Ethics Opinion Search

February 11, 1993


Opinion No. 1993-4


Nancy L. Moore
Coffeyville City Attorney
PO Box 1629
Coffeyville, Kansas 67337

Dear Ms. Moore:

This opinion is in response to your letter of December 23, 1992 in which
you request an opinion from the Kansas Commission on Governmental Standards
and Conduct concerning the local level conflict of interest law (K.S.A. 75-
4301 et seq.).

FACTUAL STATEMENT

We understand you request this opinion in your capacity as Coffeyville City
Attorney. You advise us that the Montgomery County Fair Association is a
private non-profit corporation organized in 1909 under the laws of the
State of Kansas. Its principal responsibility is putting on the Interstate
Fair and Rodeo, which takes place annually at the City of Coffeyville's
Walter Johnson Park.

In the last year, problems have arisen over the use of the park and certain
rodeo facilities and equipment purchased and placed in the park by the Fair
Association. Prior to this, the Fair Association and City operated on an
informal basis, with all requests to use the rodeo facilities channeled
through the Fair Association. Last fall, a problem arose when the Fair
Association denied the use of the rodeo facilities and the applicant
appealed to the City Commission. The Commission allowed the group to use
the rodeo facilities over the objection of the Fair Association. As a way
to prevent future problems, the City Commission proposes to create a
Fairgrounds Commission to oversee the operation of the park and rodeo
facilities throughout the year. All members of the Fairgrounds Commission
would be appointed by the City Commission, with two recommended by the Fair
Association and one recommended by the other four members.

QUESTIONS PRESENTED

1) Would it be a violation of K.S.A. 75-4301 et seq for the two
or possibly three members of the Fairground Commission who are
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February 11, 1993
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also members of the Montgomery County Fairground Association to
vote on issues concerning the Montgomery County Fairground
Association?

2) Must appointed members of the Fairground Commission file
substantial interest disclosure statements pursuant to K.S.A. 75-
4302a(e)?

OPINION

K.S.A. 75-4304 prohibits the participation of local governmental officers
in certain votes affecting businesses by which they are employed or in
which they hold a "substantial interest". Assuming the members of the
Montgomery County Fair Association are not employed by it, but rather serve
on its board of directors or in some other official position and do not
receive compensation for this service, the only issue is whether that
service constitutes the holding of a "substantial interest".

K.S.A. 75-4301a(a)(4) states:

"If an individual or an individual's spouse holds the position of
officer, director, associate, partner or proprietor of any
business, other than an organization exempt from federal taxation
of corporations under section 501(c)(3), (4), (6), (7), (8), (10)
or (19) of chapter 26 of the United States code, the individual
has a substantial interest in that business, irrespective of the
amount of compensation received by the individual or individual's
spouse."

Applying this exception, it is our opinion, assuming the Montgomery County
Fair Association is exempt from federal taxation by one of the listed
provisions, that the members of that Association do not hold a "substantial
interest" in it. Thus, the prohibitions of K.S.A. 75-4304 do not apply and
the members of the Fairground Commission who also are members of the
Montgomery County Fair Association could vote on issues affecting the
Association.

Turning to your second question, K.S.A. 75-4302(a)(e) in our view does not
set out a special disclosure requirement for individuals holding the type
of interest we have just discussed. Rather, this section requires those
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February 11, 1993
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persons otherwise required to file under K.S.A. 75-4302a(b) to disclose
these types of interests. Thus, since those serving on the Fairground
Commission are not required to file disclosure statements under K.S.A. 75-
4302a(b), they need not do so because of the language of K.S.A. 75-
4302a(e).

Sincerely,



Richard C. Loux, Chairman

By Direction of the Commission

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