Request By:
Spencer E. Harper, Jr., Esq.
Harper, Ferguson & Davis
310 West Liberty Street
Louisville, Kentucky 40202
Opinion
Opinion By: Frederic J. Cowan, Attorney General; Brent L. Caldwell, Deputy Attorney General
This is in response to your request for an opinion as to whether KRS 198A.090(1) and (2), authorizing the issuance of self-liquidating housing revenue bonds by the Kentucky Housing Corporation (KHC), creates a debt limitation in the nature of a revolving ceiling, which is regenerated as bonds of the KHC are retired, redeemed and paid down.
KRS 198A.090(1) and (2) provide:
(1) The Corporation is hereby authorized to provide for the issuance, at one (1) time or from time to time, of bonds of the Corporation in an amount not to exceed seven hundred million dollars ($ 700,000,000) to carry out and effectuate its corporate purposes and powers except as provided for in subsection (2) of this section.
(2) The Corporation is hereby authorized to provide for the issuance of an additional four hundred twenty-five million dollars ($ 425,000,000) in bonds of the Corporation with the consent of a majority of the legislative program review and investigations committee of the Kentucky General Assembly established as set forth in KRS 6.905. The legislative program review and investigations committee shall oversee in its entirety the bonding program herein set forth.
The language of KRS 198A.090(1) and (2) does not contain express wording stating that the bond ceiling authorized by the General Assembly creates a regenerative authorization such that, as bonds are paid off, new bonds may be issued so long as the bonds outstanding do not exceed the bond ceiling.
As a result, to resolve the question we must resort to statutory construction in order to determine the legislative intent in enacting the statute. Certain basic rules and principles regarding statutory construction exist in the case law. One basic rule requires that intention should be ascertained from the words employed in enacting the statute, rather than surmising what may have been intended but not expressed.
Kentucky Association of Chiropractor, Inc. v. Jefferson County Medical Society, Ky., 549 S.W.2d 817, 821 (1977). Another basic rule of statutory construction is to construe the statute so as to effect the intent of the legislative body that enacted the statute without destroying the act as a whole.
Folks v. Barren County, Ky., 232 S.W.2d 1010 (1950).
In the case of
Wilkins v. Bax, Ky., 262 S.W.2d 663 (1953), the Court noted that "the general rule of statutory interpretation is that effect must be given where possible to every word in a statute but where the object of the legislature is plain and its intent can be ascertained with certainty from the entire context, the purpose and intent of the legislature will not be defeated by the inadvertent or careless use of some word or phrase." The duty of Courts to look to the legislative enactment as a whole was again reiterated in the case of
Budget Market, Inc. v. Commonwealth of Kentucky, ex rel. Robert A. Stephens, Attorney General, Ky., 587 S.W.2d 245 (1979), in which the Court noted "it is the duty of this Court to draw all inferences and implications from the Act as a whole and thereby, if possible sustain the validity of the Act and expound it."
Given these basic rules one must look to the wording of the statute and to the legislation as a whole to determine the intent of the legislature. Even though KRS 198A.090(1) and (2) does not contain express wording stating that the bond ceiling therein created is a revolving, regenerating authority which regenerates as outstanding bonds are redeemed, paid or refunded, it does state that:
KRS 198A.090(1)
(1) The Corporation is hereby authorized to provide for issuance, at one (1) time or from time to time , of bonds of the Corporation . . . [emphasis added].
Clearly, the statutory language indicates that bonds may be provided for issuance at various times not to exceed the bond ceiling. Implicit in this language is the intent of the legislature to allow the Corporation the flexibility to issue bonds at times it deems financially prudent to do so. The statutory language contains no express wording prohibiting the Corporation from issuing additional bonds upon redemption of other bonds, but rather allows the Corporation to issue bonds at various times using sound financial discretion. The only restrictive limitation in the statute on the Corporation is the prohibition that the bonds issued should never exceed the bond ceiling limit at any one time. To construe the intent of the statute otherwise would be unreasonable, unduly restrictive and it would do violence to the overall purpose of the statute. For example, if the Corporation issues bonds to the limit of the statutory ceiling, and if no other bonds could be issued until the entire amount of bonds as issued are paid off or redeemed in full, then the Corporation would "be out of business" for all practical purposes until such time as all of the bonds are paid off or redeemed in full. We do not believe that was the intent of the legislature when looking at this statute specifically nor when viewing the act as a whole. In fact, the enumeration of powers set forth in KRS 198A.040 expresses the intent of the legislature to create an ongoing, continuously vital Corporation functioning at all times to make and participate in the making of insured mortgage loans in order to produce decent, livable housing for persons and families of lower and moderate income in Kentucky. To opine otherwise, would cause the Corporation to be a static entity for years awaiting the appointed hour when all bonds are paid off, redeemed or cancelled, and then, and only then, would it be empowered to issue more bonds.
In other words, we believe the act creating the Kentucky Housing Authority was intended to set up an entity that was to be operationally perpetual in nature based upon its ability to regenerate bond issuances as bonds are retired or redeemed and that its bonding capacity, subject to the statutory bond ceiling limit, is continuously recovered and regenerated through the redemption, payment and cancellation of its outstanding bonds.