LEGAL OPINION



     The purchaser of the Bonds will be furnished at delivery,
wnich delivery must be on June 2, 1986, at the cost of the Board,
the approving legal opinion of Henry M1. Reed IIt, Bond Counsel,
Louisville, Kentucky. Bond Counsel is of the opinion that those
provisions of the "Tax Reform Act of 1985" enacted by the United
States House of Representatives on December 17, 1985 ("H.R.
3838"), relating to 'arbitrage" restrictions are not applicable
to these Bonds; however, because certain provisions of H.R. 3838
affect selected recipients of interest on the Bonds, Bond
Counsel's opinion relating to the exemption from Federal (and
State) income taxes on the interest on these Bonds will read, in
part, substantially as follows:

     'Based upon existing statutes, regulations and official
     rulings as construed and applied as of the date the Bonds
     herein referred to are delivered, it is my further opinion
     that the receipt of interest on said Bonds is at present
     excludable from the gross income of the recipients thereof
     for present Commonwealth of Kentucky and Federal income tax
     purposes, and that said Bonds are exempt from present
     ad valorem taxation by the Commonwealth of Kentucky and all
     of its political subdivisions; provided, however, that if
     H.R. 3838 (the "Tax Reform Act of 1985") or similar
     legislation is ultimately enacted with a January 1, 1986
     effective date for provisions relating to tax-exempt bonds,
     the interest on said Bonds may be directly or indirectly
     subject to Federal income tax consequences if the recipient
     is a financial institution or property and casualty
     insurance company."

     Bond Counsel respectfully requests that the corporate
entities identified above review the provisions of H.R. 3838 in
order to determine the tax consequences unique to those
entities.

     The Board expressly reserves the right to reject all bids
and to waive any informality or irregularity which-in the
judgment of the Board does not impair the integrity of the
bidding process.



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