KRS § 56.872 — KY Code / Title VII / Chapter 56 / Section 56.872
56.872 Applicability -- Report of secretary of Finance and Administration Cabinet to General Assembly -- Procedure when cost exceeds cost approved by General Assembly
Status: in_force

56.872 Applicability -- Report of secretary of Finance and Administration Cabinet

to General Assembly -- Procedure when cost exceeds cost approved by General

Assembly.

(1) Notwithstanding the provisions of KRS 56.870(1), KRS 56.870 to 56.874 shall not

apply to any financing by the Turnpike Authority of Kentucky until July 1, 1982,

and shall not apply to any refinancing transaction by any agency, authority, board,

corporation, cabinet, commission or other agency or instrumentality of the

Commonwealth, if such refinancing transaction results in a net debt service savings

to such agency, authority, board, corporation, cabinet, commission or other agency

or instrumentality of the Commonwealth.

(2) The secretary of the Finance and Administration Cabinet shall report to the General

Assembly in the branch budget recommendation, defined in KRS 48.010, on the net

debt service savings, any funds released from a debt service reserve fund or any

other funds generated as a result of any refinancing or other mechanism approved

by any agency, authority, board, corporation, cabinet, commission or other agency

or instrumentality of the Commonwealth after July 15, 1986. No portion of any net

debt service savings realized subsequent to a refinancing or open market bond

purchase and available during the biennium in which the savings are realized, any

debt service reserve fund released or other funds generated shall be expended for

any of the purposes for which such agency, authority, board, corporation, cabinet,

commission, or agency or instrumentality of the Commonwealth may be authorized

by law to perform. The General Assembly shall on a biennial basis appropriate the

net debt service savings as described, any debt service reserve fund or other funds

generated, reported by the Finance and Administration Cabinet, to a special escrow

account for each bond issue within the Finance and Administration Cabinet. The

proceeds within this account shall be used to accelerate the payment of outstanding

principal and interest, either through open market bond purchases or investments at

maximum yield, in addition to the amounts budgeted for such purposes over the

biennium, on definitive bonds, temporary bonds or interim financing secured by

bond anticipation notes, loan agreements or other means issued by an agency,

authority, board, corporation, cabinet, commission or other agency or

instrumentality of the Commonwealth. The Finance and Administration Cabinet

shall report to the General Assembly on a biennial basis the amount of total funds

utilized in the escrow account to retire the outstanding principal and interest and the

amount of principal and interest so retired, or to be retired, for each agency,

authority, board, corporation, cabinet, commission or other agency or

instrumentality of the Commonwealth. In the event that the funds appropriated to

the escrow account cannot be used in the biennium for the purposes prescribed by

this subsection, the Finance and Administration Cabinet shall so report and provide

the reasons therefor. The funds appropriated shall not lapse at the end of the

biennium but be carried forward to the next biennium to be utilized for the purposes

prescribed by this subsection.

(3) In the event the cost of an authorized bond project exceeds its estimated cost, as

approved by the General Assembly, the financing of such project may be authorized

upon approval by the secretary of the Finance and Administration Cabinet, so long

as such cost does not exceed the estimated cost by more than twenty-five percent

(25%). In the case of financing of any bond project approved by the General

Assembly, the costs of issuance of bonds or notes shall be added to project costs in

determining the principal amount of authorized financing of any such project.