Title of Regulation: 2VAC5-680. Regulations Governing Licensing of Pesticide Businesses Operating under Authority of the Virginia Pesticide Control Act (amending 2VAC5-680-10, 2VAC5-680-20, 2VAC5-680-60, 2VAC5-680-65, 2VAC5-680-70, 2VAC5-680-80).

Statutory Authority: § 3.2-3906 of the Code of Virginia.

Public Hearing Information:

December 8, 2016 - 10 a.m. - Virginia State Capitol, House Room 3, 1000 Bank Street, Richmond, VA 23219

Public Comment Deadline: December 9, 2016.

Agency Contact: Laura Hare, Policy Analyst, Department of Agriculture and Consumer Services, P.O. Box 1163, Richmond, VA 23218, telephone (804) 786-1908, FAX (804) 255-2666, or email laura.hare@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.

Section 3.2-3906 of the Code of Virginia authorizes the board to adopt regulations, including the licensing of businesses that manufacture, sell, store, recommend for use, mix, or apply pesticides.

Purpose: The format and a large portion of the content of 2VAC5-680, Regulations Governing Licensing of Pesticide Businesses Operating under Authority of the Virginia Pesticide Control Act, were first implemented in January 1991. The regulations were amended in October 2006 and renumbered in October 2012 following the merger of the former Pesticide Control Board with the Board of Agriculture and Consumer Services. Because of the inherent safety considerations associated with the application of pesticides, it is imperative that the requirements for pesticide businesses that manufacture, sell, store, recommend for use, mix, or apply pesticides are clear and unambiguous. The proposed amendments are intended to improve the clarity of the regulations and further promote compliance.

The pesticide industry in the United States is highly regulated and is aware that regulations undergo regular reviews and are updated as necessary to align the regulations with current federal pesticide laws, agency policies and procedures, and industry standards. The agency does not expect industry to have concerns with the proposed amendments.

Substance: Substantive amendments to the regulations are as follows:

1. Amend the definition of "pesticide business location" to reflect the use of technologies when conducting business (e.g., sales, service, etc.), including cell phones, email, and websites.

2. Add the definition of the term "limited household use." Currently, the regulations require that any person or business operating in Virginia that, in exchange for compensation, sells, stores, distributes, mixes, applies, or recommends the use or application of pesticides obtain a valid pesticide business license. An exemption to these requirements exists for "Merchants of limited quantities of nonrestricted use pesticides who sell pesticides primarily intended for limited household use"; however, no definition exists for the term "limited household use."

3. Add the definition of the term "multiple violations." Currently, the regulations provide for the revocation of a business license for "Multiple violations of the Act or regulations pursuant thereto within a three-year period"; however, the term "multiple violations" is not defined.

4. Add the definition of the term "sale or sell." Currently, the regulations are ambiguous as to the meaning of these terms. Because of the inherent safety considerations associated with pesticides, it is imperative that the requirements for pesticide business licensure are as clear and unambiguous as possible.

Issues: The proposed regulatory action is advantageous to private citizens and businesses, as the amendments clarify requirements for pesticide business registration while ensuring continued compliance. The pesticide industry in the United States is highly regulated and is aware that regulations undergo regular reviews and are updated as necessary to align the regulations with current federal pesticide laws, agency policies and procedures, and industry standards. These actions do not add any additional requirements more restrictive than federal requirements to businesses seeking licensure. There are no known disadvantages to the public, businesses, or the Commonwealth. The proposed regulatory action will clarify and streamline requirements and will lead to an increase in compliance through better understanding of applicable requirements.

Small Business Impact Review Report of Findings: This proposed regulatory action serves as the report of the findings of the regulatory review pursuant to § 2.2-4007.1 of the Code of Virginia.

Department of Planning and Budget's Economic Impact Analysis:

Summary of the Proposed Amendments to Regulation. As the result of a periodic review of the above titled regulation¹, the Board of Agriculture and Consumer Services (Board) proposes amendments to add several definitions and make other clarifying changes.

Result of Analysis. Benefits outweigh costs for all proposed changes.

Estimated Economic Impact. The Board proposes to add several definitions to its regulation for licensing pesticide businesses. The Board also proposes making several changes to regulatory language, such as amending "brand or common product name" to read "brand, trademark or product name appearing on the product label," that will not change what is required of businesses but will make requirements clearer. None of these proposed regulatory changes are likely to increase costs for any regulated entity because they do not change any actual requirements. Both affected businesses and other interested parties, however, will likely benefit from the additional clarity these changes bring to the regulation.

Businesses and Entities Affected. Board staff reports that approximately 3,000 pesticide businesses are licensed under this regulation. All of these entities, as well as other interested parties, will be affected by these proposed changes.

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

Projected Impact on Employment. These proposed regulatory changes are unlikely to affect employment in the Commonwealth.

Effects on the Use and Value of Private Property. These proposed changes will likely not affect the use or value of private property in the Commonwealth.

Real Estate Development Costs. These proposed regulatory changes are unlikely to affect real estate development costs in the Commonwealth.

Small Businesses:

Definition. Pursuant 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."

Costs and Other Effects. No small businesses are likely to incur any additional costs on account of these clarifying changes.

Alternative Method that Minimizes Adverse Impact. No small businesses are likely to incur any additional costs on account of these clarifying changes.

Adverse Impacts:

Businesses. No businesses are likely to incur any additional costs on account of these clarifying changes.

Localities. Localities in the Commonwealth are unlikely to see any adverse impacts on account of these proposed regulatory changes.

Other Entities. No other entities are likely to be adversely affected by these proposed changes.

_________________________________________

¹ http://townhall.virginia.gov/l/ViewPReview.cfm?PRid=1332

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

Summary:

The proposed amendments align the regulation with current agency practices and federal requirements by (i) adding a definition of the term "distribute" or "distribution" and amending the definition of the term "pesticide business location" to address current industry practices; (ii) adding a definition of the term "limited household use" in order to clarify the requirements for merchants who are exempt from pesticide business licenses under the Virginia Pesticide Control Act; (iii) adding a definition of the term "multiple violations"; (iv) clarifying the current requirements for the application for a pesticide business license; (v) clarifying the current requirement regarding evidence of financial responsibility; and (vi) amending the recordkeeping requirements to be consistent with other pesticide labeling requirements in 2VAC5-670, Rules and Regulations for Enforcement of the Virginia Pesticide Law and this chapter.

Part I
Definitions

2VAC5-680-10. Definition of terms Definitions.

The following words and terms when used in this chapter shall have the following meanings unless the context clearly indicates otherwise. An asterisk following a definition denotes that the definition has been taken from § 3.2-100 or Article 1 (§ 3.2-3900 et seq.) of Chapter 39 of Title 3.2 of the Code of Virginia.

"Board" means the Board of Agriculture and Consumer Services.*

"Bulk pesticide" means any registered pesticide concentrate which that is transported or held in an individual container in undivided quantities of greater than 55 U.S. gallons liquid measure or greater than 100 pounds net dry weight.

"Certification" or "certified" means the recognition granted by the Board of Agriculture and Consumer Services to an applicator upon satisfactory completion of board approved requirements.*

"Commercial applicator" means any person who has completed the requirements for certification as determined by the board to use or supervise the use of any pesticide for any purpose or on any property other than as provided in the definition of private applicator.*

"Commissioner" means the Commissioner of Agriculture and Consumer Services.*

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

"Distribute" or "distribution" means the act of distributing, selling, offering for sale, holding for sale, shipping, holding for shipment, delivering for shipment or receiving and, having so received, delivering or offering to deliver, or releasing for shipment to any person in any state. The term includes the sale of pesticides to wholesalers, retailers, and other merchants or to industrial, institutional, and commercial businesses for use by the employees of the business.

"EPA" means the United States U.S. Environmental Protection Agency.

"FIFRA" means the Federal Insecticide, Fungicide, and Rodenticide Act as amended, and herein incorporated by reference in this chapter.

"Licensed" or "licensee" means those businesses which, upon meeting the requirements established by the Board of Agriculture and Consumer Services, are issued a license to engage in the sale, storage, distribution, recommend the recommendation for use, or application of pesticides in Virginia in exchange for compensation.*

"Limited household use" means the use of any general use pesticide product in or on a person's own dwelling and associated grounds such as lawn, garden, pool, or outbuildings. The term also means the use of a general use pesticide applied to animals owned as pets or raised for personal use and the use of personal use products such as mosquito repellents.

"Limited quantities" means purchases, at cost, for resale, of less than $50,000 annually per outlet of products containing nonrestricted use pesticide active ingredients.

"Multiple violations" means more than one violation of the Act or regulations pursuant to the Act.

"Pest management consultant" means any person, who may or may not apply pesticides himself, who has obtained a business license in accordance with the requirements listed below in this chapter, and who is authorized by this chapter to provide technical advice, supervision or aid, or recommendations for pesticide application commercially in Virginia.

"Pesticide" means (i) any substance or mixture of substances intended for preventing, destroying, repelling, or mitigating any insects, rodents, fungi, bacteria, weeds, or other forms of plant or animal life or viruses or bacteria, except viruses on or in living man or other animals, which the commissioner shall declare to be a pest, (ii) any substance or mixture of substances intended for use as a plant regulator, defoliant, or desiccant, and (iii) any substance which is intended to become an active ingredient in any substance defined in clauses (i) and (ii) of this definition.*

"Pesticide business" means any person engaged in the business of distributing, applying, or recommending the use of a product; or storing, selling, or offering for sale pesticides for distribution directly to the user. The term "pesticide business" does not include (i) wood treaters not for hire; (ii) seed treaters not for hire; (iii) operations that produce agricultural products unless the owners or operators of such operations described in clauses (i), (ii), and (iii) of this definition are engaged in the business of selling or offering for sale pesticides, or distributing pesticides to persons outside of that agricultural producing operation in connection with commercial transactions; or (iv) businesses exempted by regulations adopted by the board.*

"Pesticide business location" means any fixed physical location of a pesticide business with either a telephone that is used to transact business or give advice, financial transactions, arrangement of services, or assignment of work or where products, supplies, or business mail is delivered. Residences of service technicians who are employed by a licensed pesticide business are exempt, if no business solicitation is conducted from that location. The term excludes buildings or locations, including employees' residences, used solely for storage of service vehicles, equipment, or supplies or telephone answering services.

"Private applicator" means an applicator who uses or supervises the use of any pesticide which is classified for restricted use for purposes of producing any agricultural commodity on property owned or rented by him or his employer or, if applied without compensation other than trading of personal services between producers of agricultural commodities, on the property of another person.*

"Restricted use pesticide" or "pesticide classified for restricted use" means any pesticide classified as restricted by the Administrator of the United States U.S. Environmental Protection Agency.*

"Sale" or "sell" means the transfer of goods to or to render services to another in exchange for compensation of any kind.

"Virginia Pesticide Control Act" or "Act" means Chapter 39 (§ 3.2-3900 et seq.) of Title 3.2 of the Code of Virginia.

Part II
Procedures for Obtaining a Business License

2VAC5-680-20. General requirements for all pesticide businesses; exemptions.

A. Any person or business operating in Virginia, which that, in exchange for compensation, sells, stores, distributes, mixes, applies, or recommends for use pesticides, in Virginia shall obtain a valid pesticide business license pursuant to this chapter. Each pesticide business location shall be licensed.

B. Exempted from the provisions of this chapter are the following:

1. Merchants of limited quantities of nonrestricted use pesticides who sell pesticides primarily intended for limited household use;

2. Federal, state and local governmental agencies;

3. Certified applicators not for hire; including those who use or supervise the use of pesticides as part of their job duties only on property owned or leased by themselves or their employer; and

4. Providers of janitorial, cleaning or sanitizing services if the providers use no pesticides other than sanitizers, disinfectants and germicides.

C. Application for a pesticide business license is made by submitting to the department (i) a completed application form and, (ii) a check or money order in the amount of the annual business license fee established by the board, and (iii) evidence of financial responsibility, as required in 2VAC5-680-80.

D. Each applicant for a pesticide business license, or an employee designated by the applicant, shall demonstrate to the commissioner his knowledge of (i) pesticide laws and regulations; (ii) potential hazards of pesticides to man and the environment; and (iii) safe distribution, use, and disposal of pesticides by passing a written examination prior to his being issued a business license. If the applicant is already certified as a commercial applicator, he shall be exempt from the initial examination requirement.

E. All licensed pesticide businesses shall maintain written records pertaining to their operations, as required in this chapter.

F. All licensed pesticide business locations or outlets which sell restricted use pesticides, or distribute restricted use pesticides for purposes of selling, shall have a certified commercial applicator present who shall bear immediate responsibility for the correct and safe operation of the location or outlet. Each business shall notify the department of the name of the commercial applicator assigned to each location or outlet, and shall also notify the department within three business days of any change in the applicator assignments during the license period.

G. All licensed pesticide businesses that store, repack and distribute bulk pesticides shall meet the requirements established by the board for the storage, repackaging and distribution of bulk pesticides.

H. All pesticide business licenses shall expire at midnight on March 3l of each year. Licensees shall renew their licenses annually by application to the department and payment of the annual fee on or before close of business March 31. The department shall charge a 20% penalty in addition to the regular fee for renewal applications filed after March 31.

2VAC5-680-60. Recordkeeping of restricted use pesticide sales by pesticide businesses.

A. Pesticide businesses that sell restricted use pesticides shall maintain a record of each restricted use pesticide sold. Each sales record shall contain the following:

1. Name, address, certified applicator number or business license number, and certificate or license expiration date of the person to whom the restricted use pesticide was sold or delivered;

2. Date of sale;

3. Brand, trademark, or common product name appearing on the product's label;

4. EPA registration number; and

5. Quantity of pesticide sold or delivered.

B. The restricted use pesticide sales recordkeeping requirement may be satisfied by invoices, if (i) such invoices are kept separate from the licensee's other sales records, and (ii) the invoices contain the above information required by subsection A of this section.

2VAC5-680-65. Recordkeeping of pesticide applications by licensed pesticide businesses.

Licensed pesticide businesses shall maintain a record of each pesticide applied. This shall apply to both general use and restricted use pesticides. Each record shall contain the:

1. Name, address, and telephone number of customer and address or location, if different, of site of application;

2. Name and certification number (or certification number of the supervising certified applicator) of the person making the application;

3. Day, month and year of application;

4. Type of plants, crop, animals, or sites treated and principal pests to be controlled;

5. Acreage, area, or number of plants or animals treated;

6. Brand name, trademark, or common product name appearing on the product's label;

7. EPA registration number;

8. Amount of pesticide concentrate and amount of diluent used, by weight or volume, in mixture applied; and

9. Type of application equipment used.

2VAC5-680-70. Recordkeeping of pesticide applications by pesticide businesses.

Pesticide businesses shall maintain a record of each pesticide applied. This shall apply to both general use and restricted use pesticides. Each record shall contain the:

1. Name, address, and telephone number of customer and address or location, if different, of site of application;

2. Name and certification number (or certification number of the supervising certified applicator) of the person making the application;

3. Day, month and year of application;

4. Type of plants, crop, animals, or sites treated and principal pests to be controlled;

5. Acreage, area, or number of plants or animals treated;

6. Brand name, trademark, or common product name appearing on the product's label;

7. EPA registration number;

8. Amount of pesticide concentrate and amount of diluent used, by weight or volume, in mixture applied; and

9. Type of application equipment used.

Part IV
Evidence of Financial Responsibility

2VAC5-680-80. Evidence of financial responsibility required of a licensed pesticide business.

A. Prior to being issued a pesticide business license, a business shall furnish evidence of financial responsibility, consisting of a liability insurance policy from a person authorized to do business in Virginia, or a certification thereof, protecting persons who may suffer legal damages as a result of the use of any pesticide by the applicant.

B. The liability insurance policy shall meet the following conditions:

1. The certificate of insurance shall include the name of the insurance company, policy number, insurance amount, type of coverage afforded, any exclusions relating to damage arising from the use of pesticides, and expiration date of the policy. The policy shall cover liability arising out of the handling, storage, application, use or misuse, or disposal of any pesticide; it shall also cover liability relating to completed operations.

2. The policy shall be in an amount specified in subsection C of this section.

3. The licensee shall forward a current certificate of insurance to the board at each insurance renewal date.

C. The amount of financial responsibility as provided for in this section shall be a minimum of $100,000 for property damage, and $100,000 for personal injury or death of one person; and $300,000 per occurrence. The licensee shall maintain at least the minimum coverage at all times during the license period, and shall notify the board at least 10 days prior to any reduction at the request of the licensee or cancellation of such financial responsibility by the insurer. If the deductible of an applicant for a business license is greater than $1,000, evidence of financial responsibility shall be furnished to the board to satisfy the difference between the applicant's deductible and the $1,000 deductible. This evidence may consist of a financial statement.

D. The licensee shall maintain at least the minimum coverage at all times during the license period and shall notify the board at least 10 days prior to any reduction at the request of the licensee or cancellation of such financial responsibility by the insurer.