Request By:
Mr. William Murphy Howard
Attorney at Law
307 1/2 Central Street
Harlan, Kentucky 40831
Opinion
Opinion By: Robert F. Stephens, Attorney General; By: Charles W. Runyan, Assistant Deputy Attorney General
You ask about the effect of the issuance of industrial bonds on the county's bonded indebtedness. Specifically you ask whether such bonds constitute a county indebtedness under § 157, Kentucky Constitution.
We assume you refer to KRS 103.200, et seq., relating to industrial buildings for cities and counties.
The answer is that such industrial bonds issued by the county are not an indebtedness of the county within the meaning of § 157, Kentucky Constitution. KRS 103.230(2) expressly provides in part: "The bonds [industrial revenue bonds] shall be payable solely from the revenue derived from the building, and shall not constitute an indebtedness of the city or county within the meaning of the constitution. It shall be plainly stated on the face of each bond that it has been issued under the provisions of KRS 103.200 to 103.280 and that it does not constitute an indebtedness of the city or county within the meaning of the constitution." Also see KRS 103.290 to 103.410, relating to county buildings constructed from proceeds of industrial revenue bonds.
Section 157 of the Constitution provides that no county shall be permitted to become indebted in any manner or for any purpose to an amount exceeding in any year the income and revenue provided for such year without the assent of two-thirds of the voters of the county voting on the question at a general election (November) held for that purpose. However, as we said above, the industrial revenue bonds of KRS Chapter 103 are not obligations or indebtedness of the county within the terms of § 157. County "indebtedness" under § 157 or § 158 of the Constitution does not include KRS Chapter 103 bonds. Martin County v. Cassady, 307 Ky. 728, 212 S.W.2d 281 (1948) 283.