Request By:
David W. Osborne, Speaker
Kentucky House of Representatives
Opinion
Opinion By: Daniel Cameron,ATTORNEY GENERAL;Carmine G. Iaccarino,Assistant Attorney General
Opinion of the Attorney General
As a member and Speaker of the House of Representatives, David W. Osborne asks for this Office's opinion on whether he must, under Section 57 of the Kentucky Constitution, disclose a "personal or private interest" and not vote on certain legislation currently pending before the House of Representatives. For the reasons that follow, while recognizing the deference due to the General Assembly on this matter, the Attorney General concludes that Speaker Osborne need not abstain from voting on House Bill 137.
Background . House Bill 137 of the 2020 General Assembly would authorize sports wagering in the Commonwealth following the United States Supreme Court's decision in
Murphy v. National Collegiate Athletic Association , 138 S. Ct. 1461 (2018). Under the provisions of House Bill 137, any professional sports venue could offer sports wagering. In addition, the bill would authorize such wagering at an association licensed by the Kentucky Horse Racing Commission ("Commission") under KRS Chapter 230. 2020 House Bill 137, § 9(2), available at https://apps.legislature.ky.gov/recorddocuments/bill/20RS/hb137/orig_bi… (last accessed Feb. 20, 2020). Churchill Downs holds a license issued by the Commission. Under House Bill 137, Churchill Downs would be authorized to offer sports wagering at one of its licensed locations.
Churchill Downs is a publicly traded corporation. Although Speaker Osborne does not own stock in Churchill Downs, his wife does. According to Speaker Osborne, "[t]he ownership of the stock has been disclosed on the Speaker's financial disclosures as required by KRS 6.781 et seq. " He adds that "[t]he value of said shares is greater than $ 10,000 (but less than $ 25,000) as of the date of" his request. Speaker Osborne asks this Office whether his wife's stock ownership is a "personal or private interest" imposing certain obligations under Section 57 of the Kentucky Constitution--namely, to disclose "the fact" and abstain from voting on House Bill 137.
Analysis . Section 57 of the Kentucky Constitution provides that "[a] member who has a personal or private interest in any measure or bill proposed or pending before the General Assembly, shall disclose the fact to the House of which he is a member, and shall not vote thereon upon pain of expulsion."
In recognition of Kentucky's "double-barrel" separation of powers, this Office must begin its analysis by acknowledging that execution and enforcement of Section 57 of the Kentucky Constitution rests with the General Assembly and its members. See Ky. Const. § 39; see also In re Appointment of Clerk of Court of Appeals , 297 S.W.2d 764, 767 (Ky. 1957). Thus, this Office is mindful that the ultimate authority for determination of the Speaker's question rests with the House of Representatives. See generally
Stovall v. Gartrell , 332 S.W.2d 256, 260 (Ky. 1960). For this reason and out of deference to the legislative branch, this Office is reluctant to answer the question, but, because it has been asked, cautiously offers its analysis as required by KRS 15.025(2).
There is little discussion of Section 57 in Kentucky case law--only one case deals with Section 57 in any depth. Despite the broad sweep of the text, the Court of Appeals has warned that "[t]he wheels of government would stop if legislators could not vote on matters in which they necessarily have a remote personal interest by reason of being a member of the public." Stovall , 332 S.W.2d at 260. In Stovall , the court considered whether members of the General Assembly who were military veterans violated Section 57 when they voted to require "a vote of the people on the propriety of incurring an indebtedness to pay a veterans' bonus," Id. at 261, which the court described as a "proposal presented to the legislature involv[ing] a broad classification of a substantial segment of the public[.]" Id. at 260. In that context, the court rejected the alleged violation, explaining:
We believe, however, that section 57 must be construed as restricting the right to vote only to those members who have a peculiar special interest in legislation which will affect them in a menner [sic] differently from the public or a proper classification of members of the public.
Id. at 260. On this basis, the court found no violation of Section 57 and ordered that the relevant vote be certified. Id.
Certain other states have similar provisions in their constitutions. See, e.g. , Ala. Const. § 82; La. Const. Ann. art. III, § 9; Pa. Const. art. III, § 13; Tex. Const. art. III, § 22; Wyo. Const. art. III, § 46. The Alabama Supreme Court, for example, has issued two opinions applying the provisions of Section 82 of the Alabama constitution, one of which relied on the Stovall case from the Kentucky Court of Appeals. Like Kentucky's Section 57, Section 82 of the Alabama constitution provides: "A member of the legislature who has a personal or private interest in any measure or bill proposed or pending before the legislature, shall disclose the fact to the house of which he is a member, and shall not vote thereon."
In Opinion of the Justices No. 317 , the Alabama Supreme Court considered whether a legislator employed as a public school teacher would have a "personal or private" interest in a bill granting pay increases to public education employees. 474 So.2d 700, 701 (Ala. 1985). There, "[t]he Justices regarded the phrases 'conflict of interest' and "personal or private interest" as embodying the same principle, namely, the use of public office for private gain." Opinion of the Justices No. 368 , 716 So.2d 1149, 1151 (Ala. 1998) (citing Opinion of the Justices No. 317 , 474 So.2d at 703-04). Therefore, "the Justices construed § 82 as prohibiting a vote on any bill in which the legislator's personal interest conflicts with the interests of those he was elected to represent." Id. Relying on Stovall , the Court held that "[t]he conclusion is inescapable that the phrase 'personal or private interest' in Section 82 means an interest affecting the legislator individually or as a member of a small group." Opinion of the Justices No. 317 , 474 So.2d at 703-04. Therefore, the Court concluded "that it is constitutional for an educator/legislator to vote on a pay raise for teachers, at least so long as the bill does not affect the legislator in a way different from the way it affects the other members of the class to which he belongs." Id. at 704.
In Opinion of the Justices No. 368 , the Alabama Supreme Court again considered Section 82 of the Alabama Constitution. The Court more specifically addressed whether certain business interests--including stock ownership--were "personal or private interests" mandating recusal by constitutional necessity. Specifically, the Court was asked: "Does Section 82 prohibit a legislator from voting, as determined in question 1, on Senate Bill 574, if the legislator owns stock in the company eligible to receive industrial development inducements under the bill? ... If the answer to [this question] is yes, is the prohibition dependent upon the ownership of any stock in the company or a particular amount of stock?" Opinion of the Justices No. 368 , 716 So.2d at 1150. To answer these questions, the Court explicitly relied upon the Alabama Legislature's Ethics Act as a "reasonable construction" of Section 82 and as "one means by which a legislator may have a personal or private interest[.]" Id. at 1155. Referencing the definition of "conflict of interest" in Alabama's Ethics Act, the Justices opined that "[t]he prohibitions of § 82 apply, therefore, to the actions of legislators who have a 'substantial financial interest,' namely, 'ownership' or 'control' of an 'interest greater than five percent of the value of any ... business entity ... which is uniquely affected by proposed or pending legislation.'" Id. at 1153.
Here, the Legislative Ethics Commission's executive director has opined that "there is no provision in the ... Code of Legislative Ethics that prohibits Speaker Osborne from participating in matters relating to or voting upon 2020 House Bill 137." Thus, we answer only the constitutional question presented: Whether Speaker David W. Osborne must abstain from voting upon House Bill 137 under Section 57 of the Kentucky Constitution. Under Stovall , the answer to that question turns on whether Speaker Osborne has a "peculiar interest" in House Bill 137 such that he will be affected in some way different from a proper classification of the members of the public. He does not. Speaker Osborne's wife appears to own a relatively small percentage of Churchill stock because Churchill Downs has almost 39 million shares outstanding. https://www.bloomberg.com/quote/CHDN:US (last accessed Feb. 21, 2020). To the extent House Bill 137 has any effect upon the value of Churchill stock, it will affect all stock owners in the same manner. For that reason, Speaker Osborne does not have a "peculiar special interest in [the] legislation which will affect [him] in a menner [sic] differently from the public or a proper classification of members of the public." Stovall , 332 S.W.2d at 260.
For these reasons, Speaker Osborne does not have "a personal or private interest" in House Bill 137 that requires he "disclose the fact to the House" and "not vote thereon." Ky. Const. § 57.