October 13, 1998
The Honorable J. Sam Ellis House of Representatives State Legislative Building Raleigh, NC 27601
Re: Advisory Opinion; Wake County Public Schools and Qualified Nonpublic Schools Exempt from Certain Local Government "Development Charges"; 1997 N.C. Session Laws c. 450.
Dear Representative Ellis:
You have written to ask for this office’s opinion on the application of a local act entitled "An Act Exempting the Wake County Public School System and Qualified Nonpublic Schools of Wake County from Development Charges Related to the Construction, Renovation, and Repair of School Infrastructure Facilities in Wake County and the Municipalities Therein, and to Change Several Other Laws Affecting Wake County." 1997 N.C. Session Laws c. 450. Section 1 of this Act, provides in pertinent part:
Notwithstanding any other provision of law, the Wake County Public School System and qualified nonpublic schools of Wake County shall be exempt from development charges assessed by Wake County or any municipality having territory within Wake County where the development charge is assessed against the construction, renovation, or repair of school infrastructure facilities.
The Act then goes on to define "development charge" to include a wide variety of fees related to the regulation of building construction, renovation and repair, e.g., impact fees, facility fees, development fees, project fees and regulatory fees based on student seating capacity and building permit fees.
In light of the General Assembly’s enactment of this local bill, you have asked two questions. Those questions and our responses follow.
Question: Could Wake County, or any municipality in Wake County, charge the Wake County Public School System a building permit fee for a school construction project, if the building permit was issued after the effective date of the Act?
Answer: No.
The Act provides that the Wake County Public School System (WCPSS) and qualified nonpublic schools in Wake County are "exempt" from development charges "assessed" against its construction projects by Wake County and its municipalities. "Building permit fee[s]" are among the fees specifically included in the Act’s definition of "development charges." Therefore, it is our opinion that, after the effective date of the Act, i.e., August 28, 1997, Wake County and its municipalities are prohibited from assessing a building permit fee against a WCPSS school construction project or a school construction project of a qualified nonpublic school in Wake County Question: After the effective date of the Act, could Wake County or a municipality in Wake County enter into an agreement with the Wake County School System under which the County or municipality would agree to conduct building inspections on a school project and charge a fee to a contractor and the Wake County School System would agree to reimburse the contractor for the fee?
Answer: No.
The effect of the Act can only be understood in the context of counties’ and municipalities’ obligations to regulate the construction of buildings within their jurisdiction. Pursuant to G.S. § 153A-352, counties are obligated to regulate the construction and maintenance of buildings within their territorial jurisdiction. That statute expressly states:
These duties and responsibilities include receiving applications for permits and issuing or denying permits, making necessary inspections, issuing or denying certificates of compliance, issuing orders to correct violations, bringing judicial actions against actual or threatened violations, keeping adequate records, and taking any other actions that may be required to adequately enforce the laws and ordinances and regulations.
(Emphasis added). G.S. § 153A-351(a1), in turn, provides that counties may fulfill their obligations under G.S. § 153A-352 by creating their own inspection departments, creating joint inspection departments with other local units of government or contracting with other units of local government to provide inspection services. Municipalities are subject to the same inspection obligations and Chapter 160A, Article 19, Part 5 of the General Statutes provides them with the same means for fulfilling those obligations. In order to raise funds to support their building inspection departments, counties and municipalities are authorized to appropriate funds and fix fees for "issuing permits, for inspections, and for other services of the inspection department." G.S. §§ 153-354 and 160A-414.
The plain effect of the Act was to exempt WCPSS and qualified nonpublic schools from paying many of the fees that Wake County and its municipalities charge to support their inspection departments. The Act, however, left unaltered the County’s or municipalities’ obligation to continue to perform the related statutory duties and responsibilities. Consequently, the ultimate effect of the Act, and the apparent legislative purpose, was to require the County and its municipalities to provide the services associated with the "development charges" to WCPSS and qualified nonpublic schools free of charge.
The question, therefore, becomes: Can WCPSS and the County or municipalities circumvent the exemption which the Act grants to WCPSS and shift the cost of regulating the construction and maintenance of school buildings back to WCPSS by entering into a contract under which WCPSS is obligated to pay for building inspections and other construction services that the County and municipalities are statutorily obligated to provide? In our opinion, they cannot.
The cardinal rule of statutory construction is that legislation must be construed to accomplish the General Assembly’s intent. Sutton v. Aetna Casualty and Surety Co., 325 N.C. 259, 265, 280 S.E.2d 759 (1989). When ascertaining legislative intention, statutes must be interpreted as a whole. In re Brownlee, 301 N.C. 532, 272 S.E.2d 851 (1981). The law looks to the substance of an act, not its form, to determine whether it is prohibited. State v. Lipkin, 169 N.C. 265, 271, 84
S.E. 340, 343 (1915) (interpreting gambling statutes); Animal Protection Soc. of Durham, Inc. v. State, 95 N.C. App. 258, 382 S.E.2d 801, 807 (1989)(interpreting gambling statutes).
Moreover, local units of government cannot act contrary to the desire of the General Assembly. The powers of counties and municipalities emanate from the State; they cannot contravene the policy of the State nor can they exercise powers which they are expressly or impliedly prohibited from exercising. E.g., Greene v. City of Winston-Salem, 287 N.C. 66, 72, 213 S.E.2d 231, 235 (1975). When exercising their delegated authorities, counties and municipalities must recognize and give effect to the intent of the legislature. They cannot evade the purpose of legislation by elevating form over substance. Id. at 76 (city cannot evade legislature’s intent to completely regulate installation of sprinkler systems by codifying city ordinance requiring sprinklers in highrise buildings as part of its fire code rather than building code). Compare, Homebuilders Ass’n of Charlotte, Inc. v. City of Charlotte, 336 N.C. 37, 442 S.E.2d 45 (1994) (municipalities can charge user fees to cover the cost of regulatory services provided by the city when such fees are not contrary to or restricted by State or federal law).
In light of those legal principles, it is our opinion that in passing the Act the legislature intended to absolve WCPSS and qualified nonpublic schools from the obligation to pay the costs associated with building inspections and other County and municipal activities related to building construction and to require the County and municipality building inspection departments to absorb the cost of providing those building construction services to the schools. Therefore, in our opinion, any agreement between WCPSS and the County or a municipality which obligates WCPSS to pay the County or a municipality "development charges" as defined in the Act under the guise of consideration for services which the County or municipality is statutorily obligated to provide would be null and void as contrary to that legislative intent.
We hope this letter answers your questions. We apologize for the delay in responding to your request.
signed by:
Grayson G. Kelley Senior Deputy Attorney General
Thomas J. Ziko
Special Deputy Attorney General