PROPOSED RULEMAKING
STATE BOARD OF ACCOUNTANCY
[ 49 PA. CODE CH. 11 ]
Biennial Renewal Fees
[39 Pa.B. 2208]
[Saturday, May 2, 2009]The State Board of Accountancy (Board) proposes to amend § 11.4 (relating to fees) to read as set forth in Annex A.
Description of Proposed Rulemaking
Section 11.4 sets forth a schedule of fees charged by the Board. The proposed rulemaking would raise the biennial renewal fee for certified public accountants, public accountants and public accounting firms from $45 to $100 and the biennial renewal fee for continuing education program sponsors from $120 to $150. The proposed rulemaking also would make an editorial change by deleting a now-unnecessary reference to the date that the current biennial renewal fee for program sponsors took effect.
Background and Need for Proposed Rulemaking
Section 6 of the CPA Law (63 P. S. § 9.6) provides that the Board's biennial revenues from fees, fines and civil penalties shall meet or exceed the Board's biennial expenditures. Because fines and civil penalties have historically accounted for a small percentage of the Board's total revenues, the Board must generate most of its revenues from fees.
The Board's principal sources of fee revenues are the fees charged to certified public accountants, public accountants and public accounting firms for biennial renewal of their licenses and to continuing education program sponsors for biennial renewal of their approvals. The Board's biennial renewal fees currently account for approximately 84% of the Board's fee revenues during each biennial renewal period. The biennial renewal fees defray general operating expenses and overhead--primarily in the areas of investigation, prosecution and enforcement--that are not susceptible of being apportioned to individual credential-holders in the regulated community.
The biennial renewal fee for certified public accountants, public accountants and public accounting firms was last raised in June 1990, going from $30 to $45, and currently applies to 23,128 active licensees. The biennial renewal fee for continuing education program sponsors was established in January 2001 and was first assessed on renewing program sponsors for the biennial renewal period that began January 1, 2004. It currently applies to 746 active program sponsors.
According to an analysis prepared by the Department of State's Bureau of Finance and Operations (BFO), the Board's current biennial renewal fee structure is inadequate to meet the Board's revenue needs. Unless the biennial renewal fees are increased, the Board faces large deficits in the coming years, as reflected in the following projections made by the BFO:
Financial
StatusFY07-08 FY08-09 FY09-10 FY10-11 FY11-12 Beginning
Balance:($61,682.47) $312,936.92 ($616,063.08) ($579,063.08) ($1,577,063.08) Revenue: $1,200,000.00 $200,000.00 $1,200,000.00 $200,000.00 $1,200,000.00 Prior Yr.
Returned Funds:$329,014.63 0 0 0 0 Total Revenue: $1,467,331.96 $512,936.92 $583,936.92 ($379,063.08) ($377,063.08) Adjust. For Prior
Year Expenses:$58,395.04 0 0 0 0 Expenses: $1,096,000.00 $1,129,000.00 $1,163,000.00 $1,198,000.00 $1,258,000.00 Remaining
Balance:$312,936.92 ($616,063.08) ($579,063.08) ($1,577,063.08) ($1,635,063.08)
Based on fiscal information provided by the BFO, the Board determined that it would need to increase its biennial renewal fee for certified public accountants, public accountants and public accounting firms by approximately 125% in order to have sufficient biennial revenues to offset its biennial expenditures over the next nine years. Accordingly, the Board has opted to raise the biennial renewal fee from $45 to $100--a 122% increase--effective with the biennial renewal period that begins January 1, 2010. The revenues from the higher biennial renewal fee should defer the need for a further fee increase until the biennial renewal period that begins January 1, 2018.
The Board has also opted for a 25% increase in the $120 biennial renewal fee for continuing education program sponsors, effective with the biennial renewal period that begins January 1, 2010. When establishing program sponsor fees in 2001 as part of a restructuring of its regulatory scheme for approving program sponsors, the Board estimated that there would be approximately 1,150 active Board-approved program sponsors as of the start of the first biennial renewal period on January 1, 2004. (Program sponsors approved by the National Association of State Boards of Accountancy are exempt from the Board's approval requirements.) The Board's estimate proved too optimistic; at present there are 35% fewer active Board-approved program sponsors than originally estimated. The 25% increase in the biennial renewal fee for program sponsors would recapture a portion of the revenues that had been projected when the fee was initially established.
According to the BFO, the higher biennial renewal fees would raise biennial renewal revenues from the current $1,130,280 to $2,424,700. The BFO estimates that these additional biennial revenues would enable the Board to maintain positive biennial revenue balances through the end of FY15-16, when the revenue balance is projected to be $512,936.92.
Fiscal Impact
The proposed rulemaking would generate approximately $1,294,420 in additional biennial renewal revenues, broken down as follows:
Regulated Class Number of Renewing
Credential-
holders
Fee Increase Additional Revenues Certified Public Accountant 21,581 × $55 $1,186,955 Public Accountant 264 × $55 $14,520 Public Accounting Firm 1,283 × $55 $70,565 Continuing Education
Program
Sponsor746 × $30 $22,380 Paperwork Requirements
The proposed rulemaking would require the Board to change its biennial renewal forms to reflect the new fees. The proposed rulemaking would not create additional paperwork for the regulated community.
Effective Date
The proposed rulemaking would become effective upon publication of final-form rulemaking in the Pennsylvania Bulletin. The new biennial renewal fees would apply to those that renew their licenses or approvals for the biennial renewal period that begins January 1, 2010.
Statutory Authority
Section 6 of the CPA Law requires the Board to establish fees by regulation and to ensure that revenues derived from fees, fines and civil penalties are adequate to cover the Board's expenditures over a biennial period.
The Board considers the proposed rulemaking to be both required by law and the least restrictive means of covering the cost of activities that the Board is required to perform.
Regulatory Review
On April 22, 2009, as required under section 5(a) of the Regulatory Review Act (71 P. S. § 745.5(a)), the Board submitted copies of this proposed rulemaking, a Regulatory Analysis Form and Fee Report Form to the Independent Regulatory Review Commission (IRRC) and to the Chairpersons of the Senate Standing Committee on Consumer Protection and Professional Licensure and the House Standing Committee on Professional Licensure. Copies of the Regulatory Analysis Form and Fee Report Form are available to the public upon request.
Under section 5(g) of the Regulatory Review Act (71 P. S. § 745.5(g)), IRRC may convey any comments, recommendations or objections to the proposed rulemaking within 30 days after the close of the public comment period. The comments, recommendations or objections must specify the regulatory review criteria that have not been met. The Regulatory Review Act sets forth detailed procedures that permit the Board, the General Assembly and the Governor to review any comments, recommendations or objections prior to final publication of the rulemaking.
Public Comment
The Board invites interested persons to submit written comments, suggestions or objections regarding the proposed rulemaking to Steven Wennberg, Counsel, State Board of Accountancy, P. O. Box 2649, Harrisburg, PA 17105-2649 within 30 days following publication of this proposed rulemaking in the Pennsylvania Bulletin.
SAMUEL J. STEPHENSON, CPA,
ChairpersonFiscal Note: 16A-5512. No fiscal impact; (8) recommends adoption.
Annex A
TITLE 49. PROFESSIONAL AND VOCATIONAL STANDARDS
PART I. DEPARTMENT OF STATE
Subpart A. PROFESSIONAL AND OCCUPATIONAL AFFAIRS
CHAPTER 11. STATE BOARD OF ACOUNTANCY
GENERAL PROVISIONS § 11.4. Fees.
Following is the schedule of fees charged by the Board:
* * * * * Biennial renewal of license of certified public accountant, public accountant or public accounting
firm............................................[$45] $100* * * * * Biennial renewal of approval of program sponsor [beginning January 1, 2004] .................[$120] $150
[Pa.B. Doc. No. 09-799. Filed for public inspection May 1, 2009, 9:00 a.m.]
No part of the information on this site may be reproduced for profit or sold for profit.This material has been drawn directly from the official Pennsylvania Bulletin full text database. Due to the limitations of HTML or differences in display capabilities of different browsers, this version may differ slightly from the official printed version.
