January 28, 1997
Richard H. Robinson, Jr. Assistant to the President for Legal Affairs The University of North Carolina
P.O. Box 2688 Chapel Hill, NC 27515
Re: Advisory Opinion; Craven County Board of Education v. Boyles, 343 N.C. 87, 468 S.E.2d 50 (1996): Effect on Parking and Library Fines Collected By Constituent Institutions of The University of North Carolina
Dear Mr. Robinson:
This letter responds to your recent request for an opinion on whether parking and library fines collected by constituent institutions of The University of North Carolina (UNC) constitute "fines," "penalties" or "forfeitures" subject to claim by the various local school districts under article IX, section 7 of the North Carolina Constitution. In particular, you expressed concern with the decision in Craven County Board of Education v. Boyles, 343 N.C. 87, 468 S.E.2d 50 (1996), in which the North Carolina Supreme Court held that the local school districts may claim all monetary payments exacted as penalties that accrue to the State from the violation of either civil or criminal law.
It is our opinion that, insofar as the library fines are imposed for purposes other than punishment, and UNC generates and uses the parking fines pursuant to the General Assembly’s constitutional mandate to maintain and manage UNC as a public institution of higher education, article IX, section 7 does not reach these fines, Craven County notwithstanding.
I. The University Library Fines All constituent institutions of UNC maintain libraries for the use of their students and faculty. To help preserve the library collections against loss and to ensure that library materials are currently available to students and faculty, the constituent institutions charge fees for late return of borrowed materials and replacement charges for lost items. In Fiscal Year 1995-96, the consituent institutions reported collecting a total of $840,674 in library fines. It is our understanding that these funds are used to maintain and replenish the library collections.
The Effect of Craven County v. Boyles on the Ownership of The Library Fines Article IX, section 7 provides as follows:
All moneys, stocks, bonds, and other property belonging to a county school fund, and the
clear proceeds of all penalties and forfeitures and of all fines collected in the several
counties for any breach of the penal laws of the State, shall belong to and remain in the
several counties, and shall be faithfully appropriated and used for maintaining free public
schools. (Emphasis added).
The Craven County decision is the most recent of a series of Supreme Court decisions dating from the late nineteenth century that have addressed the issue of the scope of local school districts’ entitlements to funds under article IX, section 7 or its analog in the 1868 Constitution (article IX, section 5). In Craven County, the Court held that monies paid to the North Carolina Department of Environment, Health and Natural Resources resulting from violation of civil statutory air pollution control standards constituted a "penalty" under article IX, section 7, and should be remitted to the local school district.
The Constitution itself does not define "penal laws." However, courts have traditionally characterized a law, whether civil or criminal, as "penal" if the law imposes a monetary payment on anyone violating its terms and if the purpose of that payment is punishment. 3 C. Sands, Sutherland Statutes and Statutory Construction, § 59.01, at 91 (5th ed. 1992). The North Carolina Supreme Court’s decision in Craven County v. Boyles is consistent with that understanding. The Court affirmed that article IX, section 7 encompasses all monetary payments exacted as penalties that accrue to the State, regardless of whether they result from civil or criminal violations. Craven County Board of Education v. Boyles, 343 N.C. at 90 (citing State ex rel. Thornburg v. 532 B Street, 334 N.C. 290, 432 S.E.2d 684 (1993)). See also State ex rel. Hodge v. Marietta & North Georgia Railroad, 108 N.C. 24, 12 S.E. 1041 (1891) (holding that penalty accruing to State under civil statute is recoverable by local school districts).
Because a "penal law" is one that imposes a monetary payment as punishment for its violation, the courts have distinguished fines, penalties, and forfeitures from other sorts of payments, on the ground that they all are payments imposed as punishment. Thus, the specific nomenclature given to such monetary payments is insignificant. The critical factor in determining whether the monetary payments constitute "penalties, forfeitures, or fines" is not the label given the payments, but the nature of the offense that gave rise to them; i.e., whether the payments were imposed as the result of a breach of the "penal laws" of the State. Craven County v. Boyles, 343
N.C. at 92 (citing Cauble v. City of Asheville, 301 N.C. 340, 344, 271 S.E.2d 258, 260 (1980)). The Craven County Court concluded that the defendants’ monetary payments resulted from an offense that was penal in nature. Therefore, the payments were deemed to be penalties subject to article IX, section 7, even though they were not designated as "penalties" in the settlement agreement.
Despite the breadth of the Court’s construction of article IX, section 7 in Craven County v. Boyles, it is clear that Craven County would not support the proposition that this constitutional provision encompasses monetary payments accruing to the State that are imposed for some other purpose than punishment, such as remediation or restitution. Such types of payments would not result from a violation of "penal law" as the Court appears to regard it. See Shore v. Edmisten, 290 N.C. 628, 227 S.E.2d 553 (1976) (payments imposed for purpose of restitution to a governmental agency are not included in "clear proceeds" of fines under article IX, section 7); see also State ex rel. Thornburg v. 532 B Street, 334 N.C. 290, 432 S.E.2d 684 (1993), Meyer, J., dissenting (dissent concluded that certain forfeitures ordered pursuant to state RICO Act are remedial and not penal in nature and thus do not come within article IX, section 7). In Craven County, as in other recent decisions allocating funds to local school districts, the Court clearly perceived that the monetary payments at issue were intended as punishment for violation of a State civil or criminal law. See State ex rel. Thornburg, supra (forfeitures pursuant to state RICO Act were penal in nature and must be paid to public school fund); Mussallam v. Mussallam, 321
N.C. 504, 364 S.E.2d 364 (1988) (monetary payments from forfeiture of court appearance bond were penal in nature); Cauble v. City of Asheville, supra (fines city collected for overtime parking came within article IX, section 7 since imposed pursuant to city ordinance made penal by State statute).
The university library fines are distinguishable from the monetary payments in Craven County to the extent that they are assessed primarily for the maintenance and replenishment of the library collections rather than as punishment for failure to obey library regulations. In this respect, the library fines may be regarded as a means for furthering the Founders’ constitutional directive that UNC encourage and promote "useful learning." Foy v. University of North Carolina, 5 N.C. 80, 83-84 (1805) (citing N.C. Const. of 1776, § 41).
The library fines may also be distinguished from fines, penalties and forfeitures subject to article IX, section 7 on the basis of their relation to other constitutional provisions concerning public secondary and higher education and their funding. The county public school fund established by article IX, section 7 is one of two separate funds the Constitution created to assist the General Assembly in carrying out the State’s public policy to provide free public schools. N.C. Const. art. IX, § 2. However, the framers of the Constitution also directed the General Assembly to provide the State’s citizens higher education that is "as far as practicable. . . free of expense." N.C. Const. art. IX, § 9. While article IX, section 10 establishes an educational fund for UNC, consisting of revenue from escheats, the constituent institutions’ expenses so far exceed their income from that external source that the General Assembly has authorized them to generate revenue to help satisfy their constitutional mandate to keep tuition costs as low as possible. Given that the Constitution is to be construed as a consistent whole, Thomas v. State Board of Elections, 256
N.C. 401, 407, 124 S.E.2d 164, 169 (1962), it is our opinion that article IX, section 7 does not require funds — such as the library fines — generated within UNC, and used for the constitutionally required purpose of keeping the costs of university education as low as possible, to be diverted to the public schools in the county in which a constituent institution is located.
In summary, it is our opinion that, while a judicial exemption for the university library fines from article IX, section 7 cannot be predicted with certainty, such an exemption would be consistent not only with the Court’s interpretation of the "fines, penalties and forfeitures" provision of article IX, section 7 in Craven County v. Boyles, but also with the constitutional mandate of article IX, section 9 for higher education at the lowest possible cost.
II. The University Parking Fines Gen. Stat. § 116-44.4 authorizes the Boards of Trustees of the constituent institutions to establish ordinances for the regulation of traffic and parking on their campuses. The constituent institutions report that, as this statute permits, the funds they collect from violations of their ordinances are used for purposes relating to parking, traffic, and transportation on campus. In Fiscal Year 1995-96, the constituent institutions reported collecting a total of $3,766,102 in parking penalties.
The Effect of Craven County v. Boyles on the Ownership of The Parking Fines As noted, the constituent institutions generate and use funds from violations of their parking ordinances under the authority and terms of Gen. Stat. § 116-44.4. This statute authorizes two different means of enforcing violations of the institutional parking ordinances, only one of which generates funds for the constituent institutions. N.C.G.S. § 116-44.4(g), (h) (1994).
First, by provision of Gen. Stat. § 116-44.4(g), violations of the ordinances may be treated as infractions (as defined in Gen. Stat. § 14-3.1). This enforcement mechanism operates outside of the institution. Infractions are prosecuted by the local district attorney in District Court, and any resulting penalties are imposed and collected by the court. N.C.G.S. §§ 15A-1114; 15A-1116 (1988). The proceeds of these penalties must be paid to the county in which the infraction occurred, for use of the local public schools. N.C.G.S. § 14-3.1(a) (1993).
Alternatively, the constituent institutions may enforce their parking ordinances by imposing their own civil penalties according to procedures the Trustees establish, including administrative sanctions. N.C.G.S. § 116-44.4(h) enables the constituent institutions, through internal administrative action, to collect and retain the funds resulting from violations of their parking ordinances. Not surprisingly, all constituent institutions reporting to us indicate that they have elected this manner of enforcement. Funds each constituent institution receives pursuant to its own enforcement mechanisms are to be placed in a trust account and may be used for any of the following purposes:
- (1)
- To defray the cost of administering and enforcing ordinances adopted under [Gen. Stat. § 116-44.4];
- (2)
- To develop, maintain, and supervise parking areas and facilities;
- (3)
- To provide bus service or other transportation systems and facilities, including payments to any public or private transportation system serving University students, faculty, or employees;
- (4)
- As a pledge to secure revenue bonds for parking facilities issued under Article 21 of [Chapter 116, "Higher Education"];
- (5)
- Other purposes related to parking, traffic, and transportation on the campus. N.C.G.S. § 116-44.4(m) (1994).
Since these funds accrue to UNC, an agency of the State, and are imposed as a manner of punishment for violation of civil ordinances, the Supreme Court’s broad definition of "penal laws" in Craven County might initially appear to encompass them. However, a critical distinction exists between these parking fines and other fines or penalties our courts have held to be within the reach of article IX, section 7. Unlike any of those fines and penalties, the university parking fines generated by means of Gen. Stat. § 116-44.4(h) are legislatively designated, pursuant to express constitutional authority, for a purpose other than the funding of the local public schools: the maintenance and administration of The University of North Carolina.
Article IX, section 8 of the North Carolina Constitution provides as follows:
The General Assembly shall maintain a public system of higher education, comprising
The University of North Carolina and such other institutions of higher education as the
General Assembly may deem wise. The General Assembly shall provide for the selection
of trustees of The University of North Carolina and of the other institutions of higher
education, in whom shall be vested all the privileges, rights, franchises, and endowments
heretofore granted to or conferred upon the trustees of these institutions. The General
Assembly may enact laws necessary and expedient for the maintenance and management
of The University of North Carolina and the other public institutions of higher education.
(Emphasis added).
It is clear that Gen. Stat. § 116-44.4 is an exercise of the General Assembly’s authority and discretion granted by article IX, section 8, evidencing the intent to provide the means for administering the traffic and transportation aspect of the University’s "maintenance and management." Therefore, Craven County notwithstanding, we believe that article IX, section 7 cannot properly be read to invalidate Gen. Stat. § 116-44.4(m), thereby depriving The University of North Carolina of revenues generated internally and used pursuant to the specific grant of legislative authority in article IX, section 8.
In article IX, the framers articulated educational policies of apparently equal priority in favor of both public higher education and public secondary education, together with funding mechanisms for the support of each. Clearly, one such provision of the Constitution cannot be in violation of another. Martin v. State, 330 N.C. 412, 419, 410 S.E.2d 474, 478 (1991). In creating a class of penalties specifically devoted to funding UNC, the General Assembly was certainly aware of article IX, section 7. See N.C.G.S. § 116-44.4(g) (providing for infraction means of enforcement). Addressing the question of whether Gen. Stat. § 116-44.4(m) conflicts with article IX, section 7, the courts would be required to presume such awareness and resolve in the statute’s favor all doubts concerning its constitutional validity. E.g., State v. Pool, 74 N.C. 402, 405 (1876); Lowery v. School Trustees, 140 N.C. 33, 40, 52 S.E. 267 (1905); State v. White, 58 N.C. App. 558, 559, 294 S.E.2d 1, 2 (1982).
Therefore, it is our opinion that the university parking fines, which are governed by article IX, section 9, do not come within the "fines, penalties and forfeitures" provision of article IX, section
7. Accordingly, Craven County is not applicable to revenues generated under Gen. Stat. § 11644.4(h).
Andrew A. Vanore, Jr. Chief Deputy Attorney General
Celia Grasty Jones
Assistant Attorney General