Title of Regulation: 18VAC50-30. Individual License and Certification Regulations (amending 18VAC50-30-90, 18VAC50-30-120, 18VAC50-30-130, 18VAC50-30-150; repealing 18VAC50-30-110).

Statutory Authority: §§ 54.1-201 and 54.1-1102 of the Code of Virginia.

Public Hearing Information:

March 13, 2009 - 10 a.m. - Department of Professional and Occupational Regulation, 9960 Mayland Drive, Board Room 3, Richmond, VA

Public Comments: Public comments may be submitted until April 17, 2009.

Agency Contact: Eric L. Olson, Executive Director, Board for Contractors, 9960 Mayland Drive, Richmond, VA 23233, telephone (804) 367-2785, FAX (804) 527-4401, or email contractors@dpor.virginia.gov.

Basis: The proposed regulatory action is mandated by the following sections of the Code of Virginia. To comply with these statutes, the board evaluates its current and projected financial position, and determines the type of fees and amounts to be established for each fee that will provide revenue sufficient to cover its expenses.

1. § 54.1-113 (Callahan Act) provides the authority to the regulatory boards to adjust fees so that the fees are sufficient but not excessive to cover expenses.

2. § 54.1-201 describes each regulatory board’s power and duty to "levy and collect fees for the certification or licensure and renewal that are sufficient to cover all expenses for the administration and operation of the regulatory board and a proportionate share of the expenses of the Department…"

3. § 54.1-304 describes the power and duty of the director to "collect and account for all fees prescribed to be paid into each board and account for and deposit the moneys so collected into a special fund from which the expenses of the board, regulatory boards, and the Department shall be paid…"

4. § 54.1-308 provides for compensation of the director, employees, and board members to be paid out of the total funds collected. This section also requires the Director to maintain a separate account for each board showing moneys collected on its behalf and expenses allocated to the board.

Section 54.1-1102 of the Code of Virginia provides the authority for the Board for Contractors to promulgate regulations for the licensure of contractors in the Commonwealth. The content of the regulations is left to the discretion of the board, but shall not be in conflict with the purposes of the statutory authority.

Purpose: The intent of the proposed changes in regulations is to increase licensing fees for regulants of the Board for Contractors. The board must establish fees adequate to support the costs of board operations and a proportionate share of the department’s operations. By the close of the current biennium, fees will not provide adequate revenue for those costs.

The Board for Contractors provides protection to the safety and welfare of the citizens of the Commonwealth by ensuring that only those individuals and firms that meet specific criteria set forth in the statutes and regulations are eligible to receive a contractor or tradesman license. The board is also tasked with ensuring that its regulants meet standards of conduct that are set forth in the regulations. Without adequate funding, complaints against regulants, brought to the attention of the board by citizens, could not be investigated and processed in a timely manner. This could provide an opportunity for a dishonest contractor, waiting for action to be taken by the board, to continue to work, harming additional citizens.

The Department of Professional and Occupational Regulation receives no general fund money, but instead, is funded almost entirely from revenue collected through applications for licensure, renewals, examination fees, and other licensing fees. The department is self-supporting, and must collect adequate revenue to support its mandated and approved activities and operations. Fees must be established at amounts that will provide that revenue. Fee revenues collected on behalf of the boards fund the department’s authorized special revenue appropriation.

The Board for Contractors has no other source of revenue from which to funds its operations.

Substance: The existing regulations are being amended to increase the fees applicable to several licensing items.

The fee for original tradesman license by examination is increased from $90 to $130.

The fee for original tradesman license without examination is increased from $90 to $130.

The fee for card exchange (exchange of locality-issued card for state-issued Virginia tradesman license is increased from $40 to $80.

The fee for liquefied petroleum gas fitter is increased from $90 to $130.

The fee for natural gas provider is increased from $90 to $130.

The fee for backflow prevention device worker certification is increased from $90 to $130.

The fee for elevator mechanic certification is increased from $90 to $130.

The fee for water well systems provider certification is increased from $90 to $130.

Fees for duplicate cards will be repealed.

The fee for tradesman license renewal is increased from $40 to $80.

The fee for liquefied petroleum gas fitter license renewal is increased from $40 to $80.

The fee for natural gas fitter provider license renewal is increased from $40 to $80.

The fee for backflow prevention device worker certification renewal is increased from $40 to $80.

The fee for elevator mechanic certification renewal is increased from $40 to $80.

The fee for water well systems provider certification renewal is increased from $40 to $80.

The fee for tradesman license reinstatement is increased from $130 to $140.

The fee for liquefied petroleum gas fitter license reinstatement is increased from $130 to $140.

The fee for natural gas fitter provider license reinstatement is increased from $130 to $140.

The fee for backflow prevention device worker certification reinstatement is increased from $130 to $140.

The fee for elevator mechanic certification reinstatement is increased from $130 to $140.

The fee for water well systems provider certification reinstatement is increased from $130 to $140.

The fee for each addition is increased from $40 to $80.

Issues: The primary issue for the proposed fee increase is the department’s statutory requirement to comply with the Callahan Act.

Further issues to be addressed as regulations are developed include:

The Callahan Act required DPOR to review each board’s expenditures at the close of each biennium and to adjust fees if necessary. The Board for Contractors is expected to incur a deficit of $579,707 and a Callahan Act percentage of -3.5%.

The regulatory review process generally takes a minimum of 18 months, and so it is essential to consider fee increases now, before the deficit increases to the amount greater than previously anticipated. To avoid increasing the deficit the new fees will need to become effective by the beginning of the 2010 biennium. Otherwise, the board’s deficit will increase to the point that the new fees would be inadequate to provide sufficient revenue for upcoming operating cycles, which could result in the board having to consider additional fee increases in the near future.

The advantage of these changes is that the regulatory program will be able to continue to function in order to protect the public. The disadvantage is that these changes will increase the cost of the license to the regulated population; however, the impact of these changes on the income of the regulated population should not be of a great significance compared to their level of income.

The Department of Planning and Budget's Economic Impact Analysis:

Summary of the Proposed Amendments to Regulation. The Board of Contractors (Board) proposes to amend its regulations for tradesmen to increase fees.

Result of Analysis. There is insufficient information to determine if benefits outweigh costs for these proposed regulatory changes.

Estimated Economic Impact. The Board of Contractors (Board) sets fees for tradesman initial licensure, biennial license renewal and license reinstatement, for licenses not renewed within 30 days of expiration. Additionally, the Board has a fee for adding or subtracting a trade designation from a tradesman’s license and a fee for exchanging a locally issued tradesman card of a Board issued license. The Board proposes to increase all of these fees.

The Board’s current fees and proposed fees are in the table below:

Initial Licensure Fees
Fee	Current	Proposed
Tradesman license by examination	$90	$130
Tradesman license without examination	$90	$130
Liquefied petroleum gas fitter license	$90	$130
Natural gas provider	$90	$130
Backflow prevention device worker certification	$90	$130
Elevator mechanic certification	$90	$130
Water well systems provider certification	$90	$130
License Renewal Fees
Fee	Current	Proposed
Tradesman license renewal	$40	$80
Liquefied petroleum gas fitter license renewal	$40	$80
Natural gas fitter provider license renewal	$40	$80
Elevator mechanic certification renewal	$40	$80
Water well systems provider certification renewal	$40	$80
License Reinstatement Fees
Fee	Current	Proposed
Tradesman license reinstatement	$130	$140
Liquefied petroleum gas fitter license reinstatement	$130	$140
Natural gas fitter provider license reinstatement	$130	$140
Elevator mechanic certification reinstatement	$130	$140
Water well systems provider certification reinstatement	$130	$140
Other Fees
Fee	Current	Proposed
Card exchange	$40	$80
Additional trade designations	$40	$80

The Board proposes to increase all of these fees in order to cover anticipated program revenue deficits. The Department of Professional and Occupational Regulation (DPOR) reports that the Board has incurred increased expenses for enforcement activities, information systems development costs and application processing/customer support services.

DPOR reports that these fee increases will allow investigation of complaints against regulated entities to continue to be carried out in a timely fashion; absent these fee increases, DPOR reports, the public might be adversely affected by tradesmen who continue to work after a complaint is filed but before their cases are adjudicated. To the extent that possible customers for tradesmen rely on the Board for information about whom to hire (or, more importantly, whom not to hire) a slow down in complaint investigations would likely lead to questionable tradesmen being hired. To the extent that possible customers rely on private sources of information, such as references from trusted friends or family or information from the Better Business Bureau, any bad effects of a slow down are likely to be partially or completely mitigated.

The possible benefits of these proposed regulations must be weighed against the adverse impact that these fee increases will have on tradesman businesses in the Commonwealth. For healthy, full-time tradesman businesses, these fees will likely be absorbed and at least partially passed on to customers who will likely pay slightly higher fees for tradesman work. These fee increases may, however, serve as the tipping point for some marginally profitable and/or part-time tradesman businesses so that fewer individuals choose to renew their licenses. Entry into this field will also likely decrease slightly on account of the higher proposed initial licensure fees.

Businesses and Entities Affected. These proposed regulations will affect all licensed tradesmen in the Commonwealth. DPOR reports that the Board currently licenses 101,714 tradesmen and contractors (whose fees are increasing in a separate proposed regulatory action).

Localities Particularly Affected. No locality will be particularly affected by this proposed regulatory action.

Projected Impact on Employment. This regulatory action is likely to slightly decrease the number of licensed tradesmen doing business in the Commonwealth.

Effects on the Use and Value of Private Property. To the extent that this proposed regulatory action increases the cost of maintaining a tradesman business, profits for some businesses may slightly decrease. Any businesses that do experience a decrease in profits will also likely experience a corresponding decrease in their value.

Small Businesses: Costs and Other Effects. Most, if not all, licensed tradesmen in the Commonwealth qualify as small businesses. All of these small businesses will have to pay the proposed higher fees discussed above to continue operating.

Small Businesses: Alternative Method that Minimizes Adverse Impact. In general small businesses will benefit from agency actions that look toward cutting agency costs, when doing so will not adversely affect their mission, rather than raising fees.

Real Estate Development Costs. To the extent that licensed tradesmen are involved with real estate development, this regulatory action is likely to slightly increase real estate development costs in the Commonwealth.

Legal Mandate. 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 Administrative Process Act and Executive Order Number 36 (06). Section 2.2-4007.04 requires that such economic impact analyses include, but need not be limited to, the projected number of businesses or other entities to whom the 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. Further, if the proposed regulation has adverse effect on small businesses, § 2.2-4007.04 requires that such economic impact analyses include (i) an identification and estimate of the number of small businesses subject to the regulation; (ii) the projected reporting, recordkeeping, and other administrative costs required for small businesses to comply with the regulation, including the type of professional skills necessary for preparing required reports and other documents; (iii) a statement of the probable effect of the regulation on affected small businesses; and (iv) a description of any less intrusive or less costly alternative methods of achieving the purpose of the regulation. The analysis presented above represents DPB’s best estimate of these economic impacts.

Agency's Response to the Department of Planning and Budget's Economic Impact Analysis: The agency concurs with the response to the economic impact analysis performed by the Virginia Department of Planning and Budget.

Summary:

The proposed amendments (i) increase fees for (a) initial licensure and license renewal and reinstatement of tradesmen, liquefied petroleum gas fitters, and natural gas providers; (b) initial certification and certification renewal and reinstatement for backflow prevention device workers, elevator mechanics, and water well systems providers; (c) card exchanges; (d) trade designation additions and deletions; and (ii) repeal fees for the issuance of replacement cards.

18VAC50-30-90. Fees for licensure and certification.

A. Each check or money order shall be made payable to the Treasurer of Virginia. All fees required by the board are nonrefundable and shall not be prorated. The date of receipt by the department or its agent is the date that will be used to determine whether or not it is on time. Fees remain active for a period of one year from the date of receipt and all applications must be completed within that time frame.

B. Fees are as follows:

Original tradesman license by examination	$90 $130
Original tradesman license without examination	$90 $130
Card exchange (exchange of locality-issued card for state-issued Virginia tradesman license)	$40 $80
Liquefied petroleum gas fitter	$90 $130
Natural gas fitter provider	$90 $130
Backflow prevention device worker certification	$90 $130
Elevator mechanic certification	$90 $130
Water well systems provider certification	$90 $130

18VAC50-30-110. Fees for duplicate cards. (Repealed.)

The fee for a duplicate card shall be as follows:

First request	$30
Second request	$30
Third request	$45

Any request for the issuance of such a card must be in writing to the board. Requests for a third or subsequent duplicate card may be referred for possible disciplinary action.

18VAC50-30-120. Renewal.

A. Licenses and certification cards issued under this chapter shall expire two years from the last day of the month in which they were issued as indicated on the license or certification card.

B. Effective with all licenses issued or renewed after December 31, 2007, as a condition of renewal or reinstatement and pursuant to § 54.1-1133 of the Code of Virginia, all individuals holding tradesman licenses with the trade designations of plumbing, electrical and heating ventilation and cooling shall be required to satisfactorily complete three hours of continuing education for each designation and individuals holding licenses as liquefied petroleum gas fitters and natural gas fitter providers, one hour of continuing education, relating to the applicable building code, from a provider approved by the board in accordance with the provisions of this chapter.

C. Certified elevator mechanics, as a condition of renewal or reinstatement and pursuant to § 54.1-1143 of the Code of Virginia, shall be required to satisfactorily complete eight hours of continuing education relating to the provisions of the Virginia Statewide Building Code pertaining to elevators, escalators and related conveyances. This continuing education will be from a provider approved by the board in accordance with the provisions of this chapter.

D. Certified water well systems providers, as a condition of renewal or reinstatement and pursuant to § 54.1-1129 B of the Code of Virginia, shall be required to satisfactorily complete eight hours of continuing education in the specialty of technical aspects of water well construction, applicable statutory and regulatory provisions, and business practices related to water well construction from a provider approved by the board in accordance with the provisions of this chapter.

E. Renewal fees are as follows:

Tradesman license	$40 $80
Liquefied petroleum gas fitter license	$40 $80
Natural gas fitter provider license	$40 $80
Backflow prevention device worker certification	$40 $80
Elevator mechanic certification	$40 $80
Water well systems provider certification	$40 $80

All fees are nonrefundable and shall not be prorated.

F. The board will mail a renewal notice to the regulant outlining procedures for renewal. Failure to receive this notice, however, shall not relieve the regulant of the obligation to renew. If the regulant fails to receive the renewal notice, a photocopy of the tradesman license or backflow prevention device worker certification card may be submitted with the required fee as an application for renewal within 30 days of the expiration date.

G. The date on which the renewal fee is received by the department or its agent will determine whether the regulant is eligible for renewal or required to apply for reinstatement.

H. The board may deny renewal of a tradesman license or a backflow prevention device worker certification card for the same reasons as it may refuse initial issuance or to discipline a regulant. The regulant has a right to appeal any such action by the board under the Virginia Administrative Process Act (§ 2.2-4000 et seq. of the Code of Virginia).

I. Failure to timely pay any monetary penalty, reimbursement of cost, or other fee assessed by consent order or final order shall result in delaying or withholding services provided by the department such as, but not limited to, renewal, reinstatement, processing of a new application, or exam administration.

18VAC50-30-130. Reinstatement.

A. Should the Department of Professional and Occupational Regulation fail to receive the renewal application or fees within 30 days of the expiration date, the regulant will be required to apply for reinstatement of the license or certification card.

B. Reinstatement fees are as follows:

Tradesman license	$130* $140*
Liquefied petroleum gas fitter license	$130* $140*
Natural gas fitter provider license	$130* $140*
Backflow prevention device worker certification	$130* $140*
Elevator mechanic certification	$130* $140*
Water well systems provider certification	$130* $140*
*Includes renewal fee listed in 18VAC50-30-120.

All fees required by the board are nonrefundable and shall not be prorated.

C. Applicants for reinstatement shall meet the requirements of 18VAC50-30-30.

D. The date on which the reinstatement fee is received by the department or its agent will determine whether the license or certification card is reinstated or a new application is required.

E. In order to ensure that license or certification card holders are qualified to practice as tradesmen, liquefied petroleum gas fitters, natural gas fitter providers, backflow prevention device workers, elevator mechanics, or water well systems providers, no reinstatement will be permitted once one year from the expiration date has passed. After that date the applicant must apply for a new license or certification card and meet the then current entry requirements.

F. Any tradesman, liquefied petroleum gas fitter, or natural gas fitter provider activity conducted subsequent to the expiration of the license may constitute unlicensed activity and may be subject to prosecution under Title 54.1 of the Code of Virginia. Further, any person who holds himself out as a certified backflow prevention device worker, as defined in § 54.1-1128 of the Code of Virginia, or as a certified elevator mechanic, as defined in § 54.1-1140 of the Code of Virginia, or as a water well systems provider as defined in § 54.1-1129.1 of the Code of Virginia, without the appropriate certification, may be subject to prosecution under Title 54.1 of the Code of Virginia. Any activity related to the operating integrity of an elevator, escalator, or related conveyance, conducted subsequent to the expiration of an elevator mechanic certification may constitute illegal activity and may be subject to prosecution under Title 54.1 of the Code of Virginia.

G. The board may deny reinstatement of a license or certification card for the same reasons as it may refuse initial issuance or to discipline a regulant. The regulant has a right to appeal any such action by the board under the Virginia Administrative Process Act (§ 2.2-4000 et seq. of the Code of Virginia).

H. Failure to timely pay any monetary penalty, reimbursement of cost, or other fee assessed by consent order or final order shall result in delaying or withholding services provided by the department, such as, but not limited to, renewal, reinstatement, processing of a new application, or exam administration.

Part IV
Standards of Practice

18VAC50-30-150. Adding or deleting trade designations.

A. A regulant may add designations to a license by demonstrating, on a form provided by the board, acceptable evidence of experience, and examination if appropriate, in the designation sought. The experience, and successful completion of examinations, must be demonstrated by meeting the requirements found in Part II (18VAC50-30-20 et seq.) of this chapter.

B. The fee for each addition is $40 $80. All fees required by the board are nonrefundable.

C. While a regulant may have multiple trade designations on his license, the renewal date will be based upon the date the card was originally issued to the individual by the board, not the date of the most recent trade designation addition.

D. If a regulant is seeking to delete a designation, then the individual must provide a signed statement listing the designation to be deleted. There is no fee for the deletion of a designation. If the regulant only has one trade or level designation, the deletion of that designation will result in the termination of the license.

FORMS (18VAC50-30)

Tradesman License Application, 2710LIC (rev. 8/07) insert date).

Backflow Prevention Device Worker Certification Application, 2710BPD (rev. 8/07) insert date).

Elevator Mechanic Certification Application, 2710ELE (rev. 8/07) insert date).

Individual Experience Form, 2710EXP (rev. 8/07) 2/08).

Vocational Training Form, 2710VOTR (rev. 8/07) 2/08).

Education Provider Registration/Course Approval Application, 27edreg (eff. 8/06).

Certified Water Well System Provider Application, 2710WSP (eff. 11/07) (rev. insert date).