Request By:
Mr. J. Patrick Abell
Executive Director
Energy Regulatory Commission
Utility Regulatory Commission
730 Schenkel Lane
Post Office Box 615
Frankfort, Kentucky 40602
Opinion
Opinion By: Robert F. Stephens, Attorney General; By: Charles W. Runyan, Assistant Deputy Attorney General
As Executive Director of the Energy Regulatory Commission and the Utility Regulatory Commission, you request a formal opinion of this office on the interpretation of KRS 278.150.
Your question is whether or not any amount in the special fund for the maintenance of the commissions remaining unexpended at the end of any fiscal year lapses. We do not think so.
For many years under KRS 278.130, and for the purpose of maintaining the Old Public Service Commission [salaries, expenses, and cost of regulation of regulated utilities], the commission was required to annually assess the necessary amount upon the regulated utilities in proportion to their gross earnings or receipts drived from intrastate business in Kentucky for the preceding calendar year. KRS 278.150, in its original form [prior to the 1972 amendment], dealt with the financial processing of the assessments by the state through the Department of Finance and State Treasurer. KRS 278.150 originally read:
"(1) The commission shall, on or before June 1 of each year, certify to the department of finance the amount of the assessment made by it against each utility, and the department of finance shall certify that amount to the state treasurer, who shall collect and pay the assessments into the state treasury to the credit of a special fund for the maintenance of the commission. All such assessments shall be paid into the state treasury through the department of finance on or before July 1 of the year in which the assessments are made.
"(2) If any amount in the special fund for the maintenance of the commission remains unexpended at the end of any fiscal year, that amount shall not lapse, but shall remain credited to the account of the commission and may be used during any succeeding year. "
KRS 278.130 was last amended in 1978 [Ch. 379, § 19, effective April 1, 1979]. It provides that for the purpose of maintaining the commissions [now ERC and URC], including salaries and other expenses, and the cost of regulation of the utilities subject to their jurisdiction, the Department of Revenue must annually assess such utilities in proportion to their earnings or receipts derived from intrastate business in Kentucky for the preceding calendar year.
KRS 278.150, as last amended in 1978 [Ch. 379, § 21, effective April 1, 1979], reads:
"(1) Each commission shall, on or before June 1, certify to the department of revenue and the executive department for finance and administration the amount of intrastate business of each utility in the state subject to its jurisdiction during the previous calendar year. The executive department for finance and administration shall, on or before June 10, establish the assessment rate and give written notification thereof to the department of revenue and the utility and energy regulatory commissions. The department of revenue shall collect and pay the assessment into the state treasury to the credit of the general expenditure fund. All such assessments shall be paid into the state treasury through the department of revenue on or before July 31 of the year in which the assessments are made.
"(2) If any amount in the special fund for the maintenance of the commissions remains unexpended at the end of any fiscal year, that amount shall not lapse, but shall remain credited to the account of the commission and may be used during any succeeding year. "
In the original KRS 278.150 the assessments were paid into the state treasury to the "credit of a special fund" for the maintenance of the commission [PSC]. (Emphasis added). In the statute (subsection (2)) it provided that "If any amount in the special fund for the maintenance of the commission remains unexpended at the end of any fiscal year, that amount shall not lapse, but shall remain credited to the account of the commission and may be used during any succeeding year.
In 1972 [Ch. 47, § 5], KRS 278.150 was amended to provide that the assessments be paid into the state treasury to the "credit of the general expenditure fund." 1 (Emphasis added). The language relating to "a special fund for the maintenance of the commission" was deleted. Subsection (2) of the statute under the 1972 amendment read: "If any amount in the 'special fund for the maintenance of the commission' remains unexpended at the end of the 1971-72 fiscal year, that amount shall not lapse, but shall remain credited to the account of the commission and may be used during any succeeding year. "
Now we come to KRS 278.150, as amended in 1978 [Ch. 379, § 21], effective April 1, 1979, as set out in full above. The statute provides that the assessments be paid into the state treasury to the credit of the "general expenditure fund." Subsection (2) provides that "If any amount in the special fund for the maintenance of the commissions remains unexpended at the end of any fiscal year, that amount shall not lapse, but shall remain credited to the account of the commission and may be used during any succeeding year. " (Emphasis added).
The Finance Department takes the position that the 1972 amendment required the deposit of all assessments into the general fund and amended the rate of assessment to allow for collection of sufficient funds to equal the general fund appropriation to the commissions. Further, their position is that KRS 278.150 intended that the commissions be funded from general fund appropriations, and that the general expenditure fund appropriation would lapse at the end of each fiscal year.
The general fund of a political subdivision has been described in terms of taxes and license fees and other revenues collected by such government for the purpose of paying the general expenses of its operation.
Pure Milk Producers & Distributors Ass'n v. Morton, 276 Ky. 736, 125 S.W.2d 216 (1939) 219. That "general fund" definition holds, unless otherwise provided by ordinance or statute. Similarly the state biennial budget usually carries a scheme of expenditures for governmental expenses of departments, agencies, commissions, etc., designated under "General Fund. " See 1978 Acts, Chapter 167, p. 509. Under this heading we find the biennial appropriations to the subject commissions. Included in the specific appropriations were amounts established for compliance with the National Energy Act enacted by Congress (HR 8444). A lapse provision, in case the act was not passed, does not apply.
Other categories of funds in the 1978 budget are: Trust and Agency Funds, Transportation Fund and the General Construction Fund.
The Finance Department tells us that the assessments of the commission are not intended to come under the Trust and Agency Fund.
In connection with KRS 278.150 and 278.120, and the 1978 state budget, it appears that the commissions are actually being funded out of general fund appropriations. The designation of "special fund" , as it appears in KRS 278.150(2), has no practical implication at this stage.
We now return to the question you have raised, which is: Does the money appropriated to the commissions lapse at the end of each fiscal year? The answer is "no".
It is our opinion, in viewing the statutory history, that the 1978 amendment [Ch. 379, § 21] makes it abundantly clear that the original concept expressed in the original KRS 278.150 (prior to the 1972 amendment) as to the non-lapse feature of the appropriations to the commissions was to be restored. This means that: (1) the assessments go into the state treasury to the credit of the general fund; (2) the general fund appropriations to the commissions are calculated, in the budgetary process, to be equivalent to the total assessments collected from the regulated utilities; and (3) any amount in the general fund appropriation to the commissions remaining unexpended at the end of any fiscal year shall not lapse, but shall remain credited to the commissions' account and may be used by the commissions during any succeeding year.
We are bound by the express and literal wording of KRS 278.150(2) as to the non-lapse feature of such appropriations. The legislative intent is clearly evidenced by plain and precise words, and we do not have to resort to construction.
H.O. Hurley Co. v. Martin, 267 Ky. 182, 101 S.W.2d 657 (1937).
Thus, notwithstanding the general lapsing statute, KRS 45.230, the general fund appropriations of the commissions do not lapse, since KRS 278.150 is an express exception to the general statute. See KRS 45.230(4), which provides for lapse, generally, of state appropriations, "unless otherwise provided by law." As the court said in
Barrett v. Stephany, Ky., 510 S.W.2d 524 (1974), there is a duty to construe the statutes literally if it is reasonably possible. Here it is reasonably possible and logical. The courts nor administrative agencies cannot substitute their judgments for the clearly expressed legislative provision.
Footnotes
Footnotes
1 Also see KRS 278.120(4), to the same effect.