Request By:
Honorable Jim Secrest
Allen County Attorney
210 West Main Street
P.O. Box 35
Scottsville, Kentucky 42164
Opinion
Opinion By: Robert F. Stephens, Attorney General; By: Walter C. Herdman, Assistant Deputy Attorney General
This is in answer to your letter of January 4 in which you relate that the city is interested in financing an industrial project pursuant to KRS 103.200, etc., which authorizes the sale of revenue bonds for such projects. You raise the question as to whether or not the city or county could issue industrial revenue "notes" rather than "bonds" for the proposed financing, thereby avoiding the necessity of printing bonds, employing a fiscal agent and bond counsel.
Our response to your question would be in the negative as we find no reference under Ch. 103 or Ch. 58, to which you refer, that authorizes the issuing of "notes" rather than "bonds" for industrial projects or public projects. KRS 58.170, memtioned by you, refers only to the maximum possible interest rates on bonds issued after May 25, 1968, and the term "revenue bonds" used in this statute does refer to "notes" and other obligations; however, the definition is restricted to this statute which was enacted as a separate act in 1968 designated as Sections 25, 26 and 27. It is completely unrelated to the subject of whether a particular project can be financed by the issuance of revenue bonds under Ch. 58 KRS or industrial revenue bonds under Ch. 103 KRS. It refers, we believe, to the interest to be charged under a statute specifically authorizing the issuance of "notes" to finance a particular project which, for example, is permitted in anticipation of issuing revenue bonds under KRS 58.150.
Under the circumstances, therefore, we would be of the opinion that the city cannot finance its industrial building by issuing "notes" rather than revenue bonds under Ch. 103 KRS.