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PA Bulletin, Doc. No. 01-1769




[49 PA. CODE CH. 7]

Application Fees

[31 Pa.B. 5447]

   The State Board of Cosmetology (Board) adopts amendments to § 7.2 (relating to fees), to read as set forth in Annex A.

   Notice of proposed rulemaking was published at 30 Pa.B. 3266 (July 1, 2000). Publication was followed by a 30-day public comment period. The Board received no comments from the public, the House Professional Licensure Committee, the Senate Consumer Protection and Professional Licensure Committee or the Independent Regulatory Review Commission (IRRC).

Effective Date

   The amendment will be effective upon final-form publication in the Pennsylvania Bulletin.

Statutory Authority

   The final-form amendment is authorized under section 16 of the Beauty Culture Law (63 P. S. § 522).

Calculation of Administrative Overhead

1.  Use of Constant Overhead Cost Allocation and ''Rounding Up''

   In computing overhead charges, the boards and the Bureau of Professional and Occupational Affairs (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 board. Once the Bureau's expenses are determined, the Bureau's expenses are apportioned to each board based upon that board's share of the total active licensee population. The board's share of the expenses is divided by the number of active licensees under that board to calculate a ''per application'' charge which is added to the direct personnel cost to establish the cost of processing (the administrative overhead charge). 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 Act (71 P. S. §§ 745.1--745.15), the method was approved by the Senate and House Standing Committees and IRRC as reasonable and consistent with the legislative intent of statutory provisions which require the board to establish fees which meet or exceed expenses.

   IRRC suggested, in response to regulations promulgated by other boards, that within each 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 1/2 as much overhead charge as an application requiring 1 hour of processing time. The Bureau concurs with IRRC that by adopting this method-ology the Bureau and the 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 previous suggestions, the Bureau conducted a test to compare the resulting overhead charges obtained by applying IRRC suggested time factor versus the current method.

   This review of the 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 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 earlier suggestions concerning projected versus actual expenses, the 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 boards and the Bureau has established that verifiable data 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 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.

2.  Variation in Administration Charge of Verification/Certification Versus Administrative Charge for Other Services

   In response to previous regulations from the Bureau, IRRC questioned why the administrative charge included for other services was different. The administrative charge of $9.76 represents the cost of processing a verification or certification application for any licensee in the Bureau irrespective of what Board issues the license. The administrative charge of $11.38 represents the cost of processing other types of licensure applications for only licensees under the Board. In other words, whereas the administrative charge for verification or certification of licensure is constant across all licensees under the Bureau, the license services performed that are specific to the type of license held are calculated based only on the number of licensees served by the board. Thus, each board has two administrative charges applied to the provision of licensure services: $9.76 is applied to all boards for verification or certification services and an individual fee ($1.62) is applied on a per board basis.

Fees for Business Changes

   Previously, IRRC requested a more detailed explanation of the fee increases for change of business name or post office and change in business physical location.

   When a business requests a name or address change, the Board staff reviews the application for completeness and contacts the applicant for any missing information. The staff verifies that the name of the dealership has not changed as a result of an ownership change and determines whether the address change is due to an actual physical location change or to a postal address reassignment. The staff then processes the new information through the computer and issues an updated license.

   If there has been a physical location change, in addition to the previous procedures, the Board staff prepares an inspection report form and forwards the form to the Bureau of Enforcement and Investigation (BEI). BEI conducts an onsite inspection, determines whether statutory and regulatory standards for the facility are met and sends the inspection results to the Board. Board staff then updates the computer information and issues a license with the new address or, if BEI has found that the new location does not comply with applicable facility standards, issues a discrepancy notice. Inspection by BEI represents a change from the former procedure, when inspections were performed by the State Police at no charge to the Board. The State Police no longer perform this service.

Reinspection After Failure

   When applicable facility standards are not met at initial inspection for new or relocated businesses, BEI advises Board staff of the reasons for failure at the onsite inspection. The Board staff sends a discrepancy letter to the applicant informing the applicant of the deficiencies. The applicant notifies the Board office when the deficiencies have been corrected. The Board office then prepares a reinspection report form and forwards the form to BEI for follow-up inspection. After the follow-up inspection is completed, the results are sent to the Board staff. The Board staff then either sends another discrepancy letter or issues the license.

   Although the existing application fees capture the cost of the initial inspection by BEI prior to issuance of a license, the fees do not cover the cost of reinspection by BEI when the applicable facility standards were not met at the initial inspection. This new fee will cover the additional cost of reinspection and require that only those using the service must pay for the service.

Compliance with Executive Order 1996-1

   The Board reviewed this final-form amendment and considered its purpose and likely impact upon the public and the regulated population under the directives of Executive Order 1996-l. The final-form regulation addresses a compelling public interest as described in this preamble and otherwise complies with Executive Order 1996-l.

Fiscal Impact and Paperwork Requirements

   The final-form 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 Board. The final-form amendment will impose no additional paperwork requirements upon the Commonwealth, political subdivisions or the private sector.

Sunset Date

   The Board continuously monitors the cost effectiveness of its regulations. Therefore, no sunset date has been assigned.

Regulatory Review

   Under section 5(a) of the Regulatory Review Act (71 P. S. § 745.5(a)), on June 2, 2000, the Board submitted a copy of the notice of proposed rulemaking, published at 30 Pa.B. 3266, to IRRC and the Chairpersons of the House Professional Licensure Committee and the Senate Consumer Protection and Professional Licensure Committee 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 the final-form amendment, the Board has considered the comments from IRRC and the Committees.

   Under section 5.1(d) of the Regulatory Review Act (71 P. S. § 745.5a(d)), on May 16, 2001, this final-form amendment was deemed approved by the House and Senate Committees. The final-form amendment was deemed approved under section 5(g) of the Regulatory Review Act, effective on May 17, 2001.

Further Information

   Individuals who need information about the final-form amendment may contact the Board Administrator, State Board of Cosmetology, P. O. Box 2649, Harrisburg, PA 17105-2649, (717) 783-7130.


   The Board finds that:

   (1)  Public notice of proposed rulemaking was given under sections 201 and 202 of the Commonwealth Documents Law (45 P. S. §§ 1201 and 1202) and the regulations thereunder, 1 Pa. Code §§ 7.1 and 7.2.

   (2)  A public comment period was provided as required by law and all comments were considered.

   (3)  The amendment does not enlarge the purpose of proposed rulemaking published at 30 Pa.B. 3266.

   (4)  The amendment is necessary and appropriate for administration and enforcement of the Board's authorizing statute.


   The Board therefore orders that:

   (a)  The regulations of the Board, 49 Pa. Code Chapter 7, are amended by amending § 7.2 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 for approval as required by law.

   (c)  The Board shall certify this order and Annex A and shall deposit them with the Legislative Reference Bureau as required by law.

   (d)  The amendment shall take effect immediately upon publication in the Pennsylvania Bulletin.


   Fiscal Note: Fiscal Note 16A-458 remains valid for the final adoption of the subject regulation.

   (Editor's Note: For the text of the order of the Independent Regulatory Review Commission, relating to this document, see 31 Pa.B. 2855 (June 2, 2001).)

Annex A






§ 7.2.  Fees.

   (a)  The fee for the cosmetologist, cosmetician, manicurist or teacher examination is $59. The fee for the manager theory examination is $31. The fee for each portion of an examination is:

   Theory examination$31
   Performance examination (not applicable to managers)$28

   (b)  Effective September 1, 1999, the fee for the complete cosmetologist, cosmetician, manicurist or teacher examination is $71. The fee for the manager theory examination is $31. The fee for each portion of an examination is:

   Theory examination$41
   Performance examination (not applicable to managers)$30
   (c)  Other fees charged by the Board:
   Licensure of cosmetologist, manicurist or cosmetician$10
   Licensure of cosmetology shop manager or cosmetology teacher$10
   Licensure of cosmetology shop, manicurist shop or cosmetician shop$55
   Licensure of cosmetology school$160
   Licensure by reciprocity$20
   Registration of cosmetology apprentice$70
   Biennial renewal of manicurist's license$21
   Biennial renewal of cosmetician's license$21
   Biennial renewal of cosmetologist's license$23
   Biennial renewal of cosmetology shop manager's or cosmetology teacher's license$36
   Biennial renewal of cosmetology shop's license$41
   Biennial renewal of cosmetician or manicurist shop's license$25
   Biennial renewal of cosmetology school's license$66
   Approval of cosmetology school supervisor$20
   Change in cosmetology, cosmetician or manicurist shop (inspection required)$55
   Change in cosmetology, cosmetician or manicurist shop (no inspection required)$15
   Reinspection of cosmetology, cosmetician or manicurist shop or cosmetology school$40
   Certification of student or apprentice training hours$30
   Verification of license, registration, permit or approval$15
[Pa.B. Doc. No. 01-1769. Filed for public inspection September 28, 2001, 9:00 a.m.]

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