ORDERS:
PUBLIC HEARING REPORT OF THE ADMINISTRATIVE LAW JUDGE
Pursuant to S. C. Code Ann. §§ 1-23-110 and 1-23-111, a public hearing was held on January 9,
1996 at the Administrative Law Judge Division, Columbia, South Carolina to determine the "need
and reasonableness" of Proposed Regulation 106-15. The proposed regulation is intended to
fulfill the South Carolina Residential Builders Commission's ("Commission") responsibility to
promulgate regulations to "establish minimum qualifications and uniform criteria" for the licensure
of home inspectors. This regulation is being proposed by the Commission pursuant to 1994 S.C.
Act No. 463, which, among other things, prescribes licensing requirements for persons engaging
in or transacting home inspection businesses.
More specifically, S.C. Code Ann. §§ 40-59-240(B) and 40-59-280, respectively, require the
Commission to promulgate regulations to (1) establish the minimum qualifications and uniform
criteria for granting a home inspection license, and (2) administer the provisions of 1994 S.C. Act
No. 463 and to establish fees reasonably necessary to cover the cost of administering the licensing
requirements. Further, 1995 Act No. 151, a joint resolution, provides temporary qualifications
for licensure of home inspectors until qualifications are established by the Commission.
FINDINGS
1. Proposed Regulation 106-15 is being proposed by the Commission pursuant to 1994 S.C. Act
No. 463.
2. The purpose of Proposed Regulation 106-15 is to administer qualifications for licensure of
persons desiring to engage in the business of home inspection and establish licensing fees for
home inspectors.
3. The promulgation of the proposed regulation complies with the express mandate of S.C. Code
Ann. §§ 40-59-240(B) and 40-59-280 of 1994 S.C. Act No. 463.
4. The Notice of Drafting of the proposed regulation was published in the State Register on
August 25, 1995.
5. The Commission filed an Agency Transmittal Form with the Administrative Law Judge
Division on November 7, 1995, requesting a public hearing on the proposed regulation.
6. The Notice of the Proposed Regulation was published in the State Register on November 24,
1995, which included a synopsis of the proposed regulation and the Notice of Opportunity for
Public Comment and Hearing.
7. The Board complied with all notice and procedural requirements of the APA and the ALJD
Rules of Procedure.
8. A public hearing to allow agency presentation and public comment was conducted on January
9, 1996, pursuant to S.C. Code Ann. § 1-23-111 (Supp. 1995).
9. The public hearing was attended by agency representatives and members of the public who
presented testimony and written materials relating to the proposed regulation, all of which were
incorporated into the record of the hearing.
10. At the hearing, this tribunal and members of the public raised concerns that Proposed
Regulation 106-15 did not adequately and practically provide a qualifying mechanism for persons
already engaged in the business of performing home inspections, who were not currently certified
or licensed by an organization approved by the Commission. It was suggested that these home
inspectors should be able to practically and expeditiously prove or demonstrate their expertise and
qualifications to be licensed under guidelines established pursuant to 1994 Act No. 463.
11. At the close of oral testimony, agency representatives requested that the record remain open
so that the Commission could consider the concerns raised at the hearing and possibly modify the
proposed regulation accordingly. By Order of this tribunal, the record remained open until
February 10, 1996. It was further ordered that the Commission submit any modifications to
interested members of the public present at the hearing in a timely manner before February 10,
1996 for additional responsive comments.
12. On January 19, 1996, the Commission submitted modifications to Proposed Regulation
106-15 to this tribunal. Charles Dillard, President of Southern Home Inspections, Inc., responded
to the Commission's modifications to the proposed regulation on January 29, 1996. Mr. Dillard,
who testified in opposition to the proposed regulation at the hearing, is now of the opinion that
the proposed regulation is reasonable and necessary as modified. There were no other public
comments submitted to this tribunal in response to the modifications.
13. Proposed Regulation 106-15, as modified, establishes an examination fee of fifty ($50) dollars,
which is the actual cost of administering the examination.
14. The proposed regulation adopts qualifications for licensure virtually identical to those
contained in 1995 S.C. Act No. 151, the joint resolution. Under these criteria, a person may be
licensed without submitting to an examination by the Commission, if such person is currently
certified or licensed by an organization approved by the commission; and
a. has one year of experience under the direct supervision of a licensed home inspector,
residential builder, etc.; or
b. has performed at least 50 residential inspections.
15. Additionally, the proposed regulation sets forth an examination as a means for those currently
engaged in providing home inspections who do not meet the above criteria to be licensed. To be
entitled to take the home inspection examination, a person must have:
a. performed 50 home inspections within one year prior to January 1, 1996 or
b. one year of experience as a home inspector under the direct supervision of a licensed
home inspector, residential builder, etc. or
c. successfully completed a formal course of training/study in home inspection approved
by the Commission.
CONCLUSION S
To determine if a regulation is reasonable, inquiry must be made as to whether the regulation has
a rational basis or is rationally related to the end sought to be achieved. Hunter & Walden Co. v.
S.C. State Licensing Bd. for Contractors, 272 S.C. 211, 251 S.E.2d 186 (1978). That is, a
regulation is valid as long as it is reasonably related to the purpose of the enabling legislation.
Young v. SCDHPT, 287 S.C. 108, 336 S.E.2d 879 (Ct. App. 1985). However, a regulation
which is beyond the authorization of the agency's enabling legislation or which materially alters or
adds to the law is invalid. Society of Professional Journalists v. Sexton, 283 S.C. 563, 324 S.E.2d
313 (1984); Banks v. Batesburg Hauling Co., 202 S.C. 273, 24 S.E.2d 496 (1943). Proposed
Regulation 106-15 does not lessen or enlarge the powers of the Commission, but is reasonable
and necessary for the Commission to execute its charge pursuant to Act No. 463 of 1994.
Pursuant to 1994 S.C. Act No. 463, the proposed regulation is being promulgated to administer
qualifications for licensure of persons desiring to engage in the business of home inspection.
Further, in accordance with S.C. Code Ann. §§ 40-59-240(B) and 40-59-280, the proposed
regulation (1) establishes the minimum qualifications and uniform criteria for granting a home
inspection license, and (2) administers the provisions of 1994 S.C. Act No. 463 and establishes
fees reasonably necessary to cover the actual cost of administering the licensing requirement. The
proposed regulation rationally achieves the mandate with which the Commission was charged.
The proposed regulation is not beyond the authorization of, and does not materially alter or add
to S.C. Code Ann. §§ 40-59-240(B) and 40-59-280, the enabling statutes. Rather, the proposed
regulation lies within the scope of the authority conferred to the Commission. Therefore, the
proposed regulation is a valid regulation.
The modifications of the proposed regulation submitted by the Commission satisfy the concerns
raised by this tribunal and interested parties. The Commission addressed these concerns by
adequately and practically providing a qualifying mechanism for persons already engaged in the
business of performing home inspections, who are not otherwise qualified because of their
association with an organization approved by the Commission. With the modifications, the
proposed regulation establishes a reasonable method for these home inspectors to prove or
demonstrate their expertise and qualifications to be licensed as home inspectors through
examination. Additionally, the proposed regulation contains qualifications that must be satisfied
for a home inspector to be licensed without further examination, if the applicant has been licensed
by an organization approved by the Commission.
For the foregoing reasons, I conclude that Proposed Regulation 106-15, as modified, adequately
addresses the principal concerns raised at the hearing of this matter. I further conclude that the
proposed regulation is consistent with S.C. Code Ann. §§ 40-59-240(B) and 40-59-280, and
reasonable and necessary for the Commission to execute its charge under these statutes.
____________________________________
JOHN D. GEATHERS
Administrative Law Judge
Edgar A. Brown Building
1205 Pendleton Street
Columbia, South Carolina 29201
February 20, 1996 |
