Request By:
Mr. Vic Hellard, Jr.
Director, Legislative
Research Commission
State Capitol
Frankfort, Kentucky 40601
Opinion
Opinion By: Frederic J. Cowan, Attorney General; Nathan Goldman, Assistant Attorney General
In your letter to the Attorney General you ask whether KRS 132.011, recently enacted by the General Assembly, is constitutional.
That statute states:
Every organization which has qualified for exemption under Section 501(c)(3) of the Internal Revenue Code of 1986, as amended, and whose charitable activities constitute more than an incidental part of the organization's overall activities, shall be, for Kentucky tax purposes, an institution of purely public charity and its property shall be exempt from all state, county, district, city and school taxes."
Section 170 of the Kentucky Constitution states, in part: "There shall be exempted from taxation . . . institutions of purely public charity. . . . All laws exempting or omitting property from taxation other than the property above mentioned shall be void." Section 170 is self-executing and does not require enabling legislation. 16 C.J.S. Constitutional Law, § 46; Craft v. Baker, 194 Ky. 105, 238 S.W. 389 (1922).
In Kentucky Board of Tax Appeals v. Gess, Ky., 534 S.W.2d 247 (1976) the Kentucky Supreme Court held that KRS 132.010(9) was unconstitutional. That statute attempted to define a term used in Section 172A of the Constitution. The Court held that a term used in the Constitution "can be neither enlarged nor diminished by legislative definition." The Court went on to say:
"From the standpoint of substance (as distinct from procedural implementation) the constitutional amendment is self-executing and exclusive. A power to define its meaning at will would be nothing less than a power to amend it by legislation."
Furthermore, "the construction of a constitution is the peculiar province of the courts, and to them belongs the final decision; and, where a court of last resort has construed a constitutional provision, such construction is binding on all departments of the government, including the legislature." 16 C.J.S. Constitutional Law, § 17, pp. 63-64. See also, South Dakota Automobile Club, Inc. v. Volk, S.D. 305 N.W.2d 693 (1981) (It is the duty of the courts, not the legislature, to make determinations of constitutional terms.)
The Kentucky courts have attempted, over the years, to interpret the term "purely public charity. " See, e.g., Iroquois Post No. 229 v. City of Louisville, Ky., 309 S.W.2d 353 (1958) ("purely" modifies "charity" not "public"), Commonwealth ex rel. Luckett v. I. W. Bernheim Foundation, Ky., 505 S.W.2d 762 (1974) (activities which reasonably better mankind are charitable) ; Banahan v. Presbyterian Housing Corp., Ky., 553 S.W.2d 48 (1977).
Consequently, it is our opinion that KRS 132.011 is unconstitutional in that it attempts to define a constitutional term, which is the province of the judiciary.