Summary

S.F. 1694 (Betzold); H.F. ____ ( ): Volunteer Fire Plans: Inclusion in Open Meeting Law Requirements, amends Minnesota Statutes, Sections 13D.01, Subdivision 1, a portion of the Open Meeting Law, to clarify that the Open Meeting Law applies to the governing boards of the local volunteer fire relief associations.

S.F. 1694 (Betzold); H.F. ____ ( ): Volunteer Fire Plans, remedies an error made by the Legislative Commission on Pensions and Retirement (LCPR) staff in omitting a provision extending the Open Meeting Law to volunteer firefighter retirement associations from the volunteer firefighter retirement association article that was eventually incorporated into the 2000 Omnibus Pension Bill.

S.F. 1694 (Betzold); H.F. ____ ( ): Volunteer Fire Plans: Inclusion in Open Meeting Law Requirements, amends Minnesota Statutes, Sections 13D.01, Subdivision 1, a portion of the Open Meeting Law, to clarify that the Open Meeting Law applies to the governing boards of the local volunteer fire relief associations.

Policy issues raised by the bill are:

1. Appropriateness of Applying the Open Meeting Law to Quasi Governmental Entities. The policy issue is the appropriateness of including volunteer firefighter retirement associations, which are quasi governmental entities, in the governmental Open Meeting Law. The Open Meeting Law initially applied to local government, resulting in its initial coding in Minnesota Statutes, Chapter 471. It was expanded to include state government and related entities and has recently (2000) been recodified in Minnesota Statutes, Chapter 13D. Of the local public pension plans, only the Minneapolis Employees Retirement Fund (MERF), with the legal status of an instrumentality of the City of Minneapolis and Special School District No. 1 (Minneapolis), is clearly a governmental entity. The balance are all incorporated as nonprofit corporations. These nonprofit corporations have considerable governmental connections (i.e., perform the governmental function of providing public employee pension benefits, have governmental officials on their board, are governed by separate laws, receive considerable tax revenues, and are considered to be governmental under the federal income tax code), but are legal entities separate from their associated municipalities. There is a need to balance the private sector "hands-off" policy generally accorded to private organizations with the governmental procedural safeguards and practices generally imposed on governmental units. Since considerable tax revenue is deposited into these pension plans and since the plan performs the important governmental function of providing a pension benefit to volunteer firefighters, it appears appropriate to require these plans to conform to general government practices, including adherence to the Open Meeting Law.

2. Further Issues of Proper Scope. The issue is whether the bill should be amended to clearly include or specify Open Meeting Law applicability for paid police and fire plans (the Fairmont Police Relief Association, the Minneapolis Fire Department Relief Association, the Minneapolis Police Relief Association, and the Virginia Firefighters Relief Association), MERF, and all three first class city teacher plans, given the governmental function they perform in providing pension benefits to paid public safety employees and other public employees, and the large amounts of tax revenues that flow to these organizations.

3. Question of the Existence of the Problem to be Remedied by the Open Meeting Law. The policy issue is whether or not there are problems in local public pension plans that merit the remedy of the imposition of the Open Meeting Law. Presumably, in 1957, when the Open Meeting Law was initially enacted, it was a legislative attempt to remedy a problem based on one or several municipal actions. Because it was enacted 44 years ago, it is difficult to determine now what abuse led to the passage of the legislation. There are recent situations with public pension plans which suggest that application of the Open Meeting Law to all public pension plans is a reasonable action. An example is the recent problems in the investment activities of the Minneapolis Police Relief Association and the turmoil on its board of trustees, all which may have been avoidable with the greater outside scrutiny that the Open Meeting Law is intended to allow or engender.

4. Appropriateness of Open Meeting Law Remedies. The policy issue is the appropriateness of the remedies imposed upon violations of the open meeting law. Minnesota Statutes, Section 13D.06, provides for three remedies to Open Meeting Law violations, which are:

1. Fine Up to $300. A violator of the Open Meeting Law is personally liable for a fine of up to $300 for a single violation;

2. Office Forfeiture with Three Violations. A violator of the Open Meeting Law three or more times with the same governing body forfeits a right to serve on that body for the period of time equal to the term of office of the person when the violations occurred; and

3. Costs, Disbursements, and Attorney Fees. A violator of the Open Meeting Law, with a finding of specific intent to violate the law, is liable to the plaintiff for reasonable costs, disbursements, and reasonable attorney fees related to the action.

Actions under the Open Meeting Law may be brought by any person. Venue for the action is in the court applicable to the location where the governing body’s administrative office is. The penalties presumably are an outgrowth of municipal Open Meeting Law violations. The 1957 enactment of the Open Meeting Law contained no penalties. Penalties were first introduced in 1973, when state agencies and "public bodies" were added to coverage by the law. The Commission may wish to take testimony from affected and interested parties on the potential impact of these penalties.

5. Potential Increase in Pension Plan Administrative Expenses from Open Meeting Law Compliance. The policy issue is the appropriateness of the imposition of a potential increase in pension plan administrative expenses that could result from the inclusion of local pension plans in the Open Meeting Law. The Open Meeting Law requires the provision of copies of meeting materials for public inspection and the provision of meeting notices or the publication of meeting notices. For volunteer firefighter retirement associations and other local plans with nominal administrative capabilities, these requirements can be expected to cause some increase in the plan’s administrative expense.

Amendment LCPR01-121 is a technical amendment to S.F. 1694; H.F. ____, which would revise a section within Minnesota Statutes, Chapter 356A, Public Pension Plan Fiduciary Responsibility, to indicate the inclusion of volunteer fire plans under the Open Meeting Law.

Amendment LCPR01-118 is a substantive amendment, that could be used in lieu of LCPR01-121, which would revise S.F. 1694 by extending the Open Meeting Law requirements (or clarifying applicability of that provision) ) to the remaining paid police and fire plans, MERF, and the first class city teacher plans.