RULES AND REGULATIONS
STATE REAL ESTATE COMMISSION
[49 PA. CODE CH. 35]
Application Fees
[30 Pa.B. 2586] The State Real Estate Commission (Commission) amends § 35.203 (relating to fees) by revising certain application fees to read as set forth in Annex A.
This rulemaking amends fees for application, reapplication, verification and certification fees and creates reinspection fees to reflect the Board's actual cost of providing the services.
Notice of proposed rulemaking was published at 29 Pa.B. 4171 (August 7, 1999). Publication was followed by a 30-day public comment period during which the Board received public comment from the Pennsylvania Association of Realtors. Following the close of the public comment period, the Board received comments from the House Professional Licensure Committee (HPLC) and the Independent Regulatory Review Commission (IRRC). The Senate Consumer Protection and Professional Licensure Committee (SCP/PLC) did not comment.
The following is a response to the comments:
Certification and Verification Fee
The HPLC questioned under what circumstances the Commission certifies an examination score. The HPLC and IRRC also requested an explanation of the difference between a verification and certification and an explanation of what accounts for the differential in fees.
The certification of a score is made at the request of a licensee when the licensee is seeking to obtain licensure in another state based upon licensure in this Commonwealth which was issued on the basis of a uniform National or regional examination which was taken in this Commonwealth. Generally the state of original licensure is the only source of the score of the licensee as testing agencies do not maintain this information. The licensure laws of many states include provisions that licensure by reciprocity or endorsement based on licensure in another state will be granted only if the board or agency determines that the qualifications are the same or substantially similar. Many state agencies have interpreted this provision to require that licensees have attained a score equal to or exceeding the passing rate in that jurisdiction at the time of original licensure. For this reason, these states require that the Commission and other boards certify the examination score the applicant achieved on the licensure examination.
As noted in proposed rulemaking, the difference between the verification and certification fees is the amount of time required to produce the document requested by the licensee. States request different information when making a determination as to whether to grant licensure based on reciprocity or endorsement from another state. The Bureau of Professional and Occupational Affairs (Bureau) has been able to create two documents from its records that will meet all of the needs of the requesting state. When the licensee applies to the other state, the licensee receives information as to what documentation and form is acceptable in the requesting state. The Bureau then advises the licensee of the type of document the Bureau can provide and the fee. In the case of a verification, the staff produces the requested documentation by a letter, usually computer generated, which contains the license number, date of original issuance and current expiration date and status of the license. The letters are printed from the Bureau's central computer records and sent to the Commission staff responsible for handling the licensee's application. The letters are sealed, folded and mailed in accordance with the directions of the requestor. The Bureau estimates the average time to prepare this document to be 5 minutes. The Bureau uses the term ''certification fee'' to describe the fee for a request for a document, again generally to support reciprocity or endorsement applications to other states, territories or countries, or for employment of training in another state. A certification document contains information specific to the individual requestor. It may include dates or location where examinations were taken, or scores achieved or hours and location of training. The information is entered on to a document which is usually supplied by the requestor. The average time to prepare a certification is 45 minutes. This is because a number of resources, such as files, microfilm and rosters must be retrieved and consulted to provide the information requested. The Commission staff then seals and issues this document.
Administrative Overhead
IRRC requested that the Bureau and the Commission: (1) itemize the overhead cost to be recouped by the fees; and (2) reexamine the method that is used to determine the administrative overhead factor for each fee.
IRRC commented that although the Bureau's method was reasonable, there was no assurance that the fees would recover the actual overhead cost because the charge was not related to the service, and because the charge was based on the actual rather than the projected expenditures. IRRC also commented that there was no certainty that the projected revenues would meet or exceed projected expenditures, as required under the Commission's enabling statutes.
In computing overhead charges, the Commission and the 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 commission/board. Once determined the Bureau's total administrative charge is apportioned to each commission/board based upon that board's share of the total active licensee population. In turn, the commission's/board's administrative charge is divided by the number of active licensees to calculate a per application charge which is added to direct personnel cost to establish the cost of processing. 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 SCP/PLC, HPLC and IRRC as reasonable and consistent with the Legislative intent of statutory provisions which require the commission/board to establish fees which meet or exceed expenses.
IRRC suggested that within each commission/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 commissions/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 of charge obtained by applying IRRC suggested time factor versus the current method. This review of a commissions'/boards' 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 commission/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 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 commissions/boards noted 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 commissions/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 commissions/boards 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 Commission has not made changes in the method by which it allocates administrative expenditures and the resulting fees will remain as proposed.
IRRC also questioned why the administrative overhead costs for certification of history of licensure, registration or approval is $3.80 less than the administrative overhead charged for the remaining application fees. The overhead cost for certification of licensure, registration or approval is divided among the licensing population for the entire Bureau, while the overhead cost for remaining application fees are divided among the licensing population for the Commission.
Addition of satellite location or instructor for real estate school
IRRC commented that, as published in the Pennsylvania Bulletin, the fee for the addition of satellite location or instructor for real estate school contained an unnecessary comma. The Commission made the correction accordingly.
Private real estate schools
IRRC requested a description of the application process and sought an explanation for the reduction in the fee for initial license application for private real estate school from $325 to $120.
After an application for licensure is received, the Commission staff reviews the application for completeness and contacts the applicant to obtain any missing information or documents, or both. The application is then sent to the Bureau of Enforcement and Investigation (BEI) for an inspection to determine compliance with regulations. Following an inspection, the BEI sends a report to the Commission administrator. Once the information is obtained, the Commission's Education Committee reviews the application and makes a recommendation to the full Commission at its meeting. The Commission discusses the recommendation and votes to approve or deny the request. If the Commission approves the application, an approval letter is sent to the applicant. If the Commission denies the application, a denial letter is sent.
The $325 application fee was based upon a full Commission review of the application. The Commission found that a more efficient review could be accomplished by the Education Committee. Since less members of the Commission are reviewing the application, the fee is being reduced by $205.
Fee report forms
IRRC identified three errors in the fee report forms: (1) the form for certification of history of licensure should include registration or approval; (2) the form for ownership change-private real estate school contains a typographical error in that it inaccurately reflects the administrative overhead fee as $3.56, rather than $13.56; (3) the form for name change-private real estate school and initial license application-private real estate school contains a typographical error in that two different Commission review fees are used. The Commission has amended the fee report forms accordingly.
The Commission has also provided a survey of costs of other states in a revised Regulatory Analysis Form at the request of the HPLC which is available to the public on request.
Compliance with Executive Order 1996-1, Regulatory Review and Promulgation
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, Regulatory Review and Promulgation. 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 amendment 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 Commission. The amendment will impose no additional paperwork requirements upon the Commonwealth, political subdivisions or the private sector.
Statutory Authority
The amendment is authorized under section 407(a) of the Real Estate Licensing and Registration Act (act) (63 P. S. § 455.407(a)).
Sunset Date
The Commission continually monitors the effectiveness of its regulations through communications with the regulated population; accordingly, no sunset date has been set.
Regulatory Review
Under section 5(a) of the Regulatory Review Act (71 P. S. § 745.5(a), the Commission submitted a copy of the notice of proposed rulemaking, published at 29 Pa.B. 4171, to the IRRC and the Chairpersons of the HPLC and the SCP/PLC (Committees) for review and comment.
In compliance with section 5(c) of the Regulatory Review Act, the Commission also provided IRRC and the Committees with copies of all comments received, as well as other documentation. In preparing this final-form regulation, the Commission has considered the comments received from the Committees, IRRC and the public.
Under section 5.1(d) of the Regulatory Review Act (71 P.S. § 745.5a(d)), this final-form regulation was approved by the HPLC on April 18, 2000, and deemed approved by the SCP/PLC on April 26, 2000. Under section 5.1(e) of the Regulatory Review Act, IRRC met on April 27, 2000, and approved the final-form regulation.
Contact Person
Further information may be obtained by contacting Deborah A. Sopko, Administrative Assistant, State Real Estate Commission, P. O. Box 2649, Harrisburg, PA 17105-2649, (717) 783-3658.
Findings
The Commission 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 thereunder at 1 Pa. Code §§ 7.1 and 7.2.
(2) A public comment period was provided as required by law and the comments were considered.
(3) This amendment does not enlarge the purpose of proposed rulemaking published at 29 Pa.B. 4171.
(4) This amendment is necessary and appropriate for administration and enforcement of the Board's authorizing statute.
Order
The Board, acting under its authorizing statute, orders that:
(a) The regulations of the Board, 49 Pa. Code Chapter 35, are amended by amending § 35.203 to read as set forth in Annex A.
(b) The Board shall submit this order and Annex A to the Office of General Counsel and to the Office of Attorney General 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) This order shall take effect upon publication in the Pennsylvania Bulletin.
RITA HALVERSON,
Chairperson(Editor's Note: For the text of the order of the Independent Regulatory Review Commission relating to this document, see 30 Pa.B. 2430 (May 13, 2000)
Fiscal Note: Fiscal Note 16A-566 remains valid for the final adoption of the subject regulation.
Annex A
TITLE 49. PROFESSIONAL AND
VOCATIONAL STANDARDS
PART I. DEPARTMENT OF STATE
Subpart A. PROFESSIONAL AND
OCCUPATIONAL AFFAIRS
CHAPTER 35. STATE REAL ESTATE
COMMISSION
APPLICATION FEES § 35.203. Fees.
The following fees are charged by the Commission:
Licensing examination for broker, cemetary
broker, salesperson, builder-owner sales-
person or rental listing referral agent$45 Review of qualifications of candidate
for broker or cemetery broker
licensing examination$40 Application for licensure of: (i) Broker, cemetery broker or rental
listing referral agent$75 (ii) Branch office $65 (iii) Associate broker, salesperson, cem-
etery associate broker, builder-owner sales-
person, time-share salesperson, camp-
ground membership salesperson, or broker
of record, partner or officer for a partner-
ship, association or corporation$25 (iv) Cemetery salesperson $20 Application for registration of cemetery
company$25 Initial licensure for broker, cemetery broker,
branch office, rental listing referral agent,
or broker of record, partner or officer for
a partnership, association or corporation:(i) If issued in first half of biennial period 100% of biennial
renewal fee(ii) If issued in second half of biennial period 50% of biennial
renewal feeInitial registration for cemetery company or
initial licensure for associate broker,
salesperson, cemetery associate broker,
cemetery salesperson, builder-owner
salesperson, time-share salesperson or
campground membership salesperson:
(i) If issued in first half of biennial period 100% of biennial
renewal fee(ii) If issued in second half of biennial period 50% of biennial
renewal feeBiennial renewal of license of broker,
cemetery broker, branch office, rental
listing referral agent, or broker of record,
partner or officer for a partnership, asso-
ciation or corporation$84 Biennial renewal of cemetery company
registration or license of associate broker,
salesperson, cemetery associate broker,
cemetery salesperson or campground
membership salesperson$64 Registration of promotional real estate
$120 Annual renewal of registration of promo-
tional real estate$75 Approval of real estate school $120 Reinspection of real estate school
after first failure$65 Annual renewal of approval of real
estate school for each satellite
location, course and instructor
$250 plus $10 for
each satellite location,
course and instructorChange of name or office location of broker,
cemetery broker or rental listing
referral agent$75 Change of name or address for cemetery
company or change of employer, change of
employer's name or change of employer's
address for associate broker, cemetery
associate broker, salesperson, cemetery
salesperson, build-owner salesperson,
time-space salesperson, campground
membership salesperson, or broker of
record, partner or officer for a partner-
ship, association or corporation$20 Reinspection after failure for change of
name or office location of broker, cem-
etery broker or rental listing referral
agent
$55 Change of ownership or directorship of
real estate school
$75 Change of name of real estate school $45 Change of location of real estate school $70 Addition of satellite location or
instructor for real estate school$20 Addition of course for real estate school $25 Certification of current status of licensure,
registration or approval$15 Certification of history of licensure,
registration or approval
$40 Duplicate license $5 Late renewal of license In addition to the
prescribed renewal fee, $5 for
each month or part of the month
beyond the renewal date
[Pa.B. Doc. No. 00-883. Filed for public inspection May 26, 2000, 9:00 a.m.]
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