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PA Bulletin, Doc. No. 05-420



[49 PA. CODE CH. 41]

Biennial Renewal Fee Increase

[35 Pa.B. 1582]

   The State Board of Psychology (Board) proposes to amend § 41.12 (relating to fees) to read as set forth in Annex A. The proposed rulemaking would increase the biennial license renewal fee for psychologists from $120 to $300.

Effective Date

   The proposed amendment will be effective upon final-form publication in the Pennsylvania Bulletin. The new fees will take effect for the biennial period commencing December 1, 2005.

Statutory Authority

   The proposed rulemaking is authorized under section 3.3(a) of the Professional Psychologists Practice Act (act) (63 P. S. §  1203.3(a)). It requires the Board to increase fees by regulation to meet or exceed projected expenditures if the revenues raised by fees, fines and civil penalties are not sufficient to meet Board expenditures.

Background and Need for Proposed Rulemaking

   The Board is required by law to support its operations from the revenue it generates from fees, fines and civil penalties. In accordance with section 3.3(a) of the act, if the revenue raised by fees, fines and civil penalties is not sufficient to meet expenditures over a 2-year period, the Board must increase fees by regulation so that its projected revenues will match or exceed expenditures.

   The Board raises virtually all of its operating revenue (exclusive of application and services fees) through biennial renewal fees. The biennial license renewal fee is the most substantial revenue generating fee of all the fees charged by the Board. The Board's current biennial license renewal fee for psychologists was established by regulation at 20 Pa. B. 2034 (April 14, 1990).

   At its September 21, 2004, Board meeting, the Bureau of Finance and Operations (BFO) presented a summary of the Board's revenue and expenses for Fiscal Years (FY) 2001-2002 and 2003-2004 and projected revenue and expenses for FY 2003-2004 through FY 2010-2011. The summary, presented in table format as follows, demonstrated that the Board must raise fees to meet or exceed projected expenditures to comply with section 3.3(a) of the act. The BFO projected a deficit of $420,554.58 in FY 2004-2005, a deficit of $370,554.58 in FY 2005-2006 and a deficit of $998,554.58 in FY 2006-2007. The BFO recommended that the Board raise fees to meet projected expenditures, in compliance with section 3.3(a) of the act.

2001-2002 beginning balance$281,563.02 
FY 2001-2002 revenue 701,605.69 
Prior year returned funds 15,208.46 
FY 2001-2002 expenses 384,000.00 
Remaining balance 614,377.17 
2002-2003 beginning balance $614,377.17 
FY 2002-2003 revenue 40,496.72 
Prior year returned funds 0.00 
FY 2002-2003 expenses 418,000.00 
Remaining balance 236,873.89 
2003-2004 beginning balance $236,873.89 
FY 2003-2004 projected revenue 716,282.39 
FY 2003-2004 projected expenses 544,000.00 
Remaining balance 409,156.28 
2004-2005 beginning balance $409,156.28 
FY 2004-2005 projected revenue 42,000.00 
Adjusted for prior year expenses 240,710.86 
FY 2004-2005 projected expenses 631,000.00 
Remaining balance ($420,554.58)
2005-2006 beginning balance ($420,554.58)
FY 2005-2006 projected revenue 700,000.00 
FY 2005-2006 projected expenses 650,000.00 
Remaining balance (370,554.58) 
2006-2007 beginning balance ($370,554.58)
FY 2006-2007 projected revenue 42,000.00 
FY 2006-2007 projected expenses 670,000.00 
Remaining balance (998,554.58)
2007-2008 beginning balance ($998,554.58)
FY 2007-2008 projected revenue 700,000.00 
FY 2007-2008 projected expenses 690,000.00 
Remaining balance (998.554.58)
2008-2009 beginning balance ($998,554.58)
FY 2008-2009 projected revenue 42,000.00 
FY 2008-2009 projected expenses 711,000.00 
Remaining balance (1,657,554.58)
2009-2010 beginning balance ($1,657,554.58)
FY 2009-2010 projected revenue 740,000.00 
FY 2009-2010 projected expenses 732,000.00 
Remaining balance (1,649,554.58)
2010-2011 beginning balance ($1,649,554.58)
FY 2010-1011 projected revenue 42,000.00 
FY 2010-1011 projected expenses 754,000.00 
Remaining balance ($2,361.554.58)

   The BFO estimates that at the close of FY 2004-2005, the Board's expenses will exceed its revenues by $420,554.58. The BFO anticipates that the deficit will increase proportionally, except for FY 2005-2006, in each succeeding fiscal year. Without an increase, the projected deficit in FY 2010-2011 would be$2,361.554.58.

   The increases in the Board's biennial expenses occurred primarily in hearing examiner and legal office costs. Hearing examiner expenditures increased from approximately $10,914.55 in FY FY 2002-2003 to approximately $28,472.31 in FY 2003-2004. The BFO estimates that this expenditure will increase to $32,000.00 in FY 2004-2005. The legal office expenditures increased from approximately $208,344.29 in FY 2002-2003 to approximately $228,056.31 in FY 2003-2004. BFO anticipates that this expenditure will increase to $240,000.00 in FY 2004-2005.

   Hearing examiner costs almost tripled in 2003-2004 as a result of the increasing number of cases delegated to the hearing examiners in 2002-2003. During 2002-2003, the Board delegated 20 cases to hearing examiners. In 2003-2004, the Board delegated 10 cases to hearing examiners. Many of the cases delegated in 2002-2003 were actually heard in 2003-2004. In addition to continuing education cases which were delegated in 2002-2003, in 2003-2004, the Board also began delegating criminal conviction and reciprocal discipline cases to hearing examiners.

   In 2003, the Board imposed significantly more disciplinary sanctions than in any prior year. In 2003, the Board imposed 32 total sanctions, as opposed to 17 in 2002, 10 in 2001, 16 in 2000 and 20 in each 1998 and 1999. Additionally, the Board imposed more serious sanctions than in any prior year, imposing 12 serious sanctions in 2003, 7 in 2002, 5 in 2001, 8 in 2000 and 3 each in 1998 and 1999. Finally, the Board closed more cases in 2003 than in any prior year, closing 133 cases as compared with 87 cases in 2002, 62 in 2001, 88 in 2000, 86 in 1999 and 114 in 1998. As of September 20, 2004, there were 104 cases currently opened as opposed to 131 cases open as of September 20, 2003.

   At the same time, the Board's licensee population has declined by about 400 licensees over the past 5 years. The net effect was that while the Board's costs of enforcement activities were increasing, the Board experienced a decrease in its largest revenue-generating source. Moreover, as a result of a small licensee population, the Board is unable to take advantage of the economies of scale available to licensees of Boards with larger populations.

   The Board carefully reviewed several options in fee increases to ensure the lowest fee increase possible while keeping the Board out of a long run deficit. In addition to increasing fees the Board is looking at ways to streamline procedures to cut costs, but the fee increases are still necessary to maintain a positive balance in the Board account in the long run. Finally, in developing the proposal, the Board reviewed fees of other states. It found that the proposed fees are comparable to the renewal fees charged in surrounding states and should cause no competitive disadvantage to the Commonwealth.

Description of Proposed Rulemaking

   Based upon the expense and revenue estimates provided to the Board, the Board proposes to amend its fee schedule in § 41.12 (relating to fees) to increase the fee for biennial renewal of licenses for psychologists from $120 to $300.

Fiscal Impact

   The proposed rulemaking will increase the biennial renewal fee for psychologists. The proposed rulemaking should have no other fiscal impact on the private sector, the general public or political subdivisions.

Paperwork Requirements

   The proposed rulemaking will require the Board to alter some of its forms to reflect the new biennial renewal fees; however, the proposed regulations should not create additional paperwork for the private sector.

Sunset Date

   The act requires that the Board monitor its revenue and expenses on a fiscal year and biennial basis. 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 February 23, 2005, the Board 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 Senate Consumer Protection and Professional Licensure Committee and the House Professional Licensure Committee. 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 shall specify the regulatory review criteria which have not been met. The Regulatory Review Act specifies detailed procedures for review, prior to final publication of the rulemaking, by the Board, the General Assembly and the Governor of comments, recommendations or objections raised.

Public Comment

   Interested persons are invited to submit written comments, suggestions or objections regarding this proposed rulemaking to Christina Stuckey, Administrator, State Board of Psychology, P. O. Box 2649, Harrisburg, PA 17105-2649, within 30 days following publication of this proposed rulemaking in the Pennsylvania Bulletin.

ALEX M. SIEGEL, J.D., Ph.D.,   

   Fiscal Note: 16A-6316. No fiscal impact; (8) recommends adoption.

Annex A






§ 41.12. Fees.

   The schedule of fees charged by the Board is as follows:

*      *      *      *      *

   Biennial renewal fee            $[120] 300
[Pa.B. Doc. No. 05-420. Filed for public inspection March 4, 2005, 9:00 a.m.]

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