RULES AND REGULATIONS
Title 49—PROFESSIONAL AND VOCATIONAL STANDARDS
STATE BOARD OF AUCTIONEER EXAMINERS
[ 49 PA. CODE CH. 1 ]
Schedule of Fees
[45 Pa.B. 2466]
[Saturday, May 23, 2015]The State Board of Auctioneer Examiners (Board) amends § 1.41 (relating to schedule of fees) to read as set forth in Annex A.
Effective Date
This final-form rulemaking will be effective upon publication in the Pennsylvania Bulletin. It is anticipated that the increased biennial renewal fees will be implemented with the February 28, 2017, biennial renewal.
Statutory Authority
Section 6(a) of the Auctioneer Licensing and Trading Assistant Registration Act (act) (63 P. S. § 734.6(a)) requires the Board to increase fees by regulation to meet or exceed projected expenditures if the revenue raised by fees, fines and civil penalties is not sufficient to meet expenditures over a 2-year period.
Background and Need for Amendment
Under section 6(a) of the act, the Board is required by law to support its operations from the revenue it generates from fees, fines and civil penalties. In addition, the act provides that the Board shall increase fees if the revenue raised by fees, fines and civil penalties is not sufficient to meet expenditures over a 2-year period. The Board raises the majority of its revenue through biennial renewal fees. A small percentage of its revenue comes from application fees and civil penalties.
The Board has not raised its biennial renewal fees since 1998, when the biennial renewal fee for apprentice auctioneers increased from $30 to $100 and the biennial renewal fees for auctioneers, auction companies and auction houses increased from $50 to $200. At the time, the Board anticipated that these fees would sustain the Board for at least 10 years. At the March 12, 2012, Board meeting, representatives from the Department of State's Bureau of Finance and Operations (BFO) presented a summary of the Board's revenue and expenses for Fiscal Year (FY) 2009-2010 and FY 2010-2011 and projected revenue and expenses through FY 2014-2015. As anticipated, the biennial renewal fees were adequate for about 10 years. However, the actual expenditures for FYs 2009-2010 and 2010-2011 outpaced revenues during the same period by approximately $128,400. At the current fee levels, the BFO projected that, without an increase to the biennial renewal fees, the Board will incur a deficit of approximately $155,800 by the end of FY 2013-2014, necessitating a fee increase in 2015 to recoup existing deficits and to ward off further deficits. Therefore, the Board determined that it was necessary to raise fees to meet or exceed projected expenditures, in compliance with section 4(b) of the act (63 P. S. § 734.4(b)). As a result, the Board voted at its July 9, 2012, meeting to increase biennial renewal fees by 30% to meet projected expenditures.
Summary of Comments and the Board's Response
The Board published the proposed rulemaking at 43 Pa.B. 1279 (March 9, 2013) with a 30-day public comment period. The Board did not receive comments from the public. On April 24, 2013, the House Professional Licensure Committee (HPLC) submitted two comments to the Board. First, the HPLC requested information pertaining to the major cost centers of the Board and any significant increases in its expenditures. Second, the HPLC requested further explanation on the Board's statutory authority for establishing a renewal fee for trading assistants, noting that the act of October 8, 2008 (P. L. 1080, No. 89) established the registration requirement for trading assistants, specified that registration is required on a biennial basis, established that the registration fee shall be $100 and specified that the Board may not promulgate regulations pertaining to the registration requirement. Therefore, the HPLC questioned the Board's statutory authority to treat this biennial registration requirement as a renewal.
On May 8, 2013, the Independent Regulatory Review Commission (IRRC) submitted comments to the Board. First, IRRC agreed with the HPLC's comments and indicated that IRRC would review the Board's response to the HPLC's comments as part of IRRC's determination of whether this rulemaking is in the public interest. IRRC further asked the Board to explain its statutory authority to include provisions for fees for trading assistants. In addition, IRRC asked for updated fee calculations and financial information and questioned the basis for the proposed 30% increase to the fees.
The Board first considered the HPLC and IRRC comments with regard to its statutory authority to include a provision for fees for trading assistants, to treat the registration fee for trading assistants as a ''renewal'' fee and to increase this fee which was initially set by statute. The Board believes that it has the authority to provide for and increase fees for trading assistants, which would be imposed in accordance with the act. However, the Board has determined that, at least at this time, the costs associated with regulating the 47 licensed trading assistants did not merit an increase to the fee, as for each biennial renewal period it would raise only an additional $1,410 (47 trading assistants x $30 increase). The Board revised this final-form rulemaking to remove the proposed inclusion of fees for trading assistants. The Board notes that it will continue to charge the fee of $100 with each application for trading assistant registration. Under section 10.1 of the act (63 P. S. § 734.10.1), trading assistant ''[r]egistration is required on a biennial basis'' and ''[a] registration fee of $100 shall be included with each application for registration.''
The HPLC and IRRC also questioned the major cost centers of the Board and any significant increases in expenditures. The need for a fee increase at this time is not the result of significant increases in expenditures, but rather the fact that the Board has not increased its fees since 1998. At the present time, the BFO projects biennial revenue of approximately $546,000 for FYs 2012-2013 and 2013-2014. Projected expenditures for that same biennial period are expected to be approximately $660,000, producing a deficit of $114,000. It is this deficit situation that mandates that the Board raise its fees in accordance with section 6(a) of the act.
The cost centers of the Board fall into two categories: administrative costs and legal costs. Administrative costs include those associated with Board administration, the Commissioner's office, the revenue office and departmental services (human resources, finance and operations, management information systems, and the like). Legal costs include costs associated with the legal office (prosecution division, Board counsel and services of experts), hearing expenses, the Professional Compliance Office and enforcement and investigation. The largest cost center for the Board has historically been in the area of enforcement and investigation, ranging from a low of $80,022.53 in FY 2008-2009 to a high of $133,509.34 in FY 2010-2011, with an average of $98,853.51 from FY 2006-2007 through FY 2012-2013. These are the costs associated with investigatory services provided by the Bureau of Enforcement and Investigation to the Board and are entirely dependent upon how many complaints are filed, and how many of those complaints merit investigation. It is difficult to predict how many complaints may be filed in a given year, and historically the numbers have fluctuated dramatically, ranging from a low of 53 in FY 2008-2009 to a high of 185 in FY 2010-2011, with an average of 106 during the FY 2006-2007 through FY 2012-2013 time frame.
The second largest cost center is Board administration, which includes costs associated with the Board's administrative staff, printing and mailing, publications, supplies, operating and fixed assets, and the like. Board administration costs tend to fluctuate somewhat depending on whether a given year is a ''renewal year'' or a ''nonrenewal year,'' as more administrative staff and resources are dedicated to the Board during a renewal year. This cost center has ranged from a low of $46,699.09 during FY 2007-2008 (a nonrenewal year) to a high of $100,796.46 during FY 2008-2009 (a renewal year), but has averaged approximately $68,945.47 during the FY 2006-2007 through FY 2012-2013 time frame.
The third largest cost center for the Board is the legal office which includes personnel related costs for the Board counsel, prosecuting attorneys, regulatory counsel and legal support staff. It also includes direct charges such as expert witness fees and costs associated with legal notices published on behalf of the Board. Legal office costs are also dependent to a large degree on the number of complaints that are filed, investigated and prosecuted. However, it also includes costs associated with the Board's counsel and regulatory counsel, which tend to remain fairly constant. This cost center has ranged from a low of $46,490.75 in FY 2008-2009 to a high of $75,387.38 in FY 2012-2013, with an average cost of $62,350.52 from FY 2006-2007 through FY 2012-2013. These three cost centers make up approximately 70% of the Board's total expenses, with the remaining cost centers (Commissioner's office, revenue office, departmental services, hearing expenses, Professional Compliance Office and Board member expenses) making up the remaining 30%.
In response to IRRC's request for updated financial information as the basis for the fee increase, the Board attached information prepared by the BFO to the Regulatory Analysis Form. This information is available upon request. IRRC asked for information about how the proposed increases correlate with the actual expenditures the Board incurs for each activity for which it is increasing a fee. The Board notes that biennial renewal fees are not related to a specific ''activity,'' but rather support all of the operations of the Board that are not otherwise funded by a specific fee. An application fee is an example of a specific fee that is designed to fund an activity, that is, processing the application. On average, the Board receives less than $50,000 in these targeted application fees each biennial renewal period. Biennial renewal fees produce over 90% of the Board's revenue. The Board's goal is to set the biennial renewal fee at a level that covers the operations of the Board, complies with section 6(a) of the act and is reasonable for the regulated community.
Description of Amendments to the Final-Form Rulemaking
The Board amended the proposed rulemaking to eliminate the increased fee for biennial registration of trading assistants. Therefore, in the final-form rulemaking, the result is that the biennial renewal fees for apprentice auctioneers increase from $100 to $130 and the biennial renewal fees for auctioneers, auction houses and auction companies increase from $200 to $260, as proposed. The biennial registration fee for trading assistants remains at $100.
Fiscal Impact
The increased biennial renewal fees will impact licensees of the Board. There are currently approximately 311 apprentice auctioneers, 157 auction houses, 2,059 auctioneers and 220 auction companies that will be required to pay 30% more to renew their licenses and registrations when they expire in 2017, and thereafter. The Board has concluded that virtually all auction houses and auction companies in this Commonwealth are small businesses. Likewise, auctioneers and apprentice auctioneers either are themselves small businesses or are employed by small businesses. However, whether these businesses will be adversely affected by the increase in the biennial renewal fee depends on whether the employer elects to pay the biennial renewal fees on behalf of its licensed employees. Some companies may do so, others may not. A company could avoid the adverse effect by requiring its employees to pay their own licensure fees. The final-form rulemaking should not have other fiscal impact on the private sector, the general public or political subdivisions of this Commonwealth.
Paperwork Requirements
The final-form rulemaking will require the Board to alter some of its forms to reflect the new fees. However, the final-form rulemaking will not create additional paperwork for the regulated community or for the private sector.
Sunset Date
The act requires the Board to monitor its revenue and costs on a fiscal year and biennial basis. Therefore, a sunset date has not been assigned.
Regulatory Review
Under section 5(a) of the Regulatory Review Act (71 P. S. § 745.5(a)), on February 21, 2013, the Board submitted a copy of the notice of proposed rulemaking, published at 43 Pa.B. 1279, to IRRC and the Chairpersons of the HPLC and the Senate Consumer Protection and Professional Licensure Committee (SCP/PLC) for review and comment.
Under section 5(c) of the Regulatory Review Act, IRRC, the HPLC and the SCP/PLC were provided with copies of the comments received during the public comment period, as well as other documents when requested. In preparing the final-form rulemaking, the Board has considered all comments from IRRC, the HPLC, the SCP/PLC and the public.
On October 17, 2014, the Board delivered final-form rulemaking to the HPLC, the SCP/PLC and IRRC. On November 10, 2014, the Board withdrew the previously-delivered final-form rulemaking and delivered this revised final-form rulemaking to the HPLC, the SCP/PLC and IRRC. The General Assembly adjourned sine die on November 13, 2014, without the HPLC and the SCP/PLC having the full 20-day review period. Following designation of the legislative standing committees and publication in the Pennsylvania Bulletin on March 7, 2015, the Board delivered the revised final-form rulemaking to the HPLC, the SCP/PLC and IRRC on March 13, 2015.
Under section 5.1(j.2) of the Regulatory Review Act (71 P. S. § 745.5a(j.2)), on April 15, 2015, the final-form rulemaking was deemed approved by the HPLC and the SCP/PLC. Under section 5.1(e) of the Regulatory Review Act, IRRC met on April 16, 2015, and approved the final-form rulemaking.
Contact Person
Further information may be obtained by contacting Terrie Kocher, Board Administrator, State Board of Auctioneer Examiners, P. O. Box 2649, Harrisburg, PA 17105-2649, ra-auctioneer@pa.gov.
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 thereunder, 1 Pa. Code §§ 7.1 and 7.2.
(2) A public comment period was provided as required by law and public comments were not received.
(3) The amendments to the final-form rulemaking do not enlarge the purpose of proposed rulemaking published at 43 Pa.B. 1279.
(4) This final-form rulemaking is necessary and appropriate for administering and enforcing the act.
Order
The Board, acting under the authorizing statute, orders that:
(a) The regulations of the Board, 49 Pa. Code Chapter 1, are amended by amending § 1.41 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 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.
SHERMAN E. HOSTETTER, Jr., AU,
Chairperson(Editor's Note: For the text of the order of the Independent Regulatory Review Commission relating to this document, see 45 Pa.B. 2218 (May 2, 2015).)
Fiscal Note: Fiscal Note 16A-649 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 1. STATE BOARD OF AUCTIONEER EXAMINERS
FEES § 1.41. Schedule of fees.
Applicants shall pay the following fees:
Application fee for auctioneer license
$50Biennial renewal fee for auctioneer license
$260Application fee for apprentice auctioneer license
$30Biennial renewal fee for apprentice auctioneer
$130Application fee for auction house and auction
company
$50Biennial renewal fee for auction house and
auction company
$260Special license to conduct auction
$200Application fee to approve course
$45Application fee to change sponsor
$15Application fee to change auction house or
auction company license
$15Nonresident exam eligibility review
$25Certification of scores, permit or registration
$25Verification of license, registration, permit or
approval
$15
[Pa.B. Doc. No. 15-949. Filed for public inspection May 22, 2015, 9:00 a.m.]
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