Fayette County Board of Education v. White

Opinion of

STEWART, Judge

(dissenting).

I dissent from the majority opinion because I do not place the same interpretation upon subsection (7) of KRS 160.477 as does that opinion. This subsection, among other things, deals with “payments of rentals in connection with any outstanding school revenue bonds issued” pursuant to KRS Chapter 162.

House Bill No. 1, Part II, Section 5, amended KRS 160.477. This amendment retained all of the old KRS 160.477 provisions and it added two subsections that I believe are dispositive of the question raised. The two subsections added to KRS 160.477 by House Bill No. 1 deal directly and specifically with the maximum rate which may be levied in lieu of the old voted rate in those school districts having a voted building fund tax. They are numbered (6) and (7). Subsection (6) of KRS 160.477 reads:

“Notwithstanding the provisions of any other subsection of this section to the contrary, for the 1966 tax year and for all subsequent years no district board of education shall request the levy of a rate under the provisions of this section which exceeds the compensating tax rate as defined in KRS 132.010, except as provided in subsection (7) of this section, and except that a rate which has been approved by the voters under this section but which was not levied by the district board of education in 1965 may be levied after it has been reduced to the compensating tax rate as defined in KRS 132.010.” (Emphasis added.)

A school district having a voted building fund tax must conform to the “compensating rate” unless it is excepted from that requirement by the provisions of the subsection (7). Subsection (7) reads:

“Notwithstanding the limitations contained in subsection (6) of this section no *616tax rate shall be set lower than that necessary to provide such funds as are required to meet principal and interest payments on outstanding bonded indebtedness and payments of rentals in connection with any outstanding school revenue bonds issued under the provisions of KRS Chapter 162.” (Emphasis added.)

Subsection (7) of KRS 160.477 in unmistakably clear langauge provides that a school district having a voted building fund tax, against which revenue bonds have been issued, is not limited to the “compensating rate” in fixing the special building fund rate. Subsection (7) expressly states that the rate shall be set at a figure (not to exceed the 32 cents rate voted by Fayette County) which will produce an amount sufficient to meet the yearly payments of principal and interest that will accrue on the outstanding bonds.

The majority opinion points out that the special voted building fund tax, at the “compensating rate,” will produce only $780,000, whereas the rentals necessary to retire revenue bond projects that existed before House Bill No. 1 was enacted amount to around $1,168,000. The majority opinion then makes this assertion: “ * * * the fact is that no one ever expected that the building fund tax would or ever could meet all of the rental requirements * * *. We find nothing at all to indicate that the legislature intended that all of the bond and rental payments must come out of the building fund levy, or out of the extra voted general fund levy, or out of the basic general fund levy.”

The simple answer to this argument is that if the unambiguous provisions of subsection (7) of KRS 160.477 do not set the maximum rate for a voted levy at the amount necessary to meet the yearly bond-payment requirements, irrespective of the “compensating rate,” then what possible meaning or application does it have? The majority opinion stands for the proposition that this subsection cannot be related to any conceivable school tax situation involving the payment of revenue bonds issued to construct school buildings.

I would reverse the judgment.

Chief Justice Palmore concurs in this dissenting opinion.