PROPOSED RULEMAKING
STATE BOARD OF PRIVATE LICENSED SCHOOLS
[ 22 PA. CODE CH. 73 ]
Fees
[46 Pa.B. 1555]
[Saturday, March 26, 2016]The State Board of Private Licensed Schools (Board), under the authority in the Private Licensed Schools Act (act) (24 P.S. §§ 6501—6518), proposes to amend § 73.151 (relating to fees) to read as set forth in Annex A.
Description of Proposed Amendments
The proposed amendments to § 73.151(a) prescribe revised fees for biennial licensure or registration of all schools, and licensure of admissions representatives.
The proposed amendments to § 73.151(b) increase the user fees for other services provided by the Board, which services are in addition to the processing and issuance of original or renewal school licenses, registration and admissions representative licenses.
Reason for Proposed Amendments
The Board's current fees are fixed by § 73.151. Section 10 of the act (24 P.S. § 6510) authorizes the Board to increase its fees by regulation if the Board's revenues from fees, fines and civil penalties are not sufficient to meet Board expenditures over a 2-year period.
The Board recently reviewed its fees and determined that current fees are inadequate to meet revenue needs. The Board estimates that its expenditures for the biennial period covering Fiscal Years 2014-2015 and 2015-2016 will be $1,955,300. In contrast, the estimated revenues under the existing fee structure are anticipated to be $1,066,708. The projected shortfall of $888,592 will be covered by the surplus in the Board's revolving account, which is currently $1,246,770, leaving a very minimal surplus to cover operating costs after July 1, 2016.
The proposed fees in § 73.151 should raise sufficient revenue to offset the Board's projected expenditures for approximately 5 years.
The Board last increased its fees at 32 Pa.B. 1844 (April 13, 2002). At that time, the Board projected that the fees would cover 10 years of operating expenses. The 2002 fee structure sustained the Board's operation longer than anticipated.
The current staffing level will need to be maintained for the foreseeable future. While there has been no change to the actual number of staff supporting the work of the Board since 2002, one position dedicated to specialized associate degrees was covered by general funds until 2010 because the work is governed by regulations promulgated by the State Board of Education. That position was transferred to the Board account in 2010 because the work services the private licensed school community. This change adds a financial burden on the Board's funds.
Revenue has been reduced in recent years as changes in Federal regulations and economic conditions have resulted in a significant reduction in the number of licensed schools from 325 in 2002 to 270 today. While revenue is reduced in accordance with the number of schools renewing licenses, staffing needs are not directly tied to the number of schools because most services need to be provided regardless of the number of licensed schools.
Most of the Board's revenue is generated by renewal fees. After 1 year of operation, biennial renewal fees are on an assessed graduated scale based upon gross tuition revenue. Additional revenue is generated by other service fees.
The following calculations include a cap of $35,000 that was accepted by the Board in May 2015 and used in these calculations. The original material did not clarify that this cap was in place. The largest schools are currently capped at $4,400 and this proposed increase in the cap to $35,000 will ensure that the largest schools carry more of the burden of funding the Board's operation.
To accommodate the need for additional revenue, the Board is proposing to raise its current fees. The following table shows current fees and the fees proposed by this proposed rulemaking.
Board Activity Current Fee Proposed Fee 1. Initial school license $1,500 $7,500 2. Initial school license for schools presenting only seminars $750 $2,000 3. Biennial school licensure or registration (as shown in Annex A) $500—$4,400 $1,000—$6,500 plus $500 for each additional $500,000 revenue over $1,000,000 with a cap of $35,000 4. Admission representatives license $300 $600 5. New program application $700 $1,400 6. Change of ownership $1,200 $5,000 7. New school orientation $200 $300 8. New director seminar None $200 9. School site inspection $500 $750 10. Board-directed site visit $500 $750 11. Board-directed team visit $800 $1,000 Fiscal Impact
There is no fiscal impact on the General Fund from the proposed fees. If the existing fee structure is not revised, the Board's revolving operating fund will be depleted by fall 2016. The proposed increased fees are expected to generate average revenue of $1,008,400 per year for the next 5 years. Expenses for the same time period are projected to average $1,009,229.
Activity Estimated Revenue Biennial Renewal of School License or Registration
Tuition Revenue Renewal Fee Number of Schools Estimated Revenue $0—4,999 $1,000 33 $33,000 $5,000—9,999 $2,000 6 $12,000 $10,000—49,999 $2,500 28 $70,000 $50,000—99,999 $2,700 15 $40,500 $100,000—149,000 $2,800 14 $39,200 $150,000—199,999 $3,000 14 $42,000 $200,000—249,999 $3,500 11 $38,500 $250,000—299,999 $4,000 11 $44,000 $300,000—399,999 $4,500 16 $72,000 $400,000—499,999 $5,000 11 $55,000 $500,000—749,999 $5,500 12 $66,000 $750,000—999,999 $6,000 2 $12,000 $1,000,000 and over $6,500 4 × $6,500 $26,000 plus $500 12 × $7,000 $84,000 for each 2 × $7,500 $15,000 additional 1 × $8,000 $8,000 $500,000 1 × $9,000 $9,000 in revenue 13 × $10,000 $130,000 7 × $10,500 $73,500 4 × $11,000 $44,000 3 × $11,500 $34,500 1 × $12,000 $12,000 2 × $12,500 $25,000 4 × $13,000 $52,000 2 × $13,500 $27,000 2 × $14,000 $28,000 2 × $15,000 $30,000 1 × $15,500 $15,500 2 × $16,500 $33,000 2 × $17,000 $34,000 1 × $19,000 $19,000 1 × $23,000 $23,000 2 × $24,000 $48,000 1 × $25,000 $25,000 1 × $28,000 $28,000 3 × $35,000 $105,000 Total anticipated revenue from renewals every 2 years $1,452,700 Total anticipated annual renewal revenue $726,350 Original school license or registration 7 × $7,500 $52,500 Seminar provider 0 × $2,000 $0 Admission representative license 120 × $600 $72,000 New program application 68 × $1,400 $95,200 Change of ownership 5 × $5,000 $25,000 New school orientation seminar 47 × $300 $14,100 New director seminar 60 × $200 $12,000 School site inspection 15 × $750 $11,250 Board-directed site visit 0 × $750 $0 Board-directed team visit 0 × $1,000 $0 Total estimated annual revenue
$1,008,400 Total estimate annual expenditure
$1,009,229 Paperwork Requirements
The proposed rulemaking will require the Board to alter some of its forms to reflect the new fees. The proposed rulemaking would not create additional paperwork for the private sector.
Effective Date
This proposed rulemaking will become effective upon final-form publication in the Pennsylvania Bulletin.
Sunset Date
The act requires that the Board monitor its revenue and cost on a 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 March 14, 2016, the Department of Education (Department) submitted a copy of this proposed rulemaking and a copy of a Regulatory Analysis Form to the Independent Regulatory Review Commission (IRRC) and to the Chairpersons of the House and Senate Committees on Education. A copy of this material is available to the public upon request.
Under section 5(g) of the Regulatory Review Act, IRRC may convey any comments, recommendations or objections to the proposed rulemaking within 30 days of the close of the public comment period. The comments, recommendations or objections must specify the regulatory review criteria in section 5.2 of the Regulatory Review Act (71 P.S. § 745.5b) which have not been met. The Regulatory Review Act specifies detailed procedures for review, prior to final publication of the rulemaking, by the Department, the General Assembly and the Governor of comments, recommendations or objections raised.
Public Comments and Contact Person
Interested persons are invited to submit to the Board written comments, suggestions or objections regarding this proposed rulemaking within 30 days following its publication in the Pennsylvania Bulletin. Written comments, suggestions or objections for Board consideration should be sent to Patricia Landis, Coordinating Secretary, State Board of Private Licensed Schools, 333 Market Street, Harrisburg, PA 17126-0333, (717) 783-8228.
PATRICIA LANDIS,
Coordinating SecretaryFiscal Note: 6-334. No fiscal impact. The fee increases are necessary to cover the Board's associated costs. Recommends adoption.
Annex A
TITLE 22. EDUCATION
PART III. STATE BOARD OF PRIVATE LICENSED SCHOOLS
CHAPTER 73. GENERAL PROVISIONS
FEES § 73.151. Fees.
(a) License fees. The fees for school and admissions representative licenses shall accompany both original and renewal license and registration applications. The fee schedule is:
(1) For an original school license or registration—[$1,500] $7,500. The fee for an original school license or registration includes the user fee for the application for approval of one new program. Each additional new program application submitted with a new license application shall be accompanied by an additional new program approval fee as set forth in subsection (b)(1).
(2) For an original school license or registration of a school that only presents seminars—[$750] $2,000.
(3) For a renewal school license or registration—biennial fee based on gross tuition revenue:
Gross Tuition Revenue Fee [$0—2,499 $500 $2,500—4,999 $1,000 $5,000—9,999 $2,000 $10,000—49,999 $2,200 $50,000—99,999 $2,300 $100,000—199,999 $2,600 $200,000—499,999 $3,000 $500,000—999,999 $3,500 $1,000,000—1,999,999 $4,100 $2,000,000 and over $4,400] $0—4,999 $1,000 $5,000—9,999 $2,000 $10,000—49,999 $2,500 $50,000—99,999 $2,700 $100,000—149,000 $2,800 $150,000—199,999 $3,000 $200,000—249,999 $3,500 $250,000—299,999 $4,000 $300,000—399,999 $4,500 $400,000—499,999 $5,000 $500,000—749,999 $5,500 $750,000—999,999 $6,000 $1,000,000 and over $6,500 plus $500 for each additional $500,000 in revenue with $35,000 cap (4) For an admission representative license—[$300] $600 annually.
(b) User fees. Fees will also be assessed for other services provided by the Board, which services are in addition to the processing and issuance of original or renewal school licenses or registration and admissions representative licenses. These user fees are as follows:
(1) A [$700] $1,400 fee shall accompany each application for approval of a new program.
(2) A [$1,200] $5,000 fee shall accompany notification to the Board of a change in ownership of the school.
(3) A [$200] $300 fee per participant will be charged for participation in new school orientation seminars.
(4) A [$500] $750 fee will be charged for each site inspection of the following types: new school, change in location, expansion of instructional space, temporary relocation, branch facility and remote training facility. This fee shall be paid before commencement of the visit.
(5) The fee for a Board-directed visit is [$500] $750 per day if the visit is conducted by staff; [$800] $1,000 per day plus team member expenses for a visit conducted by a team with nonstaff members. The fee for a Board-directed visit shall be paid before commencement of the visit.
(6) A $200 fee per school will be charged for participation in a new director seminar.
[Pa.B. Doc. No. 16-516. Filed for public inspection March 25, 2016, 9:00 a.m.]
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