Opinion
23-ALJ-30-0299-RH
10-05-2023
South Carolina Department of Motor Vehicles, Proponent, In Re: Bil ling Accounts
PUBLIC HEARING REPORT
DEBORAH BROOKS DURDEN, JUDGE
PROCEDURAL HISTORY
This matter is before the Administrative Law Court (ALC or Court) pursuant to an Agency request regarding Document Number 5221 filed by counsel for the South Carolina Department of Motor Vehicles (Agency, Department, or SCDMV) on August 1, 2023. The Agency proposes to promulgate regulations under Sections 90-500 through 90-503. The proposed promulgation would effectively transfer regulations currently housed in Sections 38-250 through 38-253 from the Chapter of the South Carolina Code of Regulations pertaining to the South Carolina Department of Public Safety (DPS) to the Chapter pertaining to the Agency. Further, this promulgation also contains some changes to the former regulations to bring the newly promulgated regulations into alignment with the Agency's current processes for billing accounts.
On September 25, 2023, the Department filed its Statement Confirming Need for Public Hearing and Statement of Need and Reasonableness. During the promulgation process the Department received no public comments and no requests for a public hearing. A public hearing still needed to be held, however, to address five typographical errors in the Proposed Regulations as published in the Public Register on August 25, 2023. For that reason, a public hearing was held at the ALC on October 2, 2023. Appearing at the hearing for the Agency were Brandy A. Duncan, General Counsel and Adam Wagnblas, Director of Administration. No one registered as interested parties.
INTRODUCTION
The regulations at issue in this report concern the creation and management of billing accounts at the Agency. Specifically, many businesses and individuals have legitimate business needs to obtain records from the Agency on a regular basis. To streamline the production of such records for the businesses and individuals, the Agency created the billing account process. When the Agency was still a part of DPS, it promulgated regulations under Section 38-250 through 38253 regarding the billing account process. 2003 Act No. 51, § 3 created the Agency and transferred all functions, powers, duties, responsibilities, and authority statutorily exercised by the Motor Vehicle Division and the Motor Carrier Services unit with DPS to the Agency. At the time of the split of the Agency from the DPS, the regulations regarding the two agencies were not divided within the South Carolina Code of Regulations. Thus, after discovering this failure to split the regulations regarding the Agency and DPS, following the split of the agencies, SCDMV began a review of all regulations within the DPS Chapter of the South Carolina Code of Regulations to determine what, if any, SCDMV regulations were still contained within the DPS Chapter of the South Carolina Code of Regulations for purposes of evaluating whether the regulations were still needed. For those regulations the Agency determined were still needed, the regulation promulgation process was started. Each regulation identified was grouped topically for promulgation so that similar topics could be addressed in one set of promulgation and dissimilar topics would be addressed separately.
These regulations are promulgated pursuant to the authority provided by S.C. Code § 561-5, et seq., which generally sets out the power, authority, and duties of the Agency.
STANDARD OF REVIEW
The process for promulgating regulations, or rule-making, is contained in Chapter 23, Title 1 of the South Carolina Code. To promulgate regulations, an agency must give notice in the State Register. S.C. Code § 1-23-110(A)(1). If requested "by twenty-five persons, by a governmental subdivision or agency, or by an association having not less than twenty-five members," a public hearing must be held. S.C. Code § 1-23-110(A)(3). When promulgation is by a single-director agency, an administrative law judge (ALJ) must conduct the hearing. S.C. Code § 1-23-111(A). As the presiding official, the ALJ "shall issue a written report which shall include findings as to the need and reasonableness of the proposed regulation based on an analysis" of factors contained in Section 1-23-115(C). S.C. Code § 1-23-111(B); see also Rule 48, SCALC. These factors include cost and benefit, effect on business or cost of living, effect on employment, source of revenue for implementation, uncertainties of benefit or burden, and the effect on environmental or public health. S.C. Code § 1-23-115(C) (excluding subsection (C)(4) and (C)(8) as stated in Section 111). If the ALJ determines that the proposed regulations are not needed or reasonable, the agency may modify the proposed regulations, promulgate with the report, or terminate promulgation. S.C. Code § 1-23-111(C).
PUBLIC COMMENT
The Agency's General Counsel informed this Court that no one reached out to the Agency with comments regarding promulgation of these regulations following publication of the Notice of Drafting or after publication of the Proposed Regulations. Additionally, no one appeared at the time of the public hearing to comment on the proposed regulations or the proposed amendments to correct typographical errors in the proposed regulations.
DISCUSSION
90-500: Establishing a Billing Account
90-500 sets out who may establish billing accounts with the Agency, the minimal information that must be provided to the SCDMV to establish a billing account, that a security deposit must be remitted in accordance with a fee schedule established by the Agency, and that approval of the billing account will be in the Agency's sole discretion. This largely tracks how this regulation is currently drafted in S.C. Reg. 38-250, although some updates are evident to conform with the Agency's current practice. Specifically, the Agency has limited the ability for an individual to establish a billing account to people who hold a professional license (e.g., attorneys, real estate agents, etc.); has added that an email address must be provided for the contact person; and that an account number will be assigned to the customer (rather than only a four-digit account number). The Agency has also removed the requirement to provide an estimate of the number and type of anticipated requests per month with the application for billing account. The substantive changes bring the regulations more closely in line with the Agency's current practice and process for evaluating applications for billing accounts. The Court finds no reason not to implement these changes. There is no obvious cost, burden, or other economic effect to promulgating these regulations with the changes noted above since this is a process the Agency already engages in informally, based in part on the regulation currently housed in the DPS Chapter of the South Carolina Code of Regulations. Therefore, the Court recommends promulgation of this regulation with the changes already captured in the Proposed Regulations published in the State Register.
90-501: Department Invoicing Procedures
90-501 sets out the Agency's invoicing procedures, including a notation that all charges for information will be made at the normal and typical rate for that document or information. This largely tracks how this regulation is currently drafted in S.C. Reg. 38-251, with the exception that part 1 of S.C. Reg. 38-251 set out a price list for specific items and the Proposed Regulations do not. This difference in drafting was created because the price list in S.C. Reg. 38-251 is no longer accurate, both in terms of the items available and the prices. Further, since prices for SCDMV documents and information may change from time to time, and because the documents and information provided may also change based on statutory changes, provisos in the State Budget, and other flexible factors, the Agency found it inadvisable to list every document and type of information that may be provided. The Court finds no reason not to implement these changes. There is no obvious cost, burden, or other economic effect to promulgating these regulations with the changes noted above since this is a process the Agency already engages in informally, based in part on the regulation currently housed in the DPS Chapter of the South Carolina Code of Regulations. Therefore, the Court recommends promulgation of this regulation with the changes already captured in the Proposed Regulations published in the State Register.
90-502: Delinquent Billing Accounts
90-502 sets out the processes to be used with delinquent billing accounts, including disposition or use of the security deposit to satisfy any outstanding invoices that remain unpaid following proper notice to the billing account customer regarding the outstanding invoices (and return of any security deposit funds that may remain following satisfaction of any outstanding invoices). This largely tracks how this regulation is currently drafted in S.C. Reg. 38-252, with the exception that the use of the security deposit by the Agency is set out in detail and that the regulation has been modified to give the Agency some discretion about whether to suspend or close the billing account. An additional modification would allow the Agency to deny a future billing account to a person that is an immediate family member, as defined in S.C. Code § 56-3720, of a person that fails to pay their balance due to the Agency within thirty days of generation of a balance due invoice. The Court finds no reason not to implement these changes. There is no obvious cost, burden, or other economic effect to promulgating these regulations with the changes noted above since this is a process the Agency already engages in informally, based in part on the regulation currently housed in the DPS Chapter of the South Carolina Code of Regulations. Therefore, the Court recommends promulgation of this regulation with the changes already captured in the Proposed Regulations published in the State Register.
90-503: Closing Billing Accounts
90-503 sets out the processes to be used when closing a billing account, including disposition or use of the security deposit to satisfy any outstanding balance due at the time of billing account closure. This largely tracks how this regulation is currently drafted in S.C. Reg. 38-253. At the Public Hearing the Agency did request to make five changes in this section to address typographical errors contained in the Proposed Regulation as published in the State Register. Those are:
1) The accidental omission of the word "of" in the address listed in section 90-503(A).
2) The accidental misnumbering of a regulation reference in section 90-503(C) within these same proposed regulations. The draft of the proposed regulation originally referred to 90-303(3) and (4). Following guidance from Legislative Council during the initial drafting of the proposed regulations, however, SCDMV changed the proposed regulations from a 300 series to a 500 series. However, SCDMV missed updating the reference to 90-303(3) and (4) in the body of the original draft of the proposed regulations. To ensure the final regulations reflect the correct reference, these typographical errors should be corrected to show that the regulation being referenced is 90-502(C) and (D).
The Court finds no reason not to implement these changes. There is no obvious cost, burden, or other economic effect to promulgating these regulations with the changes noted above since this is a process the Agency already engages in informally, based in part on the regulation currently housed in the DPS Chapter of the South Carolina Code of Regulations. Therefore, the Court recommends promulgation of this regulation with the changes already captured in the Proposed Regulations published in the State Register and with the additional changes noted in this Public Hearing Report.
RECOMMENDATION
Upon review of the proposed regulatory changes, I find that they are both needed and reasonable. Therefore, I RECOMMEND that Document 5221 be APPROVED.
October 5, 2023 Deborah Brooks Durden, Judge Columbia, South Carolina S.C. Administrative Law Court
CERTIFICATE OF SERVICE
I, Robin E. Coleman, hereby certify that I have this date served this Order upon all parties to this cause by depositing a copy hereof, in the United States mail, postage paid, or by electronic mail to the address provided by the party(ies) and/or their attorney(s).