Request By:
Mr. A. Wallace Grafton, Jr.
Wyatt, Grafton & Sloss
Attorneys at Law
Twenty-Eighth Floor
Citizens Plaza
Louisville, Kentucky 40202
Opinion
Opinion By: Robert F. Stephens, Attorney General; By: Charles W. Runyan, Assistant Deputy Attorney General
As Counsel for the Kentucky Housing Corporation, you request our opinion with respect to two questions.
Question No. 1:
"Is KHC included among the 'spending agencies of the state' that are required by KRS 45.530-45.545 to submit professional employment contracts to the Professional Employment Commission for approval?"
The Professional Employment Commission statutes, enacted in 1978, require the Commission to review all professional employment contracts before they shall become effective, except contracts involving an emergency and contracts awarded under a procedure established by the State Department of Personnel. KRS 45.540. Obviously this legislation was designed to apply to central state government and agencies thereof in the procurement of professional services under personal services contracts. KRS 45.530(1). The statutes [KRS 45.530 et seq. ] are general in nature but must be seen as applying only to central state government and its agencies, since political subdivisions, independent agencies, and agencies outside of state government are not brought within the operative provisions of those statutory sections.
The remaining question is whether the Kentucky Housing Corporation ("KHC") is an integral part of the central state government or whether it is an independent agency or political subdivision.
KHC is characterized in KRS 198A.015 1 as a "de jure political subdivision of the Commonwealth of Kentucky." (Emphasis added). In addition, KRS 198A.030(1) and (2) reads:
"(1) There is hereby created and established an independent, de jure municipal corporation and political subdivision of the Commonwealth which shall be a public body corporate and politic to be known as the Kentucky housing corporation.
"(2) The Kentucky housing corporation is created and established as a de jure municipal corporation and political subdivision of the Commonwealth to perform essential governmental and public functions and purposes in improving and otherwise promoting the health and general welfare of the people by the production of residential housing in Kentucky."
We think the above express and unequivocal statutory language speaks for itself. Clearly the Kentucky Housing Corporation is an independent de jure municipal corporation and political subdivision of the state. Note its autonomous powers listed in KRS 198A.040.
"Words used in a statute must be given their ordinary meaning unless a different intent is set forth in the statute defining the words used. "
Old Lewis Hunter Distillery Co. v. Kentucky Tax Com'n, 302 Ky. 68, 193 S.W.2d 464 (1946) 465. Here, in KRS Chapter 198A, the legislature's use of the terms "independent de jure municipal corporation and political subdivision of the Commonwealth" must be taken literally, (Emphasis added), without adding to or detracting from that manifest intent.
The purpose of the KHC is to provide safe and sanitary residential housing at prices or rentals which can be afforded by persons and families of lower income. Further, under KRS 198A.070(1), obligations issued under this chapter shall not be deemed to constitute a debt, liability or obligation of the state or any of its political subdivisions. Under KRS 198A.230, upon dissolution of KHC, the corporation is not mandated to transfer any remaining assets to the Commonwealth.
In invoking the rule of statutory construction that the policy and purpose of the statute will be considered in determining the meaning of words used, the court, in
Kentucky Region Eight v. Commonwealth, Ky., 507 S.W.2d 489 (1974), held that the words "state department or board or agency" as used in KRS 61.510 relate to a retirement system for state employees.
The court, in
Gnau v. Louisville & Jefferson County Metropolitan Sewer District, Ky., 346 S.W.2d 755 (1961), in dealing with the question as to whether or not the sewer district was a "state agency" for the purpose of the Board of Claims statute [KRS 44.070 relating to claims involving negligence of the state and its agencies], held that the Metropolitan Sewer District was an independent public corporation and political subdivision and thus was not included as a state agency under KRS 44.070. The court held that the Metropolitan Sewer District was not an integral part (arm or branch) of central state government. The court described those state agencies under KRS 44.070 as those agencies which are under the direction and control of the central state government and are supported by monies which are disbursed by authority of the Commissioner of Finance out of the state treasury. It can be readily seen that the latter criteria do not apply to KHC, since it is not under the direction and control of contral state government [executive branch] and is not financed out of the state treasury. 2
Even though the KHC is attached to the cabinet for public protection and regulation in KRS 12.020, such inclusion in no way converts the corporation into a central state agency and in no way changes its independent and autonomous nature. See Opinion of the Justices, Mass., 136 N.E.2d 223 (1956), holding that the legislation including the Massachusetts Port Authority in a state department, but without being subject to the supervision or regulation of that department, did not make it a state agency or administrative office in the narrow constitutional sense.
The court, in
Kentucky State Racing Commission v. Fuller, Ky., 481 S.W.2d 298 (1972) 300, categorically held that the Kentucky State Racing Commission is an independent agency of state government, the court's noting that KRS 230.220(1) includes this phrase: "the Kentucky state racing commission which shall be an independent agency of state government. " The court obviously interpreted the statute literally, which is what we are doing here.
We are of the opinion that, in view of the foregoing analysis and authorities, the Kentucky Housing Corporation is not included in the state agencies that are required by KRS 45.530 et seq. , to submit professional employment contracts to the Professional Employment Commission for approval.
Question No. 2:
"Is KHC included among the various 'contracting bodies' of the Commonwealth of Kentucky that are required by KRS 45.700-45.720 to submit personal service contracts to the Legislative Research Commission and the Personal Service Contract Review Subcommittee for approval?"
KRS 45.700(1)(a) defines "contracting body" as follows:
"(1) As used in KRS 45.705 to 45.720:
"(a) 'Contracting body' means each state board, bureau, commission, department, division, authority, university, college, officer, or other entity, except the legislature, authorized by law to contract for personal services; "
Based upon the analysis and authorities given in responding to Question No. 1, it is our opinion that KHC is not included in the various "contracting bodies" of the Commonwealth that are required by KRS 45.700, et seq. , to submit personal service contracts to the L.R.C. and the Personal Service Contract Review Subcommittee for approval. We find nothing in KRS 45.700(1)(a), in the definition of "contracting bodies", which militates against our conclusion. This language of KRS 198A.015 and 198A.030(1), "an independent, de jure municipal corporation and political subdivision" is controlling. 3 The fact that KHC's obligations are not state obligations buttresses the position taken under both questions. This special autonomy and independence in such similar statutory creations has been recognized in several jurisdictions. See the following:
Maine State Housing Authority v. Depositors Trust Co., Me., 278 A.2d 699 (1971);
State ex rel. Warren v. Nusbaum, Wis., 208 N.W.2d 780 (1973);
Plumbing, Heating, Piping & Air Conditioning Contractors Association, Inc. v. New York State Thruway Authority, 185 N.Y.S.2d 534 (N.Y., 1959); and
Garden State Parkway Employees Union, Local 146 v. New Jersey High Way Authority (N.J. Super., 1969) 251 A.2d 463.
In summary, for reasons given above, we are of the opinion that KHC is not an agency or department or other administrative grouping of the Commonwealth of Kentucky subject to the above mentioned statutes relating to personal service contracts, or statutes relating to professional employment contracts. We are in agreement with your basic analysis and conclusion.
Footnotes
Footnotes
1 Also see KRS 198A.020(4).
2 We are referring to KHC obligations.
3 See also KRS 198A.020(4).