Request By:
Mr. Mike Reardon
Chrisman Miller Woodward Inc.
326 South Broadway
Lexington, Kentucky 40508
Opinion
Opinion By: Frederic J. Cowan, Attorney General; Rosemary F. Center, Assistant Attorney General
This is in response to your recent letter in which you request an opinion relating to Senate Bill 269 (codified as KRS 371.160). You ask the following questions:
1. Does the bill apply to all private jobs excluding those in which the Commonwealth is the owner, thus requiring implementation into general contract law; and
2. If this bill affects all contract construction law, then is it retroactive towards all construction projects in progress.
In response to your first question, KRS 371.160 requires that retained amounts by owners be placed in escrow in any contract for the improvement of real estate involving an amount of five hundred thousand dollars ($ 500,000) or more. Subsection (7) excludes contracts with the Commonwealth or school boards from the provisions of the statute.
In response to your second question, a statute will not be given retroactive effect unless the intent is clearly stated. (See OAG 82-195 which is enclosed for your convenience.) Section 19 of the Kentucky Constitution also expressly prohibits a change in the obligation of a contract. Therefore, we believe that this statute is applicable to contracts excluding those with the Commonwealth and school boards which were entered into on and subsequent to the effective date of the statute which in this case was July 13, 1990.