COUNTIES ‑- FAIRS ‑- FEES ‑- WAIVER OF ADMISSION CHARGES FOR ATTENDANCE
Under Article VIII, § 7 of the Washington constitution it is not legal for a county which charges an admission fee for attendance at a fair conducted under RCW 36.37.010, et seq., to waive that charge for nonindigent persons attending the fair for no other consideration, primarily to be entertained rather than in the performance of some official function; it is, however, not illegal for fair officials, news reporters or others who are attending the fair for the benefit thereof in the performance of their employment functions and not merely to be entertained, to be allowed in without paying the usual admission charge.
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November 9, 1976
Honorable Robert E. Schillberg
Snohomish County Court House
Everett, Washington 98201
Cite as: AGO 1976 No. 20
By letter previously acknowledged you requested our opinion
". . . regarding the legality of Snohomish County's giving private individuals complimentary admission tickets to the Evergreen State Fair, Monroe, Washington."
We respond to your inquiry in the manner set forth in our analysis.
In posing the above question you have identified the private individuals involved as including ". . . selected city officials, county commissioners, fair board family [[Orig. Op. Page 2]] members, news reporters and others.1/ In addition you have provided us with a copy of a memorandum opinion prepared earlier this year by your own office for the Snohomish County Fair Board in which the described practice was found, in your judgment, to be of "questionable legality" primarily because of Article VIII, § 7 of our state constitution which says that:
"No county, city, town or other municipal corporation shall hereafter give any money, or property, or loan its money, or credit to or in aid of any individual, association, company or corporation, except for the necessary support of the poor and infirm, or become directly or indirectly the owner of any stock in or bonds of any association, company or corporation."
We will, therefore, begin our response with a brief discussion of the thrust of this section of the constitution. First, it is important to note that the prohibition contained therein against gifts or loans of county or other municipal funds or credit is self-executing and has been held by our state supreme court to apply even where the transaction involved is found to be for a bona fide "public" purpose. See,State ex rel. O'Connell v. Port of Seattle, 65 Wn.2d 801, 399 P.2d 623 (1965), andJohn v. Wadsworth, 80 Wash. 352, 141 Pac. 892 (1914). In other words, the mere fact that the expenditure or other activity in question may be said to be of some abstract benefit to the people of our state, or to some segment of the population, is not sufficient to justify that which is, in form, a gift or loan of municipal funds or credit. In this regard, our constitution has been construed much differently by the Washington court than have comparable provisions in the constitutions of other states by the courts of those states. Compare, for example,Alameda County v. Janssen, 16 Cal.2d 276, 281, 106 P.2d 11 (1940), in which the supreme court of California, in construing the terms of a similar prohibition in the constitution of that state, rationalized as follows:
[[Orig. Op. Page 3]]
". . . The benefit to the state from an expenditure for a 'public purpose' is in the nature of consideration and the funds expended are therefore not a gift even though private persons are benefited therefrom. . . ."
Be that as it may, such is simply not the law at this time in the state of Washington. As was explained by the Washington court in State ex rel. O'Connell v. Port of Seattle, supra, in striking down the use of port district funds for so-called "promotional hosting":2/
"Since the expenditure of port funds for promotional hosting is without consideration, the meals, drinks, etc., are given to prospective customers. The fact that they are given for a legitimate purpose does not change their nature as gifts. The constitutional provision specifies the purposes for which public money or property may be given away‑-the necessary support of the poor and infirm. Expressio unius est exclusio alterius.
"This court has rejected the theory that the character of a gratuitous expenditure is altered by the purpose it is intended to serve. Johns v. Wadsworth, 80 Wash. 352, 141 Pac. 892. That was an action brought by a taxpayer to restrain the auditor of Pierce County from issuing a warrant to the Western Washington Fair Association (a private corporation) to pay its expenses. A statute (Rem. & Bal. Code § 3024) authorized the county to make such a payment. The trial court held the act unconstitutional, and the auditor appealed, contending that:
"'. . ." It must be conceded that the main and chief purpose of an appropriation made conformably to the statutes in question is to promote a public purpose." . . .'
[[Orig. Op. Page 4]]
"This court answered that contention as follows:
"'The section of the constitution last quoted [Art. 8, § 7, supra], in most express terms, prohibits a county from giving any money, property or credit to, or in aid of, any corporation, except for the necessary support of the poor and infirm. If the framers of the constitution had intended only to prohibit counties from giving money or loaning credit for other than corporate or public purposes, they would doubtless have said so in direct words. That agricultural fairs serve a good purpose is not questioned, but the constitution makes no distinction between purposes, but directly and unequivocally prohibits all gifts of money, property, or credit to, or in aid of, any corporation, subject to the exception noted. . . .'
"This court said further:
"'Here the appropriation is to a private corporation organized for a worthy purpose, educational in its nature. There is no room, however, for construction. Unless plain, simple, direct words have lost their meaning, the legislature was without power to authorize the gift. . . .'"
There are only two recognized exceptions to the prohibition. The first, based upon the express language of the constitution, involves those instances where the gift or loan is made ". . . for the necessary support of the poor and infirm"; i.e., the needy. Accord,Morgan v. Dept. of Social Security, 14 Wn.2d 156, 127 P.2d 686 (1942), upholding the constitutionality of an earlier version of our current, state funded, public assistance program; but see, State v. Guaranty Trust Co., 20 Wn.2d 588, 148 P.2d 323 (1944), in which the court invalidated a statute providing reimbursements to persons paying the burial expenses of deceased public assistance recipients on the ground that the persons thus receiving the payments were, themselves, not necessarily in financial distress. Secondly, through the process of judicial construction, the prohibition of Article VIII, § 7 has also been determined to be inapplicable in the case of purely intergovernmental transactions where both the grantor and [[Orig. Op. Page 5]] the grantee of the gift are federal, state or local governmental agencies. See,Rands v. Clarke County, 79 Wash. 152, 139 Pac. 1090 (1914), and more recently,Anderson v. O'Brien, 84 Wn.2d 64, 524 P.2d 390 (1974).
This office, over the years, has likewise had occasion to issue a number of opinions regarding Article VIII, § 7, supra, as well as its state counterpart, Article VIII, § 5.3/ One of the most recent of our opinions is AGLO 1975 No. 30 [[to Thomas S. Pryor, Director, Department of Emergency Services, on March 19, 1975, an Informal Opinion, AIR-75530]], copy enclosed, which also involved a factual situation largely emanating out of Snohomish county ‑ the disastrous floods which occurred during the winter of 1974-75. The basic question posed to us following the floods had to do with the legality and constitutionality of proposed grants of state funds to private individuals who had suffered loss as a result thereof. In response, after reviewing many of the same court decisions we have cited earlier in the instant opinion, we advised as follows:
"Since such regulations as would be necessary to support an affirmative answer to your first question would not involve an intergovernmental relationship, it thus follows that in order to be constitutional it would have to be drafted so as to fit this second exception. Therefore, in short, any state legislation designed to empower the department of emergency services to provide housing sites with utilities or to grant state funds to persons suffering loss from natural disasters ‑ whether alone or in conjunction with federal matching funds ‑ would have to be so written as to restrict the department, in doing so, to the supplying of such facilities or [[Orig. Op. Page 6]] financial aid only to those disaster victims who are unable, with their own resources, to alleviate their own distress. In other words, in order to be in compliance with the limitations of Article VIII, § 5,supra, such legislation would have to be keyed exclusively to the provision of financial assistance to 'needy' persons comparable to those who may receive public assistance grants or the like under existing laws."
Moreover, the same basic view has also been taken by this office with respect to the constitutionality of "free" governmental services. It is true, of course, that many of the services provided by both state and local governmental agencies are performed without "charge" except through the imposition of general taxes ‑ and there most certainly is nothing unconstitutional about that. But on the other hand, in the case of some governmental services specific charges are imposed ‑ in the form, for example, of monthly or other periodic payments for utility services, rental fees for governmental housing, fares for the use of public transportation facilities and the like. In the latter cases it has been our consistent position that it is unconstitutional for such services or facilities as are thus generally charged for by the governmental agency providing them to be given "free", instead, to any private individuals who are neither poor nor infirm within the meaning of the constitution. See, e.g., AGLO 1975 No. 32 [[to Joe D. Haussler, State Representative, on March 19, 1975, an Informal Opinion, AIR-75532]], copy enclosed, relating to public housing and our letter opinion of March 20, 1975, to State Senator Reuben A. Knoblauch, copy also enclosed, dealing with utility services.
Bearing these several points regarding Article VIII, § 7, in mind we may now turn to your question. According to your letter the Evergreen State Fair is actually a county fair which is, and for many years has been, ". . . operated by Snohomish County pursuant to provisions of Chapter 36.37, RCW, and Snohomish County Code chapter 2.32, . . ." Thus it is clearly a publicly operated fair4/ - as distinguished from the Western Washington [[Orig. Op. Page 7]] Fair held annually in Puyallup under the aegis of a private corporation.5/ Generally speaking, an admission charge of $2.50 per individual is imposed upon all adult persons who attend the fair. In certain instances, however, free tickets or passes are distributed to (again in your words) ". . . selected city officials, county commissioners, fair board family members, news reporters and others," and it is this latter practice to which your question pertains.6/ Does it constitute a gift of county funds or property, and if so, does it nevertheless come under a recognized exception to the constitutional prohibition?
The answer to the second aspect of this question seems clear. Nowhere in your letter is there an indication that any of the individuals who are thus admitted without charge are regarded as being either "poor" or "infirm" so as to bring them within [[Orig. Op. Page 8]] that express exception to the prohibition of Article VIII, § 7,supra.7/ Likewise, because they are all individual persons it seems apparent that none of them are governmental entities which could qualify under the other exception, involving intergovernmental transactions, to which we have earlier referred. In fact, the stated justification of the county commissioners for the questioned practice, according to your letter, is simply that it results in valuable publicity and advertising for the fair. But of course, assuming that an otherwise unconstitutional gift is involved, that purported rationale or justification is one which runs directly counter to the above described decisions of our state supreme court in such cases asState ex rel. O'Connell v. Port of Seattle,supra, andJohns v. Wadsworth, supra.
This, however, leads us to the other issue which must next be explored in answering your question. In some instances it may be that, in reality, the transaction is not a gift at all. If so, a different analysis is required. Article VIII, § 7,supra, would not then be applicable and thus, instead, the only constitutional question would be that of a possible denial of equal protection of the laws because of differing treatment of various classes of persons affected by state or other governmental action. See, Amendment 14 to the United States Constitution and Article I, § 12 of the constitution of our own state. And this would only be a problem if the classification was wholly without any rational basis under ordinary equal protection criteria. See, 12 McQuillin, Municipal Corporations, § 34.101 and cases cited therein.
InState ex rel. O'Connell v. Port of Seattle, supra, the court, in considering the constitutionality of promotional hosting by port districts, said at p. 804:
". . . A gift is defined in Black's Law Dictionary (4th ed.) as follows:
"'A voluntary transfer of personal property without consideration. Gordon v. Barr, Cal.App. 82 P.2d 955, 956, 957. A parting by owner with property without pecuniary consideration. Hays' Adm'rs v. Patrick, 266 Ky. [[Orig. Op. Page 9]] 713, 99 S.W.2d 805, 809. A voluntary conveyance of land, or transfer of goods, from one person to another, made gratuitously, and not upon any consideration of blood or money. 2 Bl.Comm. 440; 2 Steph. Comm. 102; 2 Kent, Comm. 437. 46 Am.St.Rep. 221; Gray v. Barton, 55 N.W. 72, 14 Am.Rep. 181; Hynes v. White, 47 Cal.App. 549, 190 P. 836, 838; in re Van Alstyne, 207 N.Y. 298, 100 N.E. 802, 804.' (p. 817)"
With this definition in mind let us engage in a bit of supposition. Without, of course, willing it to happen let us suppose that during the Evergreen State Fair a fire were to start or a riot were to break out. No one would expect firemen or police officers responding to that situation to be stopped at the gate and required to buy a ticket before entering the fair grounds to quell the riot or put out the fire. Nor would one expect bona fide news reporters covering the occurrence to be requested to do so either. Why? Because they would all be, in common parlance, on official business. In other words they would not be on the fairgrounds as ordinary spectators but, rather, they would be there to do their respective jobs ‑ just as an electrician or a plumber, for example, would be if called to the fairgrounds to repair a defective electrical installation or fix a leaking water faucet. They would not be there, in short, to be entertained and thus they would not be expected to pay an entertainment fee. Moreover this would still be so even though, while thus engaged in the performance of their employment functions, the individuals involved were able at the same time to observe some or all of the activities of the fair itself.
Conversely, if an admission charge is imposed for adults, generally, onewould ordinarily expect that charge to be paid by an off-duty fireman or policeman attending the fair simply to be entertained ‑ with his family or otherwise. This would also be true in the case of an off-duty electrician or plumber ‑ and even, we would assume, of a news reporter not on assignment to cover the fair. Why? Because in those cases the persons seeking admission to the fair would be doing so on their own time, so to speak, in order to receive the service (entertainment) for which the charge was being made. And again, this would likewise remain so even though, in a given case while at the fair, the off-duty fireman then assisted in fighting a fire, or the off-duty electrician then helped in rectifying the cause of an emergency power outage, or the off-duty newsman called in a story on either event.
The point we are attempting to make is that when a county conducting a fair under chapter 36.37 RCW,supra, determines [[Orig. Op. Page 10]] to charge an admission fee in order to fund its operation8/ it is not simply "selling" a right to enter the fairgrounds. Rather, it is selling, for lack of a better term, entertainment. People ordinarily go to a fair in order to be entertained ‑ in one way or another ‑ and that is what they pay for when they buy a ticket. In some cases, however, people go upon the fairgrounds while a fair is in progress to perform their particular jobs ‑ whether those jobs involve fighting a fire, repairing a leaking faucet or covering a news event. In such cases entertainment,per se, is neither being sought nor offered. Accordingly, by the same token the basic product of the fair, entertainment, is not being given away ‑ as a gift within the meaning of the constitution ‑ merely because no admission fee is charged in those cases. Thus, while it is true that there may well be no legal consideration for what is received, the thing being received is not that for which the admission charge is made.
In so reasoning we must, in all candor, acknowledge a lack, at this time, of anyprior decisional law in support thereof; but, by the same taken, we are aware of no prior cases to the contrary either. In the final analysis, the question is one of reasonableness versus unreasonableness in the interpretation of Article VIII, § 7 of our constitution and, to that extent, it seems to us that the oft-cited rule against absurd, unjust or incongruous interpretations of mere statutes9/ should probably also be applied to constitutional provisions such as this as well. Therefore, not only does the above analysis of the gift issue under the constitution represent our own thinking but, perhaps more importantly, it also conforms to how we would expect the courts to rule upon such cases as well if ever called upon to do so.
Care, however, must be taken not to abuse this approach to the question or to attempt to extend it beyond logical bounds. Thus, while it would, for example, seemingly justify free admissions for members of the county fair board it would not do so for their family members or friends ‑ or even for " . . . selected city officials . . ." performing no official functions for their cities in attending the fair. County commissioners, on the other hand, might well be admitted to the [[Orig. Op. Page 11]] fair without charge in order to insure themselves that it is being properly conducted, etc., for even though the fair may be under the direct supervision of the fair board it is, of course, a county function for which the commissioners are ultimately responsible.
With that latter caveat in mind we may, in closing, briefly summarize what we have above said in response to your question as follows:
(1) Under Article VIII, § 7 of the Washington constitution it is not legal for a county which charges an admission fee for attendance at a fair conducted under RCW 36.37.010, et seq., to waive that charge for nonindigent persons attending the fair for no other consideration, primarily to be entertained rather than in the performance of some official function; and this is so even though such a practice might occasionally produce some abstract public benefit in the form of publicity or good will.
(2) It is, however, not illegal for fair officials, news reporters or others (firemen and policemen, electricians and plumbers, etc., and even county commissioners) who are attending the fair for the benefit thereof in the performance of their employment functions as such, and not merely to be entertained, to be allowed in without paying the usual admission charge because, in those cases, a "gift" of the product of the fair, entertainment, will not thus occur.
We trust the foregoing will be of some assistance to you.
Very truly yours,
PHILIP H. AUSTIN
Deputy Attorney General
ROBERT F. HAUTH
Assistant Attorney General
*** FOOTNOTES ***
1/In the past those "others" have included state legislators but ‑ apparently because of potential problems related to governmental lobbying under the new state public disclosure law (chapter 42.17 RCW) ‑ you have informed us that this aspect of the practice has been discontinued.
2/A decision later counteracted by a specific constitutional amendment in 1965; namely, Article VIII, § 8 (Amendment 45), dealing, however, with port districts only.
3/Article VIII, § 5 reads as follows:
"The credit of the state shall not, in any manner be given or loaned to, or in aid of, any individual, association, company or corporation."
This provision, however, although differently worded, has been construed both by the courts and this office to have essentially the same meaning and effect as Article VIII, § 7, supra. See,Hwy. Com. v. Pac. NW Bell Tel. Co., 59 Wn.2d 216, 367 P.2d 605 (1961);State v. Guaranty Trust Co., supra, and Morgan v. Dept. of Social Security,supra.
4/RCW 36.37.010 provides that:
"The holding of county fairs and agricultural exhibitions of stock, cereals, and agricultural produce of all kinds, including dairy produce, as well as arts and manufactures, by any county in the state, and the participation by any county in a district fair or agricultural exhibition, is declared to be in the interest of public good and a strictly county purpose."
See, also, RCW 36.37.040 which says that:
"The board of county commissioners of any county may appropriate and expend each year such sums of money as they deem advisable and necessary for (1) acquisition of necessary grounds for fairs and world fairs, (2) construction, improvement and maintenance of buildings thereon, (3) payment of fair premiums, and (4) the general maintenance of such fair. The board of county commissioners of any county may also authorize the county auditor to provide a revolving fund to be used by the fair officials for the conduct of the fair. The board of county commissioners may employ persons to assist in the management of fairs or by resolution designate a nonprofit corporation as the exclusive agency to operate and manage such fairs."
5/See, again, Johns v. Wadsworth,supra.
6/In addition, children under the age of six years are admitted to the fair without charge but presumably those children are accompanied by their parents or other adults who typically do pay an admission charge. Thus, in effect, a consideration is paid in connection with their admission so on that basis no unconstitutional gift results.
7/Even if they were, however, we would seriously question whether admittance to a fair could generally be said to be necessary for their support.
8/As impliedly authorized by RCW 36.37.010 and 36.37.040, supra.
9/See, e.g., Wilson v. Lund, 74 Wn.2d 945, 447 P.2d 718 (1968), and cases cited therein.