October 17, 1994
The Honorable Marc Basnight President Pro Tempore North Carolina State Senate State Legislative Building Raleigh, North Carolina 27601
Re: Advisory Opinion; Open Meetings Law, N.C.G.S. § 143-318.11(a)(5)
Dear Senator Basnight:
You have asked for an opinion whether the location and the identity of the owner of real property for a proposed land acquisition by a public body are "material terms" which may be reserved for discussion in closed session under the state’s Open Meetings law. That law was amended in the 1994 legislative session. See, 1994 Sess. Laws Ch. 570.
For reasons that follow, it is our opinion that the location and identity of the owner of real property should ordinarily be discussed in open session. Discussion of those items may not be lawfully reserved for closed session unless the public body, in good faith, intends to negotiate those items as materials terms of a purchase contract.
Prior to the 1994 amendments, the Open Meetings law provided that "a public body may hold an executive session and exclude the public: . . . [t]o consider the selection of a site or the acquisition by any means or lease as lessee of interests in real property." N.C.G.S. § 143318.11(a)(1). As part of the 1994 amendments, the General Assembly repealed this language and replaced it with the following:
It is the policy of this State that closed sessions shall be held only when required to permit
a public body to act in the public interest as permitted in this section. A public body may
hold a closed session and exclude the public only when a closed session is required:
. . . .
(5) To establish, or to instruct the public body’s staff or negotiating agents concerning the position to be taken by or on behalf of the public body in negotiating (i) the price and other material terms of a contract or proposed contract for the acquisition of real property by purchase, option, exchange, or lease: or (ii) the amount of compensation and other material terms of an employment contract or proposed employment contract. N.C.G.S. § 143-318.11(a)(5).
When a statute is clear and unambiguous, the courts must give it its plain meaning and may not interpret its terms. State ex rel. Utilities Comm. v. Edmisten, 291 N.C. 451, 232 S.E.2d 184 (1977). In interpreting a statute, the intent of the General Assembly controls. State v. Fulcher, 294 N.C. 503, 243 S.E.2d 338 (1978). To ascertain the Legislature’s intent, a court will consider the language of the statute, the legislative history and the circumstances surrounding its adoption. State ex rel. Milk Comm. v. National Food Stores, Inc., 270 N.C. 323, 154 S.E.2d 548 (1967). Unless there is indication to the contrary, a court must presume that the General Assembly intended to give the words in a statute their ordinary meaning. Lafayette Transp. Service Inc. v.
County of Robeson, 283 N.C. 494, 196 S.E.2d 770 (1973).
Ordinarily, the "material terms" of a contract are those that are important, necessary or essential to the agreement. Black’s Law Dictionary, p. 1128, 4th Ed. Rev. (1968). And ordinarily, the property description and identity of the seller are "material terms" of a contract to purchase real property. Focus on the words "other material terms" in Subsection (5), standing alone, could lead to the conclusion that identity of the seller and location of the property, as well as other terms essential to an agreement, are properly reserved for discussion in closed session. As discussed below, we believe this would lead to an erroneous interpretation.
Under N.C.G.S. § 143-318.11(a)(5) closed session is appropriate only when it is required to instruct its staff or agent in "negotiating" the price or other material terms of a real property contract. The term "negotiating" implies that only those material terms the public body intends to negotiate over are properly reserved for a closed session under subsection (5). This ambiguity leads us to conclude that N.C.G.S. § 143-318.11(a)(5) is not clear and unambiguous on its face and would require a court to interpret its meaning.
Other language in the Open Meetings law provides a strong indication that the Legislature intended for N.C.G.S. § 143-318.11(a)(5) to be construed narrowly. Section 143-318.9 provides that "it is the public policy of the North Carolina that the hearings, deliberations, and actions of these [public] bodies be conducted openly." N.C.G.S. § 143-318.11(a) provides that closed sessions are appropriate "only when required to permit the public body to act in the public interest as permitted in this section" and "only when a closed session is required" to achieve one of the purposes described in the list of exceptions. This strong and repeated public policy in favor of open meetings weighs in favor of construing narrowly the exception contained in subsection (5).
The legislative history also weighs in favor of a narrow interpretation of Subsection (5). Prior to amendment, N.C.G.S. § 143-318.11(a) contained twenty exceptions under which a public body could meet in closed session. The 1994 amendment reduced the number of exceptions to seven. Further, as shown above, the language of the new exception for property acquisition under Subsection (5) is more narrow that the "site selection" language under the old Open Meetings law.
Limiting the subject matter of a closed session under Subsection (5) to "price and other material terms" about which the public body intends to negotiate would also appear to strike a reasonable balance between the public interest in open government and a public body’s interest in not being disadvantaged in negotiations for real property. Normally, the potential seller of real property will already know the public body wishes to enter into negotiations for purchase of property. Thus, identifying the potential seller in open session normally would not adversely affect the public body’s bargaining position. Likewise, public disclosure of the location of property under consideration by the public body would not normally place the public body at a bargaining disadvantage, unless, for example, the body wishes to negotiate over which part of a larger tract it wishes to purchase. If location is a matter the public body needs to negotiate, it could do so in closed session. In short, permitting the public body to discuss in closed session all material terms it, in good faith, wishes to negotiate, would appear to protect adequately the fiscal interests of the governmental body while promoting the public’s interest in open government.
For the reasons discussed above, we conclude that under N.C.G.S. § 143-318.11(a)(5), a public body may not lawfully reserve for closed session discussions and instructions to staff about material terms of a property purchase contract unless the public body intends, in good faith, to negotiate over such terms.
We trust this responds fully to your inquiry. If you have further questions, please do not hesitate to let us know.
Andrew A. Vanore, Jr. Chief Deputy
John R. McArthur
Chief Counsel