Opinion 92-20

This opinion represents the views of the Office of the State Comptroller at the time it was rendered. The opinion may no longer represent those views if, among other things, there have been subsequent court cases or statutory amendments that bear on the issues discussed in the opinion.

FEES -- Imposition of (for concerts held on county fairgrounds)
LICENSING AND REGULATORY POWERS -- County fairs (imposition of licensing fee)

NOT-FOR-PROFIT CORPORATION LAW, §1409(k); TOWN LAW, §§136, 137: A town may not impose a licensing fee for concerts to be held on county fairgrounds during the running of the fair, even if the property upon which the fair is held is not owned by the agricultural corporation which runs the fair.

You ask whether a town may impose a license fee on concerts which take place during the running of a county fair on the fairgrounds. The fair is held one week during the year on land within the town owned by a private person, who is also on the board of directors of the fair. The land is also utilized as a speedway, and for concerts which take place on a regular basis during the summer. You state that the county fair is organized and held by an agricultural corporation.

Town Law, §136 provides that a town board may provide by ordinance for the licensing of certain occupations and activities within the town. Pursuant to section 136, a town has the power to license, among other activities, "... the giving of exhibitions, performances or entertainments in any place within the town" (Town Law, §136[3]; see also Municipal Home Rule Law, §10[1][ii][a][12], relative to a local government's authority to regulate or license occupations or businesses by local law). Town Law, §137 provides that if any trade, occupation or use of premises is prohibited without a license, the town board shall establish uniform fees for the issuance of licenses and may require the submission of written applications. A license fee imposed in the exercise of police powers may only be such amount as will legitimately assist in the regulation of the business or occupation and may not exceed necessary or probable expenses of issuing the license and inspecting and regulating the business or occupation (see, e.g., Rauscher v Village of Boonville, 131 Misc 2d 264, 499 NYS2d 832).

Not-For-Profit Corporation Law, §1409 relates to the establishment and operation of county and town agricultural and horticultural corporations for the purpose of promoting agriculture, horticulture and the mechanic arts (see Not-For-Profit Corporation Law, §1409[e]). Among other things, these corporations are empowered to hold annual fairs and exhibitions (Not-For-Profit Corporation Law, §1409[f]).

There are certain statutory exemptions applicable to activities of agricultural and horticultural corporations (see, e.g., Tax Law, §1116[d],[3]; Real Property Tax Law, §450; Not-For-Profit Corporation Law, §1409[k]). Real Property Tax Law, §450 provides a real property tax exemption for real property "owned by an agricultural society and permanently used by it for a meeting hall or exhibition grounds ..." (emphasis added). Further, Not-For-Profit Corporation Law, §1409(k) specifically exempts from licensing by special or local law or municipal ordinance "any exhibition or entertainment held on the grounds of a town or county [agricultural or horticultural] corporation whether or not the corporation derives a pecuniary profit from such exhibition or entertainment by the lease of its grounds for such purpose" (emphasis added).

Not-For-Profit Corporation Law, §1409(k), unlike Real Property Tax Law, §450, is not expressly limited in its application to property "owned by" the corporation, but refers only to the "grounds of" the corporation. Although the word "of" when used in this context often connotes property rights through legal title (see, e.g., Sonnabend v Gittins, 235 AD 483, 257 NYS 562, "property of the judgment debtor"), it may also mean property which is only in one's control (see, e.g., Wabash R. Co. v United States, 127 F Supp 613, "property of the United States"). It is unclear, therefore, whether the phrase "on the grounds of a town or county corporation" as used in section 1409(k) is intended to limit the licensing exemption to exhibitions or entertainments on property owned by the corporation (see 18 Opns St Comp, 1962, p 268; 17 Opns St Comp, 1961, p 159), or whether it is intended to apply generally to the fairgrounds when used by the corporation during the annual county fair, without regard to ownership of the grounds.

As a general rule, the heading of a statute or a subdivision thereof is not a part of the act itself and does not expand or restrict the language of the body of the statute (McKinney's Statutes, §123[b]). When a statute contains ambiguous language, however, the heading may be used to clarify or explain imprecise provisions (id.). In this instance, the heading of section 1409(k) is "(e)xhibitions and entertainments on fair grounds to be exempt from license" (emphasis added). When read together with the phrase "on the grounds of a town or county corporation", we believe that the intent is to apply the exemption to exhibitions and entertainments conducted on property when used by the corporation as fairgrounds, whether or not the grounds are owned by the corporation. To interpret the exemption otherwise would mean that exhibitions and entertainments which happened to be on fairgrounds owned by an agricultural corporation would be treated differently from those on fairgrounds which the corporation obtains by lease or license, notwithstanding that the very same function is being performed in either situation. We believe it is unlikely the Legislature intended such an anomalous result.

Further, in our view, the reference in Not-For-Profit Corporation Law, §1409(k) to pecuniary profit derived from the lease of "its" grounds does not necessarily imply that the exemption from license fees applies only when the corporation owns the grounds. Rather, the purpose of this clause appears to be to clarify that the exemption from license fees will not be lost even if the agricultural or horticultural corporation derives a pecuniary profit by leasing the grounds for purposes of holding the entertainment or exhibition. Therefore, it is our opinion that the exemption from license fees applies to exhibitions and entertainments on the fairgrounds of annual fairs conducted by agricultural or horticultural corporations even if they do not own the grounds on which the fair is to be conducted.

July 6, 1992
Frederick R. Westphal, Esq., Town Attorney