Title 49--PROFESSIONAL AND VOCATIONAL STANDARDS STATE BOARD OF CERTIFIED REAL ESTATE
APPRAISERS[49 PA. CODE CH. 36] Biennial Renewal Fees and Examination Fees [33 Pa.B. 2476] The State Board of Certified Real Estate Appraisers (Board) amends § 36.6 (relating to fees) to read as set forth in Annex A.
The final-form rulemaking raises the biennial renewal fees for certified general and residential real estate appraisers and certified Pennsylvania evaluators from $105 to $225; establishes a biennial renewal fee of $225 for certified brokers/appraisers; deletes the examination fees for certified general and residential real estate appraisers and certified Pennsylvania evaluators; and makes editorial changes to the description of the fees. The new biennial renewal fees will initially apply to certificateholders who renew their certifications for the biennial renewal period that begins July 1, 2003.
Summary of Comments and Responses to Proposed Rulemaking
The Board published a notice of proposed rulemaking at 32 Pa.B. 4871 (October 5, 2002) with a 30-day public comment period. The Board received comments from the Pennsylvania Association of Realtors (PAR).
The Board also received comments from the Independent Regulatory Review Commission (IRRC) and the House Professional Licensure Committee (House Committee) as part of their review of proposed rulemaking under the Regulatory Review Act (71 P. S. §§ 745.1--745.12). The Board did not receive comments from the Senate Committee on Consumer Protection and Professional Licensure (Senate Committee) as part of its review of proposed rulemaking under the Regulatory Review Act.
IRRC asked whether the Board had considered gradual fee increases, instead of a one-time fee increase, as a solution to its growing budget deficit. PAR recommended that the Board phase in the increases over the next two biennial renewal cycles.
As noted during proposed rulemaking, the Department of State's Bureau of Finance and Operations (BFO) had advised the Board that to close the widening gap between revenues and expenses, the Board needed to establish uniform biennial renewal fees in an amount between $200 and $250 for all certificateholders, effective with the 2003-2005 biennial renewal period. The board had opted for the midpoint fee of $225, which, according to BFO estimates would generate sufficient revenues to permit comfortable positive balances during the next several fiscal years, thereby obviating the need for additional fee increases in the foreseeable future.
In light of the comments submitted by PAR and IRRC, the Board asked the BFO if it would be possible to have graduated fee increases while still generating sufficient revenues. In January, the BFO reported that the Board could generate the same revenues as would be realized under the one-time fee increase if the biennial renewal fees were increased to $200, $225 and $250 for the 2003-2005, 2005-2007 and 2007-2009 biennial renewal periods, respectively.
Given the temporary and relatively modest savings to certificateholders under the graduated approach, the Board believes certificateholders would prefer a one-time fee increase now rather than fee increases over the next three biennial renewal cycles, particularly since the latter would lead to higher biennial renewal fees than what were contemplated during proposed rulemaking.
IRRC also asked whether the Board's general expenses are distributed equally among its certification classes (that is, general appraiser, residential appraiser, broker/appraiser and certified Pennsylvania evaluator) and, if not, whether the biennial renewal fees could be adjusted to reflect each certification class's share of the overall expenses.
According to the BFO, it is not possible to reliably determine what portion of the Board's general expenses can be apportioned to each certification class. As a consequence, the fairest formula is to require every certificateholder, regardless of certification class, to share equally in defraying the Board's general expenses.
The House Committee asked for a detailed breakdown of the expenses that justify the imposition of new biennial renewal fees. During proposed rulemaking, the Board stated that its annual expenses have risen steadily in the nearly 12 years since its inception as a licensing board within the Bureau of Professional and Occupational Affairs (BPOA). The following information, prepared by the BFO, breaks down the Board's annual expenses of $190,577 for FY95-96 and projected annual expenses of $505,000 for FY02-03 by ''cost center'':
Cost Center/Description FY 95-96 FY 02-03 BPOA Administration (licensee population based):
BPOA expenses such as printed forms, office supplies and interagency billings$5,463 (2.87%) $9,000 (1.78%) Commissioner's Office (timesheet based):
Expenses (personnel, operating and fixed asset charges) relating to staff assigned to the BPOA Commissioner's office$1,558 (.82%) $7,000 (1.39%) Law Enforcement (timesheet based):
Expenses (personnel, operating and fixed asset charges) relating to staff assigned to Bureau of Enforcement and Investigation$42,586 (22.35%) $107,000 (21.19%) Board Member Expenses (direct charges):
Board member per diem, conference registration fees, travel expenses and membership dues for National Organization of State Appraiser Boards$12,430 (6.52%) $22,000 (4.36%) Hearing Expenses (timesheet based/direct charges):
Expenses (personnel, operating and fixed asset charges) relating to staff assigned to Hearing Examiner's Office (Note: Board-only delegates matter to Hearing Examiner's Office if hearing cannot be scheduled in connection with regular Board meeting)$73 (.04%) $2,000 (.40%) Departmental Services (timesheet based):
Charges for centralized support services provided by Department offices (for example, Secretary's Office, Chief Counsel, Press Office, Legislative Liaison, Human Resources, Management Information Services, BFO)$8,908 (4.67%) $22,000 (4.36%) Board Administration (timesheet based/direct charges):
Expenses (personnel, operating and fixed asset charges) relating to Board administrative staff and direct Board expenses$82,736 (43.41%) $158,500 (31.39%) Public Information (timesheet based/direct charges):
Expenses (personnel, operating and fixed asset charges) relating to staff involved in preparation of newsletters, announcements of disciplinary actions and informational brochures$500 (.10%) Legislative and Regulatory Analysis (timesheet based):
Expenses (personnel, operating and fixed asset charges) relating to legal review of regulatory and policy initiatives$464 (.24%) $2,000 (.40%) Legal Office (timesheet based/direct charges):
Expenses (personnel, operating and fixed asset charges) relating to Board counsel, Board prosecutors, Complaints Office and support staff and expert consultants$36,360 (19.08%) $175,000 (34.65%) As reflected in the previous chart, the most significant increases in the Board's expenses involve the legal and law enforcement areas. These amounts reflect substantial growth in complaint and disciplinary activity relating to the Board. From 1990--1996, the BPOA received 231 complaints alleging violations of either the Real Estate Appraisers Certification Act (REACA) (63 P. S. §§ 457.1--457.19) or the Assessors Certification Act (ACA) (63 P. S. §§ 458.1--458.16). During this period, the Board imposed seven disciplinary sanctions. From 1997--2001, the BPOA received 607 complaints regarding alleged violations of the REACA or the ACA, while the Board imposed 125 disciplinary sanctions. Whereas many of the complaints in the early years involved jurisdictional matters, a sizeable number of the more recent complaints allege violations of professional appraisal practice standards by certificateholders. These latter complaints tend to involve complex disciplinary issues, often requiring more specialized investigation or review by expert consultants.
Another significant area of increase in the Board's expenses relates to its administrative operations. This increase is attributable in large part to the higher level of training required of the Board's administrative staff as compared to administrative staff assigned to other business boards within the BPOA.
Fiscal Impact
According to BFO projections, the final-form rulemaking will generate approximately $621,000 in additional biennial renewal fee revenues as follows:
No. of Renewing Certification Class Certificateholders Fee Increase Additional Revenues General Appraiser 1,088 × $120 $130,560 Residential Appraiser 1,700 × $120 $204,000 Certified Pennsylvania Evaluator 512 × $120 $61,440 Broker/Appraiser 1,000 × $225 $225,000
Paperwork Requirements
The final-form rulemaking will require the Board to change its biennial renewal forms to reflect the new fees. The final-form rulemaking will not create additional paperwork requirements for certificateholders.
Effective Date
The final-form rulemaking will become effective upon publication in the Pennsylvania Bulletin and will initially apply to certificateholders who renew their certifications for the 2003-2005 biennial renewal period.
Statutory Authority
Section 5(6) of the REACA (63 P. S. § 457.5(6)) authorizes the Board to establish fees for its operations. Section 9 of the REACA (63 P. S. § 457.9) requires the Board to establish fees by regulation and to ensure that revenues derived from fees, fines and civil penalties are adequate to cover the Board's expenditures over a biennial period. Section 9 of the ACA (63 P. S. § 458.9) authorizes the Board to establish renewal and other fees relating to certified Pennsylvania evaluators by regulation.
Regulatory Review
Under section 5(a) of the Regulatory Review Act (71 P. S. § 745.5(a)), on September 25, 2002, the Board submitted a copy of the notice of proposed rulemaking, published at 32 Pa.B. 4871, to IRRC and to the Chairpersons of the House and Senate Committees for review and comment.
Under section 5(c) of the Regulatory Review Act, IRRC and the Committees were provided with copies of the comments received during the public comment period, as well as other documents when requested. In preparing this final-form rulemaking, the Department has considered the comments received from IRRC, the House Committees and the public. The Board did not receive comments from the Senate Committee.
On March 31, 2003, the Board submitted this final-form rulemaking to IRRC and the House and Senate Committees. Under section 5.1(j.2) of the Regulatory Review Act (71 P. S. § 745.5a(j.2)), on April 15, 2003, this final-form rulemaking was deemed approved by the House Committee. On May 7, 2003, this final-form rulemaking was deemed approved by the Senate Committee. Under section 5.1(e) of the Regulatory Review Act, IRRC met on May 8, 2003, and approved the final-form rulemaking.
Additional Information
Persons who require additional information about the final-form rulemaking should submit inquiries to Michelle T. DeMerice, Administrator, State Board of Certified Real Estate Appraisers, P. O. Box 2649, Harrisburg, PA 17105-2649, (717) 783-4866, appraise@pados.dos.state.pa.us.
Findings
The Board finds that:
(1) Public notice of proposed rulemaking was given under sections 201 and 202 of the Commonwealth Documents Law and the regulations thereunder, 1 Pa. Code §§ 7.1 and 7.2
(2) The final-form rulemaking adopted by this order are necessary and appropriate for the administration of the REACA and the ACA.
Order
The Board, acting under its authorizing statutes, orders that:
(a) The regulations of the Board, 49 Pa. Code Chapter 36, are amended by amending § 36.6 to read as set forth in Annex A.
(b) The Board shall submit this order and Annex A to the Office of 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 deposit them with the Legislative Reference Bureau as required by law.
(d) The final-form rulemaking shall take effect upon publication in the Pennsylvania Bulletin.
GEORGE D. SINCLAIR,
Chairperson(Editor's Note: For the text of the order of the Independent Regulatory Review Commission, relating to this document, see 33 Pa.B. 2561 (May 24, 2003).)
Fiscal Note: Fiscal Note 16A-7013 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 36. STATE BOARD OF CERTIFIED REAL ESTATE APPRAISERS Subchapter A. GENERAL PROVISIONS GENERAL PROVISIONS § 36.6. Fees.
The following is the schedule of fees charged by the Board:
Certification of scores $25 Verification of certification or registration $15 Certified Real Estate Appraisers Application (nonreciprocity) $235 Application (reciprocity) $40 Temporary practice registration $30 Initial certification (if certified on or after 7/1 of odd-numbered years or on or before 6/30 of even-numbered years) $90 Initial certification (if certified between 7/1 of even-numbered years and 6/30 of odd-numbered years) $45 Biennial renewal $225 Certified Broker/Appraisers Application (for application period of 9/3/96 to 9/3/98) $40 Initial certification (if certified between 7/1/97 and 6/30/98) $90 Initial certification (if certified between 9/3/96 and 6/30/97 or if certified on or after 7/1/98, if the application for initial certification was submitted by 9/3/98) $45 Biennial renewal $225 Certified Pennsylvania Evaluators Application $55 Initial certification (if certified on or after 7/1 of odd-numbered years or on or before 6/30 of even-numbered years) $90 Initial certification (if certified between 7/1 of even-numbered years and 6/30 of odd-numbered years) $45 Biennial renewal $225 Continuing Education Providers Application for continuing education provider approval $85 [Pa.B. Doc. No. 03-980. Filed for public inspection May 23, 2003, 9:00 a.m.]
