Janet Holley

Attorney General of Kansas — Opinion
June 29, 2004

Re: Taxation — Liquor Drink Tax — Local Alcoholic Liquor Fund; Distribution of Moneys

Synopsis: An expenditure of money from the special parks and recreation fund, derived from the local alcoholic liquor tax, for the construction of a new Elk County Free Fair Association building is within the discretion of the Elk County Board of County Commissioners. If the Commissioners determine that the facility would be used in substantial measure for recreational purposes, and thus within an authorized statutory purpose, albeit the facility would also be used for agricultural purposes by the Elk County Free Fair Association, then the Commissioners may distribute the special parks and recreation fund moneys for this purpose. Cited herein: K.S.A. 2-125; 2-132; 79-41a02; 79-41a04.

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Phill Kline, Attorney General of Kansas

Janet Holley Elk County Free Fair Association 3088 Harvest Longton, Kansas 67352-5225

Dear Ms. Holley:

On behalf of the Elk County Free Fair Association, you ask whether county money from the local alcoholic liquor fund may lawfully be provided to the Elk County Free Fair Association for the purpose of construction of a new fair building. You inform us that the Elk County Free Fair Association would use this building “for public, county, and community events and recreation, such as family reunions, fundraising, dances, local fair events, exhibits, and 4-H activities.”

The local alcoholic liquor fund is financed through a 10% tax on alcoholic drinks sold in private clubs.[1] Revenues are placed in the fund by the state treasurer and are allocated to each city and/or county on the basis of how many clubs contributed to the fund within that particular governmental unit.[2] One-third of the money received is earmarked for a special parks and recreation fund. As this situation involves a county’s portion of the liquor fund, K.S.A. 79-41a04(e) is applicable, which declares that such money may be “expended only for the purchase, establishment, maintenance or expansion of park and recreational services, programs and facilities.” Such funds are under the direction and control of the board of county commissioners.[3]

We assume the Elk County Free Fair Association was originally established pursuant to the authority of K.S.A. 2-132 to advance “the agricultural and industrial interests” of the county. As such, the Free Fair Association is required to conform to adequate standards for a “fair” as defined in K.S.A. 2-125.[4] That statute defines “fair” as:

“A bona fide exhibition designed to promote education, and to encourage improvement in agriculture, horticulture, livestock, poultry, dairy products, liberal arts, mechanical fabrics, fine arts, domestic economy, and 4-H activities by offering premiums and rewards for the best exhibits thereof.”

The dilemma presented is this:

Local liquor tax money in the special parks and recreation fund must be used for park and recreational facilities.
A free fair association is charged with the responsibility to advance agricultural and industrial interests of the county.
The building that the Elk County Free Fair Association wishes to construct would be used for agricultural purposes (local fair events, exhibits, and 4-H activities) as well as for recreational purposes (public, county, and community events and recreation, such as family reunions, fundraising, dances).

Nevertheless, in our opinion an expenditure of money from the special parks and recreation fund derived from the local alcoholic liquor tax for the construction of a new Elk County Free Fair Association building is within the discretion of the Elk County Board of County Commissioners. If the Commissioners determine that the facility would be used in substantial measure for recreational purposes, and thus within an authorized statutory purpose, albeit the facility would also be used for agricultural purposes by the Elk County Free Fair Association, then the Commissioners may distribute the special parks and recreation fund moneys for this purpose.

Sincerely,

PHILL KLINE Attorney General of Kansas
Camille Nohe Assistant Attorney General

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[1] K.S.A. 79-41a02.
[2] K.S.A. 79-41a04(b).
[3] K.S.A. 79-41a04(e).
[4] K.S.A. 1-132.