Transfer the Board of Tax Professional Examiners to Texas Department of Licensing and Regulation

Abolish the Board of Tax Professional Examiners and transfer its functions to the Texas Department of Licensing and Regulation.

Centralizing licensing functions is becoming increasingly popular among the states because routine, regulatory tasks can be performed by a single agency at less cost and with greater uniformity. Thirty-one states now centralize some licensing functions.

Except for the rule-and policy-making powers of the separate boards, a centralized agency can handle administrative functions while providing support to the governing bodies. Savings can be achieved by consolidating investigating functions, legal services, data processing and other duties, such as mailroom services.

In Texas, the Department of Licensing and Regulation (TDLR) is the state s umbrella occupational and professional licensing agency. It is governed by a commission with an appointed executive director and oversees the administration of 14 licensing functi ons. Some of the businesses licensed include: employment services, auctioneers, construction companies, talent agencies and bo iler owners and operators. Of the 14 functions, six have advisory boards that recommend rules and standards to the commission for their respective industry s professionals.

TDLR s Policy and Standards Section reviews and drafts rules and policies, as well as coordinates advisory boards activities. This process ensures more uniformity in the rule-making process, and advisory boards are accountable for their expenditures.

A number of free-standing licensing agencies still exist in Texas. There is no doubt that there is some duplication in hiring, mailing, supplies and equipment purchases, leasing and renting space, and telecommunications. The Board of Tax Professional Examiners (BTPE) is one of these agencies. Its six-member board is appointed by the gover nor and is responsible for establishing and enforcing rules and regulations and establishing standards for assessors, collectors and appraisers.

The agency collects an annual renewal and registration fee that is used to support the agency s education and certification/classification programs for property tax professionals. BTPE is made up of 3.5 employees; an executive director plus administrative support staff. Its licensing and rule-making functions are similar to those performed by TDLR.

In September 1991, a new function was added to TDLR registration of individuals who perform or supervise others in the performance of property tax consulting services. 1 The Property Tax Consultant Advisory Council is one of the commission s six advisory boards and is represented by individuals who perform consulting services and/or those engaged in property tax management.

The council is authorized to recommend standards of practice, conduct and ethics, fees, examination content, continuing education programs and educational requirements. 2 The statute also requires property tax consultants to meet specific certification and education criteria before being registered. BTPE handles equivalent responsibilities for certifying, educating and establishing rules and standa rds for assessors, collectors and appraisers of taxing units. The major difference is that BTPE exists as a single agency and the property tax consultant licensing function resides with TDLR.

There are many benefits to consolidating licensing functions within TDLR, but holding licensee industries more accountable to the public they serve is a key issue. Additionally, the department has standardized the rule-making process, as well as the approa ch to carrying out certifications, licenses, inspections and investigations. TDLR is equipped to handle the administrative, data processing, telecommunications and other services typically incurred by single boards and commissions. The department s enabling legislation positions them to acquire new professional and trade regulatory functions, as the Legislature deems appropriate.

A. The current Board of Tax Professional Examiners (BTPE) should be abolished and all of its functions and property should be transferred to the Texas Department of Licensin g and Regulation (TDLR), under the jurisdiction of the Texas Commission of Licensing and Regulation.

TDLR should be authorized in statute to appoint an advisory committee for tax professional examiners so that these professionals are represented. The advisory body will recommend licensure requirements, develop standards for practice and propose rules for these property tax professional examiners.

However, the commission, with the assistance of the executive director, will assume the responsibility for setting fees, assessing administrative penalties, processing disciplinary actions and approving the BTPE s operating budget and Legislative Appropriations Request. All BTPE administrative, licensing and certification functions should be transferred to the appropriate sections within TDLR.

B. Article 8885, Section 13 and 14, of the Government Code referring to annual and renewal fees, reinstatement penalties and initial application processing fees, should be amended to allow the Texas Commission of Licens ing and Regulation the authority to set fees and penalties at sufficient levels to recover their costs. The cost of specific fees and penalties should be addressed in department rules.

The current statute states that applicants should pay to the BTPE an annual and renewal fee of $35, reinstatement penalty of $25 and an initial processing fee of $50. A rider in the 1992-93 Appropriations Act gave the BTPE authority to raise the registrat ion fee and annual renewal fee to $45. However, the BTPE has requested a specific rider provision stating an increase in annual fees of $55 needed to support training activities in the 1994-95 biennium. For purposes of clarification, specific fee and penalty amounts should be removed from statute and addressed in the TDLR ru les. This would provide leeway to the Commission to set fees and penalties at sufficient levels to recover costs in the future. The appropriations rider can still specify a particular annual fee if the Legislature so designates. This change will make the a pproach to establishing fee policies of the BTPE consistent with the fee policies of a number of other licensing and regulatory functions under the TDLR. No fee increase is assumed in these recommendations, however.

Transferring BTPE s licensing function would mean a more standardized approach to licensure with additional fiscal and program control. Consolidating administrative services also would save the state money.

Opportunities exist for BTPE functions to be performed by existing TDLR employees once these employees are cross trained. For example, BTPE s certification process, which includes administering exams and registering tax professional examiners, would fit within TDLR s Licensing and Certification Section. TDLR also has space at its current location for BTPE employees.

Since BTPE would no longer exist as a separate agency and its board would become advisory, the interagency contract with the Comptroller of Public Accounts could be ended because the support functions are already h andled in TDLR. The cost to prepare property tax professionals for training and certification would be assumed by the TDLR through fees charged to applicants.

The industry blend of property tax professional examiners with property tax consultants might provide better representation of the property tax examiners and a more consistent regulatory approach.

Fiscal Impact
Transferring BTPE employees to the TDLR building would save $7,607 per year for leased space. With the transfer, an exempt executive dir ector position/salary and 1.5 administrative staff positions would not be needed, but two full-time positions would still be required. A reduction of the executive director s salary to that of a Group 17 Policy Analyst, would result in a yearly savings of $8,871. By eliminating 1.5 Group 8/Step 6 administrative positions, the annual savings would be $31,013. These functions will be absorbed by TDLR personnel. Additionally, the state could avoid the costs of full-time employees as requested in the BTPE Legis lative Appropriations Request.

Since the BTPE is required to set fees sufficient to recover costs, the fees should all go to the regulatory functions of property tax professional examiners; any excesses could revert to general revenue. However, none are anticipated at this time.

Advisory board members would be reimbursed for expenses as determined by the Commissioner. Savings in efficiency also could be achieved through consolidation and streamlined operations and functions.

Savings to the
Fiscal Assessors Registration Change
Year Account 160 in FTEs

1994 $48,000 -1.5
1995 48,000 -1.5
1996 48,000 -1.5
1997 48,000 -1.5
1998 48,000 -1.5

1 Texas Civil Statutes, Sec.1, Art. 8886.
2 Ibid.