Can NC state legislators serve on the Board of Directors of the NC Partnership for Children, the private nonprofit that administers Smart Start, given the state constitutional separation of powers?

Plain-English summary

Smart Start was Gov. Jim Hunt's flagship early-childhood initiative, launched in 1993. The program is administered by the NC Partnership for Children, Inc., a private nonprofit. The General Assembly funds the Partnership and conditioned that funding on various structural and procedural requirements. In 1995, the legislature increased the Partnership's board from 33 to 39 members and added six new seats for legislative leaders or their designees. The 1998 AG opinion asked whether the constitutional separation of powers permitted legislators on that board. The answer was no.

The Wallace v. Bone rule. The NC Supreme Court in State ex rel. Wallace v. Bone (1982) held unanimously that Article I, Section 6 of the NC Constitution (separation of powers) prohibits members of the General Assembly, regardless of how or by whom appointed, from serving on any board or commission that exercises a part of the administrative or executive sovereign power of the State. The legislature cannot, the Court said, "create a special instrumentality of government to implement specific legislation and then retain some control over the process of implementation by appointing legislators to the governing body of the instrumentality."

Why the Partnership is a state instrumentality. The Partnership is on paper a private nonprofit, but the legislative facts override the form:
- The Partnership was created to administer specific legislation enacted by the General Assembly (the Early Childhood Initiatives, Part 10B of Chapter 143B)
- The legislature has appropriated over $100 million to the Partnership since 1993
- The legislature set the structure and composition of the Board of Directors
- As conditions for receiving state funding, the Partnership must comply with the Open Meetings Law and Public Records Law
- The Partnership is subject to annual audit by the State Auditor

The AG quoted Cardinal Cushing through City of New York v. Clinton: "When I see a bird that walks like a duck and swims like a duck and quacks like a duck, I call that bird a duck." The Partnership is a duck (a state instrumentality), even with a private-corporate veneer.

Application of Wallace. The Partnership administers state-funded program activity. That is executive function. Legislators sitting on the board exercise administrative power. Under Wallace, that is constitutionally prohibited.

The six legislative seats are unconstitutional. The 1995 amendment that added the President Pro Tempore, Speaker, Majority Leaders, and Minority Leaders (or their designees) to the Partnership board violates Article I, Section 6. Those seats cannot be filled by legislators. Whether the seats can be filled by designees who are not legislators is a separate question the opinion does not resolve.

Currency note

This opinion was issued in 1998. 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 NC Partnership for Children continues to administer Smart Start. The legislature has restructured the board and the appointment authority several times since 1998. The Wallace v. Bone doctrine remains a fundamental principle of NC constitutional law and has been applied repeatedly to legislator appointments to administrative bodies. McCrory v. Berger (2016) is the modern leading NC Supreme Court case on the separation-of-powers question. Anyone analyzing a current legislator-on-board question should pull the Berger line of cases.

Common questions

Q: Why is the Wallace v. Bone rule so strict?
A: Because the NC Supreme Court read Article I, Section 6 as a hard prohibition. The Court was concerned that letting legislators serve on administrative bodies would let them retain control after the legislative process ends. The separation between legislative and executive functions has to be respected for the constitutional structure to work.

Q: Can a legislator appoint someone else to a Partnership seat?
A: That is what the 1995 amendment contemplates ("or a designee"). Whether the designee path is constitutional is a separate question. Wallace and later cases would still scrutinize whether the designee gives the legislature ongoing control, but a non-legislator designee may be less problematic than a sitting legislator.

Q: Why didn't the legislature foresee this when it added the seats in 1995?
A: Possibly because the Partnership's private-nonprofit form felt like a different category from the boards at issue in Wallace. The 1998 AG opinion holds that the form does not matter; substance controls. The legislature was on notice as of this opinion.

Q: What happens to past Partnership decisions made with legislator board members?
A: The 1998 opinion does not invalidate past actions. The legal remedy going forward is for legislators to step off the board (or be replaced by non-legislator designees). Past decisions stand under various validation doctrines unless specifically challenged.

Q: Does this apply to all NC boards with legislator seats?
A: Yes, the principle applies broadly. NC has dozens of state boards and commissions; Wallace v. Bone has been applied to many of them over the years. The specific question for each board is whether it exercises administrative or executive sovereign power. Boards that are purely advisory may not trigger the rule, but boards that administer programs, license professions, or enforce regulations clearly do.

Q: Did the Partnership board change after 1998?
A: Yes, the structure has been amended multiple times. The Partnership has continued to function, with the legislator seats addressed in various ways.

Background and statutory framework

The Smart Start initiative was a 1993 priority of Governor Jim Hunt. The Partnership for Children was incorporated in March 1993 as a private nonprofit specifically to administer the program. Three months later, the General Assembly enacted the Early Childhood Initiatives provisions in Chapter 143B, formalizing the Partnership's role and conditions of state funding.

The Partnership's hybrid form (private nonprofit but state-funded and state-controlled) was novel for NC. The form let the program operate with private-sector administrative flexibility while channeling state money. That hybrid form proved successful operationally but raised constitutional questions as soon as the legislature tried to insert itself into the governance.

Wallace v. Bone (1982) was the controlling precedent. The unanimous NC Supreme Court had held that the legislature could not retain post-enactment control over administrative bodies by appointing legislators to them. The 1995 Partnership amendment was the kind of post-enactment legislator appointment that Wallace forbade.

The 1998 AG opinion drew the line clearly. The legislator seats had to go. Subsequent NC constitutional law (especially McCrory v. Berger, 2016) has continued to police the separation of powers in this area.

Citations

• N.C. Const. art. I, § 6 (Separation of Powers)
• N.C. Gen. Stat. § 143B-168.11 (1993) (Early Childhood Initiatives purpose)
• N.C. Gen. Stat. § 143B-168.12 (1993) (Partnership funding conditions)
• N.C. Gen. Stat. § 143B-168.12(a) (1995) (board structure with legislator seats)
• Chapter 321, Section 254(a), 1993 Sess. Laws (initial enactment)
• Chapter 324, Section 27A, 1995 Sess. Laws (adding legislator seats)
• Chapter 18, Section 24.29(b), 1996 (2nd Extra Sess.) Sess. Laws (appropriation)
• Chapter 443, Sections 11.55(e), 11A.105, 1997 Sess. Laws (appropriations)
• State ex rel. Wallace v. Bone, 304 N.C. 591, 608 (1982)
• City of New York v. Clinton, 985 F. Supp. 168, 179 (D.D.C. 1998)

Source

• Landing page: https://ncdoj.gov/opinions/legislators-serving-as-members-of-the-board-of-directors-of-the-nc-partnership-for-children/

Original opinion text

[Caption and salutation as scraped from the NCDOJ landing page.]

• Charles Robin Britt, 101 Blair Drive, Raleigh, NC 27603;
• Jonathan B. Howes, 512 N. Salisbury Street, Raleigh, NC 27604; and
• Jane Smith Patterson, Office of the Governor, 116 W. Jones Street, Raleigh, NC 27603

When the Articles of Incorporation were filed on March 31, 1993, Mr. Britt was the Secretary of the N.C. Department of Human Resources (now called The Department of Health and Human Services), and Mr. Howes was the Secretary of the N.C. Department of Environment, Health and Natural Resources (now called The Department of Environment and Natural Resources).

Three months after the Partnership was incorporated, the General Assembly enacted Part 10B of Chapter 143B of the General Statutes, entitled "Early Childhood Initiatives." See, Chapter 321, Section 254(a), 1993 Sess. Laws. The purpose of the General Assembly in enacting the Early Childhood Initiatives is set forth in N.C.G.S. § 143B-168.11(1993), as follows: "It is the intent of the General Assembly, upon consultation with the Governor, to support through financial and other means, the N.C. Partnership for Children, Inc., a nonprofit corporation which has as its mission the development of a comprehensive, long-range strategic plan for early childhood development and the provision, through public and private means, of high-quality early childhood education and development services for children and families."

The 1993 General Assembly appropriated $20 million to the Partnership for the 1993-94 fiscal year, and $28 million for the 1994-95 fiscal year. As a condition for receiving funds appropriated to the Partnership, the 1993 General Assembly set forth in N.C.G.S. § 143B-168.12(1993) a number of specific mandates, including establishing the number of members of the Board of Directors of the Partnership and who among various state officials including the Governor, President Pro Tempore of the Senate and Speaker of the House would appoint the entire membership of the Board of Directors. As a further condition for receiving funding, the Partnership was required to adopt procedures for its operations "that are comparable to those of Article 33C of Chapter 143 of the General Statutes, the Open Meetings Law, and Chapter 132 of the General Statutes, the Public Records Law . . . ." Id. The Partnership was also required to be subject to annual audit by the State Auditor. These are among a number of requirements the Legislature put on the Partnership as conditions for receiving state funds.

The 1995 General Assembly increased the membership of the Board of Directors from 33 to 39 members. The six additional members added to the Board of Directors were: The President Pro Tempore of the Senate, or a designee; The Speaker of the House of Representatives, or a designee; The Majority Leader of the Senate, or a designee; The Majority Leader of the House of Representatives, or a designee; The Minority Leader of the Senate, or a designee; and The Minority Leader of the House of Representatives, or a designee. See, Chapter 324, Section 27A, 1995 Sess. Laws; N.C.G.S. § 143B-168.12(a)(1995).

The 1996 General Assembly appropriated $10,150,000 to the Partnership for the 1996-97 fiscal year. See, Chapter 18, Section 24.29(b) of the 1996 (2nd Extra Session) Sess. Laws. The 1997 General Assembly appropriated $22,258,625 to the Partnership for the 1997-98 fiscal year and $25,298,838 for the 1998-99 fiscal year. See, Chapter 443, Sections 11.55(e) and 11A.105, 1997 Sess. Laws.

The Wallace v. Bone Decision

In State ex rel. Wallace v. Bone, 304 N.C. 591 (1982), our Supreme Court held that the Separation of Powers provision of our Constitution prohibits members of the General Assembly, regardless of how or by whom appointed, from serving on any board or commission which exercises a part of the administrative or executive sovereign power of the state. As the Bone Court unanimously stated, " . . . the legislature cannot constitutionally create a special instrumentality of government to implement specific legislation and then retain some control over the process of implementation by appointing legislators to the governing body of the instrumentality." 304 N.C. at 608.

Although the Partnership is a private, non-profit corporation, it is crystal clear that it was created for the sole purpose of administering the Early Childhood Initiatives program enacted by the General Assembly in 1993. The General Assembly has appropriated over $100 million to the Partnership since 1993, and has conditioned the receipt of those appropriations upon the Partnership's agreement to, among other things, comply with the state's Open Meetings Law, the Public Records Law, and annual audits by the State Auditor's Office. Most importantly, the Legislature has set the structure and composition of the Board of Directors of the Partnership, which must include legislators. "In the words of Richard Cardinal Cushing, 'When I see a bird that walks like a duck and swims like a duck and quacks like a duck, I call that bird a duck.'" City of New York v. Clinton, 985 F. Supp. 168, 179 (D.D.C. 1998).

It is beyond question, therefore, that the N.C. Partnership for Children, Inc. is "a special instrumentality of government" which was created to implement specific legislation which the General Assembly may not retain any control over by appointing legislators to the governing body of the Partnership.

signed by:

Andrew A. Vanore, Jr.
General Counsel