Can a Virginia county sign a contract with another state to inspect locally-built modular buildings for that state's building code?

Plain-English summary

A Tazewell County business contracted to manufacture metal shell structures, designed to house utility equipment, for shipment to Washington State. Washington's building code requires that out-of-state-manufactured structures be inspected for code compliance by a "government official" in the state of manufacture. Washington does not accept inspections from licensed private inspectors operating outside its borders. The Washington State Department of Labor and Industries sent the business a form agreement that would delegate inspection authority to a "government official" in the manufacturing state, in exchange for certain contractual commitments.

The business asked Tazewell County's building officials to do the inspections. The County Attorney asked the AG: can the county do this, and if so, are its employees protected by sovereign immunity?

The AG answered no on both counts.

Why the county cannot enter the agreement. Virginia follows the Dillon Rule of strict construction. "Municipal corporations possess and can exercise only those powers expressly granted by the General Assembly, those necessarily or fairly implied therefrom, and those that are essential and indispensable." Power to enter into agreements with other states is held by the General Assembly under Va. Const. art. IV, § 14, and negotiated by the Governor under art. V, § 7.

Va. Code § 36-105(A) makes local building departments responsible for enforcing the Virginia Uniform Statewide Building Code on property in the Commonwealth. The industrialized building in question would be shipped to and erected in Washington, where Washington's code governs. The AG found no statutory authority enabling Virginia localities to inspect locally-manufactured industrialized buildings for compliance with another state's code. Under the Dillon corollary, "if there is any reasonable doubt whether legislative power exists, that doubt must be resolved against the local governing body."

The AG noted by contrast that the General Assembly has specifically authorized localities to enter into certain interstate agreements in other contexts (joint water authorities under §§ 15.2-5100 through 15.2-5158; garbage disposal contracts under §§ 15.2-815 and 15.2-932). Where the legislature wants localities to have interstate contracting authority, it says so. It has not said so for out-of-state building inspections.

Why sovereign immunity wouldn't attach. The Virginia Supreme Court's four-part test from Messina v. Burden (1984) considers: the nature of the function, the state's interest in it, the state's degree of control over the employee, and whether the act involved judgment and discretion. Local governments and their employees get the benefit of the same test.

Here, because the county lacked authority to do the work in the first place, the work was not a "lawful interest" of the county. The first two prongs of the test fail. No statutory framework, no state interest, no immunity. County employees performing the inspections would be exposed to ordinary tort liability for any errors that led to harm.

The opinion is a Dillon Rule classic: just because something looks like a reasonable accommodation between governments doesn't mean a county can do it without enabling legislation.

Currency note

This opinion was issued in 2013. 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.

Anyone considering whether a Virginia locality can perform a function on behalf of an out-of-state government should check the current Virginia Code for any enabling legislation enacted since 2013, and consult Virginia counsel familiar with the Dillon Rule analysis.

Common questions

What is the Dillon Rule?
A judicial principle that local governments have only the powers expressly granted by the state legislature or necessarily implied from express grants. Where there is doubt, doubt is resolved against the locality. Virginia is one of the strongest Dillon Rule states.

What is an industrialized building?
Va. Code § 36-71.1 defines it as a combination of one or more sections or modules with the necessary electrical, plumbing, heating, ventilating, and other service systems, manufactured off-site and transported to the point of use for installation or erection. Often called modular or factory-built buildings.

Why does Washington require inspections in the state of manufacture?
Because the inspection has to happen before the building leaves the factory floor. Once shipped, modular components are harder to inspect: walls are closed up, systems are concealed. Pre-shipment inspection is the only practical way to verify compliance.

Could the manufacturer hire a private inspector instead?
Washington's rules at the time required a "government official" in the manufacturing state. A private inspector wouldn't satisfy that requirement under the Washington framework described in the opinion.

What was the practical effect of this opinion for the Tazewell manufacturer?
The county couldn't help. The manufacturer would need either (a) Washington to relax its rules, (b) the General Assembly to pass enabling legislation, (c) a different inspection arrangement (perhaps involving a state agency rather than a county), or (d) a different state's market.

Could the General Assembly fix this?
Yes. The AG opinion explicitly states: "For a locality to exercise such power, the General Assembly would have to enact enabling legislation granting localities that authority." A statute authorizing localities to enter into inspection agreements with other states would resolve the issue.

What if the county had done it anyway?
The county would have acted ultra vires (beyond its authority). Any contract entered into would be vulnerable to challenge. Inspections performed could create exposure: no sovereign immunity, possible negligence claims if a structure failed and an inspector's certification was relied upon.

Does the same rule apply to cities and towns?
Yes. The Dillon Rule applies to all forms of Virginia local government, with limited charter-specific variations.

Background and statutory framework

• Va. Const. art. IV, § 14: General Assembly's broad legislative power, including authority over agreements with other states.
• Va. Const. art. V, § 7: Governor conducts intercourse with other states.
• Va. Code § 36-105(A): local building departments enforce the Virginia Uniform Statewide Building Code.
• Va. Code § 36-71.1: definition of "industrialized building."
• Dillon Rule: foundational rule of strict construction of local powers (Richmond v. Confrere Club).
• Messina v. Burden four-part sovereign immunity test: nature of function, state interest, state control, judgment/discretion.

The interpretive moves:

• No express or necessarily implied statutory authority for the proposed agreement.
• Dillon Rule resolves doubt against the locality.
• Without lawful authority for the function, the sovereign immunity test fails at the threshold.

Citations

• Va. Const. art. IV, § 14
• Va. Const. art. V, § 7
• Va. Code § 36-71.1
• Va. Code § 36-105
• Richmond v. Confrere Club of Richmond, Inc., 239 Va. 77, 387 S.E.2d 471 (1990)
• Messina v. Burden, 228 Va. 301, 321 S.E.2d 657 (1984)
• Burns v. Gagnon, 283 Va. 657, 727 S.E.2d 634 (2012)
• Ligon v. Goochland County, 270 Va. 312, 689 S.E.2d 666 (2010)
• Harrison v. Day, 201 Va. 386, 111 S.E.2d 504 (1959)
• 1974-75 Op. Va. Att'y Gen. 221
• 2004 Op. Va. Att'y Gen. 82

Source

• Landing page: https://www.oag.state.va.us/annual-reports-opinions/official-opinions
• Original PDF: https://www.oag.state.va.us/files/Opinions/2013/13-073_Young.pdf

Original opinion text

COMMONWEALTH of VIRGINIA
Office of the Attorney General
Kenneth T. Cuccinelli, II
Attorney General

900 East Main Street
Richmond, Virginia 23219
804-786-2071
FAX 804-786-1991
Virginia Relay Services
800-828-1120
7-1-1

October 11, 2013

C. Eric Young, Esquire
County Attorney for Tazewell County
108 East Main Street
Tazewell, Virginia 24651

Dear Mr. Young:

I am responding to your request for an official advisory opinion in accordance with § 2.2-505 of the Code of Virginia.

Issues Presented

You inquire whether a county may enter into an agreement with another state to perform inspections of industrialized buildings manufactured in a Virginia facility, to determine compliance with the building code of the other state. You also inquire whether the county or its employees would be entitled to the protection of sovereign immunity with respect to the performance of such inspections.

Response

It is my opinion that a county may not enter into an agreement with another state to perform building inspections of industrialized buildings manufactured in a Virginia facility, to determine compliance with the building code of the other state. It is my further opinion that neither the county nor its employees would be entitled to the protection of sovereign immunity with respect to the performance of such inspections.

Background

You relate that a business in Tazewell County has contracted to manufacture metal shell structures to be shipped to the state of Washington for use in the housing of utility equipment. You further relate that the business has requested that the county's building officials inspect the metal shell structures and certify to Washington State that the structures comply with Washington State's building code. You have been advised that Washington State's building code requires that such structures manufactured out of state be inspected for compliance with Washington State's building code by a "government official" in the state where the structure is manufactured. You indicate that Washington State does not accept certifications from licensed private inspectors performing inspections in other states. You have received a form agreement prepared by the Washington State Department of Labor and Industries by which that agency delegates specific inspection authority of factory-assembled structures to government officials in the state of manufacture, in return for certain contractual commitments by the governmental entity that is agreeing to undertake the inspections on behalf of Washington State.

Applicable Law and Discussion

The power to enter into agreements with other states is held by the General Assembly,[1] and those agreements may be negotiated by the Governor.[2]

Virginia generally follows the Dillon Rule of strict construction and its corollary for municipalities. "[M]unicipal corporations possess and can exercise only those powers expressly granted by the General Assembly, those necessarily or fairly implied therefrom, and those that are essential and indispensable."[3]

Enforcement of the provisions of the Virginia Uniform Statewide Building Code for new construction and rehabilitation of existing buildings erected on property in the Commonwealth has been designated as the responsibility of the local building department.[4] Notwithstanding this statutory authority, the type of building to be manufactured at the facility in your locality is an industrialized building,[5] to be shipped to Washington State, where it will be affixed to real property, and thus made subject to that state's building code.

I find no statutory authority enabling Virginia localities to enter into agreements with other states to inspect locally-manufactured industrialized buildings to determine such structure's compliance with that state's building code.[6] "If there is any reasonable doubt whether legislative power exists, that doubt must be resolved against the local governing body."[7] Therefore, it is my opinion that a county does not have the authority to enter into such an agreement.[8]

You also ask whether the county or its employees would be entitled to the protection of sovereign immunity for tort claims arising from the performance of such inspections. The applicability of such immunity to a given government activity constitutes a question of law, and is subject to a four-part analysis established by the Virginia Supreme Court.[9] In the landmark case of Messina v. Burden,[10] the Court articulated the legal test as follows:

In James we developed a test to determine entitlement to immunity. Among the factors to be considered are the following:

1. the nature of the function performed by the employee;
2. the extent of the state's interest and involvement in the function;
3. the degree of control and direction exercised by the state over the employee; and
4. whether the act complained of involved the use of judgment and discretion.[11]

This test likewise applies to the actions of a local government, and its employees, respecting the performance of a given function.[12]

Under the factual scenario that you describe, and consistent with the lack of enabling authority for the county to enter into an agreement with another state for the stated purpose, it is apparent that the county would have no lawful interest in the function at issue. Therefore, it is my opinion that the county would not satisfy the legal test to establish an entitlement to the protection of sovereign immunity for it or its employees respecting the performance of the inspections.

Conclusion

Accordingly, it is my opinion that a county may not enter into an agreement with another state to perform building inspections of industrialized buildings manufactured in a Virginia facility, to determine compliance with the building code of the other state. It is my further opinion that neither the county nor its employees would be entitled to the protection of sovereign immunity with respect to the performance of such inspections.

With kindest regards, I am

Kenneth T. Cuccinelli, II
Attorney General

[1] VA. CONST. art. IV, § 14 ("The authority of the General Assembly shall extend to all subjects of legislation not herein forbidden or restricted"). See also Harrison v. Day, 201 Va. 386, 396, 111 S.E.2d 504, 511 (1959) ("The Constitution of the State is not a grant of legislative powers to the General Assembly, but is a restraining instrument only, and, except as to matters ceded to the federal government, the legislative powers of the General Assembly are without limit.").

[2] VA. CONST. art. V, § 7 ("The Governor shall conduct, either in person or in such manner as shall be prescribed by law, all intercourse with other and foreign states."). See also 1974-75 Op. Va. Att'y Gen. 221, 221-22.

[3] Richmond v. Confrere Club of Richmond, Inc., 239 Va. 77, 79, 387 S.E.2d 471, 473 (1990).

[4] VA. CODE ANN. § 36-105(A) (Supp. 2013).

[5] See § 36-71.1 (2011) ("'Industrialized building' means a combination of one or more sections or modules, subject to state regulations and including the necessary electrical, plumbing, heating, ventilating and other service systems, manufactured off-site and transported to the point of use for installation or erection, with or without other specified components, to comprise a finished building.").

[6] In contrast, the General Assembly has granted authority to localities to enter into agreements in certain other specific contexts. Cf. VA. CODE ANN. §§ 15.2-5100 through 15.2-5158 (2012 and Supp. 2013) (authorizing localities to create a water authority in conjunction with other localities); 2004 Op. Va. Att'y Gen. 82 (concluding locality could enter into an agreement with neighboring jurisdiction in North Carolina to create joint water authority). Cf. also § 15.2-815 (2012) & § 15.2-932 (2012) (authorizing localities to enter contracts with other entities for garbage disposal services).

[7] Richmond v. Confrere Club of Richmond, Inc., 239 Va. 77, 79, 387 S.E.2d 471, 473 (1990).

[8] For a locality to exercise such power, the General Assembly would have to enact enabling legislation granting localities that authority.

[9] See Burns v. Gagnon, 283 Va. 657, 666, 676, 727 S.E.2d 634, 646 (2012).

[10] 228 Va. 301, 321 S.E.2d 657 (1984).

[11] Id. at 313, 321 S.E.2d at 663 (citing James v. Jane, 221 Va. 43-53, 282 S.E.2d 864, 869 (1980)).

[12] See, e.g., Ligon v. Goochland County, 270 Va. 312, 316, 689 S.E.2d 666, 668 (2010) (wherein the Court stated, "The same immunity principles apply to counties, which are political subdivisions of the Commonwealth."); and see Colby v. Boyden, 241 Va. 125, 128-30, 400 S.E.2d 184, 186-87 (1991).