Request By:
Mr. Stanley M. Billingsley
City Attorney
439 Main Street
Carrollton, Kentucky 41008
Opinion
Opinion By: Robert F. Stephens, Attorney General; By: Charles W. Runyan, Assistant Deputy Attorney General
Your question was written as follows:
"Whether or not an automobile dealership which includes a repair shop, body shop, paint shop, parts supply shop, service department, and new car and used car sale facilities is entitled to qualify under the statutes that permit cities to issue municipal bonds for certain industrial and manufacturing related businesses."
We assume you refer to KRS 103.200, et seq., relating to city revenue bonds for construction of or acquiring industrial buildings.
The problem here is whether or not an automobile dealership, as you have described, fits within the phrase "industrial building" , as envisioned by KRS 103.200. That statute reads:
"As used in KRS 103.200 to 103.285, 'building' or 'industrial building' means any building, structure, machinery, equipment or related improved site, area or edifice suitable for and intended for use as, or in connection with the use of, a factory, mill, shop, processing plant, assembly plant, fabricating plant, coal conversion facility, hospital, facility for the treatment or care of the aged or the infirm, and any parking or pollution control area or structure or industrial transportation facility (including railroad tracks, and docks, wharves, grain handling and storage and other port facilities directly related thereto, but excluding rolling stock used outside of an industrial building) deemed necessary to or useful in the establishment, retention or expansion thereof, or any of these things, to be rented or leased to a domestic or foreign corporation by the city or county by which it is acquired. A processing plant, within the meaning of this section, shall include any plant established as a manufacturer's distribution center for the packaging or re-distribution of products, any product modification center, and any plant established for the purpose of processing minerals, including the washing, drying, separating, grading, preparing, sorting, and the loading thereof."
We assume that the car dealership has already acquired the buildings necessary to operate the business and that they have been in operation for some time. In
Manning v. Fiscal Court of Jefferson County, Ky., 405 S.W.2d 755 (1966) the proposed county revenue bonds were characterized as being simply a substitute of public financing for private financing of an existing industrial venture. The court pointed out that the Fontaine Equipment Company had already acquired the plant and would remain in Louisville regardless of whether the county issued its revenue bonds under Chapter 103 or not. The court concluded that the proposed project would not serve a public purpose, and therefore it was not authorized by statute or permitted by constitution. Under the assumption of current ownership and operation of the auto dealership in question, the proposed bond issue would be illegal and unconstitutional under the Manning case.
However, the important question and one that is controlling in the pragmatic sense is whether or not this venture fits within the phrase "industrial building" in KRS 103.200.
The underlying legislative purpose relating to city or county industrial buildings revenue bonds is expressed in KRS 103.210. It is to relieve conditions of unemployment, to encourage the increase of industry in Kentucky, and to aid in the retention of existing industry through pollution control. The word "industry" is not defined in the statutes. In connection with the Industrial Development Finance Authority, KRS 154.010 defines "industrial building project" as any site, structure, facility or undertaking comprising or being connected with or being a part of an "industrial or manufacturing" enterprise, etc. (Emphasis added). There the word "industrial" is used interchangeably with "manufacturing. " KRS 81.280 deals with the annexation of unincorporated territory in which industrial plants are located. It prohibits unfair and unreasonable annexation by cities of industries. The court spoke of "industrial" plant in dealing with KRS 81.280.
White v. City of Danville, Ky., 465 S.W.2d 67 (1971). KRS Chapters 103, 154, and KRS 81.280 all deal with industries. It thus appears that these statutes should be read together under the doctrine of pari materia.
Indiana Truck Corporation of Kentucky v. Hurry Up Broadway Co., 222 Ky. 521, 1 S.W.2d 990 (1928). The thrust of those related statutes is that an industrial plant or building involves manufacturing, processing, or fabricating.
Now returning to the definitions of "industrial building" , as given in KRS 103.200, we think it clear that the various definitions, as to a factory, mill, shop, processing plant, etc., are not to be viewed as constituting independent categories, but are to be viewed in the main as a unified whole consisting of related and associated concepts pointing up a central idea. With the exceptions of any hospital and facility for care of the old or infirm, the major thrust of the definitions in KRS 103.200 is in the area of manufacturing, processing, assembling or fabricating, and thus the various definitions making up the central concept are related and associated. Under these circumstances we are constrained to conclude that in construing the statute [KRS 103.200] a word denoting a kind of industrial building must be construed in connection with the words with which it is associated. And where several things are referred to, they are presumed to be of the same class, when connected by a copulative conjunction, unless a contrary intent appears. No contrary intent appears except as to the unrelated categories of a hospital and facility for treatment or care of the aged and infirm. See
Carson & Co. v. Shelton, 128 Ky. 248, 107 S.W. 793 (1908).
Since an auto dealership involves the buying, selling, servicing and repairing of automobiles, it is our opinion that such a business does not qualify under the term "industrial building" in KRS 103.200. (Emphasis added). Thus the proposed city of Carrollton revenue bonds cannot qualify as industrial building revenue bonds under this definition. See
Haney v. City of Somerset, Ky., 530 S.W.2d 377 (1975) 379, in which the court held that such bonds could not be issued by Somerset for the construction of a gas transmission pipeline.
A Tennessee statute involving industrial building revenue bonds defines an "industrial building" to be a factory, mill, processing or fabricating plant. (Emphasis added). This is almost identical with Kentucky's statute.