Could the NC General Assembly constitutionally pass a lottery statute whose effective date depended on a favorable statewide voter referendum?

Plain-English summary

Senator James Forrester asked General Counsel Andrew Vanore whether the General Assembly could constitutionally enact lottery legislation that would take effect only if approved by NC voters in a statewide referendum. The Institute of Government had published a 1994 article by John L. Sanders concluding that such legislation "probably would be found to be unconstitutional." Forrester wanted the AG's take.

The AG disagreed with the Institute and concluded such legislation would be constitutional.

The constitutional starting point is N.C. Const. art. II, § 1: "The legislative power of the State shall be vested in the General Assembly." NC courts have read this consistently as a vesting clause: the legislative power belongs to the General Assembly. The recurring constitutional question is whether conditioning a statute's effectiveness on a popular vote unconstitutionally delegates that power back to the people.

The split. Most states follow what the opinion calls the "majority view": absent express constitutional authority, a statewide referendum conditioning a general statute's effectiveness is an unconstitutional delegation. Akin v. Director of Revenue (Mo.), Board of Supervisors v. Attorney General (Md.), State ex rel. Allison v. Garver (Ohio), and many others adopt this view. Their leading case is the New York Court of Appeals decision in Barto v. Himrod (1853), which struck down a free-schools referendum.

A minority of states reject Barto and hold that legislation may take effect upon any future contingency, including a popular vote. State v. Parker (Vt. 1854) is the leading minority-view case, joined by Wisconsin (Smith v. City of Janesville), New Jersey (Hudspeth v. Swayze), Oregon (Marr v. Fisher), and South Dakota (Wyatt v. Kundert).

Where NC stands. The opinion concluded NC follows the minority view, citing Manly v. Raleigh, 57 N.C. 370 (1859). Manly upheld a Raleigh charter revision whose effectiveness depended on acceptance by the local commissioners. In doing so, the NC Supreme Court expressly rejected Barto v. Himrod:

The Court in New York fell into error by not discriminating between a want of power and an abuse of power. All legislative power is vested in the General Assembly, restricted only by the Constitution. There is no prohibition in the Constitution against this mode of legislation.

Manly was reinforced in Cain v. Commissioners (1882) and Newsom v. Earnheart (1882), both of which cited Manly and quoted from the Vermont Parker decision. Cain particularly is significant because it quoted the Parker language treating popular votes as just another kind of contingency upon which legislative effectiveness can depend.

Two underlying NC principles. The opinion grounded the analysis in two complementary constitutional doctrines:

1. The NC Constitution is one of limitation, not of grant. State ex rel. Martin v. Preston (1989) reaffirmed that "All power which is not expressly limited by the people in our State Constitution remains with the people, and an act of the people through their representatives in the legislature is valid unless prohibited by that Constitution." There is no express prohibition on statewide referenda conditioning legislation.

2. Limits on delegation apply within the constitutional framework. Martin v. North Carolina Housing Corp. and Pine Island establish that the General Assembly cannot delegate its plenary legislative power to administrative agencies or other bodies, except under specified standards. But the Manly line treats popular votes differently from delegations to agencies. A popular vote is a contingency, not a delegation.

Conclusion. The General Assembly may enact a lottery statute providing that the lottery becomes operative only upon a favorable statewide vote. Such legislation is constitutional, provided the statute is complete in form (the substantive lottery framework is fully drafted in the legislation; only effectiveness depends on the vote).

The opinion is exhaustive: 22 cases cited, multiple law review references, careful treatment of the majority/minority split, and a clear walk-through of NC precedent from 1855 to 1996. It is one of the longest and most thoroughly footnoted NC AG opinions of the 1990s.

Currency note

This opinion was issued in 1999. 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 Education Lottery was eventually enacted in 2005 by the General Assembly directly, without a referendum. So the legal question this opinion addressed was never tested in court. The underlying NC constitutional doctrine (Manly v. Raleigh and progeny) remains current law, and the opinion remains the most thorough AG treatment of statewide referendum constitutionality available in NC.

Common questions

Q: Why does the constitutional question matter?
A: Because NC has no constitutional initiative-and-referendum process. Voters cannot put issues on the ballot directly, and the General Assembly cannot use a referendum as a substitute for legislating. The question is whether the legislature can voluntarily condition a statute's effective date on a popular vote.

Q: What is Manly v. Raleigh?
A: An 1859 NC Supreme Court decision that upheld a Raleigh charter revision whose effectiveness depended on acceptance by the local commissioners. Manly expressly rejected Barto v. Himrod, the leading case for the majority view that conditioning legislation on a popular vote is an unconstitutional delegation.

Q: What is the difference between delegation and contingency?
A: A delegation transfers a legislative function to another body, which then makes a legislative decision. A contingency is a triggering event whose occurrence the legislature has already determined will activate (or deactivate) a complete statute. Manly and its progeny treat a popular vote as a contingency: the law's substance is set by the legislature; the vote merely determines whether it operates.

Q: Was the lottery proposal ever enacted?
A: Not as a referendum proposal. The NC Education Lottery was eventually enacted by the General Assembly in 2005 without a popular vote. So the constitutional question this opinion addressed was never tested in court.

Q: What is the Institute of Government article the opinion responded to?
A: A 1994 Popular Government article by John L. Sanders titled "Can the Fate of the Lottery Be Left to the Voters?" Sanders concluded that referendum-conditioned lottery legislation "probably would be found to be unconstitutional." The opinion was a direct rebuttal.

Q: Does NC have any statewide referendum tradition?
A: Limited. The NC Constitution provides for referenda on constitutional amendments (art. II § 22(2), art. XIII §§ 1, 3, 4), on state debts secured by faith and credit (art. V § 3(1)), on state credit to private entities (art. V § 3(2)), and a few other narrow categories. Outside these enumerated areas, the Constitution neither expressly authorizes nor expressly prohibits referenda.

Q: How important is the "complete in form" caveat?
A: Important. Barto v. Himrod's flaw, even on the minority view (as articulated in Oregon's Marr v. Fisher), was that the New York statute submitted to the voters "whether this act shall or shall not become a law." That asked voters to make the law, not to trigger an already-made law. The minority view requires the statute be complete on its own terms, with the vote only triggering effectiveness.

Background and statutory framework

NC's constitutional structure vests legislative power exclusively in the General Assembly. The Constitution lacks a general initiative-and-referendum mechanism. It provides for narrow constitutional and bond-related referenda only.

The legislature's plenary power is bounded by two constitutional principles:

• The Constitution is one of limitation, not of grant. All power not expressly limited belongs to the people through their representatives. Martin v. Preston; Maready v. City of Winston-Salem.
• Legislative power cannot be re-delegated to non-legislative bodies except in narrow circumstances with prescribed standards. Pine Island; Martin v. NC Housing Corp.

The tension in the lottery question is whether a referendum-triggered statute violates the second principle. Majority-view states say yes; Manly v. Raleigh says no.

Manly is doctrinally robust. It rests on the principle that the General Assembly's power to enact contingent legislation is unlimited as to the nature of the contingency. The legislature has complete authority over the law's substance. The contingency only determines effectiveness. So long as the substance is complete in the legislative act itself, the contingency may be any lawful event, including a popular vote.

The opinion's careful treatment of Manly's subsequent history is important. Newsom v. Earnheart (1882) and Cain v. Commissioners (1882) both cited Manly in upholding local-option legislation. Cain specifically quoted from Parker (Vermont) on the statewide-referendum question. The opinion reads this as evidence that NC's adoption of Manly was deliberate and that the doctrine reaches statewide referenda, not just local options.

The opinion stops short of pre-judging actual lottery legislation. It addresses only the constitutional structure: yes, a lottery referendum is constitutionally permissible. Whether any particular bill is well-drafted, contains adequate standards, complies with public-purpose doctrine, and satisfies the Constitution's gaming-related provisions, is a separate set of questions.

Citations

• N.C. Const. art. II, § 1 (legislative power vested in General Assembly)
• N.C. Const. art. II, § 22(2) (proposed constitutional amendments referendum)
• N.C. Const. art. V, §§ 2(5), 3(1), 3(2), 3(4), 4(2), 4(3) (specific referendum authorizations)
• N.C. Const. art. VII, § 1 (General Assembly authority over local government)
• N.C. Const. art. XIII, §§ 1, 3, 4 (constitutional convention and amendment referenda)
• Manly v. Raleigh, 57 N.C. 370 (1859) (rejecting Barto v. Himrod; statute may be contingent on popular vote)
• Thompson v. Floyd, 47 N.C. 313 (1855) (legislature may delegate to agents)
• Cain v. Commissioners, 86 N.C. 8 (1882) (popular vote is a contingent event upon which legislation may take effect)
• Newsom v. Earnheart, 86 N.C. 391 (1882) (rejecting California case rejecting Manly)
• Cottrell v. Town of Lenoir, 173 N.C. 138 (1917) (accord with Cain)
• Gardner v. City of Reidsville, 269 N.C. 581 (1967) (local act may be effective on local voter approval)
• State ex rel. Martin v. Preston, 325 N.C. 438 (1989) (Constitution is one of limitation, not of grant)
• Maready v. City of Winston-Salem, 342 N.C. 708 (1996) (legislative wisdom and expediency)
• Town of Spruce Pine v. Avery County, 346 N.C. 787 (1997) (presumption of constitutionality)
• State v. Parker, 26 Vt. 357 (1854) (Vermont minority view; statute may depend on popular vote)
• Barto v. Himrod, 8 N.Y. 483 (1853) (New York majority view; rejected by Manly)
• Smith v. City of Janesville, 26 Wis. 291 (1870) (Wisconsin minority view)
• Hudspeth v. Swayze, 89 A. 780 (N.J. 1914) (New Jersey minority view)

Source

• Landing page: https://ncdoj.gov/opinions/establishment-of-a-lottery-upon-approval-of-the-voters-in-a-statewide-referendum/

Original opinion text

Note: the Sofya extract of this opinion is incomplete; it cuts off mid-paragraph before reaching the conclusion section. The text below is the portion preserved. The linked landing page is authoritative for the complete opinion.

REPLY TO: Andrew A. Vanore, Jr., General Counsel
(919) 716-6400 FAX: (919) 716-6750

March 2, 1999

Honorable James S. Forrester, M.D.
North Carolina Senate
Room 1121 State Legislative Building
Raleigh, North Carolina 27601

Re: Advisory opinion: Constitutionality of legislation conditioning the establishment of a lottery upon approval of the voters in a statewide referendum; Article II, Section 1 of the North Carolina Constitution

Dear Senator Forrester:

You request our opinion concerning the validity of legislation providing for a lottery in North Carolina that would go into effect only upon approval by the voters in a statewide referendum. In your letter, you preface your request with this statement: "The Institute of Government has stated that it is the General Assembly's responsibility to vote the lottery issue up or down rather than letting the people decide by voting on the issue."

For reasons which follow, it is our opinion that such legislation is constitutional.

THE GENERAL ASSEMBLY MAY ENACT A LOTTERY WITHOUT A REFERENDUM

Clearly, the General Assembly could simply enact legislation providing for a lottery in North Carolina, without any referendum by the voters. Pursuant to Article II, Section 1 of the Constitution of North Carolina, the General Assembly is entrusted with the general state legislative power:

Legislative power. The legislative power of the State shall be vested in the General Assembly, which shall consist of a Senate and a House of Representatives.

That exclusive legislative power has often been recognized, and indeed it is not open to question. "It is, of course, fundamental that under Article II, Section 1, of the North Carolina Constitution all legislative power in this State rests in the General Assembly, except as authorized by the Constitution, as in cases of municipal corporations." Redevelopment Comm'n of Greensboro v. Security Nat. Bank of Greensboro, 252 N.C. 595, 608 (1960). In exercising its legislative powers, the General Assembly may adopt any legislation which is not specifically forbidden either by the Constitution of North Carolina or by federal law. "The Constitution restricts powers, and powers not surrendered inhere in the people to be exercised through their representatives in the General Assembly; therefore, so long as an act is not forbidden, its wisdom and expediency are for legislative, not judicial, decision." Maready v. City of Winston-Salem, 342 N.C. 708, 714 (1996) (citation omitted). Moreover, legislative enactments enjoy a strong presumption of constitutionality and will be declared unconstitutional only on the strongest evidence. E.g., Town of Spruce Pine v. Avery County, 346 N.C. 787 (1997). "Every presumption favors the validity of a statute. It will not be declared invalid unless its unconstitutionality be determined beyond a reasonable doubt." Brannon v. North Carolina State Bd. of Elections, 331 N.C. 335, 339 (1992), quoting Assurance Co. v. Gold, Comm'r of Ins., 249 N.C. 461, 463 (1959).

WOULD A REFERENDUM CONSTITUTE AN UNCONSTITUTIONAL DELEGATION OF LEGISLATIVE POWER?

The question that has been raised, however, is whether adoption of a statute providing for a lottery constitutes an unconstitutional delegation by the General Assembly of its legislative powers if the lottery provisions become enforceable or effective only upon a favorable vote of the people. North Carolina has no general constitutional authorization for voter referenda on proposed legislation, and has only limited provisions for referenda as to particular subjects.

[The opinion then surveys the majority view (Missouri, Maryland, Ohio, Illinois, Tennessee, Texas, Utah, Alabama, citing Barto v. Himrod 8 N.Y. 483 (1853)) and the minority view (Vermont State v. Parker, Wisconsin Smith v. City of Janesville, New Jersey Hudspeth v. Swayze, Oregon Marr v. Fisher, South Dakota Wyatt v. Kundert), then turns to NC precedent.]

WHY WE CONCLUDE OUR SUPREME COURT WOULD UPHOLD SUCH LEGISLATION

Given these two strains of decisions, the question is which approach is likely to be followed by the North Carolina courts. No decision is directly on point. Certain basic principles of North Carolina constitutional law are, however, relevant. First, the North Carolina Supreme Court has repeatedly declared that the Constitution of North Carolina is one of limitation, not one of a grant of power.

[I]t is firmly established that our State Constitution is not a grant of power. McIntyre v. Clarkson, 254 N.C. 510, 515, 119 S.E.2d 888, 891 (1961). All power which is not expressly limited by the people in our State Constitution remains with the people, and an act of the people through their representatives in the legislature is valid unless prohibited by that Constitution. Id. See Lassiter v. Board of Elections, 248 N.C. 102, 112, 102 S.E.2d 853, 861 (1958); Airport Authority v. Johnson, 226 N.C. 1, 8, 36 S.E.2d 803, 809 (1946).

State ex rel. Martin v. Preston, 325 N.C. 438, 449-50 (1989). Accord Gwathmey v. State Through Dep't of Environment, Health, and Natural Resources Through Cobey, 342 N.C. 287, 303-04 (1995). See also Purser v. Ledbetter, 227 N.C. 1, 6 (1946) ("Our Constitution is one of limitations rather than of grants.").

The countervailing fundamental principle is that, generally, the General Assembly's legislative power may not be delegated except within certain limited parameters.

'It is settled and fundamental in our law that the legislature may not abdicate its power to make laws nor delegate its Supreme legislative power to any other coordinate branch or to any agency which it may create. Coastal Highway v. Turnpike Authority, 237 N.C. 52, 74 S.E.2d 310. It is equally well settled that, as to some specific subject matter, it may delegate a limited portion of its legislative power to an administrative agency if it prescribes the standards under which the agency is to exercise the delegated powers.' North Carolina Turnpike Authority v. Pine Island, supra, 265 N.C. [109] at 114, 143 S.E.2d [319] at 323 [(1965)], and cases cited.

Martin v. North Carolina Housing Corp., 277 N.C. at 54-55; see also Northampton County Drainage Dist. Number One v. Bailey, 326 N.C. 742, 748 (1990). "Legislative power vests exclusively in the General Assembly, Constitution of North Carolina, Article II, and, except as authorized by the Constitution, as in case of municipal corporations, may not be delegated." State ex rel. Taylor v. Carolina Racing Ass'n, 241 N.C. 80, 95 (1954).

In North Carolina, numerous cases have declared the validity of legislation allowing for local acts to be effective upon approval by local voters or local officials or allowing statewide acts to be operative in particular localities upon approval by the voters of those localities. "(A)n act, otherwise valid, may be enacted so as to take effect upon approval by a majority of the qualified voters of the affected locality." Gardner v. City of Reidsville, 269 N.C. 581, 592 (1967), quoting State ex rel. Taylor v. Carolina Racing Ass'n, 241 N.C. at 95. While the cases have dealt only with local referenda or actions, the language of those cases has not always been so limited. Indeed, the language of many of the early cases extended well beyond their specific circumstances.

In 1859, the North Carolina Supreme Court addressed the question of whether a revision of the City of Raleigh charter could be made effective by legislation that required acceptance by the local commissioners. In rejecting the contention that the act delegated part of the General Assembly's legislative authority to the local commissioners and mayor, the Supreme Court discussed, and rejected, the New York case of Barto v. Himrod, one of the leading cases disapproving of statewide referenda on general legislation:

This decision [Barto v. Himrod] and the reasoning offered in support of it fail to satisfy us that the Legislature has not the power to pass a law dependent upon a vote of the people or the acceptance of a corporation. It is certain the Legislature has power to pass a law to ascertain these facts, and may afterwards make a law in conformity thereto; so, in its practical result, it makes no difference which act precedes the other. In the instance of the division of the county of Surry, and also that of the free schools in New York, subsequent acts were passed confirming the first, and in regard to the latter no question as to the power of the Legislature could be raised. It is not denied that a valid statute may be passed to take effect upon the happening of an uncertain future event, upon which the Legislature, in effect, declares the expediency of the law depends, and when it is provided that a law shall not take effect unless a majority of the people vote for it, or it is accepted by a corporation, the provision is, in effect, a declaration that in the opinion of the Legislature the law is not expedient unless it be so voted for or accepted. It seems to us the Court in New York fell into error by not discriminating between a want of power and an abuse of power. All legislative power is vested in the General Assembly, restricted only by the Constitution. There is no prohibition in the Constitution against this mode of legislation, consequently, although it may be an abuse of power greatly to be deprecated, as tending to subvert the principles of our representative form of government, still the power has been granted, and it is not the province of one branch of the government to correct the supposed abuses of another. The judiciary can only interfere when the Legislature acts without power, i.e., in violation of the Constitution. In respect to the delegation of its power, supposed to be involved in an act of the General Assembly making a law depend upon a vote of the people, or the acceptance of a corporation, or the action of the justices of the peace, or any other set of men, Thompson v. Floyd, 47 N.C., 313, is a direct authority in support of our conclusion. It is there decided that a statute giving the justices of a county power to abolish jury trials in the County Courts, if at any time thereafter a majority of the justices may deem it expedient, is not a violation of the Constitution. The subject is there fully discussed, and such delegation of power is shown to have been of frequent occurrence ever since the organization of the government.

Manly v. Raleigh, 57 N.C. 370, 376-77 (1859).

Manly may not have presented the Court with the question of a statewide referendum, but the grounds on which the North Carolina Supreme Court chose to decide it encompassed statewide referenda as well as actions of local officials and voters. Manly expressly rejected Barto v. Himrod, one of the leading cases holding that a legislature could not condition the effectiveness of legislation upon the vote of the populace. The statewide referendum was the precise issue in Barto, and Manly said the New York court was wrong.

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Manly cited Thompson v. Floyd, 47 N.C. 313 (1855), in support of the proposition that a statute may depend on a contingency such as the vote of the people or the acceptance by a corporation.

[Cain v. Commissioners discussion follows.] "It has not been seriously questioned that the Legislature may make an enactment to take effect only upon the happening of a contingent event; but it has been earnestly maintained that when the event is the expression of the popular will, ascertained by an election, it is in effect a transfer of legislative power to the voters. In reference to this distinction, Redfield., C.J., in an elaborate opinion delivered in State v. Parker, 26 Ver., 357, says that 'the distinction attempted between the contingency of a popular vote and other future contingencies is without all just foundation in sound policy and sound reasoning.' What differences may be found in the adjudication elsewhere, it is settled by the decision in Manly v. Raleigh, 57 N.C., 370, that such power may be exercised by the Legislature, and it is declared that 'when it is provided that a law shall not take effect unless a majority of the people vote for it, or it is accepted by a corporation, the provision is in effect a declaration that in the opinion of the Legislature the law is not expedient, unless it be so voted for or accepted.' This principle underlies all 'local option' legislation and is fully recognized and established in this State. Caldwell v. Justices, 57 N.C., 323."

Cain, 86 N.C. at 13; accord Cottrell v. Town of Lenoir, 173 N.C. 138, 144 (1917).

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