Whether Funds Collected by the North Carolina Board of Nursing are State Funds

N.C.G.S. § 138-5.

Dear Mr. Kramer:

At the direction of the North Carolina Board of Nursing (“Board”), you have requested an Attorney General’s Opinion on the following issues:

(1)

Are funds collected by the Board “State funds” as that term is used in

N.C.G.S. §143-1? and

(2)

If so, how does that affect the distribution of per diem compensation to Board members?

For the reasons stated below, funds collected by the Board do constitute “State funds.” “State funds” are defined in the Executive Budget Act as “any and all moneys appropriated by the General Assembly of North Carolina, or moneys collected by or for the State, or any agency thereof, pursuant to the authority granted in any of its laws.”

N.C.G.S. §143-1.

The Board of Nursing was created by the General Assembly to administer the Nursing Practice Act, Article 9A, which is the mandatory licensure act to ensure minimum standards of competency and to provide the public safe nursing care. N.C.G.S. § 90

171.19. The Board’s duties include recommending and collecting fees for licensure, licensure renewal, examinations and reexaminations as it deems necessary for fulfilling the purposes of the Article. N.C.G.S. § 90-171.23. The fees collected by the Board are “State funds” as defined in the Executive Budget Act.

The compensation of members of State boards and commissions is addressed in Mr. Howard Kramer July 27, 2001 Page 2

N.C.G.S. § 138-5. Pursuant to this statute, the compensation of members of State boards and commissions depends on whether the funds of the board or commission at issue are deposited with the State treasury.

N.C.G.S. § 138-5(a) provides:

Except as provided in subsections (c) and (f) of this section, members of State boards, commissions, committees and councils which operate from funds deposited with the State Treasurer shall be compensated for their services at the following rates:

(1)

Except as otherwise provided by this subdivision, compensation at the rate of fifteen dollars ($15.00) per diem for each day of service. Members of the North Carolina Vocational Rehabilitation Council, the Statewide Independent Living Council, and the Commission for the Blind who are unemployed or who shall forfeit wages from other employment to attend Council or Commission meetings or to perform related duties, may receive compensation not to exceed fifty dollars ($50.00) per diem for attending these meetings or performing related duties, as authorized by sections 105 and 705 of the Rehabilitation Act of 1973, P.L. 102-569, 42

U.S.C. § 701, et seq., as amended.

(2)

Reimbursement of subsistence expenses at the rates allowed to State officers and employees by subdivision (3) of N.C.G.S. 138-6(a).

(3)

Reimbursement of travel expenses at the rates allowed to State officers and employees by subdivisions (1) and (2) of N.C.G.S. 138-6(a).

(4)

For convention registration fees, the actual amount expended, as shown by receipt.

(Emphasis added.)

Pursuant to N.C.G.S. § 138-5(a), it is only members of those State boards, commissions, committees and councils which operate from funds deposited with the State Treasurer who shall be compensated in accordance with the provisions of this statute. While the North Carolina Board of Nursing funds are State funds, they are not deposited with the State Treasurer. Rather, the Executive Director of the Board is required to deposit all fees payable to the Board into a financial institution or institutions as designated by the Board. These deposits are required to be used to pay all expenses incurred by the Board in carrying out its legislative mandate. N.C.G.S. § 90-171.25. Specifically, all salaries, compensation and expenses incurred in furtherance of the Article shall not be charged against the State treasury, but shall be paid by the Board exclusively out of the fees Mr. Howard Kramer July 27, 2001 Page 3

received by the Board or funds received from other sources. N.C.G.S. § 90-171.27.

In summary, while the funds used to pay Board members their per diem compensation are “State funds,” they are not funds deposited with the State Treasurer. Therefore, the payment of members of State boards and commissions as mandated by

N.C.G.S. § 138-5(a) does not apply to the members of the Board of Nursing. The conclusions set forth herein are consistent with the conclusions contained in the prior Opinion of the Attorney General addressed to Henry L. Bridges, State Auditor, dated November 4, 1979. In that opinion, the conclusion was that even though the funds collected by the occupational licensing boards constituted “State funds,” the Division of State Budget had only limited jurisdiction over those boards, in part, because the boards do not bank with the State Treasurer.

We trust that we have answered your concerns, but if we may be of further assistance, please let us know.

Sincerely,

J. B. Kelly General Counsel

John R. Corne Special Deputy Attorney General