Request By:
Mr. James Bates
Knott County Attorney
P. O. Box 404
Hindman, Kentucky 41822
Opinion
Opinion By: David L. Armstrong, Attorney General; Nathan Goldman, Assistant Attorney General
In your letter to the Attorney General you ask whether the fiscal court may donate money to the American Legion for the construction of a war memorial.
Section 179 of the Kentucky Constitution states, in part:
"The General Assembly shall not authorize any county or subdivision thereof, city, town or incorporated district, to become a stockholder in any company, association or corporation, or to obtain or appropriate money for, or to loan its credit to, any corporation, association or individual, except for the purpose of constructing or maintaining bridges, turnpike roads, or gravel roads. . . ."
Section 171 of the Kentucky Constitution states, in part: "Taxes shall be levied and collected for public purposes only. . . ."
Thus, the question that must be answered is whether the proposed donation violates the above constitutional provisions. It should be kept in mind that in deciding the constitutionality of a governmental action only the courts are authorized to make a final, authoritative determination. However, pursuant to 40 KAR 1:020, § 3, we may render our opinion on the matter.
In
City of Louisville Municipal Housing Commission v. Public Housing Administration, Ky., 261 S.W.2d 286, 288 (1953) the court held that the purpose of Section 179 (and Section 177 relating to the state) was "to prevent local and state tax revenues from being diverted from normal governmental channels."
In
Hager v. Kentucky Children's Home Society, 119 Ky. 235, 83 S.W. 605 (1904) the court construed Section 177, which is similar to Section 179. The legislature had appropriated money to a private corporation that was engaged in a purely charitable function - caring for destitute children. The court held that Section 177 was not violated since it only requires that the purpose for which public funds are used be a public one. The court held that:
". . . the vital point in all such appropriations [to private corporations] is whether the purpose is public; and that, if it is, it does not matter whether the agency through which it is dispensed is public or is not; that the appropriation is not made for the agency, but for the object which it serves; the test is in the end, not in the means." 83 S.W. at 608.
Several cases have dealt with a county or city's ability to donate money. In
Board of Trustees v. City of Lexington, 112 Ky. 171, 65 S.W. 350 (1901) a city donated money to a reform school. The court held that this did not violate Section 179 since the city was itself specifically authorized to establish a reform school.
In
Jefferson County v. Jefferson County Fiscal Court, 220 Ky. 678, 299 S.W. 209 (1927) a county's donation to the Community Chest was upheld.
In
Kesselring v. City of Louisville, Ky., 257 S.W.2d 596 (1953) the city had issued revenue bonds for capital improvements at General Hospital which was owned and operated by the city-county board of health. The court held that there was no violation of Section 179 since the board of health was but a means of carrying out a proper and necessary governmental function of the city and county.
In
O'Bryan v. City of Louisville, Ky., 382 S.W.2d 386 (1964) the city had established a zoo. It then contracted with a private, nonprofit corporation to run the zoo. The court held that there was no violation of Section 179. "That it is appropriate for a municipal corporation to use others in the performance of certain administrative or ministerial functions is established." 382 S.W.2d at 389. The court found that establishment of a zoo was a public purpose of the city (provision of recreational facilities).
In
Sawyer v. Jefferson County Fiscal Court, Ky., 392 S.W.2d 83 (1965) the county and the board of education agreed that the county would pay the board for the use of school buildings for county recreational purposes. The court held that there was no violation of Section 179.
"The situation at hand differs materially from that presented in
Board of Education of City of Corbin v. City of Corbin, 301 Ky. 686, 192 S.W.2d 951. In the Corbin case the city undertook to make an outright gift of $500 per month to the Board of Education as a means of supplementing the salaries of teachers in the schools of Corbin. This court struck down that proposed expenditure as violative of Section 179, Kentucky Constitution, since Corbin was undertaking to donate to a project in which it could not independently engage (public education), and from which it derived no benefit. The same may not be said of the case at bar. The county does have the express right to participate in a recreational program for its citizens. KRS 97.010(1)."
Finally, in Ezelle v. City of Paducah, Ky., 441 S.W.2d 162 (1969) a city appropriated money to the local chamber of commerce to buy a shoe factory to encourage employment in the city. The chamber conveyed its one half interest to the city. The county had the other one half interest. The court held that Section 179 was not violated. ". . . a governmental body may choose a private institution as an instrumentality for the accomplishment of a public purpose. . ." 441 S.W.2d at 164.
Based on the foregoing cases, it appears to us that the court has interpreted Section 179 to allow a county or city to donate money to a private corporation or institution if the purpose of the donation is a public one and one that the county or city is itself authorized to do. Of course, as the court said in
Carman v. Hickman County, 185 Ky. 630, 215 S.W. 408, 411 (1919): ". . . it is very often extremely difficult to define with accuracy what is a public purpose. " This is evident from some of our past opinions dealing with this issue.
In the most recent opinion on the issue, OAG 85-117, we came to this same conclusion as regards Section 179. However, it may be difficult to reconcile some of our past opinions with this principle. This is due to the subjective nature of the determination. Hence our caveat earlier on concerning the function of the courts as regards this question. Also, the concept of public purpose is a changing one. Many activities that governments engage in today would never have been considered appropriate in the past. We hope that our analysis herein will prove exhaustive enough to answer any future questions or at least provide a sufficient framework without reference to past opinions.
In answer to your specific question, KRS 67.083(3)(g) states that counties may provide memorials. Since this is a public purpose which the county may engage in, the fiscal court may donate money to a private institution for this purpose if it so chooses.