Kansas Attorney General Opinion 1992-075

ROBERT T. STEPHAN
ATTORNEY GENERAL
June 10, 1992
ATTORNEY GENERAL OPINION NO. 92- 75
Bill McCormick
Director of Federal and
State Affairs
Office of the Governor
State Capitol, 2nd Floor
Topeka, Kansas 66612-1590
Re: State Boards, Commissions and Authorities--
Parimutuel Racing--Prohibited Acts;
Commissioner's Ownership of a Race Horse
Synopsis: Marriage alone does not confer indirect ownership
of one spouse's property to the other. Thus K.S.A.
1991 Supp. 74-8810(b)(2), as amended by 1992 Senate
Bill No. 383, § 4, does not prohibit a commission
member's spouse from owning a horse entered in race
meetings conducted in this state unless the
commission member has an actual possessory,
pecuniary or other beneficial interest in the
horse. Cited herein: K.S.A. 23-201; 23-203;
K.S.A. 1991 Supp. 74-8810, as amended by 1992 S.B.
383, § 4.
Dear Mr. McCormick:
As counsel to the governor, you request our opinion regarding
the prohibition of K.S.A. 1991 Supp 74-8810(b)(2). You state
that the governor has chosen a potential appointee to serve on
the Kansas racing commission. The candidate is married to a
co-owner of a horse that has and will enter races simulcast
in Kansas. You question whether the spouse's ownership

interest in the horse constitutes indirect ownership of the
candidate under K.S.A. 1991 Supp. 74-8810(b)(2).
The prohibition in question states:
"(b) It is a class A misdemeanor for any
member, employee or appointee of the
commission . . . to knowingly:
"(2) participate directly or indirectly
as an owner, owner-trainer or trainer of a
horse or greyhound, or as a jockey of a
horse, entered in a race meeting conducted
in this state." K.S.A. 1991 Supp.
74-8810(b)(2), as amended by 1992 S.B. No.
383, § 4(b)(2).
The phrase "participate directly or indirectly as an owner" is
not defined in the statutes. Accordingly to the interim
committee report (published in the 1987 Senate Journal, p.
15), the state task force on parimutuel recommended that
commission members be "prohibited from participating in the
racing industry in Kansas during their terms." The interim
committee amended the task force proposal to extend the
prohibition for two years after leaving the commission, but to
would allow commissioners "to race animals during that
period." The house committee lengthened the two years to five
[see K.S.A. 1991 Supp. 74-8810(a)(1)], but subsection (b)(2)
was not altered by the legislature in the enactment process.
Neither is there any documented discussion of that provision
in the committee minutes other than a mention of its
existence. Minutes, House Committee on Federal and State
Affairs, Jan. 1, 1987, attachment B. A question was raised in
committee regarding whether "there was a time limit after
tenure on the commission whereby commissioners could have a
financial interest in horses, tracks, etc." Minutes, House
Committee on Federal and State Affairs, Feb. 11, 1987. Mr.
Clarence Kelly of the Missouri racing commission responded
that members could not have a financial interest in horses
while serving on the commission and felt that there should be
a time limit after their term on the commission. Id. See
also Mo.Ann.Stat. § 105.452(4) (Vernon 1992). There was
no action taken to alter the language of subsection (b)(2)
either to extend it's application past the end of the
commissioner's term or to limit its application to financial
interests. In fact, the exact language in subsection (b)(2)

what is now subsection (e) of K.S.A. 1991 Supp. 74-8810, as
amended, to preclude facility owner licensees, facility
manager licensees, and officers, directors and employees
thereof, from participating directly or indirectly as an owner
of a horse or greyhound entered in a race meeting conducted in
this state. Minutes, House Committee on Federal and State
Affairs, Feb. 17, 1987, and attachment H. [This provision was
later amended to cover only live races conducted in this
state. 1992 S.B. No. 383, § 4(e).] There was no recorded
discussion of the meaning of the phrase "participate directly
or indirectly as an owner" at the time of this amendment.
It appears that subsection (b)(2) was lifted from the Iowa
racing statutes which provide in part:
"5. A member [of the state racing and
gaming commission] shall not knowingly:
"b. Participate directly or indirectly as
an owner, owner-trainer, trainer of a
horse or dog, or jockey of a horse in a
race meeting conducted in this state."
Iowa Code Ann. § 990.5 (West 1992).
There are no reported Iowa cases interpreting this provision,
but it is enlightening to note the differences between this
provision and those in other states. In Oklahoma, "[n]o
individual shall be a member of the Commission if the
individual or a member of the family of the individual . . .
owns an interest in any racehorse which participates in any
race meeting supervised by the Commission." Okla. Stat.
Ann. tit. 3A, § 202 (West 1992), emphasis added. In
Illinois, "[n]o person shall be appointed a member of the
Board or continue to be a member of the Board who is (or any
member of whose family is) . . . financially interested in .
. . any racehorse competing at a meeting under the Board's
jurisdiction." Ill.Ann.Stat. ch. 8 § 37-6(a) (Smith-Hurd
1992), emphasis added. See also, Ill.Ann.Stat. ch. 8 §
37-12(a)(2) (Smith-Hurd 1992). Nebraska statutes provide
only that "[n]o horse in which any member of the State Racing
Commission or its employees has any interest shall be raced at
any meet under the jurisdiction of the commission."
Neb.Rev.Stat. § 2 - 1219(1) (1991), ¶ 2-1219(1). Minnesota's
statute is similar to Nebraska's. See Minn.Stat.Ann. S
240.28, subd. 1 (West 1992). Thus, in contrast to the
statutes in Oklahoma and Illinois, K.S.A. 1991 Supp.

74-8810(b)(2), as amended, does not specifically preclude
members of a commissioner's family from owning a horse or
greyhound entered in a race conducted in Kansas. Had the
legislature intended to make such an across the board
prohibition, it could have done so using language similar to
that used in Oklahoma or Illinois, or even K.S.A. 1991 Supp.
74-8810(c). In the absence of such language, it is our
opinion that K.S.A. 1991 Supp. 74-8810(b)(2), as amended, does
not per se prohibit a commission member's spouse from
owning a horse or greyhound entered in race meetings conducted
in this state. In other words, being married to someone who
has an ownership interest does not necessarily constitute
indirect ownership by the commission member. See K.S.A.
23-201; 23-203; In Re Oetinger, 49 B.R. 41, 43 (Bkrtcy,
D.Kan. 1985) (under normal circumstances a spouse has no
interest in the separate property of the other); Sanspar
Restaurant Corp. v. Ring, 319 N.Y.S.2d 230 (1971)
(patrolman's marriage to a woman who owned a 50% interest in a
tavern business did not, ipso facto, confer on the patrolman
"in-direct interest in the business); Independent Bankers
Assoc. of Ga., Inc., v. Dunn, 197 S.E.2d 129, 140 (Ga.
1973) (absent a statute to the contrary, mere ownership of
stock by company officers and their family members did not
constitute indirect control by the company); People v.
Simpkins, 359 N.E.2d 828, 832 (Ill. 1977) (general rule
that the wife's interest is not necessarily the husband's
interest, provided the contract is not a mere subterfuge for
husband's own pecuniary interest. "We interpret 'indirect
interest' to refer to the interest of the official, such as
ownership of stock or a beneficial interest in a trust, not
the individual interest of another to whom the official is
related").
While an indirect ownership interest in a spouse's property is
not automatically created by operation of law, the facts of
any particular case may nevertheless disclose indirect
ownership. Right of control or subjection to liability
(Sanspar, supra at 238), a beneficial interest or a
pecuniary interest in the property (Simpkins, supra)
evidence indirect ownership, even though actual legal title
rests in someone else. We do not have sufficient facts to
determine conclusively whether the potential appointee in
question is an indirect owner of the horse, but that can be
determined through the background investigation of the
appointee.
In conclusion, marriage alone does not confer indirect
ownership of one spouse's property to the other. Thus K.S.A.

1991 Supp. 74-8810(b)(2), as amended by 1992 Senate Bill No.
383, § 4, does not prohibit a commission member's spouse from
owning a horse entered in race meetings conducted in this
state unless the commission member has an actual possessory,
pecuniary or other beneficial interest in the horse.
Very truly yours,
Robert T. Stephan
Attorney General of Kansas
Julene L. Miller
Deputy Attorney General
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