June 24, 1991
TO: BOARD OF GOVERNORS NO. 44-91
STATE LIAISON COMMITTEE NO. 14-91
UNIT INVESTMENT TRUST COMMITTEE NO. 23-91
RE: INSTITUTE FILES APPEAL IN MINNESOTA REGISTRATION FEE CASE
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As we previously informed you, the Institute commenced a
lawsuit in December 1987 against the State of Minnesota and the
Commissioner of Commerce challenging the constitutionality of
Minnesota's disparate registration fee structure. On February
14, 1991, the Minnesota District Court granted the State's motion
for summary judgment and dismissed the Institute's complaint on
the grounds that the Institute had not proved beyond a reasonable
doubt that the fee provision violates the due process or equal
protection clauses of the U.S. or Minnesota Constitutions or the
commerce clause of the U.S. Constitution. (See Memorandum to
Board of Governors No. 15-91, State Liaison Committee No. 6-91
and Unit Investment Trust Committee No. 8-91, dated March 5,
1991.)
On May 22, 1991, the Institute filed an appeal with the
Minnesota Court of Appeals from the lower court judgment. The
brief submitted on June 21, 1991 by the Institute in support of
its appeal contends as follows:
1. that the Minnesota registration fee provision
violates the due process clause of the U.S. and
Minnesota Constitutions by imposing a license fee
for the registration of mutual funds and unit
trusts that is unreasonable and oppressive in that
it greatly exceeds and bears no reasonable
relationship to the costs incurred by the State in
regulating these securities; and
2. that the Minnesota registration fee provision
violates the equal protection guarantee of the U.S.
and Minnesota Constitutions because there is no
rational basis for imposing a license fee for the
registration of mutual funds and unit trusts that
is vastly greater than the license fee for
registration of other securities when the costs of
registration and regulation are the same.
* * *
Attached is a copy of the Institute's brief. We will keep
you advised of further developments.
Patricia Louie
Assistant General
Counsel
Attachment