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Amended Complaint for a Declaration of Rights and Permanent Injunction and Expedited Review

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Amended Complaint for a Declaration of Rights and Permanent Injunction and Expedited Review NO 21-CI-____________ JFEFERSON CIRCUIT COURT DIVISION _______(__) HON. ________________ ANDY BESHEAR, in his official capacity as Governor of the Commonwealth of Kentucky, and MICHAEL E. BERRY, in his official capacities as Secretary of the Kentucky Tourism, Arts and Heritage Cabinet and a Member of the State Fair Board PLAINTIFFS, vs. BERTRAM ROBERT STIVERS, II, in his official capacity as a Member of the State Fair Board as President of the Kentucky Senate, Serve: 702 Capitol Avenue Annex Room 332 Frankfort, Kentucky 40601 Jay Hartz, Director Legislative Research Commission 700 Capitol Avenue, Room 300 Frankfort, Kentucky 40601 Office of the Attorney General The Capitol Building 700 Capitol Avenue, Suite 118 Frankfort, Kentucky 40601 and DAVID W. OSBORNE, in his official capacity as a Member of the State Fair Board as Speaker of the Kentucky House of Representatives, Serve: 702 Capitol Avenue Annex Room 236 Frankfort, Kentucky 40601 000001 of 000020 AMC : 000001 of 000020 Jay Hartz, Director Legislative Research Commission 700 Capitol Avenue, Room 300 Frankfort, Kentucky 40601 Office of the Attorney General The Capitol Building 700 Capitol Avenue, Suite 118 Frankfort, Kentucky 40601 and RYAN QUARLES, in his official capacity as Commissioner of the Department of Agriculture Serve: Office of the Attorney General The Capitol Building 700 Capitol Avenue, Suite 118 Frankfort, Kentucky 40601-3449 and DR. MARK E. LYNN, in his official capacity as Chair of the State Fair Board, Serve: Office of the Attorney General The Capitol Building 700 Capitol Avenue, Suite 118 Frankfort, Kentucky 40601-3449 DEFENDANTS. Also serve: Daniel J. Cameron Attorney General Office of the Attorney General The Capitol Building 700 Capitol Avenue, Suite 118 Frankfort, Kentucky 40601-3449 (pursuant to KRS 418.075, CR 24.03, HB 3 (R.S. 2021)) 000002 of 000020 AMC : 000002 of 000020 2 FIRST AMENDED COMPLAINT FOR A DECLARATION OF RIGHTS AND PERMANENT INJUNCTION AND EXPEDITED REVIEW Plaintiffs Andy Beshear, in his official capacity as Governor of the Commonwealth of Kentucky, and Michael E. Berry, in his official capacities as Secretary of the Tourism, Arts and Heritage Cabinet and as a member of the State Fair Board, by and through counsel, bring this action for a declaration of rights and a permanent injunction against the Defendants, Robert W. Osborne, in his official capacity as a Member of the State Fair Board as Speaker of the Kentucky House of Representatives, Bertram Robert Stivers, II, in his official capacity as a Member of the State Fair Board as President of the Kentucky Senate, Ryan Quarles, in his official capacity as Commissioner of the Department of Agriculture, and Dr. Mark E. Lynn, in his official capacity as Chair of the State Fair Board. The Governor requests expedited review of this matter under KRS 418.050 and CR 57. INTRODUCTION AND FACTUAL BACKGROUND 1. During the 2021 Regular Session, the General Assembly engaged in unprecedented stripping of the Governor’s executive authority as the Chief Magistrate of the Commonwealth of Kentucky. These actions will effectively prevent the Governor from fulfilling his constitutional duty to take care that the laws be faithfully executed. 2. Under the Kentucky Constitution, there is only one Chief Magistrate with the supreme executive powers of the Commonwealth: the Governor. The Kentucky Constitution mandates that only one officer have the duty to take care that the laws be faithfully executed: the Governor 3. In order to take care that the laws be faithfully executed under Section 81 of the Kentucky Constitution, the majority of appointments to boards within the Executive Branch have 000003 of 000020 AMC : 000003 of 000020 3 always been reserved for the Governor as the Chief Magistrate under Section 69 of the Kentucky Constitution. 4. Through House Bill 518 (R.S. 2021) (“HB 518”) (attached as Exhibit A), the General Assembly removed a majority of the Governor’s appointments to an Executive Branch board – the State Fair Board. In this bill, the General Assembly instead gave the appointing authority it stripped from the Governor to the Commissioner of Agriculture, who is not the Chief Magistrate, does not have the supreme executive powers of the Commonwealth, and does not have the constitutional duty to ensure the laws are faithfully executed. 5. By stripping the Governor of his executive authority to appoint the majority of the appointed voting members of the State Fair Board – an Executive Branch board – and giving it to an officer who is not the Chief Magistrate, HB 518 prevents the Governor from ensuring that the laws are faithfully executed, as he now has no ability to ensure that the board, with an annual budget of more than $50 million and unilateral contracting authority under HB 518, properly uses taxpayers’ money. 6. As one of its functions, the State Fair Board: “Shall promote the progress of the state and stimulate public interest in the advantages and development of the state by providing the facilities of the state fairgrounds for agricultural and industrial exhibitions, public gatherings, cultural activities, and other functions calculated to advance the educational, physical, and cultural interests of the public and by providing the facilities of the exhibition center for conventions, trade shows, public gatherings, and other functions calculated to advance and enhance the visitor industry, economy, entertainment, cultural and educational interests of the public; … .” KRS 247.140(1)(c). 000004 of 000020 AMC : 000004 of 000020 4 7. As the Chief Magistrate and the highest elected official in the Commonwealth with a role in economic development, the Governor is in the best position to ensure promotion of the progress of the state and to stimulate public interest in the advantages and development of the state, and to advance and enhance the visitor industry, economy, entertainment, cultural and educational interests of the public. 8. In each the 2020 Executive Branch Budget and the 2021 Executive Branch Budget, the legislature appropriated more than $52 million to the State Fair Board.1 9. In Fiscal Year 2019-2020, the State Fair Board operated at a deficit of more than $3.1 million, which would have been more than $7 million had the board not received $4.1 million from the General Fund.2 The board operated at a deficit of nearly $11 million in Fiscal Year 2018-2019, despite a General Fund transfer in the amount of $4.1 million.3 10. In HB 518, the General Assembly gives the State Fair Board – a board that continually runs at an annual deficit even with money from the General Fund – self-control of its own functions, contracts and property. In fact, on April 1, 2021, the board informed the Tourism, Arts and Heritage Cabinet that, “as an independent, de jure municipal corporate and political subdivision of the Commonwealth of Kentucky, the Kentucky State Fair Board is responsible for its own legal affairs, human resources, communications, and finance matters, together with all other functions of the Board, [which it,] in its sole discretion, deems necessary for the efficient operations of the Board and the properties in its custody and control.”4 1 2020 House Bill 352 (R.S. 2020), at p. 98, available at https://apps.legislature.ky.gov/recorddocuments/bill/20RS/hb352/bill.pdf (last visited Apr. 12, 2021); 2021 House Bill 192 (R.S. 2021), at p. 107, available at https://apps.legislature.ky.gov/recorddocuments/bill/21RS/hb192/bill.pdf (last visited Apr. 14, 2021). 2 2020 Kentucky Venues Annual Report, available at https://www.kyvenues.com/assets/pdf/KYVenues-2020AR- Digital.pdf (last visited Apr. 14, 2021) (attached as Exhibit B). 3 2019 Kentucky Venues, Annual Report, available at https://www.kyvenues.com/assets/pdf/KYVenues-2019AR- 000005 of 000020 Digital.pdf (last visited Apr. 14, 2021) (attached as Exhibit C). 4 Kentucky Venues Letter, at p. 3, Apr. 1, 2021 (attached as Exhibit D). AMC : 000005 of 000020 5 11. Section 1 of HB 518 gives the State Fair Board authority to enter into contracts without following the Kentucky Model Procurement Code under KRS Chapter 45A – the statutory scheme that nearly every Kentucky state agency follows for contracts. In part, the purposes and policies of KRS Chapter 45A are to increase public confidence in the procedures followed in public procurement, to ensure the fair and equitable treatment of all people who deal with the Commonwealth’s procurement system, to provide increased economy in state procurement activities by fostering effective competition, and to provide safeguards for the maintenance of a procurement system of quality and integrity. See KRS 45A.010(2); Landrum v. Beshear, 599 S.W.3d 781, 789-90 (Ky. 2019); Lassiter v. Landrum, 610 S.W.3d 242, 251 (Ky. 2020). The Model Procurement Code shall apply to every expenditure of public funds by the Commonwealth under any contract or like agreement. KRS 45A.020(1); Landrum, 599 S.W.3d at 789; Lassiter, 610 S.W.3d at 248. The Model Procurement Code assures the responsible expenditure of state funds. Landrum, 599 S.W.3d at 796 (Hughes, J., concurring). “Those goals are paramount and every person involved in the MPC process should be guided by them and not by partisan concerns.” Id. 12. HB 518 allows the State Fair Board to disregard these goals and leaves the Governor and the Secretary with no ability to ensure they are met. 13. Under HB 518, the State Fair Board may choose to follow KRS Chapter 45A, but its own statutory chapter, KRS Chapter 247, controls over any provision expressly inconsistent with KRS Chapter 45A. The board also has the option of promulgating its own administrative regulations to establish its procurement procedures and, if it does, the board may include sections of KRS Chapter 45A as part of its regulations, but is not required to do so.
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