Title 49--PROFESSIONAL AND VOCATIONAL STANDARDS STATE BOARD OF VEHICLE MANUFACTURERS,
DEALERS AND SALESPERSONS[49 PA. CODE CH. 19] Application Fees [30 Pa.B. 6427] The State Board of Vehicle Manufacturers, Dealers and Salespersons (Board) adopts an amendment to § 19.4 (relating to fees) to read as set forth in Annex A.
Notice of proposed rulemaking was published at 29 Pa.B. 5105 (October 2, 1999). Publication was followed by a 30-day public comment period. The Board received no comments. Following the close of the public comment period, the Board received comments and suggestions from the House Professional Licensure Committee (HPLC) on November 16, 1999, and the Independent Regulatory Review Commission (IRRC) on December 2, 1999. The Senate Consumer Protection and Professional Licensure Committee did not comment.
Effective Date
The amendments will be effective upon publication in the Pennsylvania Bulletin.
Statutory Authority
The amendments are authorized under section 30(b) of the Board of Vehicles Act (act) (63 P. S. §818.30(b)).
Response to HPLC and IRRC Comment
The HPLC inquired as to: (1) why the proposed fees were rounded up rather than being calculated on the actual costs of services as estimated by the Board; and (2) requested an explanation of administrative overhead costs contained in the fee package. The HPLC also asked the Board to revise the Regulatory Analysis Form to include the Board's expenditure and income history.
IRRC requested additional information on: (1) the use of a constant overhead cost allocation; (2) the difference in administrative overhead costs for certification and verification of licenses versus other license services, and (3) a more detailed explanation of the fee increases for business name or post office address change and business physical location change.
Calculation of Administrative Overhead
A. Use of Constant Overhead Cost Allocation and ''Rounding Up.''
In computing overhead charges, the boards and the Bureau of Vocational and Occupational Affairs (Bureau) include expenses resulting from service of support staff operations, equipment, technology initiatives or upgrades, leased office space and other sources not directly attributable to a specific board. Once the Bureau's expenses are determined, the Bureau's expenses are apportioned to each board based upon that board's share of the total active licensee population. The board's share of the expenses is divided by the number of active licensees under that board to calculate a ''per application'' charge which is added to the direct personnel cost to establish the cost of processing (the administrative overhead charge). The administrative charge is consistently applied to every application regardless of how much time the staff spends processing the application.
This method of calculating administrative overhead to be apportioned to fees for services was first included in the biennial reconciliation of fees and expenses conducted in 1988-89. In accordance with the regulatory review, the method was approved by the Senate and House Standing Committees and IRRC as reasonable and consistent with the legislative intent of statutory provisions which require the Board to establish fees which meet or exceed expenses.
IRRC suggested that within each board, the administrative charge should be determined by the amount of time required to process each application. For example, an application requiring 1/2 hour of processing time would pay one-half as much overhead charge as an application requiring 1 hour of processing time. The Bureau concurs with IRRC that by adopting this methodology the Bureau and the boards would more nearly and accurately accomplish their objective of setting fees that cover the cost of the service. Therefore, in accordance with IRRC's suggestions, the Bureau conducted a test to compare the resulting overhead charges obtained by applying the IRRC suggested time factor versus the current method.
This review of a Board's operation showed that approximately 25% of staff time was devoted to providing services described in the regulations. The current method recouped 22% to 28% of the administrative overhead charges versus the 25% recouped using a ratio-based time factor. However, when the time factor is combined with the licensing population for each Board, the resulting fees vary widely even though different licensees may receive the same services. For example, using the time-factor method to issue a verification of licensure would cost $34.58 for a landscape architect as compared with a cost of $10.18 for a cosmetologist. Conversely, under the Bureau's method, the administrative overhead charge of $9.76 represents the cost of processing a verification application for all licensees in the Bureau. Also, the Bureau found that employing a time factor in the computation of administrative overhead would result in a different amount of overhead charge being made for each fee proposed.
With regard to IRRC's suggestions concerning projected versus actual expenses, the boards note that the computation of projected expenditures based on amounts actually expended has been the basis for biennial reconciliations for the past 10 years. During these 5 biennial cycles, the experience of both the boards and the Bureau has been that established and verifiable data which can be substantiated by collective bargaining agreements, pay scales and cost benefit factors. This method has provided a reliable basis for fees. Also, the fees are kept at a minimum for licensees, but appear adequate to sustain the operations of the board over an extended period. Similarly, accounting, recordkeeping and swift processing of applications, renewals and other fees were the primary basis for ''rounding up'' the actual costs to establish a fee. This rounding up process has in effect resulted in the necessary but minimal cushion or surplus to accommodate unexpected needs and expenditures.
For these reasons, the Board has not made changes in the method by which it allocates administrative expenditures and the resulting fees will remain as proposed.
B. Variation in Administrative Charge of Verification/Certification Versus Administrative Charge for Other Services.
IRRC questioned why the administrative charge included for verification or certification of licensure versus the administrative charge included for other services was different. The administrative charge of $9.76 represents the cost of processing a verification or certification application for any licensee in the Bureau irrespective of what board issues the license. The administrative charge of $11.53 represents the cost of processing other types of licensure applications for only licensees under the Board. In other words, whereas the administrative charge for verification or certification of licensure is constant across all licensees under the Bureau, the license services performed that are specific to the type of license held are calculated based only on the number of licensees served by the board. Thus, each board has two administrative charges applied to the provision of licensure services: $9.76 is applied to all boards for verification or certification services and an individual fee is applied on a per board basis.
Fees for Business Changes
IRRC requested a more detailed explanation of the fee increases for change of business name or post office and change in business physical location.
When a business requests a name or address change, the Board staff reviews the application for completeness and contacts the applicant for any missing information. The staff verifies that the name of the dealership has not changed as a result of an ownership change and determines whether the address change is due to an actual physical location change or to a postal address reassignment. The staff then processes the new information through the computer and issues an updated license.
If there has been a physical location change, in addition to the previously-mentioned procedures, the Board staff prepares an inspection report form and forwards the form to the Bureau of Enforcement and Investigation (BEI). The BEI conducts an onsite inspection, determines whether statutory and regulatory standards for the facility are met and sends the inspection results to the Board office. Board staff then updates the computer information and issues a license with the new address or, if BEI has found that the new location does not comply with applicable facility standards, issues a discrepancy notice. Inspection by the BEI represents a change from the former procedure, when inspections were performed by the State Police at no charge to the Board. The State Police no longer perform this service.
IRRC also suggested that the fee regulation include the phrase ''no inspection required'' next to the fee for ''business name or post office address change'' and the phrase ''inspection required'' next to the fee for ''business physical location change'' to explain the difference in fee amount. The Board has rejected this suggestion. The Board's experience indicates little confusion among its licensees in payment of these fees. In addition, the Board does not wish to complicate the fee regulation by unnecessarily amending anything other than the fee amount.
Reinspection After Failure
When applicable facility standards are not met at initial inspection for new or relocated businesses, the BEI advises board staff of the reasons for failure at the onsite inspection. The staff sends a discrepancy letter to applicant informing the applicant of the deficiencies. Applicant notifies the Board office when the deficiencies have been corrected. The Board office then prepares a reinspection report form and forwards the form to the BEI for follow-up inspection. After the follow-up inspection is competed, the results are sent to the Board staff. Board staff then either sends another discrepancy letter or issues the license.
Although the existing application fees capture the cost of the initial inspection by the BEI prior to issuance of a license, the fees do not cover the cost of reinspection by the BEI when the applicable facility standards were not met at the initial inspection. This new fee will cover the additional cost of reinspection and require that only those using the service must pay for the service. The Board estimates that approximately ten requests for reinspection are made in a biennial period.
Compliance with Executive Order 1996-1
The Board reviewed this rulemaking and considered its purpose and likely impact upon the public and the regulated population under the directives of Executive Order 1996-1. The final-form regulation addresses a compelling public interest as described in this Preamble and otherwise complies with Executive Order 1996-1.
Fiscal Impact and Paperwork Requirements
The amendments will have no adverse fiscal impact on the Commonwealth or its political subdivisions. The fees will have a modest fiscal impact on those members of the private sector who apply for services from the Board. The amendments will impose no additional paperwork requirements upon the Commonwealth, political subdivisions or the private sector.
Sunset Date
The Board continuously monitors the cost effectiveness of its regulations. Therefore, no sunset date has been assigned.
Regulatory Review
Under section 5(a) of the Regulatory Review Act (71 P. S. § 745.5(a)), on September 17, 1999, the Board submitted a copy of the notice of proposed rulemaking, published at 29 Pa.B. 5105, to IRRC and the Chairpersons of the HPLC and the Senate Consumer Protection and Professional Licensure Committee for review and comment. In addition to submitting the final-form regulation, the Board has provided IRRC and the Committees with a copy of a detailed regulatory analysis form prepared by the Board in compliance with Executive Order 1996-1, ''Regulatory Review and Promulgation.'' In preparing this final-form regulation, the Board has considered all comments received from the Committees and IRRC.
Under section 5.1(d) of the Regulatory Review Act (71 P. S. § 745.5a(d)), this final-form regulation was deemed approved by the HPLC on October 11, 2000, and deemed approved by the Senate Committee on October 23, 2000. IRRC met on November 2, 2000, and approved the final-form regulation in accordance with section 5.1(e) of the Regulatory Review Act.
Further Information
Individuals who need information about the final-form regulation may contact the Board Administrator, State Board of Vehicle Manufacturers, Dealers and Salespersons, P. O. Box 2649, Harrisburg, PA 17105-2649, (717) 783-7155.
Findings
The Board finds that:
(1) Public notice of proposed rulemaking was given under sections 201 and 202 of the act of July 31, 1968 (P. L. 769, No. 240) (45 P. S. §§ 1201 and 1202), and the regulations promulgated under, 1 Pa. Code §§ 7.1 and 7.2.
(2) A public comment period was provided as required by law and all comments were considered.
(3) This amendment does not enlarge the purpose of proposed rulemaking published at 29 Pa. B. 5105.
(4) This amendment is necessary and appropriate for administration and enforcement of the Board's authorizing statute.
The Board orders that:
(a) The regulations of the Board, 49 Pa. Code Chapter 19, are amended by amending § 19.4 to read as set forth in Annex A.
(b) The Board shall submit a copy of this order and Annex A to the Office of the Attorney General and the Office of General Counsel for approval as required by law.
(c) The Board shall certify this order and Annex A and shall deposit them with the Legislative Reference Bureau as required by law.
(d) The amendment shall take effect immediately upon publication in the Pennsylvania Bulletin.
ROBERT G. PICKERILL,
Chairperson(Editor's Note: For the text of the order of the Independent Regulatory Review Commission, relating to this document, see 30 Pa.B. 6020 (November 18, 2000).)
Fiscal Note: Fiscal Note 16A-600 remains valid for the final adoption of the subject regulation.
Annex A TITLE 49. PROFESSIONAL AND
VOCATIONAL STANDARDSPART I. DEPARTMENT OF STATE Subpart A. PROFESSIONAL AND
OCCUPATIONAL AFFAIRSCHAPTER 19. STATE BOARD OF
VEHICLE MANUFACTURERS,DEALERS AND SALESPERSONS FEES §19.4. Fees.
Vehicle salesperson license application $25 Vehicle representative license application 25 Vehicle manufacturer license application 30 Manufacturer branch license application 30 Distributor license application 30 Vehicle dealer license application 65 Vehicle broker license application 65 Dealer or broker branch license application 65 Used vehicle lot license application 65 Vehicle salesperson change of employer
transfer application25 Business name or post office address change 30 Business physical location change 60 Verification of licensure 15 Reinspection after failure 45 Certification of license history 25 Biennial Renewal--vehicle salesperson license 35 Biennial Renewal--vehicle representative
license35 Biennial Renewal--vehicle manufacturer
license100 Biennial Renewal--manufacturer branch license 70 Biennial Renewal--wholesale distributor license 70 Biennial Renewal--vehicle dealer license 70 Biennial Renewal--vehicle broker license 70 Biennial Renewal--dealer or broker branch
license70 Biennial Renewal--used vehicle lot license 70 [Pa.B. Doc. No. 00-2160. Filed for public inspection December 15, 2000, 9:00 a.m.]
