January 24, 1996
John Carter
P. O. Box 766 Jacksonville, NC 28541
Re: Advisory Opinion; Community Colleges Use Of State Funds To Purchase Liability Insurance; N.C. Gen. Stat. § 115D-31.1
Dear John:
Sometime ago you wrote on behalf of Coastal Carolina Community College to ask whether community colleges could use state funds to purchase liability insurance to cover, among other things, damages awarded against the community college for claims filed under the Tort Claims Act, N.C. Gen. Stat. § 143-291 et seq. It is our opinion that community colleges may use state funds to purchase such insurance.
Pursuant to N.C. Gen. Stat. § 143-291(a), community colleges and technical colleges are deemed to be State agencies for purposes of the Tort Claims Act. Accordingly, these colleges are subject to suit before the Industrial Commission for their negligent acts and the negligent acts of their officers, employees, agents and involuntary servants and may be held liable to claimants for up to $150,000 in damages. N.C. Gen. Stat. § 115D-32(a)(2)b2 provides that the tax-levying authority for each community college is responsible for appropriating funds to pay for "[a]ny tort claims awarded against the institution due to the negligence of the institutional employees."
Pursuant to N.C. Gen. Stat. § 115D-24 and § 115D-58.12, community colleges are authorized to purchase liability insurance to insure the community college against damages for injuries caused by its agents or employees acting within the scope of their employment. N.C. Gen. Stat. § 115D58.12(e) expressly authorizes the board of trustees of a community college "to pay as a necessary expense the lawful premiums of liability insurance provided in this section."
The question of whether the board of trustees may use state funds as opposed to local funds to purchase such insurance is addressed in N.C. Gen. Stat. § 115D-31.1. That statute states:
Notwithstanding the provisions of G.S. 115D-32(a)(2)b2 and any other provision of the law to the contrary, boards of trustees of all institutions in this Chapter may use State funds to pay the lawful premiums of liability insurance as provided in this section.
It is our opinion that despite the fact N.C. Gen. Stat. § 115D-32(a)(2)b2 specifically obligates the community colleges to pay any tort claims awarded against them from local funds, in passing
N.C. Gen. Stat. § 115D-31.1 the General Assembly intended to permit community colleges use state funds to purchase liability insurance to cover those awards.
Edwin M. Speas, Jr.
Senior Deputy Attorney General
Thomas J. Ziko
Special Deputy Attorney General