AGO 1989-045.

Case DateApril 11, 1989
CourtKansas
Kansas Attorney General Opinions 1989. AGO 1989-045. April 11, 1989ATTORNEY GENERAL OPINION NO. 89-45Horace B. EdwardsSecretary of Transportation Kansas Department of Transportation Docking State Office Building Topeka, Kansas 66612-1568 Re: State Departments; Public Officers and Employees--Department of Transportation--Railroad Rehabilitation Loan Guarantee Fund; Limits on Guarantee Under 1989 House Bill No. 2520 Synopsis: A refinancing loan to the Mid States Port Authority made by a participating financial institution may be guaranteed by the Secretary of Transporation and such refinancing loan is not subject to the 50% loss limitation applicable to the original federal government loan for acquisition and rehabilitation. Cited herein: K.S.A. 75-5029, as amended by 1989 House Bill No. 2520; 75-5030; 1989 House Bill No. 2520, New Section 1; and Kan. Const., Art. 11, § 9. * * * Dear Secretary Edwards: As Secretary of Transportation and administrator for the state railroad rehabilitation loan guarantee fund, you request our opinion on the scope of your authority to guarantee a refinancing loan to be made by a private financial institution to the Mid States Port Authority pursuant to 1989 House Bill No. 2520. Specifically, you inquire if the refinancing loan guarantee is subject to the exception clause of K.S.A. 75-5030 which limits the state guarantee to 50% of any loss that would be assumed by the federal government upon default. You express the opinion that the terms of House Bill No. 2520 do not restrict the percentage of a refinancing loan which may be guaranteed by the state of Kansas. We agree. The Mid States Port Authority is a public body corporate and politic, organized and existing under the authority of K.S.A. 12-3401 etseq. The Authority was created by agreement of fourteen Kansas counties for the purpose of acquiring a portion of the bankrupt Rock Island railroad which prior to 1983 served the northwestern part of the state. The acquisition of the railroad was made possible by an $18,000,000 loan from the Federal Railroad Administration. The Port Authority now has the opportunity to refinance the federal loan with private financial institutions and is encouraged to do so by new federal deficit reduction measures. In order for the Authority to obtain the original federal loan, the state of Kansas was...

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