Is a small private rural hospital that occasionally gets city sales-tax money for equipment subject to North Dakota's open meetings law?

Plain-English summary

Jacobson Memorial Hospital Care Center is a 25-bed critical access hospital in Elgin, North Dakota, a private nonprofit corporation. Dr. Alan Lindemann tried to attend the hospital board's May 31 and June 28, 2022 meetings. He spoke for a few minutes at the May meeting but was then told to leave. He filed a citizen request with the AG, asking whether the hospital was a "public entity" subject to open meetings laws and whether it violated those laws by excluding him.

The AG concluded the hospital is a public entity, but only to the extent it is supported by or expends public funds. The hospital had received three grants from the City of Elgin's sales tax fund: $30,000 in 2013 for a chemistry analyzer, $25,000 in 2016 for a CT scanner upgrade, and $5,000 in 2017 for a remodeling project. Those funds came without a service contract identifying specific services in fair-market-value exchange, the hospital just applied for the funds, used them as the application stated, and the city benefited indirectly through services to its residents. Under N.D.C.C. § 44-04-17.1(13)(c) and (10), that triggers public-entity status.

Critically, public-entity-by-funding status is "to the extent" of those funds. Records and meetings about how those funds are spent must be open. Records and meetings about everything else, patient care, internal hospital governance, finance unrelated to public funds, can stay private. The AG reviewed the May 31 and June 28, 2022 meeting minutes and found the board did not discuss approval or use of the city's sales tax funds at those meetings. So even though the hospital is a public entity for those funds, the meetings Dr. Lindemann wanted to attend weren't required to be open.

What this means for you

If you administer a private nonprofit hospital, clinic, or other entity that has accepted city or county grants

The grant agreements matter. If your grant comes with a service contract that identifies specific services delivered to the public entity at fair market value, you stay private. If it's general support for capital purchases, remodeling, or operations, even when restricted to specific uses, you become a public entity for those funds. The opinion is direct: restricting how funds may be spent doesn't create the kind of arms-length exchange that takes the entity outside the statute.

Practical structure: keep meeting agendas that distinguish discussion of the public-funded equipment or project from the rest of the board's agenda. The portion that touches the public funds is open. The portion that doesn't can stay private.

If you are a city or county granting sales-tax-fund money to a private organization

Your grant decisions create open-records and open-meetings exposure for the recipient. If you want the recipient to remain a fully private entity, structure the funding as a service contract with identified deliverables at fair market value (e.g., "the city pays $X for Y meals delivered to seniors"). If you want the funded project subject to public oversight, the grant-by-application model gets you that.

If you are a citizen interested in attending a hospital board meeting

You can attend the portion that discusses how publicly granted funds are or were used. Other portions of the meeting can be closed without violating the open meetings law. Ask about the agenda in advance, and if a relevant agenda item is closed, request review under N.D.C.C. § 44-04-21.1.

If you are a hospital trustee or board member

The relevant question for each meeting is: does any agenda item touch the use of public funds? If yes, that portion is open. If no, the meeting can be closed. The board doesn't have to choose between fully open and fully closed; it can sequence the agenda.

Common questions

Why does Medicare and Medicaid funding not count as "public funds" here?

The AG cited N.D.A.G. 2004-O-04 and 2024-O-06: payments from Medicare, Medicaid, and private insurance are reimbursements "for services rendered directly to the beneficiaries" of those programs. They are not general support of the hospital. So they don't trigger public-entity status.

Why did the city sales-tax fund grants count?

Because there was no contract identifying specific services in exchange for the funds. The hospital applied for the money to fund equipment and remodeling projects that benefited the hospital itself; city residents benefited indirectly through hospital services, but the city was not receiving an arm's-length exchange of value.

What about the argument that the hospital had no discretion over how to spend the grant?

The AG rejected it. Restricting spending to a specific equipment purchase doesn't convert the grant into a contract for goods or services. The opinion cites prior AG opinions where similar restrictions on use didn't change the public-funds analysis.

Are records about the chemistry analyzer, CT scanner, and remodeling open?

Yes. Under N.D.A.G. 2024-O-06, records of fund-supported entities are limited to records pertaining to the use of public funds. Records about the equipment purchases, the remodeling project, and how those funds were spent should be available on request.

What if a future grant comes with a clear service contract?

Then the hospital may stay private as to that grant, public funds being paid for specific identified services at fair market value don't trigger public-entity status. Compare that with a "general support" grant, which does.

Could Dr. Lindemann attend a future meeting that discussed the equipment purchases?

Yes. If the board agenda includes an item about the use or disposition of the chemistry analyzer, CT scanner, or remodeling project, that portion of the meeting must be open and noticed.

Background and statutory framework

N.D.C.C. § 44-04-17.1(13)(c) extends public-entity status to "[o]rganizations or agencies supported in whole or in part by public funds, or expending public funds." Section 44-04-17.1(10) defines "supported by public funds", the recipient must receive public funds "exceeding the fair market value of any goods or services given in exchange," with a presumption of fair-market-value exchange when the funds come through "any authorized economic development program."

The Adams County case, Adams Cnty. Rec. v. Greater N.D. Ass'n, 529 N.W.2d 830, 836 (N.D. 1995), explains the underlying logic: "support" does not include a bargained-for exchange of value. "When an organization is supported by public funds there is no exchange of goods or services for funds."

The "to the extent" framework comes from a line of AG opinions: 2024-O-06, 2025-O-12 (this opinion), 2006-O-04. Records and meetings of fund-supported entities are open only with respect to the public-fund use. Internal governance, patient care decisions, fundraising activities not tied to the public funds, those can stay private.

For meetings specifically, N.D.C.C. § 44-04-19 says all "meetings" of a public entity must be open. A "meeting" requires a quorum of the governing body discussing "public business", defined in § 44-04-17.1(12) as matters relating to the entity's governmental functions or use of public funds. Without a public-funds nexus, a portion of a meeting isn't a "meeting" subject to the open-meetings law.

Citations

• N.D.C.C. § 44-04-17.1(10), (13)(c), (14) (definitions)
• N.D.C.C. § 44-04-17.1(9), (12), (15), (6) (meeting, public business, quorum, governing body)
• N.D.C.C. § 44-04-19 (open meetings default)
• Adams Cnty. Rec. v. Greater N.D. Ass'n, 529 N.W.2d 830 (N.D. 1995) (support means no bargained-for exchange)
• N.D.A.G. 2024-O-06 (records of fund-supported entities limited to public-fund records; sales tax funded healthcare entity)
• N.D.A.G. 2004-O-04 (Medicare/Medicaid not "public funds"; public-funds support meaning)
• N.D.A.G. 2003-O-10 (state general funds without service contract = support)
• N.D.A.G. 2002-O-09 (no contract identifying services = support)
• N.D.A.G. 2000-O-07 (entity supported by city sales tax proceeds was a public entity)

Source

• Landing page: https://attorneygeneral.nd.gov/the-jacobson-memorial-hospital-care-center-is-a-public-entity-subject-to-open-meetings-laws-only-to-the-extent-it-is-supported-by-or-expends-public-funds-and-it-did-not-violate-those-laws-by-refusing/
• Original PDF: https://attorneygeneral.nd.gov/wp-content/uploads/2025/09/2025-O-12-v3.pdf

Original opinion text

STATE OF NORTH DAKOTA

OFFICE OF ATTORNEY GENERAL
www.attorneygeneral.nd.gov
(701) 328-2210

Drew H. Wrigley
ATTORNEY GENERAL

OPEN RECORDS AND MEETINGS OPINION
2025-O-12

DATE ISSUED: September 10, 2025
ISSUED TO: Jacobson Memorial Hospital Care Center

CITIZEN'S REQUEST FOR OPINION

Dr. Alan Lindemann requested an opinion from this office under N.D.C.C. § 44-04-21.1 asking whether the Jacobson Memorial Hospital Care Center violated the open meetings laws by refusing public access to its May 31, 2022, and June 28, 2022, meetings.

FACTS PRESENTED

The Board of Directors ("Board") of the Jacobson Memorial Hospital Care Center ("JMHCC") holds regular board meetings on the last Tuesday of every month. Dr. Alan Lindemann wished to attend the Board's May 31, 2022, and June 28, 2022, meetings. Dr. Lindemann appeared at the May 31, 2022, meeting and addressed the Board "for the first 5-10 minutes to state a small message regarding the hospital," but was not allowed to attend the full meeting. Dr. Lindemann complains he was "escorted out or told to leave the meeting" by JMHCC's chief executive officer. JMHCC contends it is not required to have its meetings open to the public because it is not a public entity subject to the open meetings laws.

JMHCC is a private non-profit corporation located in Elgin, North Dakota. It is a 25-bed critical access hospital with three provider-based rural health clinics. It provides healthcare and medical services, including swing bed care, emergency care, primary care, and acute care, to the surrounding communities. JMHCC receives funding from a variety of sources. The joint federal-state Medicaid program and the federal Medicare program reimburse JMHCC for medical services provided to eligible members of the public. JMHCC also receives payments from private health insurance companies for services rendered directly to privately insured patients and payments from insured and uninsured patients for out-of-pocket costs.

JMHCC also has received funds from the City of Elgin's sales tax fund. In 2013, JMHCC received $30,000 for a Vitros 350 Chemistry Analyzer. In 2016, JMHCC received $25,000 for a CT Scanner upgrade. In 2017, JMHCC was given $5,000 for its remodeling project related to its "A Place Called Home Campaign."

According to JMHCC, it "does not receive any other funding from the state or any political subdivision of the state, including the county or municipal political subdivisions, outside [of] the above listed programs and previously disclosed payment from the City of Elgin last occurring in 2017."

ISSUES

1. Whether JMHCC is a "public entity" subject to the open meetings laws.
2. Whether JMHCC violated the open meetings laws by refusing public access to its May 31, 2022, and June 28, 2022, meetings.

ANALYSIS

Issue One

The definition of a "public entity" subject to open records and open meetings laws includes "[o]rganizations or agencies supported in whole or in part by public funds, or expending public funds." A nongovernmental organization, even if formed as a private non-profit corporation, is a "public entity" for open records and open meetings laws if it is supported by public funds or expends public funds. "Public funds" are defined as, "cash and other assets with more than minimal value received from the state or any political subdivision of the state." An organization is "supported in whole or in part by public funds" when it "receive[s] public funds exceeding the fair market value of any goods or services given in exchange for the public funds, whether through grants, membership dues, fees, or any other payment." Alternatively, an organization is not considered to be "supported by public funds" when the "goods and services provided in exchange for those funds are reasonably identified in an agreement or contract and have a fair market value that is equivalent to the amount of public funds it receives." "When an organization is supported by public funds there is no exchange of goods or services for funds."

Here, JMHCC receives funding from two main sources. First, JMHCC receives payments from private health insurance companies, Medicaid, and Medicare for healthcare services provided to eligible patients. This office previously determined that such payments from Medicare, Medicaid, and private health insurance companies are not public funds because those "sources represent[ed] payment for services rendered directly to the beneficiaries of the private insurance carriers and federal and state third-party funding sources."

Second, JMHCC received funds from the City of Elgin in 2013, 2016, and 2017 from the City's sales tax fund. According to JMHCC, it received $30,000 for a Vitros 350 Chemistry Analyzer, $25,000 for a CT Scanner upgrade, and $5,000 for its remodeling project related to its "A Place Called Home Campaign." JMHCC argues it is not supported by public funds because the funds it received from the City of Elgin's sales tax fund were restricted for specific purchases, and JMHCC retained no discretion over how the funds were to be used.

JMHCC has not provided any contract or agreement that reasonably identifies specific goods or services it provides to the City of Elgin in exchange for the public funds it received from the city's sales tax fund. Rather, JMHCC requested the public funds from the city to subsidize and fund its ongoing remodeling projects. While these projects may indirectly benefit city residents, they constitute a direct benefit to JMHCC, and it is clear there is no exchange of goods or services from JMHCC to the city for these public funds.

JMHCC's argument that it is not supported by public funds because it retained little discretion over how to spend the funds from the city is not persuasive. This office has long held that "[t]he general purpose of the open records and meetings laws is to provide the public with the right and the means to determine how public funds are spent and how government business is conducted." This office recently explained that a different nongovernmental healthcare entity was a "public entity" because it was supported by and expended public funds received from mill levies, a city's healthcare sales tax fund, and rural ambulance service district. The sales tax funds were made available through an application process, and if awarded, the funds could be expended only for the reasons outlined in the successful application. Nonetheless, this office concluded the nongovernment entity was a public entity to the extent it was supported by and expended the public funds.

It is my opinion that JMHCC is a "public entity" subject to the open records and meetings laws to the extent it is supported by and expends the city's sales tax funds. Records and meetings related to such funds and their uses are open unless otherwise protected by law.

Issue Two

All meetings of a public entity must be open to the public, except as otherwise provided by law. "Meeting" means a formal or informal gathering, whether in person or through other means such as a telephone or video conference, involving a "quorum" of the members of the "governing body" regarding public business. The phrase "public business" is defined as "all matters that relate or may foreseeably relate in any way to:

a. The performance of the public entity's governmental functions, including any matter over which the public entity has supervision, control, jurisdiction, or advisory power; or
b. The public entity's use of public funds."

The portion of a meeting of the governing body of a public entity as defined in N.D.C.C. § 44-04-17.1(13)(c) which does not involve public business is not required to be open to the public.

While JMHCC is a "public entity" and is subject to the open meetings law regarding the use of the sales tax proceeds received from the city, only the portions of the meetings concerning the use of those funds are subject to the open meeting laws. My office has reviewed the meeting minutes from the May 31, 2022, and June 28, 2022, meetings, and based on the minutes, the Board did not discuss the approval or expenditure of those public funds during the meetings. Accordingly, it is my opinion that JMHCC's Board did not violate the open meetings law when it prohibited Dr. Lindemann or others from attending its May 31, 2022, and June 28, 2022, meetings.

CONCLUSIONS

1. JMHCC is a "public entity" subject to the open meetings laws to the extent it is supported by or expends public funds.
2. JMHCC did not violate the open meetings laws by refusing public access to its May 31, 2022, and June 28, 2022, meetings because the meetings did not relate to public funds.

Drew H. Wrigley
Attorney General
AMR/mjh
cc: Dr. Alan Lindemann