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 108.170.1 of House Committee Substitute for Senate Bill No. 140, Eighty-Third General Assembly, First Regular Session, applies only to the sales of bonds of housing authorities created under Section 99.040, RSMo.

PONDS: GENEFAL OBJ.JGATJ"ON BO!'-!DS : The sentence , "The sal e ~ha l l be a public sale unless the issuin9 jurisdictjon adepts a resolution settina forth clear INTEREST : POLITICAL SUBDIVISIONS : STATE AUDITOF: . t . +' • + . h . th 1 JUS.l _ lca ~ lon w.y . e sa e should be a private sa~e eYcept that private activity bonds may be sold ~ither at public or private sale .", in Section 108 . 170 . 1 of House Committee Substi- tute for Se~ate Bill No . 1 40 , Eighty- Third General Assembl~, First Regular Sessjon , applies onJy to the sales of bonds 0f housing authorities created un~er Sec~jon 99 . 040 , RS~o. January 6, 1986 The Honorable ~argaret Kelly , CPA Missouri State Auditor OP!NION NO . 2- 86 Truman State Office Building, Eighth Floor Jefferson City , Missouri 65101 Dear !-is . Kell~r: This opinion is in response to your questions asking : 1) When a politjcal subdivisi on of the State undertakes t o issue general ohligation bonds (other than private activity bnnds) hearing an interest rate of 9% , must the bonds be sold at a public sale unless a resolution is adopted by the issuing juris~iction giving clear justific ation why the sale shnuld be a private sale? 2) When a political subdivision of the State undertakes to issue general obligation bonds (other than private activity bonds) bearinq an interest rate of 11%, can the bonds be sold at a private sale if a reso- lution is adopted by the issui~q ~uris ­ diction givjng clear justification why thP sale should be a private sal e? 3) When examining the proceeding~ re l ating to a pr0posed general obligation bona .i.ssue wherein the issuing jurisciction has adopted a resolution giving a j usti f i~Rti on why the sal e of the bonds shoul8 he a private sale and the bonds were in fact The Hono~nble ~a1~aret Kelly sold at a private sa~e, is the State Auditor to exercise eiscr~tion in acceptin~ or rejectir.g the justification? Section 10B.170 of House Committee Substitute for Senate RilJ. No. 140, Eighty- Third General Assembly , First Regular Session , states: 1 Other provisions of law to the contrary 2 notwithstanding , any and all bonds , notes, or other 3 evidences of indebtedness, includinq bonds , notes , or other 4 evidences of indebtedness pa~·able solely from revenues 5 derived from an~ r evenue-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 sta+.e shall be negotjablP., may he issued in 16 bearer form or registered form wj.th or without coupons to 17 evidence interest payable thereon, may be issued in any 18 denomination, and mav bear ~nterest at a rate not exceeding 19 ten percent per annum, and may bP. sold, at anv sale 20 pursuant to any law applicable thereto, at the best price 21 obtainable, not less than ninetv- 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 mav bear intP.rest at a rate 27 not exceedinq fourteen percent per annum if sold at publ1c 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 sn~h bonds, notes or other 31 evidences of indebtedness may be sold to the federaJ gov- 32 ernrnent 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 section 8.010, RSMo, thP. 36 state board of fund commissioners created under section 37 33 . 300, RSMo , any port autho~ity created under section 38 68.010, RSMo , the bi - state metropolitan development dis- 39 trict authorized under section 70.370 , RS¥oo, any special 40 business district creatP.d under section 71 . 790, RSMo, any 41 county, as defined in section 108 . 465, exercising the powers 42 granted by sections 108.450 to 108.470, any land clear?.nce 43 for redevelopment authority created under section 99 . 330, 44 RSMo, the industrial development board created un0er 45 section 100 . 265, RSMo, any plannnd industrial expansion 46 authority created under section 100.320 , RS~o, the higher 2 The Honorable Mar~ar~t Kelly '7 education loan authority created un~er secti on 173.360, 48 FSHo, the l-1issouri housing de~relopment cor.unission 49 created under section 215 . 020 , RS~o , the 5tote e nvi- 50 ronmental improvement and enerqy resource~ authority 51 created under section 260 . 010 , P-SMo , the aqrjculturol an~ 52 small business development authority created under 53 section 34 8 . 020 , RSf.':o , any industrial c.eveloprnent corpo- 54 ration created under section 349.035 , FSMo , or the health 55 and educational facilities ~uthority created under section 56 360.020 , 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 bv anv housinq authoritv 61 created under section 99.040 , RSMo , may be sold at anv sale , 62 at the best price obtainable, no less than ninety- five 63 percent of the par value thereof , and may bear intere~t at a 64 rate not exceeding fourteen percent per annum, anv law of 65 this state to the contrary notwithstandina. The sale shall be 66 a public sale unless the issuing jurisdiction adopts a 67 resolution settina forth clear iustification whv the saJe 68 should be a private sale except that private activity bonds 69 mav be sol d either at public or private sa l e. 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 unv 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 J of thjs section to the 7 6 contrary not"V7i thstanding , revenue bonds issued for airport 77 purposes by any constitutional charter city in this state 78 which now h?s or may hereafter acquire a population of 79 more than four hundred fifty thousand but less than six 80 hundred thou~and inhabitants , according to the last federal 81 decennial census, may bear interest at a rate not exceeding 82 fourteen percent per annum if sold a~ public sale after 83 giving reasonable notice , at the best price obtainahle, not 84 less than ninety-five percent of the par value thereof . Section 108 . 170 of House Committee Substitute for Senate Bill No . 140 provides at lines 18 to 22 that certain bonds may be sold at " any sale" , whether private or public , when the interest rate thereon does not eY.cced ten percent (10%) . Lines 25 to 30 of Section 108 . 170 of F.cuse Committee Substi- tute for Senate Bill No . 140 provide that certain bonds may bear interest rates not exceeding fourteen percent (14%) per annum if such are sold at public sale after giving reasonable notice of such . Lines 59 to 69 of Section 108 . 170 of House Committee Substitute for Senate Bi.ll No. 140 provide thai: the sale of certain bonds must be public unle~s the issuing j uris - diction adopts a resolution setting forth clear justificatjon why the sale should be a p=ivate saJe . The first twc provi- sions existed in prior law . See Section 108 . 170, RSMo 3 The Honorable Maryaret Kelly Supp . 1984 (repealed). The latter provision is new to the law with House Cor.uni ttee Substitute for $enate Bi 11 tlo. 14 0 . We find that this latter provisinn jntroduces 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 Rouse Conmittee SuPstitute for ~enate Bill No. 140 to be ambiguouP , as this phrase does not identi~y the bonds to which the rest of the sentence applies . nne of the accepted canons to be applied in con£truing a statute permits and often requires an examination of the historical develop- ment of the legislation , a~d jn doing so, re~ort may be had to the journals of the legislature and the original bill and amendments thereto. State ex rel . Missouri PowAr & ·Liaht Company v. Riley , 54 6 S . W. 2d 792 , 797 (Mo . App., K.C. 1977). House Committee Substitute for Senate Bj.ll No . 140 was enacted in response to Section 6~1 of the Deficit Reduction Act of 1984, P.L . 98- 369, 98 Stat . 494 , 915 , amending 26 U.S.C. Section 103(n) , which requires the allocation of private activity bonds. See Section 2(4 ) of House Com- mittee Substitute for Senate Bill No. 140 and ~6 u.s.c. Section 103(n) (7) as enacted by the Peficit Reduction Action of 1984 (defining the term "private activity bonds " ). Senate Bill No. 140 , Eiqhty- Third General Assembly, First Re~ular Session , as originally introduced, was entitled "AN ACT r e lating to private nctivity bonds. " This version did not contain any Rmendments to Section 108 . 170, RSMo. The original version of the b i ll was read the first time in the Senate on Wednesday , January 9 , 1985 . 1985 Senate ~ournal , Eighty- Third General Assembly, First Regular Session (hereinafter sometimes referred to as "Senate J"ou:::-nal " ) 51. Senate Bill No. 140 was read a second time in the Senate on Wednesday , January 16 , 1985, and referr ed to the Urban Affairs and Industrial Development Committee. 1985 Senat.e Journal 188 . On Thursday , March 7, 1985 , the Committee on Urban Affairs and Industrial Development reported that it had considered the bill and recommended that the bill do pass. 1985 Senate Journal 48?. · On Thursday , April 4 , 1985 , Senate Bil! No. 140 was taken up for perfection. 1985 Senate Journal 700. At that time, Senate Amendment No. J t0 Senate Bill No . J.40 , v.•as adopten. 1985 Senate Journal 700- 703. In part, this amendment changed the title from "AN AC'E relatins to private activity bonds. " to "AN ACT to repe~l secti on 108.170 , FSl-"o Supp . 1984, relating to certain bond issues, ann to enact in lieu thereof twelve new sections relating to the same subject. " 1985 Senate ~ournal 701 . This amendment also deleted housing authorities from the list of political subdivisions whose bonds are governed by the specific statutes appljcable to them with respect to the sales pr5ce, 4 The H6norable Mar~dret Kelly ~anner of sale , and intnrest rete of their bonds, and adoed the following language: and except that , t he sale of bonds, notes or other evidences of indebtedness issued h~r any housing authori t~· 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 four- teen percent per annum , anv lav1 in this stRte to the contrary not\-1i thstanding . 1985 Senate Journal 702- 703 . This amendment was apparently aimed at the implied repeal of provisions of Section 99 . 150.J and . 2 , RSMo Supp . 1984 , which, with certain exceptions not relevant here , authorizes housing authorities to sell their bonds at any rate of interest as the authorizing resolut ion may require at public sale he l d after notice published once at least five days prior to such sale i n a newspaper having general circulation in the area of operation and in a financial newspaper published in Kansas City or in the Citv of St. Louis. On Tuesday , April 9 , 1925 , Senate Bill ~o . J40 , as amended b~ Senate Amendment No . 1, was reported perfected. 1985 Senate Journal 711. 0n Thursday , April 11, 1985 , Sen~te 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 e enate Amendment No . 1 , was reported to the House of Representat i ves and read the fir~t time. 1925 House Journal , Eighty- Third General Assembly , First Fegular Se~sion (hereinafter sometimes referred to as "Rouse ~ournal") 8~4. On Mond~~r, April 15 , 1985 , Senate Bill ~o . 140 , as amended by Senate Amendment No. 1, was read in the House for the seccnd time. 1985 House Journal 889. On Wednesday, April 17 , 1985, Senate Bill No. 140 , as amended bv Senate Amendment No. 1, vTas referred to the Budget CoMmittee . 1985 House Journal 983. On Wednesday, May ?.9, J985 , the Budqet Col'!lmittee reported its recommendation that the House Committee Substitute for Senate Bill No. 140 co pass . 1985 Eouse Journal 1619. Rouse Cormni ttee Substitute for Senate Bill No .. 140 substituted the following languaqe for that auoted supra: except that , the sale of bonds , notes or o~her evidences of indehtedness issued bv any housing authority created under 5 - The Honorable ~ars~ret Kelly s~ction ~9 . 040, RS14o, MRY be sold at any sale, at the best price attRinable, not less than ninety-five pe:::-cent of the par value thereof, and may bear interest at a rate not eY.ceeding fourte~n pe~cent per annum, any law of this state to the contrary notwi thst;md ing. The sale shall be a public sale unle~s the issuing iurisdiction adopts a resolu- tion setting forth clear justification why the sale should be a privnte sale. (Emphasis added.) The wo~ds "The sale" are ambiguous, because: (1) in the preceding phrase House Committee Substitute for Senate Bill No . 140 authorizes housinq authorities to sell their bonds at "ary saleL as a direct response to Section 99 . 150 , RSMo Supp. 1984 (w£ich requires most housing authorit~' bond sales to be public) ; and (2) the sentence in question refers to the "issuing jurisdiction" . From the legislative history and context cf this language , we interpret the words "The sale" as beinq intended by the drafter~ of the House Committee Substitute to refer only to the sale of bonds bv housing authorities ; the principal subject of these amendmen~s being whether the bon~R of housing authorities are to he sold at private or public s~le. 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 fol!owing language to that quoted above: except that private activity bonds may be ~old either at public or private sale. 1985 House ~ournal 2157. House Amendment No. 1 to Hnuse Com- mittee Sub~titute for Senate Bill No. 140 w~s adopted , and the P.ouse Committee Substitute , as ?~enced was ?cad the third time and passed . 1985 House Jnurncl 2157- 2159 . 1 House Committee Substitute for Senate Bill No. 140 deletes the words "puhlic or private" that followed the '\llords "any sale" in Sennte Amendment No . 1 to Senate Rill No . 140 . 2 House Commjttee Substitute for Senate Bill No. 140, as amended by House Amendment No. 1 . "'as reported to +.he Senate on Thursday , June 13 , 19e5 . 1985 Sena~e ~ou~na l 1838-1839 . On FriaRy, ;rune 14 , 19~5 , House t:'ommi ttee Substitute f0r Senate Bill No. 1~0, as amended by House Amendme~t No . 1 , was adopted, read the third time, and passed by the Se nate. 1985 6 The Honorable rtarQ ... re·t Kelly House Arnencment No . J raises additional c0nfusion, because it refers to " private activity bonds". The term "private activity bonds " is defined in Sect~on 2(4) of House Committee Substi tute for Senate Bill No. 1 40 as "<"'P.rtain industrial development b onds and s tudent loan bonds desiq- nated as such by federa~ law pursuant to P.L. ~£ - 369." "Private activity bond" is defined in Section 621 of the Deficit Reduction Act of 1984, P . L . 98-369 , 98 Stat . ~94 , 916, amenc.ing 26 U. S . C. Section 103 (n) (7) , generally as a federally tax- exempt bond that js either an industrial development hond or a student loan bond. The term "industrial development bend " is defined in 26 u.s.c. Section ~03 (b) ( 2 ) and (3) to exclude obligations usPCI. t o carry on a trade or business by a governmental unit . Thus, honds used to finance pr9jects ;un by a housing authority would not generally be 1ndustr~. al development bonds . In addition , 26 V.S.C . Section 103(n) (7) (B), as enacted by the Deficit Reduction Act of J984 , defines the term "private activity bond" to exclude certain multi- family residential housing . It is also u nlikely that housing authorities would be involved with student loan bonds. See 26 u. s.c. Section 103(n) (8), as enacted by the Defi c it Reduction Act of 1984 (defining the term " student loan bond") . Thus, it can be seen that housing authorities would not generally bP involved with the issuance of private activ).ty bonds. This brings into question whether the words "The sale" in Section 108.170.1 of House Committee Substitute for Sena~e Bill No . 140 refer only to houging authorities or to all bond sales generally. If the latter interpretation is ~~opted , there would be a conflict between the provisio n of Section 108 . 170.1 of House Commi~tee Substitute for Senate Bill No. 14 0 allowing the private sale of certain bends at interest rates not exceeding ten percent ( 10%) per annum ann the language requiring a public sale absent a resolu tion statinq "clear justificat ion " why the bonds should be sold at a private sale . There would also be a conflict between the provision in Section 108.170 . 1 of House Committee Substitute for Senate Bill No . 140 requiring the public sale of certain bonds with interest rates exceedin9 ten pe~cent (10%) per annum but not exceeding fourteen percent (14%) per annum and the provision allowing the private sale of such bonds upon a showing of "clear justification". Footnote continued ... Senate Journal 1879- 1880. On Friday , ~une 21 , 19R5 , Fouse ComMittee Substitute fo r Senate Bill No . 140 , as amended by House Amendment No . 1, was signed by the P~esident P~o ~ern of the Senate. 1985 Senate Journal 2094- 7095 . OP this same date , House Committee Substitute for Senate Bill No . 140 , as amended by P.ouse Areendm~nt No. 1, was si9ned by the ~peaker of the House , 1985 House Journal 2518 , and delivered to the Governor , 1985 Senate Journal 2095 . On ~uly 31 , 1985, this legislation was approved by the Governor . 7 The Sono=able Mar~dret Kelly The ultimate guide in the construction of statutes i.s the intent of the General Assembly. Edwards v. St. J.oui~ County, 429 S.W.2d 7J8, 722 (Ho. bane 196R). Statutes that appear to conflict should be =cad together, if at all possible, so that they may stand together. Id. , at 721 . If the statutes cannot be reconciled, the la~act of the General Assembly prevails. State ex rel. Atkinson v. Planned Industrial Expansion Authoritv of St. Louis , 517 S.W.2d 36, 49 (Mo. bane 1975). From the ~ontext o! this language aP.d its legislative history , we belie~r~ it is possible to harmonize the provisions of Section 108.170.1 of House Committee Substitute for Senate Bill No. 140. The words "The sale" in the language in auection refer only to the sales of bonds by housing authorities. Accordingly, the answer to the first aucstion azkina whether general obligation bonds of a political subdi~r islon bearing intere~t at a rate of nine percPnt (9~) must be sold at public sale unless a resolution is adopted by the issuing jurisdiction giving clear ~usti!ication ~~hy the sale should be a private sale is "no". The language of Section 108.170.1 of House Committee Substitute for Senate Bill No. 140 referred to in the question (lines ~5 - 691 i~ not applicable to political subdivisions generally, but is only applicable to housing authorities . The answer to the second question asking whether generRl obligation bonos of a political suhdivi~ion . 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 juris- diction g iving clear justification why the sale should b~ a private sale is "no" for the same reason aiven in response to the first ~uestion. The third question is moot . Under s~ction 108.240, RSMo Supp. 1984, the Missouri State Auditor registers only general obligation bonds . The bonds of housing authorities are not general obligation bonds. Section 99 . 140.4, RSMo 1978. Therefore, the ~issouri State Auditor will probably never have occasion to review housing authority resolutions giving a justification why the sale of bonds should be private pursuant to the provision£ of Section 108 . 170.1 of House Committee Substitute for Senate Bill No . 140 . Conclusion It is the opinion of this office that the sentence, "The sale shall be a public sale unless th~ issuing jurisdiction _adopts a resolution setting forth clear justification why the sale should be a private sale except that private activity bends may be sold either at public cr private sale.", in Section 108. J. 70.1 of Honse Committee Substi tut.e for Senate Bill No. 140, Eighty- Third ~eneral Assembly , First Regular The Fonorable Ma~ ~ dret Kelly Session , applies only to the salPs of bonds of housin9 authorities created un~er Section Q9 . 040 , P.S~o . Yours very truly, l•HLLIAM L . WF.BSTER Attorney Gene:;.al