| TO: | Faye Mitchell Henderson Public Affairs Office Department of Cultural Resources |
| FROM: | Lorinzo L. Joyner Special Deputy Attorney General |
| DATE: | October 4, 1994 |
SUBJECT: Applicability of G.S. 143-318.9 et seq. to the Franklin County Arts Council, Inc.
You have inquired whether the meetings of the Franklin County Arts Council, Inc. (the Council) are required to be open to the public pursuant to G.S. 143-318.9 et seq. (hereafter "the Open Meetings Law"). By enacting the Open Meetings Law, the General Assembly has made the policy decision regarding what entities are covered by the Open Meetings Law. This Office encourages boards and commissions to conduct as much of their business as possible in open meetings, particularly when the expenditure of public funds is involved; however, it is my conclusion that the provisions of the Open Meetings Law do not apply to the Council.
My conclusion is based on the following information. During telephone discussions we had on September 20, and 28, 1994, you represented that the Council was not created by statute, local ordinance or resolution and that it has exclusive authority to elect its own board of directors, establish policies and make its own decisions. Although it makes grant applications to and receives financial support from a number of entities, including the State, you indicated that the Council is not subject to the supervision and control by either the State or local government.
I have also reviewed the Council’s Articles of Incorporation and by-laws. These documents indicate that the Council was incorporated in 1979 as a private, non-profit corporation under G.S. 55A, Non-profit Corporation Act, and qualifies as an exempt organization under Section 501 (c)
(3) of the Internal Revenue Code. Article III of its by-laws defines the corporate purpose:
The corporation shall have as its purpose to encourage, sponsor, develop, promote, and coordinate cultural and educational activities in Franklin County. In addition to initiating its own arts programs, the Council may engage in and assist existing arts organizations, committees, or projects. The Council may also sponsor cooperative planning, research, fund raising, public education programs, administer property, and undertake other such services as deemed essential to the growth and appreciation of the visual, literary, and performing arts in the County.
The by-laws further provide that any individual, agency, or organization — public or private -may be eligible for membership, each individual member has one vote and each agency or organization has one representative vote. The Council’s policies are established by the voting membership and executed by the Board of Directors. The Board may include town or county government officials; however, those officials may only serve as non-voting ex-officio members for counsel or resource information. (Emphasis added.)
As you are no doubt aware, generally the Open Meetings Law applies to "public bodies." Significant changes to the State’s Open Meetings Law were made by the 1994 General Assembly which became effective October 1, 1994. The law, as amended, applies to any appointed or elected entity with two or more members which exercises or has the authority to exercise a governmental function (i.e., legislative, policy-making, quasi-judicial, administrative, or advisory), regardless of how it was created or established.
The Council’s status as a private, non-profit corporation does not answer the question of whether it is subject to the Open Meetings Law. State and local governments often use private non-profit entities to assist with or carry out governmental functions and under some circumstances, these private non-profit corporations may be held to be subject to the Open Meetings Law. See, for instance, News and Observer Publishing Co. v. Wake County Hospital System, Inc., 55 N.C. App. 1 (1981), where the court held that the Wake County Hospital System, a non-profit corporation, was an agency of the local government for purposes of G.S. 132-1 and was therefore subject to the Public Records Law. The court looked beyond the issue of financial support and closely examined the totality of the relationship between the county and the non-profit corporation, identifying a number of factors that illustrated that the local government exercised supervisory responsibilities and control over the non-profit corporation. See also, Coats v. Sampson County Memorial Hospital, Inc., 264 N.C. 332 (1965) (non-profit corporation operating county-owned hospital with the corporation’s board of directors appointed by the county held to be a county agency for purposes of venue under G.S. 1-77) and Sides v. Cabarrus Memorial Hospital, Inc., 287 N.C. 14 (1975) (hospital corporation established by a local act of the General Assembly was held to be an agency of the county for purposes of waiver of tort immunity through purchase of insurance.)
A review of the cases where our courts have found private entities to be local governmental agencies for various purposes reveals one common thread: in each case the local government had clear supervisory responsibilities and control over the private entity. The private entity’s receipt of financial support from the governmental unit, standing alone, did not appear sufficient.
On the basis of the foregoing, it is my opinion that the Open Meetings Law does not apply to private non-profit entities unless it is clear from the totality of the relationship that the local government has supervisory responsibilities and control over the private entity which is exercising (or has the authority to exercise) a governmental function. The by-laws of the Franklin County Arts Council, Inc., do not appear to authorize the Council to perform any governmental functions; nor does any governmental agency appear to exercise or have the authority to exercise supervisory responsibility or control over the Council.
I hope that you find this information useful.