CHAPTER 56 State Lands and Buildings

General Provisions

56.005. Composting and use of composted materials by state agencies.

To the maximum extent practicable all state agencies responsible for the maintenance of public lands in the Commonwealth shall do the following:

  1. Compost on those public lands grass clippings, leaves, and other yard waste collected at state and local government facilities;
  2. Use and make available for other state agencies’ use, those materials composted on state lands for projects including, but not limited to, roadway construction, reconstruction, or maintenance, restoration of sites including abandoned mine lands reclamation, stream bank stabilization, and reforestation; and
  3. Give preference, when making purchases of materials, to the use of compost for land maintenance activities according to procurement procedures set out in KRS 45A.520 .

History. Enact. Acts 1991 (1st Ex. Sess.), ch. 12, § 58, effective February 26, 1991.

56.010. Action for trespass or injury to state property.

The Finance and Administration Cabinet shall institute civil proceedings in the name of the Commonwealth for any trespass or injury to state property under its control.

History. 3947: amend. Acts 1966, ch. 255, § 56.

56.020. Secretary of State to have custody of title documents.

  1. The Secretary of State shall have custody of all records, judgments, deeds, maps and abstracts of title of land or buildings owned for governmental purposes by the state except deeds to rights-of-way for state or federal roads. In this section, “roads” does not include state-owned bridges or their approaches.
  2. The Secretary of State shall record all the deeds in a separate book and shall file, keep and have accessible the originals of all papers mentioned in subsection (1) of this section, and the books in which they are recorded. He shall index and cross-index the original papers and record books, including an index according to the county where the property is located and according to the use or department of the state government using the property. The records and indexes shall not be moved from the Office of the Secretary of State.

History. 2337a, 2337a-1: amend. Acts 1982, ch. 240, § 4, effective July 15, 1982.

Opinions of Attorney General.

This section and KRS 56.040 must be construed together and, therefore, the exception as to a lease of not more than six offices under KRS 56.040 would apply where a lease is longer than one year and such a lease involving not more than six offices need not be filed pursuant to this section. OAG 72-488 .

Research References and Practice Aids

Cross-References.

Certified copy of record in Office of Secretary of State, use as evidence, KRS 14.050 .

Purchase or sale of real estate by state, who to authorize, KRS 45A.045 .

56.030. State, when made grantee or lessee of land.

  1. Except as provided in KRS 177.060 , 177.070 and 183.120 , the Commonwealth shall be named as the grantee of any land given or devised to the state, or partly or wholly paid for out of state funds, and of any land or interest in land conveyed to it or for its use or for the use of any of its agencies or officers.
  2. Except as provided in KRS 183.120 , the Commonwealth shall be named as the lessee in all leases for governmental purposes or for the use of the state.

History. 2337a-2, 2337a-6.

NOTES TO DECISIONS

1.Suit for Sale of Land.

By virtue of this section, an action against the State Park Commission (now Department of Parks), by a person owning a tract jointly with it, for a sale of the tract and division of the proceeds, was an action against the state and could not be maintained. However, an action for damages could be maintained, the state having waived its immunity in such cases. Kentucky State Park Com. v. Wilder, 256 Ky. 313 , 76 S.W.2d 4, 1934 Ky. LEXIS 401 ( Ky. 1934 ).

2.Tax Exempt Status.

The fact that the Commonwealth of Kentucky is not a named grantee in the deed to the state bar center building does not prevent the property from being public property and does not deprive the property of a tax exempt status. Travis v. Landrum, 607 S.W.2d 124, 1980 Ky. App. LEXIS 373 (Ky. Ct. App. 1980).

The Kentucky Bar Center building located in Frankfort, Kentucky, is public property and therefore exempt from the levy of ad valorem taxes. Travis v. Landrum, 607 S.W.2d 124, 1980 Ky. App. LEXIS 373 (Ky. Ct. App. 1980).

Cited:

Ex parte Auditor of Public Accounts, 609 S.W.2d 682, 1980 Ky. LEXIS 274 ( Ky. 1980 ).

Research References and Practice Aids

Cross-References.

Airports, acquisition of land for is not governed by this section, KRS 183.771 .

Purchase of real estate by state, who to authorize, KRS 45A.045 .

Purchase price must be set out in deed, KRS 45.450 .

School property, how title taken, KRS 160.160 , 162.010 , 162.020 .

Title to real estate, how taken when revenue bonds are issued, KRS 56.510 .

56.040. Finance and Administration Cabinet or Transportation Cabinet to provide for title examination and certification of land or interest in land paid for out of state funds.

When any land or interest in land is to be paid for out of state funds, the Finance and Administration Cabinet (Transportation Cabinet for requirements of that cabinet) shall take action to provide for the examination and certification of the title to the affected land, with or without exceptions, by an attorney licensed to practice law in this state, or for the insurance of the title to such land by a land title insurance company authorized to do business in this state. A survey and plat of the land showing the corners, angles, and calls of the land shall be made by a competent land surveyor prior to the date of the deed conveying the land or any interest therein to the state. The costs incurred under this section shall be charged against the funds of the agency for whose use and benefit the land is acquired.

History. 2337a-3, 2337a-6: amend. Acts 1982, ch. 240, § 5, effective July 15, 1982.

NOTES TO DECISIONS

Cited:

Tipton v. Brown, 273 Ky. 496 , 117 S.W.2d 217, 1938 Ky. LEXIS 679 ( Ky. 1938 ).

Research References and Practice Aids

Cross-References.

Penal institutions, purchase or lease of land on which to work inmates, KRS 196.120 .

Secretary of Finance and Administration Cabinet must approve purchase of real estate, KRS 45A.045 .

University of Kentucky to investigate lands about to be acquired by penal institutions, KRS 196.130 .

56.050. Land acquired by condemnation or damage suit — Copy of judgment to be recorded.

When the state acquires title to any land or interest in land, as contemplated by KRS 56.020 , by condemnation proceedings or through payment of damages for an injury to land, the Secretary of State shall be furnished a copy, certified by the clerk of the court, of the judgment vesting such title in the state, and shall be furnished the other information required by KRS 56.040 . The Secretary of State shall keep and record such information as provided in KRS 56.020 .

History. 2337a-4.

Research References and Practice Aids

Cross-References.

Penal institutions, condemnation of land for, KRS 196.140 .

56.060. Recording of deeds or judgments affecting state lands — Duty of clerk.

  1. All deeds and judgments conveying to or from or vesting in or divesting the state of any land or interest in land shall be recorded in the office of the county clerk of the county where the land or the greater part of it lies.
  2. In cases conveying to or vesting in the state any land or interest therein, other than highway right-of-way acquisitions, the deed or copy of the judgment shall be immediately transmitted to the Secretary of State by the clerk. The county clerk shall endorse on the document the book, page number and county where he has recorded it, as follows: “Recorded in  . . . . . Book  . . . . . , Page  . . . . . ,  . . . . .  County Clerk’s Office.”
  3. In cases of deeds or judgments conveying from or divesting the state of land or an interest therein, the clerk shall immediately transmit a copy of the document to the Secretary of State. This document shall be endorsed as follows: “Recorded in  . . . . .  Book  . . . . . , Page  . . . . . ,  . . . . .  County Clerk’s Office.”

History. 2337a-5: amend. Acts 1978, ch. 384, § 124, effective June 17, 1978; 1982, ch. 311, § 1, effective July 15, 1982.

56.062. Inspection — Notice — Asbestos agency account.

  1. The cabinet shall cause an inspection to be made of all buildings owned, leased or operated by the Commonwealth for the presence of friable materials. If friable materials are found as a result of such inspection, the cabinet shall have samples of the friable materials analyzed for asbestos in accordance with testing methods established by the Environmental Protection Agency, as provided in 40 CFR 763.109 as amended.
  2. When friable asbestos-containing materials are identified in a state building, a notice shall be conspicuously posted on each entrance to the building informing the users of the building of their presence. The notice shall include the following warning:

    WARNING: THIS BUILDING HAS BEEN INSPECTED FOR FRIABLE (EASILY CRUMBLED) MATERIALS WHICH CONTAIN ASBESTOS. FRIABLE ASBESTOS-CONTAINING MATERIALS MAY CAUSE HEALTH PROBLEMS AND ARE PRESENT IN THIS BUILDING. A RECORD OF THE INSPECTION AND A DIAGRAM OF THE LOCATION OF FRIABLE ASBESTOS-CONTAINING MATERIALS ARE AVAILABLE IN ROOM _________ OF THIS BUILDING.

  3. The cabinet shall provide to all persons employed in state buildings found to contain friable asbestos-containing materials, a written notice of the location, by room or building area, of all friable asbestos-containing materials in the building.
  4. When friable asbestos-containing materials are not found as a result of inspection, the following notice shall be conspicuously posted on each entrance to the building:

    THIS BUILDING HAS BEEN INSPECTED FOR FRIABLE (EASILY CRUMBLED) MATERIALS WHICH CONTAIN ASBESTOS. FRIABLE ASBESTOS-CONTAINING MATERIAL MAY CAUSE HEALTH PROBLEMS. THIS BUILDING DOES NOT CONTAIN FRIABLE ASBESTOS-CONTAINING MATERIALS.

  5. When inspections identify asbestos-containing material that is not friable, the cabinet shall cause an annual inspection of the building to be made to determine if the asbestos-containing material has become friable.
  6. When inspections identify asbestos in a building which has been enclosed or encapsulated to prevent its spread, a notice shall be posted in the custodial offices of the building informing maintenance personnel of the location of such materials.
  7. When asbestos-containing materials have been removed from a building, any notice previously posted in such building pursuant to this section regarding the asbestos-containing materials so removed may be removed.
  8. Expenditures required to implement this section may be paid from the asbestos agency account established within the Finance and Administration Cabinet.

History. Enact. Acts 1986, ch. 357, § 2, effective July 15, 1986.

56.063. Deposit and use of savings generated as result of refunding transaction.

  1. As used in this section:
    1. “Asset/liability commission” means the Kentucky Asset/Liability Commission established by KRS 56.861 ;
    2. “Commission” means the State Property and Buildings Commission established by KRS 56.450 ;
    3. “General fund” has the same meaning as in KRS 48.010(15)(a);
    4. “Present value savings” means the difference expressed in terms of current dollars between debt service on refunded bonds and debt service on refunding bonds;
    5. “Refunded bonds” means outstanding bonds, notes, or other obligations that were issued at any time, and that are refinanced through a refunding transaction;
    6. “Refunding bonds” means new bonds, notes, or other obligations issued to refund outstanding bonds, notes, or other obligations, including redemption premiums and any interest accrued or to accrue to the date of redemption as part of a refunding transaction;
    7. “Refunding transaction” means a transaction:
      1. Whereby outstanding bonds, notes, or other obligations are refunded by the issuance of new refunding bonds, notes, or other obligations; and
      2. That is directly supported in whole or in part by appropriations from the general fund or road fund;
    8. “Revenue shortfall” has the same meaning as in KRS 48.010(18);
    9. “Road fund” has the same meaning as in KRS 48.010(15)(g); and
    10. “State agency”:
      1. Includes:
        1. Any state administrative body, agency, department, or division as defined in KRS 42.005 ; and
        2. Any board, commission, institution, or division exercising any function of the state; with the authority to issue bonds, notes, or other obligations, and to enter into refunding transactions with respect to those bonds, notes, or other obligations; but
      2. Does not include universities that are part of the postsecondary education system, as defined in KRS 164.001 .
  2. Notwithstanding any other provision of the Kentucky Revised Statutes, the savings generated from reduced debt service payments during a fiscal biennium as a result of any refunding transaction undertaken by the commission, the asset/liability commission, or any state agency that:
    1. Results in a reduction in required debt service during the fiscal biennium; and
    2. Does not result in positive net present value savings;

shall be deposited in the budget reserve trust fund account established by KRS 48.705 , and shall not be used as part of any budget-balancing measures adopted or taken by the executive branch either in response to a revenue shortfall, or to address expenditure reductions required by an enacted biennial budget for the executive branch.

History. Enact. Acts 2012, ch. 42, § 1, effective July 12, 2012.

Legislative Research Commission Note.

(7/12/2012). Under the authority of KRS 7.136(1), the Reviser of Statutes has corrected a manifest clerical or typographical error in subsection (1)(g)2. of this statute during codification. The meaning of the text was not changed.

Insuring State Property

56.065. Definitions for KRS 56.070 to 56.180.

As used in KRS 56.070 to 56.180 , unless the context requires otherwise:

  1. “Subject of risk” means any or all property reasonably considered to be subject to loss or damage by any single occurrence of any event insured against.
  2. “Cabinet” means the Finance and Administration Cabinet.

History. Enact. Acts 1950, ch. 192, § 1; 1966, ch. 255, § 57; 1982, ch. 406, § 1, effective July 15, 1982; 2010, ch. 24, § 39, effective July 15, 2010.

Research References and Practice Aids

Cross-References.

Office of Insurance, KRS 304.2-010 .

56.070. Finance and Administration Cabinet determines state property to be insured through state fire and tornado insurance fund — Exceptions.

  1. The cabinet shall determine which state property shall be insured against loss by fire and other hazards. The cabinet shall insure with a responsible company or companies authorized to do business in Kentucky all property financed under a statutory amortization plan, to the extent of the lien indebtedness upon the property or to the extent of its reasonable value, whichever is the lesser.
  2. Any officer or agent of the state having control or custody of any property belonging to or controlled or used by the state or any agency of the state may, with the approval of the secretary of the Finance and Administration Cabinet, from the funds allotted to such agency, purchase insurance of an additional kind or kinds which cannot properly be covered in the state fire and tornado insurance fund.

History. 4636-21, 4636-33: amend. Acts 1950, ch. 192, § 2; 1982, ch. 406, § 2, effective July 15, 1982; 2010, ch. 24, § 40, effective July 15, 2010.

NOTES TO DECISIONS

1.Decision to Purchase.

If insurance is to protect the Commonwealth by providing coverage for losses in a Circuit Court clerk’s office for which the clerk might not be personally liable, then the premiums should be paid by the Commonwealth but the decision as to whether the Commonwealth should have this insurance protection should be made by an appropriate representative of the Commonwealth and not by the circuit clerk. Hennessy v. Stewart, 283 S.W.2d 719, 1955 Ky. LEXIS 327 ( Ky. 1955 ).

The Commissioner of Finance (now Secretary of Finance and Administration), as the officer charged with the responsibility for approving obligations of the Commonwealth, in the absence of any statute expressly providing for a specific kind of insurance has the power and right to reject such insurance. Hennessy v. Stewart, 283 S.W.2d 719, 1955 Ky. LEXIS 327 ( Ky. 1955 ).

2.— Rejection.

The Commissioner of Finance (now Secretary of Finance and Administration) had the right and power to reject insurance procured by a circuit clerk and charged to the Commonwealth as “necessary office expense” where the insurance consisted of six (6) policies with premiums of $1,800 covering liability for personal injuries or property damage resulting from negligence in the operation of an automobile or otherwise, fidelity of the deputies and assistants of the clerk, loss of money or securities by destruction, disappearance or wrongful abstraction, wrongful abstraction of furniture, fixtures or equipment, loss of valuable papers or records of accounts receivable and losses sustained by the evidence of financial obligations. Hennessy v. Stewart, 283 S.W.2d 719, 1955 Ky. LEXIS 327 ( Ky. 1955 ).

3.Procurement by Circuit Court Clerk.

If insurance is desired for the protection of a Circuit Court clerk to indemnify him against a personal liability, he should pay for it and not charge the premiums to the Commonwealth as an expense of his office. Hennessy v. Stewart, 283 S.W.2d 719, 1955 Ky. LEXIS 327 ( Ky. 1955 ).

Opinions of Attorney General.

A county court clerk may not purchase “Errors and Omissions” insurance and charge the premium thereon as an office expense to be paid by the state. OAG 66-49 .

This section and KRS 56.100 , relating to insuring property through the state fire and tornado fund, do not apply to the Kentucky Trotting Commission or the Kentucky Racing Commission. OAG 71-363 .

Subsection (2) of this section was never intended to embrace or include the purchase of liability insurance covering officers or employes having control or custody of state property. OAG 83-458 .

The Department of Insurance could purchase Builders Risk insurance, on behalf of the Commonwealth Credit Union, covering the construction phase of a proposed credit union building pursuant to subsection (2) of this section; the policy would be effective at the start of construction of the credit union building and would end at the end of construction and, thereafter, the coverage under the Fire and Tornado Fund would be effected. OAG 84-80 .

The Commonwealth Credit Union could properly purchase insurance covering a credit union building, when such building was completed, from the State Fire and Tornado Insurance Fund; such building, in terms of subsection (1) of this section, qualified as property “used by the state or any agency of the state.” The premium to be charged against the Commonwealth Credit Union would be determined by the Department of Insurance, pursuant to KRS 56.090 and the premium chargeable to the credit union could be taken out of the state budget appropriations to the credit union, the profits of the credit union, or a combination of both, pursuant to KRS 56.100 . OAG 84-80 .

Research References and Practice Aids

Cross-References.

Insurance on airports and aviation facilities, Department of Transportation may provide, KRS 183.125 .

Insurance on state building being financed through revenue bond issue, KRS 56.520 .

Insurance on state fair properties being financed through revenue bond issue, KRS 247.180 .

56.080. Appraisal and valuation of state property.

Before July 1 of each year, the cabinet shall reconsider its appraisal and valuation of public buildings and personal property belonging to or under the control and use of the state or any state agency, and shall certify any changes in value to the agency that has the custody or control of the property. The appraisal and valuation shall equal the amount that the cabinet deems necessary to replace the property at the time of the appraisal, which may be less actual depreciation.

History. 4636-22, 4636-23; 1998, ch. 483, § 33, effective July 15, 1998; 2010, ch. 24, § 41, effective July 15, 2010.

56.090. Rate of premium, how fixed and certified.

Before July 1 of each year the cabinet shall fix, upon each public building and upon each class of personal property belonging to or controlled or used by the state or any agency of the state, the rate of premium that the cabinet deems to be the average rate charged by responsible insurance companies doing business in this state for insurance against damage by fire and other hazards upon property of like kind and degree of risk. The premium and insurance shall be calculated upon ninety percent (90%) of the valuation. Before July 1 of each year the cabinet shall certify to the State Treasurer the premium to be charged against each agency of the state.

History. 4636-24, 4636-25: amend. Acts 1950, ch. 192, § 3; 1982, ch. 406, § 3, effective July 15, 1982; 2010, ch. 24, § 42, effective July 15, 2010.

Opinions of Attorney General.

The Commonwealth Credit Union could properly purchase insurance covering a credit union building, when such building was completed, from the State Fire and Tornado Insurance Fund; such building, in terms of KRS 56.070(1), qualified as property “used by the state or any agency of the state.” The premium to be charged against the Commonwealth Credit Union would be determined by the Department of Insurance, pursuant to this section and the premium chargeable to the credit union could be taken out of the state budget appropriations to the credit union, the profits of the credit union, or a combination of both, pursuant to KRS 56.100 . OAG 84-80 .

56.095. KRS Chapter 45A applicable to fire and tornado insurance contracts.

Notwithstanding the provisions of any other law, KRS Chapter 45A shall apply to fire and tornado insurance contracts entered into by the cabinet, except as provided in KRS 45A.022 .

History. Enact. Acts 1982, ch. 406, § 8, effective July 15, 1982; 2010, ch. 24, § 43, effective July 15, 2010.

56.100. State fire and tornado insurance fund — Payments into — Limit on risk — Certificate of terms and conditions.

  1. Each fiscal year the State Treasurer shall deduct from any funds in the Treasury payable to an agency for the care and maintenance of public buildings or property, an amount equal to the premiums certified to him or her as chargeable against that agency. The amount so debited shall be credited to an account kept by the State Treasurer and known as the state fire and tornado insurance fund. No premium shall be charged on any one (1) subject of risk upon a valuation of more than one million dollars ($1,000,000), unless the Office of the Controller in the Finance and Administration Cabinet has contracted for reinsurance that limits the liability of the fund to one million dollars ($1,000,000) upon such subject of risk.
  2. The Office of the Controller in the Finance and Administration Cabinet shall prescribe a certificate setting forth the terms and conditions of coverage under the state fire and tornado insurance fund. Different forms of certificates may be used for different risks. Such certificates may contain such terms and conditions as the Office of the Controller in the Finance and Administration Cabinet may prescribe, including but not limited to a deductible, in order that there be fair allocation of significant losses and the elimination of unnecessary costs in administering the state fire and tornado insurance fund.

History. 4636-26: amend. Acts 1950, ch. 192, § 4; 1954, ch. 225, § 1; 1960, ch. 100, § 1, effective June 16, 1960; 1982, ch. 406, § 4, effective July 15, 1982; 1986, ch. 437, § 1, effective July 15, 1986; 2010, ch. 24, § 44, effective July 15, 2010; 2012, ch. 83, § 1, effective July 12, 2012.

Opinions of Attorney General.

The Commonwealth Credit Union could properly purchase insurance covering a credit union building, when such building was completed, from the State Fire and Tornado Insurance Fund; such building, in terms of KRS 56.070(1), qualified as property “used by the state or any agency of the state.” The premium to be charged against the Commonwealth Credit Union would be determined by the Department of Insurance, pursuant to KRS 56.090 and the premium chargeable to the credit union could be taken out of the state budget appropriations to the credit union, the profits of the credit union, or a combination of both, pursuant to this section. OAG 84-80 .

56.110. Damage to state property — How appraised.

In case any building or other property belonging to the state or a state agency is damaged by any of the perils insured against, except as otherwise provided in KRS 56.070 to 56.180 , the agency having control or custody over the property shall within thirty (30) days certify the event to the cabinet. After receiving in any manner knowledge of the event, the cabinet shall ascertain and fix the amount of damage and file with the State Treasurer a statement thereof. If the agency having control or custody of the property disagrees with the estimate of damage, the agency and the cabinet shall each appoint one (1) member of a board of appraisers, which two (2) members shall select a third member. An award in writing, submitted by the board of appraisers to the State Treasurer, shall determine the amount of damage.

History. 4636-27: amend. Acts 1950, ch. 192, § 5; 2010, ch. 24, § 45, effective July 15, 2010.

56.120. Payment for damages.

When the amount of damage has been determined, the State Treasurer shall debit the account of the state fire and tornado insurance fund by that amount and credit with an equal amount the account of the agency that has control or custody of the property damaged, and upon warrant from the Finance and Administration Cabinet, the Treasurer shall pay to the agency the amount so credited to it, for the purpose of repairing the damage or reconstructing or replacing the damaged or destroyed property. If the agency deems it impracticable or undesirable to use the money for repair, reconstruction, or replacement of the property damaged or destroyed, it may, with the approval of the Finance and Administration Cabinet, and subject to the provisions of KRS 56.491 , expend said funds for the acquisition, repair, construction, or reconstruction of property similar to the property damaged or destroyed. No debit, credit, or payment made on account of the damage to any one (1) subject of risk, by any one (1) loss, shall be in excess of one million dollars ($1,000,000), unless the Office of the Controller in the Finance and Administration Cabinet has effected reinsurance upon the subject of risk such as to limit the liability of the state fire and tornado insurance fund to one million dollars ($1,000,000), and unless the excess over this amount has actually been paid into the fund by the reinsuring company or companies.

History. 4636-28: amend. Acts 1950, ch. 192, § 6; 1954, ch. 225, § 2; 1960, ch. 100, § 2; 1970, ch. 92, § 16; 1982, ch. 406, § 5, effective July 15, 1982; 2010, ch. 24, § 46, effective July 15, 2010; 2012, ch. 83, § 2, effective July 12, 2012.

56.130. Insufficient amount in fund.

If there is not in the account of the state fire and tornado insurance fund an amount sufficient to cover the damage, the State Treasurer shall debit the fund only with the amount actually to its credit at the time, and shall continue, subject to prior claims, to debit the fund by the amount of each ensuing credit to the fund, until the total damage is covered. No payments shall be made on account of such damage to any agency of the state in excess of the amount debited against the fund at the time of payment.

History. 4636-29.

56.140. Investment of insurance fund.

  1. The State Treasurer, with approval of every investment by the Finance and Administration Cabinet, may invest the state fire and tornado insurance fund in:
    1. Obligations of the United States government, its agencies, and Kentucky cities of the first and home rule classes;
    2. Warrants issued on the State Treasurer;
    3. State bonds, including bridge revenue bonds issued under KRS 180.010 to 180.250 ;
    4. Bonds or other evidences of indebtedness of any domestic corporation that is an agent or instrumentality of the state or of any city, county, or school district of the state, secured by a mortgage on real estate in Kentucky that has been conveyed to the corporation by any city, county, school district, or state educational institution, and which the corporation has leased and given the option to lease to the city, county, school district, or state educational institution, with option in the lessee to purchase the property, or an interest therein, on the payment of the aggregate sum of the bond issue, plus the expenses incident to the issuance of the bonds and the formation and dissolution of the corporation, subject to credit of the amounts paid as rental for such property; and
    5. School bonds issued by cities under KRS 162.120 to 162.290 .
  2. The Finance and Administration Cabinet shall not approve investments on which there has ever been a default in payment of principal or interest preceding the date of acceptance by the State Treasurer.
  3. All income from investments credited to the state fire and tornado insurance fund shall be credited to that fund.

History. 4636-30, 4636-31; 2014, ch. 92, § 25, effective January 1, 2015.

56.150. Expenses of administration.

The cabinet and the State Treasurer may employ such assistance and incur such expenses as are necessary to carry out the purposes of KRS 56.070 to 56.180 . All such expenses may be debited against the state fire and tornado insurance fund, and paid on warrant of the cabinet, but the total of such expenses during any fiscal year shall not exceed ten percent (10%) of the total receipts of the fund during the same fiscal year. If such expenses are incurred at a time when there is not a sufficient amount in the fund to pay them, they shall constitute a prior claim to be paid out of the first receipts of the fund thereafter before any damages on account of insured losses are paid.

History. 4636-32: amend. Acts 1950, ch. 192, § 7; 2010, ch. 24, § 47, effective July 15, 2010.

56.160. Reinsurance.

The Office of the Controller in the Finance and Administration Cabinet may contract with any responsible fire and tornado insurance or reinsurance company authorized to do business in Kentucky to reinsure any subject of risk of which the total valuation has been fixed at over one million dollars ($1,000,000) in such a way as to limit the net liability of the state fire and tornado insurance fund with respect to such subject of risk to one million dollars ($1,000,000). The premium for reinsurance shall be paid out of the state fire and tornado insurance fund, on warrant of the cabinet.

History. 4636-33; amend. Acts. 1946, ch. 130, § 1; 1950, ch. 192, § 8; 1954, ch. 225, § 3; 1960, ch. 100, § 3, effective June 16, 1960; 1982, ch. 406, § 6, effective July 15, 1982; 2010, ch. 24, § 48, effective July 15, 2010; 2012, ch. 83, § 3, effective July 12, 2012.

Research References and Practice Aids

Cross-References.

Reinsurance contracts, filing, KRS 304.5-150 .

56.170. Inspection for fire hazards — Adjustment of premiums.

The cabinet shall annually have an inspection made of each building and its contents owned by the state or any agency thereof, for the purpose of determining the unnecessary causes of a fire hazard therein, and shall make recommendations to the agency having control or custody of the building relative to the removal or correction of the hazard. Reasonable differences in the premium chargeable against the agency on account of the building and its contents may be made contingent upon compliance with such recommendations.

History. 4636-34; 2010, ch. 24, § 49, effective July 15, 2010.

56.180. Fund exceeding ten million dollars — Use of fund — Disposition of excess.

  1. If at the end of any fiscal year the moneys and securities to the credit of the state fire and tornado insurance fund exceed ten million dollars ($10,000,000), any such excess shall be transferred to the general fund.
  2. The moneys and securities to the credit of the state fire and tornado insurance fund shall not be used for any purpose unrelated to fund operations.

History. 4636-35: amend. Acts 1946, ch. 130, § 2; 1954, ch. 225, § 4; 1958, ch. 137; 1962, ch. 45; 1982, ch. 406, § 7, effective July 15, 1982; 2012, ch. 83, § 4, effective July 12, 2012.

56.185. State agencies to comply with National Flood Insurance Program requirements for new construction.

  1. All state agencies shall comply with the requirements of the National Flood Insurance Program when constructing state buildings, structures, roads, or other facilities in a flood plain.
  2. The Finance and Administration Cabinet shall issue regulations to ensure compliance with subsection (1) of this section.
  3. The Energy and Environment Cabinet shall assist the Finance and Administration Cabinet in interpreting the federal law and regulations relating to the National Flood Insurance Program.
  4. The Finance and Administration Cabinet shall submit to the Legislative Research Commission verification of the proper initial implementation of this section and shall annually report to the Commission on its continued implementation.

History. Enact. Acts 1980, ch. 174, § 1, effective July 15, 1980; 2010, ch. 24, § 50, effective July 15, 2010.

Appropriation — Survey — Land Office

56.190. What lands may be appropriated — Effect of previous entry, survey or patent.

  1. Only vacant lands may be appropriated under KRS 56.200 to 56.240 . Land that has escheated to the state, or has been forfeited for failure to list it for taxation or for nonpayment of taxes, or has been legally and validly patented before, is not vacant land.
  2. Every entry, survey, or patent is void insofar as it embraces land previously entered, surveyed, or patented, unless the previous entry, survey, or patent itself is void; in which case the first subsequent lawful entry, survey, or patent, whether issued before, on, or after June 13, 1944, shall be valid and be accorded the same force and effect it would have been entitled to have been accorded, had the void entry, survey, or patent never been issued.

History. 4704: amend. Acts 1944, ch. 94.

NOTES TO DECISIONS

1.In General.

Existence of either entry, survey or patent bars a subsequent entry, survey or patent for another. Goosling v. Smith, 90 Ky. 157 , 13 S.W. 437, 11 Ky. L. Rptr. 991 , 1890 Ky. LEXIS 53 ( Ky. 1890 ); Terry v. Johnson, 96 Ky. 95 , 27 S.W. 984, 16 Ky. L. Rptr. 307 , 1894 Ky. LEXIS 99 ( Ky. 1894 ); Bevins v. Collinsworth, 141 Ky. 423 , 134 S.W. 441, 1911 Ky. LEXIS 113 ( Ky. 1911 ).

Void entry, survey or patent conveys no right of action. Terry v. Johnson, 96 Ky. 95 , 27 S.W. 984, 16 Ky. L. Rptr. 307 , 1894 Ky. LEXIS 99 ( Ky. 1894 ); Nolen v. Hall, 82 S.W. 418, 26 Ky. L. Rptr. 773 , 1904 Ky. LEXIS 436 (Ky. Ct. App. 1904).

A deed with an exception excluding 68 acres which had been surveyed by another conveyed no interest or rights to the 68 acres already appropriated upon which adverse possession could be based. Moore v. Davis, 273 Ky. 838 , 117 S.W.2d 1033, 1938 Ky. LEXIS 725 ( Ky. 1938 ).

Claim to a 567/8 acre island in the Ohio River based on a deed executed by the commissioner of the county court of Livingston County, Kentucky, where the plat, certificate of survey and order of the court were never filed with the register’s office and where no patent had ever been issued by the Commonwealth could not prevail since claimant had no legal title because of his failure to carry survey into a patent in the manner prescribed by statute. Ellis v. Chestnut, 289 S.W.2d 740, 1956 Ky. LEXIS 300 ( Ky. 1956 ).

2.Purpose.

The purpose of the statute is to discourage the searching out of defects in patents, and entering the same land; and to destroy the power of junior entries, surveys or patents. Kirk v. Williamson, 82 Ky. 161 , 6 Ky. L. Rptr. 108 , 1884 Ky. LEXIS 57 (Ky. Ct. App. 1884); Terry v. Johnson, 96 Ky. 95 , 27 S.W. 984, 16 Ky. L. Rptr. 307 , 1894 Ky. LEXIS 99 ( Ky. 1894 ); American Ass'n v. Innis, 109 Ky. 595 , 60 S.W. 388, 22 Ky. L. Rptr. 1196 , 1901 Ky. LEXIS 22 ( Ky. 1901 ).

The statute is for the benefit of the holder of the older survey or patent. Kentucky Union Co. v. Hevner, 210 Ky. 121 , 275 S.W. 513, 1924 Ky. LEXIS 23 ( Ky. 1924 ).

3.Applicability.

This section applies to both Kentucky and Virginia patents. Davis v. Davis, 157 Ky. 530 , 163 S.W. 468, 1914 Ky. LEXIS 314 ( Ky. 1914 ); Moore v. Marcum, 269 Ky. 101 , 106 S.W.2d 117, 1937 Ky. LEXIS 558 ( Ky. 1937 ); Warfield Natural Gas Co. v. Danks, 271 Ky. 452 , 112 S.W.2d 674, 1938 Ky. LEXIS 9 ( Ky. 1938 ), overruled, Warfield Natural Gas Co. v. Ward, 286 Ky. 73 , 149 S.W.2d 705, 1940 Ky. LEXIS 1 ( Ky. 1940 ).

4.Unappropriated Land.

Adverse possession of unappropriated lands may be had against the state. Whitley County Land Co. v. Powers's Heirs, 146 Ky. 801 , 144 S.W. 2, 1912 Ky. LEXIS 171 ( Ky. 1912 ). See Kentucky Coal & Timber Development Co. v. Kentucky Union Co., 214 F. 590, 1914 U.S. Dist. LEXIS 1837 (D. Ky. 1914 ).

5.— Vacant Land.

Entry and survey withdraw from further appropriation land designated as vacant land. Bevins v. Collinsworth, 141 Ky. 423 , 134 S.W. 441, 1911 Ky. LEXIS 113 ( Ky. 1911 ). See War Fork Land Co. v. Llewellyn, 199 Ky. 607 , 251 S.W. 663, 1923 Ky. LEXIS 887 ( Ky. 1923 ).

Land occupied by one claiming to a well defined boundary under color of title is not vacant or unappropriated. War Fork Land Co. v. Llewellyn, 199 Ky. 607 , 251 S.W. 663, 1923 Ky. LEXIS 887 ( Ky. 1923 ); Crider v. Crum, 233 Ky. 414 , 25 S.W.2d 1009, 1930 Ky. LEXIS 559 ( Ky. 1930 ); Rosiclaire Lead & Fluorspar Min. Co. v. Stone, 238 Ky. 734 , 38 S.W.2d 713, 1931 Ky. LEXIS 310 ( Ky. 1931 ).

6.Entry.

Where the dates of entry are known, the first entry would control. Speed v. Turner, 256 S.W.2d 383, 1953 Ky. LEXIS 736 ( Ky. 1953 ).

7.Survey.

As between claimants, the metes and bounds, courses and distances of the survey control over the stated acreage, and patent may not again issue for any part of the actual acreage. Frazier v. Frazier, 81 Ky. 137 , 4 Ky. L. Rptr. 935 , 1883 Ky. LEXIS 40 (Ky. Ct. App. 1883); Goff v. Lowe, 80 S.W. 219, 25 Ky. L. Rptr. 2176 (1904).

8.Patents.

Fact that patent is void does not authorize another to enter, survey or patent the same land. Kirk v. Williamson, 82 Ky. 161 , 6 Ky. L. Rptr. 108 , 1884 Ky. LEXIS 57 (Ky. Ct. App. 1884); Roberts v. Davidson, 83 Ky. 279 , 7 Ky. L. Rptr. 262 , 1885 Ky. LEXIS 69 (Ky. Ct. App. 1885); Eastern Kentucky Land Co. v. Ferguson, 65 S.W. 830, 24 Ky. L. Rptr. 43 , 1901 Ky. LEXIS 389 (Ky. Ct. App. 1901); Stoffler v. Edgewater Coal Co., 198 Ky. 523 , 249 S.W. 753, 1923 Ky. LEXIS 493 ( Ky. 1923 ).

The same land may not be patented twice. Kirk v. Williamson, 82 Ky. 161 , 6 Ky. L. Rptr. 108 , 1884 Ky. LEXIS 57 (Ky. Ct. App. 1884); Bryant v. Wood, 90 Ky. 530 , 14 S.W. 498, 12 Ky. L. Rptr. 454 , 1890 Ky. LEXIS 117 ( Ky. 1890 ); Terry v. Johnson, 96 Ky. 95 , 27 S.W. 984, 16 Ky. L. Rptr. 307 , 1894 Ky. LEXIS 99 ( Ky. 1894 ).

Person making second entry, survey or patent is a trespasser, and cannot rely on weakness of title of his adversary. Terry v. Johnson, 96 Ky. 95 , 27 S.W. 984, 16 Ky. L. Rptr. 307 , 1894 Ky. LEXIS 99 ( Ky. 1894 ).

Holder of patent may restrain issuance of second patent by suit in Franklin County, but title is not a proper subject of litigation therein. Daniel v. New Era Land Co., 137 Ky. 535 , 126 S.W. 108, 1910 Ky. LEXIS 596 ( Ky. 1910 ).

A patent which includes a tract formerly patented by the same patentee is not void. Kentucky Union Co. v. Hevner, 210 Ky. 121 , 275 S.W. 513, 1924 Ky. LEXIS 23 ( Ky. 1924 ).

If the instrument by its terms excludes prior patented land, then the patentee cannot assert a constructive possession under color of title to the excluded portion. Layne v. Ruth Elkhorn Coals, Inc., 307 Ky. 481 , 211 S.W.2d 158, 1948 Ky. LEXIS 749 ( Ky. 1948 ).

Where certain tracts lying within the exterior lines of a patent are excluded in the patent, the holder of the patent cannot assert color of title to the excluded land and he must not only show that trespasses were committed within the boundaries of his patent but must also show that they were committed outside of the excluded tracts. Layne v. Ruth Elkhorn Coals, Inc., 307 Ky. 481 , 211 S.W.2d 158, 1948 Ky. LEXIS 749 ( Ky. 1948 ).

Senior patent based on warrants issued by Perry County Court for land lying partly in Harlan County was void and never appropriated any lands in Harlan County; hence, junior patent based on Harlan County warrants takes precedence. Helton v. Day, 291 S.W.2d 535, 1956 Ky. LEXIS 380 ( Ky. 1956 ).

9.— Void.

Void patents only confer color of title and then only to define possession acquired by adverse entry made under it. Phillips v. Alma Coal Co., 7 F.2d 42, 1925 U.S. App. LEXIS 3479 (6th Cir. Ky. 1925 ), cert. denied, 271 U.S. 669, 46 S. Ct. 483, 70 L. Ed. 1142, 1926 U.S. LEXIS 747 (U.S. 1926).

Junior entries, surveys and patents are void insofar as they embrace land previously entered, surveyed or patented. Hamilton v. Fugett, 81 Ky. 366 , 3 Ky. L. Rptr. 158 , 1881 Ky. LEXIS 91 (Ky. Ct. App. 1881). See Phillips v. Alma Coal Co., 7 F.2d 42, 1925 U.S. App. LEXIS 3479 (6th Cir. Ky. 1 925), cert. denied, 271 U.S. 669, 46 S. Ct. 483, 70 L. Ed. 1142, 1926 U.S. LEXIS 747 (U.S. 1926); Davidson v. Coombs, 5 Ky. L. Rptr. 812 (1884); Kirk v. Williamson, 82 Ky. 1 61, 6 Ky. L. Rptr. 108 , 1884 Ky. LEXIS 57 (Ky. Ct. App. 1884); Roberts v. Davidson, 83 Ky. 279 , 7 Ky. L. Rptr. 262 , 1885 Ky. LEXIS 69 (Ky. Ct. App. 1885); Hall v. Martin, 89 Ky. 9 , 11 S.W. 953, 11 Ky. L. Rptr. 241 , 1889 Ky. LEXIS 1 01 ( Ky. 1889 ); Goosling v. Smith, 90 Ky. 157 , 13 S.W. 437, 11 Ky. L. Rptr. 991 , 1890 Ky. LEXIS 53 ( Ky. 1890 ); Snow v. Morse, 37 S.W. 953, 18 Ky. L. Rptr. 707 (1896); Gibson v. Board, 102 Ky. 50 5, 43 S.W. 684, 19 Ky. L. Rptr. 1568 , 1897 Ky. LEXIS 1 26 ( Ky. 1897 ); Miracle v. Arnett, 44 S.W. 641, 19 Ky. L. Rptr. 1854 (1898); Boreing v. Hurst, 45 S.W. 522, 20 Ky. L. Rptr. 184 , 1898 Ky. LEXIS 299 (Ky. Ct. App. 1898); Morgan v. Morgan, 45 S.W. 497, 20 Ky. L. Rptr. 190 , 1898 Ky. LEXIS 284 (Ky. Ct. App. 1898); Ohio & B. S. R. Co. v. Wooten, 46 S.W. 681, 20 Ky. L. Rptr. 383 (1898); Cornett v. Combs, 53 S.W. 32, 21 Ky. L. Rptr. 837 , 1899 Ky. LEXIS 542 (Ky. Ct. App. 1899); Greer v. Bowling, 55 S.W. 1081, 21 Ky. L. Rptr. 1648 , 1900 Ky. LEXIS 547 (Ky. Ct. App. 1900); Uhl v. Reynolds, 64 S.W. 498, 23 Ky. L. Rptr. 759 (1901); Nickels v. Commonwealth, 131 Ky. 75 , 64 S.W. 448, 23 Ky. L. Rptr. 778 , 1901 Ky. LEXIS 325 ( Ky. 19 01 ); Eastern Kentucky Land Co. v. Ferguson, 65 S.W. 830, 24 Ky. L. Rptr. 43 , 1901 Ky. LEXIS 389 (Ky. Ct. App. 1901); Slusher v. Simpson, 67 S.W. 380, 23 Ky. L. Rptr. 2252 , 1902 Ky. LEXIS 340 (Ky. Ct. App. 1902); Altemus v. Nichols, 115 Ky. 50 6, 74 S.W. 221 ( Ky. 19 03); Nolen v. Hall, 82 S.W. 418, 26 Ky. L. Rptr. 773 , 1904 Ky. LEXIS 436 (Ky. Ct. App. 1904); Gray v. Peay, 82 S.W. 1006, 26 Ky. L. Rptr. 989 , 1904 Ky. LEXIS 411 (Ky. Ct. App. 1904); Asher v. Brashear, 90 S.W. 1060, 28 Ky. L. Rptr. 1012 (1906); Fox v. Cornett, 124 Ky. 139 , 92 S.W. 959, 29 Ky. L. Rptr. 246 , 1906 Ky. LEXIS 228 ( Ky. 1906 ); Morgan v. Renfro, 124 Ky. 314 , 99 S.W. 311, 30 Ky. L. Rptr. 533 , 1907 Ky. LEXIS 200 ( Ky. 1907 ); Conley v. Breathitt Coal, Iron & Lumber Co., 113 S.W. 504 ( Ky. 1908 ); Hamilton v. Steele, 117 S.W. 378, 1909 Ky. LEXIS 500 ( Ky. 1909 ); Hillman Land & Iron Co. v. Marshall, 119 S.W. 180 ( Ky. 1909 ); Richie v. Owsley, 137 Ky. 63 , 121 S.W. 1015, 1909 Ky. LEXIS 476 (Ky. 1909), modified, 143 Ky. 1, 135 S.W. 439, 1911 Ky. LEXIS 333 ( Ky. 1911 ); Collinsworth v. Bevens, 125 S.W. 1060, 1910 Ky. LEXIS 702 ( Ky. 1910 ); Daniel v. New Era Land Co., 137 Ky. 535 , 126 S.W. 108, 1910 Ky. LEXIS 596 ( Ky. 1910 ); Bevins v. Collinsworth, 141 Ky. 423 , 134 S.W. 441, 1911 Ky. LEXIS 113 ( Ky. 1911 ); Whitley County Land Co. v. Powers's Heirs, 146 Ky. 801 , 144 S.W. 2, 1912 Ky. LEXIS 171 ( Ky. 1912 ); Oney v. Lovely, 151 Ky. 651 , 152 S.W. 785, 1913 Ky. LEXIS 555 ( Ky. 1913 ); Collins v. Flynn, 155 Ky. 717 , 160 S.W. 496, 1913 Ky. LEXIS 349 ( Ky. 1913 ); Mason v. Fuson, 171 Ky. 111 , 186 S.W. 891, 1916 Ky. LEXIS 292 ( Ky. 1916 ); Lancaster v. Isaacs, 172 Ky. 709 , 189 S.W. 935, 1916 Ky. LEXIS 262 ( Ky. 1916 ); Stephens v. Terry, 178 Ky. 129 , 198 S.W. 768, 1917 Ky. LEXIS 713 ( Ky. 1917 ); York Coal & Coke Co. v. Hamilton, 182 Ky. 345 , 206 S.W. 616, 1918 Ky. LEXIS 375 ( Ky. 1918 ); Combs v. Adams, 182 Ky. 762 , 207 S.W. 691, 1919 Ky. LEXIS 414 ( Ky. 1919 ); Elliott v. Hensley, 188 Ky. 444 , 222 S.W. 507, 1920 Ky. LEXIS 301 ( Ky. 1920 ); Jeffries v. Hignite, 206 Ky. 50, 266 S.W. 901, 1924 Ky. LEXIS 271 ( Ky. 1924 ); Mullins v. Robinson, 210 Ky. 461 , 276 S.W. 156, 1925 Ky. LEXIS 707 ( Ky. 1925 ); Golden v. Blakeman, 223 Ky. 517 , 3 S.W.2d 1095, 1928 Ky. LEXIS 371 ( Ky. 1928 ), overruled, Warfield Natural Gas Co. v. Ward, 286 Ky. 73 , 149 S.W.2d 705, 1940 Ky. LEXIS 1 ( Ky. 1940 ); Maynard v. Lowe, 231 Ky. 258 , 21 S.W.2d 285, 1929 Ky. LEXIS 257 ( Ky. 1929 ); Swift Coal & Timber Co. v. Ison, 231 Ky. 404 , 21 S.W.2d 659, 1929 Ky. LEXIS 293 ( Ky. 1929 ); Crider v. Crum, 233 Ky. 414 , 25 S.W.2d 1009, 1930 Ky. LEXIS 559 ( Ky. 1930 ); Turner v. Turner, 237 Ky. 257 , 35 S.W.2d 289, 1931 Ky. LEXIS 581 ( Ky. 1931 ); Osborn v. Osborn, 246 Ky. 378 , 55 S.W.2d 39, 1932 Ky. LEXIS 771 ( Ky. 1932 ); Asher v. Fordson Coal Co., 249 Ky. 496 , 61 S.W.2d 20, 1933 Ky. LEXIS 558 ( Ky. 1933 ); Givens v. United States Trust Co., 251 Ky. 587 , 65 S.W.2d 682, 1933 Ky. LEXIS 91 3 ( Ky. 1933 ); Federal Gas, Oil & Coal Co. v. Harmon, 254 Ky. 235 , 254 Ky. 255 , 71 S.W.2d 630, 1934 Ky. LEXIS 74 ( Ky. 1934 ); Stearns Coal & Lumber Co. v. White, 259 Ky. 686 , 83 S.W.2d 26, 1935 Ky. LEXIS 369 ( Ky. 1935 ); Turk v. Wilson's Heirs, 266 Ky. 78 , 98 S.W.2d 4, 1936 Ky. LEXIS 591 ( Ky. 1936 ); Moore v. Marcum, 269 Ky. 101 , 106 S.W.2d 117, 1937 Ky. LEXIS 558 ( Ky. 1937 ); French v. Childers, 280 Ky. 339 , 133 S.W.2d 63, 1939 Ky. LEXIS 117 ( Ky. 1939 ); Gillis v. Martin, 284 Ky. 714 , 145 S.W.2d 1051, 1940 Ky. LEXIS 569 ( Ky. 1940 ); Cline v. Blackburn, 292 Ky. 713 , 168 S.W.2d 15, 1943 Ky. LEXIS 738 ( Ky. 1943 ); Fletcher Lumber Co. v. Fordson Coal Co., 311 Ky. 19, 223 S.W.2d 175, 1949 Ky. LEXIS 1041 ( Ky. 1949 ).

KRS 413.060 , being the seven year statute of limitations, does not apply to an occupant under a void patent. Davidson v. Coombs, 5 Ky. L. Rptr. 812 (1884); Caughlin v. Wilson, 167 Ky. 35 , 180 S.W. 40, 1915 Ky. LEXIS 803 ( Ky. 1915 ).

Plaintiff must prove that the land is within his patent, and not within any prior grant, whereupon the burden of proof shifts to defendant. Harris v. Lavin, 6 Ky. L. Rptr. 307 (1884). See Goff v. Lowe, 80 S.W. 219, 25 Ky. L. Rptr. 2176 (1904); Steele v. Bryant, 132 Ky. 569 , 116 S.W. 755, 1909 Ky. LEXIS 127 ( Ky. 1909 ); Caddell v. Eagle Coal Co., 144 Ky. 396 , 138 S.W. 304, 1911 Ky. LEXIS 628 ( Ky. 1911 ); Miller v. Breathitt Coal Iron & Lumber Co., 152 Ky. 390 , 153 S.W. 468, 1913 Ky. LEXIS 668 ( Ky. 1913 ); Ford v. Bryant, 158 Ky. 97 , 164 S.W. 308, 1914 Ky. LEXIS 559 ( Ky. 1914 ); Tennis Coal Co. v. Sackett, 172 Ky. 729 , 190 S.W. 130, 1916 Ky. LEXIS 280 ( Ky. 1916 ).

A previous entry or survey must be legal in order to render void a subsequent entry, survey or patent. Bryant v. Kentucky Lumber Co., 144 Ky. 755 , 139 S.W. 1089, 1911 Ky. LEXIS 744 ( Ky. 1911 ). See Ford v. Bryant, 158 Ky. 97 , 164 S.W. 308, 1914 Ky. LEXIS 559 ( Ky. 1914 ); Mason v. Fuson, 171 Ky. 111 , 186 S.W. 891, 1916 Ky. LEXIS 292 ( Ky. 1916 ); Stephens v. Terry, 178 Ky. 129 , 198 S.W. 768, 1917 Ky. LEXIS 713 ( Ky. 1917 ); Combs v. Adams, 182 Ky. 762 , 207 S.W. 691, 1919 Ky. LEXIS 414 ( Ky. 1919 ); Bryant v. Meadors, 183 Ky. 651 , 210 S.W. 177, 1919 Ky. LEXIS 544 ( Ky. 1919 ); Bryant v. Hamblin, 183 Ky. 716 , 210 S.W. 786, 1919 Ky. LEXIS 574 (Ky. 1919); Stoffler v. Edgewater Coal Co., 198 Ky. 523 , 249 S.W. 753, 1923 Ky. LEXIS 493 ( Ky. 1923 ); Turk v. Wilson's Heirs, 266 Ky. 78 , 98 S.W.2d 4, 1936 Ky. LEXIS 591 ( Ky. 1936 ).

Person claiming under void patent may plead Const., § 251. Warfield Natural Gas Co. v. Ward, 286 Ky. 73 , 149 S.W.2d 705, 1940 Ky. LEXIS 1 ( Ky. 1940 ).

Where evidence of surveyors conflict concerning the true location of a survey it is a factual matter for determination by a jury and where this issue was properly submitted to a jury and the jury found that the boundaries of an eight acre tract were within the boundaries of a senior patent the junior patent was void. Bell v. Stearns Coal & Lumber Co., 247 S.W.2d 32, 1952 Ky. LEXIS 663 ( Ky. 1952 ).

Even though junior patent was void, it was not valueless because of its adaptability to use as evidence or proof of claim in contests between a person who had a possessory interest and a person who had a nonpossessory interest. Gatliff Coal Co. v. Lawson, 247 S.W.2d 375, 1952 Ky. LEXIS 693 ( Ky. 1952 ).

Where in an action to recover damages for coal mined on a six (6) acre tract owned under a 1905 patent a 1787 junior patent to an adjoining tract failed to contradict a 1787 senior patent covering the six acre tract except by urging a construction of the senior patent which would make an uncertain point take precedence over a certain point and would completely ignore the directional calls in the senior patent and would move the entire senior patent northerly to exclude the six acre tract, the 1905 patent was void. Virginia Iron, Coal & Coke Co. v. Martin, 341 S.W.2d 589, 1960 Ky. LEXIS 81 ( Ky. 1960 ).

10.— Prior Grant.

Patent need not specifically exclude prior grants. Hall v. Martin, 89 Ky. 9 , 11 S.W. 953, 11 Ky. L. Rptr. 241 , 1889 Ky. LEXIS 101 ( Ky. 1889 ). See Breathitt Coal, Iron & Lumber Co. v. Strong, 106 Ky. 699 , 51 S.W. 189, 21 Ky. L. Rptr. 302 , 1899 Ky. LEXIS 87 ( Ky. 1899 ); Uhl v. Reynolds, 64 S.W. 498, 23 Ky. L. Rptr. 759 (1901); Goff v. Lowe, 80 S.W. 219, 25 Ky. L. Rptr. 2176 (1904); Fox v. Cornett, 124 Ky. 139 , 92 S.W. 959, 29 Ky. L. Rptr. 246 , 1906 Ky. LEXIS 228 ( Ky. 1906 ); Kountze v. Hatfield, 99 S.W. 262, 30 Ky. L. Rptr. 589 (1907).

Knowledge of surveyor that patent embraced land covered by prior grants does not affect validity of patent. Nickels v. Commonwealth, 131 Ky. 75 , 64 S.W. 448, 23 Ky. L. Rptr. 778 , 1901 Ky. LEXIS 325 ( Ky. 1901 ).

11.— Collateral Attack.

Patent may not be attacked collaterally unless void on its face, issued under circumstances declared fraudulent by statute, or issued contrary to a state of case described by statute. Frazier v. Frazier, 81 Ky. 137 , 4 Ky. L. Rptr. 935 , 1883 Ky. LEXIS 40 (Ky. Ct. App. 1883). See Lockhard v. Asher Lumber Co., 123 F. 480, 1903 U.S. App. LEXIS 4919 (C.C.D. Ky. 1903 ), rev'd, 131 F. 689, 1904 U.S. App. LEXIS 4307 (6th Cir. Ky. 1904 ); McGuire v. Kirk, 26 S.W. 585, 16 Ky. L. Rptr. 87 (1894); American Ass'n v. Short, 97 Ky. 502 , 30 S.W. 978, 17 Ky. L. Rptr. 626 , 1895 Ky. LEXIS 197 ( Ky. 1895 ); American Ass'n v. Innis, 109 Ky. 595 , 60 S.W. 388, 22 Ky. L. Rptr. 1196 , 1901 Ky. LEXIS 22 ( Ky. 1901 ); Uhl v. Reynolds, 64 S.W. 498, 23 Ky. L. Rptr. 759 (1901); Bryant v. Kentucky Lumber Co., 144 Ky. 755 , 139 S.W. 1089, 1911 Ky. LEXIS 744 ( Ky. 1911 ); McClendon v. Thompkins, 150 Ky. 301 , 150 S.W. 337, 1912 Ky. LEXIS 878 ( Ky. 1912 ); Miller v. Breathitt Coal Iron & Lumber Co., 152 Ky. 390 , 153 S.W. 468, 1913 Ky. LEXIS 668 ( Ky. 1913 ); Collins v. Flynn, 155 Ky. 717 , 160 S.W. 496, 1913 Ky. LEXIS 349 ( Ky. 1913 ); Mason v. Fuson, 171 Ky. 111 , 186 S.W. 891, 1916 Ky. LEXIS 292 ( Ky. 1916 ); Mason v. Fuson, 171 Ky. 472 , 188 S.W. 464, 1916 Ky. LEXIS 369 ( Ky. 1916 ); York Coal & Coke Co. v. Hamilton, 182 Ky. 345 , 206 S.W. 616, 1918 Ky. LEXIS 375 ( Ky. 1918 ); Bryant v. Meadors, 183 Ky. 651 , 210 S.W. 177, 1919 Ky. LEXIS 544 ( Ky. 1919 ); Givens v. United States Trust Co., 251 Ky. 587 , 65 S.W.2d 682, 1933 Ky. LEXIS 913 ( Ky. 1933 ).

12.— Adverse Possession.

Appellee’s deed with title traceable by mesne conveyance back to a patent junior to two senior patents was void but nevertheless afforded appellee color of title and where the lower court found appellee had by adverse possession for more than the statutory period divested plaintiffs of any title or right thereto which they might have previously acquired the finding was not clearly erroneous and was required to be affirmed on appeal. Carlson v. C. & C. Coal Co., 115 F. Supp. 666, 1953 U.S. Dist. LEXIS 2464 (D. Ky. 1953 ), aff'd, 218 F.2d 384, 1954 U.S. App. LEXIS 4257 (6th Cir. Ky. 1954 ).

Patent, although void, afforded color of title for claim of adverse possession to patentee and his successors to extent of its boundaries, unless land was in actual adverse possession of another. Gillis v. Martin, 284 Ky. 714 , 145 S.W.2d 1051, 1940 Ky. LEXIS 569 ( Ky. 1940 ).

Where a person owns one parcel of land under a valid patent, and also claims title to an adjoining parcel under a patent which is invalid because it embraces land previously patented, title to the adjoining parcel cannot be acquired by adverse possession without proof of actual possession of such parcel, constructive possession arising from occupation of the other parcel not being sufficient. Frazier v. Banks, 294 Ky. 61 , 170 S.W.2d 900, 1943 Ky. LEXIS 378 ( Ky. 1943 ).

One holding title to a tract of land cannot take contiguous land into constructive possession by merely reaching out and claiming it as part of his own and evidence showed appellee never enclosed the area or ever actually occupied it or otherwise reduced it to possession of the character that could be deemed adverse to the title holder. Bringardner Lumber Co. v. Bingham, 251 S.W.2d 273, 1952 Ky. LEXIS 904 ( Ky. 1952 ).

In suit to quiet title where defendant’s claim was based on patent of 1865 covering 86,000 acres but patent excluded 36,000 acres and he failed to show that the tract in dispute was not within the exclusion the patent was not controlling and a void patent under which plaintiff claimed constituted color of title which could fix the boundary of plaintiff’s predecessor’s adverse possession. Hellier Coal & Coke Co. v. Bowling, 272 S.W.2d 651, 1954 Ky. LEXIS 1114 ( Ky. 1954 ).

13.Action to Vacate.

A direct proceeding to vacate a patent is a transitory action to which only the claimants are necessary or proper parties. Commonwealth use of Bryant v. James, 138 Ky. 472 , 128 S.W. 338, 1910 Ky. LEXIS 94 ( Ky. 1910 ).

14.Title.

Claimant may perfect incomplete title at any time prior to judgment. Maynard v. Lowe, 231 Ky. 258 , 21 S.W.2d 285, 1929 Ky. LEXIS 257 ( Ky. 1929 ).

A doubtful title ought not to prevail against a clear one. Swift Coal & Timber Co. v. Ison, 231 Ky. 404 , 21 S.W.2d 659, 1929 Ky. LEXIS 293 ( Ky. 1929 ).

No title can be acquired under junior patents issued since 1835 because they are void. Warfield Natural Gas Co. v. Danks, 271 Ky. 452 , 112 S.W.2d 674, 1938 Ky. LEXIS 9 ( Ky. 1938 ), overruled, Warfield Natural Gas Co. v. Ward, 286 Ky. 73 , 149 S.W.2d 705, 1940 Ky. LEXIS 1 ( Ky. 1940 ).

15.Recovery of Land by State.

The state may recover lands once entered, surveyed or patented for fraud or irregularity. Bevins v. Collinsworth, 141 Ky. 423 , 134 S.W. 441, 1911 Ky. LEXIS 113 ( Ky. 1911 ).

Cited:

Moore v. Davis, 273 Ky. 838 , 117 S.W.2d 1033, 1938 Ky. LEXIS 725 ( Ky. 19 38 ); Day v. Knuckles, 297 Ky. 157 , 179 S.W.2d 220, 1944 Ky. LEXIS 689 ( Ky. 19 44); Whitson v. Morris, 304 Ky. 447 , 201 S.W.2d 193, 1946 Ky. LEXIS 934 ( Ky. 1946 ); Fletcher Lumber Co. v. Fordson Coal Co., 311 Ky. 19, 223 S.W.2d 175, 1949 Ky. LEXIS 1041 ( Ky. 1949 ).

Research References and Practice Aids

Northern Kentucky Law Review.

Stephens, Historical and Practical Comments on Abstracting Land and Mineral Titles in Kentucky, 9 N. Ky. L. Rev. 445 (1982).

56.200. Actual settler — Preemption right.

An actual settler on any vacant and unappropriated land has a preemption right to any number of acres, not exceeding one hundred (100), to be laid-off as nearly as possible in a square, his improvements in the center. Before any other person shall locate the same land, three (3) months’ notice of intention to do so must be given to the actual settler, describing the land intended to be taken up or appropriated. If the actual settler does not, within three (3) months from the giving of such notice, have the land entered and surveyed preparatory to obtaining a patent for it, the person giving the notice may enter and survey the land and proceed to obtain the patent.

History. 4703.

NOTES TO DECISIONS

1.Vacant and Unappropriated Land.

“Vacant” and “unappropriated” are different in meaning. Potter v. Lewis, 64 S.W. 958, 23 Ky. L. Rptr. 1218 , 1901 Ky. LEXIS 595 (Ky. Ct. App. 1901).

2.Settler.

Settler could not plead this section when perfection of his title to 100 acres with his improvements in the center would not have affected the land in dispute. Kountze v. Hatfield, 99 S.W. 262, 30 Ky. L. Rptr. 589 (1907).

3.— Perfection of Statutory Rights.

A settler who fails to perfect his statutory rights has only a personal right to remain on the land, and no such right as he may sell, assign or convey. Gatliff v. Carson-Muse Lumber Co., 169 Ky. 810 , 185 S.W. 110, 1916 Ky. LEXIS 765 ( Ky. 1916 ).

4.— Notice.

Entry, survey and patent made without notice to the actual settler does not affect the settler’s rights, and surrender of title to the settler may be decreed. Slusher v. Simpson, 67 S.W. 380, 23 Ky. L. Rptr. 2252 , 1902 Ky. LEXIS 340 (Ky. Ct. App. 1902); Gatliff v. Carson-Muse Lumber Co., 169 Ky. 810 , 185 S.W. 110, 1916 Ky. LEXIS 765 ( Ky. 1916 ).

Failure to give notice does not render patent void, the settler’s rights extending only to his inclosure. Gatliff v. Carson-Muse Lumber Co., 169 Ky. 810 , 185 S.W. 110, 1916 Ky. LEXIS 765 ( Ky. 1916 ).

Once a settler had settled on vacant and unappropriated land he was not required to survey and patent his right in the land protected by this statute until he was given notice by another of intention to make surveys covering the land and where no attempt was made to prove notice was given before surveys were made by another and the settler did exercise his preemptive right, survey and obtain a patent within one year of the surveys, his patent, although junior in time was senior because of his preemptive right. Ford Motor Co. v. Potter, 330 S.W.2d 934, 1959 Ky. LEXIS 211 ( Ky. 1959 ).

56.210. Lands, how appropriated — Disposition of proceeds.

Any person who wishes to appropriate any vacant and unappropriated land may, by applying to the county judge/executive of the county in which the land lies, and paying therefor a price fixed by the fiscal court at not less than five dollars ($5) per hundred (100) acres, obtain an order authorizing him to enter and survey any number of acres of such land in the county, not to exceed two hundred (200). The party obtaining the order may, by an entry in the surveyor’s book of the county, describing the land, appropriate the quantity of land it calls for in one (1) or more parcels; but no one (1) person shall enter, survey or cause to be patented more than two hundred (200) acres of land in any one (1) county. The proceeds of the sale shall be paid into the county treasury.

History. 4702, 4703: amend. Acts 1978, ch. 384, § 125, effective June 17, 1978.

NOTES TO DECISIONS

1.Vacant and Unappropriated Land.

“Vacant” and “unappropriated” are different in meaning. Potter v. Lewis, 64 S.W. 958, 23 Ky. L. Rptr. 1218 , 1901 Ky. LEXIS 595 (Ky. Ct. App. 1901).

2.County Court.
3.— Jurisdiction.

County courts may sell only lands located within their county. McClendon v. Thompkins, 150 Ky. 301 , 150 S.W. 337, 1912 Ky. LEXIS 878 ( Ky. 1912 ).

4.— Orders.

One person may obtain any number of orders for survey, so long as no one of them is for more than 200 acres. American Ass'n v. Innis, 109 Ky. 595 , 60 S.W. 388, 22 Ky. L. Rptr. 1196 , 1901 Ky. LEXIS 22 ( Ky. 1901 ); Uhl v. Reynolds, 64 S.W. 498, 23 Ky. L. Rptr. 759 (1901); Nickels v. Commonwealth, 131 Ky. 75 , 64 S.W. 448, 23 Ky. L. Rptr. 778 , 1901 Ky. LEXIS 325 ( Ky. 1901 ); Steele v. Bryant, 132 Ky. 569 , 116 S.W. 755, 1909 Ky. LEXIS 127 ( Ky. 1909 ); Miller v. Breathitt Coal Iron & Lumber Co., 152 Ky. 390 , 153 S.W. 468, 1913 Ky. LEXIS 668 ( Ky. 1913 ).

The county court order authorizing entry and survey may not be attacked collaterally. Uhl v. Reynolds, 64 S.W. 498, 23 Ky. L. Rptr. 759 (1901); Miller v. Breathitt Coal Iron & Lumber Co., 152 Ky. 390 , 153 S.W. 468, 1913 Ky. LEXIS 668 ( Ky. 1913 ); Givens v. United States Trust Co., 251 Ky. 587 , 65 S.W.2d 682, 1933 Ky. LEXIS 913 ( Ky. 1933 ).

A valid entry and survey cannot be made until a warrant authorizing same has been issued by the county court. Mason v. Fuson, 171 Ky. 111 , 186 S.W. 891, 1916 Ky. LEXIS 292 ( Ky. 1916 ), rehearing denied, 171 Ky. 472 , 188 S.W. 464, 1916 Ky. LEXIS 369 (1916). See Meade v. Steele Coal Co., 181 Ky. 153 , 203 S.W. 1061, 1918 Ky. LEXIS 495 ( Ky. 1918 ).

Copies of county court orders directing issuance of warrants are prima facie evidence of the orders, but may be rebutted by the county court records. Mason v. Fuson, 171 Ky. 111 , 186 S.W. 891, 1916 Ky. LEXIS 292 ( Ky. 1916 ).

5.Entry.

It is the duty of the surveyor to make entries, giving the description of the land to be surveyed, if furnished him. Roberts v. Davidson, 83 Ky. 279 , 7 Ky. L. Rptr. 262 , 1885 Ky. LEXIS 69 (Ky. Ct. App. 1885).

Person first entering may enforce his right to have survey first made. Goosling v. Smith, 90 Ky. 157 , 13 S.W. 437, 11 Ky. L. Rptr. 991 , 1890 Ky. LEXIS 53 ( Ky. 1890 ); Terry v. Johnson, 96 Ky. 95 , 27 S.W. 984, 16 Ky. L. Rptr. 307 , 1894 Ky. LEXIS 99 ( Ky. 1894 ); Bevins v. Collinsworth, 141 Ky. 423 , 134 S.W. 441, 1911 Ky. LEXIS 113 ( Ky. 1911 ).

An entry, to be valid and enforceable against a subsequent locator, must locate the land with such definiteness and certainty with relation to other objects that persons may with reasonable diligence find it. Stephens v. Terry, 178 Ky. 129 , 198 S.W. 768, 1917 Ky. LEXIS 713 ( Ky. 1917 ).

Entries made by a county surveyor who had not executed bond are invalid, in absence of prejudice to innocent third parties. Wheeler v. Collins, 222 Ky. 801 , 2 S.W.2d 646, 1928 Ky. LEXIS 251 ( Ky. 1928 ).

6.Purchase Price.

Purchase price must be paid before warrant may legally issue. Bryant v. Kentucky Lumber Co., 144 Ky. 755 , 139 S.W. 1089, 1911 Ky. LEXIS 744 ( Ky. 1911 ); Stephens v. Terry, 178 Ky. 129 , 198 S.W. 768, 1917 Ky. LEXIS 713 ( Ky. 1917 ).

Purchase price, in absence of evidence, is presumed to be at least the statutory minimum. Stephens v. Terry, 178 Ky. 129 , 198 S.W. 768, 1917 Ky. LEXIS 713 ( Ky. 1917 ).

7.Land in Two Counties.

Senior patent based on warrants issued by Perry County Court for land lying partly in Harlan County was void and never appropriated any lands in Harlan County; hence, junior patent based on Harlan County warrants takes precedence. Helton v. Day, 291 S.W.2d 535, 1956 Ky. LEXIS 380 ( Ky. 1956 ).

Cited:

Carlson v. Asher Coal Mining Co., 172 F.2d 243, 1949 U.S. App. LEXIS 3811 (6th Cir. 1949); Bringardner Lumber Co. v. Bingham, 251 S.W.2d 273, 1952 Ky. LEXIS 904 ( Ky. 1952 ); Ellis v. Chestnut, 289 S.W.2d 740, 1956 Ky. LEXIS 300 ( Ky. 1956 ); Hammonds v. Ingram Industries, Inc., 716 F.2d 365, 1983 U.S. App. LEXIS 24235 (6th Cir. 1983).

56.220. Lands in Ohio River bed.

All that portion of the bed of the Ohio River, lying north of the thread of the stream, except accretions to islands privately owned, is declared to be vacant and unappropriated land, and the county judge/executive of each county bordering on the Ohio River may use or lease the river bed for county purposes, upon such terms and conditions as to him seem beneficial to the county. Any contract of leasing made by any such county judge/executive of such river bed for any sand and gravel rights for or on behalf of the county conveys full right and title to the lessee to the exclusive use of all sand and gravel deposits in the river bed to the extent embraced in the lease.

History. 4702, 4703: amend. Acts 1978, ch. 384, § 126, effective June 17, 1978.

NOTES TO DECISIONS

1.Purpose.

The intention of the General Assembly in enacting this section was to give the counties power over all the portion of the Ohio River lying north of the thread of the stream except accretions to privately owned islands to use or lease for county purposes as fully as it might otherwise deal with vacant and unappropriated land and the right to execute depletion leases is clearly implied in the circumstances. Commonwealth v. Henderson County, 371 S.W.2d 27, 1963 Ky. LEXIS 93 ( Ky. 1963 ).

The Legislature intended by enacting this section to give the counties plenary power to use or dispose of that portion of the Ohio River bed north of the thread of the river, with the exception that the vacant and unappropriated land in the river bed could not be sold in fee simple because of its nature. Commonwealth v. Henderson County, 371 S.W.2d 27, 1963 Ky. LEXIS 93 ( Ky. 1963 ).

2.Construction.

This section deals with profits a prendre not enjoyed by citizens in general and is subject to Ky. Const., § 164. Leases executed under it may not be for a period exceeding 20 years, and can be let only at public bidding after due advertisement. Willis v. Boyd, 224 Ky. 732 , 7 S.W.2d 216, 1928 Ky. LEXIS 676 ( Ky. 1928 ).

By this section the Legislature conceded the nonpatentability of the Ohio River bed north of the thread of the stream and provided for its disposition by empowering the counties to use or lease it. Commonwealth v. Henderson County, 371 S.W.2d 27, 1963 Ky. LEXIS 93 ( Ky. 1963 ).

3.Applicability.

Land lying north of the thread of the stream held under specific grant is unaffected by this section. Willis v. Boyd, 224 Ky. 732 , 7 S.W.2d 216, 1928 Ky. LEXIS 676 ( Ky. 1928 ).

4.Vacant and Unappropriated Land.

The part of the Ohio River lying between the thread and low watermark on the northern bank is unappropriated state land. Paducah-Illinois R. Co. v. Graham, 46 F.2d 806, 1931 U.S. Dist. LEXIS 1138 (D. Ky. 1931 ).

“Vacant” and “unappropriated” are different in meaning. Potter v. Lewis, 64 S.W. 958, 23 Ky. L. Rptr. 1218 , 1901 Ky. LEXIS 595 (Ky. Ct. App. 1901).

5.Patentability.

Patents issued for land on the Ohio River give the patentees title to the thread of the stream. Ware v. Hager, 126 Ky. 324 , 103 S.W. 283, 31 Ky. L. Rptr. 728 , 1907 Ky. LEXIS 39 ( Ky. 1907 ). See Paducah-Illinois R. Co. v. Graham, 46 F.2d 806, 1931 U.S. Dist. LEXIS 1138 (D. Ky. 1931 ); Caughlin v. Wilson, 167 Ky. 35 , 180 S.W. 40, 1915 Ky. LEXIS 803 ( Ky. 1915 ); Willis v. Boyd, 224 Ky. 732 , 7 S.W.2d 216, 1928 Ky. LEXIS 676 ( Ky. 1928 ); Turk v. Wilson's Heirs, 266 Ky. 78 , 98 S.W.2d 4, 1936 Ky. LEXIS 591 ( Ky. 1936 ).

Patents may not be issued for the river bed of the Ohio River north of the thread of the stream. Ware v. Hager, 126 Ky. 324 , 103 S.W. 283, 31 Ky. L. Rptr. 728 , 1907 Ky. LEXIS 39 ( Ky. 1907 ).

6.Thread of the Stream.

The expression “thread of the stream” as applied to the Ohio River means the middle line of the river as measured from the state’s northern boundary, the low watermark on the northern bank or shore, and the corresponding low watermark on the southern bank or shore and where plaintiff had a lease from a county to dredge sand and gravel north of the “thread of the stream” as authorized under this section a judgment in favor of riparian owners on the south bank of the river against plaintiff was affirmed where plaintiff dredged south of the middle of the river but north of the center line of the main channel which was close to the Kentucky shore at that point. Louisville Sand & Gravel Co. v. Ralston, 266 S.W.2d 119, 1954 Ky. LEXIS 792 ( Ky. 1954 ).

Cited:

Paducah-Illinois R. Co. v. Graham, 46 F.2d 806, 1931 U.S. Dist. LEXIS 1138 (D. Ky. 1931 ); Louisville Bridge Co. v. Louisville, 81 Ky. 189 , 5 Ky. L. Rptr. 16 , 5 Ky. L. Rptr. 473 , 1883 Ky. LEXIS 50 ( Ky. 1883 ); Ware v. Hager, 126 Ky. 324 , 31 Ky. L. Rptr. 728 , 103 S.W. 283, 1907 Ky. LEXIS 39 ( Ky. 1907 ).

Opinions of Attorney General.

The Nature Preserves Commission has control and jurisdiction of the submerged lands adjacent to the Six Mile Island Nature Preserve. OAG 87-78 .

Research References and Practice Aids

Cross-References.

Franchise or privilege for longer than 20 years, when forbidden, Ky. Const., § 164.

56.230. Survey, plat and certificate — Issue of patent.

  1. The surveyor shall survey the entries in the order in which they are made, bounding each entry by plainly marked trees, stones or stakes, noting where it binds on a watercourse or the marked line of another survey, and giving names. The survey shall be made in the presence of two (2) disinterested housekeepers as chainmen, whose names shall be placed at the bottom of the plat and certificate. Each survey must be made within six (6) months after the date of the entry. A plat and certificate of the survey shall be made out by the surveyor and recorded in his books, and the original thereof and a copy of the order of court under which it is made shall be filed in the office of the Secretary of State within six (6) months after the survey is made.
  2. When the survey is carried into grant, the Secretary of State shall write across the face of the order on which the survey was made “satisfied,” and sign his name to it. The legal title to the land shall vest in the patentee as of the time the survey is made, unless the plat and certificate of survey are filed more than six (6) months after the survey is made, in which case the legal title shall vest in the patentee as of the date of the patent.
  3. Plats and certificates are assignable, regardless of when made or when assigned, and the assignment authorizes a patent to issue to the assignee. Land warrants are not assignable.
  4. No patent shall be issued for more than two hundred (200) acres to any one (1) person in any one (1) county.

History. 4015, 4016, 4704.

NOTES TO DECISIONS

1.In General.

An island in the Ohio River is part of the state of Kentucky and person claiming under a deed from a county court commissioner had no legal title upon which to base his claim in a quiet title action where no patent had ever been issued by the state and plat, certificate of survey and order of the court were never filed with the register’s office. Ellis v. Chestnut, 289 S.W.2d 740, 1956 Ky. LEXIS 300 ( Ky. 1956 ).

Entry and survey vest an inchoate right or equitable title. Patent confers complete legal title. Bryant v. Wood, 90 Ky. 530 , 14 S.W. 498, 12 Ky. L. Rptr. 454 , 1890 Ky. LEXIS 117 ( Ky. 1890 ); Bevins v. Collinsworth, 141 Ky. 423 , 134 S.W. 441, 1911 Ky. LEXIS 113 ( Ky. 1911 ); York Coal & Coke Co. v. Hamilton, 182 Ky. 345 , 206 S.W. 616, 1918 Ky. LEXIS 375 ( Ky. 1918 ).

2.Survey.

A survey is valid against a subsequent survey, though not filed within the statutory period. Gibson v. Board, 102 Ky. 505 , 43 S.W. 684, 19 Ky. L. Rptr. 1568 , 1897 Ky. LEXIS 126 ( Ky. 1897 ).

Surveyor must first survey land first entered. Roberts v. Davidson, 83 Ky. 279 , 7 Ky. L. Rptr. 262 , 1885 Ky. LEXIS 69 (Ky. Ct. App. 1885).

Where surveyor, under several orders held by the same person, surveys the land in one boundary, he need not actually survey the interior lines. Miller v. Breathitt Coal Iron & Lumber Co., 152 Ky. 390 , 153 S.W. 468, 1913 Ky. LEXIS 668 ( Ky. 1913 ).

Provision in survey to the effect that “plotting out this survey all lands heretofore surveyed” applied only to valid surveys and did not include surveys which were never perfected in the manner required by statute. Ford v. Bryant, 158 Ky. 97 , 164 S.W. 308, 1914 Ky. LEXIS 559 ( Ky. 1914 ).

The validity of the acts of the surveyor will be presumed, in absence of proof. Combs v. Adams, 182 Ky. 762 , 207 S.W. 691, 1919 Ky. LEXIS 414 ( Ky. 1919 ).

There is a presumption that the surveyor performed his statutory duty. Speed v. Turner, 256 S.W.2d 383, 1953 Ky. LEXIS 736 ( Ky. 1953 ).

3.— Construction of Uncertain Survey.

The construction which is most against the party claiming under an uncertain survey should be adopted. Swift Coal & Timber Co. v. Ison, 231 Ky. 404 , 21 S.W.2d 659, 1929 Ky. LEXIS 293 ( Ky. 1929 ).

4.— Effect of Void Survey.

Void survey has no legal effect against valid entry, survey and patent. Collinsworth v. Bevens, 125 S.W. 1060, 1910 Ky. LEXIS 702 ( Ky. 1910 ).

5.— Order of Entry.

Requirement for surveying entries in the order in which they are made does not invalidate a survey preceding entry of the land, nor does it give a person, by virtue of mere entry, a prior right to appropriate land theretofore surveyed for another. Goosling v. Smith, 90 Ky. 157 , 13 S.W. 437, 11 Ky. L. Rptr. 991 , 1890 Ky. LEXIS 53 ( Ky. 1890 ).

Patents of claimants recited different dates of survey, but surveyor’s book recited survey on same day. Since surveyor is required to survey in order of entry, dates in patent will be presumed to refer to dates of entry. Asher v. Brashear, 90 S.W. 1060, 28 Ky. L. Rptr. 1012 (1906).

6.— Actions Against Surveyor.
7.— — Pleadings.

In action against surveyor for failure to furnish plat and certificate of survey, plaintiff must plead that the land is subject to appropriation, and either the issuance of the county court order or the jurisdictional facts. Potter v. Lewis, 64 S.W. 958, 23 Ky. L. Rptr. 1218 , 1901 Ky. LEXIS 595 (Ky. Ct. App. 1901).

8.Patent.

A patent so general and uncertain as to its boundary and exclusions as to indicate an effort to appropriate whatever vacant lands might exist, and as would enable patentee to locate the exclusions in any part of the boundary, is void. Hamilton v. Fugett, 81 Ky. 366 , 3 Ky. L. Rptr. 158 , 1881 Ky. LEXIS 91 (Ky. Ct. App. 1881); Hillman v. Hurley, 82 Ky. 626 , 6 Ky. L. Rptr. 682 , 1885 Ky. LEXIS 29 (Ky. Ct. App. 1885); Roberts v. Davidson, 83 Ky. 279 , 7 Ky. L. Rptr. 262 , 1885 Ky. LEXIS 69 (Ky. Ct. App. 1885); Stephens v. Terry, 178 Ky. 129 , 198 S.W. 768, 1917 Ky. LEXIS 713 ( Ky. 1917 ); Combs v. Adams, 182 Ky. 762 , 207 S.W. 691, 1919 Ky. LEXIS 414 ( Ky. 1919 ).

A patent is in effect a deed from the state, and an innocent purchaser of land covered by a patent is in the same position as an innocent purchaser from one who holds title by deed. Nickels v. Commonwealth, 131 Ky. 75 , 64 S.W. 448, 23 Ky. L. Rptr. 778 , 1901 Ky. LEXIS 325 ( Ky. 1901 ).

It is presumed that patentees make their entries and surveys with reference to older surveys which are known. Morgan v. Renfro, 124 Ky. 314 , 99 S.W. 311, 30 Ky. L. Rptr. 533 , 1907 Ky. LEXIS 200 ( Ky. 1907 ).

Patent may be secured by heirs of party originally entering. Bevins v. Collinsworth, 141 Ky. 423 , 134 S.W. 441, 1911 Ky. LEXIS 113 ( Ky. 1911 ).

Presumption is that the state, the surveyor, and the grantee intended to establish a valid patent. Oney v. Lovely, 151 Ky. 651 , 152 S.W. 785, 1913 Ky. LEXIS 555 ( Ky. 1913 ).

Patent issued in name of dead person vests title in his heirs by virtue of KRS 382.060 . York Coal & Coke Co. v. Hamilton, 182 Ky. 345 , 206 S.W. 616, 1918 Ky. LEXIS 375 ( Ky. 1918 ).

9.— Issuance.

Lack of jurisdiction to issue patent may be shown in a civil suit, but claim that patent is void for fraud upon the Commonwealth or county court issuing it must be presented in a direct proceeding attacking it. Commonwealth use of Bryant v. James, 138 Ky. 472 , 128 S.W. 338, 1910 Ky. LEXIS 94 ( Ky. 1910 ).

The register of the land office (now Secretary of State) is authorized to issue patent upon production to him of the plat and certificate of survey, and order of the county court, or warrant, by virtue of which the survey was made. Commonwealth use of Bryant v. James, 138 Ky. 472 , 128 S.W. 338, 1910 Ky. LEXIS 94 ( Ky. 1910 ).

A patent issued without authority is void. Commonwealth use of Bryant v. James, 138 Ky. 472 , 128 S.W. 338, 1910 Ky. LEXIS 94 ( Ky. 1910 ); Bryant v. Kentucky Lumber Co., 144 Ky. 755 , 139 S.W. 1089, 1911 Ky. LEXIS 744 ( Ky. 1911 ).

Issuance of patent is not a direct assertion of title by the state against one adversely holding the land, nor is it conclusive as to the question of a prior grant, nor does it affect the running of the statute of limitations. Whitley County Land Co. v. Powers's Heirs, 146 Ky. 801 , 144 S.W. 2, 1912 Ky. LEXIS 171 ( Ky. 1912 ).

Patent should be issued to first party securing a legal entry on the surveyor’s book. Wheeler v. Collins, 222 Ky. 801 , 2 S.W.2d 646, 1928 Ky. LEXIS 251 ( Ky. 1928 ).

10.— Abandonment.

Inchoate right to patent may be lost by neglect or laches. Bryant v. Wood, 90 Ky. 530 , 14 S.W. 498, 12 Ky. L. Rptr. 454 , 1890 Ky. LEXIS 117 ( Ky. 1890 ); Bevins v. Collinsworth, 141 Ky. 423 , 134 S.W. 441, 1911 Ky. LEXIS 113 ( Ky. 1911 ); York Coal & Coke Co. v. Hamilton, 182 Ky. 345 , 206 S.W. 616, 1918 Ky. LEXIS 375 ( Ky. 1918 ). See Givens v. United States Trust Co., 251 Ky. 587 , 65 S.W.2d 682, 1933 Ky. LEXIS 913 ( Ky. 1933 ).

A survey not carried into grant for an unreasonable period will be deemed abandoned. Bryant v. Wood, 90 Ky. 530 , 14 S.W. 498, 12 Ky. L. Rptr. 454 , 1890 Ky. LEXIS 117 ( Ky. 1890 ); Ford v. Bryant, 158 Ky. 97 , 164 S.W. 308, 1914 Ky. LEXIS 559 ( Ky. 1914 ); York Coal & Coke Co. v. Hamilton, 182 Ky. 345 , 206 S.W. 616, 1918 Ky. LEXIS 375 ( Ky. 1918 ).

A right to patent which has been abandoned may be collaterally attacked. York Coal & Coke Co. v. Hamilton, 182 Ky. 345 , 206 S.W. 616, 1918 Ky. LEXIS 375 ( Ky. 1918 ).

A right to patent which has been abandoned is voidable as to Commonwealth. York Coal & Coke Co. v. Hamilton, 182 Ky. 345 , 206 S.W. 616, 1918 Ky. LEXIS 375 ( Ky. 1918 ).

11.— Correction of Errors.

The original survey and plat may be resorted to for the correction of errors in the patent. Harris v. Lavin, 13 Ky. Op. 22, 6 Ky. L. Rptr. 304 , 1884 Ky. LEXIS 118 (Ky. Ct. App. Oct. 21, 1884); Patrick v. Spradlin, 42 S.W. 919, 19 Ky. L. Rptr. 1038 (1897); Hagins v. Whitaker, 42 S.W. 751, 19 Ky. L. Rptr. 1050 (1897); Bell County Land & Coal Co. v. Hendrickson, 68 S.W. 842, 24 Ky. L. Rptr. 371 , 1902 Ky. LEXIS 320 (Ky. Ct. App. 1902); Goff v. Lowe, 80 S.W. 219, 25 Ky. L. Rptr. 2176 (1904); Hogg v. Lusk, 120 Ky. 419 , 86 S.W. 1128, 27 Ky. L. Rptr. 840 , 1905 Ky. LEXIS 123 ( Ky. 1905 ); Morgan v. Renfro, 124 Ky. 314 , 99 S.W. 311, 30 Ky. L. Rptr. 533 , 1907 Ky. LEXIS 200 ( Ky. 1907 ); Daniel v. New Era Land Co., 137 Ky. 535 , 126 S.W. 108, 1910 Ky. LEXIS 596 ( Ky. 1910 ); Lewis, Wilson & Hicks v. Durham, 144 Ky. 704 , 139 S.W. 952, 1911 Ky. LEXIS 726 ( Ky. 1911 ); Bryant v. Kentucky Lumber Co., 144 Ky. 755 , 139 S.W. 1089, 1911 Ky. LEXIS 744 ( Ky. 1911 ); Oney v. Lovely, 151 Ky. 651 , 152 S.W. 785, 1913 Ky. LEXIS 555 ( Ky. 1913 ).

12.— Fraud.

Question of fraud cannot be raised against patent collaterally unless statute declares such fraud to have that effect. G. F. Stearns Land & Lumber Co. v. Asher, 295 F. 268, 1924 U.S. App. LEXIS 3176 (6th Cir. Ky. 1924 ).

13.— Amount of Land Permissible.

Several surveys may be included in one patent, even though the patent will cover more than 200 acres. Uhl v. Reynolds, 64 S.W. 498, 23 Ky. L. Rptr. 759 (1901). See Lockard v. Asher Lumber Co., 131 F. 689, 1904 U.S. App. LEXIS 4307 (6th Cir. Ky. 1904 ); Nickels v. Commonwealth, 131 Ky. 75 , 64 S.W. 448, 23 Ky. L. Rptr. 778 , 1901 Ky. LEXIS 325 ( Ky. 1901 ); Federal Gas, Oil & Coal Co. v. Harmon, 254 Ky. 235 , 254 Ky. 255 , 71 S.W.2d 630, 1934 Ky. LEXIS 74 ( Ky. 1934 ).

14.— Boundary Location.

Actual location of patent boundary may be shown by parol proof. Snow v. Morse, 37 S.W. 953, 18 Ky. L. Rptr. 707 (1896).

15.— Collateral Attack.

Patent may not be collaterally attacked because of illegal survey or failure to survey. American Ass'n v. Innis, 109 Ky. 595 , 60 S.W. 388, 22 Ky. L. Rptr. 1196 , 1901 Ky. LEXIS 22 ( Ky. 1901 ); Uhl v. Reynolds, 64 S.W. 498, 23 Ky. L. Rptr. 759 (1901); Nickels v. Commonwealth, 131 Ky. 75 , 64 S.W. 448, 23 Ky. L. Rptr. 778 , 1901 Ky. LEXIS 325 ( Ky. 1901 ); Steele v. Bryant, 132 Ky. 569 , 116 S.W. 755, 1909 Ky. LEXIS 127 ( Ky. 1909 ); Collins v. Flynn, 155 Ky. 717 , 160 S.W. 496, 1913 Ky. LEXIS 349 ( Ky. 1913 ).

16.— Land in Another State.

Bell County had no authority to patent lands south of the Tennessee line, although certain other counties did. American Ass'n v. Short, 97 Ky. 502 , 30 S.W. 978, 17 Ky. L. Rptr. 626 , 1895 Ky. LEXIS 197 ( Ky. 1895 ).

17.Plat and Certificate.

Plat and certificate represent a distinct property interest, and the right upon deposit of same to have patent issued thereon cannot be abridged by law. American Ass'n v. Innis, 109 Ky. 595 , 60 S.W. 388, 22 Ky. L. Rptr. 1196 , 1901 Ky. LEXIS 22 ( Ky. 1901 ).

18.— Use.

Certificate of survey may be used only to correct a mistake in the patent. Plat may be used only to correct mistake in the patent or certificate of survey. If entry has any bearing it is not controlling, and can be used only in case of ambiguity. Kentucky Coal & Timber Development Co. v. Kentucky Union Co., 214 F. 590, 1914 U.S. Dist. LEXIS 1837 (D. Ky. 1914 ).

19.— Delay in Filing.

Right to patent does not depend on plat and certificate being filed within six months from date of survey. Goosling v. Smith, 90 Ky. 157 , 13 S.W. 437, 11 Ky. L. Rptr. 991 , 1890 Ky. LEXIS 53 ( Ky. 1890 ).

20.— Assignment.

Plat and certificate are assignable. American Ass'n v. Innis, 109 Ky. 595 , 60 S.W. 388, 22 Ky. L. Rptr. 1196 , 1901 Ky. LEXIS 22 ( Ky. 1901 ).

21.Title.

Where a survey was made in 1891 but was not perfected by patent until 1915, by virtue of this section title under this survey and patent did not vest until the latter date. Hellier Coal & Coke Co. v. Bowling, 272 S.W.2d 651, 1954 Ky. LEXIS 1114 ( Ky. 1954 ).

22.Payment.

Act of March 8, 1851, applicable only to Whitley County, required certain lands to be paid for by March 1, 1852. Persons not complying therewith lost their rights, and could not thereafter secure patents on said surveys. Bryant v. Kentucky Lumber Co., 144 Ky. 755 , 139 S.W. 1089, 1911 Ky. LEXIS 744 ( Ky. 1911 ); Stephens v. Terry, 178 Ky. 129 , 198 S.W. 768, 1917 Ky. LEXIS 713 ( Ky. 1917 ) (decided under prior law).

Cited:

Whitson v. Morris, 304 Ky. 447 , 201 S.W.2d 193, 1946 Ky. LEXIS 934 ( Ky. 1946 ).

56.240. Affidavits of applicant and surveyor.

Before the surveyor permits the entry of any land for survey and patent, and before he surveys any land for the purpose of obtaining a patent thereon, he shall require the party desiring the entry and survey made to file with him an affidavit to the effect that the land has not, to the applicant’s knowledge or belief, been previously entered, surveyed or patented, in whole or in part, and that the land is vacant and unappropriated. The surveyor shall forward to the Secretary of State, with his plat and certificate of the land, his own affidavit to the effect that the land has not, to the surveyor’s knowledge or belief, been previously, in whole or in part, entered or surveyed for patent or patented.

History. 4705.

NOTES TO DECISIONS

1.Vacant and Unappropriated.

“Vacant” and “unappropriated” are different in meaning. Potter v. Lewis, 64 S.W. 958, 23 Ky. L. Rptr. 1218 , 1901 Ky. LEXIS 595 (Ky. Ct. App. 1901).

56.245. Caveats, entry of and proceedings.

  1. If any person obtains a survey of land to which another claims a better right, such other may enter a caveat with the register to prevent the issuing of a grant until the right be determined. The caveat shall state the plaintiff’s claim and the reasons why the grant should not issue. It shall be verified by his affidavit, or by that of his agent, and declare that it is entered in good faith, with the intention of procuring the land for the plaintiff, and not for the benefit of the person against whom it is entered.
  2. A copy of the caveat, certified by the register, shall, within sixty (60) days from the time it is entered, be lodged with the clerk of the Circuit Court of the county where the land or the greater part thereof lies. Failure so to lodge such copy shall be deemed an abandonment of the caveat; and it may be disregarded by the register, upon the clerk’s certificate of such failure being filed in his office.
  3. If such copy be lodged within said period, it shall be treated as a petition, and the proceedings upon it shall be the same, including an appeal to the Court of Appeals, as those in an ordinary action.
  4. If the summons be not returned in due time, or be returned not executed, the caveat shall be dismissed, if it be shown that the nonexecution or nonreturn was procured by the plaintiff or resulted from his neglect.
  5. A copy of the judgment, if in favor of the defendant, must be delivered into the land office within three (3) months from the time it is rendered; or a new caveat may, for that cause, be entered against the grant. If the judgment be for the plaintiff, and a copy thereof be not delivered into the land office within six (6) months from the time it was rendered, any other person may, for that cause, enter another caveat against the grant.
  6. No grant shall issue to the land in contest, to the plaintiff in the caveat, or to another for his use, until the caveat be dismissed or decided; and any such grant, to the extent of such land, shall be void.
  7. If the plaintiff does not prosecute his caveat as herein required, or if the same be dismissed or decided against him, neither he nor any other for his use shall have another caveat against the same grant.
  8. The court may, in its discretion, require the plaintiff to give security for costs; and upon his failure to do so may dismiss the proceeding.

History. C.C. 473: trans. Acts 1952, ch. 84, § 1, effective July 1, 1953.

NOTES TO DECISIONS

1.Entry of Caveat.

Where a claimant’s title to land rests upon a grant issued by the Commonwealth to land in controversy, the land is not vacant or unappropriated and he has no right to enter a caveat and the Circuit Court has no jurisdiction to try it. Alexander v. Noland, 88 Ky. 142 , 10 S.W. 423, 10 Ky. L. Rptr. 694 , 1889 Ky. LEXIS 9 ( Ky. 1889 ).

Where one appointed county surveyor made first entry of survey of unappropriated lands, prior to executing bond as required by statute, such survey was illegal, and persons having land warrant who obtained entry on book of succeeding county surveyor had first legal survey and were entitled to maintain caveat to prevent issuance of patent under another survey. Wheeler v. Collins, 222 Ky. 801 , 2 S.W.2d 646, 1928 Ky. LEXIS 251 ( Ky. 1928 ).

2.— Party in Possession.

Since the filing of a caveat with the register’s office is for the purpose of preventing the emanation therefrom of a patent for vacant and unappropriated land, to a claimant who is not entitled thereto, where there is a controversy between conflicting claimants as to the right to the patent, a party in possession of and claiming title to land is not required to enter a caveat with the register in order to prevent the issuing of a grant to another, but may for that purpose, commence his action in a court of chancery to enjoin the issuance of the grant. Preston v. Preston, 85 Ky. 16 , 2 S.W. 501, 8 Ky. L. Rptr. 633 , 1887 Ky. LEXIS 9 ( Ky. 1887 ).

A party in possession and claiming title to land already appropriated is not required to file a caveat with the register before bringing suit in Circuit Court to enjoin the issuing of a grant. Daniel v. New Era Land Co., 137 Ky. 535 , 126 S.W. 108, 1910 Ky. LEXIS 596 ( Ky. 1910 ).

3.Jurisdiction.

Circuit Court was without jurisdiction of caveat proceedings where caveat showed on its face that caveator claimed title to the land in controversy under existing patents covering the lands sought to be patented by his adversary as the land was not vacant and unappropriated land. Burchett v. Roop, 216 Ky. 774 , 288 S.W. 685, 1926 Ky. LEXIS 996 ( Ky. 1926 ).

56.250. Entry or survey of lands previously patented unlawful.

No person shall knowingly enter or have surveyed for patent, and no surveyor shall knowingly survey or certify for patent, any land that has previously, in whole or part, been entered or surveyed for patent, or patented.

History. 4705a.

56.260. Plats and certificates of survey, how preserved.

Plats and certificates of survey shall not be recorded, but the Secretary of State shall carefully preserve and systematically arrange them in his office, and keep a full and complete index of them.

History. 4017.

56.270. Land warrants partly appropriated.

The Secretary of State shall deliver to the owner any land warrant in his office only partially appropriated, with an indorsement showing how much remains to be appropriated.

History. 4006.

56.280. Incomplete records, how perfected.

  1. The Secretary of State shall supply upon his records the omission of the Governor’s name from a patent, when the original patent, with the Governor’s signature thereto, is produced to him, showing the omission, or when it appears from official indorsements on papers in the Office of the Secretary of State or by official marginal notes that the patent was regularly issued and was delivered to the proper person.
  2. Where any former officer in charge of the land office has omitted to affix his seal of office to an official deed, the Secretary of State may supply the omission on the original deed with the same effect as if the seal had been originally affixed.

History. 4008.

56.290. Authentication of records.

The words “A copy attest” are sufficient authentication of any record or paper in the land office, when signed by the officer in charge of the land office or his deputy.

History. 4010.

NOTES TO DECISIONS

1.Full Faith and Credit.

Copy of patent certified by auditor, then custodian of patents, was entitled to full faith and credit. Brandon v. Butler, 212 Ky. 76 , 278 S.W. 156, 1925 Ky. LEXIS 1077 ( Ky. 1925 ).

Research References and Practice Aids

Northern Kentucky Law Review.

Stephens, Historical and Practical Comments on Abstracting Land and Mineral Titles in Kentucky, 9 N. Ky. L. Rev. 445 (1982).

56.300. Land office fees.

The Secretary of State shall collect the following fees for services in connection with the land office:

  1. For filing of a caveat $0.25 (2) Judgment in cases of caveat, mandamus or other action affecting the land office or the land office duties of the Secretary of State, for filing copy of $0.25 (3) Official certificate with seal of office affixed, for each patent $5.00 (4) Plat and certificate of survey, for filing and registering, and issuing and recording patent thereon $2.50 (5) Warrant, survey, grant, for copy of each $1.00 (6) Copy of any other document (per page) $0.50

Click to view

History. 4013: amend. Acts 1988, ch. 85, § 2, effective July 15, 1988.

Research References and Practice Aids

Cross-References.

Collection of and accounting for fees, KRS 45.260 .

Fees to be paid into treasury, KRS 41.070 , 45.260 .

56.310. Annual report to Governor.

The Secretary of State shall report to the Governor, on or before October 10 of each year, the number of patents issued and copies supplied, and the amount of fees received therefor and paid into the State Treasury. He shall take the Treasurer’s receipt for the fees, and publish it with his report to the Governor.

History. 4011.

56.320. Custody of books and papers.

The Secretary of State shall not allow any of the books or papers of the land office to pass into the hands of any unauthorized person or permit anyone but his deputies to have access thereto.

History. 4007.

Opinions of Attorney General.

It is not lawful to permanently remove the official seals from land warrants; however in order to make the land warrants suitable for lamination such seals may be removed so long as they are replaced so that the warrant is restored to its original condition with the exception of the intervening sheet of plastic laminate, for to hold that the removal and replacement constitutes an unlawful alteration of a public record under KRS 519.060 (1)(b) would render such restoration impossible and because a literal reading of subsection (1)(b) of KRS 519.060 would defeat the legislative policy of preserving these warrants it cannot stand to prevent temporary removal of these seals and the subsequent replacement. OAG 77-516 .

Old Governor’s Mansion

56.325. Lieutenant Governor responsible for management, maintenance and operation of Old Governor’s Mansion. [Recompiled.]

Compiler’s Notes.

This section (Enact. Acts 1956, ch. 94, § 1) is recompiled as KRS 42.037 .

56.330. Entrance building to old penitentiary; renovation; use for state offices. [Repealed.]

Compiler’s Notes.

This section (Enact. Acts 1946, ch. 236, §§ 1, 2) was repealed by Acts 1948, ch. 89.

Property and Buildings Commission

56.340. Kentucky Building Commission created — Membership. [Repealed.]

Compiler’s Notes.

This section (Enact. Acts 1948, ch. 237, § 1) was repealed by Acts 1949, (Ex. Sess.), ch. 11, § 13.

56.350. Power of commission to determine need for lands, buildings and facilities for state agencies — Plans and specifications — Advertisement for bids — Awarding of contracts — Supervision of work — Personnel. [Repealed.]

Compiler’s Notes.

This section (Enact. Acts 1948, ch. 237, § 2) was repealed by Acts 1949, (Ex. Sess.), ch. 11, § 13.

56.360. Purposes for which capital outlay appropriations to be spent — Agencies enumerated. [Repealed.]

Compiler’s Notes.

This section (Enact. Acts 1948, ch. 237, § 3) was repealed by Acts 1949, (Ex. Sess.), ch. 11, § 13.

56.370. Division of Engineering transferred from Welfare Department to commission — Duties of division — Chief Engineer. [Repealed.]

Compiler’s Notes.

This section (Enact. Acts 1948, ch. 237, § 4) was repealed by Acts 1949, (Ex. Sess.), ch. 11, § 13.

56.380. Travel expenses for members of commission. [Repealed.]

Compiler’s Notes.

This section (Enact. Acts 1948, ch. 237, § 7) was repealed by Acts 1949, (Ex. Sess.), ch. 11, § 13.

56.390. Contracts for capital outlay of more than ten thousand dollars must be approved by commission — Conditions of approval. [Repealed.]

Compiler’s Notes.

This section (Enact. Acts 1948, ch. 237, § 7) was repealed by Acts 1949, (Ex. Sess.), ch. 11, § 13.

56.400. Powers of commission with respect to purchase, lease or sale of real estate — Allocation of cost of land and building projects — Title to real estate when revenue bonds issued, lease agreements — Eminent domain — Lease of state lands and buildings to private interests. [Repealed.]

Compiler’s Notes.

This section (Enact. Acts 1948, ch. 237, § 8) was repealed by Acts 1949, (Ex. Sess.), ch. 11, § 13.

56.410. Issuance of revenue bonds by commission. [Repealed.]

Compiler’s Notes.

This section (Enact. Acts 1948, ch. 237, § 8) was repealed by Acts 1949, (Ex. Sess.), ch. 11, § 13.

56.420. Abandonment of uncompleted building projects — Settlement with architects, engineers and contractors. [Repealed.]

Compiler’s Notes.

This section (Enact. Acts 1948, ch. 237, § 9) was repealed by Acts 1949, (Ex. Sess.), ch. 11, § 13.

56.430. KRS 56.340 to 56.420 not applicable to road or school projects. [Repealed.]

Compiler’s Notes.

This section (Enact. Acts 1948, ch. 237, § 10) was repealed by Acts 1949, (Ex. Sess.), ch. 11, § 13.

56.440. Definitions for chapter.

As used in this chapter, unless the context otherwise requires:

  1. “Commission” means the State Property and Buildings Commission;
  2. “Real estate” includes lands together with improvements thereon and appurtenances thereto;
  3. “Building” includes any structure or improvement upon real estate of a permanent nature and additionally includes any sites, structures, equipment, machinery, or devices for the purpose of establishing, developing, or furthering television or related services in aid of education or in aid of any other proper public functions, whether or not the same would otherwise be legally defined as buildings; but only (except for industrial development projects) if used or to be used by the Commonwealth of Kentucky or one (1) of its departments or agencies (not including independent municipal corporations or political subdivisions);
  4. “Building project” includes the acquisition of any real estate and the acquisition, construction, reconstruction, and structural maintenance of buildings, the installation of utility services, including roads and sewers, and the purchase and installation of equipment, facilities, and furnishings of a permanent nature for buildings; the purchase and installation initially of movable equipment, furnishings, and appurtenances necessary to make a building operable; and for television or related purposes as referred to in subsection (3) of this section, for use by the state government or one (1) of its departments or agencies, not including any independent municipal corporation or political subdivision, or any other capital outlay program authorized by any branch budget bill or other legislation;
  5. “Industrial development project” means and includes the acquisition of any real estate and the construction, acquisition, and installation thereon and with respect thereto of improvements and facilities necessary and useful for the improvement of such real estate for conveyance to or lease to industrial entities to be used for manufacturing, processing, or assembling purposes, including surveys, site tests and inspections, subsurface site work, excavation, removal of structures, roadways, cemeteries, and other surface obstructions, filling, grading and provision of drainage, storm water detention, installation of utilities such as water, sewer, sewage treatment, gas, electricity, communication, and other similar facilities, off- site construction of utility extensions to the boundaries of such real estate, construction and installation of buildings, including buildings to be used for worker training and education, rail facilities, roads, sidewalks, curbs, and other improvements to such real estate necessary to its manufacturing, processing, or assembling use by industrial entities; provided that an industrial entity must have agreed with the commission, prior to the financing of an industrial development project, to develop, in conjunction with such industrial development project, manufacturing, processing, or assembling facilities satisfactory to the commission;
  6. “Industrial entity” means any corporation, partnership, person, or other legal entity, whether domestic or foreign, which will itself or through its subsidiaries and affiliates construct and develop a manufacturing, processing, or assembling facility on the site of an industrial development project financed pursuant to this chapter;
  7. “Incremental taxes” means, for any fiscal year of the Commonwealth, that amount of money which is equal to all tax revenues received by the Commonwealth, as taxing entity, during such fiscal year in respect of an industrial development project and improvements and equipment thereon and the products thereof, and activities carried out by the occupants and users of such industrial development project, minus an amount equal to all tax revenues received by the Commonwealth, as taxing entity, in respect of the site of the industrial development project and the same type of taxable properties and activities during the fiscal year immediately preceding the fiscal year during which construction of the improvements undertaken by an industrial entity as a result of the financing of such industrial development project commenced. Incremental taxes shall include such tax revenues as state corporate income taxes, state income taxes paid by employees of manufacturing, processing, and assembling facilities developed on the site of an industrial development project, state property taxes, state corporation license taxes, and state sales and use taxes, but shall not include any taxes levied specifically for educational purposes;
  8. “State agency” means any state administrative body, agency, department, or division as defined in KRS 42.005 , or any board, commission, institution, or division exercising any function of the state but which is not an independent municipal corporation or political subdivision;
  9. “Cabinet” means the Finance and Administration Cabinet;
  10. “Asbestos” means the asbestiform varieties of: chrysotile (serpentine); crocidolite (riebeckite); amosite (cummingtonite-grunerite); anthophyllite; tremolite; and actinolite;
  11. “Asbestos-containing material” means any material which contains more than one percent (1%) asbestos by weight;
  12. “Friable material” means any material applied onto ceilings, walls, structural members, piping, ductwork, or any other part of the building structure which, when dry, may be crumbled, pulverized, or reduced to powder by hand pressure;
  13. “Meeting” means all gatherings of every kind, including video teleconferences;
  14. “Video teleconference” means one (1) meeting, occurring in two (2) or more locations, where individuals can see and hear each other by means of video and audio equipment;
  15. “Writing” or “written” shall mean letters, words, or numbers, or their equivalent, set down by handwriting, typewriting, printing, photostating, photographing, magnetic impulse, mechanical or electronic recording, or other form of data compilation;
  16. “Branch budget” shall have the same meaning as in KRS 48.010 ;
  17. “Reverse auction” shall have the same meaning as in KRS 45A.070 ;
  18. “Headquarters” means the principal office where the principal executives of the entity are located and from which other personnel, branches, affiliates, offices, or entities are controlled;
  19. “Nonretail service and technology project” means and includes the acquisition of any real estate and the construction, acquisition, equipping, and installation thereon and with respect thereto of improvements and facilities necessary and useful for the improvement of that real estate for conveyance to or lease to nonretail service and technology entities to be used for call centers, centralized administrative or processing centers, telephone or Internet sales order or processing centers, distribution or fulfillment centers, data processing centers, research and development facilities, or other similar activities; and
  20. “Nonretail service and technology entity” means any corporation, partnership, person, or other legal entity, whether domestic or foreign, which will itself or through its subsidiaries and affiliates operate call centers, centralized administrative or processing centers, telephone or Internet sales order or processing centers, distribution or fulfillment centers, data processing centers, and research and development facilities, or conduct other similar activities.

HISTORY: Enact. Acts 1949 (Ex. Sess.), ch. 11, § 1; 1956 (Ex. Sess.), ch. 7, Art. XVI, § 1; 1962, ch. 15, § 1; 1964, ch. 7, § 1; 1966, ch. 255, § 58; 1968, ch. 199, § 1; 1970, ch. 204, § 8; 1976, ch. 205, § 1, effective October 1, 1976; 1982, ch. 447, § 10, effective January 1, 1984; 1986, ch. 350, § 2, effective April 8, 1986; 1986, ch. 357, § 1, effective July 15, 1986; 1988, ch. 395, § 1, effective July 15, 1988; repealed and reenact., Acts 1990, ch. 476, Pt. V, § 284, effective July 13, 1990; 1994, ch. 387, § 25, effective July 15, 1994; 1998, ch. 120, § 22, effective July 15, 1998; 2009, ch. 78, § 35, effective June 25, 2009; 2010, ch. 63, § 9, effective July 15, 2010; 2018 ch. 199, § 1, effective July 14, 2018.

NOTES TO DECISIONS

1.Constitutionality.

The State Property and Buildings Commission was not acting arbitrarily or without rules to govern it where the State Property and Buildings Commission Act was comprehensive and complete regarding the power and authority of the commission to issue and sell revenue bonds and the commission was definitely circumscribed in the manner and procedure with respect thereto. Preston v. Clements, 313 Ky. 479 , 232 S.W.2d 85, 1950 Ky. LEXIS 902 ( Ky. 1950 ).

2.Construction.

Since an act may have a single general subject expressed in the title and may contain many provisions providing they are not inconsistent with or foreign to the subject, the State Property and Buildings Commission Act (KRS 56.440 to 56.550 ) does not contain inconsistencies in violation of Ky. Const., § 51 requiring the subject of the act to be expressed in its title and not to relate to more than one subject. Preston v. Clements, 313 Ky. 479 , 232 S.W.2d 85, 1950 Ky. LEXIS 902 ( Ky. 1950 ).

KRS 56.440 to 56.550 , setting up the State Property and Buildings Commission provides an adequate standard by which the commission is to govern its actions in determining the necessity for the construction of buildings for the use and occupancy of the Commonwealth, its departments and agencies, and for the issuance of revenue bonds to construct same and the act on its face is not invalid although possibly far-reaching. Preston v. Clements, 313 Ky. 479 , 232 S.W.2d 85, 1950 Ky. LEXIS 902 ( Ky. 1950 ).

Research References and Practice Aids

Cross-References.

Educational television, KRS Ch. 168.

Kentucky Bench & Bar.

Tobergte, The Impact of Kentucky’s Present Constitution Upon Business Growth & Development, Volume 51, No. 3, Summer 1987 Ky. Bench & B. 21.

Kentucky Law Journal.

Martin, Administrative Action for Efficient Debt Management: The Kentucky Case, 49 Ky. L.J. 505 (1961).

Northern Kentucky Law Review.

Note, Facing the Economic Challenges of the Eighties — the Kentucky Constitution and Hayes v. The State Property and Buildings Commission of Kentucky, 15 N. Ky. L. Rev. 645 (1988).

56.450. State Property and Buildings Commission — Issuance of revenue bonds.

  1. There is recognized, as an independent agency of the state within the meaning of KRS Chapter 12, and as a constituted authority of the Commonwealth of Kentucky, a state and a sovereign entity within the meaning of regulations of the United States Department of the Treasury, Internal Revenue Service, a State Property and Buildings Commission composed of the Governor, who shall be chairman thereof, the Lieutenant Governor who shall be vice chairman of the commission, the Attorney General, the secretary of the Cabinet for Economic Development, the executive director of the Office of the Controller, the state budget director, and the secretary of the Finance and Administration Cabinet, or their alternates as authorized in subsection (5) of this section.
  2. No member of the commission shall receive any salary, fee, or other remuneration for his services as a member of the commission, but each member shall be entitled to be reimbursed for his ordinary traveling expenses, including meals and lodging, incurred in the performance of his duties.
  3. The commission shall constitute a public body corporate with perpetual succession and power in its name to contract and be contracted with, sue and be sued, adopt bylaws, have and use a corporate seal, and exercise all of the powers granted to private corporations generally in KRS Chapter 271B, except as that chapter may be inconsistent with KRS 56.440 to 56.550 .
  4. Subject to the provisions of KRS 56.550 , but notwithstanding any other provision of the Kentucky Revised Statutes to the contrary, all revenue bonds issued by state agencies, except as provided in this chapter (but not including bonds issued directly by and in the name of the Commonwealth of Kentucky under authorization of the executive cabinet), shall be issued under the provisions of this chapter. As an additional and alternative method for the issuance of revenue bonds under the provisions of this chapter, upon application of any state agency and approval by the commission, the commission acting for and on behalf of said state agency may issue revenue bonds in its own name, in accordance with the terms and provisions of KRS Chapter 58, secured by and payable solely from all or any part of the revenues of the state agency as may be specified and provided in the approved application. Any covenants and undertakings of the state agency in the approved application with regard to the production of revenues and the use, application, or disposition thereof may be enforced by the holders of any of the revenue bonds or by any trustee for such bondholders. The issuance of any revenue bonds for the state or any of its agencies by or on behalf of the Kentucky Economic Development Finance Authority and the issuance of any revenue bonds for economic development projects authorized by Acts 1980, Ch. 109, shall require the prior approval of the State Property and Buildings Commission. In issuing bonds under its own name, or in approving issuance of bonds by other state agencies, the commission shall be deemed to be acting for the state government of the Commonwealth of Kentucky as one (1) unit within the meaning of the regulations of the United States Department of the Treasury, Internal Revenue Service, and it shall be limited to the issuance of bonds to accomplish the public purposes of that unit.
    1. Each member of the commission may designate, by an instrument in writing over his signature and filed with the secretary as a public record of the commission, an alternate with full authority to attend in the absence of the appointing member for any reason, any properly convened meeting of the commission and to participate in the consideration of, and voting upon, business and transactions of the commission. Any designation of an alternate may, in the discretion of the appointing member, be limited upon the face of the appointing instrument, to be effective only for a designated meeting or only for specified business; or the same may be shown on the face of the appointing instrument to be on a continuing basis (but in no case for a period of more than four (4) years), whenever the appointing member is unable to attend, but always subject to revocation by the appointing member in an instrument of like formality, similarly filed with the secretary as a public record of the commission. Any party transacting business with the commission, or materially affected thereby, shall be entitled to accept and rely upon a joint certificate of the secretary of the commission and any member of the commission concerning the designation of any alternate, the time of designation, the scope thereof, and if of a continuing nature, whether the same has been revoked, and when; and the joint certificate shall be made and delivered to any such party within a reasonable time after written request is made therefor with acceptable identification of the business or transaction referred, and of the requesting party’s interest therein. Each alternate shall be a person on the staff of the appointing member, or in the employ of his agency or department of the government of the Commonwealth, as the case may be. (5) (a) Each member of the commission may designate, by an instrument in writing over his signature and filed with the secretary as a public record of the commission, an alternate with full authority to attend in the absence of the appointing member for any reason, any properly convened meeting of the commission and to participate in the consideration of, and voting upon, business and transactions of the commission. Any designation of an alternate may, in the discretion of the appointing member, be limited upon the face of the appointing instrument, to be effective only for a designated meeting or only for specified business; or the same may be shown on the face of the appointing instrument to be on a continuing basis (but in no case for a period of more than four (4) years), whenever the appointing member is unable to attend, but always subject to revocation by the appointing member in an instrument of like formality, similarly filed with the secretary as a public record of the commission. Any party transacting business with the commission, or materially affected thereby, shall be entitled to accept and rely upon a joint certificate of the secretary of the commission and any member of the commission concerning the designation of any alternate, the time of designation, the scope thereof, and if of a continuing nature, whether the same has been revoked, and when; and the joint certificate shall be made and delivered to any such party within a reasonable time after written request is made therefor with acceptable identification of the business or transaction referred, and of the requesting party’s interest therein. Each alternate shall be a person on the staff of the appointing member, or in the employ of his agency or department of the government of the Commonwealth, as the case may be.
    2. Any four (4) members of the commission, or their alternates authorized under paragraph (a) of this subsection, shall constitute a quorum and shall by majority vote be authorized to transact any and all business of the commission.
    3. The State Property and Buildings Commission is reconstituted as of October 1, 1976, with the powers herein provided.

History. Enact. Acts 1949 (Ex. Sess.), ch. 11, § 2; 1960, ch. 63, Art. XIII; 1962, ch. 15, § 2; 1964, ch. 7, § 2; 1972, ch. 274, § 144; 1974, ch. 74, Art. II, § 9(2); 1976, ch. 205, § 2, effective October 1, 1976; 1980, ch. 141, § 2, effective July 15, 1980; 1980, ch. 295, § 16, effective July 15, 1980; 1982, ch. 396, § 7, effective July 15, 1982; 1990, ch. 476, Pt. IV, § 118, effective July 13, 1990; 1992, ch. 105, § 58, effective March 30, 1992; 1996, ch. 101, § 2, effective July 15, 1996; 2005, ch. 85, § 79, effective June 20, 2005; 2009, ch. 12, § 30, effective June 25, 2009.

NOTES TO DECISIONS

1.Applicability.

Acts 1960, ch. 128 (now repealed) relating to acquisition and use of voting machines and the method of financing them which act was enrolled March 15, 1960 and signed by the governor March 25, 1960 and which declared an emergency took effect immediately and was an authorized exception to this section (Acts 1960, ch. 68, Art. XIII) which was enrolled March 17, 1960 and signed by the Governor on the same day effective July 1, 1960 since there is not such a conflict between the two that effect cannot be given to both and which would sanction repeal. State Property & Bldg. Com. v. Hays, 346 S.W.2d 3, 1961 Ky. LEXIS 277 ( Ky. 1961 ).

2.Revenue Bonds.

It is not within the court’s jurisdiction to determine if sufficient funds are available to complete a building as this is a matter for the State Property and Buildings Commission and the purchasers of the revenue bonds. Preston v. Clements, 313 Ky. 479 , 232 S.W.2d 85, 1950 Ky. LEXIS 902 ( Ky. 1950 ).

It is not within the court’s jurisdiction to declare that a proposed plan will produce sufficient funds to retire revenue bonds issued under this section at their respective maturities and to pay interest coupons attached as this is a matter for the purchasers of the bonds to consider before they bid for the purchase of the bonds. Preston v. Clements, 313 Ky. 479 , 232 S.W.2d 85, 1950 Ky. LEXIS 902 ( Ky. 1950 ).

It is not within the province of the court to determine whether or not bonds can be fully executed and tendered within a given time. Preston v. Clements, 313 Ky. 479 , 232 S.W.2d 85, 1950 Ky. LEXIS 902 ( Ky. 1950 ).

The State Property and Buildings Commission may issue revenue bonds for the construction of a building project and the improvement of real estate owned by the Commonwealth. Preston v. Clements, 313 Ky. 479 , 232 S.W.2d 85, 1950 Ky. LEXIS 902 ( Ky. 1950 ).

Opinions of Attorney General.

In a business meeting the chairman of the commission may second a motion of another member. OAG 69-83 .

Under KRS 58.050 and 56.872(2) the costs of issuing bonds, inclusive of bond discount, capitalized interest, and a debt service reserve, are in fact and as a matter of law proper “costs of issuance” of such bonds, to be added to the authorized level of a revenue bond financed project (which construction project costs are delineated in capital construction sections of the biennial appropriations and budget report) in arriving at the authorized financing of such project. The power to include such financing costs in the total bond package is an implied power of the State Property and Buildings Commission in issuing revenue bonds under subsection (4) of this section; this implied power is clearly and inevitably necessary in order that the commission may carry out its express power of issuing revenue bonds. OAG 82-583 .

Research References and Practice Aids

Kentucky Law Journal.

Montague III, The Office of Attorney General in Kentucky, 49 Ky. L.J. 194 (1960); Martin, Administrative Action for Efficient Debt Management: The Kentucky Case, 49 Ky. L.J. 505 (1961).

56.460. Commission to transfer to cabinet capital outlay appropriation.

The commission shall transfer to the cabinet any appropriation which may be made to it, to be expended for the purpose of acquiring real estate and for building projects for any state agency, and for matching federal funds available under 42 U.S.C. ch. 6A, subch. IV (secs. 291 et seq.) or any other federal law for the purchase, construction, improvement, or repairing of property to be used for public purposes, whether owned by the Commonwealth or any agency thereof, or by any political subdivision or municipality, or by nonprofit corporations or associations. All expenditures shall be made in accordance with the provisions of this chapter.

History. Enact. Acts 1949 (Ex. Sess.), ch. 11, § 3; 1956 (1st Ex. Sess.), ch. 7, Art. XVI, § 2; 1968, ch. 152, § 21.

NOTES TO DECISIONS

1.Constitutionality.

The State Property and Buildings Commission was not acting arbitrarily or without rules to govern it where the State Property and Buildings Commission Act was comprehensive and complete regarding the power and authority of the commission to issue and sell revenue bonds and the commission was definitely circumscribed in the manner and procedure with respect thereto. Preston v. Clements, 313 Ky. 479 , 232 S.W.2d 85, 1950 Ky. LEXIS 902 ( Ky. 1950 ).

56.462. Duties of cabinet.

The cabinet shall maintain the records and perform the functions necessary and proper to accomplish the purposes of this chapter.

History. Enact. Acts 1956 (1st Ex. Sess.), ch. 7, Art. XVI, § 3; 1966, ch. 255, § 59.

56.463. Powers of cabinet in determining need, controlling, and disposing of real estate.

The cabinet shall have the power and duty:

  1. To determine the comparative needs and demands of the various state agencies for acquiring real estate and for building projects;
  2. To purchase or otherwise acquire all real property determined to be needed for state use and upon the approval of the secretary of the Finance and Administration Cabinet as to the determination of need and as to the action of purchase or other acquisition, except as provided in KRS Chapters 175, 176, 177, and 180. All such acquisitions of real property or interests therein shall be made in accordance with KRS 45A.045 ;
  3. To sell or otherwise dispose of all property, including any interest in real property, of the state that is not needed or has become unsuitable for public use or would be more suitable consistent with the public interest for some other use as determined by the secretary of the Finance and Administration Cabinet. All such sales or other disposition shall be made in accordance with KRS 45A.045 ;
    1. To control the use of any real property owned or otherwise held by the Commonwealth, or any state agency, and to determine for what periods of time and for what purposes any state agency may use the same, including the agency for whose use it was initially acquired or improved, and to determine what appropriate uses shall be made of such real property during periods that the cabinet finds the same is not required for the purposes of any particular state agency. The cabinet shall allocate to the General Assembly and the Legislative Research Commission the amount of space within the New State Capitol Annex, currently assigned to the legislative branch in the basement and on the first floor totaling forty-nine thousand six hundred thirty-eight (49,638) square feet; approximately twenty-four thousand four hundred fifty-two (24,452) square feet on the second floor from an imaginary line running north and south down the center of the center wing hallway of the building and all space to the east of this line, excluding mechanical areas, public entrances, and restrooms; approximately twenty-three thousand nine hundred forty (23,940) square feet on the third floor from an imaginary line running north and south down the center of the center wing hallway of the building and all space to the east of this line, excluding mechanical areas, public entrances, and restrooms; approximately twenty-two thousand fifty-six (22,056) square feet on the fourth floor from an imaginary line running north and south down the center of the center wing hallway of the building and all space to the east of this line, excluding mechanical areas, public entrances, and restrooms. All space assigned to the legislative branch and plans, uses, furnishings, and equipment therefor are subject to the specific approval of the Legislative Research Commission; (4) (a) To control the use of any real property owned or otherwise held by the Commonwealth, or any state agency, and to determine for what periods of time and for what purposes any state agency may use the same, including the agency for whose use it was initially acquired or improved, and to determine what appropriate uses shall be made of such real property during periods that the cabinet finds the same is not required for the purposes of any particular state agency. The cabinet shall allocate to the General Assembly and the Legislative Research Commission the amount of space within the New State Capitol Annex, currently assigned to the legislative branch in the basement and on the first floor totaling forty-nine thousand six hundred thirty-eight (49,638) square feet; approximately twenty-four thousand four hundred fifty-two (24,452) square feet on the second floor from an imaginary line running north and south down the center of the center wing hallway of the building and all space to the east of this line, excluding mechanical areas, public entrances, and restrooms; approximately twenty-three thousand nine hundred forty (23,940) square feet on the third floor from an imaginary line running north and south down the center of the center wing hallway of the building and all space to the east of this line, excluding mechanical areas, public entrances, and restrooms; approximately twenty-two thousand fifty-six (22,056) square feet on the fourth floor from an imaginary line running north and south down the center of the center wing hallway of the building and all space to the east of this line, excluding mechanical areas, public entrances, and restrooms. All space assigned to the legislative branch and plans, uses, furnishings, and equipment therefor are subject to the specific approval of the Legislative Research Commission;
    2. All additional space in the New State Capitol Annex, not specifically allocated for use by the General Assembly and the Legislative Research Commission in paragraph (a) of this subsection, shall be allocated for the use of the legislative branch, with occupancy by the legislative branch to be determined by the Legislative Research Commission. Until the Legislative Research Commission, by vote of a majority of its entire membership, determines that the legislative branch shall occupy all or part of such additional space in the Capitol Annex, the cabinet shall continue to determine the occupancy of such additional space;
    3. Forty percent (40%) of the floor space provided by paragraph (a) of this subsection for use by the legislative branch shall be assigned for the use of the Senate. Sixty percent (60%) of the floor space provided by paragraph (a) of this subsection for use by the legislative branch shall be assigned for the use of the House of Representatives; and
    4. To determine the housing and furnishings needs of the various state agencies located in Frankfort and to establish and put into effect a permanent program for housing them. Subject to paragraphs (a) and (b) of this subsection, the cabinet is also authorized and directed to allocate office space and furnishings in existing public buildings located in Frankfort, exclusive of the third and fourth floors of the New State Capitol and the space in the New State Capitol Annex allocated to the legislative branch, according to the needs of the various agencies. When necessary, the cabinet is authorized to provide additional office space and furnishings in Frankfort under any building program the cabinet deems most advisable and economical for the state. The permanent housing program shall include provisions for housing the General Assembly and its related agencies, including the Legislative Research Commission, and its subcommittees, the executive offices, the Supreme Court and the clerk of the Supreme Court, the Department of Law and the law library, in the New State Capitol, provided the General Assembly and the Legislative Research Commission shall have complete control and exclusive use of the third and fourth floors of the New State Capitol and shall have exclusive use of the space in the New State Capitol Annex allocated to them under paragraphs (a) and (b) of this subsection. If there be any additional space in the Capitol, it shall be assigned to agencies whose activities are most closely related to the agencies directed to be located permanently in the Capitol;
  4. To acquire, by condemnation in the manner provided in the Eminent Domain Act of Kentucky, any real estate necessary for use by the state or by any state agency, when the cabinet is unable to agree with the owner thereof on a price for such real estate;
  5. To lease any real property, or any interest in such real property, owned by the state or any agency thereof, in accordance with KRS 45A.045 ;
  6. To provide for and adopt plans and specifications as may be necessary, to provide adequate public notice for and receive bids for any expenditures proposed to be made, to award contracts for the purpose authorized, to supervise construction and make changes and revisions in plans and specifications or in construction as may become necessary, and generally to do any and all other things as may become necessary or expedient in order to effectively fulfill and carry out the purposes of this chapter, including the right to employ clerks, engineers, statisticians, architects, or other persons required to be employed in order to fulfill the functions of the Commonwealth relating to state property and buildings provided in KRS 56.450 to 56.550 ; and
  7. To adopt rules and promulgate administrative regulations as may be necessary to govern the acquisition, control, and disposition of the real property to which this section is applicable.

History. Enact. Acts 1956 (1st Ex. Sess.), ch. 7, Art. XVI, § 4; 1966, ch. 111, § 1; 1974, ch. 372, § 1; 1976, ch. 62, § 52; 1976, ch. 140, § 19; 1978, ch. 218, § 1, effective March 30, 1978; 1978, ch. 384, § 539, effective June 17, 1978; 1980, ch. 226, § 1, effective July 15, 1980; 1986, ch. 497, § 1, effective July 15, 1986; 1990, ch. 496, § 31, effective July 13, 1990; 1990, ch. 510, § 1, effective July 13, 1990; 1998, ch. 120, § 23, effective July 15, 1998; 2003, ch. 153, § 1, effective June 24, 2003.

NOTES TO DECISIONS

1.Purpose.

The State Property and Buildings Commission Act (KRS 56.440 to 56.550 ) was enacted in order to have one central agency of the state government to control all building necessary for state use and to insure proper and systematic planning of the building program and was not intended to repeal KRS 56.220 giving the counties the unrestricted right to lease the Ohio River bed land north of the thread of the stream as fully as it might otherwise deal with “vacant and unappropriated” land and the right for the counties to execute oil and gas depletion leases is implied although the counties cannot sell the land in fee simple. Commonwealth v. Henderson County, 371 S.W.2d 27, 1963 Ky. LEXIS 93 ( Ky. 1963 ).

2.Approval of Construction Contracts.

Where proposed agreement for construction of a building was approved by the Property and Buildings Commission, not by the Department of Finance (now Finance and Administration Cabinet), contractor had no contract with the Commonwealth, and was not entitled to damages based upon profits due to alleged abandonment of agreement. Cravens & Cravens, Inc. v. Department of Finance, 312 S.W.2d 622, 1958 Ky. LEXIS 235 ( Ky. 1958 ) (decided under prior law).

3.Offices for State Agencies.

State Property and Buildings Commission may legally enter into contracts with other state agencies of the Commonwealth to rent state capitol annex office building and the rental or lease agreements shall be binding against the agencies for any biennium for which they are executed but said lease agreements will not bind any future General Assembly to appropriate any money to pay rentals for a period longer than any biennium for which an appropriation may be made by the General Assembly. Preston v. Clements, 313 Ky. 479 , 232 S.W.2d 85, 1950 Ky. LEXIS 902 ( Ky. 1950 ).

4.Condemnation.

Where State Property and Buildings Commission had the power to condemn petitioners’ property their relief was relegated under proper pleadings and proof to the question of the amount of damages they were entitled to recover for the injury to their property resulting from the condemnation and contention that petitioners’ property would be greatly damaged was insufficient for a writ of prohibition. Hofgesang v. Grauman, 257 S.W.2d 525, 1953 Ky. LEXIS 775 ( Ky. 1953 ).

Where statute vests in the State Property and Buildings Commission the power to condemn and acquire land for use by the state or any state agency, the commission may make a determination as to the necessity of exercising its power, which in the absence of fraud, bad faith, or abuse of discretion is not reviewable by the courts. Hofgesang v. Grauman, 257 S.W.2d 525, 1953 Ky. LEXIS 775 ( Ky. 1953 ).

Subsection (5) of this section does not require the state to haggle over the price of property it wants to acquire, and where the state made a substantial effort to acquire the property over a period of time, and made a legitimate offer which was rejected by the landowner, the state had the right to acquire by condemnation. Coke v. Commonwealth, Dep't of Finance, 502 S.W.2d 57, 1973 Ky. LEXIS 62 ( Ky. 1973 ).

5.Lease of Real Property.

Where subsection (7) of KRS 56.460 referred to in a resolution of the State Property and Buildings Commission authorizing the issuance of revenue bonds for constructing improvements and facilities in designated state parks had been repealed at the time the resolution was adopted but had been reenacted as subsection (6) of this section giving the same authority to the Department of Finance (now Finance and Administration Cabinet), the failure to designate the correct statute in the resolution was not considered sufficient to invalidate the resolution and a lease which was executed by the proper officials with authority under this section. Kentucky Lake Vacation Land, Inc. v. State Property & Bldgs. Com., 333 S.W.2d 779, 1960 Ky. LEXIS 212 ( Ky. 1960 ).

In the absence of a showing that the proposed use would really tend to interfere with the proper operation of the state fair, state agencies and officials could enter into an agreement giving a private individual an option to lease 1.4% of the state fair grounds. Lehman v. Matthews, 343 S.W.2d 133, 1961 Ky. LEXIS 406 ( Ky. 1961 ).

6.Control of Real Property.

The authority of the Cabinet to issue permits to nonprofit organizations to conduct fund-raising tours of the executive mansion’s private quarters is implicitly vested in the Cabinet via KRS Chapters 42, 45, and 56, and in specific terms, subsection (4)(a) of this section. Commonwealth ex rel. Beshear v. Brown, 672 S.W.2d 675, 1984 Ky. App. LEXIS 602 (Ky. Ct. App. 1984).

7.Governor’s Mansion.

When the Governor and the Cabinet for Finance and Administration agree that the private quarters of the executive mansion be opened to fund-raising tours for the general public conducted by a nonprofit organization and a permit is issued to such effect, their actions are within the statutory grant of authority of KRS 11.020 and KRS Chapters 42, 45, and 56. Commonwealth ex rel. Beshear v. Brown, 672 S.W.2d 675, 1984 Ky. App. LEXIS 602 (Ky. Ct. App. 1984).

Cited in:

Leonhardt v. Lang, 2021 Ky. App. LEXIS 12 (Ky. Ct. App. Feb. 5, 2021).

Opinions of Attorney General.

If one claims an interest in mineral rights in property condemned by the Department of Finance (now Finance and Administration Cabinet), his interest can be condemned. OAG 63-1052 .

The Commonwealth of Kentucky has the authority to lease out of state lands for park purposes from the United States corps of engineers. OAG 70-328 .

Where a condemnation suit is filed, after the proper adjudication is made the court will issue an order providing for the conveyance of the title, but until such order is complied with the title remains in the original owner. OAG 70-756 .

The Executive Department for Finance and Administration (now Finance and Administration Cabinet) could, in appropriately worded lease documents, provide for the state’s making capital improvements on short term leaseholds; however the expenditures must be reasonably deemed to be a functional necessity for the particular agency and thus a public benefit. OAG 77-271 .

While there appears to be no problem in citizens voluntarily making a donation to see the Governor’s mansion, the Finance and Administration Cabinet has no statutory authority to charge fees or ticket costs to the public for a tour of the Governor’s Mansion, either for a one-time situation or more; further, the cabinet has no authority to permit a nonprofit corporation organized to raise funds for the mansion renovation, to sell tickets to the public for such a tour of the Governor’s Mansion. OAG 83-120 .

Research References and Practice Aids

Cross-References.

Acquisition of educational television facilities by State Board of Education, Commission to be notified, KRS 156.070 .

Eminent Domain Act of Kentucky, KRS 416.540 et seq.

56.464. Payment of moving expenses of persons displaced on acquisition of land by state — Limits. [Repealed.]

Compiler’s Notes.

This section (Enact. Acts 1968, ch. 88) was repealed by Acts 1972, ch. 195, § 18.

56.465. Disposition of land in custody of state agency.

In any case where the real property that is proposed to be sold pursuant to KRS 56.463 is in the custody of a state agency, the cabinet may submit to such agency a general description of the intended use of the land, along with such detailed information as the agency may require, but the finding of the cabinet on the question of selling and conveying the real property shall be final. Disposition shall be made in accordance with KRS 45A.045 .

History. Enact. Acts 1958, ch. 140, § 2; 1966, ch. 111, § 2; 1990, ch. 496, § 32, effective July 13, 1990.

56.467. Commission to assist school financing.

The commission shall exercise the powers prescribed by KRS 162.520 , 162.540 , 162.550 , 162.580 , 162.590 , 162.600 , and 162.620 for the purpose of assisting boards of education of any county or independent school district in financing public school building projects and undertakings.

History. Enact. Acts 1964, ch. 7, § 7; 1966, ch. 255, § 60; repealed and reenact., Acts 1990, ch. 476, Pt. V, § 285, effective July 13, 1990.

56.470. Acquisition of real estate by state agency.

No state agency shall acquire any real property without first meeting the approval of the cabinet. The cabinet may approve, modify, or disapprove the proposed acquisition of real estate, and the finding of the cabinet shall be final, except in cases where the issuance and sale of bonds is proposed, in which cases the cabinet shall submit its findings to the commission for approval, modification or disapproval. If a proposed acquisition of real property is approved as provided in this section, either in whole or in part, the cabinet shall make the acquisition. Acquisition shall be made in accordance with KRS 45A.045 .

History. Enact. Acts 1949 (Ex. Sess.), ch. 11, § 4; 1956 (1st Ex. Sess.), ch. 7, Art. XVI, § 5; 1966, ch. 111, § 3; 1990, ch. 496, § 33, effective July 13, 1990.

NOTES TO DECISIONS

Cited:

Cravens & Cravens, Inc. v. Department of Finance, 312 S.W.2d 622, 1958 Ky. LEXIS 235 ( Ky. 1958 ).

Opinions of Attorney General.

The Commonwealth of Kentucky has the authority to lease out of state lands for park purposes from the United States corps of engineers. OAG 70-328 .

56.480. Engineers, appointments — Studies of land and building needs — Cost estimates.

The cabinet may appoint qualified licensed engineers and qualified graduate engineers may be appointed for a period not to exceed one (1) year without obtaining a license, who shall perform duties delegated to them from time to time by the secretary of the Finance and Administration Cabinet. The cabinet shall prepare necessary plans and specifications, shall investigate and make studies of the comparative need and demand for acquiring lands, or for the construction or reconstruction or structural maintenance of buildings, or the purchase, installation or construction of equipment, facilities or furnishings incidental or pertaining thereto, and shall make the estimates of cost required in connection with or incidental to the development, purchase, acquisition or construction of the foregoing. The engineering staff shall give technical assistance and perform other duties the secretary of the Finance and Administration Cabinet requires. Review of construction plans for conformance with the Uniform State Building Code shall be conducted by the Department of Housing, Buildings and Construction.

History. Enact. Acts 1949 (Ex. Sess.), ch. 10, § 1; 1956 (1st Ex. Sess.), ch. 7, Art. XVI, § 6; 1966, ch. 255, § 61; 1974, ch. 74, Art. II, § 9(2); 1978, ch. 117, § 61, effective February 28, 1980; 2010, ch. 24, § 51, effective July 15, 2010.

56.490. Approval required for proposed building projects; conditions of approval. [Repealed.]

Compiler’s Notes.

This section (Enact. Acts 1949 (1st Ex. Sess.), ch. 11, § 6; 1956 (1st Ex. Sess.), ch. 7, Art. XVI, § 7; 1964, ch. 7, § 3) was repealed by Acts 1968, ch. 174, § 4.

56.491. Approval required for certain projects — Conditions — Exceptions.

  1. No state agency shall have power or authority to make plans and specifications, provide public notice of invitations for bids, let contracts, or incur any financing commitments, either in the way of a charge against public funds or in the way of negotiations for issuance of revenue bonds, for any capital construction projects involving the improvement of lands or the construction, alteration, reconstruction, or major repair of any building or other structure, or sewage disposal or water supply system, requiring the expenditure of more than two hundred thousand dollars ($200,000) without first securing the approval of the Finance and Administration Cabinet.
  2. The state agency seeking the approval shall submit to the Finance and Administration Cabinet a general description of the proposed project, with the detailed information the cabinet may require. Review of construction plans for conformance with the Uniform State Building Code shall be conducted by the Department of Housing, Buildings and Construction. The Finance and Administration Cabinet shall not approve any project requiring its approval in any instance if it finds that: the project is not needed; the proposed method of financing is not sound; the project will exceed the amount of the funds available therefor; the work contemplated will be insufficient to accomplish the purpose of the project; or after providing for the ordinary recurring expenses of government and debt service and for payments under existing allotments for extraordinary expenses and capital outlay, cash will not be available in the State Treasury to promptly pay for the work during the biennium, or except as provided in subsection (5) of this section, that the work is to be done by employees of the agency.
  3. The finding of the Finance and Administration Cabinet shall be final, except in cases where the issuance and sale of bonds is proposed, in which cases the cabinet shall submit its findings to the commission for final approval, modification, or disapproval.
  4. Any capital construction project, the total cost of completion of which the Finance and Administration Cabinet determines will exceed two hundred thousand dollars ($200,000), shall be contracted for on a competitive bid basis, and the execution of the contracts shall be approved and authorized by the cabinet. When a capital construction project has been approved as provided in this section, in whole or in part, the cabinet shall prepare the plans and specifications, provide public notice of invitations for bids, award the contracts, supervise the construction, and handle the financial negotiations on behalf of the requesting state agency; or with prior written approval, the cabinet may authorize a state agency to do so with delegated authority of the cabinet.
  5. A capital construction project, the total cost of completion of which the Finance and Administration Cabinet determines will not exceed two hundred thousand dollars ($200,000), may be performed by the employees of the requesting agency or by individuals hired specifically for the project who shall be exempt from the requirements of KRS Chapter 18A, if the project is approved and authorized by the cabinet. Necessary materials and supplies shall be procured in accordance with the standard purchasing procedures and policies of the cabinet as defined in KRS Chapter 45A.
  6. This section shall not apply to capital outlays to the Department of Highways for roads and bridges.
  7. This section shall not apply to capital outlays by the Justice and Public Safety Cabinet for repair, maintenance, improvement, or expansion of present correctional facilities on which projects inmates are used. Any capital construction project to be performed by the Justice and Public Safety Cabinet shall be approved and authorized by the Finance and Administration Cabinet.
  8. This section shall not apply to surveys capable of being performed by employees of the Department of Fish and Wildlife Resources. Boundary surveys or surveys involving property lines shall be performed by or under the supervision of an employee possessing a professional land surveyor license.

History. Enact. Acts 1968, ch. 174, § 1; 1970, ch. 146, § 1; 1972, ch. 247, § 1; 1974, ch. 74, Art. II, § 9(1); 1974, ch. 74, Art. IV, § 20(1); 1978, ch. 117, § 62, effective June 17, 1978; 1980, ch. 338, § 1, effective July 15, 1980; 1986, ch. 331, § 14, effective July 15, 1986; 1986, ch. 338, § 1, effective July 15, 1986; 1990, ch. 496, § 34, effective July 13, 1990; 1992, ch. 211, § 11, effective July 14, 1992; 1994, ch. 15, § 1, effective July 15, 1994; 1998, ch. 120, § 24, effective July 15, 1998; 2000, ch. 225, § 2, effective July 14, 2000; 2006, ch. 127, § 1, effective July 12, 2006; 2007, ch. 85, § 127, effective June 26, 2007; 2009, ch. 72, § 1, effective June 25, 2009; 2010, ch. 24, § 52, effective July 15, 2010.

NOTES TO DECISIONS

Cited in:

Leonhardt v. Lang, 2021 Ky. App. LEXIS 12 (Ky. Ct. App. Feb. 5, 2021).

Opinions of Attorney General.

The Commissioner of the Executive Department for Finance and Administration (now Secretary of the Finance and Administration Cabinet) may not legally approve a proposal or contract by a nonprofit corporation to renovate a state facility at a cost of $50,000 without complying with the formal bidding requirements of this section. OAG 75-232 .

Research References and Practice Aids

Cross-References.

Issuance of revenue bonds by state agencies, for public projects, KRS 58.020 .

56.493. Plans for public buildings to consider needs of handicapped. [Repealed.]

Compiler’s Notes.

This section (Enact. Acts 1966, ch. 209, §§ 1, 2) was repealed by Acts 1974, ch. 241, § 3.

56.495. Kentucky university and college projects.

The boards of regents of the respective state universities and the Kentucky Community and Technical College System and the board of trustees of the University of Kentucky may issue, under the provisions of KRS 162.340 to 162.380 , consolidated educational building revenue bonds or housing bonds, provided that prior to seeking the final approval required by KRS 56.491 , the board of the state university or the Kentucky Community and Technical College System shall submit to the commission, through the cabinet, a request for approval of the project before any financial commitment of any sort may be made in connection therewith, including employment of architects, engineers, fiscal agents, or attorneys. The request shall include a general description of the project and its need, use, location, approximate size, and such other information as the cabinet may require. After approval by the commission, the cabinet shall appoint fiscal agents, bond counsel, and architects and engineers as may be required to make plans and specifications or financial arrangements for the project.

History. Enact. Acts 1964, ch. 7, § 5; repealed and reenact., Acts 1990, ch. 476, Pt. V, § 286, effective July 13, 1990; 1997 (1st Ex. Sess.), ch. 1, § 36, effective May 30, 1997.

56.500. Powers of state agencies to acquire or dispose of land limited.

No state agency, except as provided in this chapter, shall have power or authority:

  1. To acquire by purchase, lease, condemnation, or other means, any real property, including any interest in real property, except as provided by this chapter and KRS 45A.045 ;
  2. To lease, sell, or convey any real property, including any interest in real property, belonging to the state or to any state agency, except as provided by this chapter and KRS 45A.045 .

History. Enact. Acts 1949 (Ex. Sess.), ch. 11, § 7; 1956 (1st Ex. Sess.), ch. 7, Art. XVI, § 8; 1958, ch. 140, § 1; 1966, ch. 111, § 4; 1990, ch. 496, § 35, effective July 13, 1990.

NOTES TO DECISIONS

1.Applicability.

This section authorizes the commission to lease and sell real property owned by the state, and the power to sell real property includes the power to execute oil and gas leases. Walker v. Felmont Oil Corp., 136 F. Supp. 584, 1955 U.S. Dist. LEXIS 2462 (D. Ky. 1955 ), vacated, 240 F.2d 912, 1957 U.S. App. LEXIS 4842 (6th Cir. Ky. 1957 ).

Opinions of Attorney General.

The Commonwealth of Kentucky has the authority to lease out of state lands for park purposes from the United States corps of engineers. OAG 70-328 .

Research References and Practice Aids

Cross-References.

Forest lands, acquisition, leasing or sale of, KRS 149.020 , 149.030 , 149.050 .

Parks, request for acquisition of property, KRS 148.028 .

Property for turnpike projects, KRS 177.530 .

State Fair Board, power to dispose of property, KRS 247.140 .

Kentucky Law Journal.

Martin, Administrative Action for Efficient Debt Management: The Kentucky Case, 49 Ky. L.J. 505 (1961).

56.505. Legislative intent respecting industrial development projects.

  1. It is hereby found, determined and declared as a legislative finding of fact that the general welfare and well-being of the citizens of the Commonwealth is inextricably connected with and related to the economic opportunities which may be created and made available to them and that it is the legitimate business of Kentucky state government in an increasingly complex society to provide to the maximum extent practicable the impetus for economic development in the Commonwealth by the creation and financing of programs which will directly and proximately cause the location of major industries in the Commonwealth.
  2. It is hereby further found, determined and declared as a legislative finding of fact that the establishment of major manufacturing, processing and assembling facilities on sites which may be acquired and developed by the Commonwealth for such uses will proximately result in increased tax revenues to the Commonwealth, as taxing entity, including state corporate income taxes, state income taxes paid by employees who work in such facilities, state property taxes, state corporation license taxes and state sales and use taxes, which would not be received by the Commonwealth but for the establishment of such manufacturing, processing and assembling facilities and which tax receipts are hereby found, determined and declared to constitute receipt of value by the Commonwealth for the lease or conveyance of any such sites, as developed and improved, to persons, firms and corporations establishing major manufacturing, processing and assembling facilities on such sites.
  3. It is the purpose of KRS 56.510 , 56.513 and 56.514 to promote the gainful employment, business and economic development opportunities and general welfare of the citizens and residents of the Commonwealth by the creation of authority to enable the Commonwealth to acquire real estate for use as manufacturing, processing and assembling sites, and to develop such sites for occupancy, use, lease or conveyance to industrial corporations, partnerships and other entities which will provide citizens and residents of the Commonwealth with employment opportunities and will provide to the Commonwealth additional tax revenues. The authority granted by KRS 56.510 , 56.513 and 56.514 and the purposes to be accomplished by this section are hereby declared to be public purposes for which public money may be expended. The General Assembly hereby declares that financing the acquisition and development of sites for industries pursuant to KRS 56.510, 56.513 and 56.514 is governmental and public in nature.

History. Enact. Acts 1986, ch. 350, § 1, effective April 8, 1986.

NOTES TO DECISIONS

1.Constitutionality.

This section is consistent with Ky. Const., §§ 3, 49, 50, 51, 59, 60, 171 and 177. Hayes v. State Property & Bldgs. Com., 731 S.W.2d 797, 1987 Ky. LEXIS 217 ( Ky. 1987 ).

Research References and Practice Aids

Kentucky Bench & Bar.

Tobergte, The Impact of Kentucky’s Present Constitution Upon Business Growth & Development, Volume 51, No. 3, Summer 1987 Ky. Bench & B. 21.

56.510. Payment 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:
    1. Out of the funds appropriated specifically for capital outlay purposes;
    2. Out of funds directly appropriated to the involved state agency which may legally be available for the purpose;
    3. 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
    4. 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:
    1. 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;
    2. 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;
    3. 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
    4. 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.
    1. 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: (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;
    2. 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;
    3. 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
    4. 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.
  3. 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:
    1. From its own appropriation;
    2. By the issuance of revenue bonds; or
    3. 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.

HISTORY: Enact. Acts 1949 (Ex. Sess.), ch. 11, § 8; 1956 (1st Ex. Sess.), ch. 7, Art. XVI, § 9; 1976, ch. 205, § 3, effective October 1, 1976; 1986, ch. 350, § 3, effective April 8, 1986; 2018 ch. 199, § 2, effective July 14, 2018.

NOTES TO DECISIONS

1.Lease Agreement.

Where bond buyer knew and understood about the creation of the bond redemption fund, and every necessary and essential thing to be done under the terms and agreement contained in the bond order which became a part of the contract between the commission and the bond buyer and understood the set-up under subsection (3) of this section at the time he bid for the bonds the court would not go back on the contract and bond buyer could not complain when the commission chose not to enter into a trust indenture but elected to carry out the provisions of subsection (3) of this section. Preston v. Clements, 313 Ky. 479 , 232 S.W.2d 85, 1950 Ky. LEXIS 902 ( Ky. 1950 ).

Provision in proposed lease, which was to be entered into by the Department of Finance (now Finance and Administration cabinet) and the State Property and Buildings Commission with the Division (now Department) of Parks, that so long as any of the revenue bonds were outstanding the Division of Parks would not provide, use, occupy or operate any other detracting properties or facilities, would not freeze the development of the state park system until the debt was paid where there was nothing in the lease prohibiting establishment and construction of new parks or the improvement of existing parks and the object of the provision was to protect the bondholders against the Division of Parks establishing or constructing a competing property or facility which would destroy the revenue-producing ability of the existing system. Kentucky Lake Vacation Land, Inc. v. State Property & Bldgs. Com., 333 S.W.2d 779, 1960 Ky. LEXIS 212 ( Ky. 1960 ).

Research References and Practice Aids

Cross-References.

Issuance of revenue bonds for public projects, KRS 58.020 .

Kentucky Bench & Bar.

Tobergte, The Impact of Kentucky’s Present Constitution Upon Business Growth & Development, Volume 51, No. 3, Summer 1987 Ky. Bench & B. 21.

Northern Kentucky Law Review.

Note, Facing the Economic Challenges of the Eighties — the Kentucky Constitution and Hayes v. The State Property and Buildings Commission of Kentucky, 15 N. Ky. L. Rev. 645 (1988).

56.513. Interim financing — Revenue bond anticipation notes — Loan agreements — Tax status.

  1. When the State Property and Buildings Commission makes a determination, in accordance with the provisions of this chapter, that one (1) or more building projects or industrial development projects will be financed by the issuance of revenue bonds, then in anticipation of such financing the commission may borrow money to provide interim financing therefor and issue in evidence thereof its revenue bond anticipation notes, bearing interest at a rate or rates not exceeding the maximum rate permitted for the issuance of such bonds. Such interim financing may be entered into for the commission’s own projects, for those of the University of Kentucky and the state colleges or universities or for any other agency of the Commonwealth where approval by the commission is required regarding the issuance of revenue bonds of such an agency. In instances where the revenue bonds involved are to be issued by other agencies, such agencies, with the prior approval of the commission, may borrow money in the same manner and for the same purpose and issue in evidence thereof their own revenue bond anticipation notes, according to rules and regulations promulgated by the commission.
  2. The commission shall solicit proposals for such interim financing from at least three (3) responsible lenders, and shall select in its discretion the best of such proposals consistent with sound financial practices. A selection may be made even though less than three (3) proposals are received. The term of any such revenue bond anticipation note shall not exceed five (5) years; and the same may be renewed, if necessary.
  3. Each revenue bond anticipation note may include prepayment provisions which will allow the commission or other borrowing agency to prepay the loan after giving reasonable notice to the lender; shall identify the revenue bond issue from the proceeds of which the note or notes and any interest thereon are to be paid; and shall include a statement that the note is being issued in anticipation of the identified revenue bond issue, and that neither the note, nor the interest thereon, shall constitute or evidence an indebtedness of the Commonwealth of Kentucky. Each such note and the interest thereon (to any extent not previously paid from other sources) shall be paid from the proceeds of the identified revenue bond issue, when such proceeds have been received and are available.
  4. Instead of borrowing money and issuing revenue bond anticipation notes in the full amount necessary for construction contract purposes, the commission (or such agencies with the prior approval of the commission and according to its rules and regulations), may enter into loan agreements with one (1) or more lenders (determined by the commission to be responsible) according to the terms of which it may be agreed:
    1. That the lender will continuously make available to the borrowing agency a stated maximum amount of money for a stated period of time;
    2. That the borrowing agency may demand and obtain cash advances against such commitment from time to time upon reasonable and agreed notice, and upon issuing in evidence of each advance a bond anticipation note which will bear an agreed rate of interest, not exceeding the maximum rate permitted for the issuance of the proposed bonds; and
    3. That in consideration of the making of such loan agreement the borrowing agency will pay to the lender or lenders a commitment fee determined by the commission to be reasonable according to financial conditions existing at the time the loan agreement is made.

      Such loan agreements may be recorded as receivables upon the books of account of the commission, the secretary of the Finance and Administration Cabinet, or other borrowing agency, and construction contracts may be awarded against the same to the amount of money which the lender contractually agrees to make available to the borrowing agency, the same as in the case of loan agreements made with departments or agencies of the United States government.

  5. Each revenue bond anticipation note issued according to this section, and the receipt of interest thereon, shall be exempt from all taxation by the Commonwealth and all of its subdivisions, municipalities, and taxing authorities; and this may be stated as a representation in the text of each such revenue bond anticipation note.
  6. The State Property and Building Commission and other state agencies authorized to issue revenue bond anticipation notes under the terms of this section may, as an alternative and if authorized to do so by the governing body of such commission or agency, adopt the procedures for interim financing established for counties, cities, and other municipal corporations, or their agencies, by KRS 58.150 .

History. Enact. Acts 1966, ch. 137, § 1; 1968, ch. 110, § 1; 1970, ch. 152, § 1; 1986, ch. 350, § 4, effective April 8, 1986; repealed and reenact., Acts 1990, ch. 476, Pt. V, § 287, effective July 13, 1990.

Research References and Practice Aids

Northern Kentucky Law Review.

Note, Facing the Economic Challenges of the Eighties — the Kentucky Constitution and Hayes v. The State Property and Buildings Commission of Kentucky, 15 N. Ky. L. Rev. 645 (1988).

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:
    1. “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;
    2. “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
    3. “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.
    1. 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; (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;
    2. 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;
    3. 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;
    4. 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;
    5. 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;
    6. 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;
    7. 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
    8. 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.
  3. 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.
  4. 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.
  5. 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.
  6. 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.

History. Enact. Acts 1986, ch. 350, § 5, effective April 8, 1986; 1988, ch. 395, § 2, effective July 15, 1988; 1998, ch. 120, § 25, effective July 15, 1998.

Research References and Practice Aids

Northern Kentucky Law Review.

Note, Facing the Economic Challenges of the Eighties — the Kentucky Constitution and Hayes v. The State Property and Buildings Commission of Kentucky, 15 N. Ky. L. Rev. 645 (1988).

56.515. Leaseback agreement for fairgrounds improvements.

  1. When the cabinet finds that the purposes of the State Fair Board and the public purposes of the Commonwealth would be promoted by the construction of buildings and improvements on land in the custody of the State Fair Board as defined in KRS 247.140(1)(a), it may, in addition to any other method prescribed by law, authorize the construction of such buildings and improvements by private capital under a conveyance and leaseback agreement authorized by subsection (2) of this section, or under a mortgage agreement authorized by subsection (3) of this section.
  2. The cabinet may convey the fee interest in any of the land described in subsection (1) of this section to a private individual, corporation, or partnership to which such land has been or will be leased, subject to a written agreement by such individual, corporation, or partnership to construct such buildings and improvements and to reconvey the fee interest to the Commonwealth subject to a mortgage placed on the fee interest by such individual, corporation, or partnership for the purpose of securing private financing for the construction of such buildings and improvements; provided, however, that such mortgage shall not constitute a general obligation or debt of the Commonwealth and that the Commonwealth may, in the event of default, redeem the mortgage if it so elects.
  3. The cabinet may agree that a private individual, corporation, or partnership to which any of the land described in subsection (1) of this section has been leased may, in order to secure private financing for the construction of such buildings and improvements, have the right to grant against its leasehold interest a first mortgage lien in an amount sufficient to pay fully the costs of the construction of such buildings and improvements, to which all rights of the Commonwealth shall be subordinate and inferior; provided, however, that such first mortgage lien shall not constitute a general debt or obligation of the Commonwealth.
  4. Any agreement made under this section shall be made only with the written consent of the State Fair Board and the State Property and Buildings Commission and shall be signed in the name of the Commonwealth by the secretary of the Finance and Administration Cabinet and the Governor and shall be lodged for record in the Office of the Secretary of State.

History. Enact. Acts 1958, ch. 140, § 3; 1974, ch. 74, Art. II, § 9(2); 1976, ch. 76, § 1, effective March 29, 1976.

Opinions of Attorney General.

The proposal of a nonprofit corporation to lease a stadium for the purposes of renovation to create a facility suitable for a professional baseball team is specifically governed upon an affirmative finding by the Department of Finance (now Finance and Administration Cabinet) that the purposes of the board and the public purposes of the Commonwealth would be promoted by the proposed renovation; thus, there is no requirement that a private lessee, using private capital, seek competitive bids for the contemplated construction. OAG 81-341 .

56.520. Revenue bonds — Investment of proceeds of authorized bonds.

  1. The commission may issue and sell revenue or other authorized bonds, in carrying out the provisions of this chapter, in denominations and amounts, as is deemed to be for the best interest of the Commonwealth, for any of the following purposes:
    1. To acquire real estate for state governmental use;
    2. To pay all or any part of the expense or cost of or incidental to a building project for state governmental use;
    3. To defray the cost of plans, specifications, blueprints, architectural fees, and other expenses authorized to be incurred for state governmental use.
  2. The payment of bonds issued, together with the interest thereon, may be secured by a pledge and a first lien on all of the receipts and revenue derived, or to be derived, from the rental or operation of the property involved. Neither the payment of any bond, nor the interest thereon issued under the authority of this chapter, shall constitute an indebtedness of the Commonwealth of Kentucky, nor shall any bond or interest thereon be payable out of any fund except funds derived from rentals or other revenues derived from the operation of the properties or from revenues as are available for the purpose by law.
  3. All competitive bids for the sale of 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 indicated in the notice made relative thereto.
  4. If the commission issues and sells bonds for a building project as authorized by this chapter, insurance, including fire and windstorm, casualty, catastrophe, use and occupancy, and such other insurance as the commission may deem advisable, shall be carried in connection with the building project, and it may so obligate and bind itself in a trust indenture securing the payment of the bonds. Any insurance shall be paid for out of funds available for the project.
  5. The commission may invest proceeds from the sale of its revenue or other authorized bonds in financial instruments and investments as provided in KRS 42.500 for the State Investment Commission.

History. Enact. Acts 1949 (Ex. Sess.), ch. 11, § 9; 1956, ch. 90; 1956 (1st Ex. Sess.), ch. 7, Art. XVI, § 10; 1962, ch. 15, § 3; 1968, ch. 110, § 2; 1968, ch. 152, § 22; 1976, ch. 205, § 4, effective October 1, 1976; 1988, ch. 395, § 3, effective July 15, 1988; 1990, ch. 277, § 2, effective July 13, 1990; 1990, ch. 291, § 3, effective July 13, 1990; 1990, ch. 476, Pt. V, § 288, effective July 13, 1990; 1998, ch. 120, § 26, effective July 15, 1998; 1998, ch. 207, § 1, effective July 15, 1998; 1998, ch. 554, § 2, effective July 15, 1998.

Legislative Research Commission Note.

(7/13/90). The two Acts amending this section prevail over the repeal and reenactment in House Bill 940, Acts Ch. 476, pursuant to Section 653(1) of Acts Ch. 476. Because there is a conflict between these two amending Acts, the amending Act which was last enacted by the General Assembly prevails, pursuant to KRS 446.250 .

(7/15/98). This section was amended by 1998 Ky. Acts chs. 120, 207, and 554 which do not appear to be in conflict and have been codified together.

NOTES TO DECISIONS

1.Constitutionality.

Where bondholders may look only to such funds as may be derived from rentals or operation of a building and under the proposal there is no created tax burden or obligation of the state to appropriate or pay the indebtedness or to be looked to as security, the bonds issued by State Property and Buildings Commission to erect capitol annex office building do not constitute an indebtedness of the state within any constitutional provision or inhibition. Preston v. Clements, 313 Ky. 479 , 232 S.W.2d 85, 1950 Ky. LEXIS 902 ( Ky. 1950 ).

2.Exemption from Taxation.

Revenue bonds and the coupons attached thereto issued by the State Property and Buildings Commission payable only from rentals collected for the occupancy of state capitol annex office building are exempt from all state, county, school and municipal taxes, including state income tax. Preston v. Clements, 313 Ky. 479 , 232 S.W.2d 85, 1950 Ky. LEXIS 902 ( Ky. 1950 ).

Research References and Practice Aids

Cross-References.

Issuance of revenue bonds for public projects, KRS 58.020 .

Issuance of revenue bonds for state fair improvements, KRS 247.180 .

Kentucky Law Journal.

Martin, Administrative Action for Efficient Debt Management: The Kentucky Case, 49 Ky. L.J. 505 (1961).

56.523. Refunding bonds.

The commission is hereby authorized to provide for the issuance of refunding bonds for the purpose of refunding any bonds outstanding that have been issued at any time under the provisions of KRS 56.520 or for the purpose of refunding any bonds outstanding that have been issued by agencies of the state under the provisions of KRS Chapter 58, including redemption premiums thereon and any interest accrued or to accrue to the date of redemption. The commission is further authorized to issue bonds for the combined purpose of refunding any bonds issued at any time under KRS 56.520 or by state agencies under KRS Chapter 58, including redemption premiums thereon and any interest accrued or to accrue to the date of redemption, and for paying the cost of extensions, improvements, betterments or additions to the project.

History. Enact. Acts 1964, ch. 7, § 4.

56.527. Revenues from bond projects, custody, investment, reports.

To the extent not inconsistent with the obligations and covenants of resolutions and trust indentures pursuant to which bonds have previously been issued and are outstanding, revenues from bond projects of all agencies of the state shall be paid into the State Treasury through the cabinet and the cabinet may, in the best interest of the project, invest and reinvest, or require a trustee to invest and reinvest, all funds held for the benefit of the project. In all instances the cabinet may, by regulations promulgated and made effective according to KRS Chapter 13A, require that all depositories, trustees, and other agents make periodic reports to the cabinet concerning the status of and balances in such funds, and the manner in which the same are invested and reinvested from time to time.

History. Enact. Acts 1964, ch. 7, § 6.

56.530. Abandonment of incompleted building projects — Settlement with architects, engineers, and contractors.

The commission may abandon, or cause to be abandoned, the construction of any building finally approved by it and may change the purposes for which such building is being constructed or for which contracts have been entered into or were commenced by the state or any state agency. Likewise the cabinet may abandon, or cause to be abandoned, the construction of any building finally approved by it and may change the purposes for which such building is being constructed or for which contracts have been entered into or were commenced by the state or any state agency. In either event the cabinet is authorized to make such equitable adjustment or settlement with the architects, engineers and contractors employed in connection with such construction as it may deem just and equitable. If there is an adjustment or settlement with said architects, engineers or contractors, the cabinet is authorized to pay the same, or to approve the payment thereof, from any of the funds set forth in KRS 56.510 .

History. Enact. Acts 1949 (Ex. Sess.), ch. 11, § 10; 1956 (1st Ex. Sess.), ch. 7, Art. XVI, § 11, effective July 1, 1956.

56.540. Acts or actions taken by commission not invalidated — Cabinet may complete transactions.

The vesting in the cabinet by KRS 56.440 to 56.580 of any of the powers, duties or functions heretofore vested in the commission shall not have the effect of invalidating any acts or action heretofore taken by the commission; and the cabinet is authorized and directed to execute any conveyance or other writing or take whatever action may be necessary to complete any such transaction, the same as the commission could have done prior to the effective date of KRS 56.440 to 56.580 .

History. Enact. Acts 1949 (Ex. Sess.), ch. 11, § 11; 1956 (1st Ex. Sess.), ch. 7, Art. XVI, § 12, effective July 1, 1956.

56.550. Applicability of KRS 56.440 to 56.540 to certain projects.

  1. Nothing in KRS 56.440 to 56.540 shall be construed to apply to the construction of roads or bridges or the acquisition of rights-of-way or real estate in connection therewith now under the jurisdiction of the Department of Highways or the Turnpike Authority of Kentucky, or for any other expenditure made from the state road fund or by said turnpike authority.
  2. Except as provided by KRS 56.467 , 162.520 to 162.620 , nothing in KRS 56.440 to 56.540 shall be construed to apply to school districts, or to affect the rights, powers, and duties of the governing authorities of such districts; provided, however, that the acquisition of sites, and the acquisition, purchase, construction, leasing, and operation of television or related facilities as an aid to education or as an aid to any other proper public function, shall be deemed to be matters of statewide jurisdiction and interest, and any or all of such activities on the part of the commission shall not be deemed to constitute encroachment upon the authority of any school district.

History. Enact. Acts 1949 (1st Extra. Sess.), ch. 11, § 12; 1962, ch. 15, § 4; 1964, ch. 7, § 10; 1970, ch. 204, § 9; 1974, ch. 74, Art. IV, § 20(1); 1986, ch. 350, § 5, effective April 8, 1986; repealed and reenact., Acts 1990, ch. 476, Pt. V, § 289, effective July 13, 1990.

Research References and Practice Aids

Cross-References.

Educational television, KRS Ch. 168.

56.560. Cabinet may transfer unneeded portions of appropriations for construction of projects from one project to another.

The cabinet may transfer unneeded portions of appropriations for construction of particular projects from one (1) project to another or to others, whether for the same or for a different agency, in order to secure the most efficient construction program.

History. Enact. Acts 1956 (1st Ex. Sess.), ch. 7, Art. XVI, § 13, effective July 1, 1956.

56.570. Information on revenue bonds issued by Commonwealth to be assembled and published.

Information on revenue bonds issued by the Commonwealth and by the agencies and institutions thereof shall be assembled and published under the direction of the secretary of the Finance and Administration Cabinet.

History. Enact. Acts 1956 (1st Ex. Sess.), ch. 7, Art. XVI, § 14, effective July 1, 1956.

Research References and Practice Aids

Kentucky Law Journal.

Martin, Administrative Action for Efficient Debt Management: The Kentucky Case, 49 Ky. L.J. 505 (1961).

56.580. Special buildings account created.

There is hereby created within the general fund a special buildings account from which expenditures may be made in carrying out the provisions of KRS 56.440 to 56.580 . Unexpended balances in the buildings account shall carry forward from year to year without lapse.

History. Enact. Acts 1956 (1st Ex. Sess.), ch. 7, Art. XVI, § 15, effective July 1, 1956.

56.590. Construction, financing by state of public buildings and improvements in capital city — Methods of financing — Title to real estate.

  1. When the cabinet finds that the general welfare of the State Capitol and its environs and the public purposes of the Commonwealth would be promoted by the construction of buildings and improvements on land owned by the Commonwealth in the vicinity of and complimentary to the Capital Plaza in the capital city, it may, in addition to any other methods prescribed by law, authorize the construction of such buildings and improvements as provided in this section.
  2. The costs of constructing buildings and improvements determined to be needed by the cabinet under this section may be paid in whole or in part (a) out of funds specifically appropriated for the construction of such buildings and improvements, or (b) out of funds derived or which may be derived from the issuance and sale of revenue bonds as authorized by this chapter or by KRS Chapter 58, or (c) by private capital under a conveyance and leaseback agreement as authorized by this section, or (d) by any combination of said methods.
  3. When the cabinet authorizes the construction of buildings and improvements under this section, the costs of which are proposed to be financed wholly by private capital under a conveyance and leaseback agreement, or partly by private capital in combination with any other method authorized by subsection (2) of this section, the cabinet, acting for and on behalf of the Commonwealth, may convey the fee simple or any lesser interest in, including air rights above, any land owned by the Commonwealth in the vicinity of the Capital Plaza to any person, corporation, or partnership, to which such land or any interest therein has been or will be leased, subject to a written agreement by such person, corporation, or partnership to construct such buildings and improvements thereon and to reconvey such land to the Commonwealth subject to a mortgage placed on the land or interest therein by the person, corporation or partnership, for the purpose of securing private financing of all or a part of the costs of construction of such buildings and improvements, and for the leaseback to such person, corporation or partnership of such land, buildings and improvements. Any mortgage placed on the land under this subsection shall not constitute a general obligation or debt of the Commonwealth but the Commonwealth may, in the event of default, redeem the mortgage if it so elects.
  4. The cabinet may divide any building or improvement project authorized under this section into two (2) or more parts or units for purposes of financing the costs of construction of each such part or unit and may agree that the Commonwealth’s interest in any part or unit of such project conveyed to any person, corporation or partnership, and reconveyed to the Commonwealth subject to a mortgage as authorized by subsection (3) of this section may be subordinate and inferior to such mortgage, provided, however, that such mortgage shall not constitute a general obligation or debt of the Commonwealth, and the Commonwealth may, in the event of default, redeem the mortgage if it so elects.
  5. Any agreements made under this section shall be made only with the written consent of the State Property and Buildings Commission and shall be signed in the name of the Commonwealth by the secretary of the Finance and Administration Cabinet and the Governor and shall be lodged for record in the office of the Secretary of State.

History. Enact. Acts 1978, ch. 120, § 1, effective June 17, 1978.

Central State Hospital Recovery Authority

56.600. Central State Hospital Recovery Authority — Board. [Repealed.]

Compiler’s Notes.

This section (Enact. Acts 1994, ch. 250, § 1, effective July 15, 1994) was repealed by Acts 2009, ch. 12, § 56, effective June 25, 2009.

56.601. Powers of board. [Repealed.]

Compiler’s Notes.

This section (Enact. Acts 1994, ch. 250, § 2, effective July 15, 1994) was repealed by Acts 2009, ch. 12, § 56, effective June 25, 2009.

56.602. Attachment of authority to Finance and Administration Cabinet. [Repealed.]

Compiler’s Notes.

This section (Enact. Acts 1994, ch. 250, § 3, effective July 15, 1994) was repealed by Acts 2009, ch. 12, § 56, effective June 25, 2009.

56.603. Expiration of KRS 56.600 to 56.602 and abolition of authority. [Repealed.]

Compiler’s Notes.

This section (Enact. Acts 1994, ch. 250, § 4, effective July 15, 1994) was repealed by Acts 2009, ch. 12, § 56, effective June 25, 2009.

Relocation Assistance

56.610. Legislative findings.

  1. The General Assembly of the Commonwealth of Kentucky finds and declares the following:
    1. Displacement as a direct result of programs or projects undertaken with federal financial assistance is caused by a number of activities, including rehabilitation, demolition, code enforcement, and acquisition;
    2. Relocation assistance policies shall provide for fair, uniform, and equitable treatment of all affected persons;
    3. The displacement of businesses often results in their closure; and
    4. Minimizing the adverse impact of displacement is essential to maintaining the economic and social well-being of communities.
  2. KRS 56.620 , 56.690 and 56.740 establish a uniform policy for the fair and equitable treatment of persons displaced as a direct result of programs or projects undertaken with federal financial assistance. The primary purpose of the above-mentioned sections shall be to ensure that such persons shall not suffer disproportionate injuries as a result of programs and projects designed for the benefit of the public as a whole and to minimize the hardship of displacement on such persons. The provisions of the above-mentioned sections may be applied to programs and projects undertaken without federal financial assistance.
  3. The following is the intent of the Kentucky General Assembly:
    1. KRS 56.620 , 56.690 and 56.740 shall be carried out in a manner which minimizes waste, fraud and mismanagement and reduces unnecessary administrative costs borne in providing relocation assistance;
    2. Uniform procedures for the administration of relocation assistance shall, to the maximum extent feasible, assure that the unique circumstances of any displaced person are taken into account and that persons in essentially similar circumstances are accorded equal treatment under the above-mentioned sections; and
    3. The improvement of housing conditions of economically disadvantaged persons under the above-mentioned sections shall be undertaken, to the maximum extent feasible, in coordination with existing federal, state and local government programs for accomplishing such goals.

History. Enact. Acts 1972, ch. 195, § 1; 1978, ch. 384, § 540, effective June 17, 1978; 1988, ch. 206, § 1, effective July 15, 1988.

Opinions of Attorney General.

Under this section and KRS 56.630 (now repealed) Kentucky agencies have full statutory authority to comply with the Uniform Relocation Assistance Act. OAG 72-515 .

The Kentucky relocation assistance legislation narrowly pertains to land acquisitions by a state agency or political subdivision involving “federally assisted projects” which result in displacement of persons due to the operation of such projects and since the city of Hodgenville is being federally assisted with the flood control and watershed programs, such city may properly and legally apply for relocation assistance from the federal government. OAG 73-609 .

56.620. Relocation assistance authorized.

  1. If any department, agency or instrumentality of the state, or any county, municipality, or other political subdivision, or any other public or private entity subject to the provisions of the Federal Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970, as amended, Public Laws 91-646, and 100-17, Title IV, hereinafter the Federal Uniform Relocation Act, undertakes any project, which results in the acquisition of real property or in any person or persons being displaced from their homes, businesses, or farms, such state department, agency or instrumentality, county, municipality or other political subdivision, or other public or private entity may provide relocation assistance, and make relocation payments to such displaced person and to do such other acts and follow such procedures and practices as may be necessary to comply with the provisions of the Federal Uniform Relocation Act.
  2. Any payment made or to be made under the authority granted herein shall be for compensating or reimbursing the displaced person or owner of real property in accordance with the requirements of the Federal Uniform Relocation Act and such payments shall not for any purpose be deemed or considered compensation for real property acquired or compensation for damages to remaining property.

History. Enact. Acts 1972, ch. 195, § 2; 1978, ch. 384, § 541, effective June 17, 1978; 1988, ch. 206, § 2, effective July 15, 1988.

Compiler’s Notes.

The Federal Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970, P.L. 9-646 and P.L. 100-17, referred to in this section, is compiled as 42 USCS §§ 4621-4638, 4651-4655.

56.630. Definitions used in KRS 56.610 to 56.760, 416.140 and 16.470. [Repealed.]

Compiler’s Notes.

This section (Enact. Acts 1972, ch. 195, § 3; 1976, ch. 101, § 1; 1978, ch. 384, § 542, effective June 17, 1978) was repealed by Acts 1988, ch. 206, § 5, effective July 15, 1988.

56.640. Relocation payments — When made. [Repealed.]

Compiler’s Notes.

This section (Enact. Acts 1972, ch. 195, § 4; 1978, ch. 384, § 543, effective June 17, 1978) was repealed by Acts 1988, ch. 206, § 5, effective July 15, 1988.

56.650. Payment for displacement from dwelling owned and occupied — Elements of payment. [Repealed.]

Compiler’s Notes.

This section (Enact. Acts 1972, ch. 195, § 5; 1978, ch. 384, § 544, effective June 17, 1978) was repealed by Acts 1988, ch. 206, § 5, effective July 15, 1988.

56.660. Payment for displacement from occupied dwelling — Elements of payment. [Repealed.]

Compiler’s Notes.

This section (Enact. Acts 1972, ch. 195, § 6; 1978, ch. 384, § 545, effective June 17, 1978) was repealed by Acts 1988, ch. 206, § 5, effective July 15, 1988.

56.670. Relocation assistance advisory program. [Repealed.]

Compiler’s Notes.

This section (Enact. Acts 1972, ch. 195, § 7) was repealed by Acts 1988, ch. 206, § 5, effective July 15, 1988.

56.680. Assurance of replacement facilities. [Repealed.]

Compiler’s Notes.

This section (Enact. Acts 1972, ch. 195, § 8) was repealed by Acts 1988, ch. 206, § 5, effective July 15, 1988.

56.690. Administrative regulations for relocation assistance.

  1. Except as provided in subsection (3) of this section, the Finance and Administration Cabinet shall adopt such administrative regulations as may be necessary to assure:
    1. That the payments and assistance authorized by KRS 56.620 shall be administered in a manner which is fair and reasonable, and as uniform as practicable;
    2. That a displaced person who makes proper application for a payment authorized for such person by KRS 56.620 shall be paid promptly after a move or, in hardship cases, be paid in advance; and
    3. That any person aggrieved by a determination as to eligibility for a payment authorized by KRS 56.620 or the amount of a payment, may have his application reviewed by the head of the state agency.
  2. The Finance and Administration Cabinet may prescribe such other administrative regulations and procedures, consistent with the provisions of KRS 56.620 , as it deems necessary or appropriate to carry out KRS 56.620 .
  3. The Transportation Cabinet shall adopt such administrative regulations and procedures consistent with the provisions of KRS 56.620 , as it deems necessary or appropriate to carry out the provisions of KRS 56.620 with regard to requirements of the Transportation Cabinet.
  4. Any county, municipality, or other political subdivision, or any other public or private entity subject to the provisions of the Federal Uniform Relocation Act, before undertaking any project involving federal financial assistance which results in the acquisition of real property or in any person or persons being displaced from their homes, businesses, or farms, shall adopt such administrative regulations, ordinances, procedures or policies as necessary or appropriate to carry out the provisions of KRS 56.620 .

History. Enact. Acts 1972, ch. 195, § 9; 1974, ch. 74, Art. II, § 9(1); 1976, ch. 101, § 2; 1978, ch. 384, § 546, effective June 17, 1978; 1986, ch. 15, § 2, effective July 15, 1986; 1988, ch. 206, § 3, effective July 15, 1988.

56.700. Contracts for relocation services. [Repealed.]

Compiler’s Notes.

This section (Enact. Acts 1972, ch. 195, § 10; 1974, ch. 74, Art. II, 9(1)) was repealed by Acts 1988, ch. 206, § 5, effective July 15, 1988.

56.710. Acquisition funds to be used for relocation. [Repealed.]

Compiler’s Notes.

This section (Enact. Acts 1972, ch. 195, § 11; 1978, ch. 384, § 547, effective June 17, 1978) was repealed by Acts 1988, ch. 206, § 5, effective July 15, 1988.

56.720. Relocation computed as cost item to local government in acquisition of real property. [Repealed.]

Compiler’s Notes.

This section (Enact. Acts 1972, ch. 195, § 12; 1978, ch. 384, § 548, effective June 17, 1978) was repealed by Acts 1988, ch. 206, § 5, effective July 15, 1988.

56.730. Displaced person defined. [Repealed.]

Compiler’s Notes.

This section (Enact. Acts 1972, ch. 195, § 13; 1978, ch. 384, § 549, effective June 17, 1978) was repealed by Acts 1988, ch. 206, § 5, effective July 15, 1988.

56.740. Displacement payments not to be considered income.

No payment received by a displaced person under KRS 56.620 shall be considered as income or resources for the purpose of determining the eligibility or extent of eligibility of any person for assistance under any state law or for the purposes of the state’s personal income tax law, corporation tax law, or other state tax laws. Such payments shall not be considered as income or resources of any recipient of public assistance and such payments shall not be deducted from the amount of aid to which the recipient would otherwise be entitled.

History. Enact. Acts 1972, ch. 195, § 14; 1978, ch. 384, § 550, effective June 17, 1978; 1988, ch. 206, § 4, effective July 15, 1988.

56.750. Project funds for relocation assistance — When applied. [Repealed.]

Compiler’s Notes.

This section (Enact. Acts 1972, ch. 195, § 15) was repealed by Acts 1988, ch. 206, § 5, effective July 1, 1988.

56.760. Displacement assistance provided jointly with federal government or directly.

  1. When federal funds are available for payment of direct financial assistance to displaced persons, the state agency may match such federal funds to the extent provided by federal law and to provide such direct financial assistance in the instances and on the conditions set forth by federal law and regulations.
  2. When federal funds are not available or used for payment of direct financial assistance to persons displaced by the acquisition of property by the state, the state agency may provide direct financial assistance to such persons. Financial assistance authorized by this subsection shall not exceed the total amount that would have been payable under subsection (1) of this section if federal funds had been available or used. The state agency may adopt rules and regulations to carry out the provisions of this subsection.

History. Enact. Acts 1972, ch. 195, § 16.

Energy Efficiency for State Government Buildings

56.770. Definitions for KRS 56.770 to 56.784.

As used in KRS 56.770 to 56.784 , unless the context requires otherwise:

  1. “Aggregate simple payback period” means the simple payback period of a set of energy conservation measures taken together for a building;
  2. “Building” means all contiguous land, structures, appurtenances, and improvements that use utilities;
  3. “Cabinet” means the Finance and Administration Cabinet;
  4. “Energy audit” means examination of a building’s utility-using systems, utilities consumption and costs, occupancy patterns, and operation and maintenance procedures;
  5. “Energy conservation measure” means any construction, process, improvement, repair, alteration, or betterment of a building or other state property that is intended to reduce utility consumption or operational cost; or any equipment, fixture, or furnishing to be added to or used in a building that will be a cost-effective utility-related project that is intended to reduce utility consumption or operational costs;
  6. “Guaranteed energy savings performance contract” means an agreement for the provision of energy services or equipment, energy conservation measures and alternate energy technologies for state government buildings or other state property, in which a person agrees to design, construct, install, maintain, operate, or manage energy systems or equipment to improve energy efficiency of, or produce energy in connection with, a state government building. Payments for a guaranteed energy savings performance contract shall be made from measured and verified savings generated from implementation of the energy conservation measures financed by the contract. The term of a guaranteed energy savings performance contract shall not exceed the life of the energy savings generated from implementation of the energy conservation measures financed by the contract. If the measured and verified savings are not sufficient to pay the financial obligations under the contract, the contractor is liable for the contract payments;
  7. “High-performance building” means a public building that is designed, constructed, and capable of being operated in a manner that:
    1. Increases environmental performance and economic value over time;
    2. Safeguards the health of occupants;
    3. Enhances satisfaction and productivity of workers through energy-efficient systems;
    4. Incorporates environmentally friendly materials and products; and
    5. Reduces waste;
  8. “High-performance building standards” means a set of standards developed by the cabinet pursuant to KRS 56.777 ;
  9. “Engineering analysis” means a detailed cost-benefit analysis of energy efficiency investments including a review of potential cost savings through operation and maintenance changes;
  10. “Life-cycle cost analysis” means a method for estimating the total cost of an energy-using component or building over its useful life, including cost factors such as purchase price or construction, renovation, or leasing costs, energy use, maintenance, interest, and inflation;
  11. “Low cost/no cost energy conservation measures” means those energy saving practices and energy conservation measures, usually involving operation and maintenance practices, that can be accomplished by existing personnel within existing operating budgets;
  12. “Simple payback period” means the number of years it takes to pay back, from estimated savings, the initial cost of an energy conservation measure with the simple payback period equal to the initial cost divided by the estimated annual savings;
  13. “Savings” means the reduction in expenditures, excluding any state government and post-secondary education personnel expenditures, that are measured and verified, including but not limited to energy usage, operating costs, and capital cost avoidance that occur as a result of the implementation of energy conservation measures;
  14. “Capital cost avoidance” means savings generated when expenditures of appropriated capital construction or appropriated capital outlay funds are avoided because the budgeted capital improvements or items of equipment are contained within the energy conservation measures provided by a guaranteed energy savings performance contract;
  15. “Operating costs” means expenditures associated with operating and maintaining a properly functioning building and its systems including but not limited to the heating, ventilation, cooling, lighting, plumbing, water heating, electrical, and laundry systems and their controls;
  16. “Public building” has the same meaning as in KRS 318.010 ;
  17. “ENERGY STAR” means the voluntary program administered by the United States Environmental Protection Agency and the United States Department of Energy that is designed to protect the environment through the promotion of energy-efficient products and practices;
  18. “Green Globes rating system” means the on-line environmental assessment tool developed by the Green Building Initiative as of December, 2004, that allows designers, property owners, and managers to evaluate and rate buildings against best sustainable building design practices and integrate principles of sustainable architecture at every stage of project delivery in order to design and construct buildings that will be energy-efficient and resource-efficient, achieve operational savings, and provide healthier environments in which to live and work; and
  19. “LEED” means the building rating systems developed on or after January 1, 2005, by the United States Green Building Council that allow designers, property owners, and managers to evaluate and rate buildings against best sustainable building design and practices and to integrate principles of sustainable architecture at every stage of project delivery in order to design and construct buildings that will be energy-efficient and resource-efficient using a whole-building approach in five (5) key areas of human and environmental health:
    1. Sustainable site development;
    2. Water savings;
    3. Energy efficiency;
    4. Material selection; and
    5. Environmental quality.

History. Enact. Acts 1996, ch. 223, § 1, effective July 15, 1996; 2002, ch. 35, § 1, effective July 15, 2002; 2007 (2nd Ex. Sess.), ch. 1, § 29, effective August 30, 2007; 2008, ch. 139, § 1, effective July 15, 2008; repeal and reenact., Acts 2010, ch. 5, § 1, effective February 25, 2010; 2014, ch. 65, § 1, effective July 15, 2014.

Legislative Research Commission Notes.

(2/25/2010). 2010 Ky. Acts ch. 5, sec. 28, provides that the repeal and reenactment of this section in that Act “shall apply retroactively to July 15, 2008.”

Research References and Practice Aids

2020-2022 Budget Reference.

See State/Executive Branch Budget, 2021 Ky. Acts ch. 169, Pt. I, K, 11, (4) at 1112.

56.772. Legislative intent — Energy Efficiency Program for State Government Buildings.

The General Assembly finds and declares it to be the public policy of the Commonwealth to maximize the use of energy conservation measures in the construction, renovation, and maintenance of buildings owned or leased by the Commonwealth. In furtherance of this policy, the cabinet shall administer an energy efficiency program, to be known as the Energy Efficiency Program for State Government Buildings.

History. Enact. Acts 1996, ch. 223, § 2, effective July 15, 1996; 2008, ch. 139, § 2, effective July 15, 2008; repeal and reenact., Acts 2010, ch. 5, § 2, effective February 25, 2010; 2014, ch. 65, § 2, effective July 15, 2014.

Legislative Research Commission Note.

(2/25/2010). 2010 Ky. Acts ch. 5, sec. 28, provides that the repeal and reenactment of this section in that Act “shall apply retroactively to July 15, 2008.”

56.774. Purpose of program — Engineering analysis — Methods of finance — Documentation of savings.

  1. The Energy Efficiency Program for State Government Buildings shall provide for implementation of low cost/no cost energy conservation measures, engineering analyses, energy efficiency measures, building improvements, and monitoring of results for state-owned or state-leased buildings.
  2. Any engineering analysis conducted on a state-owned building shall assess the energy efficiency of the building and make recommendations for improving the efficient use of energy within the building. The analyses shall be performed by qualified engineers, architects, or other persons trained in energy efficiency who may be employees of the cabinet or employed pursuant to KRS Chapter 45A, except that any engineers, architects or other persons trained in energy efficiency and retained under a guaranteed energy savings performance contract, shall not be subject to the provisions of KRS 45A.800 to 45A.835 .
  3. Except as provided in subsection (5) of this section, measures to improve the energy efficiency of a state-owned building, which have an aggregate simple payback period of five (5) years or less, shall be implemented as general fund appropriations become available. No more than five percent (5%) of the cost of energy conservation measures for a building may be utilized for monitoring the results.
  4. If general fund appropriations are available for energy conservation improvements, the cabinet shall prioritize projects among the various state-owned buildings to determine which projects shall be implemented to best utilize the available funding.
  5. If general fund appropriations are unavailable, energy conservation measures for a state-owned building may be financed by other means. These other means include but are not limited to guaranteed energy savings performance contracts as defined under KRS 56.770 entered into pursuant to KRS 45A.085 and KRS 45A.045(10). Guaranteed energy savings performance contracts shall not be subject to the provisions of KRS 45A.800 to 45A.835 . These energy conservation measures shall not be limited to those that have an aggregate simple payback period of five (5) years or less, but shall result in reasonable economic benefit to the Commonwealth. Ownership of the energy conservation measures shall be transferred to the Commonwealth upon completion of the guaranteed energy savings performance contract or as otherwise agreed upon in the contract. Savings from the implementation of the energy conservation measures under the guaranteed energy savings performance contract shall be used to satisfy the obligations under the guaranteed energy savings performance contract and to repay the cost of the other means used to finance the energy conservation measures, and may be used to repay expenses incurred by the cabinet to reimburse the cabinet for expenses related to the guaranteed energy savings performance contract, including but not limited to staff time for monitoring, overseeing, and managing the project. Notwithstanding KRS 45.229 , remaining savings shall remain in the state agency account and shall not lapse. All savings projected under a guaranteed energy savings performance contract shall be guaranteed to the Commonwealth.
  6. The savings in reduced expenditures that are specified as payment sources shall be documented in the guaranteed energy savings performance contract. Savings shall be determined by using one (1) of the measurement and verification methodologies listed in the United States Department of Energy’s “International Performance Measurement and Verification Protocol.” If specific data limitations or documented unique characteristics of the project prevent use of the “International Performance Measurement and Verification Protocol,” an alternative method that is compatible shall be adopted upon documentation and approval of the secretary of the cabinet.

History. Enact. Acts 1996, ch. 223, § 3, effective July 15, 1996; 1998, ch. 375, § 5, effective July 15, 1998; 2002, ch. 35, § 2, effective July 15, 2002; 2008, ch. 139, § 3, effective July 15, 2008; repeal and reenact., Acts 2010, ch. 5, § 3, effective February 25, 2010; 2014, ch. 65, § 3, effective July 15, 2014.

Legislative Research Commission Notes.

(2/25/2010). 2010 Ky. Acts ch. 5, sec. 28, provides that the repeal and reenactment of this section in that Act “shall apply retroactively to July 15, 2008.”

Research References and Practice Aids

2020-2022 Budget Reference.

See State/Executive Branch Budget, 2021 Ky. Acts ch. 169, Pt. I, K, 11, (4) at 1112.

56.775. Required high-performance building standards — Use of energy-efficiency products.

To improve energy efficiency throughout state government, the cabinet and universities that manage their own capital construction projects under KRS 164A.580 shall:

  1. Beginning July 1, 2009, require that all construction or renovation of public buildings for which fifty percent (50%) or more of the total capital cost is paid by the Commonwealth shall be designed and constructed, or renovated, to meet the high-performance building standards established in KRS 56.777 . This subsection applies to all projects that have not entered the design phase prior to January 1, 2009;
  2. Require that all building leases entered into by the Commonwealth or any of its agencies on and after July 1, 2018, shall meet the high-performance building standards. From July 15, 2008 and prior to July 1, 2018, a building that meets the high-performance building standards established in this section shall be given a preference in the state leasing process over other buildings that do not meet the high-performance building standards; and
  3. Incorporate ENERGY STAR-qualified products in state agency procurements to the extent economically feasible using a life-cycle cost analysis.

History. Enact. Acts 2007 (2nd Ex. Sess.), ch. 1, § 31, effective August 30, 2007; 2008, ch. 139, § 4, effective July 15, 2008; repeal and reenact., Acts 2010, ch. 5, § 4, effective February 25, 2010.

Legislative Research Commission Note.

(2/25/2010). 2010 Ky. Acts ch. 5, sec. 28, provides that the repeal and reenactment of this section in that Act “shall apply retroactively to July 15, 2008.”

Research References and Practice Aids

Kentucky Bench & Bar.

Stephens & Hinkle, Sustainable Design And Construction: Where Is It “Leeding” Us? Vol 74, No. 2, March 2010, Ky. Bench & Bar 20.

56.776. Energy audit training program — Additional programs on energy awareness.

The cabinet, with the assistance of the Office of Energy Policy, shall institute an energy audit training program to identify energy saving techniques for state-owned building maintenance staff. Additional programs shall be developed to educate state employees and other building occupants on energy awareness and practices to reduce energy use in state-owned buildings. Local government employees may be included in training and educational programs.

HISTORY: Enact. Acts 1996, ch. 223, § 4, effective July 15, 1996; 2005, ch. 95, § 53, effective June 20, 2005; 2007 (2nd Ex. Sess.), ch. 1, § 30, effective August 30, 2007; 2008, ch. 139, § 6, effective July 15, 2008; repealed and reenact., Acts 2010, ch. 5, § 6, effective February 25, 2010; 2010, ch. 24, § 54, effective July 15, 2010; 2018 ch. 29, § 2, effective July 14, 2018.

Legislative Research Commission Note.

(2/25/2010). 2010 Ky. Acts ch. 5, sec. 28, provides that the repeal and reenactment of this section in that Act “shall apply retroactively to July 15, 2008.”

56.777. High-Performance Buildings Advisory Committee — Membership — Duties — Administrative regulations — Resource utilization.

  1. A High-Performance Buildings Advisory Committee is hereby created and shall be administratively staffed by the cabinet.
  2. The committee shall consist of sixteen (16) members and shall include:
    1. A representative of the cabinet designated by the secretary;
    2. A representative of the Tourism, Arts and Heritage Cabinet designated by the secretary;
    3. A representative of the Department of Education designated by the commissioner;
    4. A representative of the Council on Postsecondary Education designated by the president;
    5. A representative of the Office of Energy Policy designated by the executive director; and
    6. A representative appointed by the Governor from each of the following:
      1. The design and construction industry involved in public works contracting;
      2. The Kentucky Chapter of the U. S. Green Building Council;
      3. The University of Kentucky College of Design;
      4. The Kentucky Forest Industries Association;
      5. The Kentucky Society of the American Institute of Architects;
      6. The American Society of Heating, Refrigerating, and Air-Conditioning Engineers;
      7. The Associated General Contractors of Kentucky;
      8. The West Kentucky Construction Association;
      9. The Kentucky Manufactured Housing Institute;
      10. The Kentucky Ready Mixed Concrete Association; and
      11. The Plantmix Asphalt Industry of Kentucky.
  3. The representative of the cabinet shall serve as the chairperson of the committee. All appointments shall be for a term of two (2) years. Committee members shall serve until their successors are appointed and shall be eligible for reappointment.
  4. The committee shall meet at least monthly or as convened by the chairperson.
  5. The members of the committee shall receive reimbursement for the cost of travel to and from the meetings and any costs necessarily incurred in carrying out their duties.
  6. The committee shall:
    1. Consult with architects, engineers, builders, energy and conservation organizations, and other interested stakeholders, and make recommendations to the cabinet regarding:
      1. Standards and benchmarks developed under existing high-performance building programs, including the ENERGY STAR rating system, Green Globes rating system, and Leadership in Energy and Environmental Design (LEED) Green Building rating system; and
      2. Standards and guidelines developed and adopted by the U.S. Green Building Council, the American Society of Heating, Refrigerating and Air-Conditioning Engineers, and the Illuminating Engineering Society of North America partnership concerning the design of sustainable buildings to balance environmental responsibility, resource efficiency, occupant comfort and well-being, and community sensitivity;
    2. Assist the cabinet in the review of state building projects to ensure that building performance and efficiency are maximized to the extent economically feasible using a life-cycle cost analysis;
    3. Assist the cabinet in developing a process of documentation of the attainment of high-performance building standards; and
    4. Assist the cabinet in conducting an ongoing professional development program for state and local building designers, construction companies, school districts, building managers, and the general public on high-performance building design, construction, maintenance, and operation.
  7. Prior to the implementation of KRS 56.770 to 56.784 , the cabinet shall promulgate administrative regulations pursuant to KRS Chapter 13A necessary to implement this section. The cabinet shall consider the recommendations made by the High- Performance Buildings Advisory Committee pursuant to subsection (6) of this section and shall establish the criteria for the high-performance building standards and the benchmarks by which the high-performance building standards will be measured. At a minimum, the cabinet shall:
    1. Include the standards for site selection and management, water efficiency, energy conservation, waste reduction, material and resource use, and indoor air quality; and
    2. Require that each high-performance building be designed, constructed, or renovated so that it is capable of being rated as an ENERGY STAR building in accordance with the criteria and rating system adopted by the United States Environmental Protection Agency and in effect at the time the building is designed or, in the case of leased buildings, at the time the lease is entered into on or after July 1, 2018.
  8. In developing the criteria for the high-performance building standards, the cabinet shall consider and encourage the use of:
    1. Locally grown lumber from forest lands implementing sustainable practices established by the American Tree Farm System’s Sustainable Forest Initiative or the Kentucky Forest Stewardship Program established under KRS 149.330 to 149.355 ;
    2. Building materials manufactured with recycled content within the Commonwealth; and
    3. Renewable energy sources.

HISTORY: Enact. Acts 2008, ch. 139, § 5, effective July 15, 2008; 2009, ch. 16, § 7, effective June 25, 2009; repeal and reenact., Acts 2010, ch. 5, § 5, effective February 25, 2010; 2010, ch. 24, § 54, effective July 15, 2010; 2015 ch. 105, § 3, effective June 24, 2015; 2018 ch. 29, § 3, effective July 14, 2018.

Legislative Research Commission Note.

(2/25/2010). 2010 Ky. Acts ch. 5, sec. 28, provides that the repeal and reenactment of this section in that Act “shall apply retroactively to July 15, 2008.”

56.778. Inclusion of life-cycle energy cost analyses in bids or plans to construct or renovate state-owned buildings.

The cabinet shall require persons submitting bids or plans for state-owned buildings to be constructed or substantially renovated after July 15, 1996, to include within those bids or plans life-cycle energy cost analyses. The cabinet shall consider those life-cycle cost analyses when evaluating competing bids or plans.

History. Enact. Acts 1996, ch. 223, § 5, effective July 15, 1996; 2008, ch. 139, § 7, effective July 15, 2008; repealed and reenact., Acts 2010, ch. 5, § 7, effective February 25, 2010.

Legislative Research Commission Note.

(2/25/2010). 2010 Ky. Acts ch. 5, sec. 28, provides that the repeal and reenactment of this section in that Act “shall apply retroactively to July 15, 2008.”

56.780. Evaluation for cost-effective energy use and energy efficiency of buildings prior to lease or purchase — Structure of leases.

  1. Any building which the Finance and Administration Cabinet considers for leasing or purchase shall be evaluated for cost-effective energy use and energy efficiency. This evaluation shall be considered in choosing between competing leases or building purchases. The cabinet shall consider the energy costs of operating a building to ensure the selection of a cost-effective lease, and the cabinet shall compare life-cycle energy cost analyses for competing leases.
  2. A lease may be structured so that both the lessor and the state agency as lessee may share energy cost savings that can be accomplished by energy-efficient lease arrangements. The lease may incorporate financial incentives to make energy efficiency improvements that are cost effective in reducing the operating cost of the building. The lease may provide for the state agency to make lease payments which may be used to help fund the costs of energy conservation measures in the building, if the costs are amortized and returned to the state agency over a period of years not to exceed the useful life of the energy conservation measures. Thereafter, the state agency shall be entitled to a reduction in the lease amount based on any continued savings resulting from the energy conservation measures. The amount of reduction shall be negotiated between the lessor and the state agency.

History. Enact. Acts 1996, ch. 223, § 6, effective July 15, 1996; 2014, ch. 65, § 4, effective July 15, 2014.

56.782. Report on use of energy-efficiency measures in state government — Contents.

The cabinet shall report on or before October 15, 2008, and on or before every October 15 thereafter to the Legislative Research Commission on progress made to maximize the use of energy-efficiency measures in state government. The Legislative Research Commission shall transmit the report to the appropriate interim joint committees and to the General Assembly when it convenes. The report shall include but not be limited to:

  1. A summary of initiatives undertaken by the cabinet during the reporting period to promote adoption of low cost/no cost energy-efficiency measures, including employee training efforts;
  2. A summary of energy-efficiency measures installed and energy improvements made during the reporting period;
  3. Energy consumption and expenditure data for facilities owned or leased by state government and any documented savings made as a result of energy-efficiency measures and improvements;
  4. Status report on the number of buildings newly constructed, renovated, or leased in accordance with the high-performance building standards required under KRS 56.777 and the amount of savings realized based upon a life-cycle cost analysis;
  5. Any efforts made during the reporting period to promote acquisition of energy-efficient products pursuant to KRS 45A.045(12) and the amount of savings expected to be realized in the first year of operation from the purchase of ENERGY STAR-qualified products pursuant to KRS 56.775 ;
  6. Any recommendations for future funding of energy improvements or other measures needed to assure energy efficiency in state government; and
  7. Any improvements in energy efficiency planned or realized through the use of the LEED rating system, the Green Globes rating system, ENERGY STAR-qualified products, and guaranteed energy savings performance contracts.

History. Enact. Acts 1996, ch. 223, § 7, effective July 15, 1996; 1997 (1st Ex. Sess.), ch. 4, §§ 34, 43, effective May 30, 1997; 2007 (2nd Ex. Sess.), ch. 1, § 33, effective August 30, 2007; 2008, ch. 139, § 8, effective July 15, 2008; repealed and reenact., Acts 2010, ch. 5, § 8, effective February 25, 2010.

Legislative Research Commission Note.

(2/25/2010). 2010 Ky. Acts ch. 5, sec. 28, provides that the repeal and reenactment of this section in that Act “shall apply retroactively to July 15, 2008.”

56.783. Energy efficiency in state government buildings revolving loan fund.

  1. A special fund in the State Treasury is hereby created which shall be known as the energy efficiency in state government buildings revolving loan fund. The fund shall be used to provide financial assistance to state government agencies for the purposes of KRS 56.770 to 56.784 .
  2. The fund may receive state appropriations, gifts, grants, and federal funds and shall include earnings from the investment of moneys in the fund. Any fund balance at the close of the fiscal year shall not lapse but shall carry forward to the next fiscal year and shall remain available solely for the purposes of this section.
  3. Administration of this fund shall be the responsibility of the cabinet. The cabinet shall establish terms and conditions for loans from the fund including the application and repayment process. The cabinet shall establish and implement fiscal controls and accounting periods for payments received and disbursements made by the fund and for fund balances at the beginning and end of each accounting period.
  4. All repayments of loans made under this section shall be paid into the fund. Balances, or portions thereof, in the fund shall not revert to the general fund.

History. Enact. Acts 2002, ch. 35, § 4, effective July 15, 2002; 2008, ch. 139, § 9, effective July 15, 2008; repealed and reenact., Acts 2010, ch. 5, § 9, effective February 25, 2010.

Legislative Research Commission Note.

(2/25/2010). 2010 Ky. Acts ch. 5, sec. 28, provides that the repeal and reenactment of this section in that Act “shall apply retroactively to July 15, 2008.”

56.784. Guaranteed energy savings performance contracts — Authority for administrative regulations.

  1. Each agency responsible for managing state-owned property shall review the utility usage of the property and shall cooperate with the cabinet to determine which properties are good candidates for guaranteed energy savings performance contracts. The responsible agency is encouraged to implement guaranteed energy savings performance contracts where appropriate.
  2. The cabinet may implement the provisions of KRS 56.770 to 56.784 through the promulgation of administrative regulations pursuant to KRS Chapter 13A.
  3. The secretary of the cabinet shall promulgate administrative regulations in accordance with the provisions of KRS Chapter 13A establishing a process for procurement of energy savings performance contracts, including required contract language. The following entities shall adhere to these regulations when procuring services under a guaranteed energy savings performance contract:
    1. Any governing body of a postsecondary institution that manages its capital construction program under KRS 164A.580 ; or
    2. Any public corporation as defined by KRS 45.750(2)(c) or as created under the Kentucky Revised Statutes as a governmental agency and instrumentality of the Commonwealth that manages its capital construction program.
  4. All state agencies, including those identified in subsection (3) of this section, shall submit proposed guaranteed energy savings performance contracts to the Office of Financial Management within the Office of the Controller for review and approval prior to contract execution.
  5. The secretary shall report all authorized guaranteed energy savings performance contracts to the Capital Projects and Bond Oversight Committee for its review.

History. Enact. Acts 1996, ch. 223, § 8, effective July 15, 1996; 2002, ch. 35, § 3, effective July 15, 2002; 2005, ch. 85, § 80, effective June 20, 2005; 2007 (2nd Ex. Sess.), ch. 1, § 32, effective August 30, 2007; 2008, ch. 139, § 10, effective July 15, 2008; repealed and reenact., Acts 2010, ch. 5, § 10, effective February 25, 2010.

Legislative Research Commission Note.

(2/25/2010). 2010 Ky. Acts ch. 5, sec. 28, provides that the repeal and reenactment of this section in that Act “shall apply retroactively to July 15, 2008.”

Energy Policy Advisory Council

56.790. Energy Policy Advisory Council — Membership — Meetings. [Repealed.]

Compiler’s Notes.

This section (Enact. Acts 2006, ch. 152, § 4, effective June 12, 2006; 2007 (2nd Ex. Sess.), ch. 1, § 40, effective August 30, 2007) was repealed by Acts 2010, ch. 24, § 1936, effective July 15, 2010.

Lease of Real Property

56.800. Finance and Administration Cabinet responsible for leasing of all property for state use.

The Finance and Administration Cabinet shall be responsible for the lease of all real property rentals required for use by all departments, agencies, and administrative bodies of the state government listed in KRS Chapter 12 that do not have statutory authority to lease property, and no lease of real property shall be binding against the Commonwealth or any agency unless made and entered into as provided in KRS 43.050 , 48.111 , and 56.800 to 56.823 .

History. Enact. Acts 1978, ch. 231, § 1, effective June 17, 1978; 1980, ch. 295, § 98, effective April 9, 1980; 1990, ch. 512, § 3, effective July 13, 1990; 2000, ch. 63, § 1, effective July 14, 2000; 2009, ch. 78, § 44, effective June 25, 2009.

56.802. Request for space by agency — Determination of need by department for facilities management — Advertisement for leasing proposals — Award of lease by commissioner — Limited judicial review — Report to capital projects and bond committee. [Repealed.]

Compiler’s Notes.

This section (Enact. Acts 1978, ch. 231, § 2, effective June 17, 1978; 1982, ch. 393, § 33, effective July 15, 1982; 1986, ch. 2, § 1, effective July 15, 1986) was repealed by Acts 1990, ch. 512, § 15, effective July 13, 1990.

56.803. Procedure when agency requests space.

  1. When an agency determines that it will need office or other space, the agency shall submit a request for the acquisition of the additional space to the Department for Facilities Management in the Finance and Administration Cabinet. Except in the case of an emergency as described at KRS 56.805(3), an agency shall submit its space request in writing to the department. In the case of an emergency, an agency shall communicate its space needs to the department pursuant to KRS 56.805(3) as soon as an agency knows that it will need the space. If the commissioner of the Department for Facilities Management determines that insufficient space has been allocated to the agency making the request and that it is appropriate to lease additional space for the agency making the request, the commissioner shall acquire the space required by lease as provided by KRS 43.050 , 48.111 , and 56.800 to 56.823 .
  2. The Department for Facilities Management shall review each agency space request to determine whether space suitable to meet the agency’s reasonable needs may be available in a state-owned or occupied building. If it is determined that there is suitable space available in a state-owned or occupied building, the commissioner shall notify the agency. A copy of the notice shall be kept on file.
  3. If it is determined that there is no suitable space available in a state-owned or occupied building, the department shall comply with the procedures set forth in this section in the leasing of space, except as otherwise provided in KRS 43.050 , 48.111 , and 56.800 to 56.823 .
  4. The department shall draw up general requirement specifications for the space required. These general requirement specifications shall not be changed except, at the discretion of the commissioner, when the lease process is initiated again pursuant to paragraph (c) of subsection (15) of this section or pursuant to paragraph (b) of subsection (16) of this section. The general requirement specifications shall be kept on file.
    1. In soliciting the interest of lessors who have property to let in a county where space is sought, the department shall give adequate public notice to reasonably inform persons having property to let within the county of the type of space required, the general location of the property, and the number of square feet needed. The notice may include posting on the Internet or newspaper advertisements. Each notice shall contain general information concerning the agency requirements for the space sought and shall state the last time, date, and place that written responses shall be received. When it is anticipated that a lease may be negotiated containing deviations or variations from the terms and conditions of the state standard lease form prescribed by the Division of Real Properties, within the department, any deviations or variations shall be stated in the notice. (5) (a) In soliciting the interest of lessors who have property to let in a county where space is sought, the department shall give adequate public notice to reasonably inform persons having property to let within the county of the type of space required, the general location of the property, and the number of square feet needed. The notice may include posting on the Internet or newspaper advertisements. Each notice shall contain general information concerning the agency requirements for the space sought and shall state the last time, date, and place that written responses shall be received. When it is anticipated that a lease may be negotiated containing deviations or variations from the terms and conditions of the state standard lease form prescribed by the Division of Real Properties, within the department, any deviations or variations shall be stated in the notice.
    2. The Department for Facilities Management may use any means available to notify landlords that a notice has been given.
  5. A property owner, or his representative, shall respond in writing on or before the time and date designated in the notice and shall state in the writing the type and location of the property, the name and address of the property owner, and the date of availability of the property. The department shall deal only with individuals who have submitted written responses on or before the time and date designated in the notice.
  6. All written responses received on or before the time and date designated shall be opened or downloaded at the same time, publicly read or posted, and kept on file by the department.
  7. Within ten (10) business days of the opening of written responses, the department shall transmit general requirement specifications to each person who submitted a written response on or before the time and date designated. The same general requirement specifications shall be transmitted to each person. The department shall state whether a reverse auction will be used to determine any terms of the proposals and shall specify the procedures for the reverse auction.
  8. After the general requirement specifications have been transmitted, except as provided in paragraph (a) of subsection (13) of this section, the commissioner, and department employees under his supervision, may negotiate with persons who submitted written responses on or before the time and date designated. If in the course of negotiations, a person proposes terms and conditions of lease different from those contained in the state standard lease form which are determined to be in the Commonwealth’s best interest to accept, but no mention of the acceptability thereof has been made in the notice given pursuant to subsection (5) of this section, all other persons who submitted written responses on or before the time and date designated shall be notified of the terms and conditions and shall be allowed to incorporate the terms and conditions in written proposals when submitted pursuant to subsection (12) of this section. A copy of each notice shall be kept on file.
  9. The department shall inspect each space proposed to be leased to determine its suitability to the reasonable needs of the agency for whose use the property is sought. The owner of the property, or the owner’s representative, shall provide access to the property for the inspection. A report of the findings about each property inspected shall be submitted on a site evaluation form to the commissioner of the department. Completed site evaluation forms shall be kept on file.
  10. After the commissioner has reviewed the completed site evaluation forms, the commissioner shall inform each owner of property, or his representative, of the steps necessary to bring the property up to general and specific requirement specifications. The commissioner shall also invite each person to submit a written proposal on a form created by the Department for Facilities Management. A copy of the form shall be provided to each bidder. The department may require any terms of the proposal to be the subject of a reverse auction. A written proposal shall constitute a best and final offer. The department shall not consider a written proposal unless it is submitted on a department form on or before the time and date designated.
  11. All written portions of the proposals submitted on or before the time and date designated shall be opened at the same time, publicly identified by the name of the property owner and the location of the property, and kept on file.
  12. Except pursuant to paragraph (b) of subsection (15) of this section, when the requirements of paragraph (a) of this subsection shall not apply, from the time that written proposals are opened until the awarding of a lease, the department:
    1. Shall not negotiate or agree to changes in the terms of written proposals except to correct technical errors;
    2. Shall log in all contacts between department employees and any person with an interest in the awarding of a lease. The log shall state the time, date, place, and a summary of the substance of each contact. Each log entry shall be signed by the department employee who was contacted. After the lease is awarded, the log shall be kept as a department record.
    1. The commissioner shall assess the proposals, taking into account factors including, but not limited to: consultation with the head of the agency for whose use the space is sought; the location and accessibility of the property to the public; its condition and state of repair; its conformity with the requirements of occupational health and safety regulations; its conformity with applicable state fire, health, safety and sanitation requirements; the proposed rental rates; utility and janitorial costs; agency moving costs; any terms of the proposal determined through a reverse auction; and whether the property proposed is in substantial conformity with the general and specific requirement specifications. (14) (a) The commissioner shall assess the proposals, taking into account factors including, but not limited to: consultation with the head of the agency for whose use the space is sought; the location and accessibility of the property to the public; its condition and state of repair; its conformity with the requirements of occupational health and safety regulations; its conformity with applicable state fire, health, safety and sanitation requirements; the proposed rental rates; utility and janitorial costs; agency moving costs; any terms of the proposal determined through a reverse auction; and whether the property proposed is in substantial conformity with the general and specific requirement specifications.
    2. The commissioner shall give preference to properties in areas which have received, within the previous five (5) year period, state community development funds for revitalization if properties are offered at a competitive rate and meet the provisions of paragraph (a) of this subsection.
  13. The commissioner, relying exclusively on his assessment made pursuant to subsection (14) of this section, shall:
    1. Choose the best proposal in the interest of the Commonwealth;
    2. Be permitted to negotiate with a potential lessor if he was the only responsive and responsible potential lessor who submitted a proposal; or
    3. Except as provided in paragraph (b) of this subsection, reject all proposals when none is in the Commonwealth’s best interest to accept as assessed according to the factors stated in subsection (14) of this section and may, at his discretion, initiate the lease process again.
    1. The commissioner shall award or decline to award a lease to the potential lessor who submitted the best proposal pursuant to paragraph (a) of subsection (15) of this section or who negotiated with the commissioner pursuant to paragraph (b) of subsection (15) of this section. However, the commissioner shall not award a lease to a potential lessor who negotiated with the commissioner pursuant to paragraph (b) of subsection (15) of this section if that potential lessor’s proposal after negotiations was not in the Commonwealth’s best interest to accept as assessed according to the factors stated in subsection (14) of this section, and the commissioner shall not award a lease to a person other than a potential lessor prescribed in this paragraph. (16) (a) The commissioner shall award or decline to award a lease to the potential lessor who submitted the best proposal pursuant to paragraph (a) of subsection (15) of this section or who negotiated with the commissioner pursuant to paragraph (b) of subsection (15) of this section. However, the commissioner shall not award a lease to a potential lessor who negotiated with the commissioner pursuant to paragraph (b) of subsection (15) of this section if that potential lessor’s proposal after negotiations was not in the Commonwealth’s best interest to accept as assessed according to the factors stated in subsection (14) of this section, and the commissioner shall not award a lease to a person other than a potential lessor prescribed in this paragraph.
    2. If the commissioner declines to award a lease, he may, at his discretion, initiate the lease process again.
  14. The commissioner shall put in writing the justifications for his decisions made pursuant to subsections (15) and (16) of this section. This writing shall be kept on file.
  15. The commissioner, all department employees under the commissioner’s supervision who performed a site evaluation or negotiated a lease agreement under this section, the head of the agency that will occupy the leased space, and all agency employees who were directly involved with a site evaluation or lease negotiations shall sign separate certificates, devised by the commissioner, which shall provide the signatory with the option of certifying that, to the best of his knowledge, he is either aware or unaware of circumstances which may constitute a violation of KRS 56.800 to 56.823 . The Department for Facilities Management shall keep the certificates on file and shall inform state agencies of the legal requirements concerning lease certification on an annual basis.
  16. The department shall notify each person who submitted a written response on or before the time and date designated in the public notice pursuant to subsection (6) of this section, but who was not awarded the lease, of the selected property to be leased, and that the person has a right to examine the leasing records relevant to the lease that was awarded. If the Capital Projects and Bond Oversight Committee, pursuant to KRS 56.823(2), will review the awarding of a lease, each notice shall state that fact. A copy of each notice shall be kept on file.
  17. Prior to finalization of the lease, the department or the leasing agency shall inspect the property to ensure that any changes described in subsection (11) of this section necessary to bring the property up to specifications have been completed in a manner satisfactory to the agency or department. At the conclusion of the inspection, the owner shall be advised in writing by the department either that the property is approved for occupancy and the lease may be finalized, or that there remain changes to be completed or corrected before the lease may be finalized.

History. Enact. Acts 1990, ch. 512, § 4, effective July 13, 1990; 1992, ch. 343, § 1, effective July 14, 1992; 1998, ch. 120, § 27, effective July 15, 1998; 1998, ch. 539, § 2, effective July 15, 1998; 2000, ch. 47, § 1, effective July 14, 2000; 2000, ch. 63, § 2, effective July 14, 2000; 2009, ch. 78, § 45, effective June 25, 2009; 2010, ch. 63, § 10, effective July 15, 2010.

Legislative Research Commission Note.

(9/19/97). An erroneous reference to KRS 58.823 in subsection (3) of this statute has been corrected to read KRS 56.823 to correct an inadvertent mistake in codifying 1990 Ky. Acts ch. 512, sec. 4.

NOTES TO DECISIONS

1.In General.

Bidder failed to establish a constitutionally protected property interest in its bid on a public contract, and thus failed to state a 42 USCS § 1983 claim based on a denial of due process, where state officials informed bidder several times during bidding process that they were awarding the subject contract under KRS 56.805 , which dispensed with many of the formal requirements of KRS 56.803 and provided state officials with broad discretion in locating office space meeting the agency’s reasonable needs. Experimental Holdings, Inc. v. Farris, 2006 U.S. Dist. LEXIS 77480 (E.D. Ky. Oct. 24, 2006), aff'd, 503 F.3d 514, 2007 FED App. 0391P, 2007 U.S. App. LEXIS 22674 (6th Cir. Ky. 2007 ).

Because the procedural requirements of Kentucky lease procurement law did not afford plaintiff real estate company a property interest in getting the state to lease the company’s real property, the district court properly dismissed the company’s “disappointed bidder” claim; KRS 56.803(15)(a) merely included an inexhaustive list of considerations on which to base a decision regarding which proposal was the best proposal in the interest of the Commonwealth, but there was nothing in the statute indicating an outcome certain to happen. Experimental Holdings, Inc. v. Farris, 503 F.3d 514, 2007 FED App. 0391P, 2007 U.S. App. LEXIS 22674 (6th Cir. Ky. 2007 ).

2.Applicability.

State officials did not violate KRS 56.803(13)(a) when they provided a competitor with information about other bids, which allowed the competitor to modify its bid, because the officials were operating under KRS 56.805 , which stated that KRS 56.803(13)(a) did not apply to emergency procurements. Experimental Holdings, Inc. v. Farris, 2006 U.S. Dist. LEXIS 77480 (E.D. Ky. Oct. 24, 2006), aff'd, 503 F.3d 514, 2007 FED App. 0391P, 2007 U.S. App. LEXIS 22674 (6th Cir. Ky. 2007 ).

56.8035. Conditions under which proposal to lease, lease-purchase, or exercise options to purchase new construction may be considered.

  1. When the Department for Facilities Management solicits for procurement of leased office space under the provisions of KRS 56.803 , a proposal for new construction shall be considered if it does not contain any provision for a lease-purchase or an option to purchase.
  2. The Department for Facilities Management shall only consider a proposal for construction of leased office space with provision for lease-purchase or option to purchase if the proposal is submitted in response to a solicitation for proposals for built-to-suit leases in accordance with KRS 56.8169 .
  3. A building constructed and leased to the Commonwealth under this section shall be constructed:
    1. In accordance with all applicable state and national safety, building, and construction code requirements; and
    2. To last for a minimum of thirty (30) years.

History. Enact. Acts 1998, ch. 539, § 7, effective July 15, 1998; 2000, ch. 63, § 3, effective July 14, 2000.

56.804. Newspaper advertising not required, when. [Repealed.]

Compiler’s Notes.

This section (Enact. Acts 1978, ch. 231, § 3, effective June 17, 1978; 1980, ch. 295, § 99, effective April 9, 1980) was repealed by Acts 1990, ch. 512, § 15, effective July 13, 1990.

56.805. Lease of space in building owned by a governmental unit or space required because of emergency.

  1. Notwithstanding the provisions of KRS 56.803(4) to (19), this section shall govern the leasing of space in a building owned by the federal government, by a political subdivision or municipal corporation of the Commonwealth, or if the space is required as the result of a bona fide emergency.
  2. When the commissioner of the Department for Facilities Management determines that it is in the Commonwealth’s best interest for him to negotiate a lease in a building owned by the federal government or by a political subdivision or municipal corporation of the Commonwealth, he shall do so. The commissioner shall state in writing his justifications for the determination, and the writing shall be kept on file.
  3. A bona fide emergency shall be deemed to exist only in cases where the head of an agency already occupying leased premises certifies in writing to the Secretary of the Finance and Administration Cabinet that:
    1. The leased premises have been damaged or destroyed by fire, windstorm, or other casualty; or
    2. The leased premises are found to be in violation of regulations of the Kentucky Occupational Safety and Health Review Commission, and the violations cannot be remedied within thirty (30) days after the issuance of a citation to the lessor of the premises; or
    3. The leased premises are found to be unsafe or unfit for occupancy due to any condition constituting a violation or infraction of fire or health laws and regulations and cannot be made safe within a reasonable time; or
      1. The necessity for leased premises arises from the enactment or adoption of federal legislation or regulations or state legislation, the effective date of which mandates commencement of programs to be housed in leased space before there is time for space to be acquired by public notice; and (d) 1. The necessity for leased premises arises from the enactment or adoption of federal legislation or regulations or state legislation, the effective date of which mandates commencement of programs to be housed in leased space before there is time for space to be acquired by public notice; and
      2. The agency’s functions will be impaired or have to be discontinued unless other quarters to house the agency’s operations are immediately located and occupied by the agency; or
    4. An emergency, other than one described in paragraph (a), (b), (c), or (d) of this subsection, exists, and the Governor has given his express written authorization of an emergency lease. The certificate shall state the details of the emergency, and the head of the agency shall include the Governor’s written authorization along with the certificate sent to the Secretary of Finance and Administration Cabinet.
  4. Upon receipt by the Finance and Administration Cabinet of the certificate, written pursuant to paragraph (a), (b), (c), or (d) of subsection (3) of this section, or the certificate and the Governor’s authorization written pursuant to paragraph (e) of subsection (3) of this section, the Department for Facilities Management shall take the action to locate and negotiate for the lease of space meeting the certifying agency’s reasonable needs. As appropriate, the department shall keep the certificate or the certificate and the Governor’s written authorization on file.

History. Enact. Acts 1990, ch. 512, § 5, effective July 13, 1990; 1998, ch. 120, § 28, effective July 15, 1998; 1998, ch. 539, § 6, effective July 15, 1998.

Legislative Research Commission Note.

(7/15/98). This section was amended by 1998 Ky. Acts chs. 120 and 539 which do not appear to be in conflict and have been codified together.

NOTES TO DECISIONS

1.In General.

Bidder failed to establish a constitutionally protected property interest in its bid on a public contract, and thus failed to state a 42 USCS § 1983 claim based on a denial of due process, where state officials informed bidder several times during bidding process that they were awarding the subject contract under KRS 56.805 , which dispensed with many of the formal requirements of KRS 56.803 and provided state officials with broad discretion in locating office space meeting the agency’s reasonable needs. Experimental Holdings, Inc. v. Farris, 2006 U.S. Dist. LEXIS 77480 (E.D. Ky. Oct. 24, 2006), aff'd, 503 F.3d 514, 2007 FED App. 0391P, 2007 U.S. App. LEXIS 22674 (6th Cir. Ky. 2007 ).

State officials did not violate KRS 56.803(13)(a) when they provided a competitor with information about other bids, which allowed the competitor to modify its bid, because the officials were operating under KRS 56.805 , which stated that KRS 56.803(13)(a) did not apply to emergency procurements. Experimental Holdings, Inc. v. Farris, 2006 U.S. Dist. LEXIS 77480 (E.D. Ky. Oct. 24, 2006), aff'd, 503 F.3d 514, 2007 FED App. 0391P, 2007 U.S. App. LEXIS 22674 (6th Cir. Ky. 2007 ).

2.Fraudulent Leases.

Because KRS 56.822 limited judicial review of an award of a lease pursuant to KRS.800 et seq. to determining whether a lease was procured by fraud or was awarded arbitrarily or capriciously, and because KRS 56.805 granted state officials broad discretion when procuring a lease in an emergency, the state officials did not act arbitrarily and capriciously and the bidder failed to show that the officials had a vested interest in or stood to gain from the contract proceedings, a prerequisite to showing that the bidding process was fraudulent. Experimental Holdings, Inc. v. Farris, 2006 U.S. Dist. LEXIS 77480 (E.D. Ky. Oct. 24, 2006), aff'd, 503 F.3d 514, 2007 FED App. 0391P, 2007 U.S. App. LEXIS 22674 (6th Cir. Ky. 2007 ).

56.806. Terms of lease — Calculation of rent — Option to purchase — Lease-purchase agreement — Right to cancel lease.

  1. Except when another lease term is approved by the secretary of the Finance and Administration Cabinet, the terms of all leases entered into pursuant to KRS 56.803 or 56.805 may provide for an initial lease term beginning on a date stated and ending on June 30 in each year in which the General Assembly has convened in an even-numbered-year regular session and appropriated funds for the operation of the state government during the next ensuing biennium. The leases may grant the state successive options for the automatic renewal of the lease upon the same terms and conditions for additional renewal periods of twenty-four (24) months each, not to exceed three (3) automatic renewal periods. Any lease containing provision for the automatic renewal of the lease after the expiration of the initial lease term shall also provide that the state may, upon written notice given to the lessor on or before April 15 of the year in which the initial or any automatic renewal term expires, elect not to exercise its option for the automatic renewal of the lease term. Subject to the agreement of the lessor, a lease in which the final automatic renewal period has expired, or will expire as of the end of the then current term, may be renewed upon the same terms and conditions, provisions of KRS 56.803 to the contrary notwithstanding.
  2. The Department for Facilities Management shall comply with the provisions of this subsection when calculating rentable area for the purposes of a lease.
    1. If the Commonwealth is the only tenant on a single floor of a multistory building, the rentable area shall be the entire area described by measuring to the inside finished surface of the dominant portion of the permanent outer building walls, excluding any major vertical penetrations of the floor which shall include, but not be limited to, stairways, elevator shafts, pipe chases, vertical air ducts, and the enclosing wall of all such excluded areas. Restrooms, corridors, and utility rooms which exclusively serve the floor occupied by the Commonwealth shall be included as part of the rentable area.
    2. If the Commonwealth is the only tenant in a one (1) story or multistory building, rentable area shall be calculated pursuant to the provisions of paragraph (a) of this subsection except that those areas excluded pursuant to paragraph (a) shall be included as part of the rentable area.
    3. If the Commonwealth shares a floor with one (1) or more other tenants, the rentable area shall be calculated by measuring from the inside finished surface of the dominant portion of the permanent outer building walls to the office side of every corridor wall or other wall separating the Commonwealth’s leased space from other adjacent rentable areas which shall include, but not be limited to, space under the control of another tenant, public corridors, restrooms, all common service and utility areas, stairways, elevator shafts, vertical pipe chases, and air ducts.
    4. The Commonwealth’s rentable area determined pursuant to paragraphs (a), (b), and (c) of this subsection shall include columns and projections necessary to the building.
  3. The Finance and Administration Cabinet may include in a lease an option to purchase the leased property or a lease-purchase of the leased property.
  4. If the Finance and Administration Cabinet exercises an option to purchase leased property, the option price shall not exceed the fair market value of the leased property as of the time the lessor and the Commonwealth enter into the option. Two (2) competent and qualified real estate appraisers shall each determine the fair market value. Each real estate appraiser shall be selected by the Finance and Administration Cabinet and shall employ an accepted appraisal technique.
    1. Except as provided in paragraph (b) of this subsection, if the Finance and Administration Cabinet includes in a lease the lease-purchase of the leased property, two (2) competent and qualified real estate appraisers shall each determine the fair market value of the leased property as of the time the lessor and the Commonwealth enter into the lease. Each appraiser shall be selected by the Finance and Administration Cabinet and shall employ an accepted appraisal technique. The lease shall provide for an initial lease term ending June 30 of the second year of the then current fiscal biennium of the Commonwealth, with the option of the Commonwealth, as lessee, to extend the term of the lease for a term of two (2) years from the expiration of each extended term of the lease, until the original term of the lease has been extended for a total number of years agreed upon by the parties. The agreed rental paid for the original term and for each of the full number of years for which the term of the lease may be extended shall amortize the fair market value of the leased property as of the time the lessor and the Commonwealth entered into the lease. The lease shall provide that the Commonwealth may, at the expiration of the original or any extended term, purchase the leased property at a stated price, which shall be the balance of the fair market value of the leased property as of the time the lease was entered into which has not been amortized by the payments of rent previously made by the Commonwealth. (5) (a) Except as provided in paragraph (b) of this subsection, if the Finance and Administration Cabinet includes in a lease the lease-purchase of the leased property, two (2) competent and qualified real estate appraisers shall each determine the fair market value of the leased property as of the time the lessor and the Commonwealth enter into the lease. Each appraiser shall be selected by the Finance and Administration Cabinet and shall employ an accepted appraisal technique. The lease shall provide for an initial lease term ending June 30 of the second year of the then current fiscal biennium of the Commonwealth, with the option of the Commonwealth, as lessee, to extend the term of the lease for a term of two (2) years from the expiration of each extended term of the lease, until the original term of the lease has been extended for a total number of years agreed upon by the parties. The agreed rental paid for the original term and for each of the full number of years for which the term of the lease may be extended shall amortize the fair market value of the leased property as of the time the lessor and the Commonwealth entered into the lease. The lease shall provide that the Commonwealth may, at the expiration of the original or any extended term, purchase the leased property at a stated price, which shall be the balance of the fair market value of the leased property as of the time the lease was entered into which has not been amortized by the payments of rent previously made by the Commonwealth.
    2. If the Finance and Administration Cabinet includes lease-purchase of the leased property in a lease with the federal government, the terms of the lease-purchase shall be determined through negotiations between the Commonwealth and the federal government.
  5. Except when a lease incorporates a lease-purchase pursuant to subsection (5) of this section, the Commonwealth shall reserve the right to cancel a lease upon written notice within thirty (30) days.

History. Enact. Acts 1978, ch. 231, § 4, effective June 17, 1978; 1990, ch. 512, § 6, effective July 13, 1990; 1994, ch. 44, § 2, effective July 15, 1994; 2000, ch. 63, § 4, effective July 14, 2000; 2001, ch. 58, § 12, effective June 21, 2001.

56.808. Modification of lease. [Repealed.]

Compiler’s Notes.

This section (Enact. Acts 1978, ch. 231, § 5, effective June 17, 1978) was repealed by Acts 1980, ch. 295, § 101, effective July 15, 1980.

56.809. Statement of owners of property to be furnished to cabinet — New statement required under certain conditions.

  1. When the owner of real property selected to be leased to the Commonwealth is a corporation, partnership, business trust, or organization, a disclosure statement providing a list of the names of all persons owning five percent (5%) or more of the shares in such entities and the names of all partners, including silent and limited partners, shall be furnished to the Finance and Administration Cabinet prior to the execution of the lease agreement.
  2. Any person, corporation, partnership, business trust, or organization which receives income from the lease of real property to the Commonwealth and then, by way of assignment, transfer, or any other direct or indirect means, conveys some part of that income to any other person, corporation, partnership, business trust, or organization shall file a disclosure statement with the Finance and Administration Cabinet. The disclosure statement shall identify each recipient of the income and the amount received by each recipient.
  3. A new disclosure statement shall be furnished to the Finance and Administration Cabinet upon:
    1. Any change or transfer of ownership involving persons, including silent or limited partners, owning five percent (5%) or more of the shares in the corporation, partnership, business trust, or organization; or
    2. Any change in the distribution of income from the leased property by way of assignment, transfer, or any other direct or indirect means.
  4. The Department for Facilities Management shall maintain each disclosure statement obtained pursuant to this section in the appropriate lease file and shall make all lease files available for public inspection.

History. Enact. Acts 1990, ch. 512, § 7, effective July 13, 1990.

56.810. Calculation of amount of rent. [Repealed.]

Compiler’s Notes.

This section (Enact. Acts 1978, ch. 231, § 6, effective June 17, 1978) was repealed by Acts 1980, ch. 295, § 101, effective July 15, 1980.

56.811. Regulations providing manner of calculating rent — Report of modification of existing lease to capital projects and bond oversight committee. [Repealed.]

Compiler’s Notes.

This section (Enact. Acts 1980, ch. 295, § 100, effective April 9, 1980; 1986, ch. 2, § 2, effective July 15, 1986) was repealed by Acts 1990, ch. 512, § 15, effective July 13, 1990.

56.812. Lists of owners of property to be furnished to cabinet. [Repealed.]

Compiler’s Notes.

This section (Enact. Acts 1978, ch. 231, § 7, effective June 17, 1978; 1982, ch. 240, § 6, effective July 15, 1982) was repealed by Acts 1990, ch. 512, § 15, effective July 13, 1990.

56.813. Request for additional space — Improvements in premises — Use of funds to improve leased building that state will own at end of lease term — Amendment or modification of leases — Emergency modification — Register of proposed lease modifications.

  1. An agency may request that the Finance and Administration Cabinet provide additional space in a building in which space is already leased by the state. If the cabinet determines there is need for more space, the current lease may be amended, with agreement of the lessor, to increase the leased space. However, the rental rate paid for the additional space shall not exceed the square foot rental rate fixed by the original lease. A lease may also be modified with agreement of the lessor to decrease the number of square feet leased and the rent shall be appropriately reduced.
      1. When an agency occupying leased premises desires improvements in the premises, the agency shall obtain the cabinet secretary’s approval for the improvements at an estimated cost before the lessor makes the improvements. (2) (a) 1. When an agency occupying leased premises desires improvements in the premises, the agency shall obtain the cabinet secretary’s approval for the improvements at an estimated cost before the lessor makes the improvements.
      2. If the improvements cost more than ten thousand dollars ($10,000), the agency shall obtain the cabinet secretary’s approval for the rent increase necessary to amortize the cost of the improvements in full over the life of the lease. No other financing method shall be used.
        1. If the improvements cost ten thousand dollars ($10,000) or less, the agency shall obtain the cabinet secretary’s approval for the dollar amount necessary to pay for the cost of the improvements at direct state expense or the rent increase necessary to amortize the cost of the improvements in full over a period of time which shall run no longer that the life of the lease. No other financing method shall be used. No improvement shall be artificially divided so as to qualify under the provisions of this subparagraph. 3. a. If the improvements cost ten thousand dollars ($10,000) or less, the agency shall obtain the cabinet secretary’s approval for the dollar amount necessary to pay for the cost of the improvements at direct state expense or the rent increase necessary to amortize the cost of the improvements in full over a period of time which shall run no longer that the life of the lease. No other financing method shall be used. No improvement shall be artificially divided so as to qualify under the provisions of this subparagraph.
        2. Any improvements approved under this subparagraph with a cost between one thousand dollars ($1,000) and ten thousand dollars ($10,000) shall be reported semiannually by the Finance and Administration Cabinet to the Capital Projects and Bond Oversight Committee established by KRS 45.790 . The report shall include, for each project, the agency for which the improvement was made, the cost, a description of the work performed, and the property identification number.
    1. Any rent increase necessary to amortize a cost pursuant to paragraph (a) of this subsection shall not extend beyond the period required to accomplish the agreed amortization.
    2. The cabinet secretary shall amend a lease to reflect a rent increase necessary to amortize a cost pursuant to paragraphs (a) and (b) of this subsection, and the amendment shall state that the rent increase is for the purpose of amortizing this cost.
    3. For any building leased by a state agency that the state will own upon termination of the lease or expiration of the lease term, and for which no modification of the lease may be made to amortize improvements to the property, the cabinet may use funds provided by state agencies to improve, renovate, or refit the building to better satisfy the needs of the agencies occupying the leased property up to six hundred thousand dollars ($600,000) without additional approval of the General Assembly.
  2. Any modification to an existing lease which is required because of an emergency as described at KRS 56.805(3) shall be made pursuant to KRS 56.805(3) and (4) and this section.
  3. The Division of Real Properties, within the Department for Facilities and Support Services, shall maintain a register of all proposed lease modifications which, if approved, will result in the payment of a square foot rate for the leased space which is greater than the square foot rate contained in the original lease. All such proposed modifications shall be filed and kept in the register for public inspection and comment for thirty (30) calendar days. Comments received from the public during the period shall be considered before the lease modification is executed by the parties and becomes binding against the Commonwealth. After receiving comments, if the secretary determines that the proposed modifications are not in the interest of the Commonwealth, he or she may require the agency to continue operation in its present space or cancel the lease and seek more suitable space. The lessor, under any lease proposed to be modified as contemplated therein, shall be advised of the requirements of this subsection and cautioned that the Commonwealth shall have no liability for any action undertaken by the lessor in anticipation of, but prior to execution of, the modifications of the lease.

History. Enact. Acts 1990, ch. 512, § 8, effective July 13, 1990; 1992, ch. 339, § 2, effective July 14, 1992; 1994, ch. 177, § 2, effective July 15, 1994; 2005, ch. 85, § 81, effective June 20, 2005; 2014, ch. 80, § 1, effective July 15, 2014; 2017 ch. 103, § 1, effective March 21, 2017.

Legislative Research Commission Note.

(7/15/2014). In codification, the Reviser of Statutes has altered the numbering within subsection (2) of this statute from the way it appeared in 2014 Ky. Acts ch. 80, sec. 1, under the authority of KRS 7.136(1)(c).

56.8135. Annual report by agency if space reconfigured, use changed, or number of employees occupying space changed for state-owned or leased property.

  1. Except as provided in subsection (3) of this section, in September of each year, every agency shall report to the Finance and Administration Cabinet concerning any state-owned or leased property if, in the preceding twelve (12) months, the agency has:
    1. Reconfigured ten percent (10%) more of the space; or
    2. Changed the use of ten percent (10%) or more of the space; or
    3. Changed the number of employees occupying the space by ten percent (10%) or more.
  2. An agency’s report shall include:
    1. The address of the property;
      1. The percentage of space which the agency reconfigured or changed the use of; or (b) 1. The percentage of space which the agency reconfigured or changed the use of; or
      2. The percentage change in the number of employees;
    2. The factors which prompted the reconfiguration, change in use, or change in number of employees; and
    3. Any other relevant information requested by the Finance and Administration Cabinet.
  3. The provisions of this section shall not apply when the property involved covers less than one thousand (1,000) square feet.
  4. This section shall expire July 13, 1998.

History. Enact. Acts 1994, ch. 33, §§ 1 and 2, effective July 15, 1994.

56.814. Employees forbidden to disclose information prior to advertisement.

  1. No officer or employee of any state agency shall engage in any act or make any representation or commitment to any person relative to the lease of any real property by the state without specific written authorization from and approval by the Finance and Administration Cabinet and neither the state nor the department shall be bound by the act, representation, or commitment unless so authorized and approved.
    1. No officer or employee of any state agency shall disclose to any person or firm who might reasonably be expected to submit a proposal, any approved plans by the department for the lease of real property for which public notice is required under KRS 43.050 , 48.111 , and 56.800 to 56.823 prior to the public notice. Discussions of approved leasing plans may be held after public notice with persons interested in submitting a proposal pertaining to the space requirements. (2) (a) No officer or employee of any state agency shall disclose to any person or firm who might reasonably be expected to submit a proposal, any approved plans by the department for the lease of real property for which public notice is required under KRS 43.050 , 48.111 , and 56.800 to 56.823 prior to the public notice. Discussions of approved leasing plans may be held after public notice with persons interested in submitting a proposal pertaining to the space requirements.
    2. If all of the proposals, submitted in response to the advertisement referred to in paragraph (a) of this subsection, are rejected, then the requirements of paragraph (a) shall govern disclosure before, and discussions after, new advertisements are placed.

History. Enact. Acts 1978, ch. 231, § 8, effective June 17, 1978; 1990, ch. 512, § 9, effective July 13, 1990; 1998, ch. 120, § 29, effective July 15, 1998; 1998, ch. 539, § 3, effective July 15, 1998; 2009, ch. 78, § 46, effective June 25, 2009.

56.816. Built-to-suit leases — Advertisement — Specifications. [Repealed.]

Compiler’s Notes.

This section (Enact. Acts 1978, ch. 231, § 9, effective June 17, 1978; 1982, ch. 393, § 34, effective July 15, 1982) was repealed by Acts 1992, ch. 54, § 15, effective July 14, 1992.

56.8161. Determination that agency is entitled to use built-to-suit to acquire space — Definitions.

If the secretary of the Finance and Administration Cabinet determines that an agency is entitled to additional space and that built-to-suit on private property or built-to-suit on state-owned land is the most economically advantageous method for acquiring that space, the secretary shall set forth his determination in a written finding which shall be approved by the Governor. The following definitions shall apply to built-to-suit projects:

  1. “Design-build-finance” means a built-to-suit project delivery method in which the chief purchasing officer enters into a single procurement and contract award for design, construction, and financing of a capital project over a contractually defined period; and in which the ownership and title of the capital project shall be conveyed at any time to the Commonwealth of Kentucky.
  2. “Design-build-finance-operate” means a built-to-suit project delivery method in which the chief purchasing officer enters into a single procurement and contract award for design, construction, financing, and operation of a capital project over a contractually defined period; and in which the ownership and title of the capital project shall be conveyed at any time to the Commonwealth of Kentucky.

History. Enact. Acts 1992, ch. 54, § 1, effective July 14, 1992; 2003, ch. 98, § 14, effective June 24, 2003.

56.8163. Built-to-suit selection committee.

  1. A built-to-suit selection committee is hereby created in the Finance and Administration Cabinet.
  2. The selection committee shall participate in every instance of the cabinet acquiring space through built-to-suit.
  3. The initial selection committee shall consist of the following eight (8) members:
    1. One (1) merit employee of the Finance and Administration Cabinet, appointed by the secretary of the cabinet, shall serve a one (1) year term.
    2. One (1) merit employee of the Finance and Administration Cabinet, appointed by the secretary of the cabinet, shall serve a two (2) year term.
    3. One (1) merit employee of the Finance and Administration Cabinet, appointed by the secretary of the cabinet, shall serve a three (3) year term.
    4. Except as provided for in subsection (4) of this section, two (2) merit employees of the agency seeking the space, appointed by the head of that agency, shall serve for the duration of the built-to-suit process involving their agency.
    5. One (1) merit employee of the Auditor of Public Accounts, appointed by the Auditor, shall serve as a nonvoting member of the committee for a four (4) year term.
    6. One (1) private citizen, appointed by the secretary of the cabinet, shall serve a one (1) year term.
    7. One (1) private citizen, appointed by the secretary of the cabinet, shall serve a two (2) year term.
  4. If the agency seeking the space does not operate under a merit system, the head of the agency shall appoint two (2) agency employees to the selection committee who shall serve for the duration of the built-to-suit process involving their agency.
  5. All selection committee members shall have experience which qualifies them to serve on the committee.
    1. This paragraph shall apply to selection committee members other than those appointed by the head of the agency seeking the space. After the initial terms established in subsection (3) of this section have expired, all subsequent terms shall last four (4) years, except that a person appointed to fill a vacancy prior to the expiration of a term shall be appointed for the remainder of the term. A selection committee member may succeed himself. He shall serve until his successor is appointed and qualified. A successor or replacement, in the case of a vacancy during an unexpired term, shall be appointed in the same manner as the initial appointee. (6) (a) This paragraph shall apply to selection committee members other than those appointed by the head of the agency seeking the space. After the initial terms established in subsection (3) of this section have expired, all subsequent terms shall last four (4) years, except that a person appointed to fill a vacancy prior to the expiration of a term shall be appointed for the remainder of the term. A selection committee member may succeed himself. He shall serve until his successor is appointed and qualified. A successor or replacement, in the case of a vacancy during an unexpired term, shall be appointed in the same manner as the initial appointee.
    2. A selection committee member appointed by the head of the agency seeking the space shall serve for the duration of the built-to-suit process involving his agency, except that a person appointed to fill a vacancy prior to the expiration of the process shall be appointed for the remainder of the process. In the case of a vacancy during an unexpired term, a replacement shall be appointed in the same manner as the initial appointee.

History. Enact. Acts 1992, ch. 54, § 2, effective July 14, 1992.

56.8165. Administrative support for selection committee.

  1. For administrative purposes, the selection committee shall be attached to the Finance and Administration Cabinet.
  2. The cabinet shall provide the selection committee with:
    1. Suitable quarters in Frankfort, Kentucky, in which to conduct its business;
    2. An executive secretary and any other staff support necessary for the expeditious conduct of the selection committee’s duties and responsibilities; and
    3. Office supplies.

History. Enact. Acts 1992, ch. 54, § 3, effective July 14, 1992.

56.8167. Per diem of members who are not state employees — Reimbursement for costs incurred.

  1. Selection committee members who are not state employees shall receive a salary of one hundred dollars ($100) per day for those days authorized by the selection committee for selection committee activities.
  2. Selection committee members who are state employees shall not receive a salary for their time spent on selection committee activities, and the state government salaries of these committee members shall not be reduced due to time spent away from other state government activities.
  3. All selection committee members shall be reimbursed for costs necessarily incurred in carrying out their duties. All reimbursements shall be authorized by the selection committee.
  4. The Finance and Administration Cabinet shall pay all costs generated under this section by the selection committee.

History. Enact. Acts 1992, ch. 54, § 4, effective July 14, 1992.

56.8169. Requests for proposals — Procedures for awarding built-to-suit leases.

  1. In conducting the built-to-suit process, the commissioner of the Department for Facilities Management, after consultation with the agency or agencies for whose use the space is sought, shall arrive at a request for proposals.
  2. The request for proposals shall indicate the relative importance of evaluation factors.
  3. A request for proposals may be amended at any time prior to the deadline for the submission of proposals.
  4. In soliciting the interest of firms to carry out a built-to-suit, the department shall comply with the procedures established in this subsection.
    1. The department shall provide adequate public notice of a request for proposals and notice of the materials that the department will provide to a firm to assist that firm in responding to a request for proposals. Those materials shall include, but not be limited to, the request for proposals and the proposal evaluation sheet to be used by the selection committee. The notice shall also set a time and date for a written response to the notice.
    2. The Department for Facilities Management may use any means available to notify firms that a notice has been given.
  5. To respond to a notice, a firm, or its representative, shall respond on or before the time and date designated in the notice. The response shall be in a form determined by the department and shall provide the firm’s name and address.
  6. All written responses submitted on or before the time and date designated shall be opened or downloaded at the same time, publicly read or posted, and kept on file by the department. A firm which fails to meet the deadline shall be barred from the procurement process.
  7. The department shall transmit to all firms that responded in time a request for proposals.
  8. After the request for proposals have been transmitted, but before written proposals are submitted, the commissioner, and his staff, may hold any meetings, discussions, or negotiations that they deem appropriate with the firms.
    1. The commissioner shall invite each firm to submit a written proposal, on a form created by the department, on or before the time and date set forth in the invitation. A form shall be provided to each firm. (9) (a) The commissioner shall invite each firm to submit a written proposal, on a form created by the department, on or before the time and date set forth in the invitation. A form shall be provided to each firm.
    2. A firm that does not submit a written proposal, on a form created by this department, on or before the deadline shall be barred from the procurement process.
    3. Employees of the department and the members of the selection committee shall keep the written proposals confidential until the lease is awarded.
  9. The commissioner shall designate a department employee to determine which firms have filed, in a timely fashion, both a response to the public notice and a written proposal on a form created by the department. The designated employee shall create a list of the firms which have done so and certify the list.
  10. The department shall organize the selection committee’s first meeting. At that meeting, the selection committee shall:
    1. Elect from its members a chairman and a vice chairman who shall hold their positions for the duration of the selection process;
    2. Be provided with:
      1. The certified list of firms;
      2. The firms’ written proposals submitted in response to a request for proposals;
      3. The request for proposals;
      4. The notice of request for proposals;
      5. The proposal evaluation sheets; and
      6. A notice from the commissioner informing the committee that the selection process is governed by KRS 56.800 to 56.823 and 56.990 ; and
    3. Discuss the future conduct of its affairs.
  11. The selection committee shall meet to:
    1. Evaluate the materials with which it has been provided;
    2. Select, but not rank, the three (3) most qualified firms, based upon the evaluation factors set forth in the request for proposals; and
    3. Notify the department of the three (3) finalists.
  12. The department shall notify each firm which responded to the request for proposals, informing the firm of:
    1. The three (3) finalists; and
    2. The rest of the procedure that will be followed in the awarding of the built-to-suit lease.
  13. The selection committee shall interview the three (3) finalists, preferably on the same day. The finalists shall be interviewed one (1) at a time, and each interview shall be attended only by representatives of the finalist and members of the selection committee. Members of the selection committee shall keep confidential the substance of an interview.
  14. The selection committee shall meet to:
    1. Rank the three (3) finalists based on the weighted evaluation factors in the request for proposals; and
    2. Forward the ranking to the department.
    1. The commissioner shall: (16) (a) The commissioner shall:
      1. Award the built-to-suit lease to the top ranked finalist; or
      2. Request best-and-final offers.
    2. The commissioner shall request best-and-final offers only of the three (3) finalists. The commissioner’s written request shall include his reason for requesting best-and-final offers, and shall state a time and date by which all best-and-final offers will have to be received. A firm that does not submit a best-and-final offer by the deadline shall not be awarded the built-to-suit lease.
    3. Employees of the department and the members of the selection committee shall keep the best-and-final offers confidential until the lease is awarded.
    4. The selection committee shall meet to assess all the materials with which it was provided pursuant to subsection (11)(b) of this section, as well as the request for best-and-final offers and best-and-final offers. The committee shall rank the best-and-final offers of the three (3) finalists based on the weighted evaluation factors in the request for proposals. If the committee determines that the top ranked best-and-final offer is adequate, the committee shall forward the name of the firm that submitted the top ranked best-and-final offer to the department. If the committee determines that the top ranked firm’s best-and-final offer is inadequate, the process shall end.
    5. The commissioner shall award the built-to-suit lease to the firm chosen by the selection committee.
  15. After the best firm has been selected, the department shall notify the finalists, informing them of:
    1. Which firm has been selected for the proposed lease; and
    2. The rest of the procedure that will be followed in the awarding of the lease.
  16. KRS 61.878 shall govern the procurement process set out in this section.

HISTORY: Enact. Acts 1992, ch. 54, § 5, effective July 14, 1992; 1998, ch. 120, § 30, effective July 15, 1998; 2018 ch. 176, § 6, effective July 14, 2018.

56.8171. Certification by selection committee members — Auditor’s report to Capital Projects and Bond Oversight Committee.

  1. After the department has awarded the proposed built-to-suit lease to a firm, but before the lease is submitted to the Capital Projects and Bond Oversight Committee for review, the commissioner shall supply a copy of the proposed lease to each member of the selection committee.
  2. The secretary of the Finance and Administration Cabinet, commissioner of the department, and each voting member of the selection committee shall sign separate certificates, devised by the department, which shall provide the signatory with the option of certifying that, to the best of his knowledge, he is either aware or unaware of circumstances which may constitute a willful violation of KRS 56.800 to 56.823 which has arisen in the procurement process.
  3. The representative of the Auditor of Public Accounts shall prepare and file a report with the Capital Projects and Bond Oversight Committee certifying that the applicable procedural provisions of KRS 56.800 to 56.823 were met.

History. Enact. Acts 1992, ch. 54, § 6, effective July 14, 1992.

56.8173. Firm not to be considered when committee member or family member employed by or has interest in that firm.

  1. A selection committee shall not consider a firm for a built-to-suit lease when a member of the committee, his spouse, either of his parents, or any of his children is employed by that firm, or has a financial interest in that firm.
  2. For a period of one (1) year after a person ends his service on a selection committee, the Commonwealth shall not consider a firm for a built-to-suit lease when the person, his spouse, either of his parents, or any of his children is employed by that firm or has a financial interest in that firm.

History. Enact. Acts 1992, ch. 54, § 7, effective July 14, 1992.

56.8175. Built-to-suit involving construction on private property — Option to purchase.

When a built-to-suit lease is awarded to a firm that owns the land upon which the building shall be built, the Commonwealth shall be granted an option to purchase the leased buildings, land, and any appurtenant facilities. The option price to be paid shall not exceed its fair market value as of the time the option is exercised as determined by a competent and qualified real estate appraiser, selected by mutual agreement of the parties, employing the reproduction cost new or other accepted appraisal techniques; provided, however, that in no event shall the option price be less than a sum equal to the remaining balance of any mortgage lien encumbering the property and securing the repayment of moneys advanced to the owner for the original construction of the building, plus an amount not to exceed ten percent (10%) of such mortgage balance.

History. Enact. Acts 1992, ch. 54, § 8, effective July 14, 1992.

56.8177. Execution of built-to-suit agreements — Recording of agreements.

All built-to-suit lease agreements shall be reviewed by the Office of Financial Management within the Office of the Controller prior to execution on behalf of the Commonwealth by the secretary of the Finance and Administration Cabinet or on behalf of an institution in accordance with KRS 164A.630 , and approved for form and legality by the Attorney General or an assistant attorney general, before they shall be binding against the Commonwealth. All the leases shall be lodged for record and recorded in the office of the county clerk of the county in which the leased property is located.

History. Enact. Acts 1992, ch. 54, § 10, effective July 14, 1992; 2003, ch. 98, § 15, effective June 24, 2003; 2005, ch. 85, § 82, effective June 20, 2005.

56.8179. Building and construction code requirements.

A building constructed and leased to the Commonwealth under a built-to-suit lease agreement shall be constructed:

  1. In accordance with all applicable state and national safety, building, and construction code requirements; and
  2. To last, at a minimum, for a period of thirty (30) years.

History. Enact. Acts 1992, ch. 54, § 11, effective July 14, 1992.

56.818. Term of built-to-suit leases — Option to purchase by Commonwealth — Recording. [Repealed.]

Compiler’s Notes.

This section (Enact. Acts 1978, ch. 231, § 10, effective June 17, 1978; 1982, ch. 393, § 35, effective July 15, 1982) was repealed by Acts 1992, ch. 54, § 15, effective July 14, 1992.

56.8181. Collusion among lease proposers prohibited.

Any agreement or collusion among lease proposers or prospective lease proposers which restrains, tends to restrain, or is reasonably calculated to restrain competition by agreement to propose a lease with certain terms, or to refrain from proposing a lease with certain terms or otherwise, is prohibited.

History. Enact. Acts 1992, ch. 54, § 12, effective July 14, 1992.

56.819. Procedure upon change in ownership of leased premises.

  1. When there is a change in ownership in leased premises, the new owner shall furnish the Division of Real Properties, within the Department for Facilities and Support Services, with a copy of the deed or other instrument of conveyance by which the new owner acquired title to the property or the right to payment under the lease and other evidence in support of his claim to the payment of rent under the lease the Division of Real Properties may request. The Commonwealth shall change its records and redirect its rent payments accordingly.
  2. When the agency occupying leased premises or the Finance and Administration Cabinet receives information that a change in ownership has occurred, payments of rent shall be suspended until the Division of Real Properties learns the ownership of the premises and determines who is entitled to the rent.

History. Enact. Acts 1990, ch. 512, § 10, effective July 13, 1990; 2005, ch. 85, § 83, effective June 20, 2005.

56.820. Construction on state-owned land under built-to-suit lease agreements — Leases without conveyance of title — Buildings located in Fayette County.

  1. This section shall apply when the built-to-suit process involves the construction of a building on state-owned land.
  2. Upon the execution of a lease awarded under this section, the Commonwealth shall convey to the individual or firm to whom such lease has been awarded, in fee simple with covenant of general warranty of title, the real estate upon which the building is to be constructed under this lease. The lease shall provide for an initial lease term commencing on the date the building is accepted for occupancy by the Commonwealth, but not later than thirty (30) days after the owner’s architect has certified that construction of the building has been completed, and ending June 30 of the second year of the then current fiscal biennium of the Commonwealth, with an option in the Commonwealth, as lessee, to extend the term of the lease for a term of two (2) years from the expiration of the original term of the lease and for two (2) years from the expiration of each extended term of the lease, until the original term of the lease has been extended for a total number of years to be agreed upon by the parties at a rental which, if paid for the original term and for each of the full number of years for which the term of the lease may be extended, will amortize the total cost of the erection of the building and appurtenances. The rent shall be paid at such times as the parties to the lease agreed upon. The lease shall provide that the lessee may, at the expiration of the original or any extended term, purchase the leased premises at a stated price, which shall be the balance of the total cost of erection of the building and appurtenances not amortized by the payments of rent previously made by the lessee. The lease shall provide that in the event of the exercise of the option to purchase the leased premises or in the event the lease has been extended for the full number of years which it is agreed the same may be extended, and all rents and payments provided for in the lease have been made, the lessor shall convey the premises to the lessee in fee simple with covenant of general warranty of title. The lease may provide that the lessee shall, as additional rent for the leased premises, pay all taxes assessed against the leased premises, and the cost of insuring the building erected thereon against loss or damage by fire and windstorm in such sum as may be agreed by the parties thereto.
  3. For buildings located in Fayette County, the commissioner of the Department for Facilities Management on behalf of the Department for Military Affairs may award a built-to-suit lease for built-to-suit projects without the conveyance of title required in subsection (2) of this section. Any lease agreement under this subsection shall be awarded in accordance with the provisions of KRS Chapter 45A. The provisions of KRS 56.8163 , 56.8165 , 56.8167 , 56.8169 , 56.8171 , and 56.8173 shall not apply to built-to-suit leases awarded under this subsection. Any lease agreement established under this subsection shall provide that title to all improvements shall vest in the Commonwealth upon completion of the term of the lease.
  4. For buildings located in Fayette County procured pursuant to this section and leased from the Commonwealth by an agency of the federal government, the following provisions shall apply:
    1. Notwithstanding KRS 56.813(2) to the contrary, the secretary of the Finance and Administration Cabinet, on behalf of the Department of Military Affairs, may approve modifications to existing buildings if the source of the payments by the Department of Military Affairs for the improvements are made through an agreement with an agency of the United States government, or through an increase in the term of the lease, provided that the improvements are procured by the Department of Military Affairs pursuant to the provisions of KRS Chapter 45A; and
    2. Any lease modification approved by the secretary of the Finance and Administration Cabinet pursuant to this subsection shall be reported by the cabinet to the Legislative Research Commission for referral to an appropriate legislative committee within thirty (30) days of the execution of the lease modification.

History. Enact. Acts 1978, ch. 231, § 11, effective June 17, 1978; 1992, ch. 54, § 9, effective July 14, 1992; 2013, ch. 32, § 158, effective March 19, 2013; 2014, ch. 15, § 2, effective April 2, 2014.

56.821. Lease records are public records.

Records relating to leases shall be a matter of public record, except as otherwise provided by law.

History. Enact. Acts 1990, ch. 512, § 11, effective July 13, 1990.

56.822. Limited judicial review.

Judicial review of the action of the Finance and Administration Cabinet and its secretary and the Department for Facilities Management and its commissioner in the award, or modification, of a lease pursuant to KRS 43.050 , 48.111 , and 56.800 to 56.823 shall be limited to determining whether a lease or modification to a lease was procured by fraud or was awarded arbitrarily or capriciously.

History. Enact. Acts 1990, ch. 512, § 12, effective July 13, 1990; 2009, ch. 78, § 47, effective June 25, 2009.

NOTES TO DECISIONS

1.In General.

Because KRS 56.822 limited judicial review of an award of a lease pursuant to KRS.800 et seq. to determining whether a lease was procured by fraud or was awarded arbitrarily or capriciously, and because KRS 56.805 granted state officials broad discretion when procuring a lease in an emergency, the state officials did not act arbitrarily and capriciously and the bidder failed to show that the officials had a vested interest in or stood to gain from the contract proceedings, a prerequisite to showing that the bidding process was fraudulent. Experimental Holdings, Inc. v. Farris, 2006 U.S. Dist. LEXIS 77480 (E.D. Ky. Oct. 24, 2006), aff'd, 503 F.3d 514, 2007 FED App. 0391P, 2007 U.S. App. LEXIS 22674 (6th Cir. Ky. 2007 ).

56.823. Reports on leases, exercise of options to purchase, completion of lease-purchase agreements, and lease modifications to Capital Projects and Bond Oversight Committee.

  1. The Finance and Administration Cabinet shall report information on leases and lease modifications awarded pursuant to KRS 43.050 , 48.111 , and 56.800 to 56.823 to the Capital Projects and Bond Oversight Committee as required by this section.
  2. Any lease awarded pursuant to KRS 56.803 , including all lease renewals except automatic renewals permitted under KRS 56.806(1), for which the annual rental cost will exceed one hundred thousand dollars ($100,000) shall be reported to the Capital Projects and Bond Oversight Committee after a proposed lease is arrived at but before execution. The report shall include:
    1. The name of the agency that will occupy the premises;
    2. The name of the lessor;
    3. The terms of the lease;
    4. The reason for the lease;
    5. A copy of the writing required by KRS 56.803 (17);
    6. A statement as to whether the Finance and Administration Cabinet complied with the requirements established in KRS 43.050 , 48.111 , and 56.800 to 56.823 . If the cabinet has not complied with any requirement, the cabinet shall explain why;
    7. An explanation of why the Finance and Administration Cabinet chose this lessor over his competition; and
    8. A cost comparison between the cost per square foot of the leased space and the average cost per square foot of comparable space the state leases in the same county. If there are factors which make the comparison misleading, the cabinet shall inform the committee of these factors.
  3. Any lease that incorporates a lease-purchase pursuant to KRS 56.806(5) shall be reported to the Capital Projects and Bond Oversight Committee after a proposed lease is arrived at but before execution.
    1. If a lease is awarded pursuant to KRS 56.803 , the report shall include the:
      1. Fair market value of the property as of the time the lessor and the Commonwealth entered into the lease;
      2. Name and qualifications of each of the two (2) real estate appraisers who determined the fair market value;
      3. Appraisal technique each appraiser employed; and
      4. Information required by subsection (2) of this section.
      1. Except as provided in subparagraph 2. of this paragraph, if a lease is awarded pursuant to KRS 56.805(2), the report shall include the: (b) 1. Except as provided in subparagraph 2. of this paragraph, if a lease is awarded pursuant to KRS 56.805(2), the report shall include the:
        1. Fair market value of the property at the time the lessor and the Commonwealth entered into the lease;
        2. Name and qualifications of each of the two (2) real estate appraisers who determined the fair market value;
        3. Appraisal technique each appraiser employed;
        4. Information required by paragraphs (a), (b), (c), (d), (f), (g), and (h) of subsection (2) of this section; and
        5. Procedure the department followed to obtain the lease.
      2. If the federal government is the lessor, the report shall include the substance of the lease-purchase.
  4. Any lease awarded pursuant to KRS 56.805(2), including all lease renewals except automatic renewals permitted under KRS 56.806(1), for which the annual rental cost will exceed one hundred thousand dollars ($100,000) shall be reported to the Capital Projects and Bond Oversight Committee after a proposed lease is arrived at but before execution. The report shall state the information required by paragraphs (a), (b), (c), (d), (f), (g), and (h) of subsection (2) of this section and the procedure the department followed to obtain the lease. The report shall also include a copy of the writing required by KRS 56.805(2).
  5. Any lease awarded as the result of an emergency described at KRS 56.805(3) shall be reported to the Capital Projects and Bond Oversight Committee within thirty (30) days after execution. The report shall include a copy of the certificate or the certificate and the Governor’s authorization, as appropriate, kept on file pursuant to KRS 56.805(4) and shall further state:
    1. The information required by paragraphs (a), (b), (f), (g), and (h) of subsection (2) of this section;
    2. The terms of lease before and after the emergency; and
    3. The procedure the department followed after the emergency to obtain a lease.
  6. Any built-to-suit lease awarded pursuant to KRS 56.8169 shall be reported to the Capital Projects and Bond Oversight Committee after a proposed lease is arrived at but before execution. The report shall state the information required by paragraphs (a), (b), (c), (d), (f), (g), and (h) of subsection (2) of this section. The report shall also include:
    1. The written finding and Governor’s approval required by KRS 56.8161 ;
    2. The selection committee’s ranking of firms required by KRS 56.8169 (15)(a);
    3. The written reason for requesting best-and-final offers, if best-and-final offers are requested, made pursuant to KRS 56.8169(16)(b);
    4. The selection committee’s selection of the best best-and-final offer, if best- and-final offers are requested, made pursuant to KRS 56.8169(16)(d);
    5. The certificates signed pursuant to KRS 56.8171(2); and
    6. The report prepared by the employee of the Auditor of Public Accounts pursuant to KRS 56.8171(3).
  7. If the Finance and Administration Cabinet decides to exercise an option to purchase pursuant to KRS 56.806(4), the cabinet shall report to the Capital Projects and Bond Oversight Committee after the decision is reached but before the purchase occurs.

    The report shall include the:

    1. Fair market value of the property;
    2. Option price;
    3. Name and qualifications of each of the two (2) real estate appraisers who set the fair market value;
    4. Appraisal technique each appraiser employed; and
    5. Rent paid by the Commonwealth prior to the exercise of the option.
    1. When, pursuant to KRS 56.806(5)(a), the Finance and Administration Cabinet attempts to complete a lease-purchase through lease payments totally amortizing the fair market value of the leased property as of the time the lessor and the Commonwealth entered into the lease, the cabinet shall report to the Capital Projects and Bond Oversight Committee no more than ninety (90) days before the final lease payment. The report shall include the: (8) (a) When, pursuant to KRS 56.806(5)(a), the Finance and Administration Cabinet attempts to complete a lease-purchase through lease payments totally amortizing the fair market value of the leased property as of the time the lessor and the Commonwealth entered into the lease, the cabinet shall report to the Capital Projects and Bond Oversight Committee no more than ninety (90) days before the final lease payment. The report shall include the:
      1. Fair market value of the property at the time the lessor and the Commonwealth entered into the lease;
      2. Name and qualifications of each of the two (2) real estate appraisers who set the fair market value;
      3. Appraisal technique each appraiser employed; and
      4. Rent paid by the Commonwealth toward the purchase.
    2. When, pursuant to KRS 56.806(5)(b), the Finance and Administration Cabinet attempts to complete a lease-purchase, the cabinet shall report to the Capital Projects and Bond Oversight Committee no more than ninety (90) days before the final lease payment. The report shall include the terms of the lease purchase.
  8. When, pursuant to KRS 56.806(5), the Finance and Administration Cabinet decides to attempt to complete a lease-purchase prior to the total amortization, through lease payments, of the fair market value of the leased property as of the time the lessor and the Commonwealth entered into the lease, the cabinet shall report to the Capital Projects and Bond Oversight Committee after the decision is reached but before the purchase occurs. The report shall state the information required by paragraph (a) or (b) of subsection (8) of this section as appropriate. The report shall also include the sum of money that must be paid in addition to rent paid, in order to complete the purchase.
  9. If the Finance and Administration Cabinet, pursuant to KRS 56.806(5), includes in a lease the lease-purchase of the leased property and thereafter becomes aware that a purchase will not be achieved, within thirty (30) days after the cabinet becomes aware, it shall notify the Capital Projects and Bond Oversight Committee of the circumstances preventing the purchase.
    1. Except in the case of an emergency as provided in paragraph (b) of this subsection, any modification to an existing lease, made pursuant to KRS 56.813 , that is less than fifty thousand dollars ($50,000) shall be reported to the Capital Projects and Bond Oversight Committee within thirty (30) days after execution, and any modification to an existing lease, made pursuant to KRS 56.813 , that is fifty thousand dollars ($50,000) or more shall be reported to the Capital Projects and Bond Oversight Committee before execution. In either case, the report shall consist of: (11) (a) Except in the case of an emergency as provided in paragraph (b) of this subsection, any modification to an existing lease, made pursuant to KRS 56.813, that is less than fifty thousand dollars ($50,000) shall be reported to the Capital Projects and Bond Oversight Committee within thirty (30) days after execution, and any modification to an existing lease, made pursuant to KRS 56.813, that is fifty thousand dollars ($50,000) or more shall be reported to the Capital Projects and Bond Oversight Committee before execution. In either case, the report shall consist of:
      1. The terms of the lease before and after modification;
      2. The reason for the modification;
      3. The name of the lessor;
      4. Any comments received from the public pursuant to KRS 56.813(4); and
      5. A statement as to whether the Finance and Administration Cabinet complied with the requirements in KRS 56.813. If the cabinet has not complied with any requirement, the cabinet shall explain why.
    2. Any modification to an existing lease which is required because of an emergency as described at KRS 56.805(3) shall be reported to the Capital Projects and Bond Oversight Committee within thirty (30) days after execution. The report shall include a copy of the certificate or the certificate and the Governor’s authorization, as appropriate, kept on file pursuant to KRS 56.805(4) and shall further state:
      1. The terms of the lease before and after modification;
      2. The name of the lessor;
      3. Any comments received from the public pursuant to KRS 56.813(4); and
      4. A statement that the Finance and Administration Cabinet complied with the requirements in KRS 56.805(3) and (4) and in KRS 56.813. If the cabinet has not complied with any requirement, the cabinet shall explain why.
  10. Before beginning work on any improvements, renovations, or refitting of a leased building under the provisions of KRS 56.813(2)(d), the cabinet shall report to the Capital Projects and Bond Oversight Committee:
    1. A description of the project;
    2. Identification of the agency or agencies for which the improvements, renovations, or refitting are being performed;
    3. An estimate of the total cost of the project;
    4. The source of funds for the project; and
    5. All the information required by KRS 45.793 .

History. Enact. Acts 1990, ch. 512, § 13, effective July 13, 1990; 1992, ch. 54, § 13, effective July 14, 1992; 1992, ch. 339, § 3, effective July 14, 1992; 1994, ch. 44, § 3, effective July 15, 1994; 1998, ch. 539, § 4, effective July 15, 1998; 2009, ch. 78, § 48, effective June 25, 2009; 2017 ch. 103, § 2, effective March 21, 2017.

56.830. Negotiation, renewal and modification of leases — Terms — Calculation of rent — Prohibition of permanent improvements — Disclosure of ownership. [Repealed.]

Compiler’s Notes.

This section (Enact. Acts 1988, ch. 131, § 1, effective July 15, 1988) was repealed by Acts 1990, ch. 512, § 15, effective July 13, 1990.

56.832. Lease by Commonwealth of real property in foreign jurisdiction.

  1. The term “foreign jurisdiction” for the purpose of this section means states other than Kentucky, a territory of the United States, or a foreign country.
  2. The Finance and Administration Cabinet shall promulgate administrative regulations relating to the lease of real property in a foreign jurisdiction.
  3. When an agency determines it has a need to lease office space in a foreign jurisdiction, the agency shall submit a request in writing to the Department for Facilities and Support Services within the Finance and Administration Cabinet.
  4. The Department for Facilities and Support Services shall review the space request and draw up general requirement specifications. The general requirement specifications shall be kept on file by the department.
    1. If the Department for Facilities and Support Services determines that it is not feasible to lease the space through competitive sealed bid, the Department for Facilities and Support Services may, under Finance and Administration Cabinet administrative regulations, acquire leased space through noncompetitive negotiation. (5) (a) If the Department for Facilities and Support Services determines that it is not feasible to lease the space through competitive sealed bid, the Department for Facilities and Support Services may, under Finance and Administration Cabinet administrative regulations, acquire leased space through noncompetitive negotiation.
    2. If competitive sealed bid is determined to be unfeasible, the commissioner of the Department for Facilities and Support Services shall put in writing the justification for his determination prior to award of the lease. This writing shall be kept on file by the department.
  5. Any lease awarded under this section shall include a thirty (30) day cancellation notice that will allow the Commonwealth the right to cancel the lease upon written notice within thirty (30) days.
  6. Any lease proposed to be awarded under this section, including all lease renewals for which the annual rental cost will exceed one hundred thousand dollars ($100,000), shall be reported to the Capital Projects and Bond Oversight Committee after drafting of the lease is completed but before execution. The report shall include:
    1. The name of the agency that will occupy the premises;
    2. The name of the lessor;
    3. The purpose and justification for the lease;
    4. The terms of the lease;
    5. An explanation of why the Finance and Administration Cabinet chose this lessor; and
    6. A survey and cost comparison of similar rental properties within the area.
  7. Within thirty (30) days after the report required in subsection (7) of this section has been submitted to the committee, the committee shall conduct its review and decide whether to approve or disapprove the proposed lease authorization. If the committee disapproves a proposed lease authorization, the secretary of the Finance and Administration Cabinet shall:
    1. Revise the proposed lease authorization to comply with the objection of the committee;
    2. Cancel the proposed lease authorization; or
    3. Determine to proceed with the proposed lease authorization disapproved by the committee.
  8. The decision made by the secretary of the Finance and Administration Cabinet under subsection (8) of this section shall be communicated to the committee in writing within thirty (30) days of the committee’s disapproval.
  9. Except when another lease term is approved by the secretary of the Finance and Administration Cabinet, the terms of the lease entered into may provide for an initial lease term beginning on a date stated and ending on June 30 in each year in which the General Assembly has convened in an even-numbered-year regular session and appropriated funds for the operation of the state government during the next ensuing biennium. The lease may grant the state successive options for the automatic renewal of the lease upon the same terms and conditions for additional renewal periods of twenty-four (24) months each, not to exceed three (3) automatic renewal periods. Any lease containing a provision for the automatic renewal of the lease after the expiration of the initial lease term shall also provide that the state may, upon written notice given to the lessor on or before April 15 of the year in which the initial or any automatic renewal term expires, elect not to exercise its option for the automatic renewal of the lease term. Subject to the agreement of the lessor, a lease in which the final automatic renewal period has expired, or will expire as of the end of the then current term, may be renewed upon the same terms and conditions, provisions of KRS 56.803 to the contrary notwithstanding.

History. Enact. Acts 2008, ch. 153, § 1, effective July 15, 2008.

Traffic Control and Vehicle Parking

56.850. Regulations for traffic control and parking on state-owned property — Enforcement powers.

Except as may otherwise be provided by law with respect to the control of real property owned by the state, used by and in the custody of any state agency or institution, the Finance and Administration Cabinet may adopt regulations for the control of vehicular and pedestrian traffic and parking of motor vehicles, bicycles or other vehicles, on, over and across the grounds appurtenant to any building or other facility owned by the state or any state agency. Such regulations may include provisions governing the use and operation of motor vehicles upon such state-owned property, including but not limited to, the establishment of speed limits, parking rules, and for the registration of motor vehicles for parking on real property of the state to which such regulations are applicable. Security officers employed by the cabinet, or by any other state agency or instrumentality authorized by the cabinet to enforce the regulations adopted by the cabinet under this section, shall have authority to remove, or cause to be removed, at the owner’s expense, any motor vehicle parked on the grounds of any state-owned building covered by such regulations, in a manner impeding or disrupting the orderly flow of traffic on such grounds or the movement thereon of an emergency vehicle, or in violation of any traffic control or parking regulation of the cabinet. Moving violations of any traffic control regulation adopted under this section shall be cited and may be prosecuted in the district court of the county in which such violation occurred. Speed limits and parking restrictions established by regulations adopted under this section shall be conspicuously posted on and around the grounds covered by such regulations.

History. Enact. Acts 1974, ch. 166, § 1; 1976 (Ex. Sess.), ch. 14, § 15, effective January 2, 1978.

Opinions of Attorney General.

This section specifically authorized the Executive Department and Finance and Administration (now Finance and Administration Cabinet) to issue regulations relating to the proper control of vehicular traffic and parking near state-owned buildings. OAG 77-213 .

Kentucky Asset/Liability Commission

56.860. Purpose of KRS 56.860 to 56.869.

The purpose of KRS 56.860 to 56.869 is to create an independent commission that will take a comprehensive view of the Commonwealth’s finances and develop policies and strategies that will seek to minimize the impact of fluctuating receipts of revenues on the budget of the Commonwealth and of fluctuating interest rates on the Commonwealth’s interest-sensitive assets and interest-sensitive liabilities.

History. Enact. Acts 1997 (1st Ex. Sess.), ch. 4, § 1, effective May 30, 1997.

56.8605. Definitions for KRS 56.860 to 56.869.

As used in KRS 56.860 to 56.869 :

  1. “Authorized project” means:
    1. Any project approved by the General Assembly and included in an enacted budget; or
    2. Any project approved by the General Assembly that is certified by the secretary of the Finance and Administration Cabinet in accordance with the provisions of KRS 56.870 , to be of a type that will independently produce revenues or will be payable from receipts of federal transportation funds that are projected by the commission to be sufficient to fully meet debt service, issuance costs, reserve fund requirements, insurance premiums, or any other expenditures necessary for financing so that no appropriation of state funds is required;
  2. “Cabinet” means the Finance and Administration Cabinet;
  3. “Commercial paper” means obligations that by their terms mature not more than three hundred sixty-six (366) days from the date of their issuance and that may be refunded;
  4. “Commission” means the Kentucky Asset/Liability Commission;
  5. “Estimated revenues” means the official revenue estimates established pursuant to KRS 48.120 on or before the dates on which tax and revenue anticipation notes are awarded to the purchaser;
  6. “Financial agreements” means interest rate swaps, options, or other agreements between two (2) parties to exchange or have the conditional right to exchange interest rate exposure from fixed rate to variable rate or from variable rate to fixed rate, or to provide other economic benefit to an issuance of notes or a portfolio of notes, or to hedge the net interest margin of the Commonwealth;
  7. “Financing agreement” means an agreement between the commission and the cabinet, or between the cabinet and a state agency, relating to the funding of projects or items associated with projects as described in KRS 56.867(3), a judgment against a state agency or the Commonwealth, or the finance or refinance of obligations owed under KRS 161.550(2) or 161.553(2). The provisions of a financing agreement shall require either the cabinet to make payments to the commission relating to the commission’s issuance of notes, or the state agency to make payments to the cabinet reimbursing the cabinet for its payments to the commission on the agency’s behalf. The obligations of the cabinet or the state agency under a financing agreement shall be contingent upon appropriations by the General Assembly to the cabinet or to the agency for the payment of those obligations;
  8. “Fixed-rate obligations” means obligations on which the interest rate remains constant to maturity;
  9. “Funding notes” means notes issued under the provisions of KRS 56.860 to 56.869 by the commission for the purpose of funding:
    1. Judgments, with a final maturity of not more than ten (10) years; and
    2. The finance or refinance of obligations owed under KRS 161.550(2) or 161.553(2);
  10. “Interest-sensitive assets” means tangible and intangible property held by the Commonwealth whose market value is dependent upon the level of interest rates;
  11. “Interest-sensitive liabilities” means interest-bearing debts or other obligations of the Commonwealth or a state agency;
  12. “Multimodal obligations” means obligations for which the time period for establishing the rate of interest may be selectively determined and altered;
  13. “Net interest margin” means the net income or expense associated with the difference between the Commonwealth’s interest-sensitive assets and interest-sensitive liabilities;
  14. “Project notes” means notes issued under the provisions of KRS 56.860 to 56.869 by the commission with a final maturity of not more than twenty (20) years for the purpose of funding authorized projects, which may include bond anticipation notes;
  15. “State agency” means any state administrative body, agency, department, or division as defined in KRS 42.005 , and set out in KRS Chapter 12, or any board, commission, institution, state university, or division exercising any function of the Commonwealth;
  16. “Tax and revenue anticipation notes” means notes that are issued under the provisions of KRS 56.860 to 56.869 by the commission with a final maturity that is no later than the last day of the fiscal year during which the tax and revenue anticipation notes are issued and that are issued in anticipation of estimated revenues to be received in that fiscal year; and
  17. “Variable-rate demand obligations” means obligations on which the rate of interest is set by reference to a predetermined index or formula, by auction, by an agent that, in the sole judgment of the commission, has the financial expertise to establish market interest rates, or by similar means.

History. Enact. Acts 1997 (1st Ex. Sess.), ch. 4, § 2, effective May 30, 1997; 2004, ch. 99, § 1, effective July 13, 2004; 2009, ch. 78, § 36, effective June 25, 2009; 2010, ch. 172, § 1, effective April 26, 2010.

Research References and Practice Aids

2020-2022 Budget Reference.

See State/Executive Branch Budget, 2021 Ky. Acts ch. 169, Pt. II, J, 7, (1) at 1129.

56.861. Kentucky Asset/Liability Commission — Membership — Status as public corporation — Selection of certain advisors — Issuance of notes.

  1. There is recognized as an independent agency of the state within the meaning of KRS Chapter 12, and as a constituted authority of the Commonwealth of Kentucky, a state and a sovereign entity within the meaning of regulations of the United States Department of Treasury, Internal Revenue Service, a Kentucky Asset/Liability Commission composed of the secretary of the Finance and Administration Cabinet, who shall be chair; the Attorney General; the State Treasurer; the executive director of the Office of the Controller; and the state budget director, or their alternates as authorized in KRS 56.865 . The vice chair shall be elected from among the membership.
  2. Any three (3) members of the commission, or their alternates, shall constitute a quorum and shall by a majority vote be authorized to transact any and all business of the commission.
  3. No member shall receive any salary, fee, or other remuneration for services as a member of the commission, but each shall be entitled to reimbursement for ordinary traveling expenses, including meals and lodging, incurred in the performance of the member’s duties.
  4. The commission shall constitute a public body corporate with perpetual succession and power in name to contract and be contracted with, sue and be sued, adopt bylaws not inconsistent with KRS 56.860 to 56.869 , have and use a corporate seal, and exercise all of the powers granted private corporations generally in KRS Chapter 271B, except as the same may be inconsistent with KRS 56.860 to 56.869 .
  5. The selection of bond counsel, senior managing underwriter, or financial advisor to the commission shall be subject to the provisions of KRS 45A.840 to 45A.879 .
  6. Notes issued pursuant to KRS 56.860 to 56.869 may be sold on a competitive or negotiated sale basis.

History. Enact. Acts 1997 (1st Ex. Sess.), ch. 4, § 3, effective May 30, 1997; 2005, ch. 85, § 84, effective June 20, 2005; 2009, ch. 12, § 31, effective June 25, 2009.

56.862. Office of Financial Management — Staffing function for commission.

The Office of Financial Management within the Office of the Controller shall serve as staff to the commission. The executive director of the Office of Financial Management shall serve as secretary to the commission. The commission shall coordinate with the Office of the Controller to ensure that the necessary financial data is made available.

History. Enact. Acts 1997 (1st Ex. Sess.), ch. 4, § 4, effective May 30, 1997; 2000, ch. 46, § 21, effective July 14, 2000; 2005, ch. 85, § 85, effective June 20, 2005.

56.863. Powers and duties of the commission.

The commission shall have the power and duty to:

  1. Maintain the records and perform the functions necessary and proper to accomplish the purposes of KRS 56.860 to 56.869 ;
  2. Promulgate administrative regulations relating to KRS 56.860 to 56.869 ;
  3. Conduct analysis to determine the impact of fluctuating receipts of revenues on the budget of the Commonwealth, fluctuating interest rates upon the interest-sensitive assets and interest-sensitive liabilities of the Commonwealth, and the resulting change in the net interest margin on the budget of the Commonwealth;
  4. Develop strategies to mitigate the impact of fluctuating receipts of revenues on the budget of the Commonwealth and of fluctuating interest rates on the Commonwealth’s interest-sensitive assets and interest-sensitive liabilities;
  5. Report its findings to the State Investment Commission at least annually to assist the State Investment Commission in developing and implementing its investment strategy. The State Investment Commission shall provide the commission with a copy of its monthly investment income report to aid the commission in developing and implementing its strategies;
  6. Issue funding notes, project notes, and tax and revenue anticipation notes or other obligations on behalf of any state agency to fund authorized projects or to satisfy judgments;
  7. Refund any funding notes, project notes, or tax and revenue anticipation notes issued under KRS 56.860 to 56.869 to achieve economic savings, to better match receipts with expenditures, or as a part of a continuing finance program;
  8. Designate individual employees or officers of the Office of Financial Management within the Office of the Controller as agents for purposes of approving the principal amount of tax and revenue anticipation notes, the interest rate, the discount, maturity date, and other relevant terms of tax and revenue anticipation notes, project notes, and funding notes or refunding notes issued within constraints established by the commission and to execute agreements, including notes and financial agreements, for the commission;
  9. Enter into financial agreements for the purpose of hedging its current or projected interest-sensitive assets and interest-sensitive liabilities to stabilize the Commonwealth’s net interest margin, as deemed necessary by the commission, subject to administrative regulations promulgated by the commission that limit the net exposure of the Commonwealth as a result of these financial agreements;
  10. Deposit net interest payments and premiums received by the commission under financial agreements into a restricted account, which shall not lapse at the end of the fiscal year but shall continue to accumulate to act as security for these financial agreements. This duty is mandatory in nature. Any accumulated funds in excess of the amount determined by the commission to be necessary to establish this security may be applied to debt service payments, net interest payments, and premiums and expenses related to interest-sensitive liabilities; and
  11. Report to the Capital Projects and Bond Oversight Committee and the Interim Joint Committee on Appropriations and Revenue on a semiannual basis, by September 30 and March 31 of each year, the following:
    1. A description of the Commonwealth’s investment and debt structure;
    2. The plan developed to mitigate the impact of fluctuating revenue receipts on the budget of the Commonwealth and fluctuating interest rates on the interest-sensitive assets and interest-sensitive liabilities of the Commonwealth, including an analysis of the impact that a change in the net interest margin would have on the budget of the Commonwealth. The report due by March 31 of each year shall reflect the strategy for January through June of the fiscal year, and the report due by September 30 shall reflect the strategy for July through December of the fiscal year;
    3. The principal amount of notes issued, redeemed, and outstanding; and a description of all financial agreements entered into during the reporting period. The report due by March 31 shall include information about agreements entered into from July through December of the fiscal year. The report due by September 30 shall include information about agreements entered into between January and June of the prior fiscal year; and
    4. A summary of gains and losses associated with financial agreements and any other cash flow strategies undertaken by the commission to mitigate the effect of fluctuating interest rates during each reporting period. The report due by March 31 shall include information about agreements and strategies entered into or undertaken from July through December of the fiscal year. The report due by September 30 shall include information about agreements and strategies entered into or undertaken from January through June of the prior fiscal year.

History. Enact. Acts 1997 (1st Ex. Sess.), ch. 4, § 5, effective May 30, 1997; 2000, ch. 46, § 22, effective July 14, 2000; 2004, ch. 99, § 2, effective July 13, 2004; 2005, ch. 85, § 86, effective June 20, 2005.

56.864. Form of financing for tax and revenue anticipation notes, project notes, and funding notes.

Tax and revenue anticipation notes, project notes, and funding notes may be variable-rate or fixed-rate obligations issued in the form of commercial paper, fixed-rate obligations, variable-rate demand obligations, multimodal obligations, commercial bank loans, or other commercially-reasonable forms of financing.

History. Enact. Acts 1997 (1st Ex. Sess.), ch. 4, § 6, effective May 30, 1997.

56.865. Designation of alternates by commission members — Scope of authority — Joint certificate concerning designation.

  1. Each member of the commission may designate, by an instrument in writing over the member’s signature and filed with the commission as a public record, an alternate with full authority to:
    1. Attend, in the absence of the appointing member for any reason, any properly-convened meeting of the commission; and
    2. Participate in the consideration of, and voting upon, business and transactions of the commission.
  2. Any designation of an alternate may, at the appointing member’s direction:
    1. Be limited upon the face of the appointing instrument to be effective only for a designated meeting or only for specified business;
    2. Be shown on the face of the appointing instrument to be on a continuing basis, but in no case for a period of more than four (4) years, whenever the appointing member is unable to attend;
    3. Be revoked by the appointing member in an instrument of like formality, similarly filed with the secretary as a public record of the commission.
  3. Any party transacting business with the commission or materially affected by the commission shall be entitled to accept and rely upon a joint certificate of the secretary of the commission and any member of the commission concerning the designation of any alternate, the time and scope of designation, and if of a continuing nature, whether the designation has been revoked, and when. The joint certificate shall be made and delivered to the party within a reasonable time after written request is made with acceptable identification of the business or transaction referred and of the requesting party’s interest.
  4. Each alternate shall be a person on the staff of the appointing member or shall be in the employ of the appointing member’s agency or department of the government of the Commonwealth.

History. Enact. Acts 1997 (1st Ex. Sess.), ch. 4, § 7, effective May 30, 1997.

56.866. Tax and revenue anticipation notes — Purpose — Sale and issuance — Report to Capital Projects and Bond Oversight Committee.

  1. As the receipt of revenues and expenditure demands of a particular fund or account of the Commonwealth render it necessary, the commission may issue tax and revenue anticipation notes to discharge expenditure demands in anticipation of estimated revenues that are required to be deposited in that fund or account during the fiscal year in which the tax and revenue anticipation notes are issued. Tax and revenue anticipation notes may be sold and issued in the manner and have terms relating to the payment of interest, principal, and premiums or discounts as market conditions warrant. Tax and revenue anticipation notes may be issued in an amount not to exceed seventy-five percent (75%) of the estimated revenues anticipated to be deposited during the fiscal year in the fund or account for which the tax and revenue anticipation notes are being issued. Tax and revenue anticipation notes, together with interest thereon, shall be repaid from revenues required to be deposited in the fund for which the tax and revenue anticipation notes were issued. Revenues to be deposited in that fund or account shall be pledged for the repayment of tax and revenue anticipation notes so long as any tax and revenue anticipation notes remain outstanding. Any lien on and security interest in taxes or revenues that may be created as provided in this section shall be prior and superior to any other lien or security interest created by law or otherwise.
  2. Tax and revenue anticipation notes may be refunded or reissued, in whole or in part.
  3. Notwithstanding any statutory provisions to the contrary, including without limitation KRS 56.870 , no approvals beyond those specifically required in this section shall be required for the issuance, sale, and delivery of the tax and revenue anticipation notes.
  4. The commission shall report the issuance of tax and revenue anticipation notes to the Capital Projects and Bond Oversight Committee within thirty (30) days of issuance.

History. Enact. Acts 1997 (1st Ex. Sess.), ch. 4, § 8, effective May 30, 1997.

56.867. Project notes — Sale and issuance — Purposes — Approval — Status of notes with respect to the Commonwealth and its political subdivisions.

  1. The commission may issue and sell project notes for authorized projects upon request by the cabinet. Project notes may be sold and issued in a manner and have terms relating to the payment of interest, principal, and premiums or discounts as market conditions warrant.
  2. Appropriations requests for payments under the financing agreements on project notes shall be made by the state agency requesting an authorized project unless the payments are to be payable from funds not subject to appropriation. Project notes, together with interest thereon, shall be repaid from payments received by the commission from the cabinet under a financing agreement. The cabinet shall enter into financing agreements with the commission for the issuance of project notes. State agencies requesting funding for an authorized project shall enter into an agreement with the cabinet for the issuance of project notes by the commission for that state agency. Agreements authorized by this section shall be either financing agreements, or alternative agreements which specify that any payments shall be made from funds that are not subject to appropriation by the General Assembly.
  3. Project notes may be issued for the following purposes:
    1. To pay any or all the costs of an authorized project for any state agency; and
    2. To refund outstanding project notes or other obligations of any state agency.
  4. Project notes shall have a maximum maturity not to exceed one hundred twenty percent (120%) of the expected useful economic life of the project as estimated by the commission, and if more than one (1) project is being financed by the project notes, then the weighted average of the expected useful economic lives shall be used.
  5. The issuance of project notes shall be subject to KRS 56.870 , to approval by the State Property and Buildings Commission, and to review by the Capital Projects and Bond Oversight Committee pursuant to KRS 45.810 .
  6. Project notes may be refunded, in whole or in part, from the proceeds of bonds or other obligations issued by any state agency authorized to issue bonds or other obligations.
  7. Project notes shall not constitute a debt of the Commonwealth or any political subdivision thereof or a pledge of the faith and credit of the Commonwealth or any political subdivision.

History. Enact. Acts 1997 (1st Ex. Sess.), ch. 4, § 9, effective May 30, 1997.

56.868. Funding notes — Purposes — Sale and issuance — Approval — Status of notes with respect to the Commonwealth and its political subdivisions.

  1. The commission may issue and sell funding notes for the purposes of funding judgments against the Commonwealth or any state agency and financing or refinancing obligations owed under KRS 161.550(2) or 161.553(2). Funding notes may be sold and issued in a manner and have terms relating to the payment of interest, principal, and premiums or discounts as market conditions warrant.
  2. Appropriations requests for payment of principal and interest on funding notes shall be made by the state agency against which a judgment has been rendered or, in the case of financing or refinancing obligations owed under KRS 161.550(2) or 161.553(2), to the Kentucky Teachers’ Retirement System. Funding notes, together with interest thereon, shall be repaid from payments received by the commission from the cabinet under a financing agreement.
  3. Funding notes may be issued for the following purposes:
    1. To pay for judgments, which shall include legal settlements, court-ordered actions against the Commonwealth or any state agency, and any part of any expense or cost incidental to legal settlements or court-ordered actions against the Commonwealth or any state agency;
    2. To finance or refinance obligations owed under KRS 161.550(2) or 161.553(2); and
    3. To refund outstanding issues of funding notes.
  4. The issuance of funding notes shall be subject to KRS 56.870 , to approval by the State Property and Buildings Commission, and to review by the Capital Projects and Bond Oversight Committee pursuant to KRS 45.810 .
  5. The cabinet, in providing for the expenditure of funds for any of the purposes mentioned in this section, may provide by a financing agreement with the state agency so affected for the funding of the Commonwealth’s or that state agency’s judgment, and the state agency so affected is authorized to enter into a financing agreement with the cabinet for that purpose.
  6. Funding notes shall not constitute a debt of the Commonwealth or any political subdivision thereof or a pledge of the faith and credit of the Commonwealth or any political subdivision, but the notes shall be payable solely from payments received under the financing agreement relating to the funding notes.

History. Enact. Acts 1997 (1st Ex. Sess.), ch. 4, § 10, effective May 30, 1997; 2010, ch. 172, § 2, effective April 26, 2010.

56.869. Tax exemptions for notes issued by the commission — Negotiability of notes.

Interest on all funding notes, project notes, and tax and revenue anticipation notes issued by the commission shall be exempt from income taxation and the funding notes, project notes, and tax and revenue anticipation notes shall be exempt from ad valorem taxation by the Commonwealth and its political subdivisions. All funding notes, project notes, and tax and revenue anticipation notes issued pursuant to KRS 56.860 to 56.869 shall be negotiable instruments.

History. Enact. Acts 1997 (1st Ex. Sess.), ch. 4, § 11, effective May 30, 1997.

Legislative Approval of State Fiscal Obligations

56.870. Approval of General Assembly required for certain state fiscal obligations — Statement for inclusion on bonds and notes and related materials on Commonwealth’s involvement.

  1. Notwithstanding any statutory provisions to the contrary, prior to the issuance and sale of any definitive bonds or temporary bonds, or the securing of any interim financing through bond anticipation notes, loan agreements, or by any other means, each agency, authority, board, corporation, cabinet, commission, or any other agency or instrumentality of the Commonwealth shall first obtain approval of financing from the General Assembly, sitting in regular or special session. This approval shall be evidenced by the adoption by the General Assembly of a specific act or the adoption by the General Assembly of the biennial branch budget bill which specifies the purposes for the financing.
  2. The biennial branch budget bill shall also establish a ceiling for revenue bonds which require a general fund or road fund appropriation to retire.
  3. The provisions of subsection (1) of this section shall not be applicable to the financing of any project in any case where the project for which financing is proposed is certified by the secretary of the Finance and Administration Cabinet to be of a type that will independently produce revenues sufficient to fully meet debt service, issuance costs, reserve fund requirements, insurance premiums, and any other expenditures necessary for financing so that no appropriation of state funds will be required. Repayments of revolving funds established with bond issues for which debt service, issuance costs, reserve fund requirements, insurance premiums, or any other expenditures associated with the issuance of the bonds are appropriated by the General Assembly shall not be deemed independently produced revenue. This certification shall be made in writing by the secretary of the Finance and Administration Cabinet to the statutory head of the issuing agency or authority with a copy to the Governor and the Legislative Research Commission.
  4. The following statement shall appear on all bonds or notes and all prospectuses offering statements or related materials used in conjunction with the sale of bonds or notes for which financing is certified in accordance with the provisions of subsection (3) of this section: “Kentucky’s name is on these bonds (or notes) for the benefit and convenience of other entities within the state. However, the only security which is pledged for the bonds (or notes) is the independent revenues and assets from the project. The General Assembly does not intend to appropriate any state funds to fulfill the financial obligation represented by the bonds (or notes).”

History. Enact. Acts 1980, ch. 96, § 1, effective July 15, 1980; 1982, ch. 450, § 62, effective July 1, 1983; 1990, ch. 507, § 19, effective July 13, 1990; 1992, ch. 105, § 53, effective July 14, 1992; 1992, ch. 295, § 2, effective July 14, 1992; 1994, ch. 53, § 1, effective July 15, 1994.

Opinions of Attorney General.

Although legislative approval of the fiscal obligations created by the issuance, by a “child” corporation of the Kentucky Housing Corporation, of housing construction loan notes and revenue bonds, would not normally be necessary under subsection (3) of this section because no appropriations are involved, the specific debt ceiling imposed upon the Kentucky Housing Authority by KRS 198A.090 would exempt the “child” corporation from the exclusion of this section since KRS 56.871 provides such exemption where a debt ceiling or specific authorization for debt service has been authorized by the General Assembly. OAG 81-242 .

This section was intended to embrace actual state fiscal obligations, and is inapplicable to issuance of industrial revenue bonds by Kentucky Development Finance Authority for benefit of corporation which desired to finance new equipment. OAG 83-453 .

The Development Finance Authority could issue bonds, without approval of the General Assembly, to generate a pool of funds to be lent to qualified businesses for various projects, using current proceeds from past loans to leverage the bond issue. OAG 89-3 .

56.871. Issuance and sale of certain bonds or notes exempt from provisions of KRS 56.870 to 56.874.

In any case in which the General Assembly has authorized a debt ceiling or a specific appropriation for debt service for a particular agency, authority, board, cabinet, commission, corporation, or other entity of the Commonwealth of Kentucky, the issuance and sale of definitive bonds or temporary bonds or notes necessary and sufficient to attain such debt ceiling or a specific appropriation for debt service shall be exempt from the provisions of KRS 56.870 to 56.874 .

History. Enact. Acts 1980, ch. 96, § 2, effective July 15, 1980.

Opinions of Attorney General.

Although legislative approval of the fiscal obligations created by the issuance, by a “child” corporation of the Kentucky Housing Corporation, of housing construction loan notes and revenue bonds, would not normally be necessary under subsection (3) of KRS 56.870 because no appropriations are involved, the specific debt ceiling imposed upon the Kentucky Housing Authority by KRS 198A.090 would exempt the “child” corporation from the exclusion of KRS 56.870 since this section provides such exemption where a debt ceiling or specific authorization for debt service has been authorized by the General Assembly. OAG 81-242 .

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.

History. Enact. Acts 1980, ch. 96, § 3, effective July 15, 1980; 1986, ch. 452, § 1, effective July 15, 1986.

Opinions of Attorney General.

Under KRS 58.050 and subsection (2) of this section the costs of issuing bonds, inclusive of bond discount, capitalized interest, and a debt service reserve, are in fact and as a matter of law proper “costs of issuance” of such bonds, to be added to the authorized level of a revenue bond financed project (which construction project costs are delineated in capital construction sections of the biennial appropriations and budget report) in arriving at the authorized financing of such project. The power to include such financing costs in the total bond package is an implied power of the State Property and Buildings Commission in issuing revenue bonds under KRS 56.450(4); this implied power is clearly and inevitably necessary in order that the commission may carry out its express power of issuing revenue bonds. OAG 82-583 .

56.873. Rating of proposed revenue bonds required.

Each proposed revenue bond shall be rated by Moody’s Investors Service, Inc. or an equivalent bond rating agency. No revenue bond issued may be sold that does not receive a Moody’s rating of at least A or the equivalent rating by another qualified bond rating agency.

History. Enact. Acts 1980, ch. 96, § 4, effective July 15, 1980.

Opinions of Attorney General.

The provisions of this section do not apply to pollution control and industrial development issues of the Kentucky Pollution Abatement Authority and the Kentucky Development Finance Authority, in cases where the bonds do not constitute a financial obligation, either direct or indirect, of such authorities, but are payable solely and only from private sources and where, consequently, no appropriation of state funds will or can ever be required. OAG 80-591 .

Even though housing bond revenues are required to go into the State Treasury, subject to payment out to the trustee for sinking fund purposes, this section has no application to university housing revenue bonds, since the act (ch. 96, 1980) requires legislative approval only where state general fund expenditures are involved. OAG 80-592 .

56.874. Contracts with federal government for flood control projects requiring General Assembly approval.

Notwithstanding any statutory provision to the contrary, no individual, agency, authority, board, cabinet, commission, corporation, or other entity of, or representing the Commonwealth of Kentucky shall enter into any contract with any instrumentality of the federal government for the acquisition or construction of any flood control project, when the satisfaction of said contract requires, or could require, the appropriation of state funds not yet appropriated, without first obtaining approval of the General Assembly sitting in regular or special session.

History. Enact. Acts 1980, ch. 96, § 5, effective July 15, 1980.

Penalties

56.990. Penalties.

  1. Any person who violates any of the provisions of KRS 56.250 shall be fined not less than fifty dollars ($50) nor more than five hundred dollars ($500) for each offense.
  2. Any person who commits a moving traffic violation of any regulation of the Finance and Administration Cabinet governing the operation and use of motor vehicles on the grounds of a state-owned building, shall upon conviction be fined not less than two dollars ($2) nor more than fifteen dollars ($15); provided, however, that if such person is found guilty of violating any provision of such regulation for which the mandatory or discretionary revocation of drivers’ licenses is prescribed by KRS 186.560 and KRS 186.570 , then the penalty for such violation shall be the same as that prescribed by the law applicable to such offense.
    1. Any individual who willfully violates any of the provisions of KRS 56.8181 shall be guilty of a felony and shall be punished by a fine of not less than five thousand dollars ($5,000) nor more than ten thousand dollars ($10,000), or by imprisonment in the penitentiary for not less than one (1) year nor more than five (5) years, or both. (3) (a) Any individual who willfully violates any of the provisions of KRS 56.8181 shall be guilty of a felony and shall be punished by a fine of not less than five thousand dollars ($5,000) nor more than ten thousand dollars ($10,000), or by imprisonment in the penitentiary for not less than one (1) year nor more than five (5) years, or both.
    2. Any firm, corporation, or association which willfully violates any of the provisions of KRS 56.8181 shall be fined not less than ten thousand dollars ($10,000) nor more than twenty thousand dollars ($20,000). The assessment of a fine under this paragraph shall not prevent the punishment of an individual under paragraph (a) of this subsection.
  3. Any individual, including any employee or official of the Commonwealth of Kentucky, who willfully violates a provision of KRS 56.800 to 56.823 , other than one found in KRS 56.8181 , shall be punished by a fine of not more than one thousand dollars ($1,000), or by imprisonment in the penitentiary for not more than one (1) year, or both.
  4. Any employee or official of the Commonwealth of Kentucky who shall willfully take, receive, or offer to take or receive, either directly or indirectly, anything of value, as an inducement, or intended inducement, in the awarding of a state lease pursuant to KRS 56.800 to 56.823 , shall be guilty of a felony and shall be punished by a fine not to exceed five thousand dollars ($5,000), or imprisonment in the penitentiary for not less than one (1) year nor more than ten (10) years, or both.
    1. Any individual willfully offering to make, pay, or give, either directly or indirectly, anything of value, as an inducement, or intended inducement, in the awarding of a lease pursuant to KRS 56.800 to 56.823 , to any employee or official of the Commonwealth of Kentucky, shall be guilty of a felony and shall be punished by a fine not to exceed five thousand dollars ($5,000) or by imprisonment in the penitentiary for not less than one (1) year nor more than ten (10) years, or both. (6) (a) Any individual willfully offering to make, pay, or give, either directly or indirectly, anything of value, as an inducement, or intended inducement, in the awarding of a lease pursuant to KRS 56.800 to 56.823 , to any employee or official of the Commonwealth of Kentucky, shall be guilty of a felony and shall be punished by a fine not to exceed five thousand dollars ($5,000) or by imprisonment in the penitentiary for not less than one (1) year nor more than ten (10) years, or both.
    2. Any firm, corporation, or association willfully offering to make, pay, or give, either directly or indirectly, anything of value, as an inducement, or intended inducement, in the awarding of a lease, to any employee or official of the Commonwealth of Kentucky, shall be punished by a fine of not less than ten thousand dollars ($10,000) nor more than twenty thousand dollars ($20,000). The assessment of a fine under this paragraph shall not prevent the punishment of an individual under paragraph (a) of this subsection.
    1. Any person who is convicted of or enters a guilty plea for a crime established in subsections (3) to (6) of this section shall be subject to the penalty established in paragraph (b) of this subsection in addition to the penalties established in those subsections. (7) (a) Any person who is convicted of or enters a guilty plea for a crime established in subsections (3) to (6) of this section shall be subject to the penalty established in paragraph (b) of this subsection in addition to the penalties established in those subsections.
    2. For a period of five (5) years from the date of a person’s conviction or the entering of a person’s guilty plea, the Commonwealth shall not rent real property from a firm that employs the person or in which the person has any ownership interest.

History. 4705a: amend. Acts 1974, ch. 166, § 2; 1992, ch. 54, § 14, effective July 14, 1992; 1998, ch. 539, § 5, effective July 15, 1998.

CHAPTER 57 Public Printing and Distribution of Public Documents

57.010. Superintendent of Public Printing; appointment, qualifications. [Repealed.]

Compiler’s Notes.

This section (3953a-1, 3953a-2: amend. Acts 1946, ch. 27, § 35) was repealed by Acts 1964, ch. 176, § 16.

57.011. State printing done under contract — Classes of printing.

The printing and binding of the laws, journals, and agency reports, and all other such public printing and binding shall be performed under contract. Printing contracts shall be divided into two (2) classes and defined as follows:

  1. First-class printing is the printing of all bills for the General Assembly together with such matters as are ordered by either or both houses to be printed in bill form and the printing and binding of the journals of the two (2) houses, printing and binding of the volumes of public documents and of the general and local laws and joint resolutions; the printing and binding of all reports, documents and other matters bound in book or pamphlet form and all miscellaneous printing and binding necessary for the several documents not otherwise provided for in KRS 57.011 to 57.151 .
  2. Second-class printing is lithographic or offset printing and engraving and embossing.

History. Enact. Acts 1964, ch. 176, § 2.

Research References and Practice Aids

Cross-References.

Constitutional provisions as to public printing, Ky. Const., §§ 40, 247.

Election ballots, printing of, KRS 117.145 .

Highways, Department of, printing and dissemination of information concerning highways not controlled by this chapter, KRS 176.055 .

Index of vital records, KRS 213.031 .

Journals, house and senate to publish, Ky. Const., § 40.

Libraries and Archives, Department for, may issue printed material, KRS 171.140 .

Public printing and binding to be let to lowest bidder, Ky. Const., § 247.

Record books and supplies of circuit clerks, procurement, KRS 30A.080 .

State law library, sale, exchange or other disposal of books by state law librarian, KRS 27A.210 .

Unemployment Insurance Commission, reports, rules, and unemployment compensation act to be published, KRS 341.150 .

57.020. Duties of Superintendent of Public Printing; contracts for work not covered by regular contracts; qualification to perform work; bond of printer. [Repealed.]

Compiler’s Notes.

This section (3953a-2, 3953a-3: amend. Acts 1946, ch. 136, § 1; 1954, ch. 26, § 1) was repealed by Acts 1964, ch. 176, § 16.

57.021. Printing by state agency — Restrictions.

In the event that the Commonwealth or any of its agencies has a printing or duplicating plant or letter press, it may print any class of printing described in KRS 57.011 for the use of it or any other state agencies with the approval of the Finance and Administration Cabinet. Such state owned facilities shall not print, under contract or otherwise, for agencies, persons, entities, or other groups or associations outside of state government.

History. Enact. Acts 1964, ch. 176, § 3.

NOTES TO DECISIONS

1.Minor Printing Services.

Ky. Const., § 247 did not confer upon the printing contractor the right to do all of the state’s printing and binding. The doing of multigraphing and minor printing services by state agencies was not violative of the printing contract nor of Ky. Const., § 247. State Journal Co. v. Commonwealth, 289 Ky. 808 , 160 S.W.2d 145, 1942 Ky. LEXIS 636 ( Ky. 1942 ) (decided under prior law).

Opinions of Attorney General.

The discretion given to the director of purchases under KRS 57.375 relates exclusively to public books and the “property of ” requirement applies automatically to all documents where the cost of printing is paid from state funds and where they are distributed without charge. OAG 66-641 .

57.030. Classes of printing, binding, printing paper, stationery and supplies. [Repealed.]

Compiler’s Notes.

This section (3956: amend. Acts 1950, ch. 182, § 1) was repealed by Acts 1964, ch. 176, § 16.

57.031. State printing under control of Finance and Administration Cabinet — Qualifications of buyer. [Repealed.]

Compiler’s Notes.

This section (Enact. Acts 1964, ch. 176, § 1) was repealed by Acts 1997 (Ex. Sess.), ch. 4, § 44, effective May 30, 1997.

57.035. State use of soybean oil printing ink — When cost effective.

Recognizing that ink produced from soybean oil is biodegradable with no known negative environmental impact, and that the state’s farmers are economically distressed and need additional income, it is the public policy of the Commonwealth of Kentucky that state agencies shall use printing ink produced from soybean oil if the secretary of the Finance and Administration Cabinet determines that it is cost effective. The secretary shall make the determination of cost effectiveness each year. If the secretary determines the use of soybean oil ink is cost effective, he shall implement procedures requiring its use for printing.

History. Enact. Acts 1988, ch. 102, § 1, effective July 15, 1988.

57.040. Contracts; who may bid for. [Repealed.]

Compiler’s Notes.

This section (3954, 3972, 3984: amend. Acts 1950, ch. 182, § 2) was repealed by Acts 1964, ch. 176, § 16.

57.041. Requisitions for printing. [Repealed.]

Compiler’s Notes.

This section (Enact. Acts 1964, ch. 176, § 6) was repealed by Acts 1997 (Ex. Sess.), ch. 4, § 44, effective May 30, 1997.

57.045. Printing by state educational institutions for own use. [Repealed.]

Compiler’s Notes.

This section (Enact. Acts 1946, ch. 136, § 2; 1952, ch. 170, § 1, effective June 19, 1952) was repealed by Acts 1964, ch. 176, § 16.

57.050. Printing work must be approved by Department of Finance. [Repealed.]

Compiler’s Notes.

This section (3956a, 4618-43, 4618-47) was repealed by Acts 1964, ch. 176, § 16.

57.051. Printing specifications. [Repealed.]

Compiler’s Notes.

This section (Enact. Acts 1964, ch. 176, § 7; 1990, ch. 496, § 36, effective July 13, 1990) was repealed by Acts 1997 (Ex. Sess.), ch. 4, § 44, effective May 30, 1997.

57.060. Paper and supplies, by whom furnished. [Repealed.]

Compiler’s Notes.

This section (3955, 3976, 3981: amend. Acts 1950, ch. 182, § 2; 1952, ch. 170, § 2; 1964, ch. 103) was repealed by Acts 1964, ch. 176, § 16.

57.061. Advertisement for bids. [Repealed.]

Compiler’s Notes.

This section (Enact. Acts 1964, ch. 176, § 8; 1990, ch. 496, § 37, effective July 13, 1990) was repealed by Acts 1997 (Ex. Sess.), ch. 4, § 44, effective May 30, 1997.

57.070. Advertisement for bids. [Repealed.]

Compiler’s Notes.

This section (3957: amend. Acts 1950, ch. 182, § 4) was repealed by Acts 1964, ch. 176, § 16.

57.071. Bond of bidders — Condition. [Repealed.]

Compiler’s Notes.

This section (Enact. Acts 1964, ch. 176, § 10) was repealed by Acts 1997 (Ex. Sess.), ch. 4, § 44, effective May 30, 1997.

57.080. Samples of paper to be used. [Repealed.]

Compiler’s Notes.

This section (3958a, 3975) was repealed by Acts 1952, ch. 170, § 3.

57.081. Restraint of competitive bidding. [Repealed.]

Compiler’s Notes.

This section (Enact. Acts 1964, ch. 176, § 13) was repealed by Acts 1997 (Ex. Sess.), ch. 4, § 44, effective May 30, 1997.

57.090. Bids; sealing, addressing, delivery, preservation. [Repealed.]

Compiler’s Notes.

This section (3965: amend. Acts 1946, ch. 136, § 3; 1952, ch. 170, § 4) was repealed by Acts 1964, ch. 176, § 16.

57.091. Contracts approved by Governor.

All work under the provisions of KRS 57.011 shall be performed under contract, to be awarded to the lowest responsible bidder, provided, however, that approval by the Governor shall be required for each award of contract. One (1) or more contracts may be awarded for each class of printing. The number of contracts required shall be as determined by the Finance and Administration Cabinet to be in the best interest of the Commonwealth. The determination of content for each award and the period thereof shall be made by the secretary of the Finance and Administration Cabinet. No contract shall be awarded to a member of the General Assembly or to any officer of the Commonwealth who is in any way interested in any such contract.

History. Enact. Acts 1964, ch. 176, § 9; 1974, ch. 74, Art. II, § 9(1); 1978, ch. 110, § 99, effective January 1, 1979.

Research References and Practice Aids

Cross-References.

Governor, approval of contracts, Ky. Const., § 247.

57.100. Bond of bidder. [Repealed.]

Compiler’s Notes.

This section (3959, 3960: amend. Acts 1946, ch. 136, § 4) was repealed by Acts 1964, ch. 176, § 16.

57.101. Execution of orders, required when — Transportation costs, payment.

  1. All successful bidders under KRS 57.011 to 57.151 shall promptly execute all orders issued to them by the Finance and Administration Cabinet. The Acts and the Journals of the General Assembly shall be printed and bound and delivered respectively within sixty (60) days and one hundred eighty (180) days after the end of the session to the Legislative Research Commission for distribution, under the penalty of forfeiture of the bond of the contractors. The Finance and Administration Cabinet may on good cause shown by the contractors, extend the time for not more than thirty (30) days for executing any work.
  2. All transportation of paper, copy, proof or printed sheets, and finished work shall be paid for by the contractor.

History. Enact. Acts 1964, ch. 176, § 11.

NOTES TO DECISIONS

1.Completion of Work.

Contractor might have completed, after expiration of his contract, all work begun in good faith prior to said expiration. Geo. G. Fetter Printing Co. v. Courier-Journal Job Printing Co., 104 Ky. 381 , 47 S.W. 241, 20 Ky. L. Rptr. 614 , 1898 Ky. LEXIS 166 ( Ky. 1898 ) (decided under prior law).

57.110. Contract, how awarded; proof of adequate equipment. [Repealed.]

Compiler’s Notes.

This section (3958, 3960, 3961, 3962: amend. Acts 1946, ch. 136, § 5; 1962, ch. 210, § 9) was repealed by Acts 1964, ch. 176, § 16.

57.111. Paper furnished by the printer — Bills for paper or stationery — Form. [Repealed.]

Compiler’s Notes.

This section (Enact. Acts 1964, ch. 176, § 4(1) to (3); 1966, ch. 203, § 1; 1990, ch. 496, § 38, effective July 13, 1990) was repealed by Acts 1997 (Ex. Sess.), ch. 4, § 44, effective May 30, 1997.

57.120. Cancellation of contract. [Repealed.]

Compiler’s Notes.

This section (3963) was repealed by Acts 1964, ch. 176, § 16.

57.121. Rejection of work — Reprinting. [Repealed.]

Compiler’s Notes.

This section (Enact. Acts 1964, ch. 176, § 4(4)) was repealed by Acts 1997 (Ex. Sess.), ch. 4, § 44, effective May 30, 1997.

57.130. Bribing of bidder. [Repealed.]

Compiler’s Notes.

This section (3964) was repealed by Acts 1964, ch. 176, § 16.

57.131. Title to plates and art work. [Repealed.]

Compiler’s Notes.

This section (Enacts 1964, ch. 176, § 4(5)) was repealed by Acts 1997 (Ex. Sess.), ch. 4, § 44, effective May 30, 1997.

57.140. Number of copies printed and bound. [Repealed.]

Compiler’s Notes.

This section (36, 834, 3956b-2, 3956b-3, 3970 to 3972, 8384-20: amend. Acts 1950, ch. 58; 1950, ch. 156, § 1; 1954, ch. 26, § 2) was repealed by Acts 1964, ch. 176, § 16.

57.141. Cancellation of contract — Grounds. [Repealed.]

Compiler’s Notes.

This section (Enact. Acts 1964, ch. 176, § 12; 1980, ch. 114, § 8, effective July 15, 1980) was repealed by Acts 1997 (Ex. Sess.), ch. 4, § 44, effective May 30, 1997.

57.150. Specifications for printing and binding; amount of work, how estimated. [Repealed.]

Compiler’s Notes.

This section (3967 to 3969: amend. Acts 1946, ch. 146, § 3; 1950, ch. 156, § 8; 1956, ch. 33, § 1) was repealed by Acts 1964, ch. 176, § 16.

57.151. Legislative Research Commission to provide copy and indexes of legislative acts.

  1. The Legislative Research Commission shall furnish a correct copy of the acts and resolutions and the journals of the General Assembly to the printer. The clerk of each house of the General Assembly shall promptly furnish to the printer copies of bills, reports, resolutions, and other papers.
  2. The Legislative Research Commission shall prepare indexes to the acts of the General Assembly and the journals of the Senate and House and have the acts proofread by the enrolled bills. The Commission shall refer to the section number affected for any section of the Kentucky Revised Statutes or of the Rules of Practice amended or repealed by any act. The printing rate shall be established in the contract for printing the basic documents.

History. Enact. Acts 1964, ch. 176, §§ 14, 15; 1966, ch. 255, § 62.

NOTES TO DECISIONS

1.Vetoed Act.

Publication of a vetoed act might have been enjoined. Cammack v. Harris, 234 Ky. 846 , 29 S.W.2d 567, 1930 Ky. LEXIS 283 ( Ky. 1930 ) (decided under prior law).

Research References and Practice Aids

Cross-References.

Legislative databases, KRS 7.500 et seq.

57.160. Manuscript of laws and legislative documents to be furnished to printer. [Repealed.]

Compiler’s Notes.

This section (3987: amend. Acts 1954, ch. 42, § 12; 1956, ch. 1, § 7) was repealed by Acts 1964, ch. 176, § 16.

57.170. Indexes and sidenotes to Acts and journals. [Repealed.]

Compiler’s Notes.

This section (2438, 3989) was repealed by Acts 1964, ch. 176, § 16.

57.180. Time in which work to be completed. [Repealed.]

Compiler’s Notes.

This section (3988: amend. Acts 1952, ch. 170, § 5, effective June 19, 1952; 1954, ch. 26, § 3; 1954, ch. 42, § 13) was repealed by Acts 1964, ch. 176, § 16.

57.190. Copy of work and account filed with Secretary of State. [Repealed.]

Compiler’s Notes.

This section (3973) was repealed by Acts 1946, ch. 136, § 6.

57.200. Itemized statement of contractor; payment. [Repealed.]

Compiler’s Notes.

This section (3974) was repealed by Acts 1964, ch. 176, § 16.

57.210. Contractor to pay for transportation if work not done at capital. [Repealed.]

Compiler’s Notes.

This section (3966) was repealed by Acts 1964, ch. 176, § 16.

57.220. Newspaper advertisements; where published; rates. [Repealed.]

Compiler’s Notes.

This section (3977) was repealed by Acts 1958, ch. 42, § 29.

57.230. Composition; rates for. [Repealed.]

Compiler’s Notes.

This section (3978, 3980: amend. Acts 1946, ch. 136, § 7; 1950, ch. 59) was repealed by Acts 1964, ch. 176, § 16.

57.240. Presswork and folding; rates. [Repealed.]

Compiler’s Notes.

This section (3979, 3980: amend. Acts 1946, ch. 136, § 8) was repealed by Acts 1964, ch. 176, § 16.

57.250. Binding (including sewing); rates. [Repealed.]

Compiler’s Notes.

This section (3981: amend. Acts 1946, ch. 136, § 9; 1952, ch. 170, § 6; 1954, ch. 26, § 5) was repealed by Acts 1964, ch. 176, § 16.

57.260. Ruling and binding blank book work; rates. [Repealed.]

Compiler’s Notes.

This section (3982) was repealed by Acts 1952, ch. 170, § 7.

57.270. Biennial report of Department of Finance to General Assembly. [Repealed.]

Compiler’s Notes.

This section (3986) was repealed by Acts 1964, ch. 176, § 16.

57.280. Biennial report of the Finance and Administration Cabinet to General Assembly. [Repealed.]

Compiler’s Notes.

This section (3990) was repealed by Acts 1997 (Ex. Sess.), ch. 4, § 44, effective May 30, 1997.

57.285. Printing for political subdivisions to be done within such subdivision. [Repealed]

History. Enact. Acts 1946, ch. 133; repealed by 2019 ch. 44, § 35, effective June 27, 2019.

57.290. Legislative Research Commission to distribute public books.

The acts of the General Assembly and the journals of each house shall, upon being printed, be delivered to the Legislative Research Commission, and distributed by it. The Commission shall prepare for each county a package containing the acts and journals, with a list of the persons entitled to receive them, and send one (1) package in the most inexpensive manner to the circuit clerk of each county, who shall distribute the books to those entitled to them.

History. 2433, 2444: amend. Acts 1950, ch. 156, § 2; 1954, ch. 42, § 14.

57.300. Acts of General Assembly, who entitled to copies.

The following officers and libraries are entitled free of charge to copies of the Acts of the General Assembly, as they are published: members of the General Assembly that passed the acts, the Governor, the State Treasurer, Secretary of State, Auditor of Public Accounts, justices and judges of the Court of Justice, Commonwealth’s attorneys, and county attorneys, one (1) copy each; the Attorney General, four (4) copies; the Legislative Research Commission, for the use of the Senate, five (5) copies, and for the use of the House of Representatives, ten (10) copies; the State Law Library, nine (9) copies; the judge of each federal court for Kentucky, one (1) copy; the United States Court of Appeals at Cincinnati, one (1) copy; the Supreme Court of the United States, one (1) copy; the law library of each county, one (1) copy; the law library of the University of Kentucky, three (3) copies; the law library of the University of Louisville, three (3) copies; the Northern Kentucky University Chase Law School library, three (3) copies; the Library of Congress, five (5) copies; the Kentucky Historical Society, one (1) copy; the Department for Libraries and Archives, two (2) copies; and each of the state universities in Kentucky, two (2) copies.

History. 2421, 2422, 2426a, 2426b: amend. Acts 1944, ch. 150, § 1; 1954, ch. 42, § 15; 1968, ch. 152, § 23; 1976, ch. 62, § 53; 1982, ch. 316, § 2, effective July 15, 1982.

Research References and Practice Aids

Cross-References.

Cooperative library services with other states, KRS 171.221 .

57.310. House and Senate journals, who entitled to copies — Affirmative response required prior to receipt.

  1. Subject to subsections (2) and (3) of this section, the following officers and libraries are entitled free of charge to copies of the journals of each house of the General Assembly, as they are published: each member of the General Assembly, one (1) copy for the session in which he served; the law library of each county, one (1) copy; the Governor and Secretary of State, one (1) copy each; the State Law Library, two (2) copies; the Legislative Research Commission, five (5) copies for the use of the Senate and five (5) copies for the use of the House of Representatives; the law library of the University of Kentucky, the law library of the University of Louisville, the Library of Congress, the Kentucky Historical Society, the Department for Libraries and Archives, and each of the state universities in Kentucky, two (2) copies each.
  2. Prior to printing the journals, the Legislative Research Commission shall inquire of those entitled to a free copy of the journals under subsection (1) of this section:
    1. Whether the officer or library wishes to receive the free copy or copies to which entitled; and
    2. If the officer or library desires to receive a free copy, whether the officer or library prefers to receive it in print or electronic format.
  3. Unless those entitled to a free copy of the journals respond affirmatively to the inquiry required by subsection (2) of this section, they shall not receive a free copy or copies of the journals.

History. 2425, 2426a, 2426b: amend. Acts 1944, ch. 150, § 2; 1954, ch. 42, § 16; 1968, ch. 152, § 24; 1982, ch. 316, § 3, effective July 15, 1982; 2003, ch. 132, § 1, effective June 24, 2003.

57.320. Purchase and distribution of bound volumes and advance sheets of opinions of Supreme Court and Court of Appeals.

The state law librarian, under direction of the Supreme Court, shall purchase bound volumes and advance sheets of the opinions of the Supreme Court and Court of Appeals and furnish them for the use of the Supreme Court, Court of Appeals, each county law library, and each judge of a Circuit Court.

History. 2426, 2426a, 2426b: amend. Acts 1950, ch. 156, § 3; 1954, ch. 42, § 17; 1976 (Ex. Sess.), ch. 14, § 16, effective January 2, 1978.

57.330. Acts of Congress, who entitled to copies of.

Each member of the General Assembly, each judge and each clerk of a state court, the Attorney General, each Commonwealth’s attorney, each county attorney, the Legislative Research Commission, the Kentucky Historical Society, and the State Law Library are each entitled, upon requesting it, to one (1) copy of the Acts of Congress sent to the state for distribution.

History. 2428: amend. Acts 1954, ch. 42, § 18.

57.340. Statutes, rules, and compilation of administrative regulations, how furnished to Circuit or District Judges.

On a certificate from any Circuit Judge or District Judge that he does not have a copy of the latest revision of the statutes and annotations thereto, rules of practice and procedure, or compilation of administrative regulations, or that his copy has been lost, mutilated, or torn, the state law librarian shall furnish to the judge a copy of the publication needed and shall furnish from time to time supplements issued to these publications. The law librarian shall certify the cost of such books to the Finance and Administration Cabinet, which shall issue its warrant on the State Treasurer for the amount, payable out of funds appropriated for that purpose.

History. 2432: amend. Acts 1954, ch. 42, § 19; 1956, ch. 236; 1968, ch. 152, § 25; 1974, ch. 74, Art. II, § 9(1); 1978, ch. 35, § 1, effective June 17, 1978.

57.350. Burning of courthouse — Books replaced free of charge.

If any county courthouse containing the law library is destroyed by fire, the Legislative Research Commission shall, upon receipt of the affidavit of the county judge/executive showing the loss, furnish to the county acts of the General Assembly and journals of the House of Representatives and Senate, and the state law librarian shall furnish bound volumes of the opinions of the Court of Justice, if available.

History. 2432a: amend. Acts 1950, ch. 156, § 4; 1954, ch. 42, § 20; 1976, ch. 62, § 54.

Research References and Practice Aids

Cross-References.

County law library, trustees of may purchase books to replace those lost, mutilated or destroyed, KRS 172.130 .

57.360. Custody and care of public books.

Any public officer, except a member of the General Assembly, who receives any books from the state shall hold them as public property and as an appendage to his office, and deliver them to his successor. Each officer shall take good care of the books delivered to him.

History. 2423, 2424.

Research References and Practice Aids

Cross-References.

Books sent to county officials to be part of county law library, KRS 172.100 , 172.110 , 172.170 .

57.370. State-owned books to be marked for identification.

When deemed by the Finance and Administration Cabinet to be desirable or necessary, consistent with all relevant factors concerning acquisition and use, all public books of the state shall be designated as public property by placing on the title page, “Property of the State of Kentucky,” and the binder shall press those words on the cover. The words, “Property of the Commonwealth of Kentucky,” may also be used for such purpose. Each officer who is charged with possession of books acquired under this chapter shall write or otherwise designate in or on each book the name of the office to which it belongs, if such books are to be retained permanently by such officer or his agency.

History. 2427: amend. Acts 1966, ch. 129, § 1.

57.375. Agency preparing documents to be identified — State expense noted when.

All public documents printed under this chapter shall indicate the office of the unit preparing the document; in addition, any document distributed without charge shall indicate that the cost of printing was paid from state funds.

History. Enact. Acts 1966, ch. 129, § 2.

Opinions of Attorney General.

The discretion given to the director of purchases under this section relates exclusively to public books and the “property of” requirement applies automatically to all documents where the cost of printing is paid from state funds and where they are distributed without charge. OAG 66-641 .

The word “distributed” does not apply to documents where the distribution is required by law. OAG 66-641 .

Travel folders, highway maps and other documents which are voluntarily distributed to members of the public should contain the required statement. OAG 66-641 .

Local governments and agencies engaged in a tourist promotion program and receiving state matching funds from the Department of Public Information under its cooperative advertising program need not indicate on their printed promotional materials that printing costs have been paid in whole or in part from state funds. OAG 77-25 .

57.380. Clerks to account for books — Liability for loss. [Repealed.]

Compiler’s Notes.

This section (2429: amend. Acts 1954, ch. 42, § 21) was repealed by Acts 1978, ch. 35, § 2, effective June 17, 1978.

57.390. Unsolicited mailings by state agencies — Publications to be submitted to Legislative Research Commission and General Assembly online.

  1. As used in this section:
    1. “Publication” means any annual or biennial report, book, pamphlet, newsletter, bulletin, map, calendar, or brochure, of a documentary or informational nature, whether or not required by statute. The term does not include news releases; notices, agendas, or minutes of meetings; or budgets and budget recommendations; and
    2. “State agency” means any executive branch organizational unit or administrative body, as defined in KRS 12.010 , or any agency of the legislative branch of state government.
  2. A state agency shall not mail a publication to any person who has not requested a copy of the publication unless the unsolicited mailing is:
    1. Used to market or advertise an agency, event, site, program, or service; or
    2. Determined, in writing, to be essential to the performance of the agency’s statutory mission by:
      1. The Governor, if the state agency is in the executive branch; or
      2. The General Assembly or the Legislative Research Commission, if the state agency is in the legislative branch.
  3. The Governor may delegate responsibility under subsection (2) of this section to the secretaries of the program cabinets for publication of state agencies within or attached to their respective cabinets.
  4. If any provision of the Kentucky Revised Statutes requires a state agency to submit a publication annually or biennially to the Legislative Research Commission or to the General Assembly, the state agency shall submit that publication online rather than on paper or by means of any other printed medium.

History. Enact. Acts 2011, ch. 42, § 1, effective June 8, 2011.

57.990. Penalties. [Repealed.]

Compiler’s Notes.

This section (2430, 2431, 3955, 3964) was repealed by Acts 1966, ch. 255, § 283.

CHAPTER 58 Acquisition and Development of Public Projects Through Revenue Bonds

58.010. Definitions.

As used in KRS 58.010 to 58.140 , unless the context requires otherwise:

  1. “Public project” means any lands, buildings, or structures, works or facilities (a) suitable for and intended for use as public property for public purposes or suitable for and intended for use in the promotion of the public health, public welfare or the conservation of natural resources, including medical office buildings contiguous to hospital facilities, and shall also include the planning of any such lands, buildings, structures, works or facilities; or (b) suitable for and intended for use for the purpose of creating or increasing the public recreational, cultural and related business facilities of a community, including such structures as concert halls, museums, stadiums, theaters and other public facilities, together with related and appurtenant parking garages, offices and office buildings for rental in whole or in part to private tenants, dwelling units and apartment buildings for rental in whole or in part to private tenants, commercial and retail businesses, stores or other establishments, and any structure or structures or combination of the foregoing, or other structures having as their primary purpose the creation, improvement, revitalization, renewal or modernization of a central business or shopping community, and shall also include existing lands, buildings, structures, works and facilities, as well as improvements or additions to any such lands, buildings, structures, works or facilities.
  2. “Public project” as defined herein shall include projects intended for use as public property for public purposes by another governmental agency, including the United States government, other than the governmental agency acquiring the land or constructing the building, structure or facility.
  3. “Governmental agency” means the Commonwealth of Kentucky as such acting by or through any department, instrumentality or agency thereof, or any county, city, agency, or instrumentality, including a regional wastewater commission established under KRS 65.8901 to 65.8923 , or other political subdivision of the Commonwealth.

History. Enact. Acts 1946, ch. 126, § 1; 1958, ch. 150; 1968, ch. 154, § 1; 1978, ch. 106, § 1, effective June 17, 1978; 1984, ch. 111, § 41, effective July 13, 1984; 2011, ch. 98, § 16, effective June 8, 2011.

NOTES TO DECISIONS

1.In General.

An ordinance authorizing project for construction of auditorium-gymnasium in which city would issue bonds under KRS 58.010 to 58.140 for its construction on a site to be furnished by the board of education under KRS 162.010 et seq. which facility would be used by the city and the board under terms providing for payment of principal and interest from rentals of the project by the city and the board to be supplemented by excess revenues of the city utilities system and expressly providing that the bonds did not constitute an indebtedness of the city was valid. Hill v. Providence, 307 Ky. 537 , 211 S.W.2d 846, 1948 Ky. LEXIS 794 ( Ky. 1948 ).

Where construction of a hospital was financed by the issuance of public project revenue bonds pursuant to this chapter, those bonds could properly be refunded by the issuance of revenue bonds under KRS 103.200 through 103.260 . Ladt v. County of McCracken, 555 S.W.2d 620, 1977 Ky. App. LEXIS 796 (Ky. Ct. App. 1977).

2.Constitutionality.

This Chapter is not violative of the provision of U.S. Const. Amends. 5, 14 and 15. Davis v. Water-Sewer & Sanitation Com., 223 F. Supp. 902, 1963 U.S. Dist. LEXIS 6540 (W.D. Ky.), aff'd, Davis v. Bowling Green, 375 U.S. 43, 84 S. Ct. 149, 11 L. Ed. 2d 107, 1963 U.S. LEXIS 391 (U.S. 1963).

The issuance of revenue-producing bonds under this Chapter is not violative of Ky, Const., §§ 157 and 158. Davis v. Water-Sewer & Sanitation Com., 223 F. Supp. 902, 1963 U.S. Dist. LEXIS 6540 (W.D. Ky.), aff'd, Davis v. Bowling Green, 375 U.S. 43, 84 S. Ct. 149, 11 L. Ed. 2d 107, 1963 U.S. LEXIS 391 (U.S. 1963).

Bonds meeting the requirements of KRS 58.010 to 58.140 do not violate the constitutional prohibitions on indebtedness, Ky. Const., §§ 157 and 158, because such bonds are paid solely from revenues of the designated system and do not encumber the city itself. Baker v. Richmond, 709 S.W.2d 472, 1986 Ky. App. LEXIS 1136 (Ky. Ct. App. 1986).

3.Construction.

This Chapter is a new and additional grant of power conferred upon governmental agencies to acquire, construct, maintain, improve and finance public projects as defined therein. Burkholder v. Louisville, 276 S.W.2d 29, 1955 Ky. LEXIS 411 ( Ky. 1955 ).

“Projects” is construed as those which may be acquired, constructed, maintained or improved as public property for public purposes or suitable for and intended for use in the promotion of the public health, public welfare or the conservation of natural resources and this comprehends property which is or may be owned by and connected with the administration of government agencies and which is within their respective governmental or proprietary sphere of action. Henderson v. Todd, 314 S.W.2d 948, 1958 Ky. LEXIS 323 ( Ky. 1958 ).

4.Applicability.

The County Forestry Act (KRS 149.200 et seq., partially repealed) is not to be read in connection with this chapter of the statutes (enacted at the same session) relating to the acquisition and development of public projects, although the term is defined therein as including lands and facilities suitable for or intended for public purposes or use in the promotion of the public welfare and the County Forestry Act cannot be made subordinate to or in effect held to be repealed in part by the broad and general statute which looks to the acquisition and development of industries and public facilities through the issuance of revenue bonds since each statute is to be construed in its own field of operation and one is not enlarged or limited by the other. Shamburger v. Duncan, 244 S.W.2d 759, 1951 Ky. LEXIS 1247 ( Ky. 1951 ).

Under this Chapter, the City of Louisville was authorized to issue $8,000,000 in water revenue bonds to be financed by revenues of the water system. Burkholder v. Louisville, 276 S.W.2d 29, 1955 Ky. LEXIS 411 ( Ky. 1955 ).

The school board is authorized under KRS 162.120 and 162.140 in combination with financing by the city under KRS 58.010 to 58.120 to convey a building site to the city and lease it back with new high school and appurtenant facilities thereon. Bowling Green v. Board of Education, 443 S.W.2d 243, 1969 Ky. LEXIS 244 ( Ky. 1969 ).

5.Public Project.

An auditorium, swimming pool, and field house to be erected by a municipality for public recreation and improvement constituted a “public project” within the meaning of this section. McKinney v. Owensboro, 305 Ky. 254 , 203 S.W.2d 24, 1947 Ky. LEXIS 780 ( Ky. 1947 ).

A combined waterworks and sewer system to promote the public health of the citizens of a city is a public project within the meaning of this section. Dunn v. Murray, 306 Ky. 426 , 208 S.W.2d 309, 1948 Ky. LEXIS 578 ( Ky. 1948 ).

A courthouse is a public project within the meaning of this chapter. Anderson v. Wayne County, 310 Ky. 597 , 221 S.W.2d 429, 1949 Ky. LEXIS 970 ( Ky. 1949 ).

A joint plan involving extension and improvement of city-owned waterworks system, acquisition of land, and erection of municipal field house for recreational purposes was a “public project” within the meaning of this chapter authorizing issuance of revenue bonds for the construction of “public projects,” with bonds being paid out of revenue derived therefrom, and KRS 96.540 , requiring assent of two-thirds of electorate before encumbering waterworks or income therefrom, was inapplicable to defeat bond issue even though election was not held on it. Hazard v. Salyers, 311 Ky. 667 , 224 S.W.2d 420, 1949 Ky. LEXIS 1149 ( Ky. 1949 ).

Acquisition of an incinerator for garbage disposal or of a tract of land to be used as a landfilled garbage disposal was a public project within the meaning of this section. Fayette County Fiscal Court v. Fayette County, 314 Ky. 595 , 236 S.W.2d 455, 1950 Ky. LEXIS 1098 ( Ky. 1950 ).

The definition of public projects contained in this section has no bearing whatsoever on the definition to be given real property as used in KRS 58.140 . Jenkins v. Kentucky Water Co., 238 S.W.2d 167, 1951 Ky. LEXIS 813 ( Ky. 1951 ).

Project to widen, deepen, straighten and realign creek that when completed would contribute to the drainage of a large area of land, some streets, and some public roads and in addition would serve to promote public health and the common welfare of a populated area and in a lesser degree would contribute to the conservation of the soil and otherwise add considerable value to the land served with consequent increase in tax returns was a public project within the meaning of this section. Tierney v. Shamburger, 240 S.W.2d 836, 1951 Ky. LEXIS 1022 ( Ky. 1951 ).

City bus transportation system fell within definition of “public project” as used in this section. Chrisman v. Cumberland Coach Lines, 249 S.W.2d 782, 1952 Ky. LEXIS 865 ( Ky. 1952 ).

The issuance of revenue bonds by a waterworks district for construction of a waterworks system is for a “public project” as authorized by this chapter. Barnes v. Jacobsen, 417 S.W.2d 224, 1967 Ky. LEXIS 247 ( Ky. 1967 ).

The construction of a high school building is a public project within the meaning of KRS 58.010 to 58.140 . Bowling Green v. Board of Education, 443 S.W.2d 243, 1969 Ky. LEXIS 244 ( Ky. 1969 ).

6.— Public Welfare.

There was neither a predominance of a public purpose nor a close relationship to the public welfare in the context of municipal government as the proposed furnishing of electrical power to an outside customer was a new and independent operation unrelated to the furnishing of service within the city; therefore, it was not in the furtherance of a legitimate municipal purpose because it was not sufficiently keyed to the public welfare of the city’s inhabitants. Corbin v. Kentucky Utilities Co., 447 S.W.2d 356, 1969 Ky. LEXIS 82 ( Ky. 1969 ).

7.— Recreation.

Purchase of steamboat was a public project because it was shown its use for recreation will bestow a widespread benefit on the citizens of the county. Boone v. Cook, 365 S.W.2d 100, 1963 Ky. LEXIS 214 ( Ky. 1963 ).

8.— Industrial Property.

While acquiring or aiding to acquire industrial property for the relief of conditions of unemployment is, in a broad sense, a “public project” it cannot be regarded as such when it comes to financing the same by the issuance of revenue bonds under this chapter, but must be done within and under the terms of KRS 103.200 to 103.280 . Henderson v. Todd, 314 S.W.2d 948, 1958 Ky. LEXIS 323 ( Ky. 1958 ).

9.— Statutory Authority.

As KRS 74.410 specifically states that the acquisition of a gas system by a water district may be financed through the issuance of revenue bonds under this chapter, it is immaterial whether, under this chapter alone, a gas system would be a public project. Fraley v. Beaver-Elkhorn Water Dist., 257 S.W.2d 536, 1953 Ky. LEXIS 781 ( Ky. 1953 ), overruled, McClellan v. Louisville Water Co., 351 S.W.2d 197, 1961 Ky. LEXIS 160 ( Ky. 1961 ).

10.— Use of Surplus Revenue.

Surplus revenues a municipality may have or would obtain from its municipally-owned electric system, other funds or tax revenues available for general purposes not already required by contract or law to be used may be used for a “public project” under this section but it cannot be applied to the acquisition by a city of an industrial plant under either the “holding company plan” or under the terms of KRS 103.200 to 103.280 . Corbin v. Johnson, 316 S.W.2d 217, 1958 Ky. LEXIS 35 ( Ky. 1958 ).

11.Governmental Agency.

Independent school district which is a body politic and corporate under KRS 160.160 and municipal corporation of the second class with general powers conferred by KRS Ch. 84 (now repealed) were governmental agencies within the meaning of subsection (3) of this section. Bowling Green v. Board of Education, 443 S.W.2d 243, 1969 Ky. LEXIS 244 ( Ky. 1969 ).

Since the school board was a body politic and corporate, a government agency, and a public corporation, it was authorized to enter into a lease or contract with another governmental agency. Bowling Green v. Board of Education, 443 S.W.2d 243, 1969 Ky. LEXIS 244 ( Ky. 1969 ).

Cited:

Faulconer v. Danville, 313 Ky. 468 , 232 S.W.2d 80, 1950 Ky. LEXIS 901 ( Ky. 1950 ); Owensboro v. Department of Revenue, 314 Ky. 172 , 234 S.W.2d 664, 1950 Ky. LEXIS 1046 ( Ky. 1950 ); Skidmore v. Elizabethtown, 291 S.W.2d 3, 1956 Ky. LEXIS 352 ( Ky. 1956 ); Danville Municipal Housing Com. v. Danville, 319 S.W.2d 460, 1958 Ky. LEXIS 168 ( Ky. 1958 ); Snowden v. Smith, 328 S.W.2d 528, 1959 Ky. LEXIS 121 ( Ky. 1959 ); Industrial Development Authority v. Eastern Kentucky Regional Planning Com., 332 S.W.2d 274, 1960 Ky. LEXIS 142 ( Ky. 1960 ); Kentucky Lake Vacation Land, Inc. v. State Property & Bldgs. Com., 333 S.W.2d 779, 1960 Ky. LEXIS 212 ( Ky. 1960 ); Norvell v. Danville, 355 S.W.2d 689, 1962 Ky. LEXIS 84 ( Ky. 1962 ); Fosson v. Fiscal Court of Boyd County, 369 S.W.2d 108, 1963 Ky. LEXIS 58 ( Ky. 1963 ); Mt. Vernon v. Banks, 380 S.W.2d 268, 1964 Ky. LEXIS 309 ( Ky. 1964 ); Valla v. Preston Street Road Water Dist., 395 S.W.2d 772, 1965 Ky. LEXIS 164 ( Ky. 1965 ); Maysville v. Coughlin, 399 S.W.2d 297, 1966 Ky. LEXIS 457 ( Ky. 1966 ); Manning v. Fiscal Court of Jefferson County, 405 S.W.2d 755, 1966 Ky. LEXIS 272 ( Ky. 1966 ); McCoy v. Florence, 409 S.W.2d 511, 1966 Ky. LEXIS 60 (Ky. 1966); Decker v. Somerset, 838 S.W.2d 417, 1992 Ky. App. LEXIS 104 (Ky. Ct. App. 1992).

Opinions of Attorney General.

Although recreational development cannot be the prime purpose of a watershed conservancy district, revenue bonds issued by the district could be retired from the receipts derived from recreational facilities used by the public. OAG 63-637 .

A watershed conservancy district, being a subdistrict of a soil conservation district, is a governmental subdivision of the state and a public body exercising public power. OAG 63-637 .

The fiscal court can legally award a franchise for the countywide collection of garbage to an individual or corporation under Ky. Const., § 164. OAG 66-468 .

The fiscal court of a county has authority to enter into a contract with an individual or corporation to establish a garbage collection system in the county. OAG 66-468 .

A county may provide ambulance service as a public project. OAG 67-327 .

A city has authority to impose a sewer service charge for the payment of its revenue bonds upon all persons discharging sewage into its sewer system regardless of the fact that the user was connected to a portion of the sewer line existing at the time the revenue bonds were issued and regardless of the fact that the sewage is discharged to the stream without treatment. OAG 68-356 .

The Kentucky statutes are presumably broad enough to authorize the expending of bond proceeds to renovate school buildings presently existing and already acquired. OAG 71-107 .

The statutory sections relating to acquisition of existing buildings in KRS Ch. 162 and this chapter are broad enough to include, by reasonable implication, whatever may be properly spent for the functional adaptation of purchased buildings to school purposes. OAG 71-107 .

The basis for a direct county disposal system is well established under KRS 58.010 to 58.170 and 67.080 . OAG 71-449 .

The statutory authority for direct county operation of a disposal system may properly extend over into the area of garbage collection. OAG 71-449 .

When KRS 67.080 is read together with KRS 58.010 to 58.170 , the legal basis for a direct county garbage collection or disposal system, or both, clearly emerges. OAG 71-449 .

Bardstown could acquire nonprofit corporation’s water system pursuant to this chapter through the issuance of revenue bonds. OAG 72-20 .

This section’s use of the term “public purpose” would not allow a fiscal court to purchase commercial property under KRS 67.080 with the intent to lease such property to the county 4-H Association with an option to purchase, which association would in turn sublease the property to various local and federal agencies. OAG 72-53 .

This section is broad enough to embrace a courthouse renovation as a “public project” under subsection (1)(a) and (b) of this section. OAG 73-764 .

“Public projects” is probably not broad enough to embrace housing for senior citizens. OAG 74-391 .

Whether or not a purchaser of a lot in a subdivision outside the city can be required by the subdivision developer who also installed the subdivision’s water system, to pay a fee beyond that required by the city for water services to hook onto this private system, said additional fee representing the pro rata share of the cost of the installation of the subdivision’s water system but which was not paid by prior purchasers of subdivision lots, is a private matter and the city should not become involved in a private dispute concerning a private water system. OAG 74-656 .

As indicated in KRS 67.080 and 67.083 , nothing in the general powers of the fiscal court indicates a ministerial duty to fix a drainage ditch; thus the court cannot be legally compelled to repair the ditch although it may, in its discretion, repair the ditch under the police powers as specifically relating to the health and welfare of county citizens and as a public project under this section. OAG 75-400 .

The Ohio-Kentucky Utilities, Inc., a paper corporation set up by Floyd County to run utility facilities acquired by bonds pursuant to KRS 58.010 et seq., is not subject to the utility tax assessment provided for by KRS 136.120 , by the Town of Wayland. OAG 78-679 .

A library district can qualify to issue revenue bonds under KRS Ch. 58, since it is a special taxing district under Ky. Const., § 157 and is a “governmental agency” under subdivision (3) of this section. If it issues revenue bonds for a proposed project, the library district board can exercise the power to condemn real estate pursuant to KRS 58.140 . OAG 82-343 .

A fire protection district, as a special taxing district under Ky. Const., §§ 157 and 158, is a “governmental agency,” as defined in subdivision (3) of this section; thus, it has the authority to acquire, construct, and maintain a firehouse or other directly related facilities by the issuance of revenue bonds, pursuant to KRS 58.020 . OAG 84-328 .

Research References and Practice Aids

Kentucky Law Journal.

Lewis, Kostas and Carnes, Consolidation — Complete or Functional — of City and County Governments in Kentucky, 42 Ky. L.J. 295 (1954).

Martin, Administrative Action for Efficient Debt Management: The Kentucky Case, 49 Ky. L.J. 505 (1961).

Comments, A Challenge to Historic Preservation in Kentucky, 65 Ky. L.J. 895 (1976-77).

58.020. Power of governmental agency to acquire or develop public project and issue revenue bonds.

A governmental agency acting separately or jointly with one (1) or more of any such agency, may acquire, construct, maintain, add to, and improve any public project as defined in KRS 58.010 , which public project may be located within or without or partly within and partly without the territorial limits of such governmental agency or agencies, and for the purpose of defraying the cost thereof may borrow money and issue negotiable revenue bonds. Before any department or agency of the state government shall borrow money and issue bonds under KRS 58.010 to 58.140 , the head of the department or agency shall file with the Secretary of State a written order, approved by the Governor, the Attorney General and the secretary of the Finance and Administration Cabinet, setting forth the proposed public project, the amount of the bonds to be issued, and the maximum rate of interest the bonds are to bear. Any governmental agency other than agencies of the state government may borrow money and issue revenue bonds under KRS 58.010 to 58.140 pursuant to an order, resolution, or ordinance of its legislative or administrative body, which order, resolution, or ordinance shall set forth the proposed public project, the amount of the revenue bonds to be issued, and the maximum rate of interest. In every instance the order, resolution, or ordinance shall provide that the public project is being undertaken under the provisions of KRS 58.010 to 58.140.

History. Enact. Acts 1946, ch. 126, § 2; 1948, ch. 226.

NOTES TO DECISIONS

1.In General.

A city of the fourth class may combine its waterworks plant and sewer system as one project and may finance improvements and extensions thereof by revenue bonds issued in conformity to this chapter without obtaining assent of the majority of the voters of the city as required by KRS 96.540 . Brown v. Harrodsburg, 252 S.W.2d 44, 1952 Ky. LEXIS 979 ( Ky. 1952 ).

2.Constitutionality.

Issuance and sale of revenue bonds by city for construction of sewer system and water system expansions, the construction of sewer treatment plant and pumping station under KRS 58.010 to 58.140 did not violate Const., §§ 157 and 158. Davis v. Water-Sewer & Sanitation Com., 223 F. Supp. 902, 1963 U.S. Dist. LEXIS 6540 (W.D. Ky.), aff'd, Davis v. Bowling Green, 375 U.S. 43, 84 S. Ct. 149, 11 L. Ed. 2d 107, 1963 U.S. LEXIS 391 (U.S. 1963).

Bonds meeting KRS 58.010-58.140 requirements do not violate the constitutional prohibitions on indebtedness because such bonds are paid solely from revenues of the designated system and do not encumber the city itself. Baker v. Richmond, 709 S.W.2d 472, 1986 Ky. App. LEXIS 1136 (Ky. Ct. App. 1986).

3.Construction.

The use of the word “may” in the provision of this section providing that a governmental agency for the purpose of defraying the cost of a public project “ . . . . . may borrow money and issue negotiable revenue bonds . . . . . ” indicates that it is not obligatory that the governmental agency borrow money and issue revenue bonds for the purpose of acquiring, constructing, maintaining, extending or improving a public project but that it may use any funds or tax revenue available for general purposes of the agency and not required by law to be devoted to some other purpose. Fayette County Fiscal Court v. Fayette County, 314 Ky. 595 , 236 S.W.2d 455, 1950 Ky. LEXIS 1098 ( Ky. 1950 ).

“Public projects” cannot be exactly described because, in most instances, the ultimate acquisition of them is dependent upon obtaining funds from the sale of the bonds and this section seems to require only that the description be sufficient to enable a later determination that the funds were in fact used for the development of such projects. Perkins v. Frankfort, 276 S.W.2d 449, 1955 Ky. LEXIS 422 ( Ky. 1955 ).

Issuance and sale of revenue bonds by city for construction of sewer system and water system expansion, the construction of sewer treatment plant and pumping stations under KRS 58.010 to 58.140 without a vote of the people is valid and nondiscriminatory and a proper exercise of the police power of the city. Davis v. Water-Sewer & Sanitation Com., 223 F. Supp. 902, 1963 U.S. Dist. LEXIS 6540 (W.D. Ky.), aff'd, Davis v. Bowling Green, 375 U.S. 43, 84 S. Ct. 149, 11 L. Ed. 2d 107, 1963 U.S. LEXIS 391 (U.S. 1963).

4.Location of Project.

Project to furnish water, electric and sewer service to customers within and without the city limits is authorized by this section. Williams v. Barbourville, 246 S.W.2d 591, 1952 Ky. LEXIS 642 ( Ky. 1952 ).

City could issue revenue bonds for purpose of acquiring, owning and operating a bus system, which, as incident to the principal public project, would serve unincorporated settlements adjoining the city and also two other cities each 22 miles distant, as being operated “partly without the territorial limits” of the city under provision of this section. Chrisman v. Cumberland Coach Lines, 249 S.W.2d 782, 1952 Ky. LEXIS 865 ( Ky. 1952 ).

5.Ordinances.

Where an ordinance relating to sewer system bonds was merely preliminary to an ordinance which would authorize the issuance of bonds to pay for the proposed sewer system and since there was nothing in the ordinance showing that bonds were to be issued or a debt created there was no debt to enjoin and since there was nothing in the ordinance to show that it was passed pursuant to KRS 58.010 to 58.140 that act was not an issue so that its constitutionality could be passed on. Jody v. London, 305 Ky. 303 , 203 S.W.2d 41, 1947 Ky. LEXIS 786 ( Ky. 1947 ).

6.— Description of Project.

Ordinances of proposed public project whereby city could issue revenue bonds for the construction of a city hospital building, recreational and parking facilities and resolution of electric and water plant board providing for issuance of its revenue bonds to obtain funds with which to purchase bonds issued by the city sufficiently described the proposed public project so that it could be determined later that the funds were in fact used for the development of such project. Perkins v. Frankfort, 276 S.W.2d 449, 1955 Ky. LEXIS 422 ( Ky. 1955 ).

7.Additions to Existing System.

Even though they would receive no additional benefit from the new facilities other than that possibly accruing from the improvement to the general health of the community as a whole, users of existing sewer facilities could not complain when the rentals and service charges from the entire system were used to liquidate revenue bonds issued to pay for new addition to the system and to improve and maintain the same. Walker v. Maysville, 310 Ky. 118 , 220 S.W.2d 96, 1949 Ky. LEXIS 859 ( Ky. 1949 ).

8.Condemnation Power.

A city has the general power to condemn land outside its corporate limits for a waterline if the city cannot acquire necessary land within or without the city limits. Baker v. Richmond, 709 S.W.2d 472, 1986 Ky. App. LEXIS 1136 (Ky. Ct. App. 1986).

Cited:

Decker v. Somerset, 838 S.W.2d 417, 1992 Ky. App. LEXIS 104 (Ky. Ct. App. 1992).

Opinions of Attorney General.

Under this section a city may purchase an existing sewerage system. OAG 72-243 .

This section would authorize a fourth-class city to effect the acquisition of a natural gas system, even though the system lies outside the city boundaries. OAG 73-219 .

A city water and sewer commission created under KRS 96.350 has no power to acquire property without the approval of the city council and has no authority to issue bonds under this section for the purchase of such property. OAG 73-527 .

A provision guaranteeing bidding procedure on all construction which is part of the bond contract is contractual in nature and the bondholders can insist upon bidding. OAG 74-379 .

A contract providing for the construction of a water and sewer system by a private developer which would require the city to pay off the costs by methods not authorized under the statutes, i.e. a refund agreement calling for fifty percent of the water and sewer charge made to each consumer in the subdivision, would be invalid. OAG 74-569 .

Research References and Practice Aids

Cross-References.

Board of Energy Research, revenue bonds, KRS 152.760 , 152.762 .

Board of Public Utilities of third-class city may spend surplus revenues for public project, KRS 96.182 .

County buildings commission, issuance of revenue bonds by, KRS 67.490 .

Finance and Administration Cabinet approval of issuance of revenue bonds by State Property and Buildings Commission, or by state agency, KRS 56.491 , 56.510 , 56.520 .

Interlocal cooperation act, revenue bonds, KRS 65.270 .

Issuance of bonds and control of funds, KRS Ch. 66.

Projects involving issuance of revenue bonds by state agencies are subject to approval of Finance and Administration Cabinet, KRS 56.491 .

Revenue bonds for miscellaneous city or county projects, KRS Ch. 103.

State parks, issuance of revenue bonds for development of, KRS 148.031 .

58.025. Facsimile signatures.

It shall be lawful for public bodies, when issuing bonds pursuant to this chapter, to issue and execute said bonds with either the manual or facsimile signatures of its officers as may be determined by the governing bodies of the respective public bodies which are the issuers thereof; but subject nevertheless to such approvals as may now or hereafter be applicable thereto according to law.

History. Enact. Acts 1986, ch. 258, § 1, effective July 15, 1986.

58.030. Interest rate and maturity of bonds — Leasing of project — Acceptance of donations and government aid.

  1. The bonds may be issued to bear interest at the rate or rates or method of determining rates, payable at least annually, and shall be executed in such manner, and be payable at such times not exceeding forty (40) years from date thereof and at such place or places as the governmental agency determines.
  2. The bonds may provide that they or any of them may be called for redemption prior to maturity, on any date not earlier than one (1) year from the date of issuance of the bonds, under conditions fixed by the governmental agency before issuing the bonds.
  3. Any governmental agency is authorized to rent or lease such public project or any portion thereof to or contract concerning same with any persons, partnerships, associations, or corporations either public or private, profit or nonprofit. Notwithstanding any of the other provisions of KRS 58.010 to 58.140 or any other laws, any such renting, leasing, or contracting may be accomplished without the necessity of awarding such lease or contract by advertisement or competitive bidding, provided the governmental agency so leasing such project or any portion thereof or contracting concerning same first makes a legislative determination that it is in the best interest of such governmental agency to enter into such lease or contract without the necessity for such advertisement or competitive bidding; and such lease may provide that the lessee therein is permitted or obligated to sublease the project or any portion thereof for the purpose of accomplishing the creation, improvement, revitalization, renewal or modernization of a central business or shopping community.
  4. A governmental agency is empowered to accept donations or gifts to the public project from any source and to accept appropriations and grants to the public project from the federal government or its agencies and appropriations from the state or any county, city, or other political subdivision and, at the option of the governmental agency, to pledge such donations, gifts, or appropriations to the payment of revenue bonds issued to finance the cost of a public project.

History. Enact. Acts 1946, ch. 126, § 3; 1948, ch. 226; 1968, ch. 110, § 3; 1968, ch. 154, § 2; 1996, ch. 274, § 2, effective July 15, 1996.

NOTES TO DECISIONS

1.Construction.

This section was amended twice in 1968; Acts 1968, Chapter 110 raised the interest rate limitation from 6% to 61/2% and Acts 1968, chapter 154 raised the interest rate limitation from 6% to 7%. The latter, being specific and detailed in nature, was intended to take precedence over the general provisions of the former. Bowling Green v. Board of Education, 443 S.W.2d 243, 1969 Ky. LEXIS 244 ( Ky. 1969 ).

2.Lease of Project.

Since the school board was a body politic and corporate, a government agency, and a public corporation, it was authorized to enter into a lease or contract with another governmental agency. Bowling Green v. Board of Education, 443 S.W.2d 243, 1969 Ky. LEXIS 244 ( Ky. 1969 ).

58.040. Bonds negotiable and tax-free — Method of sale — Payable solely from revenue.

  1. Bonds issued pursuant to KRS 58.010 to 58.140 shall be negotiable and shall not be subject to taxation.
  2. If any officer whose signature or countersignature appears on the bonds or coupons ceases to be an officer before delivery of the bonds, the officer’s signature or countersignature shall be valid and sufficient for all purposes as if the officer had remained in office until delivery.
  3. The bonds shall be sold in a manner and upon the terms as the governmental agency determines and as provided in KRS 424.360 . Any contract for the acquisition of a public project may provide that payment shall be made in bonds.
  4. The bonds shall be payable solely from the revenue derived from the public project and shall not constitute an indebtedness of the state, county, city, or political subdivision within the meaning of the Constitution.
  5. It shall be plainly stated on the face of each bond that the bond has been issued under the provisions of KRS 58.010 to 58.140 and that the bond does not constitute an indebtedness of the governmental agency within the meaning of the Constitution.

History. Enact. Acts 1946, ch. 126, § 4; 1968, ch. 110, § 4; 1968, ch. 154, § 3; 1996, ch. 274, § 3, effective July 15, 1996; 2019 ch. 35, § 3, effective June 27, 2019.

NOTES TO DECISIONS

1.Construction.

This section was amended twice in 1968; Acts 1968, chapter 110 raised the interest rate limitation from 6% to 61/2% and Acts 1968, chapter 154 raised the interest rate limitation from 6% to 7%. The latter amendment, being more specific, was intended to take precedence over the general provisions of the former. Bowling Green v. Board of Education, 443 S.W.2d 243, 1969 Ky. LEXIS 244 ( Ky. 1969 ).

2.Source of Payment.

The pledging of the revenue of water and electric system to secure payment of bonds for construction of sewer system did not contravene KRS 96.540 since this section specifically authorizes an encumbrance of this revenue. Williams v. Barbourville, 246 S.W.2d 591, 1952 Ky. LEXIS 642 ( Ky. 1952 ).

3.Indebtedness of City or Agency.

Bonds to be issued by a city on a public project consisting of a municipal auditorium, field house and swimming pool payable from revenue received from the project to be supplemented by any excess revenue from the city’s electric plant were valid revenue bonds which did not create an indebtedness of the city within the constitutional limitations of Ky. Const., §§ 157 and 158. McKinney v. Owensboro, 305 Ky. 254 , 203 S.W.2d 24, 1947 Ky. LEXIS 780 ( Ky. 1947 ).

4.Method of Sale.

Where a city of the third class proposed to issue and sell revenue bonds, the proceeds of which were to be used for the construction of a gas transmission pipeline to serve the municipal natural gas distribution system, the city could not sell the revenue bonds privately instead of at a publicly advertised competitive sale. Haney v. Somerset, 530 S.W.2d 377, 1975 Ky. LEXIS 54 ( Ky. 1975 ).

Revenue bonds issued by a city to finance the construction of a gas transmission pipeline were not industrial building revenue bonds that could be sold at a private or negotiated sale. Haney v. Somerset, 530 S.W.2d 377, 1975 Ky. LEXIS 54 ( Ky. 1975 ).

5.Approval of Bonds.

KRS 96.540 vote requirements do not apply to Chapter 58 bonds and thus a public referendum was not required before issuance of the bonds, since this section was passed after the original KRS 96.540 and allows the encumbrance of such revenues; therefore, any prohibition in KRS 96.540 is superseded, since when KRS 96.540 was re-enacted, it was only to make a change in the amount of votes needed to carry a referendum, not to require a vote on Chapter 58 bonds. Baker v. Richmond, 709 S.W.2d 472, 1986 Ky. App. LEXIS 1136 (Ky. Ct. App. 1986).

Opinions of Attorney General.

Revenue bonds issued by a watershed conservancy district pursuant to this chapter would not require a referendum before they can be issued, since they do not constitute an indebtedness of the political subdivision under this section. OAG 63-637 .

The execution of a mortgage by a municipality on the physical properties of an off-street parking project as additional security for the revenue bonds issued to finance the project, would create a prohibited indebtedness of the city within the meaning of Ky. Const., §§ 157 and 158. OAG 65-473 .

If the county decides to issue county government obligation bonds instead of revenue bonds which would not be county obligations, then the limitations of Ky. Const., §§ 157 and 158 would have to be considered and, if an emergency were shown, the 2% limit could be exceeded but if the obligation exceeded the income and revenue of the county for a one year period, the question would have to be submitted to the voters and whatever amount was borrowed would have to be measured against the limitations. OAG 73-764 .

58.050. Application of proceeds of bonds — Supplementation by contributions of issuing agency.

All money received from the bonds shall be applied solely for the acquisition, construction, maintenance or improvement of the public project, and the necessary expense of preparing, printing and selling said bonds, or to advance the payment of the interest on the bonds during the first three (3) years following the date of the bonds, or to provide an initial debt service reserve; and the proceeds of such bonds may be supplemented by contributions from the issuing governmental agency or from any other source toward the cost of construction of the project or toward the creation of a debt service reserve for the protection and benefit of the bondholders, or for any other purpose related to the financing of the acquisition and construction of such public project; and it may be further provided that any contribution made for the purpose of assisting in the initial establishment of a debt service reserve for the benefit and protection of the bondholders may be returned or reimbursed to the contributor thereof whenever other equivalent funds have been provided from the revenues of said project or from any other source toward the establishment of such debt service reserve.

History. Enact. Acts 1946, ch. 126, § 5; 1968, ch. 154, § 4.

Opinions of Attorney General.

Under this section and KRS 56.872(2) the costs of issuing bonds, inclusive of bond discount, capitalized interest, and a debt service reserve, are in fact and as a matter of law proper “costs of issuance” of such bonds, to be added to the authorized level of a revenue bond financed project (which construction project costs are delineated in capital construction sections of the biennial appropriations and budget report) in arriving at the authorized financing of such project. The power to include such financing costs in the total bond package is an implied power of the State Property and Buildings Commission in issuing revenue bonds under KRS 56.450(4); this implied power is clearly and inevitably necessary in order that the commission may carry out its express power of issuing revenue bonds. OAG 82-583 .

58.060. Receiver — Provision for foreclosure through trustee authorized.

  1. If there is any default in the payment of principal or interest of any bond, any court having jurisdiction of the action may appoint a receiver to administer the public project on behalf of the governmental agency, with power to charge and collect rents, royalties, fees, rates and charges and to receive any other available revenue sufficient to provide for the payment of any bonds or obligations outstanding against the public project, and for the payment of operating expenses, and to apply the income and revenue in conformity with KRS 58.010 to 58.140 and the order, resolution or ordinance referred to in KRS 58.020 .
  2. Notwithstanding any of the other provisions of KRS 58.010 to 58.140 , inclusive, it may be provided in the proceedings authorizing bonds issued for the purpose of financing a project under KRS 58.010 (1)(b), as amended, that the governmental agency, in connection with the issuance of its bonds, execute a mortgage deed of trust in favor of a trustee, on the project acquired or constructed through the application of the proceeds of the bonds, providing that in the event of default by the agency in the payment of interest or principal of its bonds or in the event of default of any other covenant contained in such mortgage deed of trust the trustee, on behalf of the bondholders, may institute and carry through foreclosure proceedings, with the property secured by the mortgage deed of trust put up for sale on foreclosure proceedings, the proceeds of such sale to be used for the benefit of the bondholders. In connection with such plan of financing, such provisions may be inserted in the bonds themselves and in the mortgage deed of trust as may be necessary to protect the bondholders and in order to make such bonds salable with the lowest net interest cost to the agency. If the agency declares its intent by ordinance or resolution to follow the provisions of this section, and in doing so determines it cannot comply with any provision of KRS 58.010 to 58.140 , as such provision is inconsistent with the provisions of this section, the agency is not required to comply with the inconsistent provision of KRS 58.010 to 58.140.

History. Enact. Acts 1946, ch. 126, § 6; 1968, ch. 153, § 1.

NOTES TO DECISIONS

Cited:

Perkins v. Frankfort, 276 S.W.2d 449, 1955 Ky. LEXIS 422 ( Ky. 1955 ).

Research References and Practice Aids

Cross-References.

Appointment of receiver to administer building on behalf of county buildings commission, KRS 67.515 .

58.070. Maintenance, operating and depreciation funds — Rentals, rates and charges.

At or before the issuance of bonds the governmental agency shall, by order, resolution or ordinance, set aside and pledge the income and revenue of the public project including rents, royalties, fees and proceeds of sales of property and from rates and charges for services derived from or rendered by the public project into a separate and special fund to be used and applied in payment of the cost thereof and in the maintenance, operation and depreciation thereof. The order, resolution or ordinance shall definitely fix and determine the amount of revenue necessary to be set apart and applied to the payment of principal and interest of the bonds, and the proportion of the balance of the income and revenue to be set aside as a proper and adequate depreciation account, and the remaining proportion of such balance shall be set aside for the reasonable and proper operation and maintenance of the public project. The rents, royalties, fees, rates and charges for the services or sale of the public project shall be fixed and revised from time to time so as to be sufficient to provide for payment of interest upon all bonds and to create a sinking fund to pay the principal thereof when due, and to provide for the operation and maintenance of the public project and an adequate depreciation account.

History. Enact. Acts 1946, ch. 126, § 7.

NOTES TO DECISIONS

1.Rates.

Rates fixed by the municipality for services rendered by a municipally owned utility do not deprive the user of property of his rights under the law, nor are they a taking without due process of law, but are a matter of public policy for the legislature since the property owner receives a special benefit from the construction of the sewer, water lines and plants in the privilege of making use of them. Davis v. Water-Sewer & Sanitation Com., 223 F. Supp. 902, 1963 U.S. Dist. LEXIS 6540 (W.D. Ky.), aff'd, Davis v. Bowling Green, 375 U.S. 43, 84 S. Ct. 149, 11 L. Ed. 2d 107, 1963 U.S. LEXIS 391 (U.S. 1963).

Cited:

Perkins v. Frankfort, 276 S.W.2d 449, 1955 Ky. LEXIS 422 ( Ky. 1955 ).

Opinions of Attorney General.

Although ordinance provided that certain surplus might be applied for any other lawful purpose, the transferring of any surplus funds (surplus to the special funds) derived from the combined water and sewer system to the city’s general fund is illegal since the transfer would be in violation of this section. OAG 68-548 .

Research References and Practice Aids

Cross-References.

Special fund to be applied to cost and maintenance of buildings by county buildings commission, KRS 67.520 .

Kentucky Law Journal.

Martin, Administrative Action for Efficient Debt Management: The Kentucky Case, 49 Ky. L.J. 505 (1961).

58.080. Transfer of surplus to depreciation account.

If a surplus is accumulated in the operating and maintenance funds equal to the cost of maintaining and operating the public project during the remainder of the calendar, operating or fiscal year, and during the succeeding like year, any excess over such amount may be transferred at any time by the governmental agency to the depreciation account, to be used for improvements, extensions or additions to the public project.

History. Enact. Acts 1946, ch. 126, § 8.

58.090. Expenditure and investment of depreciation fund.

The funds accumulating to the depreciation account shall be expended in balancing depreciation in the public project or in making new constructions, extensions or additions thereto. Any such accumulations may be invested as the governmental agency may designate, and if invested the income from such investment shall be carried into the depreciation account.

History. Enact. Acts 1946, ch. 126, § 9.

58.100. Refunding bonds.

The governmental agency may issue new bonds to provide funds for the payment of any outstanding bonds, in accordance with the procedure prescribed by KRS 58.010 to 58.140 . The new bonds shall be secured to the same extent and shall have the same source of payment as the bonds refunded. Furthermore, the maturity schedule of the new bonds shall not extend beyond the remaining life of the original bonds unless the original bonds were issued by a county, urban-county, city, or an agency or instrumentality of a county, urban-county, or city.

History. Enact. Acts 1988, ch. 83, § 1, effective July 15, 1988; 1992, ch. 191, § 1, effective July 14, 1992.

58.110. Additional bonds.

If the governmental agency finds that the bonds authorized will be insufficient to accomplish the purpose desired, additional bonds may be authorized and issued in the same manner.

History. Enact. Acts 1946, ch. 126, § 11.

58.120. Bonds for extensions and improvements.

Any governmental agency acquiring any public project pursuant to the provisions of KRS 58.010 to 58.140 may, at the time of issuing the bonds for such acquisition, provide for additional bonds for extensions and permanent improvements to be placed in escrow and to be negotiated from time to time as proceeds for that purpose may be necessary. Bonds placed in escrow shall, when negotiated, have equal standing with bonds of the same issue.

History. Enact. Acts 1946, ch. 126, § 12.

58.125. Sale of housing mortgage bonds.

Any public body as defined in KRS 58.410 when issuing bonds for the purpose of facilitating the construction, renovation or purchase of new or existing housing, including single family mortgage revenue bonds and multifamily housing revenue bonds, may issue and sell the bonds upon such terms, for such prices, and at such interest rates, as are deemed appropriate by the public body, including by public sale pursuant to KRS Chapter 424 or by private negotiated sale without advertisement.

History. Enact. Acts 1986, ch. 259, § 1, effective July 15, 1986.

58.130. Use of general funds or revenues for public project.

Any governmental agency may use, for the purpose of acquiring, constructing, maintaining, extending or improving a public project, or for the payment of interest or principal on any revenue bonds issued by the agency pursuant to KRS 58.010 to 58.140 , any funds or tax revenues available for general purposes of the agency and not required by law to be devoted to some other purpose.

History. Enact. Acts 1946, ch. 126, § 13.

NOTES TO DECISIONS

1.Construction.

The use of the word “may” in the provision of KRS 58.020 providing that a governmental agency for the purpose of defraying the cost of a public project “ . . . . . may borrow money and issue negotiable revenue bonds . . . . . ” indicates that it is not obligatory that the governmental agency borrow money and issue revenue bonds for the purpose of acquiring, constructing, maintaining, extending or improving a public project but that it may use any funds or tax revenue available for general purposes of the agency and not required by law to be devoted to some other purpose. Fayette County Fiscal Court v. Fayette County, 314 Ky. 595 , 236 S.W.2d 455, 1950 Ky. LEXIS 1098 ( Ky. 1950 ).

The permission given an agency by this section so to use its funds in the future as they may be available does not purport to authorize an advance commitment to do so. Turnpike Authority of Kentucky v. Wall, 336 S.W.2d 551, 1960 Ky. LEXIS 331 ( Ky. 1960 ).

2.Acquisition of Industrial Plant.

“Projects” defined in this chapter, comprehends property which is or may be owned by and connected with the administration of government agencies and which is within their respective governmental or proprietary sphere of action and a pledge of a sufficient amount of revenue from the operation of the municipal gas distribution system as will equal any deficiency that may result from a failure of revenues cannot be used for the acquisition by a city of a building or other property to be leased to an industry or for the payment of revenue bonds issued therefor. Henderson v. Todd, 314 S.W.2d 948, 1958 Ky. LEXIS 323 ( Ky. 1958 ).

Surplus revenues a municipality may have or would obtain from its municipally owned electric system, and other funds or tax revenues available for general purposes not already required by contract or law to be used, may be used for “a public project” under this chapter, but they cannot be applied to the acquisition by a city of an industrial plant under either the “holding company plan” or under the terms of KRS 103.200 to 103.280 . Corbin v. Johnson, 316 S.W.2d 217, 1958 Ky. LEXIS 35 ( Ky. 1958 ).

Opinions of Attorney General.

Under this section a city could use money in the general fund account to finance a proposed sewer treatment plant project. OAG 77-743 .

58.140. Condemnation.

In the event a governmental agency is unable to acquire, by purchase or agreement, any real property deemed necessary for the purposes of a public project, such agency may acquire the same by condemnation. The procedure for condemnation shall be as provided in the Eminent Domain Act of Kentucky.

History. Enact. Acts 1946, ch. 126, § 14; 1976, ch. 140, § 20.

NOTES TO DECISIONS

1.Applicability.

Property authorized to be condemned under provisions of this section is specifically confined to real estate. Jenkins v. Kentucky Water Co., 238 S.W.2d 167, 1951 Ky. LEXIS 813 ( Ky. 1951 ).

Since railroad condemnation procedure was made applicable to condemnation for public projects generally in 1946 and railroads in 1958 were authorized to use alternative procedures, the authorization in this section extends to the alternative procedure under KRS 416.230 . Epperson v. Briscoe Manor Sewer Constr. Dist., 420 S.W.2d 390, 1966 Ky. LEXIS 3 ( Ky. 1966 ).

2.— Personalty.

Where city instituted action against water company to condemn entire water system including all other machinery and equipment owned and used by the water company in connection with the system, it was apparent that the property sought to be condemned included personalty as well as realty and circuit court had no jurisdiction over subject matter. Jenkins v. Kentucky Water Co., 238 S.W.2d 167, 1951 Ky. LEXIS 813 ( Ky. 1951 ).

3.Property Outside Corporate Limits.

A city has the general power to condemn land outside its corporate limits for a waterline if the city cannot acquire necessary land within or without the city limits. Baker v. Richmond, 709 S.W.2d 472, 1986 Ky. App. LEXIS 1136 (Ky. Ct. App. 1986).

Cited:

St. Matthews v. Roberts, 490 S.W.2d 750, 1973 Ky. LEXIS 644 ( Ky. 1973 ); Wadsworth Electric Mfg. Co. v. Kenton County Airport Board, Inc., 509 S.W.2d 270, 1974 Ky. LEXIS 559 ( Ky. 1974 ); Decker v. Somerset, 838 S.W.2d 417, 1992 Ky. App. LEXIS 104 (Ky. Ct. App. 1992).

Opinions of Attorney General.

The city is without authority to condemn county property for any public purpose. OAG 60-293 .

A library district can qualify to issue revenue bonds under KRS Ch. 58, since it is a special taxing district under Ky. Const., § 157 and is a “governmental agency” under KRS 58.010(3). If it issues revenue bonds for a proposed project, the library district board can exercise the power to condemn real estate pursuant to this section. OAG 82-343 .

The right of condemnation in this section applies only to real estate and to financing by revenue bonds under KRS 58.010 et seq. OAG 82-343 .

Research References and Practice Aids

Cross-References.

Eminent Domain Act of Kentucky, KRS 416.540 et seq.

58.150. Revenue bond anticipation notes.

  1. When the governing body of any county, city, or other municipal corporation, or agency thereof, shall make a determination that, in accordance with the provisions of any section of the statutes authorizing it to issue revenue bonds, assessment bonds, or mortgage bonds to finance any project, it will finance a project by the issuance of bonds, then in anticipation of financing, the governing body may provide for the interim financing of a project by the sale and issuance of revenue bond, assessment bond, or mortgage bond anticipation notes, as the case may be, bearing interest at a rate or rates not exceeding the maximum rate permitted for the issuance of the bonds so anticipated, and payable within a specified period of time only from the proceeds of the bonds, when issued, or from the revenues or income of the project as may be available prior to or at maturity of the notes; provided that the initial term of the notes shall not be in excess of five (5) years from the date of issuance. The term “revenue bond” means bonds, notes, or other obligations for the payment of money issued by the state, any county, municipality, or other public district or authority except a school district, or any corporation or other corporate body acting as an instrumentality of the unit, and payable from a special fund into which some or all of the revenues of a public project have been or will be paid. “Assessment bond” means bonds, notes, or other obligations for the payment of money issued by any one (1) or more of the same issuing authorities payable from a special fund into which assessments levied on properties for benefits conferred have been or will be paid in accordance with law. “Mortgage bond” means revenue bonds which are secured by a mortgage deed of trust. A school district shall not be excluded from these definitions if it is authorized by the Kentucky Board of Education, by general or special authorization, to proceed under the authority of this section or KRS 56.513 through the agency of the appropriate city or county.
  2. The notes authorized herein shall be sold in the same manner as the bonds in anticipation of which they are issued.
  3. Each bond anticipation note may include prepayment provisions which will allow the issuing authority to prepay the note after giving reasonable notice to the holder; shall identify the bond issue from the proceeds of which the note or notes and any interest thereon are to be paid; and shall include a statement that the note is being issued in anticipation of the identified bond issue, and that neither the note, nor the interest, shall constitute or evidence an indebtedness of the issuing authority. Each note and the interest, to the extent not previously paid from other sources, shall be paid from the proceeds of the identified bond issue, when the proceeds have been received and are available; provided, however, that payment from the revenues of the project, for the financing of which the bonds will eventually be issued, shall be permitted, and provision shall be made for payment of that portion of the principal of any note issue which represents the principal of the proposed bonds scheduled to mature on or prior to the maturity of the notes.
  4. The notes authorized herein may be issued in a principal amount sufficient to include all interest due on the notes at or prior to maturity, if the notes shall be issued for a term of three (3) years or less, and the notes may be sold at a discount representing the interest due to the purchaser during the term.
  5. When, prior to the maturity of any notes issued under the authority of this section or KRS 56.513 , the governing body of the issuing authority shall make a determination that by reason of construction delays, changes in plans, uncertainties in the bond market, or other causes justifying delay in the final offering of the bond issue, the bond issue should not immediately be offered, renewal notes may be issued subject to the same limitations contained in this section or KRS 56.513 relative to the original issue of notes, and the proceeds of the sale of the renewal notes shall be applied to the payment of the principal of the notes originally issued, or any prior issue of renewal notes, or to the payment of interest due or to become due on the notes or renewal notes; provided, however, that the interest, including discount, if any, payable from the proceeds of notes or renewal notes shall not exceed an amount equal to three (3) years’ interest from the date of the original notes at the rate per annum established for the original notes.
  6. Counties, cities, and other municipal corporations, or agencies, in the discretion of the governing body in each case, may, as an alternative to this section and for interim financing purposes, solicit proposals, issue bond anticipation notes, and make commitment agreements in the same manner as provided for the State Property and Buildings Commission by KRS 56.513 ; provided, however, that in the case of notes issued on behalf of a school district, general or special approval of the Kentucky Board of Education shall be required in substitution for the approval of the State Property and Buildings Commission; and provided further, that the approval of the State Property and Buildings Commission will not be required for any issue of a county, city, or other municipal corporation, or any agency, and references to the commission shall be interpreted to be references to the governing body of the issuing authority.
  7. Nothing herein shall be deemed to invalidate any bond anticipation notes sold or issued under general statutes prior to the adoption of this section and KRS 56.513 .
  8. Each bond anticipation note issued according to this section or KRS 56.513 , and the receipt of interest on the note, shall be exempt from all taxation by the Commonwealth and all of its subdivisions, municipalities, and taxing authorities; and this may be stated as a representation in the text of each bond anticipation note.

History. Enact. Acts 1970, ch. 152, § 2; 1978, ch. 155, § 82, effective June 17, 1978; repealed and reenact., Acts 1990, ch. 476, Pt. V, § 290, effective July 13, 1990; 1996, ch. 274, § 62, effective July 15, 1996; 1996, ch. 362, § 6, effective July 15, 1996; 2021 ch. 152, § 3, effective June 29, 2021.

NOTES TO DECISIONS

Cited:

Hardin Memorial Hospital, Inc. v. Land, 645 S.W.2d 711, 1983 Ky. App. LEXIS 277 (Ky. Ct. App. 1983).

58.155. Grant anticipation notes.

  1. In the case of any public work or public project, in connection with which the Commonwealth of Kentucky, or any department, agency or bureau thereof, or any political subdivision or governmental unit of the Commonwealth of Kentucky (“governmental agency”) has applied for and received federal grants-in-aid or is entitled as a matter of law to receipt of federal grants-in-aid which may be applied for the purpose of providing a portion of or all of the funds required for construction and installation of any such public work or public project, such governmental agency may authorize and issue grant anticipation notes payable from grant proceeds when received, and any other assets which may be lawfully pledged by any such governmental agency and which are so pledged.
  2. Any grant anticipation notes issued pursuant to authority of this section shall be scheduled to mature at such time or times, not to exceed three (3) years from the date of issuance thereof, and shall bear such rate or rates of interest as the governing body of the governmental agency shall determine. Grant anticipation notes may be sold at public sale or pursuant to private, negotiated sale at the election of the governing body of the governmental agency issuing any such grant anticipation notes. Interest on any such grant anticipation notes may be capitalized in grant anticipation note issues for periods not exceeding three (3) years.
  3. Grant anticipation notes issued pursuant to the authority of this section shall be payable as to principal and interest, if interest is capitalized, from the federal grants in anticipation of which the grant anticipation notes are authorized and issued, and any governmental agency is authorized and empowered to pledge such grant proceeds when received, either as sole security for the repayment of grant anticipation notes, or together with any other assets and revenues of such governmental agency which may be lawfully pledged for such repayment.
  4. Grant anticipation notes issued pursuant to the authority of this section are hereby declared to be issued for public, governmental purposes and the interest derived thereon shall be exempt from taxation by the Commonwealth and by all political subdivisions of the Commonwealth. Grant anticipation notes shall also be exempt from ad valorem taxation by the Commonwealth or any political subdivision thereof.

History. Enact. Acts 1980, ch. 273, § 1, effective April 9, 1980.

58.170. Maximum possible interest rate on bonds issued after March 25, 1968 — Alternative nature of this provision. [Repealed.]

Compiler’s Notes.

This section (Enact. Acts 1968, ch. 110, §§ 25 to 27) was repealed by Acts 1996, ch. 274, § 65, effective July 15, 1996.

58.180. Creation of nonprofit corporation to act as an instrumentality of governmental agency in the financing of public projects.

    1. 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. (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.
    2. 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.
  1. 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.
  2. 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.
  3. 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.
  4. 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.
  5. The governing body of such corporation shall consist solely and only of the following individuals:
    1. Public officials of the governmental agency as ex officio members; or
    2. Persons appointed by the governmental agency or by public officials of the governmental agency.

History. Enact. Acts 1976, ch. 334, § 1; 2005, ch. 146, § 1, effective June 20, 2005.

NOTES TO DECISIONS

1.Repair of Roadways.

Fiscal court did not violate Ky. Const. § 157 by establishing a nonprofit corporation to float a bond issue to raise money to fund the repair of county roadways since, although the corporation, by agreement, would assume ownership of the roadways and lease them back to the fiscal court until the rental payments were sufficient to retire the bond issue, at which time the roads would be reconveyed to the county, the debt incurred was not a debt of the county or enforceable against it in any way. Hoskins v. Wilson, 778 S.W.2d 654, 1989 Ky. App. LEXIS 142 (Ky. Ct. App. 1989).

Cited:

Hardin Memorial Hospital, Inc. v. Land, 645 S.W.2d 711, 1983 Ky. App. LEXIS 277 (Ky. Ct. App. 1983); Decker v. Somerset, 838 S.W.2d 417, 1992 Ky. App. LEXIS 104 (Ky. Ct. App. 1992).

Opinions of Attorney General.

The holding company concept may be validly applied to county road and bridge building, reconstruction, and repair, pursuant to this section; under that plan the nonprofit corporation, acting as the agency and instrumentality of the county, issues the revenue bonds, constructs the project and leases the project to the county for one year, subject to automatic renewal for a sufficient period to pay off the bonds and interest, unless the county at the end of any year elects not to renew the lease, and when the bonds and interest are fully paid, the county recovers full title to the facilities; the annual rental would be funded by available tax revenues out of the current budget (this could be available general fund or road fund money). OAG 80-477 .

The Kentucky Housing Corporation cannot create a “child” corporation to issue housing construction loan notes and revenue bonds, since subsection (2) of this section in no way authorizes the corporation to create another entity to carry out the corporation’s housing function. OAG 81-242 .

A garbage disposal district organized and functioning pursuant to KRS 109.011 et seq. is considered a public or governmental agency pursuant to the provisions of subdivision (1)(b) of this section as it is exercising governmental functions; thus, it may form a nonprofit corporation in order to apply to the pollution abatement authority for the financing of a resource recovery incinerator. OAG 81-282 .

A fire protection district is a “governmental agency,” as defined in this section, and could thus use the corporate bond mechanism established in this section. Therefore, a fire protection district may create a nonprofit corporation and provide for the issuance of the corporation’s revenue bonds to finance a firehouse and related facilities. OAG 84-328 .

Research References and Practice Aids

Kentucky Bench & Bar.

Tobergte, The Impact of Kentucky’s Present Constitution Upon Business Growth & Development, Volume 51, No. 3, Summer 1987 Ky. Bench & B. 21.

58.190. Action challenging validity of ordinance or resolution authorizing bond issue.

  1. As used in this section, “lease” has the same meaning as in KRS 65.940 .
  2. Any action challenging the validity or enforceability of:
    1. Any ordinance or resolution adopted by any governmental agency approving the issuance of bonds, notes, or leases; or
    2. Any bond, note, or lease approved by an ordinance or resolution; shall be brought within thirty (30) days from the date on which notice of the adoption of the ordinance or resolution is published in accordance with KRS Chapter 424.
  3. If the action challenging the validity or enforceability of the ordinance, resolution, bond, note, or lease is not brought within the time provided by subsection (2) of this section, the action shall be forever barred.

History. Enact. Acts 1986, ch. 260, § 1, effective July 15, 1986; 2019 ch. 35, § 1, effective June 27, 2019.

58.200. Restroom requirements for certain public buildings used for specified purposes.

  1. As used in this section:
    1. “Public building” means a building, or a portion thereof, with a capacity of ten thousand (10,000) or more people, owned or leased by a state or local governmental agency, as defined in KRS 58.010 , in which the general public congregates to observe or participate in arts, sports, entertainment, and other types of assembly uses as defined by the Kentucky building code;
    2. “Restroom facility” means a toilet, chemical toilet, or water closet; and
    3. “Newly-constructed public building” means:
      1. A new public building;
      2. A new addition to or expansion of an existing public building; or
      3. The altered or renovated portion of an existing public building if the alteration or renovation requires more than fifty percent (50%) of the floor area of the entire building to be rebuilt. Cosmetic work, including painting, wall covering, wall paneling, floor covering, or suspended ceiling work, shall not be considered an alteration or renovation.
  2. Any newly-constructed public building shall be equipped with twice the number of restroom facilities for use by women as it provides restroom facilities for use by men. This section shall apply to newly-constructed public buildings for which a contract for design or construction is awarded after July 15, 1996.

History. Enact. Acts 1996, ch. 354, § 1, effective July 15, 1996.

58.205. Issuance of revenue bonds for housing project outside jurisdictional boundaries.

After July 12, 2006, no city, county, charter county, urban-county, consolidated local government, or special district shall issue revenue bonds as provided in this chapter for any housing project which is located outside the jurisdictional boundaries of the issuing entity without the express written consent of the elected legislative body of the city, county, charter county, urban-county, or consolidated local government in which the housing project will be located.

History. Enact. Acts 2006, ch. 178, § 2, effective July 12, 2006.

Capital Plaza Authority

58.210. Definitions. [Repealed.]

Compiler’s Notes.

This section (Enact. Acts 1966, ch. 207, § 1) was repealed by Acts 1998, ch. 83, § 7, effective July 15, 1998.

58.215. Capital Plaza Authority — Powers — Members — Appointment — Compensation — Officers — Records. [Repealed.]

Compiler’s Notes.

This section (Enact. Acts 1966, ch. 207, § 2; 1982, ch. 393, § 36, effective July 15, 1982; 1984, ch. 159, § 1, effective July 13, 1984; 1996, ch. 194, § 3, effective July 15, 1996) was repealed by Acts 1998, ch. 83, § 7, effective July 15, 1998.

58.220. Powers of authority. [Repealed.]

Compiler’s Notes.

This section (Enact. Acts 1966, ch. 207, § 3; 1976, ch. 140, § 21) was repealed by Acts 1998, ch. 83, § 7, effective July 15, 1998.

58.225. Agreements for financing or construction of projects. [Repealed.]

Compiler’s Notes.

This section (Enact. Acts 1966, ch. 207, § 4) was repealed by Acts 1998, ch. 83, § 7, effective July 15, 1998.

58.230. Leases by authority — Terms. [Repealed.]

Compiler’s Notes.

This section (Enact. Acts 1966, ch. 207, § 5; 1974, ch. 74, Art. II, § 9(1); 1978, ch. 384, § 15, effective June 17, 1978) was repealed by Acts 1998, ch. 83, § 7, effective July 15, 1998.

58.235. Revenue bonds, issuance — Contents. [Repealed.]

Compiler’s Notes.

This section (Enact. Acts 1966, ch. 207, § 6; 1968, ch. 110, § 5) was repealed by Acts 1998, ch. 83, § 7, effective July 15, 1998.

58.240. Bonds not obligations of state — How paid. [Repealed.]

Compiler’s Notes.

This section (Enact. Acts 1966, ch. 207, § 7) was repealed by Acts 1998, ch. 83, § 7, effective July 15, 1998.

58.245. Security for bonds, forms — Terms of trust indenture. [Repealed.]

Compiler’s Notes.

This section (Enact. Acts 1966, ch. 207, § 8) was repealed by Acts 1998, ch. 83, § 7, effective July 15, 1998.

58.250. Bondholders may enforce rights. [Repealed.]

Compiler’s Notes.

This section (Enact. Acts 1966, ch. 207, § 10) was repealed by Acts 1998, ch. 83, § 7, effective July 15, 1998.

58.255. Bonds of authority, legal investments. [Repealed.]

Compiler’s Notes.

This section (Enact. Acts 1966, ch. 207, § 12) was repealed by Acts 1998, ch. 83, § 7, effective July 15, 1998.

58.260. Refunding bonds. [Repealed.]

Compiler’s Notes.

This section (Enact. Acts 1966, ch. 207, § 15) was repealed by Acts 1998, ch. 83, § 7, effective July 15, 1998.

58.265. Funds received as trust funds. [Repealed.]

Compiler’s Notes.

This section (Enact. Acts 1966, ch. 207, § 9) was repealed by Acts 1998, ch. 83, § 7, effective July 15, 1998.

58.270. Authority tax-exempt. [Repealed.]

Compiler’s Notes.

This section (Enact. Acts 1966, ch. 207, § 11) was repealed by Acts 1998, ch. 83, § 7, effective July 15, 1998.

58.275. Acquisition of property — Condemnation. [Repealed.]

Compiler’s Notes.

This section (Enact. Acts 1966, ch. 207, § 14) was repealed by Acts 1998, ch. 83, § 7, effective July 15, 1998.

58.280. Operation and maintenance of project by lessee. [Repealed.]

Compiler’s Notes.

This section (Enact. Acts 1966, ch. 207, § 13(1)) was repealed by Acts 1998, ch. 83, § 7, effective July 15, 1998.

58.285. Local governments may convey or lease to authority, procedure. [Repealed.]

Compiler’s Notes.

This section (Enact. Acts 1966, ch. 207, § 13(3)) was repealed by Acts 1998, ch. 83, § 7, effective July 15, 1998.

58.290. Conveyance to lessee, when. [Repealed.]

Compiler’s Notes.

This section (Enact. Acts 1966, ch. 207, § 16) was repealed by Acts 1998, ch. 83, § 7, effective July 15, 1998.

58.295. Compensation for damage to private property. [Repealed.]

Compiler’s Notes.

This section (Enact. Acts 1966, ch. 207, § 13(2)) was repealed by Acts 1998, ch. 83, § 7, effective July 15, 1998.

58.300. Engineering and other studies authorized — Expense, how paid. [Repealed.]

Compiler’s Notes.

This section (Enact. Acts 1966, ch. 207, § 17) was repealed by Acts 1998, ch. 83, § 7, effective July 15, 1998.

58.305. Annual report of authority — Audit. [Repealed.]

Compiler’s Notes.

This section (Enact. Acts 1966, ch. 207, § 13(4); 1978, ch. 384, § 14, effective June 17, 1978) was repealed by Acts 1998, ch. 83, § 7, effective July 15, 1998.

58.310. Officer or employee not to purchase bonds, penalty. [Repealed.]

Compiler’s Notes.

This section (Enact. Acts 1966, ch. 207, § 13(5)) was repealed by Acts 1998, ch. 83, § 7, effective July 15, 1998.

58.315. Act supplemental to other powers. [Repealed.]

Compiler’s Notes.

This section (Enact. Acts 1966, ch. 207, § 18) was repealed by Acts 1998, ch. 83, § 7, effective July 15, 1998.

Interest Rates on Public Bonds

58.410. Definitions for KRS 58.410 to 58.440.

  1. As used in KRS 58.410 to 58.440 , unless the context otherwise requires:
    1. “Public body” means the Commonwealth, its political subdivisions, its municipalities, its school and other taxing districts, its nontaxing public bodies and institutions, and any and all agencies and instrumentalities thereof, whether such agencies or instrumentalities be now existing or hereafter created and established under and pursuant to specific statutory authority, or whether such agencies or instrumentalities be now existing or hereafter organized, established, and caused to exist as nonprofit corporations under applicable general laws, having performance as such agencies or instrumentalities as their sole corporate purposes;
    2. “Public obligation” means bonds, notes, warrants, or other obligations of any public body;
    3. “Rate of interest” means both the coupon or stated interest rate applicable to any public obligation, and the effective interest rate or interest cost percentage, computed upon the basis of the coupon or stated interest rate or rates and the price actually to be received by the issuing public body; provided, however, KRS 58.410 to 58.440 is not intended, and shall not be construed, to amend, alter, or repeal any existing law requiring that certain public obligations be sold at not less than the face amount thereof.
  2. KRS 58.410 to 58.440 does not relate to or affect borrowing by any person or corporation except such as are within the definition of “public body” as set forth in this section.

History. Enact. Acts 1970, ch. 24, § 1; repealed and reenact., Acts 1990, ch. 476, Pt. V, § 291, effective July 13, 1990.

Opinions of Attorney General.

A county or group of counties operating under an interlocal agreement and issuing revenue bonds which are “public obligations” under subsection (1)(b) to this section would be subject to the interest rate provisions of KRS 58.430 which repealed the provisions of subsection (3) of KRS 65.270 upon its enactment. OAG 81-346 .

58.420. Public policy as to bond interest rates.

It is hereby determined and declared to be the public policy of the Commonwealth that interest rates payable by public bodies upon public obligations be such as to be competitive with those rates which are permitted by other states, in order that necessary public projects may be financed and may be undertaken in the interest of the public health, safety, and general welfare.

History. Enact. Acts 1970, ch. 24, § 2; repealed and reenact., Acts 1990, ch. 476, Pt. V, § 292, effective July 13, 1990.

Opinions of Attorney General.

Chapters 103 and 58 separately, and when considered in pari materia, provide for variable interest rate bonds. OAG 85-103 .

58.430. Removal of interest rate limits.

From and after March 9, 1970, notwithstanding any other acts or laws of other import which may presently prevail, wherever the same may be found in the Kentucky Revised Statutes as of such date, it shall be lawful for public bodies to establish, agree, and bind themselves to pay interest upon their public obligations at any rate or rates which may be determined upon by the governing bodies of the respective public bodies which are the issuers thereof; but subject, nevertheless, to such approvals as may now or hereafter be applicable thereto according to law.

History. Enact. Acts 1970, ch. 24, § 3; repealed and reenact., Acts 1990, ch. 476, Pt. V, § 293, effective July 13, 1990.

Opinions of Attorney General.

This section, by its express language, repealed the interest ceiling provisions of KRS 178.170 . OAG 71-493 .

This section does not implicitly repeal or in any way modify the maximum interest rate a school district may pay on money borrowed in anticipation of taxes. OAG 80-571 .

A county or group of counties operating under an interlocal agreement and issuing revenue bonds which are “public obligations” under subsection (1)(b) of KRS 58.410 would be subject to the interest rate provisions of this section which repealed the provisions of subsection (3) of KRS 65.270 upon its enactment. OAG 81-346 .

Since KRS 96A.120 (3) provides that a mass transit authority may use the procedures set forth in KRS 58.010 to 58.170 , subject to any interest rate limitations which may be applicable thereto as provided by law, and since, as between KRS 58.170 and 96A.120 , the specific governs over the general, anticipatory notes issued by transit authority fall within the provisions of this section and are not subject to the interest limitations of KRS 58.170. OAG 83-152 .

KRS 103.200 and 103.220 in no explicit language establish pollution projects as the sole category of projects subject to a variable rate of interest and the pertinent statutes amended by Acts 1984, Ch. 122 in no way prohibit the application of the variable rate to projects other than pollution control projects; they merely emphasize pollution control projects, but not to the detriment of other kinds of projects falling within the broad range of KRS 103.200 to 103.285 . Moreover, this section is a specific statute dealing only with interest rates on public bonds and is so flexibly worded as to support variable rate structures in the issuance of public bonds and even if the sections in KRS Ch. 103 amended by Acts 1984, Ch. 122 (KRS 103.200, 103.210 , 103.210 1, 103.220 103.240 , 103.280 ) were to be said to be in some conflict with the provisions of this section, the specific statute, this section, should control over the provisions of KRS Ch. 103. OAG 84-257 .

By its express language, this section repealed the maximum rate found in KRS 220.390 , 220.400 and KRS 220.370 ; the purpose of this section was to permit public bodies to meet prevailing interest rate competition. OAG 84-360 .

Under KRS 103.200 (2), variable rate bonds do not apply only to pollution control facilities bonds; thus, the Kentucky Development Finance Authority may lawfully issue variable rate bonds with Put and Remarketing features in a proposed Internal Revenue Bond issue for the financing of the construction and equipping of airport facilities, under KRS 103.200 to 103.285 , as amended by Chapter 122, 1984, Session, and this section. OAG 84-377 .

This section, as a specific statute on public bond interest rates, clearly authorizes the insurers of the bonds to bind themselves to pay interest at “any rate or rates which may be determined by the governing body” issuing the bonds; the term “at any rate or rates,” as used in this section, is sufficiently broad to encompass variable rates arrived at under agreement. OAG 85-103 .

Chapters 103 and 58 separately, and when considered in pari materia, provide for variable interest rate bonds. OAG 85-103 .

58.440. Refinancing at higher rate than that of original issue.

If any public body shall determine:

  1. That financing of a public project may be accomplished to the best advantage in the public interest only by combining the same with refinancing of previously issued and outstanding public obligations at a rate or rates of interest higher than the rate or rates otherwise applicable thereto;
  2. That refinancing of a public project at a higher interest rate or rates is necessary in order to prevent or anticipate default in payment of interest or principal of public obligations with regard thereto; or
  3. That any combination of the circumstances described in subsection (1) or (2) of this section exists;

then such refinancing is recognized to be lawful; provided, however, that prior to any such refinancing at a higher rate or rates of interest, the issuing public body shall make and spread at large upon its public records its determination that such action is necessary or desirable in the public interest, and its reasons therefor.

History. Enact. Acts 1970, ch. 24, § 4; repealed and reenact., Acts 1990, ch. 476, Pt. V, § 294, effective July 13, 1990.

Churchill Downs Authority

58.500. Authority created to acquire Churchill Downs — Appointment of members — Terms of office — Compensation — Officers.

    1. A Churchill Downs authority is hereby created, initially consisting of three (3) prominent citizens and residents of Kentucky to be appointed by the Governor, one (1) of whom is an owner and breeder of Thoroughbred horses, and all of whom have no official connection with the government of the Commonwealth or Churchill Downs. The foregoing members shall serve as such until the acquisition of Churchill Downs, its real estate, franchises, rights, privileges and other properties by the authority as an agency of the Commonwealth. (1) (a) A Churchill Downs authority is hereby created, initially consisting of three (3) prominent citizens and residents of Kentucky to be appointed by the Governor, one (1) of whom is an owner and breeder of Thoroughbred horses, and all of whom have no official connection with the government of the Commonwealth or Churchill Downs. The foregoing members shall serve as such until the acquisition of Churchill Downs, its real estate, franchises, rights, privileges and other properties by the authority as an agency of the Commonwealth.
    2. Upon the completion of such acquisition, the then members of the authority shall be replaced by other members thereof as follows: nine (9) persons to be appointed by the Governor, who are residents or owners of real estate located in the Commonwealth and who are of outstanding character, business experience and at least six (6) of whom have knowledge of racing and the affairs of Churchill Downs, and not less than three (3) of whom shall be residents of Jefferson County. The Governor shall initially appoint nine (9) persons having such qualifications, two (2) each for staggered terms ranging from one (1) to four (4) years as he may designate and one (1) person for a term of four (4) years.
    3. As such terms expire, the then remaining members of the authority, by majority vote, shall select and submit to the Governor for his consideration the names of three (3) qualified nominees to fill each vacancy, one (1) of whom may be a member whose term has expired, from which the Governor shall appoint, for a four (4) year term, a member to fill the vacancy. After all members of the authority appointed as aforesaid have been appointed for a four (4) year term following the expiration of their initial staggered terms, the procedure outlined above shall be continued in filling vacancies of members of the authority as they occur through the expiration of terms.
    4. When and if any member dies, resigns or becomes incapacitated, the then remaining members of the authority, by majority vote, shall select and submit to the Governor for his consideration the names of three (3) qualified nominees to fill such vacancy, from which the Governor shall appoint a member to fill the vacancy for the unexpired term.
    5. The members shall be a body corporate constituting a public corporation, governmental agency and instrumentality of the Commonwealth by the name of “The Churchill Downs Authority” (herein sometimes referred to as the “authority”), with the perpetual succession and with power in that name to contract and be contracted with, to acquire and convey property, sue and be sued, to have and use a corporate seal, and exercise, in addition to the powers and functions specifically stated in KRS 58.500 to 58.590 , all of the usual powers of private corporations to the extent that the same are not inconsistent with specifically enumerated powers or limitations upon public corporations.
  1. The members of the authority shall receive no compensation for their services in that capacity, but shall be entitled to reimbursement for all reasonable expenses necessarily incurred in the performance of their duties.
  2. A majority of the members of the authority shall constitute a quorum for the transaction of business, and in the absence of a quorum, one (1) or more members may adjourn from time to time until a quorum is convened.
  3. From among its members, the authority shall annually elect a chairman and a vice chairman, each to serve for a term of one (1) year and until his successor is elected and accepts his election.
  4. The authority shall elect a president, a secretary and a treasurer, each of whom shall serve for a term of years fixed by contract or an annual term, all terminable for cause deemed sufficient by the authority, and each of whom shall receive such compensation as may be determined by the authority. These officers shall not be members of the authority, but the president and the secretary shall attend all meetings of the authority. The treasurer shall give bond to the authority and the Commonwealth conditioned upon his faithful accounting for all funds coming into his custody from time to time, the same to be in such amount as the authority may prescribe, with corporate surety given by a surety company qualified to do business in the Commonwealth, the premium therefor to be paid by the authority. The authority shall establish and maintain an office at Churchill Downs, and the secretary of the authority shall at all times maintain therein complete records of all of the authority’s actions and proceedings, which shall constitute public records open to inspection at reasonable times.

History. Enact. Acts 1978, ch. 111, § 1, effective June 17, 1978.

58.510. Powers of authority.

The authority may:

  1. Purchase Churchill Downs, its real estate, franchises, rights, privileges and other properties, and acquire such additional real estate as may become desirable in connection with the activities of Churchill Downs, and may construct, reconstruct, maintain and repair improvements on Churchill Downs, and operate the same for appropriate purposes, including, but not limited to, holding and conducting race meetings for stake, purse or reward, and providing and operating a pari-mutuel system of wagering in accordance with the provisions of KRS Chapter 230 or as may otherwise be authorized by law.
  2. Lease properties and concessions at Churchill Downs not needed by the authority for its current operations and sell such property as is not needed for the future operation of Churchill Downs at its present site.
  3. Make and enter into such contracts and agreements with the Commonwealth of Kentucky or any federal, city or county government, or other person or corporation, as may be necessary or incidental to the performance of its duties and the execution of its powers under KRS 58.500 to 58.590 .
  4. Employ consulting engineers, attorneys, accountants, construction and financial experts, superintendents, managers and such other employees and agents as may be necessary in the judgment of the authority, and fix their compensation.
  5. Receive and accept from the Commonwealth or any of its departments, any federal agency and the city or county, grants for or in aid of the construction or operation of any project, and receive and accept aid or contributions from any source of either money, property, labor or other things of value, to be held, used and applied for the purposes for which such grants and contributions may be made in furtherance of the business of the authority.
  6. Expend any funds provided under the authority of KRS 58.500 to 58.590 in advertising the facilities, services and projects of the authority.
  7. Do all acts necessary and proper to carry out the powers expressly or impliedly granted in KRS 58.500 to 58.590 .

History. Enact. Acts 1978, ch. 111, § 2, effective June 17, 1978.

58.520. Development of museum.

If the authority deems it advisable, it may further develop the museum at Churchill Downs and, in connection therewith, establish a facility and devices through which prior Kentucky Derby and other important races run at Churchill Downs may be exhibited to patrons of Churchill Downs during race meetings and to off-season tourist visitors.

History. Enact. Acts 1978, ch. 111, § 3, effective June 17, 1978.

58.530. Use of facilities for events other than horse racing.

The authority may also conduct or permit the conduct of other athletic and entertainment events at Churchill Downs and the use of its facilities in connection therewith, provided such activities or events do not conflict with or impinge upon the proper operation thereof primarily as a racetrack.

History. Enact. Acts 1978, ch. 111, § 4, effective June 17, 1978.

58.540. Power to issue revenue bonds for particular purposes — Interim financing.

  1. The authority may provide for the issuance of revenue bonds to pay all or any part of the cost of the acquisition of the properties of Churchill Downs or expenses incident thereto referred to in KRS 58.510 , or any part thereof or interest therein, and secure the payment thereof by a lien on the properties acquired with the proceeds of the bonds. The bonds shall bear interest at such rate not exceeding ten percent (10%) per annum and shall mature at such time not exceeding fifteen (15) years from their date, as may be provided by the authority, and may be made redeemable before maturity, at the option of the authority, at a price not less than the face amount thereof and accrued interest thereon. The proceeds of the bonds shall be used solely for the payment of the cost of the acquisition of Churchill Downs or expenses incident thereto, and shall be disbursed in such manner and under such restrictions, if any, as the authority may provide in the proceedings authorizing the issuance of the bonds or in the trust indenture securing the same.
  2. Notwithstanding KRS Chapter 56, the authority, in addition to the revenue bonds originally issued for the acquisition of Churchill Downs or expenses incident thereto as provided for in subsection (1) of this section, may issue revenue bonds payable solely from the charges, revenues, rentals and other funds pledged for their payment, for the purpose of paying all or any part of the cost of the acquisition of additional property, the reconstruction of improvements or the erection of additional improvements, but such revenue bonds shall be subordinate to the revenue bonds issued for the original acquisition of Churchill Downs or expenses incident thereto.
  3. Notwithstanding KRS Chapter 56, the authority, in addition to the revenue bonds originally issued for the acquisition of Churchill Downs or expenses incident thereto as provided for in subsection (1) of this section, and for the acquisition of additional property, the reconstruction of improvements or the erection of additional improvements provided for in subsection (2) of this section, may issue revenue bonds payable solely from the charges, revenues, rentals and other funds pledged for their payment, for the purpose of paying all or any part of the cost of further developing the museum at Churchill Downs and establishing a facility for the exhibition of prior Kentucky Derby and other important races held at Churchill Downs as aforesaid, but such revenue bonds shall be subordinate to any then outstanding previously issued revenue bonds.
  4. The authority may agree to or establish any method of interim financing by the authority during the acquisition of additional property, the reconstruction of improvements or the erection of additional improvements hereinbefore provided for and in developing the museum at Churchill Downs and establishing a facility for the exhibition of prior Kentucky Derby and other important races held at Churchill Downs as aforesaid, with borrowed funds from any bank, trust company, or banking institution, such borrowings to be paid from earnings or through the sale of revenue bonds before, during or at completion of such project, but such revenue bonds shall be subordinate to any then outstanding previously issued revenue bonds; and the interest rates, maturities and other provisions shall be such as the authority may at the time of issuance deem to be proper.
  5. If the proceeds of the bonds of any issue, by error of estimates or otherwise, shall be less than the cost for which issued, additional bonds may in like manner be issued to provide the amount of the deficit, and, unless otherwise provided in the proceedings authorizing the issuance of the bonds or in the trust indenture securing the same, shall be deemed to be of the same issue and shall be entitled to payment from the same fund without preference or priority of the bonds first issued. If the proceeds of the bonds of any issue exceed such cost, the surplus shall be deposited to the credit of the sinking fund for such bonds or any account therein as the authority shall have provided in the proceedings or trust indenture authorizing and securing the bonds.
  6. Prior to the preparation of definitive bonds, the authority may, under like restrictions, issue interim receipts or temporary bonds, with or without coupons, exchangeable for definitive bonds when such bonds have been executed and are available for delivery. The authority may also provide for the replacement of any bonds that become mutilated or are destroyed or lost.

History. Enact. Acts 1978, ch. 111, § 5, effective June 17, 1978.

58.550. Bonds may be issued without any departmental consent — Bond sale not governed by KRS 56.450.

The issuance of revenue bonds by the authority under the provisions of KRS 58.500 to 58.590 need not comply with the requirements of any other law applicable to the issuance of bonds. Bonds may be issued under the provisions of KRS 58.500 to 58.590 without obtaining the consent of any department, division, commission, board, bureau or agency of the Commonwealth, and without any proceedings or any other conditions or things, except as specifically required by KRS 58.500 to 58.590. The provisions of KRS 58.500 to 58.590 will supersede KRS 56.450 in regard to the sale of revenue bonds by this authority. Utilization may be made by the authority, however, of the provisions of sections of this chapter relating to issuance of revenue bonds for public projects generally in respect to: form, coupons, denominations, place of payment, signing, facsimile signatures, negotiability and method of sale.

History. Enact. Acts 1978, ch. 111, § 6, effective June 17, 1978.

58.560. Bonds not indebtedness of Commonwealth.

Bonds issued by the authority under the provisions of KRS 58.500 to 58.590 are issued on behalf of the Commonwealth but do not constitute a debt of the Commonwealth or of any political subdivision thereof, or a pledge of the faith and credit of the Commonwealth or of any such political subdivision, but such bonds and the interest thereon shall be payable solely from the funds and security provided therefor under the provisions of KRS 58.500 to 58.590 , and all such bonds shall contain on the face thereof a statement to that effect.

History. Enact. Acts 1978, ch. 111, § 7, effective June 17, 1978.

58.570. Bonds may be secured by indenture.

In the discretion of the authority, any bonds issued under the provisions of KRS 58.500 to 58.590 may be secured by a trust indenture by and between the authority and a corporate trustee, which may be any trust company or bank having the powers of a trust company in the Commonwealth. If obtainable, insurance adequate to cover the unpaid amount of outstanding revenue bonds shall be carried on the improvements of Churchill Downs. All expenses incurred in carrying out the provisions of such trust indenture or proceedings may be treated as a part of the cost of the operation of the project.

History. Enact. Acts 1978, ch. 111, § 8, effective June 17, 1978.

58.580. Property of authority is public property — Payment in lieu of taxes to local taxing units — Revenues exempt from taxation.

All projects and other property of the authority are hereby declared to be public property devoted to an essential public and governmental function and purpose, and shall be exempt from all taxes and special assessments of the Commonwealth or any political subdivision thereof, provided that the authority shall annually contribute to Louisville, Jefferson County, and the Jefferson County School District an amount equal to the local property taxes Churchill Downs would have paid under private ownership. All bonds or notes issued pursuant to KRS 58.500 to 58.590 are hereby declared to be issued by a body corporate and public of the Commonwealth and for an essential public and governmental purpose and such bonds and notes, and the interest thereon and the income therefrom, and all funds, revenues, income, and other moneys received or to be received by the authority and pledged or available to pay or secure the payment of such bonds or notes, or interest thereon, shall at all times be exempt from taxation except for transfer, inheritance, and estate taxes.

History. Enact. Acts 1978, ch. 111, § 9, effective June 17, 1978.

58.590. Annual report to Governor and General Assembly — Annual audit.

By January 30 each year, the authority shall make an annual report of its activities for the preceding calendar year to the Governor and to the General Assembly. Each such report shall set forth a complete operating and financial statement covering its operations during the year. The authority shall provide for an audit of its books and accounts to be made at least once in each year by certified public accountants, and the cost thereof may be treated as a part of the cost of acquisition or operation of the project. Such audits shall be public records within the meaning of KRS 61.870 .

History. Enact. Acts 1978, ch. 111, § 10, effective June 17, 1978.

Energy Conservation Improvements

58.600. Definitions for KRS 58.600 to 58.610.

As used in KRS 58.600 to 58.610 , unless the context requires otherwise:

  1. “Energy conservation revenue bonds” or “bonds” means securities issued by a local public agency in accordance with the provisions of KRS 58.600 to 58.610 to pay for energy conservation measures under guaranteed energy savings contracts;
  2. “Energy conservation measure” means a facility alteration designed to reduce energy consumption or operating costs, and may include one (1) or more of the following:
    1. Insulation of building structure or systems within buildings;
    2. Storm windows or doors, caulking or weatherstripping, multiple pane windows or doors, heat absorbing or heat reflective glazing for windows and doors, additional glazing, reductions in glass area or other window and door systems modifications that reduce energy consumption;
    3. Automated or computerized energy control systems;
    4. Heating, ventilating, or air conditioning system modifications or replacements;
    5. Replacement or modification of lighting fixtures to increase energy efficiency of the lighting system without increasing the overall illumination of the building, unless an increase in illumination is necessary to conform to applicable state or local building codes for the lighting system after the proposed modifications are made;
    6. Energy recovery systems;
    7. Cogeneration systems that produce steam or forms of energy such as heat as well as electricity for use primarily within a building or complex of buildings;
    8. Energy conservation measures that provide long-term operating cost reductions; or
    9. Any life safety measures that provide long-term operating cost reductions;
  3. “Local public agency” means a city, county, charter county, urban-county, school district, special district, or an agency formed by a combination of these agencies under KRS Chapter 79;
  4. “Capital cost avoidance” has the same definition as in KRS 45A.345 ; and
  5. “Guaranteed energy savings contract” has the same definition as in KRS 45A.345 .

History. Enact. Acts 1996, ch. 213, § 1, effective July 15, 1996; 1998, ch. 375, § 6, effective July 15, 1998; 2010, ch. 63, § 13, effective July 15, 2010.

Legislative Research Commission Note.

(7/12/2006). In subsection (5) of this statute, the Reviser of Statutes has changed a reference to “KRS 45A.345(26)” to read “KRS 45A.345(27),” in order to correct an error resulting from the renumbering of subsections in 1998 Ky. Acts ch. 120, sec. 12, and ch. 375, sec. 2. See KRS 7.136(1)(e) and (h).

58.605. Energy conservation revenue bonds for energy conservation measures — Procedure.

  1. Subject to the reporting and approval requirements in KRS 45A.352 , 45A.353 , and 58.610 , any local public agency may issue energy conservation revenue bonds to pay for the cost of energy conservation measures under guaranteed energy savings contracts for the purpose of reducing the cost of energy to buildings owned or operated by the local public agency by making energy-saving improvements to these buildings.
  2. A local public agency, or an agency acting on its behalf, may issue energy conservation revenue bonds to finance the energy conservation measures under guaranteed energy savings contracts, with the following limitations:
    1. Any energy conservation measure, financed through bonds, shall comply with the provisions set forth in KRS 45A.345 , 45A.352 , and 45A.353 ;
    2. The term of the bonds shall run coterminous with the term of guaranteed energy savings contract;
    3. A local public agency shall not enter into a guaranteed energy savings contract where the total cost of the energy conservation measures exceeds the cost of the energy savings plus the operational costs plus the capital cost avoidance that is estimated for the term of the guaranteed energy savings contract commencing from the date of the energy conservation measure’s installation; and
    4. The use of capital cost avoidance shall be subject to the following restrictions:
      1. The amount expended shall not exceed fifty percent (50%) of the project cost; and
      2. Capital cost avoidance shall be restricted to payment for permanent equipment replacement as follows:
        1. Storm windows or doors, multiglazed windows or doors, additional glazing, and reduction in glass area;
        2. Replacement of heating, ventilating, or air conditioning major components or systems;
        3. New lighting fixtures where required to achieve Illuminating Engineering Society of North America (IES) standards, provided the existing light fixtures shall have been determined to be obsolete and incapable of achieving IES standards; and
        4. Life safety system replacements or upgrades which shall have been determined to be necessary to conform with existing state and local codes and standards.
  3. Energy conservation revenue bonds shall be issued in accordance with the provisions of KRS 58.010 to 58.140 and shall be sold at a competitive sale preceded by adequate public notice and shall bear interest at an interest rate or rates determined by the local public agency at the time of the sale.

History. Enact. Acts 1996, ch. 213, § 2, effective July 15, 1996; 1998, ch. 120, § 31, effective July 15, 1998; 1998, ch. 375, § 7, effective July 15, 1998.

Legislative Research Commission Note.

(7/15/98). This section was amended by 1998 Ky. Acts chs. 120 and 375 which do not appear to be in conflict and have been codified together.

58.610. Issuance by school districts, county and city government, or special district — Special procedure.

  1. Energy conservation revenue bonds authorized under KRS 58.600 to 58.610 issued by or on behalf of a school district shall be approved or disapproved by the chief state school officer based on consideration of the following criteria:
    1. Funding capability of the school;
    2. The availability of general fund, capital outlay allotment under KRS 157.420 , or state and local funds from the Facility Support Program of Kentucky under KRS 157.440 , that are to be contributed by the school district as capital cost avoidance; and
    3. Proper bond documentation.
  2. Guaranteed energy savings and guaranteed operational savings of a guaranteed energy savings contract shall be exempt from current or future debt limitations, except that capital cost avoidance, as defined in KRS 58.600 , shall not be exempt from current or future debt limitations.
  3. No energy conservation revenue bonds authorized under KRS 58.600 to 58.610 shall be issued by or on behalf of a county, urban-county government, charter county government, city, or special district without the prior approval of the state local debt officer, except that this approval shall not be required if the principal amount of energy conservation revenue bonds is less than five hundred thousand dollars ($500,000).
  4. Any issuance of energy conservation revenue bonds shall be reported to the state local debt officer.

History. Enact. Acts 1996, ch. 213, § 3, effective July 15, 1996; 1998, ch. 375, § 8, effective July 15, 1998.

58.615. Authority for administrative regulations. [Repealed.]

Compiler’s Notes.

This section (Enact. Acts 1996, ch. 213, § 4, effective July 15, 1996) was repealed by Acts 1998, ch. 375, § 11, effective July 15, 1998.

Legislative Research Commission Note.

(7/15/98). Under KRS 446.260 , the repeal of this section in 1998 Ky. Acts ch. 375 prevails over its amendment in 1998 Ky. Acts ch. 69.