North Carolina Department of Justice
North Carolina Department of Justice
North Carolina Department of Justice
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February 4, 1999

Mr. Roy A. Carroll Senior Vice President and Vice President for Academic Affairs The University of North Carolina General Administration

P.O. Box 2688 Chapel Hill, NC 27515-2688

RE: Advisory Opinion; Eligibility for Optional Retirement Program; G.S. § 135-5.1(a)

Dear Mr. Carroll:

On behalf of President Broad, you have written to ask our advice on the Board of Governors' implementation of the Optional Retirement Program (ORP) established under G.S. § 135-5.1. The General Assembly established the ORP in 1971 as an alternative to the Teachers and State Employees Retirement System (TSERS). Under the ORP, the employee's and the State's retirement contributions are not paid into TSERS but rather are used to purchase annuity contracts for the employee. Employees who exercise their option to participate in the ORP retain their interest in those annuity contracts and can continue to make contributions to those contracts even after they leave State employment.

The General Assembly created the ORP to enhance UNC's ability to attract and retain administrators and faculty by providing for retirement benefits that are portable between universities. Consistent with that purpose, G.S. § 135-5.1(a) specifically states that the University shall implement the ORP "for the benefit of administrators and faculty of The University of North Carolina with the rank of instructor or above." The Board of Governors has recently adopted policies and rules that provide that eligibility for participation in the ORP is limited to "senior academic and administrative officers" and "faculty who hold the rank of instructor or above." Questions have arisen about the Board of Governors' authority to implement those rules and policies. You have asked for our advice regarding the Board of Governors' authority in this area and the propriety of its policies and rules defining eligibility to participate in the ORP.

The Board of Governors is the constitutionally established agency with responsibility for the general control, supervision, management, and governance of all the affairs of the constituent institutions of the University of North Carolina. Constitution of North Carolina, Art. IX, Sec. 8;

G.S. § 116-11(2). Among its specific powers, the Board of Governors is authorized to fix the compensation of all senior academic and administrative officers. G.S. § 116-11(5). With respect to the ORP, G.S. § 135-5.1 expressly provides that the ORP "shall be implemented by the Board of Governors" (G.S. § 135-5.1(a)) and that the Board of Governors "may provide for the administration of . . . and may perform or authorize the performance of the functions necessary for . . . administration" of the ORP. G.S. § 135-5.1(e).

In light of these constitutional and statutory provisions, it is our opinion that the Board of Governors has the general authority to adopt policies and rules reasonably necessary to implement and administer the ORP. Whether that authority includes the power to adopt policies and rules defining eligibility for participation in the ORP requires an understanding of the role of administrative agencies in the construction and interpretation of statutes.

The primary objective of all statutory construction is to ascertain legislative intent in order to assure that both the purpose and the intent of the legislature are carried out. Crowell Constructors, Inc. v. State ex rel. Cobey, 342 N.C. 838, 843, 467 S.E.2d 675, 678 (1996); Supply Co. of Durham v. Swain Elec. Co., 328 N.C. 651, 403 S.E.2d 291 (1991). Absent any ambiguity in the language of a statute, it is the duty of the courts to construe the legislative intent behind administrative statutes and to apply the words of the statute according to their plain and definite meanings. Id. But when the language of a statute is ambiguous, the interpretation of the agency responsible for the administration may be helpful and is entitled to great consideration when the courts are called upon to construe the statute. The Court of Appeals recently summarized the significance of an implementing agency's construction of a statute as follows:

While the construction of a statute by the agency charged with its enforcement is not binding on this Court, it is relevant and is entitled to due consideration. MacPherson v. City of Asheville, 283 N.C. 299, 307, 196 S.E.2d 200, 206 (1973). Our Supreme Court has recognized the significance of an agency's interpretation, regarding it as "strongly persuasive," Shealy v. Associated Transport, 252 N.C. 738, 742, 114 S.E.2d 702, 705 (1960), and even "prima facie correct," Petition of Vanderbilt University, 252 N.C. 743, 747, 114 S.E.2d 655, 658 (1960). The Court has stated that:

[t]he construction placed upon a statute by the officers whose duty it is to execute it is

entitled to great consideration, especially if such construction has been made by the

highest officers in the executive department of the Government or has been observed and

acted upon for many years; and such construction should not be disregarded or overturned

unless it is clearly erroneous.

Gill v. Commissioners, 160 N.C. 176, 188, 76 S.E. 203, 208 (1912) (citation omitted).

Mark IV Beverage, Inc. v. Molson Breweries USA, Inc., ___ N.C. App. ___, 500 S.E.2d 439, 445 (1998).

In light of those principles of statutory construction and the role agencies play in implementing authorized programs, the determinative issue here is whether G.S. § 135-5.1(a) plainly and definitely identifies those University employees eligible to participate in the ORP, or whether the language of the statute on that point is ambiguous. If the statute plainly and definitely describes the employees eligible to participate in the ORP, then any rule of the Board of Governors that differs from the plain language of the statute is ineffective. However, if the statute's definition of eligible employees is ambiguous, then the law provides that courts should accept the Board of Governors' rules clarifying eligibility to participate in the ORP as long as these rules are not clearly erroneous. Id.

The particular statutory language at issue here is that portion of G.S. § 135-5.1(a) which states that the University shall implement the ORP "for the benefit of administrators and faculty of The University of North Carolina with the rank of instructor or above." This portion of the statute clearly states the General Assembly's intent to restrict participation in the ORP to "administrators and faculty of The University of North Carolina." Moreover, the statute's reference to both "administrators" and "faculty" clearly indicates that the General Assembly intended to permit persons who were not faculty to participate in the ORP. However, it is not at all clear which nonfaculty employees of the University the General Assembly intended to include among the "administrators" eligible to participate in the ORP. Nor, is it clear that the General Assembly intended to limit participation in the ORP to those "administrators" who hold "the rank of instructor or above." Arguably, if the General Assembly had intended to limit participation in the ORP to administrators who hold "the rank of instructor or above," there would have been no reason for the statute to distinguish between administrators and faculty in the first place. The statute would simply have stated that "persons" or "employees" with the rank of instructor or above could participate in the ORP.

In light of the words and syntax of G.S. § 135-5.1(a), it is our opinion that the legislative intent expressed in this portion of the statute is ambiguous. In light of that ambiguity and the Board of Governors' obligations to implement and administer the ORP, it is our opinion that the policies and rules that the Board of Governors has adopted to clarify the description of persons eligible to participate in the ORP are reasonable. Therefore, consistent with well .established precedents and rules of statutory construction, it is our opinion that the courts will accept the Board of Governors' policies and rules as reasonable interpretations of G.S. § 135-5.1(a) and reject any legal challenge to the legitimacy of those policies and rules.

signed by:

Thomas J. Ziko Special Deputy Attorney General

Alexander M. Peters

Special Deputy Attorney General