Summary
noting that the Governor's constitutional duty to balance the budget was paramount to the General Assembly's desire to control major budget transfers
Summary of this case from Goldston v. StateOpinion
21 January 1982
Hon. Joseph Branch
Chief Justice
Hon. J. Frank Huskins
Hon. J. William Copeland
Hon. James G. Exum, Jr.
Hon. David M. Britt
Hon. J. Phil Carlton
Hon. Louis B. Meyer
Associate Justices
Of the Supreme Court of North Carolina
Raleigh, North Carolina 27611
My dear Sirs:
Especially in the light of your recent decision in State ex rel. Wallace v. Bone, 304 N.C. 591, 286 S.E.2d 79, 1982, Case No. 55, Fall Term 1981, questions of great public importance have arisen in connection with the mandate of our Constitution that the powers of the three branches of State government "shall be forever separate and distinct from each other." In accordance with established practice, we are writing to request your advisory opinion on these questions.
The questions involve the constitutionality of two statutes enacted by the General Assembly, on October 10, 1981, as parts of Chapter 1127 of the 1981 Session Laws. One of the statutes relates to State budget transfers, and the other relates to Federal block grant funds. Outlined below are the provisions of those statutes, the pertinent provisions of our State Constitution, and the questions on which we seek your opinion.
A. The Statutes Involved
(a) State Budget Transfers
Since its enactment in 1929, G.S. 143-23 has provided as follows:
"All appropriations now or hereafter made for the maintenance of the various departments, institutions and other spending agencies of the State, are for the purposes and/or objects enumerated in the itemized requirements of such departments, institutions and other spending agencies submitted to the General Assembly by the Director of the Budget and the Advisory Budget Commission, and/or as amended by the General Assembly. Transfers or changes as between objects and items in the budget of any department, institution or other spending agency, may be made at the request in writing of the head of such department, institution or other spending agency by the Director of the Budget."
Consistent with Section 5(3) of Article III of the N.C. Constitution, the Governor is ex officio Director of the Budget. G.S. 143-2.
By Section 82 of Chapter 1127 of the 1981 Session Laws, the General Assembly enacted the following amendment to the statute quoted above:
"G.S. 143-23 is amended by designating the present language as subsection (a) and by adding a new subsection (b) to read:
'(b) Notwithstanding subsection (a), no requested transfer or change from a program line item may be made if the total amount transferred from that line item during the fiscal year would be more than ten percent (10%) of the amount appropriated for that program line item for that fiscal year, unless the Joint Legislative Commission on Governmental Operations has given its prior approval for that transfer. This restriction applies to all State departments with a total General Fund appropriation of at least fifty million dollars ($50,000,000). All other departments shall apply the ten percent (10%) limitation to the summary by object line items. No transfers or changes, regardless of amount, from salary funds may be made without the prior approval of the Joint Legislative Commission on Governmental Operations. The Commission must take action within 40 days of receiving a request for approval from the Office of State Budget and Management. Transfers or changes within the Medicaid program are exempt from this subsection.' "
The Joint Legislative Commission on Governmental Operations was established by Chapter 490 of the 1975 Session Laws to provide for "the continuing review of operations of State government," and it is comprised of the President of the Senate, the Speaker of the House, and twelve other members of the General Assembly. G.S. 120-71 through 120-79.
Thus, the new G.S. 143-23(b), as enacted by Section 82 of Chapter 1127 of the 1981 Session Laws, purports to give to a fourteen-member commission of legislators power over budget transfers (of the specified magnitude) proposed to be made by the Governor in his role as Director of the Budget.
(b) Federal Block Grant Funds
In 1978, the General Assembly enacted G.S. 143-16.1 which provides as follows:
"All federal funds shall be expended and reported in accordance with provisions of the Executive Budget Act. Proposed budgets recommended to the General Assembly by the Governor and Advisory Budget Commission shall include all appropriate information concerning the federal expenditures in State agencies, departments and institutions."
Subsequent to enactment of Chapter 859, Sessions Laws of 1981, the fiscal 1981-83 current operations budget, Congress passed and President Reagan signed into law, on August 13, 1981, P.L. 97-35, the Omnibus Budget Reconciliation Act of 1981, making major changes in the organization of federal programs and making large sums of money available to the state in the form of block grants.
Then, on October 10, 1981, in an attempt to exercise its perceived budgetary duties for the remainder of the biennium while not in Session, the General Assembly enacted, as Section 62 of Chapter 1127 of the 1981 Session Laws, the following special provision:
"Notwithstanding G.S. 143-16.1, all federal block grant funds received by the State between August 31, 1981, and July 1, 1983, shall be received by the General Assembly. This section is effective October 1, 1981."
By Section 63 of Chapter 1127 of the 1981 Session Laws, the General Assembly added Sections 120-80 through 120-84 to the General Statutes. These new statutes establish a Joint Legislative Committee to Review Federal Block Grant Funds (G.S. 120-80), which is comprised of twelve members of the General Assembly (G.S. 120-81), has organizational rules prescribed by statute (G.S. 120-82), and is empowered to review all aspects of the acceptance and use of federal block grant funds and to make recommendations to the General Assembly for legislation relating to federal block grant funds (G.S. 120-83). The most significant of these new statutes is G.S. 120-84, which provides as follows:
"(a) After federal block grant funds have been accepted by the General Assembly, the Director of the Budget shall propose administration and use of those funds. All proposals shall be submitted to the Committee, or to the General Assembly if it is in session, for its prior approval.
"(b) None of the following actions with regard to State use of federal block grant funds may be taken without the prior approval of the Committee or of the General Assembly if it is in session:
(1) acceptance of federal block grants,
(2) determination of pro rata reduction procedures and amounts for State programs,
(3) determination of distribution formulas,
(4) transfer of funds between block grants,
(5) intradepartmental transfer of block grant funds,
(6) encumbrance of anticipated block grant funds,
(7) adoption of departmental rules relating to federal block grant funds,
(8) contracting between State departments involving block grant funds, and
(9) any other final action affecting acceptance or use of federal block grant funds.
The Committee shall take action within 40 days of receiving a request for approval from the Office of State Budget and Management."
Thus, the new G.S. 120-84, as enacted by Section 63 of Chapter 1127 of the 1981 Session Laws, purports to give to a twelve-member committee of legislators (when the General Assembly is not in session) power over action proposed to be taken by the Governor with respect to the administration and use of Federal block grant funds.
B. The Pertinent Constitutional Provisions
Section 6 of Article I of the N.C. Constitution provides as follows:
"The legislative, executive and supreme judicial powers of the State government shall be forever separate and distinct from each other."
Consistent with this mandated separation of powers, the Constitution provides, in Section 1 of Article II, that
"The legislative power of the State shall be vested in the General Assembly, which shall consist of a Senate and a House of Representatives."
and, in Section I of Article III, that
"The executive power of the State shall be vested in the Governor."
Additionally, the Constitution provides, in Section 5(3) of Article III, that "The Governor shall prepare and recommend to the General Assembly a comprehensive budget of the anticipated revenue and proposed expenditures of the State for the ensuing fiscal period. The budget as enacted by the General Assembly shall be administered by the Governor."
C. The Questions Presented
The questions on which we request your advisory opinion are as follows:
1. Is G.S. 143-23(b), as enacted by Section 82 of Chapter 1127 of the 1981 Session Laws, consistent with, or contrary to, in whole or in part, the pertinent provisions of the N.C. Constitution?
2. Is G.S. 120-84, as enacted by Section 63 of Chapter 1127 of the 1981 Session Laws, consistent with, or contrary to, in whole or in part, the pertinent provisions of the N.C. Constitution?
The Attorney General has advised the Governor of his opinion that these two statutes are probably unconstitutional. (A copy of his Memorandum of Law is attached.) However, the Attorney General has informed the Governor that there is no North Carolina precedent on these precise points and, therefore, has advised that this request be made for your advisory opinion.
Your opinion on these important constitutional questions will be greatly appreciated.
Sincerely,
James B. Hunt, Jr.
James C. Green
Liston B. Ramsey
Enclosure
Hon. James B. Hunt, Jr.
Governor of North Carolina
Hon. James C. Green
Lieutenant Governor of North Carolina
and President of the Senate
Hon. Liston B. Ramsey
Speaker of the North Carolina House
of Representatives
Your communication of 21 January 1982 presents the following questions:
1. Is G.S. 143-23(b), as enacted by Section 82 of Chapter 1127 of the 1981 Session Laws, consistent with, or contrary to, in whole or in part, the pertinent provisions of the N.C. Constitution?
2. Is G.S. 120-84, as enacted by Section 63 of Chapter 1127 of the 1981 Session Laws, consistent with, or contrary to, in whole or in part, the pertinent provisions of the N.C. Constitution?
In answering these questions we will review briefly the pertinent provisions of the Constitution. We will then discuss each of the statutes in question in light of the constitutional provisions.
I.
The first section of our Constitution pertinent to our inquiry is Section 6 of Article I which provides:
Separation of powers. The legislative, executive, and supreme judicial powers of the State government shall be forever separate and distinct from each other.
This section is commonly referred to as the "separation of powers" provision of our Constitution. In the recent cases of State of North Carolina ex rel. Wallace et al. v. Bone et al. and Barkalow et al. v. Harrington et al., 304 N.C. 591, 286 S.E.2d 79 (joint opinion filed 12 January 1982) we discussed the history and meaning of the separation of powers doctrine. For the sake of brevity we will not restate all that we said in that opinion. It suffices to say that the principle of separation of powers was clearly in the minds of the framers of our Constitution; and that the people of North Carolina, by specifically including a separation of powers provision in the original Constitution adopted in 1776, and readopting the provision in 1868 and 1970, are firmly and explicitly committed to the principle.
After declaring the principle of separation of powers in Article I, our Constitution then provides in Article II, Section 1, that "the legislative power of the State shall be vested in the General Assembly, which shall consist of a Senate and a House of Representatives." Article III, Section 1, provides that "the executive power of the State shall be vested in the Governor." Article IV, Section 1, vests all judicial power in the judicial branch of our government. It is clear that the framers of our Constitution followed the instructions given to them that our government "shall be divided into three branches distinct from each other, viz:
The power of making laws
The power of executing laws and
The Colonial Records of North Carolina, Saunders, Vol. X, 870a, 870b.
Section 5 of Article III specifies certain constitutional duties of the Governor. Among these duties is that specified by Section 5(3) which provides in pertinent part as follows:
Budget. The Governor shall prepare and recommend to the General Assembly a comprehensive budget of the anticipated revenue and proposed expenditures of the State for the ensuing fiscal period. The budget as enacted by the General Assembly shall be administered by the Governor. (Emphasis added.)
In Wallace et al. v. Bone et al., supra, after reviewing the history of the separation of powers provisions of our State Constitution, and after reviewing decisions from numerous sister states, we concluded that Section 6 of Chapter 1158 of the 1979 Session Laws which provided for the appointment of two members of the House of Representatives and two members of the Senate to the Environmental Management Commission violated Section 6 of Article I of the Constitution. This is so because "the duties of the EMC are administrative or executive in character and have no relation to the function of the legislative branch of government which is to make laws."
II.
We now consider the question presented with respect to Section 82 of Chapter 1127 of the 1981 Session Laws [G.S. 143-23(b) ].
Since its enactment in 1929, G.S. 143-23 has provided:
All appropriations now or hereafter made for the maintenance of the various departments, institutions and other spending agencies of the State, are for the purposes and/or objects enumerated in the itemized requirements of such departments, institutions and other spending agencies submitted to the General Assembly by the Director of the Budget and the Advisory Budget Commission, and/or as amended by the General Assembly. Transfers or changes as between objects and items in the budget of any department, institution or other spending agency, may be made at the request in writing of the head of such department, institution or other spending agency by the Director of the Budget.
By Section 82 of Chapter 1127 of the 1981 Session Laws, the General Assembly enacted the following amendment to the statute quoted above:
G.S. 143-23 is amended by designating the present language as subsection (a) and by adding a new subsection (b) to read:
(b) Notwithstanding subsection (a), no requested transfer or change from a program line item may be made if the total amount transferred from that line item during the fiscal year would be more than ten percent (10%) of the amount appropriated for that program line item for that fiscal year, unless the Joint Legislative Commission on Governmental Operations has given its prior approval for that transfer. This restriction applies to all State departments with a total General Fund appropriation of at least fifty million dollars ($50,000,000). All other departments shall apply the ten percent (10%) limitation to the summary by object line items. No transfers or changes, regardless of amount, from salary funds may be made without the prior approval of the Joint Legislative Commission on Governmental Operations. The Commission must take action within 40 days of receiving a request for approval from the Office of State Budget and Management. Transfers or changes within the Medicaid program are exempt from this subsection.
Consistent with Section 5(3) of Article III of the Constitution, which provides that the Governor shall administer the budget, G.S. 143-2 designates the Governor as ex officio Director of the Budget.
The Joint Legislative Commission on Governmental Operations was established by Chapter 490 of the 1975 Session Laws to provide, among other things, for "the continuing review of operations of State government", and it is composed of the President of the Senate, the Speaker of the House of Representatives and twelve other members of the House and Senate. G.S. 120-71 through 120-79.
Obviously, the intended effect of G.S. 143-23(b), above quoted, is to give to a 13-member commission composed of 12 members of the House and Senate, and the President of the Senate who is usually the Lieutenant Governor, power to control major budget transfers proposed to be made by the Governor in his constitutional role as administrator of the budget.
Our Constitution mandates a three-step process with respect to the State's budget. (1) Article III, Section 5(3) directs that the "Governor shall prepare and recommend to the General Assembly a comprehensive budget ... for the ensuing fiscal period." (2) Article II vests in the General Assembly the power to enact a budget [one recommended by the Governor or one of its own making]. (3) After the General Assembly enacts a budget, Article III, Section 5(3) then provides that the Governor shall administer the budget "as enacted by the General Assembly."
In our opinion the power that G.S. 143-23(b) purports to vest in certain members of the legislative branch of our government exceeds that given to the legislative branch by Article II of the Constitution. The statute also constitutes an encroachment upon the duty and responsibility imposed upon the Governor by Article III, Section 5(3), and, thereby violates the principle of separation of governmental powers.
III.
We next consider the question presented with respect to Section 63 of Chapter 1127 of the 1981 Session Laws [codified as G.S. 120-84].
The 1978 General Assembly enacted G.S. 143-16.1 which provides:
All federal funds shall be expanded and reported in accordance with provisions of the Executive Budget Act. Proposed budgets recommended to the General Assembly by the Governor and Advisory Budget Commission shall include all appropriate information concerning the federal expenditures in State agencies, departments and institutions.
After the enactment of the current operations budget for fiscal 1981-83 by the 1981 General Assembly, Congress passed, and the President signed into law on 13 August 1981, P.L. 97-35, the Omnibus Budget Reconciliation Act of 1981, which made major changes in the organization of federal programs and made large sums of money available to the states in the form of block grants.
On 10 October 1981 the General Assembly enacted as Section 62 of Chapter 1127 of the 1981 Session Laws the following special provisions:
Notwithstanding G.S. 143-16.1, all federal block grant funds received by the State between August 31, 1981, and July 1, 1983, shall be received by the General Assembly. This section is effective October 1, 1981.
By Section 63 of Chapter 1127 of the 1981 Session Laws, the General Assembly added Sections 120-84.1 through 120-84.5 to the General Statutes. These new statutes establish a Joint Legislative Committee to Review Federal Block Grant Funds (G.S. 120-84.1). This Committee is composed of six members of the House of Representatives and six members of the Senate (G.S. 120-84.2), has organizational rules prescribed by statute (G.S. 120-84.3), and is empowered to review all aspects of the acceptance and use of federal block grant funds and to make recommendations to the General Assembly for legislation relating to federal block grant funds (G.S. 120-84.4). The most significant of these new statutes is G.S. 120-84.5, which provides as follows:
(a) After federal block grant funds have been accepted by the General Assembly, the Director of the Budget shall propose administration and use of those funds. All proposals shall be submitted to the Committee, or to the General Assembly if it is in session, for its prior approval.
(b) None of the following actions with regard to State use of federal block grant funds may be taken without the prior approval of the Committee or of the General Assembly if it is in session:
(1) acceptance of federal block grants,
(2) determination of pro rata reduction procedures and amounts for State programs,
(3) determination of distribution formulas,
(4) transfer of funds between block grants,
(5) intradepartmental transfer of block grant funds,
(6) encumbrance of anticipated block grant funds,
(7) adoption of departmental rules relating to federal block grant funds,
(8) contracting between State departments involving block grant funds, and
(9) any other final action affecting acceptance or use of federal block grant funds.
The Committee shall take action within 40 days of receiving a request for approval from the Office of State Budget and Management.
Thus, the new G.S. 120-84, as enacted by Section 63 of Chapter 1127 of the 1980 Session Laws, purports to give to a 12-member committee of legislators (when the General Assembly is not in session) power over action proposed to be taken by the Governor with respect to the administration and use of federal block grant funds.
While we are not asked for an opinion on the validity of Section 62 of Chapter 1127 of the 1981 Session Laws quoted above, we question the validity of any statute which provides that funds accruing to the State or any of its agencies "shall be received by the General Assembly." Although the Constitution gives the General Assembly broad power to raise revenue and make appropriations, we find nothing in the Constitution that authorizes the legislative branch actually to receive funds. Article V, Section 7, provides:
No money shall be drawn from the State Treasury but in consequence of appropriations made by law, and an accurate account of the receipts and expenditures of State funds shall be published annually.
The inquiry presented relates to federal block grants under the Omnibus Reconciliation Act of 1981 and actually presents two questions: (1) Does the General Assembly have the authority to determine if the State or its agencies will accept the grants in question and, if accepted, the authority to determine how the funds will be spent? (2) May the General Assembly delegate to a legislative committee the power to determine if the grants will be accepted, and, if accepted, how they will be spent?
G.S. 120-84.1 provides that "for purposes of this Act, 'block grant' means a block grant under the Omnibus Budget Reconciliation Act of 1981."
We decline to answer question (1) just posed. The briefs and materials submitted to us contain very little, if any, information about the grants, their purposes, for whom they are intended, and the conditions placed on them by Congress. Our independent research discloses that the Omnibus Budget Reconciliation Act of 1981 contains 575 pages and that its numerous sections refer to other federal enactments that are amended by it. The legislature neither being in session nor purporting presently to act, we do not perceive any exigent need to address this part of the inquiry and to engage now in the lengthy research that would be necessary to answer it. If our opinion on this question is deemed urgently needed, we will consider a further request, provided it is accompanied by in-depth information and briefs with respect to the grants being considered.
With regard to part (2) of the inquiry, if the General Assembly has the authority to determine whether the State or its agencies will accept the grants in question, and, if accepted, the authority to determine how the funds will be spent, it is our considered opinion that the General Assembly may not delegate to a legislative committee the power to make those decisions.
In several of the instances set forth in G.S. 120-84.5 the committee would be exercising legislative functions. In those instances there would be an unlawful delegation of legislative power. In the other instances the committee would be exercising authority that is executive or administrative in character. In those instances there would be a violation of the separation of powers provisions of the Constitution and an encroachment upon the constitutional power of the Governor. As stated above, our Constitution vests in the General Assembly the power to enact a budget--to appropriate funds--, but after that is done, Article III, Section 5(3) explicitly provides that "the Governor shall administer the budget as enacted by the General Assembly."
IV.
In sum, it is the opinion of the undersigned Chief Justice and Associate Justices:
1. That Section 82 of Chapter 1127 of the 1981 Session Laws [codified as Section 143-23(b) in the 1981 Cumulative Supplement to Volume 3C of the General Statutes] violates Section 6 of Article I and Section 5(3) of Article III of our State Constitution; and
2. That those parts of Section 63 of Chapter 1127 of the 1981 Session Laws [codified as Sections 120-84.1 through 120-84.5 in the 1981 Supplement to the 1981 Replacement Volume 3B of the General Statutes] which purport to vest a legislative committee with certain powers over federal block grants when the General Assembly is not in session constitute an unconstitutional delegation of legislative power, and also violate Section 6 of Article I and Section 5(3) of Article III of our State Constitution.
Respectfully,
Joseph Branch
Chief Justice
J. William Copeland
Associate Justice
J. G. Exum, Jr.
Associate Justice
David M. Britt
Associate Justice
J. Phil Carlton
Associate Justice
Louis B. Meyer
Associate Justice
Burley B. Mitchell, Jr.
Associate Justice