18VAC80-30 Opticians Regulations

REGULATIONS

Vol. 32 Iss. 4 - October 19, 2015

TITLE 18. PROFESSIONAL AND OCCUPATIONAL LICENSING

BOARD FOR HEARING AID SPECIALISTS AND OPTICIANS

Chapter 30

Proposed Regulation

Title of Regulation: 18VAC80-30. Opticians Regulations (amending 18VAC80-30-50).

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

Public Hearing Information:

December 16, 2015 - 2 p.m. - Department of Professional and Occupational Regulation, 9960 Mayland Drive, Suite 200, Board Room 1, Richmond, VA 23233

Public Comment Deadline: December 18, 2015.

Agency Contact: Demetrios J. Melis, Executive Director, Board for Hearing Aid Specialists and Opticians, 9960 Mayland Drive, Suite 400, Richmond, VA 23233, telephone [phone], FAX [phone], or email [e-mail].

Basis: The proposed regulatory action is mandated by several 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. The sections are:

§ 54.1-113 (commonly known as the Callahan Act), which states that 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 of the Code of Virginia shows expenses allocated to it for the past biennium to be more than 10% 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.

§ 54.1-201.4, which 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."

§ 54.1-304.3, which 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."

§ 54.1-308, which 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.

The above sections of the Code of Virginia mandate that the board manage and periodically review and adjust fees. The referenced sections require the department to (i) pay expenses of each board and the department from revenues collected; (ii) establish fees adequate to provide sufficient revenue to pay expenses; (iii) account for the revenues collected and expenses charged to each board; and (iv) adjust fees as necessary to ensure that revenue is sufficient but not excessive to cover all expenses.

To comply with these requirements, the department (i) distinctly accounts for the revenue collected for each board; (ii) accounts for direct board expenses for each board and allocates a proportionate share of agency operating expenses to each board; (iii) 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 (iv) 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.

Fee adjustments are mandatory in accordance with the cited Code of Virginia sections. The board exercises discretion on how the fees are adjusted by determining the amount of adjustment for each type of fee. The board makes its determination based on the adequacy of the fees to provide sufficient revenue for upcoming operating cycles.

Purpose: The intent of the proposed changes in the regulation is to increase licensing fees for applicants and regulants of the board. 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 licensure as opticians, 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 opticians have at least the minimal competencies to perform work protects the health, safety, and welfare of Virginia citizens.

The department receives no general fund money, instead it 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 has no other source of revenue from which to funds its operations.

Substance: The existing regulations are being amended to adjust the fees related to obtaining and maintaining licensure as an optician in the following ways:

1) The optician licensure new applicant fee is adjusted from $100 to $85.

2) The optician licensure renewal fee is adjusted from $100 to $115.

3) The optician licensure late renewal fee is adjusted from $25 to $35.

4) The optician licensure reinstatement fee is adjusted from $100 to $85.

Issues: The Code of Virginia establishes the board as the state agency that oversees licensure of opticians providing services in Virginia. The board's primary mission is to protect the citizens of the Commonwealth 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 Code of Virginia requires the department to comply with the Callahan Act. The proposed fee adjustments 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 in this action.

Department of Planning and Budget's Economic Impact Analysis:

Summary of the Proposed Amendments to Regulation. The Board for Hearing Aid Specialists and Opticians (Board) proposes to amend fees for optician licensure. Specifically, the Board proposes to decrease fees for initial application and for contact lens certification and to increase fees for license renewal (renewal with the 30-day grace period after license expiration), late renewal (between 30 and 60 days of license expiration) and reinstatement (more than 60 days after license expiration).

Result of Analysis. There is insufficient information to ascertain whether benefits will outweigh costs for these proposed changes.

Estimated Economic Impact. Under current regulations, applicants for initial licensure as optician pay $100 and pay an additional $100 for contact lens certification; licensees currently pay a biennial renewal fee of $100 and, when necessary, pay a late renewal fee of $125 or a reinstatement fee of $225 (depending on how late they are in renewing their licenses). The Board now proposes to decrease fees for initial licensure application and contact lens certification and to increase fees for license renewal, late renewal and reinstatement of licensure.

Below is a comparison table for current and proposed fees:

FEE TYPE	CURRENT FEE	PROPOSED FEE	% change
Initial Application for Licensure	$100	$85	-15%
Contact Lens Certification	$100	$85	-15%
License Renewal	$100	$115	+15%
License Late Renewal	$125	$150	+20%
License Reinstatement	$225	$235	+4.44%

Board staff reports that, although revenues have fallen short of being able to pay for all expenditures in this and the last biennium, the Board had excess balances that covered budget shortfalls. Absent some fee increase, Board staff reports that the Board will run a deficit by the end of the 2016-18 biennium. Even though historical revenue and expenditure numbers support that the Board would eventually have to increase fees, an assumption used to forecast a decrease in revenues seems dubious. Board staff reports that forecasted revenues for the current biennium and the next two biennia are less than revenues over the last two biennia because they assumed that renewals would follow historical patterns (in that approximately 92% of current licensees would choose to renew) but they also assumed that revenues for initial licensure applications would be lower than they have been historically over the last two biennia. In short, Board staff assumes that fewer new individuals will choose to be licensed over this or the next two biennia in order to forecast a decrease in revenues. While revenue increased from $288,840 for the 2010-12 biennium to $289,704 for the 2012-14 biennium, the Board is forecasting the revenue will fall to $276,485 for the current biennium and will be the same for the next two biennia (absent fee increases).

An assumption used to forecast increased costs (that the Department of Professional and Occupational Regulation (DPOR) will fill empty positions that the Board would then be responsible for partially covering the cost of) also may not happen and may not be in the best interests of current or future licensees if it does happen. Specifically, if neither licensee services nor investigations of complaints for this Board have suffered a significant lag on account of DPOR's lower staffing levels, neither licensees of this Board nor the public who uses their services are likely to experience a significant benefit on account of DPOR's anticipated hiring of additional staff.

In addition to anticipated staffing increases at DPOR, Board staff also reports that they expect expenditures to increase because of rising cost of health insurance for DPOR staff. On a per employee basis these costs are entirely outside of the power of the Board (and DPOR) to control. To the extent that health care costs are anticipated to increase because DPOR plans to hire more staff, the analysis in the paragraph above would also apply here.

Increasing fees will likely increase the cost of being licensed or registered and, so, will likely slightly decrease the number of people who choose to be remain in these jobs or businesses. To the extent that the public benefits from the Board regulating these professional populations, they will also 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. This proposed regulation will affect all current and future optician licensees. Board staff reports that there are currently 1,965 opticians who are licensed in the Commonwealth.

Localities Particularly Affected. No localities will likely be disproportionately affected by this proposed regulatory change.

Projected Impact on Employment. Marginally decreased initial licensure fees may lead to a likely very marginal increase in the number of individuals seeking initial licensure as opticians. This effect will likely be partially or fully offset by a marginal decrease in the number individuals who choose to renew their licenses because renewal fees are higher. On the whole, this action will likely have little net effect on employment in the Commonwealth.

Effects on the Use and Value of Private Property. To the extent that professional licenses are private property of value to licensees, Board proposed changes will marginally increase the initial value of an optician's license and will marginally decrease the value of licenses more than two years old.

Small Businesses: Costs and Other Effects. Given that these proposed changes will have little to no net effect on employment in the Commonwealth, small businesses that employ opticians are unlikely to incur any additional costs. Opticians who own their own businesses will incur slightly higher renewal fees on account of these regulations.

Small Businesses: Alternative Method that Minimizes Adverse Impact. There are actions that the Board could take that might mitigate the necessity of raising fees at this time. If licensees and the public have not thus far been harmed by decreased staffing levels, licensees would likely benefit from DPOR reconsidering its decision to hire more staff who would need to be funded through licensure fees.

Real Estate Development Costs. This regulatory action will likely have no effect on real estate development costs in the Commonwealth.

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 17 (2014). 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 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 for Hearing Aid Specialists and Opticians concurs with the approval. However, the board would like to address certain statements regarding the board's projected revenues and expenditures.

Estimated Economic Impact.

1. Economic Impact Analysis (EIA) position: "Absent some fee increase, Board staff reports that the Board will run a deficit by the 2016-18 biennium. Even though historical revenue and expenditure numbers support that the Board would eventually have to increase fees, an assumption used to forecast a decrease in revenues seems dubious."

Agency Response: The board concurs with the EIA's conclusion that revenue and expenditure numbers support that the board must increase fees. The board disagrees with the EIA's characterization that its revenue forecast is dubious. Revenue projections for applicants are based on historical averages for the past eight years for opticians. This method has been proven successful when considering that the number of applicants vary from year to year. The projection methodology used for renewals has also shown to be historically fairly accurate, with a typical variance of less than 5.0%. This revenue projection method has been reviewed by Department of Professional and Occupational Regulation (DPOR) management, external budget analysts, and an external auditor; and the method is considered sound and reasonable. This revenue projection methodology is used across all professions under DPOR, and has been in place for over a decade. These specific revenue projections are the same used for all budgeting purposes, including the annual executive branch six year budget projections. It is of note that the board projects the cash deficit to occur in the first part of 2017, under the current fee structure.

2. EIA position: "Specifically, if neither licensee services nor investigations of complaints for this Board have suffered a significant lag on account of DPOR's lower staffing levels, neither licensees of this Board nor the public who uses their services are likely to experience a significant benefit on account of DPOR's anticipated hiring of additional staff."

Agency Response: DPOR utilizes a specific staffing model, honed over several decades, to keep costs at a minimum while maintaining its charge of protecting the health, safety, and welfare of the public by ensuring minimal competency of licensed professionals. Boards are staffed with licensing professionals who are generalists in licensing and board-specific functions. Functions that are not board specific, some of which include accounting, investigations, examinations, information services, and recordkeeping, are staffed by professionals in those fields who perform these functions for all of the boards at DPOR. So, for example, the DPOR finance section staffs accountants who split their time performing accounting for each of the boards. The board is then charged a portion of the accountant's costs based on the percentage of the accountant's workload that was spent on the board's accounting. This model saves the board the expense of hiring a staff accountant to perform this function. The board simply does not have the funds to staff professionals to perform all of the incidental or specialized services performed by DPOR staff. Neither can the board afford the loss of productivity by having generalists attempt to perform these functions in addition to their other duties for the board. The board receives the benefits of economies of scale when sharing the cost of services provided by DPOR staff. When DPOR is adequately staffed, all of the boards, including this board, operate at minimal costs by receiving the benefits of specialization and economies of scale.

Filling vacant positions is only one aspect of the projected increased expenditures. The increases in health insurance and retirement costs to DPOR that are already in effect as of Fiscal Year 2015 total nearly $2 million per biennium, with the board's allocated portion estimated at about $18,000 per biennium.

Effects on the Use and Value of Private Property.

EIA position: "To the extent that professional licenses are private property of value to licensees, Board proposed changes will marginally increase the initial value of an optician's license and will marginally decrease the value of licenses more than two years old."

Agency Response: Regardless of the EIA response's relation to a separate action, the board disagrees with the characterization of an occupational license as private property. The board, in consultation with the Attorney General's office, maintains that an occupational license is a legal status conferred by the state granting special privileges to the licensee, not private property.

Further, it is not clear how increasing the cost of the license decreases its value. Changing the cost of the license does not affect its function, characteristics, or the usability of the license, factors that would normally determine its value. In this sense, it is not clear how a fee change alone can change the value of a license. The EIA takes the position that a fee increase will lead to a decrease in the number licensees making the license more scarce. A decrease in supply would likely result in increased value. So if the license is more scarce due to the fee increase, its value would increase, not decrease as the EIA indicates.

Small Businesses: Alternative Method that Minimizes Adverse Impact.

EIA position: "There are actions that the Board could take that might mitigate the necessity of raising fees at this time. If licensees and the public have not thus far been harmed by decreased staffing levels, licensees would likely benefit from DPOR reconsidering its decision to hire more staff that would need to be funded through licensure fees."

Agency Response: As indicated above, licensees and the public benefit when DPOR maintains adequate staffing levels.

DPOR utilizes a specific staffing model, honed over several decades, to keep costs at a minimum while maintaining its charge of protecting the health, safety, and welfare of the public by ensuring minimal competency of licensed professionals. Boards are staffed with licensing professionals who are generalists in licensing and board-specific functions. Functions that are not board specific, some of which include accounting, investigations, examinations, information services, and recordkeeping, are staffed by professionals in those fields who perform these functions for all of the boards at DPOR. So, for example, the DPOR finance section staffs accountants who split their time performing accounting for each of the boards. The board is then charged a portion of the accountant's costs based on the percentage of the accountant's workload that was spent on the board's accounting. This model saves the board the expense of hiring a staff accountant to perform this function. The board simply does not have the funds to staff professionals to perform all of the incidental or specialized services performed by DPOR staff. Neither can the board afford the loss of productivity by having generalists attempt to perform these functions in addition to their other duties for the board. The board receives the benefits of economies of scale when sharing the cost of services provided by DPOR staff. When DPOR is adequately staffed, all of the boards, including this board, operate at minimal costs by receiving the benefits of specialization and economies of scale.

Summary:

The proposed amendments (i) decrease the application fee for licensure and for contact lens endorsement and (ii) increase the license fees for renewal, late renewal, and reinstatement.

18VAC80-30-50. Fees.

A. The fee for examination or examinations shall consist of the combination of an administrative charge of $25 (spectacle), $25 (contact lens), and the appropriate contract charges. Examination service contracts shall be established in compliance with the Virginia Public Procurement Act (§ 2.2-4300 et seq. of the Code of Virginia). The total examination fee shall not exceed a cost of $1,000 to the applicant.

B. All application fees for licenses are nonrefundable and the date of receipt by the board or its agent is the date which that will be used to determine whether it is on time.

C. Application and examination fees must be submitted with the application for licensure.

D. The following fees shall apply:

	FEE TYPE	AMOUNT DUE	WHEN DUE
	Application for licensure	$100 $85	With application
	Application for contact lens certification endorsement	$100 $85	With application
	Renewal	$100 $115	Up to the expiration date on the license with a 30-day grace period
	Late renewal (includes renewal fee)	$125 $150	Between 30 and 60 days after the expiration date on the license
	Reinstatement (includes renewal and late renewal fees)	$225 $235	After 60 days following the expiration date on the license

NOTICE: The following forms used in administering the regulation were filed by the agency. The forms are not being published; however, online users of this issue of the Virginia Register of Regulations may click on the name of a form with a hyperlink to access it. The forms are also available from the agency contact or may be viewed at the Office of the Registrar of Regulations, General Assembly Building, 2nd Floor, Richmond, Virginia 23219.

FORMS (18VAC80-30)

License and Examination Application, 11LIC (rev. 2004).

Contact Lens Endorsement Application, 11CLEND (rev. 2004).

Opticians Examination & License Application, A448-11EXLIC-v6 (rev. 3/2016)

Contact Lens Endorsement Application, A448-11CLEND-v4 (rev. 3/2016)

Reciprocity Application, 11REC (eff. 2004).

Reinstatement Application, 11REI (rev. 2004).

Opticians License Reinstatement Application, A448-11REI-v3 (rev. 3/2016)

Voluntary Practice Registration Application, 11VOLREG (eff. 7/03).

Sponsor Certification for Voluntary Practice Registration, 11VRSPCERT (eff. 7/03).

VA.R. Doc. No. R14-3948; Filed September 25, 2015, 9:24 a.m.