Can the Governor of North Carolina, after declaring a state of disaster, create new flood-relief programs for citizens not eligible for federal aid, and pay for those programs by shifting money out of regular state agency budgets, or does that have to wait for a legislative appropriation?
Plain-English summary
This opinion was written in the immediate aftermath of Hurricane Floyd. Floyd hit eastern North Carolina in September 1999 and caused historic flooding; tens of thousands of homes and businesses were damaged or destroyed. Governor Jim Hunt had declared a state of disaster. The state budget officer, Marvin K. Dorman, Jr., asked the Attorney General two questions: (1) does the Governor have authority to create new state-funded flood-relief programs targeted at people who could not get federal or other state aid? and (2) can the Governor pay for those programs by reallocating money already appropriated to state agencies, rather than waiting for a special legislative appropriation?
AG Mike Easley's office answered yes, with conditions, on both points.
The statutory mechanics. N.C.G.S. § 166A-2 declares it the policy of the state to provide for the "rapid and orderly rehabilitation of persons and the restoration of property" during disasters. To carry out that policy, N.C.G.S. § 166A-6(c)(5) gives the Governor power, during a declared state of disaster and with the concurrence of the Council of State, to reallocate "such funds as may reasonably be available within the appropriations of the various departments." That language, the AG concluded, is plainly broad enough to (a) let the Governor create relief programs the legislature has not specifically authorized, and (b) fund those programs from agency budgets without unnecessarily compromising the agencies' ability to perform their duties.
The Governor's discretion is broad. The AG noted that, on questions like how big a relief program to create and which agencies' budgets can spare what, the Governor has wide discretion. He must weigh the magnitude of the disaster against each agency's ongoing duties. The opinion cites Sterling v. Constantin, 287 U.S. 378, 398 (1932), for the principle that a governor's good-faith emergency-power judgments are ordinarily not subject to judicial review. (The opinion's text reads "Starling," a typo for the well-known U.S. Supreme Court case Sterling v. Constantin.)
The Executive Budget Act doesn't conflict. The Executive Budget Act (Chapter 143, § 143-1 et seq.) has its own emergency provision: § 143-23(a1)(2)(b) lets the Governor increase budgeted expenditures for programs "required to respond to an unanticipated disaster such as a . . . hurricane." That sits comfortably alongside the § 166A-6(c)(5) reallocation power and doesn't restrict it.
One important limit: the Savings Reserve Account is off-limits. G.S. § 143-15.3 created a "Savings Reserve Account" (commonly called the rainy day fund), which is a "restricted reserve in the General Fund." Because that fund is structurally set aside as a reserve rather than as part of "the appropriations of the various departments," the AG concluded the Governor cannot reach it under § 166A-6(c)(5). If a flood-relief program needs Savings Reserve money, that requires legislative action.
The bottom line: the Governor, with Council of State concurrence, could move quickly to stand up Hurricane Floyd recovery programs by trimming and redirecting existing agency money, but a true depletion of the state's reserve required the General Assembly.
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.
Chapter 166A (the Emergency Management Act) has been substantially amended since 1999, including a major restructuring in the 2010s into the current Chapter 166A "Emergency Management Act of 1977 as amended." The specific cross-references in this 1999 opinion (§ 166A-6(c)(5) in particular) no longer match the current section numbering. The Savings Reserve Account statute has also been revised; its current location is N.C.G.S. § 143C-4-2 within the State Budget Act. The doctrinal point about the Governor's emergency-reallocation power being statutory and bounded by the express scope of the disaster legislation has held up, but anyone applying this opinion to a present disaster needs to use the current chapter numbers and the current Council of State procedures.
Common questions readers actually have
Why does the Council of State have to concur?
The legislature did not want the Governor making unilateral budget calls during a declared disaster. The Council of State (the elected statewide officials: Lt. Governor, Secretary of State, State Auditor, State Treasurer, Attorney General, Superintendent of Public Instruction, Commissioner of Agriculture, Commissioner of Labor, Commissioner of Insurance) is a check. The Governor proposes; the Council concurs.
What kinds of "agency appropriations" can be reallocated?
The AG read the statute as letting the Governor pull from any line that can spare the money without "unnecessarily compromising" the agency's duties. The opinion does not name specific funds. In practice this would be unspent operating money, deferred maintenance accounts, projects that could be slipped, and so on. The agency-by-agency judgment was up to the Governor and Council of State.
Why is the Savings Reserve different?
Because the General Assembly built it as a restricted reserve. Money sitting in the General Fund Savings Reserve is not, by its statutory design, an "appropriation of a department." It is set aside for legislative call later. The emergency-powers statute reaches departmental appropriations; it does not reach into reserves outside that structure.
Did the Governor go on to create programs under this authority?
The opinion does not say. As a matter of historical record, North Carolina spent extensively on Hurricane Floyd recovery in late 1999 and through 2000, and the General Assembly returned to the issue with substantial recovery legislation. The AG opinion was issued in the early window of the recovery response, before the legislature could assemble.
Could the Governor declare disasters in less obvious situations and unlock the same authority?
The opinion addresses the flood specifically. As a matter of law, § 166A-6(c)(5) keys off a declared state of disaster; a Governor's discretion to declare a disaster is itself broad but reviewable for good faith. The deeper question of whether a "disaster" can be stretched to cover non-natural events is beyond the scope of this opinion.
Background and statutory framework
Hurricane Floyd context
Hurricane Floyd made landfall in eastern North Carolina on September 16, 1999, dropping enormous rainfall on already-saturated ground from Tropical Storm Dennis the week before. The flooding that followed was the most destructive natural disaster in the state's modern history. Tens of thousands of homes were affected; dozens of people died; the eastern third of the state experienced major infrastructure damage. This opinion was issued in December 1999, while recovery planning was still rapidly evolving.
The statutory pillars
N.C.G.S. § 166A-2 (policy). The Emergency Management Act states the broad policy of rapid recovery for people and property.
N.C.G.S. § 166A-5. Outlines the Governor's emergency powers more generally.
N.C.G.S. § 166A-6(c)(5). The specific reallocation authority: during a declared state of disaster, with Council of State concurrence, the Governor may "use the appropriations available to the various departments" within reasonable bounds to fund disaster response.
N.C.G.S. § 143-23(a1)(2)(b). The Executive Budget Act's own emergency provision, complementary rather than restrictive.
N.C.G.S. § 143-15.3 (Savings Reserve). The restricted General Fund reserve the AG identified as off-limits to the § 166A-6(c)(5) reallocation power.
The Sterling v. Constantin citation
The opinion's text refers to "Starling v. Constantine." That is a typographical error for Sterling v. Constantin, 287 U.S. 378 (1932), a Supreme Court decision involving Texas Governor Ross S. Sterling's declaration of martial law in the East Texas oil fields. The case is best known for the principle that gubernatorial good-faith emergency judgments are generally not subject to judicial second-guessing.
The signing official
The opinion was signed by Edwin M. Speas, Jr., Chief Deputy Attorney General, with initials EMSJr/spw.
Source
Original opinion text
(1) the existence of a state of disaster proclaimed by the Governor or the General Assembly and
(2) the concurrence of the Council of State.
Id.
There is nothing ambiguous about the words of these statutes. In order to accomplish its purpose of providing for "the rapid and orderly rehabilitation of persons and the restoration of property," the General Assembly conferred on the Governor the power to provide that relief to citizens through the reallocation of such funds "as may reasonably be available within the appropriations of the various departments." These words clearly encompass the authority to create programs to aid flood victims who are not otherwise eligible for federal or State aid and to fund those programs from agency appropriations which can be diverted to that purpose without unnecessarily compromising the agencies' ability to perform their duties. In this regard, the Governor has very broad discretion to determine the type of programs needed to provide relief to citizens and the level of funds which may reasonably be available within the appropriations of the various departments to fund those programs. In making these judgments, the Governor must weigh both the magnitude of the disaster and the obligation of the departments to fulfill their duties to citizens. Cf. Sterling v. Constantin, 287 U.S. 378, 398 (1932) (observing that the good faith judgments of a governor regarding the exercise of his emergency powers are ordinarily not subject to judicial review).
We find nothing in the Executive Budget Act, G.S. § 143-1, et seq., that is inconsistent with the General Assembly's grant of emergency powers to the Governor in G.S. § 166A-6(c)(5). Indeed, the Executive Budget Act itself grants emergency powers to the Governor. See G.S. § 143-23(a1)(2)(b) which confers the power on the Governor to increase budgeted expenditures for programs or purposes when "required to respond to an unanticipated disaster such as a . . . hurricane." Please note, however, that the emergency powers granted the Governor by G.S. § 166A-6(c)(5) to reallocate funds do not include the power to utilize the Savings Revenue Account created by G.S. § 143-15.3 for emergency purposes. That account is a "restricted reserve in the General Fund," and, therefore, this money is not subject to the Governor's power under G.S. § 166A-6(c)(5) to reallocate funds "within the appropriations of the various departments."
In summary, it is our opinion that the General Assembly, by G.S. §§ 166A-2 and 6(c)(5), has conferred the power on the Governor during a state of disaster, and with the concurrence of the Council of State, to establish programs to aid the victims of that disaster and to fund those programs from appropriations to the State's agencies and institutions.
Other legal questions may arise in the course of the creation or implementation of these flood relief programs. We, of course, are available to assist with such legal questions.
Sincerely,
Edwin M. Speas, Jr.
Chief Deputy Attorney General
EMSJr/spw