When the 1998 General Assembly appropriated capital project money for NC community colleges, can the colleges receive the money without coming up with matching local funds?

Plain-English summary

The 1998 General Assembly's appropriations bill included substantial capital funding for NC's community college system. The State Board of Community Colleges asked the AG whether it could disburse the appropriations to individual colleges without requiring the colleges to come up with matching local funds. The AG said no: matching is required unless the legislature expressly waives it.

The matching statute. G.S. 115D-31(a) lays out the State Board's funding responsibilities. Subsection (a)(1) covers the "Plant Fund," and includes a key conditional clause: "Provided, the State Board may, on an equal matching-fund basis from appropriations made by the State for the purpose, grant funds to individual institutions for the purchase of land, construction and remodeling of institutional buildings determined by the State Board to be necessary for the instructional programs or administration of such institutions." That clause carries an affirmative obligation: when disbursing state capital money for land, construction, or remodeling, the State Board must require an equal local match.

How the legislature has handled exceptions. In prior capital appropriations bills, the legislature occasionally waived matching for specific projects by saying so in plain language. The AG cited 1985 N.C. Sess. Laws c. 757, ss. 150 and 151, and 1988 N.C. Sess. Laws c. 1086, s. 68 as examples of express matching waivers. The pattern shows the legislature knows how to waive when it wants to.

The 1998 appropriations text contained no such waiver. Without express waiver language, the default G.S. 115D-31(a)(1) matching requirement applies.

Where the money sits and who controls it. The 1998 capital appropriations sit in State Office of Budget and Management accounts. The State Board administers those accounts; it approves projects, approves invoices, and signs the checks. Because the State Board controls disbursement, it can only release the funds consistent with its statutory authority. G.S. 115D-31(a)(1) is the operative authority, and it imposes the matching condition.

Practical effect. Community colleges seeking 1998 capital money for land, construction, or remodeling must arrange local matching funds, typically from their county commissioners. The State Board cannot release the state money until the local match is in place.

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 community college matching framework has continued to evolve. G.S. 115D-31 has been amended several times since 1998, and individual appropriations bills have sometimes overridden the default matching rule for specific projects. The connect.NC bond program of 2016 funded community college construction without local matching for those specific projects. Anyone analyzing current community college capital funding should check the operative appropriations bill and any local-act overrides.

Common questions

Q: Why does NC require local matching for community college construction?
A: Because NC's community college system is structured as a state-county partnership. The state pays the bulk of operating costs (salaries, programs), while counties traditionally handle capital costs (buildings, grounds). The matching requirement preserves that structure by ensuring counties stay invested in capital decisions.

Q: Does matching apply to operating money too?
A: Generally no. G.S. 115D-31(a)(1) is specifically about capital outlay: land, construction, remodeling. Operating funds (faculty salaries, instructional expenses) flow under different rules without the matching requirement.

Q: What counts as a local match?
A: County appropriations are the most common source. Local foundation gifts, federal grants, and college-generated revenue can also count in some circumstances. The State Board has policies that specify what qualifies.

Q: Can the legislature override the matching requirement?
A: Yes, by express statement in the appropriations bill or by amending G.S. 115D-31. The AG opinion specifically points to past sessions where the legislature did this for specific projects.

Q: What if a county can't afford the match?
A: The college has to wait. Without the match, the state funds stay frozen in the SBCC's accounts. Some smaller, rural counties have struggled with this and have lobbied for matching waivers or state-only programs for specific needs.

Q: Did the 1998 capital appropriation create new community college buildings?
A: Yes, many. The full effect depended on counties' ability to come up with local match. The AG opinion does not address the politics, just the legal framework.

Background and statutory framework

NC's community college system, the third-largest in the country, has 58 campuses serving 750,000+ students annually. The funding structure dates to the system's founding in the 1960s: state pays operations, counties pay capital. The matching requirement formalizes that division.

The 1998 capital appropriations bill was one of several major capital infusions in the late 1990s and early 2000s as the system grew. Each bill required this same kind of analysis: which provisions waive matching, which preserve it.

The AG opinion is a clean statutory interpretation: read the appropriations bill carefully, default to the matching requirement when the bill is silent, look for express waiver language to overcome the default. The framework gives the State Board a predictable rule.

Citations

• N.C. Gen. Stat. § 115D-31 (community college plant fund and matching requirement)
• N.C. Gen. Stat. § 115D-31(a) (State Board's funding responsibilities)
• N.C. Gen. Stat. § 115D-31(a)(1) (Plant Fund and matching language)
• 1985 N.C. Sess. Laws c. 757, ss. 150-151 (prior matching waiver examples)
• 1988 N.C. Sess. Laws c. 1086, s. 68 (prior matching satisfaction declaration)
• 1998 N.C. Sess. Laws (1998 Appropriations Bill, capital community college section)

Source

• Landing page: https://ncdoj.gov/opinions/matching-fund-requirements-for-the-1998-capital-appropriations-for-community-colleges/

Original opinion text

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

(a) The State Board of Community Colleges shall be responsible for providing, from sources available to the State Board, funds to meet the financial needs of institutions, as determined by policies and regulations of the State Board, for the following budget items:

(1) Plant Fund. – Furniture and equipment for administrative and instructional purposes, library books, and other items of capital outlay approved by the State Board. Provided, the State Board may, on an equal matching-fund basis from appropriations made by the State for the purpose, grant funds to individual institutions for the purchase of land, construction and remodeling of institutional buildings determined by the State Board to be necessary for the instructional programs or administration of such institutions. (Emphasis added).

The plain language of this statute generally authorizes the State Board of Community Colleges to adopt policies and regulations to control the disbursement of funds "available to the State Board" to the local community colleges. Thus, for example, with respect to furniture, library books and "other items of capital outlay" the State Board may approve disbursements in accordance with its own policies and regulations.

In the case of capital outlays for land, construction and remodeling, however, the General Assembly expressly restricted the State Board's discretion. With respect to the disbursement of funds for capital improvements, G.S. § 115D-31(a)(1) specifically provides:

[T]he State Board may, on an equal matching-fund basis from appropriations made by the State for the purpose, grant funds to individual institutions for the purchase of land, construction and remodeling of institutional buildings determined by the State Board to be necessary for the instructional programs or administration of such institutions.

In our opinion, this provision indicates the General Assembly's intent to impose on the State Board the affirmative obligation to require local colleges to provide equal matching funds before the State Board disburses funds for the purchase of land, construction and remodeling of institutional buildings.

This construction of G.S. § 115D-31(a)(1) is consistent with the General Assembly's prior capital appropriations for community colleges. On occasion, in prior capital appropriation bills, the General Assembly has expressly stated either that some funds appropriated for specific capital improvements on community college campuses were not subject to matching requirements or that the matching requirement had been satisfied. E.g., 1985 N.C. Sess. Laws c. 757, sec. 150 and 151; 1988 Sess. Laws c. 1086, sec. 68. Thus, it appears that the General Assembly is aware of the general requirement that local community colleges must provide matching funds in order to receive disbursements from state capital appropriations.

We believe that this interpretation of G.S. § 115D-31(a)(1) controls the State Board's authority with respect to the disbursement of funds from the general capital appropriation in the 1998 Appropriations Bill. We understand that the appropriations for community college capital projects in the 1998 Appropriations Bill have been placed in accounts with the State Office of Budget and Management. The State Board of Community Colleges is responsible for the administration of those accounts. The State Board must approve the projects, the invoices for the projects and draw the checks before money can be disbursed from those accounts.

In light of the fact that the State Board controls the administration of the funds appropriated for the projects specified in the 1998 Appropriations Bill, it is our opinion that the State Board can only disburse the funds consistent with its authority under G.S. § 115D-31(a)(1). In the language of G.S. § 115D-31(a), the 1998 capital appropriations are funds "from sources available to the State Board" which the State Board may "grant to the individual institutions for the purchase of land, construction and remodeling of institutional buildings" "on an equal matching-fund basis."

Therefore, it is our opinion that the funds appropriated for capital projects in the 1998 Appropriations Bill are subject to the general matching requirements of G.S. § 115D-31(1)(a).

signed by:

Grayson G. Kelley
Senior Deputy Attorney General

Thomas J. Ziko
Special Deputy Attorney General