Does the State Budget Manual, which dictates how agencies prepare and execute the budget, count as 'rules' under North Carolina's Administrative Procedures Act, and if so does it have to be filed with the Attorney General and go through the standard rulemaking procedure?
Apply this to your situation
This page answers the general question as of 1979. Ask about yours and see what current North Carolina law means for your facts, with citations you can check.
Plain-English summary
The General Assembly's Administrative Rules Review Committee asked whether the Division of State Budget and Management had to file its Budget Manual with the Attorney General and follow rule-adoption procedures. The 1979 AG answered yes to each question, except for portions already filed or not qualifying as rules. The answer required examining the Manual's provisions individually.
The opinion distinguishes two definitions of "rule" in the Administrative Procedures Act. Article 5, on publication, used the broader definition in G.S. 150A-58. A rule within that definition had to be filed with the Attorney General before becoming effective under G.S. 150A-59, unless an Article 5 exception applied. Article 2, on rulemaking, used the definition in G.S. 150A-10, with exclusions for some internal management statements, interpretative rules, and general policy statements. Other provisions addressed hearings and adoption by reference.
The AG found that parts of the Budget Manual consisted of reprinted statutes or Administrative Code sections, while others were regulations developed by the Division. Some of those Division regulations had not been filed. The rule already on file, 1 N.C.A.C. 2A .0103, merely described the Manual and said where it could be inspected. The AG said an official rule still had to be on file even if the Attorney General published a summary under G.S. 150A-63(c). The unfiled Manual provisions that were rules under Article 5 had to be filed to be effective.
Currency note
This opinion was issued in 1979 under the Administrative Procedures Act provisions it quotes. Check current North Carolina rulemaking and publication law before relying on its procedures today.
What this means for you
Budget and agency staff. The filed description of the Manual did not substitute for filing the Manual's unfiled rules. Review each provision to determine whether it qualifies as a rule and which filing or adoption requirements apply.
Rule reviewers. Article 2 and Article 5 used different definitions. A provision excluded from Article 2 rulemaking was not automatically excluded from Article 5 filing. The opinion says Article 5 exceptions must be examined separately.
Common questions
Did filing 1 N.C.A.C. 2A .0103 put the entire Budget Manual on file?
No. The AG says that rule described the Manual and its inspection location, while some portions of the Manual had not been filed. Qualifying unfiled rules had to be filed with the Attorney General to be effective.
Could the Attorney General publish only a summary of a long rule?
The quoted G.S. 150A-63(c) permitted a summary when publishing the rule in full was impracticable, with a specific reference to the official rule on file. The opinion emphasizes that the official rule still had to be filed.
Did every part of the Manual need a rulemaking hearing?
The AG did not make that blanket finding. It described exclusions in G.S. 150A-10 and a hearing exception for rules solely describing agency organization, forms, or instructions in G.S. 150A-12(f). It called for individual examination of the Manual's regulations.
Did moving the Division into the Governor's Office change the result?
No. The opinion says Executive Order 38 transferred the Division there, but both the Governor's Office and the Department of Administration qualified as agencies under the relevant definitions.
Background and statutory framework
G.S. 150A-58 defined "rule" for Article 5 publication. G.S. 150A-59 required filing rules with the Attorney General and governed their effective dates. G.S. 150A-63(c) allowed a published summary only with an official rule on file. For Article 2 procedures, G.S. 150A-10 defined "rule" with exclusions; G.S. 150A-12(f) addressed hearings for specified descriptive rules; and G.S. 150A-14 permitted adoption by reference in the circumstances quoted by the AG.
The opinion directed the Division to examine each Manual regulation for rule status under Article 2, a hearing exception, and adoption by reference. It separately required filing under Article 5 for unfiled provisions that met that article's rule definition.
Citations
- G.S. 150A-2
- G.S. 150A-9
- G.S. 150A-10
- G.S. 150A-12(f)
- G.S. 150A-14
- G.S. 150A-58
- G.S. 150A-59
- G.S. 150A-63(c)
- 1 N.C.A.C. 2A .0103
- Executive Order 38
Source
Original opinion text
Requested By: Administrative Rules Review Committee of the General Assembly
Questions: Is the budget manual of the Division of State Budget and Management required to be filed with the Attorney General?
- Is the budget manual of the Division of State Budget and Management subject to the adoption and amendment procedural requirements of the Administrative Procedures Act?
Conclusion: Yes, except for those parts already filed or which are not rules.
- Yes, except for those parts already filed or which are not rules.
- G.S. 150A-58, in relevant part, reads as follows:
(b) As used in this Article, "rule" means every rule, regulation, ordinance, standard, and amendment thereto adopted by any agency and shall include rules and regulations regarding substantive matters, standards for products, procedural rules for complying with statutory or regulatory authority or requirements and executive orders of the Government.
G.S. 150A-59, in relevant part, reads as follows:
Rules adopted by any agency on or after February 1, 1976, shall be filed with the Attorney General. All rules shall become effective 30 days after filing, unless the agency shall specify, an earlier or later effective date. An earlier effective date shall not precede the date of filing.
1 North Carolina Code 2A .0103 reads as follows:
The budget manual sets forth policies and procedures to be followed by state agencies in preparing, monitoring and executing the state's budget. Copies of the budget manual shall be provided to the various departments of state government and are available for public inspection at the division office.
History Note: Statutory Authority G.S. Chapter 143, Article 1; Eff. February 1, 1976; Readopted Eff. February 27, 1979.
G.S. 150A-63, in relevant part, reads as follows:
(c) If the Attorney General determines that publication of any rule would be impracticable, he shall substitute a summary with specific reference to the official rule on file in his office.
Chapter 150A, the Administrative Procedures Act, has two separate and distinct definitions of "rule." The definition in Article 5, Publication of Administrative Rules, is more inclusive than the rule making definition in Article 2, Rule Making, Regulations exempt from the rule making article are not exempt from the publication article unless the regulation is exempted by G.S. 150A-58(b)(1-4). G.S. 150A-59 states no rule, as defined in G.S. 150A-58, may become effective any earlier than the date of filing with the Attorney General.
The budget manual is a compilation of rules and regulations developed by the Division of State Budget and Management which sets forth policies and procedures state agencies must follow in preparing, monitoring and executing the state's budget. An examination of the contents of the manual discloses that it consists of (1) reprints of General Statutes, (2) reprints of other sections of the Administrative Code, and (3) regulations not contained in other sections of the code. This last category includes regulations developed by the Division of State Budget and Management which are necessary to provide more specific procedures for complying with the requirements of the General Statutes and the Executive Orders of the Governor. The last category also contains the portions of the budget manual which have not been filed with the Attorney General. The rule on file, 1 N.C.A.C. 2A.0103, describes the budget manual and states it may be inspected in the division office. G.S. 150A-63(c) allows for a summary rule if the publication of a rule would be impracticable, but it requires the official rule must be on file in the Attorney General's Office. Those portions of the budget manual which are rules within the the meaning of G.S. 150A-58 and which have not previously been filed with the Attorney General must be filed with the Attorney General to be effective.
(2) In relevant part, G.S. 150A-9, reads as follows:
It is the intent of this Article to establish basic minimum procedural requirements for the adoption, amendment, or repeal of administrative rules . . . No rule hereafter adopted is valid unless adopted in substantial compliance with this article.
G.S. 150A-10, in relevant part, reads as follows:
As used in this Article, "rule" means each agency regulation, standard or statement of general applicability that implements or prescribes law or policy, or describes the organization, procedure, or practice requirements of any agency.
The term includes the amendment or repeal of a prior rule but does not include the following:
- (1) Statements concerning only the internal management of an agency and not affecting private rights or procedures available to the public;
- (6) Interpretative rules and general statements of policy of the agency.
G.S. 150A-12, in relevant part, reads as follows:
(f) No rule making hearing is required for the adoption, amendment or repeal of a rule which solely describes the organization of the agency or describes forms or instructions used by an agency.
- G.S. 150A-14, in relevant part, reads as follows: An agency may adopt, by reference in its rules and without publishing the adopted matter in full, all or any part of a code, standard or regulation which has been adopted by any other agency of this State or any agency of the United States or by a generally recognized organization or association.
- G.S. 150A-2, in relevant part, reads as follows:
(1) "Agency" means every . . . department, division, council, member of Council of State, or officer of the State Government of the State of North Carolina . . .
Article 2, Rule Making has a definition of "rule" which varies substantially from that of Article 5. The definition in G.S. 150A-10 determines which regulations are subject to the procedural requirements of Article 2, which include notice of hearing and public hearing prior to adoption. The two exemptions cited above, G.S. 150A-10(1) and (6), may include some of the unfiled portions of the budget manual. In applying the definition of "rule," the exemption created by G.S. 150A-10(1) should be limited to those regulations concerning the internal management of the Division of State Budget and Management. Some guidance on the exemption created by G.S. 150A-10(6) is provided by Professor Charles E. Daye in his 1975 article entitled "North Carolina's New Administrative Procedures Act: An Interpretive Analysis," 53 N.C. Law Review 833-923, (1975). At page 853, it states:
"Generally speaking, interpretative rules carry no sanction, and if a sanction is involved, it is seen as emanating from the statute . . . It should be emphasized that careful scrutiny of the substance of the rule in question is critical, since the interpretive rule exclusion, if not confined to proper boundaries, could well subsume the rulemaking provision."
Finally, two separate statutory sections may exempt certain of the regulations of the budget manual from rulemaking or publication in full. G.S. 150A-12(f) exempts any regulations which describe "forms or instructions used by an agency." G.S. 150A-14 exempts from publication in full any regulations adopted by another agency of the State which are adopted by reference. It should be noted any regulations so adopted must be amended any time the promulgating agency alters a regulation for the adopting agency to maintain the same regulations or the promulgating agency.
Each regulation in the budget manual must be individually examined to determine (1) whether it is a rule within the meaning of G.S. 150A-10; (2) whether, although it is rule, it is exempted from the rule making requirements by G.S. 150A-12(f); and (3) whether it was adopted by reference and thereby exempt from publication.
When the manual was developed, the Division of State Budget and Management was a part of the Department of Administration. By Executive Order 38, that division was transferred to the Office of the Governor on September 10, 1979. Both the Governor's Office and the Department of Administration are agencies within the statutory definitions of "agency" in G.S. 150A-2(1) and G.S. 150A-58(c) and are required to comply with Article 2, Rule Making, and Article 5, Publication of Administrative Rules, to the same extent as are other agencies not specifically exempted.
Rufus L. Edmisten
Attorney General
Daniel F. McLawhorn
Assistant Attorney General
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