Entities eligible for LMCIT coverage
Participation in the Trust is generally open to any city that’s a member of the League of Minnesota Cities. Certain other types of political subdivisions can also join the League and become eligible for Trust coverage. Several other types of city-related entities are also eligible for LMCIT coverage.
Joint powers boards and entities
A joint powers entity is created by an agreement or contract among two or more political subdivisions. A joint powers entity is eligible for coverage if at least one of its constituent political subdivisions is a League member. A joint powers entity does not itself have to become a League member.
Special purpose political subdivisions
A special purpose political subdivision is created either directly by statute or by following a procedure specified in the statutes. It is eligible for coverage, but it must first become a subscribing member of the League.
City boards, commissions, and authorities
The Trust can provide coverage for independent city boards, commissions, and authorities. These can be covered either under their city’s coverage (assuming their city’s already a Trust member) or by issuing separate coverage. If the board or commission’s city is a League member, it doesn’t also need to become a League member in order get coverage from the Trust.
Private nonprofit corporations
The Trust can provide coverage to a private corporation only under limited circumstances:
- The corporation must be a nonprofit corporation.
- It must qualify as an instrumentality of a member city (an instrumentality is defined as an entity that has the authority to serve a city purpose, and its articles of incorporation or bylaws give the city a reasonable degree of control over the entity’s activities).
If the nonprofit corporation qualifies as a city instrumentality, the Trust can provide coverage either by adding the corporation to the city’s coverage or by issuing separate coverage to the corporation. If the latter is preferred, the city must request the Trust provide coverage, and the city must agree to be secondarily responsible for any premiums or deductible reimbursements the corporation may owe to the Trust.
If the corporation’s city is a League member, the corporation doesn’t also need to become a member to get coverage from the Trust.
There are other entities that can qualify as instrumentalities of cities, and to whom the Trust can provide coverage. Examples include housing and redevelopment authorities, economic development authorities, and utility commissions. If the instrumentality’s city is a League member, the instrumentality doesn’t also need to become a member to get coverage from the Trust.
Associations of public officials
Associations of public officials are typically organized as nonprofit corporations. This type of association may be eligible to participate in the Trust if:
- It qualifies as an instrumentality of cities.
- The association’s articles of incorporation or bylaws clearly identify a valid municipally related purpose for the entity’s existence.
- The membership group consists predominantly of city officials.
- A majority of the governing board’s members are city officials.
An association that qualifies does not need to become a League member if it is affiliated with a League member city.
Native American tribes
The Trust does not have the legal authority to accept a Native American tribe as a member because tribes are sovereign nations and not political subdivisions of the state.
Any township is eligible to participate in the Trust’s workers’ compensation program, but not its property/casualty program. To be eligible, the township must pay an annual access charge to the League, which equals 75 percent of the League’s standard dues for a city of the same population. This entitles the township to participate in the workers’ compensation program, but the township does not receive any other League or Trust services.
An urban town is eligible to participate in any Trust coverage program if the town is a League member. League dues for an urban town are figured on the same sliding population-based schedule used for cities.
The Trust can provide coverage for a transit operation that is:
- A private nonprofit corporation.
- Run by a member city.
- Run by a joint powers board, provided that at least one member of the joint powers board is a League member.
- Run by a special purpose political subdivision or district, provided the district is a member of the League.
- Run by a nonprofit corporation, provided the corporation is an instrumentality of a League member city, the city requests the Trust to provide coverage, and the city agrees to be secondarily responsible for any premiums or deductible reimbursements the corporation may owe to the Trust.
LMCIT can’t provide coverage for transit operations that are run solely by a county or by a for-profit corporation.