AGO 2009-23.

• Court: Kansas

Kansas Attorney General Opinions 2009. AGO 2009-23. ATTORNEY GENERAL OPINION NO. 2009-23Ed Van Petten, Executive Director Kansas Lottery128 North Kansas AvenueTopeka, Kansas 66603Re: State Boards, Commissions and Authorities--State Lottery; Lottery Gaming Facilities; Purchase of Lottery Facility Games; Kansas Retailers' Sales TaxTaxation--Kansas Retailers' Sales Tax; Exempt Sales; Lottery Facility GamesSynopsis: The Kansas Expanded Lottery Act requires a lottery gaming facility manager to purchase or lease lottery facility games. A manager cannot satisfy this requirement by providing the funds to the Kansas Lottery that would then lease or purchase the games. Cited herein: K.S.A. 2008 Supp. 74-8733; 74-8734; 79-3606; K.A.R. 92-19-52. * * * Dear Mr. Van Petten: You inquire whether the Kansas Expanded Lottery Act (KELA)(fn1) requires a lottery gaming facility manager (facility manager) to purchase or lease lottery facility games or whether a facility manager can provide the funds to the Kansas Lottery (Lottery) that would then lease or purchase the games. If the Lottery can lease or purchase the games, the next question is whether the lease/purchase of the games is exempt from payment of the retailers' sales tax.(fn2) K.S.A. 2008 Supp. 74-8734(n)(2) provides, as follows:

A lottery gaming facility manager, on behalf of the state, shall purchase or lease for the Kansas lottery all lottery facility games.All lottery facility games shall be subject to the ultimate control of the Kansas lottery in accordance with this act.(fn3)

The issue is whether "shall" is mandatory or directory. If "shall" is mandatory, then it is the facility manager that must purchase/lease the games - not the Kansas Lottery. A recent Kansas Supreme Court case provides the analysis for determining whether the word "shall" in a statute is mandatory or directory. In State v. Raschke,(fn4) the Court considered whether "shall" is mandatory in a statute setting forth minimum fines for forgery.(fn5) In determining that "shall" is mandatory, the Court, after reviewing relevant Kansas appellate court decisions since 1863, enunciated the following principles: 1. The canon of statutory construction commanding courts to apply the plain language of a statute does not apply when determining whether "shall" is mandatory or directory because the meaning is not...