Can the North Carolina ferry system sell souvenirs like T-shirts, jackets, hats, coffee cups, and post cards at its onboard concessions?
Plain-English summary
The State Highway Chief Engineer asked the AG whether the Department of Transportation could sell souvenirs at its ferry concessions: shirts, jackets, hats, visors, ash trays, coffee cups, post cards, and key chains. The DOT was clearly thinking about a revenue stream that would make ferry rides more pleasant and bring in money.
AG Lacy H. Thornburg, through Senior Deputy AG Eugene A. Smith and Associate AG Elaine A. Dawkins, said no, and the reasoning was a study in close statutory reading against a strong background public policy.
The authorizing statute, G.S. 136-82, lets DOT "operate, or contract for the operation of, concessions on the ferries and at ferry facilities providing food, drink, other refreshments, and personal comfort items for those passengers." Three words mattered: "personal comfort items."
The AG started with G.S. 66-58(a), the state's anti-competition statute, which makes it "unlawful for any . . . agency of the State government . . . to engage directly or indirectly in the sale of goods, wares or merchandise in competition with any person, firm or corporation." Mitchell v. NC Industrial Development Financing Authority, 273 N.C. 137 (1968), stated the underlying rule directly: "the rule in North Carolina is that it is not the function of government to engage in private business."
Against that backdrop, the AG noted that other statutes carving out exceptions to G.S. 66-58 use explicit, item-specific language. The Wildlife Commission can sell "wildlife memorabilia" (G.S. 66-58(b)(19)). College bookstores can sell "educational materials and supplies, gift items and miscellaneous personal use articles" (G.S. 66-58(c)(3)). The Museum of Art has express authority for "books, periodicals, art works, art supplies" (G.S. 140-5.14(13)). In none of those exceptions did the General Assembly use the phrase "personal comfort items." When it wanted to allow souvenirs, memorabilia, or gift items, it said so.
That fit a familiar rule of construction: exceptions to a general statute are strictly but reasonably construed in conformity with the purpose of the statute. The AG borrowed the federal court's observation in St. John's Hospital v. Harris, 535 F.Supp. 751, 763 (N.D. Ill., E.D. 1981), that "personal comfort items" is "an unclear phrase; at best it is an ambiguous phrase." Given the ambiguity, the proper reading was the one that did not push state activity into commercial souvenir competition with private vendors.
The AG offered an illustrative reading: in the ferry-passenger context, personal comfort items would be things like handkerchiefs, fingernail clippers and files, combs, Tums, aspirin, first-aid items (band-aids, mercurochrome), and sunburn lotion. Things a passenger might reasonably need on board for personal comfort and forgot to bring. Not memorabilia of the trip itself.
The conclusion: aside from refreshments, the ferry concessions are limited to those modest, true-comfort items. Shirts, jackets, hats, visors, ash trays, coffee cups, post cards, and key chains were out.
Currency note
This opinion was issued in 1989. 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.
G.S. 136-82 and G.S. 66-58 have both been amended since 1989. The list of exceptions in G.S. 66-58(b) and (c) has grown substantially as the General Assembly has authorized more state agencies to sell more categories of items. Anyone advising on what can be sold today at NC ferry concessions should pull the current G.S. 136-82, the current G.S. 66-58, and any later AG opinions on the same question, plus the DOT's current ferry concession contracts.
Common questions
Q: Why does North Carolina care so much about state agencies competing with private business?
A: It is one of the older, deeper threads in NC public-policy law. The legislature has repeatedly enacted G.S. 66-58 and its predecessors to keep state government from using its tax-supported infrastructure to undercut private merchants. The Mitchell court stated it simply: "the rule in North Carolina is that it is not the function of government to engage in private business."
Q: What if the ferry concession would not actually compete with anyone (e.g., on the open water)?
A: The AG did not get into that argument. G.S. 66-58(a) is categorical; it does not require a market-impact showing before it applies. And the AG's reasoning relied at least as much on the literal statutory text ("personal comfort items") as on the anti-competition policy.
Q: Is there a way to interpret "personal comfort items" to include a sweatshirt on a chilly Outer Banks crossing?
A: An interesting question the AG did not consider in detail. The opinion focused on the merchandise the DOT actually wanted to sell (T-shirts and souvenir items), which are clearly memorabilia. A different question might be whether emergency cold-weather gear could fit. The opinion's reasoning, though, suggests the AG would likely say the legislature meant small consumables, not clothing.
Q: Could DOT contract with a private vendor to operate a souvenir shop on land at the ferry terminal?
A: Possibly, but that goes outside the scope of the opinion. The opinion addressed concession authority under G.S. 136-82, which is the statutory tool DOT was using. A different statutory hook (lease of state property to a private operator, etc.) would raise different questions.
Q: What is the modern status of NC ferry concessions?
A: The AG opinion is 37 years old. Anyone interested in current practice should look at the NCDOT Ferry Division's current concession contracts and current implementing rules under G.S. 136-82 as amended. The opinion's literal interpretation of "personal comfort items" may or may not survive subsequent statutory amendments.
Background and statutory framework
The NC ferry system is operated by the NCDOT Ferry Division and connects communities across the sounds and rivers of eastern North Carolina, including the iconic Hatteras-Ocracoke route. It is part of the state highway system rather than a tourism operation, although in practice many of its passengers are tourists.
G.S. 136-82 authorizes DOT to operate the ferries and provides for related concession authority. The phrase "personal comfort items" was added to the statute as an expansion beyond pure refreshment sales. The 1989 question to the AG was about how far that expansion went. The state-competition baseline (G.S. 66-58) and the express-exception pattern (Wildlife Commission, college bookstores, Museum of Art) shaped the AG's narrow reading.
The opinion is a useful example of NC statutory-construction methodology: read the operative phrase, find the background anti-competition rule, look at analogous statutes for legislative usage, observe that the express souvenir authorizations elsewhere use different language, and conclude that the ambiguous phrase should be read narrowly.
Citations
- N.C.G.S. § 66-58(a) (state agencies prohibited from competing with private enterprise)
- N.C.G.S. § 66-58(b)(19) (Wildlife Commission may sell wildlife memorabilia)
- N.C.G.S. § 66-58(c)(3) (college bookstores may sell gift items)
- N.C.G.S. § 136-82 (DOT ferry concession authority)
- N.C.G.S. § 140-5.14(13) (Museum of Art auxiliary services authorization)
- Mitchell v. NC Industrial Development Financing Authority, 273 N.C. 137 (1968) (government should not engage in private business)
- Black v. Littlejohn, 312 N.C. 626 (1985) (statutory words given natural, approved, recognized meaning)
- St John's Hospital v. Harris, 535 F.Supp. 751, 763 (N.D. Ill., E.D. 1981) ("personal comfort items" is an ambiguous phrase)
Source
Original opinion text
Requested By: E. H. McEntire, P.E., State Highway Chief Engineer
Question: Does N.C.G.S. § 136-82, which provides for concessions on ferries to provide for refreshments and "personal comfort items" to the passengers, authorize the sale of shirts, jackets, hats, visors, ash trays, coffee cups, post cards, and key chains?
Conclusion: No.
This is in response to your request for our opinion concerning N.C.G.S. § 136-82, which authorizes the Department of Transportation to provide certain items at concessions on ferries and at ferry facilities. You specifically ask if the sale of souvenirs, such as ash trays, coffee cups, post cards, key chains, jackets, hats, visors, and T-shirts are authorized by the statute. The pertinent language of the statute reads as follows:
"To provide for the comfort and convenience of the passengers on the ferries established and maintained pursuant to this section, the Department of Transportation, notwithstanding any other provision of law, may operate, or contract for the operation of, concessions on the ferries and at ferry facilities providing food, drink, other refreshments, and personal comfort items for those passengers." (emphasis added) N.C.G.S. 136-82.
North Carolina has established statutory and case law that indicates that it is against public policy for the State to engage in commercial activities in competition with private enterprise. N.C.G.S. § 66-58(a) states that it is "unlawful for any . . . agency of the State government, . . . to engage directly or indirectly in the sale of goods, wares or merchandise in competition with any person, firm or corporation for the operation or rendering of any such business or service . . . or to purchase for or sell to any person, firm or corporation any article of merchandise in competition with private enterprise." The North Carolina Supreme Court has stated that "the rule in North Carolina is that it is not the function of government to engage in private business." Mitchell v. North Carolina Industrial Development Financing Authority, 273 N.C. 137, 156 (1968). N.C.G.S. § 136-82, must be read in conjunction with the clearly expressed public policy that prohibits government agencies from competing with private industries in business.
There are a number of exceptions to N.C.G.S. § 66-58. In these cases, the authorization language is explicit. For example, the Wildlife Commission can sell wildlife memorabilia, N.C.G.S. § 66-58(b)(19); college bookstores can sell "educational materials and supplies, gift items and miscellaneous personal use articles" to employees and students, N.C.G.S. § 66-58(c)(3); and, the Museum of Art is expressly authorized "to provide auxiliary services at the North Carolina Museum of Art . . . including the sale of books, periodicals, art works, art supplies . . .", N.C.G.S. § 140-5.14(13).
The meaning of the term "food, drink and other refreshments" as used in N.C.G.S. § 136-82, is clear. The Legislature contemplates the sale of coffee, soft drinks and snack items at the concessions on ferries and at ferry facilities. However, the definition of "personal comfort items" is not clear from reading the statute. The federal government used these words, "personal comfort items," in the Medicare Act to describe items for which the federal government would not reimburse patients. The federal district court stated that the phrase "personal comfort items" is an unclear phrase; at best it is an ambiguous phrase. St John's Hospital v. Harris, 535 F.Supp. 751, 763 (N.D. Ill., E.D. 1981).
Exceptions to a statute, as a general rule, should be strictly, but reasonably construed in conformity with the purpose and meaning of the statute. 82 CJS, STATUTES, Par. 82, p. 891. The Legislature in this case, after authorizing concessions for refreshments to ferry passengers, authorized "personal comfort items" to be included. As already indicated, other exceptions to N.C.G.S. § 66-58 include "wildlife memorabilia" (Wildlife Commission), gift items and miscellaneous personal use articles (colleges), books, periodicals and art supplies (Art Museum). Had the Legislature intended to authorize the sale of the items in question they could have clearly done so by authorizing the sale of souvenirs and items of clothing. However, the statute is restricted to "personal comfort items." Usually, words of a statute will be given their natural, approved, and recognized meaning. Black v. Littlejohn, 312 N.C. 626, 638 (1985). We believe the term should be given its ordinary meaning in the context of the status as a passenger on the ferry, i.e., such items that passengers on a ferry would usually or normally expect to be available to ferry passengers for sale for their personal comfort. While the enumerated articles may come within the meaning of other terms that have been used by the Legislature to make exceptions, i.e., personal use items, gift items, souvenirs, memorabilia, the Legislature chose to use the term "personal comfort items" which is more restrictive.
When N.C.G.S. § 136-82 is read in conjunction with the clearly established public policy and the generally accepted rules of statutory construction are applied to give the words their natural, approved and recognized meaning, we do not believe T-shirts, jackets, hats, visors, coffee cups, key rings, and post cards are included within the term "personal comfort items" for ferry passengers. In the context of the sale to ferry passengers at the concessions, we believe such items as handkerchiefs, fingernail clippers/files, combs, tums, aspirin, first aid items, such as band-aids, merthiolate, and sun burn lotion could provide for their personal comfort. Therefore, except for the sale of refreshments at concessions on ferries and at ferry facilities, the Department of Transportation is limited to selling to ferry passengers "personal comfort items," that in the opinion of this office excludes shirts, jackets, hats, other such items of clothing, ash trays, coffee cups, post cards, key chains and other such souvenirs.
Lacy H. Thornburg
Attorney General
Eugene A. Smith
Senior Deputy Attorney General
Elaine A. Dawkins
Associate Attorney General