Request By:
Mr. William S. O'Daniel
Commissioner
Department for Local Government
909 Leawood Drive
Frankfort, Kentucky 40601
Opinion
Opinion By: Robert F. Stephens, Attorney General; By: Charles W. Runyan, Assistant Deputy Attorney General
Your questions relate to the Area Development Fund and Coal Severance Economic Aid Fund, and the processing of applications for such capital projects by the Department of Finance.
You ask whether the Department of Finance must approve title report, appraisal and survey on acquisition of real property where a direct grant in aid from these funds is given?
KRS 42.332(3) provides that, "except when a direct grant for a capital project is made to a beneficiary agency as authorized under subsection (4) of this section", the Department for Finance shall award, administer and control, or shall delegate to the pertinent beneficiary agency, the contracts for the construction or acquisition of capital projects wholly financed out of the fund [coal severance economic aid fund], in accordance with KRS Chapters 45 and 56 [see also KRS 42.332(2)]. (Emphasis added).
Under KRS 42.332(4), the Secretary of the Department of Finance may make direct grants out of the fund [turn the money over to the beneficiary agency] to any beneficiary agency for capital construction or acquisition, where the estimated cost does not exceed $50,000. In addition, the secretary may make direct grants in amounts exceeding $50,000, after consultation with you, provided that the grant does not exceed one third (1/3) of the total cost of the project.
Where a direct grant in aid is made, the Department of Finance is not required to approve a title report, appraisal and survey on acquisition of the real property. We are of the opinion that the general provisions relating to budget and land acquisition controls, as set forth in KRS Chapters 45 and 56, must give way to the specific provisions of KRS 42.332. The appellate court has held that, as between legislation of a broad and general nature on one hand, and legislation dealing minutely with a specific matter on the other hand, the specific shall control over the general. City of Bowling Green v. Board of Education, Ky., 443 S.W.2d 243 (1969) 247.
KRS 42.332(5) provides that no capital project shall be constructed under KRS 42.330 to 42.340 except upon land to which (a) the Commonwealth, a political subdivision thereof or the beneficiary agency of the project has a good and marketable title, free of encumbrances, or (b) the beneficiary agency of the project has the right to the uninterrupted and peaceful employment, use, occupany and possession etc. Notwithstanding those provisions, when KRS 42.332 is read in its entirety, the intent to delegate the determination of such assurances to the beneficiary agency where a direct grant is made is evident. Henry v. Com., 312 Ky. 491, 228 S.W.2d 32 (1950).
What we have said applies equally to the Area Development Fund. See KRS 42.355.
A second problem arises when persons are living on the real property acquired with subject funds. You ask whether the project must provide for relocation of such persons, payable out of the project money?
KRS 56.610, et seq., provides for relocation assistance which is narrowly restricted to lands acquired by a "state agency" engaged in federally assisted projects, which result in displacement of persons due to the operation of such projects. A "state agency" includes any department, agency or instrumentality of the state or of a political subdivision of the state, or any department, agency or instrumentality of two or more subdivisions of the state, engaged in federally assisted projects which result in displacement of persons. KRS 56.630.
If the beneficiary agency qualifies as a state agency, as defined in KRS 56.630(1), as mentioned above, then under KRS 56.720, the relocation cost must be included as a part of the realty acquisition cost of the project for which federal and state financial assistance are available. Thus if the beneficiary agency qualifies under KRS 56.630(1), the relocation cost is an eligible expenditure from the subject fund [coal severance economic aid fund or area development fund]. Joint federal and state aid for land acquisition is envisioned, and a pro-rata allocation of relocation cost is implied, as relates to the two sources of financial assistance.