Commonwealth of Kentucky
Office of the Attorney General
Daniel Cameron
Attorney General
Capitol Building, Suite 118
700 Capital Avenue
Frankfort, Kentucky 40601
(502) 696-5300
Fax: (502) 564-2894
July 18, 2023
OAG 23-05
Subject:
Whether the procurement authority of the Department of Fish
and Wildlife Resources under KRS Chapters 45A and 150 allows
it to engage in a bid process for income-generating real property
leases.
Requested by:
Rich Storm, Commissioner
Department of Fish and Wildlife Resources
Written by:
Aaron J. Silletto, Assistant Attorney General
Office of Civil and Environmental Law
Syllabus:
The procurement authority of the Department of Fish and
Wildlife Resources does not allow it to unilaterally lease to others
any of the real property it owns or manages.
Opinion of the Attorney General
The Department of Fish and Wildlife Resources (“Department”) has
agreements with a variety of public agencies and private persons to lease land owned
or managed by the Department. These real property lease agreements cover a variety
of activities, including allowing tenants to cut hay, plant crops, or erect cellular
communications towers, and generate income for the Department. In the past, theOpinion of the Attorney General 23-05
July 18, 2023
Page 2
2
Finance and Administration Cabinet (“FAC”) has invited bids from the public for
these real property lease agreements at the Department’s request. As the terms of
these lease agreements expire, the Department now wishes to renew or re-bid them.
But in a change from its past actions, citing recent legislation granting procurement
authority to the Department and its Commissioner, FAC is no longer willing to
facilitate the Department’s bidding process for leases of real property owned or
managed by the Department. This dispute between the Department and FAC
imperils the Department’s ability to enter into these lease agreements, and thus,
jeopardizes a substantial source of income to the Department in the current fiscal
year.
This dispute is the latest in a growing line of conflicts between the current
gubernatorial administration and the Department. The conflicts started in 2020,
when the Governor proposed transferring $5.5 million of boat registration fees per
year from the Department to the state’s general fund.1 The General Assembly
declined to do so,2 but the stage was set for this ongoing tug-of-war between the
administration and the Department. Since then, the administration and the
Department have fought over who gets to appoint the Commissioner of the
Department,3 with the General Assembly eventually resolving that issue in favor of
the Department of Fish and Wildlife Resources Commission.4 Ongoing efforts by the
administration to control the Department through the FAC Secretary’s power as the
Commonwealth’s chief financial officer, KRS 42.012, and chief purchasing officer,
KRS 45A.030(3), have resulted in the General Assembly enacting bills at its last two
legislative sessions to grant greater independence and procurement authority to the
Department (2022 Senate Bill 217 or “SB 217”5), and then to clarify the extent of that
authority (2023 Senate Bill 241 or “SB 241”6). In this latest skirmish, FAC now
1
See 2020 House Bill 352 (as introduced), Part V, J.2., p. 125 (transferring $5,500,000 each year in
fiscal years 2020-21 and 2021-22 from the Department’s Motorboat Registration Fee Account to the
General Fund).
2
See 2020 Ky. Acts ch. 92 (House Bill 352), Part V, I. (omitting any transfers from Department funds
to the General Fund, but including transfers of other funds from the Tourism, Arts and Heritage
Cabinet to the General Fund).
3
See OAG 20-12 (June 26, 2020); Commonwealth, Dep’t of Fish & Wildlife Res. Comm’n v. McCoy-
Johnson, No. 20-CI-00706 (Franklin Cir. Ct. Oct. 28, 2020), appeal dismissed as moot, No. 2020-CA-
1435-MR (Ky. App. Sept. 1, 2021).
4
2021 Ky. Acts ch. 161 § 2 (amending KRS 150.061).
5
2022 Ky. Acts ch. 197. The General Assembly stated as one of its reasons for passing SB 217 that
“it is critical to the proper management and administration of the Department of Fish and Wildlife
Resources that it is able to exercise independent authority in managing the natural resources under
its jurisdiction.” Id. § 12.
6
2023 Ky. Acts ch. 139. The General Assembly stated as one of its reasons for passing SB 241 that
“it is critical to the proper administration of the Department of Fish and Wildlife Resources that its
procurements and acquisitions of interests in real property are completed in a timely manner.” Id.
§ 23.Opinion of the Attorney General 23-05
July 18, 2023
Page 3
3
believes that, after the enactment of SB 217 and SB 241, it no longer has any duty or
responsibility to assist the Department with respect to leases of real property owned
or managed by the Department.
With the passage of SB 217 and SB 241, the General Assembly has empowered
the Department to “conduct all procurements necessary for the performance of its
duties in accordance with the procurement procedures outlined in KRS Chapter 45A,
[KRS Chapter 150], and the administrative regulations promulgated under this
chapter, but the [D]epartment shall not be subject to any provision of KRS Chapter
45A that requires the approval of any Finance and Administration Cabinet official
for the department to proceed with any aspect of the procurement process.” KRS
150.0242(1) (emphasis added). The statute also permits the Commissioner to act as
the Department’s “chief purchasing officer for the purposes of conducting
procurements,” rather than the FAC Secretary. Id. (emphasis added). Otherwise, KRS
Chapter 45A—the Kentucky Model Procurement Code—applies to the Department’s
procurement process. KRS 150.0242(2).
The Model Procurement Code defines the term “procurement” as “the
purchasing, buying, renting, leasing, or otherwise obtaining of any supplies, services,
or construction.” KRS 45A.030(22) (emphasis added). Thus, the Department’s and the
Commissioner’s “procurement” powers under KRS 150.0242 relate to the acquisition
of property by the Department, whether by purchase or by lease.7 The term, as
defined by the Model Procurement Code, cannot mean the sale or lease of real
property owned or managed by the Department to someone else.
Kentucky law addresses leases of real property owned by the Commonwealth
and its agencies in KRS Chapter 56. “No state agency . . . shall have power or
authority . . . [t]o lease . . . any real property, including any interest in real property,
belonging to the state or to any state agency, except as provided by [KRS Chapter 56]
and KRS 45A.045.” KRS 56.500(2). Under KRS Chapter 56, FAC has the “power and
duty” to “lease any real property, or any interest in such real property, owned by the
state or any agency thereof, in accordance with KRS 45A.045.” KRS 56.463(6).8
Nothing in KRS Chapter 150 exempts leases of real property owned or managed by
the Department from the requirements of KRS Chapter 56.9 Therefore, the General
7
SB 241 specifically states that it applies to “all procurements and acquisitions of interests in real
property undertaken by, or for the benefit of, the Department.” 2023 Ky. Acts ch. 139 § 22 (emphasis
added).
8
KRS 45A.045, which is referred to in both KRS 56.463(6) and KRS 56.500(2), grants to FAC, inter
alia, the general power to “sell, trade, or otherwise dispose of any interest in real property of the state.”
KRS 45A.045(4) (emphasis added).
9
The General Assembly has exempted the Commission from KRS Chapter 56 with respect to its
appointment of the Commissioner. KRS 150.061(1) (“Notwithstanding any provisions of KRS Chapter
. . . 56 . . . to the contrary, the commission shall have the sole authority to appoint a commissioner ofOpinion of the Attorney General 23-05
July 18, 2023
Page 4
4
Assembly has not given the Department the power to lease to anyone else any of the
real property it owns or manages, as any such leases are not within the Department’s
“procurement” authority under KRS Chapters 45A and 150. Rather, FAC has the
“power and duty” under KRS 56.463 to lease real property owned or managed by the
Department on the Department’s behalf.
To say that FAC has the statutory power and duty to lease real property owned
or managed by the Department on the Department’s behalf does not mean the
Department may compel FAC to agree to bid out any particular lease agreement.
Under KRS 45A.045, the FAC Secretary determines whether such a lease agreement
would be “suitable to the public’s interest.” KRS 45A.045(4). Such determination
“shall be reached only after review of a written request” by the Department, which
request “shall describe the property and state the reasons why the agency believes
the property should be” leased. Id. Once presented with such a request, FAC is obliged
to make a determination regarding the suitability of the lease. KRS 56.463; KRS
56.463(6).
The Department has provided this Office with several examples of agricultural
leases approved and bid out by FAC prior to the enactment of SB 217 and SB 241. In
addition to providing a stream of income to the Department’s game and fish fund,
KRS 150.150(1)(a), these leases also routinely provide that “[f]ive percent of the . . .
crop must be left standing in the field at harvest for wildlife food and cover.” These
example leases also describe the purpose for leasing Department lands as follows:
The KDFWR, being sound stewards of the soil and water, wishes
to exemplify practices that are beneficial to the State’s wildlife
resources. Agricultural practices are essential components to many
wildlife resource management activities and provide for overall general
wildlife habitat enhancement goals. Agricultural operations on KDFWR
owned land, leased or operated properties should follow a general,
consistent, uniform pattern for sustainable practices. These programs
are developed to enhance and perpetuate Kentucky’s diverse wildlife
species and to insure that sustainable land use practices are carried out.
Departmental staff uses agricultural activities on lands owned or
managed for the following reasons:
To utilize farming as a method of maintaining open
lands and early successional vegetative cover for wildlife.
Provide food for [wildlife].
the Department of Fish and Wildlife Resources. . . .”). But that exemption from KRS Chapter 56 does
not apply to any other contract or agreement involving the Department.Opinion of the Attorney General 23-05
July 18, 2023
Page 5
5
To generate monies to help offset operational,
maintenance, and habitat costs of the [Department’s land].
To provide public a demonstration of sustainable
agricultural techniques on KDFWR owned/managed
properties.
Thus, there appear to be both valid fiscal reasons and wildlife conservation reasons
for approving such leases.
Under KRS 56.463, FAC has the duty to approve such leases when in the best
interests of the Commonwealth. Neither SB 217 nor SB 241 provides FAC with
grounds for refusing to consider the Department’s request to lease some of the real
property it owns or manages. Having received an appropriate request, FAC is obliged
to consider and act upon it.
Daniel Cameron
Attorney General
Aaron J. Silletto
Assistant Attorney General