RULES AND REGULATIONS
Title 49—PROFESSIONAL AND VOCATIONAL STANDARDS
STATE BOARD OF CERTIFIED REAL ESTATE APPRAISERS
[ 49 PA. CODE CH. 36 ]
Biennial License Fee for Licensed Appraiser Trainees
[46 Pa.B. 447]
[Saturday, January 23, 2016]The State Board of Certified Real Estate Appraisers (Board) amends § 36.6 (relating to 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 biennial renewal fees for licensed appraiser trainees will be implemented with the June 30, 2017, biennial renewal.
Statutory Authority
Section 5(6) of the Real Estate Appraisers Certification Act (act) (63 P. S. § 457.5(6)) authorizes the Board to establish fees for the operation of the Board, including fees for the issuance and renewal of certificates and licenses. Section 9 of the act (63 P. S. § 457.9) provides that fees established under the act shall be fixed by the Board by regulation.
Background and Need for Amendment
The Board published a final-form rulemaking at 40 Pa.B. 3956 (July 17, 2010) establishing a regulatory scheme for the appraiser trainee license, which was added to the act by the act of July 8, 2008 (P. L. 833, No. 59) and the act of October 9, 2008 (P. L. 1380, No. 103). At that time, the Board established an initial application fee of $75 for the appraiser trainee license. However, although an appraiser trainee license may be renewed biennially up to four times, the Board did not establish a biennial renewal fee for this class of license at that time. With this final-form rulemaking, the Board corrects that oversight by amending § 36.6 to establish a biennial renewal fee for licensed appraiser trainees at $150.
Summary of Comments and the Board's Response
Notice of proposed rulemaking was published at 43 Pa.B. 5827 (October 5, 2013) with a 30-day public comment. On November 1, 2013, the Pennsylvania Association of Realtors (PAR) submitted a letter indicating their support of the fee of $150 for appraiser trainees stating ''[w]e believe that the fee is within reason and therefore have no concerns regarding the proposal.'' No other public comments were received.
On December 4, 2013, the Independent Regulatory Review Commission (IRRC) submitted comments to the Board.
IRRC noted that the Governor's Executive Order 1996-1 requires that ''regulations shall be drafted and promulgated with early and meaningful input from the regulated community.'' IRRC asked the Board to explain how the process it used to develop the proposed rulemaking complies with Executive Order 1996-1. The Board discussed the proposed rulemaking during public meetings on December 13, 2012, and January 10, 2013, which are routinely attended by representatives of the regulated community and their professional associations. In advance of each Board meeting, the Board releases the agenda to individuals and entities who have indicated an interest in the Board's regulatory activities, including the professional associations that represent the regulated community. In addition, the Board posts the agenda on its web site. In this way, if a stakeholder or interested party wishes to be heard on a particular topic, that party can plan to attend the meeting. On both of these dates when the proposed rulemaking was discussed, a representative of the PAR attended the public Board meetings. On November 1, 2013, the PAR submitted a letter indicating their concurrence with the fee of $150 for appraiser trainees, stating ''[w]e believe that the fee is within reason and therefore have no concerns regarding the proposal.'' Likewise, on January 10, 2013, a representative of the Coalition of Pennsylvania Real Estate Appraisers (Coalition) attended the Board meeting, at which time the Board voted to promulgate the proposed rulemaking. Representatives of the Coalition have informally expressed verbal support of the fee. Thus, the members of the regulated community and their professional associations have had the opportunity to provide ''early and meaningful input'' on this final-form rulemaking.
IRRC asked generally how the addition of this fee relates to the overall revenues and expenditures of the Board. Specifically, IRRC asked the Board to establish that the revenues raised by fees, fines and civil penalties currently are not sufficient to meet expenditures over a 2-year period. The $150 fee for trainees is new, as there was not a biennial renewal fee for trainees. This fee for biennial renewal for licensed appraiser trainees is not meant to cover the cost or balance the budget of the Board, but to have trainees participate in paying for some of the expenses of the Board. This final-form rulemaking is not to address a shortfall in revenue. However, prior to the implementation of the licensure of appraisal management companies, the Board was heading toward a general fee increase. At that time, during the biennial period of 2011-2013, the Board's fees generated revenue of $1,056,115.98, while expenditures for the same period were $1,174,532.83, a biennial deficit of $118,416.85. At the conclusion of Fiscal Year (FY) 2012-2013, a renewal year when the Board receives the bulk of its biennial revenue, the Board's remaining balance in the Professional Licensure Augmentation Account was $505,611.40. Had it not been for the issuance of initial appraisal management company licenses in FY 2013-2014, the Board would have needed to increase fees across all licensure categories.
There are currently 316 licensed appraiser trainees. If approximately 316 trainees renew their licenses on June 30, 2017, by paying a biennial renewal fee of $150, then the total revenue generated by the fee would be $47,400, which is approximately 3.6% of the Board's expected budgetary expenditures of $1.315 million for combined FY 2016-2017 ($648,000 projected) and FY 2017-2018 ($667,000 projected). Thus, the portion of the Board's total budgetary expenditures that will be paid by appraiser trainees over the next 2 fiscal years is only a little more than 3.6%, which is very small, and by itself would not have covered the prior shortfall in revenues. However, the Board believes that all licensees, including trainees, should be required to support the operations of the Board through biennial renewal fees, rather than having all of the costs fall on certified appraisers, certified Pennsylvania evaluators and appraisal management companies.
IRRC made a comment regarding the appraisal management company fees. Under § 36.306 (relating to fees), the initial application fee for appraisal management companies is $2,000. IRRC asked whether this fee subsidizes the Board's other licensure classifications. The Board intends to address the application fee and a renewal fee for appraisal management companies more fully in a separate proposed rulemaking. Therefore, consideration of those fees and their effect on balancing the Board's budget is better set forth in the appraisal management company general rulemakings. As previously stated, this final-form rulemaking for the biennial renewal fee for appraiser trainees is not intended to cover the overall costs for the Board or balance the Board's budget.
IRRC's comments also dealt with the licensed appraiser trainee fee in relation to other renewal fees. IRRC asked the Board why it set the biennial renewal fee at $150 when all other biennial renewal fees in § 36.6 are $225. The Board's reasoning in charging trainees less than other licensees is that trainees are at the beginning of their professional careers, and trainees are not authorized to practice independently. For that reason, trainees cannot earn as much as appraisers and assessors. According to the Department of Labor and Industry, the 2013 average annual wage for appraisers and assessors was $52,420, although salaries vary based on geographic region. This compares to the average salary for real estate appraiser trainees of $31,328 according to the United States Bureau of Labor Statistics. The Board was taking into consideration the relative earning potential of a trainee when determining that a biennial renewal fee of $150 was reasonable.
IRRC asked whether the fees it charges to the regulated community accurately reflect the current costs the Board incurs to perform the tasks associated with the fee. For purposes of this final-form rulemaking, the Board has not evaluated application fees for which the fee should cover the cost of providing the service. Instead, because this final-form rulemaking only concerns a renewal fee, the Board looks at only aggregate revenue and expenses. The Board uses the current budget and actual fees for prior years to determine its budget for the current fiscal year. In preparing its budget, the Board compares the Board's past and projected revenue with its past and projected costs. These figures become the basis for the Board's determination of the fees to charge its regulated community. It is significant that both of the associations representing the Board's regulated community, the PAR and the Coalition, have agreed that the biennial renewal fee of $150 for appraiser trainees is reasonable, and neither organization has expressed opposition regarding this biennial renewal fee.
Fiscal Impact
This final-form rulemaking will impact licensed appraiser trainees who elect to renew their licenses. There are currently 316 actively licensed appraiser trainees. Small businesses will be impacted to the extent that they elect to pay the fees on behalf of their licensed employees. 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
This final-form rulemaking requires 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 because appraiser trainees are already required to file biennial renewal applications. The final-form rulemaking will not create additional paperwork 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 September 20, 2013, the Board submitted a copy of the notice of proposed rulemaking, published at 43 Pa.B. 5827, to IRRC and the Chairpersons of the House Professional Licensure Committee (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, the Board shall submit to IRRC, the HPLC and the SCP/PLC copies of 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.
Under section 5.1(j.2) of the Regulatory Review Act (71 P. S. § 745.5a(j.2)), on December 9, 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 December 10, 2015, and approved the final-form rulemaking.
Contact Person
Further information may be obtained by contacting Heidi Weirich, Board Administrator, State Board of Certified Real Estate Appraisers, P. O. Box 2649, Harrisburg, PA 17110-2649, st-appraise@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 one written public comment was received.
(3) This final-form rulemaking is necessary and appropriate for administering and enforcing the authorizing act identified this preamble.
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, with ellipses referring to the existing text of the regulation.
(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 on publication in the Pennsylvania Bulletin.
D. THOMAS SMITH,
Chairperson(Editor's Note: See 45 Pa.B. 7350 (December 26, 2015) for IRRC's approval order.)
Fiscal Note: Fiscal Note 16A-7020 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 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:
* * * * * Licensed Appraiser Trainee
Application
$75Biennial renewal
$150
[Pa.B. Doc. No. 16-109. Filed for public inspection January 22, 2016, 9:00 a.m.]
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