                                 CODE OF VIRGINIA

ONSITE SEWAGE INDEMNIFICATION FUND (§ 32.1-164.1:01)

A. There is hereby created the Onsite Sewage Indemnification Fund, hereafter
referred to as &#8220;the Fund,&#8221; whose purpose is to receive moneys
generated by a portion of the fees collected by the Department of Health
pursuant to subsections C and E of &#xA7; 32.1-164 and appropriated by the
Commonwealth for the purpose of assisting any Virginia real property owner
holding a valid permit to operate an onsite sewage system when such system or
components thereof fail within three years of construction and such failure
results from the negligence of the Department of Health. The Fund may also be
used, in the discretion of the Board, to support the program for training and
recognition of licensed onsite soil evaluators and to provide grants and loans
to property owners with income at or below 200 percent of the federal poverty
guidelines to repair failing onsite sewage systems or install onsite sewage
systems on properties that lack adequate sewage disposal. No expenses shall be
paid from the Fund to support the program for training and recognition of onsite
soil evaluators, or to provide any grant or loan to repair a failing onsite
sewage system or install an onsite sewage system on any property that lacks
adequate sewage disposal, in lieu of payment to any owner or owners qualified to
receive payment from the Fund pursuant to this chapter.

B. Ten dollars of each fee collected by the Department of Health pursuant to
subsections C and E of &#xA7; 32.1-164 shall be deposited by the Comptroller in
the Fund to be appropriated for the purposes of this section to the Department
of Health by the General Assembly as it deems necessary.

C. The owner of an onsite sewage system that has been permitted by the
Department of Health may cause, by filing a request for payment from the Fund
within one year from the date the system or components thereof failed, the
Commissioner to review the circumstances of the onsite sewage system failure, if
the onsite sewage system has failed within three years of construction. Upon the
Commissioner&#8217;s finding that the onsite sewage system was permitted by the
Department and (i) the system or components thereof failed within three years of
construction; (ii) that specific actions of the Department were negligent and
that those actions caused the failure; and (iii) that the owner filed a request
for payment from the Fund within one year from the date the system or components
thereof failed, the Commissioner shall, subject to the limitations stated
herein, reimburse the owner for the reasonable cost of following the
Board&#8217;s regulations to repair or replace the failed onsite sewage system
or components thereof.

D. Prior to receiving payment from the Fund, the owner shall follow the
requirements in the Board&#8217;s regulations to repair or replace the failed
onsite sewage system or components thereof.

E. The total amount an owner may receive in payment from the Fund shall not
exceed $30,000. Only the costs of the system that failed or the costs of labor
and equipment required to repair or replace the failed onsite sewage system or
components thereof are reimbursable by the Fund.

F. If the Commissioner finds that the system was permitted by the Department and
has failed within three years of construction and that the failure resulted from
faulty construction or other private party error, the Commissioner may assist
the owner of the failed system in seeking redress from the system&#8217;s
builder or other private party.

G. Every request for payment from the Fund shall be forever barred unless the
owner has filed a complete application as required by the Department. The
request shall be filed with the Commissioner within one year from the date that
the onsite sewage system or components thereof first failed. However, if the
owner was under a disability at the time the cause of action accrued, the
tolling provisions of &#xA7; 8.01-229 shall apply. The owner shall mail the
request for payment from the Fund via the United States Postal Service by
certified mail, return receipt requested, addressed to the Commissioner.
			In any action contesting the filing of the request for payment from the Fund,
the burden of proof shall be on the owner to establish mailing and receipt of
the notice in conformity with this section. The signed receipt indicating
delivery to the Commissioner, when admitted into evidence, shall be prima facie
evidence of filing of the request for payment from the Fund under this section.
The request for payment from the Fund shall be deemed to be timely filed if it
is sent by certified mail, return receipt requested, and if the official receipt
shows that the mailing was within the prescribed time limits.
			Notwithstanding any provision of this article, the liability for any payment
from the Fund shall be conditioned upon the execution by the owner of a release
approved by the Attorney General of all claims against the Commonwealth, its
political subdivisions, agencies, and instrumentalities and against any officer
or employee of the Commonwealth in connection with or arising out of the
occurrence complained of.

H. The Commissioner and the Attorney General shall cooperatively develop an
actuarially sound program and policy for identifying, evaluating, and processing
requests for payment from the Fund.

I. If the Commissioner refuses the request for payment from the Fund, the owner
may appeal the refusal to the State Health Department Sewage Handling and
Disposal Appeal Review Board.
			The Board may promulgate regulations pursuant to the Administrative Process
Act (&#xA7; 2.2-4000 et seq.) for the administration of the Fund consistent with
this chapter.
			In the event the Fund is insufficient to meet requests for payment from the
Fund, this section and the creation of the Fund shall not be construed to
provide liability on the part of the Department or any of its personnel where no
such liability existed prior to July 1, 1994.

HISTORY: 1994, c. 747; 2007, cc. 448, 515; 2016, c. 90; 2021, Sp. Sess. I, c.
382.