North Carolina Department of Justice
North Carolina Department of Justice
North Carolina Department of Justice
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Gary O. Bartlett

Executive Sectetary-Director

State Board of Elections

P.O. Box 2169

Raleigh, NC 27602

 

Re:  Advisory Opinion; Political Party Designated Funds; N.C. Gen. Stat. § 105-159.1

 

Dear Mr. Bartlett:

 

You have requested an advisory opinion on two questions arising from the designation of funds for political parties by 1998 taxpayers. While the Department of Revenue collects the designated funds, the State Board of Elections is charged with the duty of administering the Political Parties Fund pursuant to N.C. Gen. Stat. § 163-278.41. Through no fault of the Department of Revenue, the Libertarian Party was erroneously jnc1uded as a qualified party on the 1998 income tax forms. The Parry qualified to place candidates on the ballot, but did not have 1% of the registered voters as required by N.C. Gen. Stat. § 105-159.1.

 

The two questions you have raised, and our view as to their proper resolution, are as follows:

 

(1) Given that the Libertarian Parry did not in fact meet all statutory requirements to qualify as a party entitled to designated funds pursuant to N.C. Gen. Stat. § 105-159.1 how should any funds designated in 1998 for the Libertarian Party be handled?

 

N.C. Gen. Stat. § 105-159.1 directs the Secretary of Revenue to reconfigure the income tax return using data furnished by the State Board of Elections in order that any taxpayer so “desiring” may contribute to the Fund.  Since contributions come from an individual’s actual tax liability, they constitute funds otherwise accruing to the State. Disposition of property owned by the State in its sovereign capacity is strictly controlled, and surrender of such property to private entities without a valid claim is illegal.

 

Although a close question, we do not believe release of the designated funds to the Libertarian Party in these unusual circumstances constitutes an impermissible gift of State property.  While normally the sovereign acting in its traditional governmental role cannot be bound or estopped by mistakes of its agents, N.C. Gen. Stat. § 105-264 constitutes a limited waiver of this aspect of sovereign immunity. Section 264 imposes a positive duty upon the Secretary to interpret the laws administered by her. Her interpretation is a “protection” to all affected taxpayers, who are entitled to “rely” upon her advice. Oscar Miller Contractor v. Tax Review Board,  61 N.C. App. 725, 729-30 (1983).

 

Applying Oscar Miller and Section 264 to these facts, it appears that all requirements set by Section 159.1 have been met or are deemed satisfied. The Secretary amended the tax return to specifically enable taxpayers to voluntarily participate, individuals acted upon the form’s representations in order to contribute to the Libertarian Party, and the Secretary collected the funds with this understanding.  In our opinion, the Party qualifies to receive these monies.

 

(2) Given that the Libertarian Party was not in fact a qualified party in 1998, how should funds designated for the “Unspecified” box be distributed?

 

N.C. Gen. Stat. § 105-159.1(a) requires any funds generated because a taxpayer “elects to designate but does not specify a particular political party …  to be distributed among the political parties on a pro rata basis according to their respective party voter registrations as determined by the most recent certification of the State Board of Elections.” The Libertarian Party has not qualified as a political party under the statute because it has failed to achieve at least 1% of the total number of registered voters in the State at any point. Thus, the funds generated by voters checking the “Unspecified” box should be allocated between the qualified parties, which for the 1998 tax year are the Republican and Democratic Parties.

 

Please let us know if we can provide additional assistance in this matter.

 

Edwin M. Speas, Jr.

Chief Deputy Attorney General

 

George W. Boylan

Special Deputy Attorney General

 

Susan K. Nichols

Special Deputy Attorney General