FORMAL OPINION
DATE: October 17, 1994
Subject: Department of Correction Pay Telephone System; Public Utility Status Formal Opinion
Requested by: LaVee Hamer, General Counsel, N. C. Department of Correction
Question: Is the North Carolina Department of Correction subject to the regulatory fee requirement provided in N.C. Gen. Stat. §62-302?
Conclusion: No, the Department of Correction, as a State agency, is not a public utility as defined by N.C. Gen. Stat. §62-3 (23) and, therefore, is not subject to requirements of N. C. Gen. Stat. §62-302.
The North Carolina Department of Correction offers telephone service to inmates by the means of pay telephone instruments in its confinement facilities. N.C. Gen. Stat. §62-110 (c) requires that all persons under the jurisdiction of the North Carolina Utilities Commission (the "Commission") offering telephone service to the public by means of private coin, coinless, and key-operated pay telephone instrument obtain a Special Certificate from the Commission. The North Carolina Department of Correction filed an application for such a special certificate and received a Special Certificate on February 22, 1989 (NCUC Docket No. SC-418).
Subsequent to the issuance of the Special Certificate, the Commission began sending quarterly requests for payment of the regulatory fee set out in N.C. Gen. Stat. §62-302. The Department of Correction is seeking an opinion from the Attorney General as to whether it is subject to the regulatory fee requirements set out in the statute.
The North Carolina Utilities Commission is authorized to assess a regulatory fee from every public utility under the jurisdiction of the Commission. This authority is set out in N.C. Gen. Stat. §62-302, which reads in pertinent part:
(a) Fee Imposed – It is the policy of the State of North Carolina to provide fair regulation of public utilities in the interest of the public, as provided in G.S. 62-2. The cost of regulating public utilities is a burden incident to the privilege of operating as a public utility. Therefore, for the purpose of defraying the cost of regulating public utilities, every public utility subject to the jurisdiction of the Commission shall pay a quarterly regulatory fee, in addition to all other fees and taxes, as provided in this section. The fees collected shall be used only to pay the expenses of the Commission and the Public Staff in regulating public utilities in the interest of the public." (Emphasis added.)
"Public utility" is defined by N. C. Gen. Stat. §62-3 (23) as follows:
(a) … a person, whether organized under the laws of this State or under the laws of any other state or country, now or hereafter owning or operating, in this State equipment or facilities for: . . .
6. Conveying or transmitting messages or communications by telephone or telegraph or any other means of transmission, where such service is offered to the public for compensation.
The threshold question, then, is whether the Department of Corrections is a "public utility" within the meaning of the statute.
The statutory definition of "public utility" includes any "person…[c]onveying or transmitting messages or communications by telephone … to the public for compensation." N.C. Gen. Stat. §62-3 (21) defines "person" to include any:
"[c]orporation, individual, copartnership, company, and association, or any combination
of individuals or organizations doing business as a unit, and includes any trustee,
receiver, assignee, lessee, or personal representation thereof."
The State, or any agency of the State, is not expressly identified within the definition of "person" or "public utility"; neither is there any specific reference to the State in N.C. Gen. Stat. §62-302. North Carolina law has consistently found that a general statute is not applicable to the State, or agency thereof, unless the State is expressly included in the statute. Yancey v. Highway Commission, 222 N.C. 106, 22 S.E.2d 256 (1942). See also Davidson County v. City of High Point, 85 N.C. App. 26, 37, 354 S.E.2d 250 (1987).
When these rules are applied to the language in the relevant statutes, it is clear that the statutory definition of public utility does not include the Department of Corrections and the Department is thus not subject to the payment of the regulatory fee set out in N. C. Gen. Stat. §62-302. This conclusion is consistent with prior case law and formal opinions of the Attorney General.
In State ex. rel. Utilities Commission v. Chapel Hill Telephone Company, 12 N.C. App. 543, 183, S.E.2d 802, cert. denied, 279 N.C. 729, 184 S.E.2d 887 (1971), the court applied this standard in determining that the University of North Carolina at Chapel Hill, an agency of the State, was not included in the definition of "public utility" as then defined in Chapter 62 and was, therefore, not subject to the authority of the Commission. The statute was later amended to specifically include the University of North Carolina system.
In a formal opinion issued on June 8, 1993, the Attorney General, citing Yancey v. State Highway Commission, supra., determined that the North Carolina State Ports Authority is not a public utility as defined by N.C. Gen. Stat. §62-3 (23) and that its services, rates, and charges are not subject to regulation of the North Carolina Utilities Commission.
In conclusion, the Department of Correction, as a State agency, is not a public utility within the meaning of N.C. Gen. Stat. §62-3(23) and, therefore, is not subject to the regulatory fee requirements of N.C. Gen. Stat. §62-302.
MICHAEL F. EASLEY Attorney General
J. Mark Payne
Assistant Attorney General