North Carolina Department of Justice
North Carolina Department of Justice
North Carolina Department of Justice
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October 12, 2004

The Hon. Richard H. Moore
Treasurer, State of North Carolina
325 North Salisbury Street
Raleigh, North Carolina 27603-1385

Re: Advisory Opinion: Applicability of Open Meetings Law to Tax Review Board Proceedings

Dear Treasurer Moore:

You have requested our opinion with respect to a number of questions regarding the application of certain statutory provisions to the operations of the Tax Review Board, of which you are the Chair. The Tax Review Board is established pursuant to North Carolina General Statutes Section 105-269.2. The members of the Tax Review Board are: (1) the State Treasurer, ex officio, (2) the chairman of the Utilities Commission, ex officio, (3) a member appointed by the Governor, and (4) the Secretary of Revenue, ex officio. The Secretary of Revenue, however, only sits on hearings relating to corporate franchise and income tax allocations. N.C.G.S. § 105-269.2 (2004); see id. §§ 105-122(c)(2) (2004), 105-130.4(t)(1) (2004). Your letter of September 17, 2004 refers to the Tax Review Board as the “regular Tax Review Board” when it sits without the Secretary of Revenue. Your letter refers to the Tax Review Board as the “augmented Tax Review Board” when it sits with the Secretary of Revenue. For purposes of this advisory opinion, the term “Tax Review Board” refers to the Tax Review Board in both its capacity with the Secretary of Revenue participating as a member and when the Secretary of Revenue is not participating as a member.

North Carolina General Statutes Section 105-259(b) provides that “[a]n officer, an employee, or an agent of the State who has access to tax information in the course of service to or employment by the State may not disclose the information to any other person unless the disclosure is made for one of the following purposes.” Subsection (b) then enumerates 29 specific exemptions to nondisclosure. Under Section 105-259, “tax information” is defined as “[a]ny information from any source concerning the liability of a taxpayer for a tax.” N.C.G.S. § 105-259(a)(2) (2004).

Your specific questions and our responses follow.

1. Are meetings of the Tax Review Board - - whether regular or augmented by the participation of the Secretary of Revenue - - open to anyone other than: - - taxpayer and his invitees/counsel/advisors; - - members of the Board and staff to the Board; and - - representatives of the Departments of Revenue and Justice?

Response: Yes. The Tax Review Board is a public body. N.C.G.S. § 143-318.10 (2004). Accordingly, the Tax Review Board must comply with the Open Meetings Law. N.C.G.S. § 143-318.9 to -318.18 (2004). The Open Meetings Law provides exemptions from the Act as set out in North Carolina General Statutes Section 143-318.18. Section 143-318.18 provides that the Open Meetings Law does not apply to:

Any public body subject to the Executive Budget Act (G.S. 143-1 et seq.) and exercising quasi-judicial functions, during a meeting or session held solely for the purpose of making a decision in an adjudicatory action or proceeding.  N.C.G.S. § 143-318.18(7) (2004). The Tax Review Board is subject to the Executive Budget Act and exercises quasi-judicial functions. Accordingly, the Tax Review Board is exempt from the Open Meetings Law while it is meeting “solely for the purpose of making a decision” in a petition pending before the Board. By its very terms, the exemption only applies to the deliberations of the Tax Review Board. The exemption does not apply when the Tax Review Board is receiving evidence or arguments in a hearing prior to deliberating upon the evidence. Nor does this exemption apply when the Tax Review Board is meeting for any purpose other than deciding the outcome of a petition pending before the Board. See News & Observer Publishing Co. v. Interim Board of Education, 29 N.C. App. 37, 47, 223 S.E.2d 580, 586-87 (1976) (“exceptions to our open meetings law should be strictly construed and . . . those seeking to come within the exceptions should have the burden of justifying their action”).

The applicable statutes (North Carolina General Statutes Sections 105-269.2, 105122(c)(2) and 105-130.4(t)(1)) do not expressly or implicitly exclude the Tax Review Board from the scope of the Open Meetings Law. No such exclusion can be found in any other provision of the North Carolina General Statutes. It is our opinion that the General Assembly intended that the Tax Review Board should be treated the same under the Open Meetings Law as every other public body. See State v. Hooper, 358 N.C. 122, 125, 591 S.E.2d 514, 516 (2004) (“The primary goal of statutory construction is to effectuate the purpose of the legislature in enacting the statute.”).

2(a). May any officer or employee of the State of North Carolina, specifically including Board members, who participate in an official capacity on the Tax Review Board (regular or augmented) disclose publicly any information received, reviewed or discussed by the Board concerning any taxpayer or a taxpayer’s tax information? If so, please be specific about the kind of information that is public.

Response: Employees and Officers of the State, including members of the Tax Review Board are prohibited from disclosing any tax information as defined in North Carolina General Statutes Section 105-259(a)(2)(2004). The only exceptions are those enumerated in paragraphs(1) through (29) of subsection (b).

2(b). If the case arises under G.S. § 105-241.2, does the answer to question (a), above, vary by whether the point of discussion/disclosure is prior to or after publication of the order pursuant to G.S. § 150B-21.17(a)(5)? Specifically, are Board members and staff to the Board required by any considerations of quasijudicial conduct or by provisions of Chapter 105 to refrain from such disclosure or discussion, even after publication of the order?

Response: Members of the Tax Review Board and staff must comply with both the confidentiality obligations of North Carolina General Statutes Section 105-259(b) and the obligations for disclosure set forth in the Public Records Law, N.C.G.S. § 132-1 et seq., with respect to the release of records and other information. That obligation does not vary based upon whether the Tax Review Board receives a request for information prior to or after publication of an order by the Tax Review Board.

3. Is it correct that, by virtue of disparate statutory treatment, the “regular Board” decisions on administrative review of the Secretary of Revenue are ultimately made public, but those of the augmented Board are not made public?

Response: There is a matter pending before the North Carolina Court of Appeals involving the appeal rights from orders issued by the Tax Review Board. The decision in that case may impact our analysis of the question you have posed. Therefore, consistent with our practice of not issuing opinions on legal issues related to pending matters, we are deferring our response to this question. We will revisit this question when the Court of Appeals renders a decision.

4. Does G.S. § 143-318.11(a)(1) combine with G.S. § 132-1.1(b) and G.S. § 105-259 to require that the Tax Review Board meetings must be closed sessions to prevent the disclosure of information that is confidential and/or not considered a public record?

Response: No. See response to Question No. 1. The Board may enter into a closed session for the limited purposes enumerated in North Carolina General Statutes Section 143318.11(2004). The methodology for entering into a closed session is set forth at North Carolina General Statutes Section 143-318.11(c) (2004). Compliance with North Carolina General Statutes Section 105-259(2004) may provide a basis for a motion by a Board member to close an open meeting, pursuant to North Carolina General Statutes Section 143-318.11(c)(2004), under certain circumstances, for example to receive evidence concerning tax information presented by a state employee.

We hope the foregoing proves helpful. Please advise if we may be of further assistance.

Sincerely,

J.B. Kelly
General Counsel

Grayson Kelly
Chief Deputy Attorney General