When the Duplin Soil and Water Conservation District lacked enough money to fully fund swine lagoon retrofit cost-share grants needed for state water-quality compliance, could the district promise farmers a grant from a future budget cycle instead, and could it do so just for Duplin or did it have to extend the same option statewide?
Plain-English summary
In April 1997, the Duplin Soil and Water Conservation District (in eastern North Carolina hog country) was up against a hard problem: the state was requiring swine farm lagoon retrofits for water-quality compliance, but the district's cost-share grant budget was not large enough to pay shares of all the necessary projects. The district wanted to encourage farmers to do the retrofits anyway by promising them cost-share grants from later budget cycles. Chairman James Ferguson asked the AG whether this approach was legal.
Chief Deputy AG Andrew A. Vanore, Jr., and Senior Deputy AG Daniel C. Oakley gave a qualified yes.
The Agricultural Cost-Share Program is authorized by N.C.G.S. § 143-215.74, with the primary purpose of reducing agricultural nonpoint source pollution. The AG found nothing in that statute or in any constitutional provision that flatly prohibited deferred-grant commitments. So if the Commission wanted to authorize this approach, the bare legality was fine.
But three guardrails came with the answer.
First, no binding of future boards. Neither the current Commission nor the current district boards could bind future boards through commitments today. Citing 63A AmJur 2d, Public Officers and Employees § 333 (1984), the AG explained the standard public-officials rule that current-board commitments cannot tie the hands of successor boards on discretionary matters.
Second, no contracts requiring future appropriations. Contracts entered now could not obligate future Commissions or future district boards to provide cost-share funds if those funds had not been appropriated. This is the standard rule against appropriating money the body does not have. Any farmer accepting a deferred-grant commitment had to understand and agree, in writing, that the grant was contingent on future appropriations.
Third, equal treatment. This was the operationally important constraint. North Carolina Constitution Article I, § 32 provides: "No person or set of persons is entitled to exclusive or separate emoluments or privileges from the community but in consideration of public services." That meant if the Commission allowed Duplin SWCD to use the deferred-commitment approach, it had to make the same option available to every similarly-situated district and to every similarly-situated eligible recipient. The Commission could not authorize Duplin alone.
Putting it all together: the Commission could implement a deferred-commitment policy by adopting it as a statewide option, available to all districts and to all farmers in like circumstances. Each cost-share agreement would have to clearly disclose that no future grant was guaranteed if appropriations were not received. With those structural elements, the approach was lawful.
The AG offered to help with drafting resolutions and amended cost-share agreement language if the Commission decided to authorize the procedure.
Currency note
This opinion was issued in 1997. 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 agricultural cost-share program has been amended several times since 1997, including additions for animal-waste management and nutrient-management practices. The structural principles in the opinion (no binding of future boards, no obligations without appropriations, equal-treatment under Article I, § 32) are constitutional law and have remained stable. The specific application to current cost-share program practices should be checked against the current statute and the Soil and Water Conservation Commission's current policies.
Background and statutory framework
North Carolina's Agriculture Cost-Share Program is one of the longest-running state water-quality programs aimed at agriculture. It provides matching grants to farmers who install conservation practices that reduce nonpoint-source pollution: terraces, buffer strips, animal-waste containment, nutrient management plans, and similar interventions. The program operates through local Soil and Water Conservation Districts (SWCDs), which solicit and prioritize applications based on water-quality benefit, then forward funded projects to the state Commission for administration.
The 1997 question arose because the state was tightening swine farm water-quality requirements in response to the 1990s explosion of swine production in eastern North Carolina, particularly Duplin County. Hog production had grown rapidly, with associated lagoon systems for waste containment. Floods and other failures had created visible water-quality problems. The state required retrofits to bring older lagoons up to current standards. But the cost-share budget was not keeping pace with the demand. Duplin's district was looking for ways to leverage the budget it had into more practice installations.
The deferred-commitment approach was creative public finance: get the practice installed now using farmer dollars, with a state-funded reimbursement later. The legal questions were the ones the AG addressed. Could a current board promise a future board's money? Could the Commission make this option available to one district but not others? The AG's structural analysis kept the approach viable while preserving the proper constitutional and statutory framework.
Article I, § 32's "exclusive emoluments" clause is unusually broad in North Carolina constitutional law. Many states have similar provisions, but North Carolina's has been interpreted to require formal equal treatment for similarly-situated parties in state-administered programs. The AG's application of it to this cost-share question prevented the Commission from playing favorites with individual districts.
Common questions
Can the Soil and Water Conservation Commission promise me a cost-share grant for a project I haven't done yet?
Under this opinion, yes, but the commitment is contingent on future appropriations. The Commission can structure agreements to make this clear: "if appropriations are received, you will receive this grant." Without that disclaimer, the Commission lacks authority to bind future boards.
What if I install a practice based on a deferred commitment and the legislature does not appropriate the money?
You bear the risk. The deferred commitment is not a contract right against the state; it's a promise contingent on appropriations. The AG opinion was clear that contracts could not obligate future appropriations. If the money doesn't come through, you have no enforceable claim.
Did the AG opinion mean Duplin had to share its priority status with other districts?
It meant any district allocation of the deferred-commitment policy had to be available to all similarly-situated districts. Duplin's specific funding shortage was a fact about Duplin, but the policy mechanism (allowing deferred commitments) had to be statewide.
What practices qualified for cost-share funding under this program?
Under § 143-215.74 in 1997, eligible practices included those reducing agricultural nonpoint source pollution: terraces, contour farming, animal-waste systems, riparian buffers, and similar interventions. The Commission set specific eligibility criteria by rule.
Source
Citations
- N.C.G.S. § 143-215.74
- N.C. Const. art. I, § 32
- 63A AmJur 2d, Public Officers and Employees § 333 (1984)
Original opinion text
April 18, 1997
Mr. James Ferguson, Chairman, Soil and Water Conservation Commission Route 3, Box 43 Clyde, North Carolina 28721
Re: Advisory Opinion: Agricultural Cost-Share Program, N.C.G.S. 143-215.74
Dear Chairman Ferguson:
You have asked this office to provide guidance to the Soil and Water Conservation Commission and local districts concerning the provision of agricultural cost-share grants for eligible farming practices from grant cycles which are subsequent to the installation of the practice. The specific question has been raised by the Duplin Soil and Water Conservation District, which currently has insufficient funds to provide cost-shares on swine farm lagoon retrofits necessary to protect water quality in compliance with State law and rules. The Duplin SWCD would like to encourage the immediate completion of these lagoon retrofits, and other eligible practices, by committing future cost-share grants.
The agriculture cost-share program is authorized by N.C.G.S. § 143-215.74, and has as its primary purpose the reduction of agricultural nonpoint source pollution. The program has been successful, and the Commission has legitimate concerns over the desirability of such future commitments, in light of the shortage of funds to assist on all potentially suitable projects. There are both legal and policy questions at issue.
We have reviewed the agricultural cost-share provisions, and several pertinent Constitutional provisions, and offer the following legal guidance to you. There is nothing in N.C.G.S. § 143-215.74, nor any Constitutional principle, which would prevent the Commission, should it decide to do so, from allowing cost-share grants to be given for eligible practices in grant cycles which are subsequent to the practice installation. However, neither the current Commission nor the current district boards may bind future boards to such commitments, nor may contracts be entered which would obligate a future Commission or a future district board to provide such cost-share funds if there presently are no appropriations for it. 63A AmJur 2d, Public Officers and Employees, § 333 (1984). Additionally, you should keep in mind Article I, § 32 of the Constitution of North Carolina, which provides as follows: "No person or set of persons is entitled to exclusive or separate emoluments or privileges from the community but in consideration of public services." Thus, if the Commission determines that it is prudent to allow this procedure, it would have to also be made available for any district allocation, and for any eligible recipient, similarly situated. In other words, you would not be empowered to authorize Duplin SWCD's expenditures without extending the policy to other similar situations.
Thus, we believe there is adequate legal authority to support such a grant process, so long as the understanding is made clear between the district board and the farmer installing the practice that there is no obligation to provide a future grant if appropriations are not received. We will be glad to work with you on appropriate resolutions for the Commission or the district board to adopt, and on any necessary cost-share agreement language amendments, should you decide to authorize this process.
Sincerely,
Andrew A. Vanore, Jr.
Chief Deputy Attorney General
Daniel C. Oakley
Senior Deputy Attorney General