Dear Ms. Kelly:
This opinion is in response to your questions asking:
1) When a political subdivision of the State undertakes to issue general obligation bonds (other than private activity bonds) bearing an interest rate of 9%, must the bonds be sold at a public sale unless a resolution is adopted by the issuing jurisdiction giving clear justification why the sale should be a private sale?
2) When a political subdivision of the State undertakes to issue general obligation bonds (other than private activity bonds) bearing an interest rate of 11%, can the bonds be sold at a private sale if a resolution is adopted by the issuing jurisdiction giving clear justification why the sale should be a private sale?
3) When examining the proceedings relating to a proposed general obligation bond issue wherein the issuing jurisdiction has adopted a resolution giving a justification why the sale of the bonds should be a private sale and the bonds were in fact sold at a private sale, is the State Auditor to exercise discretion in accepting or rejecting the justification?
Section
1 Other provisions of law to the contrary 2 notwithstanding, any and all bonds, notes, or other 3 evidences of indebtedness, including bonds, notes, or other 4 evidences of indebtedness payable solely from revenues 5 derived from any revenue-producing facility, hereafter 6 issued under any law of this state by any county, city, town, 7 village, school district, educational institution, drainage 8 district, levee district, nursing home district, hospital 9 district, library district, road district, fire protection 10 district, water supply district, sewer district, housing 11 authority, land clearance for redevelopment authority, 12 special authority created under section
64.920 , RSMo, 13 authority created pursuant to the provisions of chapter 238, 14 RSMo, or other municipality, political subdivision or 15 district of this state shall be negotiable, may be issued in 16 bearer form or registered form with or without coupons to 17 evidence interest payable thereon, may be issued in any 18 denomination, and may bear interest at a rate not exceeding 19 ten percent per annum, and may be sold, at any sale 20 pursuant to any law applicable thereto, at the best price 21 obtainable, not less than ninety-five percent of the par 22 value thereof, anything in any proceedings heretofore had 23 authorizing such bonds, notes, or other evidences of 24 indebtedness, or in any law of this state to the contrary 25 notwithstanding. Such aforementioned bonds, notes, or 26 other evidences of indebtedness may bear interest at a rate 27 not exceeding fourteen percent per annum if sold at public 28 sale after giving reasonable notice of such sale, at the best 29 price obtainable, not less than ninety-five percent of the par 30 value thereof; provided, that such bonds, notes or other 31 evidences of indebtedness may be sold to the federal government 32 at private sale at a rate not exceeding fourteen 33 percent per annum; except that, the sale of bonds, notes, or 34 other evidences of indebtedness issued by the state board of 35 public buildings created under section8.010 , RSMo, the 36 state board of fund commissioners created under section 3733.300 , RSMo, any port authority created under section 3868.010 , RSMo, the bi-state metropolitan development district 39 authorized under section70.370 , RSMo, any special 40 business district created under section71.790 , RSMo, any 41 county, as defined in section108.465 , exercising the powers 42 granted by sections108.450 to108.470 , any land clearance 43 for redevelopment authority created under section99.330 , 44 RSMo, the industrial development board created under 45 section100.265 , RSMo, any planned industrial expansion 46 authority created under section100.320 , RSMo, the higher 47 education loan authority created under section173.360 , 48 RSMo, the Missouri housing development commission 49 created under section215.020 , RSMo, the state environmental 50 improvement and energy resources authority 51 created under section260.010 , RSMo, the agricultural and 52 small business development authority created under 53 section348.020 , RSMo, any industrial development corporation 54 created under section349.035 , RSMo, or the health 55 and educational facilities authority created under section 56360.020 , RSMo, shall, with respect to the sales price, 57 manner of sale and interest rate, be governed by the specific 58 sections applicable to each of these entities rather than this 59 section and except that, the sale of bonds, notes or other 60 evidences of indebtedness issued by any housing authority 61 created under section99.040 , RSMo, may be sold at any sale, 62 at the best price obtainable, no less than ninety-five 63 percent of the par value thereof, and may bear interest at a 64 rate not exceeding fourteen percent per annum, any law of 65 this state to the contrary notwithstanding. The sale shall be 66 a public sale unless the issuing jurisdiction adopts a 67 resolution setting forth clear justification why the sale 68 should be a private sale except that private activity bonds 69 may be sold either at public or private sale. Industrial 70 development revenue bonds may be sold at private sale and 71 bear interest at a rate not exceeding fourteen percent per 72 annum if sold pursuant to any law applicable thereto, at the 73 best price obtainable, not less than ninety-five percent of 74 the par value thereof. 75 2. Other provisions in subsection 1 of this section to the 76 contrary notwithstanding, revenue bonds issued for airport 77 purposes by any constitutional charter city in this state 78 which now has or may hereafter acquire a population of 79 more than four hundred fifty thousand but less than six 80 hundred thousand inhabitants, according to the last federal 81 decennial census, may bear interest at a rate not exceeding 82 fourteen percent per annum if sold at public sale after 83 giving reasonable notice, at the best price obtainable, not 84 less than ninety-five percent of the par value thereof.
Section
We find that this latter provision introduces some ambiguity as to the interest rates to be applied to bonds. In particular, we find the words "The sale" on line 65 of Section 180.170 of House Committee Substitute for Senate Bill No. 140 to be ambiguous, as this phrase does not identify the bonds to which the rest of the sentence applies. One of the accepted canons to be applied in construing a statute permits and often requires an examination of the historical development of the legislation, and in doing so, resort may be had to the journals of the legislature and the original bill and amendments thereto. State ex rel. Missouri Power LightCompany v. Riley,
House Committee Substitute for Senate Bill No. 140 was enacted in response to Section 621 of the Deficit Reduction Act of 1984, P.L. 98-369,
Senate Bill No. 140, Eighty-Third General Assembly, First Regular Session, as originally introduced, was entitled "AN ACT relating to private activity bonds." This version did not contain any amendments to Section
On Thursday, April 4, 1985, Senate Bill No. 140 was taken up for perfection. 1985 Senate Journal 700. At that time, Senate Amendment No. 1 to Senate Bill No. 140, was adopted. 1985 Senate Journal 700-703. In part, this amendment changed the title from "AN ACT relating to private activity bonds." to "AN ACT to repeal section
and except that, the sale of bonds, notes or other evidences of indebtedness issued by any housing authority created under section
99.040 , RSMo, may be sold at any sale, public or private, at the best price obtainable, not less than ninety-five percent of the par value thereof, and may bear interest at a rate not exceeding fourteen percent per annum, any law in this state to the contrary notwithstanding.
1985 Senate Journal 702-703. This amendment was apparently aimed at the implied repeal of provisions of Section
On Tuesday, April 9, 1985, Senate Bill No. 140, as amended by Senate Amendment No. 1, was reported perfected. 1985 Senate Journal 711. On Thursday, April 11, 1985, Senate Bill No. 140, as amended by Senate Amendment No. 1, was read the third time in the Senate and passed. 1985 Senate Journal 742-743.
On Thursday, April 11, 1985, Senate Bill No. 140, as amended by Senate Amendment No. 1, was reported to the House of Representatives and read the first time. 1985 House Journal, Eighty-Third General Assembly, First Regular Session (hereinafter sometimes referred to as "House Journal") 874. On Monday, April 15, 1985, Senate Bill No. 140, as amended by Senate Amendment No. 1, was read in the House for the second time. 1985 House Journal 889. On Wednesday, April 17, 1985, Senate Bill No. 140, as amended by Senate Amendment No. 1, was referred to the Budget Committee. 1985 House Journal 983.
On Wednesday, May 29, 1985, the Budget Committee reported its recommendation that the House Committee Substitute for Senate Bill No. 140 do pass. 1985 House Journal 1619.
House Committee Substitute for Senate Bill No. 140 substituted the following language for that quoted supra:
except that, the sale of bonds, notes or other evidences of indebtedness issued by any housing authority created under section
99.040 , RSMo, may be sold at any sale, at the best price attainable, not less than ninety-five percent of the par value thereof, and may bear interest at a rate not exceeding fourteen percent per annum, any law of this state to the contrary notwithstanding. The sale shall be a public sale unless the issuing jurisdiction adopts a resolution setting forth clear justification why the sale should be a private sale.
(Emphasis added.)
The words "The sale" are ambiguous, because: (1) in the preceding phrase House Committee Substitute for Senate Bill No. 140 authorizes housing authorities to sell their bonds at "any sale" as a direct response to Section
On Thursday, June 13, 1985, House Committee Substitute for Senate Bill No. 140 was taken up and House Amendment No. 1 was offered, which added the following language to that quoted above:
except that private activity bonds may be sold either at public or private sale.
1985 House Journal 2157. House Amendment No. 1 to House Committee Substitute for Senate Bill No. 140 was adopted, and the House Committee Substitute, as amended was read the third time and passed. 1985 House Journal 2157-2159.2
House Amendment No. 1 raises additional confusion, because it refers to "private activity bonds". The term "private activity bonds" is defined in Section 2(4) of House Committee Substitute for Senate Bill No. 140 as "certain industrial development bonds and student loan bonds designated as such by federal law pursuant to P.L. 98-369." "Private activity bond" is defined in Section 621 of the Deficit Reduction Act of 1984, P.L. 98-369,
The ultimate guide in the construction of statutes is the intent of the General Assembly. Edwards v. St. LouisCounty,
Accordingly, the answer to the first question asking whether general obligation bonds of a political subdivision bearing interest at a rate of nine percent (9%) must be sold at public sale unless a resolution is adopted by the issuing jurisdiction giving clear justification why the sale should be a private sale is "no". The language of Section
The answer to the second question asking whether general obligation bonds of a political subdivision bearing interest at a rate of eleven percent (11%) per annum can be sold at a private sale if a resolution is adopted by the issuing jurisdiction giving clear justification why the sale should be a private sale is "no" for the same reason given in response to the first question.
The third question is moot. Under Section
Conclusion
It is the opinion of this office that the sentence, "The sale shall be a public sale unless the issuing jurisdiction adopts a resolution setting forth clear justification why the sale should be a private sale except that private activity bonds may be sold either at public or private sale.", in Section
Yours very truly,
WILLIAM L. WEBSTER Attorney General