Under the 1977 rewrite of the North Carolina statutes governing Area Mental Health Authorities, does a satellite unit operated by an Area Mental Health Authority require its own license? What about a private agency that contracts with the Area Mental Health Authority to provide services that are statutorily required of the Authority?
Plain-English summary
The Deputy Director of the Division of Mental Health and Mental Retardation Services asked the AG a licensing scope question. The 1977 General Assembly had completely rewritten the statutory basis for Area Mental Health Programs and Area Mental Health Authorities, including a new Article 2F of Chapter 122. The Division wanted to know whether two specific types of facility had to be separately licensed: (a) satellite units of an Area Mental Health Authority and (b) private agencies that contract with the Authority to perform services that the Authority is statutorily required to provide.
The 1979 AG said yes to both.
The opinion's analytical work is brief because the statutory text is clear.
G.S. 122-35.51, effective July 1, 1977, imposes the licensing requirement. The statute says: "An area mental health facility operated under the provisions of Chapter 122 of the General Statutes shall obtain a license permitting such operation." Licensing standards come from the Commission for Mental Health and Mental Retardation Services; the Department of Human Resources issues the licenses.
G.S. 122-35.36(3) defines "Area Mental Health Facility" broadly. "A mental health facility, public or private, established to serve the needs of a designated catchment area in mental health, mental retardation, or substance abuse." The definition has three significant features: (1) it covers both public and private facilities, so private contractors are not excluded; (2) it covers the full spectrum of catchment area services (mental health, mental retardation, substance abuse); and (3) it is keyed to the catchment area function, not to the formal organizational status of the facility within the Authority.
G.S. 143B-147a(2)e confirms the breadth. The statute requires the Commission for Mental Health and Mental Retardation Services to establish licensing standards for "all area or community mental health facilities 'of whatsoever nature' pursuant to Article 2F of Chapter 122."
Applying these provisions:
Satellite units. A satellite unit is, by definition, an extension of the Authority into part of the catchment area. It is a mental health facility serving the catchment area. It fits the G.S. 122-35.36(3) definition. It must be licensed.
Contracted providers. A private agency that contracts with the Authority to provide statutorily required services is a private mental health facility serving the catchment area. The "public or private" inclusion in G.S. 122-35.36(3) and the "of whatsoever nature" reach of G.S. 143B-147a(2)e bring contracted providers within the licensing requirement.
The AG observed that the 1977 rewrite superseded an earlier 1975 AG opinion (45 N.C.A.G. 51 (1975)) on the same subject under the prior statutory regime.
Currency note
This opinion was issued in 1979. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here. North Carolina's mental health system has been substantially restructured since 1979, including the 2001 reform of LME-MCO arrangements and the renumbering of mental health statutes into Chapter 122C. The Commission for Mental Health and Mental Retardation Services framework has likewise evolved. Anyone evaluating current licensing requirements should consult current Chapter 122C and current Department of Health and Human Services rules.
Historical context: what the AG concluded
The opinion's structural significance is recognizing that the 1977 rewrite of Chapter 122 (Article 2F) had two interlocking pieces. G.S. 122-35.51 imposed a categorical licensing duty on every area mental health facility. G.S. 122-35.36(3) defined "area mental health facility" with deliberately broad language. G.S. 143B-147a(2)e tied them together by directing the Commission to set licensing standards for facilities "of whatsoever nature."
The General Assembly's choice of breadth was intentional. Before the rewrite, the licensing regime had been narrower, and the 1975 AG opinion (45 N.C.A.G. 51) had necessarily reflected those narrower categories. The rewrite chose to extend licensing to all catchment-area mental health facilities, public and private, regardless of organizational form.
The 1979 AG's job was to ride the new statutory text out to its logical reach. Satellite units fall within it because they are facilities serving the catchment area. Private contractors fall within it because the definition includes private facilities and the licensing direction is "of whatsoever nature."
For the Division in 1979, the operational consequence was that the licensing process needed to be applied uniformly to satellites and contractors, not just to the central facilities operated by the Authorities. The Department of Human Resources had work to do extending its licensing inspections to satellite locations and to the private agencies under contract.
For private agencies contracting with Authorities, the takeaway was that the contract did not exempt them from licensing. They had to qualify for and obtain their own license from the Department of Human Resources, on top of any contractual obligations to the Authority.
Common questions
Do satellite units of an Area Mental Health Authority need their own license?
Yes. Under G.S. 122-35.51 and the broad definition of "area mental health facility" in G.S. 122-35.36(3), a satellite unit is a separately licensable facility.
Do private agencies that contract with an Area Mental Health Authority need their own license?
Yes. The G.S. 122-35.36(3) definition expressly includes private facilities. A contracted provider performing services statutorily required of the Authority is an area mental health facility and must be licensed.
Who issues the license?
The Department of Human Resources, using standards set by the Commission for Mental Health and Mental Retardation Services. G.S. 122-35.51.
Does the licensing extend to substance abuse and mental retardation facilities as well?
Yes. G.S. 122-35.36(3) covers facilities established to serve the catchment area in any of the three service areas: mental health, mental retardation, or substance abuse.
Does the 1975 AG opinion still apply?
No, as to scope. The AG specifically noted that the statutory basis "has been completely rewritten" since 1975 and that the answers to the licensing questions are now in Article 2F of Chapter 122 and G.S. 143B-147a(2)e. The earlier 1975 opinion (45 N.C.A.G. 51) reflects the prior statutory regime, not the regime governing in 1979.
Background and statutory framework
The 1977 rewrite. The General Assembly substantially rewrote the statutes governing Area Mental Health Programs and Area Mental Health Authorities, effective July 1, 1977, creating Article 2F of Chapter 122.
The licensing duty. G.S. 122-35.51 imposes the categorical duty on area mental health facilities to obtain a license.
The definition of "Area Mental Health Facility." G.S. 122-35.36(3) defines the term to include both public and private facilities established to serve a designated catchment area in mental health, mental retardation, or substance abuse.
The standards-setting authority. G.S. 143B-147a(2)e directs the Commission for Mental Health and Mental Retardation Services to establish standards for licensing area or community mental health facilities of whatsoever nature.
The prior AG opinion. 45 N.C.A.G. 51 (1975) addressed local mental health facility licensing under the pre-rewrite statutory regime. The 1979 opinion specifically notes that the 1975 opinion's framework no longer applies because the underlying statutes were rewritten.
Citations
- Chapter 122, Article 2F
- G.S. 122-35.36(3)
- G.S. 122-35.51
- G.S. 143B-147a(2)e
- 45 N.C.A.G. 51 (1975)
Source
- Landing page: https://ncdoj.gov/opinions/requirement-for-licensing-of-local-mental-health-facilities/
Original opinion text
Requested By: R. J. Bickel Deputy Director for Administration Division of Mental Health and Mental Retardation Services
Question: Under current statutes dealing with Area Mental Health Authorities are the following required to be licensed:
- (A) Satellite units of an Area Mental Health Authority?
- (B) Agencies with which the Area Mental Health Authority contracts for services statutorily required of the Area Mental Health Authority?
Conclusion: The entities described in both (A) and (B) above are required to obtain licenses.
This Office has previously issued an opinion dealing with the licensing of various types of local mental health facilities. See 45 N.C.A.G. 51 (1975). Since the date of that prior opinion, however, the statutory basis for Area Mental Health Programs and Area Mental Health Authorities has been completely rewritten. The answers to the questions posed here are now found in Article 2F, Chapter 122 and G.S. 143-B-147a(2)e.
G.S. 122-35.51, effective July 1, 1977, provides as follows:
"An area mental health facility operated under the provisions of Chapter 122 of the General Statutes shall obtain a license permitting such operation. Subject to standards governing the operation and licensing of these facilities set by the Commission for Mental Health and Mental Retardation Services, the Department of Human Resources shall be responsible for issuing licenses."
An "Area Mental Health Facility" is defined by G.S. 122-35.36(3) in the following language:
"(3) Area Mental Health Facility. A mental health facility, public or private, established to serve the needs of a designated catchment area in mental health, mental retardation, or substance abuse."
Significantly, G.S. 143B-147a(2)e authorizes and requires the Commission for Mental Health and Mental Retardation Services to establish standards and adopt rules and regulations for the licensing of all area or community mental health facilities "of whatsoever nature" pursuant to Article 2F of Chapter 122.
As a result of the above-described provisions, it is clearly the intent of the General Assembly that all units and service-providing agencies to the Area Mental Health Authorities be licensed by the Department of Human Resources utilizing standards, rules and regulations promulgated by the Commission for Mental Health and Mental Retardation Services.
Rufus L. Edmisten
Attorney General
William F. O'Connell
Special Deputy Attorney General