KRS § 58.180 — KY Code / Title VII / Chapter 58 / Section 58.180
58.180 Creation of nonprofit corporation to act as an instrumentality of governmental agency in the financing of public projects
Status: in_force

58.180 Creation of nonprofit corporation to act as an instrumentality of

governmental agency in the financing of public projects.

(1) (a) As used herein, the term "public project" shall have the same meaning as

ascribed to such term by KRS 58.010, and the term "public project" shall

include, inter alia, but not by way of limitation, public facilities such as

sewers, sewage treatment works, water systems, streets, sidewalks and other

public ways, both vehicular and pedestrian, parks and recreational and sports

facilities, hospitals and health facilities, educational facilities, drainage and

reclamation projects, jails, municipal buildings, public docks, wharves and

port facilities, solid waste disposal facilities, pollution control systems, mass

commuting and transport systems, industrial parks, courthouses and other

public buildings, public parking and garage facilities, and other edifices,

projects and like things and objects intended for governmental and public

purposes.

(b) As used herein, the term "governmental agency" shall mean any division of

the Commonwealth which is a municipal corporation and political subdivision

of the Commonwealth of Kentucky, or to which has been delegated the right

to exercise part of the sovereign power of the Commonwealth.

(2) Any governmental agency may create a nonprofit corporation pursuant to the

provisions of KRS 273.161 to 273.390, inclusive, to act as the agency and

instrumentality and the constituted authority of such governmental agency in the

acquisition and financing of any public project which may be undertaken by such

governmental agency pursuant to the provisions of Kentucky law and thus

accomplish a public purpose of such governmental agency. Such corporation, upon

direction of such governmental agency, shall be authorized to issue its bonds, notes

or other obligations on behalf of such governmental agency for the acquisition and

financing of one or more public projects on behalf of such governmental agency,

and may pledge for the amortization of such bonds, notes or other obligations all

revenues derived from the operation of such public project or public projects,

including specifically all revenues derived from the leasing of such public project or

public projects directly to the governmental agency upon whose behalf and upon

whose direction such bonds, notes or other obligations are issued. Provided,

however, that no bonds or other obligations shall be authorized under the provisions

of this chapter for the construction or acquisition of telephone, gas, or electric

facilities unless such electric facilities are constructed or maintained to provide

service solely to the customers of the municipal utility.

(3) It shall be provided in any such financing (i) that upon the retirement and discharge

of the bonds, notes or other obligations issued by such corporation at the direction

of and on behalf of such governmental agency, title to the public project or public

projects so acquired shall vest in such governmental agency; (ii) that in the event of

default with respect to such bonds, notes or other obligations, the governmental

agency shall have the exclusive option to acquire the public project or public

projects for the amount required to discharge such bonds, notes or other obligations,

and is provided a reasonable time to exercise such option; (iii) that the issuance of

such bonds, notes or other obligations shall be directed by and approved by such

governmental agency not more than sixty (60) days prior to the date of issue of such

obligations; and (iv) that no bonds, notes or other obligations shall be issued by

such corporation for and on behalf of such governmental agency except upon

express direction of such governmental agency.

(4) Any governmental agency creating a corporation pursuant to this section to act for

and on behalf of, and as the agency and instrumentality of, such governmental

agency in the acquisition and financing of a public project or public projects shall,

at all times either (i) exercise organizational control over such corporation by

creating the corporation pursuant to this section, and retain authority at any and all

times to alter or change the structure, organization, programs or activities of the

corporation, including the power to terminate existence of the corporation, subject

to any limitation on the impairment of contracts entered into by such corporation, or

shall (ii) exercise supervisory control over such corporation as may be deemed

proper by the governmental agency in the administration of the corporation's

activities as a constituted authority of such governmental agency, and as may be

required from time to time by federal law in order to qualify the corporation to issue

bonds, notes or other obligations on behalf of the governmental agency.

(5) It shall be provided, inter alia, in the articles of incorporation of any such

corporation and constituted authority created to act as the agency and

instrumentality of a governmental agency and to finance public projects for such

governmental agency on its behalf and thereby accomplish a public purpose of such

governmental agency, (i) that any net revenues of such corporation beyond those

necessary for retirement of indebtedness, or implementation of the public purpose

or purposes of the corporation and the governmental agency shall not inure to the

benefit of any person other than the governmental agency; (ii) that upon dissolution

of the corporation, title to all property owned by such corporation shall vest in the

governmental agency; and (iii) that the corporation shall be created and operated

solely and only to accomplish one or more of the public purposes of the

governmental agency and for the acquisition and financing of public projects for

and on behalf of such governmental agency.

(6) The governing body of such corporation shall consist solely and only of the

following individuals:

(a) Public officials of the governmental agency as ex officio members; or

(b) Persons appointed by the governmental agency or by public officials of the

governmental agency.