When the Child Day Care Commission writes a rule requiring day care licenses for preschool programs in public school buildings (whether run by the school system or by a private provider), can it lawfully reach programs run by public schools for 3 and 4 year olds even though G.S. 110-86(3) excludes 'public schools' from the definition of 'day care facility'?

Plain-English summary

The Legal Specialist for the Department of Public Instruction asked the AG a jurisdictional dispute between two state regulatory regimes that had quietly coexisted for nearly two decades and were now colliding. The Child Day Care Commission, originally the Child Day Care Licensing Board, was created in 1971 to license day care facilities under G.S. § 110-85 et seq. The statutory definition of "day care facility" at G.S. § 110-86(3) excludes "public schools." For years, the Commission and the AG had read that exclusion broadly: public schools and their programs were outside the Commission's jurisdiction. But effective August 1, 1990, the Commission amended 10 N.C.A.C. 3U.0202 to require a day care license for "preschool programs housed in a public school building, whether operated by a public school system or a private provider." The new rule pulled public school early-childhood programs into the day care licensing regime.

Three questions came out of that change:

• Are public-school-operated preschool programs for 3 and 4 year olds subject to Commission licensure?
• Are programs for 3 and 4 year olds housed in public school buildings but operated by private providers subject to Commission licensure?
• Is the State prohibited from purchasing day care services from public-school day care programs that are not Commission-licensed?

The 1990 AG answered: no, yes, no.

The rule-versus-statute principle. States' Rights Democratic Party v. Board of Elections, 229 N.C. 179 (1948), establishes that state agencies cannot adopt rules contrary to acts of the General Assembly. The Commission has rulemaking authority but cannot rewrite the statutory exclusion. To the extent the new rule reaches programs the statute exempts, the rule is void.

Resolving the "public schools" ambiguity. The statute does not define "public schools." Three possible readings:

• Broadest: any program operated in a public school building, regardless of provider.
• Middle: only programs operated by public schools (provider-based test).
• Narrowest: only public-school programs for children of traditional school age (age 5 and up).

The AG picked the middle reading. Provider, not building, drives the exclusion. And the age of the children is irrelevant: all programs run by public schools under authority from the General Assembly or State Board of Education fall within the exclusion.

Why the middle reading wins. Three structural points support it:

• Purpose of the day care regime. G.S. § 110-85 says the State should protect children placed in day care arrangements "when those children are under the supervision and care of persons other than their parents, grandparents, guardians or full time custodians during the day." The General Assembly's target is private-sector day care, not redundant regulation of programs already governed by the State Board of Education's comprehensive education plan. The General Assembly and State Board have built a full regulatory regime for public-school programs (curriculum, staffing, facilities, health, safety, nutrition). The Department of Public Instruction has recommended standards for public-school programs for 3 and 4 year olds that meet or exceed the Day Care Commission's requirements. Layering a second licensing regime on top would be needless duplication.

• Prospective application of comprehensive terms. The term "public schools" was enacted in 1971 when public schools were grades 1 through 12. Kindergarten and other early-childhood programs were added later, including programs for handicapped children ages 3 to 5 (G.S. § 115C-106, § 115C-122, § 115C-146.1), federally-funded early-childhood programs (G.S. § 115C-47(7), § 115C-408), and research and special-project programs (G.S. § 115C-12(11), § 115C-47(8)). Applied prospectively, "public schools" picks up these later additions. Southerland Statutory Construction § 49.02 supports prospective reading of comprehensive terms.

• Asymmetry within § 110-86(3). The same statutory section that exempts "public schools" also exempts certain "nonpublic schools," but the nonpublic exemption is limited to programs operated for "children who are of public school age." The public-schools exemption has no such age limitation. If the General Assembly had meant to limit the public-schools exclusion to school-age children, it would have used the same language it used for nonpublic schools. It did not.

The penalty structure also points to the broad public-schools exclusion. Day care violations are punishable by civil penalties, criminal fines, and imprisonment under G.S. § 110-103 and § 110-103.1. The General Assembly would not have set up criminal penalties applicable to public school principals and superintendents for running unlicensed preschool programs that the same Legislature was simultaneously requiring or encouraging local boards of education to operate.

The "government is not within general statutes" canon. Citing 82 CJS, Statutes, § 317; Employees v. Missouri Public Health Department, 411 U.S. 279 (1973); and Davidson Co. v. City of High Point, 85 N.C. App. 26 (1987), the AG noted the general rule that statutes do not bind the government or its agencies absent clearly manifested intent. The day care licensing statute does not clearly manifest an intent to bind public schools; if anything, the express exclusion goes the opposite direction.

The private-provider half. Private-provider preschool programs operating in public school buildings (perhaps under a lease or shared-space arrangement) are a different story. They are not "public schools" by virtue of being run by public schools. They are private-sector day care providers using public space. The Commission's licensure regime reaches them.

Purchasing services from unlicensed public-school programs. The State is not prohibited from buying day care services from public-school programs even though those programs lack Commission licenses. The licensing exclusion runs through, so the absence of a license is not a defect.

Currency note

This opinion was issued in 1990. 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 early-childhood landscape has been reshaped multiple times since 1990, including the Smart Start initiative (1993), NC Pre-K (formerly More at Four), and various federal-state pre-K funding programs. The Division of Child Development and Early Education has assumed regulatory functions formerly housed elsewhere, and the rule numbering at 10 N.C.A.C. 3U has been superseded. Anyone deciding whether a current preschool program needs day care licensure should consult current Chapter 110 (now Article 7 of Chapter 110), current 10A N.C.A.C. 9 (the successor rules), and current Department of Health and Human Services and Department of Public Instruction guidance.

Historical context: what the AG concluded

The opinion captures a 1990 turf dispute that grew out of the expansion of early-childhood education in North Carolina. The Child Day Care Commission saw the proliferation of public-school preschool programs for 3 and 4 year olds and concluded that the licensing-protection rationale should reach them. The Commission's rule change was a serious attempt to extend regulation to a fast-growing category of programs that were operating outside the day care licensure regime.

The Department of Public Instruction saw it as a turf encroachment. Public schools were governed by the State Board of Education under a comprehensive regulatory regime that already addressed staffing, curriculum, safety, and nutrition. A second licensing regime on top would impose duplicative paperwork, conflicting standards in some areas, and a different inspection cycle. The Department asked the AG to clarify.

The AG's analysis is careful and structurally sound. Read the statutory exclusion broadly enough to cover the General Assembly's clear preference for one regulator per public-school program. Read it narrowly enough to keep private providers in the licensing tent even when they occupy public-school space. Confirm that the rule, to the extent it overreaches, is void.

The reasoning illustrates a common pattern in administrative law: when an agency tries to expand its jurisdiction by rule, courts and AGs look back to the enabling statute. If the statute creates an exclusion, the agency cannot abolish it. Here, the exclusion was express ("public schools") and the rule's encroachment on the exclusion was clear. The rule was void to the extent of the encroachment.

For local boards of education in 1990 the practical effect was substantial. They could continue running 3- and 4-year-old programs under State Board of Education authority without applying for day care licenses. Private providers in school buildings, by contrast, still needed Commission licenses. State agencies purchasing day care services could buy from unlicensed public-school programs.

Common questions

What programs are exempt from day care licensure under G.S. 110-86(3)?

All programs operated by public schools under authority from the General Assembly or the State Board of Education, regardless of the age of the children enrolled. This includes traditional K-12, kindergarten, pre-K, and special-needs programs.

Are private preschool programs in public school buildings exempt?

No. The exclusion is provider-based, not building-based. A private provider using public school space still needs a Commission license.

Why doesn't the day care licensing regime apply to public schools?

Because the General Assembly has built a separate, comprehensive regulatory regime for public schools through the State Board of Education and the Department of Public Instruction. Layering day care licensure on top would be needless duplication.

Can a state agency buy day care from an unlicensed public-school program?

Yes. The absence of a Commission license is not a defect because public-school programs are statutorily exempt from licensure in the first place.

What about Head Start or federally-funded early-childhood programs in public schools?

The opinion does not address them specifically. Programs operated by public schools under federally-funded authority that the General Assembly has authorized (G.S. § 115C-47(7), § 115C-408) fall within the public-schools exclusion as the AG read it.

Could the General Assembly change this?

Yes. The General Assembly could narrow the public-schools exclusion in G.S. § 110-86(3) by amending the statute. The Commission cannot accomplish that change by rulemaking alone.

Background and statutory framework

The day care licensing statute. Created by 1971 N.C. Sess. Laws Ch. 803, codified as G.S. § 110-85 et seq. G.S. § 110-85 (policy: protect children in day care arrangements outside the home). G.S. § 110-86(3) (definition of "day care facility" excluding "public schools"). G.S. § 110-103 and § 110-103.1 (penalties for unlicensed operation).

The challenged rule. 10 N.C.A.C. 3U.0202 (as amended effective August 1, 1990) (requiring license for preschool programs in public school buildings, whether public-school-operated or private). 10 N.C.A.C. 3U.0102(21) and (24) (defining covered programs).

Public-school authority for early childhood programs. G.S. § 115C-106, § 115C-122, § 115C-146.1 (handicapped children ages 3 to 5). G.S. § 115C-47(7), § 115C-408 (federal-fund acceptance for early-childhood education). G.S. § 115C-12(11), § 115C-47(8) (research and special projects).

Rule-versus-statute principle. States' Rights Democratic Party v. Board of Elections, 229 N.C. 179 (1948).

Statutory-construction sources. Young v. Whitehall Co., 229 N.C. 360 (1948) (language, mischief, remedy). Commissioner of Insurance v. Rate Bureau, 300 N.C. 381 (1980) (agency authority restricted by other laws). Hughey v. Cloninger, 297 N.C. 86 (1979) (comprehensive education plan). Bridges v. Charlotte, 221 N.C. 472 (1942) (local boards as administrative arms). Southerland Statutory Construction § 49.02 (prospective reading of comprehensive terms).

Government-not-bound canon. 82 CJS, Statutes, § 317. Employees v. Missouri Public Health Department, 411 U.S. 279 (1973). Davidson Co. v. City of High Point, 85 N.C. App. 26 (1987).

Citations

• G.S. § 110-85
• G.S. § 110-86(3)
• G.S. § 110-103, G.S. § 110-103.1
• G.S. § 115C-12(11), G.S. § 115C-47(7), G.S. § 115C-47(8), G.S. § 115C-106, G.S. § 115C-122, G.S. § 115C-146.1, G.S. § 115C-408
• 1971 N.C. Sess. Laws Ch. 803
• 10 N.C.A.C. 3U.0102(21), 10 N.C.A.C. 3U.0102(24), 10 N.C.A.C. 3U.0202
• States' Rights Democratic Party v. Board of Elections, 229 N.C. 179, 49 S.E.2d 379 (1948)
• Young v. Whitehall Co., 229 N.C. 360, 49 S.E.2d 797 (1948)
• Commissioner of Insurance v. Rate Bureau, 300 N.C. 381, 269 S.E.2d 547 (1980)
• Hughey v. Cloninger, 297 N.C. 86, 253 S.E.2d 898 (1979)
• Bridges v. Charlotte, 221 N.C. 472, 20 S.E.2d 825 (1942)
• Davidson Co. v. City of High Point, 85 N.C. App. 26, 354 S.E.2d 280 (1987)
• Employees v. Missouri Public Health Department, 411 U.S. 279 (1973)

Source

• Landing page: https://ncdoj.gov/opinions/education-state-departments-institutions-and-agencies-licenses-and-licensing/

Original opinion text

Requested By: Harry E. Wilson, Legal Specialist, North Carolina Department of Public Instruction

Questions:

(1) Are educational programs operated by public schools for 3 and 4 year old children subject to licensure and regulation by the Child Day Care Commission?

(2) Are educational programs for 3 and 4 year old children housed in public school buildings but operated by private providers subject to licensure and regulations by the Child Day Care Commission?

(3) Is the State prohibited from purchasing day care services from day care programs operated by the public schools, even though those programs are not licensed by the Child Day Care Commission?

Conclusion:

(1) No.

(2) Yes.

(3) No.

The Child Day Care Commission (originally the Child Day Care Licensing Board) was created by the General Assembly in 1971, and was given responsibility for licensing day care facilities. 1971 N.C. Sess. Laws Ch. 803; G.S. § 110-85 et seq. As defined in G.S. § 110-86(3), the term "day care facility" excludes "public schools". On a number of occasions during the 1970's and 1980's, this office informally advised public schools and the Day Care Commission that the Commission does not have any jurisdiction or authority over public school programs. Until recently, the Commission had not attempted to assert any authority over public schools. However, effective August 1, 1990, the Commission amended its rules, specifically 10 N.C.A.C. 3U.0202, to require a day care license for "preschool programs housed in a public school building, whether operated by a public school system or a private provider." The Department of Public Instruction has asked for the opinion of this office concerning the validity of this rule.

State agencies have authority to adopt rules implementing acts of the General Assembly, but in the course of exercising that authority they may not adopt or enforce rules contrary to acts of the General Assembly. States' Rights Democratic Party v. Board of Elections, 229 N.C. 179, 186, 49 S.E. 2d 379 (1948). In this case we must determine the scope of the Commission's rule and the scope of the legislative exemption for "public schools." To the extent that the Commission's rule infringes upon the legislative exemption, it is void and unenforceable.

The scope and intent of the Commission's rule is relatively clear: any program housed in a local school building, whether educational or custodial in nature, and whether operated by a public school system or a private provider is subject to licensure and regulation by the Commission as long as the children enrolled in that program are less than kindergarten age, i.e., less than five years of age. See 10 N.C.A.C. 3U.0102 (21) and (24), and 10 N.C.A.C. 3U.0202. Conversely, it is apparent that the Commission does not intend that any program operated by public schools for children of kindergarten age or older, is subject to licensure or regulation by the Commission.

The scope of the legislative exclusion for "public schools" is somewhat ambiguous. It could mean that all programs operated in public school buildings are exempt from licensure or regulation regardless of whether the programs are operated by the public schools or by private providers. Construing the exclusion more narrowly, it could mean that only programs operated in public school buildings by the public schools are exempt from licensure or regulation. Most narrowly, it could mean that only programs operated by the public schools for children of traditional school age, i.e. age five or older, are excluded from licensure and regulation by the Commission.

When statutes are ambiguous, the rules of statutory construction must be applied to determine the General Assembly's intent. In ascertaining this intent, "the language of the statute, the mischiefs sought to be avoided and the remedies intended to be applied" should be considered. Young v. Whitehall Co., 229 N.C. 360, 367, 49 S.E.2d 797 (1948). Further, the act as a whole and its relation to other laws must be considered. Commissioner of Insurance v. Rate Bureau, 300 N.C. 381, 409, 269 S.E.2d 547 (1980) ("The rulemaking power of an administrative agency is restricted by law apart from the statute conferring power and an agency having authority to effectuate the policies of a particular statute may not effectuate such policies so single mindedly that it wholly ignores other and equally important legislative objectives.")

Application of these rules to the phrase "public schools" leads us to the conclusion that the General Assembly intended all programs operated by public schools under the authority conferred upon them by the General Assembly and the State Board of Education to be exempt from licensure and regulation by the Day Care Commission regardless of the age of the children enrolled in those programs. Likewise, it leads us to the conclusion that programs housed in public school buildings but operated by private providers were not intended to be exempt from licensure and regulation by the Commission, regardless of the age of the children enrolled in those programs.

The General Assembly's specific and primary intention in regulating day care is that "the State should protect the growing number of children placed in day care facilities or in child care arrangements when those children are under the supervision and care of persons other than their parents, grandparents, guardians or full time custodians during the day." G.S. § 110-85. (Emphasis added.) The clear import of this statement is that the General Assembly intended to extend the protection of children by regulation of private sector day care and did not intend the redundant regulation of programs already regulated by the State. The General Assembly and State Board of Education, pursuant to their constitutional obligations, have adopted a comprehensive plan for public education, including, inter alia, standards for curriculum, personnel and facilities. See Hughey v. Cloninger, 297 N.C. 86, 253 S.E.2d 898 (1979). Local boards of education are the administrative arms of the General Assembly and the State Board of Education in carrying out this comprehensive plan. Bridges v. Charlotte, 221 N.C. 472, 478, 20 S.E.2d 825 (1942). This plan of education is directed primarily to children five years of age and older. In recent years, however, the General Assembly, in recognition of the value of early childhood education and education beyond the normal school day, has authorized, and in some cases directed, local school boards to provide educational programs for children between the ages of three and five. See G.S. § 115C-106, 122 and 146.1 et seq. (educational program required to be provided for handicapped children from three to five years of age); G.S. § 115C-47(7) and 408 (authorizing the State Board of Education and local boards of education to accept and administer federal funds, including federal funds for early childhood education programs); and G.S. § 115C-12(11) and 47(8) (authorizing State Board of Education and local boards of education to sponsor and conduct research programs and special projects to improve educational opportunities for children.) In response to this legislation, the Department of Public Instruction has adopted recommended standards for programs for three and four year old children operated by public schools. These standards govern curriculum, staffing ratios, teacher qualifications, health, safety, and nutrition, and the standards meet or exceed the requirements of the Day Care Commission.

It is, therefore, highly unlikely that the legislature intended to vest jurisdiction over public school programs in the Day Care Commission and hence create a needless duplication of state regulatory authority. To the contrary, the specific exclusion for "public schools" indicates the legislature's conscious acknowledgment that children in public school programs are, in fact, protected by virtue of the comprehensive and well-established statutory and regulatory scheme governing such programs.

Our conclusion is strongly supported by three other factors. First, legislation is generally applied prospectively so that a comprehensive term will be construed to encompass programs coming into existence after the enactment of the legislation. Southerland Statutory Construction, § 49.02 (4th Ed. 1986). "Public schools" is a comprehensive term. In 1971 the "public schools" were limited to grades 1 through 12. Kindergarten and other early childhood education programs were added to the "public schools" after 1971. Applying the term "public schools" prospectively results in kindergarten and other early childhood education programs established after 1971 coming within the meaning of that term. Second, the exclusion in G.S. § 110-86(3) for "public schools" is not limited in any respect. By contrast, the exclusion in that same section for nonpublic schools is limited to programs operated for "children who are of public school age." Had the General Assembly intended the "public schools" exclusion to be limited in this same manner, it would have expressly included that limitation. Third, violations of day care requirements are punishable by civil penalties, criminal fines and imprisonment. G.S. § 110-103 and 103.1. This is strong evidence that the General Assembly did not intend programs operated by public schools to be subject to licensure or regulation by the Day Care Commission.

The government, whether state or federal, and its agencies are not ordinarily to be considered as within the purview of the statutes, however general and comprehensive the language of the act may be, unless intention to include them is clearly manifest, as where they are expressly named therein, or included by necessary implication. This general doctrine . . . applies with special force to statutes . . . under which liabilities would be imposed on the governments.

82 CJS, Statutes, § 317; see also Employees v. Missouri Public Health Department, 411 U.S. 279 (1973); Davidson Co. v. City of High Point, 85 N.C. App. 26, 354 S.E.2d 280, modified and affirmed on other grounds, 321 N.C. 252 (1987) (Normally general statutes do not apply to the State or its agencies or subdivisions, unless the legislature has clearly manifested that intent.)

Application of these same rules of statutory construction to preschool programs housed in public schools but operated by private providers leads to the conclusion that the phrase "public schools" was not intended to encompass these programs. It is therefore our opinion that these programs are subject to regulation by the Child Day Care Commission if they meet the definition of day care facilities. On the other hand, programs operated by local boards of education under authority granted them by the General Assembly and the State Board of Education are not subject to licensure or regulation by the Commission, regardless of the ages of the children enrolled in such programs. To the extent that 10 N.C.A.C. 3U.0202 attempts to regulate these public school programs, it is void and unenforceable.

Lacy H. Thornburg, Attorney General

Edwin M. Speas, Jr., Special Deputy Attorney General

Laura E. Crumpler, Assistant Attorney General