Request By:
Honorable David G. Mason
Henry County Attorney
Main Street
New Castle, Kentucky 40050
Opinion
Opinion By: Steven L. Beshear, Attorney General; By: Robert L. Chenoweth, Deputy Attorney General
You have asked the Office of the Attorney General to review a matter involving Henry County and the legal effects of the will of the late Judge Richard H. Hill. As brief background you explained that Judge Hill gave Henry County eighteen acres many years ago for a fair-grounds. The beneficient Hill also left his farm to a trust of the executor to pay the income to his surviving spouse (who quitclaimed her interest therein) and the trustee then quitclaimed to Eastern Kentucky University as provided for in Judge Hill's will. The pertinent language from the will reads as follows:
"4. Upon the death of Mary Jo Hill, the Trustee shall pay all of her funeral expenses and proceed to work up the affairs of the said Trust, which shall therefore terminate and cease; and the properties so held in trust shall be disposed of by the Trustee in the following manner:
(1) If the farm has not been sold, the Trustee shall deed it to Eastern Kentucky University, Richmond, Ky., in fee simple, in memory of my father, Benjamin Franklin Hill, and my brother, Samuell Douthitt Hill. I hope said University will maintain and operate said farm as 'The Ben and Sam Hill Experimental Agricultural Farm, ' and employ Larry Roberts to manage the crop and cattle, Should the University fail to do that and sells the farm, I request it to use the proceeds from the sale to establish 'Ben and Sam Hill Scholarships' to be awarded and given to high school graduates of high schools in Henry County, including the Eminence High School, under such terms and conditions as the University shall determine and provide;" (Emphasis added.)
You further related that Eastern Kentucky University desires to sell a small portion of this tract to Henry County for use as a park. Henry County would like to use federal and matching funds for this purpose. However, a snag has developed in that the federal funds are being withheld based on the premise that Eastern Kentucky University can legally give the property to the County. You have asked this office if, as a matter under Kentucky law, the University can give this property to Henry County.
Several provisions of statutory law come into consideration. KRS 56.030(1) provides that the Commonwealth is to "be named as the grantee of any land given or devised to the state, or partly or wholly paid for out of state funds, and of any land or interest in land conveyed to it or for its use or for the use of any of its agencies or officers." Of course, Eastern Kentucky University is one of the state-supported institutions of higher education. See KRS 164.290. Thus, the Hill property devised to Eastern Kentucky University is property owned by the Commonwealth of Kentucky.
KRS 164.410 is quite important and reads in full as follows:
"Acquisition and sale of property. - Each board or regents may, on such terms as it regards best for the university or college, purchase or lease land for the purpose of securing the erection of buildings, and may receive by any legal mode of conveyance, purchase and hold property of any description that the board deems necessary for the purposes of the school, and may build and construct improvements for such purposes and hold or sell the same. If a board of regents is unable to agree with the owner of such real estate as to its value, or to its purchase, it may proceed in its own name to condemn such real estate in the manner provided in the Eminent Domain Act of Kentucky. Real estate acquired by purchase or condemnation shall be paid for out of money appropriated to the university or college. Each board of regents may, when it regards it best for the school, sell and convey any real estate, buildings or equipment owned by it, but the proceeds arising from the sale must be reinvested in other real estate, buildings and equipment for the use of the university or college."
Under this section, the Eastern Kentucky University Board of Regents has authority to acquire and sell property. For comparison purposes, note KRS 164.270 as to the sale of real property held by the Commonwealth for the use and benefit of the University of Kentucky.
Two remaining sections of statutes are to be covered. KRS 56.500(2) reads:
"No state agency, except as provided in this chapter, shall have power or authority:
* * *
(2) To lease, sell or convey any real property, including any interest in real property, belonging to the state or to any state agency, except as provided by this chapter and KRS 45.360."
KRS 45.360(7) provides:
"The executive department for finance and administration shall sell or otherwise dispose of all property (including any interest in real property) of the state which is not needed or has become unsuitable for public use, or would be more suitable consistent with the public interest for some other use, as determined by the secretary of the executive department for finance and administration. The determination of the secretary of the executive department for finance and administration shall be set forth in an order, and shall be reached only after review of a written request by the agency desiring to dispose of the property. Such request shall descrive the propety and state the reasons why the agency believes disposal should be effected. All instruments required by law to be recorded which convey any interest in any such real property so disposed of shall be executed and signed by the secretary of the executive department for finance and administration and approved by the governor. Unless the secretary of the executive department for finance and administration deems it in the best interest of the state to proceed otherwise, all such property (including any interests in real property) shall be sold either by invitation of sealed bids or by public auction, provided however that the selling price of any interest in real property shall not be less than the appraised value thereof as determined by the department, or the department of transportation for such requirements of that department."
In view of the above, we believe it is clear that the Eastern Kentucky University Board of Regents must follow several statutory provisions before the real property in question may be conveyed to Henry County. KRS 45.360(7) directs that all state property must be sold at the appraised value unless the secretary of the executive department for finance and administration deems it in the best interest of the Commonwealth to proceed otherwise.
It is our understanding that pursuant to the above referred to statutes, Eastern Kentucky University desires to sell and Henry County is willing to pay for the tract of land involved. Besides being fully consistent with the statutes on conveyance of real property, we also note that such an arrangement is directed and contemplated by the will itself. The obvious intent of the testator was that the University would sell the farm if it ceased using it for experimental agricultural purposes. Thus, we are of the opinion the sale of the property is consistent with all of the applicable statutes as well as with the language of the will.