North Carolina Department of Justice
North Carolina Department of Justice
North Carolina Department of Justice
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REPLY TO: Thomas G. Walker

(919) 716-6400 FAX: (919) 716-6750

January 24, 2002

The Honorable Eric Miller Reeves The North Carolina General Assembly Room 1028, Legislative Building Raleigh, North Carolina 27601-2808

The Honorable Alice Graham Underhill The North Carolina General Assembly Room 1219, Legislative Building Raleigh, North Carolina 27601-1096

Re: Advisory Opinion: Board of Agriculture; Department of Agriculture; Authority to Contract for State Fair Midway Operator

Dear Senator Reeves and Representative Underhill:

You have requested an opinion from this Office regarding the legal authority of the Department of Agriculture to enter into a contract selecting the midway operator for the State Fair. Specifically, you have asked for an opinion with respect to the following legal questions: (1) Between the Department of Agriculture and the Board of Agriculture, who has the authority to select the midway operator for the State Fair? (2) Between the Department of Agriculture and the Board of Agriculture, who has the authority to execute contracts for operation of the midway at the State Fair? (3) Between the Department of Agriculture and the Board of Agriculture, who has the ultimate authority and responsibility for the operation and management of the North Carolina State Fair? After careful analysis of relevant statutory provisions and well-established legal principles of deference to an agency’s long-standing interpretation of its governing statutes, it is the opinion of this Office that the Department of Agriculture has the ultimate authority to select the midway operator for the State Fair, to execute contracts necessary for the operation of the midway at the State Fair and to operate the State Fair.

The Commissioner of Agriculture is an elected constitutional office established by Article III, § 7 of the North Carolina Constitution. In accordance with Chapter 143A, Article 7, the Commissioner heads the Department of Agriculture and Consumer Services, a principal state department, with such powers and responsibilities as are conferred by statute and the constitution. As head of a principal department, the Commissioner is responsible for the department’s general management, including the budget, personnel, and official records.

The Honorable Eric Miller Reeves The Honorable Alice Graham Underhill January 24, 2002 Page 2

The specific statutory responsibilities of the Commissioner are primarily set forth in Chapter 106 of the General Statutes. Included among those responsibilities are a wide variety of programs related to the State’s agricultural economy. The Commissioner exercises many of these responsibilities with the “consent and advice” of the Board of Agriculture. N.C.G.S. § 106-2; 106

22. The Commissioner is vested with individual responsibility, however, for certain other functions. See, e.g. N.C.G.S. § 106-140.1 (maintaining a registry of prescription drug producers); N.C.G.S. § 106-262 (requiring reports regarding milk sales and purchases).

The Board of Agriculture is established by N.C.G.S. § 106-2 for the primary purpose of providing “consent and advice” to the Commissioner of Agriculture in carrying out the statutory responsibilities of the Department. Notwithstanding this general authority, the Board is vested with specific responsibility for certain other programs. See, e.g. N.C.G.S. § 106-187 (duty to investigate and provide information to the public regarding marketing of farm products); N.C.G.S. § 106-407.2 (power to revoke livestock market permit). Our review of Chapter 106 therefore reveals a broad spectrum of statutory language defining the relative responsibilities of the Commissioner and the Board.

The State Fair was created by action of the 1927 General Assembly with management responsibility vested in a board of directors. Session Law 1927, Chapter 209. In 1931 the General Assembly created the Department of Agriculture, Immigration and Statistics, with all duties to be performed by the Commissioner of Agriculture with the advice of a newly created Board of Agriculture. Session Law 1931, Chapter 360. This act repealed the 1927 act and transferred responsibility for the State Fair to the Board. N.C.G.S. § 106-503, the current codification of the 1931 act, states that the State Fair shall be managed, operated and conducted by the Board of Agriculture.

However, this statutory language must be construed within the context of the Executive Organization Act of 1971. N.C.G.S. § 143A et seq. Pursuant to N.C.G.S. § 143A-59, the Board was transferred to the Department by a Type II transfer. In accordance with N.C.G.S. § 143A-6, under a Type II transfer “the management functions of [the] transferred agency or part thereof, shall be performed under the direction and supervision of the principal department.” The term “management functions” is defined as “planning, organizing, staffing, directing, coordinating, reporting and budgeting.” N.C.G.S. § 143A-6(c).

We believe this statutory language supports an interpretation that Chapter 143A transferred responsibility for the midway operator contract from the Board to the Department. We recognize, however, that N.C.G.S. § 106-503 represents a prescribed statutory power which, arguably, is retained by the Board. Nevertheless, our research has failed to identify a legal precedent which clearly resolves this conflict.

In view of this conflict, as well as the absence of jurisdictional clarity in many other programs for which the Department and Board are responsible, we believe that the issues presented The Honorable Eric Miller Reeves The Honorable Alice Graham Underhill January 24, 2002 Page 3

should be analyzed within the context of the interpretations historically applied by the Department and Board themselves. It is a well-established principal that the long-standing interpretation of a statute by the administering agency should be given deference. Chevron U.S.A. Inc., v. National Resources Defense Council, Inc. 467 U.S. 837 (1984). “The interpretation of a statute given by the agency charged with carrying it out is entitled to great weight.” Frye Regional Medical Center, Inc.

v. Hunt, 350 N.C. 39 (1999). “Administrative interpretation of a statute, acquiesced in over a long period of time, is properly considered in the construction of the statute by the courts.” Petty v. Owen, 140 N.C. App. 494 (2000).

We have been made aware of at least three factors which support a conclusion that both the Department and the Board have historically agreed that the Department has the authority to award and administer the midway operator contract. First, it is our understanding that for at least 20 years the former Commissioner of Agriculture selected the midway operator, negotiated and executed a contract with an operator and also managed and operated the State Fair, all with the acquiescence of the Board of Agriculture. Two, we understand that during the average fair over 500 leases are executed. These leases are for services, various vendors and exhibitors who annually take part in the fair. Historically, none of these leases has been reviewed or signed by the Board of Agriculture. Third, the Council of State adopted a resolution on July 1, 1975, after the Executive Organization Act of 1971, now codified at 1 N.C.A.C. 6B.0307, which reads as follows:

.0307 LEASES AT STATE FAIRGROUND The Department of Agriculture, without prior approval of the Council of State, is authorized to enter into leases of buildings on the State Fair Grounds, leases of space on the State Fair Grounds, and contracts for the furnishing of rides, shows and other services on the State Fair Grounds, provided that the duration of such leases, rental agreements and contracts shall not exceed 15 days.

We are aware that the General Assembly in its last session amended N.C.G.S. § 106503.1(b). This amendment gives the Board of Agriculture specific statutory authority to raise money in certain enumerated ways in order to construct and finance facilities and improvements for the State Fair. N.C.G.S. § 106-503.1(b) permits the Board of Agriculture to enter into leases and contracts and to pledge gate receipts to meet the purposes of this statute. By its very language, the amendment only applies to the agreements, contracts and leases authorized under N.C.G.S. § 106503.1(b) which are directed to the construction and financing of facilities and improvements for the State Fair. It does not apply to the selection of a midway operator.

The Honorable Eric Miller Reeves The Honorable Alice Graham Underhill January 24, 2002 Page 4

We recognize that this is a close legal question. However, for the aforementioned reasons, this Office believes that the Department of Agriculture and Consumer Services has the authority to select the midway operator, execute contracts and operate and manage the North Carolina State Fair.

Very truly yours,

Edwin M. Speas, Jr. Chief Deputy Attorney General

Ann Reed Senior Deputy Attorney General

Thomas G. Walker Special Counsel for Policy and Planning

TGW/sp