KRS § 56.514 — KY Code / Title VII / Chapter 56 / Section 56.514
56.514 Types of bonds issuable to finance industrial development projects or building projects -- Terms -- Issuance -- Marketing -- Refunding
Status: in_force

56.514 Types of bonds issuable to finance industrial development projects or

building projects -- Terms -- Issuance -- Marketing -- Refunding.

The following provisions shall be applicable to commission financing to carry out the

purposes of this chapter:

(1) As used in this section, the following terms shall have the following meanings:

(a) "Commercial paper revenue bonds" means revenue bond anticipation notes

which by their terms mature not more than two hundred seventy (270) days

from the date of issuance thereof and are to be refunded by the issuance of

commercial paper revenue bonds or by refunding revenue bonds; provided,

however, that all commercial paper revenue bonds must possess the

characteristics set forth and described in subsection (3)(d) of this section;

(b) "Refunding revenue bonds" means revenue bonds issued by the commission

to refund outstanding issues of revenue bonds, commercial paper revenue

bonds and variable rate revenue bonds; and

(c) "Variable rate revenue bonds" means revenue bonds the rate of interest on

which fluctuates either automatically by reference to predetermined formulas

and indices or pursuant to the standards set forth in subsection (3)(e) of this

section.

(2) The commission may issue and sell revenue or other authorized bonds, including

variable rate and commercial paper bonds, to pay all or any part of the expense or

cost of or incidental to an industrial development project, or a building project in

denominations and amounts, as it deems to be for the best interest of the

Commonwealth.

(3) (a) Revenue bonds issued to pay the costs of industrial development projects or

building projects may bear interest at any rate or rates, either fixed or variable

in accordance with such method as shall be determined by the commission,

shall be payable either annually or at shorter intervals, may be of such terms

and maturities, may bear such conversion privileges, may be executed by the

manual or facsimile signatures of such officers of the commission, and shall

be executed in such manner and at such time or times, or from time to time,

and be payable at such times not exceeding forty (40) years from the date

thereof, or, if commercial paper, from the date of initial issuance thereof, and

at such place or places as the commission determines;

(b) Such revenue bonds may provide that they or any of them may be called for

redemption prior to maturity under conditions determined by the commission

before issuing the bonds;

(c) Such revenue bonds may, at any time on or after the earliest redemption date

provided therefor at the time of their issuance, be refunded by the

commission, in such amount as the commission may deem necessary to refund

the principal of the revenue bonds to be refunded, together with any unpaid

interest thereon, to create any necessary debt service reserve fund, and to pay

any premiums, expenses, and commissions required to be paid in connection

therewith;

(d) At the time of the initial issuance of commercial paper revenue bonds to pay

the costs of industrial development projects or building projects, the

commission may designate individual officials of any state agency as agents

for purposes of approving the principal amount, the interest rate, the discount,

if any, and the maturity date of revenue bonds being issued later to refund the

maturing commercial paper revenue bonds; provided, however, that at the

time of the initial issuance of any such commercial paper revenue bonds, the

commission shall set the maximum principal amount, the maximum interest

rate, and the maximum discount, if any, of the refunding revenue bonds plus

the final maturity date of the last issue of such refunding revenue bonds; and

provided further that the commission shall retain the right to revoke any such

agent's authority at any time and for any reason whatsoever. Individual issues

of commercial paper revenue bonds, issued as part of a continuing financing

program, may be refunded by the approvals of such agents of the commission;

(e) At the time of issuance of variable rate revenue bonds to pay the costs of

industrial development projects or building projects, the commission may

designate individuals or institutions which in the sole judgment of the

commission have financial market expertise to serve as agent for the

commission for establishing and changing from time to time while such

variable rate revenue bonds remain outstanding the rate of interest to be borne

by and the price to be paid for such revenue bonds; provided, however, that

the rate-setting procedures and authority of each such agent shall be set forth

in writing, and may include a formula or an index or indices based upon

market factors, and shall be established by the commission at the time of

issuance of such revenue bonds; and provided further that at the time of the

issuance of such revenue bonds, the commission shall establish the maximum

interest rate to be borne by the revenue bonds; and provided further that the

commission shall retain the right to remove or replace any such agent at any

time and for any reason whatsoever;

(f) Any revenue bonds issued and outstanding hereunder to pay the costs of

industrial development projects or building projects and the interest due on

such revenue bonds shall, prior to the maturity or redemption date thereof, be

deemed to have been paid to the same extent as if they had actually been paid

in cash and retired, if:

1. In the event any of such revenue bonds are to be redeemed on any date

prior to their maturity, the commission shall have given a trustee

appointed for the holders of such revenue bonds in connection with their

issuance, in form satisfactory to such trustee and in conformity with the

requirements of the resolution authorizing their issuance irrevocable

instructions to give notice of redemption of such revenue bonds to the

holders thereof by written notice which is satisfactory to such trustee;

2. There shall have been deposited with the trustee either money in an

amount which shall be sufficient, or direct obligations of or obligations

guaranteed by the United States of America, or other obligations

specified by the commission, the principal of and the interest on which,

when due, will provide money which, together with the money, if any,

deposited with the trustee at the same time, shall be sufficient to pay

when due the principal and the interest due and to become due on such

revenue bonds on and prior to redemption date or maturity date thereof,

as the case may be; and

3. In the event that such revenue bonds are not to be redeemed within the

next succeeding sixty (60) days, the commission shall have given the

trustee in form satisfactory to it irrevocable instructions to give, as soon

as practicable, in a manner satisfactory to it, a notice to the holders of

such revenue bonds that the deposit required by subparagraph 2. of this

paragraph has been made with the trustee, that such revenue bonds are

deemed to have been paid in accordance with the provisions hereof and

stating such maturity or redemption date upon which money is to be

available for the payment of the principal of and interest on such

revenue bonds;

(g) It is hereby declared and determined that the issuance of any and all refunding

bonds as provided herein will be for a public purpose if the commission so

declares in the proceedings authorizing same; and

(h) If any officer whose signature or countersignature appears on revenue bonds

issued to pay the costs of industrial development projects or building projects

ceases to be such officer before delivery of the bonds, his signature or

countersignature shall nevertheless be valid and sufficient for all purposes the

same as if he had remained in office until delivery. Any such revenue bonds

issued to pay the costs of industrial development projects or building projects

shall be sold upon such terms as the commission deems best, either at public

or private sale, and for such price, as the commission may determine. In the

event the revenue bonds are sold at private, negotiated sale, the commission

shall publish in accordance with the requirements of KRS Chapter 424 a

notice of the intent of the commission to negotiate the sale of such revenue

bonds within thirty (30) days of such proposed sale, which notice shall include

the identification and description of such revenue bonds, an estimate of the

week during which the negotiated sale is expected to occur and the identity of

the state officer or agency and the fiscal advisor or managing underwriter from

whom further information regarding the revenue bonds may be obtained.

Revenue bonds, notes, or other obligations issued by the commission under

this chapter, the income thereon, and the transfer thereof, including any profit

made on the sale thereof, shall at all times be exempt from taxation or

assessment of any type by the Commonwealth, its agencies and departments,

and by all political subdivisions within the state. Nothing contained in this

section shall preclude or prevent the authorization and issuance by the

commission from time to time of revenue bonds, notes, or other obligations,

the receipt of interest on which may be subject to federal income taxation.

(4) The payment of revenue bonds issued to pay the cost of an industrial development

project or building project, together with the interest thereon, may be secured by a

pledge of and a first lien on all of the receipts and revenue derived, or to be derived,

from the rental, financing, or operation of the industrial development projects or

building projects involved, including rentals and financing payments made by the

Finance and Administration Cabinet from appropriated funds on a biennial basis,

pursuant to lease agreements or financing agreements between the Finance and

Administration Cabinet and the commission. Neither the payment of any revenue

bond, nor the interest thereon, issued under the authority of this section shall

constitute an indebtedness of the Commonwealth of Kentucky, nor shall any

revenue bond or interest thereon be payable out of any fund except funds derived

from rentals, financing payments, or other revenues derived from the operation of

the industrial development projects or building projects or from revenues as are

available for the purpose by law.

(5) If revenue bonds are sold at public, competitive sale, the revenue bonds issued by

the commission under the provisions of this section shall be sold after notice

adequate to inform the public of the sale. Notice may include posting on the Internet

or newspaper advertising.

(6) If revenue bonds are sold at public, competitive sale, competitive bids for the sale of

the revenue bonds shall be opened and read publicly by the secretary of the Finance

and Administration Cabinet or the secretary's representative at a designated place,

day, and hour, all of which shall be announced in the notice made relative thereto.

(7) All money from the sale of revenue bonds issued pursuant to this section shall be

deposited in the State Treasury and shall be credited to a special account to be

designated as directed by the Finance and Administration Cabinet, and no part

thereof shall be withdrawn from the State Treasury except for the purposes

authorized by this chapter, together with the cost incidental to the issuing and

selling of the revenue bonds and other expenses directly related thereto. The

commission may provide in any trust indenture securing revenue bonds for

additional terms and conditions thereof, or for other restrictions not in conflict with

this chapter.