Request By:
Robert L. Caummisar, Esq.
City Attorney, City of Grayson
302 East Main Street
Grayson, Kentucky 41143
Opinion
Opinion By: Steven L. Beshear, Attorney General; By: Thomas R. Emerson, Assistant Attorney General
This is in reply to your letter raising several questions in connection with the establishment of a Tourist and Convention Commission, pursuant to KRS 91A.350 to 91A.390, by a city of the fourth class.
Your first question asks whether the city may allow the motor courts, motels, hotels or similar establishments subject to the tax, a collection fee for collecting, reporting and forwarding the tax to be imposed. You state that to allow a collection fee would appear to conflict with KRS 91A.390 which states in part that proceeds of the tax may not be used to provide a subsidy in any form to any hotel, motel or restaurant. You point out, however, that a collection fee is allowed in some situations to the persons collecting a tax.
KRS 91A.390(1) states in part that provisions shall be made for the collection of the tax and the enforcement of the tax measure enacted. KRS 91A.390(2) sets forth the purposes for which the money collected from the imposition of the tax may be utilized. That same section also provides that proceeds of the tax may not be used to provide a subsidy in any form to any hotel, motel or restaurant. KRS 91A.360(4) states in part that the tourist and convention commission may employ personnel and make such contracts as are necessary to effectively carry out the purpose of KRS 91A.350 to 91A.390.
As pointed out in your letter, there are specific instances where a collection fee is allowed to persons collecting a tax. For example, KRS 75.040(3) provides that a sheriff shall be entitled to a fee of one percent of the amount collected by him in connection with the tax levied to operate a fire protection district. KRS 92.285(5) authorizes an insurance company to retain a collection fee within limits established by the statute as compensation for collecting license fees or taxes upon insurance companies levied pursuant to KRS 92.285. The two above-mentioned examples of fees for the collection of taxes as well as other situations where collection fees are authorized all involve statutory authorization for the collection of such fees.
There are no provisions in KRS 91A.350 to 91A.390 authorizing a fee for private persons or public officers for the collection of the tax levied for the support of a tourist and convention commission. As far as officers are concerned, KRS 64.410 provides in part that no officer shall demand a fee for services rendered when the law has not fixed compensation for such services. In connection with fees and compensation for collecting taxes, we direct your attention to 84 C.J.S., Taxation, § 655, where the following appears:
"As a general rule the compensation of a tax collector is under legislative control, and he is entitled to fees and commissions only in the cases and in the amounts prescribed by statute."
* * *
"In the absence of statutory authority for the collection of such a fee, a tax-payer cannot be required to pay a fee to one for his services in effecting the collection of a tax lawfully imposed, and a practice even though long established, of collecting such unauthorized fee, commission, or charge will not make it legal. . . ."
In OAG 79-214, copy enclosed, we concluded that a tourist and convention commission, in an attempt to collect delinquent room taxes, could contract with an attorney and pay him a fee for collecting the delinquent taxes.
In response to your first question, it is our opinion that the city may not allow the operators of motor courts, motels or hotels or similar establishments subject to the tax authorized by KRS 91A.350 to 91A.390 a collection fee for collecting, reporting and forwarding the tax imposed.
Your second question is as follows:
"In that the commission contemplated will be the city's alone, do the requirements of KRS 91A.360 as to joint and sole appointments by the County Judge/Executive apply? OAG 75-523 appears to allow appointments by mayor only. However, OAG 78-310, as to Lexington, could be read to the contrary."
The statutes have never been clear in regard to the question you have posed and we do not know of any reported case which attempts to interpret the statutory sections involved. OAG 78-310, copy enclosed, deals specifically with the situation where a city and county are operating as an urban county government and thus the procedure for the appointment of members of a tourist and convention commission under those facts will not resolve your question.
KRS 91A.350(2) states:
"For the purpose of promoting recreational, convention and tourist activity in counties containing cities other than cities of the first class, such counties and the cities located therein, either jointly or by separate action, are authorized to establish recreational, tourist and convention commissions." (Emphasis supplied.)
KRS 91A.360 deals with the organization and membership of a commission established pursuant to KRS 91A.350(2). It states that such a commission shall be composed of seven members, to be appointed, jointly, by the mayor of the largest city in the county and the county judge/executive.
Since KRS 91A.350(2) clearly authorizes a city, by separate action, to establish a tourist and convention commission, and since KRS 91A.360 only deals with the appointments to a joint city-county commission by the mayor and the county judge/executive, we can only reiterate what we said in OAG 75-523, copy enclosed, at page three:
"In regard to KRS 83.345(1) [now compiled as KRS 91A.360(1)] concerning the appointment of the members of a recreational, tourist and convention commission we suggest a declaratory judgment suit to determine the force and effect of this particular provision. If the city alone decides to establish a recreational tourist and convention commission and a declaratory judgment suit is not filed, we can only suggest that the mayor of the city alone make the seven appointments to the commission required by the statute including the one contemplated to be made specifically by the county judge [now the county judge/executive]. Certainly the county judge [executive] would have no authority to appoint a person to a commission created unilaterally by the city. If the statute is to stand at all and if a city by itself may create such a commission, we see no other practical or reasonable alternative, particularly in the absence of judicial interpretation or corrective action by the General Assembly."