Kentucky Revised Statutes

Ky. Rev. Stat. § 58.040 (2026)

Bonds negotiable and tax-free -- Method of sale -- Payable solely from

✓ current as of May 2026

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revenue.

(1) Bonds issued pursuant to KRS 58.010 to 58.140 shall be negotiable and shall not be subject to taxation.

(2) If any officer whose signature or countersignature appears on the bonds or coupons ceases to be an officer before delivery of the bonds, the officer's signature or countersignature shall be valid and sufficient for all purposes as if the officer had remained in office until delivery.

(3) The bonds shall be sold in a manner and upon the terms as the governmental agency determines and as provided in KRS 424.360. Any contract for the acquisition of a public project may provide that payment shall be made in bonds.

(4) The bonds shall be payable solely from the revenue derived from the public project and shall not constitute an indebtedness of the state, county, city, or political subdivision within the meaning of the Constitution.

(5) It shall be plainly stated on the face of each bond that the bond has been issued under the provisions of KRS 58.010 to 58.140 and that the bond does not constitute an indebtedness of the governmental agency within the meaning of the Constitution. Effective: June 27, 2019 History: Amended 2019 Ky. Acts ch. 35, sec. 3, effective June 27, 2019. -- Amended 1996 Ky. Acts ch. 274, sec. 3, effective July 15, 1996. -- Amended 1968 Ky. Acts ch. 110, sec. 4; and ch. 154, sec. 3. -- Created 1946 Ky. Acts ch. 126, sec. 4.

Notes of Decisions

Cited in 6 cases, 1947–1986 · leading case: Texas Cont'l Life Ins. v. Bankers Bond Co., 187 F. Supp. 14 (W.D. Ky. 1960).

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Texas Cont'l Life Ins. v. Bankers Bond Co., 187 F. Supp. 14 (W.D. Ky. 1960). · cites it 2× “It also stated that “it will be futile to have a public sale with bidders, but since Section 58.040 permits the bonds to ‘ * * * be sold in such manner and upon such terms as the governmental agency deems best, or * * * may provide that payment shall be made in such bonds.”

McKinney v. City of Owensboro, 203 S.W.2d 24 (Ky. Ct. App. 1947). “KRS 58.040 and 58.030. The order, resolution or ordinance must recite that the public project is being undertaken under the provisions of this Act, KRS 58.”

Brown v. City of Harrodsburg, 252 S.W.2d 44 (Ky. Ct. App. 1952). “It is expressly stated in KRS 58.040 that such “bonds shall be payable solely from the revenue derived from the public project and shall not constitute an indebtedness of the state, county, city or political subdivision within the meaning of the -Constitution.”

Williams v. City of Barbourville, 246 S.W.2d 591 (Ky. Ct. App. 1952). “540, since KRS 58.040 specifically authorizes an encumbrance of this revenue.”

Haney v. City of Somerset, 530 S.W.2d 377 (Ky. Ct. App. 1975). “KRS 58.040 provides for the method of sale by the following language: “The bonds shall be sold in such manner and upon such terms as the governmental *380 agency deems best, * * *.”

Baker v. City of Richmond, 709 S.W.2d 472 (Ky. Ct. App. 1986). “Appellee responds that since KRS 58.040, under which the city would issue the bonds, was passed after the original KRS 96.”

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