Request By:
Mr. James H. Fallin
Hancock County Judge/Executive
Courthouse
Hawesville, Kentucky 42348
Opinion
Opinion By: Steven L. Beshear, Attorney General; By: Charles W. Runyan, Assistant Deputy Attorney General
In Hancock County a developer is considering asking the fiscal court or one or both of the two cities in Hancock County to authorize the issuance of industrial bonds pursuant to KRS 103.200(5).
The "industrial buildings" to be so financed would be multi-family housing units to be exclusively used by the elderly. The city or county would issue the bonds under KRS 103.210, et seq., for the benefit of the owner-developer of the project.
Your question is:
"Does KRS 103.200(5) authorize a city or county to issue industrial building revenue bonds for acquisition and construction of 'housing for the aged' (60 years of age and over)?"
KRS 103.200, defining "industrial buildings" authorized for cities and counties, was amended in 1980 (Ch. 339, § 1). Subsection (5), under the amendment, reads:
"(5) Any buildings, structures and facilities, including the site thereof and machinery, equipment and furnishings suitable for use as health care or related facilities, including without limitation, hospitals, clinics, nursing homes, research facilities, extended or long-term care facilities, including housing for the aged or the infirm and all buildings, structures and facilities deemed necessary or useful in connection therewith;"
Subsection (5), above, contains the express phrase "housing for the aged." The court, in
Old Lewis Hunter Distillery Co. v. Kentucky Tax Com'n, 302 Ky. 68, 193 S.W.2d 464 (1946), wrote that "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. " (Emphasis added).
Thus KRS 103.200(5) clearly authorizes any city or county to issue industrial building revenue bonds for "housing for the aged." The only problem is that the statute does not define the term "aged".
A Georgia case,
Pass v. Pass, 195 Ga. 155, 23 S.E.2d 697, 700 (1942), points out that the term "aged", as applied to human beings, is not susceptible of precise definition. While the term clearly suggests that such person has seen many summers, it does not indicate precisely how many. Webster (7th New Collegiate Dictionary - Merriam-Webster) at page 17, defines "aged" as "grown old, as of an advanced age. " Thus in the statute "aged" has no technical meaning.
It is our opinion that the courts, if faced with the question, would hold that the term "aged", as used in KRS 103.200(5), would be considered in its popular meaning.
Commonwealth v. Wombles, Ky., 346 S.W.2d 299 (1961). Thus when considering age in a popular sense, and even in the broad context of various federal and state laws dealing with people of advanced age, the courts might very well find that "aged", in KRS 103.200(5), could practically include at least people of 60 years of age and above.
See KRS 103.210, relating to the basic mechanics of a city's or county's issuance of such bonds. Note that the statute envisions that the city or county will issue such revenue bonds (which of course are not general obligation bonds) to acquire the ownership in the "industrial" buildings and land, pursuant to an appropriate ordinance of the city or county legislative body. Then later the acquired realty is leased to a lessee, the bonds being retired from the proceeds of the lease payments, as set forth in KRS 103.200 to 103.285. Note that KRS 103.230(2) provides that such bonds shall be payable solely from the revenue derived from the building, and shall not constitute an indebtedness of the city or county within the meaning of the Constitution. See §§ 157 and 158, Kentucky Constitution.
If the fiscal court is interested in such a project, you should consult bond counsel for the actual details of the lease document and its particulars.