A. The Board upon its own motion or, in its discretion, upon receipt of a petition therefor by any county, city or town within the surface water management area in question, or any state agency, may initiate a surface water management area proceeding whenever in its judgment there is evidence to indicate that:
1. A stream has substantial instream values as indicated by evidence of fishery, recreation, habitat, cultural or aesthetic properties; and
2. Historical records or current conditions indicate that a low flow condition could occur which would threaten important instream uses; and
3. Current or potential offstream uses contribute to or are likely to exacerbate natural low flow conditions to the detriment of instream values.
B. If, after a public hearing held pursuant to § 2.2-4007.01, or at the request of an affected person or on the Board’s motion, a hearing shall be held under § 2.2-4009, and the Board finds that the conditions required above exist and further finds that the public welfare, health and safety require that regulatory efforts be initiated, the Board shall declare the area in question to be a surface water management area. The Board shall cause notice of the surface water management area to be published in a newspaper of general circulation throughout the area, and shall mail a copy of its decision to the mayor or chairman of the governing body of each county, city or town within which any part of the area lies, or which is known by the Board to make offstream use of water from the area, and to the chief administrative officer of any federal facility known by the Board to be using water from within the area. The Board shall include in its decision a definition of the boundaries of the water management area.