TITLE 9. ENVIRONMENT

STATE WATER CONTROL BOARD

Proposed Regulation

Title of Regulation: 9VAC25-875. Virginia Erosion and Stormwater Management Regulation (amending 9VAC25-875-1360, 9VAC25-875-1380 through 9VAC25-875-1420; adding 9VAC25-875-1375).

Statutory Authority: §§ 62.1-44.15:28 and 62.1-44.15:52 of the Code of Virginia.

Public Hearing Information:

September 23, 2025 - 10 a.m. - Department of Environmental Quality, Central Office, Bank of America Building, Third Floor Conference Room, 1111 East Main Street, Richmond, VA 23219.

Public Comment Deadline: October 10, 2025.

Agency Contact: April Rhodes, Department of Environmental Quality, 1111 East Main Street, Suite 1400, P.O. Box 1105, Richmond, VA 23218, telephone (571) 866-6091, or email april.rhodes@deq.virginia.gov.

Basis: Section 62.1-44.15:28 of the Code of Virginia authorizes the State Water Control Board to adopt regulations that establish requirements for the effective control of soil erosion, sediment deposition, and stormwater, including nonagricultural runoff, to prevent the unreasonable degradation of properties, stream channels, waters, and other natural resources, and requires the board to include a statewide fee schedule to cover all costs associated with the implementation of a Virginia Erosion and Stormwater Management Program (VESMP) related to land-disturbing activities where permit coverage is required, and for land-disturbing activities where the board serves as a VESMP authority or Virginia Stormwater Management Program (VSMP) authority. Item 363 J of Chapter 2 of the 2024 Acts of Assembly, Special Session I, directs the board to set fees for the VPDES Permit for Discharges of Stormwater from Construction Activities and MS4 permits at an amount representing no less than 60% nor more than 62% of the direct costs for the administration, compliance, and enforcement of those permits.

Purpose: This action is required by Item 363 J of Chapter 2 of the 2024 Acts of Assembly, Special Session I, and protects the water quality in the Commonwealth of Virginia, which is essential to the health, safety, and welfare of Virginia's citizens and is needed in order to effectively administer an erosion and stormwater management program in Virginia.

Substance: The proposed amendments conform the Virginia Erosion and Stormwater Management (VESM) Regulation (9VAC25-875) to Item 363 J of Chapter 2 of the 2024 Acts of Assembly, Special Session I by (i) setting the existing statewide permit fee schedules for the VPDES Permit for Discharges of Stormwater from Construction Activities, MS4 permits, permit modification, and permit maintenance to an amount representing no less than 60% but not more than 62% of the direct costs for the administration, compliance, and enforcement of such permits; (ii) adding a consumer price index annual adjustment factor to provide a mechanism to ensure that fees keep pace with the costs of doing business; and (iii) increasing to 30% the portion of the total permit fee paid to the department by local VESM Program authorities.

Issues: The primary advantage of this regulatory change for the public is an enhanced statewide erosion and stormwater management program that will be properly funded and administered, which will improve compliance and consistency with the VESM Regulation and thus improve water quality. The regulated community will also benefit from properly funded and staffed stormwater management programs because the department uses program funds to provide support and assistance to local program authorities, develop guidance to assist local authorities and the regulated community, and operate as the program authority for localities that chose to opt out of adopting a program. There are no expected disadvantages to localities or to the department from the fees associated with permits for construction activities or MS4s. The primary disadvantage of this proposed regulation is increased permit fees for the regulated community; however, the existing fees for permits associated with construction activities are set at levels insufficient to support the vast majority of responsibilities associated with administering an erosion and stormwater management program. The fees proposed by this action will allow for proper funding of permit oversight and administration.

Department of Planning and Budget 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 and Executive Order 19. The analysis presented represents DPB's best estimate of the potential economic impacts as of the date of this analysis.¹

Summary of the Proposed Amendments to Regulation. To implement a 2024 legislative mandate, the State Water Control Board (board) proposes to amend the Virginia Erosion and Stormwater Management (VESM) regulation to increase fees so that they provide 60% to 62% of the direct costs for the administration, compliance, and enforcement of Department of Environmental Quality (DEQ) erosion and stormwater management program. The proposed fee increases would apply to an individual Virginia Pollutant Discharge Elimination System (VPDES) Permit for Discharges of Stormwater from Construction Activities, a VPDES General Permit for Discharges of Stormwater from Construction Activities, municipal separate storm sewer system (MS4) permits, permit modification fees, and permit maintenance fees.

Background. Item 363 J of Chapter 2 of the 2024 Acts of Assembly, Special Session I, directs the board to amend the existing permit fee schedule such that the fees for the VPDES Permit for Discharges of Stormwater from Construction Activities and MS4 permits are set at an amount representing no less than 60% and not to exceed 62% of the direct costs for the administration, compliance, and enforcement of such permits. The board reports that the total personnel and discretionary costs of the stormwater program in fiscal year (FY) 2024 was $8,201,057, with permit fees providing a revenue of $3,173,629, or 38.7% of those costs. Thus, the proposed changes are aimed at increasing the fee revenue to fall between $4,920,634 (60% of costs) and $5,084,655 (62% of costs), which necessitates that the fee revenue increase by 56% to 61%. The board notes that with the exception of General or Stormwater Management Phase I and Phase II permits (9VAC25-875-1400), permit fees in this regulation have not been adjusted since 2010. The proposed changes have three broad components: (i) increasing the fees in 9VAC25-875-1380, 9VAC25-875-1390, 9VAC25-875-1400, 9VAC25-875-1410, 9VAC25-875-1420. Unless specified in the text, these fees are either paid to one of the 93 local Virginia Erosion and Stormwater Management Programs (VESMP) or to DEQ for the remaining localities; (ii) increasing the share of fees paid to DEQ by local VESMP authorities from 28% to 30%, which is the statutory limit as per § 62.1-44.15:28 of the Code of Virginia. This would apply to fees in all sections listed in (i) in the localities that operate a VESMP; and (iii) adding an annual inflation adjustment (in a new section 1375) based on changes to the Consumer Price Index (CPI) for all urban consumers in the United States relative to its level in July 2024. This adjustment would apply to fees in 9VAC25-875-1380, 9VAC25-875-1400, and 9VAC25-875-1420. It would not apply to the fees in 9VAC25-875-1390 and 9VAC25-875-1410, which pertain to modifications. The proposed fee increases are listed in the following tables. The new permit fees in Tables 1, 3, and 5 would be the base rates that adjust every year for inflation.

The fee table in 9VAC25-875-1400 includes a column with the DEQ portion of the fee, which would also increase from 28% to 30% of the fee paid by permit applicants as result of the proposed changes. The table below shows changes to the fees that would be charged to permit applicants. It should be noted that although permit fees would increase by 49 to 60 percent, as shown in the following table, the DEQ share of the fees would increase by 59% to 67%.

The proposed inflation adjustment broadly aligns with the approach currently taken in Permit maintenance fees (9VAC25-20-142), and uses the U.S. Bureau of Labor Statistics CPI for urban consumers (CPI-U) in aggregate for all U.S. consumers, without seasonal adjustments. The permit fee in any year would be the base rate (as revised in Tables 1, 3, and 5) multiplied by an adjustment factor C. C would be given by 1 + ΔCPI, where ΔCPI equals the proportional change in the CPI-U relative to its value in July 2024. Specifically, the formula uses the average CPI-U for the 12-month period ending on April 30 of the calendar year preceding the year the fee is due. The reference value for July 2024, which is 314.54, would be subtracted from this number. The resulting difference would be divided by 314.54 to give ΔCPI. DEQ has confirmed that updated fees, based on this formula, would be posted on their website following the release of the April CPI-U data each year. The inflation adjustment would not apply to modifications of permits; this is consistent with 9VAC25-20. The board needs to increase fee revenues by roughly 56% to 61% relative to the 2024 fee revenues to meet the 60% to 62% limit set in the budget bill. The proposed changes to the permit fees and the increased share to DEQ could be expected to increase aggregate revenues by the requisite 56% to 61%, provided the numbers of applicants or permit holders paying each type of fee remains roughly the same as it was in 2024. If the DEQ costs change by an amount that is not well represented by the CPI-U or the number and composition of permittees change significantly, actual revenues may fall outside the 60% to 62% range.

Estimated Benefits and Costs. DEQ reports that the primary advantage of this regulatory change for the public is an enhanced statewide erosion and stormwater management program that will be properly funded and administered. The aim of this program is to ensure land-disturbing activities and post-construction stormwater management in the Commonwealth do not result in excessive runoff, flooding, or other negative impacts on public health, water quality, and the environment. DEQ uses program funds to provide support and assistance to local program authorities, develop guidance to assist local authorities and the regulated community with how to the comply with state law and regulations, and operate as the program authority for localities that chose to opt out of adopting a program. DEQ reports that the existing fees for permits associated with construction activities, which have not been revised since 2010, are set at levels insufficient to support the vast majority of responsibilities associated with administering an erosion and stormwater management program. To the extent that the increased fees allow DEQ to improve compliance and consistency with the VESM regulation, the public would benefit from improved water quality, reduced flooding, and resulting health and environmental impacts. On the other hand, new and existing permittees would face higher fees; these entities are described.

Businesses and Other Entities Affected. The increased fees would increase costs for all developers that perform land disturbing activities that require a CGP as well as all current and future MS4 permittees. DEQ reports that the Virginia Department of Transportation (VDOT) would be particularly affected due to the amount of land disturbing activities undertaken by the agency that require a CGP. Other public entities or private businesses that undertake construction would also require CGPs and would face higher fees. In addition, VDOT and 25 other state entities (colleges, universities, etc.), as well as 59 localities, 26 federal entities (including military bases), and one airport authority have a MS4 permit. On the other hand, the 93 localities that operate a VESMP would benefit from increased fee revenue, even if a slightly larger share of those fees would be transferred to DEQ. The Code of Virginia requires DPB to assess whether an adverse impact may result from the proposed regulation.² An adverse impact is indicated if there is any increase in net cost or reduction in net benefit for any entity, even if the benefits exceed the costs for all entities combined.³ Although the proposed changes would increase costs to a number of entities, the fee increases appear to have been set such that the revenue from the fees would account for 60% to 62% of the direct costs of the DEQ stormwater management program, as required by statute. Thus, an adverse impact from the regulation itself is not indicated.

Small Businesses⁴ Affected.⁵ Types and Estimated Number of Small Businesses Affected: Some construction businesses may meet the definition of small business; however, DEQ does not collect this data from permit applicants. Costs and Other Effects: Small construction businesses would face fee increases. Alternative Method that Minimizes Adverse Impact: There are no clear alternative methods that both reduce adverse impact and meet the intended policy goals.

Localities⁶ Affected.⁷ 93 localities that operate a VESMP and administer construction permits would benefit via higher fee revenue, even if they have to transfer a slightly increased share of the fee revenue to DEQ. 59 localities that have a MS4 permit would have to pay higher fees to maintain or modify them, and any localities newly obtaining an MS4 permit would face higher fees for new permits. Thus, the net impact would vary depending on the locality but are not intended to disproportionately affect any particular locality. DEQ notes that the Regulatory Advisory Panel for this proposal considered increasing fees only for the localities that do not run their own VESMP and rely on DEQ to administer permits. This approach was not taken as it would disproportionately increase costs for those localities.

Projected Impact on Employment. The proposed higher fees may discourage some construction projects, which could moderately reduce employment in the industry. This is due to the legislation rather than the regulation.

Effects on the Use and Value of Private Property. The proposed amendments may modestly decrease the value of private construction businesses as well as private entities that hold MS4 permits by increasing their operating costs. The CGP fee increases would also increase 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.

² Pursuant 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.

³ 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. As a result, DPB has adopted a definition of adverse impact that assesses changes in net costs and benefits for each affected Virginia entity that directly results from discretionary changes to the regulation.

⁴ Pursuant 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."

⁵ If 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 § 2.2-4007.1 of the Code of Virginia, 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.

⁶ "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.

⁷ Section 2.2-4007.04 defines "particularly affected" as bearing disproportionate material impact.

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

Summary:

The proposed amendments conform the Virginia Erosion and Stormwater Management (VESM) Regulation (9VAC25-875) to Item 363 J of Chapter 2 of the 2024 Acts of Assembly, Special Session I by (i) setting the existing statewide permit fee schedules for the Virginia Erosion and Stormwater Management Program Permit for Discharges of Stormwater from Construction Activities, MS4 permits, permit modification or transfer, and permit maintenance to an amount representing no less than 60% but not more than 62% of the direct costs for the administration, compliance, and enforcement of such permits; (ii) adding a consumer price index annual adjustment factor to provide a mechanism to ensure that fees keep pace with the costs of doing business; and (iii) increasing to 30% the portion of the total permit fee paid to the department by local VESM Program authorities.

9VAC25-875-1360. Deposit and use of fees.

A. All fees collected by the department pursuant to this chapter shall be deposited into the Virginia Stormwater Management Fund and shall be used and accounted for as specified in § 62.1-44.15:29 of the Code of Virginia. Fees collected by the department shall be exempt from statewide indirect costs charged and collected by the Department of Accounts.

B. All fees collected by a VESMP authority pursuant to this chapter shall be subject to accounting review and shall be used solely to carry out the VESMP authority's responsibilities pursuant to the VESMA, Article 3 (9VAC25-875-100 et seq.) of Part II (9VAC25-875-40 et seq.) and Part V (9VAC25-875-470 et seq.) of this chapter, local ordinances, or standards and specifications.

Pursuant to subdivision A 9 of § 62.1-44.15:28 of the Code of Virginia, whenever the department has authorized the administration of a VESMP by a VESMP authority, 28% 30% of the total revenue generated by the statewide stormwater management fees collected in accordance with 9VAC25-875-1400 shall be remitted on a schedule determined by the department to the State Treasurer for deposit in the Virginia Stormwater Management Fund unless otherwise collected electronically. If the VESMP authority waives or reduces any fee due in accordance with 9VAC25-875-1400, the VESMP authority shall remit the 28% 30% portion that would be due to the Virginia Stormwater Management Fund if such fee were charged in full. Any fee increases established by the VESMP authority beyond the base fees established in this part shall not be subject to the fee distribution formula.

9VAC25-875-1375. Fee calculation.

A. Fees set forth in sections 9VAC25-875-1380, 9VAC25-875-1400, and 9VAC25-875-1420 shall be adjusted annually by the change in the Consumer Price Index (CPI). The Consumer Price Index is the Consumer Price Index for all-urban consumers (CPI-U) for the 12-month period ending on April 30 of the calendar year preceding the year the fee is due. The Consumer Price Index for all-urban consumers is published by the U.S. Department of Labor, Bureau of Labor Statistics, U.S. All items, CUUR0000SA0.

B. The permit fee due shall be calculated according to the following formulas:

Where:

F = the permit fee due (in $)

B = the base fee rate for the type of MS4 or Construction General Permit

C = the Consumer Price Index adjustment factor

ΔCPI = the difference between CPI-U and 314.54, expressed as a proportion of 314.54 (the reference base is 1982-84 = 100; 314.54 is the unadjusted average CPI for all urban consumers for July 2024)

CPI-U = the Consumer Price Index for all-urban consumers for the 12-month period ending on April 30 of the calendar year preceding the year the fee is due, CUUR0000SA0.

For example, if calculating the hypothetical 2026 permit fee (F) for a General / Stormwater Management – Large Construction Activity/Land Clearing permit (> 5 acres < 10 acres):

CPI-U = 317.67 (hypothetical CPI-U for April 30, 2025, which would be used for the 2026 permit fee calculation).

ΔCPI = 0.01 for the 2026 permit fee calculation (i.e., (317.67 – 314.54) / 314.54 = (3.13) / 314.54 = 0.01).

C = 1.01 for the 2026 permit fee calculation (i.e., 1 + 0.01 = 1.01).

B = $5,100 (i.e. the fee for a General / Stormwater Management – Large Construction Activity/Land Clearing permit (> 5 acres < 10 acres), taken from subsection A of 9VAC25-875-1400).

F = $5,151 for the hypothetical 2026 permit fee calculation for this General / Stormwater Management – Large Construction Activity/Land Clearing permit (i.e., $5,100 x 1.01 = $5,150.75).

C. Permit fees (F) calculated for each facility or permitted land-disturbing activity shall be rounded to the nearest dollar.

D. The total amount of permit fees collected by the department (permit application fees plus permit maintenance fees) shall not exceed 62% of direct costs for administration, compliance, and enforcement of MS4 permits and VPDES Permits for Discharges of Stormwater from Construction Activities. The director shall take whatever action is necessary to ensure that this limit is not exceeded.

9VAC25-875-1380. Fee schedules for municipal separate storm sewer system new permit issuance.

A. The following fee schedule applies to permit applications for issuance of a new individual municipal separate storm sewer system permit or coverage under a MS4 General Permit. All regulated MS4s that apply for joint coverage under an individual permit or general permit registration shall each pay the appropriate fees set out in the following table.

B. The amount of the permit fee due for a MS4 permit for a specified year as required by subsection A of this section shall be calculated according to the formulas in 9VAC25-875-1375 B.

9VAC25-875-1390. Fee schedules for major modification of MS4 individual permits requested by the operator.

The following fee schedule applies to applications for major modification of an individual MS4 permit requested by the permittee:

9VAC25-875-1400. Fees for individual permit or coverage under the General Permit of for Discharges of Stormwater from Construction Activities.

A. The following total fees to be paid by an applicant apply to any operator seeking coverage under a General VPDES Permit for Discharges of Stormwater from Construction Activities or a state agency or federal entity that does not file standards and specifications or an individual permit issued by the department. On and after approval by the department of or a VESMP authority for coverage under the General VPDES Permit for Discharges of Stormwater from Construction Activities, no more than 50% of the total fee to be paid by an applicant set out in this part shall be due at the time that a stormwater management plan or an initial stormwater management plan is submitted for review in accordance with 9VAC25-875-530. The remaining total fee balance to be paid by an applicant shall be due prior to the issuance of coverage under the General VPDES Permit for Discharges of Stormwater from Construction Activities.

When a site is purchased for development within a previously permitted common plan of development or sale, the applicant shall be subject to fees ("total fee to be paid by applicant" column) in accordance with the disturbed acreage of the applicant's site according to the following table.

The following fees apply to coverage under the General VPDES Permit for Discharges of Stormwater from Construction Activities issued by the department for a state agency or federal entity that has standards and specifications approved by the department.

B. The amount of the permit fee due for a General VPDES Permit for Discharges of Stormwater from Construction Activities for a specified year as required by subsection A of this section shall be calculated according to the formulas in 9VAC25-875-1375 B.

9VAC25-875-1410. Fees for the modification or transfer of individual permits or of registration statements for the General VPDES Permit for Discharges of Stormwater from Construction Activities.

The following fees apply to modification or transfer of individual permits or of registration statements for the General VPDES Permit for Discharges of Stormwater from Construction Activities issued by the department. If the permit modifications result in changes to stormwater management plans that require additional review by the VESMP authority, such reviews shall be subject to the fees set out in this section. The fee assessed shall be based on the total disturbed acreage of the site. In addition to the permit modification fee, modifications resulting in an increase in total disturbed acreage shall pay the difference in the initial permit fee paid and the permit fee that would have applied for the total disturbed acreage in 9VAC25-875-1400. No modification or transfer fee shall be required until such department-approved programs exist. These fees shall only be effective when assessed by a VESMP authority, including the department when acting in that capacity, that has been approved by the department. No modification fee shall be required for the General VPDES Permit for Discharges of Stormwater from Construction Activities for a state agency or federal entity that is administering a project in accordance with approved standards and specifications but shall apply to all other state or federal agency projects.

9VAC25-875-1420. Permit maintenance fees.

A. The following annual permit maintenance fees apply to each permit identified below, including expired permits that have been administratively continued. With respect to the General VPDES Permit for Discharges of Stormwater from Construction Activities, these fees shall apply until the permit coverage is terminated and shall only be effective when assessed by a VESMP authority, including the department when acting in that capacity that has been approved by the department. No maintenance fee shall be required for the General VPDES Permit for Discharges of Stormwater from Construction Activities for a state agency or federal entity that is administering a project in accordance with approved standards and specifications but shall apply to all other state or federal agency projects. All regulated MS4s that are issued joint coverage under an individual permit or general permit registration shall each pay the appropriate fees set out in the following table:

B. The amount of the annual permit maintenance fee due for a MS4 permit or permit for discharges of stormwater from construction activities for a specified year as required by subsection A of this section shall be calculated according to the formulas in 9VAC25-875-1375 B.