Who has the legal authority to select and contract with the midway operator for the North Carolina State Fair: the Department of Agriculture or the Board of Agriculture?

Plain-English summary

Senator Reeves and Representative Underhill asked the AG to resolve who legally selects and contracts with the State Fair midway operator: the Department of Agriculture (headed by the elected Commissioner) or the Board of Agriculture (the statutory advisory body). The Office's answer placed the authority with the Department.

Chief Deputy AG Edwin Speas, with Senior Deputy AG Ann Reed and Special Counsel for Policy and Planning Thomas Walker, acknowledged the question was close but used three threads of analysis to reach the conclusion.

First, the statutory baseline. N.C.G.S. § 106-503 (the codification of a 1931 act) says the State Fair "shall be managed, operated and conducted by the Board of Agriculture." Read alone, that text supports Board authority. But the 1971 Executive Organization Act transferred the Board to the Department by Type II transfer (G.S. § 143A-59). G.S. § 143A-6 says that for Type II transferees, "the management functions of [the] transferred agency or part thereof, shall be performed under the direction and supervision of the principal department," with "management functions" defined as planning, organizing, staffing, directing, coordinating, reporting, and budgeting. Running a fair is a management function, so the Department's supervisory role under the 1971 act overlays the older Board grant in G.S. § 106-503.

Second, the administrative-practice thread. The AG cited Chevron, Frye Regional Medical Center, and Petty v. Owen for the proposition that long-standing administrative interpretation of a statute, acquiesced in over time, gets deference. The Office had three facts on point: (1) for at least 20 years, the Commissioner had selected midway operators, negotiated contracts, and managed the fair with Board acquiescence; (2) over 500 leases per fair were signed by the Department without Board involvement; (3) the Council of State adopted 1 N.C.A.C. 6B.0307 in 1975 authorizing the Department to enter into fairground leases without Council of State approval. That consistent practice supplied the deference-worthy administrative interpretation.

Third, a 2001 statutory wrinkle. The General Assembly had recently amended N.C.G.S. § 106-503.1(b) to give the Board specific authority to raise money and enter into leases for State Fair facility construction. The AG limited that amendment's reach to facility construction and financing, not the selection of operators or general management. The recent amendment did not undo the 1971 transfer or the Department's practical control.

The AG acknowledged the question was a close legal call. The 1931 statute and the 1971 reorganization act pulled in different directions, and no published case had resolved the conflict. But the combination of the broad 1971 transfer of management functions, the 20-year history of Department control, and the 1975 Council of State resolution tipped the conclusion toward the Department.

Currency note

This opinion was issued in 2002. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. Treat this page as historical context, not current legal advice. The State Fair has continued to operate under the Department of Agriculture and Consumer Services since 2002. Anyone investigating current authority over Fair contracts should consult current statutes, current departmental rules, and any new administrative-law decisions on Type II transfers.

Background and statutory framework

The State Fair's institutional history. Created by Session Law 1927, Chapter 209, with management by a board of directors. Session Law 1931, Chapter 360 created the Department of Agriculture, Immigration and Statistics and transferred Fair responsibility to the new Board of Agriculture. That 1931 transfer is the source of the current language in G.S. § 106-503. The Fair has been continuously run since 1931 under the umbrella of state agricultural administration.

Commissioner versus Board, generally. The Commissioner of Agriculture is a constitutionally elected office (N.C. Const. Art. III, § 7) and heads the Department of Agriculture and Consumer Services. The Commissioner exercises most powers under Chapter 106 with the "consent and advice" of the Board (G.S. §§ 106-2, 106-22). Some functions are specifically Commissioner-only (G.S. §§ 106-140.1, 106-262), and some are specifically Board functions (G.S. §§ 106-187, 106-407.2). The framework gives Board and Commissioner overlapping authority calibrated by statute.

Type II transfers under Chapter 143A. The Executive Organization Act of 1971 reorganized state government into principal departments. Type I transfers move an entire agency wholesale. Type II transfers move an agency into a department but leave it with some independence. G.S. § 143A-6(c) defines what gets reorganized: "management functions of [the] transferred agency... shall be performed under the direction and supervision of the principal department." "Management functions" gets a specific statutory definition: planning, organizing, staffing, directing, coordinating, reporting, and budgeting.

The 2001 amendment to G.S. § 106-503.1(b). This amendment gave the Board explicit authority to raise money and enter into leases and contracts for the construction and financing of State Fair facilities. The AG read the amendment narrowly to that specific authority, not as a global reaffirmation of Board control over the Fair.

Chevron in NC. While Chevron is a federal doctrine, North Carolina has its own version: Frye Regional Medical Center v. Hunt (1999) and Petty v. Owen (2000) endorse deference to long-standing administrative interpretations of ambiguous statutes. The AG relied on this deference doctrine rather than on a pure textual reading, because the text alone did not clearly resolve the conflict.

Why 1 N.C.A.C. 6B.0307 mattered. This 1975 Council of State resolution authorized the Department of Agriculture to enter into fairground leases of buildings, space, and ride/show contracts up to 15 days without Council of State approval. It was a contemporaneous (1975) interpretation of the post-1971 framework, and it placed the Department, not the Board, in the lease-signing role.

Common questions

Q: Did this opinion settle the question between the Commissioner and the Board for all Fair-related decisions?

A: Not fully. The opinion addressed selection of the midway operator, executing midway contracts, and overall fair operation. Other categories of Fair-related decisions (e.g., facility construction under the 2001 amendment to § 106-503.1(b)) were not part of the answer. The opinion was specific to the midway-operator question and its closest analogs.

Q: Could the Board override the Commissioner's choice?

A: Based on the opinion, no. The Board's "consent and advice" role under G.S. §§ 106-2 and 106-22 does not extend to vetoing Department actions over which the Department has independent statutory authority. The AG identified midway-operator selection as one of those Department-controlled actions.

Q: What if a midway operator dispute went to court?

A: A court would apply the same Chevron / Frye Regional / Petty deference doctrine and would have to weigh the textual conflict between G.S. § 106-503 (Board) and the 1971 Type II transfer (Department supervision). The AG opinion is persuasive but not binding. A challenger could argue that § 106-503's specific language should override the general management-functions framework. The opinion noted the closeness of the question.

Q: Did the 2001 amendment to § 106-503.1(b) suggest the legislature was moving authority back to the Board?

A: The AG read the amendment as narrow, addressing only facility-construction financing. The legislature did not amend § 106-503 itself or otherwise reassert global Board control. The 2001 change therefore did not signal a broader reorientation.

Citations

Statutes and rules:
- N.C. Const. Art. III, § 7 (Commissioner of Agriculture as elected constitutional officer)
- N.C.G.S. § 106-2 (Board of Agriculture consent and advice)
- N.C.G.S. § 106-22 (Commissioner exercises functions with Board consent)
- N.C.G.S. § 106-140.1 (registry of prescription drug producers, Commissioner-only)
- N.C.G.S. § 106-187 (Board's duty re marketing of farm products)
- N.C.G.S. § 106-262 (milk reports, Commissioner-only)
- N.C.G.S. § 106-407.2 (livestock market permit revocation, Board)
- N.C.G.S. § 106-503 (Board manages, operates, conducts State Fair)
- N.C.G.S. § 106-503.1(b) (Board authority to raise money for State Fair facility construction)
- N.C.G.S. § 143A et seq. (Executive Organization Act of 1971)
- N.C.G.S. § 143A-6(c) (definition of management functions)
- N.C.G.S. § 143A-59 (Type II transfer of Board to Department)
- 1 N.C.A.C. 6B.0307 (Council of State resolution on State Fair leases, 1975)
- Session Law 1927, Chapter 209 (creation of State Fair)
- Session Law 1931, Chapter 360 (Department of Agriculture, Immigration and Statistics; Fair transferred to Board)

Cases:
- Chevron U.S.A. Inc. v. National Resources Defense Council, Inc., 467 U.S. 837 (1984) (deference to agency interpretation)
- Frye Regional Medical Center, Inc. v. Hunt, 350 N.C. 39 (1999) (NC adoption of deference doctrine)
- Petty v. Owen, 140 N.C. App. 494 (2000) (long-standing administrative interpretation given weight)

Source

• Landing page: https://ncdoj.gov/opinions/state-fair-midway-operator/

Original opinion text

REPLY TO: Thomas G. Walker
(919) 716-6400 FAX: (919) 716-6750

January 24, 2002

The Honorable Eric Miller Reeves
The North Carolina General Assembly
Room 1028, Legislative Building
Raleigh, North Carolina 27601-2808

The Honorable Alice Graham Underhill
The North Carolina General Assembly
Room 1219, Legislative Building
Raleigh, North Carolina 27601-1096

Re: Advisory Opinion: Board of Agriculture; Department of Agriculture; Authority to Contract for State Fair Midway Operator

Dear Senator Reeves and Representative Underhill:

You have requested an opinion from this Office regarding the legal authority of the Department of Agriculture to enter into a contract selecting the midway operator for the State Fair. Specifically, you have asked for an opinion with respect to the following legal questions: (1) Between the Department of Agriculture and the Board of Agriculture, who has the authority to select the midway operator for the State Fair? (2) Between the Department of Agriculture and the Board of Agriculture, who has the authority to execute contracts for operation of the midway at the State Fair? (3) Between the Department of Agriculture and the Board of Agriculture, who has the ultimate authority and responsibility for the operation and management of the North Carolina State Fair? After careful analysis of relevant statutory provisions and well-established legal principles of deference to an agency's long-standing interpretation of its governing statutes, it is the opinion of this Office that the Department of Agriculture has the ultimate authority to select the midway operator for the State Fair, to execute contracts necessary for the operation of the midway at the State Fair and to operate the State Fair.

The Commissioner of Agriculture is an elected constitutional office established by Article III, § 7 of the North Carolina Constitution. In accordance with Chapter 143A, Article 7, the Commissioner heads the Department of Agriculture and Consumer Services, a principal state department, with such powers and responsibilities as are conferred by statute and the constitution. As head of a principal department, the Commissioner is responsible for the department's general management, including the budget, personnel, and official records.

The specific statutory responsibilities of the Commissioner are primarily set forth in Chapter 106 of the General Statutes. Included among those responsibilities are a wide variety of programs related to the State's agricultural economy. The Commissioner exercises many of these responsibilities with the "consent and advice" of the Board of Agriculture. N.C.G.S. § 106-2; 106-22. The Commissioner is vested with individual responsibility, however, for certain other functions. See, e.g. N.C.G.S. § 106-140.1 (maintaining a registry of prescription drug producers); N.C.G.S. § 106-262 (requiring reports regarding milk sales and purchases).

The Board of Agriculture is established by N.C.G.S. § 106-2 for the primary purpose of providing "consent and advice" to the Commissioner of Agriculture in carrying out the statutory responsibilities of the Department. Notwithstanding this general authority, the Board is vested with specific responsibility for certain other programs. See, e.g. N.C.G.S. § 106-187 (duty to investigate and provide information to the public regarding marketing of farm products); N.C.G.S. § 106-407.2 (power to revoke livestock market permit). Our review of Chapter 106 therefore reveals a broad spectrum of statutory language defining the relative responsibilities of the Commissioner and the Board.

The State Fair was created by action of the 1927 General Assembly with management responsibility vested in a board of directors. Session Law 1927, Chapter 209. In 1931 the General Assembly created the Department of Agriculture, Immigration and Statistics, with all duties to be performed by the Commissioner of Agriculture with the advice of a newly created Board of Agriculture. Session Law 1931, Chapter 360. This act repealed the 1927 act and transferred responsibility for the State Fair to the Board. N.C.G.S. § 106-503, the current codification of the 1931 act, states that the State Fair shall be managed, operated and conducted by the Board of Agriculture.

However, this statutory language must be construed within the context of the Executive Organization Act of 1971. N.C.G.S. § 143A et seq. Pursuant to N.C.G.S. § 143A-59, the Board was transferred to the Department by a Type II transfer. In accordance with N.C.G.S. § 143A-6, under a Type II transfer "the management functions of [the] transferred agency or part thereof, shall be performed under the direction and supervision of the principal department." The term "management functions" is defined as "planning, organizing, staffing, directing, coordinating, reporting and budgeting." N.C.G.S. § 143A-6(c).

We believe this statutory language supports an interpretation that Chapter 143A transferred responsibility for the midway operator contract from the Board to the Department. We recognize, however, that N.C.G.S. § 106-503 represents a prescribed statutory power which, arguably, is retained by the Board. Nevertheless, our research has failed to identify a legal precedent which clearly resolves this conflict.

In view of this conflict, as well as the absence of jurisdictional clarity in many other programs for which the Department and Board are responsible, we believe that the issues presented should be analyzed within the context of the interpretations historically applied by the Department and Board themselves. It is a well-established principal that the long-standing interpretation of a statute by the administering agency should be given deference. Chevron U.S.A. Inc., v. National Resources Defense Council, Inc. 467 U.S. 837 (1984). "The interpretation of a statute given by the agency charged with carrying it out is entitled to great weight." Frye Regional Medical Center, Inc. v. Hunt, 350 N.C. 39 (1999). "Administrative interpretation of a statute, acquiesced in over a long period of time, is properly considered in the construction of the statute by the courts." Petty v. Owen, 140 N.C. App. 494 (2000).

We have been made aware of at least three factors which support a conclusion that both the Department and the Board have historically agreed that the Department has the authority to award and administer the midway operator contract. First, it is our understanding that for at least 20 years the former Commissioner of Agriculture selected the midway operator, negotiated and executed a contract with an operator and also managed and operated the State Fair, all with the acquiescence of the Board of Agriculture. Two, we understand that during the average fair over 500 leases are executed. These leases are for services, various vendors and exhibitors who annually take part in the fair. Historically, none of these leases has been reviewed or signed by the Board of Agriculture. Third, the Council of State adopted a resolution on July 1, 1975, after the Executive Organization Act of 1971, now codified at 1 N.C.A.C. 6B.0307, which reads as follows:

.0307 LEASES AT STATE FAIRGROUND
The Department of Agriculture, without prior approval of the Council of State, is authorized to enter into leases of buildings on the State Fair Grounds, leases of space on the State Fair Grounds, and contracts for the furnishing of rides, shows and other services on the State Fair Grounds, provided that the duration of such leases, rental agreements and contracts shall not exceed 15 days.

We are aware that the General Assembly in its last session amended N.C.G.S. § 106-503.1(b). This amendment gives the Board of Agriculture specific statutory authority to raise money in certain enumerated ways in order to construct and finance facilities and improvements for the State Fair. N.C.G.S. § 106-503.1(b) permits the Board of Agriculture to enter into leases and contracts and to pledge gate receipts to meet the purposes of this statute. By its very language, the amendment only applies to the agreements, contracts and leases authorized under N.C.G.S. § 106-503.1(b) which are directed to the construction and financing of facilities and improvements for the State Fair. It does not apply to the selection of a midway operator.

We recognize that this is a close legal question. However, for the aforementioned reasons, this Office believes that the Department of Agriculture and Consumer Services has the authority to select the midway operator, execute contracts and operate and manage the North Carolina State Fair.

Very truly yours,

Edwin M. Speas, Jr.
Chief Deputy Attorney General

Ann Reed
Senior Deputy Attorney General

Thomas G. Walker
Special Counsel for Policy and Planning

TGW/sp