KRS § 56.510 — KY Code / Title VII / Chapter 56 / Section 56.510
56.510 Payments of costs -- Conveyance of title of industrial development, headquarters, or nonretail service and technology project -- Acquisition of public project by state -- Lease agreement or financing agreements
Status: in_force

56.510 Payments of costs -- Conveyance of title of industrial development,

headquarters, or nonretail service and technology project -- Acquisition of

public project by state -- Lease agreement or financing agreements.

(1) In carrying out the purposes of this chapter, and in providing for the expenditure of

funds for the acquisition of real estate or for a building project for the state or for

any state agency, the cabinet may find that the cost may be paid in whole or in part:

(a) Out of the funds appropriated specifically for capital outlay purposes;

(b) Out of funds directly appropriated to the involved state agency which may

legally be available for the purpose;

(c) Out of funds derived or which may be derived by the issuance and sale of

revenue bonds by the commission (but only for the purpose of acquiring

property for use by the state government or one of its departments or agencies,

but not including any independent municipal corporation or political

subdivision); or

(d) By any one (1) or a combination of said methods of financing. Any such

findings providing for the issuance and sale of bonds shall be submitted to the

commission for final determination. When any funds appropriated to or

standing to the credit of a particular state agency are to be used for a purpose

of the character above contemplated, the head of the agency may direct that

the funds be transferred to the credit of the Finance and Administration

Cabinet and made available for expenditure by the Finance and

Administration Cabinet for the agreed purpose. Industrial development,

headquarters, or nonretail service and technology projects may be financed by

the issuance of revenue bonds of the commission only at the request of the

Cabinet for Economic Development, subject to the provisions of subsection

(3) of this section.

(2) In any case where the expenditures for the acquisition of real estate or for a building

project for the state or any state agency are to be financed in whole or in part by the

issuance or sale of revenue bonds, the commission may provide that the title to any

real estate which may be so acquired shall not vest in the Commonwealth until the

revenue bonds, together with interest thereon, have been paid in full. In such cases

the commission may, by agreement or in a trust indenture securing the payment of

such revenue bonds, provide that the title of such real estate may be vested in some

other state agency, or in a trustee named in such indenture, until the revenue bonds,

together with the interest thereon, have been paid in full. It shall be provided in any

such financing:

(a) That upon the retirement and discharge of the bonds, notes, or other

obligations issued by the commission at the direction of and on behalf of a

state agency, title to the public project or public projects so acquired shall vest

in the Commonwealth;

(b) That in the event of default with respect to such bonds, notes, or other

obligations, the Commonwealth 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;

(c) That the issuance of such bonds, notes, or other obligations shall be directed

by and approved by such state agency not more than sixty (60) days prior to

the date of issue of such obligations; and

(d) That no bonds, notes, or other obligations shall be issued by the commission

for and on behalf of such state agency except upon express direction of such

state agency.

(3) (a) In any case where the expenditures for the acquisition, installation and

construction of an industrial development, headquarters, or nonretail service

and technology project will be financed in whole or in part by the issuance or

sale of revenue bonds, the commission may provide that the title to the

industrial development, headquarters, or nonretail service and technology

project which may be so acquired shall be conveyed to the entity which will

occupy and utilize the industrial development, headquarters, or nonretail

service and technology project; provided, however, that such conveyance shall

only be made if:

1. The subject entity agrees in writing prior to the issuance of any revenue

bonds to construct and acquire in connection with the industrial

development, headquarters, or nonretail service and technology project

facilities satisfactory to the commission;

2. The commission makes a finding in writing, that, based upon diligent

investigation, the aggregate incremental taxes to be received by the

Commonwealth as a result of such project are reasonably expected, over

the life of the revenue bond issue, to be at least equal to the principal

amount of any revenue bonds issued to finance such project;

3. The industrial development, headquarters, or nonretail service and

technology project is separately approved in writing by the Governor;

4. The industrial development, headquarters, or nonretail service and

technology project is separately approved and authorized by the General

Assembly; and

5. Any revenue bond proceedings for the financing of an industrial

development, headquarters, or nonretail service and technology project

provide that in the event of any disposition by an entity of any such

project previously conveyed to such industrial, headquarters, or nonretail

service and technology entity prior to the collection by the

Commonwealth of incremental taxes in the amount specified in

subparagraph 2. of this paragraph, the subject industrial, headquarters, or

nonretail service and technology entity shall pay to the Commonwealth

an amount equal to the difference between the aggregate incremental

taxes collected by the Commonwealth to such date of disposition and the

principal amount of such revenue bonds;

(b) As an alternate to the initial conveyance of an industrial development,

headquarters, or nonretail service and technology project to an entity, such

project may be leased to such entity upon such terms as the commission and

the Cabinet for Economic Development shall determine to be proper, and in

such case, subject to the provisions of subparagraphs 1., 2., and 3. of

paragraph (a) of this subsection, provision may also be made for title to such

project to be conveyed to the subject entity at such time as the Commonwealth

has collected incremental taxes in respect of the project in an amount equal to

the principal amount of any revenue bonds issued to finance such industrial

development, headquarters, or nonretail service and technology project;

(c) It is hereby determined and declared as a legislative finding of fact that the

provisions and requirements of paragraphs (a) and (b) of this subsection

provide for the receipt by the Commonwealth of fair market value for any

industrial development, headquarters, or nonretail service and technology

project conveyed to an entity pursuant to this subsection; and

(d) The Cabinet for Economic Development is authorized and empowered to

initiate industrial development, headquarters, or nonretail service and

technology projects and to finance such projects pursuant to the provisions of

this chapter. When revenue bonds are issued for the financing of any such

project, the Cabinet for Economic Development is authorized and empowered

to enter into financing agreements or lease agreements with the commission

providing for the making of financing payments by the Cabinet for Economic

Development from appropriations made to the Cabinet for Economic

Development as, if and when received, for the amortization of revenue bonds

so issued, provided that no such obligation shall be binding upon the Cabinet

for Economic Development for a period extending beyond the legislative

biennium during which such obligation is incurred, but such obligation may

be renewed during successive biennial periods by the Cabinet for Economic

Development. The issuance of any revenue bonds, notes or other obligations

for the financing of industrial development, headquarters, or nonretail service

and technology projects shall be directed by and approved by the Cabinet for

Economic Development not more than sixty (60) days prior to the date of the

issue of such obligations, and no bonds, notes or other obligations shall be

issued by the commission for and on behalf of the Cabinet for Economic

Development, except upon such express direction and upon compliance with

this subsection. Any portion of an industrial development, headquarters, or

nonretail service and technology project may be financed by a city or county

of the Commonwealth in the same manner as a financing by the commission

under this section, KRS 56.513 and 56.514 or pursuant to the statutory

authority of such city or county. In such event, the Cabinet for Economic

Development may enter into similar financing agreements or lease agreements

with such city or county in order to make proper provision for such financing.

(4) The cabinet, in providing for the expenditure of funds for any of the purposes

mentioned in this section, or the commission in providing for the issuance and sale

of revenue bonds, shall have power to provide by agreement with the state agency

affected, or by provision in the trust indenture securing the bonds, such terms and

conditions as may be considered appropriate and reasonable so as to permit either

the leasing to, and use by, any state agency of any building project or the

conveyance or lease of any industrial, headquarters, or nonretail service and

technology development project to any entity, any such building project to be paid

for by such state agency either:

(a) From its own appropriation;

(b) By the issuance of revenue bonds; or

(c) By means of a proposal to pay a rental for the use of all or any part of any

building proposed to be constructed and any such industrial, headquarters, or

nonretail service and technology development project to be paid for by the

Cabinet for Economic Development by the issuance of revenue bonds of the

commission, subject to the provisions of subsection (3) of this section, and

amortization of such revenue bonds by the Cabinet for Economic

Development.

The cabinet or the commission, in making any such lease agreement or financing

agreement, or in making provision in any trust indenture securing revenue bonds, is

authorized and empowered to lease all or any part of the facility financed for such

term and upon such conditions and for such considerations or enter into financing

agreements with the Cabinet for Economic Development in respect of any industrial

development, headquarters, or nonretail service and technology project as may

appear to be in the public interest.