Are leases of buildings on the North Carolina State Fair grounds, including year-round leases to flea-market vendors, exempt from the statutory ban on government competition with private enterprise (G.S. 66-58), or does the exemption apply only during the nine-day October fair?

Plain-English summary

Governor James B. Hunt, Jr., and the Council of State asked whether leases of North Carolina State Fair buildings used for flea markets were exempt from G.S. 66-58. The Attorney General concluded that “all leases and rentals of fair properties and buildings, at whatever time, are exempt from G.S. 66-58.” The holding concerns leases and rentals of fair property; the opinion does not decide whether every possible commercial use of the buildings receives the same treatment.

The central question was whether “The North Carolina State Fair” in G.S. 66-58(b)(12) meant only the nine-day October event. The opinion points to buildings designed and used for year-round activity, state budgets with line items for annual building use, and a 1959 statute confirming prior State Fair projects outside the annual fair dates. It also says State Fair contracts and leases had long named the “N.C. State Fair” as the lessor without separating the fair dates from other months. The Attorney General cites judicial respect for an agency's interpretation of statutes as an additional reason.

The inquiry described current and proposed building leases whose tenants would sublease to vendors selling goods to the public in flea markets. The opinion answers the exemption question for the leases and rentals. It does not predict the outcome of a lawsuit by a particular vendor or resolve another legal theory.

Currency note

This opinion interprets G.S. 66-58 and State Fair statutes as understood in 1983. Check current law and the particular lease for a present question.

Historical context: what the AG concluded

The opinion quotes the 1959 enactment confirming and ratifying actions by the State Fair Manager in operating projects on the fairgrounds “at times other than the annual dates of the State Fair.” It says the legislature had also budgeted for yearly building use for at least twenty years. Those points support reading the statutory reference to the State Fair as extending beyond the annual event.

The Attorney General then states the precise conclusion: all leases and rentals of fair properties and buildings are exempt from G.S. 66-58, regardless of when they occur. That conclusion covers the lease arrangement presented in the inquiry. The opinion does not pronounce all commercial activity on the grounds exempt.

Background and statutory framework

G.S. 66-58 was the statute at issue, and subsection (b)(12) referred to “The North Carolina State Fair.” The opinion interprets that phrase in light of year-round use described in budgets, the 1959 legislation, and the Department of Agriculture's administrative practice. It cites MacPherson v. Asheville for the weight courts give an agency's statutory interpretation.

Common questions

Does the exemption end when the nine-day fair closes?

Not for the leases and rentals addressed. The opinion says all leases and rentals of fair properties and buildings, “at whatever time,” are exempt from G.S. 66-58.

Did the opinion address flea-market buildings?

Yes. It describes leased buildings that were or would be subleased to vendors offering goods to the public in flea markets. Its conclusion covers leases and rentals of fair properties and buildings.

Does it exempt every commercial use of State Fair property?

The opinion does not decide that broader question. Its stated conclusion is about leases and rentals.

Would a challenge by a private operator necessarily fail?

The opinion does not decide any particular case or predict a court's result. It gives the Attorney General's view of the G.S. 66-58 exemption for the leases and rentals described.

Source

• Landing page: https://ncdoj.gov/opinions/state-fair-buildings-and-grounds-exempt-therefrom/

Citations

• N.C.G.S. § 66-58
• N.C.G.S. § 66-58(b)(12)
• N.C.G.S. § 106-503
• Session Laws 1959, c. 1186, s. 3
• MacPherson v. Asheville, 283 N.C. 299, 196 S.E.2d 200 (1973)

Original opinion text

Subject:

Requested By: Governor James B. Hunt, Jr., and the Council of State

Conclusion: Yes, based on legislative enactments relating to the fairgrounds, annual budgets contained in the State budget and administrative interpretation of various statutes discussed herein.

The buildings under current lease and the two proposed to be leased are and would be respectively subleased to individuals to offer for sale and sell to the general public various goods, wares and merchandise. Such a commercial operation is generally referred to as a "flea market."

A brief review of the history of the North Carolina State Fair appears appropriate. The following are excerpts from a publication of the North Carolina Department of Agriculture, entitled N.C. State Fair — 1983 — Premium Book, pp. 12-14, entitled "North Carolina State Fair History"

[. . .]

Most of the funds for capital improvements mentioned above were appropriated by the General Assembly. It is self-evident that these buildings were designed for and have been used since their construction for year-round use, not just during the nine-day fair.

The crucial question to be resolved is whether "The North Carolina State Fair" as worded in G.S. 66-58(b)(12) is limited to the nine-day event held in October of each year. Clearly, as quoted above, the administrators of the Fair and the Department of Agriculture, responsible for its publication, think not. Legislation enacted during the past several years supports this conclusion.

The budget for the Department of Agriculture, enacted by the General Assembly, has for at least 20 years, been entitled "Department of Agriculture, North Carolina State Fair (Special Fund)" and contains numerous line items for the yearly use of buildings on the fairgrounds.

In 1959, the General Assembly in a rewrite of G.S. 106-503 (S.L. 1186, s. 3) provided: "All actions heretofore taken by the Manager of the North Carolina State Fair in the operation of projects on the fair grounds at times other than the annual dates of the State Fair are confirmed, ratified and validated." (Emphasis added).

For many years all contracts and leases used by the State Fair have referred to the "N.C. State Fair" as the lessor or contracting party. No distinction is made between the nine day fair and the year-round operation of the facilities.

It is clear from the above-described administrative actions of the Department of Agriculture and laws enacted by the General Assembly that year-round use of the Fair's buildings and grounds was intended by the repeated use of the term "State Fair".

Finally, our courts give weight to the interpretation of statutes by an administrative agency. Strong's Index, 3rd Ed., Statutes, s. 5.7, citing MacPherson v. Asheville, 283 N.C. 299, 196 S.E.2d 200 (1973).

We conclude therefore that all leases and rentals of fair properties and buildings, at whatever time, are exempt from G.S. 66-58.

Rufus L. Edmisten
Attorney General

Millard R. Rich, Jr.
Deputy Attorney General