during the escheat process shall be deposited into the bank account of the escheator no later than the next banking day following the collection date. A check for the full amount collected shall be drawn on this account and made payable to the Treasurer of Virginia no later than 10 banking days following the deposit date. The escheator shall submit the check and complete columns 5, 6, 7, and 8 of the Annual Escheat Report Form received from the local treasurer or submit other supporting documentation for funds collected other than sale proceeds.

The escheator shall be responsible for the collection of any checks relative to the escheat process returned by the bank to the escheator's bank account for insufficient funds or any other reason which that makes a check uncollectible. The escheator shall institute procedures for collection of these moneys immediately upon notification from the bank that a check has been returned uncollected. The procedures shall include, but not be limited to, a written notice to the maker of the returned check advising the maker that payment, with certified funds or cash, be made within five business days of the correspondence date. In regard to a sale transaction, the notice shall state that failure to comply may result in (i) the forfeiture of any deposit and the resale of escheated property pursuant to § 55-187 § 55.1-2425 of the Code of Virginia, (ii) a suit to enforce specific performance of the sale agreement, (iii) resale of the property and suit for any damages resulting from default by the purchaser, or (iv) any other remedy at law or in equity available to a seller against a defaulting purchaser of real estate.

1VAC75-30-90. Required written disclosures to be made by the escheator at the escheat auction.

The escheator shall provide written information to any and all individuals who register as a bidder for an escheat sale that the grant for the escheated property will be issued in accordance with § 55-186.1 § 55.1-2422 of the Code of Virginia and that this statutory form of grant contains no warranty of title. In addition, the written information shall instruct any and all bidders seeking a recovery of proceeds from a sale of escheated property that the recovery of proceeds of each sale from the Commonwealth, less the expenses of sale and the escheator's fee, may be obtained if the buyer, pursuant to § 55-200 § 55.1-2438 of the Code of Virginia, submits satisfactory evidence to the State Treasurer within 120 days of the sale that the escheated property does not exist or was improperly escheated.

1VAC75-30-110. Reimbursable expenses and required documents of the auctioneer.

The auctioneer shall submit an expense report with supporting documentation to the State Treasurer within 30 days of the auction to ensure proper reimbursement of the auction expenses pursuant to § 55-186 § 55.1-2421 of the Code of Virginia. Reimbursable expenses shall include: advertisements, postage, payroll, and any other expenses directly related to the auction, but in no case shall the expense reimbursement exceed 5.0% of the proceeds collected. Proceeds do not include recording fees.

1VAC75-30-120. Fees charged for requests under the Virginia Freedom of Information Act (§ 2.1-340 § 2.2-3700 et seq. of the Code of Virginia).

Fees shall be computed on all requests for information under the Virginia Freedom of Information Act, Chapter 21 37 (§ 2.1-340 § 2.2-3700 et seq.) of Title 2.1 2.2 of the Code of Virginia, related to the escheat process. The fee assessed shall be determined based on the actual time of the employee performing the duties necessary to comply with the request and other costs incurred. Other costs include copies, postage, and any other cost directly associated with providing the requested information.

If there is an amount due the agency and it is in excess of 30 days past due, current and future requests for information will be withheld until the outstanding amount is paid to the agency. Continued failure to pay fees when due may result in the agency requesting payment in advance.

FORMS (1VAC75-30)

Annual Escheat Report, #ESH-1 (3/93).

Title of Regulation: 1VAC75-40. Unclaimed Property Administrative Review Process (amending 1VAC75-40-10 through 1VAC75-40-60).

Statutory Authority: § 55.1-2541 of the Code of Virginia.

Public Hearing Information: No public hearing is currently scheduled.

Public Comment Deadline: February 16, 2022.

Effective Date: March 3, 2022.

Agency Contact: Brad Earl, Director of Unclaimed Property, Department of the Treasury, James Monroe Building, 101 North 14th Street, 4th Floor, Richmond, VA 23219, telephone (804) 807-0073, FAX (804) 786-4653, or email bradley.earl@trs.virginia.gov.

Basis: Pursuant to § 55.1-2541 D of the Code of Virginia, the State Treasurer or Treasurer's designee shall promulgate regulations pursuant to which any person (i) asserting ownership of property remitted to the Commonwealth under this chapter, (ii) required to pay or deliver abandoned property pursuant to this chapter, or (iii) otherwise aggrieved by a decision of the administrator may file an application for administrative appeal and correction of the administrator's determination.

Purpose: The purpose of this revision to the Unclaimed Property Administrative Review Process regulations is to update language in response to recent recodification of Title 55 to Title 55.1 via Chapter 712 of the 2019 Acts of Assembly. The Department of Treasury affirms that the consistency between statute and regulation is important to public health, safety, and welfare with regard to the unclaimed property regulations.

Rationale for Using Fast-Track Rulemaking Process: Outside of the renaming of the statute and several minor semantic changes, there were no substantive changes to the statute so the action is deemed to be noncontroversial.

Substance: The Department of Treasury has amended 1VAC75-40 to conform the regulation to the recodification of Title 55 to Title 55.1 via Chapter 712 of the 2019 Acts of Assembly.

Issues: The primary advantage of the regulatory update to the public is elimination of potential confusion because of outdated statutory citations. There are no disadvantages to the public. There are no primary advantages and disadvantages to the agency or the Commonwealth.

Department of Planning and Budget's Economic Impact Analysis:

The Department of Planning and Budget (DPB) has analyzed the economic impact of this proposed regulation in accordance with § 2.2-4007.04 of the Code of Virginia (Code) and Executive Order 14 (as amended, July 16, 2018). The analysis presented represents DPB's best estimate of these economic impacts.¹

Summary of the Proposed Amendments to Regulation. As the result of a legislative mandate,² the State Treasurer proposes to amend 1VAC75-40 Unclaimed Property Administrative Review Process (regulation) to update Code of Virginia citations that are no longer valid due to the recodification of the Uniform Disposition of Unclaimed Property Act³ in 2019. Additionally, obsolete text would be removed and non-consequential wording changes would be made.

Background. Pursuant to a recommendation of the Virginia Code Commission, Title 55.1 (Property and Conveyances) was created in the Code of Virginia as a revision of then existing Title 55 (Property and Conveyances).⁴ The Uniform Disposition of Unclaimed Property Act was in Title 55 prior to the legislation, but is now in Title 55.1 and renamed the Virginia Disposition of Unclaimed Property Act. The regulation contains citations to the Uniform Disposition of Unclaimed Property Act using what are now obsolete numbers. The proposed action would update the name of the act and the citations to the Title 55.1 numbers in the regulation.

Estimated Benefits and Costs. Updating citations to the Code of Virginia would be beneficial because it helps enable readers of the regulation to find relevant information. Otherwise, the proposed amendments would not have any substantive impact in practice.

Businesses and Other Entities Affected. The proposed amendments affect readers of the regulation. The regulation pertains to any person or entity (i) asserting ownership of property remitted to the Commonwealth under the Virginia Disposition of Unclaimed Property Act or (ii) required to pay or deliver abandoned property pursuant to the Virginia Disposition of Unclaimed Property Act. Such persons or people who work for such entities may be particularly interested in reading the regulation.

The Code of Virginia requires DPB to assess whether an adverse impact may result from the proposed regulation.⁵ An adverse impact is indicated if there is any increase in net cost or reduction in net revenue for any entity, even if the benefits exceed the costs for all entities combined. The proposed amendments do not produce adverse impact.

Small Businesses⁶ Affected.⁷ The proposed amendments do not appear to adversely affect small businesses.

Localities⁸ Affected.⁹ The proposed amendments neither disproportionally affect any particular localities nor affect costs for local governments.

Projected Impact on Employment. The proposed amendments do not affect employment.

Effects on the Use and Value of Private Property. The proposed amendments do not affect the use and value of private property or real estate development costs.

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¹ Section 2.2-4007.04 of the Code of Virginia requires that such economic impact analyses determine the public benefits and costs of the proposed amendments. Further the analysis should include but not be limited to: (1) the projected number of businesses or other entities to whom the proposed regulatory action would apply, (2) the identity of any localities and types of businesses or other entities particularly affected, (3) the projected number of persons and employment positions to be affected, (4) the projected costs to affected businesses or entities to implement or comply with the regulation, and (5) the impact on the use and value of private property.

²See https://townhall.virginia.gov/l/viewmandate.cfm?mandateid=1239

³See https://law.lis.virginia.gov/vacode/title55.1/chapter25/

⁴See Chapter 712 of the 2019 Acts of Assembly at https://lis.virginia.gov/cgi-bin/legp604.exe?191+ful+CHAP0712

⁵Pursuant to § 2.2-4007.04 D: In the event this economic impact analysis reveals that the proposed regulation would have an adverse economic impact on businesses or would impose a significant adverse economic impact on a locality, business, or entity particularly affected, the Department of Planning and Budget shall advise the Joint Commission on Administrative Rules, the House Committee on Appropriations, and the Senate Committee on Finance. Statute does not define "adverse impact," state whether only Virginia entities should be considered, nor indicate whether an adverse impact results from regulatory requirements mandated by legislation.

⁶Pursuant to § 2.2-4007.04, small business is defined as "a business entity, including its affiliates, that (i) is independently owned and operated and (ii) employs fewer than 500 full-time employees or has gross annual sales of less than $6 million."

⁷If the proposed regulatory action may have an adverse effect on small businesses, § 2.2-4007.04 requires that such economic impact analyses include: (1) an identification and estimate of the number of small businesses subject to the proposed regulation, (2) the projected reporting, recordkeeping, and other administrative costs required for small businesses to comply with the proposed regulation, including the type of professional skills necessary for preparing required reports and other documents, (3) a statement of the probable effect of the proposed regulation on affected small businesses, and (4) a description of any less intrusive or less costly alternative methods of achieving the purpose of the proposed regulation. Additionally, pursuant to Code § 2.2-4007.1, if there is a finding that a proposed regulation may have an adverse impact on small business, the Joint Commission on Administrative Rules shall be notified.

⁸"Locality" can refer to either local governments or the locations in the Commonwealth where the activities relevant to the regulatory change are most likely to occur.

⁹§ 2.2-4007.04 defines "particularly affected" as bearing disproportionate material impact.

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

Summary:

The amendments (i) update citations to the Code of Virginia that changed due to the recodification of Title 55 to Title 55.1 pursuant to Chapter 712 of the 2019 Acts of Assembly; (ii) remove obsolete text; and (iii) update definitions, clarify language, and remove a form.

1VAC75-40-10. Definitions.

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

"Abandoned property" means funds or other property, tangible or intangible, presumed abandoned under the act.

"Act" refers to the Uniform Virginia Disposition of Unclaimed Property Act, Chapter 11.1 25 (§ 55-210.1 55.1-2500 et seq.) of Title 55 55.1 of the Code of Virginia.

"Administrator" means the Director of the Unclaimed Property Division at the Department of the Treasury or such other person as shall be designated by the State Treasurer or the State Treasurer's designee.

"Applicant" means any person (i) asserting ownership of property remitted to the Commonwealth under the Uniform Virginia Disposition of Unclaimed Property Act, (ii) required to pay or deliver abandoned property pursuant to the Uniform Virginia Disposition of Unclaimed Property Act, or (iii) otherwise aggrieved by a decision of the administrator.

"Division of Unclaimed Property" means the Division in the Department of the Treasury of the Commonwealth of Virginia responsible for administration of the Uniform Virginia Disposition of Unclaimed Property Act.

"Holder" means a person, wherever organized or domiciled, who is (i) in possession of property belonging to another, (ii) a trustee in case of a trust, or (iii) indebted to another on an obligation.

1VAC75-40-20. State Treasurer Administrator to give written notice to any person asserting ownership of property when payment denied.

The State Treasurer administrator will issue a denial of payment letter to any person asserting ownership of property remitted to the Commonwealth under the act where it is determined that the evidence submitted does not provide sufficient proof of ownership.

1VAC75-40-30. State Treasurer Administrator to give written notice for failure to pay or deliver abandoned property.

The State Treasurer administrator shall issue a written notice to any person who he the administrator ascertains has failed to pay or deliver abandoned property. The notice will demand the remittance of the property and payment of any penalties and interest. The notice will be accompanied by a detailed explanation of the person's right to administrative or judicial review. The notice will require the holder to remit the demanded property, plus penalties and interest, if any, to the State Treasurer administrator within 90 days from the date the notice is received by the holder unless the holder requests (i) an administrative review in accordance with this regulation, or (ii) a judicial review in accordance with § 55-210.22 55.1-2534 of the Code of Virginia.

1VAC75-40-40. Request for administrative review.

Any person aggrieved by a decision of the administrator may file an application a request for administrative review and correction of the administrator's determination.

1. Any person asserting ownership of property remitted to the Commonwealth receiving a denial of payment letter from the State Treasurer administrator may file an application for administrative review within 90 days from the date the notice is received by such person.

2. Any person receiving a written notice from the State Treasurer administrator demanding the remittance of property and the payment of penalties and interest, if any, may file an application for administrative review within 90 days after receipt by the holder of the written notice.

3. Any person otherwise aggrieved by a decision of the administrator may file an application for administrative review within 90 days from the date the written notice is received by such person.

1VAC75-40-50. Application Submission of request for administrative review.

All requests for an administrative review are required to be submitted on the form entitled "Application for an Administrative Review" within the prescribed time period. The Application for an Administrative Review must be in writing and accompanied by the documentation to support the review or an explanation as to why such supporting documentation is not available. No application request shall be denied solely on the basis that no supporting documentation is available or that additional documentation may be desirable. Failure to submit the Application for an Administrative Review request within the prescribed time period will bar administrative but not judicial review of the matter.

1VAC75-40-60. Administrative review process steps.

A. The Application for an Administrative Review form request must be submitted to the administrator as agent for the State Treasurer within the prescribed time period.

B. The administrator will contact the applicant to schedule the administrative review meeting within 30 calendar days of the receipt of the Application for an Administrative Review request.

C. The administrative review will be held at the office of the State Treasurer Department of the Treasury at an agreed upon time during the next 30 calendar days or at such later time as is mutually agreed upon by the applicant and the administrator. Prior to the review meeting, the applicant shall present any additional evidence and pertinent information supporting the basis for the Application for an Administrative Review request.

D. The review panel for the Department of the Treasury will consist of the State Treasurer or designee, the Director of Unclaimed Property or designee, and a representative from the Office of the Attorney General. A representative from the Division of Unclaimed Property Audit or Claims area may also participate in the administrative review meeting. The applicant may be assisted at the review meeting by his agent or by legal counsel, or both.

E. During the administrative review meeting, the applicant will have an opportunity to explain his reason for requesting a correction. Members of the State Treasurer's review panel may ask questions to clarify their understanding of the issues. There will be no examination or cross-examination of any of those present at the meeting. The Division of Unclaimed Property (Division) shall allow the applicant to make an audio recording of the administrative review meeting at the applicant's expense and using the applicant's equipment. The division may make an audio recording of the administrative review meeting at the division's expense and using the division's equipment. The division shall, upon request of the applicant, provide the applicant a transcript of a meeting recorded by the division. The division may charge the applicant for the cost of the requested transcription and reproduction of the transcript. Receipts from the charges for the transcripts shall be credited to the division for reimbursement of transcription expenses.

F. The State Treasurer's review panel has the ability to approve claims, correct errors and amend or withdraw any denial of payment letter or other written notice from the administrator or State Treasurer.

G. Based on the evidence and additional information presented during the review meeting, the State Treasurer will issue a written determination to the applicant within 90 days of the receipt of the Application for an Administrative Review request. The State Treasurer will notify the applicant and the administrator if a longer period is required. The State Treasurer's written determination will also advise the applicant of his right to seek judicial review pursuant to § 55-210.22 55.1-2534 of the Code of Virginia.

FORMS (1VAC75-40)

Application for an Administrative Review (eff. 9/04).

Title of Regulation: 2VAC5-560. Rules and Regulations Pertaining to Labeling and Sale of Infant Formula (amending 2VAC5-560-50, 2VAC5-560-70).

Statutory Authority: § 3.2-5121 of the Code of Virginia.

Public Hearing Information: No public hearing is currently scheduled.

Public Comment Deadline: February 16, 2022.

Effective Date: March 3, 2022.

Agency Contact: Ryan Davis, Program Manager, Office of Dairy and Foods, Department of Agriculture and Consumer Services, P.O. Box 1163, Richmond, VA 23218, telephone (804) 786-8910, FAX (804) 371-7792, TDD (800) 828-1120, or email ryan.davis@vdacs.virginia.gov.

Basis: Section 3.2-109 of the Code of Virginia establishes the Board of Agriculture and Consumer Services as a policy board with the authority to adopt regulations in accordance with the provisions of Title 3.2 of the Code of Virginia. Section 3.2-5121 of the Code of Virginia grants the board authority to adopt regulations for the efficient enforcement of Article 3 (§ 3.2-5120 et seq.) of Chapter 51 of Title 3.2 of the Code of Virginia, which pertains to the adulteration, misbranding, and false advertising of food.

Purpose: The purpose of the proposed amendments is to ensure that the regulation and its references are accurate. The proposed amendments protect the health, safety, and welfare of Virginia's citizens in that they ensure that the regulation and the Code of Virginia references contained therein are current and enforceable. A current and enforceable infant formula regulation will ensure that infants receive and consume infant formula that is nutritious and capable of supporting the infant's growth, health, and wellbeing. The goal of the proposed amendments is to ensure a regulation with references to the Code of Virginia that are accurate, updated, and enforceable.

Rationale for Using Fast-Track Rulemaking Process: A periodic regulatory review of this regulation identified references to the Code of Virginia that are outdated and inaccurate. These sections needed to be amended to reflect an accurate reference. This rulemaking is expected to be noncontroversial and therefore appropriate for the fast-track rulemaking process because the proposed amendments simply ensure the regulation is accurate.

Substance: The misbranding provision in this regulation references a Code of Virginia section that was eliminated when Title 3.1 was recodified. The proposed amendment updates the reference to § 3.2-5123 A 1 of the Code of Virginia.

The section of this regulation pertaining to the sale of a product unfit for food also references an obsolete section of Title 3.1 of the Code of Virginia and will be updated to subdivision 3 of § 3.2-5122 of the Code Virginia.

Issues: The proposed amendments will ensure an accurate, updated, and enforceable regulation. The amended regulation will further ensure that infant formula is not sold beyond the scientifically determined expiration date and will further ensure that infants will consume nutritionally sound formula in order to ensure the infant's health, growth, and development.

The primary advantage to the agency and Commonwealth is that the agency can ensure an enhanced degree of public health protection by ensuring that infant formula consumed in the Commonwealth is nutritionally sound.

There do not appear to be any disadvantages to the public or the Commonwealth.

Department of Planning and Budget's Economic Impact Analysis:

Summary of the Proposed Amendments to Regulation. As the result of a 2021 periodic review,¹ the Board of Agriculture and Consumer Services (Board) is proposing to update two references to the Code of Virginia.

Background. This regulation requires that any container of infant formula manufactured or sold in the Commonwealth of Virginia conspicuously show the calendar month and year after which the product is not to be sold or used for human consumption. For many children, infant formula is the sole source of nutrition during the initial stages of life. Manufacturers must ensure scientifically that infant formula consumed contains the appropriate spectrum and quality of nutrients required for growth and development as long as the formula is consumed by the expiration date and retailers must ensure that expired infant formula is not sold to consumers.

The regulation provides that any infant formula manufacturer knowingly filing incorrect or unverifiable data with the Commissioner or placing an expiration date upon a shipping carton, container, or any consumer package that is inconsistent with the data filed with the Commissioner shall be considered to have misbranded the formula.

The regulation also states that any manufacturer, distributor, dealer, or other person who offers for sale or sells infant formula without an expiration date, or who offers for sale or sells infant formula after the expiration date shown, shall be deemed to be offering for sale a product that is unfit for food.

The misbranding provision in this regulation references a section of the Code of Virginia (Code) that addresses misbranding. The section of the Code that is referenced, § 3.1-396(a), no longer exists, as Title 3.1 of the Code was recodified in 2008.² The correct reference to the statue is now § 3.2-5123(a)(1). The proposed amendment updates the reference so that it refers to the correct section of the Code of Virginia.

Similarly, the section of this regulation pertaining to the sale of a product unfit for food references a section of the Code that addresses adulterated food products. This section of the Code that is referenced, § 3.1-395(a)(3), also no longer exists due the recodification of Title 3.1 in 2008. The regulation should reference § 3.2-5122(3). The proposed change updates the reference so that it refers to the correct section of the Code.

Estimated Benefits and Costs. The proposed changes simply update references to the Code of Virginia regarding misbranding and unfit food without any change in regulatory requirements. Therefore, no significant economic effect is expected other than improving the accuracy of the regulatory text.

Businesses and Other Entities Affected. This regulation applies to one manufacturer of infant formula in the Commonwealth and approximately 9,000 retail establishments that may be offering infant formula for sale. No adverse economic impact³ on any entity is indicated.

Small Businesses⁴ Affected. The proposed amendments do not adversely affect small businesses.

Localities⁵ Affected.⁶ The proposed amendments do not introduce costs for local governments and do not affect any particular locality.

Projected Impact on Employment. The proposed amendments do not affect total employment.

Effects on the Use and Value of Private Property. No impact on the use and value of private property or on the real estate development costs is expected.

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¹https://townhall.virginia.gov/L/ViewPReview.cfm?PRid=1984

²https://lis.virginia.gov/cgi-bin/legp604.exe?ses=081&typ=bil&val=ch860

³Adverse impact is indicated if there is any increase in net cost or reduction in net revenue for any entity, even if the benefits exceed the costs for all entities combined.

⁴Pursuant to § 2.2-4007.04 of the Code of Virginia, small business is defined as "a business entity, including its affiliates, that (i) is independently owned and operated and (ii) employs fewer than 500 full-time employees or has gross annual sales of less than $6 million."

⁵"Locality" can refer to either local governments or the locations in the Commonwealth where the activities relevant to the regulatory change are most likely to occur.

⁶§ 2.2-4007.04 defines "particularly affected" as bearing disproportionate material impact.

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

Summary:

The amendments update citations to the Code of Virginia that changed due to the recodification of Title 3.1 to Title 3.2 pursuant to Chapter 860 of the 2008 Acts of Assembly.

2VAC5-560-50. Misbranding.

Knowingly filing incorrect or unverifiable data with the commissioner, or placing an expiration date upon a shipping carton, container, or any consumer package which that is inconsistent with the data filed with the commissioner, shall be considered to be misbranding under § 3.1-396(a) § 3.2-5123 A 1 of the Code of Virginia. However, it shall not be considered misbranded if the expiration date shown is an earlier date than the filed data could warrant.

2VAC5-560-70. Sale of a product unfit for food.

Any manufacturer, distributor, dealer, or other person who offers for sale or sells infant formula without an expiration date, or who offers for sale or sells infant formula after the expiration date shown, shall be deemed to be offering for sale a product unfit for food within the meaning of § 3.1-395(a)(3) as described in subdivision 3 of § 3.2-5122 of the Code of Virginia.

FORMS (2VAC5-560)

Inspection Report, Form VDACS-06017.

Title of Regulation: 6VAC16-10. Public Participation Guidelines (adding 6VAC16-10-10 through 6VAC16-10-110).

Statutory Authority: §§ 2.2-4007.02 and 53.1-266 of the Code of Virginia.

Public Hearing Information: No public hearing is currently scheduled.

Public Comment Deadline: February 16, 2022.

Effective Date: March 5, 2022.

Agency Contact: Tracey Jenkins, Grant Administrator, Department of Corrections, 6900 Atmore Drive, Richmond, VA 23225, telephone (804) 887-7898, or email tracey.jenkins@vadoc.virginia.gov.

Basis: Section 2.2-4007.02 of the Code of Virginia requires state agencies to develop, adopt, and use public participation guidelines in order to ensure the involvement of interested persons in the formation and development of the agency's regulations.

The Director of the Department of Corrections is authorized under § 53.1-266 of the Code of Virginia to promulgate regulations as related to the administration of specific duties and responsibilities of the department.

Purpose: This regulatory action is necessary to comply with § 2.2-4007.02 of the Code of Virginia, which requires state agencies to develop, adopt, and use public participation guidelines in order to ensure the involvement of interested persons in the formation and development of the agency's regulations. Participation by the public in the regulatory process is essential to assist the department in the promulgation of regulations that will protect the public health and safety.

Rationale for Using Fast-Track Rulemaking Process: The proposed regulatory action establishes public participation guidelines for the Department of Corrections under 6VAC16. Section 2.2-4007.02 of the Administrative Process Act requires agencies to adopt public participation guidelines, which are procedures for obtaining public input from interested parties in the formation and development of an agency's regulations. Regulations under 6VAC15-10 are specific for the Board of Local and Regional Jails and do not extend to regulations that must be promulgated for the Department of Corrections under 6VAC16; therefore, separate public participation guidelines are necessary under 6VAC16.

The proposed regulation follows model public participation guidelines used by agencies throughout the Commonwealth for obtaining public input from interested parties in the formation and development of an agency's regulations. Therefore, these are expected to be noncontroversial and appropriate for the fast-track rulemaking process.

Substance: The proposed regulation follows model public participation guidelines used by agencies throughout the Commonwealth for obtaining public input from interested parties in the formation and development of an agency's regulations without deviation. As provided for in model public participation guidelines, the proposed regulations include the following parts and sections:

Part I: Purpose and Definitions; sections: Purpose; Definitions

Part II: Notification of Interested Persons; sections: Notification list; Information to be sent to persons on the notification list

Part III: Public Participation Procedures; sections: Public comment; Petition for rulemaking; Appointment of regulatory advisory panel; Appointment of negotiated rulemaking panel; Meetings; Public hearings on regulations; Periodic review of regulations

Issues: The primary advantage of the regulatory proposal is to provide guidance for obtaining public input from interested parties in the formation and development of an agency's regulations. The regulation will benefit the general public and the department by ensuring that a standardized process for obtaining public input from interested parties is used in the formation and development of an agency's regulations. There are no disadvantages associated with the regulatory proposal for the public or Commonwealth.

Department of Planning and Budget's Economic Impact Analysis:

The Department of Planning and Budget (DPB) has analyzed the economic impact of this proposed regulation in accordance with § 2.2-4007.04 of the Code of Virginia (Code) and Executive Order 14 (as amended, July 16, 2018). The analysis presented below represents DPB's best estimate of these economic impacts.¹

Summary of the Proposed Amendments to Regulation. The Department of Corrections (DOC) proposes to promulgate Public Participation Guidelines (PPGs).

Background. In § 2.2-4007.02, the Virginia Administrative Process Act requires agencies to adopt PPGs for soliciting the input of interested parties in the formation and development of its regulations.² The guidelines shall set out any methods for the identification and notification of interested parties and any specific means of seeking input from interested persons or groups that the agency intends to use in addition to the Notice of Intended Regulatory Action. The PPGs must also set out a general policy for the use of standing or ad hoc advisory panels and consultation with groups and individuals registering interest in working with the agency. Such policy shall address the circumstances in which the agency considers the panels or consultation appropriate and intends to make use of the panels or consultation.

DOC's proposed PPGs follow the model PPGs developed by DPB,³ and also reflect 2012 legislation concerning PPGs. Chapter 795 of the 2012 Acts of Assembly⁴ clarified that in formulating any regulation or in evidentiary hearings on regulations, an interested party shall be entitled to be accompanied by and represented by counsel or other qualified representative.

Chapter 759 of the 2020 Acts of Assembly⁵ renamed the Board of Corrections as the State Board of Local and Regional Jails. As a result, the location in the Virginia Administrative Code where the regulations of the Board of Corrections resided (6 VAC 15) was renamed State Board of Local and Regional Jails. There currently are PPGs in 6VAC15, namely 6VAC15-11.⁶

DOC and the Registrar of Regulations determined, however, that some of the regulations formerly under the Board of Corrections fall under the authority of DOC. Hence, the Registrar assigned a new location for regulations of DOC within the VAC (6VAC16); and since each regulatory entity needs to have PPGs in place, the DOC proposes to promulgate such a regulation now.

Estimated Benefits and Costs. The proposed regulation would benefit the general public and DOC by ensuring that a clear standardized process for obtaining public input from interested parties is used in the formation and development of the agency's regulations.

Businesses and Other Entities Affected. The proposed regulation affects people interested in providing input regarding the formation and development of DOC regulations, as well as DOC.

The Code of Virginia requires the DPB to assess whether an adverse impact may result from the proposed regulation.⁷ An adverse impact is indicated if there is any increase in net cost or reduction in net revenue for any entity, even if the benefits exceed the costs for all entities combined. The proposed regulation does not produce an adverse impact.

Small Businesses⁸ Affected.⁹ The proposed regulation does not appear to adversely affect small businesses.

Localities¹⁰ Affected.¹¹ The proposed regulation does not disproportionally affect any particular localities, and does not affect costs for local governments.

Projected Impact on Employment. The proposed regulation does not appear to affect employment.

Effects on the Use and Value of Private Property. The proposed regulation does not appear to affect the use and value of private property or real estate development costs.

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¹Section 2.2-4007.04 of the Code of Virginia requires that such economic impact analyses determine the public benefits and costs of the proposed amendments. Further the analysis should include but not be limited to: (1) the projected number of businesses or other entities to whom the proposed regulatory action would apply, (2) the identity of any localities and types of businesses or other entities particularly affected, (3) the projected number of persons and employment positions to be affected, (4) the projected costs to affected businesses or entities to implement or comply with the regulation, and (5) the impact on the use and value of private property.

²See http://law.lis.virginia.gov/vacode/title2.2/chapter40/section2.2-4007.02/

³Chapter 321 of the 2008 Acts of Assembly required DPB, in consultation with the Office of the Attorney General, to develop model PPGs. See http://leg1.state.va.us/cgi-bin/legp504.exe?081+ful+CHAP0321

⁴See https://lis.virginia.gov/cgi-bin/legp604.exe?121+ful+CHAP0795

⁵See https://lis.virginia.gov/cgi-bin/legp604.exe?201+ful+CHAP0759

⁶See https://law.lis.virginia.gov/admincode/title6/agency15/chapter11/

⁷Pursuant to Code § 2.2-4007.04 D: In the event this economic impact analysis reveals that the proposed regulation would have an adverse economic impact on businesses or would impose a significant adverse economic impact on a locality, business, or entity particularly affected, the Department of Planning and Budget shall advise the Joint Commission on Administrative Rules, the House Committee on Appropriations, and the Senate Committee on Finance. Statute does not define "adverse impact," state whether only Virginia entities should be considered, nor indicate whether an adverse impact results from regulatory requirements mandated by legislation.

⁸Pursuant to § 2.2-4007.04, small business is defined as "a business entity, including its affiliates, that (i) is independently owned and operated and (ii) employs fewer than 500 full-time employees or has gross annual sales of less than $6 million."

⁹If the proposed regulatory action may have an adverse effect on small businesses, § 2.2-4007.04 requires that such economic impact analyses include: (1) an identification and estimate of the number of small businesses subject to the proposed regulation, (2) the projected reporting, recordkeeping, and other administrative costs required for small businesses to comply with the proposed regulation, including the type of professional skills necessary for preparing required reports and other documents, (3) a statement of the probable effect of the proposed regulation on affected small businesses, and (4) a description of any less intrusive or less costly alternative methods of achieving the purpose of the proposed regulation. Additionally, pursuant to Code § 2.2-4007.1, if there is a finding that a proposed regulation may have an adverse impact on small business, the Joint Commission on Administrative Rules shall be notified.

¹⁰"Locality" can refer to either local governments or the locations in the Commonwealth where the activities relevant to the regulatory change are most likely to occur.

¹¹§ 2.2-4007.04 defines "particularly affected" as bearing disproportionate material impact.

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

Summary:

This regulatory action establishes Public Participation Guidelines (6VAC16-10) for the Department of Corrections, which are procedures for obtaining public input from interested parties in the formation and development of an agency's regulations.

Chapter 10

Public Participation Guidelines

Part I

Purpose and Definitions

6VAC16-10-10. Purpose.

The purpose of this chapter is to promote public involvement in the development, amendment or repeal of the regulations of the Department of Corrections. This chapter does not apply to regulations, guidelines, or other documents exempted or excluded from the provisions of the Administrative Process Act (§ 2.2-4000 et seq. of the Code of Virginia).

6VAC16-10-20. Definitions.

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

"Administrative Process Act" means Chapter 40 (§ 2.2-4000 et seq.) of Title 2.2 of the Code of Virginia.

"Agency" means the Department of Corrections, which is the unit of state government empowered by the agency's basic law to make regulations or decide cases. Actions specified in this chapter may be fulfilled by state employees as delegated by the agency.

"Basic law" means provisions in the Code of Virginia that delineate the basic authority and responsibilities of an agency.

"Commonwealth Calendar" means the electronic calendar for official government meetings open to the public as required by § 2.2-3707 C of the Freedom of Information Act.

''Negotiated rulemaking panel'' or ''NRP'' means an ad hoc advisory panel of interested parties established by an agency to consider issues that are controversial with the assistance of a facilitator or mediator, for the purpose of reaching a consensus in the development of a proposed regulatory action.

"Notification list" means a list used to notify persons pursuant to this chapter. Such a list may include an electronic list maintained through the Virginia Regulatory Town Hall or other list maintained by the agency.

"Open meeting" means any scheduled gathering of a unit of state government empowered by an agency's basic law to make regulations or decide cases, which is related to promulgating, amending, or repealing a regulation.

"Person" means any individual, corporation, partnership, association, cooperative, limited liability company, trust, joint venture, government, political subdivision, or any other legal or commercial entity and any successor, representative, agent, agency, or instrumentality thereof.

"Public hearing" means a scheduled time at which members or staff of the agency will meet for the purpose of receiving public comment on a regulatory action.

"Regulation" means any statement of general application having the force of law, affecting the rights or conduct of any person, adopted by the agency in accordance with the authority conferred on it by applicable laws.

"Regulatory action" means the promulgation, amendment, or repeal of a regulation by the agency.

"Regulatory advisory panel" or "RAP" means a standing or ad hoc advisory panel of interested parties established by the agency for the purpose of assisting in regulatory actions.

"Town Hall" means the Virginia Regulatory Town Hall, the website operated by the Virginia Department of Planning and Budget at www.townhall.virginia.gov, which has online public comment forums and displays information about regulatory meetings and regulatory actions under consideration in Virginia and sends this information to registered public users.

"Virginia Register" means the Virginia Register of Regulations, the publication that provides official legal notice of new, amended and repealed regulations of state agencies, which is published under the provisions of Article 6 (§ 2.2-4031 et seq.) of the Administrative Process Act.

Part II

Notification of Interested Parties

6VAC16-10-30. Notification list.

A. The agency shall maintain a list of persons who have requested to be notified of regulatory actions being pursued by the agency.

B. Any person may request to be placed on a notification list by registering as a public user on the Town Hall or by making a request to the agency. Any person who requests to be placed on a notification list shall elect to be notified either by electronic means or through a postal carrier.

C. The agency may maintain additional lists for persons who have requested to be informed of specific regulatory issues, proposals, or actions.

D. When electronic mail is returned as undeliverable on multiple occasions at least 24 hours apart, that person may be deleted from the list. A single undeliverable message is insufficient cause to delete the person from the list.

E. When mail delivered by a postal carrier is returned as undeliverable on multiple occasions, that person may be deleted from the list.

F. The agency may periodically request those persons on the notification list to indicate their desire to either continue to be notified electronically, receive documents through a postal carrier, or be deleted from the list.

6VAC16-10-40. Information to be sent to persons on the notification list.

A. To persons electing to receive electronic notification or notification through a postal carrier as described in 6VAC16-10-30, the agency shall send the following information:

1. A notice of intended regulatory action (NOIRA).

2. A notice of the comment period on a proposed, a reproposed, or a fast-track regulation and hyperlinks to, or instructions on how to obtain, a copy of the regulation and any supporting documents.

3. A notice soliciting comment on a final regulation when the regulatory process has been extended pursuant to § 2.2-4007.06 or 2.2-4013 C of the Code of Virginia.

B. The failure of any person to receive any notice or copies of any documents shall not affect the validity of any regulation or regulatory action.

Part III

Public Participation Procedures

6VAC16-10-50. Public comment.

A. In considering any nonemergency, nonexempt regulatory action, the agency shall afford interested persons an opportunity to (i) submit data, views, and arguments, either orally or in writing, to the agency; and (ii) be accompanied by and represented by counsel or other representative. Such opportunity to comment shall include an online public comment forum on the Town Hall.

1. To any requesting person, the agency shall provide copies of the statement of basis, purpose, substance, and issues; the economic impact analysis of the proposed or fast-track regulatory action; and the agency's response to public comments received.

2. The agency may begin crafting a regulatory action prior to or during any opportunities it provides to the public to submit comments.

B. The agency shall accept public comments in writing after the publication of a regulatory action in the Virginia Register as follows:

1. For a minimum of 30 calendar days following the publication of the notice of intended regulatory action (NOIRA).

2. For a minimum of 60 calendar days following the publication of a proposed regulation.

3. For a minimum of 30 calendar days following the publication of a reproposed regulation.

4. For a minimum of 30 calendar days following the publication of a final adopted regulation.

5. For a minimum of 30 calendar days following the publication of a fast-track regulation.

6. For a minimum of 21 calendar days following the publication of a notice of periodic review.

7. Not later than 21 calendar days following the publication of a petition for rulemaking.

C. The agency may determine if any of the comment periods listed in subsection B of this section shall be extended.

D. If the Governor finds that one or more changes with substantial impact have been made to a proposed regulation, the Governor may require the agency to provide an additional 30 calendar days to solicit additional public comment on the changes in accordance with § 2.2-4013 C of the Code of Virginia.

E. The agency shall send a draft of the agency's summary description of public comment to all public commenters on the proposed regulation at least five days before final adoption of the regulation pursuant to § 2.2-4012 E of the Code of Virginia.

6VAC16-10-60. Petition for Rule Making.

A. As provided in § 2.2-4007 of the Code of Virginia, any person may petition the agency to consider a regulatory action.

B. A petition shall include to the following information:

1. The petitioner's name and contact information;

2. The substance and purpose of the rulemaking that is requested, including reference to any applicable Virginia Administrative Code sections; and

3. Reference to the legal authority of the agency to take the action requested.

C. The agency shall receive, consider, and respond to a petition pursuant to § 2.2-4007 and shall have the sole authority to dispose of the petition.

D. The petition shall be posted on the Town Hall and published in the Virginia Register.

E. Nothing in this chapter shall prohibit the agency from receiving information or from proceeding on its own motion for rulemaking.

6VAC16-10-70. Appointment of regulatory advisory panel.

A. The agency may appoint a regulatory advisory panel to provide professional specialization or technical assistance when the agency determines that such expertise is necessary to address a specific regulatory issue or action or when individuals indicate an interest in working with the agency on a specific regulatory issue or action.

B. Any person may request the appointment of a RAP and request to participate in its activities. The agency shall determine when a RAP shall be appointed and the composition of the RAP.

C. A RAP may be dissolved by the agency if:

1. The proposed text of the regulation is posted on the Town Hall, published in the Virginia Register, or such other time as the agency determines is appropriate; or

2. The agency determines that the regulatory action is either exempt or excluded from the requirements of the Administrative Process Act.

6VAC16-10-80. Appointment of negotiated rulemaking panel.

A. The agency may appoint a negotiated rulemaking panel if a regulatory action is expected to be controversial.

B. An NRP that has been appointed by the agency may be dissolved by the agency when:

1. There is no longer controversy associated with the development of the regulation;

2. The agency determines that the regulatory action is either exempt or excluded from the requirements of the Administrative Process Act; or

3. The agency determines that resolution of a controversy is unlikely.

6VAC16-10-90. Meetings.

Notice of any open meeting, including meetings of a RAP or an NRP, shall be posted on the Town Hall and Commonwealth Calendar at least seven working days prior to the date of the meeting. The exception to this requirement is any meeting held in accordance with § 2.2-3707 D of the Code of Virginia allowing for contemporaneous notice to be provided to participants and the public.

6VAC16-10-100. Public hearings on regulations.

A. The agency shall indicate in its notice of intended regulatory action whether it plans to hold a public hearing following the publication of the proposed stage of the regulatory action.

B. The agency may conduct one or more public hearings during the comment period following the publication of a proposed regulatory action.

C. An agency is required to hold a public hearing following the publication of the proposed regulatory action when:

1. The agency's basic law requires the agency to hold a public hearing;

2. The Governor directs the agency to hold a public hearing; or

3. The agency receives requests for a public hearing from at least 25 persons during the public comment period following the publication of the notice of intended regulatory action.

D. Notice of any public hearing shall be posted on the Town Hall and Commonwealth Calendar at least seven working days prior to the date of the hearing. The agency shall also notify those persons who requested a hearing under subdivision C 3 of this section.

6VAC16-10-110. Periodic review of regulations.

A. The agency shall conduct a periodic review of its regulations consistent with:

1. An executive order issued by the Governor pursuant to § 2.2-4017 of the Administrative Process Act to receive comment on all existing regulations as to their effectiveness, efficiency, necessity, clarity, and cost of compliance; and

2. The requirements in § 2.2-4007.1 of the Administrative Process Act regarding regulatory flexibility for small businesses.

B. A periodic review may be conducted separately or in conjunction with other regulatory actions.

C. Notice of a periodic review shall be posted on the Town Hall and published in the Virginia Register.

Title of Regulation: 8VAC40-31. Regulations Governing Certification of Certain Institutions to Confer Degrees, Diplomas and Certificates (amending 8VAC40-31-260).

Statutory Authority: §§ 23.1-215 and 23.1-224 of the Code of Virginia.

Public Hearing Information: No public hearing is currently scheduled.

Public Comment Deadline: March 18, 2022.

Agency Contact: Beverly Rebar, Senior Associate for Academic and Legislative Affairs, State Council of Higher Education for Virginia, 101 North 14th Street, 9th Floor, Richmond, VA 23219, telephone (804) 371-0571, FAX (804) 225-2604, or email beverlyrebar@schev.edu.

Basis: Section 23.1-215 of the Code of Virginia authorizes the State Council of Higher Education for Virginia (SCHEV) to adopt, pursuant to the Administrative Process Act (§ 2.2-4000 et seq. of the Code of Virginia), such regulations as may be necessary to implement the provisions for standards for certain private and out-of-state institutions of higher education. Section 23.1-224 of the Code of Virginia grants SCHEV authority to establish nonrefundable fees for services and methods for collecting such fees.

Purpose: The Private Postsecondary Education (PPE) unit of SCHEV is funded solely by revenue collected from certification application fees, annual recertification fees, agent fees, religious exemption fees, transcript fees, and program approval fees. The unit does not receive money from general funds. SCHEV must establish fees adequate to support the direct and indirect costs of operating the PPE unit. Indirect costs are assessed to the PPE unit via a cost allocation method that ensures an equitable distribution of costs assumed by SCHEV but consumed by the PPE unit. The annual assessment allows SCHEV to collect PPE's share of operating expenses.

The budget in Fiscal Year (FY) 2020 severely limits the unit's operation in the areas of compliance audits and institutional training. The unit cannot adequately perform its duties by drastically cutting expenses. Section 23.1-215 of the Code of Virginia charges SCHEV with the significant responsibility of ensuring student protections for those attending certified institutions. New schools are only certified to operate after they have been given a thorough assessment to ensure they will be operating within the confines of Virginia law and regulation. Annual recertifications verify financial compliance as well as enrollment and graduation data. Compliance audits verify student records, refunds, quality of online education, and faculty qualifications to teach subjects assigned. PPE staff also handles student complaints, investigates institutions operating without certification, and issues transcripts for closed institutions. In order to perform all these duties effectively, the PPE unit must maintain adequate staffing, have sufficient funds to cover the expense of travel and accommodations for its compliance investigators, have adequate resources to pay for the costs of sustaining an online portal and database, and be able to provide crucial and timely training for staff and regulated institutions.

Substance: The amendments increase certain fees.

Issues: One primary advantage to the public is that consumer protections for students at the regulated schools will be enabled to continue at sufficient levels. Primary advantages to the agency and the Commonwealth are that the PPE unit will be able to fund its operations. The unit will be fully staffed and able to perform the necessary duties to regulate the schools under its purview, providing students of certified schools with adequate consumer protections against fraud or substandard service. Increased fees disadvantage the regulated community due to increased operating costs, but the schools will benefit from the assurance that the unit has adequate resources to respond to concerns and conduct business effectively.

Department of Planning and Budget's Economic Impact Analysis:

Summary of the Proposed Amendments to Regulation. The State Council of Higher Education for Virginia (SCHEV) proposes to increase the fees it charges to private postsecondary schools, including out-of-state schools operating in Virginia. The fee increases are intended to cover the operating costs of the Private Postsecondary Education (PPE) unit, which oversees nearly 300 private education institutions to ensure that institutions certified to operate in the Commonwealth meet minimal academic and administrative capability standards.

In addition, a legislative mandate enacted by the 2020 Acts of Assembly requires SCHEV to certify out-of-state postsecondary schools offering distance learning programs in Virginia, unless those schools are participants of a reciprocity agreement to which the Commonwealth belongs. Thus, the proposed fee changes include new fees for the certification of out-of-state online institutions of higher education that are not members of the National Council for State Authorization Reciprocity Agreements (NC-SARA).

Background. Section 23.1-215 of the Code of Virginia directs SCHEV to establish (i) minimum standards for private providers of postsecondary education, (ii) procedures by which a postsecondary school may seek approval to confer degrees in the Commonwealth, (iii) measures designed to ensure that all postsecondary schools that are subject to the provisions of this article meet the minimal standards, (iv) protections for students attending postsecondary schools subject to the provisions of this article, and (v) information to assist persons who rely on postsecondary degrees or certificates to judge the competence of individuals in receipt of such degrees or certificates.¹

The PPE unit was established within SCHEV to meet these statutory obligations, thereby protecting the citizens of the Commonwealth from fraudulent or substandard educational institutions. To accomplish this, the PPE unit currently regulates 291 private postsecondary schools, including 126 degree-granting institutions of higher education (IHE) and 165 career-technical schools (now called nondegree schools, abbreviated as NDS) at more than 300 locations throughout Virginia.^2,3 Staff responsibilities include approving new postsecondary schools, approving programs, completing compliance audits, granting exemptions, approving agents, and annually recertifying postsecondary schools. In addition, the PPE unit is also charged with investigating student complaints against all postsecondary institutions in the Commonwealth, investigating schools operating without authorization, ensuring student protections for students enrolled in certified postsecondary schools, assisting with school closures, the retention of student transcripts, and serving as the repository for student records from closed institutions.

Section 23.1-224 of the Code of Virginia authorizes SCHEV to "establish nonrefundable fees for services and methods for collecting such fees."⁴ The PPE unit of SCHEV is funded solely by revenue collected from certification application fees, annual recertification fees, agent fees, religious exemption fees, transcript fees, and program approval fees. SCHEV does not receive general funds to perform the duties delegated to the PPE unit, which has no other source of revenue from which to fund its operations.

PPE fees were last evaluated for an increase in 2009. The fee schedule derived from that analysis was adequate to meet the needs of the PPE unit at that time. However, due to a delay in the implementation of the new regulation, the fees did not become effective until February 2014.⁵ Although SCHEV reports that the fees were adequate to cover the operating expenditures for a few years immediately following the increase, the agency states that this is no longer the case. Due to increases in indirect cost assessments by SCHEV and salary increases mandated by the General Assembly, the PPE unit's operating costs have risen such that they exceeded revenue in FY 2020.

Table 1 compares the current and proposed fees for both IHE and NDS. In setting the new fees, SCHEV has sought to minimize the burden on smaller schools and attract new NDS to the Commonwealth. Accordingly, NDS would face no increase to their initial fee or nonrefundable administrative fee. In addition, the PPE unit has a handful of schools that collect very small annual tuition. For 2018, for example, one income tax school reported a total tuition income of $26,000, a barber school reported tuition income of $28,000, and a dental assisting school reported tuition income of $15,000. The agency believes that raising the annual renewal fee beyond the $250 that they currently charge would be burdensome on the smallest schools. Thus, the annual renewal fee for schools with an annual gross tuition under $50,000 would remain unchanged. For all other schools, SCHEV proposes to increase renewal fees such that schools with higher enrollment rates (and thus higher tuition revenue) would face greater percentage increases. SCHEV also proposes to create a new category that would consist of postsecondary schools receiving over $5 million in annual gross tuition.

Table 1: Comparison of current and proposed fees

In addition, a new fee of $1,000 for a request for change in degree level authorization would be added, the fee for each additional instructional location would be increased threefold from $100 to $300, and the application fee for additional programs and modifications to existing programs would now be extended to cover program deletion as well.

Lastly, the proposed changes include a new initial and renewal fee for "out-of-state online institutions of higher education that are not members of NC-SARA." Chapter 380 of the 2020 Acts of Assembly added a definition of "distance learning" and amended § 23.1-219 of the Code of Virginia to add: Any degree-granting postsecondary school providing distance learning to residents of the Commonwealth from a location outside of the Commonwealth shall be certified to operate in the Commonwealth or shall be a participant in a reciprocity agreement to which the Commonwealth belongs for the purpose of consumer protection.⁷ Since this requirement creates new duties for the PPE unit, the new fees are intended to cover the expenses that would arise from discharging those duties. SCHEV has indicated that these fees were set to be high enough to "cover reasonable and anticipated administrative costs of regulating an out-of-state institution that is not a SARA member. The most burdensome duty we will have is conducting site visits outside of Virginia, first within the first 18-24 months of certification, and then about every three years regularly. The need for a site visit can also be triggered by an influx of complaints or other information that would raise compliance concerns, so there needs to be funding available for those contingencies."

Estimated Benefits and Costs. The proposed changes to fees would directly increase costs for private postsecondary educational institutions in Virginia and for out-of-state institutions providing distance learning programs in Virginia. As long as the demand for postsecondary educational programs remains robust, these private institutions would most likely pass on the increased costs to their students rather than reduce its staff or program offerings. Depending on enrollment rates, the increased costs would be distributed across a large number of students and are unlikely to have a significant impact on the cost of attending any single program at any particular institution. Virginia students and their families would benefit from the PPE unit's continued ability to ensure the quality of postsecondary education provided by private institutions in the Commonwealth, including maintained capacity for investigating fraudulent practices and greater oversight of online programs, particularly those not part of NC-SARA.

Businesses and Other Entities Affected. The proposed amendments would impact the 126 degree-granting institutions and 165 career-technical schools that the PPE unit currently oversees as well as new private postsecondary education institutions that may be established in the future. SCHEV has indicated that 206 of the 291 postsecondary schools are operated as for-profit businesses. Although an institution's status as a for-profit has no bearing on the fees charged, for-profit institutions tend to have higher enrollment rates and gross tuition revenue and would accordingly fall in the higher fee brackets.

Small Businesses⁸ Affected. As per the ABD, about 120 of the private postsecondary education institutions overseen by the PPE unit would meet the definition of a small business; however, some of these may be not-for-profit educational institutions and thus may not be considered businesses in the traditional sense.

Localities⁹ Affected.¹⁰ The proposed amendments do not introduce new costs for local governments and are unlikely to affect any locality in particular.

Projected Impact on Employment. As mentioned previously, the proposed fee changes are unlikely to impact employment at private postsecondary education institutions since these costs can be easily spread out over the current and future student body.

Effects on the Use and Value of Private Property. The proposed fee changes are unlikely to affect the use or value of private property for private postsecondary educational institutions. Real estate development costs are not affected.

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¹See https://law.lis.virginia.gov/vacode/title23.1/chapter2/section23.1-215/.

²Section 23.1-213 of the Code of Virginia defines "institution of higher education" as private entities that have received approval from SCHEV to use the term "college" or "university" in its name, enroll students, and offer approved courses for degree credit or programs of study leading to a degree. "Non-college degree school" is defined as any entity that offers courses or programs of study that do not lead to a degree. "Postsecondary school" is defined to include both IHE and NDS. See https://law.lis.virginia.gov/vacode/title23.1/chapter2/section23.1-213/.

³Numbers taken from the Agency Background Document (ABD), page 1. See https://townhall.virginia.gov/L/GetFile.cfm?File=100\5391\9259\AgencyStatement_SCHEV_9259_v1.pdf.

⁴See https://law.lis.virginia.gov/vacode/title23.1/chapter2/section23.1-224/.

⁵See https://townhall.virginia.gov/L/ViewAction.cfm?actionid=3048.

⁶SCHEV clarified that, "We give new institutions six years to become accredited. During the pendency, they will only pay the annual fee for unaccredited institutions, not both fees." There are currently only five unaccredited institutions.

⁷See https://lis.virginia.gov/cgi-bin/legp604.exe?201+ful+CHAP0380+hil.

⁸Pursuant to § 2.2-4007.04 of the Code of Virginia, small business is defined as "a business entity, including its affiliates, that (i) is independently owned and operated and (ii) employs fewer than 500 full-time employees or has gross annual sales of less than $6 million."

⁹"Locality" can refer to either local governments or the locations in the Commonwealth where the activities relevant to the regulatory change are most likely to occur.

¹⁰§ 2.2-4007.04 defines "particularly affected" as bearing disproportionate material impact.

Agency's Response to Economic Impact Analysis: State Council of Higher Education for Virginia concurs with the Department of Planning and Budget's economic impact analysis.

Summary:

The proposed amendments increase fees to cover the essential functions of the Private Postsecondary Education unit of the Academic Affairs division of the State Council of Higher Education for Virginia.

8VAC40-31-260. Fees.

A. All fees collected by council staff will be deposited in the State Treasury.

B. All fees are nonrefundable with the exception of withdrawal of an application in which case all fees will be refunded minus a nonrefundable administrative fee noted in subsection D of this section.

C. Fees must be paid with a company check and made payable to the Treasurer of Virginia.

D. The annual fee is based on the annual gross tuition received by each administrative branch of institutions certified to operate in Virginia. For out-of-state institutions certified to operate in Virginia, annual gross tuition means income generated from students enrolled at Virginia locations. The flat fee schedule is as follows:

E. A school that submits a payment that is returned for any reason must resubmit the required payment, any applicable late fee, and the assessed returned check fee of $35 via a money order or certified bank check only.

Title of Regulation: 8VAC40-31. Regulations Governing Certification of Certain Institutions to Confer Degrees, Diplomas and Certificates (amending 8VAC40-31-10, 8VAC40-31-160).

Statutory Authority: § 23.1-215 of the Code of Virginia.

Effective Date: February 18, 2022.

Agency Contact: Beverly Rebar, Senior Associate for Academic and Legislative Affairs, State Council of Higher Education for Virginia, 101 North 14th Street, 9th Floor, Monroe Building, Richmond, VA 23219, telephone (804) 371-0571, or email beverlyrebar@schev.edu.

Summary:

The amendments add (i) the definition of "enrollment agreement" and (ii) the requirements for the enrollment agreement between students and regulated institutions mandated by Chapter 298 of 2017 Acts of Assembly.

Summary of Public Comments and Agency's Response: A summary of comments made by the public and the agency's response may be obtained from the promulgating agency or viewed at the office of the Registrar of Regulations.

8VAC40-31-10. Definitions.

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

"Academic credit" means the measure of the total time commitment an average student is expected to devote to learning per week of study. Generally, one unit of credit represents a total of three hours per week of in-class and out-of-class work (Carnegie Unit of Credit). In this context, an hour is defined as 50 minutes. Emerging delivery methodologies may necessitate determining a unit of undergraduate or graduate credit with nontime-based methods. These courses shall use demonstration of competency, demonstration of proficiency, or fulfillment of learning outcomes to ensure these courses are equivalent to traditionally delivered courses.

"Academic-vocational" means a noncollege degree school that offers degree and nondegree credit courses at a site in Virginia or via telecommunications equipment located in Virginia.

"Accreditation" means a process of external quality review used by higher education to scrutinize colleges, universities, and educational programs for quality assurance and quality improvement. This term applies to those accrediting organizations recognized by the United States Department of Education.

"Adjunct faculty" means professional staff members of businesses, industries, and other agencies and organizations who are appointed by institutions and schools on a part-time basis to carry out instructional, research, or public service functions.

"Administrative capability" means a branch (i) maintains or has access to all records and accounts; (ii) has an administrator; (iii) offers courses that consist of a large number of unit subjects that comprise a program of education or a set curriculum large enough to allow pursuit on a continuing basis; and (iv) provides student services, including but not limited to financial aid, admissions, career placement assistance, or registration.

"Agent" means a person who is employed by any institution of higher education or noncollege degree school, whether such institution or school is located within or outside this Commonwealth, to act as an agent, solicitor, procurer, broker, or independent contractor to procure students or enrollees for any such institution or school by solicitation in any form at any place in this Commonwealth other than the office or principal location of such institution or school.

"Avocational" means instructional programs that are not intended to prepare students for employment but are intended solely for recreation, enjoyment, personal interest, or as a hobby or courses or programs that prepare individuals to teach such pursuits.

"Branch" means an additional location, operated by a school with an approved existing site. A branch campus must have administrative capability exclusive of the main campus and adequate resources to ensure that the objectives of its programs can be met.

"Career-technical school" means a school that does not offer courses for degree credit at a site in Virginia or via telecommunication equipment located in Virginia; same as academic-vocational school.

"Certificate" means the credential awarded by a school upon the successful completion of a program that consists of one or more technical courses, usually completed in less than 26 weeks, normally with a single skill objective.

"Certification" means the process of securing authorization to operate a private or out-of-state postsecondary school or institution of higher education and/or or degree, certificate, or diploma program in the Commonwealth of Virginia.

"Change of ownership" means the change in power within a school. Change of ownership may include, but is not limited to, the following situations: (i) sale of the school;, (ii) merger of two or more schools if one of the schools is nonexempt;, or (iii) change from profit to nonprofit or collective.

"CIP code" means the six-digit number assigned to each discipline specialty in the Classification of Instructional Programs (CIP) taxonomy maintained by the National Center for Education Statistics.

"Clock (or contact) hour" or "contact hour" means a minimum of 50 minutes of supervised or directed instruction and appropriate breaks.

"College" means any institution of higher education that offers degree programs.

"Conditional certification" means a status that may be granted by the council to a school certified to operate in Virginia to allow time for the correction of major deficiencies or weaknesses identified in the school's administration that are of such magnitude that, if not corrected, may result in the suspension or revocation of the school's certificate to operate. During a period of conditional certification, a school may not enroll new students or confer any degrees, diplomas, or certificates.

"Council" means the State Council of Higher Education for Virginia.

"Course for degree credit" means a single course whose credits are applicable to the requirements for earning a degree, diploma, or certificate.

"Course registration materials" means any official documents provided to students for the purpose of formal enrollment into the school, a specific program, or a certain course.

"Credit" means (i) the quantitative measurement assigned to a course generally stated in semester hours, quarter hours, or clock hours or (ii) the recognition awarded upon successful completion of coursework.

"Credit hour" means a unit by which a school may measure its coursework. The number of credit hours assigned to a traditionally delivered course is usually defined by a combination of the number of hours per week in class, the number of hours per week in a laboratory, and/or or the number of hours devoted to externship multiplied by the number of hours in the term. One unit of credit is usually equivalent to, at a minimum, one hour of classroom study and outside preparation, two hours of laboratory experience, or three hours of internship or practicum, or a combination of the three multiplied by the number of weeks in the term. Emerging delivery methodologies may necessitate determining a unit of undergraduate or graduate credit with nontime-based methods. These courses shall use demonstration of competency, demonstration of proficiency, or fulfillment of learning outcomes to ensure these courses are equivalent to traditionally delivered courses.

"Degree" means any earned award at the associate, baccalaureate, master's, first professional, or doctoral level that represents satisfactory completion of the requirements of a program or course of study or instruction beyond the secondary school level and includes certificates and specialist degrees when such awards represent a level of educational attainment above that of the associate degree level.

"Degree program" means a curriculum or course of study that leads to a degree in a discipline or interdisciplinary specialty and normally is identified by a six-digit CIP code number.

"Diploma" means an award that represents a level of educational attainment at or below the associate degree level and that normally consists of up to (i) 1,500 clock hours, (ii) 90 quarter hours, or (iii) 60 semester hours.

"Distance education" means education that uses the Internet, one-way transmission and two-way transmission through open broadcast, closed circuit, cable, microwave, broadband lines, fiber optics, satellite, or wireless communications; audio conferencing; or video cassettes, DVDs, and CD-ROMs to deliver instruction to students who are separated from the instructor and to support regular and substantive interaction between student and instructor.

"Enrollment agreement" means a legally binding document signed by a student and an authorized representative of an institution, prior to the time instruction begins that contains required disclosures, a completed copy of which is given to the student upon execution.

"Existing institution" or "existing postsecondary school" means any postsecondary school that either (i) has been in operation in Virginia for two or more calendar years as of July 1, 2004, and has been certified to operate continuously during that period or (ii) has been approved to operate as a postsecondary school in another state, is accredited by an accrediting agency recognized by the United States Department of Education, and is certified to operate in Virginia.

"Full-time faculty" means a person whose: (i) employment is based upon an official contract, appointment, or agreement with a school; (ii) principal employment is with that school; and (iii) major assignments are in teaching and research. A full-time administrator who teaches classes incidental to administrative duties is not a full-time faculty member.

"Graduate credit hours" means credits hours earned for successful completion of courses beyond the baccalaureate level, generally awarded at the 500 series and above.

"Gross tuition collected" means all fees collected or received on either a cash or accrual accounting method basis for all instructional programs or courses, except for nonrefundable registration and application fees and charges for materials, supplies, and books that have been purchased by, and are the property of, the student.

"In-state institution" means an institution of higher education that is formed, chartered, or established within Virginia. An out-of-state institution shall be deemed an in-state institution for the purposes of certification as a degree-granting institution if (i) the institution has no instructional campus in the jurisdiction in which it was formed, chartered, established, or incorporated and (ii) the institution produces clear and convincing evidence that its main or principal campus is located in Virginia.

"Institution of higher education" or "institution" means any person, firm, corporation, association, agency, institute, trust, or other entity of any nature whatsoever offering education beyond the secondary school level that has received certification from the council and either: (i) offers courses or programs of study or instruction that lead to, or that may reasonably be understood to be applicable to, a degree; (ii) operates a facility as a college or university or other entity of whatever kind that offers degrees or other indicia of level of educational attainment beyond the secondary school level; (iii) uses the term "college" or "university," or words of like meaning, in its name or in any manner in connection with its academic affairs or business; or (iv) offers approved courses of degree credit or programs of study leading to a degree or offers degrees either at a site in Virginia or via telecommunications equipment located within Virginia.

"Instructional faculty" means a person employed by a school who is engaged in instructional, research, or related activities.

"Instructional site" means a location in Virginia where a postsecondary school (i) offers one or more courses on an established schedule and (ii) lacks administrative capability.

"Multistate compact" means any agreement involving two or more states to offer jointly postsecondary educational opportunities, pursuant to policies and procedures set forth by such agreement and approved by council.

"New institution" or "new postsecondary school" means any postsecondary school that seeks certification and has been in operation in Virginia for less than two calendar years as of July 1, 2004, and has neither operated in another state as a postsecondary institution nor has been approved to operate in another state as a postsecondary institution.

"Noncollege degree school" means any postsecondary school that offers courses or programs of study that do not lead to an associate or higher level degree at a site in Virginia or via telecommunications equipment located within Virginia. Such schools may be academic-career-technical or career-technical.

"Out-of-state institution" means an institution of higher education that is formed, chartered, established, or incorporated outside Virginia.

"Part-time faculty" means a person whose: (i) annual employment is based upon an official contract, appointment, or agreement with a school and (ii) courseload of teaching assignments is of lesser quantity than that expected of a full-time faculty member and/or or is of lesser quantity than the school's definition of a full load of courses.

"Postsecondary education" means the provision of formal instructional programs with a curriculum designed primarily for students who have completed the requirements for a high school diploma or equivalent or who are beyond the age of compulsory high school attendance. It includes programs of an academic, career-technical, and continuing professional education purpose, and excludes avocational and adult basic education programs.

"Postsecondary education activities" means researching, funding, designing, and/or or conducting instructional programs, classes, or research opportunities, designed primarily for students who have completed the requirements for a high school diploma or its equivalent or who are beyond the age of compulsory high school attendance.

"Postsecondary school" or "school" means any entity offering formal instructional programs with a curriculum designed primarily for students who have completed the requirements for a high school diploma or its equivalent or who are beyond the age of compulsory high school attendance, and for which tuition or a fee is charged. Such schools include programs of academic, career-technical, and continuing professional education, and exclude avocational and adult basic education programs. For the purposes of this chapter, a "postsecondary school" shall be classified as either an institution of higher education as defined in this section or a noncollege degree school, as defined in this section.

"Private postsecondary career school" means any for-profit or nonprofit postsecondary career entity maintaining a physical presence in Virginia providing education or training for tuition or a fee that (i) augments a person's occupational skills; (ii) provides a certification; or (iii) fulfills a training or education requirement in one's employment, career, trade, profession, or occupation. Any entity that offers programs beyond the secondary school level, including programs using alternate modes of delivery, shall be included in this definition so long as tuition and fees from such programs constitute any part of its revenue.

"Program" means a curriculum or course of study in a discipline or interdisciplinary area that leads to a degree, certificate, or diploma.

"Program area" means a general group of disciplines in which one or more degree programs, certificates, or diplomas may be offered.

"Program of study" means a curriculum of two or more courses that is intended or understood to lead to a degree, diploma, or certificate. It may include all or some of the courses required for completion of a degree program.

"Provisional certification" means a preliminary approval status granted by the council to a new school applicant that has demonstrated substantial compliance with the provisions of this chapter [ pursuant to § 23-276 of the Code of Virginia ]. Such a status may include any conditions imposed by the council to ensure compliance with the provisions of this chapter. The provisionally certified school must demonstrate compliance with all conditions within one calendar year of the initial grant of provisional certification.

"Surety instrument" means a surety bond or a clean irrevocable letter of credit issued by a surety company or banking institution authorized to transact business in Virginia adequate to provide refunds to students for the unearned non-Title IV portion of tuition and fees for any given semester, quarter or term and to cover the administrative cost associated with filing a claim against the instrument.

"Teach-out agreement" means the process whereby a closed or closing school undertakes to fulfill its educational and contractual obligations to currently enrolled students.

"Telecommunications activity" means any course offered by a postsecondary school or consortium of postsecondary schools where the primary mode of instructional delivery is by television, videocassette or disc, film, radio, computer, or other telecommunications devices.

"Unearned tuition" means the portion of tuition charges billed to the student but not yet earned by the institution; the unearned tuition represents future educational services to be rendered to presently enrolled students.

"University" means any institution offering programs leading to degrees or degree credit beyond the baccalaureate level.

"Vocational" means a noncollege degree school that offers only noncollege credit courses. Such schools have programs of instruction offering a sequence of courses that are directly related to the preparation of individuals for paid or unpaid employment in current or emerging occupations requiring other than a baccalaureate or advanced degree. Vocational education shall not include instructional programs intended solely for recreation, enjoyment, personal interest, or as a hobby, or courses or programs that prepare individuals to teach such pursuits.

8VAC40-31-160. Certification criteria for all postsecondary schools.

A. The criteria in this section shall apply to all postsecondary schools for which certification is required. With regard to postsecondary schools that are accredited by an accrediting agency recognized by the U.S. Department of Education, the council may apply a presumption of compliance with criteria in this section if the school has complied with an accreditation standard directed to the same subject matter as the criteria. The council need not apply this presumption if the accreditation standard is deficient in satisfying an identifiable goal of the council. The council shall articulate reasons that the accreditation standard is deficient.

B. The postsecondary school shall have a clear, accurate, and comprehensive written statement, which shall be available to the public upon request. The statement minimally shall include the following items:

1. The history and development of the postsecondary school;

2. An identification of any persons, entities, or institutions that have a controlling ownership or interest in the postsecondary school;

3. The purpose of the postsecondary school, including a statement of the relative degree of emphasis on instruction, research, and public service as well as a statement demonstrating that the school's proposed offerings are consistent with its stated purpose;

4. A description of the postsecondary school's activities, including telecommunications activities away from its principal location, and a list of all program areas in which courses are offered away from the principal location;

5. A list of all locations in Virginia at which the postsecondary school offers courses and a list of the degree and nondegree programs currently offered or planned to be offered in Virginia;

6. For each Virginia location, and for the most recent academic year, the total number of students who were enrolled as well as the total number and percentage of students who were enrolled in each program offered;

7. For each Virginia location, the total number of students who completed or graduated from the school as of the end of the last academic year and the total number and percentage of students who completed or graduated from each program offered by the school as of the end of the last academic year; and

8. For unaccredited institutions of higher education and career-technical schools only, the total number of students who report employment in their field of study within (i) six months of completion or graduation and (ii) one year of completion or graduation.

C. The postsecondary school or branch shall have a current, written document available to students and the general public upon request that accurately states the powers, duties, and responsibilities of:

1. The governing board or owners of the school;

2. The chief operating officer, president, or director at that branch in Virginia;

3. The principal administrators and their credentials at that branch in Virginia; and

4. The students, if students participate in school governance.

D. The postsecondary school shall have, maintain, and provide to all applicants a policy document accurately defining the minimum requirements for eligibility for admission to the school and for acceptance at the specific degree level or into all specific degree programs offered by the postsecondary school that are relevant to the school's admissions standards. In addition, the document shall explain:

1. The standards for academic credit or course completion given for experience;

2. The criteria for acceptance of transfer credit where applicable;

3. The criteria for refunds of tuition and fees;

4. Students' rights, privileges, and responsibilities; and

5. The established grievance process of the school, which shall indicate that students should follow this process and may contact council staff to file a complaint about the school as a last resort. The written policy shall include a provision that students will not be subjected to adverse actions by any school officials as a result of initiating a complaint.

E. The postsecondary school shall maintain records on all enrolled students. At a minimum, these records shall include:

1. Each student's application for admission and admissions records containing information regarding the educational qualifications of each regular student admitted that are relevant to the postsecondary school's admissions standards. Each student record must reflect the requirements and justification for admission of the student to the postsecondary school. Admissions records must be maintained by the school, its successors, or its assigns for a minimum of three years after the student's last date of attendance.

2. An original agreement titled "Student Enrollment Agreement" signed by the student and an authorized representative of the school. The use of electronic signatures is permissible so long as the use complies with the Uniform Electronic Transactions Act (§ 59.1-479 et seq. of the Code of Virginia). A copy of the completed enrollment agreement shall be given to the student upon execution.

a. (Reserved.) At the time of enrollment, the agreement shall contain, at a minimum:

(1) Student name, address, and phone number;

(2) Institution name, address, and phone number;

(3) Name of the educational program, start date, and the total number of credit hours or clock hours to complete the program of study and type of credential awarded upon completion (certificate, diploma, or degree);

(4) Estimated cost of all institutional charges and fees including tuition, fees, equipment charges, supplies, textbooks, and uniforms;

(5) The institution's refund policy, which must be in compliance with subsection N of this section;

(6) A labeled section titled "STUDENT'S RIGHT TO CANCEL" that shall provide the terms for cancellation. Specifically:

(a) The school shall provide a period of at least three business days, excluding weekends and holidays, by which the student applicant must cancel in order to receive refund of all moneys paid less a nonrefundable fee not to exceed $100. The actual date by which the student applicant must cancel shall be specified in the agreement.

(b) The school shall disclose that following the cancellation period, a student applicant may cancel his enrollment agreement, by written notice, at any time prior to the first class day of the session for which application was made. When cancellation is requested under these circumstances, the school will refund all tuition paid by the student, less a maximum tuition fee of 15% of the stated costs of the course or program or $100, whichever is less;

(7) A notice stating that the transferability of credit and credentials earned is at the sole discretion of the receiving institution;

(8) For enrollees in programs leading to professional licensure, the school shall disclose annual pass rates for first time test takers for the last three years, if applicable. If results are not available, the school must provide a written explanation. This disclosure must be signed by the student;

(9) A statement informing students of the institution's grievance policy;

(10) A statement informing students that the institution is certified to operate by SCHEV and providing full contact information for council;

(11) A statement that reads: "By signing below, I certify that I have been provided access to the institution's electronic or print catalog, bulletin, or brochure.";

(12) A statement that reads: "I understand that this is a legally binding agreement. My signature below certifies that I have read, understood, and agreed with my rights and responsibilities. Further, I certify that I understand the institution's cancellation and refund policies and I understand and agree to these policies."; and

(13) Following the statement in subdivision E 2 a (12) of this section, the document provides places for signatures of the student and authorized representative of the school and date the document was signed.

b. (Reserved.) A new enrollment agreement must be completed in the event that the student (i) delays his start date, (ii) changes the program of enrollment, or (iii) drops from the program and re-enrolls at a later date.

c. No postsecondary school shall condition the enrollment of a student on:

(1) Entering into an agreement that requires the student to arbitrate any dispute between the student and the school, regardless of whether the agreement permits the student to opt out of the requirement to arbitrate any such dispute in the future; or

(2) Entering into an agreement that requires the student to resolve a dispute on an individual basis and waive the right to class or group actions.

3. A transcript of the student's academic or course work at the school, which shall be retained permanently in either hard copy forms or in an electronic database with backup by the school, its successors, or its assigns.

4. A record of student academic or course progress at the school including programs of study, dates of enrollment, courses taken and completed, grades, and indication of the student's current status (graduated, probation, etc.) must be retained permanently. Any changes or alterations to student records must be accurately documented and signed by an appropriate school official.

5. A record of all financial transactions between each individual student and the school including payments from the student, payments from other sources on the student's behalf, and refunds. Fiscal records must be maintained for a minimum of three years after the student's last date of attendance. When tuition and fees are paid by the student in installments, a clear disclosure of truth-in-lending statement must be provided to and signed by the student.

6. The school shall make the documents referenced in subdivisions 1 through 4 5 of this subsection available to the student upon request. Academic transcripts shall be provided upon request if the student is in good financial standing.

F. Each school shall provide or make available to students, prospective students, and other interested persons a catalog, bulletin, brochure, or electronic media containing, at a minimum, the following information:

1. The number of students enrolled in each program offered.

2. For each Virginia location, the total number of students who completed or graduated from the school as of the end of the last academic year and the total number and percentage of students who completed or graduated from each program offered by the school as of the end of the last academic year.

3. A description of any financial aid offered by the school including repayment obligations, standards of academic progress required for continued participation in the program, sources of loans or scholarships, the percentage of students receiving federal financial aid (if applicable) and the average student indebtedness at graduation.

4. A broad description, including academic or career-technical objectives of each program offered, the number of hours of instruction in each subject and total number of hours required for course completion, course descriptions, and a statement of the type of credential awarded.

5. A statement of tuition and fees and other charges related to enrollment, such as deposits, fees, books and supplies, tools and equipment, and any other charges for which a student may be responsible.

6. The school's refund policy for tuition and fees pursuant to subsection N of this section.

7. The school's procedures for handling complaints, including procedures to ensure that a student will not be subject to unfair actions as a result of his initiation of a complaint proceeding.

8. The name and address of the school's accrediting body, if applicable.

9. The minimum requirements for satisfactory completion of each degree level and degree program, or nondegree certificates or diplomas.

10. A statement that accurately describes the transferability of any courses.

11. A statement that accurately represents the transferability of any diplomas, certificates, or degrees offered by the school.

12. If the institution offers programs leading to the Associate of Applied Science or Associate of Occupational Science degree, a statement that these programs are terminal occupational or technical programs and that credits generally earned in these programs are not applicable to other degrees.

13. The academic or course work schedule for the period covered by the publication.

14. A statement that accurately details the type and amount of career advising and placement services offered by the school.

15. The name, location, and address of the main campus, branch, or instructional site operating in Virginia.

G. The school must have a clearly defined process by which the curriculum is established, reviewed, and evaluated. Evaluation of school effectiveness must be completed on a regular basis and must include:

1. An explanation of how each program is consistent with the mission of the school.

2. An explanation of the written process for evaluating each degree level and program, or career-technical program, once initiated and an explanation of the procedures for assessing the extent to which the educational goals are being achieved.

3. Documented use of the results of these evaluations to improve the degree and career-technical programs offered by the school.

H. Pursuant to [ § 23-276.3 B § 23.1-215 ] of the Code of Virginia, the school must maintain records that demonstrate it is financially sound; exercises proper management, financial controls, and business practices; and can fulfill its commitments for education or training. The school's financial resources should be characterized by stability, which indicates the school is capable of maintaining operational continuity for an extended period of time. The stability indicator that will be used is the USDOE Financial Ratio (composite score).

1. Institutions of higher education shall provide the results of an annual audited, reviewed, or compiled financial statement. Career-technical schools shall provide the results of an annual audited, reviewed or compiled financial statement or the school may elect to provide financial information on forms provided by council staff. The financial report shall be prepared in accordance with generally accepted accounting principles (GAAP) currently in effect. The financial report shall cover the most recent annual accounting period completed.

2. The USDOE composite score range is -1.0 to 3.0. Schools with a score of 1.5 to 3.0 meet fully the stability requirement in subsection I of this section; scores between 1.0 and 1.4 meet the minimum expectations; and scores less than 1.0 do not meet the requirement and shall be immediately considered for audit.

I. Pursuant to [ § 23-276.3 B § 23.1-215 ] of the Code of Virginia, the school shall have and maintain a surety instrument issued by a surety company or banking institution authorized to transact business in Virginia that is adequate to provide refunds to students for the unearned non-Title IV portion of tuition and fees for any given semester, quarter or term and to cover the administrative cost associated with the instrument claim. The instrument shall be based on the non-Title IV funds that have been received from students or agencies for which the education has not yet been delivered. This figure shall be indicated in an audited financial statement as a Current (non-Title IV) Tuition Liability. A school certified under this regulation shall be exempt from the surety instrument requirement if it can demonstrate a USDOE composite financial responsibility score of 1.5 or greater on its current financial statement; or if it can demonstrate a composite score between 1.0 and 1.4 on its current financial statement and has scored at least 1.5 on a financial statement in either of the prior two years. The school's eligibility for the surety waiver shall be determined annually, at the time of recertification.

1. Public postsecondary schools originating in a state other than Virginia that are operating a branch campus or instructional site in the Commonwealth of Virginia are exempt from the surety bond requirement.

2. New schools and unaccredited existing schools must complete at least five calendar years of academic instruction or certification to qualify for the surety waiver or exemption.

3. Existing schools seeking a waiver of the surety instrument requirement must submit an audited financial statement for the most recent fiscal year end that reflects the appropriate composite score as indicated in this subsection.

J. The school shall have a current written policy on faculty accessibility that shall be distributed to all students. The school shall ensure that instructional faculty are accessible to students for academic or course advising at stated times outside a course's regularly scheduled class hours at each branch and throughout the period during which the course is offered.

K. All recruitment personnel must provide prospective students with current and accurate information on the school through the use of written and electronic materials and in oral admissions interviews:

1. The school shall be responsible and liable for the acts of its admissions personnel.

2. No school, agent, or admissions personnel shall knowingly make any statement or representation that is false, inaccurate or misleading regarding the school.

L. All programs offered via telecommunications or distance education must be comparable in content, faculty, and resources to those offered in residence and must include regular student-faculty interaction by computer, telephone, mail, or face-to-face meetings. Telecommunication programs and courses shall adhere to the following minimum standards:

1. The educational objectives for each program or course shall be clearly defined, simply stated, and of such a nature that they can be achieved through telecommunications.

2. Instructional materials and technology methods must be appropriate to meet the stated objectives of the program or course. The school must consider and implement basic online navigation of any course or program, an information exchange privacy and safety policy, a notice of minimum technology specification for students and faculty, proper system monitoring, and technology infrastructure capabilities sufficient to meet the demands of the programs being offered.

3. The school shall provide faculty and student training and support services specifically related to telecommunication activities.

4. The school shall provide for methods for timely interaction between students and faculty.

5. The school shall develop standards that ensure that accepted students have sufficient background, knowledge, and technical skills to successfully undertake a telecommunications program.

M. The school shall maintain and ensure that students have access to a library with a collection, staff, services, equipment, and facilities that are adequate and appropriate for the purpose and enrollment of the school. Library resources shall be current, well distributed among fields in which the institution offers instructions, cataloged, logically organized, and readily located. The school shall maintain a continuous plan for library resource development and support, including objectives and selections of materials. Current and formal written agreements with other libraries or with other entities may be used. Institutions offering graduate work shall provide access to library resources that include basic reference and bibliographic works and major journals in each discipline in which the graduate program is offered. Career-technical schools shall provide adequate and appropriate resources for completion of course work.

N. In accordance with [ § 23-276.3 B § 23.1-215 ] of the Code of Virginia, the school shall establish a tuition refund policy and communicate it to students. Each school shall establish, disclose, and utilize a system of tuition and fee charges for each program of instruction. These charges shall be applied uniformly to all similarly circumstanced students. This requirement does not apply to group tuition rates to business firms, industry, or governmental agencies that are documented by written agreements between the school and the respective organization.

1. The school shall adopt a minimum refund policy relative to the refund of tuition, fees, and other charges. All fees and payments, with the exception of the nonrefundable fee described in subdivision 2 of this subsection, remitted to the school by a prospective student shall be refunded if the student is not admitted, does not enroll in the school, does not begin the program or course, withdraws prior to the start of the program, or is dismissed prior to the start of the program.

2. A school may require the payment of a reasonable nonrefundable initial fee, not to exceed $100, to cover expenses in connection with processing a student's enrollment, provided it retains a signed statement in which the parties acknowledge their understanding that the fee is nonrefundable. No other nonrefundable fees shall be allowed prior to enrollment.

3. The school shall provide a period of at least three business days, excluding weekends and holidays, during which a student applicant may cancel his enrollment without financial obligation other than the nonrefundable fee described in subdivision 2 of this subsection.

4. Following the period described in subdivision 3 of this subsection, a student applicant (one who has applied for admission to a school) may cancel, by written notice, his enrollment at any time prior to the first class day of the session for which application was made. When cancellation is requested under these circumstances, the school is required to refund all tuition paid by the student, less a maximum tuition fee of 15% of the stated costs of the course or program or $100, whichever is less. A student applicant will be considered a student as of the first day of classes.

5. The date of the institution's determination that the student withdrew should be no later than 14 calendar days after the student's last date of attendance as determined by the institution from its attendance records. The institution is not required to administratively withdraw a student who has been absent for 14 calendar days. However, after 14 calendar days, the institution is expected to have determined whether the student intends to return to classes or to withdraw. In addition, if the student is eventually determined to have withdrawn, the end of the 14-day period begins the timeframe for calculating the refunds. In the event that a written notice is submitted, the effective date of termination shall be the date of the written notice. The school may require that written notice be transmitted via registered or certified mail, or by electronic transmission provided that such a stipulation is contained in the written enrollment contract. The school is required to submit refunds to individuals who have terminated their status as students within 45 days after receipt of a written request or the date the student last attended classes whichever is sooner. An institution that provides the majority of its program offerings through distance learning shall have a plan for student termination, which shall be provided to council staff for review with its annual or recertification application.

6. In the case of a prolonged illness or accident, death in the family, or other special circumstances that make attendance impossible or impractical, a leave of absence may be granted to the student if requested in writing by the student or designee. No monetary charges or accumulated absences may be assessed to the student during a leave of absence. A school need not treat a leave of absence as a withdrawal if it is an approved leave of absence. A leave of absence is an approved leave of absence if:

a. The school has a formal, published policy regarding leaves of absence;

b. The student followed the institution's policy in requesting the leave of absence and submits a signed, dated request with the reasons for the leave of absence;

c. The school determines that there is a reasonable expectation that the student will return to the school;

d. The school approved the student's request in accordance with the published policy;

e. The school does not impose additional charges to the student as a result of the leave of absence;

f. The leave of absence does not exceed 180 days in any 12-month period; and

g. Upon the student's return from the leave of absence, the student is permitted to complete the coursework he began prior to the leave of absence.

7. If a student does not resume attendance at the institution on or before the end of an approved leave of absence, the institution must treat the student as a withdrawal, and the date that the leave of absence was approved should be considered the last date of attendance for refund purposes.

8. The minimum refund policy for a school that financially obligates the student for a quarter, semester, trimester, or other period not exceeding 4-1/2 calendar months shall be as follows:

a. For schools that utilize an add/drop period, a student who withdraws during the add/drop period shall be entitled to 100% refund for the period.

b. For unaccredited schools and schools that do not utilize an add/drop period:

(1) A student who enters school but withdraws during the first 1/4 (25%) of the period is entitled to receive as a refund a minimum of 50% of the stated cost of the course or program for the period.

(2) A student who enters a school but withdraws after completing 1/4 (25%), but less than 1/2 (50%) of the period is entitled to receive as a refund a minimum of 25% of the stated cost of the course or program for the period.

(3) A student who withdraws after completing 1/2 (50%), or more than 1/2 (50%), of the period is not entitled to a refund.

9. The minimum refund policy for a school that financially obligates the student for the entire amount of tuition and fees for the entirety of a program or course shall be as follows:

a. A student who enters the school but withdraws or is terminated during the first quartile (25%) of the program shall be entitled to a minimum refund amounting to 75% of the cost of the program.

b. A student who withdraws or is terminated during the second quartile (more than 25% but less than 50%) of the program shall be entitled to a minimum refund amounting to 50% of the cost of the program.

c. A student who withdraws or is terminated during the third quartile (more than 50% but less than 75%) of the program shall be entitled to a minimum refund amounting to 25% of the cost of the program.

d. A student who withdraws after completing more than three quartiles (75%) of the program shall not be entitled to a refund.

10. The minimum refund policy for a school that offers its programs completely via telecommunications or distance education shall be as follows:

a. For a student canceling after the [ 5th fifth ] calendar day following the date of enrollment but prior to receipt by the school of the first completed lesson assignment, all moneys paid to the school shall be refunded, except the nonrefundable fee described in subdivision 2 of this subsection.

b. If a student enrolls and withdraws or is discontinued after submission of the first completed lesson assignment, but prior to the completion of the program, minimum refunds shall be calculated as follows:

(1) A student who starts the program but withdraws up to and including completion of the first quartile (25%) of the program is entitled to receive as a refund a minimum of 75% of the stated cost of the course or program for the period.

(2) A student who starts the program but withdraws after completing up to the second quartile (more than 25%, but less than 50%) of the program is entitled to receive as a refund a minimum of 50% of the stated cost of the course or program for the period.

(3) A student who starts the program but withdraws after completing up to the third quartile (more than 50%, but less than 75%) of the program is entitled to receive as a refund a minimum of 25% of the stated cost of the course or program for the period.

(4) A student who withdraws after completing the third quartile (75%) or more of the program is not entitled to a refund.

c. The percentage of the program completed shall be determined by comparing the number of completed lesson assignments received by the school to the total number of lesson assignments required in the program.

d. If the school uses standard enrollment terms, such as semesters or quarters, to measure student progress, the school may use the appropriate refund policy as provided in subdivision 8 or 9 of this subsection.

11. Fractions of credit for courses completed shall be determined by dividing the total amount of time required to complete the period or the program by the amount of time the student actually spent in the program or the period, or by the number of correspondence course lessons completed, as described in the contract.

12. Expenses incurred by students for instructional supplies, tools, activities, library, rentals, service charges, deposits, and all other charges are not required to be considered in tuition refund computations when these expenses have been represented separately to the student in the enrollment contract and catalogue, or other documents, prior to enrollment in the course or program. The school shall adopt and adhere to reasonable policies regarding the handling of these expenses when calculating the refund.

13. For programs longer than one year, the policy outlined in subdivisions 9, 10, and 11 of this subsection shall apply separately for each academic year or portion thereof.

14. Schools shall comply with the cancellation and settlement policy outlined in this section, including promissory notes or contracts for tuition or fees sold to third parties.

15. When notes, contracts or enrollment agreements are sold to third parties, the school shall continue to have the responsibility to provide the training specified regardless of the source of any tuition, fees, or other charges that have been remitted to the school by the student or on behalf of the student.

O. The school shall keep relevant academic transcripts for all teaching faculty to document that each has the appropriate educational credentials in the area of teaching responsibility. In the event teaching qualification is based on professional competencies or scholarly achievements, relevant documentation to support reported experience must be retained by the school.

P. If an internship, externship, or production work is necessary as a part of the school's education program, the school must adhere to the following:

1. When programs contain internships or externships, in any form, the professional training must:

a. Be identified as part of the approved curriculum of the school and be specified in terms of expected learning outcomes in a written training plan.

b. Be monitored by an instructor of record during the entire period of the internship.

c. Not be used to provide labor or as replacement for a permanent employee.

d. Be performed according to a specified schedule of time required for training including an expected completion date.

e. If the internship, externship, or production work is part of the course requirement, the student may not be considered as a graduate or issued a graduation credential until the internship, externship, or production work has been satisfactorily completed.

2. When receiving compensation for services provided by students as part of their education program, the school must clearly inform customers that services are performed by students by (i) posting a notice in plain view of the public or (ii) requiring students to wear nametags that identify them as students while performing services related to their training.

Q. An institution shall notify council staff of the following occurrences no later than 30 days prior to said occurrence:

1. Addition of new programs or modifications to existing program. Program names must adhere to the CIP taxonomy maintained by the National Center for Education Statistics.

2. Addition of a new branch location or instructional site.

3. Address change of a branch or instructional site in Virginia.

Notification of the above-referenced occurrences in this subsection shall be submitted in writing on forms provided by and in a manner prescribed by the council.

R. An institution shall notify the council of the following occurrences no later than 30 days following said occurrence.

1. Naming of new school president.

2. Naming of new campus or branch director.

3. Naming of person responsible for the regulatory oversight of the institution.

Title of Regulation: 9VAC15-100. Small Energy Storage Facilities Permit by Rule (adding 9VAC15-100-10 through 9VAC15-100-130).

Statutory Authority: §§ 10.1-1197.5 and 10.1-1197.6 of the Code of Virginia.

Effective Date: January 1, 2022.

Agency Contact: Mary E. Major, Department of Environmental Quality, 1111 East Main Street, Suite 1400, P.O. Box 1105, Richmond, VA 23218, telephone (804) 698-4423, FAX (804) 698-4178, or email mary.major@deq.virginia.gov.

Summary:

Pursuant to Chapter 419 of the 2021 Acts of Assembly, Special Session I, the action creates a new regulation, Small Energy Storage Facilities Permit by Rule (9VAC15-100), a permit by rule regulation for energy storage facilities 150 megawatts or less. The regulation establishes criteria, procedures, and permit requirements for a complete application to construct and operate a small energy storage facility. Key application criteria include a public notice and comment period, local government approval, interconnection requirements, natural and cultural resource assessments, site plan, context map, and a fee structure that should be sufficient to support the program.

Chapter 100

Small Energy Storage Facilities Permit by Rule

9VAC15-100-10. Definitions.

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

"Administratively complete application" means an application the department has determined meets the requirements of this chapter.

"Applicant" means the developer, owner, or operator that submits an application to the department for a permit by rule pursuant to this chapter.

"Archaeological field survey" means systematic identification-level archaeological investigations as described in DHR's guidelines for conducting historic resources surveys within the project area and submission of necessary documentation to DHR with recommendations on eligibility of identified resources for listing in the Virginia Landmarks Register and National Register of Historic Places.

"Architectural field survey" means comprehensive, reconnaissance-level documentation as described in DHR's guidelines for conducting historic resources surveys of all standing buildings or structures 50 years of age or older within the project area and surrounding areas with a view to the facility and submission of necessary documentation to DHR with recommendations on eligibility of identified resources for listing in the Virginia Landmarks Register and National Register of Historic Places.

"Begin commercial operation" means to have begun to store and discharge electricity for sale to the grid. This does not include testing to ensure the facility will not cause a reliability problem for the electrical grid system.

"Begin construction" means a continuous program of construction or land-disturbing activity necessary to construct a small energy storage project.

"DACS" means the Department of Agriculture and Consumer Services.

"Department" or "DEQ" means the Department of Environmental Quality, the department's director or the director's designee.

"DCR" means the Department of Conservation and Recreation.

"DHR" means the Department of Historic Resources.

"Disturbance zone" means the area within the site directly impacted by land-disturbing activity, including construction and operation of the small energy storage facility and 100 feet from the boundary of the directly impacted area. A facility located within an urban area, as defined by the U.S. Census Bureau, provided it is not a hybrid facility, will be subject to local government zoning requirements. Hybrid facilities will be subject to the requirements of any other small renewable energy project permit by rule regulation that is applicable.

"Document certification" means the statement as prescribed in 9VAC15-100-30 B 2 a, signed by the responsible person and submitted with the application documents or any supplemental information submitted to the department for a PBR.

"DWR" means the Department of Wildlife Resources.

"Historic resource" means any prehistoric or historic district, site, building, structure, object, or cultural landscape that is included or meets the criteria necessary for inclusion in the Virginia Landmarks Register pursuant to the authorities of § 10.1-2205 of the Code of Virginia and in accordance with 17VAC5-30-40 through 17VAC5-30-70.

"Hybrid renewable energy and storage facility" or " hybrid facility" means a small energy storage facility and an electrical generation facility that is one of the following: (i) an electrical generation facility with a rated power capacity not exceeding 150 MW in alternating current (AC) that generates electricity only from sunlight or wind with an energy storage facility with a rated power capacity that does not exceed 150 MW in AC; (ii) an electrical generation facility with a rated power capacity not exceeding 100 MW in AC that generates electricity only from falling water, wave motion, tides, or geothermal power with an energy storage facility with a rated power capacity that does not exceed 100MW in AC; or (iii) an electrical generation facility with a rated power capacity not exceeding 20 MW in AC that generates electricity only from biomass, energy from waste, or municipal solid waste with an energy storage facility with a rated power capacity that does not exceed 20 MW in AC.

"Interconnection point" means the point where the small renewable energy project connects to a project substation for transmission to the electrical grid.

"Land disturbance" or "land-disturbing activity" means a man-made change to the land surface that potentially changes the land surface's runoff characteristics, including clearing, grading, or excavation, except that the term shall not include those exemptions specified in § 62.1-44.15:34 of the Code of Virginia.

"Megawatt" or "MW" means a measurement of power; 1,000 kilowatts equals one MW.

"Natural heritage resource" means the habitat of rare, threatened, or endangered plant and animal species, rare or state significant natural communities or geologic sites, and similar features of scientific interest benefiting the welfare of the citizens of the Commonwealth.

"Notice of Intent" or "NOI" means notification, in a manner acceptable to the department, by an applicant stating intent to submit documentation for a permit under this chapter.

"Operator" means the person responsible for the overall operation and management of a small energy storage facility.

"Owner" means the person that owns all, a portion of, or has all or a controlling interest in a small energy storage facility.

"Permit by rule," "PBR," or "permit" means provisions of the regulation stating that a project or activity is deemed to have a permit if it meets the requirements of the provision.

"Person" means any individual, partnership, firm, association, joint venture, public or private corporation, trust, estate, commission, board, public or private institution, utility, cooperative, county, city, town, or other political subdivision of the Commonwealth, any interstate body, or any other legal entity.

"Preconstruction" means any time prior to beginning land-disturbing activities necessary for the installation of energy generating or energy storage structures at the facility.

"Previously disturbed or repurposed area" means the land area within the property boundary of industrial or commercial properties, including brownfields, or previously mined areas. It does not include active or fallow agricultural land or silvicultural land use.

"Project" refers to all aspects of small energy storage facility development, including planning, permitting, construction and commissioning.

"Rated power capacity" means the maximum amount of stored energy of the energy storage system in kilowatt-hours or megawatt-hours that can be delivered to the grid.

"Responsible person" means:

1. For a corporation or limited liability company, a president, secretary, treasurer, or vice-president in charge of a principal business function, or any other person who performs similar policy or decision-making functions for the corporation or limited liability company or is subject to Title 13.1 of the Code of Virginia;

2. For partnership or sole proprietorship, a general partner or the proprietor, respectively; and

3. For a local government entity subject to Title 15.2 of the Code of Virginia or state, federal, or other public agency, either a principal executive officer or ranking elected official.

"Retrofit" means the addition of an energy storage facility to an existing, permitted small renewable energy project.

"Site" means the area of a project that is under common ownership or operating control. Electrical infrastructure and other appurtenant structures up to the interconnection point shall be considered to be within the site.

"Small energy storage facility" or "facility" means an energy storage facility that uses electrochemical cells to convert chemical energy with a rated power capacity not exceeding 150 MW in AC.

"Small renewable energy project" means (i) an electrical generation facility with a rated power capacity not exceeding 150 MW that generates electricity only from sunlight or wind; (ii) an electrical generation facility with a rated capacity not exceeding 100 MW that generates electricity only from falling water, wave motion, tides, or geothermal power; (iii) an electrical generation facility with a rated power capacity not exceeding 20 MW that generates electricity only from biomass, energy from waste, or municipal solid waste; (iv) an energy storage facility that uses electrochemical cells to convert chemical energy with a rated power capacity not exceeding 150 MW; or (v) a hybrid project composed of an electrical generation facility that meets the parameters established in subdivision (i), (ii), or (iii) of this definition and an energy storage facility that meets the parameters established in subdivision (iv) of this definition.

"Threatened and endangered," "T&E," "state threatened or endangered species," or "state-listed species" means (i) any wildlife species designated as a Virginia endangered or threatened species by DWR pursuant to the §§ 29.1-563 through 29.1-570 of the Code of Virginia and 4VAC15-20-130 or (ii) any species designated as a Virginia endangered or threatened species by DACS pursuant to §§ 3.2-1000-through 3.2-1100 of the Code of Virginia and 2VAC5-320-10.

"Virginia Natural Landscape Assessment Ecological Cores" means large patches of natural land with at least 100 contiguous acres of interior, which begins 100 meters inward from the nearest edge between natural and unnatural land covers identified by DCR.

"VLR" means the Virginia Landmarks Register.

"VLR-eligible" means those historic resources that meet the criteria necessary for inclusion on the VLR pursuant to 17VAC5-30-40 through 17VAC5-30-70 but are not listed in VLR.

"VLR-listed" means those historic resources that have been listed in the VLR in accordance with the criteria of 17VAC5-30-40 through 17VAC5-30-70.

"Wildlife" means wild animals; except, however, that T&E insect species shall be considered T&E wildlife.

9VAC15-100-20. Applicability.

A. This chapter applies throughout the Commonwealth of Virginia. Nothing in this chapter shall be interpreted to affect the rights of a private property owner.

B. A permit by rule shall be required for small energy storage facilities with a disturbance zone greater than 10 acres.

C. Facilities with a disturbance zone less than or equal to 10 acres shall comply with the requirements of 9VAC15-100-130. Facilities that meet the requirements of that section are deemed to be covered by the permit by rule.

9VAC15-100-30. Application for permit by rule for small energy storage facilities with a disturbance zone greater than 10 acres.

A. The application for a small energy storage facility with a disturbance zone greater than 10 acres, provided that the project does not otherwise meet the criteria for 9VAC15-100-130, shall contain all of the following:

1. An NOI to submit the necessary documentation for a permit by rule, to be published by the department in the Virginia Register of Regulations.

a. The applicant shall submit the NOI in a form approved by the department.

(1) The initial NOI shall be submitted to the department as early in the project development process as practicable, but at least 90 days prior to the start of the public comment period required under 9VAC15-100-90.

(2) The NOI shall be submitted to the chief administrative officer and chief elected official of the locality in which the project is proposed to be located the same time the NOI is submitted to the department.

b. The NOI shall expire if no application has been submitted within 48 months from the NOI submittal date unless the department receives a written request for extension prior to the NOI expiration date. A NOI extension may be granted for an additional 36 months at which time the NOI shall expire.

c. An applicant seeking changes for a project that results in an increase of acreage shall submit a new NOI using the form approved by the department.

d. The applicant shall notify the department of any change of operator, ownership, or controlling interest for a project within 30 days of the transfer. No additional fee shall be assessed.

(1) The original applicant shall notify the department of the change by withdrawing the initial NOI in a form acceptable to the department.

(2) The new applicant shall submit a NOI in a form acceptable to the department.

(3) The department will not consider the change of operator, ownership, or controlling interest for a project effective until the department receives notification from both the original applicant and the new applicant.

2. A certification by the governing body of the locality in which the small renewable energy facility will be located that the project complies with all applicable land use ordinances.

3. Copies of all interconnection studies undertaken by the regional transmission organization or transmission owner, or both, on behalf of the project.

4. A copy of the final interconnection agreement, between the project and the regional transmission organization or transmission owner indicating that the connection of the project will not affect system reliability.

a. If the final agreement is not available, the most recent interconnection study shall be sufficient for the purposes of this subsection.

b. The final agreement shall be provided to the department within 30 days of the date of execution.

c. The department will forward a copy of the agreement or study to the State Corporation Commission.

5. A certification signed and stamped by a professional engineer licensed in Virginia that the maximum storage capacity of the facility, as designed, does not exceed 150 MW.

6. An analysis of potential environmental impacts of the project's operations on attainment of national ambient air quality standards (42 USC § 7409 as implemented by 9VAC5-30).

7. An analysis of the beneficial and adverse impacts of the proposed project on natural resources pursuant to 9VAC15-100-40. For wildlife, that analysis shall be based on information on the presence, activity, and migratory behavior of wildlife to be collected at the site for a period of time dictated by the site conditions and biology of the wildlife being studied, not exceeding 12 months.

8. A mitigation plan pursuant to 9VAC15-100-60 if a determination of likely significant adverse impacts has been made according to 9VAC15-100-50. The plan shall detail actions necessary to avoid, minimize, or otherwise mitigate such impacts, and to measure the efficacy of those actions.

9. A certification signed and stamped by a professional engineer licensed in Virginia that the facility is designed in accordance with 9VAC15-100-80.

10. An operating plan that includes a description of how the project will be operated and any mitigation plan required due to findings under 9VAC15-100-50.

11. A detailed site plan meeting the requirements of 9VAC15-100-70.

12. A certification signed by the applicant that the department has been notified that the applicant intends to apply for or has applied for or obtained all necessary environmental permits for the project.

13. A certification signed by the applicant that the project is being proposed, developed, constructed, or purchased by a person that is not a utility regulated pursuant to Title 56 of the Code of Virginia, or a certification that (i) the project's costs are not recovered from Virginia jurisdictional customers under base rates, a fuel factor charge, or a rate adjustment clause; or (ii) the applicant is a utility aggregation cooperative formed under Article 2 (§ 56-231.38 et seq.) of Chapter 9.1 of Title 56 of the Code of Virginia.

14. A summary report of the 30-day public review and comment period conducted pursuant to 9VAC15-100-90, including a summary of the issues raised by the public, any written comments received, and the applicant's response to those comments.

15. The appropriate fee pursuant to 9VAC15-100-110.

B. An applicant seeking a PBR under this chapter shall submit the following:

1. All items identified in subsection A of this section submitted in a format acceptable to the department and all applicable fees pursuant to 9VAC15-100-110.

2. A cover letter submitted with the application that contains the following:

a. Document certification signed by a responsible person that contains the following statement:

"I certify under penalty of law that this application document and all attachments were prepared under my direction or supervision in accordance with a system designed to ensure that qualified personnel properly gather and evaluate the information submitted. Based on my inquiry of the person or persons who manage the system, or those persons directly responsible for gathering and evaluating the information, the information submitted is, to the best of my knowledge and belief, true, accurate, and complete. I am aware that there may be significant penalties for submitting false information, including the possibility of fine and imprisonment for knowing violations."

b. The name and contact information of the responsible person signing the document certification required under subdivision 2 a of this subsection; and

c. The name and contact information of the responsible person to receive the permit authorization.

C. Within 90 days of receiving all of the required documents and fees listed in subsection A of this section, the department will, after consultation with DCR, DHR, and DWR, form a determination that an application is an administratively complete application or incomplete.

1. If the department determines that the application meets the requirements of this chapter, the department will form a determination that an application is an administratively complete application and notify the responsible person in writing that the person is authorized to construct and operate the facility pursuant to this chapter.

a. The authorization to construct and operate shall become invalid if (i) a program of continuous construction or modification or retrofit is not begun within 60 months from the date the PBR or modification or retrofit authorization is issued, or (ii) a program of construction or modification or retrofit is discontinued for a period of 24 months or more, except for a department-approved period between phases of a phased construction project. Routine maintenance is not considered either a modification or retrofit of a facility.

b. The department may grant an extension on a case-by-case basis.

c. The applicant for any project for which the PBR or modification authorization has been deemed invalid shall submit a new NOI, application documents, and appropriate fees to reactivate authorization.

2. If the department determines that the application does not meet the requirements of this chapter, the department will form a determination that an application is administratively incomplete, notify the applicant in writing, and specify the deficiencies.

3. If the applicant corrects deficiencies in an incomplete application, (i) the applicant shall notify the department within 30 days of an incomplete notification, (ii) the department will follow the procedures of this subsection, and (iii) the department will notify the applicant within 60 days whether the supplemental information meets the requirements of this chapter.

4. Any case decision by the department pursuant to this subsection shall be subject to the process and appeal provisions of the Administrative Process Act (§ 2.2-4000 et seq. of the Code of Virginia).

9VAC15-100-40. Analysis of the beneficial and adverse impacts on natural resources.

A. The applicant shall conduct a preconstruction wildlife analyses as follows.

1. The applicant shall prepare a wildlife report and map generated either (i) from DWR's Virginia Fish and Wildlife Information Service web-based application or (ii) from a data and mapping system including the most recent data available from DWR's subscriber-based Wildlife Environmental Review Map Service of known wildlife species and habitat features on the site or within two miles of the boundary of the site, known or potential sea turtle nesting beaches located within one-half mile of the disturbance zone, and desktop information for bald eagle nesting locations from the Center for Conservation Biology at the College of William and Mary.

2. The applicant shall assess and describe the expected beneficial and adverse impacts, if any, of the proposed project on wildlife identified by these studies and analyses.

B. The applicant shall perform a preconstruction historic resources analysis conducted by a qualified professional meeting the qualification standards of the Secretary of the Interior's Standards for Archeology and Historic Preservation in the appropriate discipline. Any study or analysis required under this subsection submitted to DHR for review may be considered accepted by DHR if DHR does not provide comments within 30 calendar days from confirmed receipt of an analysis determined to be administratively complete. In this case, the applicant may assume DHR concurrence with the recommendations of the study or analysis and proceed accordingly. The analysis shall include each of the following:

1. Information on known historic resources within the disturbance zone and within one-half mile of the disturbance zone boundary, identified on the context map referenced in 9VAC15-100-70 B, or as an overlay to this context map, as well as in tabular format.

2. An architectural field survey of all architectural resources, including cultural landscapes 50 years of age or older within the disturbance zone and within one-half mile of the disturbance zone boundary, and an evaluation of the eligibility of any identified resource for listing in the VLR. The architectural survey area may be refined by the applicant based on an analysis to exclude areas that have no direct view to the facility. The applicant shall provide detailed justification for any changes to the survey area.

3. An archaeological field survey of the disturbance zone and an evaluation of the eligibility of any identified archaeological site for listing in the VLR. To streamline archaeological investigations, the survey may be guided by a research design that utilizes a probability assessment or predictive modeling. Such a research design shall be approved by DEQ and DHR prior to conducting the fieldwork.

C. For projects subject to 9VAC15-100-120, the applicant shall conduct a preconstruction desktop survey of natural heritage resources and Virginia Natural Lands Assessment Ecological Cores within the disturbance zone within six months prior to the date of the application submittal. The analysis shall include a report of natural heritage resources using either the DCR online information service order form or the DCR subscriber-based Natural Heritage Data Explorer web application and include the most recent data available on the following:

1. Documented occurrences of natural heritage resources within 100 feet of the site;

2. Intersection of the site with predicated suitable habitat models developed by DCR for rare, threatened, and endangered species;

3. Intersection of the site with the Virginia Natural Landscape Assessment Ecological Cores; and

4. Onsite surveys for natural heritage resources recommended by DCR based on the analysis required under this subsection.

9VAC15-100-50. Determination of likely significant adverse impacts for applications.

A. The department will find that significant adverse impacts to wildlife are likely whenever the wildlife analyses prescribed in 9VAC15-100-40 A document that state-listed T&E wildlife species are found to occur within the disturbance zone or the disturbance zone is located on or within one-half mile of a known or potential sea turtle nesting beach.

B. The department will find that significant adverse impacts to historic resources are likely whenever the historic resources analyses prescribed by 9VAC15-100-40 B indicate that the proposed project is likely to diminish significantly any aspect of a historic resource's integrity.

C. For projects subject to 9VAC15-100-120, the department will find that significant adverse impacts to natural heritage resources and ecological cores are likely whenever the analysis prescribed by any other small renewable energy project permit by rule regulation is applicable indicates that that significant adverse impacts are likely.

9VAC15-100-60. Mitigation plan.

A. The applicant shall prepare a mitigation plan for any resource for which a significant adverse impact determination has been made as a result of the analysis pursuant to 9VAC15-100-50. The plan shall detail actions by the applicant to avoid, minimize, or otherwise mitigate such impacts and shall be an enforceable part of the PBR.

B. Mitigation measures for significant adverse impacts to wildlife shall include the following.

1. For state-listed T&E wildlife, the applicant shall take all reasonable measures to avoid significant adverse impacts or shall demonstrate in the mitigation plan what significant adverse impacts cannot practicably be avoided and why additional proposed actions are reasonable. These additional proposed actions may include best practices to avoid, minimize, or offset adverse impacts to resources analyzed pursuant to 9VAC15-100-40 A or C.

2. For proposed projects where the disturbance zone is located on or within one-half mile of a known or potential sea turtle nesting beach, the applicant shall take all reasonable measures to avoid significant adverse impacts or shall demonstrate in the mitigation plan what significant adverse impacts cannot practicably be avoided and why additional proposed mitigation actions are reasonable. Mitigation measures shall include the following.

a. Avoiding construction within likely sea turtle crawl or nesting habitats during the turtle nesting and hatching season (May 20 through October 31). If avoiding construction during this period is not possible, then conducting daily crawl surveys of the disturbance zone (May 20 through August 31) and one mile beyond the northern and southern reaches of the disturbance zone (sea turtle nest survey zone) between sunrise and 9 a.m. by qualified individuals who have the ability to distinguish accurately between nesting and non-nesting emergences.

b. If construction is scheduled during the nesting season, including measures to protect nests and hatchlings found within the sea turtle nest survey zone.

c. If nighttime construction cannot be avoided, designing project lighting during the construction and operational phases to minimize impacts on nesting sea turtles and hatchlings. Proposed project lighting must be submitted to DWR and the U.S. Fish and Wildlife Service for approval prior to construction.

C. Mitigation measures for significant adverse impacts to historic resources shall include the following.

1. Significant adverse impacts to VLR-eligible or VLR-listed architectural resources shall be minimized to the extent practicable through project design or the installation of vegetative or other screening.

2. If significant adverse impacts to VLR-eligible or VLR-listed architectural resources cannot be avoided or minimized such that impacts are no longer significantly adverse, then the applicant shall develop a reasonable and proportionate mitigation plan that offsets the significantly adverse impacts and has a demonstrable public benefit and benefit for the affected or similar resource.

3. If any identified VLR-eligible or VLR-listed archaeological site cannot be avoided or minimized to such a degree as to avoid a significant adverse impact, significant adverse impacts of the project will be mitigated through archaeological data recovery.

D. For projects subject to 9VAC15-100-120, mitigation measures for significant adverse impacts to natural heritage resources shall be as required for any other small renewable energy project permit by rule regulation that is applicable.

9VAC15-100-70. Site plan and context map requirements.

A. The applicant shall submit a site plan that includes maps showing the physical features, topography, and land cover of the area within the site, both before and after construction of the proposed project. The site plan shall be submitted at a scale sufficient to show and shall include the following: (i) the boundaries of the site, disturbance zone with 100 foot buffer or local zoning setback requirement as applicable, storage infrastructure, open areas, and screening areas; (ii) the location, height, and dimensions of all existing and proposed energy storage systems, other structures, fencing, and other infrastructure; (iii) the location, grades, and dimensions of all temporary and permanent onsite and access roads from the nearest county or state maintained road; (iv) water bodies, waterways, wetlands, and drainage channels; and (v) for facilities subject to 9VAC15-100-30, the location of any mitigation measures and resources subject to mitigation.

B. The applicant shall submit a context map including the area encompassed by the site and within five miles of the site boundary. The context map shall show state and federal resource lands and other protected areas, Chesapeake Bay Resource Protection Areas pursuant to 9VAC25-830-80, historic resources, state roads, waterways, locality boundaries, forests, open spaces, farmland, brownfield sites, and transmission and substation infrastructure.

C. The applicant shall submit post-construction site maps to the department within six months after beginning commercial operation that show the physical features, topography, and land cover of the area within the site. The maps shall contain the following:

1. The boundaries of the site, disturbance zone with 100-foot buffer or local zoning setback requirement as applicable, open areas, and screening areas;

2. Infrastructure placement;

3. Mitigation required pursuant to 9VAC15-100-60, as applicable; and

4. Location of any avoided cultural resources.

9VAC15-100-80. Small energy storage facility design standards and operational plans.

A. The design and installation of the small energy storage facility shall incorporate any requirements of the mitigation plan that pertain to design and installation if a mitigation plan is required pursuant to 9VAC15-100-50 or 9VAC15-100-60 as applicable.

B. The applicant shall prepare an operation plan detailing operational parameters for the project, including (i) remote monitoring or staffing requirements, (ii) emergency procedures and contacts, (iii) vegetation to be used within the disturbance zone and 100-foot buffer or local zoning setback requirement as applicable, and (iv) application frequency of pesticides or herbicides over the life of the project. Owners and operators are encouraged to utilize the link to the DACS Fieldwatch in 9VAC15-100-120 B 6 prior to the application of either pesticides or herbicides.

9VAC15-100-90. Public participation.

A. The applicant shall conduct a public comment period for public review of all application documents required by 9VAC15-100-30 and include a summary report of the public comment as part of the PBR application. The report shall include documentation of the public comment period and public meeting and include a summary of the issues raised by the public, any written comments received, and the applicant's response to those comments.

B. The applicant shall publish a notice announcing a 30-day comment period. The notice shall be published once a week for two consecutive weeks in a local newspaper of general circulation where the project is to be located. The notice shall include the following:

1. A brief description of the proposed project and its location, including the approximate dimensions of the site, approximate number and configuration of energy storage systems, and approximate maximum height of energy storage systems;

2. A statement that the purpose of the public participation is to (i) acquaint the public with the technical aspects of the proposed project and how the standards and the requirements of this chapter will be met, (ii) identify issues of concern, (iii) facilitate communication, and (iv) establish a dialogue between the owner or operator and persons that may be affected by the project;

3. Announcement of a 30-day comment period in accordance with subsection D of this section, and the name, telephone number, address, and email address of the applicant who can be contacted by the interested persons to answer questions or to whom comments shall be sent;

4. Announcement of the date, time, and place for a public meeting held in accordance with subsection E of this section; and

5. Location where copies of the documentation to be submitted to the department in support of the permit by rule application will be available for inspection.

C. The owner or operator shall place a copy of the documentation in a location accessible to the public during business hours for the duration of the 30-day comment period in the vicinity of the proposed project.

D. The public shall be provided at least 30 days to comment on the technical and the regulatory aspects of the proposal. The comment period shall begin no sooner than 15 days after the applicant initially publishes the notice in the local newspaper.

E. The applicant shall hold a public meeting not earlier than 15 days after the beginning of the 30-day public comment period and no later than seven days before the close of the 30-day comment period. The meeting shall be held in the locality or, if the project is located in more than one locality, in a place proximate to the location of the proposed project.

F. For purposes of this chapter, the applicant and any interested party who submits written comments on the proposal to the applicant during the public comment period or who signs in and provides oral comments at the public meeting shall be deemed to have participated in the proceeding for a permit by rule under this chapter and pursuant to § 10.1-1197.7 B of the Code of Virginia

9VAC15-100-100. Permit by rule change of ownership, project modifications, reporting, and permit termination.

A. A PBR may be transferred to a new owner or operator through an administrative amendment to the permit. The department will incorporate the administrative changes to the PBR after the receipt of notification of the change in a form acceptable to the department, including a written agreement between the existing and new owner or operator containing a specific date for transfer of permit responsibility, coverage, and liability between them. The transfer of the PBR to the new owner or operator shall be effective on the date specified in the written agreement. Information required for a change of ownership shall be submitted to the department within 30 days of the transfer date. The department will not consider the change of operator, ownership, or controlling interest for a facility to be effective until the department receives notification from both the original applicant and the new applicant.

B. A PBR name may be changed through an administrative amendment to the permit as follows.

1. Information required for a change of ownership shall be submitted to the department within 30 days of the change date.

2. The department will incorporate the administrative changes to the PBR after receipt of the notification in a form acceptable to the department.

C. Modification to an existing PBR, with the exception of administrative changes, shall be in accordance with the provisions of 9VAC15-100-30 B and as follows.

1. The applicant shall submit the modification application and include the facility address, documents, maps, and studies supporting the changes to the existing permit. Information that is unchanged in the existing PBR shall not be submitted. Unchanged information shall be identified and certified as unchanged in the modification application.

2. In addition to the information required in subdivision 1 of this subsection, a modification to an existing PBR shall also require a certification from the local government pursuant to 9VAC15-100-30 A 2, a public comment period pursuant to 9VAC15-100-90, and the appropriate fee pursuant to 9VAC15-100-110.

3. Upon receipt of all required documents and applicable fees, the department will review the modification submittal in accordance with the provisions of 9VAC15-100-30 C.

D. Recordkeeping and reporting shall be performed as follows.

1. The owner or operator shall furnish notification of the following milestones:

a. The date the project began construction within 30 days after such date;

b. The date the project began commercial operation within 30 days of such date;

c. The date of any onsite construction or maintenance that could impact the project's mitigation and avoidance plan within 15 days after such date;

d. A map of the project post construction clearly showing infrastructure configuration relative to any required mitigation and incorporates any onsite changes resulting from any onsite construction or maintenance that could impact the project mitigation and avoidance plan within 90 days of completion of such work; and

e. For projects that contain mitigation for historic resources, a post-construction demonstration of completed mitigation requirements according to the approved mitigation within 90 days of completion of such work.

2. A copy of the site map clearly showing any resources to be avoided or mitigated shall be maintained onsite during construction.

3. Upon request, the owner shall furnish to the department copies of records required to be kept by this PBR.

4. Within 30 days of notification, any information requested by the department.

E. The department may enforce provisions of this chapter in accordance with §§ 10.1-1197.9, 10.1-1197.10, and 10.1-1197.11 of the Code of Virginia. In so doing, the department may:

1. Issue directives in accordance with the law;

2. Issue special orders in accordance with the law;

3. Issue emergency special orders in accordance with the law;

4. Seek injunction, mandamus, or other appropriate remedy as authorized by the law;

5. Seek civil penalties under the law; or

6. Seek remedies under the law, or under other laws including the common law.

F. Pursuant to the Virginia Administrative Process Act (§ 2.2-4000 et seq. of the Code of Virginia), terminate the permit by rule whenever the department finds that the applicant has:

1. Knowingly or willfully misrepresented or failed to disclose a material fact in any report or certification required under this chapter;

2. Failed to comply with the conditions or commitments stated within the permit by rule application; or

3. Violated the project's mitigation plan.

9VAC15-100-110. Fees.

A. Fees shall be collected for an application for a PBR or an application to retrofit an existing PBR for a project subject either to 9VAC15-100-30 or 9VAC15-100-130. No fee shall be required for administrative permit changes pursuant to 9VAC15-100-100 A or B.

B. Fees for PBR applications or retrofits shall be paid by the applicant as follows.

1. All permit application and retrofit fees if applicable are due at the time of application or retrofit submittal.

2. Fees shall be collected utilizing, where practicable, an online payment system. Until such system is operational, fees shall be paid by check, draft, or postal money order made payable to "Treasurer of Virginia/DEQ" and shall be sent to the Department of Environmental Quality, Receipts Control, P.O. Box 1104, Richmond, VA 23218.

a. Fees shall be in United States currency, except that agencies and institutions of the Commonwealth of Virginia may submit interagency transfers for the amount of the fee.

b. The department may provide a means to pay fees electronically. When fees are collected electronically pursuant to this section through credit cards, business transaction costs to the department associated with processing such payments may be assessed.

3. All incomplete payments shall be deemed nonpayment.

4. No PBR application, modification, or retrofit will be deemed complete until the department receives proper payment.

a. Interest may be charged for late payments at the underpayment rate set forth in § 58.1-15 of the Code of Virginia and is calculated on a monthly basis at the applicable periodic rate. A 10% late payment fee shall be charged to any delinquent (over 90 days past due) account.

b. The department is entitled to all remedies available under the Code of Virginia in collecting any past due amount.

C. Each application for a PBR and each retrofit of a PBR is a separate action and shall be assessed a separate fee. The fee for a permit application or retrofit is identified in Table 1.

D. All applicants, unless otherwise specified by the department, shall submit the following information along with the fee payment in a form acceptable to the department and include the following information:

1. Applicant name, address, and daytime telephone number;

2. Responsible person name, address, and daytime telephone number if different from the applicant;

3. Name of the project and project location;

4. Whether the fee is for a new PBR issuance or permit retrofit;

5. The amount of fee submitted; and

6. The existing permit number.

9VAC15-100-120. Hybrid projects.

A. Applicants for a hybrid renewable energy and storage facility shall submit one application combining and satisfying the requirements of 9VAC15-100-30 and the application requirements for any other small renewable energy project that is applicable. The department may request any additional information beyond that listed in this section as needed in order that the application and final permit be correct and complete.

B. Applicants for a hybrid facility may combine the requirements for an analysis of the beneficial and adverse impacts on natural resources under 9VAC15-100-40 with those for similar analyses that are required for any other small renewable energy project that is applicable.

C. Applicants for a hybrid facility may combine the mitigation plan requirements of 9VAC15-100-60 with the mitigation plan requirements for any other small renewable energy project that is applicable.

D. Applicants for a hybrid facility may combine the site plan and context map requirements of 9VAC15-100-70 with the site plan and context map requirements for any other small renewable energy project that is applicable.

E. Applicants for a hybrid facility may combine the public participation requirements of 9VAC15-100-90 with the public participation requirements for any other small renewable energy project that is applicable.

F. Applicants for a hybrid facility are not subject to the fee for the small energy storage facility portion of the hybrid facility project set forth in 9VAC15-100-110.

G. The rated capacity of the small energy storage portion of a hybrid renewable energy and storage facility is not added to that of any other small renewable energy project that is part of the overall hybrid facility when determining the hybrid facility's qualification for a permit by rule.

H. The addition of a small energy storage facility subject to this chapter, if identified on the site plan of a permit by rule for a constructed or operating small renewable energy project, shall not be considered a modification to the small renewable energy project.

I. The addition of an electrical storage facility adjacent but beyond the approved site plan of an existing small renewable energy project shall not be considered a hybrid project.

9VAC15-100-130. Small energy storage facilities with a disturbance zone less than or equal to 10 acres or meeting certain categorical criteria.

A. Facilities meeting one of the following conditions shall be subject to this section:

1. Facilities with a disturbance zone less than or equal to 10 acres; or

2. Facilities located on previously disturbed or repurposed areas without regard to the size of the disturbance zone, or the rated power capacity is less than or equal to 150 MW and any impact to undisturbed areas is less than or equal to 10 acres.

B. An application for a PBR under this section shall contain the following:

1. The NOI in a form acceptable to the department;

2. A certification by the governing body of the locality wherein the project will be located that the project complies with all applicable land use ordinances;

3. An interconnection agreement pursuant to 9VAC15-100-30 A 4;

4. A certification signed and stamped by a professional engineer licensed in Virginia that the maximum storage capacity of the facility, as designed, does not exceed 150 MW;

5. A detailed site plan meeting the requirements of 9VAC15-100-70;

6. A certification signed by the applicant that the department has been notified that the applicant intends to apply for or has applied for or obtained all necessary environmental permits for the project; and

7. The appropriate fee pursuant to 9VAC15-100-110.

C. An applicant seeking a PBR under this subsection shall submit the application documents according to the requirements of 9VAC15-100-30 B 2.

D. The owner or operator of a PBR must provide notification to DEQ of operation within 30 days of the start of operation.

E. A facility with a rated power capacity equal to or less than one MW is not required to submit any notification or certification to the department.

Title of Regulation: 9VAC25-260. Water Quality Standards (amending 9VAC25-260-50, 9VAC25-260-140, 9VAC25-260-185, 9VAC25-260-187, 9VAC25-260-310, 9VAC25-260-390, 9VAC25-260-400, 9VAC25-260-410, 9VAC25-260-420, 9VAC25-260-440, 9VAC25-260-470, 9VAC25-260-500).

Statutory Authority: § 62.1-44.15 of the Code of Virginia; Clean Water Act (33 USC § 1251 et seq.); 40 CFR Part 131.

Public Hearing Information:

February 22, 2022 - noon - Bank of America, 3rd Floor Conference Room, 1111 East Main Street, Richmond, VA

Public Comment Deadline: March 18, 2022.

Agency Contact: David Whitehurst, Department of Environmental Quality, 1111 East Main Street, Suite 1400, P.O. Box 1105, Richmond, VA 23218, telephone (804) 698-4121, or email david.whitehurst@deq.virginia.gov.

Basis: The federal Clean Water Act authorizes restoration and maintenance of the chemical, physical, and biological integrity of the nation's waters. Section 303(c)(1) of the Clean Water Act requires that the states hold public hearings for the purpose of reviewing applicable water quality standards, and, as appropriate, modifying and adopting standards. Federal regulations at 40 CFR 131 authorize requirements and procedures for developing, reviewing, revising, and approving water quality standards by the states as authorized by § 303(c) of the Clean Water Act. 40 CFR 131 specifically requires the states to adopt criteria to protect designated uses.

The State Water Control Law (§ 62.1-44.2 et seq. of the Code of Virginia) authorizes protection and restoration of the quality of state waters, safeguarding the clean waters from pollution, prevention and reduction of pollution, and promotion of water conservation. Section 62.1-44.15 (3a) of the State Water Control Law requires the State Water Control Board to establish standards of quality and to modify, amend, or cancel any such standards or policies. It also requires the board to hold public hearings from time to time for the purpose of reviewing the water quality standards, and, as appropriate, adopting, modifying, or canceling such standards.

The amendments being considered are modifications of criteria that will protect designated uses and criteria and designated uses are requirements of the Water Quality Standards. The authority to adopt standards as provided by the provisions is mandated, although the specific standards to be adopted or modified are discretionary to the U.S. Environmental Protection Agency (EPA) and the state.

Purpose: The rulemaking is essential to the protection of health, safety, or welfare of the citizens of the Commonwealth because proper water quality standards protect water quality and living resources of Virginia's waters for the designated uses of aquatic life, wildlife, recreation, public water supply, shellfish consumption, and fish consumption. The intent of this rulemaking is to protect designated and beneficial uses of state waters by adopting a regulation that is technically correct, necessary, and reasonable.

Substance: This rulemaking will modify, add, or delete any section, criteria, use designation, standard, and policy to conform to EPA guidance, clarify state intent, implement state programs (e.g., permitting, monitoring, and assessments), and improve water quality or protect beneficial uses. The proposed amendments to the Water Quality Standards are as follows:

In 9VAC25-260-50

Add missing **** (quadruple asterisk) to pH column to clarify that pH criteria apply only to the epilimnion of a lake or reservoir when thermally stratified.

9VAC25-260-140

Add freshwater aluminum criteria for the protection of aquatic life according to the 2018 EPA nationally recommended criteria.

Correct identified errors:

(i) Ammonia CAS number is formatted with dashes, all other CAS numbers do not have dashes

(ii) Ammonia CAS number is incorrect 766414; should be 7664417

(iii) Correct name for Bis2-Chloroisopropyl Ether (2,2'-Oxybis(1-Chloropropane)

(iv) Chlordane CAS number 57749 is for mixed isomers; EPA Regional Screening Level (RSL) uses 12789036 for Chlordane, this is not wrong but inconsistent

(v) Nickel CAS number is incorrect 744002; should be 7440020

(vi) Include CAS number for Uranium (7440611)

(vii) Tributyltin CAS number is incorrect 60105 (no such CAS number); EPA RSL uses E1790678

Delete Bis (chloromethyl) Ether.

Copper Biotic Ligand Model (BLM) Language - Edit language in Table 140.B to state where the board has determined that a sufficient dataset of model input parameters is available, the BLM shall be used to determine copper criteria and that the hardness-based criteria will be used when sufficient input parameters are not available. Language in subsection G is amended similarly.

Update 20 human health criteria for the following 10 parameters to reflect updated exposure factors recommended by EPA in 2011: antimony, 2,3,7,8-tetrachlorodibenzo-p-dioxin, nickel, n-nitrosodimethylamine, n-nitrosodiphenylamine, n-nitrosodi-n-propylamine, total PCBs, selenium, thallium, and zinc A

Add language to footnotes 3 and 4 stating that human health criteria are based on the assumption of an average amount of exposure on a long-term basis.

9VAC25-260-185 B

Submerged Aquatic Vegetation (SAV) and Water Clarity acreages for five Chesapeake Bay segments are increased to match most recent Chesapeake Bay Program recommendations.

9VAC25-260-187

DEQ staff recommend application of lake nutrient criteria to a relatively recently constructed water supply reservoir in the Rappahannock River basin (Lake Mooney).

9VAC25-260-310

Delete special standard y (ammonia criteria for freshwater tidal tributaries of the Potomac River) as it is superseded by freshwater ammonia criteria that became effective in 2020.

Add special standard ii, which is a benthic chlorophyll-a threshold that protects the recreational use from persistent, nuisance filamentous algae in certain main-stem sections of the North Fork Shenandoah River, South Fork Shenandoah River, and Shenandoah River.

9VAC25-260-360 through 9VAC25-260-540

Add, modify, or delete trout waters as appropriate.

Add, modify, or delete public water supplies designations as appropriate.

Adjust temperature criteria or application of temperature criteria to waters stocked with trout by the Department of Wildlife Resources in the winter with the intent of supplying the public with seasonal trout fishing opportunities only in the winter but not in the summer.

Add or correct Class designations as appropriate.

Corrections to section descriptions in river basin tables for clarity or accuracy.

Issues: The primary advantage to the public of the regulatory action is that the updated numerical toxics criteria are based on better scientific information to protect aquatic life and human health. The disadvantage is that criteria that become more stringent may result in increased costs to the regulated community. However, the goal is to set realistic, protective goals in water quality management and to maintain the most scientifically defensible criteria in the Water Quality Standards regulation. EPA has also provided guidance that these criteria are "approvable" under the Clean Water Act.

The advantage to the agency or the Commonwealth that will result from the adoption of these amendments will be more accurate and scientifically defensible permit limits, assessments, and clean-up plans. The regulated community may find that the amendments pertinent to their operations may require additional capital or operating costs for control in their discharge, particularly where the numerical criteria are more stringent.

There is no disadvantage to the agency or the Commonwealth that will result from the adoption of these amendments.

Department of Planning and Budget's Economic Impact Analysis:

The Department of Planning and Budget (DPB) has analyzed the economic impact of this proposed regulation in accordance with § 2.2-4007.04 of the Code of Virginia (Code) and Executive Order 14 (as amended, July 16, 2018). The analysis presented represents DPB's best estimate of these economic impacts.¹

Summary of the Proposed Amendments to Regulation. The State Water Control Board (Board) proposes to amend 9VAC25-260 Water Quality Standards (regulation) to update numerical and narrative criteria, use designations, and other policies based on current scientific information. The proposed changes include: (i) adding freshwater aluminum criteria, (ii) requiring the use of the Copper Biotic Ligand Model, (iii) updating 20 human health criteria for 10 parameters of water quality, (iv) increasing the acreage for Submerged Aquatic Vegetation and Water Clarity for five Chesapeake Bay segments, (v) applying lake nutrient criteria to Lake Mooney, (vi) adding a special standard that would limit the quantity of the filamentous algae in certain sections of the Shenandoah river, and (vii) modifying trout waters designation and public water supply designation, and adjusting temperature criteria for waters stocked with trout by the Virginia Department of Wildlife Resources in the winter.

Background. The proposed amendments were developed as part of a triennial review of the regulation, which is mandated by federal regulation and state law. The Clean Water Act (CWA) establishes the basic structure for regulating discharges of pollutants into the waters of the United States and regulating quality standards for surface waters.² The federal regulations at 40 CFR 131 authorize requirements and procedures for developing, reviewing, revising and approving water quality standards by the states as authorized by section 303(c) of the CWA.³ 40 CFR 131.20 specifies that states shall hold public hearings at least once every three years for the purpose of reviewing the state's water quality standards, and adopting, modifying or canceling such standards, as appropriate.

The State Water Control Law (Code of Virginia, § 62.1-44.2 et seq.) is intended to protect and restore the quality of state waters, safeguard clean waters from pollution, prevent and reduce pollution, and promote water conservation.⁴ Specifically, § 62.1-44.15(3a) requires the Board to establish standards of quality, and also modify, amend or cancel any such standards or policies; that section mirrors 40 CFR 131 in requiring that the Board conduct a triennial review of water quality standards, including holding public hearings.

The water quality standards contained in this regulation are used in setting Virginia Pollutant Discharge Elimination System (VPDES) permit limits and for evaluating the waters of the Commonwealth so that "impaired waters" can be addressed as per the Clean Water Act and Code of Virginia § 62.1-44.19:7.⁵ In keeping with the legal mandate, the Board convened a Regulatory Advisory Panel with representatives from various stakeholders to review the current standards and proposed changes.⁶ The proposed changes reflect a combination of updated scientific data, newer standards adopted by the U.S. Environmental Protection Agency, information on current conditions as obtained by the Department of Environmental Quality (DEQ), and input from members of the advisory panel.⁷ The most significant proposed changes are summarized below.

I. In 9VAC25-260-140, numerical water quality criteria (upper limits) for parameters (various chemicals) that are measured to assess toxicity would be changed as follows:

(i) Add freshwater aluminum criteria for the protection of aquatic life according to the 2018 EPA nationally recommended criteria.⁸ Aluminum is currently not included among the parameters used to assess water toxicity.

(ii) Require that the freshwater criteria for copper be calculated using the EPA 2007 Biotic Ligand Model (BLM) in sites where the Board has determined that a sufficient dataset of input parameters is available. The BLM is currently offered as an alternative to sites that have sufficient data; the proposed change would effectively require those sites to use the BLM. Places where the Board has determined that a sufficient dataset is not available will be allowed to continue using the current method of calculating the criteria.⁹ A change from the current hardness-based criteria (and, therefore permit limits) to the BLM-based criteria would not always result in more stringent criteria (and permit limits). Less stringent criteria could result from using the BLM depending on the site-specific water chemistry of the receiving waterbody.

(iii) Update criteria for toxicity with respect to human health for the following 10 parameters to reflect updated exposure factors recommended by EPA in 2011: antimony, 2,3,7,8-tetrachlorodibenzo-p-dioxin, nickel, n-nitrosodimethylamine, n-nitrosodiphenylamine, n-nitrosodi-n-propylamine, total PCBs, selenium, thallium, and zinc. The current criteria are based on outdated exposure factors; the new criteria are derived using the latest exposure factors.¹⁰

Lastly, the Board proposes to make a number of smaller changes such as correcting identification numbers for some chemicals and removing Bis (chloromethyl) Ether since it naturally degrades rapidly in water.

II. Submerged Aquatic Vegetation (SAV) and Water Clarity acreages for five Chesapeake Bay segments would be increased to match the most recent recommendations from the Chesapeake Bay Program (9VAC25-260-185 B). The current criteria are based on outdated water quality models, and the proposed increases would make the rationale for these segments consistent with other parts of the Bay. The criteria are used to determine shallow water SAV use as a designated use, and as such increasing the acreage increases the area that can be protected for such use from the impacts of nutrients and suspended sediments.

III. Lake Mooney, which was recently constructed as a water supply reservoir in Stafford County, would be added to the list of man-made lakes and reservoirs in the state that are subject to nutrient criteria in order to protect aquatic life and recreational designated uses (9VAC25-260-187). DEQ staff proposed this since Lake Mooney is proposed to be designated as a public water source.

IV. The Board proposes to add a benthic chlorophyll-a threshold as a special standard (9VAC25-260-310) to protect recreational use from persistent, nuisance filamentous algae in certain main-stem sections of the North Fork Shenandoah River, South Fork Shenandoah River, and Shenandoah River.¹¹ Specifically, the proposed language states, "In the wadeable portions of the mainstem sections of the Shenandoah River, North Fork Shenandoah River, and South Fork Shenandoah River listed below, a determination of persistent nuisance filamentous algae impeding the recreation use should be made when exceedances of the specified benthic chlorophyll-a concentration thresholds occur in more than one recreation season (May 1 to October 31) in three years. "Wadeable" constitutes a stream that can be crossed and sampled safely during a given sampling event occurring within the recreation season." A determination of persistent nuisance filamentous algae could lead to the water being designated as "impaired," which would then require further interventions from DEQ to address the causes and mitigate the algal blooms by implementing total maximum daily loads (TMDL).

The Board proposes to remove special standard "y" pertaining to ammonia criteria for freshwater tidal tributaries of the Potomac River as it is superseded by freshwater ammonia criteria that became effective in 2020.

V. The Board also proposes to update the designations for various sections of river basins, either to change trout waters or public water supply designations or to add or correct class designations, as well as to make the location descriptions more precise (9VAC25-260-360 through 9VAC25-260--540.) For some class III waters that are stocked with trout during the winter by the Department of Wildlife Resources, the proposed changes would add temperature criteria to ensure the water is not allowed to get too warm for the trout. In general, these changes would serve to ensure that the regulation is accurate and that the appropriate criteria are applied to assess water bodies based on the correct classification.

Estimated Benefits and Costs. The proposed amendments broadly benefit the public by ensuring that the numerical toxics criteria that protect aquatic life and human health are updated based on better scientific information. The accurate classification of water bodies would further ensure that public water sources for household consumption and water bodies used purely for recreational purposes are correctly assessed and protected for such use. DEQ and the Commonwealth would benefit from more accurate and scientifically defensible permit limits, assessments, and clean-up plans (TMDLs) in case of legal proceedings brought either by the regulated community or by conservation groups.

However, criteria that become more stringent may result in increased costs to the regulated community. Since these criteria are used to grant permits under VPDES, current permit holders as well as regulants who are assessed for a new permit may face more stringent effluent limits or be subject to monitoring requirements, or may face higher indirect costs by having to process or filter their effluents to meet the new criteria. As mentioned previously, adopting the copper BLM-based criteria may lead to less stringent criteria and permit limits depending on the site-specific water chemistry; thus some current and future VPDES permit holders with copper limits may benefit from this change.

Businesses and Other Entities Affected. All VPDES permit holders with pollutants in their discharge that are being updated with the proposed amendments may be impacted by the proposed changes. Data shared by DEQ show that there are currently 816 VPDES individual permit holders with effluent limits. With regard to the copper BLM, there are 146 VPDES permittees in the Commonwealth that currently have copper effluent limits or copper monitoring requirements in their discharge permit. Of these 146 facilities, 135 discharge to freshwater and may be directly affected by the modified language for the copper BLM. Municipally owned wastewater treatment plants comprise 38% of these permittees, while industrial facilities make up a majority of the rest.¹² There are other permittees that currently do not have copper limits but may be required to have them when their permits are renewed due to the proposed changes.

Similarly, 161 permittees may be affected by the proposed changes to the human health criteria. These permittees currently have either a permit limit derived from at least one of the existing criteria or monitoring requirements. Municipally-owned wastewater treatment plants comprise 34% of these permittees, while industrial facilities make up a majority of the rest. There are other permittees that currently do not have permit limits derived from these criteria, but they may be required to have them when their permits are renewed if the proposed amendments become effective.

Permittees that have aluminum in their effluent and that discharge into freshwater may be affected by the addition of the aluminum criteria. The number of potentially affected permittees is unknown since aluminum would be added as a new parameter.

The proposal to add a benthic chlorophyll-a threshold as a special standard for wadeable portions of the mainstem sections of the Shenandoah River, North Fork Shenandoah River, and South Fork Shenandoah River could result in new costs to the state or to regulants if impairments are identified in the future that necessitate clean-up plans. Due to the geographic nature of the intervention, entities located in the localities that encompass these river section are likely to bear a disproportionate material impact: Augusta, Clark, Lee, Page, Rockingham, Shenandoah and Warren Counties, and the Towns of Luray and Shenandoah.

The Code of Virginia requires DPB to assess whether an adverse impact may result from the proposed regulation.¹³ An adverse impact is indicated if there is any increase in net cost or reduction in net revenue for any entity, even if the benefits exceed the costs for all entities combined. As noted, the more stringent criteria would lead to higher direct or indirect costs to VPDES permit applicants who would be subject to effluent limits or monitoring criteria. Thus, an adverse impact is indicated.

Small Businesses¹⁴ Affected.¹⁵ The proposed amendments do not appear to adversely affect small businesses. The proposed amendments affect private businesses that have VPDES individual permits. Based on a list of permit holders provided by DEQ, private businesses with individual permits with effluent limits for copper or any of the parameters that have human health criteria are all large corporations in the energy, chemicals, steel, railway, shipbuilding, agricultural processing, paper milling, and heavy machinery sectors.¹⁶ Thus, an adverse economic impact is not being indicated for small businesses.¹⁷

Localities¹⁸ Affected.¹⁹ Some localities that operate wastewater treatment plants may be affected by the proposed changes to the criteria for copper, aluminum, or the 10 parameters with human health criteria. Consequently, an adverse economic impact²⁰ on these localities is indicated because they may face higher costs to monitor or mitigate the pollutant content in the treatment plants' effluent due to the more stringent numeric criteria. However, which localities will be affected by these changes is as yet unknown.

Due to the location-specific nature of adopting a benthic chlorophyll-a threshold as a special standard, entities in the localities that encompass wadeable portions of the mainstem sections of the Shenandoah River, North Fork Shenandoah River, and South Fork Shenandoah River are likely to bear a disproportionate material impact: Augusta, Clark, Lee, Page, Rockingham, Shenandoah and Warren Counties, and the Towns of Luray and Shenandoah. Consequently, an adverse economic impact²¹ on these counties and towns is indicated because entities in those localities, including municipal wastewater treatment facilities and industrial facilities, may be subject to TMDLs if these sections of the river are found to be impaired.

Lastly, Stafford County, which contains Lake Mooney, would also be affected by the proposed amendments, but only in the sense that it would contain a water body that is assessed for nutrient content.

Projected Impact on Employment. The proposed amendments do not appear to affect total employment. It is unlikely that the proposed amendments would affect employment in wastewater treatment or water quality management.

Effects on the Use and Value of Private Property. As discussed, the proposed changes in numerical criteria may increase costs for some private businesses. Consequently, the value of these firms may be modestly reduced. The proposed amendments do not affect real estate development costs.

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¹Section 2.2-4007.04 of the Code of Virginia requires that such economic impact analyses determine the public benefits and costs of the proposed amendments. Further the analysis should include but not be limited to: (1) the projected number of businesses or other entities to whom the proposed regulatory action would apply, (2) the identity of any localities and types of businesses or other entities particularly affected, (3) the projected number of persons and employment positions to be affected, (4) the projected costs to affected businesses or entities to implement or comply with the regulation, and (5) the impact on the use and value of private property.

²See https://www.epa.gov/laws-regulations/summary-clean-water-act for the history of the Clean Water Act

³See https://www.law.cornell.edu/cfr/text/40/part-131.

⁴See https://law.lis.virginia.gov/vacode/title62.1/chapter3.1/.

⁵See https://www.epa.gov/tmdl/statute-and-regulations-addressing-impaired-waters-and-tmdls for information on the requirements under the Clean Water Act and https://law.lis.virginia.gov/vacode/title62.1/chapter3.1/section62.1-44.19:7 for the requirements in Virginia statute.

⁶See https://townhall.virginia.gov/L/GetFile.cfm?File=Meeting\103\32600\Minutes_DEQ_32600_v1.pdf and https://townhall.virginia.gov/L/GetFile.cfm?File=Meeting\103\32678\Minutes_DEQ_32678_v1.pdf for minutes from the Regulatory Advisory Panel's two meetings, held in June 2021.

⁷The Board also received a number of public comments, reported on pages 16-23 of the Agency Background Document. See https://townhall.virginia.gov/l/GetFile.cfm?File=103\5637\9438\AgencyStatement_DEQ_9438_v1.pdf.

⁸See https://www.epa.gov/wqc/2018-final-aquatic-life-criteria-aluminum-freshwater.

⁹See https://www.epa.gov/wqs-tech/copper-biotic-ligand-model.

¹⁰"Exposure factors" are benchmark values for variables like drinking water consumption, consumption of fish, etc. that are used to conduct risk assessments for human exposure to potentially toxic chemicals in the environment. See https://cfpub.epa.gov/ncea/risk/recordisplay.cfm?deid=236252.

¹¹This does not include Harmful Algal Blooms, which are monitored by the Virginia Department of Health. See https://www.vdh.virginia.gov/waterborne-hazards-control/algal-bloom-surveillance-map/.

¹²Other individual permit holders that are not private businesses include the Department of Corrections, the Virginia Department of Transportation, and the U.S. Army, Navy and Marine Corps.

¹³Pursuant to Code § 2.2-4007.04 D: In the event this economic impact analysis reveals that the proposed regulation would have an adverse economic impact on businesses or would impose a significant adverse economic impact on a locality, business, or entity particularly affected, the Department of Planning and Budget shall advise the Joint Commission on Administrative Rules, the House Committee on Appropriations, and the Senate Committee on Finance. Statute does not define "adverse impact," state whether only Virginia entities should be considered, nor indicate whether an adverse impact results from regulatory requirements mandated by legislation.

¹⁴Pursuant to § 2.2-4007.04, small business is defined as "a business entity, including its affiliates, that (i) is independently owned and operated and (ii) employs fewer than 500 full-time employees or has gross annual sales of less than $6 million."

¹⁵If the proposed regulatory action may have an adverse effect on small businesses, § 2.2-4007.04 requires that such economic impact analyses include: (1) an identification and estimate of the number of small businesses subject to the proposed regulation, (2) the projected reporting, recordkeeping, and other administrative costs required for small businesses to comply with the proposed regulation, including the type of professional skills necessary for preparing required reports and other documents, (3) a statement of the probable effect of the proposed regulation on affected small businesses, and (4) a description of any less intrusive or less costly alternative methods of achieving the purpose of the proposed regulation. Additionally, pursuant to Code § 2.2-4007.1, if there is a finding that a proposed regulation may have an adverse impact on small business, the Joint Commission on Administrative Rules shall be notified.

¹⁶Data source: DEQ

¹⁷Adverse impact is indicated if there is any increase in net cost or reduction in net revenue for any entity, even if the benefits exceed the costs for all entities combined.

¹⁸"Locality" can refer to either local governments or the locations in the Commonwealth where the activities relevant to the regulatory change are most likely to occur.

¹⁹§ 2.2-4007.04 defines "particularly affected" as bearing disproportionate material impact.

²⁰Adverse impact is indicated if there is any increase in net cost or reduction in net revenue for any entity, even if the benefits exceed the costs for all entities combined.

²¹Adverse impact is indicated if there is any increase in net cost or reduction in net revenue for any entity, even if the benefits exceed the costs for all entities combined.

Agency's Response to Economic Impact Analysis: The department has reviewed the economic impact analysis prepared by the Department of Planning and Budget and has no comment.

Summary:

The proposed amendments update numerical and narrative criteria, use designations, and other policies based on current scientific information. The proposed changes include: (i) adding freshwater aluminum criteria, (ii) requiring the use of the Copper Biotic Ligand Model, (iii) updating 20 human health criteria for 10 parameters of water quality, (iv) increasing the acreage for Submerged Aquatic Vegetation and Water Clarity for five Chesapeake Bay segments, (v) applying lake nutrient criteria to Lake Mooney, (vi) adding a special standard that would limit the quantity of the filamentous algae in certain sections of the Shenandoah River, and (vii) modifying trout waters designation and public water supply designation and adjusting temperature criteria for waters stocked with trout by the Virginia Department of Wildlife Resources in the winter.

9VAC25-260-50. Numerical criteria for dissolved oxygen, pH, and maximum temperature***.

*This classification recognizes that the natural quality of these waters may fluctuate outside of the values for D.O. and pH set forth above as water quality criteria in Class I through VI waters. The natural quality of these waters is the water quality found or expected in the absence of human-induced pollution. Water quality standards will not be considered violated when conditions are determined by the board to be natural and not due to human-induced sources. The board may develop site specific criteria for Class VII waters that reflect the natural quality of the waterbody when the evidence is sufficient to demonstrate that the site specific criteria rather than narrative criterion will fully protect aquatic life uses. Virginia Pollutant Discharge Elimination System limitations in Class VII waters shall not cause significant changes to the naturally occurring dissolved oxygen and pH fluctuations in these waters.

**Maximum temperature will be the same as that for Classes I through VI waters as appropriate.

***The water quality criteria in this section do not apply below the lowest flow averaged (arithmetic mean) over a period of seven consecutive days that can be statistically expected to occur once every 10 climatic years (a climatic year begins April 1 and ends March 31). See 9VAC25-260-310 and 9VAC25-260-380 through 9VAC25-260-540 for site specific adjustments to these criteria.

****For a thermally stratified man-made lake or reservoir in Class III, IV, V, or VI waters that are listed in 9VAC25-260-187, these dissolved oxygen and pH criteria apply only to the epilimnion of the waterbody. When these waters are not stratified, the dissolved oxygen and pH criteria apply throughout the water column.

9VAC25-260-140. Criteria for surface water.

EDITOR'S NOTE: Subsections A, C, D, E, and F of 9VAC25-260-140 are not amended; therefore, that text is not set out.

B. The following table is a list of numerical water quality criteria for specific parameters.

G. Biotic Ligand Model for copper. On a case-by-case basis Where the board determines that a sufficient dataset of input parameters is available, EPA's 2007 copper criteria (EPA-822-F-07-001) biotic ligand model (BLM) for copper may shall be used to determine alternate the applicable copper criteria for freshwater sites. The BLM is a bioavailability model that uses receiving water characteristics to develop site-specific criteria. Site-specific data for 10 parameters are needed to use the BLM. These parameters are temperature, pH, dissolved organic carbon, calcium, magnesium, sodium, potassium, sulfate, chloride, and alkalinity. If sufficient data for these parameters are available, the BLM can be used to calculate alternate criteria values for the copper criteria. The Where the board determines that a sufficient dataset of input parameters is available, the BLM would shall be used instead of the hardness-based criteria and takes the place of the hardness adjustment and the WER. A WER will not be applicable with the BLM.

9VAC25-260-185. Criteria to protect designated uses from the impacts of nutrients and suspended sediment in the Chesapeake Bay and its tidal tributaries.

EDITOR'S NOTE: Subsections A, C, and D of 9VAC25-260-185 are not amended; therefore, that text is not set out.

B. Submerged aquatic vegetation (SAV) and water clarity. Attainment of the shallow-water submerged aquatic vegetation designated use shall be determined using any one of the following criteria:

9VAC25-260-187. Criteria for man-made lakes and reservoirs to protect aquatic life and recreational designated uses from the impacts of nutrients.

EDITOR'S NOTE: Subsections A, C, and D of 9VAC25-260-187 are not amended; therefore, that text is not set out.

B. Whether or not algicide treatments are used, the chlorophyll a criteria apply to all waters on the list. The total phosphorus criteria apply only if a specific man-made lake or reservoir received algicide treatment during the monitoring and assessment period of April 1 through October 31.

The 90th percentile of the chlorophyll a data collected at one meter or less within the lacustrine portion of the man-made lake or reservoir between April 1 and October 31 shall not exceed the chlorophyll a criterion for that waterbody in each of the two most recent monitoring years that chlorophyll a data are available. For a waterbody that received algicide treatment, the median of the total phosphorus data collected at one meter or less within the lacustrine portion of the man-made lake or reservoir between April 1 and October 31 shall not exceed the total phosphorus criterion in each of the two most recent monitoring years that total phosphorus data are available.

Monitoring data used for assessment shall be from sampling location(s) locations within the lacustrine portion where observations are evenly distributed over the seven months from April 1 through October 31 and are in locations that are representative, either individually or collectively, of the condition of the man-made lake or reservoir.

9VAC25-260-310. Special standards and requirements.

The special standards are shown in small letters to correspond to lettering in the basin tables. The special standards are as follows:

EDITOR'S NOTE: Subdivisions a through x of 9VAC25-260-310 are not amended; therefore, that text is not set out.

y. Tidal freshwater Potomac River and tidal tributaries that enter the tidal freshwater Potomac River from Cockpit Point (below Occoquan Bay) to the fall line at Chain Bridge. During November 1 through February 14 of each year the 30-day average concentration of total ammonia nitrogen (in mg N/L) shall not exceed, more than once every three years on the average, the following chronic ammonia criterion:

MAX = temperature in °C or 7, whichever is greater.

The default design flow for calculating steady state wasteload allocations for this chronic ammonia criterion is the 30Q10, unless statistically valid methods are employed which demonstrate compliance with the duration and return frequency of this water quality criterion. Canceled.

EDITOR'S NOTE: Subdivisions z through hh of 9VAC25-260-310 are not amended; therefore, that text is not set out.

ii. In the wadeable portions of the mainstem sections of the Shenandoah River, North Fork Shenandoah River, and South Fork Shenandoah River listed in the table in this subdivision, a determination of persistent nuisance filamentous algae impeding the recreation use should be made when exceedances of the specified benthic chlorophyll-a concentration thresholds occur in more than one recreation season (May 1 to October 31) in three years. "Wadeable" constitutes a stream that can be crossed and sampled safely during a given sampling event occurring within the recreation season.

9VAC25-260-390. Potomac River Basin (Potomac River Subbasin).

Potomac River Subbasin

9VAC25-260-400. Potomac River Basin (Shenandoah River Subbasin).

Shenandoah River Subbasin