June 3, 1993
Stan C. Broadway Executive Director
N.C. State Education Assistance Authority Box 2688 Chapel Hill, N.C. 27515-2688
Re: Advisory Opinion; Article 23, Chapter 116 of the General Statutes;
State Education Assistance Authority Contingency Reserve Trust Fund
Dear Mr. Broadway:
We write in response to your request for our opinion regarding the power of the State Education
Assistance Authority to establish the "State Education Assistance Authority Contingency Reserve
Trust Fund" and to transfer to that fund the part of the Reserve Trust Fund created under G.S.
116-209 equal to appropriations made to the Authority by the General Assembly and interest
accruing on those appropriations. The Authority has determined that this transfer will not affect
the Authority’s reserve capacity and that this transfer is otherwise in the interest of the State and
its citizens. The Contingency Reserve Trust Fund will be managed under the auspices of the
State Treasurer. It will be used for the purposes specified in a document adopted by the Board of
Directors for the Authority. Those purposes are essentially the same as the purposes for which
the Reserve Fund itself may be used.
It is our opinion that the Authority has this power under G.S. 116-204, and other provisions of
Article 23, particularly G.S. 116-209.3, to create the Contingency Reserve Trust Fund and
transfer to that Fund the part of the Reserve Trust Fund which represents legislative
appropriations, with accrued interest, so long as the Contingency Reserve Trust Fund is managed
under the auspices of the State Treasurer and used for the purposes specified by the Board of
Directors for the Authority in the document prepared by the Board. In addition, in our opinion no
part of the Contingency Reserve Trust Fund may be used for "maintenance and operation" of the
Authority. See G.S. 116-209.
Edwin M. Speas, Jr.
Senior Deputy Attorney General