When a county board creates a hospital authority, can the county reserve the right to change the size of the authority's board later, or does only the hospital authority itself have that power?
Plain-English summary
When Haywood County created its hospital authority in 1997, the County Board of Commissioners tried to keep a string attached. The 1997 resolution that created Haywood Regional Medical Center (the hospital authority) included Paragraph 11 stating that "[t]he number of members to the Board of Commissioners of the Hospital Authority shall not be changed except by resolution of the Haywood County Board of Commissioners."
That sounded sensible: the County had created the authority, so the County could control its size, right? Wrong. Two years later, in 1999, the question arose about whether the County Board could increase the size of the Hospital Authority's board. William I. Millar and Thomas S. Stukes (on behalf of Haywood Regional Medical Center) asked the AG.
Senior Deputy AG Ann Reed and Special Deputy AG James A. Wellons answered no.
The statutory text. § 131E-18(a) provides: "There shall be not less than six and not more than thirty commissioners. Upon a finding that it is in the public interest, the commissioners may adopt a resolution increasing or decreasing the number of commissioners by a fixed number." (emphasis added). The General Assembly used the phrase "the commissioners," not "the board of county commissioners."
Why the distinction matters. § 131E-16 defines both terms separately and clearly:
- § 131E-16(6): "commissioner" means "one of the members of a hospital authority appointed in accordance with the provisions of this Part."
- § 131E-16(1): "board of county commissioners" means "the legislative body charged with governing the county."
The General Assembly knew the difference. It said "the commissioners" when granting the power to expand or contract the size of the hospital authority. Had the legislature wanted the County Board to hold that power, it would have used "the board of county commissioners."
Dillon's Rule kicks in. Even setting aside textual analysis, NC follows Dillon's Rule: "a county has no inherent power, but may exercise only those powers prescribed by statute and those necessarily implied by law." In re Easement in Fairfield Park, 90 N.C. App. 303, 308, 368 S.E.2d 639 (1988). The Hospital Authorities Act specifies how a hospital authority's size can be changed. It does not authorize county boards to reserve that power to themselves. The power is also not necessarily implied by other county powers. So even if the statute were silent, the County Board couldn't reserve such authority.
Paragraph 11 is a nullity. A reservation of power in a creating resolution that contradicts the General Assembly's statutory scheme has no legal force. The County Board's good-faith effort to retain control was simply ineffective.
Practical implications.
- The hospital authority's own commissioners decide whether to change the board's size, but they must find that the change is in the public interest.
- The AG noted that hospital authority boards in practice "will give great weight to the Board of County Commissioners' view of the public interest." County input matters; it just isn't binding.
- Even though the hospital board sets the size and nominates new members, the actual appointment of new commissioners is made by the chairman of the county board (or the full board, depending on county size) per § 131E-18(d) and (g). So the County Board still has appointment-level influence.
The structural division: hospital authority decides on size and nominees; county chairman (or full board) appoints from the nominees. Both bodies have a role, but the size decision is the authority's alone.
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 131E has been amended multiple times. The structural division between hospital authority and county board on commissioner appointment matters has been a recurring topic; check current statute text before relying on the specifics.
Background and statutory framework
Haywood Regional Medical Center's creation. On April 21, 1997, the Haywood County Board of County Commissioners passed a resolution finding that creating a hospital authority was "in the interest of the public health and welfare." The Chairman appointed eight initial commissioners. Per § 131E-19, the eight commissioners filed an Application for Incorporation with the Secretary of State, and the Secretary issued a certificate of incorporation on May 28, 1997. The hospital authority became a "public body and a body corporate and politic" operating Haywood Regional Medical Center, a general acute care hospital in Clyde, NC.
§ 131E-18(a) text. The key statutory text the AG analyzed:
"There shall be not less than six and not more than thirty commissioners. Upon a finding that it is in the public interest, the commissioners may adopt a resolution increasing or decreasing the number of commissioners by a fixed number."
The phrase "the commissioners" is the operative grant of authority. It refers back to the hospital authority commissioners defined in § 131E-16(6).
§ 131E-16 definitions.
- "Commissioner" = a member of a hospital authority appointed under Part B of Article 2 of Chapter 131E.
- "Board of county commissioners" = the legislative body governing the county.
The two terms are distinct. The General Assembly's word choice in § 131E-18(a) is decisive.
§ 131E-18(d) and (g). Govern appointments. The chairman of the county board (or the full board, depending on county size) makes appointments from a list of nominees submitted by the hospital authority's existing commissioners. This is a separate question from the size of the board; the AG distinguished the two.
Public interest finding. § 131E-18(a) requires that the hospital authority find any size change to be in the public interest. The AG noted that the authority will likely give great weight to the County Board's view in making that finding, but the authority is not bound by the County Board's view.
Dillon's Rule and counties. In re Easement in Fairfield Park is the leading citation for NC's Dillon's Rule application to county powers. Counties have:
- Powers expressly granted by statute.
- Powers necessarily implied by law.
- Nothing else.
A county cannot reserve to itself a power the General Assembly assigned elsewhere just by writing it into a creating resolution.
Why this matters in practice. Hospital authorities operate hospitals: complex, capital-intensive, regulated institutions. The size of the governing board can affect quorum requirements, committee structures, conflict-of-interest management, and governance efficiency. The General Assembly placed the size decision with the hospital authority's commissioners themselves because they are closest to those operational considerations.
Common questions
Q: Can a county insist on a particular size by tying it to funding?
A: The opinion doesn't address conditional funding. But conditioning operating support on a particular governance structure raises separate legal questions about contractual coercion of public bodies. Counties wanting structural change generally have to either persuade the hospital authority or seek state legislative action.
Q: How does the hospital authority make a 'public interest' finding?
A: § 131E-18(a) doesn't prescribe procedure. The hospital authority's board would typically deliberate, consider community input including the County Board's view, and adopt a resolution stating the finding. The standard is the authority's own good-faith judgment.
Q: If county input doesn't bind the authority, what role does the county still play?
A: Several. The county chairman (or full board, by size of county) appoints new commissioners from the authority's nominee list under § 131E-18(d) and (g). The county can withdraw funding (subject to its own contractual obligations). The county can ask the General Assembly to amend the Hospital Authorities Act or pass a local act. And the County Board's view on the public interest carries persuasive weight even if not binding.
Q: What about the original creating resolution's Paragraph 11?
A: The AG concluded it is a nullity. The County Board cannot retroactively (or proactively) reserve a power the General Assembly assigned to the hospital authority. The remaining provisions of the resolution (the finding of public interest, the initial commissioner appointments, etc.) remain valid; only the reservation of power is void.
Q: Could the County Board have refused to create the hospital authority in the first place?
A: Yes. The decision to create a hospital authority is the County Board's. Once created, however, the statutory structure governs its operation.
Q: Has anyone else tested this issue in court?
A: The opinion didn't cite NC case law directly addressing the size-of-hospital-authority issue. In re Easement in Fairfield Park supplied the general Dillon's Rule principle. The reasoning is textual and structural.
Citations from the opinion
- N.C. Gen. Stat. §§ 131E-16, 131E-16(1), 131E-16(6), 131E-18, 131E-18(a), 131E-18(d), 131E-18(g), 131E-19
- Part B of Article 2 of Chapter 131E (Hospital Authorities Act)
- In re Easement in Fairfield Park, 90 N.C. App. 303, 368 S.E.2d 639 (1988)
Source
Original opinion text
Reproduced from the NCDOJ landing page. The linked landing page is authoritative.
December 21, 1999
William I. Millar, Attorney at Law, PO Drawer 1018, Waynesville NC 28786
Thomas S. Stukes, Smith Helms Mulliss & Moore, L.L.P., Post Office Box 21927, Greensboro NC 27420
RE: Advisory Opinion: Increase in the Number of Commissioners Serving on the Board of Commissioners of Haywood Regional Medical Center; N.C. Gen. Stat. §§ 131E-16 and -18.
Dear Mr. Millar and Mr. Stukes:
On behalf of Haywood Regional Medical Center, a hospital authority located in Haywood County, North Carolina ("the Hospital Authority"), you have asked whether the Haywood County Board of County Commissioners has the authority to increase the number of the Hospital Authority's commissioners.
STATEMENT OF THE FACTS
On April 21, 1997, pursuant to Part B of Article 2 of Chapter 131E of the North Carolina General Statutes ("the Hospital Authorities Act"), the Haywood County Board of County Commissioners found by Resolution that it was "in the interest of the public health and welfare to create a hospital authority." The Chairman of the Board of County Commissioners appointed eight persons to serve as the hospital authority's initial commissioners. Pursuant to N.C. Gen. Stat. § 131E-19, those eight commissioners submitted an Application for Incorporation as a Hospital Authority to the Office of the Secretary of State of North Carolina. On May 28, 1997, the Secretary of State issued a certificate of incorporation to the eight commissioners under the name of Haywood Regional Medical Center. The Hospital Authority is a public body and a body corporate and politic. It operates a general acute care hospital in Clyde in Haywood County, North Carolina. A question has arisen as to whether the Board of County Commissioners has the authority to increase the number of the Hospital Authority's commissioners. Paragraph 11 of the resolution that created the Hospital Authority provides that "[t]he number of members to the Board of Commissioners of the Hospital Authority shall not be changed except by resolution of the Haywood County Board of Commissioners."
ANALYSIS
The Hospital Authorities Act specifies that:
There shall be not less than six and not more than thirty commissioners. Upon a finding that it is in the public interest, the commissioners may adopt a resolution increasing or decreasing the number of commissioners by a fixed number.
N.C. Gen. Stat § 131E-18(a) (emphasis added). As used in the Hospital Authorities Act, the term "commissioner" means "one of the members of a hospital authority appointed in accordance with the provisions of this Part." N.C. Gen. Stat. § 131E-16(6). In contrast, the phrase "board of county commissioners" means "the legislative body charged with governing the county." N.C. Gen. Stat. § 131E-16(1). Because N.C. Gen. Stat. § 131E-18(a) refers to "the commissioners" rather than to "the board of county commissioners", it expressly grants the authority to expand the number of a hospital authority's commissioners to the hospital authority's commissioners themselves rather than to the board of county commissioners. Had the legislature intended otherwise, it would have used the phrase "the board of county commissioners" rather than the phrase "the commissioners."
As noted above, the Haywood County Board of County Commissioners specified in Paragraph 11 of the Resolution that created the Hospital Authority that "[t]he number of members to the Board of Commissioners of the Hospital Authority shall not be changed except by resolution of the Haywood County Board of Commissioners." For the reasons given below, this reservation of power is a nullity and has no force and effect.
The North Carolina Court of Appeals has said that "a county has no inherent power, but may exercise only those powers prescribed by statute and those necessarily implied by law." In re Easement in Fairfield Park, 90 N.C. App. 303, 308, 368 S.E.2d 639 (1988). The General Assembly has specified in the Hospital Authorities Act the manner in which the size of a hospital authority's board of commissioners may be changed. It has not given the various county boards of county commissioners the authority to change the statutory procedure. Furthermore, this power is not necessarily implied by the powers actually given to the counties. Consequently, the Haywood County Board of County Commissioners had no authority to reserve to itself the authority to change the size of the Hospital Authority's Board of Commissioners.
As an aside, we note that a hospital authority board may change the number of commissioners on the hospital board only upon a finding that the change is in the public interest. We assume that a hospital board will give great weight to the Board of County Commissioners' view of the public interest. Furthermore, we note that, although the hospital board has the sole authority to change the number of commissioners on the board and the hospital board nominates new commissioners, the authority to appoint new commissioners is vested in the chairman of the board of county commissioners or the full board, depending on the size of the county. See N.C. Gen. Stat. § 131E-18(d) and (g).
CONCLUSION
For the foregoing reasons, we conclude that the Haywood County Board of County Commissioners does not have the authority to increase the number of the Hospital Authority's commissioners.
Sincerely,
Ann Reed, Senior Deputy Attorney General
James A. Wellons, Special Deputy Attorney General