NC NC AG Advisory Opinion (1994-05-03) 1994-05-03

Within the NC Department of Commerce, which Type II agencies have hire-and-fire authority over their own staff under their own organic statutes, rather than answering to the Secretary of Commerce?

Short answer: The AG identified fourteen Type II commissions, divisions, and agencies inside the Department of Commerce whose own statutes specifically vest hire-and-fire authority over staff in the agency rather than the Secretary. For two newer councils (Community Development Council, Job Training Coordinating Council) the question was academic because neither had staff.

Disclaimer: This is an official North Carolina Attorney General advisory opinion. AG opinions are persuasive authority but not binding precedent like a court ruling. This summary is for informational purposes only and is not legal advice. Consult a licensed North Carolina attorney for advice on your specific situation.

About this page: The plain-English summary, reader guidance, and Q&A below were written by Ezel based on the official AG opinion. The original opinion (linked at the bottom of this page) is the authoritative source for any reliance.

Plain-English summary

The Executive Organization Act of 1973 grouped North Carolina's many boards, commissions, and divisions into principal state departments. Some were folded in completely (Type I transfers, where the principal department head controls personnel and administration). Others were placed inside a department for housekeeping purposes but kept their independent statutory authority over their own work (Type II transfers). Type II agencies "exercise all their prescribed statutory powers independently of the head of the principal department." G.S. 143B-431(a)(3).

In 1994, Chief Deputy Attorney General Andrew A. Vanore, Jr. and Special Deputy Attorney General Henry T. Rosser were asked to identify which Type II agencies inside the Department of Commerce had their own statutory hire-and-fire authority. The answer mattered because Type II status alone does not necessarily decide the personnel question. Each agency's organic statute had to be checked.

The opinion produced a list of fourteen Type II agencies with such authority: the ABC Board, Utilities Commission, Employment Security Commission, Industrial Commission, State Banking Commission and Commissioner of Banks, Savings Institutions Commission, Credit Union Division, Milk Commission, Mutual Burial Association Commission, Rural Electrification Authority, State Ports Authority, Public Staff of the Utilities Commission, Cemetery Commission, and Ports Railway Commission.

Two newer Type II councils, the Community Development Council and the Job Training Coordinating Council, had been transferred to the Department by G.S. 143B-432(c). The Community Development Council had no staff. The Job Training Coordinating Council had never even been appointed or staffed. The AG flagged a tension between G.S. 143B-431(a)(3) (the Type II independence rule) and the more specific statutes about how Community Development and Job Training Coordinating staff are hired (G.S. 143B-437.2(g) and 143B-438.4(d)), and recommended clarifying legislation if either council was ever staffed.

Currency note

This opinion was issued in 1994. 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 Department of Commerce has been reorganized multiple times since 1994. Some of the agencies listed here have been moved, renamed, merged, or eliminated. The Employment Security Commission, for instance, no longer exists in its 1994 form. Anyone trying to figure out whether a particular present-day agency has independent personnel authority should pull the current organic statute for that agency, current G.S. 143B-431, and current G.S. 143B-432, then map them to the modern departmental organization.

Common questions

Q: What is a Type II transfer?
A: Under the 1973 Executive Organization Act, a Type II transfer placed an existing agency inside a principal department for housekeeping (budget submission, IT, facilities, etc.) but left the agency's substantive authority untouched. The Type II agency "exercise[s] all [its] prescribed statutory powers independently of the head of the principal department." G.S. 143B-431(a)(3).

Q: Why does Type II status alone not answer the personnel question?
A: The Type II rule is a general statement that the principal department head does not have authority over the agency's substantive work. But "personnel authority" is a separate question. Some Type II agencies' organic statutes specifically vest staff hire-and-fire authority in the agency or its director. Others are silent, in which case the default rules of the State Personnel Act and the principal department's authority may apply. The AG had to read each agency's organic statute to give a complete answer.

Q: What did the AG find for the fourteen listed agencies?
A: For each, the organic statute identified above expressly granted the agency (or its director or commissioner) hire-and-fire authority over staff. The detail level varied: some statutes simply authorized the commission to "employ such personnel as may be necessary"; others granted specific civil-service exemptions or salary-setting authority.

Q: What was the issue with the Community Development Council and the Job Training Coordinating Council?
A: Both were transferred to the Department by Type II transfers under G.S. 143B-432(c). On paper, that meant they were independent of the Secretary. But G.S. 143B-437.2(g) (Community Development) and G.S. 143B-438.4(d) (Job Training Coordinating) addressed who hires their staff in a way that arguably gave the Secretary of Commerce some role. Because neither council had any staff at the time, the AG declined to resolve the conflict and recommended that the General Assembly amend the statutes if either council was ever actually staffed.

Q: Is "Type II" still a concept in NC government?
A: Yes, the Executive Organization Act and Article 1 of Chapter 143B remain in force, though many specific agency listings have changed. Modern agencies inside principal departments are still classified as Type I or Type II (or have hybrid arrangements set out in their own organic acts).

Background and statutory framework

The Executive Organization Act of 1973, codified at G.S. 143A and 143B, reorganized hundreds of state boards and commissions into a smaller number of principal departments. To respect the substantive independence of certain commissions, the Act introduced the Type II transfer category at G.S. 143B-431(a)(3): a Type II agency "is a separate agency [that] exercise[s] all [its] prescribed statutory powers independently of the head of the principal department, but [its] management functions shall be performed under the direction and supervision of the head of the principal department."

Personnel authority is the part of "management functions" that the General Assembly has handled inconsistently across agency statutes. The 1994 opinion's careful inventory documented that handling for the Department of Commerce's Type II agencies. The fourteen agencies on the list each had organic-statute language assigning hire-and-fire authority somewhere other than to the Secretary of Commerce (typically to the agency's own commission, director, or commissioner).

The two unstaffed councils illustrate a recurring problem with the Executive Organization Act: when the General Assembly later added a new Type II council under G.S. 143B-432(c) without clearly addressing personnel authority, two arguably conflicting statutes resulted. The AG flagged the ambiguity rather than resolve it. The advice was prudent: a substantive opinion would have been advisory only, since neither council had staff to fire.

Citations

N.C.G.S. § 18B-200(d) (ABC Board)
N.C.G.S. § 62-14(a) (Utilities Commission)
N.C.G.S. § 62-15(b) (Public Staff of the Utilities Commission)
N.C.G.S. §§ 96-4(a), (d) (Employment Security Commission)
N.C.G.S. §§ 97-78, 97-79 (Industrial Commission)
N.C.G.S. §§ 53-101, 53-117 (State Banking Commission, Commissioner of Banks)
N.C.G.S. § 54B-53(f) (Savings Institutions Commission)
N.C.G.S. § 65-53(1) (Cemetery Commission)
N.C.G.S. § 106-266.7 (Milk Commission)
N.C.G.S. § 117-2(2) (Rural Electrification Authority)
N.C.G.S. § 143B-431(a)(3) (Type II transfer general definition)
N.C.G.S. § 143B-432(c) (transfer of Community Development Council and Job Training Coordinating Council)
N.C.G.S. §§ 143B-437.2(g), 143B-438.4(d) (Community Development, Job Training Coordinating staff)
N.C.G.S. § 143B-439(b) (Credit Union Division)
N.C.G.S. § 143B-454(a)(5) (State Ports Authority)
N.C.G.S. § 143B-469.1(5), (9) (Ports Railway Commission)
N.C.G.S. § 143B-472 (Mutual Burial Association Commission)

Source

Landing page: https://ncdoj.gov/opinions/authority-of-type-ii-agencies-within-the-department-of-commerce-to-hire-and-dismiss-personnel/

Original opinion text

The text reproduced from the NCDOJ landing page begins with the agency inventory. The salutation, summary of the question, and opening framing are not in the rendered HTML on the landing page.

(1) Board of Alcoholic Control – G.S. § 18B-200(d).
(2) Utilities Commission – G.S. § 62-14(a).
(3) Employment Security Commission – G.S. § 96-4(a), (d).
(4) Industrial Commission – G.S. §§ 97-78 and 97-79.
(5) State Banking Commission and Commissioner of Banks – G.S. §§ 53-101 and 53-117.
(6) Savings Institutions Commission – G.S. § 54B-53(f).
(7) Credit Union Division – G.S. § 143B-439(b).
(8) Milk Commission – G.S. § 106-266.7.
(9) Mutual Burial Association Commission – G.S. § 143B-472.
(10) Rural Electrification Authority – G.S. § 117-2(2).
(11) State Ports Authority – G.S. § 143B-454(a)(5).

We have found, in addition, the following, which are or appear to be Type II agencies:

(12) Public Staff of Utilities Commission – G.S. § 62-15(b).
(13) Cemetery Commission – G.S. § 65-53(1).
(14) Ports Railway Commission – G.S. § 143B-469.1(5), (9).

Two councils, the Community Development Council and the Job Training Coordinating Council, were transferred to the Department by Type II transfers pursuant to G.S. § 143B-432(c). During our telephone conversation on April 28, 1994, you indicated that the Community Development Council has no staff, which appears, for now, to render the issue of who may hire and fire academic. The same is true of the Job Training Coordinating Council, since our conversation disclosed that that Council has never been appointed or staffed. If it is ever anticipated that either of these councils will be staffed, clarifying legislation would be appropriate, since the provisions of G.S. § 143B-431(a)(3), when compared with those of G.S. § 143B-437.2(g) and G.S. § 143B-438.4(d), create some ambiguity as to who has the authority to hire and fire staff.

We hope that this satisfactorily answers your request, but if you have comments or further questions, please contact us.

Andrew A. Vanore, Jr.

Chief Deputy Attorney General

Henry T. Rosser

Special Deputy Attorney General