Request By:
Mr. Larry J. Crigler
Boone County Attorney
P.O. Box 114
Burlington, Kentucky 41005
Opinion
Opinion By: David L. Armstrong, Attorney General; By: Charles W. Runyan, Assistant Deputy Attorney General
A Fire Protection District is a special taxing district under §§ 157 and 158, Kentucky Constitution; and KRS 75.040, with the ad valorem tax, is not the exclusive method of financing its necessary capital facilities.
The issuance of revenue bonds directly by the district would require an express statutory authorization. See
J.D. Van Hooser & Co. v. University of Kentucky, 262 Ky. 581, 90 S.W.2d 1029 (1936). The powers of a special district are strictly a matter of statute. See
Effinger v. Fern Creek Volunteer Fire Dept., Ky.App., 564 S.W.2d 847 (1978).
However, it is our opinion that a Fire Protection District, as a special taxing district under § 157 of the Kentucky Constitution, is a "governmental agency" , as defined in KRS 58.010(3). Thus it has the authority to acquire, construct, and maintain a firehouse or other directly related facilities by the issuance of revenue bonds, pursuant to KRS 58.020. See KRS 58.010(1), defining "public project" .
As another method of financing such a building complex, KRS 58.180(2) provides in part that any governmental agency may create a nonprofit corporation, pursuant to KRS 273.161 to 273.390, to act as the agency and instrumentality of such governmental agency in the acquisition and financing of any public project which may be undertaken by such governmental agency pursuant to Kentucky law, etc. Thus such nonprofit corporation, upon direction of such governmental agency, is authorized to issue its bonds, notes or other obligations on behalf of such governmental agency for the acquisition and financing of public projects on behalf of such governmental agency. A "governmental agency" is defined in KRS 58.180(1)(b) as any division of the Commonwealth which is a municipal corporation and political subdivision of the Commonwealth of Kentucky, or to which has been delegated the right to exercise part of the sovereign power of the Commonwealth.
It is our opinion that a Fire Protection District is a "governmental agency" , as defined in KRS 58.180, and could thus use the corporate bond mechanism established in KRS 58.180. See also the definition of "public project" in KRS 58.180(1) (a). Thus a Fire Protection District may create a nonprofit corporation and provide for the issuance of the corporation's revenue bonds to finance such firehouse and related facilities. See KRS 273.167, and 273.171(8) (relating to issuing bonds).
Many years prior to the advent of major revenue bond financing, the courts approved the "holding company" concept. See