After Kentucky's HB 314, does the KCNA Board still run the state broadband authority or is it just advisory?

Plain-English summary

The Kentucky Communications Network Authority (KCNA) runs the state's broadband network. In its 2026 session the General Assembly passed House Bill 314, which reorganized KCNA: it changed who sits on the seven-member Board, eliminated the KCNA executive director position, and told the executive director of the Commonwealth Office of Technology (COT) to assign staff to do KCNA's work. After the reshuffle, a dispute broke out over how much power the Board still has. The Board's chair asked the Attorney General to clarify. KCNA staff and the agency's own lawyers had been treating the Board as "largely advisory" and refusing some of its directives, including directives about pending litigation with a wholesaler, OpenFiber.

The opinion concludes the Board is the governing body of KCNA, not an advisory committee. The key point is that HB 314 did not change KRS 154.15-030(3), the statute that lists the Board's duties. That statute tells the Board to "develop and implement a strategic plan" and "provide policy direction," to "establish" rates and customer-account methods, to "direct upgrades to technology as necessary," and to "approve fiscal planning" including budgets, appropriations management, and billing services. Reading those verbs in their ordinary sense, the opinion finds the Board has the power to make the agency act, control its finances, and direct its operations, including the conduct of litigation, contracts, and RFPs. It contrasts the Board's broad, enumerated powers with the limited, specific duties the statute gives the COT executive director and the Finance and Administration Cabinet secretary. It also points to a long record of past Board actions (approving settlements, contracts, and the OpenFiber wholesaler agreement) that confirm the Board has always exercised this authority.

The opinion identifies one real limit. By abolishing the KCNA executive director (who used to hire staff "with the approval of the board") and giving COT's executive director the duty to assign personnel, HB 314 removed the Board's direct control over personnel decisions. But the opinion says that does not make the assigned staff free to ignore the Board's other directives. It analogizes to the legislature, which sets policy without personally hiring the employees who carry it out.

What this means for you

The KCNA Board and its members: Based on this opinion, the Board retains authority under KRS 154.15-030(3) to direct KCNA's policy and operations, approve or disapprove contracts and RFPs, and direct the conduct of litigation, including the OpenFiber matter, which means the subjects of the motions the Board passed at its April 17, 2026, meeting fall within its authority. The Board cannot, however, directly hire or fire the staff carrying out its work.

KCNA staff, general counsel, and outside counsel: The opinion concludes the Board is not merely advisory, so assigned staff and the agency's lawyers are expected to follow the Board's lawful directives on policy, finances, operations, and litigation. The loss of the Board's personnel authority does not free staff from that obligation.

The COT executive director and Finance Cabinet secretary: The opinion reads KRS 154.15-020(3) to give the COT executive director the duty to assign personnel and, with the Board's approval, to execute certain contracts; it reads the secretary's role as a required signatory on certain contracts, a role HB 314 narrowed rather than expanded. Neither official has authority to act contrary to the Board's directives.

Agency boards generally: The opinion is a useful illustration of how Kentucky courts read a board's enumerated statutory duties (implement, establish, direct, approve) as conferring real decision-making power, not advisory suggestions, especially when the legislature simultaneously created a separate advisory body it later removed.

Common questions

Q: After HB 314, is the KCNA Board just advisory?
A: No. The opinion concludes the Board remains the governing body of KCNA, with authority to direct policy, operations, finances, and litigation, because HB 314 left KRS 154.15-030(3) unchanged.

Q: What power did the Board actually lose under HB 314?
A: Its direct authority over personnel. HB 314 eliminated the KCNA executive director position (which hired staff with Board approval) and gave the COT executive director the duty to assign personnel to KCNA.

Q: Can the Board control the OpenFiber litigation and contracts?
A: Yes, in the opinion's view. It reads the Board's powers to "implement" its strategic plan and "direct upgrades to technology" and approve fiscal planning as including the power to direct litigation and to approve or disapprove contracts and RFPs.

Q: How did the opinion decide the Board is not advisory?
A: It looked at the verbs in KRS 154.15-030(3) ("develop and implement," "establish," "direct," "approve"), applied their ordinary meaning, and noted that the statute had separately created an advisory group (removed by HB 314), which shows the Board itself was never meant to be merely advisory.

Q: Does losing personnel authority mean staff can ignore the Board?
A: No. The opinion analogizes to the General Assembly, whose policymaking authority is not negated because it does not directly hire the employees who carry out its mandates. Assigned KCNA staff still must follow the Board's other lawful directives.

Background and statutory framework

KCNA is created and, after HB 314, "attached to the Finance and Administration Cabinet for administrative purposes." 2026 Ky. Acts ch. 2 (HB 314) reorganized the agency: it changed the Board's composition so that only two of seven members are appointed by the Governor, eliminated the KCNA executive director position, removed an advisory group formerly created by KRS 154.15-020(2)(j), and directed the executive director of COT to "assign personnel employed with [COT] to carry out the functions and responsibilities of the authority" under KRS 154.15-020(3).

The Board's powers are set by KRS 154.15-030(3). The opinion reads each paragraph: (a) "[d]evelop and implement a strategic plan for and provide policy direction to the authority"; (d) "approve fiscal planning for the authority including budget development, state appropriations management, cost-recovery schedules, grant administration, and billing services"; (e) "establish" rates and "methods for customer account management"; and (f) "[d]irect upgrades to technology as necessary." It treats "implement," "establish," and "direct" as conferring operative power, not advice, relying on Fletcher v. Commonwealth (the word "implement" implied unambiguous power) and Hancock v. Schroering (the word "direct" connotes the power to make all decisions on a matter).

The interpretive frame is that an administrative board has "only such powers as are conferred expressly or by necessary or fair implication" (Croke v. Public Serv. Comm'n of Ky.), and that statutes are construed as written when their language is plain and unambiguous (Conn v. Ky. Parole Bd.). The opinion contrasts the Board's broad duties with the limited roles assigned to the COT executive director (assign personnel; execute certain contracts with Board approval) and the Finance Cabinet secretary (a required signatory on certain contracts under KRS 154.15-020(2)(g), a role HB 314 narrowed), invoking the principle that the legislature "does not hide elephants in mouseholes" (Shively Police Dep't v. Courier Journal, Inc., citing Landrum v. Commonwealth ex rel. Beshear). It supports its reading with the Board's documented history of directing litigation, approving settlements, and approving contracts (including the OpenFiber wholesaler agreement). On the limit it identifies, the opinion analogizes the Board's loss of personnel authority to the General Assembly's policymaking role, which does not depend on directly hiring staff (Brown v. Barkley). A footnote explains the office did not treat the request as barred by 40 KAR 1:020(4)'s rule against opining on matters being litigated, because the Franklin Circuit Court had declined to reach the Board-authority question as unripe.

Source

• Landing page: https://www.ag.ky.gov/Opinions/Pages/default.aspx
• Original PDF: https://www.ag.ky.gov/Resources/Opinions/Opinions/OAG%2026-04.pdf

Original opinion text

June 15, 2026

OAG 26-04

Subject: What is the function and role of the Board of the Kentucky Communications Network Authority after the passage of HB 314?

Requested by: David Couch, Chair, Board of the Kentucky Communications Network Authority

Written by: Christopher L. Thacker, General Counsel

Syllabus: HB 314 did not alter the provisions of KRS 154.15-030(3), which outlines the principal duties of the Board. Accordingly, the Board remains the governing body of KCNA with the authority to implement and direct policy, develop budgets and approve fiscal decisions, and direct the Authority's operations. HB 314 did, however, remove the Board's direct authority over personnel decisions by eliminating the independent office of KCNA executive director and delegating to the executive director of COT the duty of assigning personnel for KCNA.

Opinion of the Attorney General

The Board of the Kentucky Communications Network Authority (KCNA) has requested this advisory opinion to clarify its role and the scope of its authority over the activities of KCNA. This request arises in the aftermath of the changes to KCNA's organic statute brought about by the passage of House Bill 314 (HB 314) by the General Assembly during its 2026 Regular Session. [1] HB 314 made several changes to KCNA's organization. Significantly, HB 314 changed the composition of the KCNA Board. As a result, only two of the Board's seven members are now appointed by the Governor and only one member of the Board, as previously constituted, remains on the current Board. HB 314 also eliminated the position of executive director of KCNA and directed the executive director of the Commonwealth Office of Technology (COT) to "assign personnel employed with [COT] to carry out the functions and responsibilities of the authority." KRS 154.15-020(3).

In the wake of the Board's reconstitution, questions have arisen about the scope of the Board's authority. Specifically, the current Board believes that it is the governing body of KCNA with general power to oversee and direct the agency's activities, as evidenced by a number of resolutions passed at its meeting on April 17, 2026. [2] KCNA staff and agents (including KCNA's outside attorneys and general counsel) have refused to follow several of the Board's directives, contending that the Board's role is largely advisory. A specific subject of contention has been the scope of the Board's authority to direct conduct of pending litigation against OpenFiber Kentucky Company, LLC (OpenFiber), arising from disputes over the terms of the wholesaler agreement between OpenFiber and KCNA. [3] The Board has also expressed concern about a pending request for proposal (RFP) for wholesale services.

KCNA and its Board, "like other administrative boards and agencies, [have] only such powers as are conferred expressly or by necessary or fair implication." Croke v. Public Serv. Comm'n of Ky., 573 S.W.2d 927, 929 (Ky. App. 1978). Thus, the question of who has decision making authority over KCNA is a statutory matter to be resolved by reference to the plain and ordinary meaning of words the General Assembly used in KRS Chapter 154.15. See Conn v. Ky. Parole Bd., 701 S.W.3d 76, 82 (Ky. 2024) ("Statutes are to be construed as they are written, and 'the intent of the Legislature must be deduced from the language it used, when it is plain and unambiguous[.]'" (internal citation omitted)).

KRS 154.15-030(3) defines the duties of the Board and, by implication, its powers. Paragraph (a) states that the Board is to "[d]evelop and implement a strategic plan for and provide policy direction to the authority[.]" This can hardly be construed as merely advisory authority. [4] The dictionary definition of the verb "implement" is "to take steps to put into practice" or "to give practical effect to and ensure of actual fulfillment by concrete measures." [5] The General Assembly's use of the verb "implement" in this statute, therefore, confers upon the Board not only the duty to set high-level goals and policy objectives, but also the power to cause the agency to take the steps necessary to achieve the goals the Board sets. See Fletcher v. Commonwealth, 163 S.W.3d 852, 857 (Ky. 2005) (finding that the word "implement" in an executive order implied the unambiguous executive power consistent with the term's normal usage).

The other paragraphs of KRS 154.15-030(3) are similarly replete with verbiage providing the Board with direct authority over KCNA's activities. The Board is empowered to "establish" the network's rates and "methods for customer account management," not merely to advise some other actor within KCNA to do so. KRS 154.15-030(3)(e). And it is the Board's express power to "[d]irect upgrades to technology as necessary[.]" KRS 154.15-030(3)(f). In Hancock v. Schroering, Kentucky's highest court explained that the word "direct," as used in another statute, "from its plain meaning would connote that the Attorney General would have the power to make all decisions as to the conduct of an investigation exclusive of any other state officer." 481 S.W.2d 57, 61 (Ky. 1972). Likewise, here, the Board has the "power to make all decisions" relating to "upgrades to technology" by KCNA—including those involving contracts and RFPs.

Finally, the Board holds the power of the purse and has final authority over KCNA's finances. KRS 154.15-030(3)(d) provides that the Board must "approve fiscal planning for the authority including budget development, state appropriations management, cost-recovery schedules, grant administration, and billing services[.]" From the development of the Authority's budget to the actual "management" of state appropriations, and even to decisions about "billing services," the General Assembly has delegated financial responsibility and control over KCNA's affairs to the Board alone.

In contrast to the broad, enumerated powers entrusted to the Board in KRS 154.15-030(3), the only other actors discussed in KRS Chapter 154.15 are assigned discreate, limited duties. While KRS 154.15-020(2) discusses the duties of the Authority generally, the only reference to the "executive director" of KCNA in that subsection was removed by HB 314; there is no mention of the executive director of COT at all in that subsection. Rather, when discussing the duties and powers of the executive director of COT with respect to KCNA, KRS 154.15-020(3) only imposes upon him the duty to "assign personnel employed with the Commonwealth Office of Technology to carry out the functions and responsibilities of the authority," and paragraph (4)(a) grants him the power to "make, execute, and effectuate" certain contracts "with the approval of the board." Nothing in the statute suggests that he has any authority to act contrary to the Board's directives. Rather, HB 314 tasks COT's executive director with carrying out KCNA's duties under the oversight of KCNA's Board and subject to the Board's direction as to policy, finances, and operations.

The only other actor identified in the statute is the secretary of the Finance and Administrative Cabinet, who is mentioned only as a required signatory for certain contracts in KRS 154.15-020(2)(g). But HB 314 expressly limited the secretary's role with respect to KCNA rather than expanding it. When moving KCNA from Office of the Governor, the General Assembly attached it to the Cabinet for administrative purposes only. [6] The addition of the phrase "for administrative purposes" by the General Assembly clearly indicates its intent to make KCNA largely independent from the Cabinet.

As the Supreme Court of Kentucky has observed on several occasions, "[t]he General Assembly does not hide elephants in mouseholes." Shively Police Dep't v. Courier Journal, Inc., 701 S.W.3d 430, 443 (Ky. 2024) (citing Landrum v. Commonwealth ex rel. Beshear, 599 S.W.3d 781, 791 (Ky. 2019)). If the General Assembly intended to vest independent control of the Authority in either the executive director of COT or the secretary of the Finance and Administration Cabinet, it would have said so. Rather, HB 314 left KRS 154.15-030(3) unchanged.

Given that HB 314 made no change to the Board's duties as listed in KRS 154.15-030(3), a review of the Board's actions prior to the bill's passage, as memorialized in the Board's minutes, further confirms the Board's broad decision-making authority. Those minutes record multiple prior actions confirming the Board's authority with respect to legal disputes, litigation, or potential litigation. The Board routinely entered closed session to discuss pending or contemplated litigation with both KCNA's general counsel and outside counsel. See, e.g., KCNA Board's meeting minutes of August 14, 2019 (House Enterprises lawsuit), January 16, 2020 ("to discuss pending litigation"), June 23, 2022 ("Purpose of Discussing Litigation Issues"), and February 4, 2025 ("to discuss pending litigation").

Moreover, the Board's vote has been required in the past to approve settlement agreements. [7] See, e.g., KCNA Board's meeting minutes of January 17, 2019 (ratified "global settlement agreement with project partners"), August 10, 2021 (approved "proposed settlement of outstanding and potential litigation" involving "issues relating to accessing the Ft. Knox military reserve and ongoing construction and design defects with communications shelters"), and December 28, 2022 (Board was presented with proposed settlement of pending litigation after mediation and passed motion "to accept proposed settlement"). And, significantly, in a joint report filed in the Franklin Circuit Court following a court-ordered mediation in Commonwealth, Kentucky Communications Network Authority v. Graybar Electric Co., Inc., et al., No. 21-CI-00865, the parties represented to the Court that the "term sheet and final and agreed to settlement agreement documents are subject to and contingent upon the Kentucky Communications Network Authority and Kentucky Wired Operations Company, LLC boards' approvals." See Joint Report filed August 31, 2022.

The Board has also approved significant contracts on behalf of KCNA. See, e.g., KCNA Board's meeting minutes of August 14, 2019 (CRD lease). Particularly noteworthy is the fact that the Board approved the wholesaler agreement with OpenFiber that is the subject of the pending litigation referenced above. See KCNA Board's meeting minutes of June 15, 2017.

Certainly, HB 314 did curtail the Board's authority in one significant way. By eliminating the independent position of KCNA executive director with the power to hire personnel "with the approval of the board," providing instead that "[t]he executive director of [COT] shall assign personnel employed by [COT] to carry out the functions and responsibilities of the authority," HB 314 effectively removed the Board's direct authority over personnel decisions. However, this does not alter the legal obligation of the assigned KCNA staff—including COT's executive director and KCNA's assigned general counsel—to follow the Board's other directives. The Board's statutory authority to direct policy and operations is no more impaired by its inability to remove specific personnel than is the General Assembly's policy making authority negated by the fact that it does not directly hire and fire state employees or choose the constitutional officers charged with carrying out its mandates. See Brown v. Barkley, 628 S.W.2d 616, 623 (Ky. 1982) (observing that "the executive branch exists principally to do [the legislative branch's] bidding").

For these reasons, it is the opinion of this Office that the authority of the Board of KCNA under KRS 154.15-030(3) is similar to that of agency and corporate boards generally. This includes the ability to direct the Authority to take specific actions that the Board deems necessary to implement its strategic plan and policies—specifically including the direction of litigation; to approve (or disapprove) contracts and RFPs as it deems necessary to carry out its budgetary and fiscal oversight duties; and to make final determinations regarding network operations and upgrades. As such, the Board's authority clearly extends to the subjects of the motions passed in its April 17, 2026, meeting.

Russell Coleman
Attorney General

Christopher L. Thacker
General Counsel

[1] 2026 Ky. Acts ch. 2.

[2] The Board meet again on May 15, 2026, and at that meeting it approved the minutes of the April 17 meeting.

[3] See Franklin Circuit Court Civil Action Nos. 23-CI-01049, 24-CI-00333, 24-CI-00875. The Office is aware that the subject of the Board's authority was raised by counsel for OpenFiber in connection with a dispute related to the appointment of a mediator in that litigation. However, the Court declined to reach this issue—which is not raised in any of the pleadings in the cases before it—explaining that: "The Court recognizes the enactment of House Bill 314 in the 2026 General Assembly, and is aware that there may be conflicting interpretations of how the changes in governance for KCNA enacted in that legislation should be interpreted. Those potential disputes need not be resolved at this time, and in fact they are not ripe for the Court to consider." Opinion and Order, entered May 29, 2024, at 14. The Office, therefore, does not believe the question raised in the Board's request for an advisory opinion to be one "involving matters being litigated or . . . submitted in contemplation litigation." See 40 KAR 1:020(4).

[4] It should also be noted that, while HB 314 did not change any of the statutory text regarding the Board's duties in KRS 154-15.030(3), it did eliminate an advisory group formerly created by KRS 154-15.020(2)(j). See 2026 Ky. Acts ch. 2 § 2. The fact that the statute formerly provided for both a Board and a separate advisory body strongly suggests that the Board was not itself ever intended to be merely advisory.

[5] Merriam-Webster.com Dictionary, "implement," available at https://www.merriam-webster.com/dictionary/implement (last accessed June 15, 2026).

[6] HB 314 amended KRS 154.15-020(1) to state that "[t]he Kentucky Communications Network Authority is established and shall be attached to the Finance and Administration Cabinet for administrative purposes." 2026 Ky. Acts ch. 2 § 2(1) (emphasis added).

[7] The Board's authority in this regard was specifically discussed by the Governor in his Veto Message regarding HB 314, which was issued on March 6, 2026: "The new unconstitutional Board could reverse the decisions of the current Board which the Finance and Administration Cabinet has agreed with that held the wholesaler company accountable for its conduct that was in breach of its contract. It could potentially settle the lawsuits and allow the wrongdoer company to again be in business with the Commonwealth."