Can a North Carolina life care center receive a certificate of need to add nursing home beds, even though the 1983 session law has a cross-reference to a subsection that doesn't quite fit, suggesting the legislature may not have meant to include life care centers?
Plain-English summary
The AG was asked whether a North Carolina life care center could receive a Certificate of Need (CON) for adding nursing home beds.
The AG answered yes. The reasoning required correcting an apparent clerical mistake in the 1983 session law that amended the CON framework. Section 1 of Chapter 920 referred to "section 31(f)" of a related provision, but section 31(f) did not exist in the form needed for the reference to make sense. The AG concluded the legislature meant to refer to section 31 generally, which does provide for life care center CON treatment.
The Certificate of Need framework, G.S. 131-175 et seq. (recodified at G.S. 131E-175 et seq. effective January 1, 1984, per 1983 Session Laws c. 775), required CON approval before a person could offer or develop a "new institutional health service." G.S. 131-178(a). Adding skilled nursing or intermediate care beds was generally a new institutional health service under G.S. 131-176(17).
Life care centers (residential communities for older adults that offer a continuum of care from independent living through nursing care) were a relatively new institutional category in 1983. The legislature had carved out a separate treatment path for them, recognizing their distinct structure compared to standalone nursing homes. The clerical-error issue was about how exactly that separate path connected back to the CON statute.
The AG worked through the canons of statutory construction. The North Carolina Supreme Court had held in Banks (cited at 295 N.C. 240) that where a literal interpretation of statutory language would contravene the manifest purpose of the statute, the reason and purpose of the law will be given effect and the strict letter disregarded. Hobbs v. Moore County, 267 N.C. 665, framed the rule that statutory language will be interpreted to avoid absurd consequences. And the North Carolina courts had long held that clerical errors in statutes will be corrected, citing Teachy v. Coble Dairies (1982), State v. Daniels (1956), State v. Sizemore (1930), and Tommey v. Goldsboro Lumber Company (1916).
Applying that framework, the AG read "section 31(f)" as a clerical mistake for "section 31." With that correction, qualifying life care centers can receive a CON for nursing home bed construction.
Currency note
This opinion was issued in 1983. 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. The CON framework was recodified to G.S. 131E-175 et seq. effective January 1, 1984. The legislature has revised the CON statute many times since 1983, including significant changes to the categories of services and beds subject to CON. Life care center treatment under the modern CON framework should be checked against current law and Department of Health and Human Services regulations.
Historical context: what the AG concluded
The opinion does the following:
It identifies the clerical-error problem. The legislature, in passing Chapter 920, cited "section 31(f)." On a literal reading, that subsection did not fit the legislative purpose of opening CON eligibility for life care centers. The AG took the mismatch as a clerical mistake rather than a deliberate substantive choice.
It invokes the well-settled canon that clerical errors are correctable. Four North Carolina Supreme Court cases (Teachy, Daniels, Sizemore, Tommey) plus the absurd-consequence rule from Hobbs and the manifest-purpose rule from Banks combine into a strong basis for reading "section 31(f)" as "section 31."
It defers to legislative purpose. The substantive answer (life care centers can receive a CON for nursing home beds) is what the legislature seemed to want. The clerical error obscured that intent. The AG removes the obstacle so the policy can operate.
It treats the answer as straightforward despite a tortured-looking textual problem. The opinion does not hand-wring about the line between clerical error and legislative intent. The four Supreme Court cases supply ample authority; the AG applies the doctrine and moves on.
Background and statutory framework
The Certificate of Need program was North Carolina's mechanism for limiting unnecessary expansion of institutional health services. Adopted in the 1970s under federal encouragement, CON required state approval before adding healthcare facilities or services in defined categories. The goal was to prevent oversupply, control healthcare costs, and ensure orderly geographic distribution of services.
Nursing home beds were within the CON framework from the start. A provider seeking to add beds had to apply for and receive CON approval. The application process required demonstration of need, financial feasibility, and consistency with state health planning.
Life care centers (also called continuing care retirement communities, or CCRCs) emerged in the 1970s and 1980s as a distinct model. A life care center offers a contract for life: the resident pays an entry fee and ongoing monthly fees, and the center provides housing, services, and (when needed) skilled care. The structure is different from a standalone nursing home because of the contractual lifetime commitment and the bundled service package.
The 1983 General Assembly addressed life care centers in Chapter 920. The legislative drafters apparently intended to make life care centers eligible to receive a CON for nursing home beds within the life care framework. The drafting error created an interpretive problem.
The AG's clerical-error solution was practical and grounded in long-standing North Carolina law. The opinion's resolution let life care centers proceed under the CON framework as the legislature seemed to intend.
Common questions
What was the practical effect of the opinion?
Life care center developers could pursue CON approval for nursing home bed construction with confidence that the cross-reference error would not be a bar. Without the opinion, developers might have hesitated to invest in the lengthy CON application process given the textual uncertainty.
Did the legislature fix the error?
Statutes are often updated after a session to fix drafting errors. The 1983 Session Laws c. 775 recodification of the CON framework as G.S. 131E-175 et seq. would have been an opportunity to clean up the cross-reference. Specific text in current law should be checked.
How is this approach different from judicial activism?
The AG's approach is statutory construction, not judicial revision. The opinion applies an established North Carolina canon (clerical errors are correctable) supported by multiple Supreme Court decisions spanning 70 years. Reading "section 31(f)" as "section 31" is the kind of small textual fix the courts have endorsed for over a century, not a substantive policy change.
Does the same canon apply to non-clerical drafting errors?
The opinion deals with what it characterizes as a clerical error. Larger interpretive problems (ambiguous language, contradictory provisions, missing subsections) are addressed under related but distinct canons. The clerical-error rule is narrow and applies to mechanical mistakes.
How does CON work today for life care centers?
CON regimes have shrunk in many states since the federal mandate was repealed. North Carolina retained CON but has revised the framework significantly. Life care center CON treatment under current law (G.S. 131E-175 et seq.) should be reviewed against current text and current DHHS regulations.
Source
Citations
- N.C.G.S. § 131-175
- N.C.G.S. § 131-176(17)
- N.C.G.S. § 131-178(a)
- N.C.G.S. § 131-181
- N.C.G.S. § 131A-3
- Chapter 920 of the 1983 Session Laws
- 1983 Session Laws, c. 775
- Hobbs v. Moore County, 267 N.C. 665, 149 S.E.2d 1 (1966)
- Teachy v. Coble Dairies, Inc., 306 N.C. 324, 293 S.E.2d 182 (1982)
- State v. Daniels, 244 N.C. 671, 94 S.E.2d 799 (1956)
- State v. Sizemore, 199 N.C. 687, 155 S.E. 724 (1930)
- Tommey v. Goldsboro Lumber Company, 171 N.C. 178, 88 S.E. 215 (1916)
Original opinion text
Subject:
Requested By:
Conclusion: Yes.
North Carolina's Certificate of Need Law, G.S. 131-175 et seq., n1 provides that no person may offer or develop a new institutional health service without first obtaining a certificate of need from the Department of Human Resources. G.S. 131-178(a). The addition or construction of skilled nursing care or intermediate care beds (commonly and hereinafter referred to as nursing home beds) is generally a new institutional health service. See G.S. 131-176(17).
n1 To be recodified at G.S. 131E-175 et seq. effective January 1, 1984. 1983 Session Laws, c. 775.
In addition, "it is a well settled rule of statutory construction that, where a literal interpretation of the language would contravene the manifest purpose of the statute, the reason and purpose of the law will be given effect and the strict letter thereof disregarded." Banks, 295 N.C. at 240, 244 S.E.2d at 389. "Where possible 'the language of a statute will be interpreted so as to avoid an absurd consequence. . . .'" Id. quoting Hobbs v. Moore County, 267 N.C. 665, 671, 149 S.E.2d 1, 5 (1966). To this end, the North Carolina courts have long held that clerical errors will be corrected in interpreting statutes. Teachy v. Coble Dairies, Inc., 306 N.C. 324, 331, 293 S.E.2d 182 (1982); State v. Daniels, 244 N.C. 671, 673, 94 S.E.2d 799 (1956); State v. Sizemore, 199 N.C. 687, 689-90, 155 S.E. 724 (1930); Tommey v. Goldsboro Lumber Company, 171 N.C. 178, 180-82, 88 S.E. 215 (1916).
For the reasons set forth above, it is our opinion that the reference in section 1 of Chapter 920 to section 31(f) is a clerical mistake and should be read to mean section 31. Thus, qualifying life care centers may be eligible to receive a certificate of need for the construction of nursing home beds.
RUFUS L. EDMISTEN
ATTORNEY GENERAL
William F. Briley
Assistant Attorney General