Could the Idaho Park and Recreation Board spend recreation registration fees, fuel-tax revenues, and capital-improvement money on general agency overhead, and could it redirect a $25,000 RV-fund earmark away from gateway visitor centers?

Plain-English summary

Chairman Later asked the AG five questions about how the Idaho Department of Parks and Recreation (IDPR) could spend the various pots of money flowing through its programs: vendor handling fees on boat, snowmobile, ATV, and Park N' Ski registrations; administrative percentages of those registration revenues; off-highway fuel-tax allocations; capital-improvement funds; road-and-bridge improvement money; and a $25,000 annual transfer the legislature had directed from the recreational-vehicle fund to gateway visitor centers.

Deputy AG Clive J. Strong, writing for AG Alan G. Lance, drew several lines. Vendor fees (the $1.50-or-so add-on charges that compensate the entity issuing a registration) had to be spent on registration-program costs, with anything left over discretionary. The 15% administrative slice of registration revenue could pay direct program costs plus a fair proportional share of general overhead, and unspent administrative balances had to flow back to the underlying program account. Fuel-tax revenue allocated to the waterways improvement fund and off-road motor vehicle account could be used for administrative costs up to 20%; capital-improvement and road-and-bridge funds, while silent on administrative spending, could absorb a reasonable share of administrative cost so long as those costs supported the capital projects, drawing on Attorney General Opinion No. 81-14 and trust-administration analogies. The Board had wide discretion within its capital-improvement budget but remained subject to the legislative appropriations process. The $25,000 RV-fund transfer to gateway visitor centers was a legislative act binding on the Board; only a subsequent appropriations bill or statutory change could redirect it.

The opinion warned that "administrative cost" had no statutory definition and urged the Board to set written policies identifying what counted as administrative overhead and a methodology for proportional allocation, both as a control on day-to-day spending and as a defense against auditor or public criticism.

Currency note

This opinion was issued in 1996. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here.

Common questions

What was the legal difference between a vendor fee and an administrative fund?

The opinion drew on Brewster v. City of Pocatello, 115 Idaho 502, 768 P.2d 765 (1988) for the basic distinction: a fee compensates the provider for a specific service rendered, and the amount must bear a reasonable relationship to the cost of that service. An administrative fund, by contrast, is a statutorily-set percentage of registration revenue that the Department gets to spend on running the program. Vendor handling fees of around $1.50 were designed to cover the cost to whoever sold the registration; the 15% administrative slice was designed to cover IDPR's full administration of the program, including a proportional share of general agency overhead.

Why could overhead come out of fuel-tax money for capital improvements when the statute didn't say so?

Because the AG read the silence the same way it had read silence in Attorney General Opinion No. 81-14 about the Department of Lands' "ten per cent fund": capital project funds are similar to trust funds, and trust law lets administration costs be paid from the trust so long as those costs support the trust's purposes. The opinion was careful, though, to limit this to administrative spending in furtherance of the capital projects themselves, not general agency overhead unrelated to the projects.

What did "ordinary and necessary" mean for the Board's discretion over capital-improvement allocations?

The Board had wide discretion in deciding which projects received capital-improvement money, but that discretion was bounded both ways. Statutory dedications (for example, the road-and-bridge funds that had to be spent "solely to improve roads and bridges within and leading to parks and recreation areas") narrowed where the money could go. And the Board's overall spending authority was subject to budget review by the Division of Financial Management, the Governor's Office, the legislative budget office, and the Joint Finance and Appropriations Committee, any of which could attach restrictions through the appropriations process.

Could the Board have just refused to spend the $25,000 on gateway visitor centers?

No. Starting with the FY1995 appropriation and continuing in subsequent years, the legislature transferred $25,000 from the RV fund to the parks and recreation fund earmarked for gateway visitor centers. Once the legislature spoke that directly through an appropriations bill, the Board could not redirect the money. A different result would have required a future appropriations bill or a statutory amendment.

What practical advice did the AG give for staying out of trouble on overhead allocations?

Adopt written policies. The opinion repeatedly urged the Board to define what counts as an administrative cost, establish a methodology for apportioning costs across programs, and consider a cap on the share of capital funds that can go to administration. The reasoning, drawn from a 1988 PERSI guideline, was that "it is not as important precisely where the lines are drawn as that there be consistency in the process." Consistent written policies give the Board defensible answers when auditors or the public ask why a given dollar was spent the way it was.

Background and statutory framework

The Idaho Department of Parks and Recreation operates a registration system for boats, snowmobiles, off-highway motorbikes, ATVs, and a winter parking permit program known as Park N' Ski. Each program has its own statutory framework in Title 67, Chapter 70 (and related sections), and each program's revenue splits roughly the same way: vendors keep a small handling fee per registration, 85% of the remaining revenue funds program services, and 15% is allocated to IDPR for administering the program.

Fuel-tax revenue gets allocated under Idaho Code § 63-2412(1)(e). A portion goes to the waterways improvement fund (Idaho Code § 57-1501), a portion goes to the off-road motor vehicle account (Idaho Code § 57-1901), and a portion goes to a capital improvement account (Idaho Code § 57-1801) of which a sub-account is dedicated to roads and bridges within and leading to parks and recreation areas. The waterways and off-road allocations carry an explicit 20% cap on administrative spending; the capital improvement and road-and-bridge allocations are silent on administration.

The opinion was prompted by an underlying budget challenge: park user fees and dedicated revenues were growing slower than IDPR's general administrative needs, and the Board wanted to know how aggressively it could pull from program-specific pots to cover overhead without crossing into legally prohibited cost-shifting. The answer was: cautiously, with written policies, and with respect for legislative earmarks like the RV-fund transfer.

Citations

• Idaho Code §§ 49-448, 57-1501, 57-1801, 57-1901, 58-140, 63-2412, 67-4223
• Idaho Code §§ 67-7013, 67-7014, 67-7106, 67-7115, 67-7118, 67-7126
• Brewster v. City of Pocatello, 115 Idaho 502, 768 P.2d 765 (1988)
• Kootenai County Property Association v. Kootenai County, 115 Idaho 676, 769 P.2d 553 (1989)
• V-1 Oil Company v. Idaho Petroleum Clean Water Trust Fund, 96.14 ISCR 633 (July 2, 1996)
• 1981 Idaho Att'y Gen. Ann. Rpt. 154 (Opinion 81-14)
• 1988 Idaho Att'y Gen. Ann. Rpt. 94 (PERSI administrative-cost guideline)
• 1994 Idaho Sess. Laws 627 (gateway visitor centers transfer)

Source

• Landing page: https://www.ag.idaho.gov/office-resources/opinions/
• Original PDF: https://ag.idaho.gov/content/uploads/2018/04/OP96-04.pdf

Original opinion text

The full text of Attorney General Opinion 96-4, addressing five questions on use of recreation-registration fees, fuel-tax allocations, capital-improvement funds, and the legislature's $25,000 RV-fund transfer, is available at the linked PDF above. Key passages reproduced here for reference.

ATTORNEY GENERAL OPINION NO. 96-4
TO: Mr. Monte Q. Later, Chairman, Idaho Park and Recreation Board

CONCLUSIONS

1. The fees described in Idaho Code §§ 67-7013, 67-7014, 67-7106, 67-7118 and 67-7126 are of two different types: "Vendor" or "handling" fees (collectively vendor fees), which IDPR collects when it acts as a vendor of recreational registrations, and administrative funds which are allocated to IDPR as a percentage of recreational registration revenue. Vendor fees should be used to offset expenses attributable to the department's registration functions. Excess vendor fees may be expended at the agency's discretion. Administrative funds may be expended to cover the direct costs of administering the respective recreational programs, and may, in addition, be used to cover a proportionate share of general administrative costs.

2. A portion of fuel tax revenues allocated to IDPR pursuant to Idaho Code § 63-2412(1)(e)(1-3) may be used to offset the general administrative costs of operating the respective recreation programs.

3. The allocation of road and bridge improvement moneys within the capital improvement account (Idaho Code §§ 57-1801 and 63-2412(1)(e)(3)) is within the discretion of the board. The legislature has directed that these road and bridge improvement moneys be "used solely to improve roads and bridges within and leading to parks and recreation areas of the state."

4. The legislature has determined that a percentage of fuel tax revenue generated statewide shall be allocated to the park and recreation capital improvement account. The expenditure of capital improvement funds is left to the discretion of the board, subject to the legislative and budgetary process.

5. The board could not unilaterally allocate $25,000 from the recreational vehicle (RV) fund for the support of gateway visitor information centers. Approval of a qualified grant application for such purposes would be within the board's discretion. In this instance, the transfer of $25,000 from the RV fund to gateway visitor information centers was a legislative act over which the board has no discretion.

ANALYSIS

I. Distinction Between Fees and Taxes

For purposes of this analysis, vendor fees collected by IDPR in its capacity as a recreational registration vendor are assumed to be "fees," while administrative funds and revenues generated by taxes on the sale of motor fuels are assumed to be "taxes." "In a general sense a fee is a charge for a direct public service rendered to the particular consumer, while a tax is a forced contribution by the public at large to meet public needs." Brewster v. City of Pocatello, 115 Idaho 502, 505, 768 P.2d 765, 768 (1988). The amount collected as a fee must bear a reasonable relationship to the service provided. Kootenai County Property Association v. Kootenai County, 115 Idaho 676, 680, 769 P.2d 553, 557 (1989).

II. Use of Vendor Fees and Administrative Revenues

A. Vendor Fees Should Be Used To Offset The Costs Of Selling Recreational Registrations. Vendors of vessel registrations may set an "administrative fee" of not more than $1.50, which "shall be used to defray related administrative costs." Vendors of snowmobile registrations may "charge an additional one dollar and fifty cents ($1.50) handling fee per registration for the distribution of certificates of number." Sellers of Park N' Ski permits "are entitled to receive a commission of one dollar ($1.00) on each permit sold, which sum may be retained as compensation for the sale of the permit." Vendors of motorbike and ATV registrations are mandated to charge a $1.50 handling fee. When IDPR acts as the vendor and collects the vendor fee, it should use those funds for the direct maintenance, operation, and enhancement of the registration program; however, to the extent excess funds exist, they may be used for other departmental programs.

B. Administrative Revenues May Be Used To Offset The Cost Of Selling Recreational Registrations, Together With A Proportionate Share Of General Administrative Overhead Costs. The bulk of the revenue (85%) is dedicated to the provision of facilities and services for the particular users who generated the revenue. The remaining 15% is apportioned to IDPR to cover the "administrative costs" of operating the respective recreation programs.

The Idaho Code provides no guidance on what constitutes "administrative costs." Black's Law Dictionary (6th ed. 1990) suggests "administrative costs" may be synonymous with "overhead." In a 1988 guideline addressing PERSI, this office recommended PERSI adopt guidelines distinguishing between investment and administrative expenses, stating: "It would seem that it is not as important precisely where the lines are drawn as that there be consistency in the process." 1988 Idaho Att'y Gen. Ann. Rpt. 94, 97. By establishing policies or guidelines defining what items are appropriate for inclusion as administrative costs, and formulating a methodology to fairly apportion the administrative costs, the department and the board could bring some consistency to this issue and reduce the ambiguity and the opportunity for controversy and criticism.

III. Use of Gas Tax Revenues

In 1983 the legislature directed that a portion of motor fuel tax revenue would be allocated to the waterways improvement fund and the off-road motor vehicle account. In 1988, Idaho Code § 63-2412 was amended to allow distribution of off-highway motor fuels tax revenue to the park and recreation capital improvement account. In 1993 the legislature again amended the formula to dedicate a portion specifically to road and bridge improvements within and leading to state park and recreation areas.

A. Waterways Improvement Fund and Off-Road Motorized Vehicle Account. The gas tax provisions expressly provide that up to 20% of the waterways improvement moneys and off-road motorized vehicle moneys may be spent to "defray administrative costs."

B. Capital Improvement Account and Road and Bridge Moneys. Unlike the waterways improvement fund and the off-road motorized vehicle account, there is no mention of administrative costs in the distribution formula for the capital improvement account or the road-and-bridge sub-account. The opinion concluded, drawing on Attorney General Opinion No. 81-14 and trust-law principles, that capital projects don't happen without support from fiscal, purchasing, legal and management information systems, so it is consistent with prior attorney general opinions to allow for a reasonable expenditure of capital funds for these administrative costs, so long as these costs are incurred in furtherance of the capital projects funded by the fuel tax.

IV. Allocation of Capital Improvement and Road and Bridge Moneys

So long as the board expends the capital improvement funds, including road and bridge funds, in compliance with its statutory authority, it is within the board's discretion where and how it spends the funds. The legislature appropriates spending authority for capital improvement funds after the board's budget proposal is reviewed and modified by the division of financial management, the governor's office, the legislative budget office and the joint finance and appropriations committee.

V. Use of RV Funds

Beginning with the 1995 fiscal year budget and continuing in subsequent fiscal year appropriations, the legislature began appropriating the sum of $25,000 per year from the recreational vehicle fund to the park and recreation fund in order to provide a portion of the annual funding for operation of the state's gateway visitor centers. 1994 Idaho Sess. Laws 627. This fund transfer and the legislative directive concerning its expenditure are binding on the board. Transfer of these funds from the recreational vehicle account to the park and recreation fund for use in operating gateway visitor centers can only be changed by legislative directive in a subsequent appropriations bill or by statute.

DATED this 23rd day of September, 1996.
ALAN G. LANCE
Attorney General

Analysis by:
CLIVE J. STRONG
Deputy Attorney General
Chief, Natural Resources Division