February 19, 1996
The Honorable Lucy Hancock Bode Chairman, North Carolina Medical Care Commission Department of Human Resources
P.O. Box 29530 Raleigh, North Carolina 27626-0530
Re: Advisory Opinion; Authority of Nonresident Corporate Trustee; N.C.G.S. § 131A-12
Dear Ms. Bode:
This will respond to your request of our office for an opinion on the issue of whether banks that do not have offices located within the State of North Carolina may legally serve as, and carry out the responsibilities of, the trustee for bonds issued by the North Carolina Medical Care Commission.
As a general rule of law, a nonresident bank or trust company does not have the statutory authority to exercise fiduciary powers in this state. The General Assembly, however, has in certain instances provided an express statutory exception to the general rule. In the case of the North Carolina Medical Care Commission, N.C.G.S. § 131A-12 provides in relevant part that [i]n the discretion of the Commission any bonds or notes issued under the provisions of this Chapter may be secured by a trust agreement by and between the Commission and a corporate trustee, which may be any trust company or bank having the powers of a trust company within or without the state.
It thus clearly appears that the Commission may designate a nonresident corporate trustee to administer the bonds and notes which the Commission is authorized to issue pursuant to
N.C.G.S. § 131A-11.
We trust that this provides you with the information you seek. If we may be of further assistance, please let us know.
Ann Reed Senior Deputy Attorney General
L. McNeil Chestnut
Assistant Attorney General