Can the NC State Board of Cosmetic Art Examiners adopt a rule defining rented cosmetology booths as 'cosmetic art shops' subject to licensure and inspection, even though the statute doesn't expressly say so?

Plain-English summary

Representative Richard Morgan asked the AG whether the NC State Board of Cosmetic Art Examiners could adopt a rule defining a rented cosmetology booth as a "cosmetic art shop." The practical stakes were licensing and inspection: a "shop" comes with sanitation rules, periodic inspection, and licensure under Chapter 88; a person renting a booth inside someone else's shop might not, depending on how the term is read.

Senior Deputy AG Ann Reed, joined by Assistant AG P. Bly Hall, analyzed it as a basic question of administrative-rulemaking authority under the APA. Under N.C.G.S. § 150B-19(1), a state agency rule cannot implement or interpret a law unless that law (or another statute) specifically authorizes the agency to do so. Authority can be express or implied. The General Motors v. Kinlaw line of cases lets an agency exercise implied authority when the implication is necessary for the agency to function properly. Any rule must be reasonably necessary to fulfill a delegated duty, per N.C.G.S. § 150B-21.9.

Applying those tests to the Board: the express grant in N.C.G.S. § 88-23 authorized the Board to adopt reasonable rules for the sanitary management of cosmetic art shops; the Board was also generally responsible for licensing and inspecting such shops and enforcing Chapter 88. From that combination, the Board had the responsibility of applying the statutory definition of "cosmetic art shop" to actual fact situations. If the Board could build a factual record showing that defining rented booths as shops was reasonably necessary for it to do its job (for instance, evidence of sanitary or accountability problems at booth-rental operations that ordinary shop regulation could not reach), it would arguably have implied authority to adopt such a rule.

The AG was careful not to declare the question fully settled. The opinion used hedged language ("arguably might," "would arguably have implied authority"), reflecting the case-specific nature of implied-authority analysis. The Board had recently considered, proposed, and then declined to adopt a booth-as-shop rule, concluding that at the time the facts and circumstances did not support such a showing. The AG signaled that nothing in the statutes as written would prohibit the Board from revisiting the question if the factual record changed.

Currency note

This opinion was issued in 1993. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here.

The North Carolina APA has been amended several times since 1993, including significant changes to rulemaking procedure and to the role of the Rules Review Commission. Chapter 88 has been amended; the Board itself has been reorganized and renamed in subsequent legislation. The general doctrine of implied agency authority (the General Motors v. Kinlaw approach) remains good law, but anyone considering booth-versus-shop regulation today should start with the current Chapter 88, the current Cosmetic Art rules in Title 21 of the N.C. Administrative Code, and any later cases or AG opinions addressing booth-rental arrangements.

Common questions

Q: What is the practical difference between a "cosmetic art shop" and a rented booth?
A: A shop, under Chapter 88, is a licensed, inspected, sanitarily managed establishment. A rented booth, depending on how the lease is structured, can blur the lines: who is the licensee, who is responsible for cleanliness, who answers to inspectors when a violation is found? Defining booths as shops would put the booth-renter on the regulatory hook directly.

Q: Why did the Board pull back from adopting the rule?
A: According to the opinion, the Board concluded that no facts or circumstances at the time supported the showing that the rule was reasonably necessary. The Board was not told the rule was illegal; it was told the supporting record was not strong enough yet.

Q: What does "implied authority" mean in administrative law?
A: It means an agency can do things the statute does not literally spell out if the action is reasonably necessary for the agency to carry out its delegated duties. The classic NC formulation comes from General Motors Corp. v. Kinlaw, 78 N.C. App. 521 (1985). It is a fact-bound doctrine: the more clearly the gap-filling rule serves a delegated function, the stronger the implied-authority argument.

Q: Could a court overturn a rule the Board adopted on this theory?
A: Yes, on judicial review under N.C.G.S. § 150B-43 et seq. The challenger would argue that the rule went beyond the Board's authority or was unsupported by reasonable necessity. The Board's posture under the AG's opinion was that a defensible factual record was a precondition, not a formality.

Q: How does N.C.G.S. § 150B-21.9 fit in?
A: That statute requires that any rule adopted be reasonably necessary to fulfill an agency's delegated duty. It is the substantive backstop to the rulemaking process: even after a rule clears notice and comment, the Rules Review Commission (and courts on review) check it against this necessity test.

Background and statutory framework

The North Carolina Cosmetic Art Practice Act, Chapter 88 of the General Statutes, regulates the practice of cosmetic art (cosmetology, esthetics, manicuring, and related disciplines) and the establishments where it is performed. N.C.G.S. § 88-4 (in the form referenced in this opinion) included definitions of regulated practices and establishments. N.C.G.S. § 88-23 authorized the Board of Cosmetic Art Examiners to adopt reasonable rules for sanitary management of shops and to enforce the Act.

The state Administrative Procedure Act, Chapter 150B, governs how agencies adopt rules. Under § 150B-19(1), a rule cannot implement or interpret a law unless the legislature has specifically authorized the agency to do so. That requirement does not foreclose all implied authority; it requires the agency to point to some legislative grant from which the implied power reasonably flows. § 150B-21.9 requires that rules be reasonably necessary to carry out delegated duties.

Booth-rental arrangements began appearing more commonly in the 1980s and 1990s as cosmetologists shifted away from W-2 employment toward independent operation inside larger salons. The regulatory question is whether the salon operator (who leases the space) or the individual cosmetologist (who controls the booth) is the appropriate licensee for sanitation and inspection purposes. States have answered the question differently; in 1993 the NC Board was actively considering whether to address it by rule. The AG's opinion gave the Board a roadmap: build the record, then act.

Citations

• N.C.G.S. § 150B-19(1) (rules must rest on statutory authority)
• N.C.G.S. § 150B-21.9 (rules must be reasonably necessary to fulfill delegated duty)
• N.C.G.S. § 88-4 (definitions under Chapter 88)
• N.C.G.S. § 88-23 (Board authority to adopt sanitary rules)
• Chapter 88 of the General Statutes generally (Cosmetic Art Practice Act)
• General Motors Corp. v. Kinlaw, 78 N.C. App. 521, 338 S.E.2d 114 (1985) (agency authority may be express or implied where necessary for proper functioning)

Source

• Landing page: https://ncdoj.gov/opinions/extent-of-the-state-board-of-cosmetic-art-examiners-rulemaking-authority/

Original opinion text

April 13, 1993

The Honorable Richard Morgan
Representative
North Carolina General Assembly
Legislative Office Building
Raleigh, North Carolina

Re: Advisory Opinion; Representative Richard Morgan; Extent of the State Board of Cosmetic Art Examiners' rulemaking authority; G.S. 150B-19, 88-4, 88-23 and Chapter 88 of the General Statutes generally

Dear Representative Morgan:

I have received your letter of March 30, 1993 regarding the rulemaking authority of the North Carolina State Board of Cosmetic Art Examiners (Board). As you state in your letter, the Board recently proposed and then decided not to adopt a rule that would have defined rented cosmetology booths as cosmetic art shops. You note that the Board may be petitioned to revisit the issue, and you are therefore inquiring about the extent of the Board's rulemaking authority in this matter.

A rule adopted by a State agency pursuant to Chapter 150B of the General Statutes may not implement or interpret a law unless that law or another law specifically authorizes the agency to do so. N.C.Gen. Stat. § 150B-19(1) (1991). An administrative agency's authority may be expressly granted in a statute or implied from a general grant of authority where necessary for the agency to function properly. See General Motors Corp. v. Kinlaw, 78 N.C.App. 521, 338 S.E.2d 114 (1985). Any rule adopted must be reasonably necessary to fulfill a duty delegated to the agency by the General Assembly. See N.C.Gen. Stat. § 150B-21.9 (1991). The Board has explicit statutory authority to adopt reasonable rules for the sanitary management of cosmetic art shops, N.C.Gen.Stat. § 88-23 (1990); it is also generally given the duty to license and inspect such shops and to enforce its rules and the provisions of Chapter 88 of the General Statutes. The Board therefore has the responsibility of applying the statutory definition of "cosmetic art shop" to given fact situations and arguably might, by rule, define a particular situation to be a "cosmetic art shop" if necessary. If the Board could show, based on existing facts and circumstances, that defining "cosmetic art shop" to include rented cosmetology booths was reasonably necessary for the Board to function properly, the Board would arguably have implied authority to adopt such a rule. General Motors Corp. v. Kinlaw, 78 N.C.App. 521, 338 S.E.2d 114. Nothing in the statutes as of the date of this letter would prohibit such an action. I am informed that in deciding not to adopt the proposed rule, the Board concluded that at least at this time no facts or circumstances exist that would support such a showing.

If this office can be of any further assistance in this matter, please do not hesitate to contact us.

Ann Reed
Senior Deputy Attorney General

P. Bly Hall
Assistant Attorney General