Title of Regulation: 18VAC15-30. Virginia Lead-Based Paint Activities Regulations (amending 18VAC15-30-161).

Statutory Authority: §§ 54.1-201 and 54.1-501 of the Code of Virginia.

Public Hearing Information:

February 26, 2015 - 10 a.m. - Department of Professional and Occupational Regulation, 9960 Mayland Drive, Suite 200, Richmond, Virginia 23233

Public Comment Deadline: April 10, 2015.

Agency Contact: Trisha Henshaw, Executive Director, Virginia Board for Asbestos, Lead, and Home Inspectors, 9960 Mayland Drive, Suite 400, Richmond, VA 23233, telephone (804) 367-8595, FAX (866) 350-5354, or email alhi@dpor.virginia.gov.

Basis: Section 54.1-201 of the Code of Virginia authorizes the Virginia Board for Asbestos, Lead, and Home Inspectors to promulgate regulations in accordance with the Administrative Process Act (§ 2.2-4000 et seq. of the Code of Virginia) necessary to assure continued competency, prevent deceptive or misleading practices by practitioners, and effectively administer the regulatory system administered by the regulatory board.

Section 54.1-501 of the Code of Virginia authorizes the board to promulgate regulations for the licensure of lead professionals and firms, approval of accredited lead training programs, and approval of criteria for accredited lead training programs.

Purpose: The ability to competitively negotiate and procure contracts for the examination administration of the lead program is a critical component of the application process. The current examination cap of $75 has been in place since October 1, 1995, the original effective date of the regulations. Due in part to the small number of candidates for lead examinations (approximately 80 per year), the increased security requirements necessary to ensure examination content is not compromised, the ability to procure services that allow maximum offerings (geographic and multi-day availability), and overall changes in the economy, the costs associated with administering examinations have increased. The current examination cap inhibits the board's ability to competitively negotiate examination services because some vendors will not submit proposals due to the extensive limitation of the examination cap and recent proposal submittals indicate the current examination cap is unrealistic. Third-party vendors who develop and administer examinations cannot provide an effective, secure examination for $75. The Department of Professional and Occupational Regulation strictly adheres to the competitive negotiation process in the Virginia Public Procurement Act (§ 2.2-4300 et seq. of the Code of Virginia), and the department negotiates to ensure fees remain reasonable for candidates while ensuring all examination administration needs are met. Increasing the examination cap is essential to cover the current cost of the examination as well as to ensure receiving proposals from vendors in the future for these services.

The most recent examination services procurement process affirms the necessity to make this change based on the above factors as no proposals could comply with the current examination cap. There is a separate regulatory action in process to adjust the board's fees pursuant to § 54.1-113 of the Code of Virginia to ensure that revenues are sufficient but not excessive to cover its ongoing operating expenses. Without the proposed fee increases, the board will incur a deficit by the end of the 2012-2014 biennium and the department will not collect adequate revenue to pay for operations. The additional examination costs the board will need to absorb due to the limitation of the examination fee cap will further compound the board's financial position.

The purpose of the lead examination is to ensure minimum competency of those who perform lead abatement activities, which is critical to reducing the risk of lead exposure to the public, particularly children. In order to establish minimum competency of individuals and businesses performing abatement activities and protect the public health, safety, and welfare, a valid, comprehensive, psychometrically sound examination is essential.

Substance: The board proposes amending 18VAC15-30-161 C to increase the maximum cost of the examination to the candidate to reflect the $150 maximum amount of the current exam vendor contract. All future examination service contracts shall continue to be established through the competitive negotiation process pursuant to the Virginia Public Procurement Act (§ 2.2-4300 et seq. of the Code of Virginia). Examination candidates will be required to pay for the actual cost of the examination, not to exceed the maximum of $150, which has been competitively negotiated and bargained for by the department and is subject to contracted charges.

Issues: The advantage of this action to the board's regulants, that is, the public, is that there is less risk of a significant increase in application or renewal fees due to the board having to absorb the additional cost of each examination. Without raising the exam cap, the board would be forced to increase applications and other licensing fees in order to ensure that its revenue is sufficient to cover its expenses in accordance with the Callahan Act (§ 54.1-113 of the Code of Virginia), which must ultimately be paid by the board's regulants. There are no disadvantages to the public or the agency.

Department of Planning and Budget's Economic Impact Analysis:

Summary of the Proposed Amendments to Regulation. The proposed change will allow the Board for Asbestos, Lead and Home Inspectors (the Board) to charge more than $75 to a candidate taking the lead licensure examination.

Result of Analysis. The benefits likely exceed the costs for all proposed changes.

Estimated Economic Impact. Current regulation contains a $75 exam fee cap that prevents the Board from passing on the actual cost of the lead licensure test to candidates taking the exam. According to the Department of Professional Occupational Regulation (DPOR), this cap has been in place since 1995 and is no longer reflective of the actual costs of the test. In 2013, DPOR was unable to procure a third party vendor to administer the test for $75 or less. In fact, DPOR contracted with a vendor after a competitive negotiation process in accordance with the Virginia Public Procurement Act for $150 per test. Since the Board cannot collect more than $75 from candidates, the Board has been paying for the remaining $75 from its own budget. Without the proposed removal of the cap, the Board will continue to incur deficits from administering its licensure examinations. In the first three months of 2014, the Board administered 15 lead examinations. For these examinations, the Board paid $2,250 to the vendor but collected only $1,125 from candidates, resulting in a deficit of $1,125 from this activity.

The Board proposes to remove the current $75 exam fee cap so as to be able to adjust the exam fee in accordance with the competitively negotiated contract. The proposed language would allow the Board, for example, to charge $150 to a candidate currently taking the exam.

The proposed change is expected to help the Board collect the revenues it needs to support the administration of its exam while imposing additional costs on individuals taking the exam. In addition, since this change will allow the Board to pass on the true exam costs to candidates who are taking the exam as opposed to using its revenues from elsewhere to finance this particular activity, an improvement in the allocative efficiency of the Board's resources may be expected. For example, an exam fee less than the actual cost is likely to result in more candidates taking the exam than the optimal number of candidates. Conversely, if the Board is using, let's say, renewal fees to finance its deficiency from the initial licensure exam, fewer than the optimal number of renewal applications would be expected. In short, the proposed change would allow the Board to charge fees for services commensurate with their true costs and achieve a more efficient allocation of the Board's resources.

Businesses and Entities Affected. The proposed change will primarily affect the Board and candidates taking the lead licensure exam. Approximately, 80 individuals take the test per year.

Localities Particularly Affected. The regulation is not expected to affect any locality more than others.

Projected Impact on Employment. While the proposed change will moderately increase costs associated with becoming a lead professional, it is unlikely to significantly affect employment.

Effects on the Use and Value of Private Property. While the proposed change will moderately increase costs associated with becoming a lead professional and have a negative impact on their profitability and asset values, it is unlikely to be significant. Conversely, increased revenues from initial exam candidates would reduce the need to finance the exam cost from other regulants and may have a small positive impact on them.

Small Businesses: Costs and Other Effects. Most of the candidates taking the lead exam are expected to be affiliated with small businesses. The cost and other affects on small businesses are the same as discussed above.

Small Businesses: Alternative Method that Minimizes Adverse Impact. There is no known alternative that minimizes the small adverse impact expected.

Real Estate Development Costs. Since the proposed change will moderately increase costs associated with becoming a lead professional, there may be a very small increase in cost of renovating a building with lead paint.

Legal Mandate.

General: The Department of Planning and Budget (DPB) has analyzed the economic impact of this proposed regulation in accordance with § 2.2-4007.04 of the Code of Virginia and Executive Order Number 14 (2010). Section 2.2-4007.04 requires that such economic impact analyses determine the public benefits and costs of the proposed amendments. Further the report should include but not be limited to:

• the projected number of businesses or other entities to whom the proposed regulation would apply,

• the identity of any localities and types of businesses or other entities particularly affected,

• the projected number of persons and employment positions to be affected,

• the projected costs to affected businesses or entities to implement or comply with the regulation, and

• the impact on the use and value of private property.

Small Businesses: If the proposed regulation will have an adverse effect on small businesses, § 2.2-4007.04 requires that such economic impact analyses include:

• an identification and estimate of the number of small businesses subject to the proposed regulation,

• the projected reporting, recordkeeping, and other administrative costs required for small businesses to comply with the proposed regulation, including the type of professional skills necessary for preparing required reports and other documents,

• a statement of the probable effect of the proposed regulation on affected small businesses, and

• a description of any less intrusive or less costly alternative methods of achieving the purpose of the proposed regulation.

Additionally, pursuant to § 2.2-4007.1, if there is a finding that a proposed regulation may have an adverse impact on small business, the Joint Commission on Administrative Rules (JCAR) is notified at the time the proposed regulation is submitted to the Virginia Register of Regulations for publication. This analysis shall represent DPB's best estimate for the purposes of public review and comment on the proposed regulation.

Agency's Response to Economic Impact Analysis: The board concurs with the approval.

Summary:

The proposed amendment increases the maximum fee that can be charged for taking the lead licensure examination from $75 to $150.

Part IV
Fees

18VAC15-30-161. General fee requirements.

A. All fees are nonrefundable and shall not be prorated. The date on which the fee is received by the department or its agent will determine whether the fee is on time. Checks or money orders shall be made payable to the Treasurer of Virginia.

B. Fees for approval and renewal of an accredited lead training program and an accredited lead refresher training program shall not be imposed on any state, local government, or nonprofit training program.

C. The examination fee shall consist of the administration expenses of the board ensuing from the board's examination procedures and contract charges. Examination service contracts shall be established through competitive negotiations in compliance with the Virginia Public Procurement Act (§ 2.2-4300 et seq. of the Code of Virginia). The examination shall not exceed a cost of $75 $150 to the candidate.