Request By:
Mr. Ralph A. Coldiron
Executive Director
Office of Community and
Regional Development
Development Cabinet
Capital Plaza Tower
Frankfort, Kentucky
Opinion
Opinion By: Steven L. Beshear, Attorney General; By: Walter C. Herdman, Assistant Deputy Attorney General
This is in answer to your letter of December 3 in which you relate the following facts and question.
"During the past year, the Office of the Secretary of the Kentucky Development Cabinet has participated in a four state (Virginia, West Virginia, Tennessee and Kentucky) Task Force which received a grant from the Appalachian Regional Commission to research the feasibility of a land bank that would serve the Appalachian portions of these four states.
". . . the Task Force has made the recommendation to incorporate a Board of Directors and apply to the Internal Revenue Service for a 501(c)(3) designation.
* * *
"I would like to request a determination as to whether the Secretary of the Development Cabinet or a person from the Office of the Secretary could be legally appointed to the Board of Directors of the Land Bank without any undue obligation to the Commonwealth."
In addition to the above facts, you have sent us a copy of the bylaws of the Central Appalachian Land Bank.
After reviewing the bylaws together with the factual situation, the mere appointment of either the Secretary of the Development Cabinet or some person from the Office of the Secretary to the Board of Directors of the Central Appalachian Land Bank would not of itself obligate the Commonwealth either financially or otherwise nor do we perceive any conflict of interest being involved.
The proposed Central Appalachian Land Bank would be a nonprofit corporation established pursuant to Ch. 273 KRS. The purpose of the bank would be to assist organizations presumably of a private nature in acquiring land for development purposes. The directors serve without compensation other than reasonable expenses. There is no indication from the facts presented that the state is in any way obligated by virtue of one of its officers or employes serving on the board, to pay any of the expenses in connection with the operation of the land bank.
Also service as director of the board by a state officer or employe would not create a conflict of interest. The Secretary of the Development Cabinet, pursuant to KRS 152.055, is responsible for administering and approving Appalachian development programs in this state which, of course, the Central Appalachian Land Bank may be involved and which is a compatible situation. Thus, the fact that the Secretary or an employe in the office also serves as a member of the board of directors of the land bank would not involve any conflict of interest or incompatibility so far as we can determine.