Title of Regulation: 18VAC145-40. Regulations for the Geology Certification Program (amending 18VAC145-40-20).

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

Public Hearing Information:

August 7, 2013 - 11 a.m. - Department of Professional and Occupational Regulation, 9960 Mayland Drive, Board Room 2, Richmond, VA

Public Comment Deadline: August 30, 2013.

Agency Contact: Kathleen R. Nosbisch, Executive Director, Board for Professional Soil Scientists, Wetland Professionals, and Geologists, 9960 Mayland Drive, Suite 400, Richmond, VA 23233, telephone (804) 367-8514, FAX (866) 465-6206, or email bpssandwp@dpor.virginia.gov.

Basis: Section 54.1-113 of the Code of Virginia (commonly referred to as the Callahan Act) requires regulatory boards to periodically review and adjust fees. It states, in part, "Following the close of any biennium, when the account for any regulatory board within the Department of Professional and Occupational Regulation or the Department of Health Professions maintained under § 54.1-308 or § 54.1-2505 shows expenses allocated to it for the past biennium to be more than ten percent greater or less than moneys collected on behalf of the board, it shall revise the fees levied by it for certification or licensure and renewal thereof so that the fees are sufficient but not excessive to cover expenses."

Section 54.1-201 A 4 of the Code of Virginia describes the power and duty of regulatory boards to "levy and collect fees for 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 of Professional and Occupational Regulation and the Board for Professional and Occupational Regulation."

Subdivision 3 of § 54.1-304 of the Code of Virginia describes the authority of the department 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 Department shall be paid."

Section 54.1-308 of the Code of Virginia requires costs to be paid by regulatory boards. It states, "The compensation of the Director and the employees within the Department, including the compensation of the members of each board, shall be paid out of the total funds collected and charged to the accounts of the respective boards. The Director shall maintain a separate account for each board showing the moneys collected on its behalf and the expenses allocated to each board."

The above sections of the Code of Virginia mandate that the board manage and periodically review and adjust fees. In addition, the department must:

1. Pay expenses of each board and the department from revenues collected;

2. Establish fees adequate to provide sufficient revenue to pay expenses;

3. Account for the revenues collected and expenses charged to each board; and

4. Adjust fees as necessary to ensure that revenue is sufficient but not excessive to cover all expenses.

To comply with these requirements, the department:

1. Distinctly accounts for the revenue collected for each board;

2. Accounts for direct board expenses for each board, and allocates a proportionate share of agency operating expenses to each board;

3. Reviews the actual and projected financial position of each board biennially to determine whether revenues are adequate, but not excessive, to cover reasonable and authorized expenses for upcoming operating cycles; and

4. Recommends adjustments to fees to respond to changes and projections in revenue trends and operating expenses. If projected revenue collections are expected to be more than sufficient to cover expenses for upcoming operating cycles, decreases in fees are recommended. If projected revenue collections are expected to be inadequate to cover operating expenses for upcoming operating cycles, increases in fees are recommended.

Purpose: The intent of the proposed changes in the regulation is to increase certification fees for professional geologist applicants and regulants of the Board for Professional Soil Scientists, Wetland Professionals, and Geologists. The board must establish fees adequate to support the costs of board operations and a proportionate share of the department's operations.

The board provides protection for the health, safety, and welfare of the citizens of the Commonwealth by ensuring that only individuals who meet specific criteria set forth in statute and regulations receive certification as professional geologists; by ensuring its regulants meet standards of practice and conduct set forth in the regulation; and by imposing penalties for not complying with the governing statutes and regulations. Without adequate funding, complaints against regulants, brought to the attention of the board by citizens, cannot be investigated and processed in a timely manner. Ensuring that professional geologists have at least the minimal competencies to perform geological work protects the health, safety, and welfare of Virginia citizens.

The department receives no general fund money, but instead, is funded almost entirely from revenue collected through applications for certification, licensure, renewals, examination fees, and other certification and 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 adequate revenue. Fee revenues collected on behalf of the boards fund the department's authorized special revenue appropriation.

The Board for Professional Soil Scientists, Wetland Professionals, and Geologists has no other source of revenue from which to funds its operations.

Substance: The existing regulation is being amended to increase the fees related to obtaining and maintaining certification as a professional geologist.

1. The application fee for certification is increased from $40 to $90.

2. The fee for renewal of certification is increased from $35 to $70.

3. The penalty fee for late renewal remains $25.

4. The reinstatement fee is increased from $40 to $90.

Issues: The Code of Virginia establishes the board as the state agency that oversees certification of professional geologists providing services in Virginia. The board's primary mission is to protect the citizens of the Commonwealth, and it views certification as a broad concept that offers the public significant protection by prescribing requirements for minimal competencies; by prescribing standards of conduct and practice; and by imposing penalties for not complying with the regulations. Further, the department is compelled to comply with § 54.1-113 of the Code of Virginia (commonly referred to as the Callahan Act). The proposed fee increases will ensure that the board has sufficient revenues to fund its operating expenses.

There are no disadvantages to the public or the Commonwealth in raising the board's fees as proposed.

Department of Planning and Budget's Economic Impact Analysis:

Summary of the Proposed Amendments to Regulation. The Board of Professional Soil Scientists, Wetland Professionals, and Geologists (Board) proposes to increase fees paid by individuals certified as geologists.

Result of Analysis. There is insufficient information to accurately gauge whether benefits are likely to outweigh costs for these proposed changes.

Estimated Economic Impact. Under regulations promulgated by the now defunct Board of Geology, certified geologists pay $40 for initial certification, $35 for renewal of certification, a $25 additional fee for late renewal of certification and $40 for reinstatement of certification. The Board of Professional Soil Scientists, Wetland Professionals, and Geologists, which now has authority to certify geologists now propose to raise most fees paid by geologists.

Below is a comparison table for current and proposed fees:

FEE TYPE	CURRENT FEE	PROPOSED FEE %	% INCREASE
Initial Geologist Certification	$40	$90	125%
Certification Renewal	$35	$70	100%
Certification Reinstatement	$40	$90	125%

According to information provided by the Board, fees are being increased to bring geologists' fees in line with others charged by this Board and because information technology costs have increased precipitously over the last few years. Board staff reports that the Department of Professional and Occupational Regulation (DPOR) has already paid $3.6 million, and expects to pay an additional $1.6 million, for its new automated licensure system. These costs are additional to other IT (VITA) costs which have increased for all state agencies. It is likely that most of the per regulant expenditure increase in the last decade is due to these increased information systems costs. Over the 02-04 biennium, DPOR spent $60.98 per regulant; for the 04-06 biennium, per regulant spending was $52.19. During the 06-08 biennium, per regulant spending increased to $76.63 and has increased in both of the biennia since (estimated spending for the current biennium is approximately $87 per regulant). Given this information, it is not at all clear that these increased information systems costs represent a net benefit for the Board's regulated entities.

Increasing fees will likely increase the cost of being certified and, so, will likely slightly decrease the number of people who choose to be certified by the Commonwealth. This will likely not greatly decrease the number of individuals actually practicing geology because certification is voluntary. To the extent that the public benefits from the Board regulating this professional population, they will likely benefit from the Board's proposed action that will increase fees to support Board activities. There is insufficient information to ascertain whether benefits will outweigh costs.

Businesses and Entities Affected. Board staff reports that the Board currently regulates 883 geologists.

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

Projected Impact on Employment. Employment in the Commonwealth is unlikely to be affected by this proposed regulatory action.

Effects on the Use and Value of Private Property. Fee increases will likely slightly decrease business profits and make affected businesses slightly less valuable.

Small Businesses: Costs and Other Effects. Board staff reports that most of the individuals regulated by the Board likely qualify as small businesses. Affected small businesses will bear the costs of proposed increased fees.

Small Businesses: Alternative Method that Minimizes Adverse Impact. There are several actions that the Board could take that might mitigate the necessity of raising fees overall. The Board could slightly lengthen the time that it takes to process both certification applications and complaints so that staff costs could be cut. This option would benefit current certificate holders but would slightly delay certification for new applicants. Affected small businesses would also likely benefit from increased scrutiny of the IT costs that are driving increases in Board expenditures.

Real Estate Development Costs. This regulatory action will likely have no effect on 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 14 (10). 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 Economic Impact Analysis: The result of Department of Planning and Budget's analysis is there is insufficient information to accurately gauge whether benefits are likely to outweigh costs for the proposed fee adjustments.

The Department of Professional and Occupational Regulation (DPOR) is proposing the fee adjustment now because geologists renew certification in August of even fiscal years. While it will be too soon to have the fee adjustment in place for August 2013, it is needed to be in place before August 2015. Fee increases would end up being substantially higher if the fee adjustment is not in place before August 2015. Although it may seem premature to submit the fee adjustment at this time, the entire approval process has been taking three years or more for other DPOR boards. DPOR is trying to minimize the size of the adjustment now as well as future adjustments, while also trying to avoid from entering into deficit cash positions.

As to the magnitude of the fee increase, it is important to note that fees for geologists were actually higher in 1995 than the current proposed fees. Incremental fee increases are not possible due to the three year approval process and are in order to sufficiently cover expenses.

Summary:

The proposed amendments increase the application, renewal, and reinstatement fees for professional geologists and align the fees with those of professional soil scientists and wetland professionals.

18VAC145-40-20. Fees.

All fees for application, examination, renewal, and reinstatement shall be established by the board pursuant to § 54.1-201 of the Code of Virginia. All fees are nonrefundable and shall not be prorated.

1. The application fee for certification shall be $40 $90.

2. The fee for renewal of certification shall be $35 $70.

3. The application fee for the Geologist-in-Training (GIT) designation shall be $20.

4. The fee for examination or reexamination is subject to contracted charges to the department by an outside vendor. These contracts are competitively negotiated and bargained for in compliance with the Virginia Public Procurement Act (§ 2.2-4300 et seq. of the Code of Virginia). Fees may be adjusted and charged to the candidate in accordance with this contract.

5. The penalty fee for late renewal shall be $25 in addition to the renewal fee.

6. The reinstatement fee shall be $40 $90.