CHAPTER 41 Department of the Treasury

41.010. Definitions for KRS 41.070, 41.110, 41.120, 41.130, 41.280, 41.290, or 41.300 — Definitions for chapter.

  1. As used in KRS 41.070 , 41.110 , 41.120 , 41.130 , 41.280 , 41.290 , or 41.300 , unless the context requires otherwise, the terms “appropriation,” “budget unit,” “disbursements,” “expenditures,” “expenses,” and “receipts” have the meaning given them by KRS 43.010 and 48.010 .
  2. As used in this chapter:
    1. “Administrative body” includes an authority, board, bureau, interstate compact, commission, committee, conference, council, or any other form of organization in the executive branch of state government, but does not include office, department, program cabinet, or division;
    2. “Agency” means any state administrative body, program cabinet, office, department, or division;
    3. “Assistant” means assistant treasurer;
    4. “Bank” includes any bank or savings and loan association chartered by the State of Kentucky or the United States government designated to take custody of state funds on deposit, for periods greater than overnight, with the intent to honor presentments against those deposits;
    5. “Check,” unless the context requires otherwise, means either a paper check or a paperless entry on an electronic data processing medium that substitutes for a paper check and of which a permanent record is made for purposes of debiting or crediting an account;
    6. “Collateral” means the listed securities and other obligations in KRS 41.240(4);
    7. “Form” or “report” means any written method of transporting data;
    8. “Secretary” means the secretary of the Finance and Administration Cabinet;
    9. “State depository” means any bank designated to take custody of state funds on deposit pursuant to KRS 41.220 ;
    10. “Warrant” means a printed or electronic authorization from the Finance and Administration Cabinet for the Treasurer to issue a check; and
    11. “Writing” or “written” means 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.

History. 1992b-2: amend. Acts 1982, ch. 382, § 1, effective July 15, 1982; ch. 450, § 55, effective July 1, 1983; 1998, ch. 118, § 1, effective July 15, 1998; 1998, ch. 120, § 1, effective July 15, 1998; 2009, ch. 78, § 26, effective June 25, 2009; 2021 ch. 155, § 1, effective June 29, 2021.

Opinions of Attorney General.

The Kentucky Center for the Arts Corporation does not have to deposit the moneys it receives in the State Treasury since it is not a budget unit of the Commonwealth, a budget unit being a department or other unit of organization for which separate appropriations are made from those for any other organization unit (this section, KRS 43.010 and 45.010 (now repealed), see KRS 48.010 ). OAG 81-129 .

Since the General Assembly in subsection (2) of this section defined “bank” and “depository” to include savings and loan associations, such institutions can be considered as state depositories so long as they satisfy the remaining criteria found in Chapter 41 of the Kentucky Revised Statutes. OAG 92-83 .

Research References and Practice Aids

Cross-References.

Acts of General Assembly, treasurer entitled to copies of, KRS 57.300 .

Books received from librarian, care and custody of, KRS 57.360 , 57.370 .

Constitutional provisions as to treasurer, Ky. Const., §§ 91, 93, 95, 96, 152, 228.

Deposits of insurers, KRS 304.8-010 et seq.

Election, term, qualifications, when to enter office, duties, fees, Ky. Const., §§ 91, 93, 95.

Library service work, treasurer trustee of federal grants for, KRS 171.160 .

Motor vehicle reparations act, KRS 304.39-010 et seq.

Oath of treasurer, Ky. Const., § 228.

Teachers’ retirement system, treasurer member, ex officio treasurer and custodian of funds of, KRS 161.250 , 161.370 , 161.380 .

Unemployment insurance fund, treasurer ex officio treasurer of, KRS 341.500 .

Vocational education and rehabilitation, treasurer custodian of federal grants for, KRS 151B.155 .

Workers’ compensation subsequent injury fund, KRS 342.122 .

41.020. Treasurer head of department — Where to keep office.

The Department of the Treasury shall be headed by the State Treasurer. He shall reside and keep his office at the seat of government.

History. Recodified 1942 Ky. Acts ch. 208, sec. 1, effective October 1, 1942, from Ky. Stat. secs. 4618-77, 4684.

NOTES TO DECISIONS

Cited:

Dennis v. Fiscal Court of Bullitt County, 784 S.W.2d 608, 1990 Ky. App. LEXIS 23 (Ky. Ct. App. 1990).

Research References and Practice Aids

Cross-References.

Bond of treasurer, amount and conditions, KRS 62.160 , 62.180 .

Commissioned by Governor, KRS 61.020 .

Election, term, qualifications, when to take office, not to succeed himself, duties, Ky. Const., §§ 91, 93, 95.

Oath, Ky. Const., § 228.

Salary of treasurer, KRS 64.480 .

State Investment Commission, treasurer is member of, KRS 42.500 .

Vacancy, how filled, Ky. Const., § 152; KRS 63.190 .

41.025. Tuition Account Program Office. [Repealed.]

Compiler’s Notes.

This section (Enact. Acts 2000, ch. 163, § 8, effective July 14, 2000) was repealed by Act 2005, ch. 162, § 9, effective July 1, 2005.

41.030. Bond of Treasurer. [Repealed.]

Compiler’s Notes.

This section (4680, 4681) was repealed by Acts 1946, ch. 27, § 21.

41.040. Salary of Treasurer. [Repealed.]

Compiler’s Notes.

This section (4683, 4683a: amend. Acts 1946, ch. 26, § 3) was repealed by Acts 1950, ch. 123, § 29. For present law see KRS 64.480 .

41.050. Suspension of Treasurer. [Repealed]

History. 4685; repealed by 2021 ch. 155, § 24, effective June 29, 2021.

41.060. Assistant treasurer.

  1. The Treasurer shall appoint an assistant and may remove him or her at pleasure. The assistant shall take the constitutional oath. The assistant may perform any of the duties of the Treasurer, excepting the signing of checks, and shall perform the duties of clerk.
  2. If the Treasurer is incapacitated, or is absent from the seat of government, the assistant shall discharge the duties of the office during the incapacity or absence of the Treasurer.
  3. The Treasurer and his or her sureties shall be responsible on his or her bond for all the acts and omissions of the assistant.
  4. The salary of the assistant shall be fixed by the Treasurer, subject to the provisions of KRS Chapter 18A.

History. 4682, 4683: amend. Acts 1946, ch. 27, § 45; 1962, ch. 210, § 4; 1982, ch. 448, § 59, effective July 15, 1982; 2021 ch. 155, § 2, effective June 29, 2021.

NOTES TO DECISIONS

1.Salary.

When the salary of the assistant treasurer was fixed by statute, the biennial appropriation bills did not authorize the Treasurer to increase that salary. Dishman v. Coleman, 244 Ky. 239 , 50 S.W.2d 504, 1932 Ky. LEXIS 397 ( Ky. 1932 ).

2.Removal.

Where the Treasurer appoints an assistant, and the Treasurer is later adjudged not to be entitled to the office, the appointed assistant is not thereby removed from his office. Long v. Coulter, 67 S.W. 272, 23 Ky. L. Rptr. 2389 , 1902 Tex. Crim. App. LEXIS 295 (Tex. Crim. App. 1902).

Research References and Practice Aids

Cross-References.

Fire and tornado insurance fund, employment of personnel necessary to carry out law relating to, KRS 56.150 .

41.070. Moneys to be deposited in state depositories — Exceptions — Designated depositories — Records of agencies.

  1. Unless otherwise expressly provided by law, no receipts from any source of state money or money for which the state is responsible shall be held, used, or deposited in any personal or special bank account, temporarily or otherwise, by any agent or employee of any budget unit, to meet expenditures or for any other purpose.
  2. All receipts of any character of any budget unit, all revenue collected for the state, and all public money and dues to the state shall be deposited in state depositories in the most prompt and cost-efficient manner available. However in the case of state departments or agencies located outside Frankfort, and all state institutions, the Finance and Administration Cabinet may permit temporary deposits to be made to the accounts maintained by the agency, department, or institution in a state depository for a period not to exceed thirty (30) days, and may require that the money be forwarded to the State Treasury at the time and in the manner and form prescribed by the cabinet. Nothing in this section shall be construed as authorizing any representative of any agency, department, or institution to enforce or cash, even for the purpose of a deposit, any check or other instrument of value payable to the Commonwealth or any agency thereof.
  3. Each agency depositing its receipts directly with the State Treasurer shall do so in the manner approved by the State Treasurer as agent in charge of public fund deposits.
  4. The Department of Revenue may deposit receipts to the credit of the State Treasury directly with a state depository utilized by the Commonwealth for its primary banking services. The State Treasurer, with the approval of the Finance and Administration Cabinet, may authorize other agencies to deposit receipts directly with a state depository to the credit of the State Treasury if the Treasurer prescribes the manner in which the deposit is to be made, and the forms and reports to be filed with the Treasury Department. The Finance and Administration Cabinet shall prescribe the forms and reports to be filed with it when this type of deposit is made.
  5. Each department, agency, or other budget unit which receives funds to be deposited into the State Treasury shall maintain records to report adequately each amount received, from whom received, and date received. Agency records shall be easily reconcilable with the information forwarded to the State Treasurer.

History. 1922b-45, 4618-85, 4686: amend. Acts 1954, ch. 244, § 1; 1968, ch. 119, § 1; 1974, ch. 74, Art. II, § 9(1); 1982, ch. 382, § 31, effective July 15, 1982; 1994, ch. 58, § 1, effective March 10, 1994; 1998, ch. 118, § 2, effective July 15, 1998; 2005, ch. 85, § 46, effective June 20, 2005; 2021 ch. 155, § 3, effective June 29, 2021.

NOTES TO DECISIONS

1.Collection of Funds.

An attorney employed to collect money due the state does not have a lien on the funds so collected by him. Hendrick v. Posey, 104 Ky. 8 , 45 S.W. 525, 20 Ky. L. Rptr. 359 , 1898 Ky. LEXIS 125 ( Ky. 1898 ).

2.KRA Premiums.

The premiums collected by Kentucky Reinsurance Association are not state funds — they are private funds; therefore since subsection (1) of this section and 446.010(31) are applicable only to state funds the premiums collected by the KRA are not required to be deposited in the State Treasury; the method of operation is to collect premiums — in advance of liabilities — to invest these funds, so that much of the liability can be met by investment income. Thompson v. Kentucky Reinsurance Asso., 710 S.W.2d 854, 1986 Ky. LEXIS 266 ( Ky. 1986 ).

3.Deposited Funds.

Upon receiving a good faith deposit to secure a real estate purchase agreement, the Commonwealth of Kentucky Transportation Cabinet did not place the funds in escrow with a third party by using a state deposit account as provided in this section. The parties never created an escrow agreement, the Cabinet's entitlement to the deposit was not conditional, and the purchase agreement did not afford the buyer any right to a refund. Lawrence v. Commonwealth of Ky. Transp. Cabinet (In re Shelbyville Rd. Shoppes, LLC), 775 F.3d 789, 2015 FED App. 0002p, 2015 U.S. App. LEXIS 73 (6th Cir. Ky. 2015 ).

Opinions of Attorney General.

After the state depositories have been initially designated by the state treasurer and the Commissioner of Finance (now Secretary of the Finance and Administration Cabinet), the commissioner of finance (now Secretary of the Finance and Administration Cabinet) under the exception may permit temporary deposits to be made in any such bank without any additional consent or approval from the state treasurer. OAG 60-332 .

An account may remain open and used from month to month under the exception with respect to temporary deposits, so long as such deposits do not exceed the 30-day period. OAG 60-332 .

Once temporary deposits are made, they cannot be changed to another state depository without the joint determination of both the State Treasurer and the Commissioner of Finance (now Secretary of the Finance and Administration Cabinet). OAG 60-332 .

This section, relating to the paying of money to the State Treasury, does not apply to the Kentucky Trotting Commission or the Kentucky Racing Commission. OAG 71-363 .

The Kentucky State Racing Commission is not required to deposit the fees it receives as authorized by KRS 230.260 into the state treasury. OAG 72-494 .

The Department of Fish and Wildlife Resources is subject to the provisions of this section unless expressly exempted. OAG 72-701 .

Although KRS 41.290 specifically excepts from its provisions private funds made available to state universities, bond project revenues are not “private funds” but are state funds falling within the purview of this section and the corporate powers of the state universities in no way militate against the application of this section in connection with subject bond project revenues. OAG 73-173 .

The state universities are required to promptly transfer subject bond project revenues into the State Treasury as required by this section and the funds are subject to investment as required by the bond contract and KRS 45.140 (now repealed) and the deposit of such revenues in the State Treasury would in no way effect a substantial impairment of bond indenture requirements. OAG 73-173 .

The Governor’s Council on Agriculture is a state agency and all funds received by it from whatever source must be handled and accounted for as state funds and may not be separately deposited in a local bank account. OAG 75-62 .

The interest accruing on the investment of fees collected on the motor vehicle usage tax each week by the county court clerk belongs to the state since the interest is produced from the principal, which principal belongs to the state and it should, therefore, be remitted to the State Treasurer at the time the principal is turned into the Department of Revenue (now Revenue Cabinet). OAG 75-502 .

The Department of Revenue (now Revenue Cabinet) can legally engage in a lockboxing arrangement with a selected depository bank which acts as an agent of the Department (now Cabinet) in carrying out duties relative to tax collections and deposits in the State Treasury and which is bound by the confidentiality provisions of KRS 131.190 . OAG 76-510 .

Revenue going to the Kentucky retirement systems must be kept in the State Treasury, since it involves money which the state or its agency is responsible for receiving and disbursing from time to time to retirees or their beneficiaries. OAG 79-396 .

The Kentucky Bar Association is not a state agency for the purpose of being subjected to an audit by the Auditor of Public Accounts pursuant to KRS Chapter 43 and since the Bar Association is not a state budget unit, its receipts do not have to be deposited to the State Treasury and its funds are not subject to appropriation by the General Assembly. OAG 80-393 .

The foundation of a state university (a nonprofit fiduciary holding funds for the benefit of any form of state organization) is not required under this section to deposit moneys received by it in the State Treasury as foundation funds are private rather than public funds. OAG 82-521 .

Funds, other than private funds and contributions, received by an affiliated corporation are subject to the provisions of this section; however, if the state university has elected to receive, deposit, collect, retain, invest, disburse and account for all funds received or due from any source as provided by subsection (2) of KRS 164A.560 , then the receipts of an affiliated corporation to that university would no longer be required to be deposited in the State Treasury. OAG 82-521 .

Proceeds of general obligation bonds and revenue bonds should be deposited directly into the State Treasury System, i.e., into properly established state depositories subject to fund accounting pursuant to this section and KRS 48.010(13)(b). OAG 83-241 .

Bond proceeds and subsequent receipts that go toward debt service, and state agency bond issues for which no request of state funds is anticipated, should be deposited in a state depository as a part of the Treasury System; bond moneys include bond proceeds (sale of bonds) and project revenues. OAG 83-241 .

Receipts collected by the Kentucky Reinsurance Association must be deposited in state depositories as provided in this section; the receipts cannot be deposited outside the treasury system of Kentucky. OAG 83-370 .

The Cabinet for Human Resources may establish a system for the collection and disbursement of child support payments through the office of CHR’s contracting officials without violating subsection (1) of this section and KRS 41.160 . OAG 93-59 .

Research References and Practice Aids

Cross-References.

Boiler safety revolving fund, KRS 236.130 .

Checks and money orders to be made payable to treasurer, KRS 45.260 .

Collectors of public funds to keep record of money paid into treasury, KRS 46.030 .

Revenue Cabinet field agents, temporary deposits by, KRS 131.205 .

Fees for licenses, permits, certificates and services of budget units, how collected, KRS 45.260 .

Fines and forfeitures to be paid into treasury, KRS 30A.190 .

Penalties on taxes to be paid into treasury, how disposed of, KRS 134.400 .

Taxes to be reported to Revenue Cabinet and paid into treasury monthly, KRS 134.320 .

Tolls collected from state toll bridges to be paid into treasury, KRS 180.240 .

Unemployment insurance fund, how money paid into, KRS 341.500 .

41.080. Permits to Treasurer to receive money. [Repealed.]

Compiler’s Notes.

This section (152, 4686, 4687) was repealed by Acts 1968, ch. 119, § 21.

41.090. Pay-in vouchers. [Repealed.]

Compiler’s Notes.

This section (1992b-47) was repealed by Acts 1968, ch. 119, § 21.

41.100. Treasurer to receive and acknowledge notification of moneys from state agencies.

The Treasurer shall receive notification from state agencies of all money due or payable to the state. The Treasurer shall provide acknowledgment of the notification to the Finance and Administration Cabinet.

History. 4695: amend. Acts 1968, ch. 119, § 2; 1974, ch. 74, Art. II, § 9(1); 1998, ch. 118, § 3, effective July 15, 1998.

Opinions of Attorney General.

In the limited circumstance where federal law preempts state law that would otherwise govern, the State Treasurer may authorize, without a completed “warrant” at the time the authorization is given, the financial agent of the U.S. Treasury to debit the bank account of the Commonwealth for the amount the Commonwealth owes in federal tax deposits. OAG 94-65 .

Research References and Practice Aids

Cross-References.

Finance and Administration Cabinet to keep receipt book, KRS 45.310 .

41.110. Restrictions on withdrawals of money from Treasury.

  1. No public money shall be withdrawn from the Treasury for any purpose other than that for which its withdrawal is proposed in accordance with the Constitution and statutes of the Commonwealth of Kentucky, nor unless it has been appropriated by the General Assembly or is a part of a revolving fund, and has been allotted as provided in KRS 48.010 to 48.800 , and then only on the warrant of the Finance and Administration Cabinet.
  2. The provisions of this section do not apply to withdrawals of funds from one (1) or more state depositories for immediate redeposit in other state depositories or to funds held in trust for the security of bond holders.

History. 1992b-36; 4688: amend. Acts 1968, ch. 119, § 3; 1974, ch. 74, Art. II, § 9(1); 1982, ch. 450, § 56, effective July 1, 1983; 2021 ch. 155, § 4, effective June 29, 2021.

NOTES TO DECISIONS

1.Purpose.

The purpose of this section and Ky. Const., § 230 was to prevent the expenditure of the state’s money without the consent of the legislature. Ferguson v. Oates, 314 S.W.2d 518, 1958 Ky. LEXIS 295 ( Ky. 1958 ).

2.Applicability.

This section together with KRS 41.120 does not authorize a claim against the state but merely outlines the procedure by which a validated claim must be paid out of the treasury which procedure must be followed in paying a tax refund, provided, of course, the taxpayer has first established his right to such refund. Department of Conservation v. Co-De Coal Co., 388 S.W.2d 614, 1964 Ky. LEXIS 537 (Ky. Ct. App. 1964).

Ky. Const., § 230 and KRS 41.110 , preventing the expenditure of the State’s money without the consent of the legislature, and KRS 453.010 and CR 54.04(1), restricting judgments for costs against the Commonwealth, did not prohibit the trial court’s order requiring the Cabinet for Health and Family Services to pay for counseling for a mother whose child was placed with the Cabinet; a purpose of the Unified Juvenile Code was to strengthen and maintain the biological family unit and to offer all available resources to a family in need of them, under KRS 600.010(2)(a). Cabinet for Health & Family Servs. v. Evans, 2006 Ky. App. LEXIS 52 (Ky. Ct. App. Feb. 17, 2006, sub. op., 2006 Ky. App. Unpub. LEXIS 831 (Ky. Ct. App. Feb. 17, 2006).

Trial court erred in ordering the cabinet for health and family services to pay for opiate hair follicle drug screen testing performed on the parents of a neglected child because there was no specific statute authorizing assessment of such payment and there was no significant potential infringement of the parents’ due process rights which would serve to bring the issue within the purview of the court’s inherent powers to administer justice. Commonwealth v. G.W.F., 229 S.W.3d 596, 2007 Ky. App. LEXIS 364 (Ky. Ct. App. 2007).

3.Appropriation.

The auditor (now Finance and Administration Cabinet) cannot be compelled by mandamus to issue his warrant upon the Treasury unless the Legislature has expressly appropriated the money to discharge the liability. Hager v. Shuck, 120 Ky. 574 , 87 S.W. 300, 27 Ky. L. Rptr. 957 , 1905 Ky. LEXIS 133 ( Ky. 1905 ).

Commissioners of sinking fund had no authority to make expenditures without permission of Legislature, and could not create a debt binding on the state unless specifically authorized to so do. Rhoads v. Fields, 219 Ky. 303 , 292 S.W. 809, 1927 Ky. LEXIS 321 ( Ky. 1927 ).

Direction by the Legislature to the auditor (now Finance and Administration Cabinet) to issue a warrant and to the Treasurer to pay it out of the general fund is an appropriation within the meaning of Ky. Const., § 230, it being unnecessary to use the word “appropriate.” Shannon v. Dean, 279 Ky. 279 , 130 S.W.2d 812, 1939 Ky. LEXIS 290 ( Ky. 1939 ).

A law providing a limit of $5,000 upon the expenditures of a certain state agency was a continuing appropriation, which was repealed by the Budget Act of 1934 and by succeeding appropriation acts, all of which abolished continuing appropriations and required expenditures to be based on the biennial appropriation acts. Mattingly v. Kirtley, 285 Ky. 795 , 149 S.W.2d 521, 1941 Ky. LEXIS 468 ( Ky. 1941 ).

4.— Exhaustion.

The Treasurer could not be required by mandamus to pay a warrant for clerical services rendered by claimant to the auditor (now Finance and Administration Cabinet) after the appropriation for that purpose had been exhausted in the payment of previous warrants for similar services. Bosworth v. Shuck, 118 Ky. 458 , 81 S.W. 240, 26 Ky. L. Rptr. 324 , 1904 Ky. LEXIS 57 ( Ky. 1904 ).

Since certain money from fees and receipts of county officers belonged to those officers or the county, its payment into the State Treasury did not vest the state with title thereto or a right to its custody, and the county officers were entitled to refund from the general fund without special appropriation by the General Assembly after appropriation for making refunds had been exhausted. Ross v. Gross, 300 Ky. 337 , 188 S.W.2d 475, 1945 Ky. LEXIS 544 ( Ky. 1945 ).

5.Payment into Treasury.

The Legislature intended that the revenues of the state should be paid directly into the Treasury, and an attorney who collects money due the state has no authority to retain a part of the money so collected on the theory that he has a lien on the money for his fee. Hendrick v. Posey, 104 Ky. 8 , 45 S.W. 525, 20 Ky. L. Rptr. 359 , 1898 Ky. LEXIS 125 ( Ky. 1898 ).

6.Refusal to Honor Warrant.

To the extent the Department of Finance (now Finance and Administration Cabinet) is authorized to certify the correctness of a claim from an accounting and bookkeeping standpoint, the warrant must be honored by the Treasurer, however, the designation by the Legislature of certain specific duties and responsibilities under Ky. Const., § 93 does not extinguish the implied obligation of the office and the Treasurer may properly, acting in good faith, upon a substantial constitutional ground, raise a question for judicial determination concerning the legality of a claim upon the Treasury. Raney v. Stovall, 361 S.W.2d 518, 1962 Ky. LEXIS 246 ( Ky. 1962 ).

Opinions of Attorney General.

The appropriation by trust and agency accounts in the state budget is an appropriation as defined by KRS 45.010 (now repealed) and as mentioned in Ky. Const., § 230, and the exclusion of bond project revenues by this section was designed to accommodate KRS 45.140 (now repealed) since the trust and agency accounts do not require allotments but give the exclusion the meaning that appropriations are not necessary for bond project revenues placed in the state treasury, therefore placing it in square conflict with Ky. Const., § 230, which requires appropriations in order to get revenues out of the treasury. OAG 73-173 .

In view of this section and the restrictions of Ky. Const., § 230, the payment of costs cannot be mandatorily enforced against the state, although under KRS 453.010 the state may decide payment or nonpayment of court costs based upon factual and equitable considerations surrounding the litigation. OAG 73-430 .

Under this section and KRS 31.050 , KRS 31.060 , and in view of KRS 45.230 (now repealed) and Ky. Const., § 230, excess funds returned to the public defender at the end of the fiscal year may not be returned to a county as an addition to the maximum formula state grant provided. OAG 73-525 .

Where a county was delinquent in payments to the county employees’ retirement fund, which is a state fund under KRS 78.520 , and the board of trustees of the county employees’ retirement system proceeded under KRS 78.535 to collect this arrearage and the State Treasurer under the authority of KRS 44.030 paid the arrearage to the retirement system fund out of funds which had been granted to the delinquent county by the state public defender’s office pursuant to KRS 31.050 and KRS 31.160 , subsequently issuing a check to the delinquent county only for the amount of the grant from the public defender’s office less the retirement fund arrearage, this action violated neither Ky. Const., § 230 or KRS 41.110 , KRS 44.030 being considered an exception to the provisions of that section. OAG 73-561 .

Although the responsibility for receiving and processing the documentation supportive of claims against the state and issuing the proper and legal warrants rests with the Executive Department for Finance and Administration (now Finance and Administration Cabinet), the State Treasurer may question any particular warrant if it is done in good faith and on good constitutional grounds. OAG 76-221 .

Revenue going to the Kentucky Retirement Systems must be kept in the State Treasury, since it involves money which the state or its agency is responsible for receiving and disbursing from time to time to retirees or their beneficiaries. OAG 79-396 .

Departments and agencies of the central state government can legally pay, out of the current operational account, the travel expenses of out-of-state persons invited to Kentucky for screening employment interviews, involving high level state management or cabinet positions, when the prospective employee will not agree to pay such expenses. OAG 80-37 .

When a local development project is referred to by name in a branch budget appropriation, the use of the project name is inseparable from a local entity’s receipt of the state funds. The appropriated funds can only be lawfully applied to a facility as named in the appropriation, and any inconsistent use of those funds by the Governor’s Office for Local Development or by any local entity receiving the funds would lack authorization from the General Assembly and would therefore be contrary to state law. OAG 2005-05 .

Research References and Practice Aids

Cross-References.

Compensation of employees of General Assembly paid on certification by clerk of each house, KRS 6.230 .

Expenditures from unemployment insurance fund not subject to laws requiring specific appropriations or other formal release by state officers of money in their custody, KRS 341.500 .

Money not to be withdrawn from treasury except in pursuance of appropriation, Ky. Const., § 230.

No money to be paid to person indebted to state, KRS 44.030 .

Refund of alcoholic beverage license tax may be made without specific appropriation, KRS 243.460 .

Kentucky Law Journal.

Oberst and Lewis, Claims Against the State of Kentucky, 42 Ky. L.J. 65 (1953).

Salamanca, The Constitutionality of an Executive Spending Plan, 92 Ky. L.J. 149 (2003).

41.120. Claims to be paid by warrants — Warrant authorizes Treasurer to pay — Manner of authorization.

  1. All claims against the state shall be paid by the Treasurer on the warrants of the Finance and Administration Cabinet.
  2. All warrants issued in accordance with the provisions of this chapter shall, when signed by the secretary of the Finance and Administration Cabinet or an assistant designated by him or her, constitute full and sufficient authority to the Treasurer for the disbursement of public money in the amount set forth.
  3. Signatures may be placed on the warrants by means of an approved mechanical device. A signed transmittal which lists warrants may be accepted in lieu of each warrant being signed. Electronic authorization, approved by the secretary of the Finance and Administration Cabinet, may be accepted in lieu of any signatures.

History. 1992b-34, 1992b-37: amend. Acts 1950, ch. 101, § 1; 1968, ch. 119, § 4; 1974, ch. 74, Art. II, § 9(1); 1998, ch. 118, § 4, effective July 15, 1998; 2021 ch. 155, § 5, effective June 29, 2021.

Opinions of Attorney General.

Although the responsibility for receiving and processing the documentation supportive of claims against the state and issuing the proper and legal warrants rests with the Executive Department for Finance and Administration (now Finance and Administration Cabinet), the State Treasurer may question any particular warrant if it is done in good faith and on good constitutional grounds. OAG 76-221 .

In the limited circumstance where federal law preempts state law that would otherwise govern, the State Treasurer may authorize, without a completed “warrant” at the time the authorization is given, the financial agent of the U.S. Treasury to debit the bank account of the Commonwealth for the amount the Commonwealth owes in federal tax deposits. OAG 94-65 .

Research References and Practice Aids

Cross-References.

Finance and Administration Cabinet to keep record of money paid out of Treasury and of warrants issued, KRS 45.310 .

41.130. Warrants — Contents — Conditions of issuance Unified and integrated system of accounts.

  1. Each warrant of the Finance and Administration Cabinet upon the Treasury shall specify the date, amount, and person to whom payable, and no money shall be disbursed by the Treasurer unless the warrant contains these specifications.
  2. No warrant shall be issued unless the money to pay it has been appropriated by law. The Finance and Administration Cabinet may require any claimant to state on the face of his claim the law under which it is payable.
  3. The Finance and Administration Cabinet shall record all warrants in the unified and integrated system of accounts.
  4. The Treasurer shall maintain electronic records in the unified and integrated system of accounts that show all checks issued, the name of the payee, date, and amount and shall be in a format that is readily reconcilable with the warrants issued by the Finance and Administration Cabinet.

History. 143, 146, 1992b-37, 4689: amend. Acts 1968, ch. 119, § 5; 1974, ch. 74, Art. II, § 9(1); 1998, ch. 118, § 5, effective July 15, 1998; 2021 ch. 155, § 6, effective June 29, 2021.

NOTES TO DECISIONS

1.Issuance of Warrant.
2.— Refusal.

The auditor (now Finance and Administration Cabinet) has the legal right to refuse to issue a warrant for the payment of any claim presented to him, the correctness of which he may question and on the advice of the Attorney General conclude to contest. Greene v. Ballard, 174 Ky. 808 , 192 S.W. 841, 1917 Ky. LEXIS 246 ( Ky. 1917 ).

To the extent the Department of Finance (now Finance and Administration Cabinet) is authorized to certify the correctness of a claim from an accounting and bookkeeping standpoint, the warrant must be honored by the Treasurer, however, the designation by the Legislature of certain specific duties and responsibilities under Ky. Const., § 93 does not extinguish the implied obligation of the office and the Treasurer may properly, acting in good faith, upon a substantial constitutional ground, raise a question for judicial determination concerning the legality of a claim upon the Treasury. Raney v. Stovall, 361 S.W.2d 518, 1962 Ky. LEXIS 246 ( Ky. 1962 ).

3.Appropriation.

The state cannot be made liable at all except under a statute passed by the legislature incurring the liability, nor can it then be liable to suit against its auditor (now Finance and Administration Cabinet) to compel him by mandamus to issue his warrant upon the Treasury unless the Legislature has expressly appropriated the money to discharge the liability. Hager v. Shuck, 120 Ky. 574 , 87 S.W. 300, 27 Ky. L. Rptr. 957 , 1905 Ky. LEXIS 133 ( Ky. 1905 ).

Direction by the Legislature to the auditor (now Finance and Administration Cabinet) to issue a warrant and to the treasurer to pay it out of the general fund is an appropriation within the meaning of Ky. Const., § 230, it being unnecessary to use the word “appropriate.” Shannon v. Dean, 279 Ky. 279 , 130 S.W.2d 812, 1939 Ky. LEXIS 290 ( Ky. 1939 ).

4.Drug Testing Costs.

Trial court erred in ordering the cabinet for health and family services to pay for opiate hair follicle drug screen testing performed on the parents of a neglected child because there was no specific statute authorizing assessment of such payment and there was no significant potential infringement of the parents’ due process rights which would serve to bring the issue within the purview of the court’s inherent powers to administer justice. Commonwealth v. G.W.F., 229 S.W.3d 596, 2007 Ky. App. LEXIS 364 (Ky. Ct. App. 2007).

Opinions of Attorney General.

In the limited circumstance where federal law preempts state law that would otherwise govern, the State Treasurer may authorize, without a completed “warrant” at the time the authorization is given, the financial agent of the U.S. Treasury to debit the bank account of the Commonwealth for the amount the Commonwealth owes in federal tax deposits. OAG 94-65 .

Research References and Practice Aids

Cross-References.

No money to be paid to person indebted to state, KRS 44.030 .

Warrants for salaries not to be issued until end of month, KRS 45.340 .

41.140. Warrants to be submitted to Treasurer. [Repealed]

History. 1992b-51: amend. Acts 1974, ch. 74, Art. II, § 9(1); 1998, ch. 118, § 6, effective July 15, 1998; repealed by 2021 ch. 155, § 24, effective June 29, 2021.

41.150. Treasurer to accept warrants — Payment — Register of checks. [Repealed]

History. 1992b-37, 4688a-1: amend. Acts 1968, ch. 119, § 6; 1974, ch. 74, Art. II, § 9(1); repealed by 2021 ch. 155, § 24, effective June 29, 2021.

41.160. Payments to be made by Treasurer.

  1. No money shall be paid out of the Treasury except by the check of the Treasurer upon a state depository, or through the provisions of KRS 45A.655 .
  2. Payments may be made direct by the Treasurer to the persons entitled to receive them, by mail or otherwise, or through the heads of the budget units which incurred the expenditures.

History. 1992b-34, 4688, 4689: amend. Acts 1968, ch. 119, § 7; 1998, ch. 118, § 7, effective July 15, 1998; 2021 ch. 155, § 7, effective June 29, 2021.

NOTES TO DECISIONS

1.Payment.
2.— Method.

Mailing of a check of the Treasurer on a designated state depository, by the auditor (now Finance and Administration Cabinet) to the proper address of the payee, is payment in compliance with this section. Gibony v. Commonwealth, 91 S.W. 732, 28 Ky. L. Rptr. 1230 , 28 Ky. L. Rptr. 1280 (1906).

3.Duplicate Check.

A check mailed to the trustee of the jury fund by the Treasurer constituted payment as to the state of the amount of such check, but where the trustee never received the check and the check had never been presented to the bank for payment the trustee could by executing a bond of indemnity to the treasurer and making proof of the loss of the check receive of them a duplicate check for the amount due him. Gibony v. Commonwealth, 91 S.W. 732, 28 Ky. L. Rptr. 1230 , 28 Ky. L. Rptr. 1280 (1906).

4.Refusal to Honor Warrant.

To the extent the Department of Finance (now Finance and Administration Cabinet) is authorized to certify the correctness of a claim from an accounting and bookkeeping standpoint, the warrant must be honored by the Treasurer, however, the designation by the Legislature of certain specific duties and responsibilities under Ky. Const., § 93 does not extinguish the implied obligation of the office and the treasurer may properly, acting in good faith, upon a substantial constitutional ground, raise a question for judicial determination concerning the legality of a claim upon the Treasury. Raney v. Stovall, 361 S.W.2d 518, 1962 Ky. LEXIS 246 ( Ky. 1962 ).

Opinions of Attorney General.

Where a check mailed by the State Treasurer was claimed to have been lost the payee may have a duplicate check upon execution of an indemnity bond. OAG 72-757 .

The electronic transfer of funds from the State Treasury cannot be legally done since, under the explicit language of this section, the check is presently the exclusive device for transferring money out of the State Treasury. OAG 79-206 .

An urban county government would be required to execute an indemnity bond in order to obtain a duplicate check to replace one issued by the State Treasurer which never reached the local government and was presumably lost. OAG 82-112 .

The Cabinet for Human Resources may establish a system for the collection and disbursement of child support payments through the office of CHR’s contracting officials without violating KRS 41.070(1) and this section. OAG 93-59 .

Research References and Practice Aids

Cross-References.

Check of person receiving Confederate pension to be sent to address of pensioner, KRS 206.100 .

Records of warrants and receipts, KRS 45.310 .

41.165. Wage payment by electronic transfer of funds — Request forms.

  1. Notwithstanding the provisions of KRS 337.010 through 337.070 and 41.160 , the Treasurer shall pay, by electronic fund transfer, the wages of any state employee who makes a prior written request to the employing state agency to be paid by electronic fund transfer. The Treasurer may refuse to comply with the request of an employee if the financial institution designated by the employee does not have the capability of receiving electronic transfers of funds.
  2. The Personnel Cabinet shall provide forms on which to request wage payments by electronic transfer of funds. The Personnel Cabinet may, by regulations promulgated pursuant to KRS Chapter 13A, require information on the request forms for wage payment by electronic transfer of funds that sufficiently identifies the employee and the designated financial institution of the employee.
  3. Any state agencies which employ persons who have exercised the option authorized by subsection (1) of this section shall retain the forms described in subsection (2) of this section.

History. Enact. Acts 1982, ch. 252, § 1, effective July 1, 1983; 1998, ch. 118, § 8, effective July 15, 1998; 1998, ch. 154, § 60, effective July 15, 1998.

Legislative Research Commission Note.

(7/15/98). This section was amended by 1998 Ky. Acts chs. 118 and 154 which do not appear to be in conflict and have been codified together.

(10/5/90). Pursuant to KRS 7.136(1), KRS Chapter 13A has been substituted for the prior reference to KRS Chapter 13 in this statute. The sections in KRS Chapter 13 were repealed by 1984 Ky. Acts ch. 417, § 36 and KRS Chapter 13A was created in that same chapter of the 1984 Ky. Acts.

41.167. Electronic funds transfers.

The State Treasurer may withdraw funds from or deposit funds in the State Treasury by means of electronic funds transfers. The Finance and Administration Cabinet shall obtain a payee’s prior, written consent for the payment of funds due him or her from the State Treasury by means of direct deposit rather than by means of a paper check issued to him or her. A single authorization may be granted for multiple payments to a payee by means of direct deposit.

History. Enact. Acts 1982, ch. 382, § 4, effective July 15, 1982; 1998, ch. 118, § 9, effective July 15, 1998; 2021 ch. 155, § 8, effective June 29, 2021.

41.170. Record of warrants in system of accounts — Notice of issuance of checks. [Repealed]

History. 146, 1992b-53: amend. Acts 1968, ch. 119, § 8; 1974, ch. 74, Art. II, § 9(1); 1998, ch. 118, § 10, effective July 15, 1998; repealed by 2021 ch. 155, § 24, effective June 29, 2021.

41.180. Interest-bearing warrants; how and when issued. [Repealed.]

Compiler’s Notes.

This section (4618-85, 4688a-2, 4688a-3, 4688a-6: amend. Acts 1942, ch. 114, §§ 1, 3, 4) was repealed by Acts 1968, ch. 119, § 21.

41.185. Maximum limit on interest-bearing warrants. [Repealed.]

Compiler’s Notes.

This section (Enact. Acts 1942, ch. 39, § 1) was repealed by Acts 1968, ch. 119, § 21.

41.190. Calling warrants for payment. [Repealed.]

Compiler’s Notes.

This section (4688a-4: amend. Acts 1942, ch. 114, §§ 2, 4; 1966, ch. 239, § 3) was repealed by Acts 1968, ch. 119, § 21.

41.200. Warrants negotiable and tax-free.

All warrants heretofore or hereafter issued by the state, whether the date of maturity is fixed or not, are negotiable instruments. No warrant shall be subject to taxation by the state or any subdivision thereof.

History. 4688a-8.

41.210. Public money to be deposited in state depositories.

All public money of the state received into the Treasury shall be deposited, on the day it is received, in one (1) or more of the state depositories.

History. 1992b-44, 4686, 4692; 2021 ch. 155, § 9, effective June 29, 2021.

41.220. Designation of banks as state depositories — Minimum capital stock requirement — Use of banks if state depositories not designated.

  1. Not less than three (3) solvent banks shall be designated as state depositories for state funds. Each bank designated shall have not less than the minimum capital stock as required by the primary state or federal regulator of the bank. Banks shall be designated as state depositories for state funds upon agreement of the State Treasurer and the secretary of the Finance and Administration Cabinet. Those banks designated shall be entered in the executive journal. If at any time it appears that the capital of any state depository has become impaired, the state’s deposits shall be withdrawn and deposited with another state depository.
  2. The State Treasurer and the secretary of the Finance and Administration Cabinet shall determine the needs for moving state funds from one (1) designated depository to another.
  3. If no banks are designated as state depositories in accordance with this section, all banks as defined in KRS 41.010 shall be considered eligible state depositories.

History. 1992b-44, 4692: amend. Acts 1948, ch. 115; 1956 (1st Ex. Sess.), ch. 7, Art. XVI, § 18, effective July 1, 1956; 1998, ch. 196, § 27, effective July 15, 1998; 2021 ch. 155, § 10, effective June 29, 2021.

Legislative Research Commission Notes.

(7/12/2006). 2006 Ky. Acts ch. 247 instructs the Reviser of Statutes to adjust KRS references throughout the statutes to conform with the 2006 renumbering of the Financial Services Code, KRS Chapter 286. Such an adjustment has been made in this statute.

NOTES TO DECISIONS

1.Notice of Termination.

In the absence of any agreement specifically fixing the time, the designated bank will continue to be the depository of the state until terminated by notice. State Nat'l Bank v. Commonwealth, 129 Ky. 637 , 112 S.W. 678, 1908 Ky. LEXIS 202 ( Ky. 1908 ).

Opinions of Attorney General.

Once temporary deposits are made, they cannot be changed to another state depository without the joint determination of both the State Treasurer and the Commissioner of Finance (now secretary of the Finance and Administration Cabinet). OAG 60-332 .

The word “banks” as used in subsection (1) includes state banks organized under KRS Chapter 287 and any national banks whose principal offices are located in Kentucky and, relating to state depository banks, would not include savings and loan associations organized under KRS Chapter 289. OAG 73-109 .

If the secretary of finance and the State Treasurer agree in writing to the moving of the deposit account of the Kentucky retirement systems from the state’s general fund account from one bank to another, such moving of the deposit account would be legal, although it would entail some new accounting procedure on the part of the Department of Finance (now Finance and Administration Cabinet) and the state treasury. The court assumes, of course, that the Citizens Fidelity Bank is already a designated state depository. Thus the transfer of the Kentucky retirement systems account would be permissible under the joint determination and agreement of the State Treasurer and secretary of finance. OAG 79-396 .

Subsection (2) of this section and KRS 41.260 are to be read together as a whole, under the doctrine of pari materia. OAG 79-396 .

KRS 41.380 (now KRS 42.500 ), 386.010 , 386.020 and this section should be read together, i.e., in pari materia, since they concern the same subject matter. OAG 81-353 .

The State Investment Commission may, pursuant to KRS 41.380(2) (now KRS 42.500 ), invest surplus state funds in Certificates of Deposit of any state or national bank, designated in subsection (1) of this section as a state depository whose deposits are insured by the Federal Deposit Insurance Corporation and whose main office is in this state subject to the $100,000 limitation on insurance coverage. OAG 81-353 .

The word “banks,” as used in subsection (1) of this section, would include state banks organized under KRS Chapter 287 and any national banks whose principal officers are located in Kentucky. OAG 81-353 .

41.230. Charges for services by state depositories — Interest on deposits.

For services rendered by state depositories, compensation shall be made in the form of a predetermined fee or a predetermined compensating balance. State depositories shall each pay to the state, in proportion to the deposits received, interest at such rate per annum upon the average daily deposit on hand at the close of business hours as is agreed upon between the Treasurer and the state depositories, consistent with the regulations promulgated by the State Investment Commission pursuant to KRS 42.525 . The interest shall be paid to the Treasurer no later than at the end of each six (6) months or upon maturity commencing with the date of the deposit.

History. 4692: amend. Acts 1982, ch. 382, § 2, effective July 15, 1982; 2021 ch. 155, § 11, effective June 29, 2021.

Research References and Practice Aids

Cross-References.

Unemployment insurance fund, no public deposit insurance charge or premium to be paid out of, KRS 341.500 .

41.240. Pledge of collateral required of state depositories — Qualifications for a reduced pledge — Eligible securities and other obligations.

    1. Before any bank shall be named as a state depository to receive public funds, it shall either pledge or provide to the State Treasurer collateral having an aggregate current face value or current quoted market value at least equal to the deposits as of the last business day of each quarter in which funds are so deposited or provide to the State Treasurer a surety bond or surety bonds in favor of the State Treasurer in an amount at least equal to the deposits, as of the last business day of each quarter in which funds are deposited; provided, however, that amounts insured by the Federal Deposit Insurance Corporation or the Federal Savings and Loan Insurance Corporation need not be so collateralized. The president or an executive officer of each state depository shall submit to the Treasurer and the State Investment Commission a statement subscribed and sworn to by the president or executive officer showing: (1) (a) Before any bank shall be named as a state depository to receive public funds, it shall either pledge or provide to the State Treasurer collateral having an aggregate current face value or current quoted market value at least equal to the deposits as of the last business day of each quarter in which funds are so deposited or provide to the State Treasurer a surety bond or surety bonds in favor of the State Treasurer in an amount at least equal to the deposits, as of the last business day of each quarter in which funds are deposited; provided, however, that amounts insured by the Federal Deposit Insurance Corporation or the Federal Savings and Loan Insurance Corporation need not be so collateralized. The president or an executive officer of each state depository shall submit to the Treasurer and the State Investment Commission a statement subscribed and sworn to by the president or executive officer showing:
      1. The face value or current quoted market value of the securities or other obligations pledged as collateral; and
      2. The value of surety bonds provided as of the time such surety bonds are provided as collateral.

        The aggregate valuation of all pledged or provided collateral shall be reported to the State Treasurer and State Investment Commission by the state depository within ten (10) days of the close of each quarter after the date of deposit. Such value with respect to pledged collateral other than surety bonds shall be as of the end of the quarter or the preceding business day and, as to surety bonds, the market values shall be obtained from a reputable bond-pricing service. The State Treasurer and Governor may from time to time call for additional collateral to adequately secure the deposits as aggregate face or current market values may require, if the value of collateral is not compliant with state law as of the report date.

    2. No deposit of state funds shall collectively exceed at any time the state depository’s sum of capital, reserves, undivided profits and surplus or ten percent (10%) of the total deposits of the state depository, whichever is less. For purposes of this subsection only, the value of the state deposit will be determined as of the end of the last business day of each quarter that funds are deposited.
    1. As an alternative to subsection (1)(a) of this section, a state depository insured by the Federal Deposit Insurance Corporation may either pledge to the State Treasurer, as collateral, securities or other obligations having an aggregate face value or a current quoted market value or provide to the State Treasurer a surety bond or surety bonds in an amount equal to eighty percent (80%) of the value of the state deposit including demand and time accounts, if the state depository is determined by the State Investment Commission to have very strong credit with little or no credit risk at any maturity level and the likelihood of short-term unexpected problems of significance is minimal or not of a serious or long-term nature. The value of the state deposit will be determined at the end of the business day of deposit and as of the end of business on the last day of each quarter that funds are so deposited. (2) (a) As an alternative to subsection (1)(a) of this section, a state depository insured by the Federal Deposit Insurance Corporation may either pledge to the State Treasurer, as collateral, securities or other obligations having an aggregate face value or a current quoted market value or provide to the State Treasurer a surety bond or surety bonds in an amount equal to eighty percent (80%) of the value of the state deposit including demand and time accounts, if the state depository is determined by the State Investment Commission to have very strong credit with little or no credit risk at any maturity level and the likelihood of short-term unexpected problems of significance is minimal or not of a serious or long-term nature. The value of the state deposit will be determined at the end of the business day of deposit and as of the end of business on the last day of each quarter that funds are so deposited.
    2. Valuation of all pledged or provided collateral shall be reported to the State Treasurer and the State Investment Commission within ten (10) days of the close of each quarter after the date of deposit.
    3. State depositories designated as qualified for reduced pledging shall be so recorded in the executive journal.
    4. The State Investment Commission shall determine eligibility for the reduced pledging option based on totally objective and quantifiable measures of financial intermediary performance. The information for such eligibility shall be obtained from publicly available documents. The State Investment Commission shall promulgate the particular criteria of eligibility by regulations issued pursuant to KRS Chapter 13A.
  1. State depositories which do not qualify or do not choose to qualify under subsection (1) or (2) of this section shall not receive state deposits in excess of amounts that are insured by an instrumentality of the United States.
  2. Only the following securities and other obligations may be accepted by the State Treasurer as collateral under this section:
    1. Bonds, notes, letters of credit, or other obligations of or issued or guaranteed by the United States, or those for which the credit of the United States is pledged for the payment of the principal and interest thereof, and any bonds, notes, debentures, letters of credit, or any other obligations issued or guaranteed by any federal governmental agency or instrumentality, presently or in the future established by an Act of Congress, as amended or supplemented from time to time, including, without limitation, the United States government corporations listed in KRS 66.480(1)(c);
    2. Obligations of the Commonwealth of Kentucky including revenue bonds issued by its statutory authorities, commissions, or agencies;
    3. Revenue bonds issued by educational institutions of the Commonwealth of Kentucky as authorized by KRS 162.340 to 162.380 ;
    4. Obligations of any city of the Commonwealth of Kentucky, or any county, for the payment of principal and interest on which the full faith and credit of the issuing body is pledged;
    5. School improvement bonds issued in accordance with the authority granted under KRS 162.080 to 162.100 ;
    6. School building revenue bonds issued in accordance with the authority granted under KRS 162.120 to 162.300 , provided that the issuance of such bonds is approved by the Kentucky Board of Education;
    7. Surety bonds issued by sureties rated in one (1) of the three (3) highest categories by a nationally recognized rating agency;
    8. Letters of credit issued by federal home loan banks; and
    9. Real property owned by the bank.

HISTORY: 4693: amend. Acts 1952, ch. 221; 1972, ch. 118, § 1; 1978, ch. 155, § 82, effective June 17, 1978; 1982, ch. 382, § 3, effective July 15, 1982; 1996, ch. 362, § 6, effective July 15, 1996; 1998, ch. 554, § 1, effective July 15, 1998; 2001, ch. 112, § 3, effective June 21, 2001; 2014, ch. 92, § 24, effective January 1, 2015; 2021 ch. 155, § 12, effective June 29, 2021.

Legislative Research Commission Note.

(10/5/90). Pursuant to KRS 7.136(1), KRS Chapter 13A has been substituted for the prior reference to KRS Chapter 13 in this statute. The sections in KRS Chapter 13 were repealed by 1984 Ky. Acts ch. 417, § 36 and KRS Chapter 13A was created in that same chapter of the 1984 Ky. Acts.

NOTES TO DECISIONS

1.Purpose.

This section is for the protection of the state, and where a bond to protect state deposits is renewed the obligors on the first bond are not relieved from liability. State Nat'l Bank v. Commonwealth, 129 Ky. 637 , 112 S.W. 678, 1908 Ky. LEXIS 202 ( Ky. 1908 ).

2.Securities Pledged.

Where by charter or statute a bank must secure a deposit of public funds, the security given by the bank must be such as it can obtain by personal indorsement, or in some other way that does not involve the pledging of assets. Commercial Banking & Trust Co. v. Citizens' Trust & Guaranty Co., 153 Ky. 566 , 156 S.W. 160, 1913 Ky. LEXIS 901 ( Ky. 1913 ).

3.Insolvency of Depository.

Commonwealth is not entitled to a right of preference in distribution of the assets of an insolvent bank because the funds were public funds. Denny v. Thompson, 236 Ky. 714 , 33 S.W.2d 670, 1930 Ky. LEXIS 819 ( Ky. 1930 ).

Opinions of Attorney General.

Applicable Kentucky administrative regulations could be amended to lawfully provide that obligations of a Federal Farm Credit Bank, the Federal National Mortgage Association and the Federal Home Loan Bank could be used as collateral as security for the depository bond mentioned in KRS 160.570 , since subdivision (a) of this section permits as collateral obligations or securities issued or guaranteed by any federal governmental agency. OAG 85-3 .

Research References and Practice Aids

Cross-References.

Conditions of bond of public depository, recovery on, KRS 62.060 to 62.080 .

Federal housing act securities eligible as collateral to secure deposits of public funds, KRS 386.040 , 386.050 .

State not liable for safe custody of deposits of insurance securities, KRS 304.8-080 .

41.245. Pledge of county bonds to secure deposits. [Repealed.]

Compiler’s Notes.

This section (Enact. Acts 1942, ch. 127, § 1) was repealed by Acts 1972, ch. 118, § 2.

41.250. Liability of Treasurer and state depository not affected by bond or pledge.

The execution of the bond or the pledge of the warrants or bonds required by KRS 41.240 shall not diminish the liability of the Treasurer and his or her sureties upon his or her bond, nor impair or delay the right of the state to recover on the Treasurer’s bond for any loss or misapplication of the public funds or other delinquency in office, nor impair or delay the right of the state to recover from any delinquent or defaulting bank, or the officers or stockholders thereof, in the same manner as other depositors.

History. 4693; 2021 ch. 155, § 13, effective June 29, 2021.

41.260. Transfer of deposits among state depositories.

Whenever the Treasurer decides to transfer any deposit of public money from one (1) state depository to another, the Treasurer shall notify the Finance and Administration Cabinet, describing the proposed transfer and the deposit of money to be transferred. On receipt of the notification the Finance and Administration Cabinet shall register the proposed transfer and issue its warrant for the amounts specified by the Treasurer. When the transfers have been completed the Treasurer shall immediately notify the Finance and Administration Cabinet.

History. 1992b-48: amend. Acts 1974, ch. 74, Art. II, § 9(1); 1998, ch. 118, § 11, effective July 15, 1998; 2021 ch. 155, § 14, effective June 29, 2021.

Opinions of Attorney General.

If the secretary of finance and the State Treasurer agree in writing to the moving of the deposit account of the Kentucky retirement systems from the state’s general fund account from one bank to another, such moving of the deposit account would be legal, although it would entail some new accounting procedure on the part of the Department of Finance (now Finance and Administration Cabinet) and the State Treasury. The court assumes, of course, that the Citizens Fidelity Bank is already a designated state depository. Thus the transfer of the Kentucky retirement systems account would be permissible under the joint determination and agreement of the State Treasurer and secretary of finance. OAG 79-396 .

KRS 41.220(2) and this section are to be read together as a whole, under the doctrine of pari materia. OAG 79-396 .

41.270. Monthly statements from depositories. [Repealed.]

Compiler’s Notes.

This section (159, 1992b-52, 4691: amend. Acts 1974, ch. 74, Art. II, § 9(1)) was repealed by Acts 1998, ch. 118, § 20, effective July 15, 1998.

41.280. Unified and integrated system of accounts — Annual report by Treasurer.

  1. The Commonwealth of Kentucky shall maintain a unified and integrated system of accounts. As a part of any unified and integrated system of accounts:
    1. The Treasurer shall maintain the necessary records to exhibit accurately the Treasury’s cash balance;
    2. The Finance and Administration Cabinet shall provide the Treasurer with accounting data that will accurately describe the Commonwealth’s financial condition, including access to information necessary to determine the status of each receipt and expenditure account;
    3. The Treasurer shall keep a record of each depository, showing the amount deposited and the date, and the amount checked out and the date; and
    4. The Treasurer shall provide the Finance and Administration Cabinet with information regarding accumulated receipts and the status of warrants.
  2. The Treasurer shall make a clear, distinct, and intelligible report of all money received and disbursed during each fiscal year showing the receipts and expenditures of each year on account of every department of the public service, the name of each state depository, and the rate of interest paid by it. The report shall be published annually, and the Treasurer shall submit the report to the Governor, the Chief Justice, and the Legislative Research Commission ninety (90) days after the close of the fiscal year.

History. 4697: amend. Acts 1968, ch. 119, § 9; 1974, ch. 74, Art. II, 9(1); 2021 ch. 155, § 15, effective June 29, 2021.

Research References and Practice Aids

Cross-References.

Airport development fund, KRS 183.772 .

Common school fund provided for, Ky. Const., §§ 184, 185, 186; KRS 157.010 .

County sinking fund, treasurer to keep separate, for deposits under county debt act, KRS 66.370 .

Delinquent tax fund, KRS 134.400 .

Finance and Administration Cabinet to keep accounts with receipts, payments and depositories independent of those kept by treasurer, KRS 45.305 .

Federal grants for library service work, special fund for, KRS 171.160 .

Fiscal year, Ky. Const., § 169.

Forest reserves, federal grants for to be kept in separate fund, KRS 149.130 .

Highway bridge fund, KRS 180.240 .

Revolving fund accounts, KRS 45.253 .

Road fund, KRS ch. 176.

State Fair Board, improvement fund, to be kept by treasurer, KRS 247.190 .

State fire and tornado insurance fund, duties of treasurer as to, KRS 56.090 to 56.160 .

Unemployment compensation administration fund, KRS 341.240 .

Unemployment compensation contingent fund, KRS 341.295 .

Unemployment insurance fund, KRS 341.500 , 341.510 .

Public Service Commission, assessments for expenses of to be kept in separate fund, KRS 278.150 .

Workers’ compensation subsequent injury fund, KRS 342.122 .

41.290. Private funds and contributions.

Every department, institution or other agency of the state government having private funds or contributions available for its support or for the purpose of defraying the expenses of any work done under its direction shall deposit such funds or contributions with the Treasurer, and shall certify to the Finance and Administration Cabinet the sources from which the funds or contributions were received, the terms and conditions under which, and the purpose for which, they were received, the names of the trustees or administrators of the funds or contributions, and the name of the person authorized to approve expenditures from each fund or contribution. All disbursements from such funds and contributions shall be made by the Treasurer on the warrants of the Finance and Administration Cabinet, which shall issue such warrants only upon adequate vouchers approved by the person authorized to approve the expenditures. Separate accounting shall be made for each such contribution, and the receipts and disbursements thereof shall be maintained by the Finance and Administration Cabinet. This section does not apply to private funds of students in state educational institutions nor to the private funds of patients or prisoners in state charitable or correctional institutions, when such funds are deposited with an officer of such institutions for safekeeping, nor to the private funds or contributions made and available to the governing boards of the state supported institutions of higher learning.

History. 1992b-49: amend. Acts 1946, ch. 149, § 1; 1968, ch. 119, § 10; 1974, ch. 74, Art. II, § 9(1).

Opinions of Attorney General.

Although this section specifically excepts from its provisions private funds made available to state universities, bond project revenues are not “private funds” but are state funds falling within the purview of KRS 41.070 and the corporate powers of the state universities in no way militate against the application of KRS 41.070 in connection with subject bond project revenues. OAG 73-173 .

Since inmate funds are private funds deposited for safekeeping by the institution, the institution is a mere custodian of prisoner funds and may not place the funds on time deposit to earn interest. OAG 74-279 .

The Kentucky Horse Council (now Horse Park Commission) is an agency of state government and all of its funds from whatever source received, including private sources, contributions and membership fees, upon receipt become public funds of a state agency and are subject to all general constitutional and statutory provisions governing the audit, budgeting, accounting and expenditure of state funds. OAG 74-715 .

KRS Chapters 45 and 45A concern public funds of the commonwealth such that these provisions are not applicable to the private funds and contributions covered in this section. OAG 82-520 .

The foundation of a state university (a nonprofit fiduciary holding funds for the benefit of any form of state organization) is not required under KRS 41.070 to deposit moneys received by it in the State Treasury as foundation funds are private rather than public funds. OAG 82-521 .

Research References and Practice Aids

Cross-References.

Federal grants for equalization of library service to be kept in special fund, KRS 171.160 .

Federal grants for forest reserves to be kept in separate fund, KRS 149.130 .

Federal grants for promotion of aviation, how handled, KRS 183.130 .

41.295. Investment of surplus funds of agencies not supported by taxation. [Repealed.]

Compiler’s Notes.

This section (Enact. Acts 1944, ch. 55, § 1) was repealed by Acts 1954, ch. 245, § 2, effective July 1, 1954.

41.300. Special deposit trust fund.

There shall be a special deposit fund consisting of all money received by the state or any department or officer thereof as guarantees for the payment of any costs, charges or damages accruing or liable to accrue to the state or for the performance of any specific act, including all money deposited as bail to secure the liberation of persons accused of public offenses, all money deposited by bidders on contracts to insure their entering into contracts awarded them, and all money deposited to indemnify persons whose property may be damaged or destroyed by the operations of the depositor. All such money shall be paid to the Treasurer, in the manner provided for the deposit of public money, and shall be deposited by the Treasurer as a trust fund in a separate account in a designated state depository. The money so deposited may be returned to the depositor, if he becomes entitled to its return, without specific appropriation, allotment or authorization for expenditure therefor, in the same manner as other claims against the state may be paid, or may, upon default of any depositor and upon certificate to such effect by the administrative officer having charge of the matter, be declared by the Finance and Administration Cabinet to be forfeited in whole or in part and thereupon be transferred to the extent so forfeited to the general fund. The interest on bank deposits of this fund shall accrue to the general fund.

History. 1992b-50: amend. Acts 1974, ch. 74, Art. II, § 9(1); 2021 ch. 155, § 16, effective June 29, 2021.

Research References and Practice Aids

Cross-References.

Deposit of money in lieu of bail, RCr 4.18 et seq.

Escheat of unclaimed deposits, KRS 393.010 et seq.

41.305. Elder and vulnerable victims trust fund.

  1. The elder and vulnerable victims trust fund is created as a separate revolving fund in the Office of the State Treasurer.
  2. The moneys in the trust fund shall be expended only as provided in this section and are hereby appropriated for those purposes.
  3. The State Treasurer shall credit to the trust fund all amounts received for this purpose, including appropriations, grants, gifts, and any amounts received under KRS 381.280 .
  4. The State Treasurer shall invest trust fund money in the same manner as surplus funds are invested. Earnings shall be credited to the trust fund.
  5. Notwithstanding KRS 45.229 , any moneys remaining in the trust fund at the close of the fiscal year shall not lapse but shall be carried forward into the succeeding fiscal year to be used for the purposes set forth in this section.
  6. Money shall be disbursed from the trust fund only for the purpose of providing funding to one (1) or more public or private nonprofit organizations, including government organizations, in the development or operation of elder or vulnerable adult abuse, neglect, or financial exploitation prevention or intervention programs. An organization shall be eligible to receive funding only if:
    1. The organization agrees to provide at least a twenty-five percent (25%) match of the total project amount requested, which may consist of monetary or in-kind contributions;
    2. The organization demonstrates a willingness and ability to provide program models and consultation to other organizations and communities regarding program development and maintenance; and
    3. The organization funds:
      1. Programs which provide advocacy, crisis counseling, financial guardianship, or other similar services to victims of elder or vulnerable adult abuse, neglect, or financial exploitation;
      2. Law enforcement, prosecution, or court-based programs that enhance case investigations, prosecutions, or victim assistance in criminal cases involving elder or vulnerable adult abuse, neglect, or financial exploitation;
      3. Programs which develop and implement public education and awareness campaigns on elder and vulnerable adult abuse, neglect, or financial exploitation by making use of electronic and print media to inform the public about the nature of these crimes and available resources such as victims’ rights, legal remedies, agency services, and prevention strategies; or
      4. Research initiatives that provide greater insight into the dynamics of elder and vulnerable adult abuse, neglect, or financial exploitation and guidance on best practices for intervention or prevention strategies.
    1. Fiscal, programmatic, and disbursement authority over trust fund money shall be provided by the Justice and Public Safety Cabinet, which shall develop a review panel system to award grants from the trust fund on an annual basis. Panel members shall be individuals with knowledge and operational experience in elder and vulnerable adult abuse, neglect, or financial exploitation and shall be drawn from the law enforcement, court, prosecution, and victim advocacy communities. (7) (a) Fiscal, programmatic, and disbursement authority over trust fund money shall be provided by the Justice and Public Safety Cabinet, which shall develop a review panel system to award grants from the trust fund on an annual basis. Panel members shall be individuals with knowledge and operational experience in elder and vulnerable adult abuse, neglect, or financial exploitation and shall be drawn from the law enforcement, court, prosecution, and victim advocacy communities.
    2. In disbursing money from the trust fund, the panel shall not disburse to any one (1) program more than twenty-five percent (25%) of the total funds available for disbursement and shall seek to distribute meaningful awards to as many programs as possible throughout the Commonwealth.
  7. The Justice and Public Safety Cabinet shall promulgate administrative regulations in accordance with KRS Chapter 13A to implement this section.

History. Enact. Acts 2011, ch. 43, § 4, effective June 8, 2011.

41.310. Treasurer to furnish information regarding receipts and expenditures to the Finance and Administration Cabinet on a monthly basis.

The Finance and Administration Cabinet shall furnish the Treasurer with information regarding the status of each receipt and expenditure account. At the end of each month, the Treasurer shall furnish the Finance and Administration Cabinet with information regarding the accumulated receipts and a listing of all warrants unpaid as of the end of the last day of each month.

History. 159, 4699: amend. Acts 1968, ch. 119, § 11; 1974, ch. 74, Art. II, § 9(1); 1998, ch. 118, § 12, effective July 15, 1998.

NOTES TO DECISIONS

1.Failure to Audit.

The negligence of the auditor in performing his statutory duty to periodically audit and examine the treasurer’s books and accounts did not relieve the sureties on the treasurer’s bond, nor estop the state from recovering for defalcations of the treasurer. Commonwealth v. Tate, 89 Ky. 587 , 13 S.W. 113, 12 Ky. L. Rptr. 1 , 1890 Ky. LEXIS 29 ( Ky. 1890 ) (decided under prior law).

Research References and Practice Aids

Cross-References.

Auditor to make annual examination of Treasurer’s office, KRS 43.050 .

Auditor to make monthly investigation of accounts of Treasurer and Finance and Administration Cabinet, KRS 43.060 .

General Assembly to provide for monthly investigation of accounts of Treasurer and Auditor, Ky. Const., § 53.

Penalty for obstructing investigation or examination by auditor, KRS 43.990 .

41.320. Governor may require statement of condition of Treasury.

The Governor may require, at any time, a full statement of the condition of the Treasury from the Finance and Administration Cabinet, Treasurer, and the state depositories. The Treasurer shall, at all times when called upon by the Governor, exhibit his or her books and accounts of the Treasury and all cash on hand or on deposit.

History. 4690, 4699: amend. Acts 1974, ch. 74, Art. II, § 9(1); 2021 ch. 155, § 17, effective June 29, 2021.

41.330. Delivery of office to successor — Certification of accounts and inventory — Certification by assistant treasurer in case of vacancy due to death or incapacitation of Treasurer.

  1. Upon the expiration of the term of office of the Treasurer, or if a vacancy occurs, the outgoing Treasurer shall certify in writing that the accounts and inventory of the Treasury, as recorded in the recordkeeping systems of the Commonwealth, are true, complete, and accurate as of the close of business on the Treasurer’s last day in office. The certification shall include accounts and tangible property held by the Treasury pursuant to KRS Chapters 393 and 393A. A copy of this certification shall be provided to the following:
    1. The Auditor of Public Accounts;
    2. The Secretary of State; and
    3. The secretary of the Finance and Administration Cabinet.
  2. The money, books, supplies, and equipment shall be delivered to the newly elected Treasurer or the person who fills the vacancy, and the newly elected Treasurer or the person who fills the vacancy shall give a receipt for them which shall be filed with the Secretary of State.
  3. In the event that a vacancy occurs due to the death or incapacitation of the Treasurer, the certification set forth in subsection (1) of this section shall be completed by the assistant in accordance with KRS 41.060 .
  4. Nothing in this section shall be construed as limiting the right of the Auditor to review the accounts and inventory of the Treasurer at other times as the Auditor may deem necessary or appropriate, or as required by KRS 43.060 .

History. 4684, 4700; 2021 ch. 155, § 18, effective June 29, 2021.

41.340. Annual report by Treasurer. [Repealed]

History. 4698: amend. Acts 1982, ch. 450, § 57, effective July 1, 1983; repealed by 2021 ch. 155, § 24, effective June 29, 2021.

41.345. Photostatic copies of Treasury records — Use as evidence.

  1. Treasury checks and records that are susceptible to photostatic reproduction may be proved as to foundation, identity, and authenticity without any preliminary testimony, by use of legible and durable copies, certified in the manner provided herein by the State Treasurer as custodian of the originals. The copies may be used in any trial, hearing, deposition, or any other judicial or administrative action or proceeding, whether civil or criminal, in lieu of the original checks or records.
  2. When a subpoena duces tecum is served upon the State Treasurer requiring the production of any checks or records at any action or proceeding, it is sufficient if the State Treasurer, as custodian of the original thereof, promptly notifies, in writing, the attorney for the party causing service of the subpoena, of the State Treasurer’s election to proceed under the provisions of this section. Upon notification, the attorney causing the service of the subpoena shall notify all other attorneys of record, or other parties if they are not represented by attorneys, of the State Treasurer’s procedure. Following notification, the State Treasurer as custodian of the checks or records specified in the subpoena shall promptly deliver, by certified mail, legible and durable copies, certified by the State Treasurer, of checks or records specified in the subpoena. The certification shall be signed before a notary public by the State Treasurer as custodian of the records.

History. Enact. Acts 1986, ch. 372, § 1, effective July 15, 1986; 1990, ch. 211, § 2, effective March 30, 1990.

41.350. Canceled checks and electronic transactions records to be kept ten years.

  1. Canceled checks and records of all electronic transactions of the State Treasurer debiting state depositories shall be preserved by the State Treasurer for a period of ten (10) years.
  2. For purposes of this subsection, preservation of records may be in an electronic format, including the records contained within the state’s unified and integrated system of accounts.

History. Enact. Acts 1946, ch. 4; 1982, ch. 252, § 2, effective January 1, 1983; 1982, ch. 382, § 5, effective July 15, 1982; 1990, ch. 211, § 1, effective March 30, 1990; 1998, ch. 118, § 13, effective July 15, 1998; 2021 ch. 155, § 19, effective June 29, 2021.

Opinions of Attorney General.

Since the checks of the State Treasurer upon state depository banks must be preserved for seven years warrants held by the State Treasurer must, by implication, be preserved for a similar period; thus prior to the elapsing of the seven-year period the State Treasurer may microfilm the warrants held in her office provided such is accomplished in accordance with the rules and regulations promulgated by the Department of Library and Archives (now Department for Libraries and Archives) and the original record, when it is microfilmed, may be destroyed subject to the rules and regulations of the subject department; however, since checks issued by the state treasurer must be presented within one year under KRS 41.370 , the microfilming of the original warrants should not take place until at least after the elapsing of one year from the date of issue of the check relating to the warrant in question plus an additional period sufficient to cover cancellation and reissue process described in KRS 41.370 . OAG 76-404 .

41.360. Disposition of unclaimed balances of payroll deductions for war bond purchases.

  1. Where any officer or employee of the state government or of any agency of the state government has authorized the State Treasurer to deduct from his compensation as such officer or employee a sum or sums for the purchase of United States Series E savings bonds, and thereafter, for any cause, has departed from such office or employment leaving unclaimed in the hands of the State Treasurer a sum arising from such deduction not equal to the amount for which such a bond may be purchased, the State Treasurer shall, within ninety (90) days after the date of the last deduction, mail to such officer or employee, at his last-known address as shown on the records of the Personnel Cabinet, a notice stating the sum held by the State Treasurer for such officer or employee, and requesting that he make claim for the same within six (6) months thereafter. A duplicate of such notice, addressed to the officer or employee, shall at the same time be delivered to the state agency of which the person was an officer or employee. If, at the expiration of six (6) months from the date of mailing the letter, the officer or employee has not made claim for the sum due him, the sum shall, as of July 1 following the expiration of such six-months’ period, be presumed abandoned.
  2. On or before September 1 of each year, the State Treasurer shall report to the Department of Revenue, in duplicate, a list of the sums presumed to be abandoned as of the preceding July 1, giving the name of the officer or employee and his last-known address. The State Treasurer shall cause the report to be posted and published as provided in KRS 393A.030 . If, by November 15 following such posting and publication, the sums involved have not been claimed, the State Treasurer shall place the sums to the credit of the general fund in the State Treasury and shall report that fact to the Department of Revenue. Thereafter such sums shall have the same status as other property turned over to the Department of Revenue, and the rights of any person to make claim for the same shall rest upon the same principles as the rights of other claimants of property presumed to be abandoned under the provisions of KRS Chapter 393.

HISTORY: Enact. Acts 1946, ch. 3; 1998, ch. 154, § 61, effective July 15, 1998; 2005, ch. 85, § 47, effective June 20, 2005; 2018 ch. 163, § 87, effective July 14, 2018.

41.370. Check to be presented within one year — Cancellation and warrant against check.

  1. Any check issued by the State Treasurer shall not be valid as an order for payment after one (1) year from its date of issue and this limitation shall appear on all checks issued. The State Treasurer is authorized to clear the records of all such unpaid checks and credit the amounts to the fund against which it was originally drawn.
  2. When any properly endorsed check issued by the State Treasurer is presented for payment more than one (1) year after its date of issue and within the period prescribed by KRS 413.120 , the State Treasurer shall, upon satisfactory proof of ownership, cancel the check and forward it to the secretary of the Finance and Administration Cabinet with the date and identifying information which credited the amount of the check to a particular fund. The secretary of the Finance and Administration Cabinet shall draw a warrant against the check. All endorsements on the surrendered check shall have the same effect as if the check were paid by the drawee. All checks paid in the manner herein set forth shall be charged against the fund against which they were originally drawn.

History. Enact. Acts 1948, ch. 187; 1972, ch. 209, § 1; 1974, ch. 74, Art. II, § 9(2); 1988, ch. 74, § 2, effective July 15, 1988; 1992, ch. 115, § 1, effective July 14, 1992; 1998, ch. 118, § 14, effective July 15, 1998; 2012, ch. 88, § 3, effective April 11, 2012.

Opinions of Attorney General.

Provisions in this section for payment of a stale check can be applied anytime, provided that there is sufficient money in the fund against which the surrendered check was originally drawn, but if there is an insufficiency in the proper fund or where the check is over five years old, the Legislature would have to pass a specific bill to authorize its payment. OAG 76-221 .

41.375. Issuance of duplicate check — Liability for loss sustained by issuance.

  1. A duplicate check shall be issued by the Treasurer upon:
    1. Receipt of a notarized affidavit, which may be transmitted to the Treasury in an electronic format, signed by the payee and stating that the original check has been lost or stolen; and
    2. A review of the records of the Treasury, including the unified and integrated system of accounts to determine that the original check has not been presented for payment.
  2. The payee receiving a duplicate check shall make good any loss the Commonwealth or the Treasurer may sustain on account of the issuance of the duplicate or the presentation and payment of the original, if the loss has been caused by actions of the payee. The Treasurer shall not be liable for any loss sustained by the issuance of the duplicate check.

History. Enact. Acts 1992, ch. 115, § 2, effective July 14, 1992; 2021 ch. 155, § 20, effective June 29, 2021.

41.380. Investment commission — Power to invest surplus funds — Disposition of interest. [Repealed, reenacted and amended.]

Compiler’s Notes.

This section (Enact. Acts 1952, ch. 86; 1954, ch. 245, § 1, effective June 17, 1954; 1980, ch. 295, § 11 effective July 15, 1980; 1980, ch. 347 § 1, effective January 1, 1982) was repealed, reenacted and amended as KRS 42.500 by Acts 1982, ch. 382, § 6.

41.390. Power to borrow money and issue negotiable notes. [Repealed.]

Compiler’s Notes.

This section (Enact. Acts 1954, ch. 192, effective June 17, 1954; 1988, ch. 273, § 2, effective July 15, 1988; 1996, ch. 274, § 1, effective July 15, 1996) was repealed by Acts 1997 (Ex. Session), ch. 4, § 44, effective May 30, 1997. For present law see KRS 56.860 to 56.869 .

41.400. Child victims’ trust fund — Limitation on disbursement.

  1. The child victims’ trust fund is created as a separate fund in the office of the State Treasurer. The fund shall be expended only as provided in this section.
  2. The State Treasurer shall credit to the trust fund all amounts received for this purpose and any amounts received under KRS 141.440 .
  3. The State Treasurer shall invest trust fund money in the same manner as surplus funds are invested. Earnings shall be credited to the trust fund.
  4. Until the total amount of assets in the trust fund exceeds twenty million dollars ($20,000,000), not more than one-half of the money contributed to the trust fund each year, plus the earnings credited to the trust fund during the previous fiscal year, and the money earned by the sale of child victims’ trust fund license plates pursuant to KRS Chapter 186, shall be available for disbursement upon the authorization of the state board as provided in KRS 15.935 . After such time that the State Treasurer certifies that the assets in the trust fund exceed twenty million dollars ($20,000,000), only the earnings credited to the trust fund shall be available for disbursement upon the authorization of the state board as provided in KRS 15.935 .
  5. Funds granted or funds received as gifts or donations to the child victims’ trust fund shall be available for disbursement upon appropriation by the General Assembly, and funds authorized for expenditure shall not be considered assets for purposes of subsection (4) of this section.

History. Enact. Acts 1984, ch. 382, § 13, effective July 13, 1984; 1996, ch. 366, § 9, effective July 15, 1996; 2005, ch. 133, § 9, effective June 20, 2005.

Research References and Practice Aids

Northern Kentucky Law Review.

Armstrong & Gillig, Responding to Child Sexual Abuse and Exploitation: The Kentucky Approach, 16 N. Ky. L. Rev. 17 (1988).

41.410. Commonwealth Council on Developmental Disabilities — Members — Executive director — Duties.

  1. The Commonwealth Council on Developmental Disabilities is created within the Department of the Treasury.
  2. The Commonwealth Council on Developmental Disabilities is established to comply with the requirements of the Developmental Disabilities Assistance and Bill of Rights Act of 2000 and any subsequent amendment to that act.
    1. The members of the Commonwealth Council on Developmental Disabilities shall be appointed by the Governor to serve as advocates for persons with developmental disabilities. The council shall be composed of twenty-six (26) members. (3) (a) The members of the Commonwealth Council on Developmental Disabilities shall be appointed by the Governor to serve as advocates for persons with developmental disabilities. The council shall be composed of twenty-six (26) members.
    2. Ten (10) members shall be representatives of: the principal state agencies administering funds provided under the Rehabilitation Act of 1973 as amended; the state agency that administers funds provided under the Individuals with Disabilities Education Act (IDEA); the state agency that administers funds provided under the Older Americans Act of 1965 as amended; the single state agency designated by the Governor for administration of Title XIX of the Social Security Act for persons with developmental disabilities; higher education training facilities, each university-affiliated program or satellite center in the Commonwealth; and the protection and advocacy system established under Public Law 101-496. These members shall represent the following:
      1. Office of Vocational Rehabilitation;
      2. Division of Blind Services within the Office of Vocational Rehabilitation;
      3. Department of Education;
      4. Department for Aging and Independent Living;
      5. Department for Medicaid Services;
      6. Department of Public Advocacy, Protection and Advocacy Division;
      7. University-affiliated programs;
      8. Local and nongovernmental agencies and private nonprofit groups concerned with services for persons with developmental disabilities;
      9. Department for Behavioral Health, Developmental and Intellectual Disabilities; and
      10. Department for Public Health, Division of Maternal and Child Health.
    3. At least sixty percent (60%) of the members of the council shall be composed of persons with developmental disabilities or the parents or guardians of persons, or immediate relatives or guardians of persons with mentally impairing developmental disabilities, who are not managing employees or persons with ownership or controlling interest in any other entity that receives funds or provides services under the Developmental Disabilities Assistance and Bill of Rights Act of 2000 as amended and who are not employees of a state agency that receives funds or provides services under this section. Of these members, five (5) members shall be persons with developmental disabilities, and five (5) members shall be parents or guardians of children with developmental disabilities or immediate relatives or guardians of adults with mentally impairing developmental disabilities who cannot advocate for themselves. Six (6) members shall be a combination of individuals in these two (2) groups, and at least one (1) of these members shall be an immediate relative or guardian of an institutionalized or previously institutionalized person with a developmental disability or an individual with a developmental disability who resides in an institution or who previously resided in an institution.
    4. Members not representing principal state agencies shall be appointed for a term of three (3) years. Members shall serve no more than two (2) consecutive three (3) year terms. Members shall serve until their successors are appointed or until they are removed for cause.
    5. The council shall elect its own chair, adopt bylaws, and operate in accordance with its bylaws. Members of the council who are not state employees shall be reimbursed for necessary and actual expenses. The Department of the Treasury shall provide personnel adequate to ensure that the council has the capacity to fulfill its responsibilities. The council shall be headed by an executive director. If the executive director position becomes vacant, the council shall be responsible for the recruitment and hiring of a new executive director.
  3. The Commonwealth Council on Developmental Disabilities shall:
    1. Develop and implement the state plan as required by Part B of the Developmental Disabilities Assistance and Bill of Rights Act of 2000, as amended, with a goal of development of a coordinated consumer and family centered focus and direction, including the specification of priority services required by that plan;
    2. Monitor, review, and evaluate, not less often than annually, the implementation and effectiveness of the state plan in meeting the plan’s objectives;
    3. To the maximum extent feasible, review and comment on all state plans that relate to persons with developmental disabilities;
    4. Submit to the Department of the Treasury and the Secretary of the United States Department of Health and Human Services any periodic reports on its activities as required by the United States Department of Health and Human Services and keep records and afford access as the Department of the Treasury finds necessary to verify the reports;
    5. Serve as an advocate for individuals with developmental disabilities and conduct programs, projects, and activities that promote systematic change and capacity building;
    6. Examine, not less than once every five (5) years, the provision of and need for federal and state priority areas to address, on a statewide and comprehensive basis, urgent needs for services, supports, and other assistance for individuals with developmental disabilities and their families; and
    7. Prepare, approve, and implement a budget that includes amounts paid to the state under the Developmental Disabilities Assistance and Bill of Rights Act of 2000, as amended, to fund all programs, projects, and activities under that Act.

History. Enact. Acts 1998, ch. 426, § 14, effective July 15, 1998; 2000, ch. 20, § 1, effective July 14, 2000; 2002, ch. 59, § 1, effective July 15, 2002; 2005, ch. 99, § 156, effective June 20, 2005; 2005, ch. 138, § 3, effective June 20, 2005; 2006, ch. 211, § 118, effective July 12, 2006; 2007, ch. 24, § 5, effective June 26, 2007; 2012, ch. 146, § 22, effective July 12, 2012; 2012, ch. 158, § 17, effective July 12, 2012; Repealed and reenact., 2018, ch. 95 § 1, effective July 14, 2018; 2019 ch. 125, § 1, effective June 27, 2019; 2019 ch. 146, § 4, effective June 27, 2019; 2021 ch. 26, § 3, effective June 29, 2021.

Compiler’s Notes.

KRS 41.410 was originally compiled as KRS 194A.135 .

The Rehabilitation Act of 1973, referred to in subsection (3), is compiled as 29 USCS § 701 et seq. The Individuals with Disabilities Education Act (IDEA), referred to in subsection (3), is compiled as 20 USCS § 1400 et seq. The Older Americans Act of 1965, referred to in subsection (3), is compiled as 42 USCS § 3001 et seq. Title XIX of the Social Security Act, referred to in subsection (3), is compiled as 42 USCS § 1396 et seq. The protection and advocacy system established under Public Law 101-496, referred to in subsection (3), is compiled as 42 USCS § 6042. The Developmental Disabilities Act of 1984, referred to in subsections (3)(b) and (4), is compiled as 42 USCS § 6000 et seq.

Legislative Research Commission Notes.

(6/29/2021). Under the authority of KRS 7.136(1), the Reviser of Statutes has altered the format of the text in subsection (3) of this statute during codification. The words in the text were not changed.

41.415. STABLE Kentucky accounts — Administration — Cooperative agreements.

  1. As used in this section, “STABLE Kentucky account” has the same definition as set forth in KRS 164A.260 .
  2. The Department of the Treasury shall be responsible for administering and promoting STABLE Kentucky accounts.
  3. In order to ensure that the program is administered in a cost-effective manner, the Department of the Treasury may enter into any cooperative agreements, contracts, or similar instruments with:
    1. Other states which administer programs created under 26 U.S.C. sec. 529 A;
    2. Other agencies or departments of the Commonwealth; or
    3. A nonprofit organization tasked with providing services to individuals who are eligible for a STABLE Kentucky account.

HISTORY: 2019 ch. 125, § 2, effective June 27, 2018.

Kentucky Financial Empowerment Commission

41.450. Kentucky Financial Empowerment Commission — Board of directors — Membership — Terms — Vacancies — Removal — Appeal.

  1. As used in KRS 41.450 to 41.465 :
    1. “Board” means the board of directors of the commission; and
    2. “Commission” means the Kentucky Financial Empowerment Commission.
  2. The commission is created and established as an independent de jure municipal corporation and political subdivision of the Commonwealth of Kentucky to perform essential governmental and public functions for the purposes set forth in KRS 41.450 to 41.465 .
  3. The commission shall be governed by a board consisting of eleven (11) members as follows:
    1. The State Treasurer or the Treasurer’s designee;
    2. The commissioner of the Kentucky Department of Education or his or her designee;
    3. The commissioner of the Department of Financial Institutions or his or her designee;
    4. A representative from the Federal Reserve Bank of St. Louis — Louisville Branch;
    5. A representative from the Kentucky Credit Union League;
    6. A representative from the Kentucky Bankers Association; and
    7. Five (5) members appointed by the State Treasurer.
    1. Members of the board not representing state agencies shall be appointed for a term of three (3) years. (4) (a) Members of the board not representing state agencies shall be appointed for a term of three (3) years.
    2. Members of the board not representing state agencies shall serve no more than two (2) consecutive three (3) year terms.
    3. Members of the board shall serve until their successors are appointed or until they are removed for cause.
  4. For initial appointments of the five (5) members appointed by the State Treasurer to the board, two (2) members shall be appointed for a term of four (4) years each, and three (3) members shall be appointed for terms of three (3) years each.
  5. If a vacancy of one (1) of the five (5) members appointed to the board by the State Treasurer occurs, the State Treasurer shall appoint a replacement who shall hold office during the remainder of the term vacated.
    1. The State Treasurer may remove any of the five (5) members appointed by the State Treasurer in case of incompetency, neglect of duties, gross immorality, or malfeasance in office, and may upon removal declare the position vacant and appoint a person to fill the vacancy as provided in other cases of vacancy. (7) (a) The State Treasurer may remove any of the five (5) members appointed by the State Treasurer in case of incompetency, neglect of duties, gross immorality, or malfeasance in office, and may upon removal declare the position vacant and appoint a person to fill the vacancy as provided in other cases of vacancy.
      1. If a board member is removed under paragraph (a) of this subsection, he or she may appeal that action. (b) 1. If a board member is removed under paragraph (a) of this subsection, he or she may appeal that action.
      2. Upon appeal, an administrative hearing shall be conducted in accordance with KRS Chapter 13B.

HISTORY: 2019 ch. 155, § 1, effective June 27, 2019.

Legislative Research Commission Notes.

(6/27/2019). Under the authority of KRS 7.136(1), the Reviser of Statutes has rear-ranged the paragraphs in subsection (1) of this statute to place the definitions in alphabetical order. No words in the definitions were changed in the process.

41.455. Board chair and vice chair — Quorum — Meetings — Expenses — Conflict of interest — Administrative support.

    1. The State Treasurer shall serve as chair of the board of the commission. (1) (a) The State Treasurer shall serve as chair of the board of the commission.
    2. At the first board meeting following initial appointment of all board members, the board shall elect a vice-chair from its membership, and a vice chair shall be elected annually thereafter.
  1. The vice chair shall chair any meetings when directed to do so in writing by the State Treasurer.
    1. A majority of the commission board members shall constitute a quorum for the purposes of conducting its business, exercising its powers, and for all other purposes. (3) (a) A majority of the commission board members shall constitute a quorum for the purposes of conducting its business, exercising its powers, and for all other purposes.
    2. In determining whether a quorum exists, vacancies on the board shall be considered.
    1. The board shall meet at least once a quarter. (4) (a) The board shall meet at least once a quarter.
    2. The board may meet at other times:
      1. Upon call of the chair; or
      2. At the written request of a majority of board members;

        with a minimum of a seven (7) day notice.

  2. Board members shall receive no compensation for their services, but may be entitled to payment of reasonable and necessary expenses actually incurred in attending meetings, or discharging their official duties, subject to availability of funding.
  3. Any reimbursement of extraordinary travel expenses of board members, including but not limited to attending conventions and conferences, shall be reasonable and necessary and shall be approved by vote of a majority of the board during a meeting.
  4. If any board member has a direct or indirect interest in any organization, department, or agency with which the commission seeks to enter into a contract:
    1. The interest shall be disclosed and set forth in the minutes of the board; and
    2. The board member having the interest shall not participate in any action involving the organization in which he or she has the interest.
    1. The Kentucky State Treasury: (8) (a) The Kentucky State Treasury:
      1. Shall provide technical, clerical, and administrative assistance and support to the commission; and
      2. May provide state personnel, property, and resources to assist the commission in its functions as set forth in KRS 41.450 to 41.465 .
    2. As funding is available, the commission may enter into a contract with the Kentucky State Treasury as may be proper and appropriate for the provision of these services and resources.

HISTORY: 2019 ch. 155, § 2, effective June 27, 2019.

41.460. Powers and duties of commission and board — Executive director.

  1. All powers and duties conferred upon the commission in this chapter shall be exercised by the board, including but not limited to the following:
    1. To adopt bylaws and operate according to its bylaws;
    2. To enter into agreements, contracts, or other documents with any:
      1. Federal, state, or local agency; or
      2. Person, corporation, association, partnership, or other organization or entity; necessary to accomplish the purposes set forth in KRS 41.450 to 41.465 ;
      1. To develop and implement a plan toward increasing financial empowerment for all Kentuckians, specifically the following target groups: (c) 1. To develop and implement a plan toward increasing financial empowerment for all Kentuckians, specifically the following target groups:
        1. State government personnel;
        2. Kentuckians with disabilities;
        3. Kentuckians below the poverty threshold as defined by federal guidelines;
        4. K-12 students in Kentucky;
        5. Military veterans and personnel who claim residence in Kentucky; and
        6. Kentuckians who are retired or at retirement age.
      2. Any curriculum shall be developed by local schools under direction provided by the Kentucky Board of Education related to financial literacy guidelines as promulgated in administrative regulations under KRS 158.1411 ;
    3. To monitor, review, and evaluate, not less often than annually, the implementation and effectiveness of the commission’s objectives;
    4. To accept for inclusion in the fund appropriations, grants, revenue sharing, devises, gifts, bequests, donations, federal grants, and any other aid from any source whatsoever and to agree to, and to comply with, conditions incident thereto;
    5. To incorporate a nonprofit organization pursuant to KRS Chapter 273 which qualifies as a tax-exempt organization under Section 501(c)(3) of the Internal Revenue Code, for the purposes of receiving tax-deductible gifts, donations, and bequests; and
      1. To employ a full-time executive director, who shall hold office at the pleasure of the board, and any employees necessary to fulfill the duties of the commission. (g) 1. To employ a full-time executive director, who shall hold office at the pleasure of the board, and any employees necessary to fulfill the duties of the commission.
      2. The executive director may be terminated by a vote of seven (7) members of the board.
      3. The executive director shall:
        1. Act under the direction of the board;
        2. Hire necessary staff to assist in performing the duties of the commission;
        3. Carry out the policy and program directives of the commission;
        4. Be responsible for the day-to-day operations of the commission;
        5. Establish appropriate organizational structures and personnel policies;
        6. Prepare annual reports on the commission’s activities;
        7. Prepare budgets; and
        8. Perform all other duties as directed by the commission or assigned by law.
      4. The executive director and any employees of the commission shall not participate as members of the Kentucky Retirement Systems.
  2. Nothing in this section shall be construed to require the Kentucky Department of Education or any particular school district to utilize any resource or provider that enters into a contractual relationship with the commission.

HISTORY: 2019 ch. 155, § 3, effective June 27, 2019.

41.465. Annual financial statement audit.

    1. The commission shall annually procure a financial statement audit of all funds and accounts within its control. (1) (a) The commission shall annually procure a financial statement audit of all funds and accounts within its control.
    2. The audit shall be conducted in accordance with generally accepted government auditing standards.
    1. The commission shall not enter into any contract with a certified public accountant for an audit unless the Auditor of Public Accounts has: (2) (a) The commission shall not enter into any contract with a certified public accountant for an audit unless the Auditor of Public Accounts has:
      1. Declined in writing to perform the audit; or
      2. Failed to respond within fifteen (15) days of receipt of a written request for an audit.
    2. If the Auditor of Public Accounts performs the annual audit required in subsection (1) of this section, the Auditor of Public Accounts shall maintain a record of all expenses incurred, including time worked on the audit, and these expenses shall be charged to the commission.
    3. If the Auditor of Public Accounts does not perform the annual audit, any contract with a certified public accountant shall specify the following:
      1. The certified public accountant shall forward a copy of the audit report and management letters to the Auditor of Public Accounts and to the Legislative Research Commission; and
      2. The Auditor of Public Accounts shall have the right to review the certified public accountant’s work papers.

HISTORY: 2019 ch. 155, § 4, effective June 27, 2019.

Linked Deposit Investment Program

41.600. Definitions for KRS 41.600 to 41.625 — Eligibility requirements. [Repealed]

History. Enact. Acts 1994, ch. 276, § 1, effective July 15, 1994; 1996, ch. 208, § 4, effective July 15, 1996; 1998, ch. 172, § 1, effective July 15, 1998; 2004, ch. 41, § 1, effective July 13, 2004; repealed by 2019 ch. 125, § 5, effective June 27, 2019.

41.605. Authorized investment — Limitations — Annual report — Authority for administrative regulations. [Repealed.]

Compiler’s Notes.

This section (Enact. Acts 1994, ch. 276, § 2, effective July 15, 1994) was repealed by Acts 1996, ch. 208, § 9, effective July 15, 1996. For present law see KRS 41.606 .

41.606. Linked deposit investment program — Purpose — Reports — Authority for administrative regulations. [Repealed]

History. Enact. Acts 1996, ch. 208, § 5, effective July 15, 1996; 2004, ch. 41, § 2, effective July 13, 2004; repealed by 2019 ch. 125, § 5, effective June 27, 2019.

41.610. Participation in program — Investment agreements — Required terms and conditions. [Repealed]

History. Enact. Acts 1994, ch. 276, § 3, effective July 15, 1994; 1996, ch. 208, § 6, effective July 15, 1996; 1998, ch. 172, § 2, effective July 15, 1998; 2004, ch. 41, § 3, effective July 13, 2004; repealed by 2019 ch. 125, § 5, effective June 27, 2019.

41.615. Use of moneys obtained — Refinancing of prior loans. [Repealed]

History. Enact. Acts 1994, ch. 276, § 4, effective July 15, 1994; 1996, ch. 208, § 7, effective July 15, 1996; 1998, ch. 172, § 3, effective July 15, 1998; repealed by 2019 ch. 125, § 5, effective June 27, 2019.

41.620. Application for linked deposit loan — Effect of false statement. [Repealed]

History. Enact. Acts 1994, ch. 276, § 5, effective July 15, 1994; 1996, ch. 208, § 8, effective July 15, 1996; repealed by 2019 ch. 125, § 5, effective June 27, 2019.

41.625. Monitoring — Administrative support — Authority for administrative regulations. [Repealed.]

Compiler’s Notes.

This section (Enact. Acts 1994, ch. 276, § 6, effective July 1, 1994) was repealed by Acts 1996, ch. 208, § 9, effective July 15, 1996.

Penalties

41.990. Penalties.

  1. If the president or cashier of any state depository willfully violates any of the provisions of KRS 41.230 , 41.240 , 41.270 or 41.320 , he shall be fined not less than one thousand dollars ($1,000).
  2. Any officer, agent or employee of any budget unit who willfully fails or refuses to comply with, or expends any money in violation of, any of the provisions of KRS 41.070 , 41.110 to 41.160 , 41.210 , 41.220 , 41.260 , 41.270 , 41.290 or 41.300 shall be subject to indictment in the Franklin Circuit Court, and upon conviction shall be fined not less than fifty (50) nor more than five hundred dollars ($500) for each offense.

History. 1992b-63, 4694; 2021 ch. 155, § 23, effective June 29, 2021.

CHAPTER 42 Finance and Administration Cabinet

42.001. Definition of writing.

As used in this chapter, “writing” or “written” means 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.

History. Enact. Acts 1998, ch. 120, § 2, effective July 15, 1998.

42.005. Definitions for KRS 42.010.

As used in KRS 42.010 , unless the context requires otherwise:

  1. “Department” means a basic unit of administrative organization of the Finance and Administration Cabinet designated by statute or by statutorily authorized executive action as a “department.” A department may contain offices, divisions, or both, that report to it;
  2. “Office” means a basic unit of administrative organization of the Finance and Administration Cabinet. An office may or may not report directly to the secretary of the Finance and Administration Cabinet. An office may contain offices, divisions, or both, that report to it;
  3. “Division” means a major branch of a department or office established by statute or by statutorily authorized administrative action;
  4. “Administrative body” includes authority, board, bureau, interstate compact, commission, committee, conference, council, and any other form or organization in the executive branch of government, but does not include “office,” “department,” “program cabinet” or “division”;
  5. “Program cabinet” means a group of departments, or departments and commissions, or departments and offices, or other administrative bodies, designated by statute or statutorily authorized executive action as a “program cabinet.”

History. Enact. Acts 1982, ch. 447, § 8, effective January 1, 1984; 2005, ch. 85, § 48, effective June 20, 2005.

42.010. Definition of state agency.

As used in KRS 42.0171 , 42.0172 , and 42.425 , unless the context requires otherwise, “state agency” means any state administrative body, department or division as defined by KRS 42.005 .

History. 4618-69: amend. Acts 1962, ch. 210, § 5; 1966, ch. 255, § 48; 1980, ch. 188, § 15, effective July 15, 1980; 1982, ch. 447, § 9, effective January 1, 1984; 1984, ch. 111, § 32, effective July 13, 1984; 2005, ch. 85, § 49, effective June 20, 2005.

Opinions of Attorney General.

The provisions of this chapter are not applicable to local boards of education. OAG 61-894 .

Research References and Practice Aids

Cross-References.

Administrative organization, KRS Ch. 12.

Annual audit by Auditor, KRS 43.050 .

Vocational education and rehabilitation, KRS Ch. 163.

42.011. Finance and Administration Cabinet created — Office of secretary. [Repealed.]

Compiler’s Notes.

This section (Enact. Acts 1974, ch. 74, Art. II, § 1; 1978, ch. 155, § 41, effective June 17, 1978; 1980, ch. 295, § 12, effective July 15, 1980; 1982, ch. 393, § 14, effective July 15, 1982) was repealed by Acts 1992, ch. 13, § 13, effective July 14, 1992.

42.012. Secretary as state’s chief financial officer.

The secretary of the Finance and Administration Cabinet shall be the chief financial officer of the state and the adviser of the Governor and the General Assembly in financial matters, and shall at all times protect the financial interests of the state.

History. Enact. Acts 1974, ch. 74, Art. II, § 2; 1978, ch. 155, § 42, effective June 17, 1978; 1982, ch. 393, § 15, effective July 15, 1982; 1992, ch. 13, § 4, effective July 14, 1992.

NOTES TO DECISIONS

1.Commissioner.

The Commissioner of Finance (now secretary of the Finance and Administration Cabinet) was more than an accounting officer, having discretion in passing on the propriety and justification of proposed expenditures. Reeves v. Talbott, 289 Ky. 581 , 159 S.W.2d 51, 1941 Ky. LEXIS 37 ( Ky. 1941 ) (decided under prior law).

2.— Powers.

While the Commissioner of Finance (now secretary of the Finance and Administration Cabinet) was designated the chief financial officer of the state with the duty to protect its financial interests, the only direct powers he was given with respect to claims against the state was to preaudit expenditures under KRS 42.030(1)(e) (now repealed) and to examine statements of indebtedness, and if found “correct” and there was a sufficient amount to pay the claim in the budget unit against which the claim was chargeable to issue warrants upon the state treasurer under KRS 45.220(1) (now repealed). There was no provision of the law recognizing the Commissioner of Finance (now secretary of the Finance and Administration Cabinet) as the final arbiter of the legality of a claim against the commonwealth which would bar the treasurer who was immediately in charge of the receipt and disbursement of all funds of the commonwealth from questioning the constitutional validity of a claim. Raney v. Stovall, 361 S.W.2d 518, 1962 Ky. LEXIS 246 ( Ky. 1962 ) (decided under prior law).

Research References and Practice Aids

Cross-References.

Accounts of local official, secretary may require Auditor of Public Accounts to audit, KRS 43.050 .

Bond, amount and conditions, KRS 62.160 , 62.180 .

Department of Fish and Wildlife Resources, approval of contracts, KRS 150.250 .

Development Finance Authority, secretary member of, KRS 154.20-020 .

Investment Commission, secretary member of, KRS 42.500 .

Salary of secretary, KRS 64.640 .

State Property and Buildings Commission, secretary member of, KRS 56.450 .

42.013. Deputy secretary — Organization of office. [Repealed, reenacted and amended.]

Compiler’s Notes.

This section (Enact. Acts 1974, ch. 74, Art. II, § 3; 1976, ch. 299, § 6; 1978, ch. 155, § 43, effective June 17, 1978; 1982, ch. 393, § 16, effective July 15, 1982; 1984, ch. 340, § 1, effective July 13, 1984; 1992, ch. 13, § 5, effective July 14, 1992; 1998, ch. 68, § 1, effective July 15, 1998; 2000, ch. 5, § 1, effective July 14, 2000; 2002, ch. 12, § 1, effective July 15, 2002) was repealed, reenacted and amended as KRS 42.0145 by Acts 2005, Ch. 85, § 6, effective June 20, 2005.

42.014. Organization of cabinet.

  1. There is established within the cabinet the:
    1. Office of the Secretary;
    2. Commonwealth Office of Technology, and the Office of the Controller, each of which shall be headed by an executive director appointed by the secretary with the approval of the Governor; and
    3. Department of Revenue and the Department for Facilities and Support Services, each of which shall be headed by a commissioner appointed by the secretary, upon the approval of the Governor, and responsible to the secretary. Each of these departments may have at least one (1) major assistant not in the classified service.
  2. The secretary shall establish the internal organization and assignment of functions which are not established by statute, and shall divide the cabinet into the offices, bureaus, divisions, or other units the secretary deems necessary to perform the functions, powers, and duties of the cabinet, subject to the provisions of KRS Chapter 12.
  3. All appointments under this chapter to positions not in the classified service shall be made pursuant to KRS 12.050 , and such appointees shall be major assistants to the secretary and shall assist in the development of policy.

History. Enact. Acts 1974, ch. 74, Art. II, § 4; 1976, ch. 299, § 7; 1978, ch. 155, § 44, effective June 17, 1978; 1982, ch. 183, § 3, effective July 15, 1982; 1982, ch. 393, § 19, effective July 15, 1982; 1984, ch. 186, § 2, effective July 13, 1984; 1984, ch. 340, § 2, effective July 13, 1984; 1988, ch. 273, § 3, effective July 15, 1988; 1990, ch. 321, § 2, effective July 13, 1990; 1990, ch. 378, § 1, effective July 13, 1990; 1994, ch. 176, § 1, effective July 15, 1994; 1994, ch. 216, § 2, effective July 15, 1994; 1994, ch. 508, § 8, effective July 15, 1994; 1998, ch. 68, § 2, effective July 15, 1998; 1998, ch. 83, § 2, effective July 15, 1998; 2000, ch. 46, § 4, effective July 14, 2000; 2000, ch. 506, § 13, effective July 14, 2000; 2000, ch. 536, § 13, effective July 14, 2000; 2002, ch. 12, § 2, effective July 15, 2002; 2005, ch. 85, § 5, effective June 20, 2005; 2005, ch. 95, § 10, effective June 20, 2005.

Legislative Research Commission Note.

(6/20/2005). This section was amended by 2005 Ky. Acts chs. 85 and 95, which do not appear to be in conflict and have been codified together.

42.0141. Establishment of Office of Revenue Estimating and Economic Analysis. [Repealed.]

Compiler’s Notes.

This section (Enact. Acts 1988, ch. 273, § 1, effective July 15, 1988) was repealed by Acts 1990, ch. 321, § 12, effective July 13, 1990.

42.0145. Office of the Secretary.

  1. The Office of the Secretary of the Finance and Administration Cabinet shall consist of the Office of Inspector General, Office of General Counsel, Office of Administrative Services, Office of Legislative and Intergovernmental Affairs, Office of Policy and Audit, and Office of Equal Employment Opportunity and Contract Compliance, each headed by an executive director who shall be appointed by the secretary with the approval of the Governor. The Office of the Secretary shall include a deputy secretary who shall be appointed by the secretary with the approval of the Governor. The deputy secretary shall be responsible to and have such authority to sign for the secretary as the secretary designates in writing.
  2. The secretary may organize the office into such additional administrative units as he deems necessary to perform the functions and fulfill the duties of the cabinet, subject to the provisions of KRS Chapter 12.
  3. All appointments under this chapter to positions not in the classified service shall be made pursuant to KRS 12.050 , and such appointees shall be major assistants to the secretary and shall assist in the development of policy.

History. Enact. Acts 1974, ch. 74, Art. II, § 3; 1976, ch. 299, § 6; 1978, ch. 155, § 43, effective June 17, 1978; 1982, ch. 393, § 16, effective July 15, 1982; 1984, ch. 340, § 1, effective July 13, 1984; 1992, ch. 13, § 5, effective July 14, 1992; 1998, ch. 68, § 1, effective July 15, 1998; 2000, ch. 5, § 1, effective July 14, 2000; 2002, ch. 12, § 1, effective July 15, 2002; repealed, reenact. and amend., Acts 2005, ch. 85, § 6, effective June 20, 2005; 2009, ch. 12, § 19, effective June 25, 2009; 2017 ch. 131, § 4, effective June 29, 2017.

Compiler’s Notes.

This section was formerly compiled as KRS 42.013 .

42.0145. Office of the Secretary.

  1. The Office of the Secretary of the Finance and Administration Cabinet shall consist of the Office of Inspector General, Office of General Counsel, Office of Administrative Services, Office of Legislative and Intergovernmental Affairs, Office of Policy and Audit, Office of Equal Employment Opportunity and Contract Compliance, and Office of Fleet Management, each headed by an executive director who shall be appointed by the secretary with the approval of the Governor. The Office of the Secretary shall include a deputy secretary who shall be appointed by the secretary with the approval of the Governor. The deputy secretary shall be responsible to and have such authority to sign for the secretary as the secretary designates in writing.
  2. The secretary may organize the office into such additional administrative units as he deems necessary to perform the functions and fulfill the duties of the cabinet, subject to the provisions of KRS Chapter 12.
  3. All appointments under this chapter to positions not in the classified service shall be made pursuant to KRS 12.050 , and such appointees shall be major assistants to the secretary and shall assist in the development of policy.

HISTORY: Enact. Acts 1974, ch. 74, Art. II, § 3; 1976, ch. 299, § 6; 1978, ch. 155, § 43, effective June 17, 1978; 1982, ch. 393, § 16, effective July 15, 1982; 1984, ch. 340, § 1, effective July 13, 1984; 1992, ch. 13, § 5, effective July 14, 1992; 1998, ch. 68, § 1, effective July 15, 1998; 2000, ch. 5, § 1, effective July 14, 2000; 2002, ch. 12, § 1, effective July 15, 2002; repealed, reenact. and amend., Acts 2005, ch. 85, § 6, effective June 20, 2005; 2009, ch. 12, § 19, effective June 25, 2009; 2017 ch. 131, § 4, effective June 29, 2017; 2022 ch. 51, § 3.

42.0146. Office of Equal Employment Opportunity and Contract Compliance — Oversight of certification program for disabled veteran-owned businesses — Administrative regulations.

  1. For purposes of this section:
    1. “Disabled veteran” means an individual, domiciled in Kentucky, who has served on active duty in the Armed Forces, has been separated therefrom under honorable or general conditions, and has established the present existence of a service-connected disability or is receiving compensation, disability retirements benefits, or pension because of a public statute administered by the United States Department of Veterans Affairs or Department of Defense, or was terminated from active duty by the Department of Defense because of a disability; and
    2. “Disabled veteran-owned business” means a business:
      1. Where a disabled veteran has at least fifty-one percent (51%) ownership;
      2. That is independently owned and operated;
      3. That does not exceed the applicable size standards for its industry, as determined by the United States Small Business Administration;
      4. That has been owned and operated by the disabled veteran for at least a full calendar or fiscal year; and
      5. For which the disabled veteran has filed a business tax return consisting of a full calendar or fiscal year.
  2. The Office of Equal Employment Opportunity and Contract Compliance shall oversee a program that provides certification of a disabled veteran-owned business in order to encourage growth among businesses owned by disabled veterans within the state and assist those businesses in competing for work in other states that require certification by a statewide body. This certification does not provide a preference in state procurement, nor does it create a point system or set aside for disabled veteran-owned businesses.
  3. In order to apply for certification, a disabled veteran shall provide proof of his or her disability. Proof shall be in the form of Department of Defense Form DD 214, United States Department of Veterans Affairs disability letter, or other United States Department of Veterans Affairs documentation establishing a service-connected disability.
  4. The Finance and Administration Cabinet shall promulgate any administrative regulations necessary to create and manage the disabled veteran-owned business certification program, which may include but is not limited to additional certification requirements, the application process, onsite visitation by the Office of Equal Employment Opportunity and Contract Compliance, and recertification.

HISTORY: 2016 ch. 100, § 1, effective July 15, 2016.

42.0147. Office of the Inspector General.

The Office of the Inspector General is established within the Office of the Secretary of the Finance and Administration Cabinet and shall be responsible for conducting various investigations within the executive branch in accordance with KRS 45.131 .

HISTORY: 2017 ch. 131, § 1, effective June 29, 2017; 2021 ch. 81, § 1, effective June 29, 2021.

42.0148. Office of Legislative and Intergovernmental Affairs.

  1. The Office of Legislative and Intergovernmental Affairs is established within the Finance and Administration Cabinet to provide executive direction and coordination of the cabinet’s legislative priorities.
  2. The Office of Legislative and Intergovernmental Affairs, in close communication with the secretary, shall:
    1. Proactively pursue the goals of the cabinet by working with members of the General Assembly and the staff of the Legislative Research Commission;
    2. Oversee all public information issues;
    3. Manage requests for information; and
    4. Prepare press releases, respond to press inquiries, and coordinate the publication of newsletters, reports, Web site information, and other statewide communications of the Finance and Administration Cabinet.

HISTORY: 2017 ch. 131, § 2, effective June 29, 2017.

42.015. Transfer of functions, powers and duties to department and secretary. [Repealed.]

Compiler’s Notes.

This section (Enact. Acts 1974, ch. 74, Art. II, § 5) was repealed by Acts 1982, ch. 393, § 51, effective July 15, 1982.

42.016. Corporate bodies and instrumentalities attached to Office of Secretary.

The following corporate bodies and instrumentalities of the Commonwealth shall be attached to the Office of the Secretary for administrative purposes and staff services:

  1. State Property and Buildings Commission;
  2. Kentucky Turnpike Authority;
  3. State Investment Commission;
  4. Kentucky Housing Corporation;
  5. Kentucky River Authority; and
  6. Executive Branch Ethics Commission.

HISTORY: Enact. Acts 1974, ch. 74, Art. II, § 6; 1976, ch. 299, § 8; 1978, ch. 155, § 45, effective June 17, 1978; 1980, ch. 295, § 13, effective July 15, 1980; 1982, ch. 184, § 6, effective July 15, 1982; 1982, ch. 382, § 29, effective July 15, 1982; 1982, ch. 393, § 20, effective July 15, 1982; 1984, ch. 339, § 1, effective July 13, 1984; 1984, ch. 346, § 1, effective July 13, 1984; 1984, ch. 406, § 1, effective July 13, 1984; 1988, ch. 154, § 3, effective July 15, 1988; 1994, ch. 208, § 3, effective July 15, 1994; 1998, ch. 83, § 3, effective July 15, 1998; 2000, ch. 221, § 3, effective July 14, 2000; 2000, ch. 265, § 1, effective July 14, 2000; 2000, ch. 287, § 1, effective July 14, 2000; 2001, ch. 27, § 8, effective June 21, 2001; 2005, ch. 85, § 50, effective June 20, 2005; 2006, ch. 152, § 13, effective July 12, 2006; 2007, ch. 47, § 13, effective June 26, 2007; 2009, ch. 12, § 20, effective June 25, 2009; 2021 ch. 12, § 5, effective March 12, 2021.

42.017. Office of General Counsel.

  1. The Office of General Counsel established within the Office of the Secretary by KRS 42.0145 shall be responsible for the coordination and provision of legal services for the cabinet and for other functions and duties as the secretary may assign relating to the performance of the cabinet’s legal services.
  2. The Office of General Counsel shall be headed by an executive director who shall function as the general counsel. The executive director shall be appointed in accordance with KRS 12.210 and shall report to the secretary. The Attorney General, on request of the secretary, may designate attorneys in the Office of General Counsel as assistant attorneys general as provided in KRS 15.105 .
  3. The Office of General Counsel shall consist of two (2) offices, each of which shall provide legal services for its respective offices and departments, as follows:
    1. Office of Legal Services for Finance and Technology, headed by an executive director and composed of organizational entities deemed appropriate by the secretary of the Finance and Administration Cabinet; and
    2. Office of Legal Services for Revenue, headed by an executive director, including organizational entities deemed appropriate by the secretary of the Finance and Administration Cabinet.

History. Enact. Acts 1984, ch. 340, § 3, effective July 13, 1984; 2002, ch. 12, § 3, effective July 15, 2002; 2005, ch. 85, § 8, effective June 20, 2005; 2009, ch. 12, § 21, effective June 25, 2009.

42.0171. Office of Administrative Services.

  1. The Office of Administrative Services established in KRS 42.0145 shall be generally responsible for all internal administrative and human resource functions of the cabinet, including but not limited to providing administrative assistance; managing and preparing the cabinet’s budget; performing general accounting; managing fiscal, personnel, and payroll functions of the cabinet; providing statewide postal and printing services; providing administrative support to boards and commissions; and performing any additional administrative functions and duties the secretary may assign.
  2. There shall be established in the Office of Administrative Services:
    1. The Office of Budget and Fiscal Management, headed by an executive director who shall report directly to the executive director of the Office of Administrative Services, and consisting of the:
      1. Division of Budget; and
      2. Division of Fiscal Management; and
    2. The following divisions which shall be headed by a division director who shall report to the executive director of the Office of Administrative Services:
      1. Division of Human Resources;
      2. Division of Postal Services; and
      3. Division of Fleet Management.
  3. Executive directors and division directors appointed under this section shall be appointed by the secretary with the approval of the Governor under KRS 12.050 . Each division shall be headed by a division director appointed by the secretary of the Finance and Administration Cabinet. There may be, if needed, sections assigned to specific areas of work, responsible directly to the executive director of the Office of Administrative Services.

History. Enact. Acts 1978, ch. 155, § 49, effective June 17, 1978; 1982, ch. 393, § 22, effective July 15, 1982; 1994, ch. 214, § 1, effective July 15, 1994; 1994, ch. 216, § 5, effective July 15, 1994; 1994, ch. 508, § 9, effective July 15, 1994; 2000, ch. 5, § 2, effective July 14, 2000; repealed, reenact. and amend., Acts 2005, ch. 85, § 9, effective June 20, 2005; 2009, ch. 12, § 22, effective June 25, 2009; 2021 ch. 81, § 2, effective June 29, 2021.

Compiler’s Notes.

This section was formerly compiled as KRS 42.023 .

Legislative Research Commission Notes.

(7/15/94). This section was amended by 1994 Ky. Acts chs. 214, 216, and 508. Where these Acts are not in conflict, they have been codified together. Where a conflict exists between chs. 216 and 508, Acts ch. 508, which was last enacted by the General Assembly, prevails under KRS 446.250 .

This section was amended by 1982 Acts Chapter 183, Section 2 and 1982 Acts Chapter 393, Section 22 which conflict and cannot be compiled together. Pursuant to KRS 446.250 , the amendment in Chapter 393 prevails as the later enactment.

42.0171. Office of Administrative Services.

  1. The Office of Administrative Services established in KRS 42.0145 shall be generally responsible for all internal administrative and human resource functions of the cabinet, including but not limited to providing administrative assistance; managing and preparing the cabinet’s budget; performing general accounting; managing fiscal, personnel, and payroll functions of the cabinet; providing statewide postal and printing services; providing administrative support to boards and commissions; and performing any additional administrative functions and duties the secretary may assign.
  2. There shall be established in the Office of Administrative Services:
    1. The Office of Budget and Fiscal Management, headed by an executive director who shall report directly to the executive director of the Office of Administrative Services, and consisting of the:
      1. Division of Budget; and
      2. Division of Fiscal Management; and
    2. The following divisions which shall be headed by a division director who shall report to the executive director of the Office of Administrative Services:
      1. Division of Human Resources; and
      2. Division of Postal Services.
  3. Executive directors and division directors appointed under this section shall be appointed by the secretary with the approval of the Governor under KRS 12.050 . There may be, if needed, sections assigned to specific areas of work, responsible directly to the executive director of the Office of Administrative Services.

HISTORY: Enact. Acts 1978, ch. 155, § 49, effective June 17, 1978; 1982, ch. 393, § 22, effective July 15, 1982; 1994, ch. 214, § 1, effective July 15, 1994; 1994, ch. 216, § 5, effective July 15, 1994; 1994, ch. 508, § 9, effective July 15, 1994; 2000, ch. 5, § 2, effective July 14, 2000; repealed, reenact. and amend., Acts 2005, ch. 85, § 9, effective June 20, 2005; 2009, ch. 12, § 22, effective June 25, 2009; 2021 ch. 81, § 2, effective June 29, 2021; 2022 ch. 51, § 4.

42.0172. Division of Postal Services.

The Division of Postal Services shall operate the centralized postal services for executive branch agencies as set forth in KRS 12.020 . The division shall operate at a central location with additional locations necessary to maintain and improve service levels.

History. Enact. Acts 1978, ch. 155, § 51, effective June 17, 1978; 1982, ch. 393, § 24, effective July 15, 1982; 1994, ch. 214, § 2, effective July 15, 1994; 1994, ch. 508, § 11, effective July 15, 1994; 1997 (1st Ex. Sess.), ch. 4, § 15, effective May 30, 1997; repealed, reenact. and amend., Acts 2005, ch. 85, § 10, effective June 20, 2005; 2009, ch. 12, § 23, effective June 25, 2009.

Compiler’s Notes.

This section was formerly compiled as KRS 42.025 .

42.0173. Office of Public Information. [Repealed]

History. Enact. Acts 2005, ch. 85, § 7, effective June 20, 2005; repealed by 2017 ch. 131, § 6, effective June 29, 2017.

Compiler’s Notes.

This section (Enact. Acts 2005, ch. 85, § 7, effective June 20, 2005), was repealed by Acts 2017, ch. 131, § 6, effective June 29, 2017.

42.0174. Office of Policy and Audit.

  1. The Office of Policy and Audit established within the Office of the Secretary by KRS 42.0145 shall have the duties and responsibilities established in KRS 42.065 .
  2. The Office of Policy and Audit shall be headed by an executive director who shall be appointed in accordance with KRS 12.050 and shall report to the secretary.

History. Enact. Acts 2009, ch. 12, § 1, effective June 25, 2009; 2012, ch. 69, § 3, effective July 12, 2012.

42.018. Office of Capital Plaza Operations. [Repealed]

HISTORY: Enact. Acts 1984, ch. 340, § 4, effective July 13, 1984; 1990, ch. 378, § 2, effective July 13, 1990; 1994, ch. 216, § 3, effective July 15, 1994; 1998, ch. 83, § 4, effective July 15, 1998; 2002, ch. 12, § 4, effective July 15, 2002; 2005, ch. 85, § 51, effective June 20, 2005; repealed by 2018 ch. 69, § 4, effective July 14, 2018.

42.019. Division of Historic Properties — State curator.

  1. The Division of Historic Properties established by KRS 42.425 shall be responsible for overseeing the management and preservation of state-owned historic properties including, but not limited to, the Executive Mansion, Old Governor’s Mansion, Vest Lindsey House, Berry Hill, and the State Capitol. In addition, the division shall be responsible for maintaining state-owned furniture, china, silver, and art works and the care, display, inventory, conservation, restoration, and storage of any state-owned item of historical significance.
  2. The Department of Parks and the Kentucky Horse Park may advise and consult the Division of Historic Properties in the operation, maintenance, restoration, conservation, and inventory of the state’s shrines and museums.
  3. The director of the Division of Historic Properties shall serve as state curator pursuant to KRS 11.026 . The director may employ the personnel and assemble the records and files necessary to perform the duties, responsibilities, and functions of the office.

History. Enact. Acts 1984, ch. 340, § 5, effective July 13, 1984; 1994, ch. 176, § 3, effective July 15, 1994; 2005, ch. 85, § 699, effective June 20, 2005; 2008, ch. 13, § 1, effective July 15, 2008.

42.0192. Office of Risk Management. [Amended and Redesignated]. [Transferred]

Compiler’s Notes.

This section (Enact. Acts 1990, ch. 377, § 1, effective July 13, 1990) was amended and redesignated as KRS 42.0245 by the Reviser of Statutes under the authority of KRS 7.136 and 7.140 .

42.020. Organization of department — Commissioner of finance — Deputy Commissioner. [Repealed.]

Compiler’s Notes.

This section (4618-86: amend. Acts 1954, ch. 187, § 1; 1956 (1st Ex. Sess.), ch. 7, Art. XVI, § 16) was repealed by Acts 1974, ch. 74, Art. II, § 12.

42.0201. Office of the Controller.

  1. There is created within the Finance and Administration Cabinet the Office of the Controller.
  2. The Office of the Controller shall be headed by an executive director appointed by the secretary of the Finance and Administration Cabinet with the approval of the Governor. The executive director shall function as the state controller, who shall be a person qualified by education and experience for the position and held in high professional esteem in the accounting community.
  3. The state controller shall be the Commonwealth’s chief accounting officer and shall be responsible for all aspects of accounting policies and procedures, financial accounting systems, and internal accounting control policies and procedures. The Office of the Controller shall establish guidelines for state personnel administration on issues relating to paycheck distribution dates, assignment of data elements to accurately report labor costs, assignment and tracking of actual expenditures by code, and coverage issues relating to Social Security and Medicare.
  4. The state controller; the executive director of the Office of Financial Management, Finance and Administration Cabinet; and the state budget director designated under KRS 11.068 shall develop and maintain the Commonwealth’s strategic financial management program.
  5. Executive directors and division directors appointed under this section shall be appointed by the secretary with the approval of the Governor.
  6. There are established in the Office of the Controller the following organizational entities:
    1. The Office of Financial Management, which shall be headed by an executive director, shall have the duties and responsibilities established in KRS 42.410 , and shall serve as administrative staff to the Turnpike Authority of Kentucky. The executive director shall serve as secretary to the authority;
    2. The Office of Material and Procurement Services, which shall be headed by an executive director and shall have the duties established in KRS 42.024 . There are established within the Office of Material and Procurement Services the following organizational entities:
      1. The Division of Professional Services and Training, which shall be headed by a division director who is appointed by the secretary of the Finance and Administration Cabinet pursuant to KRS 12.050 , and who shall report to the executive director; and
      2. The Division of Contract Management, which shall be headed by a division director who is appointed by the secretary of the Finance and Administration Cabinet pursuant to KRS 12.050 , and who shall report to the executive director;
    3. The Division of Local Government Services, which shall be headed by a division director and shall be responsible for:
      1. Providing property valuation administrators with fiscal, personnel, payroll, training, and other essential administrative support services;
      2. Overseeing Kentucky’s Social Security coverage program, including but not limited to all aspects of FICA wage reporting for state government and the Commonwealth’s Social Security coverage agreement;
      3. Serving as liaison between local governments and the federal Internal Revenue Service and Social Security Administration;
      4. Serving as the payroll and fiscal officer for the sheriff and clerk in counties over seventy thousand (70,000) in population, disbursing various reimbursements and expenditures to local governments and serving as liaison and conduit for all court fees associated with report of state money through the Circuit Courts;
      5. Directing the federal employment tax program for state employees; and
      6. Performing state government’s duties relating to the county fee system for local entities;
    4. The Office of Statewide Accounting Services, headed by an executive director appointed by the secretary of the Finance and Administration Cabinet, subject to the approval of the Governor. The executive director shall report directly to the state controller. The office shall perform financial record keeping functions at the state controller’s direction, and shall be responsible for the performance of the cabinet’s functions outlined in KRS 45.305 , 48.800 , and other related statutes. There is established within the Office of Statewide Accounting Services the Division of Customer Resource Center, which shall be headed by a division director appointed by the secretary pursuant to KRS 12.050 and who shall report to the executive director of the Office of Statewide Accounting Services. The division shall be responsible for:
      1. Providing a help desk for users of state government’s financial and procurement system, including state employee users and vendors and payees of the Commonwealth who do, or would like to do, business with the state;
      2. Training state employees in the use of state government’s financial and procurement system; and
      3. Assisting cabinet entities in improving the quality of their products and processes; and
    5. The Division of State Risk and Insurance Services, headed by a division director appointed by the secretary of the Finance and Administration Cabinet, subject to the approval of the Governor. The director shall report directly to the state controller and shall have the duties specified in KRS 42.0651 .

History. Enact. Acts 1994, ch. 508, § 1, effective July 15, 1994; 1998, ch. 85, § 1, effective July 15, 1998; 2000, ch. 5, § 5, effective July 14, 2000; 2000, ch. 46, § 5, effective July 14, 2000; 2005, ch. 85, § 11, effective June 20, 2005; 2009, ch. 12, § 24, effective June 25, 2009; 2012, ch. 69, § 4, effective July 12, 2012; 2016 ch. 84, § 1, effective July 15, 2016.

42.021. Governor’s advisory council to the office of volunteer services. [Amended and reenacted.]

Compiler’s Notes.

This section (Enact. Acts 1978, ch. 155, § 47, effective June 17, 1978) was amended and reenacted as KRS 147A.008 (since repealed) by Acts 1980, ch. 295, § 14, effective July 15, 1980.

42.022. Functions and duties of deputy secretary for the office for policy and management. [Repealed.]

Compiler’s Notes.

This section (Enact. Acts 1978, ch. 155, § 48, effective June 17, 1978; 1980, ch. 310, § 4, effective July 15, 1980; 1982, ch. 393, § 21, effective July 15, 1982) was repealed by Acts 1984, ch. 186, § 4, effective July 13, 1984.

42.023. Department for Administration — Duties — Organization. [Repealed, reenacted and amended.]

Compiler’s Notes.

This section (Enact. Acts 1978, ch. 155, § 49, effective June 17, 1978; 1982, ch. 393, § 22, effective July 15, 1982; 1994, ch. 214, § 1, effective July 15, 1994; 1994, ch. 216, § 5, effective July 15, 1994; 1994, ch. 508, § 9, effective July 15, 1994; 2000, ch. 5, § 2, effective July 14, 2000) was repealed, reenacted and amended as KRS 42.0171 by Acts 2005 ch. 85, § 9, effective June 20, 2005.

42.024. Office of Material and Procurement Services.

The Office of Material and Procurement Services within the Office of the Controller shall be responsible for the performance of the cabinet’s purchasing functions under KRS Chapters 45 and 45A, except those purchasing functions related to the acquisition of interests in real property, and contractual and construction services which are related to and required in connection with the construction, renovation, and repair of state-owned buildings. The Office of Material and Procurement Services shall be responsible for the control of all state-purchased personal property.

History. Enact. Acts 1978, ch. 155, § 50, effective June 17, 1978; 1982, ch. 393, § 23, effective July 15, 1982; 1984, ch. 111, § 33, effective July 13, 1984; 1990, ch. 386, § 1, effective July 13, 1990; 1994, ch. 216, § 6, effective July 15, 1994; 1994, ch. 508, § 10, effective July 15, 1994; 2000, ch. 5, § 3, effective July 14, 2000; 2005, ch. 85, § 12, effective June 20, 2005.

Legislative Research Commission Note.

(7/15/94). This section was amended by 1994 Ky. Acts chs. 216 and 508. Where these Acts are not in conflict, they have been codified together. Where a conflict exists, Acts ch. 508, which was last enacted by the General Assembly, prevails under KRS 446.250 .

42.0245. Division of Risk Management. [Repealed, reenacted and amended.]

Compiler’s Notes.

This section (Enact. Acts 1990, ch. 377, § 1, effective July 13, 1990; amend. and redesig. Acts 1994, ch. 116, § 3, effective July 15, 1994; 1994, ch. 216, § 4, effective July 15, 1994; 1998, ch. 82, § 12, effective July 15, 1998; 1998, ch. 154, § 62, effective July 15, 1998; 2001, ch. 164, § 3, effective June 21, 2001) was repealed, reenacted and amended as KRS 42.0651 by Acts 2005 ch. 85, § 14, effective June 20, 2005.

42.025. Division of Printing and Division of Postal Services — Duties. [Repealed, reenacted and amended.]

Compiler’s Notes.

This section (Enact. Acts 1978, ch. 155, § 51, effective June 17, 1978; 1982, ch. 393, § 24, effective July 15, 1982; 1994, ch. 214, § 2, effective July 15, 1994; 1994, ch. 508, § 11, effective July 15, 1994; 1997 (1st Ex. Sess.), ch. 4, § 15, effective May 30, 1997) was repealed, reenacted and amended as KRS 42.0172 by Acts 2005, ch. 85, § 10, effective June 20, 2005.

42.026. Bureau of computer services established — Organization — Duties. [Repealed.]

Compiler’s Notes.

This section (Enact. Acts 1978, ch. 155, § 52, effective June 17, 1978) was repealed by Acts 1982, ch. 393, § 51, effective July 15, 1982.

42.027. Department for Facilities Management — Organization — Duties — Responsibilities. [Repealed, reenacted and amended.]

Compiler’s Notes.

This section (Enact. Acts 1978, ch. 155, § 53, effective June 17, 1978; 1982, ch. 393, § 25, effective July 15, 1982; 1992, ch. 41, § 2, effective July 14, 1992; 1994, ch. 176, § 2, effective July 15, 1994; 1998, ch. 68, § 3, effective July 15, 1998; 1998, ch. 87, § 1, effective July 15, 1998; 2002, ch. 19, § 1, effective July 15, 2002) was repealed, reenacted and amended as KRS 42.425 by Acts 2005, ch. 85, § 17, effective June 20, 2005.

42.0271. Plaque commemorating prisoners and missing soldiers in Vietnam War — Duties of Department of Veterans’ Affairs and Department of Facilities Management relating to plaque and Freedom Tree. [Repealed, reenacted and amended.]

Compiler’s Notes.

This section (Enact. Acts 2002, ch. 256, § 1, effective July 15, 2002) was repealed, reenacted and amended as KRS 42.430 by Act 2005, ch. 85, § 18, effective June 20, 2005.

42.028. Bureau of public properties established — Organization — Duties. [Repealed.]

Compiler’s Notes.

This section (Enact. Acts 1978, ch. 155, § 54, effective June 17, 1978; 1980, ch. 295, § 15, effective July 15, 1980) was repealed by Acts 1982, ch. 393, § 51, effective July 15, 1982.

42.029. Department of Information Systems — Commissioner and other personnel — Divisions — Duties — Delegation of authority. [Repealed.]

Compiler’s Notes.

This section (Enact. Acts 1982, ch. 393, § 17, 18, effective July 15, 1982; 1984, ch. 111, § 34, effective July 13, 1984; 1984, ch. 404, § 9, effective July 13, 1984; 1988, ch. 306, § 1, effective July 15, 1988; 1994, ch. 474, § 1, effective July 15, 1994; 1998, ch. 68, § 4, effective July 15, 1998; 1998, ch. 353, § 8, effective July 15, 1998) was repealed by Acts 2000, ch. 506, § 25, effective July 14, 2000; and Acts 2000, ch. 536, § 37, effective July 14, 2000. For present law, see KRS 11.501 et seq.

42.030. General functions of department. [Repealed.]

Compiler’s Notes.

This section (4618-43, 4618-85: amend. Acts 1956 (1st Ex. Sess.), ch. 7, Art. XVI, § 17; 1968, ch. 119, § 12; 1974, ch. 74, Art. II, § 9(1); 1982, ch. 393, § 26, effective July 15, 1982) was repealed by Acts 1982, ch. 450, § 79, effective July 1, 1983. For present law, see KRS 45.301 .

42.032. Web site to provide public access to expenditure records of executive branch — Monthly and weekly updates — Cabinet is sole custodian of information and records — Branches to share software and applications.

  1. By January 1, 2012, the Finance and Administration Cabinet shall provide public access to records relating to expenditures of the executive branch of state government through display of the records on a Web site. The Web site shall provide:
    1. Financial information of expenditures not exempt under the provisions of state or federal law, including:
      1. The payee name;
      2. The category or type of the expenditure;
      3. A description of the reason for the expenditure, if available;
      4. The expenditure amount; and
      5. A link to the financial document, if the document is electronically available;
    2. A searchable format;
    3. Access to the current enacted Executive Branch Budget; and
    4. A link to the public access Web site displays of the legislative and judicial branches of state government, and of the public institutions of higher education.
  2. Information on the Web site shall be updated at least on a monthly basis. However, information on the Web site which is part of, or contained in, an electronic accounting system utilized by all branches of state government, such as the Enhanced Management Administrative Reporting System (EMARS), shall be updated on a weekly basis.
  3. The cabinet shall maintain exclusive control and be considered the sole custodian of all information and records generated by and through activity of the executive branch of government, notwithstanding the situs of the information and the records in another branch of government, and disclosure thereof shall only be by the cabinet in accordance with applicable law.
  4. In order to reduce Web site development costs and enhance public access and use of records viewed through Web sites as provided by this section and KRS 7.505 and 26A.260 , each branch of state government shall freely share with the other branches of state government the software, software developments, and all applications, data, and information within its control used for Web site design, appearance, content, and operation in compliance with, or in furtherance of, the purposes contemplated by this section and KRS 7.505 and 26A.260 .

History. Enact. Acts 2011, ch. 105, § 3, effective June 8, 2011.

42.035. Executive Mansion — Maintenance and operation — Duties of cabinet as to food, personnel and Governor’s travel expenses.

  1. The Finance and Administration Cabinet shall be responsible for the management, maintenance, and operation, including the purchase for all purposes of all food and related supplies, of the Executive Mansion, and further including the reasonable and necessary expenses of the chief executive while traveling on business of the Commonwealth outside of the state. Such personnel, including domestic and household servants, as are necessary for the operation and maintenance of the Executive Mansion shall be employed by the Finance and Administration Cabinet. The provisions of KRS Chapter 42 shall apply to all purchases made for the maintenance and operation of the mansion. None of the provisions of KRS 18A.110 and 18A.155 shall apply to personnel employed for the maintenance and operation of the mansion.
  2. A reasonable amount shall be deducted from the salary or other allowance of the Governor for the consumption by the Governor and his family of such food and supplies.
  3. A reasonable amount shall be deducted from the salaries of personnel employed in operational and maintenance functions, including domestic and household servants, for the consumption by such personnel of such food and supplies.
  4. The Finance and Administration Cabinet shall maintain such records relative to the management, maintenance, and operation of the Governor’s Mansion and travel expenses of the chief executive as may be dictated by sound accounting practices.

History. Enact. Acts 1956, ch. 11, § 1; 1962, ch. 210, § 6; 1964, ch. 18, § 1; 1974, ch. 74, Art. II, § 9(1); 1982, ch. 448, § 60, effective July 15, 1982.

Opinions of Attorney General.

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 .

42.037. Old Governor’s Mansion, maintenance and operation — Duties of cabinet as to food, personnel.

  1. The Finance and Administration Cabinet shall be responsible for the management, maintenance, and operation, including the purchase for all purposes of all food and related supplies, of the Old Governor’s Mansion. Such personnel, including domestic and household servants, as are necessary for the operation and maintenance of the Old Governor’s Mansion shall be employed by the Finance and Administration Cabinet. The provisions of this chapter shall apply to all purchases made for the maintenance and operation of the Old Governor’s Mansion. None of the provisions of KRS 18A.110 and 18A.155 shall apply to the personnel employed for the maintenance and operation of the Old Governor’s Mansion.
  2. A reasonable amount shall be deducted from the salary or other allowance of the Lieutenant Governor for the consumption by the Lieutenant Governor and his family of such food and supplies.
  3. A reasonable amount shall be deducted from the salaries of personnel employed in operational and maintenance functions, including domestic and household servants, for the consumption by such personnel of such food and supplies.
  4. The Finance and Administration Cabinet shall maintain such records relative to the management, maintenance, and operation of the Lieutenant Governor’s mansion as may be dictated by sound accounting practices.

History. Enact. Acts 1956, ch. 94, § 1; 1964, ch. 18, § 2; 1974, ch. 74, Art. II, § 9(1); 1982, ch. 448, § 61, effective July 15, 1982.

Compiler’s Notes.

This section was formerly compiled as KRS 56.325 .

42.038. Vest Lindsey House — Use as state meeting house and visitor information center.

  1. The Division of Historic Properties shall establish the Vest Lindsey House as a state meeting house and restrict its use, except as provided in subsection (3) of this section, to small meetings, luncheons, receptions, and other similar functions deemed appropriate by the Historic Properties Advisory Commission.
  2. The use of the Vest Lindsey House as a state meeting house, as provided in subsection (1) of this section, shall be available to state and local government agencies, nonprofit organizations, and private persons and entities, all subject to availability and with the approval of the director of the Division of Historic Properties or his or her designee.
  3. In addition to the use of the Vest Lindsey House as a state meeting house, the Division of Historic Properties shall maintain the Vest Lindsey House as a central visitor information center for the North Frankfort area, and, in consultation with the Kentucky Heritage Council, shall develop and display interpretative materials and other resources regarding the historical and architectural significance of the Vest Lindsey House and other sites in the North Frankfort area.

History. Enact. Acts 2008, ch. 24, § 1, effective July 15, 2008.

42.040. Division of the budget. [Repealed.]

Compiler’s Notes.

This section (4618-87) was repealed by Acts 1974, ch. 74, Art. II, § 12.

42.050. Division of accounts. [Repealed.]

Compiler’s Notes.

This section (4618-88: amend. Acts 1954, ch. 187, § 2, effective June 17, 1954) was repealed by Acts 1974, ch. 74, Art. II, § 12.

42.055. Division of services. [Repealed.]

Compiler’s Notes.

This section (Enact. Acts 1954, ch. 187, § 4, effective June 17, 1954) was repealed by Acts 1974, ch. 74, Art. II, § 12.

42.060. Division of Purchases. [Repealed.]

Compiler’s Notes.

This section (4618-89: amend. Acts 1942, ch. 14; 1954, ch. 187, § 3) was repealed by Acts 1964, ch. 16, § 8. For present law see KRS 45A.045 .

42.061. Division of purchases. [Repealed.]

Compiler’s Notes.

This section (Enact. Acts 1964, ch. 16, § 1(1)) was repealed by Acts 1974, ch. 74, Art. II, § 12.

42.062. Definition for KRS 42.064 and 42.066. [Repealed.]

Compiler’s Notes.

This section (Enact. Acts 1962, ch. 106, Art. V, § 5) was repealed by Acts 1982, ch. 393, § 51, effective July 15, 1982.

42.064. Division of occupations and professions. [Repealed.]

Compiler’s Notes.

This section (Enact. Acts 1962, ch. 106, Art. V, § 6; 1974, ch. 74, Art. II, § 7) was repealed by Acts 1982, ch. 393, § 51, effective July 15, 1982.

42.065. Powers of Office of Policy and Audit.

  1. The Office of Policy and Audit established in the Office of the Secretary in KRS 42.0145 may, with the approval of the secretary of the Finance and Administration Cabinet, conduct any internal audit, investigation, or management review in the Finance and Administration Cabinet related to the secretary’s duties and responsibilities as chief financial officer of the Commonwealth pursuant to KRS 42.012 .
  2. When it is necessary to complete an internal audit, investigation, or management review in the Finance and Administration Cabinet, with the written approval of the secretary of the Finance and Administration Cabinet, the Office of Policy and Audit shall have access during business hours to all books, reports, papers, and accounts in the office or under the custody or control of any budget unit, or of any other program cabinet, department, or agency under the authority and direction of the Governor.

History. Enact. Acts 1986, ch. 242, § 1, effective July 15, 1986; 1994, ch. 216, § 7, effective July 15, 1994; 1998, ch. 68, § 5, effective July 15, 1998; 2000, ch. 5, § 4, effective July 14, 2000; 2005, ch. 85, § 13, effective June 20, 2005; 2009, ch. 12, § 25, effective June 25, 2009.

42.0651. Duties of Division of State Risk and Insurance Services — Assistance from other agencies — Risk management program.

  1. The Division of State Risk and Insurance Services shall:
    1. Oversee and assist the management of the state fire and tornado insurance fund established in KRS Chapter 56;
    2. Develop and manage programs of risk assessment and insurance for the protection of state property not covered by the state fire and tornado insurance fund;
    3. Advise the secretary of the Finance and Administration Cabinet on the fiscal management of programs relating to life insurance, workers’ compensation, and health care benefits for state employees;
    4. Serve as the central clearinghouse for coordinating and evaluating existing and new risk management programs within all state agencies;
    5. Develop financing techniques for risk protection;
    6. Provide insurance for all state-owned and state-operated facilities and vehicles; and
    7. Develop and implement other risk management, insurance, and self-insurance programs or other functions and duties as the secretary of the Finance and Administration Cabinet may direct the division to undertake and implement within the general statutory authority and control of the Finance and Administration Cabinet over state property and fiscal affairs of the executive branch of state government, including, but not limited to, those areas pertaining to tort and contractual liability, fidelity, and property risks.
  2. Nothing in this section shall be construed or interpreted as affecting the operation of the employee benefit programs generally administered by the Office of Employee  Relations and Department of Employee Insurance within the Personnel Cabinet. These agencies shall coordinate the operation of life insurance, workers’ compensation, health care benefit programs, and other self-insured programs with the Division of State Risk and Insurance Services.
  3. All cabinets, departments, boards, commissions, and other state agencies shall provide to the Division of State Risk and Insurance Services the technical advice and other assistance the Division of State Risk and Insurance Services or the secretary of the Finance and Administration Cabinet shall request in the performance of the functions of the division as described in this section.
  4. The secretary of the Finance and Administration Cabinet shall have the power and authority to promulgate administrative regulations pursuant to KRS Chapter 13A for purposes of implementing a risk management program for the executive branch of state government. Any administrative regulations promulgated by the secretary shall be administered by the Division of State Risk and Insurance Services.

History. Enact. Acts 1990, ch. 377, § 1, effective July 13, 1990; amend. and redesig. Acts 1994, ch. 116, § 3, effective July 15, 1994; 1994, ch. 216, § 4, effective July 15, 1994; 1998, ch. 82, § 12, effective July 15, 1998; 1998, ch. 154, § 62, effective July 15, 1998; 2001, ch. 164, § 3, effective June 21, 2001; repealed, reenact. and amend., Acts 2005, ch. 85, § 14, effective June 20, 2005; 2010, ch. 24, § 32, effective July 15, 2010; repealed, reenact. and amend, Acts 2012, ch. 69, § 2, effective July 12, 2012; 2012, ch. 10, § 7, effective July 12, 2012.

Compiler’s Notes.

This section was formerly compiled as KRS 42.0245 .

Legislative Research Commission Note.

(7/12/2012). This statute was amended by 2012 Ky. Acts ch. 10 and repealed, reenacted, and amended by 2012 Ky. Acts ch. 69, which do not appear to be in conflict and have been codified together.

(7/15/94). This statute was formerly codified as KRS 42.0192 and was renumbered by the Reviser of Statutes pursuant to KRS 7.136(1)(a) because of changes made by 1994 Ky. Acts ch. 216, sec. 4.

42.066. Division of Occupations and Professions — Services for boards and commissions — Charges — Complaints — Acceptance of personal checks in payment of license renewal fees. [Repealed and reenacted.]

Compiler’s Notes.

This section (Enact. Acts 1962, ch. 106, Art. V, § 7; 1974, ch. 74, Art. II, § 8; 1976, ch. 307, § 1; 1978, ch. 384, § 10, effective June 17, 1978; 1982, ch. 393, § 27, effective July 15, 1982; 1984, ch. 17, § 1, effective July 13, 1984; 1996, ch. 369, § 2, effective July 15, 1996; 2005, ch. 11, § 1, effective June 20, 2005; 2008, ch. 59, § 7, effective July 15, 2008) was repealed and reenacted as KRS 224.10-052 by Acts 2009, ch. 12, § 16, effective June 25, 2009.

42.068. Activation of KRS 42.064 and 42.066. [Repealed.]

Compiler’s Notes.

This section (Enact. Acts 1962, ch. 106, Art. V, § 8) was repealed by Acts 1974, ch. 74, Art. II, § 12.

42.070. Manner for letting contracts for materials, supplies and equipment; advertisement. [Repealed.]

Compiler’s Notes.

This section (3990-15: amend. Acts 1942, ch. 119, §§ 1, 2; 1950, ch. 57; 1956 (1st Ex. Sess.), ch. 7, Art. XVI, § 19) was repealed by Acts 1964, ch. 16, § 8.

42.071. Purchases from the federal government or a federal agency. [Repealed.]

Compiler’s Notes.

This section (Enact. Acts 1946, ch. 154) was repealed by Acts 1966, ch. 125, § 2.

42.072. Purchase price to be set out in bill of sale or deed. [Repealed.]

Compiler’s Notes.

This section (Enact. Acts 1950, ch. 132) was repealed by Acts 1966, ch. 110, § 2.

42.075. Preferred status of products of the blind. [Repealed.]

Compiler’s Notes.

This section (Enact. Acts 1958, ch. 86; 1974, ch. 74, Art. II, § 9(3); 1976, ch. 377, § 4) was repealed by Acts 1982, ch. 170, § 3, effective July 15, 1982.

42.076. Collusion to restrain bids prohibited — Affidavit. [Repealed and reenacted.]

Compiler’s Notes.

This section (Enact. Acts 1964, ch. 178, § 1; 1966, ch. 126, § 1) was renumbered as KRS 45.460 which section was repealed and reenacted by Acts 1978, ch. 110, § 65 effective January 1, 1979, as KRS 45A.325 .

42.080. Names of seller’s representatives to accompany bid or estimate for contract with state agency. [Repealed.]

Compiler’s Notes.

This section (3990-19) was repealed by Acts 1942, ch. 122, § 4.

42.090. Names of seller’s representatives to appear on invoice. [Repealed.]

Compiler’s Notes.

This section (3990-20) was repealed by Acts 1942, ch. 122, § 4.

42.100. Representatives to be listed with Secretary of State. [Repealed.]

Compiler’s Notes.

This section (3990-21) was repealed by Acts 1942, ch. 122, § 4.

42.110. Division of Personnel Efficiency. [Repealed.]

Compiler’s Notes.

This section (4618-90) was repealed by Acts 1956 (1st Extra. Sess.), ch. 7, Art. IV, § 6, effective July 1, 1956.

42.120. Examination and classification of state employes. [Repealed.]

Compiler’s Notes.

This section (4618-90) was repealed by Acts 1956 (1st Extra. Sess.), ch. 7, Art. IV, § 6, effective July 1, 1956.

42.130. Change of status of employes; payrolls to be checked. [Repealed.]

Compiler’s Notes.

This section (4618-90) was repealed by Acts 1956 (1st Extra. Sess.), ch. 7, Art. IV, § 6, effective July 1, 1956.

42.140. Removal of state employes. [Repealed.]

Compiler’s Notes.

This section (4618-90) was repealed by Acts 1956 (1st Extra. Sess.), ch. 7, Art. IV, § 6, effective July 1, 1956.

42.150. Political activity prohibited. [Renumbered and Repealed.]

Compiler’s Notes.

This section (4618-90) was renumbered as KRS 18.080 and repealed by Acts 1960, ch. 63, § 26.

42.160. Mismanagement of state affairs, duty of department in case of. [Repealed.]

Compiler’s Notes.

This section (1992b-61: amend. Acts 1974, ch. 74, Art. II, § 9(1)) was repealed by Acts 1982, ch. 450, § 79, effective July 1, 1983. For present law, see KRS 45.131 .

42.170. Functions of state local debt officer exercised by Office of the Controller. [Repealed.]

Compiler’s Notes.

This section (Enact. Acts 1960, ch. 68, Art. V, §§ 1, 2; 1966, ch. 255, § 50; 1974, ch. 74, Art. II, § 9(1); 1978, ch. 155, § 46, effective June 17, 1978; 1982, ch. 393, § 28, effective July 15, 1982; 1994, ch. 508, § 12, effective July 15, 1994) was repealed by Acts 1998, ch. 85, § 7, effective July 15, 1998.

42.180. Transfer of archives and records functions to department. [Repealed.]

Compiler’s Notes.

This section (Enact. Acts 1962, ch. 106, Art. V, § 1) was repealed by Acts 1974, ch. 74, Art. II, § 12.

42.190. Cost projections of Firefighters Foundation Program fund and Law Enforcement Foundation Program fund — Disposition of funds collected under KRS 136.392 — Lapsing of certain funds — Monthly reports.

  1. On June 1, 1982, and then on or before the first day of each December, March, June, and September thereafter, the cabinet shall request in writing of the administrator of the Firefighters Foundation Program fund, which is established by KRS 95A.220 , and of the administrator of the Law Enforcement Foundation Program fund, which is established by KRS 15.430 , cost projections of their respective funds for the next quarter. Based on these projections, the cabinet shall determine the proportionate share of total insurance premium surcharge proceeds, prescribed in KRS 136.392 , to accrue to each fund.
  2. On or before the first day of each quarter, the cabinet shall certify to the State Treasurer a distribution schedule describing the proportionate share of total insurance premium surcharge proceeds accruing to each fund during such quarter, and the State Treasurer shall pay into each fund’s trust and agency account its proportionate share of all deposited tax moneys as set forth and in the manner as prescribed in KRS 136.392 .
  3. Moneys deposited in the Firefighters Foundation Program fund’s trust and agency account, and in the Law Enforcement Foundation Program fund’s trust and agency account, shall be invested by the state in accordance with state investment practices, and all earnings from such investments shall accrue to, and be paid into the respective account from which such investments are made. All moneys remaining on deposit at the close of the state’s fiscal year in the Firefighters Foundation Program fund’s trust and agency account and all earnings from investments made from moneys in this account in excess of three million dollars ($3,000,000), beginning with fiscal year 1994-95, through June 30, 1999, shall lapse, except that moneys in the revolving loan fund established in KRS 95A.262 shall not lapse. All moneys remaining on deposit at the close of the state’s fiscal year in the Law Enforcement Foundation Program fund’s trust and agency account, and all earnings from investments made from moneys in this account, in excess of three million dollars ($3,000,000), beginning with fiscal year 1994-95, through June 30, 1999, shall lapse. On and after July 1, 1999, moneys in these accounts shall not lapse.
  4. The cabinet shall provide monthly financial reports to the administrator of the Firefighters Foundation Program fund and the administrator of the Law Enforcement Foundation Program fund respecting the amount of funds received and on deposit in each fund and the amount of earnings accruing to each fund from their investment.

History. Enact. Acts 1982, ch. 246, § 2, effective July 15, 1982; 1984, ch. 300, § 2, effective July 13, 1984; 1992, ch. 381, § 6, effective July 14, 1992; 1998, ch. 244, § 6, effective July 15, 1998; 1998, ch. 510, § 6, effective July 15, 1998.

Legislative Research Commission Note.

(7/15/98). This section was amended by 1998 Ky. Acts ch. 244, sec. 6, and ch. 510, sec. 6, which are identical and have been codified together.

NOTES TO DECISIONS

1.Valid Emergency Clause.

The reason stated in the emergency clause of Acts 1982, ch. 246 which act deals generally with a surcharge upon certain insurance premiums collected in the state which is intended to fund a trust for the payment of incentives to the firefighters and policemen of the various municipalities, to the effect that the general fund appropriations for fiscal year 1981-82 for the professional Firefighters Foundation Program fund as provided by KRS 95A.200 through 95A.990 , and the Law Enforcement Foundation Program fund as provided by KRS 15.410 through 15.510 , would lapse on June 30, 1982, sufficiently supported the legislative declaration of an emergency. American Ins. Asso. v. Geary, 635 S.W.2d 306, 1982 Ky. LEXIS 265 ( Ky. 1982 ).

42.200. Water project interest rate buy down fund — Funding sources, purposes, uses, and administration.

  1. The water project interest rate buy down fund is hereby created as a special fund in the State Treasury. The fund may receive state appropriations, gifts, grants, and federal funds and shall include earnings from investments of moneys in the fund. Any fund balance at the close of the fiscal year shall not lapse but shall be carried forward to the next fiscal year, and moneys in this fund shall be continuously appropriated only for the purposes specified in this section.
  2. The fund shall be used to provide financial assistance to government agencies for the construction of publicly owned water supply projects located in rural areas of the Commonwealth. In order to qualify for the financial assistance, the governmental agency shall obtain a loan from a bank or combined bank and trust company organized under the laws of this Commonwealth and at an interest rate no greater than two (2) percentage points higher than the current prime rate. The financial assistance provided shall consist of an annual grant to the governmental agency to be made over the life of the loan obtained by the governmental agency for the construction of the publicly owned water supply project. The amount of the annual grant shall be calculated over the life of the loan to provide to the governmental agency each year the portion of the interest on the loan calculated at a four percent (4%) interest rate. The governmental agency shall be responsible for the payment of the interest on the loan in excess of the four percent (4%) interest rate and for the payment of the principal on the loan.
  3. The Finance and Administration Cabinet shall administer the fund and may promulgate administrative regulations as necessary to implement the provisions of this section. The Department for Local Government shall advise government agencies of the fund and how to apply for moneys from the fund.
  4. The provisions of this section shall be known and may be cited as the Kentucky Rural Water Act.

History. Enact. Acts 1996, ch. 322, § 1, effective July 15, 1996; 1998, ch. 69, § 6, effective July 15, 1998; 2007, ch. 47, § 14, effective June 26, 2007; 2010, ch. 117, § 20, effective July 15, 2010.

42.205. Permanent pension fund.

  1. There is hereby established within the Finance and Administration Cabinet the Kentucky permanent pension fund for the purpose of addressing the Commonwealth’s unfunded pension liabilities. The proceeds contained in this fund shall be used only for contributions to the Commonwealth’s pension funds.
  2. The fund may receive:
    1. State appropriations;
    2. The net proceeds from the sale of real property owned by the Commonwealth or any agency thereof; and
    3. Any settlements or judgments resulting from litigation in which the Commonwealth or any of its agencies is a party, after costs of litigation and mandatory deductions or restitution to consumers have been deducted.
  3. Any unallotted or unencumbered balances in the fund shall be invested pursuant to KRS 42.500 .
  4. Income earned from the investments shall be credited to and become part of the fund.
  5. Notwithstanding KRS 45.229 , any fund balance at the close of the fiscal year shall not lapse but shall be carried forward to the next fiscal year. All amounts in the fund shall remain in the fund and shall not be expended or appropriated without the express authority in an enacted biennial budget bill.

HISTORY: 2016 ch. 133, § 8, effective July 15, 2016.

Research References and Practice Aids

2020-2022 Budget Reference.

See State/Executive Branch Budget, 2021 Ky. Acts ch. 169, Pt. V, E, 2 at 1158.

42.210. Office of state curator established — Purpose. [Repealed.]

Compiler’s Notes.

This section (Enact. Acts 1970, ch. 159, § 1) was repealed by Acts 1972, ch. 309, § 1.

42.220. Qualifications — Selection — Terms — Salary. [Repealed.]

Compiler’s Notes.

This section (Enact. Acts 1970, ch. 159, § 2) was repealed by Acts 1972, ch. 309, § 1.

42.230. Curator to be in department of finance and work with department. [Repealed.]

Compiler’s Notes.

This section (Enact. Acts 1970, ch. 159, § 3) was repealed by Acts 1972, ch. 309, § 1.

42.240. Curator to replace mansion committee — Duties. [Repealed.]

Compiler’s Notes.

This section (Enact. Acts 1970, ch. 159, § 4) was repealed by Acts 1972, ch. 309, § 1.

42.250. Acceptance of gifts — Articles of dedication. [Repealed.]

Compiler’s Notes.

This section (Enact. Acts 1970, ch. 159, § 5) was repealed by Acts 1972, ch. 309, § 1.

42.260. Duties as to items removed from executive mansion, old governor’s mansion, state shrines and historic homes. [Repealed.]

Compiler’s Notes.

This section (Enact. Acts 1970, ch. 159, § 6) was repealed by Acts 1972, ch. 309, § 1.

42.270. Inventory. [Repealed.]

Compiler’s Notes.

This section (Enact. Acts 1970, ch. 159, § 7) was repealed by Acts 1972, ch. 309, § 1.

42.280. Use or storage of items by governor or lieutenant governor — Procedure as to new items. [Repealed.]

Compiler’s Notes.

This section (Enact. Acts 1970, ch. 159, § 8) was repealed by Acts 1972, ch. 309, § 1.

42.290. Cooperation by departments, agencies, etc. [Repealed.]

Compiler’s Notes.

This section (Enact. Acts 1970, ch. 159, § 9) was repealed by Acts 1972, ch. 309, § 1.

42.300. Coal producing county development fund. [Repealed.]

Compiler’s Notes.

This section (Enact. Acts 1974, ch. 262, § 2; 1978, ch. 155, § 41, effective June 17, 1978) was repealed by Acts 1980, ch. 394, § 13, effective July 1, 1980. For present law, see KRS 42.245 to 42.495 .

42.310. Advisory committee — Membership — Functions. [Repealed.]

Compiler’s Notes.

This section (Enact. Acts 1974, ch. 262, § 4; 1978, ch. 155, § 41, effective June 17, 1978; 1978, ch. 188, § 6, effective June 17, 1978) was repealed by Acts 1980, ch. 394, § 13, effective July 1, 1980. For present law, see KRS 42.450 to 42.495 .

42.320. Court cost distribution fund — Disbursements — Payments into general fund.

  1. There is hereby established the court cost distribution fund, which is created to provide a central account into which the court costs collected by all circuit clerks, under KRS 23A.205(1) and 24A.175(1), shall be paid.
  2. The fund shall be administered by the Finance and Administration Cabinet, which shall make monthly disbursements from the fund according to the following schedule:
    1. Forty-nine percent (49%) of each court cost shall be paid into the general fund;
    2. Ten and eight-tenths percent (10.8%) of each court cost, up to five million four hundred thousand dollars ($5,400,000), shall be paid into the State Treasury for the benefit and use of the Kentucky Local Correctional Facilities Construction Authority under KRS 441.605 to 441.695 ;
    3. Six and one-half percent (6.5%) of each court cost, up to three million two hundred fifty thousand dollars ($3,250,000), shall be paid into the spinal cord and head injury research trust fund created in KRS 211.504 ;
    4. Five and one-half percent (5.5%) of each court cost, up to two million seven hundred fifty thousand dollars ($2,750,000), shall be paid into the traumatic brain injury trust fund created in KRS 211.476 ;
    5. Five percent (5%) of each court cost, up to two million five hundred thousand dollars ($2,500,000), shall be paid into a trust and agency account with the Administrative Office of the Courts and is to be used by the circuit clerks to hire additional deputy clerks and to enhance deputy clerk salaries;
    6. Three and one-half percent (3.5%) of each court cost, up to one million seven hundred fifty thousand dollars ($1,750,000), shall be paid to a special trust and agency account that shall not lapse for the Department of Public Advocacy;
    7. Three and four-tenths percent (3.4%) of each court cost, up to one million seven hundred thousand dollars ($1,700,000), shall be paid into the crime victims’ compensation fund created in KRS 49.480 ;
    8. Seven-tenths of one percent (0.7%) of each court cost, up to three hundred fifty thousand dollars ($350,000), shall be paid to the Justice and Public Safety Cabinet to defray the costs of conducting record checks on prospective firearms purchasers pursuant to the Brady Handgun Violence Prevention Act and for the collection, testing, and storing of DNA samples;
    9. Ten and one-tenth percent (10.1%) of each court cost, up to five million fifty thousand dollars ($5,050,000), deposited in the fund shall be paid to the county sheriff in the county from which the court cost was received; and
    10. Five and one-half percent (5.5%) of each court cost, up to two million seven hundred fifty thousand dollars ($2,750,000), deposited in the fund shall be paid to the county treasurer in the county from which the court cost was received and shall be used by the fiscal court in that county for the purposes of defraying the costs of operation of the county jail and the transportation of prisoners.
  3. Any moneys remaining in the fund after the monthly disbursements in subsection (2) of this section shall be paid into the general fund.
  4. Any moneys collected above the prescribed amount shall be paid into the general fund.

HISTORY: Enact. Acts 2002, ch. 183, § 9, effective August 1, 2002; 2007, ch. 85, § 123, effective June 26, 2007; 2017 ch. 74, § 60, effective June 29, 2017; 2017 ch. 167, § 11, effective June 29, 2017.

Legislative Research Commission Notes.

(6/29/2017). This statute was amended by 2017 Ky. Acts chs. 74 and 167, which do not appear to be in conflict and have been codified together.

(6/26/2007). 2007 Ky. Acts ch. 85, relating to the creation and organization of the Justice and Public Safety Cabinet, instructs the Reviser of Statutes to correct statutory references to agencies and officers whose names have been changed in that Act. Such a correction has been made in this section.

(7/15/2002). This statute number, KRS 42.320 , was previously used for a KRS section that was repealed. That earlier section (1974 Ky. Acts ch. 74, Art. VIII, Part I, sec. 1; 1982 Ky. Acts ch. 396, sec. 5) was repealed by 1982 Ky. Acts ch. 450, sec. 79, effective July 1, 1983. The catchline at repeal read, “State clearinghouse functions for federal funds.”

Research References and Practice Aids

2020-2022 Budget Reference.

See State/Executive Branch Budget, 2021 Ky. Acts ch. 169, Pt. I, H, 4, (2) at 1100.

42.325. Definitions for KRS 42.330 to 42.340. [Repealed.]

Compiler’s Notes.

This section (Enact. Acts 1978, ch. 188, § 1, effective June 17, 1978) was repealed by Acts 1980, ch. 394, § 13, effective July 1, 1980. For present law, see KRS 42.450 to 42.495 .

42.330. Coal severance economic aid fund — Use — Board. [Repealed.]

Compiler’s Notes.

This section (Enact. Acts 1976, ch. 338, § 1; 1978, ch. 100, § 1, effective June 17, 1978; 1978, ch. 188, § 2, effective June 17, 1978) was repealed by Acts 1980, ch. 394, § 13, effective July 1, 1980. For present law, see KRS 42.450 to 42.495 .

42.332. Examination and approval of capital projects. [Repealed.]

Compiler’s Notes.

This section (Enact. Acts 1978, ch. 188, § 3, effective June 17, 1978) was repealed by Acts 1980, ch. 394, § 13, effective July 1, 1980. For present law, see KRS 42.450 to 42.495 .

42.334. Apportionment of funds. [Repealed.]

Compiler’s Notes.

This section (Enact. Acts 1978, ch. 188, § 4, effective June 17, 1978) was repealed by Acts 1980, ch. 394, § 13, effective July 1, 1980. For present law, see KRS 42.450 to 42.495 .

42.340. Rules and regulations as to coal severance economic aid fund and projects. [Repealed.]

Compiler’s Notes.

This section (Enact. Acts 1978, ch. 338, § 2) was repealed by Acts 1980, ch. 394, § 13, effective July 1, 1980. For present law, see KRS 42.450 to 42.495 .

Capital Projects in Area Development Districts

42.345. Definitions for KRS 42.350 to 42.370.

As used in KRS 42.350 to 42.370 the words:

  1. “Beneficiary agency” means an agency eligible to receive the benefit of a capital project to be wholly or partly financed out of the area development fund, including and limited to political subdivisions, special districts and agencies created pursuant to the Interlocal Cooperation Act, or any combination thereof; and, not-for-profit corporations organized for public purposes and performing governmental functions and services;
  2. “Fund” means the area development fund established in the State Treasury by KRS 42.350 .

History. Enact. Acts 1978, ch. 187, § 1, effective June 17, 1978.

Compiler's Notes.

The Interlocal Cooperation Act referred to in subdivision (1) of this section is compiled as KRS 65.210 to 65.300 .

Opinions of Attorney General.

Even though a beneficiary agency is a public corporation in terms of the nature of its governmental purpose, there is no express statutory provision making bidding procedure mandatory where it is formed pursuant to KRS Chapter 273. OAG 79-577 .

Where the acquisition of property was legal at the time of acquisition, the fact that it was acquired without bidding does not bar the corporation from subsequently obtaining the assistance of either the coal severance economic aid fund or the area development fund in retiring preexisting debts. OAG 79-577 .

Research References and Practice Aids

2020-2022 Budget Reference.

See State/Executive Branch Budget, 2021 Ky. Acts ch. 169, Pt. I, A, 13, (1) at 1066.

42.350. Area development fund for capital projects.

  1. The area development fund in the State Treasury shall be administered by the Department for Local Government. The fund may receive state appropriations, gifts, grants, and federal funds and shall be disbursed by the State Treasurer upon the warrant of the commissioner of the Department for Local Government. Any unallotted or unencumbered balances in the fund shall be invested in United States government securities maturing not later than one (1) year from the date of investment, and the income from the investments shall be prorated for expenditure for capital projects in area development districts according to the formula provided in KRS 42.370 .
  2. Money in the fund shall be used only for capital projects which contribute to community or industrial development in the Commonwealth, KRS 48.300 and 48.500 notwithstanding. Capital projects eligible for financing out of the fund include and shall be limited to:
    1. The construction, reconstruction, renovation, and maintenance of buildings and other improvements to real estate;
    2. The acquisition of real property and interests in real property;
    3. The purchase of major items of equipment;
    4. Industrial site development projects, including land reclamation, clearing, grading, draining, landscaping, and the construction of walkways and fences;
    5. The extension and installation of water, gas, sewer, and electrical utilities lines to public facilities and industrial sites;
    6. The provision of solid waste management or disposal systems bringing counties into compliance with state or federal law. All expenses incurred in connection with or incidental to the construction or acquisition of a capital project under this section, including architectural, engineering, legal, and other expenses required for the projects may be paid out of the fund. Money in the fund may be used to retire a mortgage or other indebtedness encumbering an eligible capital project made within the preceding five (5) calendar years to secure the repayment of moneys loaned or advanced to finance the construction or acquisition of the project and may be used in match or in combination with funds obtained from other sources for an eligible capital project. No money shall be expended out of the fund, directly or indirectly, to pay or reimburse the cost of any feasibility study, master plan for any capital improvement development or redevelopment project, the purchase of consumable supplies or any administrative salary, or other operating or capital expense of any area development district or for the acquisition, construction, reconstruction, renovation, or maintenance of any building or property of schools, state institutions of higher learning, or any road, street, bridge, or highway.
  3. The board of directors of each area development district shall determine from among the capital project proposals submitted by eligible beneficiary agencies, the capital projects to be proposed to be constructed or acquired out of the fund. The area development districts shall submit to the commissioner of the Department for Local Government the capital projects selected for construction or acquisition within the districts. Each project proposal shall include: a detailed description of the project; a statement of the public benefit to be derived from the project; if available, design plans and specifications for the project; an itemized estimate of the cost of the project; a statement of the sources and amounts of funds available from any other source for the construction or acquisition of the project; and other information relating to the proposed capital project as the Department for Local Government may require.

History. Enact. Acts 1976, ch. 339, § 1; 1978, ch. 187, § 2, effective June 17, 1978; 1984, ch. 111, § 35, effective July 13, 1984; 1984, ch. 404, § 42, effective July 13, 1984; 1998, ch. 69, § 7, effective July 15, 1998; 2007, ch. 47, § 15, effective June 26, 2007; 2010, ch. 117, § 21, effective July 15, 2010.

Opinions of Attorney General.

The restriction against encumbrances applies to private business enterprises acquiring industrial development properties for completion of an industrial development purpose. OAG 77-51 .

Engineering and architectural design costs for a capital project, as a condition for consideration of a construction grant by a federal agency, are eligible for payment from the economic aid fund or the area development fund, regardless of whether the capital project is completed or not. OAG 77-565 .

Since a landing or wharf constructed on city property would be a legitimate municipal improvement, a fourth-class city could use area development funds to construct a ferry boat landing on city-owned property. OAG 77-651 .

Although this section prohibits the encumbrance of a capital improvement project, the use of area development funds for the renovation of a county courthouse would not be in conflict with the statute. OAG 77-714 .

Land leased from a county board of education for a term of 50 years and used by the fiscal court in the construction of a recreational complex does not constitute “school property” within the prohibition contained in this section. OAG 77-750 .

While the board of an area development district may exercise its sound and reasonable discretion in establishing criteria leading to making the selections of projects to be submitted to the Secretary of the Finance Department (now Finance and Administration Cabinet), a criterion providing that the applicant must have made a monetary contribution to the area development district organization does not represent a rational connection between the legislative purpose and the scheme of criteria and is arbitrary in violation of Ky. Const., § 2. OAG 79-181 .

Although KRS 424.260 is not mentioned in KRS 42.345 et seq., implicit in such statutes is the concept that a mandatory law applicable to procuring of personal property must be complied with. OAG 79-371 .

The phrase “road, street, bridge or highway” logically includes any road department equipment, such as a truck, to be used by that department. OAG 85-75 .

Even though subdivision (2)(c) of this section provides for the use of the area development fund for “the purchase of major items of equipment,” such equipment can only be considered in connection with equipment of an eligible “capital project.” OAG 85-75 .

Under the clear and unambiguous wording of subdivision (2)(f) of this section, the Area Development Fund money granted to counties cannot legally be expended by a fiscal court for county road department equipment or for county roads and bridges. OAG 85-75 .

Research References and Practice Aids

2020-2022 Budget Reference.

See State/Executive Branch Budget, 2021 Ky. Acts ch. 169, Pt. I, A, 13, (1) at 1066.See State/Executive Branch Budget, 2021 Ky. Acts ch. 169, Pt. I, A, 13, (2) at 1066.

Kentucky Law Journal.

Whiteside and Gillig, Coal and Conservation — Tax Policy, 64 Ky. L.J. 573 (1975-76).

42.355. Examination and approval of projects — Grants — Administration — Conditions.

  1. The Department for Local Government shall examine each capital project selected by the area development districts, and when it finds that a proposed project conforms to the requirements of KRS 42.350 to 42.370 ; that the estimated costs of the project are reasonable; that the costs proposed to be paid from the fund are within the amount available; and that the proposed beneficiary agency will be reasonably able to finance the operation and maintain the capital project during its estimated useful life, the commissioner of the Department for Local Government shall approve it. If the Department for Local Government determines that a capital project proposal does not conform to the requirements of KRS 42.350 to 42.370 , that the estimated costs of the project are excessive or unreasonable in light of the public benefit to be derived from the project, or the unencumbered balance in the fund available for expenditure in the area development district is insufficient to pay the costs of the project, or the part thereof proposed to be paid out of the fund, or the beneficiary agency cannot reasonably finance the operation of or maintain the capital project during its estimated useful life, the project proposal shall be disapproved by the Department for Local Government. The final decision to either approve or disapprove any project proposal shall be made no later than forty-five (45) days following official submittal of a complete proposal by the area development district, and the area development district shall be accordingly notified at that time.
  2. The commissioner of the Department for Local Government may make direct grants-in-aid of money out of the fund to any beneficiary agency for the construction or acquisition of any approved capital project. When a direct grant-in-aid has been made to a beneficiary agency, all contracts awarded for the purchase of materials, supplies, equipment, or services, except professional and technical services, required for the construction or acquisition of the project shall be awarded to the lowest and best bidder in the discretion of the beneficiary agency after public advertisement as required by KRS Chapter 424 or other applicable law. All contracts awarded under this section for the construction, reconstruction, or renovation of a building or other improvement to real estate shall be deemed contracts for public works within the meaning of KRS 341.317 and KRS Chapter 376 and other applicable statutes. All beneficiary agencies receiving a direct grant-in-aid under this subsection shall keep and maintain complete and accurate records of accounts of all expenditures of the grant moneys which shall be subject to audit by the Commonwealth for a period of five (5) years after completion of the capital project. Beneficiary agencies shall complete approved capital projects within a reasonable period of time as determined by the Department for Local Government. Upon completion of capital projects, beneficiary agencies shall submit project completion reports to the Department for Local Government as prescribed by the Department for Local Government and containing documents and information as may be necessary to determine compliance with KRS 42.350 to 42.360 and other applicable statutes and administrative regulations. Beneficiary agencies shall be liable to repay to the fund any granted funds for failure to submit full project completion reports within a reasonable period of time or for expenditure of granted funds in violation of statutes and regulations. No additional area development funds may be approved until compliance, except at the discretion of the commissioner of the Department for Local Government. Any grant moneys not required after all of the costs of the capital project have been paid by the beneficiary agency shall be promptly returned to the Commonwealth for reallocation for expenditure for other capital projects in the area development district to which the funds had been originally allocated.
  3. No capital project shall be constructed under KRS 42.350 to 42.370 except upon land to which (a) the Commonwealth, a political subdivision of the Commonwealth, or the beneficiary agency of the capital project has a good and marketable title, free of encumbrances, or (b) the beneficiary agency of the project has the right to the uninterrupted use, occupancy, and possession for a period longer than the estimated useful life of the capital project; provided nothing herein shall prohibit the construction or renovation of public buildings on land with an existing encumbrance to secure payment of funds obtained for the acquisition or improvement of said land. Each beneficiary agency shall execute and deliver to the Commonwealth its written assurances, which shall be binding on the agencies’ successors and assigns, guaranteeing that during its estimated useful life, the capital project shall be operated and maintained for public purposes and pledging that no mortgage or other encumbrances shall be placed against any capital project wholly financed out of the fund, except industrial development projects, for the breach of which assurances the Commonwealth shall have right of entry to the capital project and the beneficiary agency, or its successors and assigns, shall forthwith convey the title to the capital project to the Commonwealth. Similar assurances shall be executed and delivered to the Commonwealth by the beneficiary agencies of capital projects financed in part out of the fund and in part from other sources, except that when additional funding is derived from the issuance and sale of revenue bonds or under other statutorily authorized financing methods, to secure the repayment of which funds a statutory mortgage lien is granted in favor of any person or group of persons, the capital project may be encumbered to the extent authorized or required by the law under which the financing method was undertaken; nor shall anything in this section prohibit the encumbrance of any real property located within an industrial park or constituting an industrial site, developed or improved as a capital project under KRS 42.350 and this section, by any person, firm, company, partnership, or corporation to which the property has been conveyed, to obtain financing for the construction upon the property of industrial and commercial buildings. The written assurances provided by beneficiary agencies under this section shall be lodged for recording and recorded in the office of the county clerk of the county in which the proposed project shall be located.

History. Enact. Acts 1978, ch. 187, § 3, effective June 17, 1978; 1984, ch. 404, § 43, effective July 13, 1984; 1998, ch. 69, § 8, effective July 15, 1998; 2007, ch. 47, § 16, effective June 26, 2007; 2010, ch. 117, § 22, effective July 15, 2010.

Opinions of Attorney General.

The Department of Local Government could not approve an expenditure for purchase of two ambulances by a county where the department was unable to certify that the proposed project was an eligible capital project because the purchase was a void transaction since the provisions of KRS 424.260 were not followed. OAG 79-371 .

Subsection (4) of this section, in mentioning the bidding law of KRS Chapter 424, specifically adopts KRS 424.260 to the extent that such latter statute requires formal bidding. OAG 84-57 .

Research References and Practice Aids

2020-2022 Budget Reference.

See State/Executive Branch Budget, 2021 Ky. Acts ch. 169, Pt. I, A, 13, (1) at 1066.

42.360. Rules and regulations for implementation of KRS 42.350 and 42.355.

The commissioner of the Department for Local Government shall promulgate rules and regulations governing submission and approval of proposed capital projects, the expenditure of moneys from the fund, and the designation of beneficiary agencies involved in capital projects as shall be appropriate to the implementation of KRS 42.350 and 42.355 .

History. Enact. Acts 1976, ch. 339, § 3; 1978, ch. 187, § 4, effective June 17, 1978; 1984, ch. 404, § 44, effective July 13, 1984; 1998, ch. 69, § 9, effective July 15, 1998; 2007, ch. 47, § 17, effective June 26, 2007; 2010, ch. 117, § 23, effective July 15, 2010.

Research References and Practice Aids

2020-2022 Budget Reference.

See State/Executive Branch Budget, 2021 Ky. Acts ch. 169, Pt. I, A, 13, (1) at 1066.

42.370. Amounts to be expended from fund.

  1. The maximum amount to be expended out of the area development fund for capital projects within each area development district shall be calculated on the basis of the following formula:
    1. Sixty percent (60%) of the fund is allocated for expenditure within each district in the ratio that the population of the component counties bears to the total population of the state.
    2. Twenty percent (20%) of the fund is allocated for expenditure in each district in inverse proportion to the total manufacturing employment conducted in each such district.
    3. Twenty percent (20%) of the fund is allocated for expenditure in each district in inverse proportion to the relative per capita income prevailing in each such district.
  2. Any balance remaining in the fund at the close of any fiscal year shall not lapse, but shall continue into and be available for expenditure during the next succeeding fiscal year.

History. Enact. Acts 1978, ch. 187, § 5, effective June 17, 1978.

Research References and Practice Aids

2020-2022 Budget Reference.

See State/Executive Branch Budget, 2021 Ky. Acts ch. 169, Pt. I, A, 13, (1) at 1066.

Investment and Debt Management

42.400. Office of Financial Management.

  1. The Office of Financial Management established in KRS 42.4201 shall be headed by an executive director responsible to the secretary of the Finance and Administration Cabinet, and appointed by the secretary upon approval of the Governor in accordance with the provisions of KRS 12.050 .
  2. There are included in the Office of Financial Management established in KRS 42.4201 the positions of deputy executive directors for investment and debt management, who shall be employed in the classified service as set forth inKRS Chapter 18A.

History. Enact. Acts 1980, ch. 310, § 1, effective July 15, 1980; 1990, ch. 321, § 3, effective July 13, 1990; 2000, ch. 46, § 6, effective July 14, 2000; 2005, ch. 85, § 15, effective June 20, 2005.

42.409. Definitions for KRS 42.410 and 45.760.

As used in KRS 42.410 and 45.760 , unless the context requires otherwise:

  1. “State total personal income” means the measure of all income received by or on behalf of persons in the Commonwealth, as most recently published in the Survey of Current Business by the United States Department of Commerce, Bureau of Economic Analysis.
  2. “Estimated state total personal income” means the personal income figure used by the Governor’s Office for Economic Analysis to generate final detailed revenue estimates.
  3. “Total revenues” means revenues credited to the general fund and the road fund consistent with the provisions of KRS 48.120 , as well as any restricted agency fund account from which debt service is expended.
  4. “Anticipated total revenues” means the official revenue estimates, as provided for in KRS 48.120 , projected for the general fund and the road fund, as well as any restricted agency fund account from which debt service is expended.
  5. “Available revenues” means revenues credited to the general fund and the road fund consistent with the provisions of KRS 48.120 , as well as any restricted agency fund account from which debt service is expended, minus any statutorily dedicated receipts of the respective funds.
  6. “Anticipated available revenues” means official revenue estimates, as provided for in KRS 48.120 , projected for the general fund and the road fund, as well as any restricted agency fund account from which debt service is expended, minus any statutorily dedicated receipts of the respective funds.
  7. “Total assessed value of property” means state total net assessed value of property for taxes due, as obtained from the Department of Revenue.
  8. “Per capita” means per unit of population, where population figures are the most recent available from the University of Louisville, Kentucky State Data Center.
  9. “Appropriation-supported debt service” means the amount of an appropriation identified to be expended for debt service purposes in the executive budget recommendation, and the amount of an appropriation expended for debt services in a completed fiscal year.
  10. “Appropriation-supported debt” means the outstanding principal of bonds issued by all state agencies and all individuals, agencies, authorities, boards, cabinets, commissions, corporations, or other entities of, or representing the Commonwealth with the authority to issue bonds, and for which debt service is appropriated by the General Assembly.
  11. “Nonappropriation-supported debt” means the outstanding principal of bonds issued by all state agencies and all individuals, agencies, authorities, boards, cabinets, commissions, corporations, or other entities of, or representing the Commonwealth with the authority to issue bonds, and for which debt service is not appropriated by the General Assembly.
  12. “Statutorily dedicated receipts” means revenues credited to the general fund and road fund consistent with the provisions of KRS 48.120 , as well as any restricted agency fund account, which are required by an enacted statute to be used for a specific purpose. Statutorily dedicated receipts include, but are not limited to, the following:
    1. Receipts credited to the general fund which are subject to KRS 42.450 to 42.495 , KRS 278.130 to 278.150 , or KRS 350.139 ;
    2. Receipts credited to the road fund which are subject to KRS 175.505 , KRS 177.320 , KRS 177.365 to 177.369 , KRS 177.9771 to 177.979 , KRS 186.531 , or KRS 186.535 ; and
    3. Receipts credited to a restricted agency fund account in accordance with any applicable statute.
  13. “True interest cost” means the bond yield according to issue price without a reduction for related administrative costs, and is the same figure as the arbitrage yield calculation described in the United States Tax Reform Act of 1986.

History. Enact. Acts 1990, ch. 30, § 1, effective July 13, 1990; 2000, ch. 46, § 7, effective July 14, 2000; 2004, ch. 78, § 3, effective April 6, 2004; 2005, ch. 85, § 52, effective June 20, 2005; 2009, ch. 78, § 27, effective June 25, 2009.

Compiler’s Notes.

The arbitrage yield calculation described in the U.S. Tax Reform Act, referred to in (13), may be found as 26 USCS § 148.

Legislative Research Commission Note.

(6/25/2009). As submitted by the drafter, Proposed Senate Committee Substitute to House Bill 423, which became 2009 Ky. Acts ch. 78, contained references to “KRS 48.120(2)” with “(2)” bracketed and stricken through in subsections (4) and (6) of this statute. However, during the processing of that document, the brackets and striking lines were inadvertently omitted from “(2).” This manifest clerical or typographical error has been corrected during codification by the Reviser of Statutes under the authority of KRS 7.136(1).

42.410. Duties of Office of Financial Management — Contents of state debt report.

  1. The Office of Financial Management established in KRS 42.4201 shall, subject to the provisions of KRS 41.020 to 41.375 and KRS 42.500 , have and perform functions and duties as follows:
    1. The analysis and management of short and long-term cash flow requirements;
    2. The maximization of the return on state investments given the cash flow and liquidity requirements;
    3. The coordination and monitoring of cash needs relative to investment and debt activity;
    4. The development of a long-term debt plan including criteria for the issuance of debt and an evaluation of how much total state debt is justified;
    5. The responsibility for liaison with the General Assembly on all investment and debt matters, including, but not limited to, new bond issues, the status of state debt, and the status of state investments; and
    6. All other functions of the cabinet relative to state investment and debt management including, but not limited to, the making of debt service payments, the sale of bonds, and staff assistance to the State Property and Buildings Commission, the Asset Liability Commission, and the State Investment Commission.
  2. The Office of Financial Management shall render monthly written reports concerning the performance of each investment to the State Investment Commission.
  3. The Office of Financial Management shall review state appropriation-supported bond issues for possible debt service savings through refundings as market conditions warrant.
  4. The Office of Financial Management shall submit a report within forty-five (45) days after the publication of the Comprehensive Annual Financial Report to the Legislative Research Commission, for referral to the appropriate committee, indicating the bond issues refunded, original and new interest rates, estimated savings, original and new amortization schedules, issuance costs, debt reserves, disposition of savings, and information on economic, fiscal, and market indicators of the Commonwealth’s debt position.
  5. The state debt report shall include, but not be limited to, economic, fiscal, and market indicators of debt position as set forth in this section. Indicators shall be presented in tabular and, where appropriate, graphical form. Indicators shall be presented for the fiscal year just ended and, if data is available and except as otherwise noted, for the preceding nine (9) fiscal years.
  6. Economic indicators shall include:
    1. Nonappropriation-supported debt as a percent of state total personal income;
    2. Nonappropriation-supported debt as a percent of total assessed value of property;
    3. Nonappropriation-supported debt per capita;
    4. Appropriation-supported debt as a percent of state total personal income;
    5. Appropriation-supported debt as a percent of total assessed value of property;
    6. Appropriation-supported debt per capita;
    7. Appropriation-supported debt service as a percent of total state personal income;
    8. Appropriation-supported debt service as a percent of total assessed value of property; and
    9. Appropriation-supported debt service per capita.
  7. Fiscal indicators shall be reported separately and in total for the general fund, the road fund, and each restricted fund account from which debt service is expended.
  8. Fiscal indicators shall include:
    1. Annual appropriation-supported debt service as a percent of total revenues; and
    2. Annual appropriation-supported debt service as a percent of available revenues.
  9. Market indicators shall include:
    1. The rating assigned by Moody’s Investors Services, Inc., or a comparable rating agency, to each nonappropriation-supported bond issued in the fiscal year just ended;
    2. The rating assigned by Moody’s Investors Services, Inc., or a comparable rating agency, to each appropriation-supported bond issued in the fiscal year just ended;
    3. A comparison of the difference between the true interest cost of each nonappropriation-supported bond issued and the value of a selected revenue bond index, as published by the Bond Buyer Weekly, the Delphis Hanover Corporation, or other comparable service on a date relevant to the bond issue; and
    4. A comparison of the difference between the true interest cost of each appropriation-supported bond issued and the value of a selected municipal bond index, as published by the Bond Buyer Weekly, the Delphis Hanover Corporation, or other comparable service on a date relevant to the bond issue.
  10. The state debt report shall contain a complete description of the sources of data used to prepare the report. This description shall include, but not be limited to, an enumeration, by fund and restricted fund account, of all debt, debt service, and revenue figures; the source and publication date of figures used for state total personal income, total assessed value of property, population, and selected bond indexes.
  11. If the sources of data used in a current report differ substantially from those used in the report of the preceding year, the report shall include a detailed explanation of the change. If possible, data presented in the current report for previous years shall be calculated so that, in any one (1) report, indicators for all years are calculated using consistent data categories. The use of any inconsistent data shall be noted and explained.
  12. Nothing in this section shall authorize any act inconsistent with the authority granted the State Investment Commission by KRS 42.500 and 42.525 .

History. Enact. Acts 1980, ch. 310, § 2, effective July 15, 1980; 1982, ch. 382, § 23, effective July 15, 1982; 1988, ch. 82, § 1, effective July 15, 1988; 1990, ch. 30, § 2, effective July 13, 1990; 1990, ch. 321, § 4, effective July 13, 1990; 1992, ch. 295, § 3, effective July 14, 1992; 1994, ch. 508, § 13, effective July 15, 1994; 1997 (1st Ex. Sess.), ch. 4, § 42, effective May 30, 1997; 2000, ch. 46, § 8, effective July 14, 2000; 2005, ch. 85, § 16, effective June 20, 2005.

Opinions of Attorney General.

The Kentucky Housing Corporation must submit all proposed bond issues and debt financing to the office for investment and debt management since this section and KRS 42.420 when read together, in pari materia, show that the legislative intent was to establish a centralized entity in the Finance Department (now Finance and Administration Cabinet) to evaluate, review and approve all proposed anticipation notes and bond issues of all state agencies and all agencies, commissions, corporations or other entities of or representing the Commonwealth. OAG 81-242 .

For review and approval procedures of office for Investment and Debt Management found to conform with KRS 42.420 and this section, see OAG 82-444 .

The review and approval function in the case, which involved issuance of industrial revenue bonds by Kentucky Development Finance Authority for benefit of corporation which desired to finance certain new equipment, should be restricted to these factors: (1) a determination that the proposed bonds were in reasonable conformity with the general legislative policy expressed in KRS Chapters 103 and 154; and (2) the evaluation of revenue projections relative to the proposed bond issue including a reasonable determination of the fiscal or financial soundness of the company; in a revenue bond issue of this category, the Division (now Office) of Investment and Debt Management has no authority to require by regulations a rating agency presentation, competitive bidding of all advisers, consultants, trustees, underwriters and bond counsel and a determination that the proposed bond issue has been legally authorized by and/or determined feasible in a biennial budget. OAG 83-453 .

The Office of Financial Management and Economic Analysis’ (OFMEA) lending of the Workers’ Compensation Funding Commission’s securities constitutes a violation of KRS 342.1227 based on the statutory authority for OFMEA to invest funds in repurchase agreements combined with the separate accounting and full collateralization of the Commission funds. OAG 93-13 .

The Office of Financial Management and Economic Analysis’ overnight investment of the Workers’ Compensation Funding Commission’s funds is impermissible under KRS 342.1223(2)(a). OAG 93-13 .

42.420. Proposed bond issuance subject to approval prior to issuance.

All other provisions of the Kentucky Revised Statutes notwithstanding, all state agencies and all individuals, agencies, authorities, boards, cabinets, commissions, corporations, or other entities of, or representing the Commonwealth with the authority to issue bonds, shall submit all proposed bond issues, bond anticipation notes, or interim debt financing to the Office of Financial Management for review and approval prior to issuance of such debt.

History. Enact. Acts 1980, ch. 310, § 3, effective July 15, 1980; 1990, ch. 321, § 5, effective July 13, 1990; 2000, ch. 46, § 9, effective July 14, 2000.

Opinions of Attorney General.

Cities and counties would not come under this section since a similar approval procedure is provided in KRS 66.045 and 66.310 , involving the state local finance officer and this section was not intended to be duplicative. OAG 81-242 .

The Kentucky Housing Corporation must submit all proposed bond issues and debt financing to the Office for Investment and Debt Management since KRS 42.410 and this section when read together, in pari materia, show that the legislative intent was to establish a centralized entity in the Finance Department (now Finance and Administration Cabinet) to evaluate, review and approve all proposed anticipation notes and bond issues of all state agencies and all agencies, commissions, corporations or other entities of or representing the Commonwealth. OAG 81-242 .

When this section is read together with KRS 42.410 , which stresses state debt and investments, it is clear that this section requires that all of the proposed debt issues of all central state agencies and of all individuals, commissions or corporations of or acting for the state, be reviewed and approved by the Office for Investment and Debt Management prior to issuance; thus, this section applies to all state agencies issuing revenue bonds and anticipation notes, to all debt issuing entities which issue debt in the name of the state, and to all corporations created by the state which issue revenue bonds and anticipation notes. OAG 81-242 .

For review and approval procedures of Office for Investment and Debt Management found to conform with KRS 42.410 and this section, see OAG 82-444 .

Industrial revenue bonds issued by the Kentucky Development Finance Authority require the approval of the Office for Investment and Debt Management pursuant to this section. OAG 83-131 .

Under the language of KRS 154.20-020 , the Kentucky Development Finance Authority is a “state agency” and thus under the specific and explicit language of this section, any proposed industrial revenue bonds to be issued by the Kentucky Development Finance Authority must be submitted to the Office for Investment and Debt Management for review and approval prior to the issuance of such debt. OAG 83-131 .

The review and approval function in the case, which involved issuance of industrial revenue bonds by Kentucky Development Finance Authority for benefit of corporation which desired to finance certain new equipment, should be restricted to these factors: (1) a determination that the proposed bonds were in reasonable conformity with the general legislative policy expressed in KRS Chapters 103 and 154; and (2) the evaluation of revenue projections relative to the proposed bond issue including a reasonable determination of the fiscal or financial soundness of the company; in a revenue bond issue of this category, the Division (now Office) of Investment and Debt Management has no authority to require by regulations a rating agency presentation, competitive bidding of all advisers, consultants, trustees, underwriters and bond counsel and a determination that the proposed bond issue has been legally authorized by and/or determined feasible in a biennial budget. OAG 83-453 .

42.425. Department for Facilities and Support Services — Organization — Duties.

    1. The Department for Facilities and Support Services established in the Finance and Administration Cabinet by KRS 42.014 shall be generally responsible for performance of the cabinet’s functions and duties as outlined in KRS Chapters 45, 45A, and 56 with relation to the management and administration of the State Capital Construction Program, including without limitation to the generality thereof the procurement of necessary consulting services related to capital construction and building renovation projects, construction services, and supervision of building construction projects, and for the maintenance and operation of the state government’s real property management functions and physical plant management functions. (1) (a) The Department for Facilities and Support Services established in the Finance and Administration Cabinet by KRS 42.014 shall be generally responsible for performance of the cabinet’s functions and duties as outlined in KRS Chapters 45, 45A, and 56 with relation to the management and administration of the State Capital Construction Program, including without limitation to the generality thereof the procurement of necessary consulting services related to capital construction and building renovation projects, construction services, and supervision of building construction projects, and for the maintenance and operation of the state government’s real property management functions and physical plant management functions.
    2. The department shall be headed by a commissioner appointed by the secretary of the Finance and Administration Cabinet.
    3. The department shall have the primary responsibility for developing and implementing policies applicable to all state agencies to ensure effective planning for and efficient operation of state office buildings, and shall provide appropriate assistance regarding the planning and efficient operation of all state facilities.
    4. The department shall be divided for administrative and operational purposes into:
      1. The Office of Facility Development and Efficiency, headed by an executive director appointed by the secretary in accordance with KRS 12.050 . The office shall analyze and monitor guaranteed energy savings performance contracts for state agencies. The office shall include:
        1. The Division of Engineering and Contract Administration; and
        2. The Division of Facility Efficiency;
      2. The Office of Building and Mechanical Services, headed by an executive director appointed by the secretary in accordance with KRS 12.050 . The office shall provide building and grounds maintenance, mechanical maintenance, and electronic security services to state-owned facilities across the Commonwealth and shall consist of the Division of Building Services and the Division of Mechanical Services;
      3. The Division of Real Properties;
      4. The Division of Historic Properties; and
      5. The Division of Surplus Properties.
    5. Each division shall be headed by a division director appointed by the secretary, subject to the approval of the Governor, and responsible to the commissioner of the Department for Facilities and Support Services. The commissioner shall provide for the distribution of the department’s work among the divisions within the department.
    6. The Division of Surplus Properties shall be responsible for the disposition of all personal property of the state declared surplus. The division shall be the single state agency of the Commonwealth of Kentucky that may receive, warehouse, and distribute surplus property under the Federal Property and Administrative Services Act of 1949, as amended, and any other federal law relating to the disposal of surplus federal property to the states and political subdivisions within the states. The division shall comply with federal laws and regulations in the administration of surplus property received through federal agencies. The division director may promulgate administrative regulations in accordance with KRS Chapter 13A as necessary to comply with minimum standards established by federal laws and regulations governing disposal of surplus federal property and to implement the fee or service charge provisions contained in this paragraph. The division director may establish, charge, and collect from donees of federal surplus property a fair and reasonable fee or service charge to defray the cost of operating the surplus property disposal program. The fees shall be deposited in a trust and agency account in the State Treasury to the credit of the Division of Surplus Properties.
  1. In conjunction with the responsibilities listed in subsection (1) of this section, the Department for Facilities and Support Services shall have the following duties:
    1. Establish policies to ensure efficient utilization of state property by:
      1. Requiring the development of guidelines which set forth space standards and criteria for determining the space needs of state agencies, and maintaining an inventory which tracks the agencies’ compliance with those standards and criteria; and
      2. Requiring certification of compliance, or justification for exceptions, as a criterion for approval of additional space;
    2. Establish policies to ensure effective planning for state facilities by:
      1. Developing a long-range plan for the Frankfort area, with priority on reducing dependency on leased space and encouraging the consolidation of agencies’ central offices into single locations, and shared offices for agencies with similar functions; and
      2. Developing long-range plans for housing state agencies in metropolitan areas, with priority on centralization of services and coordination of service delivery systems; and
      3. Encouraging executive branch agencies to expand long-range planning efforts, consistent with the policies of the Capital Planning Advisory Board; and
      4. Supporting long-range planning for a statewide information technology infrastructure to more efficiently deliver state government services;
    3. Establish priorities to allow least-cost financing of state facilities by:
      1. Initiating policies which authorize the state to use innovative methods to lease, purchase, or construct necessary facilities; and
      2. Requiring cost analysis to determine the most effective method of meeting space needs, with consideration for ongoing operations and initial acquisition; and
    4. Implement and maintain a comprehensive real property and facilities management database to include all state facilities and land owned or leased by the executive branch agencies, including any postsecondary institution. All state agencies and postsecondary institutions shall work cooperatively with the Department for Facilities and Support Services to implement and maintain the database.
  2. The Department for Facilities and Support Services shall develop plans for the placement of computing and communications equipment in all facilities owned or leased by state government. As part of this planning process, the department shall:
    1. Provide adequate site preparation in all state-owned facilities and require the same of those from whom the state leases space as part of the lease agreement;
    2. Fund a minimum level of site preparation for computing and communications in each new state-owned facility; and
    3. As new office sites are developed, or existing ones undergo renovation, consider the placement of shareable high-cost, high-value facilities at strategic locations throughout the state. These facilities may include video teleconference centers, optical scanning and storage services, and gateways to high-speed communication networks.

History. Enact. Acts 1978, ch. 155, § 53, effective June 17, 1978; 1982, ch. 393, § 25, effective July 15, 1982; 1992, ch. 41, § 2, effective July 14, 1992; 1994, ch. 176, § 2, effective July 15, 1994; 1998, ch. 68, § 3, effective July 15, 1998; 1998, ch. 87, § 1, effective July 15, 1998; 2002, ch. 19, § 1, effective July 15, 2002; repealed, reenact. and amend., Acts 2005, ch. 85, § 17, effective June 20, 2005; 2009, ch. 12, § 26, effective June 25, 2009.

Compiler’s Notes.

This section was formerly compiled as KRS 42.027 .

42.430. Plaque commemorating prisoners and missing soldiers in Vietnam War — Duties of Department of Veterans’ Affairs and Department for Facilities and Support Services.

  1. To honor those Kentuckians who proudly served their country during the Vietnam War but remain unaccounted for, the Department of Veterans’ Affairs shall update the plaque at the base of the Freedom Tree near the Floral Clock on the grounds of the New Capitol Annex to contain the names of Kentucky Vietnam War POW/MIAs from the most recent official accounting available from the United States Department of Defense. The plaque shall also contain a depiction of the POW/MIA flag of the National League of Families of American Prisoners of War and Missing in Southeast Asia.
  2. The Department of Veterans’ Affairs shall be responsible for the design of the new plaque required by subsection (1) of this section, and the plaque shall be paid for by the Department of Veterans’ Affairs. The Department of Veterans’ Affairs may receive appropriations, gifts, grants, federal funds, and any other funds, both public and private, to defray the cost of updating the plaque.
  3. The Department for Facilities and Support Services shall be responsible for preparing the base for the updated plaque, and for installing the plaque. The Department for Facilities and Support Services shall be reimbursed the cost of the installation by the Department of Veterans’ Affairs. The Department for Facilities and Support Services shall also be responsible for the routine maintenance of the Freedom Tree, the memorial plaque, and the grounds surrounding the tree and plaque.

History. Repealed, reenact. and amend., Acts 2005, ch. 85, § 18, effective June 20, 2005.

Compiler’s Notes.

This section was formerly compiled as KRS 42.0271 .

42.435. Plaque commemorating Kentucky Congressional Medal of Honor recipients — Duties of Department for Facilities and Support Services.

  1. To honor those who have been awarded a Congressional Medal of Honor, the United States’ highest military award for valor in combat, the Department for Facilities and Support Services shall create a plaque to contain the names of each Kentucky Congressional Medal of Honor recipient.
  2. The Department for Facilities and Support Services shall be responsible for selecting a location on the first floor of the New State Capitol for the plaque required by subsection (1) of this section. The Department for Facilities and Support Services shall also be responsible for the design, installation, and routine maintenance of the plaque. The plaque shall be updated by the Department for Facilities and Support Services within six (6) months of a Congressional Medal of Honor nomination and approval accredited to the Commonwealth of Kentucky.

History. Enact. Acts 2011, ch. 6, § 1, effective June 8, 2011.

Local Government Economic Assistance Program

42.450. Local Government Economic Assistance Fund — Sources.

  1. There is hereby established in the State Treasury a fund entitled “Local Government Economic Assistance Fund.” The fund may receive state appropriations, gifts, grants, and federal funds and shall be disbursed by the State Treasurer upon the warrant of the secretary of the Finance and Administration Cabinet. Any unallotted or unencumbered balances in the fund shall be invested pursuant to KRS 42.500 and the income earned from the investment shall be prorated for expenditure in coal producing and coal impact counties according to each county’s allocable part in the fund.
  2. Effective July 1, 1981, an amount equal to one-half (1/2) of the tax collected annually on the sale of minerals, exclusive of coal, shall be transferred from the general fund into this fund. The transfers shall be made quarterly, based upon the revenue estimates prevailing at the time each quarterly transfer is due, except that the last quarterly transfer shall be made after the close of the fiscal year accounting records, and shall be adjusted to provide the balance of the annual transfer required by this subsection.
  3. Effective October 1, 2010, the quarterly transfer of funds required by subsection (2) of this section shall be made only after the quarterly installment of the annual amount from the prior calendar year allowed as an incentive to an approved company under KRS 143A.025 and 154.27-060 has been made.

History. Enact. Acts 1980, ch. 394, § 1, effective July 1, 1980; 1986, ch. 464, § 8, effective July 15, 1986; 1992, ch. 107, § 1, effective July 1, 1992; 2010, ch. 115, § 1, effective July 15, 2010; 2010, ch. 139, § 6, effective July 15, 2010.

Legislative Research Commission Note.

(7/15/2010). This section was amended by 2010 Ky. Acts chs. 115 and 139, which do not appear to be in conflict and have been codified together.

Opinions of Attorney General.

Where KRS 42.490 transfers the coal haul road money from unencumbered fund balances under KRS 42.300 (repealed), KRS 42.330 (repealed) and KRS 177.970 (repealed) to the local government assistance fund under KRS 42.450 et seq. of a county which has no county road over which coal is being hauled, the county through the fiscal court can spend the funds on one or more of the priority categories listed under subsections 2(a) through 2(i) of KRS 42.455 including any county road under subsection 2(c) within the limits of KRS 178.010 , even though no coal is hauled over it. OAG 81-15 .

Although a county receiving moneys from the Economic Assistance Fund established under this section would appear to have statutory authorization to make expenditures from the fund to such nonprofit organizations as little league baseball pursuant to the language of subsection (2) of KRS 42.455 and 67.083(3)(f) which allow expenditures for “recreation,” such an appropriation would violate the prohibition of Ky. Const., § 179 against appropriations for corporations since the baseball program is not a county operation or function and is not under the basic operative control or management of the fiscal court. OAG 81-381 .

Penalty and interest on delinquent coal severance taxes should not be included in the calculations of the Local Government Economic Assistance Fund. OAG 84-66 .

Research References and Practice Aids

2020-2022 Budget Reference.

See State/Executive Branch Budget, 2021 Ky. Acts ch. 169, Pt. I, A, 12, (1) at 1065.See State/Executive Branch Budget, 2021 Ky. Acts ch. 169, Pt. I, A, 12, (2) at 1066.See State/Executive Branch Budget, 2021 Ky. Acts ch. 169, Pt. I, A, 12, (4) at 1066.

42.4501. Definitions for KRS 42.450 to 42.495.

As used in KRS 42.450 to 42.495 :

  1. “Refund” means a payment of money from the State Treasury to a taxpayer, upon the authorization of the Department of Revenue following the submission of a timely request filed in accordance with applicable statutes and administrative regulations, representing all or part of an overpayment previously made by the taxpayer for a tax liability arising under KRS 143.020 or 143A.020 ; and
  2. “Severance and processing taxes on coal collected annually” means the total amount of money collected from the tax imposed by KRS 143.020 in a given fiscal year, reduced by the total amount of refunds of that tax paid during the prior fiscal year.

HISTORY: 2016 ch. 110, § 1, effective July 1, 2016.

Research References and Practice Aids

2020-2022 Budget Reference.

See State/Executive Branch Budget, 2021 Ky. Acts ch. 169, Pt. I, A, 12, (1) at 1065.See State/Executive Branch Budget, 2021 Ky. Acts ch. 169, Pt. I, A, 12, (2) at 1066.See State/Executive Branch Budget, 2021 Ky. Acts ch. 169, Pt. I, A, 12, (4) at 1066.

42.453. Kentucky Coal Fields Endowment Authority — Creation — Role and duties — Project eligibility criteria — Appropriation — Tax exemption.

  1. The Kentucky Coal Fields Endowment Authority is hereby created as a public corporation, governmental agency, and instrumentality of the Commonwealth, with the perpetual succession and with power in that name to:
    1. Contract and be contracted with;
    2. Acquire and convey property;
    3. Sue and be sued;
    4. Have and use a corporate seal;
    5. Adopt bylaws;
    6. Invest moneys; and
    7. Exercise, in addition to the powers and functions specifically stated in this section and KRS 42.454 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.
  2. It shall be the role and duty of the authority to support through funding efforts to diversify the economy of the coal fields within Kentucky.
    1. Projects that may be funded shall be non-recurring investments in:
      1. Economic development;
      2. Public infrastructure, water, and wastewater;
      3. Public health and safety; and
      4. Information technology development and access.
    2. Projects shall be selected based on economic impact, job creation, workforce development, community benefit, available partnerships, project readiness, and the ability for a project to be self-sustaining.
  3. Seven million five hundred thousand dollars ($7,500,000) of the severance and processing taxes on coal collected annually shall be transferred from the general fund to the Kentucky coal fields endowment authority established in this section. The transfers shall be made in quarterly amounts of one million eight hundred seventy-five thousand dollars ($1,875,000) at the same time as the transfers to the local government economic development fund.
  4. Moneys transferred to the authority are hereby appropriated for the purposes set forth in this section and shall not be appropriated or transferred by the General Assembly for any other purpose. State moneys appropriated that are not spent at the end of the fiscal year shall not lapse.
  5. All property and income of the Kentucky coal fields endowment authority shall be exempt from all taxes and assessment of any nature.

HISTORY: 2017 ch. 164, § 1, effective June 29, 2017.

Research References and Practice Aids

2020-2022 Budget Reference.

See State/Executive Branch Budget, 2021 Ky. Acts ch. 169, Pt. I, A, 12, (1) at 1065.See State/Executive Branch Budget, 2021 Ky. Acts ch. 169, Pt. I, A, 12, (2) at 1066.See State/Executive Branch Budget, 2021 Ky. Acts ch. 169, Pt. I, A, 12, (4) at 1066.

42.454. Membership of Kentucky Coal Fields Endowment Authority — Terms — Disclosure of certain ownership interest — Officers — Investment options.

  1. As used in this section:
    1. “Authority” means the Kentucky coal fields endowment authority;
    2. “Board” means the chair, vice chair, and secretary-treasurer of the authority;
    3. “Chair” means the chair of the Kentucky coal fields endowment authority;
    4. “Commissioner” means the commissioner of the Department for Local Government; and
    5. “Eligible counties” means counties of the Commonwealth of Kentucky participating in the Local Government Economic Development Fund on June 29, 2017, and those that participated on January 1, 2016;
  2. The authority shall consist of seven (7) persons, who shall be selected as follows:
    1. Two (2) persons, appointed by the Governor, from counties located within the Eastern Coal Field;
    2. Two (2) persons, appointed by the Governor, from counties located within the Western Coal Field;
    3. Two (2) persons, appointed by the Governor, possessing experience and expertise in finance and investment; and
    4. The commissioner or the commissioner’s proxy.
  3. Two (2) members initially appointed to the authority shall have a term of one (1) year each, two (2) members initially appointed to the authority shall have a term of two (2) years each, and two (2) members initially appointed to the authority shall have a term of three (3) years each, except that any person appointed to fill a vacancy shall serve only for the remainder of the unexpired term. All subsequent appointments shall be for a term of three (3) years.
  4. The board members are hereby determined to be officers and agents of the Commonwealth of Kentucky and, as such, shall enjoy the same immunities from suit for the performance of their official acts as do other officers of the Commonwealth of Kentucky.
  5. If any member or officer of the authority shall be interested in, either directly or indirectly, or shall be an officer of, employee of, or have an ownership interest in any firm or corporation interested directly or indirectly in any project funded by the authority, the interest shall be disclosed clearly in the application and shall be set forth in the minutes of the authority, and the member or officer having an interest therein shall not participate in the application process.
  6. Any person appointed to the authority shall be eligible for reappointment.
  7. The members of the authority shall elect biennially from the authority’s membership the following offices: chair, vice chair, secretary-treasurer, and any assistant secretaries and assistant treasurers the authority deems necessary. The commissioner shall not be eligible to hold any of these offices.
  8. A majority of the members of the authority, determined by excluding any existing vacancies from the total number of members, shall constitute a quorum. A majority vote of the members present at a duly called meeting of the authority shall be required for the purposes of conducting its business and exercising its powers and for all other purposes.
  9. The authority shall prepare bylaws and procedures applicable to the operation of the authority and submit them to the commissioner to be promulgated as administrative regulations in accordance with KRS Chapter 13A.
  10. Members of the authority shall be entitled to reimbursement for all necessary expenses in connection with the performance of their duties.
  11. The authority shall meet twice annually and at other times upon call of the chair or a majority of the board to discuss and vote on funding for projects in eligible counties permitted to receive moneys from the authority under KRS 42.453(2).
  12. The authority may invest any and all of the assets of the fund in:
    1. Obligations and contracts for future delivery of obligations backed by the full faith and credit of the United States or a United States government agency, including but not limited to:
      1. United States Treasury;
      2. Export-Import Bank of the United States;
      3. Farmers Home Administration;
      4. Government National Mortgage Corporation; and
      5. Merchant Marine bonds;
    2. Obligations of any corporation of the United States government or government-sponsored enterprise, including but not limited to:
      1. Federal Home Loan Mortgage Corporation;
      2. Federal Farm Credit Banks;
        1. Bank for Cooperatives;
        2. Federal Intermediate Credit Banks; and
        3. Federal Land Banks;
      3. Federal Home Loan Banks;
      4. Federal National Mortgage Association; and
      5. Tennessee Valley Authority obligations;
    3. Collateralized or uncollateralized certificates of deposit, issued by banks rated in one (1) of the three (3) highest categories by a nationally recognized statistical rating organization or other interest-bearing accounts in depository institutions chartered by this state or by the United States, except for shares in mutual savings banks;
    4. Bankers acceptances for banks rated in the highest short-term category by a nationally recognized statistical rating organization;
    5. Commercial paper rated in the highest short-term category by a nationally recognized statistical rating organization;
    6. Securities issued by a state or local government, or any instrumentality or agency thereof, in the United States, and rated in one (1) of the three (3) highest long-term categories by a nationally recognized statistical rating organization;
    7. United States denominated corporate, Yankee, and Eurodollar securities, excluding corporate stocks, issued by foreign and domestic issuers, including sovereign and supranational governments, rated in one (1) of the three (3) highest long-term categories by a nationally recognized statistical rating organization;
    8. Asset-backed securities rated in the highest category by a nationally recognized statistical rating organization;
    9. Shares of mutual funds, each of which shall have the following characteristics:
      1. The mutual fund shall be an open-end diversified investment company registered under Federal Investment Company Act of 1940, as amended;
      2. The management company of the investment company shall have been in operation for at least five (5) years; and
      3. The mutual fund shall be rated in the highest category by a nationally recognized statistical rating organization; and
    10. State and local delinquent property tax claims which upon purchase shall become certificates of delinquency secured by interests in real property not to exceed twenty-five million dollars ($25,000,000) in the aggregate. For any certificates of delinquency that have been exonerated pursuant to KRS 132.220(5), the Department of Revenue shall offset the loss suffered by the Finance and Administration Cabinet against subsequent local distributions to the affected taxing districts as shown on the certificate of delinquency.

HISTORY: 2017 ch. 164, § 2, effective June 29, 2017.

Research References and Practice Aids

2020-2022 Budget Reference.

See State/Executive Branch Budget, 2021 Ky. Acts ch. 169, Pt. I, A, 12, (1) at 1065.See State/Executive Branch Budget, 2021 Ky. Acts ch. 169, Pt. I, A, 12, (2) at 1066.See State/Executive Branch Budget, 2021 Ky. Acts ch. 169, Pt. I, A, 12, (4) at 1066.

42.455. Local Government Economic Assistance Program — Grants for priority expenditures — Administrative regulations — Public hearings — Reports — Directory of coal road system.

  1. There is established within the Department for Local Government a Local Government Economic Assistance Program to consist of a system of grants to local governments to improve the environment for new industry and to improve the quality of life for the residents.
  2. Grants obtained under this program shall be used for priority expenditures. Thirty percent (30%) of all moneys in the fund shall be spent on the coal haul road system as described in subsection (7) of this section. The remaining seventy percent (70%) of the fund shall be spent on priority categories limited to the following, but in no event shall grants obtained under this program be used for expenses related to administration of government:
    1. Public safety, including law enforcement, fire protection, ambulance service, and other related services;
    2. Environmental protection, including sewage disposal, sanitation, solid waste, and other related programs;
    3. Public transportation, including mass transit systems, streets, and roads;
    4. Health;
    5. Recreation;
    6. Libraries and educational facilities;
    7. Social services for the poor, the elderly, and individuals with disabilities;
    8. Industrial and economic development;
    9. Vocational education;
    10. Workforce training; and
    11. Secondary wood industry development.
  3. The use of entitlement funds for repayment of debt as related to long-term bond issues is permissible as long as the revenue from the bond issues is expended on priority categories.
  4. Grants obtained under this program may be used as local portion to secure federal programs as long as program expenditures are in the priority category area. Interest earned on funds received by local units of government shall be considered available for use by the local unit of government in the priority expenditure categories.
  5. The Department for Local Government shall be responsible for the promulgation of rules and regulations necessary to implement the grants programs authorized by this section.
  6. The Department for Local Government shall assure that a public hearing is held on the expenditure of funds received under KRS 42.450 to 42.495 . Advertisement of the public hearing shall be published at least once but may be published two (2) or more times, provided that one (1) publication occurs not less than seven (7) days nor more than twenty-one (21) days before the scheduled date of the public hearing. The Department for Local Government shall submit an annual report to the Governor indicating how the grants were used and an evaluation of the program’s effectiveness in improving the economy of the units of government receiving assistance.
  7. On or before August 15, 1980, and each year thereafter, the Transportation Cabinet shall publish and furnish to the Department for Local Government a directory, including supporting maps and other documents, designating the official state coal road system in coal-impact and coal-producing counties which shall include all public highways, roads, and streets over which quantities of coal, sufficient to significantly affect the condition and state of repair of highways, roads, and streets, have been transported in the immediately preceding fiscal year. The cabinet shall further publish the total county mileage of the official state coal road system and the total ton/miles within each coal-impact and coal-producing county for said preceding fiscal year.
  8. Every person shipping or transporting coal, and every carrier for hire or common carrier hauling coal over the public highways, roads, and streets shall file with the Transportation Cabinet such information and at intervals as the cabinet shall designate by regulation duly adopted for the purpose of identifying those highways, roads, and streets comprising the coal haul road system and the quantities of coal transported thereon, in order that the cabinet can accurately calculate total ton/miles within each coal-impact and coal-producing county.
  9. The Department of Revenue shall make available to the Transportation Cabinet coal severance and processing tax data for use in verifying and supplementing the information furnished under the provisions of subsection (8) of this section. The information shall be furnished in such a manner as to conceal the identity of individual taxpayers; if the data cannot be furnished without revealing the identity of individual taxpayers, it shall be withheld.

History. Enact. Acts 1980, ch. 394, § 2, effective July 1, 1980; 1982, ch. 393, § 29, effective July 15, 1982; 1986, ch. 374, § 5, effective July 15, 1986; 1990, ch. 50, § 1, effective July 13, 1990; 1992, ch. 107, § 2, effective July 1, 1992; 1994, ch. 18, § 1, effective July 15, 1994; 1994, ch. 224, § 17, effective July 15, 1994; 1994, ch. 405, § 8, effective July 15, 1994; 1998, ch. 69, § 10, effective July 15, 1998, 2005, ch. 85, § 53, effective June 20, 2005; 2007, ch. 47, § 18, effective June 26, 2007; 2010, ch. 117, § 24, effective July 15, 2010.

Opinions of Attorney General.

Where KRS 42.490 transfers the coal haul road money from unencumbered fund balances under KRS 42.300 (repealed), KRS 42.330 (repealed) and KRS 177.970 (repealed) to the local government assistance fund under KRS 42.450 et seq. of a county which has no county road over which coal is being hauled, the county through the fiscal court can spend the funds on one or more of the priority categories listed under subsections 2(a) through 2(i) of this section including any county road under subsection 2(c) within the limits of KRS 178.010 , even though no coal is hauled over it. OAG 81-15 .

Although a county receiving moneys from the Economic Assistance Fund established under KRS 42.450 would appear to have statutory authorization to make expenditures from the fund to such nonprofit organizations as little league baseball pursuant to the language of subsection (2) of this section and 67.083(3)(f) which allow expenditures for “recreation”, such an appropriation would violate the prohibition of Ky. Const., § 179 against appropriations for corporations since the baseball program is not a county operation or function and is not under the basic operative control or management of the fiscal court. OAG 81-381 .

Future receipts of county coal severance funds could not be obligated by a fiscal court beyond its present term of office for the future construction of a high school pursuant to subsection (1)(f) of this section; a fiscal court cannot, due to the restrictions of Ky. Const., § 157, create county obligations in any year which would be in excess of the county’s income and revenue for that particular year without a vote of the people. OAG 81-408 .

A fiscal court in a county affected by the local government economic assistance program has no authority to enact an ordinance requiring all coal transporters to file the form TD 59-100 (Coal Severor and/or Route and Tonnage Report) with the transportation cabinet, or an ordinance requiring similar reports to be filed with the fiscal court. There is no statute expressly granting counties the authority to enact ordinances in this kind of situation, neither is there any necessary implication of such authority; moreover, the nature of the state legislation is such that it can be seen clearly as a state-preempted financial program of assistance to local governments. OAG 83-77 .

Research References and Practice Aids

2020-2022 Budget Reference.

See State/Executive Branch Budget, 2021 Ky. Acts ch. 169, Pt. I, A, 11, (2) at 1065.See State/Executive Branch Budget, 2021 Ky. Acts ch. 169, Pt. I, A, 12, (1) at 1065.See State/Executive Branch Budget, 2021 Ky. Acts ch. 169, Pt. I, A, 12, (2) at 1066.See State/Executive Branch Budget, 2021 Ky. Acts ch. 169, Pt. I, A, 12, (4) at 1066.

42.455. Local Government Economic Assistance Program — Grants for priority expenditures — Administrative regulations — Public hearings — Reports — Directory of coal road system.

  1. There is established within the Department for Local Government a Local Government Economic Assistance Program to consist of a system of grants to local governments to improve the environment for new industry and to improve the quality of life for the residents.
  2. Grants obtained under this program shall be used for priority expenditures. Thirty percent (30%) of all moneys in the fund shall be spent on the coal haul road system as described in subsection (8) of this section. The remaining seventy percent (70%) of the fund shall be spent on priority categories limited to the following, but in no event shall grants obtained under this program be used for expenses related to administration of government:
    1. Public safety, including law enforcement, fire protection, ambulance service, and other related services;
    2. Environmental protection, including sewage disposal, sanitation, solid waste, and other related programs;
    3. Public transportation, including mass transit systems, streets, and roads;
    4. Health;
    5. Recreation;
    6. Libraries and educational facilities;
    7. Social services for the poor, the elderly, and individuals with disabilities;
    8. Industrial and economic development;
    9. Vocational education;
    10. Workforce training; and
    11. Secondary wood industry development.
  3. The use of entitlement funds for repayment of debt as related to long-term bond issues is permissible as long as the revenue from the bond issues is expended on priority categories.
  4. Grants obtained under this program may be used as local portion to secure federal programs as long as program expenditures are in the priority category area. Interest earned on funds received by local units of government shall be considered available for use by the local unit of government in the priority expenditure categories.
  5. The Department for Local Government shall be responsible for the promulgation of rules and regulations necessary to implement the grants programs authorized by this section.
  6. The Department for Local Government shall submit an annual report to the Governor indicating how the grants were used and an evaluation of the program’s effectiveness in improving the economy of the units of government receiving assistance.
  7. Prior to a local government’s expenditure of any funds it receives under this section, the local government shall allow an opportunity for public input and comments regarding the expenditure of those funds. Before any unit of local government expends any funds it receives under this section, it shall:
    1. Provide an opportunity to the public to provide input with regard to the project or projects in a public meeting for which notice has been given under KRS 61.823(2) to (4);
    2. Include the topic as a specific item on the public meeting agenda and shall allow any person to speak with regard to any proposed project, any project which he or she feels should be built or done which has not been proposed, priorities for completion of projects, and any other matter related to expenditure of any funds it receives under this section. The local government shall not be bound by the comments and input provided at the meeting but shall give due consideration to them; and
    3. Not begin construction on a project until the meeting as provided in this section has been held.

      This subsection shall not be construed to require a separate meeting for each project. A single meeting encompassing the program, if all projects subsequently undertaken have been identified at the meeting, shall meet the requirements of this subsection.

  8. On or before August 15, 1980, and each year thereafter, the Transportation Cabinet shall publish and furnish to the Department for Local Government a directory, including supporting maps and other documents, designating the official state coal road system in coal-impact and coal-producing counties which shall include all public highways, roads, and streets over which quantities of coal, sufficient to significantly affect the condition and state of repair of highways, roads, and streets, have been transported in the immediately preceding fiscal year. The cabinet shall further publish the total county mileage of the official state coal road system and the total ton/miles within each coal-impact and coal-producing county for said preceding fiscal year.
  9. Every person shipping or transporting coal, and every carrier for hire or common carrier hauling coal over the public highways, roads, and streets shall file with the Transportation Cabinet such information and at intervals as the cabinet shall designate by regulation duly adopted for the purpose of identifying those highways, roads, and streets comprising the coal haul road system and the quantities of coal transported thereon, in order that the cabinet can accurately calculate total ton/miles within each coal-impact and coal-producing county.
  10. The Department of Revenue shall make available to the Transportation Cabinet coal severance and processing tax data for use in verifying and supplementing the information furnished under the provisions of subsection (9) of this section. The information shall be furnished in such a manner as to conceal the identity of individual taxpayers; if the data cannot be furnished without revealing the identity of individual taxpayers, it shall be withheld.

HISTORY: Enact. Acts 1980, ch. 394, § 2, effective July 1, 1980; 1982, ch. 393, § 29, effective July 15, 1982; 1986, ch. 374, § 5, effective July 15, 1986; 1990, ch. 50, § 1, effective July 13, 1990; 1992, ch. 107, § 2, effective July 1, 1992; 1994, ch. 18, § 1, effective July 15, 1994; 1994, ch. 224, § 17, effective July 15, 1994; 1994, ch. 405, § 8, effective July 15, 1994; 1998, ch. 69, § 10, effective July 15, 1998, 2005, ch. 85, § 53, effective June 20, 2005; 2007, ch. 47, § 18, effective June 26, 2007; 2010, ch. 117, § 24, effective July 15, 2010; 2022 ch. 103, § 1.

42.4582. Local government economic development fund — Adjustment for quarterly transfers — Schedule of transfers from general fund.

  1. There is hereby established in the State Treasury a fund entitled “Local Government Economic Development Fund.” The fund may receive state appropriations, gifts, grants, and federal funds and shall be disbursed by the State Treasurer upon the warrant of the secretary of the Finance and Administration Cabinet. Any unallotted or unencumbered balances in the fund shall be invested as provided for in KRS 42.500(9). Income earned from the investments shall be prorated for grants to counties according to the allotment schedule set out in KRS 42.4592 .
    1. Moneys shall be transferred from the general fund in an amount equal to fifty percent (50%) of the severance and processing taxes on coal collected annually, unless otherwise amended by the budget bill. (2) (a) Moneys shall be transferred from the general fund in an amount equal to fifty percent (50%) of the severance and processing taxes on coal collected annually, unless otherwise amended by the budget bill.
    2. The transfers shall be made quarterly, based upon the revenue estimates prevailing at the time each quarterly transfer is due. Each quarterly transfer shall be adjusted to account for refunds by determining the total amount of refunds paid in the prior fiscal year, dividing that amount by four (4), and reducing each transfer by this amount. The last quarterly transfer shall be made after the close of the fiscal year accounting records, and shall be adjusted to provide the balance of the annual transfer required by this subsection.
    3. The quarterly calculation and transfer of funds pursuant to this section shall be made only after distribution of the quarterly installment of the annual amount from the prior calendar year allowed as an incentive to an approved company under KRS 143.024 and 154.27-060 .

History. Enact. Acts 1992, ch. 107, § 4, effective July 1, 1992; 1996, ch. 101, § 3, effective July 15, 1996; 1996 (1st Ex. Sess.), ch. 1, § 76, effective December 12, 1996; 2007 (2nd Ex. Sess.), ch. 1, § 15, effective August 30, 2007; 2012, ch. 110, § 13, effective April 11, 2012; 2016 ch. 110, § 2, effective July 1, 2016.

Legislative Research Commission Notes.

(7/15/96). The reference to KRS 45.4592 at the end of subsection (1) of this statute has been corrected to read KRS 42.4592 , remedying an inadvertent misnumbering in codification. See 1992 Ky. Acts ch. 107, secs. 4 and 7.

Research References and Practice Aids

2020-2022 Budget Reference.

See State/Executive Branch Budget, 2021 Ky. Acts ch. 169, Pt. I, A, 12, (1) at 1065.See State/Executive Branch Budget, 2021 Ky. Acts ch. 169, Pt. I, A, 12, (2) at 1066.See State/Executive Branch Budget, 2021 Ky. Acts ch. 169, Pt. I, A, 12, (4) at 1066.See State/Executive Branch Budget, 2021 Ky. Acts ch. 169, Pt. V, A, 2 at 1157.

42.4585. Transfers from local government economic development fund to local government economic assistance fund — Schedule of transfers.

  1. A portion of each quarterly transfer of moneys provided for in KRS 42.4582 shall be transferred from the local government economic development fund into the local government economic assistance fund.
  2. The amount transferred annually from the local government economic development fund into the local government economic assistance fund under the provisions of subsection (1) of this section shall be not less than an amount equal to fifteen percent (15%) of the severance and processing taxes on coal collected annually.
  3. The quarterly calculation and transfer of funds pursuant to subsections (1) and (2) of this section shall be made only after distribution of the quarterly installment of the annual amount from the prior calendar year allowed as an incentive to an approved company under KRS 143.024 and 154.27-060 .

History. Enact. Acts 1992, ch. 107, § 5, effective July 1, 1992; 1996 (1st Ex. Sess.), ch. 1, § 77, effective December 12, 1996; 2002, ch. 338, § 2, effective July 15, 2002; 2007 (2nd Ex. Sess.), ch. 1, § 16, effective August 30, 2007; 2012, ch. 110, § 14, effective April 11, 2012.

Research References and Practice Aids

2020-2022 Budget Reference.

See State/Executive Branch Budget, 2021 Ky. Acts ch. 169, Pt. I, A, 12, (1) at 1065.See State/Executive Branch Budget, 2021 Ky. Acts ch. 169, Pt. I, A, 12, (2) at 1066.See State/Executive Branch Budget, 2021 Ky. Acts ch. 169, Pt. I, A, 12, (4) at 1066.

42.4586. Transfers from local government economic development fund to secondary wood products development fund. [Repealed]

Compiler's Notes.

This section (Enact. Acts 1994, ch. 224, § 15, effective July 15, 1994) was repealed by Acts 2013, ch. 49, § 10 effective June 25, 2013.

Research References and Practice Aids

2020-2022 Budget Reference.

See State/Executive Branch Budget, 2020 Ky. Acts ch. 92, Pt. I, A, 12, (1) at 856.See State/Executive Branch Budget, 2020 Ky. Acts ch. 92, Pt. I, A, 12, (2) at 856.See State/Executive Branch Budget, 2020 Ky. Acts ch. 92, Pt. I, A, 12, (4) at 856.

42.4588. Local Government Economic Development Program — Use of grants — Procedures.

    1. A Local Government Economic Development Program is established to consist of a system of grants to counties to attract new industry. Grants from funds provided for in KRS 42.4592(1)(a) and (b) shall be administered by the Department for Local Government. Grants from funds provided for in KRS 42.4592(1)(c) shall be administered by the Kentucky Economic Development Finance Authority. (1) (a) A Local Government Economic Development Program is established to consist of a system of grants to counties to attract new industry. Grants from funds provided for in KRS 42.4592(1)(a) and (b) shall be administered by the Department for Local Government. Grants from funds provided for in KRS 42.4592(1)(c) shall be administered by the Kentucky Economic Development Finance Authority.
    2. All references in this section to the commissioner of the Department for Local Government relate only to the grants or industrial development projects funded through KRS 42.4592(1)(a) and (b). All references in this section to the secretary of the Cabinet for Economic Development or the Kentucky Economic Development Finance Authority relate only to grants or industrial development projects funded through KRS 42.4592(1)(c).
  1. Grants obtained under this program shall be used for:
    1. Industrial development projects if an industrial firm has agreed with the local government, to the satisfaction of the Kentucky Economic Development Finance Authority or the Department for Local Government, to develop, in conjunction with the industrial development project, manufacturing, processing, assembling, or other facilities approved by the secretary of the Cabinet for Economic Development or the commissioner of the Department for Local Government;
    2. Industrial development projects if the secretary of the Cabinet for Economic Development or the commissioner of the Department for Local Government finds that the project is necessary for the creation of an environment for new industry in order to obtain an agreement from an industrial firm to develop manufacturing, processing, assembling, or other facilities approved by the secretary of the Cabinet for Economic Development or the commissioner of the Department for Local Government; and
    3. Debt service for industrial development projects, as defined in subsection (2)(a) and (b) of this section, or for facilities approved by the secretary of the Cabinet for Economic Development or the commissioner of the Department for Local Government under the provisions of subsection (3) of this section.
  2. The secretary of the Cabinet for Economic Development or the commissioner of the Department for Local Government may approve facilities, other than manufacturing, processing, or assembling facilities, for industrial development projects when the secretary or the commissioner finds that the facility will add value to a product. Value-added facilities shall include data processing, telecommunication, and distribution facilities but shall not include retail facilities or coal mining, coal processing, or coal transportation facilities. The secretary or the commissioner may also approve privately owned facilities for transient lodging and recreation where the secretary or commissioner finds that the cost of the recreation component of the facility is equal to, or greater than, the cost of the lodging component of the facility. The criteria for approval of applications for grants provided for in subsection (10)(a), (b), and (c) of this section shall be paramount in the case of lodging and recreational facilities.
  3. Applications for grants from funds provided for in KRS 42.4592(1)(a) and (b) shall be made by the legislative bodies of one (1) or more counties with accounts in the local government economic development fund. Applications for grants from funds provided for in KRS 42.4592(1)(c) shall be made by the legislative bodies of two (2) or more counties with accounts in the local government economic development fund. No grant shall be awarded without application for a grant.
  4. A grant may be awarded for an industrial development project located in a county that does not have an account in the local government economic development fund, if the secretary of the Cabinet for Economic Development or the commissioner of the Department for Local Government finds that the industrial development project may be reasonably expected to create jobs for residents of the local unit or units of government applying for the grant. Application for the grant shall be made by the legislative bodies of one (1) or more counties with accounts in the local government economic development fund.
  5. An industrial development project may include legal, accounting, engineering, and marketing expenses for a regional industrial park, in addition to the activities set forth in subsection (11)(a) of this section.
  6. Grants awarded from funds provided for in KRS 42.4592(1)(a) and (b) shall not exceed the total balance of the accounts of the applicant counties at the time of the award of the grant.
  7. Grants awarded under the provisions of subsection (2)(c) of this section may be for a period not to exceed the current biennium of the Commonwealth and shall be limited to an amount not to exceed the amount estimated to be allocated to the applicant county or counties for the current biennium under the provisions of KRS 42.4592(1)(a) and (b).
  8. Approval of grant applications shall be by the secretary of the Cabinet for Economic Development or the commissioner of the Department for Local Government. Award of grants from funds provided for in KRS 42.4592(1)(c) shall be by the Kentucky Economic Development Finance Authority. Award of grants from funds provided for in KRS 42.4592(1)(a) and (b) shall be by the commissioner of the Department for Local Government.
  9. Criteria for approval of applications and the award of grants to be considered, if applicable, shall include:
    1. The number of jobs to be created or preserved, directly or indirectly, by the industrial development project;
    2. Payrolls, and the taxes generated, both at the state and local levels, by the industrial development project and taxes generated by the employment created or preserved by the industrial development project;
    3. The size, nature, and cost of the industrial development project, including the prospect of the industrial development project providing long-term jobs in enterprises consistent with the changing economies of the affected local units of government;
    4. The needs, and degree of needs, of the local units of government which will be affected by the industrial development project;
    5. The needs of any industrial firm benefiting from the industrial development project;
    6. The amount and kind of assistance, if any, available to an industrial firm from other government agencies through tax exemption or abatement, financing assistance through industrial development bonds, and otherwise, with respect to the industrial development project;
    7. The amount of capital made available to the facility by lenders and by the industrial firm; and
    8. The economic feasibility of the facility.
  10. For purposes of this section:
    1. “Industrial development project” 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 the real estate for conveyance to or lease to industrial firms 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 retention; 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 the real estate; construction and installation on the real estate of the industrial firm of buildings, including buildings to be used for worker training and education; rail facilities; roads; sidewalks; curbs; other improvements to the real estate necessary to its manufacturing, processing, assembling, or other approved use by industrial entities; workforce training; and job development incentive grants;
    2. “Industrial firm” means any corporation, limited liability company, limited liability partnership, 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, assembling, or other approved facility on the site of an industrial development project financed pursuant to this section;
    3. “Job development incentive grant” means an award to a county of funds from its account administered by the Department for Local Government pursuant to KRS 42.4592(1)(a) and (b) for the use by the county to encourage job development for those industrial development projects located in that county which create at least twenty-five (25) new full-time jobs held by Kentucky residents who receive a minimum wage of at least one hundred thirty percent (130%) of the federal minimum wage. Each job development incentive grant shall be limited to five thousand dollars ($5,000) for each job created which fulfills the requirements of this subsection. The industrial firm receiving the job development incentive grant shall pay its employees at the project site an average wage equal to or greater than one hundred fifty percent (150%) of the federal minimum wage and shall invest at least ten thousand dollars ($10,000) per new job created. After a fiscal court has received authorization for the job development grant by the Department for Local Government, the county, the industrial firm, and the Department for Local Government shall enter into an agreement committing the grant funds to be disbursed at such time as the industrial firm certifies the authenticity of the following information to be delivered to the county:
      1. The industrial firm has made at least the minimum investment required;
      2. At least twenty-five (25) new full-time Kentucky jobs have been created at the project site by the industrial firm;
      3. No employee at the project site is paid a salary by the industrial firm which is less than one hundred thirty percent (130%) of the federal minimum wage;
      4. The employees at the project site are paid an average wage by the industrial firm at least equal to one hundred fifty percent (150%) of the federal minimum wage;
      5. Each employee hired for the project by the industrial firm shall have worked on a full-time basis at the minimum wages described in this section at least twelve (12) full consecutive months at the site prior to any grant funds disbursement; and
      6. No job created by the industrial firm after twenty-four (24) months from the date of the first eligible hire at the project site shall be considered for the grant.

        If the county is satisfied the information provided is accurate and qualifies the industrial firm for the job development incentive grant as described in the agreement, it shall forward the certified information to the Department for Local Government, which shall make the job development grant disbursement upon sufficient evidence that all terms of the agreement have been met; and

    4. “Regional industrial park” means an industrial development project authorized for a grant award by the Kentucky Economic Development Finance Authority for a minimum of three (3) counties eligible for grant funds provided for in KRS 42.4592(1)(c), which coalition may include a county as approved under subsection (5) of this section.
  11. Findings by the secretary of the Cabinet for Economic Development or the commissioner of the Department for Local Government, provided for in subsections (2)(b), (3), and (5) of this section, shall be made in writing to the affected counties, the Governor, and the Legislative Research Commission.
  12. By October 1 of each odd-numbered year, the secretary of the Cabinet for Economic Development and the commissioner of the Department for Local Government shall each provide, in writing, to the Governor and the Legislative Research Commission a listing of all applications for grants received pursuant to this section subsequent to the last report, indicating which applications were approved or disapproved, with the reason for disapproval when the decision was to disapprove, and a listing of all grants awarded, with the amount of the award, the recipient county, and the related industrial development project.
    1. Projects specifically authorized by appropriations made by the General Assembly in an enacted budget bill, with the funding source identified as funds allocated to individual counties under KRS 42.4592(1)(a) or (b), shall be deemed approved and shall not be subject to the application process established in this section. (14) (a) Projects specifically authorized by appropriations made by the General Assembly in an enacted budget bill, with the funding source identified as funds allocated to individual counties under KRS 42.4592(1)(a) or (b), shall be deemed approved and shall not be subject to the application process established in this section.
    2. Projects described in paragraph (a) of this subsection shall be subject to a memorandum of agreement between the entity identified in the appropriation and the Department for Local Government. The memorandum of agreement shall address the legal requirements for the disbursement and accounting of funds.
    3. Within thirty (30) days of the receipt of a written request from an entity designated in the appropriation for funding related to a project described in paragraph (a) of this subsection, the Department for Local Government shall prepare and send a memorandum of agreement to the designated entity for review and signature. Upon receipt of the signed memorandum of agreement from the designated entity, the Department for Local Government shall release the funds for the project for use by the designated entity.
    4. Funds appropriated for specific projects as described in paragraph (a) of this subsection shall not be expended for any other purpose, provided that the commissioner of the Department for Local Government may, upon written request by a designated entity identifying an extraordinary circumstance or emergency situation, approve the reallocation of funds appropriated for a specific project as described in paragraph (a) of this subsection to the extent necessary to address the extraordinary circumstance or emergency situation. Any approval under this paragraph shall be made in writing, and shall be reported to the State Budget Director and the Interim Joint Committee on Appropriations and Revenue within thirty (30) days of the approval being made.

History. Enact. Acts 1992, ch. 107, § 6, effective July 1, 1992; 1994, ch. 18, § 2, effective July 15, 1994; 1994, ch. 499, § 6, effective July 15, 1994; 1996, ch. 194, § 1, effective July 15, 1996; 1998, ch. 170, § 2, effective July 15, 1998; 2000, ch. 300, § 1, effective July 14, 2000; 2001, ch. 34, § 2, effective June 21, 2001; 2002, ch. 338, § 1, effective July 15, 2002; 2006, ch. 210, § 2, effective July 12, 2006; 2007, ch. 47, § 19, effective June 26, 2007; 2008, ch. 123, § 1, effective July 15, 2008; 2010, ch. 117, § 25, effective July 15, 2010.

Legislative Research Commission Notes.

(7/15/2008). 2008 Ky. Acts chs. 123, sec. 2 provides that amendments made to this section by that Act “shall apply to projects beginning with those authorized in the 2008-2010 biennial budget.”

(6/21/2001). A reference to “subsection (9)” in subsection (3) of this statute has been changed in codification to “subsection (10)” under KRS 7.136(1)(e) and (h). In 2000 Ky. Acts ch. 300, sec. 1, the existing subsection (9) was renumbered as subection (10), but an internal reference to that subsection in the existing language of this statute was overlooked.

Research References and Practice Aids

2020-2022 Budget Reference.

See State/Executive Branch Budget, 2021 Ky. Acts ch. 169, Pt. I, A, 12, (1) at 1065.See State/Executive Branch Budget, 2021 Ky. Acts ch. 169, Pt. I, A, 12, (2) at 1066.See State/Executive Branch Budget, 2021 Ky. Acts ch. 169, Pt. I, A, 12, (4) at 1066.

42.4592. Allocation of remaining moneys in local government economic development fund.

  1. Moneys remaining in the local government economic development fund following the transfer of moneys to the local government economic assistance fund provided for in KRS 42.4585 shall be allocated as follows:
    1. Thirty-three and one-third percent (33-1/3%) shall be allocated to each coal producing county on the basis of the ratio of total coal severed in the current and preceding four (4) years in each respective county to the total coal severed statewide in the current and four (4) preceding years;
    2. Thirty-three and one-third percent (33-1/3%) shall be allocated quarterly to each coal-producing county on the basis of the following factors, which shall be computed for the current and four (4) preceding years, and which shall be equally weighted:
      1. Percentage of employment in mining in relation to total employment in the respective county;
      2. Percentage of earnings from mining in relation to total earnings in the respective county; and
      3. Surplus labor rate; and
    3. Thirty-three and one-third percent (33-1/3%) shall be reserved for expenditure for industrial development projects benefiting two (2) or more coal-producing counties. For purposes of this paragraph, “coal-producing county” shall mean a county which has produced coal in the current or any one of the four (4) preceding years.
    1. For purposes of paragraph (b) of subsection (1) of this section, “percentage of employment in mining” and “percentage of earnings from mining” shall be provided by the Department of Workforce Development in the Education and Labor Cabinet, and “surplus labor rate” shall be the rate published for the latest available five (5) year period by the Department of Workforce Development as provided in paragraph (b) of this subsection. (2) (a) For purposes of paragraph (b) of subsection (1) of this section, “percentage of employment in mining” and “percentage of earnings from mining” shall be provided by the Department of Workforce Development in the Education and Labor Cabinet, and “surplus labor rate” shall be the rate published for the latest available five (5) year period by the Department of Workforce Development as provided in paragraph (b) of this subsection.
      1. Each year the Department of Workforce Development shall estimate surplus labor for each county and for the Commonwealth and shall annually publish an estimate of the surplus labor rate for each county and the Commonwealth. (b) 1. Each year the Department of Workforce Development shall estimate surplus labor for each county and for the Commonwealth and shall annually publish an estimate of the surplus labor rate for each county and the Commonwealth.
      2. The estimate of surplus labor for each county and for the Commonwealth shall be made using the best practical method available at the time the estimates are made. In determining the method to be adopted, the Department of Workforce Development may consult with knowledgeable individuals, including but not limited to the Office of the United States Bureau of Labor Statistics, state and national researchers, state and local officials, and staff of the Legislative Research Commission. The description of the method used to estimate surplus labor shall be reported in each annual publication provided for in subparagraph 1. of this paragraph.
      3. For purposes of this section, “surplus labor” means the total number of residents who can be classified as unemployed or as discouraged workers, and “surplus labor rate” means the percentage of the potential civilian labor force which is surplus labor.
  2. The funds allocated under the provisions of paragraphs (a) and (b) of subsection (1) of this section shall retain their identity with respect to the county to which they are attributable, and a separate accounting of available moneys within the fund shall be maintained for the respective counties. Accounting for funds allocated under the provisions of this section shall be by the Department for Local Government.

HISTORY: Enact. Acts 1992, ch. 107, § 7, effective July 1, 1992; 1994, ch. 224, § 16, effective July 15, 1994; 1996, ch. 271, § 4, effective July 15, 1996; 1998, ch. 69, § 11, effective July 15, 1998; 2006, ch. 211, § 10, effective July 12, 2006; 2007, ch. 47, § 20, effective June 26, 2007; 2009, ch. 11, § 8, effective June 25, 2009; 2010, ch. 117, § 26, effective July 15, 2010; 2013, ch. 49, § 1, effective June 25, 2013; 2016 ch. 110, § 3, effective July 1, 2016; 2019 ch. 146, § 5, effective June 27, 2019; 2022 ch. 236, § 17, effective July 1, 2022.

Research References and Practice Aids

2020-2022 Budget Reference.

See State/Executive Branch Budget, 2021 Ky. Acts ch. 169, Pt. I, A, 12, (1) at 1065.See State/Executive Branch Budget, 2021 Ky. Acts ch. 169, Pt. I, A, 12, (2) at 1066.See State/Executive Branch Budget, 2021 Ky. Acts ch. 169, Pt. I, A, 12, (3) at 1066.See State/Executive Branch Budget, 2021 Ky. Acts ch. 169, Pt. I, A, 12, (4) at 1066.See State/Executive Branch Budget, 2021 Ky. Acts ch. 169, Pt. V, A, 2 at 1157.

42.4595. Authority for administrative regulations.

The Department for Local Government may promulgate administrative regulations to implement the provisions of KRS 42.4582 , 42.4585 , 42.4592 , and KRS 42.4588 as it relates to KRS 42.4592 (1)(a) and (b). The Cabinet for Economic Development or the Kentucky Economic Development Finance Authority may promulgate administrative regulations to implement the provisions of KRS 42.4588 as it relates to KRS 42.4592(1)(c).

History. Enact. Acts 1992, ch. 107, § 8, effective July 1, 1992; 1994, ch. 499, § 7, effective July 15, 1994; 1998, ch. 69, § 12, effective July 15, 1998; 2001, ch. 34, § 3, effective June 21, 2001; 2002, ch. 338, § 45, effective July 15, 2002; 2006, ch. 210, § 3, effective July 12, 2006; 2007, ch. 47, § 21, effective June 26, 2007; 2010, ch. 117, § 27, effective July 15, 2010.

Research References and Practice Aids

2020-2022 Budget Reference.

See State/Executive Branch Budget, 2021 Ky. Acts ch. 169, Pt. I, A, 12, (1) at 1065.See State/Executive Branch Budget, 2021 Ky. Acts ch. 169, Pt. I, A, 12, (2) at 1066.See State/Executive Branch Budget, 2021 Ky. Acts ch. 169, Pt. I, A, 12, (4) at 1066.

42.460. Independent annual audit and certification of compliance — Exception.

Except as provided in KRS 91A.040(7)(b), any assistance granted under KRS 42.450 to 42.495 shall include an agreement that an independent annual audit shall be conducted and that the audit report shall include a certification that the funds were expended for the purpose intended. A copy of the audit and certification of compliance shall be forwarded to the Department for Local Government, in the case of assistance granted from the local government economic assistance fund or the local government economic development fund as allocated in KRS 42.4592(1)(a) and (b), or to the Cabinet for Economic Development and the Kentucky Economic Development Finance Authority, in the case of assistance granted from the local government economic development fund, within eighteen (18) months after the end of the fiscal year.

History. Enact. Acts 1980, ch. 394, § 3, effective July 1, 1980; 1982, ch. 393, § 30, effective July 15, 1982; 1986, ch. 374, § 6, effective July 15, 1986; 1990, ch. 52, § 4, effective July 13, 1990; 1992, ch. 107, § 9, effective July 1, 1992; 1994, ch. 499, § 8, effective July 15, 1994; 1998, ch. 69, § 13, effective July 15, 1998; 2001, ch. 34, § 4, effective June 21, 2001; 2002, ch. 338, § 46, effective July 15, 2002; 2006, ch. 210, § 4, effective July 12, 2006; 2007, ch. 47, § 22, effective June 26, 2007; 2010, ch. 117, § 28, effective July 15, 2010; 2018 ch. 10, § 3, effective July 14, 2018; 2019 ch. 91, § 3, effective June 27, 2019.

Research References and Practice Aids

2020-2022 Budget Reference.

See State/Executive Branch Budget, 2021 Ky. Acts ch. 169, Pt. I, A, 12, (1) at 1065.See State/Executive Branch Budget, 2021 Ky. Acts ch. 169, Pt. I, A, 12, (2) at 1066.See State/Executive Branch Budget, 2021 Ky. Acts ch. 169, Pt. I, A, 12, (4) at 1066.

42.465. Approval of assistance.

No assistance shall be approved in excess of funds received and transferred to the account of any respective unit of government, and no assistance shall be approved for a unit of government failing to submit the certification of compliance required in KRS 42.460 .

History. Enact. Acts 1980, ch. 394, § 4, effective July 1, 1980.

Research References and Practice Aids

2020-2022 Budget Reference.

See State/Executive Branch Budget, 2021 Ky. Acts ch. 169, Pt. I, A, 12, (1) at 1065.See State/Executive Branch Budget, 2021 Ky. Acts ch. 169, Pt. I, A, 12, (2) at 1066.See State/Executive Branch Budget, 2021 Ky. Acts ch. 169, Pt. I, A, 12, (4) at 1066.

42.470. Allocation of funds among counties — Limitation of reduction of funds to counties and their incorporated areas.

Moneys in the local government economic assistance fund shall be allocated among the counties as follows:

  1. Funds allocated under KRS 42.4585 :
    1. Sixty percent (60%) shall be distributed to each coal producing county on the basis of the ratio of coal severed in each respective county to the coal severed statewide.
    2. Thirty percent (30%) shall be distributed to each coal producing county on the basis of per capita income (inverse order), ton miles of resource roads and population, equally weighted.
    3. Ten percent (10%) shall be distributed to non-coal producing counties impacted by the transport of coal on the basis of geographic area, ton miles of resource roads, and per capita income (inverse order), weighted on a basis of 30/100, 40/100, and 30/100, respectively. The expenditure of such funds shall be limited to the categories of projects set out in KRS 42.455(2)(c). All counties shall receive an annual payment based on the average of total ton miles within the county during the most recent three (3) year period. To qualify for the funds distributed under the provisions of this paragraph, a county must have within its geographic boundaries in any single year twenty-five hundredths of one percent (0.25%) of the total ton miles within coal impact counties during the most recent three (3) year period.
    1. All funds allocated under KRS 42.450(2) shall be distributed among the mineral producing counties on the basis of the tax collected on minerals severed in each respective county. (2) (a) All funds allocated under KRS 42.450(2) shall be distributed among the mineral producing counties on the basis of the tax collected on minerals severed in each respective county.
    2. In no event shall the amount of funds distributed to a mineral producing county, and to the incorporated areas within that county under KRS 42.475 , in any given quarter be reduced by greater than fifty percent (50%) as a result of any refund of the tax imposed on the severance and processing of minerals. If a refund of tax occurs and a county’s allocated share of the refund amount is greater than fifty percent (50%) of the quarterly distribution due that county and its incorporated areas, the remainder shall carry forward to be offset in successive quarters as necessary until it is satisfied in full.

History. Enact. Acts 1980, ch. 394, § 5, effective July 1, 1980; 1992, ch. 107, § 3, effective July 1, 1992; 1994, ch. 488, § 4, effective July 15, 1994; 2016 ch. 110, § 4, effective July 1, 2016.

NOTES TO DECISIONS

1.County in Which Tax Collected.

Since “severance” of coal means the parting of the coal from the earth in which it has been imbedded, the county in which underground seams of coal were located was entitled to an allocation portion of the state severance tax collections rather than the county in which mouths of mines through which the same coal was brought to the surface were located. Clay County v. Leslie County, 531 S.W.2d 524, 1975 Ky. LEXIS 47 ( Ky. 1975 ) (decided under prior law).

Research References and Practice Aids

2020-2022 Budget Reference.

See State/Executive Branch Budget, 2021 Ky. Acts ch. 169, Pt. I, A, 11, (1) at 1065.See State/Executive Branch Budget, 2021 Ky. Acts ch. 169, Pt. I, A, 12, (1) at 1066.See State/Executive Branch Budget, 2021 Ky. Acts ch. 169, Pt. I, A, 12, (2) at 1066.See State/Executive Branch Budget, 2021 Ky. Acts ch. 169, Pt. I, A, 12, (4) at 1066.

42.472. Use of tar sands moneys by counties.

Moneys from tar sands distributed to counties under KRS 42.470(2) shall be used for economic development purposes as approved by the Department for Local Government.

History. Enact. Acts 2002, ch. 367, § 3, effective July 15, 2002; 2007, ch. 47, § 23, effective June 26, 2007; 2010, ch. 117, § 29, effective July 15, 2010.

Research References and Practice Aids

2020-2022 Budget Reference.

See State/Executive Branch Budget, 2021 Ky. Acts ch. 169, Pt. I, A, 12, (1) at 1065.See State/Executive Branch Budget, 2021 Ky. Acts ch. 169, Pt. I, A, 12, (2) at 1066.See State/Executive Branch Budget, 2021 Ky. Acts ch. 169, Pt. I, A, 12, (4) at 1066.

42.475. Allocation of funds to incorporated areas — Allocation to counties.

  1. Except as provided in subsection (2) of this section, ten percent (10%) of the funds allocated to each county under the provisions of KRS 42.470 shall be allotted to the incorporated areas within the county based on the ratio that the population of each incorporated area bears to the total population of all the incorporated areas within the county; except that incorporated areas shall not be eligible for funds allocated to counties under the provisions of KRS 42.490 and 1980 Acts, ch. 394, sec. 11.
  2. If the amount of funds to be allotted to an incorporated area under subsection (1) of this section is less than twenty-five dollars ($25) in any given quarter, then the allotment shall not be made and the applicable funds shall instead be distributed to the county to which they were allocated under KRS 42.470 .

History. Enact. Acts 1980, ch. 394, § 6, effective July 1, 1980; 2016 ch. 110, § 5, effective July 1, 2016.

Compiler's Notes.

Acts 1980, ch. 394, § 11, referred to herein, contained an appropriation for the fiscal year 1979-80.

Opinions of Attorney General.

In applying the program to incorporated areas under this section the state is only required to determine whether the applicant exists as an incorporated city; it is not its duty to determine precisely what municipal functions are being carried on. The statute must be accepted and applied as it is written. OAG 82-558 .

Research References and Practice Aids

2020-2022 Budget Reference.

See State/Executive Branch Budget, 2021 Ky. Acts ch. 169, Pt. I, A, 12, (1) at 1065.See State/Executive Branch Budget, 2021 Ky. Acts ch. 169, Pt. I, A, 12, (2) at 1066.See State/Executive Branch Budget, 2021 Ky. Acts ch. 169, Pt. I, A, 12, (4) at 1066.

42.480. Estimate of funds to be allocated — Remittance of funds.

  1. On or before July 1, 1992, and each year thereafter, the commissioner of the Department for Local Government shall provide the Cabinet for Economic Development, the Kentucky Economic Development Finance Authority, and the legislative body of each local government eligible for funds under the provisions of KRS 42.450 to 42.495 , an estimate of the funds that will be allocated to the local government for fiscal year 1992-93, and each year thereafter.
  2. On or before the fifteenth of the first month of a quarter, the commissioner of the Department for Local Government shall cause to be remitted to the legislative bodies of the local governments eligible for funds from the local government economic assistance fund, the funds allocated to the respective local governments for the prior quarter; except that the remittance for the last quarter of a fiscal year shall be made after the close of the fiscal year accounting records and shall be adjusted to provide the balance of the annual allocation due the local government.

History. Enact. Acts 1980, ch. 394, § 7, effective July 1, 1980; 1986, ch. 374, § 7, effective July 15, 1986; 1992, ch. 107, § 10, effective July 1, 1992; 1994, ch. 499, § 9, effective July 15, 1994; 1998, ch. 69, § 14, effective July 15, 1998; 2001, ch. 34, § 5, effective June 21, 2001; 2002, ch. 338, § 47, effective July 15, 2002; 2007, ch. 47, § 24, effective June 26, 2007; 2010, ch. 117, § 30, effective July 15, 2010.

Opinions of Attorney General.

Under the literal wording of this section, the allocating process of the Finance and Administration Cabinet cannot be properly and fairly applied except in terms of the cities actually in existence and eligible on or before July 1, 1981, or on or before July 1 of each year thereafter; thus the inevitable starting point in the whole program of allocation is the estimate of allocation to then existing eligible local governments. In this manner the actual schedule of payment to eligible local governments, under subsection (2) of this section, must be followed. OAG 82-558 .

Research References and Practice Aids

2020-2022 Budget Reference.

See State/Executive Branch Budget, 2021 Ky. Acts ch. 169, Pt. I, A, 12, (1) at 1065.See State/Executive Branch Budget, 2021 Ky. Acts ch. 169, Pt. I, A, 12, (2) at 1066.See State/Executive Branch Budget, 2021 Ky. Acts ch. 169, Pt. I, A, 12, (4) at 1066.

42.485. Funds not to lapse.

Moneys in the local government economic assistance fund are hereby appropriated, and shall be treated as a continuing appropriation and shall not lapse at the end of the fiscal year.

History. Enact. Acts 1980, ch. 394, § 8, effective July 1, 1980.

Research References and Practice Aids

2020-2022 Budget Reference.

See State/Executive Branch Budget, 2021 Ky. Acts ch. 169, Pt. I, A, 12, (1) at 1065.See State/Executive Branch Budget, 2021 Ky. Acts ch. 169, Pt. I, A, 12, (2) at 1066.See State/Executive Branch Budget, 2021 Ky. Acts ch. 169, Pt. I, A, 12, (4) at 1066.

42.490. Transfer of fund balances of county.

All unencumbered fund balances in each county’s account established under KRS 42.300 , and all unencumbered fund balances in each county’s account established under KRS 42.330 , and all unencumbered fund balances in each county’s account established under KRS 177.970 , shall be transferred to that county’s account established to implement the provisions of KRS 42.450 to 42.495 . Funds transferred may be used for those purposes authorized by KRS 42.450 to 42.495 .

History. Enact. Acts 1980, ch. 394, § 9, effective July 1, 1980.

Research References and Practice Aids

2020-2022 Budget Reference.

See State/Executive Branch Budget, 2021 Ky. Acts ch. 169, Pt. I, A, 12, (1) at 1065.See State/Executive Branch Budget, 2021 Ky. Acts ch. 169, Pt. I, A, 12, (2) at 1066.See State/Executive Branch Budget, 2021 Ky. Acts ch. 169, Pt. I, A, 12, (4) at 1066.

Opinions of Attorney General.

Where this section transfers the coal haul road money from unencumbered fund balances under KRS 42.300 (repealed), KRS 42.330 (repealed) and KRS 177.970 (repealed) to the local government assistance fund under KRS 42.450 et seq. of a county which has no county road over which coal is being hauled, the county through the fiscal court can spend the funds on one or more of the priority categories listed under subsections 2(a) through 2(i) of KRS 42.455 including any county road under subsection 2(c) within the limits of KRS 178.010 , even though no coal is hauled over it. OAG 81-15 .

42.495. Effect of reduction of local general tax effort.

  1. If a qualifying local government unit reduces its general tax effort for any fiscal year, below the level of fiscal year 1991-92, that governmental unit shall forfeit funds that would otherwise be available under the provisions of KRS 42.450 to 42.495 on a dollar-for-dollar basis.
  2. For purposes of this section, “general tax effort” shall mean the total revenues raised in fiscal year 1991-92 from the levy of all of the taxing district’s taxes in fiscal year 1991-92. Taxes based upon the 1991 assessment of property shall be considered to be taxes levied and collected for fiscal year 1991-92.

History. Enact. Acts 1980, ch. 394, § 10, effective July 1, 1980; 1992, ch. 107, § 11, effective July 1, 1992.

Research References and Practice Aids

2020-2022 Budget Reference.

See State/Executive Branch Budget, 2021 Ky. Acts ch. 169, Pt. I, A, 12, (1) at 1065.See State/Executive Branch Budget, 2021 Ky. Acts ch. 169, Pt. I, A, 12, (2) at 1066.See State/Executive Branch Budget, 2021 Ky. Acts ch. 169, Pt. I, A, 12, (4) at 1066.

Opinions of Attorney General.

The forfeiture of funds mentioned in this section can only apply to an eligible city which has exercised the General Assembly’s direction in KRS 92.280 and has engaged in a general tax effort, as defined in KRS 42.495(2). OAG 82-558 .

Considering the literal wording of this section, any city incorporated as such after the fiscal year of 1979-80 and thus not having a general tax effort, as called for in the statute, does not come within the operative effect of the statute. OAG 82-558 .

Investment Commission

42.500. State Investment Commission — Powers.

  1. There shall be a State Investment Commission composed of:
    1. The State Treasurer who shall be chairman;
    2. The secretary of the Finance and Administration Cabinet;
    3. The state controller; and
    4. Two (2) persons appointed by the Governor.
  2. The individuals appointed by the Governor shall be selected as follows: one (1) to be selected from a list of five (5) submitted to the Governor by the Kentucky Bankers Association, and one (1) to be selected from a list of five (5) submitted to the Governor by the Independent Community Bankers Association.
  3. The State Investment Commission shall meet at least quarterly to review investment performance and conduct other business. This provision shall not prohibit the commission from meeting more frequently as the need arises.
  4. The State Treasurer and secretary of the Finance and Administration Cabinet shall each have the authority to designate, by an instrument in writing over his or her signature and filed with the secretary of the commission as a public record of the commission, an alternate with full authority to:
    1. Attend in the member’s absence, for any reason, any properly convened meeting of the commission; and
    2. Participate in the consideration of, and vote upon, business and transactions of the commission.

      Each alternate shall be a person on the staff of the appointing member or in the employ of the appointing member’s state agency or department.

  5. 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 for only a specific meeting or specified business;
    2. Be shown on the face of the appointing instrument to be a continuing designation, for a period of no more than four (4) years, whenever the appointing member is unable to attend; or
    3. Be revoked at any time by the appointing member in an instrument in writing, over his or her signature, filed with the secretary of the commission as a public record of the commission.
  6. Any person transacting business with, or materially affected by, the business of the commission may 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 the designation, and, if it is of a continuing nature, whether and when the designation has been revoked. The joint certificate shall be made and delivered to the person requesting it within a reasonable time after it has been requested in writing, with acceptable identification of the business or transaction to which it refers and the requesting person’s interest in the business or transaction.
  7. Any three (3) persons who are members of the commission or alternates authorized under subsections (4) and (5) of this section shall constitute a quorum and may, by majority vote, transact any business of the commission. Any three (3) members of the commission may call a meeting.
  8. The provisions of KRS 61.070 shall not apply to members of the commission.
  9. The commission shall have authority and may, if in its opinion the cash in the State Treasury is in excess of the amount required to meet current expenditures, invest any and all of the excess cash in:
    1. Obligations and contracts for future delivery of obligations backed by the full faith and credit of the United States or a United States government agency, including but not limited to:
      1. United States Treasury;
      2. Export-Import Bank of the United States;
      3. Farmers Home Administration;
      4. Government National Mortgage Corporation; and
      5. Merchant Marine bonds;
    2. Obligations of any corporation of the United States government or government-sponsored enterprise, including but not limited to:
      1. Federal Home Loan Mortgage Corporation;
      2. Federal Farm Credit Banks:
        1. Bank for Cooperatives;
        2. Federal Intermediate Credit Banks; and
        3. Federal Land Banks;
      3. Federal Home Loan Banks;
      4. Federal National Mortgage Association; and
      5. Tennessee Valley Authority obligations;
    3. Collateralized or uncollateralized certificates of deposit, issued by banks rated in one (1) of the three (3) highest categories by a nationally recognized statistical rating organization or other interest-bearing accounts in depository institutions chartered by this state or by the United States, except for shares in mutual savings banks;
    4. Bankers acceptances for banks rated in the highest short-term category by a nationally recognized statistical rating organization;
    5. Commercial paper rated in the highest short-term category by a nationally recognized statistical rating organization;
    6. Securities issued by a state or local government, or any instrumentality or agency thereof, in the United States, and rated in one (1) of the three (3) highest long-term categories by a nationally recognized statistical rating organization;
    7. United States denominated corporate, Yankee, and Eurodollar securities, excluding corporate stocks, issued by foreign and domestic issuers, including sovereign and supranational governments, rated in one (1) of the three (3) highest long-term categories by a nationally recognized statistical rating organization;
    8. Asset-backed securities rated in the highest category by a nationally recognized statistical rating organization;
    9. Shares of mutual funds, each of which shall have the following characteristics:
      1. The mutual fund shall be an open-end diversified investment company registered under Federal Investment Company Act of 1940, as amended;
      2. The management company of the investment company shall have been in operation for at least five (5) years;
      3. The mutual fund shall be rated in the highest category by a nationally recognized statistical rating organization;
      4. All of the securities in the mutual fund shall be eligible investments pursuant to this section; and
    10. State and local delinquent property tax claims which upon purchase shall become certificates of delinquency secured by interests in real property not to exceed twenty-five million dollars ($25,000,000) in the aggregate. For any certificates of delinquency that have been exonerated pursuant to KRS 132.220(5), the Department of Revenue shall offset the loss suffered by the Finance and Administration Cabinet against subsequent local distributions to the affected taxing districts as shown on the certificate of delinquency.
  10. The State Investment Commission shall promulgate administrative regulations for the investment and reinvestment of state funds in shares of mutual funds, and the regulations shall specify:
    1. The long and short term goals of any investment;
    2. The specification of moneys to be invested;
    3. The amount of funds which may be invested per instrument;
    4. The qualifications of instruments; and
    5. The acceptable maturity of investments.
  11. Any investment in obligations and securities pursuant to subsection (9) of this section shall satisfy this section if these obligations are subject to repurchase agreements, provided that delivery of these obligations is taken either directly or through an authorized custodian.
    1. Income earned from investments made pursuant to this section shall accrue to the credit of the investment income account of the general fund, except that interest from investments of excess cash in the road fund shall be credited to the surplus account of the road fund and interest from investments of excess cash in the game and fish fund shall be credited to the game and fish fund, interest earned from investments of imprest cash funds and funds in the trust and revolving fund for each state public university shall be credited to the appropriate institutional account, and interest earned from the investment of funds accumulated solely by means of contributions and gifts shall not be diverted to any purpose other than that stipulated by the donor, when the donor shall have designated the use to which the interest shall be placed. (12) (a) Income earned from investments made pursuant to this section shall accrue to the credit of the investment income account of the general fund, except that interest from investments of excess cash in the road fund shall be credited to the surplus account of the road fund and interest from investments of excess cash in the game and fish fund shall be credited to the game and fish fund, interest earned from investments of imprest cash funds and funds in the trust and revolving fund for each state public university shall be credited to the appropriate institutional account, and interest earned from the investment of funds accumulated solely by means of contributions and gifts shall not be diverted to any purpose other than that stipulated by the donor, when the donor shall have designated the use to which the interest shall be placed.
    2. Except as otherwise provided by law, or by the obligations and covenants contained in resolutions and trust indentures adopted or entered into for state bond issues, interest earned from the investment of moneys appropriated to the capital construction accounts, trust and agency accounts, and trust and agency revolving accounts shall accrue to the capital construction investment income account.
    3. If there is a revenue shortfall, as defined in KRS 48.010 , of five percent (5%) or less, the secretary of the Finance and Administration Cabinet, upon the recommendation of the state budget director, may direct the transfer of excess unappropriated capital construction investment income to the general fund investment income account. The amount of the transfer shall not exceed the amount of the shortfall in general fund revenues.
    4. If the capital construction investment income is less than that amount appropriated by the General Assembly, the secretary of the Finance and Administration Cabinet may, upon recommendation of the state budget director, direct the transfer of excess unappropriated general fund investment income to the capital construction investment income account. The transfer of general fund investment income revenues to the capital construction investment income account shall be made only when the actual general fund revenues are in excess of the enacted estimates under KRS 48.120 and shall be limited to the amount of the excess general fund revenues. The amount of the transfer shall not exceed the amount of the shortfall in the capital construction fund revenues.
  12. The authority granted by this section to the State Investment Commission shall not extend to any funds that are specifically provided by law to be invested by some other officer or agency of the state government.
  13. The authority granted by this section to the State Investment Commission shall only be exercised pursuant to the administrative regulations mandated by KRS 42.525 .
  14. Each member of the State Investment Commission shall post bond for his or her acts or omissions as a member thereof identical in amount and kind to that posted by the State Treasurer.

History. Repealed, reenacted and amended Acts 1982, ch. 382, § 6, effective July 15, 1982; 1982, ch. 300, § 5, effective July 15, 1982; 1982, ch. 450, § 58, effective July 1, 1983; 1984, ch. 324, § 60, effective July 13, 1984; 1986, ch. 408, § 1, effective July 15, 1986; 1988, ch. 368, § 2, effective July 15, 1988; 1990, ch. 277, § 1, effective July 13, 1990; 1990, ch. 291, § 1, effective July 13, 1990; 1990, ch. 294, § 1, effective July 13, 1990; 1996, ch. 101, § 1, effective July 15, 1996; 1997 (1st Ex. Sess.), ch. 4, § 36, effective May 30, 1997; 1998, ch. 209, § 19, effective March 30, 1998; 2005, ch. 85, § 54, effective June 20, 2005; 2009, ch. 78, § 28, effective June 25, 2009; 2013, ch. 60, § 1, effective June 25, 2013; 2021 ch. 159, § 1, effective June 29, 2021.

Compiler’s Notes.

This section was formerly compiled as KRS 41.380 (Acts 1952, ch. 86; 1954, ch. 245, § 1, effective June 17, 1954; 1980, ch. 295, § 11, effective July 15, 1980; 1980, ch. 347, § 1, effective January 1, 1982) and was repealed, reenacted and amended as this section by Acts 1982, ch. 382, § 6.

Section 21 of Acts 1998, ch. 209, provided that the 1998 amendments to this section “shall apply for sales of delinquent tax bills made on or after March 1, 1998.”

NOTES TO DECISIONS

1.Constitutionality.

The power to appoint members of boards and agencies within the executive department of government is an essentially executive power which cannot be exercised by any member of the legislative department; accordingly, the former provisions in this section by which the Speaker of the House of Representatives and the President Pro Tem of the Senate were authorized to make appointments to the State Investment Commission were an invalid unconstitutional incursion by the General Assembly, or its designees, into the separation of powers doctrine. Legislative Research Com. by Prather v. Brown, 664 S.W.2d 907, 1984 Ky. LEXIS 300 ( Ky. 1984 ) (Decision prior to 1984 amendment).

Opinions of Attorney General.

Interest earned on investments of funds for the tobacco research-trust fund must accrue to the credit of the general expenditure fund. OAG 70-495 .

The investment authority rests with the state investment commission. OAG 70-495 .

Since this section requires that interest accruing on any state funds be placed in the general fund of the State Treasury, the interest on the area development fund could not be paid to the area development districts. OAG 77-481 .

The State Investment Commission may, under the implied authority of this section, upon the establishment of a basic policy (voted on by a majority of the commission) to be applied under the specific major categories of investment permitted in the statute, have the legal authority to delegate the day-to-day administration of investments to a qualified committee or employee of state government, and by such a policy under the statute, the commission would not thereby be delegating its basic power of discretion or judgment, since by the established policy it would be specifically retaining its discretionary authority. OAG 78-542 .

Interest on funds deposited on behalf of the department of fish and wildlife resources should be credited on a pro rata basis to the game and fish fund to be used to carry out the purposes of KRS Chapter 150 as directed by KRS 150.150 . OAG 78-761 .

Under subsection (3), now subsection (10), of this section interest earned from investment of coal severance economic aid fund grant money shall accrue to the credit of the state’s general expenditure fund. OAG 79-630 .

Interest earned from investments of excess cash involving any fund of the state, and not excepted by subsection (4) of this section accrues to the credit of the general fund, except in the cases of the use of road fund and the game and fish fund; accordingly, the State Investment Commission may invest “excess cash” in the Transportation Fund, the Capital Construction Fund, the Agency Receipt Fund, the Trust and Revolving Fund, the Special Deposit Trust Fund, the Bond Redemption and Interest Fund, and the Bond Turnpike Authority Fund, in the form of term repurchase agreements. OAG 82-29 .

The State Investment Commission has the authority under KRS 41.380(2)(see now KRS 42.500 ) and KRS 386.020(1)( l ) to invest “excess cash” in term repurchase agreements involving United States Treasury Bills since such agreements, in reality, involve the state’s purchase of United States Treasury Bills from a financial institution with an agreement that the financial institution will repurchase the Treasury Bills at some definite future date, not to exceed one year from date of investment. OAG 82-29 .

Purchases under subsection (2) of KRS 41.380 (now subsection (8) of this section) may include “repurchase agreements,” involving United States Treasury Bills which would involve the state’s purchase of the United States Treasury Bills from a financial institution with an agreement that the financial institution would repurchase the Treasury Bills at some definite, future date, not to exceed one year from date of investment; however, such investments must be carefully tailored to meet precisely normal payment schedules of state obligations. OAG 82-209 .

Since proposed “reverse repurchase agreements,” by which the state would sell an investment that it held (such as Treasury Bills) for a specified number of days with the condition that the state repurchase the security at the end of that time, contemplated the use of “excess” funds (in excess of that amount required to meet current state expenditures under normal payment schedules) within the time limits of KRS 41.380(2) (now subsection (8) of this section), such agreements would be valid and permissible on the part of the State Investment Commission. OAG 82-209 .

The authority to engage in “reverse repurchase agreements” is implicit in the express power of investment. OAG 82-209 .

The obvious purpose of KRS 386.020 and 41.380 (now this section) is to derive the maximum possible under marketing conditions from the investment of state money. OAG 82-209 .

Though the term “reverse repurchase agreement” is not found in that total terminology in the statutes, the language of KRS 41.380 (now this section) and 386.020(1)( l ) is broad enough to cover this temporary sale of the securities, since the temporary sale does not negate the basic “investment” posture of the Commission in holding the securities involved in this procedure. OAG 82-209 .

This section may be interpreted to allow the State Investment Commission to invest in mutual funds that invest solely in U.S. government securities, including securities subject to repurchase agreements. OAG 90-20 .

In view of the fact that the Council for Education Technology has the duty to invest funds appropriated for education technology, the State Investment Commission would not have authority under this section to invest those same funds. OAG 91-39 .

The Office of Financial Management and Economic Analysis’ (OFMEA) lending of the Workers’ Compensation Funding Commission’s securities constitutes a violation of KRS 342.1227 based on the statutory authority for OFMEA to invest funds in repurchase agreements combined with the separate accounting and full collateralization of the Commission funds. OAG 93-13 .

Research References and Practice Aids

Cross-References.

Housing obligations, investment of public funds in, KRS 386.030 to 386.050 .

Unemployment compensation administration fund and contingent fund, investment of, KRS 341.296 .

42.505. Authority of State Investment Commission.

Subject to the limitations of KRS Chapters 41 and 42 the State Investment Commission is authorized to make purchases, sales, exchanges, investments, and reinvestments, of any of the securities and investments in which any of the state funds shall have been invested, as well as the proceeds of said investments and any money belonging to said funds.

History. Enact. Acts 1982, ch. 382, § 7, effective July 15, 1982.

42.510. Fixing rates of interest — Relationship to Linked Deposit Investment Program. [Repealed]

History. Enact. Acts 1982, ch. 382, § 7, effective July 15, 1982; 1994, ch. 276, § 7, effective July 15, 1994; 1996, ch. 208, § 1, effective July 15, 1996; repealed by 2019 ch. 125, § 5, effective June 27, 2019.

42.515. Investments to be offered first to Kentucky depositories. [Repealed.]

Compiler’s Notes.

This section (Enact. Act 1982, ch. 382, § 9, effective July 15, 1982) was repealed by Acts 1997 (Ex. Sess.), ch. 4, § 44, effective May 30, 1997.

42.520. Priority for assignment of public funds.

  1. The State Investment Commission shall assign public funds to public depositories by priority based on evidence that the public depository serves the convenience and economic development needs of the communities in which they are chartered to do business. The convenience and needs of communities shall include the need for credit services as well as deposit services.
  2. The State Investment Commission shall only assign priorities to public depositories on the basis of compliance with regulations promulgated pursuant to KRS Chapter 13A.

History. Enact. Acts 1982, ch. 382, § 10, effective July 15, 1982; 1994, ch. 276, § 8, effective July 15, 1994; 1996, ch. 208, § 2, effective July 15, 1996.

42.525. Authority to promulgate administrative regulations.

  1. The State Investment Commission shall promulgate administrative regulations for the investment and reinvestment of state funds and the acquisition, retention, management, and disposition of investments.
  2. The regulations shall specify:
    1. The long and short term goals of any investment;
    2. The specification of moneys to be invested;
    3. The amount of funds which may be invested per instrument;
    4. The qualifications of instruments;
    5. The acceptable maturity of investments;
    6. The investment procedure with respect to in-state and out-of-state depositories provided that funds available for investment shall be offered first to qualified Kentucky depositories consistent with the investment guidelines; and
    7. The distribution method of funds among types of institutions.

History. Enact. Acts 1982, ch. 382, § 11, effective July 15, 1982; 1997 (1st Ex. Sess.), ch. 4, § 37, effective May 30, 1997.

42.530. Quarterly reports of commission.

The State Investment Commission shall render quarterly written reports concerning the performance of each investment to the Legislative Research Commission. The reports may contain recommendations of the commission for legislative or other action to effectuate the purposes and policies of this chapter.

History. Enact. Acts 1982, ch. 382, § 12, effective July 15, 1982.

42.535. Annual reports of agencies holding funds.

Each agency holding funds listed in this section shall make a report according to generally accepted accounting principles of all money received and disbursed by the listed funds during each fiscal year, on or before the fifteenth of July, showing the receipts, expenditures, depositories, rates of interest paid by depositories, investments, and rates of return on investments by each listed fund to the Office of the Controller. The funds which shall be reported are:

  1. Tobacco research trust fund;
  2. The uninsured employers’ fund;
  3. The administrative fund created by KRS 342.440 , also known as the workers’ compensation maintenance fund;
  4. The special claim fund; and
  5. The common school fund.

History. Enact. Acts 1982, ch. 382, § 13, effective July 15, 1982; 1997 (1st Ex. Sess.), ch. 4, § 38, effective May 30, 1997; 1998, ch. 85, § 2, effective July 15, 1998.

Legislative Research Commission Note.

(5/30/97). KRS 342.440 , cited in this statute, was repealed by 1987 (1st Extra. Sess.) Ky. Acts ch. 1, sec. 72(2), effective January 4, 1988.

Opinions of Attorney General.

This section and KRS 42.550 suggest that the Legislature fully expects the Council for Education Technology, in its advisory capacity to the State Board, to invest the education technology funds, as opposed to the State Investment Commission. OAG 91-39 .

42.540. Annual reports of nonprofit fiduciary holding funds for benefit of state organization.

Notwithstanding KRS 41.290 , every nonprofit fiduciary holding funds for the benefit of any form of state organization, including, but not limited to, Eastern Kentucky University, Kentucky State University, Morehead State University, Murray State University, Northern Kentucky University, University of Kentucky, University of Louisville, Western Kentucky University, Kentucky Community and Technical College System, and the State Fair Board shall make a report according to generally accepted accounting principles of all money received and disbursed during each fiscal year, on or before the fifteenth of July, showing receipts, expenditures, depositories, rates of interest paid by depositories, investments, and rates of return in investments to the Office of the Controller. These fiduciaries include, but are not limited to, Eastern Kentucky University Foundation; Kentucky State University Foundation, Inc.; Morehead State University Foundation, Inc.; Morehead Alumni Foundation, Inc.; Eagle Athletic Foundation, Inc.; Murray State University Foundation; Northern Kentucky University Foundation, Inc.; University of Kentucky Research Foundation; University of Kentucky Athletics Association; the Fund for the Advancement of Education and Research in the University of Kentucky Medical Center; Health Care Collection Service, Inc.; McDowell Cancer Network, Inc.; University of Kentucky-Business Partnership Foundation, Inc.; Kentucky Medical Services Foundation, Inc.; University of Louisville Foundation, Inc.; University of Louisville Hospital, Inc.; University of Louisville Institute of Industrial Research, Inc.; University of Louisville Medical School Fund, Inc.; the College Heights Foundation; KFEC Research and Development Foundation, Inc.; Kentucky Export Resources Authority, Inc.; and all similar nonprofit fiduciaries for the benefit of any form of state organization and their successors.

History. Enact. Acts 1982, ch. 382, § 14, effective July 15, 1982; 1990, ch. 325, § 22, effective July 13, 1990; 1997 (1st Ex. Sess.), ch. 1, § 32, effective May 30, 1997; 1997 (1st Ex. Sess.), ch. 4, § 39, effective May 30, 1997.

Legislative Research Commission Note.

(7/28/97). This section was amended by 1997 (1st Extra. Sess.) Ky. Acts ch. 1, sec. 32, and ch. 4, sec. 39, which do not appear to be in conflict and have been compiled together under KRS 7.136(3).

42.545. Annual report of each agency authorized to issue bonds.

Each agency authorized to issue bonds listed in this section shall make a report according to generally accepted accounting principles of all money received and disbursed during each fiscal year, on or before the fifteenth of July, showing the receipts, expenditures, trustees, depositories, rates of interest paid by depositories, investments, and rates of return on investments by each agency to the Office of the Controller. The agencies required to report under this section are Eastern Kentucky University; Kentucky State University; Morehead State University; Murray State University; Northern Kentucky University; University of Kentucky; University of Louisville; Western Kentucky University; Kentucky Community and Technical College System; Kentucky Housing Corporation; Kentucky Higher Education Student Loan Corporation; Kentucky School Building Authority; the Turnpike Authority of Kentucky; the State Property and Buildings Commission; Churchill Downs Authority; State Fair Board; Department of Fish and Wildlife Resources; Water Resources Authority of Kentucky; and any other agency or instrumentality authorized to issue bonds.

History. Enact. Acts 1982, ch. 382, § 15, effective July 15, 1982; 1997 (1st Ex. Sess.), ch. 1, § 33, effective May 30, 1997; 1997 (1st Ex. Sess.), ch. 4, § 40, effective May 30, 1997; 1998, ch. 83, § 5, effective July 15, 1998; 2005, ch. 85, § 55, effective June 20, 2005; 2020 ch. 36, § 1, effective July 15, 2020.

42.550. Annual reports of school funds from Department of Education.

The Department of Education shall make a report according to generally accepted accounting principles of all money received and disbursed from the common school fund and the Support Education Excellence in Kentucky (SEEK) Program to local school districts showing their receipts, expenditures, depositories, rates of interest paid by depositories, investments, and rates of return on investments by each fund to the Office of the Controller for each fiscal year on or before the fifteenth of July.

History. Enact. Acts 1982, ch. 382, § 20, effective July 15, 1982; 1990, ch. 476, Pt. IV, § 117, effective July 13, 1990; 1997 (1st Ex. Sess.), ch. 4, § 41, effective May 30, 1997.

Opinions of Attorney General.

KRS 42.535 and this section suggest that the Legislature fully expects the Council for Education Technology, in its advisory capacity to the State Board, to invest the education technology funds, as opposed to the State Investment Commission. OAG 91-39 .

42.555. Investment commission as Sinking Fund Commission — Sale of stock in Bank of Kentucky.

  1. For the purposes of Section 185 of the Constitution of Kentucky, the State Investment Commission shall constitute the Sinking Fund Commission.
  2. The State Investment Commission may sell the stock in the Bank of Kentucky referred to in Sections 184 and 185 of the Constitution of Kentucky. The State Investment Commission may sell and reinvest the proceeds of the sale of the stock in the Bank of Kentucky from time to time.

History. Enact. Acts 1982, ch. 382, § 21, effective July 15, 1982.

Low-Income Energy Assistance Trust Fund

42.560. Energy assistance trust fund — Allocation of interest.

  1. There is established in the Treasury of the Commonwealth a trust fund to be known as the “Energy Assistance Trust Fund” referred to in KRS 42.560 to 42.572 as the “trust fund.”
  2. The trust fund shall consist of any oil overcharge refunds which become available to the state as a result of litigation for alleged overcharges for crude oil or refined petroleum products sold during the period of time in which federal price controls on such products were in effect, any moneys as may be appropriated by the general fund, and any investment interest earned on the fund.
  3. The fund shall be managed by the state Office of Financial Management within the Office of the Controller and all moneys in excess of the amount to be disbursed in a given fiscal year shall be invested to maximize returns. The principal and any interest earnings of the trust fund shall at no time lapse to the general fund.
  4. The accumulated interest shall be made available as follows:
    1. Fifty percent (50%) to the Finance and Administration Cabinet to be allocated to weatherization services to low-income households; and
    2. Fifty percent (50%) to the Cabinet for Health and Family Services to be allocated to low-income energy assistance services.

The funds to be available for expenditure in any fiscal year shall be appropriated by the General Assembly from the trust fund as provided in KRS 48.300 .

History. Enact. Acts 1986, ch. 262, § 1, effective April 3, 1986; 1988, ch. 10, § 1, effective February 19, 1988; 1990, ch. 321, § 6, effective July 13, 1990; 1998, ch. 426, § 81, effective July 15, 1998; 2000, ch. 46, § 10, effective July 14, 2000; 2005, ch. 85, § 56, effective June 20, 2005; 2005, ch. 99, § 102, effective June 20, 2005; 2012, ch. 69, § 5, effective July 12, 2012; 2012, ch. 158, § 8, effective July 12, 2012.

Legislative Research Commission Note.

(7/12/2012). This statute was amended by 2012 Ky. Acts chs. 69 and 158, which do not appear to be in conflict and have been codified together.

(7/12/2012). 2012 Ky. Acts ch. 158, sec. 82, provides: “The Finance and Administration Cabinet, which is assigned the functions, duties, and responsibilities associated with the administration of the weatherization program operated in accordance with the requirements for funding received from the United States Department of Energy and any subordinate entities in Executive Order 2011-353 and this Act, is hereby authorized to engage and contract with the Kentucky Housing Corporation to operate and manage the weatherization program if the cabinet deems it to be in the best interest of the weatherization program and the Commonwealth of Kentucky.”

42.562. Low-income energy assistance trust fund board. [Repealed.]

Compiler’s Notes.

This section (Enact. Acts 1986, ch. 262, § 2, effective April 1, 1986) was repealed by Acts 1988, ch. 10, § 4, effective February 19, 1988.

42.564. Review of investments — Estimate of funds available. [Repealed.]

Compiler’s Notes.

This section (Enact. Acts 1986, ch. 262, § 3, effective April 1, 1986) was repealed by Acts 1988, ch. 10, § 4, effective February 19, 1988.

42.566. Energy assistance trust fund — Allocation of appropriations.

The funds appropriated by the General Assembly from the energy assistance trust fund shall be expended in a manner consistent with the judgments and settlements, as amended, which produced the oil overcharge refunds, as follows:

  1. The sum of five hundred thousand dollars ($500,000) or eight percent (8%) of the amount appropriated each fiscal year, whichever is greater, shall be distributed annually to the Energy and Environment Cabinet for expenditure in the Institutional Conservation Program established pursuant to Part G of Title III of the Energy Policy and Conservation Act, 42 U.S.C. secs. 6371 et seq. The source of these funds shall be deemed to be the trust funds produced by the Stripper Well litigation, In Re Department of Energy Stripper Well Exemption Litigation, D.C. Kan., M.D.L. No. 378, and the Diamond Shamrock litigation, Diamond Shamrock Refining Co. v. Standard Oil of Indiana, D.C. Ind., Civil Action No. C-84-1432, and interest accumulated thereon; and
  2. The balance of the trust funds appropriated for expenditure in any fiscal year shall be distributed as follows:
    1. Forty percent (40%) to the Finance and Administration Cabinet to be allocated to the cabinet’s program for weatherization of low-income households established pursuant to Part A of the Energy Conservation and Existing Buildings Act of 1976, 42 U.S.C. secs. 6861 et seq.; and
    2. Sixty percent (60%) to the Cabinet for Health and Family Services to be allocated to the cabinet’s program for energy crisis or prevention services for low-income households established pursuant to the Low-Income Home Energy Assistance Act of 1981, 42 U.S.C. secs. 8621 et seq.

History. Enact. Acts 1986, ch. 262, § 4, effective April 3, 1986; 1988, ch. 10, § 2, effective February 19, 1988; 1990, ch. 325, § 23, effective July 13, 1990; 1998, ch. 426, § 82, effective July 15, 1998; 2005, ch. 99, § 103, effective June 20, 2005; 2010, ch. 24, § 33, effective July 15, 2010; 2012, ch. 69, § 6, effective July 12, 2012; 2012, ch. 158, § 9, effective July 12, 2012.

Legislative Research Commission Note.

(7/12/2012). This statute was amended by 2012 Ky. Acts chs. 69 and 158, which do not appear to be in conflict and have been codified together.

(7/12/2012). 2012 Ky. Acts ch. 158, sec. 82, provides: “The Finance and Administration Cabinet, which is assigned the functions, duties, and responsibilities associated with the administration of the weatherization program operated in accordance with the requirements for funding received from the United States Department of Energy and any subordinate entities in Executive Order 2011-353 and this Act, is hereby authorized to engage and contract with the Kentucky Housing Corporation to operate and manage the weatherization program if the cabinet deems it to be in the best interest of the weatherization program and the Commonwealth of Kentucky.”

(6/8/2011). The Reviser of Statutes has corrected the internal numbering of subdivisions of this statute from the way they appeared in 2010 Ky. Acts ch. 24, sec. 33, under the authority of KRS 7.136 .

42.568. Withdrawal of funds. [Repealed.]

Compiler’s Notes.

This section (Enact. Acts 1986, ch. 262, § 5, effective April 3, 1986) was repealed by Acts 1988, ch. 10, § 4, effective February 19, 1988.

42.570. Limitation on expenditures. [Repealed.]

Compiler’s Notes.

This section (Enact. Acts 1986, ch. 262, § 6, effective April 3, 1986) was repealed by Acts 1988, ch. 10, § 4, effective February 19, 1988.

42.572. Annual status report.

The State Office of Financial Management shall prepare and submit to the Legislative Research Commission a report by July 30 of each year on the operational and financial status of the fund.

History. Enact. Acts 1986, ch. 262, § 7, effective April 3, 1986; 1988, ch. 10, § 3, effective February 19, 1988; 1990, ch. 321, § 7, effective July 13, 1990; 2000, ch. 46, § 11, effective July 14, 2000.

42.574. Administrative regulations. [Repealed.]

Compiler’s Notes.

This section (Enact. Acts 1986, ch. 262, § 8, effective April 3, 1986) was repealed by Acts 1988, ch. 10, § 4, effective February 19, 1988.

Kentucky Bluegrass Turns Green Program

42.580. Definitions for KRS 42.580 to 42.588.

As used in KRS 42.580 to 42.588 :

  1. “Cabinet” means the Finance and Administration Cabinet;
  2. “Demand-side management” has the same meaning as in KRS 278.010 ;
  3. “Energy audit” has the same meaning as in KRS 56.770 ;
  4. “Energy-efficient heating, cooling, ventilation, or hot water system” has the same meaning as in KRS 141.435 ;
  5. “Energy-efficient interior lighting system” has the same meaning as in KRS 141.435 ;
  6. “Energy-efficient windows and storm doors” has the same meaning as in KRS 141.435 ;
  7. “Engineered demand-side management project” means a project undertaken to reduce the amount of energy consumed in an existing structure, including but not limited to:
    1. Energy-efficient heating, cooling, ventilation, or hot water systems;
    2. Energy-efficient interior lighting systems;
    3. Energy-efficient windows and storm doors;
    4. Qualified energy property;
    5. Upgraded insulation;
    6. Solar water-heating systems; and
    7. Any other energy conservation measures that will reduce energy costs, including those that will use solar power, either active or passive;
  8. “Private sector building” means a building owned by a private retail, commercial, or industrial business;
  9. “Public sector building” means a building owned by the Commonwealth of Kentucky, any public university of the Commonwealth, or any public community college of the Commonwealth;
  10. “Qualified energy property” has the same meaning as in KRS 141.435 ;
  11. “Simple payback period” has the same meaning as in KRS 56.770 ;
  12. “Solar water-heating system” has the same meaning as in KRS 141.435 ; and
  13. “Upgraded insulation” has the same meaning as in KRS 141.435 .

History. Enact. Acts 2008, ch. 139, § 21, effective July 15, 2008; repealed and reenact., Acts 2010, ch. 5, § 20, effective February 25, 2010; 2014, ch. 65, § 5, 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.”

42.582. Kentucky Bluegrass Turns Green Program — Purposes — Funding.

  1. There is established in the cabinet the Kentucky Bluegrass Turns Green Program for the purposes of:
    1. Concentrating on energy demand-side management in private and public sector buildings;
    2. Generating savings to taxpayers and the Commonwealth;
    3. Allowing for continued economic development;
    4. More efficiently using the Commonwealth’s precious natural resources; and
    5. Establishing the Commonwealth as a benchmark state for demand-side management efforts.
  2. The Kentucky Blue Grass Turns Green Program shall consist of the bluegrass turns green public sector grant fund established in KRS 42.584 and the bluegrass turns green private sector loan fund established in KRS 42.586 .

History. Enact. Acts 2008, ch. 139, § 22, effective July 15, 2008; repealed and reenact., Acts 2010, ch. 5, § 21, 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.”

42.584. Bluegrass turns green public sector grant fund — Purpose — Eligibility — Payback period — Administrative regulations.

    1. The bluegrass turns green public sector grant fund is created as a trust and agency fund. The fund shall be administered by the cabinet and shall consist of: (1) (a) The bluegrass turns green public sector grant fund is created as a trust and agency fund. The fund shall be administered by the cabinet and shall consist of:
      1. Proceeds from grants, contributions, appropriations, or other moneys made available for purposes of the trust and agency fund; and
      2. Funds derived from the bond issuance authorized under 2008 Ky. Acts ch. 139, sec. 27.
    2. Notwithstanding KRS 45.229 , fund amounts not expended at the close of the fiscal year shall not lapse but shall be carried forward to the next fiscal year. Any interest earnings of the trust and agency fund shall become part of the trust and agency fund and shall not lapse.
  1. Trust and agency fund moneys shall be used by the cabinet to provide grants to the public sector for engineered demand-side management projects in public sector buildings. The cabinet shall not award more than one (1) grant per public university campus or public community college campus within an eighteen (18) month period.
  2. To be eligible for a grant under this section, the cost of a proposed engineered demand-side management project shall be at least five thousand dollars ($5,000) and shall not exceed one million five hundred thousand dollars ($1,500,000) per project.
  3. Beginning July 1, 2009, and ending June 30, 2013, the simple payback period for an approved engineered demand-side management project shall be no more than five (5) years. Beginning July 1, 2013, the cabinet may consider a simple payback period of no more than twelve (12) years.
  4. Moneys in the grant fund are hereby appropriated for the purposes set forth in subsection (2) of this section.
  5. The cabinet shall not approve an applicant for a grant under this section, unless the applicant:
    1. Agrees to undergo and pay for an energy audit to establish a baseline of energy consumption; and
    2. Meets all the requirements established in this section and any regulations promulgated thereunder.

History. Enact. Acts 2008, ch. 139, § 23, effective July 15, 2008; repealed and reenact., Acts 2010, ch. 5, § 22, 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.”

42.586. Bluegrass turns green private sector loan fund — Purpose — Eligibility — Payback period — Interest rate — Administrative regulations.

    1. The bluegrass turns green private sector loan fund is created as a separate revolving fund. The fund shall be administered by the cabinet and shall consist of: (1) (a) The bluegrass turns green private sector loan fund is created as a separate revolving fund. The fund shall be administered by the cabinet and shall consist of:
      1. Proceeds from grants, contributions, appropriations, or other moneys made available for purposes of the revolving fund;
      2. Loan repayments made by the private sector;
      3. Funds derived from the bond issuance authorized under 2008 Ky. Acts ch. 139, sec. 28.
    2. Notwithstanding KRS 45.229 , fund amounts not expended at the close of a fiscal year shall not lapse but shall be carried forward to the next fiscal year. Any interest earnings of the fund shall become part of the revolving fund and shall not lapse.
  1. Revolving fund moneys shall be used by the cabinet to provide low-interest loans to the private sector for engineered demand-side management projects in private sector buildings. The cabinet shall not have more than one (1) loan outstanding at a time to any private retail, commercial, or industrial business.
  2. To be eligible for a loan under this section, the cost of a proposed engineered demand-side management project shall be at least five thousand dollars ($5,000) and shall not exceed one million five hundred thousand dollars ($1,500,000) per project.
  3. Beginning July 1, 2009, and ending June 30, 2013, the simple payback period for an approved engineered demand-side management project shall be no more than five (5) years. Beginning July 1, 2013, the cabinet may consider a simple payback period of no more than twelve (12) years.
  4. The loans provided under this section shall be subject to the prime interest rate minus one percent (1%).
  5. Moneys in the fund are hereby appropriated for the purposes set forth in subsection (2) of this section.
  6. The cabinet shall not approve an applicant for a loan under this section, unless the applicant:
    1. Can demonstrate that the applicant has no outstanding liabilities with the Commonwealth;
    2. Can demonstrate that the applicant has a positive payment history with the applicant’s electricity provider for the preceding three (3) consecutive years;
    3. Agrees to undergo and pay for an energy audit to establish a baseline of energy consumption; and
    4. Meets all the requirements established in this section and any administrative regulations promulgated thereunder.

History. Enact. Acts 2008, ch. 139, § 24, effective July 15, 2008; repealed and reenact., Acts 2010, ch. 5, § 23, 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.”

42.588. Administrative regulations — Reports to Governor and Legislative Research Commission.

  1. The cabinet shall, by administrative regulations promulgated in accordance with KRS Chapter 13A:
    1. Develop a method to score applications for the bluegrass turns green private sector loan fund established in KRS 42.586 and the bluegrass turns green public sector grant fund established in KRS 42.584 ;
    2. Develop a list of companies qualified to perform energy audits for the purposes of determining a baseline of energy consumption and any subsequent projected energy cost savings for:
      1. Private sector recipients of low-interest loans provided from the bluegrass turns green private sector loan fund established in KRS 42.586 ; and
      2. Public sector recipients of grants awarded from the public sector turns green grant fund established in KRS 42.584 ; and
    3. Establish a process for the collection of loan payments from the private sector to repay amounts that were made available under the bluegrass turns green loan private sector fund. The cabinet shall also promulgate any other administrative regulations necessary to administer the provisions of KRS 42.580 to 42.588 .
  2. The cabinet shall report to the Governor and the Legislative Research Commission on or before November 1, 2009, and on or before each November 1 thereafter, the following for the bluegrass turns green private sector loan fund and the bluegrass turns green public sector grant fund for the immediately preceding fiscal year:
    1. The number of applicants;
    2. A description of the engineered demand-side management projects on which loans or grants were provided;
    3. The total amount loaned to the private sector and the total amount of grants provided to the public sector;
    4. The projected private sector energy cost savings;
    5. The projected public sector energy cost savings;
    6. The number of applicants and the amount of loan and grants for which funding was not available; and
    7. Based upon the energy audits performed, the amount of increased energy capacity realized.

History. Enact. Acts 2008, ch. 139, § 25, effective July 15, 2008; repealed and reenact., Acts 2010, ch. 5, § 24, 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.”

Reports to Legislative Research Commission

42.600. Report of Court of Justice as to collections.

The Court of Justice shall make a report according to generally accepted accounting principles of all money received and disbursed pursuant to fines, court costs, or fees established by enactment of the General Assembly, showing the receipts, expenditures, depositories, rates of interest paid by depositories, investments, and rates of return on investments by each fund to the Legislative Research Commission for each fiscal year on or before the 15th of July.

History. Enact. Acts 1982, ch. 382, § 16, effective July 15, 1982.

42.605. Reports of Court of Justice concerning money judgments.

The Court of Justice shall make a report according to generally accepted accounting principles of all money received and disbursed pursuant to any action based on a cause of action established by enactment of the General Assembly, showing the receipts, expenditures, depositories, rates of interest paid by depositories, investments, and rates of return on investments by each fund to the Legislative Research Commission for each fiscal year on or before the 15th of July.

History. Enact. Acts 1982, ch. 382, § 17, effective July 15, 1982.

42.610. Reports to be similar in form.

The Legislative Research Commission shall, by regulations promulgated pursuant to KRS Chapter 13A, require reports by the Court of Justice, under KRS 42.600 and 42.605 , to be substantially similar in form to the reports made to the State Investment Commission under KRS 42.535 to 42.550 .

History. Enact. Acts 1982, ch. 382, § 18, effective July 15, 1982.

Legislative Research Commission Note.

(10/5/90). Pursuant to KRS 7.136(1), KRS Chapter 13A has been substituted for the prior reference to KRS Chapter 13 in this statute. The sections in KRS Chapter 13 were repealed by 1984 Ky. Acts ch. 417, § 36 and KRS Chapter 13A was created in that same chapter of the 1984 Ky. Acts.

42.615. Annual reports of retirement funds.

Each retirement fund listed in this section shall make a report according to generally accepted accounting principles of all money received and disbursed by the listed fund during each fiscal year on or before the first day of October after the fiscal year, showing receipts, expenditures, depositories, rates of interest paid by depositories, investments, and rates of return on investments by each listed fund to the Legislative Research Commission. The funds which shall be reported are:

  1. Kentucky employees’ retirement fund;
  2. State Police retirement fund;
  3. County employees’ retirement fund;
  4. Kentucky retirement systems insurance fund;
  5. Funds controlled by the Teachers’ Retirement System of the State of Kentucky;
  6. Judicial retirement fund;
  7. Legislators retirement fund; and
  8. The Kentucky state public employees deferred compensation trust fund.

History. Enact. Acts 1982, ch. 382, § 19, effective July 15, 1982; 1988, ch. 77, § 1, effective July 15, 1988.

Division of Geographic Information Systems

42.630. Legislative findings.

The General Assembly finds and declares that:

  1. Much of the Commonwealth’s information is geographically referenced and may be presented through geographic information systems;
  2. Geographic information systems allow for the exchange of information between levels of government and facilitate the management of the Commonwealth’s natural, human, cultural, and economic resources;
  3. There is a need to reduce redundancy in data-collection and development efforts, to coordinate the various activities in geographic information systems, and to share geographic information system resources and expertise to maximize the Commonwealth’s investment in geographic information systems technology;
  4. Considerations of cost and the need for the transfer of information among agencies of state government in the most timely and useful form possible require a uniform policy and coordinated approach for the use of geographic information systems;
  5. It is the policy of the Commonwealth of Kentucky to coordinate and direct the use of geographic information resources and technologies to provide the most cost-effective and useful retrieval of information by its elected and appointed officials.

History. Enact. Acts 1994, ch. 327, § 1, effective July 15, 1994.

42.640. Definitions for KRS 42.650. [Repealed.]

Compiler’s Notes.

This section (Enact. Acts 1994, ch. 327, § 2, effective July 15, 1994) was repealed by Acts 2000, ch. 506, § 25, effective July 14, 2000; and Acts 2000, ch. 536, § 37, effective July 14, 2000. For present law, see KRS 11.503 .

42.650. Division of Geographic Information Systems — Powers and duties — Authority for administrative regulations.

  1. The Division of Geographic Information Systems is hereby established in the Office of Architecture and Governance within the Commonwealth Office of Technology in the Finance and Administration Cabinet.
  2. The Division of Geographic Information Systems shall be headed by a division director, whose appointment is subject to KRS 12.050 . The division director may employ personnel, pursuant to the provisions of KRS Chapter 18A, as required to perform the functions of the office.
  3. The division may solicit, receive, and consider proposals for funding from any state agency, federal agency, local government, university, nonprofit organization, or private person or corporation. The division may also solicit and accept money by grant, gift, donation, bequest, legislative appropriation, or other conveyance.
  4. The division shall:
    1. Establish a central statewide geographic information clearinghouse to maintain map inventories, information on current and planned geographic information systems applications, information on grants available for the acquisition or enhancement of geographic information resources, and a directory of geographic information resources available within the state or from the federal government;
    2. Coordinate multiagency geographic information system projects, including overseeing the development and maintenance of statewide base maps and geographic information systems;
    3. Provide access to both consulting and technical assistance, and education and training, on the application and use of geographic information technologies to state and local agencies;
    4. Maintain, update, and interpret geographic information and geographic information systems standards, under the direction of the council;
    5. Provide geographic information system services, as requested, to agencies wishing to augment their geographic information system capabilities;
    6. In cooperation with other agencies, evaluate, participate in pilot studies, and make recommendations on geographic information systems hardware and software;
    7. Assist the council with review of agency information resource plans and participate in special studies as requested by the council;
    8. Provide staff support and technical assistance to the Geographic Information Advisory Council; and
    9. Prepare proposed legislation and funding proposals for the General Assembly which will further solidify coordination and expedite implementation of geographic information systems.
  5. The division may promulgate necessary administrative regulations for the furtherance of this section.

HISTORY: Enact. Acts 1994, ch. 327, § 3, effective July 15, 1994; 2005, ch. 85, § 57, effective June 20, 2005; 2012, ch. 69, § 7, effective July 12, 2012; 2018 ch. 78, § 1, effective July 14, 2018; 2021 ch. 81, § 4, effective June 29, 2021.

42.650. Division of Geographic Information Systems — Powers and duties — Authority for administrative regulations.

  1. The Division of Geographic Information Systems is hereby established in the Office of Architecture and Governance within the Commonwealth Office of Technology in the Finance and Administration Cabinet.
  2. The Division of Geographic Information Systems shall be headed by a division director, whose appointment is subject to KRS 12.050 . The division director may employ personnel, pursuant to the provisions of KRS Chapter 18A, as required to perform the functions of the office.
  3. The division may solicit, receive, and consider proposals for funding from any state agency, federal agency, local government, university, nonprofit organization, or private person or corporation. The division may also solicit and accept money by grant, gift, donation, bequest, legislative appropriation, or other conveyance.
  4. The division shall:
    1. Establish the central statewide geographic information clearinghouse to maintain map inventories, information on current and planned geographic information systems applications, information on grants available for the acquisition or enhancement of geographic information resources, and a directory of geographic information resources available within the state or from the federal government;
    2. Make all reasonable efforts to collect and present geographic information in a manner which meets the needs of all state agencies;
    3. Coordinate multiagency geographic information system projects, including overseeing the development and maintenance of statewide base maps and geographic information systems;
    4. Provide access to both consulting and technical assistance, and education and training, on the application and use of geographic information technologies to state and local agencies;
    5. Maintain, update, and interpret geographic information and geographic information systems standards, under the direction of the council;
    6. Provide geographic information system services, as requested, to agencies wishing to augment their geographic information system capabilities;
    7. In cooperation with other agencies, evaluate, participate in pilot studies, and make recommendations on geographic information systems hardware and software;
    8. Assist the council with review of agency information resource plans and participate in special studies as requested by the council;
    9. Provide staff support and technical assistance to the Geographic Information Advisory Council; and
    10. Prepare proposed legislation and funding proposals for the General Assembly which will further solidify coordination and expedite implementation of geographic information systems.
  5. The division may promulgate necessary administrative regulations for the furtherance of this section.

HISTORY: Enact. Acts 1994, ch. 327, § 3, effective July 15, 1994; 2005, ch. 85, § 57, effective June 20, 2005; 2012, ch. 69, § 7, effective July 12, 2012; 2018 ch. 78, § 1, effective July 14, 2018; 2021 ch. 81, § 4, effective June 29, 2021; 2022 ch. 229, § 2.

Kentucky Community Crisis Response Board

42.660. Definitions for KRS 42.660 to 42.680. [Repealed, reenacted and amended.]

Compiler’s Notes.

This section (Enact. Acts 1996, ch. 316, § 1, effective July 15, 1996) was repealed, reenacted and amended as KRS 36.250 by Acts 1998, ch. 86, § 1, effective July 15, 1998.

42.665. Kentucky Community Crisis Response Board — Members — Meetings. [Repealed, reenacted and amended.]

Compiler’s Notes.

This section (Enact. Acts 1996, ch. 316, § 2, effective July 15, 1996) was repealed, reenacted and amended as KRS 36.255 by Acts 1998, ch. 86, § 2, effective July 15, 1998.

42.670. Duties of board. [Repealed and reenacted.]

Compiler’s Notes.

This section (Enact. Acts 1996, ch. 316, § 3, effective July 15, 1996) was repealed and reenacted as KRS 36.260 by Acts 1998, ch. 86, § 3, effective July 15, 1998.

42.675. Attorney General to represent board members in civil proceedings. [Repealed, reenacted and amended.]

Compiler’s Notes.

This section (Enact. Acts 1996, ch. 316, § 4, effective July 15, 1996) was repealed, reenacted and amended as KRS 36.265 by Acts 1998, ch. 86, § 4, effective July 15, 1998.

42.680. Status of state and local government employees acting on behalf of board. [Repealed, reenacted and amended.]

Compiler’s Notes.

This section (Enact. Acts 1996, ch. 316, § 5, effective July 15, 1996) was repealed, reenacted and amended as KRS 36.270 by Acts 1998, ch. 86, § 5, effective July 15, 1998.

42.700. Medical professional liability insurance for charitable health care facilities and volunteer caregivers — Fee on physicians and attorneys for payment of premiums. [Repealed.]

Compiler’s Notes.

This section (Enact. Acts 1994, ch. 87, § 1, effective July 15, 1994) was repealed by Acts 1996, ch. 348, § 4, effective July 15, 1996. For present law see KRS 304.40-075 .

Display of Historic Artifacts, Monuments, Symbols, and Texts

42.705. Legislative findings and declarations — Display of historic religious and nonreligious artifacts, monuments, symbols, and texts in public buildings and on public property owned by the Commonwealth.

The General Assembly hereby finds and declares as follows:

  1. The Commonwealth’s public buildings and their surrounding grounds provide Kentucky’s citizens and others a place at which they may conduct public business, visit and interact with government officials, and learn about the Commonwealth’s history and government;
  2. The Commonwealth’s public buildings and public properties are themselves important symbols of Kentucky’s history;
  3. Whether it be former battlegrounds, Native American sites, parks, recreation areas, historic government sites, homes of famous Kentuckians, or any other site of interest, without historic artifacts, monuments, symbols, and texts on the properties and in the buildings, most persons would not even know of the significance of the site or building;
  4. Kentucky is justly proud of its history, as the past is the prologue to how we live today, how our government functions, and what things we hold to be important to us;
  5. It is not in Kentucky’s best interest to hide its heritage or traditions, or the beliefs or deeply held opinions of its citizens;
  6. It is in Kentucky’s best interest that its public buildings and public properties reflect the Commonwealth’s rich history by exhibiting items of significance to Kentucky’s civic and cultural development;
  7. The display of historic artifacts, monuments, symbols, and texts in and on the grounds of Kentucky’s public buildings and public properties promotes its citizens’ awareness of their common history and an appreciation of the persons and events contributing to that history;
  8. The free exercise of religion, as well as the right to have no religion, is a right guaranteed by the Constitution of the United States and the Constitution of Kentucky;
  9. The right of the people to express themselves is enshrined in the freedom of speech guaranteed by the Constitution of the United States and the Constitution of Kentucky;
  10. While the authors of the Constitution of the United States and the Constitution of Kentucky were guaranteeing the free exercise of religion and prohibiting the establishment of a state-sponsored religion, these same authors and the public officials of that date publicly and regularly proclaimed a belief in a supreme being, prayed openly, and placed religious-based statements and symbols in and on their public buildings and properties, and that tradition has continued unbroken to this day;
  11. The free exercise of religion, in all of its myriad expressions, is a significant component of Kentucky’s historical heritage and may be acknowledged as such;
  12. Historic artifacts, monuments, symbols, and texts, including but not limited to religious materials, may be displayed in Kentucky’s public schools, within the framework of applicable legal precedents, if they are displayed in connection with a course of study that is academic, balanced, objective, and not devotional in nature, and that neither favors nor disfavors religion generally or any particular religious belief; and
  13. Historic artifacts, monuments, symbols, and texts, including but not limited to religious materials, may be displayed in Kentucky’s public buildings and on Kentucky’s public properties if they are displayed in a:
    1. Balanced, objective, and not solely religious manner;
    2. Manner that neither favors nor disfavors religion generally;
    3. Manner that neither favors nor disfavors any religious belief; and
    4. Manner which promotes the display of Kentucky’s historic, cultural, political, and general heritage and achievements.

History. Enact. Acts 2006, ch. 34, § 1, effective March 24, 2006.

42.710. Agency or instrumentality of state authorized to display historic religious and nonreligious artifacts, monuments, symbols, and texts in public buildings and on public property owned by the Commonwealth.

Any agency or instrumentality of state government may display historic artifacts, monuments, symbols, and texts, including but not limited to religious materials, in public buildings and public property owned by the Commonwealth if the display is consistent with the requirements of KRS 42.705 .

History. Enact. Acts 2006, ch. 34, § 2, effective March 24, 2006.

Information Technology

42.720. Legislative findings.

The General Assembly finds and declares that:

  1. The establishment of the position of the executive director of the Commonwealth Office of Technology, appointed by the secretary of the Finance and Administration Cabinet with the approval of the Governor, as the Commonwealth’s single point of contact and spokesperson for all matters related to information technology and resources, including policies, standard setting, deployment, strategic and tactical planning, acquisition, management, and operations is necessary and in keeping with the industry trends of the private and public sectors;
  2. The appropriate use of information technology by the Commonwealth can improve operational productivity, reduce the cost of government, enhance service to customers, and make government more accessible to the public;
  3. Government-wide planning, investment, protection, and direction for information resources must be enacted to:
    1. Ensure the effective application of information technology on state business operations;
    2. Ensure the quality, security, and integrity of state business operations; and
    3. Provide privacy to the citizens of the Commonwealth;
  4. The Commonwealth must provide information technology infrastructure, technical directions, and a proficient organizational management structure to facilitate the productive application of information technology and resources to accomplish programmatic missions and business goals;
  5. Oversight of large scale and government statewide systems or projects is necessary to protect the Commonwealth’s investment and to ensure appropriate integration with existing or planned systems;
  6. A career development plan and professional development program for information technology staff of the executive branch is needed to provide key competencies and adequate on-going support for the information resources of the Commonwealth and to ensure that the information technology staff will be managed as a Commonwealth resource;
  7. The Commonwealth is in need of information technology advisory capacities to the Governor and the agencies of the executive cabinet;
  8. Appropriate public-private partnerships to supplement existing resources must be developed as a strategy for the Commonwealth to comprehensively meet its spectrum of information technology and resource needs;
  9. Technological and theoretical advances in information use are recent in origin, immense in scope and complexity, and change at a rapid rate, which presents Kentucky with the opportunity to provide higher quality, more timely, and more cost-effective government services to ensure standardization, interoperability, and interconnectivity;
  10. The sharing of information resources and technologies among executive branch state agencies is the most cost-effective method of providing the highest quality and most timely government services that would otherwise be cost-prohibitive;
  11. The ability to identify, develop, and implement changes in a rapidly moving field demands the development of mechanisms to provide for the research and development of technologies that address systems, uses, and applications; and
  12. The exercise by the executive director of the Commonwealth Office of Technology of powers and authority conferred by KRS 42.720 to 42.742 , 45.253 , 171.420 , 186A.040 , and 186A.285 shall be deemed and held to be the performance of essential governmental functions.

History. Enact. Acts 1998, ch. 353, § 1, effective July 15, 1998; repealed, reenact., and amend. Acts 2000, ch. 506, § 1, effective July 14, 2000; 2000, ch. 536, § 1, effective July 14, 2000; 2005, ch. 85, § 21, effective June 20, 2005; 2005, ch. 99, § 3, effective June 20, 2005; repealed, reenact. and amend., Acts 2009, ch. 12, § 2, effective June 25, 2009; 2020 ch. 36, § 2, effective July 15, 2020.

Compiler’s Notes.

This section was formerly compiled as KRS 11.501 .

42.722. Definitions for KRS 42.720 to 42.742.

As used in KRS 42.720 to 42.742 :

  1. “Communications” or “telecommunications” means any transmission, emission, or reception of signs, signals, writings, images, and sounds of intelligence of any nature by wire, radio, optical, or other electromagnetic systems, and includes all facilities and equipment performing these functions;
  2. “Geographic information system” or “GIS” means a computerized database management system for the capture, storage, retrieval, analysis, and display of spatial or locationally defined data;
  3. “Information resources” means the procedures, equipment, and software that are designed, built, operated, and maintained to collect, record, process, store, retrieve, display, and transmit information, and associated personnel;
  4. “Information technology” means data processing and telecommunications hardware, software, services, supplies, facilities, maintenance, and training that are used to support information processing and telecommunications systems to include geographic information systems;
  5. “Personal information” has the same meaning as in KRS 61.931 ;
  6. “Project” means a program to provide information technologies support to functions within an executive branch state agency, which should be characterized by well-defined parameters, specific objectives, common benefits, planned activities, expected outcomes and completion dates, and an established budget with a specified source of funding;
  7. “Security breach” has the same meaning as in KRS 61.931 ; and
  8. “Technology infrastructure” means any computing equipment, servers, networks, storage, desktop support, telephony, enterprise shared systems, information technology security, disaster recovery, business continuity, database administration, and software licensing.

History. Enact. Acts 2000, ch. 506, § 2, effective July 14, 2000; 2000, ch. 536, § 2, effective July 14, 2000; repealed, reenact. and amend., Acts 2009, ch. 12, § 3, effective June 25, 2009; 2014, ch. 89, § 9, effective July 15, 2014; ch. 138, § 2, effective July 15, 2014, ch. 74, § 5, effective January 1, 2015.

Compiler’s Notes

This section was formerly compiled as KRS 11.503 .

Legislative Research Commission Note.

(1/1/2015). 2014 Ky. Acts ch. 74, sec. 10 provided that “the provisions of this Act shall not impact the provisions of KRS 61.870 to 61.884 .” That proviso applies to this statute as amended in Section 5 of that Act.

(1/1/2015) This statute was amended by 2014 Ky. Acts chs. 74, 89, and 138, which do not appear to be in conflict and have been codified together.

42.724. Commonwealth Office of Technology.

  1. There is hereby created within the Finance and Administration Cabinet an agency of state government known as the Commonwealth Office of Technology.
  2. The Commonwealth Office of Technology shall be headed by an executive director, also known as the chief information officer, appointed by the secretary of the Finance and Administration Cabinet and approved by the Governor. Duties and functions of the executive director shall include serving on the Governor’s Executive Cabinet and those established in KRS 42.730 .
  3. The Commonwealth Office of Technology shall consist of the following offices, each headed by an executive director and organized into divisions headed by a division director:
    1. Office of Infrastructure Services, consisting of the:
      1. Division of Network Services; and
      2. Division of Platform Services;
    2. Office of Architecture and Governance, consisting of the:
      1. Division of Enterprise Solutions;
      2. Division of Mainframe Services;
      3. Division of Geographic Information Systems; and
      4. Division of Governance and Strategy;
    3. Office of the Chief Information Security Officer. The office shall ensure the efficiency and effectiveness of information technology security functions and responsibilities; and
    4. Office of Client Support Services, consisting of the:
      1. Division of Field Services; and
      2. Division of Support Services.
  4. Executive directors and division directors appointed under this section shall be appointed by the secretary with the approval of the Governor.

History. Enact. Acts 2000, ch. 506, § 3, effective July 14, 2000; 2000, ch. 536, § 3, effective July 14, 2000; 2001, ch. 59, § 1, effective June 21, 2001; 2005, ch. 85, § 22, effective June 20, 2005; repealed, reenact. and amend., Acts 2009, ch. 12, § 4, effective June 25, 2009; 2012, ch. 69, § 8, effective July 12, 2012; 2014, ch. 89, § 10, effective July 15, 2014; ch. 138, § 3, effective July 15, 2014; 2018 ch. 78, § 2, effective July 14, 2018; 2021 ch. 81, § 3, effective June 29, 2021.

Compiler’s Notes.

This section was formerly compiled as KRS 11.505 .

42.726. Roles, duties, and permissible activities for Commonwealth Office of Technology — Duties of Archives and Records Commission and Department for Libraries and Archives not affected — Annual report concerning security breaches.

  1. The Commonwealth Office of Technology shall be the lead organizational entity within the executive branch regarding delivery of information technology services, including application development and delivery, and shall serve as the single information technology authority for the Commonwealth.
  2. The roles and duties of the Commonwealth Office of Technology shall include but not be limited to:
    1. Providing technical support and services to all executive agencies of state government in the application of information technology;
    2. Assuring compatibility and connectivity of Kentucky’s information systems;
    3. Developing strategies and policies to support and promote the effective applications of information technology within state government as a means of saving money, increasing employee productivity, and improving state services to the public, including electronic public access to information of the Commonwealth;
    4. Developing, implementing, and managing strategic information technology directions, standards, and enterprise architecture, including implementing necessary management processes to assure full compliance with those directions, standards, and architecture;
    5. Promoting effective and efficient design and operation of all major information resources management processes for executive branch agencies, including improvements to work processes;
    6. Developing, implementing, and maintaining the technology infrastructure of the Commonwealth and all related support staff, planning, administration, asset management, and procurement for all executive branch cabinets and agencies except:
      1. Agencies led by a statewide elected official;
      2. The nine (9) public institutions of postsecondary education;
      3. The Department of Education’s services provided to local school districts;
      4. The Kentucky Retirement Systems, the County Employees Retirement System, the Kentucky Public Pensions Authority, and the Teachers’ Retirement System;
      5. The Kentucky Housing Corporation;
      6. The Kentucky Lottery Corporation;
      7. The Kentucky Higher Education Student Loan Corporation; and
      8. The Kentucky Higher Education Assistance Authority;
    7. Facilitating and fostering applied research in emerging technologies that offer the Commonwealth innovative business solutions;
    8. Reviewing and overseeing large or complex information technology projects and systems for compliance with statewide strategies, policies, and standards, including alignment with the Commonwealth’s business goals, investment, and other risk management policies. The executive director is authorized to grant or withhold approval to initiate these projects;
    9. Integrating information technology resources to provide effective and supportable information technology applications in the Commonwealth;
    10. Establishing a central statewide geographic information clearinghouse to maintain map inventories, information on current and planned geographic information systems applications, information on grants available for the acquisition or enhancement of geographic information resources, and a directory of geographic information resources available within the state or from the federal government;
    11. Coordinating multiagency information technology projects, including overseeing the development and maintenance of statewide base maps and geographic information systems;
    12. Providing access to both consulting and technical assistance, and education and training, on the application and use of information technologies to state and local agencies;
    13. In cooperation with other agencies, evaluating, participating in pilot studies, and making recommendations on information technology hardware and software;
    14. Providing staff support and technical assistance to the Geographic Information Advisory Council and the Kentucky Information Technology Advisory Council;
    15. Overseeing the development of a statewide geographic information plan with input from the Geographic Information Advisory Council;
    16. Developing for state executive branch agencies a coordinated security framework and model governance structure relating to the privacy and confidentiality of personal information collected and stored by state executive branch agencies, including but not limited to:
      1. Identification of key infrastructure components and how to secure them;
      2. Establishment of a common benchmark that measures the effectiveness of security, including continuous monitoring and automation of defenses;
      3. Implementation of vulnerability scanning and other security assessments;
      4. Provision of training, orientation programs, and other communications that increase awareness of the importance of security among agency employees responsible for personal information; and
      5. Development of and making available a cyber security incident response plan and procedure; and
    17. Preparing proposed legislation and funding proposals for the General Assembly that will further solidify coordination and expedite implementation of information technology systems.
  3. The Commonwealth Office of Technology may:
    1. Provide general consulting services, technical training, and support for generic software applications, upon request from a local government, if the executive director finds that the requested services can be rendered within the established terms of the federally approved cost allocation plan;
    2. Promulgate administrative regulations in accordance with KRS Chapter 13A necessary for the implementation of KRS 42.720 to 42.742 , 45.253 , 171.420 , 186A.040 , and 186A.285 ;
    3. Solicit, receive, and consider proposals from any state agency, federal agency, local government, university, nonprofit organization, private person, or corporation;
    4. Solicit and accept money by grant, gift, donation, bequest, legislative appropriation, or other conveyance to be held, used, and applied in accordance with KRS 42.720 to 42.742 , 45.253 , 171.420 , 186A.040 , and 186A.285 ;
    5. Make and enter into memoranda of agreement and contracts necessary or incidental to the performance of duties and execution of its powers, including, but not limited to, agreements or contracts with the United States, other state agencies, and any governmental subdivision of the Commonwealth;
    6. Accept grants from the United States government and its agencies and instrumentalities, and from any source, other than any person, firm, or corporation, or any director, officer, or agent thereof that manufactures or sells information resources technology equipment, goods, or services. To these ends, the Commonwealth Office of Technology shall have the power to comply with those conditions and execute those agreements that are necessary, convenient, or desirable; and
    7. Purchase interest in contractual services, rentals of all types, supplies, materials, equipment, and other services to be used in the research and development of beneficial applications of information resources technologies. Competitive bids may not be required for:
      1. New and emerging technologies as approved by the executive director or her or his designee; or
      2. Related professional, technical, or scientific services, but contracts shall be submitted in accordance with KRS 45A.690 to 45A.725 .
  4. Nothing in this section shall be construed to alter or diminish the provisions of KRS 171.410 to 171.740 or the authority conveyed by these statutes to the Archives and Records Commission and the Department for Libraries and Archives.
  5. The Commonwealth Office of Technology shall, on or before October 1 of each year, submit to the Legislative Research Commission a report in accordance with KRS 57.390 detailing:
    1. Any security breaches that occurred within organizational units of the executive branch of state government during the prior fiscal year that required notification to the Commonwealth Office of Technology under KRS 61.932 ;
    2. Actions taken to resolve the security breach, and to prevent additional security breaches in the future;
    3. A general description of what actions are taken as a matter of course to protect personal data from security breaches; and
    4. Any quantifiable financial impact to the agency reporting a security breach.

HISTORY: Enact. Acts 2000, ch. 506, § 4, effective July 14, 2000; 2000, ch. 536, § 4, effective July 14, 2000; 2005, ch. 85, § 30, effective June 20, 2005; 2005, ch. 99, § 4, effective June 20, 2005; 2006, ch. 193, § 10, effective July 12, 2006; repealed, reenact. and amend., Acts 2009, ch. 12, § 5, effective June 25, 2009; 2012, ch. 69, § 9, effective July 12, 2012; 2014, ch. 89, § 11, effective July 15, 2014; ch. 138, § 4, effective July 15, 2014; ch 74, § 6, effective January 1, 2015; 2018 ch. 78, § 3, effective July 14, 2018; 2020 ch. 36, § 3, effective July 15, 2020; 2020 ch. 79, § 16, effective April 1, 2021.

Legislative Research Commission Notes.

(4/1/2021). This statute was amended by 2020 Ky. Acts chs. 36 and 79, which do not appear to be in conflict and have been codified together.

(1/1/2015). 2014 Ky. Acts ch. 74, sec. 10 provided that “the provisions of this Act shall not impact the provisions of KRS 61.870 to 61.884 .” That proviso applies to this statute as amended in Section 6 of that Act.

42.726. Roles, duties, and permissible activities for Commonwealth Office of Technology — Duties of Archives and Records Commission and Department for Libraries and Archives not affected — Annual report concerning security breaches.

  1. The Commonwealth Office of Technology shall be the lead organizational entity within the executive branch regarding delivery of information technology services, including application development and delivery, and shall serve as the single information technology authority for the Commonwealth.
  2. The roles and duties of the Commonwealth Office of Technology shall include but not be limited to:
    1. Providing technical support and services to all executive agencies of state government in the application of information technology;
    2. Assuring compatibility and connectivity of Kentucky’s information systems;
    3. Developing strategies and policies to support and promote the effective applications of information technology within state government as a means of saving money, increasing employee productivity, and improving state services to the public, including electronic public access to information of the Commonwealth;
    4. Developing, implementing, and managing strategic information technology directions, standards, and enterprise architecture, including implementing necessary management processes to assure full compliance with those directions, standards, and architecture;
    5. Promoting effective and efficient design and operation of all major information resources management processes for executive branch agencies, including improvements to work processes;
    6. Developing, implementing, and maintaining the technology infrastructure of the Commonwealth and all related support staff, planning, administration, asset management, and procurement for all executive branch cabinets and agencies except:
      1. Agencies led by a statewide elected official;
      2. The nine (9) public institutions of postsecondary education;
      3. The Department of Education’s services provided to local school districts;
      4. The Kentucky Retirement Systems, the County Employees Retirement System, the Kentucky Public Pensions Authority, and the Teachers’ Retirement System;
      5. The Kentucky Housing Corporation;
      6. The Kentucky Lottery Corporation;
      7. The Kentucky Higher Education Student Loan Corporation; and
      8. The Kentucky Higher Education Assistance Authority;
    7. Facilitating and fostering applied research in emerging technologies that offer the Commonwealth innovative business solutions;
    8. Reviewing and overseeing large or complex information technology projects and systems for compliance with statewide strategies, policies, and standards, including alignment with the Commonwealth’s business goals, investment, and other risk management policies. The executive director is authorized to grant or withhold approval to initiate these projects;
    9. Integrating information technology resources to provide effective and supportable information technology applications in the Commonwealth;
    10. Establishing the central statewide geographic information clearinghouse to maintain map inventories, information on current and planned geographic information systems applications, information on grants available for the acquisition or enhancement of geographic information resources, and a directory of geographic information resources available within the state or from the federal government;
    11. Coordinating multiagency information technology projects, including overseeing the development and maintenance of statewide base maps and geographic information systems;
    12. Providing access to both consulting and technical assistance, and education and training, on the application and use of information technologies to state and local agencies;
    13. In cooperation with other agencies, evaluating, participating in pilot studies, and making recommendations on information technology hardware and software;
    14. Providing staff support and technical assistance to the Geographic Information Advisory Council and the Kentucky Information Technology Advisory Council;
    15. Overseeing the development of a statewide geographic information plan with input from the Geographic Information Advisory Council;
    16. Developing for state executive branch agencies a coordinated security framework and model governance structure relating to the privacy and confidentiality of personal information collected and stored by state executive branch agencies, including but not limited to:
      1. Identification of key infrastructure components and how to secure them;
      2. Establishment of a common benchmark that measures the effectiveness of security, including continuous monitoring and automation of defenses;
      3. Implementation of vulnerability scanning and other security assessments;
      4. Provision of training, orientation programs, and other communications that increase awareness of the importance of security among agency employees responsible for personal information; and
      5. Development of and making available a cyber security incident response plan and procedure; and
    17. Preparing proposed legislation and funding proposals for the General Assembly that will further solidify coordination and expedite implementation of information technology systems.
  3. The Commonwealth Office of Technology may:
    1. Provide general consulting services, technical training, and support for generic software applications, upon request from a local government, if the executive director finds that the requested services can be rendered within the established terms of the federally approved cost allocation plan;
    2. Promulgate administrative regulations in accordance with KRS Chapter 13A necessary for the implementation of KRS 42.720 to 42.742 , 45.253 , 171.420 , 186A.040 , and 186A.285 ;
    3. Solicit, receive, and consider proposals from any state agency, federal agency, local government, university, nonprofit organization, private person, or corporation;
    4. Solicit and accept money by grant, gift, donation, bequest, legislative appropriation, or other conveyance to be held, used, and applied in accordance with KRS 42.720 to 42.742 , 45.253 , 171.420 , 186A.040 , and 186A.285 ;
    5. Make and enter into memoranda of agreement and contracts necessary or incidental to the performance of duties and execution of its powers, including, but not limited to, agreements or contracts with the United States, other state agencies, and any governmental subdivision of the Commonwealth;
    6. Accept grants from the United States government and its agencies and instrumentalities, and from any source, other than any person, firm, or corporation, or any director, officer, or agent thereof that manufactures or sells information resources technology equipment, goods, or services. To these ends, the Commonwealth Office of Technology shall have the power to comply with those conditions and execute those agreements that are necessary, convenient, or desirable; and
    7. Purchase interest in contractual services, rentals of all types, supplies, materials, equipment, and other services to be used in the research and development of beneficial applications of information resources technologies. Competitive bids may not be required for:
      1. New and emerging technologies as approved by the executive director or her or his designee; or
      2. Related professional, technical, or scientific services, but contracts shall be submitted in accordance with KRS 45A.690 to 45A.725 .
  4. Nothing in this section shall be construed to alter or diminish the provisions of KRS 171.410 to 171.740 or the authority conveyed by these statutes to the Archives and Records Commission and the Department for Libraries and Archives.
  5. The Commonwealth Office of Technology shall, on or before October 1 of each year, submit to the Legislative Research Commission a report in accordance with KRS 57.390 detailing:
    1. Any security breaches that occurred within organizational units of the executive branch of state government during the prior fiscal year that required notification to the Commonwealth Office of Technology under KRS 61.932 ;
    2. Actions taken to resolve the security breach, and to prevent additional security breaches in the future;
    3. A general description of what actions are taken as a matter of course to protect personal data from security breaches; and
    4. Any quantifiable financial impact to the agency reporting a security breach.

HISTORY: Enact. Acts 2000, ch. 506, § 4, effective July 14, 2000; 2000, ch. 536, § 4, effective July 14, 2000; 2005, ch. 85, § 30, effective June 20, 2005; 2005, ch. 99, § 4, effective June 20, 2005; 2006, ch. 193, § 10, effective July 12, 2006; repealed, reenact. and amend., Acts 2009, ch. 12, § 5, effective June 25, 2009; 2012, ch. 69, § 9, effective July 12, 2012; 2014, ch. 89, § 11, effective July 15, 2014; ch. 138, § 4, effective July 15, 2014; ch 74, § 6, effective January 1, 2015; 2018 ch. 78, § 3, effective July 14, 2018; 2020 ch. 36, § 3, effective July 15, 2020; 2020 ch. 79, § 16, effective April 1, 2021; 2022 ch. 229, § 3.

42.728. State agencies to assist Commonwealth Office of Technology — Exceptions for judicial and legislative branches and retirement systems.

  1. To accomplish the work of the Commonwealth Office of Technology, all organizational units and administrative bodies, as defined in KRS 12.010 , and all members of the state postsecondary education system, as defined in KRS 164.001 , shall furnish the Commonwealth Office of Technology necessary assistance, resources, information, records, and advice as required.
  2. The provisions of KRS 42.720 to 42.742 , 45.253 , 171.420 , 186A.040 , and 186A.285 shall not be construed to grant any authority over the judicial or legislative branches of state government, or agencies thereof, to the Commonwealth Office of Technology.
  3. The information, technology, personnel, agency resources, and confidential records of the Kentucky Retirement Systems, the County Employees Retirement System, the Kentucky Public Pensions Authority, and the Kentucky Teachers’ Retirement System shall be excluded from the provisions of KRS 42.720 to 42.742 , 45.253 , 171.420 , 186A.040 , and 186A.285 and shall not be under the authority of the Commonwealth Office of Technology.

History. Enact. Acts 2000, ch. 506, § 5, effective July 14, 2000; 2000, ch. 536, § 5, effective July 14, 2000; 2005, ch. 85, § 31, effective June 20, 2005; 2005, ch. 99, § 5, effective June 20, 2005; repealed, reenact. and amend., Acts 2009, ch. 12, § 6, effective June 25, 2009; 2020 ch. 36, § 4, effective July 15, 2020; 2020 ch. 79, § 17, effective April 1, 2021.

Compiler’s Notes.

This section was formerly compiled as KRS 11.509 .

Legislative Research Commission Notes.

(4/1/2021). This statute was amended by 2020 Ky. Acts chs. 36 and 79, which do not appear to be in conflict and have been codified together.

42.730. Executive Director of Commonwealth Office of Technology — Roles and duties.

  1. The executive director of the Commonwealth Office of Technology shall be the principal adviser to the Governor and the executive cabinet on information technology policy, including policy on the acquisition and management of information technology and resources.
  2. The executive director of the Commonwealth Office of Technology shall also serve as the chief information officer for all agencies within the executive branch, including the Commonwealth Office of Technology.
  3. The executive director shall carry out functions necessary for the efficient, effective, and economical administration of information technology and resources within the executive branch. Roles and duties of the executive director shall include but not be limited to:
    1. Assessing, recommending, and implementing information technology governance and organization design to include effective information technology personnel management practices;
    2. Integrating information technology and resources plans with agency business plans;
    3. Overseeing shared Commonwealth information technology resources and services;
    4. Performing as the focal point and representative for the Commonwealth in information technology and related areas with both the public and private sector;
    5. Establishing appropriate partnerships and alliances to support the effective implementation of information technology projects in the Commonwealth;
    6. Identifying information technology applications that should be statewide in scope, and assisting agencies in avoiding duplicate services;
    7. Establishing performance measurement and benchmarking policies and procedures;
    8. Preparing annual reports and plans concerning the status and result of the state’s specific information technology plans and submitting these annual reports and plans to the Governor and the General Assembly;
    9. Managing the Commonwealth Office of Technology and its budget; and
    10. Approving technology acquisition prior to any procurement.

HISTORY: Enact. Acts 1998, ch. 353, § 2, effective July 15, 1998; repealed, reenact., and amend. Acts 2000, ch. 506, § 6, effective July 14, 2000; 2000, ch. 536, § 6, effective July 14, 2000; 2005, ch. 85, § 23, effective June 20, 2005; repealed and reenact., Acts 2009, ch. 12, § 7, effective June 25, 2009; 2011, ch. 75, § 3, effective March 16, 2011; 2018 ch. 78, § 4, effective July 14, 2018.

Compiler's Notes.

This section was formerly compiled as KRS 11.511 .

42.732. Kentucky Information Technology Advisory Council — Purposes — Members.

  1. There is hereby created the Kentucky Information Technology Advisory Council to:
    1. Advise the executive director of the Commonwealth Office of Technology on approaches to coordinating information technology solutions among libraries, public schools, local governments, universities, and other public entities;
    2. Advise the executive director of the Commonwealth Office of Technology on coordination among and across the organizational units of the executive branch of state government to prepare for, respond to, and prevent attacks; and
    3. Provide a forum for the discussion of emerging technologies that enhance electronic accessibility to various publicly funded sources of information and services.
  2. The Kentucky Information Technology Advisory Council shall consist of:
    1. The state budget director or a designee;
    2. The state librarian or a designee;
    3. One (1) representative from the public universities to be appointed by the Governor from a list of three (3) persons submitted by the Council on Postsecondary Education;
    4. Three (3) citizen members from the private sector with information technology knowledge and experience appointed by the Governor;
    5. Two (2) representatives of local government appointed by the Governor;
    6. One (1) representative from the area development districts appointed by the Governor from a list of names submitted by the executive directors of the area development districts;
    7. One (1) member of the media appointed by the Governor;
    8. The executive director of the Kentucky Authority for Educational Television;
    9. The chair of the Public Service Commission or a designee;
    10. Two (2) members of the Kentucky General Assembly, one (1) from each chamber, selected by the Legislative Research Commission;
    11. One (1) representative of the Administrative Office of the Courts;
    12. One (1) representative from the public schools system appointed by the Governor;
    13. One (1) representative of the Kentucky Chamber of Commerce;
    14. The executive director of the Commonwealth Office of Technology; and
    15. The executive director of the Kentucky Communications Network Authority or designee.
  3. Appointed members of the council shall serve for a term of two (2) years. Members who serve by virtue of an office shall serve on the council while they hold the office.
  4. Vacancies on the council shall be filled in the same manner as the original appointments. If a nominating organization changes its name, its successor organization having the same responsibilities and purposes shall be the nominating organization.
  5. Members shall receive no compensation but shall receive reimbursement for actual and necessary expenses in accordance with travel and subsistence requirements established by the Finance and Administration Cabinet.

History. Enact. Acts 2000, ch. 506, § 7, effective July 14, 2000; ch. 5236, § 7, effective July 14, 2000; 2005, ch. 85, § 32, effective June 20, 2005; repealed and reenacted., Acts 2009, ch. 12, § 8, effective June 25, 2009; 2014, ch. 74, § 7, effective January 1, 2015.; 2017 ch. 89, § 6, effective June 29, 2017.

Legislative Research Commission Note.

(1/1/2015). 2014 Ky. Acts ch. 74, sec. 10 provided that “the provisions of this Act shall not impact the provisions of KRS 61.870 to 61.884 .” That proviso applies to this statute as amended in Section 7 of that Act.

42.734. Kentucky Wireless Interoperability Executive Committee created.

The Kentucky Wireless Interoperability Executive Committee is hereby created to address communications interoperability, a homeland security issue which is critical to the ability of public safety first responders to communicate with each other by radio. The committee shall advise and make recommendations to the executive director of the Commonwealth Office of Technology regarding strategic wireless initiatives to achieve public safety voice and data communications interoperability.

History. Enact. Acts 2003, ch. 164, § 1, effective June 24, 2003; 2005, ch. 85, § 34, effective June 20, 2005; repealed and reenact., Acts 2009, ch. 12, § 10, effective June 25, 2009.

Compiler’s Notes.

This section was formerly compiled as KRS 11.5161 .

42.736. Definitions for KRS 42.734, 42.736, and 42.738.

As used in this section and KRS 42.734 and 42.738 , unless the context requires otherwise:

  1. “Architecture” means the design principles, physical structure, and functional organization of a land mobile radio system;
  2. “Frequency” means for a periodic function, the number of cycles or events per unit time that comprises the frequency spectrum used by or assigned to a wireless public safety voice or data communications system;
  3. “Interoperability” means:
    1. The ability of public safety agencies to be able to communicate with one another; to exchange voice or data with one another in real time;
    2. The ability of systems, units, or forces to provide services to and accept services from other systems, units, or forces and to use the services so exchanged to enable them to operate effectively together; and
    3. The condition achieved among communications-electronics systems or items of communications-electronic equipment when information or services can be exchanged directly and satisfactorily between them and their users;
  4. “Primary wireless public safety voice or data communications systems” means a regular interacting group of base, mobile, and associated control and fixed relay stations intended to provide land mobile radio voice or data communications service over a single area of operation for public safety agencies. This definition shall not include “911” telephone systems;
  5. “Public safety shared infrastructure” means any component that by the nature of its function or physical characteristics can be used by multiple agencies to implement or support primary wireless public safety voice or data communications systems. This shall include but not be limited to towers, equipment shelters, radios, and other electronic equipment, backbone communications networks, and communications-related software;
  6. “Public safety working group” means a working group whose mission is to design and develop a seamless coordinated plan for the use of the public safety frequency spectrum as regulated by the Federal Communications Commission;
  7. “Spectrum” means a usable radio frequency in the electromagnetic distribution; and
  8. “Standards” means:
    1. Engineering and technical requirements that are necessary to be employed in the design of systems, units, or forces and to use the services so exchanged to enable them to operate effectively together, including but not limited to operating frequencies, over-the-air protocols, and bandwidth; and
    2. Established protocol that provides a common interface.

History. Enact. Acts 2003, ch. 164, § 2, effective June 24, 2003; 2004, ch. 48, § 1, effective July 13, 2004; repealed, reenact. and amend., Acts 2009, ch. 12, § 11, effective June 25, 2009.

Compiler’s Notes.

This section was formerly compiled as KRS 11.5162 .

42.738. Statewide public safety interoperability plan — Annual report by executive director— Duties of Kentucky Wireless Interoperability Executive Committee — Membership — Public Safety Working Group.

  1. The executive director shall establish and implement a statewide public safety interoperability plan. This plan shall include the development of required architecture and standards that will insure that new or upgraded Commonwealth public safety communications systems will interoperate. The Kentucky Wireless Interoperability Executive Committee shall be responsible for the evaluation and recommendation of all wireless communications architecture, standards, and strategies. The executive director shall provide direction, stewardship, leadership, and general oversight of information technology and information resources. The executive director shall report by September 15 annually to the Interim Joint Committee on Seniors, Veterans, Military Affairs, and Public Protection and the Interim Joint Committee on State Government on progress and activity by agencies of the Commonwealth to comply with standards to achieve public safety communications interoperability.
  2. The Kentucky Wireless Interoperability Executive Committee shall serve as the advisory body for all wireless communications strategies presented by agencies of the Commonwealth and local governments. All state agencies in the Commonwealth shall present all project plans for primary wireless public safety voice or data communications systems for review and recommendation by the committee, and the committee shall forward the plans to the executive director for final approval. Local government entities shall present project plans for primary wireless public safety voice or data communications systems for review and recommendation by the Kentucky Wireless Interoperability Executive Committee.
  3. The committee shall develop funding and support plans that provide for the maintenance of and technological upgrades to the public safety shared infrastructure, and shall make recommendations to the executive director, the Governor’s Office for Policy and Management, and the General Assembly.
  4. The executive director shall examine the project plans for primary wireless public safety voice or data communications systems of state agencies as required by subsection (2) of this section, and shall determine whether they meet the required architecture and standards for primary wireless public safety voice or data communications systems.
  5. The Kentucky Wireless Interoperability Executive Committee shall consist of twenty (20) members as follows:
    1. A person knowledgeable in the field of wireless communications appointed by the executive director who shall serve as chair;
    2. The executive director of the Office of Infrastructure Services, Commonwealth Office of Technology;
    3. The executive director of Kentucky Educational Television, or the executive director’s designee;
    4. The information technology lead of the Transportation Cabinet;
    5. The information technology lead of the Justice and Public Safety Cabinet;
    6. The information technology lead of the Department of Kentucky State Police;
    7. The commissioner of the Department of Fish and Wildlife Resources, or the commissioner’s designee;
    8. The information technology lead of the Energy and Environment Cabinet;
    9. The director of the Division of Emergency Management, Department of Military Affairs;
    10. The executive director of the Kentucky Office of Homeland Security;
    11. The information technology lead of the Department for Public Health, Cabinet for Health and Family Services;
    12. A representative from an institution of postsecondary education appointed by the Governor from a list of three (3) names submitted by the president of the Council on Postsecondary Education;
    13. The executive director of the Center for Rural Development, or the executive director’s designee;
    14. A representative from a municipal government to be appointed by the Governor from a list of three (3) names submitted by the Kentucky League of Cities;
    15. A representative from a county government to be appointed by the Governor from a list of three (3) names submitted by the Kentucky Association of Counties;
    16. A representative from a municipal police department to be appointed by the Governor from a list of three (3) names submitted by the Kentucky Association of Chiefs of Police;
    17. A representative from a local fire department to be appointed by the Governor from a list of three (3) names submitted by the Kentucky Association of Fire Chiefs;
    18. A representative from a county sheriff’s department to be appointed by the Governor from a list of three (3) names submitted by the Kentucky Sheriffs’ Association;
    19. A representative from a local Emergency Medical Services agency to be appointed by the Governor from a list of three (3) names submitted by the Kentucky Board of Emergency Medical Services; and
    20. A representative from a local 911 dispatch center to be appointed by the Governor from a list of three (3) names submitted by the Kentucky Chapter of the National Emergency Number Association/Association of Public Safety Communications Officials.
  6. Appointed members of the committee shall serve for a two (2) year term. Members who serve by virtue of an office shall serve on the committee while they hold that office.
  7. The committee shall meet quarterly, or as often as necessary for the conduct of its business. A majority of the members shall constitute a quorum for the transaction of business. Members’ designees shall have voting privileges at committee meetings.
  8. The committee shall be attached to the Commonwealth Office of Technology for administrative purposes only. Members shall not be paid and shall not be reimbursed for travel expenses.
  9. The Public Safety Working Group is hereby created for the primary purpose of fostering cooperation, planning, and development of the public safety frequency spectrum as regulated by the Federal Communications Commission, including the 700 MHz public safety band. The group shall endeavor to bring about a seamless, coordinated, and integrated public safety communications network for the safe, effective, and efficient protection of life and property. The Public Safety Working Group membership and other working group memberships deemed necessary shall be appointed by the chair of the Kentucky Wireless Interoperability Executive Committee.
  10. The committee may establish additional working groups as determined by the committee.

History. Enact. Acts 2003, ch. 164, § 3, effective June 24, 2003; 2004, ch. 48, § 2, effective July 13, 2004; 2005, ch. 85, § 35, effective June 20, 2005; 2005, ch. 95, § 6, effective June 20, 2005; 2005, ch. 99, § 74, effective June 20, 2005; 2006, ch. 193, § 8, effective July 12, 2006; 2007, ch. 85, § 6, effective June 26, 2007; repealed, reenact. and amend., Acts 2009, ch. 12, § 12, effective June 25, 2009; 2010, ch. 24, § 34, effective July 15, 2010; 2018 ch. 78, § 5, effective July 14, 2018; 2021 ch. 81, § 5, effective June 29, 2021.

Compiler’s Notes.

This section was formerly compiled as KRS 11.5163 .

Legislative Research Commission Notes.

(7/13/2004). In subsection (5)(i) of this statute, a reference to “the Department of Emergency Management” has been changed to read “the Division of Emergency Management” to reflect the correct structure of the Department of Military Affairs. The Reviser of Statutes has corrected this manifest clerical error under the authority of KRS 7.136(1)(h).

42.740. Geographic Information Advisory Council — Purpose — Members — Conflicts of interest.

  1. There is hereby established a Geographic Information Advisory Council, attached to the Commonwealth Office of Technology for administrative purposes, to advise the executive director of the Commonwealth Office of Technology on issues relating to geographic information and geographic information systems.
  2. The council shall recommend policies and procedures that assist state and local jurisdictions in developing, deploying, and leveraging geographic information resources and geographic information systems technology for the purpose of improving public administration.
  3. The council shall closely coordinate with users of geographic information systems to recommend policies and procedures that ensure the maximum use of geographic information by minimizing the redundancy of geographic information and geographic information resources.
  4. The Geographic Information Advisory Council shall consist of twenty-six (26) members and one (1) legislative liaison. The members shall be knowledgeable in the use and application of geographic information systems technology and shall have sufficient authority within their organizations to influence the implementation of council recommendations.
    1. The council shall consist of:
      1. The secretary of the Transportation Cabinet or his or her designee;
      2. The secretary of the Cabinet for Health and Family Services or his or her designee;
      3. The director of the Kentucky Geological Survey or his or her designee;
      4. The secretary of the Finance and Administration Cabinet or his or her designee;
      5. The executive director of the Commonwealth Office of Technology or her or his designee, who shall serve as chair;
      6. The secretary of the Economic Development Cabinet or his or her designee;
      7. The commissioner of the Department for Local Government or his or her designee;
      8. The secretary of the Justice and Public Safety Cabinet or his or her designee;
      9. One (1) member appointed by the Governor from a list of three (3) persons submitted by the president of the Council on Postsecondary Education;
      10. The adjutant general of the Department of Military Affairs or his or her designee;
      11. The commissioner of the Department of Education or his or her designee;
      12. The secretary of the Energy and Environment Cabinet or his or her designee;
      13. The Commissioner of the Department of Agriculture or his or her designee;
      14. The secretary of the Tourism, Arts and Heritage Cabinet or his or her designee;
      15. Two (2) members appointed by the Governor from a list of six (6) persons submitted by the president of the Kentucky League of Cities;
      16. Two (2) members appointed by the Governor from a list of six (6) persons submitted by the president of the Kentucky Association of Counties;
      17. One (1) member appointed by the Governor from a list of three (3) persons submitted by the president of the Kentucky Chapter of the American Planning Association;
      18. One (1) member appointed by the Governor from a list of three (3) persons submitted by the president of the Kentucky Chamber of Commerce;
      19. One (1) member appointed by the Governor from a list of three (3) persons submitted by the president of the Kentucky Association of Professional Surveyors;
      20. One (1) member appointed by the Governor from a list of three (3) persons submitted by the president of the Kentucky Society of Professional Engineers;
      21. One (1) member appointed by the Governor from a list of three (3) persons submitted by the chairman of the Kentucky Board of Registered Geologists;
      22. One (1) member appointed by the Governor from a list of three (3) persons submitted by the president of the Council of Area Development Districts;
      23. One (1) member appointed by the Governor from a list of three (3) persons submitted by the president of the Kentucky Association of Mapping Professionals; and
      24. The executive director of the Kentucky Office of Homeland Security.
    2. The council shall have one (1) nonvoting legislative liaison, to be appointed by the Legislative Research Commission.
  5. The council may have committees and subcommittees as determined by the council or an executive committee, if an executive committee exists.
  6. A member of the council shall not:
    1. Be an officer, employee, or paid consultant of a business entity that has, or of a trade association for business entities that have, a substantial interest in the geographic information industry and is doing business in the Commonwealth;
    2. Own, control, or have, directly or indirectly, more than ten percent (10%) interest in a business entity that has a substantial interest in the geographic information industry;
    3. Be in any manner connected with any contract or bid for furnishing any governmental body of the Commonwealth with geographic information systems, the computers on which they are automated, or a service related to geographic information systems;
    4. Be a person required to register as a lobbyist because of activities for compensation on behalf of a business entity that has, or on behalf of a trade association of business entities that have, substantial interest in the geographic information industry;
    5. Accept or receive money or another thing of value from an individual, firm, or corporation to whom a contract may be awarded, directly or indirectly, by rebate, gift, or otherwise; or
    6. Be liable to civil action or any action performed in good faith in the performance of duties as a council member.
  7. Those council members specified in subsection (4)(a) of this section who serve by virtue of an office shall serve on the board while they hold that office.
  8. Appointed members of the council shall serve for a term of four (4) years. Vacancies in the membership of the council shall be filled in the same manner as the original appointments. If a nominating organization changes its name, its successor organization having the same responsibilities and purposes shall be the nominating organization.
  9. The council shall have no funds of its own, and council members shall not receive compensation of any kind from the council.
  10. A majority of the members shall constitute a quorum for the transaction of business. Members’ designees shall have voting privileges at council meetings.

History. Enacts. Acts 1994, ch. 327, § 4, effective July 15, 1994; 1997 (Ex. Sess.), ch. 1, § 40, effective May 30, 1997; 1998, ch. 48, § 4, effective July 15, 1998; 1998, ch. 69, § 23, effective July 15, 1998; 1998, ch. 426, § 87, effective July 15, 1998; repealed, reenact., and amend. Acts 2000, ch. 506, § 8, effective July 14, 2000; 2000, ch. 536, § 8, effective July 14, 2000; 2005, ch. 85, § 33 effective June 20, 2005; 2005, ch. 95, § 5, effective June 20, 2005; 2005, ch. 99, § 6, effective June 20, 2005; 2005, ch. 123, § 6, effective June 20, 2005; 2007, ch. 47, § 5, effective June 26, 2007; 2007, ch. 85, § 5, effective June 26, 2007; repealed, reenact. and amend., Acts 2009, ch. 12, § 9, effective June 25, 2009; 2009, ch. 16, § 2, effective June 25, 2009; 2010, ch. 24, § 35, effective July 15, 2010; 2010, ch. 117, § 31, effective July 15, 2010; 2012, ch. 69, § 10, effective July 12, 2012; 2019 ch. 139, § 1, effective June 27, 2019.

Compiler’s Notes.

This section was formerly compiled as KRS 11.515 .

42.740. Geographic Information Advisory Council — Purpose — Members — Conflicts of interest.

  1. There is hereby established a Geographic Information Advisory Council, attached to the Commonwealth Office of Technology for administrative purposes, to advise the executive director of the Commonwealth Office of Technology on issues relating to geographic information and geographic information systems.
  2. The council shall recommend policies and procedures that assist state and local jurisdictions in developing, deploying, and leveraging geographic information resources and geographic information systems technology for the purpose of improving public administration.
  3. The council shall closely coordinate with users of geographic information systems to recommend policies and procedures that ensure the maximum use of geographic information by minimizing the redundancy of geographic information and geographic information resources, as well as to ensure that the geographic information clearinghouse maintained by the Division of Geographic Information Systems meets the needs of all state agencies.
  4. The Geographic Information Advisory Council shall consist of twenty-five (25) members and one (1) legislative liaison. The members shall be knowledgeable in the use and application of geographic information systems technology and shall have sufficient authority within their organizations to influence the implementation of council recommendations.
    1. The council shall consist of:
      1. The secretary of the Transportation Cabinet or his or her designee;
      2. The secretary of the Cabinet for Health and Family Services or his or her designee;
      3. The director of the Kentucky Geological Survey or his or her designee;
      4. The secretary of the Finance and Administration Cabinet or his or her designee;
      5. The executive director of the Commonwealth Office of Technology or her or his designee, who shall serve as chair;
      6. The secretary of the Economic Development Cabinet or his or her designee;
      7. The commissioner of the Department for Local Government or his or her designee;
      8. The secretary of the Justice and Public Safety Cabinet or his or her designee;
      9. One (1) member appointed by the Governor from a list of three (3) persons submitted by the president of the Council on Postsecondary Education;
      10. The adjutant general of the Department of Military Affairs or his or her designee;
      11. The commissioner of the Department of Education or his or her designee;
      12. The secretary of the Energy and Environment Cabinet or his or her designee;
      13. The Commissioner of the Department of Agriculture or his or her designee;
      14. The secretary of the Tourism, Arts and Heritage Cabinet or his or her designee;
      15. The executive director of the Office of Property Valuation or his or her designee;
      16. One (1) member appointed by the Governor from a list of six (6) persons submitted by the president of the Kentucky League of Cities;
      17. One (1) member appointed by the Governor from a list of six (6) persons submitted by the president of the Kentucky Association of Counties;
      18. One (1) member appointed by the Governor from a list of three (3) persons submitted by the president of the Kentucky Chapter of the American Planning Association;
      19. One (1) member appointed by the Governor from a list of three (3) persons submitted by the president of the Kentucky Association of Professional Surveyors;
      20. One (1) member appointed by the Governor from a list of three (3) persons submitted by the president of the Kentucky Society of Professional Engineers;
      21. One (1) member appointed by the Governor from a list of three (3) persons submitted by the chairman of the Kentucky Board of Registered Geologists;
      22. One (1) member appointed by the Governor from a list of three (3) persons submitted by the president of the Council of Area Development Districts;
      23. One (1) member appointed by the Governor from a list of three (3) persons submitted by the president of the Kentucky Association of Mapping Professionals;
      24. One (1) member appointed by the Governor from a list of three (3) persons submitted by the executive director of the Kentucky Property Valuation Administrators Association; and
      25. The executive director of the Kentucky Office of Homeland Security.
    2. The council shall have one (1) nonvoting legislative liaison, to be appointed by the Legislative Research Commission.
  5. The council may have committees and subcommittees as determined by the council or an executive committee, if an executive committee exists.
  6. A member of the council shall not:
    1. Be an officer, employee, or paid consultant of a business entity that has, or of a trade association for business entities that have, a substantial interest in the geographic information industry and is doing business in the Commonwealth;
    2. Own, control, or have, directly or indirectly, more than ten percent (10%) interest in a business entity that has a substantial interest in the geographic information industry;
    3. Be in any manner connected with any contract or bid for furnishing any governmental body of the Commonwealth with geographic information systems, the computers on which they are automated, or a service related to geographic information systems;
    4. Be a person required to register as a lobbyist because of activities for compensation on behalf of a business entity that has, or on behalf of a trade association of business entities that have, substantial interest in the geographic information industry;
    5. Accept or receive money or another thing of value from an individual, firm, or corporation to whom a contract may be awarded, directly or indirectly, by rebate, gift, or otherwise; or
    6. Be liable to civil action or any action performed in good faith in the performance of duties as a council member.
  7. Those council members specified in subsection (4)(a) of this section who serve by virtue of an office shall serve on the board while they hold that office.
  8. Appointed members of the council shall serve for a term of four (4) years. Vacancies in the membership of the council shall be filled in the same manner as the original appointments. If a nominating organization changes its name, its successor organization having the same responsibilities and purposes shall be the nominating organization.
  9. The council shall have no funds of its own, and council members shall not receive compensation of any kind from the council.
  10. A majority of the members shall constitute a quorum for the transaction of business. Members’ designees shall have voting privileges at council meetings.

HISTORY: Enacts. Acts 1994, ch. 327, § 4, effective July 15, 1994; 1997 (Ex. Sess.), ch. 1, § 40, effective May 30, 1997; 1998, ch. 48, § 4, effective July 15, 1998; 1998, ch. 69, § 23, effective July 15, 1998; 1998, ch. 426, § 87, effective July 15, 1998; repealed, reenact., and amend. Acts 2000, ch. 506, § 8, effective July 14, 2000; 2000, ch. 536, § 8, effective July 14, 2000; 2005, ch. 85, § 33 effective June 20, 2005; 2005, ch. 95, § 5, effective June 20, 2005; 2005, ch. 99, § 6, effective June 20, 2005; 2005, ch. 123, § 6, effective June 20, 2005; 2007, ch. 47, § 5, effective June 26, 2007; 2007, ch. 85, § 5, effective June 26, 2007; repealed, reenact. and amend., Acts 2009, ch. 12, § 9, effective June 25, 2009; 2009, ch. 16, § 2, effective June 25, 2009; 2010, ch. 24, § 35, effective July 15, 2010; 2010, ch. 117, § 31, effective July 15, 2010; 2012, ch. 69, § 10, effective July 12, 2012; 2019 ch. 139, § 1, effective June 27, 2019; 2022 ch. 229, § 4.

42.742. Duties of Geographic Information Advisory Council.

  1. The Geographic Information Advisory Council’s duties shall include the following:
    1. Recommending the development and adoption of policies and procedures related to geographic information and geographic information systems;
    2. Providing input and recommendations for the development of a strategy for the maintenance and funding of a statewide base map and geographic information system;
    3. Recommending standards on geographic information and geographic information systems for inclusion in the statewide architecture;
    4. Contributing to the development and delivery of a statewide geographic information plan;
    5. Overseeing the development of operating policies and procedures for the management of the council and any standing or ad hoc committees and associated advisory groups; and
    6. Promoting collaboration and the sharing of data and data development, as well as other aspects of geographic information systems.
  2. The Division of Geographic Information Systems shall provide necessary staff support services to the council. All cabinets, departments, divisions, agencies, and officers of the Commonwealth shall furnish the council necessary assistance, resources, information, records, or advice as it may require to fulfill its duties.

History. Enact. Acts 1994, ch. 327, § 5, effective July 15, 1994; repealed, reenact., and amend. Acts 2000, ch. 506, § 9, effective July 14, 2000; 2000, ch. 536, § 9, effective July 14, 2000; 2005, ch. 85, § 36, effective June 20, 2005; repealed, reenact. and amend., Acts 2009, ch. 12, § 13, effective June 25, 2009; 2012, ch. 69, § 11, effective July 12, 2012; 2018 ch. 78, § 6, effective July 14, 2018; 2021 ch. 81, § 6, effective June 29, 2021.

Compiler’s Notes.

This section was formerly compiled as KRS 11.517 .

42.742. Duties of Geographic Information Advisory Council.

  1. The Geographic Information Advisory Council’s duties shall include the following:
    1. Recommending the development and adoption of policies and procedures related to geographic information and geographic information systems;
    2. Providing input and recommendations for the development of a strategy for the maintenance and funding of a statewide base map and geographic information system;
    3. Recommending standards on geographic information and geographic information systems for inclusion in the statewide architecture;
    4. Contributing to the development and delivery of a statewide geographic information plan;
    5. Recommending policies and procedures that ensure that the geographic information clearinghouse maintained by the Division of Geographic Information Systems meets the needs of all state agencies;
    6. Overseeing the development of operating policies and procedures for the management of the council and any standing or ad hoc committees and associated advisory groups; and
    7. Promoting collaboration and the sharing of data and data development, as well as other aspects of geographic information systems.
  2. The Division of Geographic Information Systems shall provide necessary staff support services to the council. All cabinets, departments, divisions, agencies, and officers of the Commonwealth shall furnish the council necessary assistance, resources, information, records, or advice as it may require to fulfill its duties.

HISTORY: Enact. Acts 1994, ch. 327, § 5, effective July 15, 1994; repealed, reenact., and amend. Acts 2000, ch. 506, § 9, effective July 14, 2000; 2000, ch. 536, § 9, effective July 14, 2000; 2005, ch. 85, § 36, effective June 20, 2005; repealed, reenact. and amend., Acts 2009, ch. 12, § 13, effective June 25, 2009; 2012, ch. 69, § 11, effective July 12, 2012; 2018 ch. 78, § 6, effective July 14, 2018; 2021 ch. 81, § 6, effective June 29, 2021; 2022 ch. 229, § 5.

42.744. Addition of nonlicensed raster-based datasets of publicly funded Kentucky locations to the Geospatial Data Warehouse — Exceptions — Confidentiality.

  1. All entities in Kentucky that create or purchase digital ortho-rectified aerial imagery, remotely sensed imagery, LiDAR, digital elevation models, or any other form of nonlicensed raster-based datasets of locations in Kentucky using public funds, in whole or in part, shall provide a copy of the information to the Commonwealth Office of Technology, Division of Geographic Information Systems, without cost, in order to allow the Commonwealth Office of Technology to effectively discharge its statutory responsibility to maintain an accurate and complete central statewide geographic information clearinghouse for official state use. The imagery provided to the Commonwealth Office of Technology shall be added to Kentucky’s secure Geospatial Data Warehouse for official government use only.
  2. Subsection (1) of this section shall not apply to roads, land parcels, structure locations, or other vector-based datasets acquired with public funding.
  3. The Commonwealth Office of Technology shall not disclose to the general public or make available for distribution, download, or purchase any data that an entity providing data under subsection (1) of this section has requested remain confidential.

History. Enact. Acts 2006, ch. 206, § 1, effective July 12, 2006; repealed and reenact., Acts 2009, ch. 12, § 14, effective June 25, 2009; 2012, ch. 69, § 12, effective July 12, 2012; 2018 ch. 78, § 7, effective July 14, 2018; 2021 ch. 81, § 7, effective June 29, 2021.

Compiler’s Notes.

This section was formerly compiled as KRS 11.518 .

42.744. Addition of nonlicensed raster-based datasets of publicly funded Kentucky locations to the Geospatial Data Warehouse — Exceptions — Confidentiality.

  1. All entities in Kentucky that create or purchase digital ortho-rectified aerial imagery, remotely sensed imagery, LiDAR, digital elevation models, or any other form of nonlicensed raster-based datasets of locations in Kentucky using public funds, in whole or in part, shall provide a copy of the information to the Commonwealth Office of Technology, Division of Geographic Information Systems, without cost, in order to allow the Commonwealth Office of Technology to effectively discharge its statutory responsibility to maintain an accurate and complete central statewide geographic information clearinghouse for official state use. The imagery provided to the Commonwealth Office of Technology shall be added to Kentucky’s secure Geospatial Data Warehouse for official government use only.
  2. All entities in Kentucky that create or purchase digital ortho-rectified aerial imagery, remotely sensed imagery, LiDAR, digital elevation models, or any other form of raster-based datasets of locations in Kentucky using public funds, in whole or in part, shall create or purchase that information in a nonlicensed format whenever such a format is available.
  3. Subsection (1) of this section shall not apply to roads, land parcels, structure locations, or other vector-based datasets acquired with public funding.
  4. The Commonwealth Office of Technology shall not disclose to the general public or make available for distribution, download, or purchase any data that an entity providing data under subsection (1) of this section has requested remain confidential.

HISTORY: Enact. Acts 2006, ch. 206, § 1, effective July 12, 2006; repealed and reenact., Acts 2009, ch. 12, § 14, effective June 25, 2009; 2012, ch. 69, § 12, effective July 12, 2012; 2018 ch. 78, § 7, effective July 14, 2018; 2021 ch. 81, § 7, effective June 29, 2021; 2022 ch. 229, § 6.

42.746. Statewide planning and mapping system for public buildings.

  1. To the extent funds are made available, the Commonwealth Office of Technology shall establish a statewide planning and mapping system for public buildings in this state for use by response agencies who are called to respond to an act of terrorism or an emergency.
  2. The statewide planning and mapping system for public buildings shall include:
    1. Floor plans, fire protection information, building evacuation plans, utility information, known hazards, and information on how to contact emergency personnel;
    2. The manner by which the information required by paragraph (a) of this subsection shall be transferred to the system from state agencies and the local political subdivisions who participate in the system;
    3. Standards for the software that shall be used by state agencies and local political subdivisions that participate in the system;
    4. Conditions for use of the system by response agencies;
    5. Guidelines for:
      1. The accessibility and confidentiality of information contained within the system; and
      2. The incorporation, in connection with the use of the system, of the items described in subsection (3)(b) of this section;
    6. In accordance with information obtained by the Kentucky Office of Homeland Security, a priority for the distribution of any money that may be available for state agencies and political subdivisions to participate in the system; and
    7. Guidelines recommended by the Division of Emergency Management for the training of persons employed by the response agencies concerning the use of the system.
  3. To the extent money is available, state agencies and political subdivisions shall:
    1. Participate in the statewide planning and mapping system; and
    2. Incorporate into their use of the system, without limitation:
      1. Evacuation routes and strategies for evacuation;
      2. Alarms and other signals or means of notification;
      3. Plans for remaining inside a building, room, structure, or other location during an emergency when egress may be impossible or when egress may present a more substantial risk than remaining inside; and
      4. Training and strategies for prevention in connection with attacks involving violence.

        If a state agency or political subdivision uses its own planning and mapping system before the Commonwealth Office of Technology establishes a statewide planning and mapping system, the state agency or political subdivision may continue to use its system unless money is made available for the state agency or political subdivision to update or modify its system as necessary for inclusion in the statewide system.

  4. The Commonwealth Office of Technology:
    1. Shall pursue any money that may be available from the federal government for the development and operation of a statewide planning and mapping system for public buildings, and for the distribution of grants to state agencies and political subdivisions that participate in the system; and
    2. May accept gifts, grants, and contributions for the development and operation of a statewide planning and mapping system, and for the distribution of grants to the state agencies and political subdivisions that participate in the system.
  5. Each state agency and political subdivision that participates in the system shall, on or before July 1, 2007, and on or before July 1 of each year thereafter, submit to the Commonwealth Office of Technology a progress report setting forth, in accordance with regulations promulgated by the Commonwealth Office of Technology, the experience of the agency or political subdivision with respect to its participation in the system. The Commonwealth Office of Technology shall receive and process the progress reports, and provide a summarized overview of the system to the Legislative Research Commission on or before October 1, 2007, and on or before October 1 of each year thereafter.

History. Enact. Acts 2006, ch. 223, § 1, effective July 12, 2006; repealed and reenact., Acts 2009, ch. 12, § 15, effective June 25, 2009.

Compiler’s Notes.

This section was formerly compiled as KRS 11.520 .

Legislative Research Commission Note.

(7/12/2006). 2006 Ky. Acts ch. 193, sec. 14, instructs the Reviser of Statutes to correct statutory references to agencies and officers whose names have been changed in the Act, as it confirms reorganization within the executive branch and establishes the Kentucky Office of Homeland Security. Such a correction has been made in this section.

42.747. Blockchain Technology Working Group.

  1. As used in this section, unless the context otherwise requires:
    1. “Blockchain technology” means shared or distributed data structures or digital ledgers used in peer-to-peer networks that:
      1. Store digital transactions;
      2. Verify and secure transactions cryptographically; and
      3. Allow automated self-execution of smart contracts;
    2. “Peer-to-peer networks” means computer systems that are connected to each other over the Internet so that each computer system:
      1. Is a client and a server simultaneously; and
      2. Allows file sharing without use of a central server;
    3. “Smart contract” means a computerized transaction protocol that self- executes the terms of a contract and that is integrated into the blockchain program architecture; and
    4. “Contract” means an agreement of the parties in fact, as found in their language or inferred from other circumstances, including course of performance, course of dealing, or usage of trade, reached through offer and mutual acceptance by the parties to be legally bound by the terms of the agreement which includes valuable consideration for all parties.
  2. There is hereby established a Blockchain Technology Working Group which shall be attached to the Commonwealth Office of Technology for administrative purposes.
  3. The working group shall evaluate the feasibility and efficacy of using blockchain technology to enhance the security of and increase protection for the state’s critical infrastructure, including but not limited to the electric utility grid, natural gas pipelines, drinking water supply and delivery, wastewater, telecommunications, and emergency services. The workgroup shall create a priority list of critical infrastructure that could benefit from the use of blockchain technology and then determine whether:
    1. Blockchain fits the distributed nature of transactions;
    2. The peer-to-peer network is robust enough to support the use of blockchain technology;
    3. A cost-benefit analysis of blockchain for each case is warranted to demonstrate its value, applicability, or efficiency; and
    4. If the parties involved in the blockchain would agree to its usage if deployed.
  4. The workgroup shall consist of nine (9) members, three (3) of which shall be ex officio, as follows:
    1. The chief information officer for the Commonwealth Office of Technology or his or her designee who shall serve as chair;
    2. The secretary for the Energy and Environment Cabinet or his or her designee;
    3. The chief information officer for the Finance and Administration Cabinet or his or her designee;
    4. A representative designated by the executive director of the Kentucky Public Service Commission, who has knowledge of the spatial characteristics of the infrastructure used by public utilities;
    5. The executive director of Kentucky Department of Homeland Security or his or her designee;
    6. One (1) member in academia designated by the chief information officer of the Commonwealth Office of Technology, who has expertise in blockchain technology and its applicability to different industry sectors
    7. One (1) ex officio member representing the Kentucky Municipal Utilities Association (KMUA) designated by the executive director of KMUA;
    8. One (1) ex officio member representing the investor-owned electric utilities designated by the executive director of the Kentucky Public Service Commission; and
    9. One (1) ex officio member representing Kentucky electric cooperatives designated by the chairman of the board of the Kentucky Association of Electric Cooperatives.
  5. The workgroup shall be staffed by the Commonwealth Office of Technology.
  6. The workgroup shall report to the Governor and to the Legislative Research Commission by December 1 of each year. The report shall include the current priority list and a discussion of whether blockchain could be deployed, and any associated cost-benefit analysis.

HISTORY: 2020 ch. 108, § 1, effective July 15, 2020.

42.800. Kentucky Kare Health Insurance Authority — Board of directors — Executive director — Annual audit. [Repealed.]

Compiler’s Notes.

This section (Enact. Acts 1998, ch. 82, § 6, effective July 15, 1998) was repealed by Acts 2001, ch. 164, § 18, effective June 21, 2001.

42.805. Kentucky Kare health insurance fund — Benefits — Contributions — Provisions of plan — Group rates for disabled children. [Repealed.]

Compiler’s Notes.

This section (Enact. Acts 1998, ch. 82, § 7, effective July 15, 1998) was repealed by Acts 2001, ch. 164, § 18, effective June 21, 2001.

42.810. Duties of authority — Amounts credited to fund — Investment of fund — Annual report — Actuarial evaluation. [Repealed.]

Compiler’s Notes.

This section (Enact. Acts 1998, ch. 82, § 8, effective July 15, 1998) was repealed by Acts 2001, ch. 164, § 18, effective June 21, 2001.

42.815. Self-funded health insurance fund not subject to certain taxes. [Repealed.]

Compiler’s Notes.

This section (Enact. Acts 1998, ch. 82, § 9, effective July 15, 1998) was repealed by Acts 2001, ch. 164, § 18, effective June 21, 2001.

42.820. Authority determines date on which option is available. [Repealed.]

Compiler’s Notes.

This section (Enact. Acts 1998, ch. 82, § 10, effective July 15, 1998) was repealed by Acts 2001, ch. 164, § 18, effective June 21, 2001.

42.825. Exclusion of coverage for employment-related conditions. [Repealed.]

Compiler’s Notes.

This section (Enact. Acts 1998, ch. 82, § 11, effective July 15, 1998) was repealed by Acts 2001, ch. 164, § 18, effective June 21, 2001.

42.990. Penalties. [Repealed and reenacted.]

Compiler’s Notes.

This section (1992b-3: amend. Acts 1954, ch. 187, § 5; repealed and reen. Acts 1968, ch. 152, § 18; 1974, ch. 74, Art. II, § 9(1)) was repealed and reenacted as KRS 45.991 by Acts 1984, ch. 111, § 36, effective July 13, 1984.

CHAPTER 43 Auditor of Public Accounts

43.010. Definitions for chapter.

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

  1. “Auditor” means the Auditor of Public Accounts.
  2. “Budget unit” means a department or other unit of organization for which separate appropriations are made from those for any other organization unit.
  3. “State agency” means any state officer, department, board, commission, institution, division, or other person or functional group that is authorized to exercise or does exercise any executive or administrative jurisdiction, powers, duties, rights or obligations of the state government conferred or imposed by law or exercised, performed, or discharged by legal authority in compliance with law.
  4. “Writing” or “written” means 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.

History. 1992b-2, 4618-69; 1998, ch. 120, § 3, effective July 15, 1998.

NOTES TO DECISIONS

1.Budget Unit or State Agency.

A “budget unit” or “state agency” as defined under this section do not include the Kentucky Bar Association or Kentucky board of bar examiners since these organizations exist solely by virtue of the rules of the Kentucky Supreme Court which are expressly and exclusively authorized by Ky. Const., § 116. Ex parte Auditor of Public Accounts, 609 S.W.2d 682, 1980 Ky. LEXIS 274 ( Ky. 1980 ).

Opinions of Attorney General.

The Kentucky Horse Council (now Horse Park Commission) is an agency of state government and all of its funds from whatever source received, including private sources, contributions and membership fees, upon receipt become public funds of a state agency and are subject to all general constitutional and statutory provisions governing the audit, budgeting, accounting and expenditure of state funds. OAG 74-715 .

The Governor’s Council on Agriculture is a state agency and all funds received by it from whatever source must be handled and accounted for as state funds. OAG 75-62 .

The Kentucky Bar Association is not a state agency for the purpose of being subjected to an audit by the Auditor of Public Accounts pursuant to KRS Chapter 43 and since the Bar Association is not a state budget unit, its receipts do not have to be deposited to the State Treasury and its funds are not subject to appropriation by the General Assembly. OAG 80-393 .

The Auditor of Public Accounts has no right to conduct audits of circuit court clerks, as a permissive mandatory matter, if he is not statutorily required or permitted to conduct such audits; however in view of the direct involvement of the circuit clerks in putting money into the State Treasury and expending money coming out of the state treasury, and in view of the express language of KRS 43.050(2)(a) and this section, the auditor of public accounts is required to audit the circuit court clerks of Kentucky in the areas of state treasury involvement, within the practical capabilities of his staff and budget, and considering other mandatory audits. OAG 81-41 .

The Kentucky Center for the Arts Corporation does not have to deposit the moneys it receives in the State Treasury since it is not a budget unit of the Commonwealth, a budget unit being a department or other unit of organization for which separate appropriations are made from those for any other organization unit (KRS 41.010 , this section and 45.010 (repealed)). OAG 81-129 .

Research References and Practice Aids

Cross-References.

Accounts of Auditor to be audited by Finance and Administration Cabinet, KRS 45.301 .

Acts of General Assembly, Auditor to receive and take care of, KRS 57.300 , 57.360 .

Commission from Governor, KRS 61.020 .

Constitutional provisions as to Auditor, Ky. Const., §§ 53, 91, 93, 95, 96.

Treasurer, Auditor to examine accounts of and take inventory of books and office equipment, KRS 41.330 .

Treasurer, suspension of, duties of Auditor, KRS 41.050 .

Unsatisfied claims of commonwealth, Auditor to assist Attorney General and Revenue Cabinet to investigate, KRS 15.060 .

43.020. Location of office of Auditor.

The Auditor shall keep his or her office at the seat of government.

History. 138, 141: amend. Acts 1946, ch. 26, § 4; 1946, ch. 27, § 19; 1966, ch. 255, § 51; 2020 ch. 59, § 1, effective July 15, 2020.

Opinions of Attorney General.

The Constitution providing only that all state officers shall reside within the Commonwealth, a state officer residing within the State of Kentucky may legally reside, where commuting time is less than an hour, in another county other than at the seat of government. OAG 69-196 .

Research References and Practice Aids

Cross-References.

Bond of Auditor, amount and conditions, KRS 62.160 , 62.180 .

Election, term and qualifications of Auditor, Ky. Const., §§ 91, 93, 95.

Oath to be taken and bond given before entering on duties of office, KRS 62.010 , 62.050 .

Salary, KRS 64.480 .

43.030. Assistant auditor — Subordinate personnel — Qualifications.

  1. The Auditor shall appoint for the duration of his or her own term, subject to removal by the Auditor at any time, one (1) assistant auditor of public accounts, who shall be a certified public accountant and who has been a citizen and resident of the state for at least two (2) years. The assistant auditor shall have direct supervision over all technical work and technical assistants, and shall otherwise aid the Auditor in the performance of his or her duties, except that the assistant auditor of public accounts may exercise a full or partial recusal from this supervision requirement in regard to the consulting function authorized in KRS 43.050 if needed to comply with the professional standards of accountancy. If the Auditor is absent or is rendered incapable of performing his or her duties, or if a vacancy in the office occurs, the assistant auditor shall perform the duties of Auditor until the necessity therefor ceases to exist. He or she shall take the constitutional oath.
  2. The Auditor may employ other subordinate personnel subject to the provisions of KRS 12.060 . All employees with status as defined in KRS 18A.005 who are engaged in auditing or investigations shall possess a minimum of a four (4) year college degree. No less than ninety percent (90%) of all employees engaged in financial auditing or financial investigations shall have twenty (20) semester hours or thirty (30) quarter hours of accounting, or alternately, shall be a certified public accountant. Not more than two (2) persons charged with the conduct of audits and investigations may substitute year-for-year responsible experience acceptable to the Personnel Cabinet for the required college education and accounting hours.
  3. The Auditor and his or her sureties are liable on his or her official bond for the acts of the assistant auditor and clerks.
  4. Nothing in this section shall be deemed to affect the provisions of KRS 11.090 or other legislation authorizing audits.

History. 140 to 142, 147, 4618-137: amend. Acts 1946, ch. 27, § 44; 1956 (1st Ex. Sess.), ch. 7, Art. XI; 1968, ch. 152, § 19; 1976, ch. 329, § 1; 1980, ch. 177, § 1, effective July 15, 1980; 1998, ch. 39, § 1, effective July 15, 1998; 1998, ch. 154, § 63, effective July 15, 1998; 2019 ch. 18, § 1, effective June 27, 2019; 2020 ch. 59, § 2, effective July 15, 2020.

NOTES TO DECISIONS

1.Clerical Force.

A clerk appointed by the person holding the office of Auditor was entitled to hold the position for the four-year term of the Auditor, although the person making the appointment was subsequently held not to be the lawful incumbent of the Auditor’s office. Smith v. Coulter, 113 Ky. 74 , 67 S.W. 1, 23 Ky. L. Rptr. 2384 , 1902 Ky. LEXIS 11 ( Ky. 1902 ).

The term of a clerk appointed by the Auditor continues during the Auditor’s four-year term or balance thereof, unless the clerk is lawfully removed or abandons the position. Smith v. Coulter, 113 Ky. 74 , 67 S.W. 1, 23 Ky. L. Rptr. 2384 , 1902 Ky. LEXIS 11 ( Ky. 1902 ).

The selection of the clerical force necessary for the proper conduct of the business of the Auditor’s office, and the fixing of their respective salaries, is at the discretion of the auditor, but the aggregate of such salaries cannot exceed the amount appropriated for the purpose by the General Assembly. Bosworth v. Shuck, 118 Ky. 458 , 81 S.W. 240, 26 Ky. L. Rptr. 324 , 1904 Ky. LEXIS 57 ( Ky. 1904 ).

The Auditor is primarily liable to the state for loss occasioned by fraudulent acts of his clerks. Commonwealth use of Coleman v. Farmers Deposit Bank, 264 Ky. 839 , 95 S.W.2d 793, 1936 Ky. LEXIS 413 ( Ky. 1936 ).

Cited:

Hager v. Lucas, 120 Ky. 307 , 27 Ky. L. Rptr. 710 , 86 S.W. 552, 1905 Ky. LEXIS 104 ( Ky. 1905 ).

Research References and Practice Aids

Cross-References.

Bonds to be required of employees handling money or property, KRS 62.170 .

43.040. Duty of Auditor at end of term.

  1. Upon the expiration of the Auditor’s term of office, the Auditor shall file a certification of the inventory of the office with the Secretary of State and shall deliver the inventory to the Auditor’s successor.
  2. In the event of a vacancy in the office of Auditor, the assistant auditor of public accounts shall file a certification of the inventory of the office with the Secretary of State and shall deliver the inventory to the Auditor’s successor.

History. 141; 2020 ch. 59, § 3, effective July 15, 2020.

43.050. General functions of Auditor.

  1. The Auditor constitutes an agency independent of the administrative departments enumerated in KRS 12.020 , it being the policy of the General Assembly to provide for the independent auditing of the accounts, financial transactions, and performance of all spending agencies of the state through a disinterested auditor, who is entirely independent of the state administration whose affairs he is called upon to audit.
  2. The Auditor may:
    1. Audit annually, and at such other times as may be deemed expedient, the accounts of all state agencies, all private and semiprivate agencies receiving state aid or having responsibility for the handling of any state funds, the accounts, records, and transactions of the budget units, and the general accounts of the state;
    2. Make a complete audit and verification of all moneys handled for the account of the state government by local officials charged with the collection of fees or other money for or on behalf of the state, when an audit is demanded in writing by the Legislative Research Commission, the secretary of the Finance and Administration Cabinet, or the Governor, and may make an audit when it is not so demanded;
    3. Examine periodically the performance, management, conduct, and condition of all asylums, prisons, institutions for the intellectually disabled, and eleemosynary institutions; public works owned, operated, or partly owned by the state, or in the conduct or management of which the state has any financial interest or legal power; and state agencies. The examinations shall give special attention to the faithful and economical application of any money appropriated by the state to the institution, public works, or state agency examined, or of any money in which the state has an interest;
    4. Examine annually the management and condition of the offices of the Finance and Administration Cabinet, the State Treasurer, and the chief state school officer, to determine whether the laws regulating their duties are being fully complied with, and all money received by them for the state fully accounted for;
    5. Examine, at least biennially, the Finance and Administration Cabinet’s compliance with this section and KRS 48.111 and 56.800 to 56.823 . Within sixty (60) days of the completion of each examination, the Auditor shall report his findings and recommendations to the Capital Projects and Bond Oversight Committee;
    6. Audit periodically all state revenue collections, and, if he finds that collections are not being satisfactorily made, report that fact to the authority whose duty it is to make the collections;
    7. Make special audits and investigations when required by the Governor;
    8. Investigate the means of accounting for, controlling, and insuring the safe custody of all property of the state, and verify the existence and condition of such property charged to, or held in the custody of any state agency;
    9. Audit the statements of financial condition and operations of the state government, and certify in writing the results of the audit and examination with the comments he deems necessary for the information of the General Assembly;
    10. Report immediately in writing to the Governor, the Legislative Research Commission, and the secretary of the Finance and Administration Cabinet, any unauthorized, illegal, irregular, or unsafe handling or expenditure of state funds, or other improper practice of financial administration, or evidence that any such handling, expenditure, or practice is contemplated, and any obstruction of the Auditor or his agents during the conduct of any audit or investigation of a state agency; and
    11. Assist the Legislative Research Commission at hearings and investigations conducted by it and cooperate with the Legislative Research Commission in the preparation of its reports to the General Assembly.
  3. The Auditor may investigate and examine into the conduct of all state and county officers who are authorized to receive, collect, or disburse any money for the state, or who manage or control any property belonging to the state or in which the state is interested, or who make estimates or records that are used as a basis by any state agency in the disbursement of public funds.
  4. The Auditor may conduct a special audit or examination of a city government or any of its agencies or departments.
  5. Except where otherwise provided, any expenses incurred by the Auditor for audits, examinations, investigations, or reviews shall be charged to the entity that is the subject of the audit, examination, investigation, or review. The Auditor shall maintain a record of all time expenses for each audit, examination, investigation, or review.
  6. The Auditor may provide consulting services, in accordance with auditing standards generally accepted in the United States and government auditing standards, to state or local government entities and associations of such entities, including special purpose governmental entities, and may charge a mutually agreed upon rate for those services, including:
    1. Providing training and technical presentations;
    2. Developing audit guides applicable to those entities;
    3. Developing question and answer documents to promote understanding of technical issues or standards; and
    4. Collaborating with other professional organizations to advance auditing of government entities and programs.
  7. The Auditor shall not be responsible for the keeping of any accounts of the state, except accounts relating to his own operations. The Auditor shall not be responsible for the collection of any money due the state, or for the handling or custody of any state funds or property except in the process of counting and verifying the amounts of the funds or property in the course of the audits provided for in this section.

History. 1992b-59, 4618-134, 4622, 4623: amend. Acts 1970, ch. 92, § 14; 1974, ch. 74, Art. II, §§ 9(1) and 9(2); 1978, ch. 92, § 1, effective June 17, 1978; 1982, ch. 450, § 59, effective July 1, 1983; 1990, ch. 512, § 14, effective July 13, 1990; 1992, ch. 27, § 3, effective March 2, 1992; 1998, ch. 39, § 2, effective July 15, 1998; 2009, ch. 78, § 29, effective June 25, 2009; 2010, ch. 141, § 3, effective July 15, 2010; 2016 ch. 17, § 1, effective July 15, 2016; 2020 ch. 59, § 4, effective July 15, 2020.

NOTES TO DECISIONS

1.State Bar and Bar Examiners Funds.

The funds of the Kentucky Bar Association and board of bar examiners have not been collected pursuant to any statute, have not been appropriated by the legislative body and are not subject to legislative appropriation, and thus are not subject to audit by the Auditor of Public Accounts under this section which directs the auditor to audit the accounts of all state, private and semiprivate agencies and accounts of budget units. Ex parte Auditor of Public Accounts, 609 S.W.2d 682, 1980 Ky. LEXIS 274 ( Ky. 1980 ).

2.Scope.

Defamation was not established because the mileage reimbursements paid to a publicly-elected sheriff by a county government were clearly within the scope of an audit of the sheriff's office, as was the sheriff's maximum allowed salary. Moreover, since a lease agreement was within the scope of the audit, any facts underlying the auditors' opinions about the lease were also within scope, and were covered by the pure opinion privilege. Williams v. Blackwell, 487 S.W.3d 451, 2016 Ky. App. LEXIS 16 (Ky. Ct. App. 2016).

Cited:

Perkins v. Sims, 350 S.W.2d 715, 1961 Ky. LEXIS 131 ( Ky. 1961 ).

Opinions of Attorney General.

In the absence of a written demand as set out in subsection (2)(b) of this section an audit by the auditor of public accounts of local officials in their handling of fines, forfeitures, and legal process taxes is permissive only. OAG 67-320 .

State agencies may make payment to the state auditor of the costs of the annual audit or other necessary audit and the auditor may receive such payments, reimbursements and/or interaccounting to cover the costs of such proper services. OAG 68-348 .

The expenditure of money appropriated and allocated to the office of the Auditor of public accounts for auditing the racing and trotting commissions which the State Auditor is not required to do would be an illegal expenditure of such funds. OAG 71-404 .

The State Auditor has no authority to audit the accounts of the Commonwealth Credit Union, Inc., since that corporation is not a “state agency” as defined by KRS 43.010 . OAG 72-121 .

Where the State Auditor is required to make audits for state agencies or departments and the budget of the Auditor does not provide for such services, the costs of such services may be interaccounted and, therefore, the department of military affairs may be required to pay the cost of audits in cities or counties experiencing flood or related disasters. OAG 72-284 .

The Auditor of Public Accounts has the authority to audit the Kentucky State Racing Commission and the Kentucky Trotting Commission and the opinions OAG 71-363 and 71-404 are modified to the extent they are in conflict with this opinion. OAG 72-428 .

Given the provisions of KRS 64.270 (now repealed) a master commissioner would be subject to audit under this section. OAG 72-720 .

The State Auditor has the authority to audit only the accounts of state agencies and county officers and there is no state auditing agency in existence that can audit the records of a city. OAG 74-90 .

The Kentucky Horse Council (now Horse Park Commission) is an agency of state government and all of its funds from whatever source received, including private sources, contributions and membership fees, upon receipt become public funds of a state agency and are subject to all general constitutional and statutory provisions governing the auditing, budgeting, accounting and expending of state funds. OAG 74-715 .

Fees collected by the Governor’s Council on Agriculture and deposited by the Council in a separate bank account must be deposited in and expended through the state treasury and are subject to the general auditing authority of the State Auditor. OAG 75-62 .

A county attorney, who submitted to a 1973 audit in early 1974 and made settlement with the fiscal court for the deficiency in May, 1974, properly refused to submit to a duplicate audit by the State Auditor’s office in 1975 and there was no violation of KRS 43.990(3) since the intent of this section is to avoid unnecessary and duplicate audits. OAG 75-112 .

Although it is clear that a part of the general functions of the State Auditor of Public Accounts, pursuant to this section is to audit, at least annually, the accounts of all state agencies, the General Assembly may statutorily authorize and mandate an audit in addition to this audit, so the plain meaning of KRS 164.760 must be adhered to and the annual audit report therein required to be done by an independent certified public accountant is in addition to any audit report which may be made by the State Auditor. OAG 75-591 .

The State Auditor should bill the counties for the entire cost of the “state” audit as well as the county fee officers audit. OAG 77-50 .

Where the Bureau for the Blind (now Department for the Blind), pursuant to KRS 163.470(14), operates a concession stand within the Louisville post office, the concession operation is subject to audit by the Auditor of Public Accounts pursuant to subsection (2)(a) of this section; since the State Auditor has the responsibility for auditing the Bureau for the Blind (now Department for the Blind), there is nothing in the statutes that would permit him to accept an audit of the concession stand done by a Bureau for the Blind (now Department for the Blind) employee. OAG 80-155 .

The Kentucky Bar Association is not a state agency for the purpose of being subjected to an audit by the Auditor of Public Accounts pursuant to KRS Chapter 43 and since the Bar Association is not a state budget unit, its receipts do not have to be deposited to the State Treasury and its funds are not subject to appropriation by the General Assembly. OAG 80-393 .

The Auditor of Public Accounts has no right to conduct audits of circuit court clerks, as a permissive mandatory matter, if he is not statutorily required or permitted to conduct such audits; however in view of the direct involvement of the circuit clerks in putting money into the state treasury and expending money coming out of the State Treasury, and in view of the express language of subsection (2)(a) of this section and 43.010 , the Auditor of Public Accounts is required to audit the circuit court clerks of Kentucky in the areas of State Treasury involvement, within the practical capabilities of his staff and budget, and considering other mandatory audits. OAG 81-41 .

The Auditor of Public Accounts in an administrative officer, not a legal officer, and must observe the inherent limitations of KRS 43.070 , 43.075 , 43.090 and this section. OAG 82-333 .

Research References and Practice Aids

Cross-References.

Auditor for teachers’ retirement system, KRS 161.370 .

Auditor included among departments enumerated, KRS 12.020 .

Books of Louisville and Jefferson County board of health, when to audit, KRS 212.550 .

Copy of published annual financial statement of public officers to be filed with Auditor, KRS 424.220 .

Revenue Cabinet, powers over local finance, KRS 131.140 .

Governor may employ experts for special audit, study or survey, KRS 11.070 , 11.090 to 11.110 .

Legislative Research Commission, KRS 7.090 to 7.110 .

Member of Archives and Records Commission, KRS 171.420 .

State fair fund, auditor to make annual accounting of, KRS 247.190 .

43.060. Annual investigation of accounts of Treasurer and Finance and Administration Cabinet.

The Auditor shall audit annually the Commonwealth’s Comprehensive Annual Financial Report, in accordance with generally accepted government auditing standards, and may at any other time the Auditor thinks necessary audit or examine the books, accounts, and papers of the State Treasurer and the Finance and Administration Cabinet.

History. 1992b-60, 4630: amend. Acts 1974, ch. 74, Art. II, § 9(1); 2020 ch. 59, § 5, effective July 15, 2020.

NOTES TO DECISIONS

1.Settling of Accounts.

The Auditor is required to have his accounts settled monthly. Commonwealth use of Louisville v. Ross, 135 Ky. 315 , 122 S.W. 161, 1909 Ky. LEXIS 290 ( Ky. 1909 ).

Research References and Practice Aids

Cross-References.

Accounts of Auditor and Treasurer to be investigated monthly and results reported, Ky. Const., § 53; KRS 45.301 .

43.070. Audit of accounts of county officers and special purpose governmental entities — Agreed-upon procedures engagement for country clerks and sheriffs.

    1. To determine whether any unauthorized, illegal, irregular, or unsafe handling or expenditure of revenue or other improper practice of financial administration has occurred and to assure that all proper items have been duly charged, taxed, and reported, the Auditor shall audit annually: (1) (a) To determine whether any unauthorized, illegal, irregular, or unsafe handling or expenditure of revenue or other improper practice of financial administration has occurred and to assure that all proper items have been duly charged, taxed, and reported, the Auditor shall audit annually:
      1. The funds contained in each county’s budget; and
      2. The books, accounts, and papers of all county clerks and sheriffs.
    2. The Auditor shall not conduct an audit pursuant to this subsection if the fiscal court or the elected official notifies the Auditor that a certified public accountant has been employed to audit the books, accounts, and papers of the county or the fee office, in accordance with KRS 64.810 .
      1. If any county clerk or sheriff meets the criteria established in this subsection and any additional criteria established in administrative regulations promulgated by the Auditor, that county clerk’s or sheriff’s audit required by this section may, in the discretion of the Auditor, be conducted by an agreed-upon procedures engagement performed by the Auditor. If, in the discretion of the Auditor, an agreed-upon procedures engagement in progress will not provide sufficient oversight of the county clerk’s or sheriff’s office, the Auditor may at any time convert the engagement to an audit performed under paragraph (a)2. of this subsection. A county clerk or sheriff shall not be eligible for the agreed-upon procedures engagement as allowed in this paragraph for the first audit period after election if the county clerk or sheriff is serving in office for the first time, or is assuming the office after experiencing a break in sequential service in that position. (c) 1. If any county clerk or sheriff meets the criteria established in this subsection and any additional criteria established in administrative regulations promulgated by the Auditor, that county clerk’s or sheriff’s audit required by this section may, in the discretion of the Auditor, be conducted by an agreed-upon procedures engagement performed by the Auditor. If, in the discretion of the Auditor, an agreed-upon procedures engagement in progress will not provide sufficient oversight of the county clerk’s or sheriff’s office, the Auditor may at any time convert the engagement to an audit performed under paragraph (a)2. of this subsection. A county clerk or sheriff shall not be eligible for the agreed-upon procedures engagement as allowed in this paragraph for the first audit period after election if the county clerk or sheriff is serving in office for the first time, or is assuming the office after experiencing a break in sequential service in that position.
      2. The Auditor and the county clerk or sheriff shall establish specific procedures for any agreed-upon procedures engagement. If the Auditor and the county clerk or sheriff cannot agree to the specific procedures for an agreed-upon procedures engagement, the audit of the county clerk’s or sheriff’s office shall be conducted under paragraph (a)2. of this subsection for that year subject to the audit.
      3. At a minimum, the county clerk or sheriff shall meet the following criteria in order to be eligible to have the county clerk’s or sheriff’s annual audit in any particular year conducted using agreed-upon procedures:
        1. The county clerk or sheriff applies to the Auditor to have an agreed-upon procedures engagement for the year subject to the audit on a form provided by the Auditor and by the application deadline established by the Auditor;
        2. The county clerk’s or sheriff’s office did not have any reported audit comment or finding in its most recent audit report;
        3. The county clerk or sheriff and the Auditor agree to specific procedures for the agreed-upon procedures engagement; and
        4. Any additional criteria that may be determined by the Auditor.
      4. The publication requirements related to an agreed-upon procedures engagement shall be the same as those required for audits of the county clerks and sheriffs performed under paragraph (a)2. of this subsection, except that the Auditor may provide a summary of the agreed-upon procedures engagement report, and publication of the summary shall satisfy the statutory requirements to publish the audit report, opinion letter, and transmittal letter.
      5. The billing and expense provisions of subsection (3) of this section shall apply to any agreed-upon procedures engagement performed under this section.
      6. The Auditor may promulgate administrative regulations that set forth additional criteria to qualify for agreed-upon procedures engagements, the application procedures, and the standards, procedures, guidelines, and reporting requirements for agreed-upon procedures engagements under this section.
      7. In exercising discretion regarding whether a county clerk or sheriff who otherwise meets the minimum requirements may have an agreed-upon procedures engagement in lieu of an audit for any particular year subject to an engagement, and in exercising discretion regarding the proposed procedures for the agreed-upon procedures engagement for any particular year subject to an audit, the Auditor may consider factors including but not limited to past audit comments or agreed-upon procedures engagement findings, assessment of risks, complaints, financial statements, the number of consecutive agreed-upon procedures engagements performed of the county clerk or sheriff, and other factors relevant to oversight of the county clerk’s or sheriff’s office.
  1. The Auditor may audit:
    1. The books, accounts and papers of all county judges/executive, county attorneys, coroners and constables; and
    2. The books, accounts, papers, and performance of all special purpose governmental entities as defined in KRS 65A.010 . The expense of any audit or examination performed pursuant to this paragraph shall be borne by the entity audited or examined.
  2. The county shall bear one-half (1/2) of the actual expense of the audit conducted pursuant to subsection (1)(a)1. of this section and shall bear the total actual expense of the audit conducted pursuant to subsections (1)(a)2. and (2)(a) of this section. No county shall be required to bear the expense for more than one (1) audit of the same fund or office annually pursuant to subsection (1)(a)1. or 2. of this section, except as provided in KRS 64.810(4).
  3. Within a reasonable time after the completion and distribution of the audit reports authorized by subsection (1) of this section, the Auditor of Public Accounts shall bill the county for the expenses incurred pursuant to subsection (3) of this section. A copy of this bill shall be forwarded to the secretary of the Finance and Administration Cabinet. Should the fiscal court within sixty (60) days following receipt of said bill determine the charge to be excessive or otherwise improper it shall submit its objection to the secretary of the Finance and Administration Cabinet and to the State Treasurer for resolution of the controversy in accordance with subsection (5) of this section. If the amount billed has not been paid within sixty (60) days from date of billing, and no objection has been filed, the Auditor shall notify the secretary of the Finance and Administration Cabinet and the secretary of revenue who shall cause said amount to be deducted from the next payment or return of moneys provided by KRS 47.110 by the state to the county or counties. Deductions shall continue until the total amount due the Auditor’s office has been paid. All moneys received pursuant to this section shall be credited to the trust and agency account of the Auditor of Public Accounts. When an objection to the bill has been filed with the secretary of the Finance and Administration Cabinet and the State Treasurer in accordance with subsection (5) of this section the amount found to be equitable and just shall become payable immediately upon the entry of the final decision.
  4. Any controversy over the amount of the bill for the actual expenses incurred shall be submitted by the fiscal court to the secretary of the Finance and Administration Cabinet and the State Treasurer for a decision as to the proper amount. In the event that these two (2) arbitrators fail to agree, then the controversy shall be submitted to the Attorney General, whose decision shall be final.

HISTORY: 4636-1: amend. Acts 1962, ch. 185; 1974, ch. 74, Art. II, § 9(1); 1974, ch. 254, § 8; 1976, ch. 229, § 1; 1976 (Ex. Sess.), ch. 14, § 12, effective January 2, 1978; 1976 (Ex. Sess.), ch. 20, § 6, effective January 2, 1978; 1978, ch. 197, § 11, effective June 17, 1978; 1982, ch. 121, § 1, effective July 15, 1982; 1984, ch. 111, § 37, effective July 13, 1984; 1986, ch. 51, § 1, effective July 15, 1986; 2013, ch. 40, § 18, effective March 21, 2013; 2018 ch. 118, § 1, effective July 14, 2018.

NOTES TO DECISIONS

1.Scope.

Defamation was not established because the mileage reimbursements paid to a publicly-elected sheriff by a county government were clearly within the scope of an audit of the sheriff's office, as was the sheriff's maximum allowed salary. Moreover, since a lease agreement was within the scope of the audit, any facts underlying the auditors' opinions about the lease were also within scope, and were covered by the pure opinion privilege. Williams v. Blackwell, 487 S.W.3d 451, 2016 Ky. App. LEXIS 16 (Ky. Ct. App. 2016).

Cited:

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

Opinions of Attorney General.

The State Auditor has the authority to audit only the accounts of state agencies and county officers and there is no state auditing agency in existence that can audit the records of a city. OAG 74-90 .

Subsection (2) of this section refers only to payment of the State Auditor for audits and does no apply to a private CPA hired in lieu of the State Auditor. OAG 74-449 .

The sheriff is responsible for preparing and submitting his report of settlement to the fiscal court and the reasonable cost of preparing it may be considered an official expense of his office and paid out of his fees, even though the report may not be a formal or technical audit although a formal audit is the most desirable approach from the public viewpoint, since an accountant can accurately and competently determine the existence or nonexistence of excess fees. OAG 75-33 .

The State Auditor is required to audit annually the funds contained in the county budget and the accounts of all county clerks, circuit clerks, county judges (now county judges/executive), county attorneys, sheriffs, jailers, coroners, constables and justices of the peace exercising criminal jurisdiction unless the elected official notifies the state auditor that he has employed a CPA to audit his official account prior to the beginning of the State Auditor’s audit. OAG 75-44 .

A county attorney, who submitted to a 1973 audit in early 1974 and made settlement with the fiscal court for the deficiency in May, 1974, properly refused to submit to a duplicate audit by the State Auditor’s office in 1975 and there was no violation of KRS 43.990(3) since the intent of this section is to avoid unnecessary and duplicate audits. OAG 75-112 .

So long as the $20.00, representing advance costs, remains in the trustee account in the custody of the clerk during the pendency of the suit, and prior to the termination of the suit and the taxing and paying of all costs, the auditor of public accounts has the responsibility of including such “receipts,” though technically not “fees” at that stage, in the auditing of such circuit clerk’s accounts, based upon the provisions in this section and KRS 64.810 that the “books, accounts, and papers” of circuit clerks shall be audited and the advance cost is revenue of the clerk’s office even in the custodial stage. OAG 75-233 .

In view of KRS 64.340 , where a misdemeanor defendant is not convicted, or the case does not proceed to judgment, a sheriff has no statutory means for collecting his fees and, since such fees are uncollectible, he is not accountable for them. OAG 75-393 .

Where a misdemeanor defendant is convicted but never pays the costs, including the sheriff’s fees, the sheriff, as a fee officer, is accountable in his audit for such uncollected fees unless he shows to the Auditor that he took all reasonable and practical means to collect such fees, although the statutes do not make the sheriff an insurer of the collection of fees legally due and payable. OAG 75-393 .

The controlling factor in determining whether the county pays the entire cost of a state audit, as this section provides by the amendment thereto effective June 21, 1974, is the date the audit is conducted, not the calendar year of the accounts audited. OAG 75-620 .

As there is nothing in the 1974 amendment to this section prohibiting retroactive application, such is permissible where the amendment is merely being applied to audits conducted after the amendment’s effective date though involving an account year prior to 1974. OAG 75-653 .

Since the new system of uniform accounting and standard bookkeeping procedures for all counties and county officials was to be established by January, 1975, pursuant to KRS 68.210 , the installation of the new system of auditing of county officials called for by this section and KRS 64.810 was mandatorily required as of January, 1975, and not before. OAG 76-51 .

The State Auditor has the primary responsibility for sending a written audit report of county officials and the letter of transmittal to a newspaper having general circulation in the county examined, and if the audit concerns the county’s budget then the Auditor’s office will have to pay one-half of the publication. OAG 76-204 .

All of the revenue for the 1976-78 biennium provided for in the 1976-78 biennial budget for the Auditor of Public Accounts can be utilized by such office for expenditure to carry out the necessary constitutional functions of such office which functions are determined to be necessary constitutional functions of government. OAG 76-558 .

The State Auditor should bill the counties for the entire cost of the “state” audit as well as the county fee officers audit. OAG 77-50 .

Audits of the county auditor’s office should cover each calendar year during the term of the county attorney. OAG 78-359 .

For purposes of audit, under this section, and for the purpose of determining the sheriff’s aggregate rubber dollar income under Ky. Const., § 246, payments made by the Army Corps of Engineers to county sheriffs under contracts to provide law enforcement to designated civil works water resource projects are to financially assist the sheriffs to step up law enforcement activities in such projects during peak visitation periods, are impressed with a public fee character, accrue to the office, and count toward the aggregate rubber dollar limit for that year. OAG 79-454 .

Where the United States Department of the Army Corps of Engineers has contracted with various fiscal courts and sheriffs for increased law enforcement at civil works water resource projects, the federal financial assistance paid to the fiscal court or the sheriff is construed, for audit purposes of the affected county and sheriff’s income, as included in the audit of the county treasurer, if paid to him, and as county sheriff’s fee income, if paid to him. OAG 79-454 .

Where jailer is carrying on a commissary operation in the jail, he should maintain commissary records in order to provide an adequate basis for determining whether he is operating at a profit to himself or not; such records take on the nature of public records since there is no logical way to disassociate the commissary activity of this public officer from his functions as jailer, and would be a part of the total official records as concerns any auditing of the books. OAG 80-525 .

The audit by the Auditor of Public Accounts apparently carries with it a presumption of the financial status or of correctness as to the county clerk’s account for the year, unless such presumption is overturned or overcome in some way in an appropriate law suit; the exception to this would arise where the account involves “unliquidated claims,” and in which case the fiscal court acting in good faith could work out a compromise with the clerk as to any unliquidated claims. OAG 80-618 .

The county attorneys of Kentucky are not required to publish a financial statement pursuant to KRS 424.220 since the auditing of the county attorney’s books pursuant to this section and KRS 64.810 is ample to disclose the specifics of his official operation. OAG 81-168 .

The Auditor of Public Accounts is an administrative officer, not a legal officer, and must observe the inherent limitations of KRS 43.050 , 43.075 , 43.090 and this section. OAG 82-333 .

There is no statute which authorizes a county to charge interest on money owed from any fee officer after his audit has been completed for that year. OAG 82-489 .

The Auditor’s duty under KRS 43.070 et seq. requires audit reports of each officer, rather than one report for both the elected officer and the appointed successor, because without separate reports the Auditor’s findings would not reflect the separate liabilities, if any, of the person having responsibility for the public funds. OAG 91-227 .

Under KRS 64.810 , a fiscal court, county clerk, or sheriff has authority to employ a certified public accountant to perform to audit called for by this section, only if the Auditor of Public Accounts declines to perform such audit, or has failed to respond within 30 days to a written notice of intent to employ a certified accountant for such purpose. OAG 93-2 .

Research References and Practice Aids

Cross-References.

Copy of published annual statement of public officers to be filed with Auditor, KRS 424.220 .

Revenue Cabinet, investigation of officers’ accounts, KRS 131.210 .

43.071. Annual audit of county clerk’s motor vehicle and motorboat tax receipts.

  1. The Auditor of Public Accounts shall annually audit each county clerk concerning:
    1. All receipts due from the collection of motor vehicle and motorboat registration fees, motor vehicle and motorboat licenses and other receipts due the clerk pertaining to motor vehicles and motorboats as prescribed in KRS Chapters 186, 186A and 235;
    2. All receipts due from the collection of motor vehicle usage tax as prescribed by KRS 138.460 ; and
    3. All receipts due from the collection of the ad valorem tax on motor vehicles and motorboats as prescribed by KRS 134.800 . These annual audits shall be completed by April 15 of the year following the year to be audited.
  2. The provisions of KRS 43.070 shall not apply to the separate and distinct duties imposed on the Auditor of Public Accounts pursuant to subsection (1) of this section. The audits specified in subsection (1) of this section shall be conducted prior to the audits mandated by KRS 43.070 .
  3. Immediately upon completion of each audit, the Auditor of Public Accounts shall prepare a report of his findings noting any indebtedness to the Commonwealth. He shall furnish one (1) copy to the county clerk, one (1) copy to the secretary of the Transportation Cabinet, one (1) copy to the secretary of the Finance and Administration Cabinet and one (1) copy to the secretary of the Energy and Environment Cabinet. If the county clerk objects to any findings of indebtedness in the Auditor’s report, he shall file a written response with the Auditor within ten (10) days of his receipt of the report. The Auditor shall consider the written response and within thirty (30) days of its receipt issue a final report. If the county clerk wishes to object to any findings of indebtedness contained in the final report, he shall file a request within ten (10) days of his receipt of the final report for a hearing before a three (3) member panel composed of the secretary of transportation or his designee, the commissioner of the Department of Revenue or his designee, and the president of the Kentucky County Clerks Association or his designee. The hearing shall be conducted in accordance with the provisions of KRS Chapter 13B. The majority decision of this panel shall be determinative of any indebtedness to the Commonwealth. If the county clerk wishes to appeal the decision of this panel, he shall file the appeal in the Circuit Court for the county where he serves in accordance with KRS Chapter 13B.

History. Enact. Acts 1986, ch. 429, § 3, effective July 15, 1986; 1988, ch. 163, § 17, effective January 1, 1990; 1996, ch. 318, § 27, effective July 15, 1996; 2005, ch. 85, § 58, effective June 20, 2005; 2010, ch. 24, § 36, effective July 15, 2010.

43.073. Annual audit of school district entity by Auditor or private accountant — Expenses — Review of private audit by Auditor.

  1. The Auditor of Public Accounts shall be responsible for an annual audit of the funds contained in each school district cooperative, school district consortium, school district corporation, and any other entity formed by school districts in an agreement made pursuant to KRS 65.210 to 65.300 , with the cost of the audit to be borne by the audited entity.
  2. A school district cooperative, school district consortium, school district corporation, or other entity formed by school districts in an agreement made pursuant to KRS 65.210 to 65.300 may employ a certified public accountant to audit the books, accounts, and papers of the cooperative, consortium, corporation, or other entity in lieu of the audit required by subsection (1) of this section, if the Auditor of Public Accounts declines in writing to assume responsibility for performing the audit or fails to respond in writing within thirty (30) days of receiving the cooperative’s, consortium’s, corporation’s, or other entity’s written notice of its intent to employ a certified public accountant to conduct the audit. The cooperative, consortium, corporation, or other entity shall not enter into any contract with a certified public accountant for an audit unless the Auditor of Public Accounts has declined in writing to assume responsibility for performing the audit or has failed to respond within thirty (30) days of receipt of a written request for an audit.
    1. Any contract with a certified public accountant entered into as a result of the Auditor of Public Accounts either declining to assume responsibility of performing the audit or failing to respond within thirty (30) days of receipt of a written request for an audit shall specify the following: (3) (a) Any contract with a certified public accountant entered into as a result of the Auditor of Public Accounts either declining to assume responsibility of performing the audit or failing to respond within thirty (30) days of receipt of a written request for an audit shall specify the following:
      1. That the certified public accountant shall forward a copy of the audit report and management letters to the Auditor of Public Accounts for review;
      2. That the Auditor of Public Accounts shall have the right to review the certified public accountant’s work papers before and after the release of the audit; and
      3. That after review of the certified public accountant’s work papers, if discrepancies are found, the Auditor of Public Accounts shall notify the audited entity of the discrepancies. If the certified public accountant does not correct these discrepancies prior to the release of the audit, the Auditor of Public Accounts may conduct its own audit to verify the findings of the certified public accountant’s report.
    2. If an audit verifying the findings of the certified public accountant’s report is conducted by the Auditor of Public Accounts, the total audit expense incurred by the audited entity shall be an allowable expenditure and shall be paid by the audited entity to the Auditor of Public Accounts. If the audit conducted by the Auditor of Public Accounts discloses discrepancies in the audit by the certified public accountant, the findings of the Auditor of Public Accounts shall be deemed official for all purposes.

History. Enact. Acts 2000, ch. 491, § 1, effective July 14, 2000.

43.075. Uniform standards and procedures.

  1. The Auditor shall develop uniform standards and procedures for conducting, and uniform formats for reporting, all audits of county budgets and the accounts, books and papers of elected county or district officials performed under KRS 43.070(1)(a)1. and 2. or (1)(b) or 64.810 . The Auditor shall promulgate the uniform standards and procedures by administrative regulation according to KRS Chapter 13A.
  2. Upon and after July 15, 1986, no person shall conduct an audit under KRS 43.070(1)(a)1. and 2. or (1)(b) or 64.810 which does not comply with the standards and procedures promulgated by the state Auditor of Public Accounts under subsection (1) of this section.
  3. The uniform audit standards and procedures promulgated by the Auditor shall include but need not be limited to the requirement that each person performing an audit shall determine whether the fiscal court or county official is complying with the requirements of the uniform system of accounts adopted under KRS 68.210 , whether there is accurate recording of receipts by source and expenditures by payee, and whether or not each official is complying with all other legal requirements relating to the management of public funds by his office, including all publication requirements. The requirements for uniform formats for audit reports shall require that the format of reports for each category of county or district office shall be uniform.
  4. The Auditor shall make informational copies of the regulations containing the audit standards and procedures available to interested persons at their request, and may charge a reasonable fee for such copies.

History. Enact. Acts 1976, ch. 49, § 1; 1986, ch. 51, § 2, effective July 15, 1986; 2013, ch. 40, § 19, effective March 21, 2013.

Opinions of Attorney General.

The Auditor of Public Accounts is an administrative officer, not a legal officer, and must observe the inherent limitations of KRS 43.050 , 43.070 , 43.090 and this section. OAG 82-333 .

43.080. Access to books and records — Power to obtain testimony.

  1. The Auditor and his authorized agents shall have access to and may examine all books, accounts, reports, vouchers, correspondence files, records, money and property of any state agency. Every officer or employee of any such agency having such records or property in his possession or under his control shall permit access to and examination of them upon the request of the Auditor or any agent authorized by him to make such request.
  2. The Auditor and his assistants shall have access at all times to the papers, books and records of the asylums, prisons, institutions for the intellectually disabled and eleemosynary institutions, and public works that he is authorized to examine, and of any county officer who receives or disburses county funds.
  3. The Auditor may require information on oath from any person touching any matters relative to any account that the Auditor is required to state, audit or settle. The Auditor may administer the oath himself, or have it done by any officer authorized to administer an oath.
  4. The Auditor and his assistants may issue process and compel the attendance of witnesses before them, and administer oaths and compel witnesses to testify in any of the investigations the Auditor is authorized to make.

History. 150, 4618-136, 4625, 4636-1: amend. Acts 1978, ch. 92, § 2, effective June 17, 1978; 2010, ch. 141, § 4, effective July 15, 2010.

Opinions of Attorney General.

This section would not authorize the Auditor to subpoena construction plans in the possession of an individual stockholder of a construction company. OAG 77-436 .

43.090. Reports of audits and investigations — Implementation by agency of audit recommendation.

  1. Immediately upon completion of each audit and investigation, except those provided for in KRS 43.070 , the Auditor shall prepare a report of his or her findings and recommendations. He or she shall furnish one (1) copy of the report to the head of the agency to which the report pertains, one (1) copy to the Governor, one (1) copy to the secretary of the Finance and Administration Cabinet, one (1) copy to the Legislative Research Commission, and one (1) copy to the state librarian. The agency to which an Auditor’s draft report pertains shall respond in writing to any adverse or critical audit findings and to any recommendations contained in the draft report within fifteen (15) days of receipt of the draft report. The Auditor shall distribute the agency’s response to those entitled by this subsection to a copy of the audit report. Within sixty (60) days of the completion of the final audit or examination report, the agency to which an Auditor’s report pertains shall notify the Legislative Research Commission and the Auditor of the audit recommendations it has implemented and of the audit recommendations it has not implemented. The agency shall state the reasons for its failure to implement any recommendation made in the final audit or examination report. All audit reports and agency responses shall be, subject to KRS 61.870 to 61.884 , posted online in a publicly searchable format.
  2. The Auditor shall, within a reasonable time after the examination of each county as provided in KRS 43.070 , make a written report to the Governor, the General Assembly, the Attorney General, the state librarian, and the fiscal court and county attorney of the county examined, calling attention in specific terms to any mismanagement, misconduct, misapplication or illegal appropriation, or extravagant use of money received or disbursed by any officer of the county examined. In addition, said report shall be sent to a newspaper having general circulation in the county examined, and the letter of transmittal accompanying the report shall be published in said newspaper in accordance with the provisions of KRS Chapter 424. All audit reports and responses shall be, subject to KRS 61.870 to 61.884 , posted online in a publicly searchable format.

History. 1992b-59, 4618-135, 4636-4: amend. Acts 1942, ch. 139, §§ 1, 2; 1966, ch. 255, § 52; 1974, ch. 254, § 9; 1982, ch. 176, § 2, effective July 15, 1982; 2007, ch. 47, § 25, effective June 26, 2007; 2020 ch. 59, § 6, effective July 15, 2020.

Opinions of Attorney General.

The State Auditor has the primary responsibility for sending a written audit report of county officials and the letter of transmittal to a newspaper having general circulation in the county examined, and if the audit concerns the county’s budget then the Auditor’s office will have to pay one-half of the publication cost. OAG 76-204 .

Although this section makes audits “public documents,” under KRS 61.878 (f) these documents would not be available for public inspection, if they were to be the basis for a criminal prosecution, until after the criminal action was resolved. OAG 78-816 .

This section, in providing that audit and investigative reports are public documents, in effect amends KRS 61.870 (2) which defines “public records,” since this section, as amended in 1978, is later legislation (KRS 61.870 was enacted in 1976) and constitutes specific as contrasted with general legislation. OAG 78-816 .

It is not necessary that the letter of transmittal published under this section should contain notes accompanying the financial statement (audit). OAG 79-103 .

The letter of transmittal required by subsection (2) of this section should merely serve the purpose of alerting the public to the fact that an audit of the county funds has been completed and that a copy is on file with the clerk of fiscal court. OAG 79-103 .

The publication of a letter of transmittal under this section or even an Auditor’s report of audit in no way serves to cancel out the county treasurer’s duty to publish his or her report under KRS 424.220 . OAG 79-103 .

The Auditor of Public Accounts is an administrative officer, not a legal officer, and must observe the inherent limitations of KRS 43.050 , 43.070 , 43.075 and this section. OAG 82-333 .

43.200. Auditor’s scholarships in accounting.

  1. There is hereby created in the Auditor of Public Accounts office a scholarship program for economically disadvantaged students planning to major in accounting at Kentucky institutions of higher education agreeing to provide matching funds.
  2. Up to four (4) students each year may be selected by the Auditor as eligible to receive a scholarship for up to four (4) years while pursuing an accounting degree. Each individual scholarship shall be subject to review annually.
  3. The annual scholarship amount shall be set by the Auditor in an amount required to cover the average cost of room, board, tuition, and fees at Kentucky public institutions, as well as living expenses. In addition, the scholarship shall include full-time summer employment with the Auditor’s office.
  4. Upon receiving their accounting degree, recipients of the scholarship shall be required to work one (1) year for the Auditor’s office for each year they received the scholarship.
  5. Recipients failing to complete an accounting program or failing to fulfill the service requirement shall become liable to the Auditor’s office for the sum of all scholarship funds received plus interest for the entire period. The rate of interest shall be determined when the scholarship is awarded. The debt may be deferred for cause by the Auditor and a schedule for repayment may be established.
  6. The Auditor’s office shall execute appropriate contracts and promissory notes with scholarship recipients.

History. Enact. Acts 1988, ch. 358, § 1, effective July 15, 1988; 2020 ch. 59, § 7, effective July 15, 2020.

Research References and Practice Aids

2020-2022 Budget Reference.

See State/Executive Branch Budget, 2021 Ky. Acts ch. 169, Pt. I, A, 23, (1) at 1070.

43.990. Penalties.

  1. Any officer who prevents, attempts to prevent or obstructs an examination by the Auditor, under the provisions of paragraph (c) of subsection (2) of KRS 43.050 , or of subsection (3) of KRS 43.050 , into his official conduct, or the conduct or condition of the office in his charge or with which he is connected, except when the office constitutes a state agency, is guilty of a high misdemeanor, and, upon conviction on indictment in the Franklin Circuit Court, shall be fined five hundred dollars ($500) and removed by the Governor. Any person, other than an officer, who prevents, attempts to prevent or obstructs such an examination shall be fined one thousand dollars ($1,000).
  2. If the Auditor fails or refuses without good cause to perform the duties imposed upon him by KRS 43.060 , he shall be fined not less than two hundred and fifty dollars ($250) nor more than one thousand dollars ($1,000) for each offense.
  3. Any county officer who prevents, attempts to prevent or obstructs an examination by the Auditor, under KRS 43.070 , into his official conduct, or the conduct or condition of the office in his charge or with which he is connected, is guilty of a high misdemeanor, and shall, upon indictment and conviction in the Franklin Circuit Court, be fined five hundred dollars ($500). Any person, other than a county officer, who prevents, attempts to prevent or obstructs such an examination shall be fined one thousand dollars ($1,000).
  4. Any officer or other person who fails or refuses to permit the access and examination provided for in subsection (1) of KRS 43.080 , or who interferes with such examination, shall be fined not less than one hundred dollars ($100), or imprisoned in the county jail for not less than one (1) month nor more than twelve (12) months, or both. Each refusal by an officer shall constitute a separate offense.
  5. Any person who has custody of any papers, books or records of an asylum, prison, institution for the intellectually disabled or eleemosynary institution or public works, other than a state agency, that the Auditor is authorized to examine under paragraph (c) of subsection (2) of KRS 43.050 , under subsection (3) of KRS 43.050 , and under subsection (2) of KRS 43.080 , who fails or refuses, when called upon by the Auditor for that purpose, to permit him to inspect any of such papers, books or records, shall, upon conviction on indictment in the Franklin Circuit Court, be fined not more than five hundred dollars ($500) and be subject to removal by the Governor.
  6. Any person who refuses to be sworn when required by the Auditor to be sworn for the purpose mentioned in subsection (3) of KRS 43.080 shall be fined not more than one hundred dollars ($100).
  7. Any witness called by the Auditor under subsection (4) of KRS 43.080 who fails, without legal excuse, to attend or testify shall be fined not more than two hundred and fifty dollars ($250).

History. 150, 4618-136, 4625, 4626, 4628, 4629, 4635, 4636-2, 4636-3: amend. Acts 1978, ch. 92, § 3, effective June 17, 1978; 1980, ch. 348, § 1, effective July 15, 1980; 2010, ch. 141, § 5, effective July 15, 2010.

Opinions of Attorney General.

A county attorney, who submitted to a 1973 audit in early 1974 and made settlement with the fiscal court for the deficiency in May, 1974, properly refused to submit to a duplicate audit by the State Auditor’s office in 1975 and there was no violation of this section since the intent of this chapter is to avoid unnecessary duplicate audits. OAG 75-112 .

CHAPTER 44 Claims Upon the Treasury

44.001. Definitions for chapter.

As used in this chapter:

  1. “Local government” means any city, county, urban-county government, consolidated local government, charter county government, or unified local government of the Commonwealth;
  2. “Warrant” has the same meaning as in KRS 41.010 ; and
  3. “Writing” or “written” means 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.

History. Enact. Acts 1998, ch. 120, § 4, effective July 15, 1998; 2013, ch. 88, § 1, effective June 25, 2013; 2021 ch. 155, § 21, effective June 29, 2021.

NOTES TO DECISIONS

1.Sanitation District Was Not a Local Government.

Chapter 7 trustee was entitled to an order allowing him to garnish the accounts of a county sanitation district in order to satisfy a judgment because Ky. Rev. Stat. Ann. § 66.400 , which provided that the public property of any local government used for government or public purposes was exempt from seizure by attachment, execution, or other legal process, did not apply to sanitation districts, as they did not fall within the statutory definition of a local government. Further, even if it did, it could not apply retroactively to the judgment, which was entered prior to the enactment of § 66.400 , which became effective on June 27, 2019. Keats v. Bullitt Cty. Sanitation Dist. (In re Bullitt Utils., Inc.), 2019 Bankr. LEXIS 3403 (Bankr. W.D. Ky. Oct. 29, 2019).

44.010. Claims upon State Treasury, how paid.

All claims upon the State Treasury that are authorized by law shall be paid when due by the State Treasurer to the person entitled to the amount claimed. The warrant for such payment shall be issued by the Finance and Administration Cabinet upon such proof of services performed or of demand made as is required by law.

History. 340: amend. Acts 1974, ch. 74, Art. II, § 9(1).

NOTES TO DECISIONS

1.Origin of Claim.

Claims against the Treasury cannot arise by implication, and he who demands money from the public Treasury must fail unless his claim is warranted by law. Hager v. Sidebottom, 130 Ky. 687 , 113 S.W. 870, 1908 Ky. LEXIS 310 ( Ky. 1908 ).

2.Legality of Claim.

The Commissioner of Finance (now Secretary of Finance and Administration) has an opportunity to review and control payment of claims when presented. Reeves v. Talbott, 289 Ky. 581 , 159 S.W.2d 51, 1941 Ky. LEXIS 37 ( Ky. 1941 ).

To the extent the Department of Finance (now Finance and Administration Cabinet) is authorized to certify the correctness of a claim from an accounting and bookkeeping standpoint, the warrant must be honored by the Treasurer; however, the designation by the Legislature of certain specific duties and responsibilities under Ky. Const., § 93 does not extinguish the implied obligation of the office and the treasurer may properly, acting in good faith, upon a substantial constitutional ground, raise a question for judicial determination concerning the legality of a claim upon the Treasury. Raney v. Stovall, 361 S.W.2d 518, 1962 Ky. LEXIS 246 ( Ky. 1962 ).

3.Person Entitled.

Prior to KRS 427.130 “person entitled” did not include an attaching creditor of an officer paid by the state. Tiller v. Burke, 43 S.W. 182, 19 Ky. L. Rptr. 1149 (1897); Dickinson v. Johnson, 110 Ky. 236 , 61 S.W. 267, 22 Ky. L. Rptr. 1686 , 1901 Ky. LEXIS 78 ( Ky. 1901 ).

4.Basic Reparation Benefits.

The basic reparation benefits section of the Motor Vehicle Reparations Act, KRS 304.39-060 , applies to awards made by the Board of Claims pursuant to KRS Chapter 44. Cooke v. Board of Claims, 743 S.W.2d 32, 1987 Ky. App. LEXIS 575 (Ky. Ct. App. 1987).

Opinions of Attorney General.

“When due” within the meaning of this section includes the requirement that the services have been rendered. OAG 79-448 .

The advance payment of money to the Brussels office of the European economic development office of the Commonwealth of Kentucky for the purpose of paying certain operational expenses is constitutional under Ky. Const., §§ 3 and 171 and meets precisely the requirements of this section that claims against the state treasury be paid only when due since the final and effective disbursement of the operational money is only effected after the persons or corporations have actually performed the services. OAG 79-532 .

Any practice of making full or partial payments on state personal service contracts in advance of the actual and full performance of the contract is unconstitutional. OAG 80-38 .

Statutory law and Ky. Const., §§ 3 and 171 mandate the payment of state money only after the services have been rendered or performed. OAG 82-281 .

Where it is contemplated that state money must be turned over or advanced to private or corporate contractors before contractual services are actually rendered, and the state officials engaging in the contracts determine in good faith that such advancements are necessary in point of time and the ultimate rendering of the services sought, such advancements may be constitutional under these conditions: (1) the contract must expressly provide that the responsible contractor will not make final effective disbursement of the advanced state funds until the contractual services have in fact been rendered; (2) in order to protect the State Treasury, the contractor must execute a suitable bond or procure an insurance contract providing for full repayment to the state where advanced money has been disbursed without reflecting the concomitant contractual services to be rendered. OAG 82-281 .

Where the state’s money remains in the hands of officials or employes of state government and the money is not finally and effectively paid out until the services are performed, such an arrangement is valid under Ky. Const., §§ 3 and 171. OAG 82-281 .

An action for negligence pursuant to this section appears to be the only potential way recovery may be had from the Commonwealth for damages caused by wild deer if, indeed, recovery may be had at all. OAG 90-70 .

There being no legislative waiver of the Commonwealth’s immunity from suit for damage by wild deer, and there being no legal duty of the Commonwealth to prevent wild deer from damaging persons or property such as would give rise to a Board of Claims action sounding in negligence, the Commonwealth of Kentucky, Department of Fish and Wildlife Resources, incurs no legal liability as a result of wild deer injuring persons or damaging property. OAG 90-70 .

In the limited circumstance where federal law preempts state law that would otherwise govern, the State Treasurer may authorize, without a completed “warrant” at the time the authorization is given, the financial agent of the U.S. Treasury to debit the bank account of the Commonwealth for the amount the Commonwealth owes in federal tax deposits. OAG 94-65 .

Research References and Practice Aids

Cross-References.

Annual statement of state expenditures to be published, Ky. Const., § 230.

Attachment or garnishment of sums due from Treasury, KRS 427.130 .

Constitutional provisions relating to payments out of State Treasury, Ky. Const., §§ 58, 59(14), 98, 106, 120, 230.

County boards of assessment appeals to receive half of compensation from State Treasury, KRS 133.030 .

Election expenses, state to pay part of, KRS 117.345 .

Fees of county officers paid into Treasury, 25% to be returned to counties, KRS 64.350 .

Fees of officers payable out of State Treasury, KRS Ch. 64.

Fraudulent, illegal or erroneous claim, attorney general to recover, KRS 15.060 .

How claims presented, approved and paid, KRS 41.120 , 41.160 , 45.121 .

Money not to be drawn from State Treasury unless appropriated, Ky. Const., § 230; KRS 41.110 .

Premiums on sheriffs’ bonds, when claim against state, KRS 62.155 .

Private claims against state, when may be allowed or paid, Ky. Const., § 58.

Record books, blanks and forms paid for by state, KRS 46.020 .

Refund of money by local or special act forbidden, Ky. Const., § 59(14).

Refund or credit of taxes, KRS 134.580 , 134.590 .

Salaries of county and city officers, when to be paid out of State Treasury, Ky. Const., § 106.

Witnesses, when fees paid by state, KRS 30A.110 , 421.030 , 421.050 .

Kentucky Law Journal.

Oberst and Lewis, Claims Against the State of Kentucky, 42 Ky. L.J. 65 (1953).

44.020. Claims allowed by courts — Contest.

  1. Within three (3) working days after the first and fifteenth of each month, the sheriff, or any other public official with a claim payable from the State Treasury for duties performed in any court of the Court of Justice, shall make out the claim and have it certified by the judge of the court as allowable for payment, and transmit the list to the Department for Local Government. The claim approved by the judge of the court shall serve as an order of allowance notwithstanding any statutory provision to the contrary. The Department for Local Government shall keep a separate record of all claims allowed in each county, noting the number and amount of each warrant issued for the payment of the claims.
  2. The order of any court authorized by law to approve and allow fee bills, settlements, credits, charges, and other claims against the State Treasury shall not be treated as a judgment, or made conclusive against the state, but shall only be regarded as prima facie evidence of the correctness and legality of the fee bill, settlement, credit, charge, or claim. The Department for Local Government, if it believes the fee bill, settlement, credit, charge, or claim to be fraudulent, erroneous, or illegal, may, upon the advice of the Attorney General, refuse to pay and may contest the claim in the Franklin Circuit Court, which shall have exclusive jurisdiction of all actions against the Department for Local Government to compel the payment of claims against the State Treasury.

History. 340a-1, 359: amend. Acts 1954, ch. 191; 1974, ch. 74, Art. II, § 9(1); 1976, ch. 62, § 51; 1976 (Ex. Sess.), ch. 14, § 13; 1978, ch. 384, § 123, effective June 17, 1978; 1990, ch. 136, § 1, effective July 13, 1990; 1998, ch. 69, § 15, effective July 15, 1998; 2007, ch. 47, § 26, effective June 26, 2007; 2010, ch. 117, § 32, effective July 15, 2010.

NOTES TO DECISIONS

1.Refusal to Issue Warrant.

The Auditor (now Finance and Administration Cabinet) may refuse to issue warrant for any claim, the correctness of which he questions. Greene v. Ballard, 174 Ky. 808 , 192 S.W. 841, 1917 Ky. LEXIS 246 ( Ky. 1917 ).

2.Defendant’s Costs in Felony Case.

Circuit Courts may not bind state for attendance and mileage claims of witness for defendant tried for a felony, nor for cost of subpoenaing the witness. Greene v. Ballard, 174 Ky. 808 , 192 S.W. 841, 1917 Ky. LEXIS 246 ( Ky. 1917 ).

3.Order Authorizing Claim.

An order of court allowing a claim against the treasury is prima facie evidence of that correctness of the claim. Talbott v. Caudill, 248 Ky. 146 , 58 S.W.2d 385, 1933 Ky. LEXIS 206 ( Ky. 1933 ).

4.Contesting Claim.

The joint decision of the Auditor (now Finance and Administration Cabinet) and Attorney General not to contest the validity of a claim is not final. Commonwealth v. Carter, 55 S.W. 701, 21 Ky. L. Rptr. 1509 , 1900 Ky. LEXIS 545 ( Ky. 1900 ).

5.— Exclusive Jurisdiction.

Franklin Circuit Court has exclusive jurisdiction of all actions to compel payment of claims by the Auditor (now Finance and Administration Cabinet). Greene v. Wolf, 175 Ky. 58 , 193 S.W. 1048, 1917 Ky. LEXIS 290 ( Ky. 1917 ).

6.— Petition.

In suit against circuit clerk for sums paid by state on fraudulent witness claims issued by him, petition should have alleged transmission by clerk of alphabetical list of claims, but such defect was cured by verdict. Fraize v. Commonwealth, 16 Ky. L. Rptr. 29 (1894).

7.Appeal of Award.

Plaintiffs maintained that under this section an award of attorney fees against the Commonwealth could only be reviewed by the Franklin Circuit Court. However, the case was unique in that the Franklin Circuit Court was the court which ordered the award of attorneys fees against the Commonwealth and since statutes must be given a practical construction, and will not be given strict or literal reading where this would lead to an absurd or unreasonable conclusion, it would be unreasonable for the Franklin Circuit Court to review its own decision. Giving the statute a practical construction in light of the special circumstances and the fact that all parties were entitled as a matter of right to one appeal under Ky. Const., § 115, the Court of Appeals held that its jurisdiction over the appeal in this case was proper. Revenue Cabinet v. Barbour, 836 S.W.2d 418, 1992 Ky. App. LEXIS 14 (Ky. Ct. App. 1992).

Cited:

Commonwealth ex rel. Att’y Gen. v. Bacon, 111 S.W. 387, 1908 Ky. LEXIS 337 , 33 Ky. L. Rptr. 935 (Ky. Ct. App. 1908).

Opinions of Attorney General.

Claims of the Circuit Court clerk for fees in lunacy cases presided over by the county judge (now county judge/executive) may be approved by said judge at the time of the inquest, otherwise they must be approved by the Circuit Judge. OAG 65-457 .

Although subsection (2) of this section provides that an order of a court allowing fees, etc., shall not be treated as a “judgment,” the Legislature intended to say that such judgments for claims shall not be “final judgments,” since the Executive Department for Finance and Administration (now Finance and Administration Cabinet) may contest a particular claim in Franklin Circuit Court, which has exclusive jurisdiction of such matters. OAG 78-249 .

Since this section concerns only claims against the state allowed by courts, the inclusion of the “county court clerk” is a misnomer since there is no county court and is meaningless in that context. OAG 78-249 .

The term “claims payable out of the state treasury,” as it appears in this section, means claims, arising out of court actions, for which there are statutory provisions or appropriations and would include statutory fees earned by local officials in court actions, which fees must be taxed as costs and included in the judgment. OAG 78-249 .

A fee based on the sheriff’s fee schedule contained in KRS 64.090 and paid to the sheriff for services in summoning grand and petit jurors and performing his duties under KRS Chapter 29A is payable out of the State Treasury; and since such claims would arise out of court actions, this section would apply. OAG 81-336 .

Although KRS 64.348 (now KRS 64.092 ), which involves fees for officers attending court and litigation, is silent as to who pays the fees, the strongest implication is that it must be borne by the state, for whom the services are rendered, thus this section would apply. OAG 81-336 .

KRS 421.250 which provides for procuring prosecuting witnesses from other states but does not cover defense witnesses, involves court action and thus this section applies. OAG 81-336 .

Pursuant to KRS 62.155 , the premium on the sheriff’s general revenue bond and his faithful performance bond must be paid by the state; thus, in counties of 75,000 population or more, the chief circuit judge and Circuit Court, or fiscal court, as the case may be under KRS 64.345(2), may permit the sheriff to take the subject premium out of the sheriff’s “75% account” where the state has not otherwise paid the premium; however, this section does not apply. OAG 81-336 .

Special bailiff compensation which is dealt with in KRS 421.135 involves a “felony case” and thus this section applies. OAG 81-336 .

Pursuant to KRS 29A.180(1), the sheriff, city police or city marshal, as appropriate, shall be initially responsible for meals, housing, and other incidental needs of grand jurors and petit jurors in circuit and district court when the jurors are kept overnight or otherwise sequestered, when ordered to do so by the judge of the court for which the jurors were summoned and, since the officer who had to pay for such services initially will be reimbursed by the Finance Department (now Finance and Administration Cabinet), this section is not involved. OAG 81-336 .

The jailer fees enumerated in KRS 64.150 (now repealed), including the prisoner dieting fee and court attendance fee, must be paid by the government whose law the prisoner is charged with violating; thus, if the prisoner is charged with violating a state statute, the state must pay the jailer fees and this section, involving court approval of the fees, applies. OAG 81-336 .

This section applies to KRS 421.015 which pertains to a mileage allowance for Kentucky witnesses in Circuit and District Courts. OAG 81-336 .

This section applies to KRS 421.030 , which relates to nonresident prosecutorial witness expenses in felony cases. OAG 81-336 .

This section does not apply to KRS 441.010 (now KRS 441.045 ), under which the state must pay for nonpostponable medical care extended to an indigent prisoner in the county jail, provided the prisoner is charged with violating a state statute and is not a prisoner of the United States. OAG 81-336 .

This section does not apply to the payment of the jury commissioners or jurors, both of which must be effected by each circuit clerk out of one or two imprest funds of the clerk established by the state treasurer and the Department of Finance (now Finance and Administration Cabinet) pursuant to KRS 30A.110 . OAG 81-336 .

This section may be read together and applied with KRS 64.070(2), (4), KRS 441.030 (now KRS 441.520 ), and KRS 441.040 (now KRS 441.530 ), relating to the transfer of prisoners to a secure jail or to the penitentiary, and the court order directing the transfer and awarding the sheriff compensation therefor, and KRS 441.050 (now KRS 441.540 ) relating to the transfer of a prisoner to the penitentiary when violence is threatened and the court approval of fees for the sheriff. OAG 81-336 .

This section which provides the procedure for paying claims out of the state treasury would not apply to KRS 440.090 , since the return of a fugitive or extradition under KRS 440.090 is effected through the Governor of Kentucky and the fugitive is brought back and placed in the jail of the county designated in the proclamation and thus, the extradition is accomplished outside the frame of litigation. OAG 81-336 .

A court has no authority to direct the Finance and Administration Cabinet to make direct payments for deputy sheriff court attendance to the deputy sheriff so attending court since such fees are in legal reality the fees of the sheriff’s office; thus the payments should go directly to the sheriff. OAG 83-19 .

Research References and Practice Aids

Cross-References.

Compromise of disputed claims by or against Commonwealth or state budget unit, KRS 45.121 .

44.030. Money not to be paid to state or local government debtor — Priority of multiple claims — Matching child support obligors and claimants — Information on debts referred to Department of Revenue to be provided to State Treasurer.

  1. No money shall be paid to any person on a claim against the state in his or her own right, or as an assignee of another, when the person or the person’s assignor is indebted to the state or any local government. The claim, to the extent it is allowed, shall first be credited to the account of the person indebted to the state, and if there is any balance due the person after settling the whole demand of the state, any certified liquidated debts of any local government shall be paid if the local government provides information concerning the liquidated debt to the State Treasurer. If there is any balance due the person after settling the whole demand of the state or local governments, and if there are not liquidated debts certified against the claim pursuant to KRS 44.065 , that balance shall be paid to the person.
  2. In case of multiple claims by state agencies, the claims shall be paid as follows:
    1. First, to any claim made by the Cabinet for Health and Family Services for past due child support obligations;
    2. Second, to any claim filed by the Finance and Administration Cabinet, Department of Revenue, for taxes owed the Commonwealth; and
    3. Third, to all other state agencies in the order that the claims were filed with the State Treasury.
  3. In the case of multiple claims filed by any local government, the claims shall be paid in the order that the claims were filed with the State Treasury.
  4. No money shall be paid to any person on a claim against a local government in his or her own right, or as an assignee of another, when the person or the person’s assignor is indebted to the local government or the state. The claim, to the extent it is allowed, shall first be credited to any debt of the person indebted to the local government, and if there is any balance due the person after settling the whole demand of the local government, any certified liquidated debts of the state shall be paid if the state provides the local government with information concerning the liquidated debt. If there is any balance due the person after settling the whole demand of the local government or the state, that balance shall be paid to the person.
  5. The Finance and Administration Cabinet shall provide the Cabinet for Health and Family Services with a quarterly report of all tort claims made against the state by individuals that the Cabinet for Health and Family Services shall compare with the child support database to match individuals who have a child support arrearage and may receive a settlement from the state.
  6. Each organizational unit and administrative body in the executive branch of state government, as defined in KRS 12.010 , the Court of Justice in the judicial branch of state government, and, where feasible, any local government shall provide information to the State Treasurer concerning any debt it has referred to the Department of Revenue for collection under KRS 45.241 .
  7. Each agency, the Court of Justice, and, where feasible, any local government shall provide information to the State Treasurer concerning any debt referred to the Department of Revenue for collection under KRS 45.237 .

History. 4701; 2000, ch. 430, § 17, effective July 14, 2000; 2004, ch. 118, § 2, effective July 13, 2004; 2004, ch. 192, § 4, effective April 21, 2004; 2005, ch. 85, § 59, effective June 20, 2005; 2005, ch. 99, § 104, effective June 20, 2005; 2006, ch. 252, Pt. XVI, § 1, effective April 25, 2006; 2013, ch. 88, § 2, effective June 25, 2013.

NOTES TO DECISIONS

1.Deduction from Claim.

It is the duty of the treasurer to deduct from a claim any sum due the state from the debtor. Long v. McDowell, 107 Ky. 14 , 52 S.W. 812, 21 Ky. L. Rptr. 605 , 1899 Ky. LEXIS 122 ( Ky. 1899 ); Stone v. Mayo, 55 S.W. 700, 21 Ky. L. Rptr. 1559 , 1900 Ky. LEXIS 551 (Ky. Ct. App. 1900).

2.Erroneously Paid Compensation.

Although Commonwealth’s attorney was entitled under theory of subrogation to claim against Commonwealth for amount which substitute, employed by him during time he was in the army, would have been entitled to receive as a pro tem Commonwealth’s attorney, he could not recover such sum from the Treasury, but was only entitled to have it credited against the amount being withheld by the Commonwealth out of future compensation due Commonwealth’s attorney, to reimburse it for compensation erroneously paid to him while he was in the army. Whitworth v. Miller, 302 Ky. 24 , 193 S.W.2d 470, 1946 Ky. LEXIS 592 ( Ky. 1946 ).

University was properly granted summary judgment on a former medical director’s wage and hour claim where although the university’s governmental immunity had been waived under Ky. Rev. Stat. ch. 337, the director failed to counter the university’s evidence that he had been overpaid by a specific amount, and thus, under former Ky. Rev. Stat. Ann. § 44.030 , the university was entitled to withhold wages. Lipson v. Univ. of Louisville, 556 S.W.3d 18, 2018 Ky. App. LEXIS 201 (Ky. Ct. App. 2018).

3.Public Assistance Grant.

A citizen eligible in all respects for public assistance grant under KRS Chapter 205 does not have a claim against the Commonwealth for assistance payments as the word “claim” is used in this section. Powell v. Offutt, 380 S.W.2d 209, 1964 Ky. LEXIS 281 ( Ky. 1964 ).

4.Miller Act.

The Miller Act, 40 USCS § 270a, is comparable to this section. Reliance Ins. Co. v. Commonwealth, Dep't of Transp., 576 S.W.2d 231, 1978 Ky. App. LEXIS 653 (Ky. Ct. App. 1978).

5.Set-off Procedure.

This section is merely an extension to the government of the equitable right of set-off which belongs to every creditor, and in those cases it is seldom that the two debts arise out of the same transaction. Reliance Ins. Co. v. Commonwealth, Dep't of Transp., 576 S.W.2d 231, 1978 Ky. App. LEXIS 653 (Ky. Ct. App. 1978).

The set-off procedure authorized by this section by which the Commonwealth may withhold money it owes to a debtor of the Commonwealth is not an “action” within the scope of the statutes of limitations. Metts v. Frankfort, 665 S.W.2d 318, 1984 Ky. App. LEXIS 477 (Ky. Ct. App. 1984).

The Commonwealth could not use the set-off procedure of this section to set off money appropriated to the City of Frankfort by the General Assembly against unpaid bills incurred by the city for the relocation of its sewer lines in connection with three highway improvements; it would be against public policy to allow this section to be used against such legislative appropriations which benefit the residents of Frankfort, and indirectly benefit the residents of the Commonwealth as a whole. Metts v. Frankfort, 665 S.W.2d 318, 1984 Ky. App. LEXIS 477 (Ky. Ct. App. 1984).

6.Nature of Debt.
7.— Taxes.

There is no distinction between taxes arising from the project from which the fund was created and other projects or ventures by the same debtor. Reliance Ins. Co. v. Commonwealth, Dep't of Transp., 576 S.W.2d 231, 1978 Ky. App. LEXIS 653 (Ky. Ct. App. 1978).

Opinions of Attorney General.

Amounts of “excess” advancements, for flood relief under federal-state disaster assistance agreements, made to the counties may be recouped by the state by deducting such amounts from other funds due the counties. OAG 69-419 .

The Finance Department’s (now Finance and Administration Cabinet) policy of applying the provisions of this section, in withholding payments to circuit clerks delinquent in the remittance of excess fees until such time as their liability is satisfied, is both an economic and efficacious one. OAG 70-604 .

Where a county was delinquent in payments to the county employees’ retirement fund, which is a state fund under KRS 78.520 , and the board of trustees of the county employees’ retirement system proceeded under KRS 78.535 to collect this arrearage and the State Treasurer under the authority of this section paid the arrearage to the retirement system fund out of funds which had been granted to the delinquent county by the state public defender’s office pursuant to KRS 31.050 and 31.160 , subsequently issuing a check to the delinquent county only for the amount of the grant from the public defender’s office less the retirement fund arrearage, this action violated neither Ky. Const., § 230 or KRS 41.110 , KRS 44.030 being considered an exception to the provisions of that section. OAG 73-561 .

Where a state check, payable to a corporation, representing the release and refund of a cash bond filed with the department of reclamation is held by the State Treasurer it should be credited, pursuant to this section, towards the obligation of the corporation under a claim filed by the division of unemployment insurance for nonpayment of unemployment contributions; and thus the corporation has no funds in the hands of the treasurer to be attached by a subsequent levy against the corporation by the internal revenue service and the law to determine the priority of competing liens does not apply. OAG 74-666 .

By virtue of its lien a lienor is a statutory assignee of the tax debtor. OAG 80-15 .

Delinquent taxes are a debt owed to the state by the assignor. OAG 80-15 .

Since delinquent taxes are a debt to the state, under this section, a lien for taxes, under KRS 134.420 , which has accrued is superior to a materialman’s lien, under KRS 376.230 , thereafter filed and perfected. OAG 80-15 .

The Finance Department (now Finance and Administration Cabinet) acted legally in deducting $2,500 from a jailer’s dieting fee check where the jailer owed the state $2,500 for dieting fees that had been illegally paid out to the jailer on prior occasions. OAG 80-286 .

Research References and Practice Aids

Cross-References.

Taxes to be deducted from claim against state, KRS 134.170 .

Kentucky Law Journal.

Notes, Effective Child Support Enforcement in Kentucky: The Tax Refund Intercept Program, 74 Ky. L.J. 667 (1985-86).

44.040. Mileage allowance, how computed.

When any allowance for mileage is made by the state, the number of miles shall be computed upon the route most usually traveled.

History. 341.

Opinions of Attorney General.

Where an officer conveys different types of prisoners or patients at the same time to institutions operated by different departments, he shall apportion the mileage cost to each department. OAG 62-713 .

44.045. Motor vehicles, purchase for state use — License plates — Markings and administrative regulations.

  1. A passenger motor vehicle or vehicles may be purchased by the Finance and Administration Cabinet for the use of the Governor and the Lieutenant Governor.
  2. Motor vehicles, including passenger motor vehicles, may be purchased by the Finance and Administration Cabinet as are deemed necessary by the secretary of the Finance and Administration Cabinet or by the secretary of the Transportation Cabinet for the discharge of the authorized duties and functions of the various agencies of the state. The vehicles shall be used for official purposes only and for no other purposes. The assignment of passenger motor vehicles to specific individuals shall be discouraged but may be made upon approval by the secretary of the Finance and Administration Cabinet of a written request to make the assignment by the head of the agency involved.
  3. All motor vehicles purchased pursuant to this section shall be issued official license plates and shall bear on one (1) door on each side the great seal of the Commonwealth, and the words “For official use only.” It shall not be necessary that the vehicles purchased pursuant to subsections (1), (4), and (5) of this section bear the seal and the words.
  4. The Department of Revenue, Justice and Public Safety Cabinet, and the Department of Law may, upon approval by the secretary of the Finance and Administration Cabinet of a written request by the head of the agency involved, register a vehicle or vehicles under KRS 186.020 and be issued regular license plates. The vehicles shall be used for investigatory purposes only and for no other purposes.
  5. The Administrative Office of the Courts may register a vehicle or vehicles used by Justices and Judges of the Supreme Court and Court of Appeals under KRS 186.020 and be issued regular license plates.
  6. The secretary of the Finance and Administration Cabinet may adopt administrative regulations pursuant to KRS Chapter 13A necessary to govern the use of those state-owned vehicles acquired pursuant to the provisions of this section.
  7. Any person violating subsections (2) and (4) of this section shall, on conviction thereof, be subject to the penalties prescribed in KRS 44.990 .

History. Enact. Acts 1968, ch. 175, § 1; 1974, ch. 74, Art. II, § 9(1); 1974, ch. 74, Art. V, § 24(1); 1990, ch. 28, § 1, effective July 13, 1990; 1996, ch. 305, § 1, effective July 15, 1996; 2007, ch. 85, § 124, effective June 26, 2007.

Legislative Research Commission Note.

(8/18/2011). 2009 Ky. Acts ch. 12, relating to the reorganization of the Finance and Administration Cabinet, instructs the Reviser of Statutes to correct statutory references to agencies and officers whose names have been changed in that Act. Such a correction has been made in subsection (6) of this section.

Compiler's Notes.

This section has been reprinted to correct errors appearing in the bound volume.

Legislative Research Commission Note.

(6/26/2007). 2005 Ky. Acts ch. 85, relating to the creation and organization of the Finance and Administration Cabinet, instructs the Reviser of Statutes to correct statutory references to agencies and officers whose names have been changed in that Act. Such a correction has been made in this section.

Research References and Practice Aids

Cross-References.

State-owned vehicles, marking, exceptions, KRS 186.065 .

44.050. Motor vehicles, when may be purchased out of state funds.

The Department of Military Affairs is hereby authorized to purchase from state funds motor trucks to be used in the carrying out of the functions of this department, and it is further provided that the Department of Military Affairs may acquire motor vehicles by gift or transfer from the federal government for use in said department.

History. 2739-9, 2739g-70, 2739g-71, 2739g-74, 2739g-77: amend. Acts 1942, ch. 77, § 2; 1944, ch. 27; 1950, ch. 77; 1968, ch. 175, § 3.

Research References and Practice Aids

Cross-References.

State Police division may purchase and use motor vehicles, KRS 16.070 .

44.055. Insuring state vehicles — Blanket liability policy — Effect on sovereign immunity — Eligibility of insurers.

  1. Any state agency, as defined in KRS Chapter 12, may in its discretion, for the protection of the public and its employees, expend state funds to purchase policies of insurance of all kinds deemed advisable covering vehicles, including boats, owned by the state and operated by state employees when in the conduct of official business. The executive director of insurance, upon recommendation of the secretary of the Finance and Administration Cabinet, shall initiate and be responsible for the purchase of a blanket liability insurance policy to cover the officers and employees of the several state agencies and shall determine, by administrative regulation, the policy limits that shall be applicable to the persons covered in each such affected agency not to exceed the limit prescribed in KRS 49.040 .
  2. Nothing contained in this section shall be construed to be a waiver of sovereign immunity and claims against the Commonwealth, its agencies, officers, employees, or insurers may be asserted only in the manner set forth in KRS 49.040 to 49.180 .
  3. Policies authorized by this section shall be purchased only from insurers authorized to do business in this state and shall be countersigned by a licensed resident agent.

HISTORY: Enact. Acts 1958, ch. 125; 1960, ch. 180; 1994, ch. 372, § 1, effective July 15, 1994; 2017 ch. 74, § 61, effective June 29, 2017.

NOTES TO DECISIONS

1.Sovereign Immunity.

Authorization of state agencies to purchase motor vehicle liability insurance does not waive sovereign immunity. Ginter v. Montgomery County, 327 S.W.2d 98, 1959 Ky. LEXIS 71 ( Ky. 1959 ).

Opinions of Attorney General.

A person injured by the negligence of a state employee has an option whether to proceed through the board of claims or against the individual employee, but the remedy, once elected, is exclusive. OAG 61-994 .

In connection with the operation of state-owned vehicles in the conduct of official business and operated by state employees who work for the authority, the capital plaza authority may, in its discretion, purchase liability policies pursuant to this section. OAG 71-347 .

The authority granted by this section applies only to state-owned vehicles and does not permit purchase by state agencies of liability insurance covering privately owned vehicles driven on state business and no funds have been budgeted for the purchase of a blanket liability policy for state-owned vehicles as provided for in this section. OAG 75-60 .

Research References and Practice Aids

Cross-References.

Blanket and group insurance, KRS 304.18-010 et seq.

44.060. Expense of operating vehicle used by state officer, employee, or agent.

When any state officer, member of a state board or commission, or any subordinate officer, agent, or employee thereof is authorized by law to and does incur, in the discharge of his official duties, any expense incident to traveling in his own motor vehicle, the amount allowed for such expense shall be fixed by the secretary of the Finance and Administration Cabinet which sum shall include depreciation and investment charges incident to the operation of the motor vehicle.

History. 2739g-72: amend. Acts 1948, ch. 85; 1958, ch. 85; 1968, ch. 60, § 1; 1974, ch. 296, § 1; 1974, ch. 74, Art. II, § 9(1); 1978, ch. 155, § 41, effective January 1, 1978.

NOTES TO DECISIONS

Cited in:

Manning v. Sims, 308 Ky. 587 , 213 S.W.2d 577, 1948 Ky. LEXIS 864 , 5 A.L.R.2d 1154 ( Ky. 1948 ).

Opinions of Attorney General.

Travel by privately owned aircraft is authorized and reimbursement from the Department of Finance (now Finance and Administration Cabinet) will be on the basis of mileage over the nearest traveled route. OAG 62-1034 .

Although the increased mileage allowance would not directly apply to a circuit clerk since he is a county official, it shows a legislative intent that a credit of ten cents per mile for official travel of a circuit clerk would not be unreasonable. OAG 68-231 .

A regular and well-publicized schedule of trips by the clerk or his deputy to outlying areas in which a sizable demand for this service exists and is used would qualify for travel reimbursement if properly documented to show the purpose and official necessity of each trip and the distance traveled on each trip. OAG 68-231 .

When this section is read together with KRS 45.180 (now repealed) it appears that it was the intent of the Legislature that state employees stationed in a city who must proceed regularly by vehicle from place to place within the city boundaries in the actual and necessary performance of their duties should be reimbursed for such travel expenses. OAG 73-42 .

State department heads have no authority to establish a maximum level for reimbursements for official state travel involving motor vehicle, food, lodging, expenses, etc., which levels would constitute less than ten cents per mile for a privately owned motor vehicle and less than the actual expenses for food and lodging (and other expenses) presently reimbursable under the administrative regulations and statute. OAG 73-658 .

An extradition agent’s meals and lodging are restricted to that generally allowed by Department of Finance (now Finance and Administration Cabinet) travel regulations. OAG 80-387 .

The state agent in extradition is entitled to 18 cents per mile, pursuant to this section, plus five cents per mile; in addition, he is entitled to any other necessary expenses he pays in reclaiming and returning the fugitive, including the costs of food and lodging for himself and for the prisoner. OAG 80-387 .

KRS 44.060 , 45.180 (repealed) and 45.300 (repealed) when read together, in pari materia, establish that the State Board of Accountancy is a state agency for purposes of observing state agency travel regulations. OAG 82-69 .

Although KRS 421.015 refers narrowly to a mileage allowance for witnesses in court, under the doctrine of in pari materia, i.e., reading related statutes together, witnesses who must travel to another county for appearance in Circuit Court would be entitled to the mileage allowance given state employees, and would be entitled to reimbursement for their necessary food and lodging costs as authorized in KRS 44.060 , 45.101 and 45.180 (now repealed). OAG 83-117 .

Research References and Practice Aids

2020-2022 Budget Reference.

See State/Executive Branch Budget, 2021 Ky. Acts ch. 169, Pt. III, 34 at 1153.

44.065. Reciprocal agreements to offset claim of any person against the Commonwealth to debt of that person owed to any federal, state, or local government.

  1. Notwithstanding any other provision of the Kentucky Revised Statutes, and pursuant to the provisions of 31 U.S.C. sec. 3716(b) and (h)(1), the Finance and Administration Cabinet, at the request of any executive, judicial, or legislative agency of the Commonwealth, may enter into a reciprocal agreement with the United States government to offset the claim of any person against the Commonwealth to any debt of that person owed to the United States government which has been certified by the United States government as final, due, and owing, with all appeals and legal actions having been waived or exhausted, and to offset any nontax claim of any person against the United States government to any liquidated debt of that person owed to the Commonwealth.
  2. Notwithstanding any other provision of the Kentucky Revised Statutes, the Finance and Administration Cabinet, at the request of any executive, judicial, or legislative agency of the Commonwealth, may enter into a reciprocal agreement with any state, as defined in KRS 446.010 , to offset the claim of any person against the Commonwealth to any debt of that person owed to any state which has certified the debt as final, due, and owing, with all appeals and legal actions having been waived or exhausted, and to offset any claim of any person against any state to any liquidated debt of that person owed to the Commonwealth.
  3. In the case of multiple creditors who have certified liquidated debt against the same person on a claim against the Commonwealth, pursuant to this section and KRS 44.030 , the debts of the Commonwealth, counties, cities, urban-county governments, consolidated local governments, and charter county governments shall be credited first in the priority established in KRS 44.030 , and if there is any balance due the claimant after settling the whole demands of the Commonwealth, counties, cities, urban-county governments, consolidated local governments, and charter county governments, the balance shall be credited to the liquidated debts certified by the United States government and any other state, as defined in KRS 446.010 , in the order that the claims were filed with the Treasury. If there is a balance due the claimant after satisfaction of all liquidated debts as itemized in this section or any court-ordered payments, the balance shall be paid to the claimant.

History. Enact. Acts 2006, ch. 252, Pt. XVI, § 2, effective April 25, 2006; 2011, ch. 2, § 104, effective June 8, 2011.

Legislative Research Commission Note.

(4/25/2006). This statute, as created by 2006 Ky. Acts ch. 252, Pt. XVI. sec. 2, contained internal references in subsections (2) and (3) to “KRS 446.010(30).” Under KRS 7.136(1)(e), these references have been changed in codification to “KRS 446.010(31)” by the Reviser of Statutes to reflect the insertion of a new subsection (24) in KRS 446.020 and the resulting renumbering of succeeding subsections in 2006 Ky. Acts ch. 149, sec. 237.

Board of Claims

44.070. Board of Claims — Limitation on damage awards — Hearing officers — Asbestos related claims. [Renumbered]

History. Enact. Acts 1946, ch. 189, §§ 1, 3, par. 1; 1950, ch. 50, § 1; 1956 (1st Ex. Sess.), ch. 7, Art. XIII, § 1; 1958, ch. 52, § 1; 1960, ch. 25, § 1; 1972, ch. 234, § 1; 1976, ch. 326, § 2; 1978, ch. 15, § 1, effective June 17, 1978; 1986, ch. 279, § 1, effective July 15, 1986; 1986, ch. 499, § 3, effective July 15, 1986; 2000, ch. 304, § 4, effective July 14, 2000; renumbered 2017, ch. 74, § 4, effective June 29, 2017.

Compiler's Notes.

This section was renumbered as KRS § 49.040 effective June 29, 2017.

44.071. Jurisdiction of Board of Claims as to municipal maintenance of state-owned traffic control devices.

  1. The Board of Claims, created by KRS 44.070 , is hereby vested with full power, authority, and jurisdiction to investigate, hear proof, and compensate persons for damages sustained to either person or property as approximate result of negligence on the part of any municipality, or any of its officers, agents, or employees while acting within the scope of their employment by the municipality, or any agency thereof, relating to the maintenance by the municipality of state-owned traffic control devices pursuant to a contract with the Commonwealth.
  2. Claims for personal injury or property damage against any municipality, or any of its officers, agents, or employees while acting within the scope of their employment of the municipality, arising out of negligence in the maintenance of state-owned traffic control devices pursuant to a contract with the Commonwealth, shall be limited and reduced in the same manner as described in KRS 44.070 with respect to claims against the Commonwealth.
  3. It is the intention of subsections (1) and (2) of this section to provide every municipality and agency thereof, and their respective officers, agents, or employees with the same liability protection, restrictions, and reductions when such municipalities and agencies are performing maintenance on state-owned traffic control devices pursuant to a contract with the Commonwealth as the Commonwealth and its agencies, officers, and employees would enjoy if performing the work itself.

History. Enact. Acts 1990, ch. 225, § 1, effective July 13, 1990.

NOTES TO DECISIONS

1.Loss of Consortium Claim.

Wife’s loss of spousal consortium claim in the Kentucky Board of Claims arising from an injury to her husband caused by a malfunctioning pedestrian control device was barred by KRS 44.070(1), which precluded liability for collateral or dependent claims. City of Danville v. Goode, 122 S.W.3d 591, 2003 Ky. App. LEXIS 314 (Ky. Ct. App. 2003).

2.Counties.

KRS 44.071(1) only vests the Kentucky Board of Claims with jurisdiction over “municipalities”; counties are unincorporated political subdivisions of the state, preexisting its formation, whose existence is provided for constitutionally in Ky. Const., §§ 63, 64, and 65, and therefore, an unincorporated county government is not a “municipality” under Kentucky law, and the Board of Claims has no jurisdiction over claims against a county. Lexington-Fayette Urban County Gov't v. Smolcic, 142 S.W.3d 128, 2004 Ky. LEXIS 182 ( Ky. 2004 ).

Research References and Practice Aids

Treatises

Caldwell’s Kentucky Form Book, 5th Ed., Practice Context for Kentucky Board of Claims, § 8.00.

44.071. Jurisdiction of Board of Claims as to municipal maintenance of state-owned traffic control devices. [Renumbered]

History. Enact. Acts 1990, ch. 225, § 1, effective July 13, 1990; renumbered 2017, ch. 74, § 5, effective June 29, 2017.

Compiler’s Notes.

This section was renumbered as KRS § 49.050 effective June 29, 2017.

44.072. Legislative intent as to sovereign immunity in negligence claims. [Renumbered]

History. Enact. Acts 1986, ch. 499, § 1, effective July 15, 1986; renumbered 2017, ch. 74, § 6, effective June 29, 2017.

Compiler’s Notes.

This section was renumbered as KRS § 49.060 effective June 29, 2017.

44.073. State institutions of higher education declared agencies of state government — Jurisdiction of Board of Claims — Sovereign immunity. [Renumbered]

History. Enact. Acts 1986, ch. 499, § 2, effective July 15, 1986; renumbered 2017, ch. 74, § 7, effective June 29, 2017.

Compiler’s Notes.

This section was renumbered as KRS § 49.070 effective June 29, 2017.

44.075. Source of payment of expenses of Workers’ Compensation Board. [Repealed]

History. Enact. Acts 1960, ch. 25, § 4; repealed by 2017 ch. 74, § 106, effective June 29, 2017.

Compiler’s Notes.

This section (Enact. Acts 1960, ch. 25, § 4), was repealed by Acts 2017, ch. 74, § 106, effective June 29, 2017.

44.080. Sessions of board — Rules — Subpoenas — Oaths. [Repealed]

History. Enact. Acts 1946, ch. 189, § 5; 1948, ch. 193; repealed by 2017 ch. 74, § 106, effective June 29, 2017.

Compiler’s Notes.

This section (Enact. Acts 1960, ch. 25, § 4), was repealed by Acts 2017, ch. 74, § 106, effective June 29, 2017.

44.084. Venue of hearings. [Renumbered]

History. Enact. Acts 1960, ch. 25, § 2; renumbered 2017, ch. 74, § 8, effective June 29, 2017.

Compiler’s Notes.

This section was renumbered as KRS § 49.080 effective June 29, 2017.

44.086. Investigation of claims — Additional information on claims under $1,000 — Hearings — Order — Review. [Renumbered]

History. Enact. Acts 1960, ch. 25, § 3; 1978, ch. 299, § 1, effective June 17, 1978; 1982, ch. 355, § 1, effective July 15, 1982; 2000, ch. 304, § 2, effective July 14, 2000; renumbered 2017, ch. 74, § 9, effective June 29, 2017.

Compiler’s Notes.

This section was renumbered as KRS § 49.090 effective June 29, 2017.

44.090. Defense to claims. [Renumbered]

History. Enact. Acts 1946, ch. 189, § 6; 1950, ch. 50, § 2; 1986, ch. 499, § 4, effective July 15, 1986; renumbered 2017, ch. 74, § 10, effective June 29, 2017.

Compiler's Notes.

This section was renumbered as KRS § 49.100 effective June 29, 2017.

44.100. Compensation of board, assistant attorneys general or attorneys appointed by Governor — Payment of awards — Cost of operation. [Renumbered]

History. Enact. Acts 1946, ch. 189, §§ 7, 8; 1950, ch. 50, § 3; 1956 (1st Ex. Sess.), ch. 7, Art. XIII, § 2; 1958, ch. 52, § 2; 1960, ch. 25, § 5; 1986, ch. 499, § 5, effective July 15, 1986; renumbered 2017, ch. 74, § 11, effective June 29, 2017.

Compiler's Notes.

This section was renumbered as KRS § 49.110 effective June 29, 2017.

44.110. When claims must be presented. [Renumbered]

History. Enact. Acts 1946, ch. 189, § 3(a); 1950, ch. 50, § 4; 1958, ch. 52, § 5; 1962, ch. 304, § 2; 1966, ch. 255, § 53; 1986, ch. 499, § 6, effective July 15, 1986; 1990, ch. 176, § 1, effective July 13, 1990; renumbered 2017, ch. 74, § 12, effective June 29, 2017.

Compiler's Notes.

This section was renumbered as KRS § 49.120 effective June 29, 2017.

44.115. Purpose of exception to limitation of KRS 44.110. [Repealed.]

Compiler’s Notes.

This section (Enact. Acts 1962, ch. 304, § 1) was repealed by Acts 1968, ch. 152, § 168.

44.120. Conditions of awards. [Renumbered]

History. Enact. Acts 1946, ch. 189, § 2; 1950, ch. 50, § 5; 1960, ch. 25, § 6; renumbered 2017, ch. 74, § 13, effective June 29, 2017.

Compiler's Notes.

This section was renumbered as KRS § 49.130 effective June 29, 2017.

44.130. Enforcement and entry of awards. [Renumbered]

History. Enact. Acts 1946, ch. 189, § 4; renumbered 2017, ch. 74, § 14, effective June 29, 2017.

Compiler's Notes.

This section was renumbered as KRS § 49.140 effective June 29, 2017.

44.140. Appeal from award or judgment of board. [Renumbered]

History. Enact. Acts 1946, ch. 189, § 9; 1958, ch. 52, § 3; 1960, ch. 25, § 7; 1980, ch. 291, § 1, effective July 15, 1980; 1982, ch. 355, § 2, effective July 15, 1982; 1984, ch. 310, § 1, effective July 13, 1984; 2000, ch. 304, § 3, effective July 14, 2000; renumbered 2017, ch. 74, § 15, effective June 29, 2017.

Compiler's Notes.

This section was renumbered as KRS § 49.150 effective June 29, 2017.

44.150. Appeal to Court of Appeals. [Renumbered]

History. Enact. Acts 1948, ch. 189, § 10; renumbered 2017, ch. 74, § 16, effective June 29, 2017.

Compiler's Notes.

This section was renumbered as KRS § 49.160 effective June 29, 2017.

44.160. Exclusiveness of board’s award or judgment. [Renumbered]

History. Enact. Acts 1946, ch. 189, § 3(b); 1950, ch. 50, § 6; 1958, ch. 52, § 4; 1986, ch. 499, § 7, effective July 15, 1986; renumbered 2017, ch. 74, § 17, effective June 29, 2017.

Compiler's Notes.

This section was renumbered as KRS § 49.170 effective June 29, 2017.

44.165. Monetary threshold for claims brought before board. [Renumbered]

History. Enact. Acts 2000, ch. 304, § 1, effective July 14, 2000; renumbered 2017, ch. 74, § 18, effective June 29, 2017.

Compiler’s Notes.

This section was renumbered as KRS § 49.180 effective June 29, 2017.

44.170. Transfer of pending cases. [Repealed.]

Compiler’s Notes.

This section (Enact. Acts 1960, ch. 25, § 8) was repealed by Acts 1966, ch. 255, § 283.

Contract Claims

44.260. Definitions. [Amended and Reenacted.]

Compiler’s Notes.

This section (Enact. Acts 1966, ch. 180, § 1; 1974, ch. 181, § 1) was amended and reenacted by Acts 1978, ch. 110, § 48, effective January 1, 1979, as KRS 45A.240 .

44.270. Action on contract — Damages — Limitations. [Repealed and Reenacted.]

Compiler’s Notes.

This section (Enact. Acts 1966, ch. 180, § 2, in part; 1974, ch. 181, § 2; 1976, ch. 297, § 1) was repealed and reenacted by Acts 1978, ch. 110, § 49, effective January 1, 1979 as KRS 45A.245 .

44.280. Findings of court. [Amended and Reenacted.]

Compiler’s Notes.

This section (Enact. Acts 1966, ch. 180, § 2, in part; 1974, ch. 181, § 3) was amended and reenacted by Acts 1978, ch. 110, § 50, effective January 1, 1979, as KRS 45A.250 .

44.290. Rules and regulations governing administrative hearing — Procedure. [Repealed.]

Compiler’s Notes.

This section (Enact. Acts 1966, ch. 180, § 3) was repealed by Acts 1974, ch. 181, § 8.

44.300. Appeals from Circuit Court. [Repealed and Reenacted.]

Compiler’s Notes.

This section (Enact. Acts 1966, ch. 180, § 4; 1974, ch. 181, § 4) was repealed and reenacted by Acts 1978, ch. 110, § 51, effective January 1, 1979, as KRS 45A.255 .

44.310. Limitations on claims. [Repealed and Reenacted.]

Compiler’s Notes.

This section (Enact. Acts 1966, ch. 180, § 6; 1974, ch. 181, § 5) was repealed and reenacted by Acts 1978, ch. 110, § 52, effective January 1, 1979, as KRS 45A.260 .

44.320. One recovery only. [Repealed and Reenacted.]

Compiler’s Notes.

This section (Enact. Acts 1966, ch. 180, § 5) was repealed and reenacted by Acts 1978, ch. 110, § 53, effective January 1, 1979, as KRS 45A.265 .

44.330. Presentation of judgment for payment — Appropriations. [Amended and Reenacted.]

Compiler’s Notes.

This section (Enact. Acts 1966, ch. 180, § 7; 1974, ch. 74, Art. II, § 9(1); 1974, ch. 181, § 6) was amended and reenacted by Acts 1978, ch. 110, § 54, effective January 1, 1979, as KRS 45A.270 .

44.340. Judgments against Commonwealth up to $500,000 deemed necessary governmental expense. [Amended and Reenacted.]

Compiler’s Notes.

This section (Enact. Acts 1974, ch. 181, § 7) was amended and reenacted by Acts 1978, ch. 110, § 55, effective January 1, 1979, as KRS 45A.275 .

Penalties

44.990. Penalties.

Any person who violates any of the provisions of KRS 44.045 shall be fined not less than fifty dollars ($50) nor more than five hundred dollars ($500) for each offense.

History. 2739g-76: amend. Acts 1968, ch. 175, § 2.

CHAPTER 45 Budget and Financial Administration

45.0005. Definitions for chapter.

As used in this chapter:

  1. “Branch budget bill” shall have the same meaning as in KRS 48.010 ;
  2. “Document” means any physical embodiment of information or ideas, regardless of form or characteristic, including electronic versions thereof;
  3. “Warrant” means a printed or electronic authorization from the Finance and Administration Cabinet for the State Treasurer to issue a check; and
  4. “Writing” or “written” means 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.

History. Enact. Acts 1998, ch. 118, § 15, effective July 15, 1998; ch. 120, § 5, effective July 15, 1998; 2009, ch. 78, § 30, effective June 25, 2009.

Legislative Research Commission Notes.

(7/15/98). This section was created by 1998 Ky. Acts chs. 118 and 120 which have been codified together. Section 15 of Acts ch. 118 is substantively identical to subsection (3) of Section 5 of Acts ch. 120.

Research References and Practice Aids

2020-2022 Budget Reference.

See Transportation Cabinet Budget, 2021 Ky. Acts ch. 198, Section 1, Pt. I, A, 4, (9) at 1508.

45.001. Capital Development Committee.

  1. The Capital Development Committee is created.

    The committee shall ensure the proper coordination of state government initiatives which impact the City of Frankfort and Franklin County government and are unique to the seat of state government.

  2. The committee shall meet at least semiannually at a time and place announced by the chairperson.
  3. The membership of the committee shall consist of the following members or their designees:
    1. The mayor of the city of Frankfort;
    2. The county judge/executive of Franklin County;
    3. The secretary of the Finance and Administration Cabinet;
    4. The secretary of the Tourism, Arts and Heritage Cabinet;
    5. The secretary of the Education and Labor Cabinet;
    6. The commissioner of the Kentucky Department of Tourism;
    7. The chairman of the Frankfort/Franklin County Tourist and Convention Commission;
    8. A citizen at large, who is a resident of Franklin County, appointed by the Franklin County judge/executive; and
    9. A citizen at large, who is a resident of Frankfort, appointed by the mayor of the city of Frankfort.

      The citizen-at-large members of the committee shall be appointed to a term of four (4) years each.

  4. The Governor shall appoint the chairperson of the committee.
  5. Members of the committee shall serve without compensation.
  6. The Finance and Administration Cabinet shall provide administrative support to the committee.

HISTORY: Enact. Acts 1984, ch. 25, § 1, effective July 13, 1984; 1996, ch. 194, § 2, effective July 15, 1996; 1998, ch. 83, § 6, effective July 15, 1998; 2005, ch. 85, § 60, effective June 20, 2005; 2005, ch. 95, § 11, effective June 20, 2005; 2006, ch. 211, § 12, effective July 12, 2006; 2009, ch. 11, § 9, effective June 25, 2009; 2009, ch. 16, § 6, effective June 25, 2009; 2010, ch. 65, § 2, effective July 15, 2010; 2018 ch. 69, § 2, effective July 14, 2018; 2022 ch. 236, § 18, effective July 1, 2022.

Legislative Research Commission Notes.

(6/29/2017). Under the authority of KRS 7.136(2), one or more references to the “Kentucky Department of Travel and Tourism” in this statute have been changed in codification to the “Kentucky Department of Tourism” to reflect the reorganization of certain parts of the Executive Branch, as set forth in Executive Order 2016-856 and confirmed by the General Assembly in 2017 Ky. Acts ch. 110.

45.010. Definitions. [Repealed.]

Compiler’s Notes.

This section (1992b-2: amend. Acts 1968, ch. 2, § 1; 1968, ch. 119, § 13; 1974, ch. 260, § 1) was repealed by Acts 1982, ch. 450, § 79, effective July 1, 1983. For present law, see KRS 48.010 .

45.011. Capital outlay and printing — Contracts in anticipation of appropriations.

The Governor, the Chief Justice, and the Legislative Research Commission, or their designees may grant special authority for their budget units, during any fiscal year, to enter into contracts for capital outlay or for state printing, in anticipation of appropriations already made for the ensuing fiscal year or biennium. Contracts made before the close of a fiscal year under such authority shall be treated as deferred charges to the appropriations and expenses of the next fiscal year or biennium. The grant of such authority and a report of all contracts made under this section shall be reported to the Finance and Administration Cabinet.

History. Enact. Acts 1982, ch. 450, § 41, effective July 1, 1983.

NOTES TO DECISIONS

1.Approval of Contract Agreement.

Where plaintiff, a contractor who was a successful bidder on proposed construction approved by the state Property and Building Commission, executed a “contract agreement” and a performance bond and the project was abandoned without the “contract agreement” being signed by the state Property and Building Commission or approved by the Department of Finance (now Finance and Administration Cabinet) there was no contract with the Commonwealth and plaintiff could not recover damages based upon lost profits. Cravens & Cravens, Inc. v. Department of Finance, 312 S.W.2d 622, 1958 Ky. LEXIS 235 ( Ky. 1958 ) (decided under prior law).

45.020. Expenditures to be authorized by appropriation acts — Refund of funds illegally received. [Repealed.]

Compiler’s Notes.

This section (1992b-6: amend. Acts 1968, ch. 119, § 14; 1974, ch. 74, Art. II, § 9(1)) was repealed by Acts 1982, ch. 450, § 79, effective July 1, 1983. For present law, see KRS 45.111 .

45.021. Contracts for municipal services to state agencies by city of Frankfort.

The Finance and Administration Cabinet, within budgetary limits fixed by any appropriations made by the General Assembly for such purpose, shall contract with the city of Frankfort for the provision by the city to state agencies located at the seat of government for fire and police protection of state-owned property and other municipal services as are provided by the city to commercial and industrial taxpayers residing in the city of Frankfort.

History. Enact. Acts 1982, ch. 450, § 47, effective July 1, 1983.

45.030. Biennial budget report to be prepared. [Repealed.]

Compiler’s Notes.

This section (1992b-7: amend. Acts 1956, ch. 2, § 1, effective January 23, 1956; 1974, ch. 74, Art. II, § 9(1)) was repealed by Acts 1982, ch. 450, § 79, effective July 1, 1983. For present law, see KRS 48.020 , 48.100 .

45.031. Federal funds — State clearinghouse function.

  1. Any department, board, commission, agency, advisory council, interstate compact, corporate body, or instrumentality of the Commonwealth of Kentucky applying for federal funds, aids, loans, or grants shall file a summary notification of the intended application with the Department for Local Government in accordance with the existing A-95 procedures.
  2. When as a condition to receiving federal funds, the Commonwealth of Kentucky is required to match the federal funds, a statement shall be filed with the notice of intent or summary of the application stating:
    1. The amount and source of state funds needed for matching purposes;
    2. The length of time the matching funds shall be required;
    3. The growth of the program;
    4. How the program will be evaluated;
    5. What action will be necessary should the federal funds be canceled, curtailed, or restricted; and
    6. Any other financial and program management data required by the Finance and Administration Cabinet or by law.
  3. Any application for federal funds, aids, loans, or grants which will require state matching or replacement funds at the time of application or at any time in the future, must be approved by the secretary of the Finance and Administration Cabinet, the Legislative Research Commission, and the Chief Justice for their respective branches of government or their designated agents prior to its filing with the appropriate federal agency. Any application for federal funds, aids, loans, or grants which will require state matching or replacement funds at the time of application or at any time in the future, when funds have not been appropriated for that express purpose, must be approved by the General Assembly, if in session. When the General Assembly is not in session, the application shall be reported to and reviewed by the Interim Joint Committee on Appropriations and Revenue, as provided by KRS 48.500(3).
  4. When any federal funds, aids, loans, or grants are received by any department, board, commission or agency of the Commonwealth of Kentucky, a report of the amount of funds received shall be filed with the Finance and Administration Cabinet; and this report shall specify the amount of funds which would reimburse an agency for indirect costs as provided for under OMB Circular A-87.
  5. The secretary of the Finance and Administration Cabinet may refuse to issue his warrant for the disbursement of any state or federal funds from the State Treasury as the result of any application which is not approved as provided by this section, or in regard to which the statement or reports required by this section were not filed.
  6. The secretary of the Finance and Administration Cabinet shall be responsible for the orderly administration of this section and for issuing the appropriate guidelines and regulations from each source of fund used.

History. Enact. Acts 1982, ch. 450, § 49, effective July 1, 1983; 1994, ch. 508, § 14, effective July 15, 1994; 1998, ch. 69, § 16, effective July 15, 1998; 2007, ch. 47, § 27, effective June 26, 2007; 2010, ch. 117, § 33, effective July 15, 2010; 2011, ch. 73, § 5, effective June 8, 2011.

45.040. Contents of biennial budget report. [Repealed.]

Compiler’s Notes.

This section (1992b-9: amend. Acts 1974, ch. 260, § 2) was repealed by Acts 1982, ch. 450, § 79, effective July 1, 1983. For present law, see KRS 48.110 .

45.045. Budget recommendations. [Repealed.]

Compiler’s Notes.

This section (Enact. Acts 1978, ch. 187, § 6, effective June 17, 1978; 1978, ch. 188, § 5, effective June 17, 1978; 1980, ch. 394, § 12, effective July 1, 1980) was repealed by Acts 1982, ch. 450, § 79, effective July 1, 1983. For present law, see KRS 48.100 .

45.046. Picked-up employee pension contributions not considered an increase or decrease in employee salaries.

The pick up of employee pension contributions pursuant to Acts 1982, ch. 166, shall not be construed as either an increase or a decrease in the amount budgeted for employee salaries by the state or any other employer affected by Acts 1982, ch. 166.

History. Enact. Acts 1982, ch. 166, § 14, effective July 15, 1982.

45.050. Appropriation and revenue acts — Adoption — Questions of interpretation. [Repealed.]

Compiler’s Notes.

This section (1992b-8, 1992b-24: amend. Acts 1974, ch. 74, Art. II, § 9(1)) was repealed by Acts 1982, ch. 450, § 79, effective July 1, 1983. For present law, see KRS 48.020 to 48.060 , 48.200 , 48.300 .

45.060. Forms for budget estimates. [Repealed.]

Compiler’s Notes.

This section (1992b-10: amend. Acts 1970, ch. 10, § 1; 1974, ch. 74, Art. II, § 9(1)) was repealed by Acts 1982, ch. 450, § 79, effective July 1, 1983. For present law, see KRS 48.020 to 48.060 , 48.200 , 48.300 .

45.070. Estimates to be submitted by heads of budget units. [Repealed.]

Compiler’s Notes.

This section (1992b-11: amend. Acts 1970, ch. 10, § 2; 1974, ch. 74, Art. II, § 9(1)) was repealed by Acts 1982, ch. 450, § 79, effective July 1, 1983. For present law, see KRS 48.020 to 48.060 , 48.200 , 48.300 .

45.080. Continuous financial planning. [Repealed.]

Compiler’s Notes.

This section (1992b-12: amend. Acts 1974, ch. 74, Art. II, § 9(1)) was repealed by Acts 1982, ch. 450, § 79, effective July 1, 1983. For present law, see KRS 48.020 to 48.060 , 48.200 , 48.300 .

45.090. Duties of governor in preparation of budget report — Governor-elect to be informed. [Repealed.]

Compiler’s Notes.

This section (1992b-13, 1992b-14: amend. Acts 1974, ch. 74, Art. II, § 9(1)) was repealed by Acts 1982, ch. 450, § 79, effective July 1, 1983. For present law, see KRS 48.020 to 48.060 , 48.200 , 48.300 .

45.100. Budget report to be printed and transmitted to house of representatives. [Repealed.]

Compiler’s Notes.

This section (1992b-15: amend. Acts 1956, ch. 2, § 2; 1974, ch. 74, Art. II, § 9(1)) was repealed by Acts 1982, ch. 450, § 79, effective July 1, 1983. For present law, see KRS 48.020 to 48.060 , 48.200 , 48.300 .

45.101. Expense accounts of state officers and employees — Receipts — Authority to promulgate administrative regulations.

  1. Except as otherwise provided by law, each state officer or employee who is authorized by law to receive, from corporations or from the State Treasury or from any fund appropriated out of the State Treasury, traveling or other expenses incident to the discharge of official duties shall submit to the Finance and Administration Cabinet information regarding the expenses and necessary receipts as provided by administrative regulation promulgated by the Finance and Administration Cabinet, provided that any expenses in excess of ten dollars ($10) shall be accompanied by a receipt, unless the Finance and Administration Cabinet increases the minimum expense amount for which a receipt is required as provided in this section. The required information and documentation shall be provided before the cabinet shall audit or pay the expenses. The Finance and Administration Cabinet may promulgate an administrative regulation to increase the minimum expense amount for which a receipt is required, not to exceed twenty-five dollars ($25). The Finance and Administration Cabinet may rely on a preaudit performed by the budget unit as a basis for issuing a warrant.
  2. The Finance and Administration Cabinet may promulgate administrative regulations to permit budget units to contract with airlines, railroads, hotels, or other companies for services to a group of their employees while on official travel status. The expenses are to be submitted to the Finance and Administration Cabinet on forms prescribed by the Finance and Administration Cabinet before the cabinet shall audit or pay the expenses.
  3. The Finance and Administration Cabinet may promulgate administrative regulations to permit state officers or employees to assign their claim for reimbursement of travel expenses to airline, railroad, hotel, or other companies in payment of services rendered as provided for in subsections (1) and (2) of this section.
  4. Each state officer or employee who by reason of the duties assigned to the officer’s or employee’s office is required to be at the state capital for the majority of the time, or who has an office located at the state capital, shall not be permitted to charge for expenses except from the state capital to the place where the business the officer or employee is transacting is to be transacted, and from that place back to the state capital, and each officer or employee who is assigned to duty at some place other than the state capital shall only be permitted to charge to the state such expenses as are incurred in going from that place to the place where the business is transacted, and returning. Expenses in going from the state capital or the place where the officer or employee is assigned to duty to the officer’s or employee’s real place of residence, or in return therefrom, shall not be allowed unless it is shown that it was necessary for the officer or employee to make the trip in the discharge of business for the state.
  5. The Finance and Administration Cabinet may promulgate administrative regulations to permit the payment of travel and other expenses incidental to the official activities of formally organized groups sponsored by or otherwise representing state agencies. The payment may be made direct to service establishments in the manner set forth in subsection (3) of this section, by an inter-account bill between budget units, or by reimbursement to the official or other employee who has been designated as the officer-in-charge of the organized group. If it is necessary that one (1) or more state employees or officials travel with the group, their expenses may be included in the total expenses for the group.
  6. The Finance and Administration Cabinet may promulgate administrative regulations allowing heads of budget units to establish imprest cash funds for reimbursement of travel expenses.
  7. Except as provided in KRS Chapter 6, but the provisions of any other laws to the contrary notwithstanding, and in lieu of the reimbursement of travel and other incidental expenses authorized by subsection (1) of this section, the Finance and Administration Cabinet may promulgate administrative regulations to provide for the payment of a fixed expense allowance per day to be established by the secretary of the Finance and Administration Cabinet, plus necessary travel expenses, to each state officer or employee who is authorized by law to be reimbursed for expenses incurred in the discharge of official duties. This payment shall be made from an appropriation for this purpose to a budget unit of a branch of government.

History. Enact. Acts 1982, ch. 450, § 42, effective July 1, 1983; 1997 (1st Ex. Sess.), ch. 4, § 16, effective May 30, 1997.

NOTES TO DECISIONS

1.Out-of-State Expenses.

Expenses of state auditor in attending out-of-state convention were not “expenses” incident to the discharge of his official duties. Shanks v. Commonwealth, 219 Ky. 212 , 292 S.W. 837, 1927 Ky. LEXIS 334 ( Ky. 1927 ) (decided under prior law).

Since it was the duty of the Division of Research and Statistics, under the direction of the Commissioner (now Secretary) of Revenue, to make investigations into matters of taxation in the state or elsewhere, a proposed trip of the Commissioner (now Secretary) of Revenue to Minnesota to attend a tax conference was justified and would probably have been profitable to the Commonwealth. Reeves v. Talbott, 289 Ky. 581 , 159 S.W.2d 51, 1941 Ky. LEXIS 37 ( Ky. 1941 ) (decided under prior law).

2.—Approval.

To secure refund for out-of-state travel expense, claim must have been approved by both the Commissioner of Finance (now Secretary of Finance and Administration) and the head of the department involved. Reeves v. Talbott, 289 Ky. 581 , 159 S.W.2d 51, 1941 Ky. LEXIS 37 ( Ky. 1941 ) (decided under prior law).

Research References and Practice Aids

Cross-References.

Mileage allowance for travel by motor vehicle, KRS 44.060 .

State police, expense accounts of, KRS 16.100 .

2020-2022 Budget Reference.

See State/Executive Branch Budget, 2021 Ky. Acts ch. 169, Pt. III, 34 at 1153.

45.110. Representative of department of finance to serve appropriations committees. [Repealed.]

Compiler’s Notes.

This section (1992b-16: amend. Acts 1974, ch. 74, Art. II, § 9(1)) was repealed by Acts 1982, ch. 450, § 79, effective July 1, 1983. For present law, see KRS 48.210 .

45.111. Refund of funds illegally received.

Any funds received into the State Treasury which are later determined not to be due to the state may be refunded to the person who paid such funds into the Treasury. The Finance and Administration Cabinet may issue a warrant to disburse the funds upon a request from the budget unit that originally received and deposited the funds. The request for refund must be approved by the head of the budget unit or his designated assistant. The Finance and Administration Cabinet may require any documentation deemed necessary.

History. Enact. Acts 1982, ch. 450, § 43, effective July 1, 1983.

NOTES TO DECISIONS

1.Applicability.

When it was held that the legislature violated Ky. Const. § 51 by transferring funds from workers’ compensation accounts to the general fund, KRS 45.111 did not apply in an action to require the governor to restore funds previously transferred because the statute only applied to funds received by the state treasury that were not due, and assessments on workers’ compensation premiums at issue were due. Beshear v. Haydon Bridge Co., 416 S.W.3d 280, 2013 Ky. LEXIS 582 ( Ky. 2013 ).

45.120. Appropriation of preceding year, when continued. [Repealed.]

Compiler’s Notes.

This section (1992b-17: amend. Acts 1974, ch. 74, Art. II, § 9(1)) was repealed by Acts 1982, ch. 450, § 79, effective July 1, 1983.

45.121. Examination of claims — Preaudit by budget unit — Compromise of claims.

  1. The Finance and Administration Cabinet shall examine all authorizations for payment presented, and if it finds them correct shall file them and issue warrants upon the State Treasurer. The Finance and Administration Cabinet shall not certify any claim to the State Treasurer until it is satisfied that there is in the appropriation to the budget unit against which the claim is chargeable, a sufficient amount to pay the claim. The Finance and Administration Cabinet may rely on the preaudit performed by a budget unit as a basis for issuing a warrant.
  2. The Finance and Administration Cabinet, the Chief Justice, and the Legislative Research Commission with the approval of the Attorney General, may authorize the compromise of any disputed claim by or against their respective branches of government. In the event of a claim against the Commonwealth which cannot be ascribed to a particular branch of government or budget unit thereof, with the approval of the Attorney General, it may be compromised by agreement among them.

History. Enact. Acts 1982, ch. 450, § 44, effective July 1, 1983.

NOTES TO DECISIONS

1.Authorization for Payment.
2.— Certifying Correctness.

To the extent the Department of Finance (now Finance and Administration Cabinet) was authorized to certify the correctness of a claim from an accounting and bookkeeping standpoint, the warrant must have been honored by the Treasurer; however, the specific right to question the validity of a claim on constitutional grounds was not reposed by statute in either the Department of Finance (now Finance and Administration Cabinet) or the State Treasurer but stemmed from the general provisions of both the Constitution and the statutes which fixed a basic public policy with respect to the expenditure of public funds. Raney v. Stovall, 361 S.W.2d 518, 1962 Ky. LEXIS 246 ( Ky. 1962 ) (decided under prior law).

Research References and Practice Aids

Cross-References.

Claims allowed by court, Finance and Administration Cabinet may contest, KRS 44.020 .

Fraudulent, erroneous or illegal fee, bill or claim, Attorney General to recover amount allowed or paid, KRS 15.060 .

45.130. Transfer of appropriations and allotments. [Repealed.]

Compiler’s Notes.

This section (1992b-18, 1992b-23) was repealed by Acts 1948, ch. 185, § 4.

45.131. Investigations of mismanagement of branches of government.

The Finance and Administration Cabinet, the Chief Justice, and the Legislative Research Commission for their respective branches of government shall investigate any alleged mismanagement of any of the affairs of the state by any officer, employee, or governing body responsible within their respective branches of government for the carrying out of any state function or the management of state funds and shall recommend the removal of any unnecessary officer or employee and of any officer or employee who they find has grossly mismanaged any state affairs within their respective branches of government.

History. Enact. Acts 1982, ch. 450, § 45, effective July 1, 1983.

NOTES TO DECISIONS

1.Duty to Investigate.

Circuit court erred in finding that the Secretary of the Kentucky Finance and Administration Cabinet did not have the power to issue a subpoena to a consultant; because the Secretary has the duty to investigate mismanagement of public funds, there was no need for the legislature to use words including Ky. Rev. Stat. Ann. ch. 45A within the subpoena power granted. Landrum v. Lassiter, 2018 Ky. App. LEXIS 271 (Ky. Ct. App. Nov. 16, 2018, sub. op., 2018 Ky. App. Unpub. LEXIS 988 (Ky. Ct. App. Nov. 16, 2018).

2.Subpoena Powers.

Pursuant to Ky. Rev. Stat. Ann. §§ 45.131 and 45.142 , the subpoena powers of the Secretary of the Finance and Administration Cabinet extended to suspected violations of Kentucky’s Model Procurement Code. Lassiter v. Landrum, 610 S.W.3d 242, 2020 Ky. LEXIS 401 ( Ky. 2020 ).

45.140. Revolving trust and agency accounts — Charges for services by agencies. [Repealed.]

Compiler’s Notes.

This section (1992b-19: amend. Acts 1946, ch. 149, § 2; 1948, ch. 235; 1966, ch. 131, § 1; 1968, ch. 119, § 15; 1974, ch. 260, § 3) was repealed by Acts 1982, ch. 450, § 79, effective July 1, 1983. For present law, see KRS 45.253 .

45.141. Agency fund account for department of agriculture. [Repealed.]

Compiler’s Notes.

This section (Enact. Acts 1950, ch. 6, § 1) was repealed by Acts 1974, ch. 260, § 10.

45.142. Enforcement of laws — Investigation procedure.

For the purpose of enforcing the provisions of this chapter and those sections of KRS Chapters 41, 45, and 48 relating to the state budget and financial administration, the secretary of the Finance and Administration Cabinet, the Chief Justice, and the Legislative Research Commission, for their respective branches of government, or any officer or employee designated by them, shall have free access during business hours to all books, reports, papers, and accounts in the office or under the care or control of any budget unit of their respective branches of government, and may administer oaths, certify to official acts, issue subpoenas, compel the attendance of witnesses and the production of testimony touching any subject properly under investigation by them, and may compel the production of books, papers, and accounts. If any person fails to comply with the order of, or to obey a subpoena issued by them or their designated agents, or refuses to testify as a witness to any matters regarding which he may be lawfully interrogated, the judge having jurisdiction of the person to whom the order or subpoena was issued may, on their application compel obedience by proceedings for contempt as in the case of disobedience of a subpoena or order issued from such court or a refusal to testify therein, and may adjudge such person guilty of contempt of court and punish him as provided by law in other contempt cases.

History. Enact. Acts 1982, ch. 450, § 46, effective July 1, 1983.

NOTES TO DECISIONS

1.Power to Issue Subpoenas.

Circuit court erred in finding that the Secretary of the Kentucky Finance and Administration Cabinet did not have the power to issue a subpoena to a consultant; because the Secretary has the duty to investigate mismanagement of public funds, there was no need for the legislature to use words including Ky. Rev. Stat. Ann. ch. 45A within the subpoena power granted. Landrum v. Lassiter, 2018 Ky. App. LEXIS 271 (Ky. Ct. App. Nov. 16, 2018, sub. op., 2018 Ky. App. Unpub. LEXIS 988 (Ky. Ct. App. Nov. 16, 2018).

By the use of the word “and” in the statute, the legislature conferred an additional and separate investigative tool, the power to issue subpoenas, compel the attendance of witnesses and the production of testimony touching any subject properly under investigation by him, and compel the production of books, papers, and accounts, and this power is not limited by time, place, or person. Landrum v. Lassiter, 2018 Ky. App. LEXIS 271 (Ky. Ct. App. Nov. 16, 2018, sub. op., 2018 Ky. App. Unpub. LEXIS 988 (Ky. Ct. App. Nov. 16, 2018).

Secretary of the Kentucky Finance and Administration Cabinet’s subpoena power under the statute extends investigations to all mismanagement of state funds within the executive branch, including the procurement and award of state contracts and that a subpoena ducus tecum may be properly issued to persons and entities outside of state government; however, the Secretary has no independent power to enforce those subpoenas. Landrum v. Lassiter, 2018 Ky. App. LEXIS 271 (Ky. Ct. App. Nov. 16, 2018, sub. op., 2018 Ky. App. Unpub. LEXIS 988 (Ky. Ct. App. Nov. 16, 2018).

Pursuant to Ky. Rev. Stat. Ann. §§ 45.131 and 45.142 , the subpoena powers of the Secretary of the Finance and Administration Cabinet extended to suspected violations of Kentucky’s Model Procurement Code. Lassiter v. Landrum, 610 S.W.3d 242, 2020 Ky. LEXIS 401 ( Ky. 2020 ).

After comparing Ky. Rev. Stat. Ann. § 45.990 to Ky. Rev. Stat. Ann. § 45.142 , it was clear that the enforcement provision did not identify the scope of the subpoena power. Lassiter v. Landrum, 610 S.W.3d 242, 2020 Ky. LEXIS 401 ( Ky. 2020 ).

Secretary of the Finance and Administration Cabinet’s subpoena power extended to nongovernment employees as long as the subpoena touched any subject properly under his investigation and was otherwise proper. Lassiter v. Landrum, 610 S.W.3d 242, 2020 Ky. LEXIS 401 ( Ky. 2020 ).

Research References and Practice Aids

Cross-References.

Contempt, punishment for, KRS 432.230 to 432.270 .

Heads of administrative departments and their agents may administer oaths and examine witnesses, KRS 12.120 .

Witnesses, how attendance compelled, KRS 421.110 to 421.140 .

45.149. Audit of budget unit by Auditor of Public Accounts — Contract for audit by certified public accountant.

  1. A budget unit of any branch of government may request that an audit be performed by the Auditor of Public Accounts. Such request shall be in writing and shall include a statement of the scope and nature of the proposed audit.
  2. No budget unit shall enter into any contract with a certified public accountant for an audit unless the Auditor of Public Accounts has declined in writing to perform the audit or has failed to respond within fifteen (15) days of receipt of a written request for an audit. Any contract with a certified public accountant entered into as a result of the Auditor of Public Accounts declining to perform the audit shall specify the following:
    1. The certified public accountant shall forward a copy of the audit report and management letters to the Auditor of Public Accounts and to the Legislative Research Commission; and,
    2. The Auditor of Public Accounts shall have the right to review the certified public accountant’s work papers.

History. Enact. Acts 1982, ch. 450, § 48, effective July 1, 1983; 1998, ch. 120, § 6, effective July 15, 1998.

45.150. Capital outlays, how authorized. [Repealed.]

Compiler’s Notes.

This section (1992b-20, 1992b-21: amend. Acts 1964, ch. 7, § 11) was repealed by Acts 1968, ch. 174, § 3.

45.151. Certain projects are subject to KRS Chapter 56.

All capital construction projects or capital outlays for the improvement of land or the construction, alteration, reconstruction, or major repair of any building or other structure, or sewage disposal or water supply system, or any bridge or road except a road and bridge under the jurisdiction of the Department of Highways, authorized under this chapter shall be subject to the provisions of KRS Chapter 56.

History. Enact. Acts 1968, ch. 174, § 2; Acts 1974, ch. 74, Art. IV, § 20(1).

45.155. Contract between state and city of Frankfort for municipal services to state agencies. [Repealed.]

Compiler’s Notes.

This section (Enact. Acts 1976, ch. 344, § 1; 1980, ch. 188, § 16, effective July 15, 1980) was repealed by Acts 1982, ch. 450, § 79, effective July 1, 1983. For present law, see KRS 45.021 .

45.160. Allotment of appropriations — Deviations. [Repealed.]

Compiler’s Notes.

This section (1992b-22, 1992b-23, 1992b-25: amend. Acts 1948, ch. 185, § 1; 1954, ch. 244, § 2; 1962, ch. 281, § 1; 1974, ch. 260, § 4) was repealed by Acts 1982, ch. 450, § 79, effective July 1, 1983. For present law, see KRS 45.610 to 48.620 .

45.170. Disbursements, how authorized — Vouchers. [Repealed.]

Compiler’s Notes.

This section (1992b-3, 1992b-26 to 1992b-28: amend. Acts 1968, ch. 119, § 16; 1974, ch. 74, Art. II, § 9(1)) was repealed by Acts 1982, ch. 450, § 79, effective July 1, 1983. For present law, see KRS 45.251 .

45.180. Expense accounts of state officers and employees. [Repealed.]

Compiler’s Notes.

This section (359a-1, 359a-4: amend. Acts 1950, ch. 56; 1954, ch. 241, § 1; 1968, ch. 119, § 17; 1974, ch. 74, Art. II, § 9(1); 1976, ch. 125, § 1; 1978, ch. 294, § 1, effective June 17, 1978) was repealed by Acts 1982, ch. 450, § 79, effective July 1, 1983. For present law, see KRS 45.101 .

45.185. Establishment of air travel credit plan and other credit plans. [Repealed.]

Compiler’s Notes.

This section (Enact. Acts 1954, ch. 241, § 2(1), effective March 22, 1954; 1974, ch. 74, Art. II, § 9(1)) was repealed by Acts 1982, ch. 450, § 79, effective July 1, 1983.

45.190. Unauthorized obligations — Current inventories of supplies and equipment. [Repealed.]

Compiler’s Notes.

This section (1922b-29 to 1992b-31: amend. Acts 1948, ch. 185, § 2; 1968, ch. 119, § 18; 1974, ch. 74, Art. II, § 9(1); 1982, ch. 226, § 1, effective July 15, 1982; 1982, ch. 240, § 1, effective July 15, 1982) was repealed by Acts 1982, ch. 450, § 79, effective July 1, 1983. For present law see KRS 45.242 , 45.244 , 45.313 .

45.200. Contracts for capital outlay or printing in anticipation of appropriations. [Repealed.]

Compiler’s Notes.

This section (1922b-32: amend. Acts 1948, ch. 185, § 3; 1974, ch. 74, Art. II, § 9(1)) was repealed by Acts 1982, ch. 450, § 79, effective July 15, 1983. For present law see KRS 45.011 .

45.210. Statements of indebtedness, how presented; forms. [Repealed.]

Compiler’s Notes.

This section (1992b-33, 1992b-34) was repealed by Acts 1968, ch. 119, § 21.

45.220. Examination of claims — Preaudit by budget unit — Compromise of disputed claims. [Repealed.]

Compiler’s Notes.

This section (1992b-34, 1992b-35: amend. Acts 1968, ch. 119, § 19; 1974, ch. 74, Art. II, § 9(1)) was repealed by Acts 1982, ch. 450, § 79, effective July 1, 1983. For present law, see KRS 45.121 .

45.229. Appropriations — Lapsing.

  1. No state officer or budget unit shall, after the close of any fiscal year, incur, or vote, order, or approve the incurring of, any obligation or expenditure under any appropriation for that fiscal year, and no expenditure shall be made from or charged to any appropriation for any fiscal year that has expired at the time the obligation of the expenditure was incurred.
  2. The Finance and Administration Cabinet may, for a period of thirty (30) days after the close of any fiscal year, draw warrants against the available balances of appropriations made for that fiscal year, for the payment of expenditures incurred during that year or in fulfillment of contracts properly made during that year, but for no other purpose. Except as provided in KRS 48.705 , after the expiration of thirty (30) days from the beginning of each fiscal year, all balances of appropriations for the prior fiscal year shall lapse to the surplus account of the general fund or road fund unless a branch budget bill provides that the appropriation from which the expenditures shall be paid does not lapse. No further payments shall be made on any claims on account of expenditures of the prior fiscal year.

History. Enact. Acts 1982, ch. 450, § 36, effective July 1, 1983; 1990, ch. 507, § 2, effective July 13, 1990; 1995 (3rd Ex. Sess.), ch. 2, § 2, effective November 3, 1995.

NOTES TO DECISIONS

1.Purpose.

The provision of former law regarding lapsing of appropriations permitting the Department of Finance (now Finance and Administration Cabinet) to draw warrants against available balances of appropriations for three months after the close of any fiscal year for payment incurred or in fulfillment of contracts properly made during the previous year “but for no other purpose” was to permit the clearing of payments of obligations legally and in good faith contracted during the course of the year which had just closed and was not intended to be used to evade the budget law, however worthy the object or purpose might be. Commonwealth ex rel. Meredith v. Frost, 295 Ky. 137 , 172 S.W.2d 905, 1943 Ky. LEXIS 185 ( Ky. 1943 ) (decided under prior law).

Research References and Practice Aids

Cross-References.

Airport development fund not to lapse, KRS 183.772 .

Assessment of public utility companies for expenses of Energy Regulatory Commission and Utility Regulatory Commission, funds remaining unexpended not to lapse, KRS 278.150 .

Unemployment compensation administration fund not to lapse, KRS 341.240 .

Workers’ compensation subsequent injury fund not to lapse, KRS 342.122 .

2020-2022 Budget Reference.

See State/Executive Branch Budget, 2021 Ky. Acts ch. 169, Pt. I, A, 15, (1) at 1067.See State/Executive Branch Budget, 2021 Ky. Acts ch. 169, Pt. I, B, 1, (2) at 1077.See State/Executive Branch Budget, 2021 Ky. Acts ch. 169, Pt. I, B, 1, (4) at 1077.See State/Executive Branch Budget, 2021 Ky. Acts ch. 169, Pt. I, C, 1, (3) at 1078.See State/Executive Branch Budget, 2021 Ky. Acts ch. 169, Pt. I, C, 2, (6) at 1080.See State/Executive Branch Budget, 2021 Ky. Acts ch. 169, Pt. I, C, 3, (7) at 1081.See State/Executive Branch Budget, 2021 Ky. Acts ch. 169, Pt. I, D, 7, (1) at 1085.See State/Executive Branch Budget, 2021 Ky. Acts ch. 169, Pt. I, G, 1, (4) at 1091.See State/Executive Branch Budget, 2021 Ky. Acts ch. 169, Pt. I, G, 3, b, (17) at 1094.See State/Executive Branch Budget, 2021 Ky. Acts ch. 169, Pt. I, M, 11, (1) at 1116.See State/Executive Branch Budget, 2021 Ky. Acts ch. 169, Pt. III, 36 at 1154.See Transportation Cabinet Budget, 2021 Ky. Acts ch. 198, Section 1, Pt. I, A, 4, (10) at 1508.See Legislative Branch Budget, 2021 Ky. Acts ch. 118, Pt. I at 781.See Judicial Branch Budget, 2021 Ky. Acts ch. 170, Pt. I, A, 1, c, (1) at 1168.See Judicial Branch Budget, 2021 Ky. Acts ch. 170, Pt. III, 5 at 1170.

45.230. Lapsing of appropriations. [Repealed.]

Compiler’s Notes.

This section (1992b-38: amend. Acts 1974, ch. 260, § 5; 1976, ch. 33, § 1) was repealed by Acts 1982, ch. 450, § 79, effective July 1, 1983. For present law, see KRS 45.229 .

45.231. Payment of prior year claims.

  1. Any claim against any agency, department, or budget unit not presented or encumbered for payment within the fiscal year in which the obligation was incurred may, after determination by the secretary of the Finance and Administration Cabinet, be found to be a valid claim against the Commonwealth, and may be authorized for payment out of the appropriation for the prior year claims, provided that the agency, department, or budget unit had an available balance sufficient to pay the obligation at the close of the fiscal year in which the obligation was incurred. All claims authorized to be paid under this section shall be limited to those incurred during the two (2) preceding fiscal years, and the total of such claims paid for any one (1) agency, department, or budget unit shall not exceed the available balance remaining to the credit of such agency, department, or budget unit at the close of the fiscal year in which the obligations were incurred.
  2. Any claim incurred against any revolving, trust or agency fund account of any department or agency and authorized to be paid under subsection (1) of this section shall be charged against the current balance to the credit in such revolving, trust or agency fund account, and not the general expenditure fund.

History. Enact. Acts 1950, ch. 104; 1954, ch. 244, § 3, effective July 1, 1954; 1982, ch. 240, § 2, effective July 15, 1982.

NOTES TO DECISIONS

Analysis

1.Application.

The Motor Vehicle Reparations Act (MVRA) applies to motorcycles the same as it applies to all motor vehicles, in the same manner and to the same extent, except where the Act specifies otherwise. Troxell v. Trammell, 730 S.W.2d 525, 1987 Ky. LEXIS 277 ( Ky. 1987 ).

While a settlement under which an underinsured motorist (UIM) carrier substituted its funds for those offered to an injured party by a tortfeasor’s liability carrier did not release a tortfeasor’s subrogation liability to an injured party’s UIM insurer, such settlement did release the tortfeasor from any further liability to the injured party. True v. Raines, 99 S.W.3d 439, 2003 Ky. LEXIS 43 ( Ky. 2003 ).

Under the procedure whereby an underinsured motorist (UIM) insurer substituted its funds for those offered to an injured party by a tortfeasor’s liability carrier, in order to preserve the UIM carrier’s subrogation rights, a tortfeasor’s liability carrier’s settlement offer was conditioned upon a release of its insured from any further liability to the injured party, and the injured party’s acceptance of the UIM insurer’s payment of the contemplated settlement was an acceptance of that condition and a release of the tortfeasor from any further liability to the injured party, but the injured party’s UIM insurer preserved its subrogation claim against the tortfeasor for any amount that it was thereafter required to pay its insured under its UIM coverage. True v. Raines, 99 S.W.3d 439, 2003 Ky. LEXIS 43 ( Ky. 2003 ).

Although an insured had settled for less than an underinsured driver’s liability policy limit, the underinsured motorist carrier was entitled to a credit against total damages up to that limit. Progressive Max Ins. Co. v. Humble, 431 S.W.3d 452, 2013 Ky. App. LEXIS 106 (Ky. Ct. App. 2013).

Underinsured motorist (UIM) carrier is liable only for damages for which the insured would have been compensated but for the fact that the tortfeasor was underinsured, and if the underinsured tortfeasor could not be held liable for an item of damages, that item is not uncompensated damages’ payable by the UIM carrier; therefore, proof the tortfeasor is an underinsured motorist is an essential fact that must be proved before the insured can recover judgment in a lawsuit against the UIM insurer. Jackson v. Estate of Day, 595 S.W.3d 117, 2020 Ky. LEXIS 7 ( Ky. 2020 ).

In a suit for underinsured/uninsured motorist coverage involving an accident in Georgia and a Kentucky insurance policy, the grant of summary judgment to the insurer was vacated because the trial court did not reach the additional issues of opposition raised by the insured, namely that the insurer’s summary judgment motion should have been denied on grounds of estoppel, public policy, and ambiguity of terms within the insurance policy, to see if they had merit. Helton v. United Servs. Auto. Ass'n, 354 Ga. App. 208, 840 S.E.2d 692, 2020 Ga. App. LEXIS 149 (Ga. Ct. App. 2020).

2.Purpose.

The purpose of underinsured motorist (UIM) coverage is not to compensate the insured or his additional insureds from his own failure to purchase sufficient liability insurance. Windham v. Cunningham, 902 S.W.2d 838, 1995 Ky. App. LEXIS 61 (Ky. Ct. App. 1995).

3.Construction.

This section is part of the Motor Vehicle Reparations Act, and as such, it is remedial legislation which should be generally construed to accomplish its stated purposes. La Frange v. United Services Auto. Asso., 700 S.W.2d 411, 1985 Ky. LEXIS 289 ( Ky. 1985 ).

Phrases such as “due by law” or “legally entitled to recover” should not be interpreted to preclude the right of an insured to recover underinsured motorist insurance when tort immunity either precludes securing or restricts the indemnification from a tortfeasor. Nationwide Mut. Ins. Co. v. Hatfield, 122 S.W.3d 36, 2003 Ky. LEXIS 247 ( Ky. 2003 ).

Terms of an automobile insurance policy made clear that if the named insured was a “corporation” or “any other form of organization,” insureds under the UIM coverage were limited to those individuals occupying a covered automobile at the time of the motor vehicle accident. The insurance policy explicitly defined the class of covered persons when the named insured was a corporation. Isaacs v. Sentinal Ins. Co., 607 S.W.3d 678, 2020 Ky. LEXIS 298 ( Ky. 2020 ).

4.—Underinsured Motorist.

A reasonable interpretation of the definition of an “undersinsured motorist” in subsection (1) of this section would be that the legislature intended to provide additional protection to a victim where the underinsured party was a separate individual and not the victim herself. Windham v. Cunningham, 902 S.W.2d 838, 1995 Ky. App. LEXIS 61 (Ky. Ct. App. 1995).

Employee is entitled to a favorable construction of KRS 304.39-320 as it is remedial legislation which should be generally construed to accomplish its stated purpose of compensating for injuries caused by motorists who are underinsured; insurance providing for such coverage must be broad enough to meet that purpose. Samples v. Cincinnati Ins. Co., 2003 Ky. App. LEXIS 306 (Ky. Ct. App. Dec. 5, 2003), aff'd in part and rev'd in part, 192 S.W.3d 311, 2006 Ky. LEXIS 139 ( Ky. 2006 ).

In the context of underinsured motorist (UIM) insurance and workers’ compensation insurance, where the Legislature intended to limit recovery, i.e., to define public policy, it clearly has done so; yet in enacting underinsured motorist provision, KRS 304.39-320 , the Legislature is silent on the issue, and in the absence of a provision limiting double recovery for UIM coverage and workers’ compensation insurance, the appellate court is not convinced that the Legislature intended to so limit UIM coverage. Samples v. Cincinnati Ins. Co., 2003 Ky. App. LEXIS 306 (Ky. Ct. App. Dec. 5, 2003), aff'd in part and rev'd in part, 192 S.W.3d 311, 2006 Ky. LEXIS 139 ( Ky. 2006 ).

Summary judgment was properly entered for an insurer in a declaratory judgment action as the driver was not entitled to underinsured motorist (UIM) benefits under the clear language of the policy as: (1) the driver’s parents’ were the insureds under the policy, (2) the driver was the daughter of the insureds and was living in their home at the time of the accident, (3) the daughter regularly used the parents’ car, which was involved in the accident, (4) the car did not fall within the definition of an “underinsured motor vehicle” in the policy, and (5) the interpretation was consistent with KRS 304.39-320 (2), which required insurers to make available upon request UIM coverage for their customers. Edwards v. Carlisle, 179 S.W.3d 257, 2004 Ky. App. LEXIS 189 (Ky. Ct. App. 2004).

Because the Kentucky Motor Vehicle Reparations Act, KRS 304.39-320 (2), did not prohibit a regular use exclusion in an insurance contract for UIM benefits, Kentucky law did not override Pennsylvania law on public policy grounds, and Pennsylvania law governed the dispute. State Farm Mut. Auto. Ins. Co. v. Hodgkiss-Warrick, 413 S.W.3d 875, 2013 Ky. LEXIS 399 ( Ky. 2013 ).

Owned-but-not-scheduled provisions in a motor vehicle insurance policy are enforceable as a matter of public policy to deny underinsured benefits, so long as the plain meaning of the policy clearly and unambiguously excludes that type of coverage. Phila. Indem. Ins. Co. v. Tryon, 502 S.W.3d 585, 2016 Ky. LEXIS 498 ( Ky. 2016 ).

Lower court erred in reversing the grant of summary judgment to an insurer where a UIM exclusion for vehicles owned but not scheduled for coverage was upheld where the policy plainly and explicitly stated that UIM coverage was unavailable. Phila. Indem. Ins. Co. v. Tryon, 502 S.W.3d 585, 2016 Ky. LEXIS 498 ( Ky. 2016 ).

Lower court's reversal of summary judgment for another insurer was affirmed where the excluded coverage was ambiguous, if not totally absent, and thus, the policy inadequately rebutted the insured's reasonable expectation of coverage. Phila. Indem. Ins. Co. v. Tryon, 502 S.W.3d 585, 2016 Ky. LEXIS 498 ( Ky. 2016 ).

Circuit court properly granted an insurer’s motion for summary judgment and dismissed a passenger’s action seeking underinsured motorist (UIM) coverage because the narrow exclusion in the insured’s policy was valid since it applied to UIM coverage, and the passenger did not qualify as an insured; the UIM policy was reasonable because it covered the named insured, and its exclusion provision was only effective if another UIM policy was applicable. Peterson v. Grange Prop. & Cas., 568 S.W.3d 884, 2018 Ky. App. LEXIS 329 (Ky. Ct. App. 2018).

5.Optional Coverage.

“Full coverage,” as used in relation to automobile or motor vehicle insurance, means insurance in such amount and for such coverage as made mandatory by statute. Flowers v. Wells, 602 S.W.2d 179, 1980 Ky. App. LEXIS 338 (Ky. Ct. App. 1980).

This section clearly sets out that underinsured motorists coverage is optional and not mandatory; therefore a request for “full coverage” does not include underinsured motorists coverage. Flowers v. Wells, 602 S.W.2d 179, 1980 Ky. App. LEXIS 338 (Ky. Ct. App. 1980).

Every Kentucky policyholder obtains the relatively modest uninsured—underinsured coverage described in KRS 304.20-020 unless he opts out of such coverage by rejecting it in writing; but to obtain the potentially more extensive underinsured motorist coverage described in this section, by contrast, the policyholder must opt in to the coverage. Roy v. State Farm Mut. Auto. Ins. Co., 954 F.2d 392, 1992 U.S. App. LEXIS 765 (6th Cir. Ky. 1992 ).

Plaintiffs alleged that defendant insurer’s agents negligently failed to advise the plaintiffs as to the availability of underinsured motorist coverage and added reparation benefits. Plaintiff requested a “policy as good as I can get on liability and no-fault.” In contrast to KRS 304.20-020 which mandates that no liability policy shall be delivered or issued unless it contains a provision for uninsured motorists, this section is optional. There is no affirmative duty on the part of the defendant to advise plaintiffs about the availability of underinsured motorist coverage. Mullins v. Commonwealth Life Ins. Co., 839 S.W.2d 245, 1992 Ky. LEXIS 126 ( Ky. 1992 ).

6.Right to Coverage.

This section contemplates that the insured will have the right to provide insurance coverage for the vehicle of a prospective tortfeasor in the same amount as the liability coverage he purchases for his own. La Frange v. United Services Auto. Asso., 700 S.W.2d 411, 1985 Ky. LEXIS 289 ( Ky. 1985 ).

When separate items of “personal” insurance are bought and paid for, there is a reasonable expectation that the coverage will be provided. Allstate Ins. Co. v. Dicke, 862 S.W.2d 327, 1993 Ky. LEXIS 131 ( Ky. 1993 ), overruled in part, Phila. Indem. Ins. Co. v. Tryon, 502 S.W.3d 585, 2016 Ky. LEXIS 498 ( Ky. 2016 ).

The reasonable expectation of the average person who purchases underinsured motorist (UIM) coverage is that she will be entitled to UIM benefits if she is struck by another driver whose liability limits are not sufficient to satisfy her damages. Windham v. Cunningham, 902 S.W.2d 838, 1995 Ky. App. LEXIS 61 (Ky. Ct. App. 1995).

Insured has no right to select the insurance coverage—underinsured motorist coverage or added reparations benefits—from which benefits are to be paid. Saxe v. State Farm Mut. Auto. Ins. Co., 955 S.W.2d 188, 1997 Ky. App. LEXIS 110 (Ky. Ct. App. 1997).

An insured is not required to be occupying a vehicle insured for UIM coverage at the time of the accident in order to recover UIM benefits; instead, underinsured motorist coverage comes in to play whenever the insured has uncompensated damages that he or she is entitled to recover under a judgment in excess of the policy limits of the owner of the other vehicle. Dupin v. Adkins, 17 S.W.3d 538, 2000 Ky. App. LEXIS 37 (Ky. Ct. App. 2000).

Insurance policy provision that excludes government-owned vehicles from underinsured motorist coverage is against public policy and therefore is void and unenforceable. Therefore, where one insured was injured and another was killed in a collision with a negligently-driven city fire truck, and the city paid all it was legally obliged to under Missouri’s sovereign immunity statute, the insurer’s exclusion of underinsured motorist benefits for accidents involving government-owned vehicles was unenforceable as a violation of public policy. Nationwide Mut. Ins. Co. v. Hatfield, 122 S.W.3d 36, 2003 Ky. LEXIS 247 ( Ky. 2003 ).

Decendent’s estate was able to recover benefits under the uninsured motorist (UM) and underinsured motorist (UIM) portions of a decedent’s motor vehicle insurance policy even though it was a coworker’s negligence that caused the accident that fatally injured the decedent; a coworker’s immunity from liability under the Kentucky Workers’ Compensation Act, KRS 342.690(1), did not preclude the estate from recovering UM benefits from the decedent’s policy because an injured employee who received workers’ compensation benefits had the right to seek additional coverage not only under his own UM or UIM policy but his employer’s as well. State Farm Mut. Auto. Ins. Co. v. Slusher, 2009 Ky. App. LEXIS 31 (Ky. Ct. App. Feb. 27, 2009), rev'd, 325 S.W.3d 318, 2010 Ky. LEXIS 276 ( Ky. 2010 ).

Because the clear intent of the underinsured motorist (UIM) statute is to allow an insured to purchase additional coverage so as to be fully compensated for damages when injured by the fault of another individual, the inability of a tortfeasor to respond in damages for whatever reason is of no consequence; Kentucky case law has clearly expressed an expansive view when deciding the extent of coverage under either UIM or uninsured motorist benefits, as well as an intention to ensure that injured parties are fully compensated. State Farm Mut. Auto. Ins. Co. v. Slusher, 2009 Ky. App. LEXIS 31 (Ky. Ct. App. Feb. 27, 2009), rev'd, 325 S.W.3d 318, 2010 Ky. LEXIS 276 ( Ky. 2010 ).

7.Recovery Not Afforded.

Where insured’s policy limits and tortfeasor’s policy limits are coextensive, the insured’s damages, however extensive, do not trigger the policy coverage. Thus, the insured did not recover under this section where his policy unambiguously provided that the settlement paid on behalf of the tortfeasor by his insurance company would be offset by the per person recovery limit rather than the sum which represented actual damages as determined by a finding of fact in a later law suit. La Frange v. United Services Auto. Asso., 700 S.W.2d 411, 1985 Ky. LEXIS 289 ( Ky. 1985 ).

Passenger of motor vehicle driven by son of insurance policyholder and injured due to negligence of driver, was covered under the liability coverage of the policy, but could not also recover under the underinsured motorist (UIM) coverage of the policyholder, as the UIM coverage—consistent with Kentucky’s UIM statute—clearly excluded from the definition of “underinsured motor vehicle” vehicles owned or regularly used by the insured, and in this case, occupied by passenger. Pridham v. State Farm Mut. Ins. Co., 903 S.W.2d 909, 1995 Ky. App. LEXIS 91 (Ky. Ct. App. 1995).

Under the 1988 version of the statute, an insurance company was required to pay under its underinsured motorist coverage (UIM) coverage only to the extent that the UIM coverage exceeded the liability policy limits of the tortfeasor’s insurance policy. Motorists Mut. Ins. Co. v. Glass, 996 S.W.2d 437, 1997 Ky. LEXIS 138 ( Ky. 1997 ), overruled in part, Hollaway v. Direct Gen. Ins. Co. of Miss., 497 S.W.3d 733, 2016 Ky. LEXIS 433 ( Ky. 2016 ).

8.Subrogation.

It does not abrogate underinsured motorist (UIM) coverage for an insured to settle with the tortfeasor and his carrier for the policy limits in his liability coverage, so long as the UIM insured notifies his UIM carrier of his intent to do so and provides the carrier an opportunity to protect its subrogation. Coots v. Allstate Ins. Co., 853 S.W.2d 895, 1993 Ky. LEXIS 64 ( Ky. 1993 ).

As an underinsured motorist (UIM) carrier’s contractual subrogation right could not obstruct a UIM insured’s right to settle for the policy limits, even if it meant releasing subrogation, the UIM carrier’s contractual subrogation had to be disregarded only to the extent it was in conflict with the UIM insured’s superior right to accept a tortfeasor’s policy limits when offered, when to do so required executing a release and indemnity agreement. True v. Raines, 99 S.W.3d 439, 2003 Ky. LEXIS 43 ( Ky. 2003 ).

Insurer’s denial of an underinsured motorist (UIM) claim was upheld on appeal; as the insured failed to give the insurer notice of a proposed settlement with the other driver involved in an accident with the insured in compliance with KRS 304.39-320 (3), requiring notice by certified or registered mail, the insurer had no duty to provide UIM coverage to the insured. Liberty Mut. Fire Ins. Co. v. Massarone, 326 F.3d 813, 2003 FED App. 0123P, 2003 U.S. App. LEXIS 7912 (6th Cir. Ky. 2003 ).

Employer had no subrogation rights against underinsured motorist benefits paid to an injured employee for workers’ compensation benefits paid to the employee as a result of the same auto accident; KRS 342.700 (1) allowed subrogation against the third-party tortfeasor, but a payment made in performance of a contractual obligation was not a payment of “damages” and the liability of an insurance company under its uninsured motorist coverage was not the “legal liability for damages” mentioned in KRS 342.700 . While the UIM carriers may have stood in the shoes of the tortfeasor for the sole purpose of making the injured party whole, the UIM contracts did not provide an additional right of subrogation in favor of the employer. G&J Pepsi-Cola Bottlers v. Fletcher, 229 S.W.3d 915, 2007 Ky. App. LEXIS 220 (Ky. Ct. App. 2007).

Under KRS 304.39-320 (4), the insurer could stand in the shoes of its insured to seek a determination of liability and damages, and ultimately collect a judgment against the tortfeasor’s liability carrier; as the insurer bore the risk of overpayment once liability had been determined and damages assessed, an assessment of fault and damages had to be made. Auto Owners Ins. Co. v. Omni Indem. Co., 298 S.W.3d 457, 2009 Ky. LEXIS 285 ( Ky. 2009 ).

Underinsured motorist (UIM) insurer was not entitled to restitution from a liability insurer for funds advanced to the UIM insurer’s insured pursuant to Coots v. Allstate Insurance Company, 853 S.W.2d 895, 1993 Ky. LEXIS 64 ( Ky. 1993 ), because while the UIM insurer was entitled to seek subrogation under KRS 304.39-320 (4), the UIM insurer failed to preserve its rights as it did not file a proof of claim in the adverse driver’s bankruptcy proceeding. Auto Owners Ins. Co. v. Omni Indem. Co., 2008 Ky. App. LEXIS 247 (Ky. Ct. App. Aug. 1, 2008), rev'd, 298 S.W.3d 457, 2009 Ky. LEXIS 285 ( Ky. 2009 ).

On a subrogation cross-claim, an underinsured motorist insurer was entitled to a judgment in its favor without any need to present evidence during trial, and the insurer did not proceed improperly when it filed a timely motion to alter or amend after the circuit court left subrogation unaddressed. Progressive Max Ins. Co. v. Humble, 431 S.W.3d 452, 2013 Ky. App. LEXIS 106 (Ky. Ct. App. 2013).

9.Insurer’s Duty.

Plaintiffs alleged that defendant insurer’s agents negligently failed to advise the plaintiffs as to the availability of underinsured motorist coverage, however they failed to produce facts evidencing an implied assumption of duty to advise about the availability of underinsured motorist coverage and neither paid the insurance agent an amount beyond the premium for such advice, nor had long-term course of dealing with the insurance agent, nor expressly asked for advice. Thus, no implied assumption of duty to advise is implicated. Mullins v. Commonwealth Life Ins. Co., 839 S.W.2d 245, 1992 Ky. LEXIS 126 ( Ky. 1992 ).

10.Stacking.

Anti-stacking insurance policy provision with respect to uninsured motorist coverage was void. Allstate Ins. Co. v. Dicke, 862 S.W.2d 327, 1993 Ky. LEXIS 131 ( Ky. 1993 ), overruled in part, Phila. Indem. Ins. Co. v. Tryon, 502 S.W.3d 585, 2016 Ky. LEXIS 498 ( Ky. 2016 ).

An insurer is not required to stack multiple units of uninsured motorist (UM) coverage which have been paid by a single premium, if that premium is not based on the number of vehicles insured; thus, an insured was not entitled to stack three units of UM coverage in a situation where the insured’s policy listed three vehicles, but a single actuarial premium was charged for the UM coverage. Adkins v. Ky. Nat'l Ins. Co., 220 S.W.3d 296, 2007 Ky. App. LEXIS 101 (Ky. Ct. App. 2007).

Circuit court erred in ruling that bus occupants were entitled to stack underinsured motorist (UIM) coverage provided in a vehicle insurance policy issued to a county board of education because they were insureds of the second class who were precluded from stacking the UIM coverage; the bus occupants were not named insureds or family members of the named insured, and there was no reasonable interpretation of the policy language that would permit them to stack the UIM coverages. Consol. Ins. Co. v. Slone, 538 S.W.3d 922, 2018 Ky. App. LEXIS 18 (Ky. Ct. App. 2018).

There was no logical connection between any misrepresentation to a county board of education and bus occupants' right to stack the underinsured motorist (UIM) coverage provided in a vehicle insurance policy because the bus occupants, as insureds of the second class, could not have relied upon such misrepresentation, which they knew nothing about, and they had no reasonable expectation that they could stack the UIM coverage. Consol. Ins. Co. v. Slone, 538 S.W.3d 922, 2018 Ky. App. LEXIS 18 (Ky. Ct. App. 2018).

11.Punitive Damages.

Trial court did not err by finding that insurance company’s underinsured motorist (UIM) coverage exclusion regarding punitive damages was not violative of subsection (2) of this section as UIM coverage was intended only to provide protection against uncompensated injury and not protection of an insured’s right to also seek punitive damages, nor was such exclusion violative of public policy. Hodgin v. Allstate Ins. Co., 935 S.W.2d 614, 1996 Ky. App. LEXIS 70 (Ky. Ct. App. 1996).

12.Setoff of Other Recovery.

A provision in an uninsured motorist endorsement which undertook to reduce or setoff workers’ compensation benefits against the policy limits violated the statute and public policy regarding uninsured motorist coverage. Philadelphia Indem. Ins. Co. v. Morris, 990 S.W.2d 621, 1999 Ky. LEXIS 44 ( Ky. 1999 ).

The mandate in KRS 342.700(1) that “he shall not collect from both” was a limitation on the rights of a worker that was attendant to his right to collect workers’ compensation benefits; a driver injured in a traffic accident could not have recovered damages duplicating workers’ compensation benefits against the tortfeasor, and so, he was not entitled to recover those same damages against his underinsured motorist insurer. Cincinnati Ins. Co. v. Samples, 192 S.W.3d 311, 2006 Ky. LEXIS 139 ( Ky. 2006 ).

13.Notice.

Because an insurer had received the insured’s notification letter pursuant to Coots v. Allstate Insurance Company, 853 S.W.2d 895, 1993 Ky. LEXIS 64 ( Ky. 1993 ) and did not object to the letter as not having been sent by certified or registered mail pursuant to KRS 304.39-320 (3), the insurer waived its right to the statutorily prescribed form of notice and, correspondingly, waived any defense to underinsured motorist payments and subrogation based upon the lack of that form of notice. Young v. Ky. Farm Bureau Mut. Ins. Co., 2008 Ky. App. LEXIS 105 (Ky. Ct. App. Apr. 11, 2008), rev'd, 317 S.W.3d 43, 2010 Ky. LEXIS 126 ( Ky. 2010 ).

Insured’s underinsured motorist claim was extinguished because the insured failed to give the insurer proper notice pursuant to KRS 304.39-320 of his intention to settle his claim with the tortfeasor’s liability carrier; a letter to the insurer stating that the insured was considering whether to accept the offer made by the tortfeasor’s liability carrier was insufficient. Plainly, no settlement agreement existed, and the letter never stated that the insured himself had done what he had to do in order to invoke KRS 304.39-320 , which was “agree to settle” with the other motorist and his liability carrier. Malone v. Ky. Farm Bureau Mut. Ins. Co., 287 S.W.3d 656, 2009 Ky. LEXIS 149 ( Ky. 2009 ).

Coots process cannot be achieved unless the underinsured motorists insurance carrier knows with reasonable certainty what it must pay. It appears from the legislative intent of KRS 304.39-320 that the Coots notice should provide accurate information about the proposed settlement including the correct “amount of the written offer from the underinsured motorist’s liability insurer.” Ky. Farm Bureau Mut. Ins. Co. v. Young, 317 S.W.3d 43, 2010 Ky. LEXIS 126 ( Ky. 2010 ).

In those circumstances where the proposed settlement amount differs from the final settlement amount, the Coots notice only must reflect the agreed to settlement amount at the time the notice was provided. Ky. Farm Bureau Mut. Ins. Co. v. Young, 317 S.W.3d 43, 2010 Ky. LEXIS 126 ( Ky. 2010 ).

When the policyholders settled their claim arising from an automobile accident with the tortfeasor, the policyholders’ failure to provide its underinsured motorists insurance carrier with the correct settlement amount made the Coots notice defective under KRS 304.39-320 (4) and extinguished the policyholders’ right to claim UIM benefits. Ky. Farm Bureau Mut. Ins. Co. v. Young, 317 S.W.3d 43, 2010 Ky. LEXIS 126 ( Ky. 2010 ).

Rule that a Coots notice must contain accurate information regarding the proposed settlement under KRS 304.39-320 is intended to protect the insurer’s ability to protect its subrogation interests, not for use as a weapon to deny its policyholders benefits; in the limited circumstances where the underinsured motorists insurance (UIM) carrier has reason to doubt the accuracy of the information contained in a Coots notice, prudence places a responsibility on the UIM insurer to take reasonable measures to resolve the doubt, which may include a request for clarification of the information needed to make its decision to advance its own funds in place of the tortfeasor’s. Otherwise, the insurer may be found to have waived its right to deny UIM coverage after ignoring a defective notice; putting this burden on the insurer and giving the policyholder the opportunity to eliminate any confusion caused by his faulty Coots notice is within the spirit of the policies and purposes behind the Kentucky Motor Vehicle Reparations Act, KRS 304.39-010 . Ky. Farm Bureau Mut. Ins. Co. v. Young, 317 S.W.3d 43, 2010 Ky. LEXIS 126 ( Ky. 2010 ).

It was unjust to hold as a matter of law that an insured was precluded from recovering underinsured motorist benefits for failure to comply with the notice requirement to the insurer of a potential settlement because the insured could not have given the notice if the underlying existence of the policy was denied or misstated by the insurance agent. Uto-Owners Ins. Co. v. Spalding, 573 S.W.3d 626, 2019 Ky. App. LEXIS 2 (Ky. Ct. App. 2019).

Cited:

Transport Ins. Co. v. Ford, 886 S.W.2d 901, 1994 Ky. App. LEXIS 110 (Ky. Ct. App. 1994); Am. Home Assur. Co. v. Hughes, 310 F.3d 947, 2002 U.S. App. LEXIS 23890 (6th Cir. 2002); Cincinnati Ins. Co. v. Hofmeister, — S.W.3d —, 2008 Ky. App. LEXIS 302 (Ky. Ct. App. 2008); Gilbert v. Nationwide Mut. Ins. Co., 275 S.W.3d 690, 2009 Ky. LEXIS 15 ( Ky. 2009 ).

Notes to Unpublished Decisions

1.Setoff of Other Recovery.

Unpublished decision: Trial court erred in holding that an injured person’s recovery on a personal injury award was limited under KRS 304.39-320 by the amount that the injured person recovered in underinsured motorist (UIM) benefits from his own insurers. Since UIM insurance payments were subject to the collateral source rule similarly to other insurance payments, the negligent driver was not entitled to a setoff against the tort recovery for the UIM benefits the injured person already recovered. Schwartz v. Hasty, 175 S.W.3d 621, 2005 Ky. App. LEXIS 43 (Ky. Ct. App. 2005).

Opinions of Attorney General.

The lapsing of the unexpended balance of appropriations of the Department of Education, existing at the close of the fiscal years in question, will not defeat a valid claim under this section, but in fact provides a fund from which said claims may be satisfied. OAG 64-535 .

The payment of so-called prior year claims is limited to those incurred in the fiscal year preceding the then present fiscal year, and which claims were submitted for payment during the then present fiscal year. OAG 64-535 .

An expenditure for back wages under KRS 18.270 (now see KRS 18A.095 ) from allotted funds (100 account) under this section for the current year would not be authorized unless the dismissal time extended over into the present fiscal year. OAG 71-118 .

The payment of the so-called prior year claims is limited to those incurred in the fiscal year immediately preceding the then present fiscal year, and which claims were submitted for payment during the then present fiscal year. OAG 71-118 .

Where the Personnel Board ordered the payment of back salary to two dismissed employes, this section could be applied. OAG 71-118 .

Where a circuit judge has required the presence of more than one deputy sheriff in the courtroom, any old claims for payment of the fees provided for in KRS 64.090 except for prior year claims under this section cannot be honored in the absence of specific legislative action authorizing such payment. OAG 75-520 .

45.235. Social security appropriations not to lapse at end of first fiscal year of biennium. [Repealed.]

Compiler’s Notes.

This section (Enact. Acts 1948, ch. 236, §§ 1 to 3; 1974, ch. 74, Art. VI, § 107(27)) formerly compiled as KRS 200.045 , 205.045 , and 207.085 , was repealed by Acts 1982, ch. 393, § 51, effective July 15, 1982.

45.236. Child welfare appropriations not to lapse.

Notwithstanding the provisions of KRS 45.229 and notwithstanding any other provision of the Kentucky Revised Statutes, any unexpended or unencumbered balance of any Social Security appropriation, made available for expenditure by the Cabinet for Health and Family Services in the administration of its child welfare functions for the first fiscal year of each biennium, remaining at the end of that fiscal year, shall be carried forward and be available for expenditure at any time during the ensuing fiscal year within the biennium and no portion shall lapse to the general expenditure fund.

History. Enact. Acts 1950, ch. 125, § 9; 1970, ch. 92, § 15; 1974, ch. 74, Art. VI, § 107(1); 1984, ch. 111, § 38, effective July 13, 1984; 1998, ch. 426, § 84, effective July 15, 1998; 2005, ch. 99, § 105, effective June 20, 2005.

Collection of Debts Owed the Commonwealth

45.237. Definitions for KRS 45.237 to 45.239 — Establishment of internal controls and preaudit procedures for state agencies — Collection of improper payments — Referral of certified debts by agency or local government to Department of Revenue — Information to be provided to State Treasurer.

  1. As used in KRS 45.237 to 45.239 :
    1. “Agency” means an organizational unit or administrative body in the executive branch of state government as defined in KRS 12.010 ;
    2. “Cabinet” means the Finance and Administration Cabinet;
    3. “Court of Justice” means the Administrative Office of the Courts, all courts, and all clerks of the courts;
    4. “Debt” means:
      1. For agencies, a sum certain which has been certified as due and owing;
      2. For local governments, a sum certain which has been certified as due and owing, including but not limited to any delinquent taxes or fees other than delinquent real and personal property taxes; and
      3. For the Court of Justice, a legal debt, including any fine, fee, court costs, or restitution due the Commonwealth, which have been imposed by a final sentence of a trial court of the Commonwealth and for which the time permitted for payment pursuant to KRS 534.020 has expired;
    5. “Department” means the Department of Revenue;
    6. “Improper payment” means a payment made to a vendor, provider, or recipient due to error, fraud, or abuse; and
    7. “Local government” means any city, county, urban-county government, consolidated local government, charter county government, or unified local government of the Commonwealth.
  2. The cabinet shall develop for the executive branch of state government a system of internal controls and preaudit policies and procedures applicable to disbursement transactions for the purpose of prevention and detection of errors or fraud and abuse prior to the issuance of a check or warrant. The initial policies and procedures shall focus first on programs or activities that expend the most federal and general fund dollars. The cabinet shall develop preaudit procedures that meet the unique needs of each agency.
  3. In establishing these systems of internal control and preaudit policies and procedures, the cabinet shall:
    1. Consult with each agency within the executive branch to ascertain its unique fraud risks;
    2. Establish policies and procedures for agency-level oversight of fraud risks, including risk assessment, risk tolerance, and management policies, and fraud- prevention processing controls;
    3. Establish systems and procedures for detecting both unintentional errors and fraudulent misrepresentations that may have occurred in vendor invoices submitted for payment, applications submitted for benefits, claims for refunds of amounts previously paid or withheld, and other disbursements;
    4. Establish systems and procedures for preventing and detecting unintentional errors and the fraudulent disbursement of funds by state government employees in the processing, approving, and paying of invoices, refunds, vouchers, benefit payments, and other disbursements; and
    5. Consult with the state Auditor of Public Accounts, the Commonwealth Office of Technology, the American Institute of Certified Public Accountants, the Association of Certified Fraud Examiners, law enforcement agencies, or any other entity with knowledge and expertise in the detection and prevention of fraud.
  4. Each agency shall diligently attempt to collect amounts paid to a vendor, provider, or recipient due to error, fraud, or abuse for sixty (60) days after the improper payment is discovered. If the improper payment has not been recovered after sixty (60) days, the agency shall certify the improper payment as a debt of the agency and shall refer all certified debts to the department.
  5. A local government may, after making reasonable efforts to collect its debts, by ordinance, resolution, or otherwise pursuant to law, certify its debts that have been due and owing for more than ninety (90) days to the department for collection. The department may, by administrative regulation promulgated in accordance with KRS Chapter 13A, prescribe the form and format of, and the information required in, referrals by a local government, which may be required to be made electronically.
  6. Any funds recovered by an agency within the sixty (60) day collection period allowed under subsection (4) of this section and prior to referral to the department shall be allocated to the fund from which the improper payment was expended.
  7. Each agency shall submit annual summaries of debts due to error, fraud, or abuse, improper payments discovered, and certified debts referred to the department to the Legislative Research Commission. These summaries shall include but not be limited to:
    1. Debts owed the Commonwealth that have been identified by the agency, in accordance with the preaudit procedures established under this section, as those resulting from error, fraud, or abuse, of either the payee or the state agency;
    2. The aggregate amount of money collected by the agency on those debts during the sixty (60) day period allowed under subsection (4) of this section; and
    3. The aggregate amount of certified debts that the agency referred to the department.
  8. Each agency shall provide information about each debt due to error, fraud, or abuse that is certified under this section to the State Treasurer for the Treasurer’s action under KRS 44.030(1).
  9. Each local government shall, where feasible, provide information about each debt that is certified pursuant to this section to the State Treasurer for the Treasurer’s action under KRS 44.030(1).

HISTORY: Enact. Acts 2004, ch. 192, § 1, effective April 21, 2004; 2005, ch. 85, § 61, effective June 20, 2005; 2013, ch. 88, § 3, effective June 25, 2013; 2017 ch. 158, § 7, effective June 29, 2017.

45.238. Powers and duties of Department of Revenue to collect referred debts — Cost-ineffective debts — Treatment of collected debts — Annual report.

  1. Debts that are certified by an agency or by a local government as provided in KRS 45.237 shall be referred to the department for collection. The department shall be vested with all the powers necessary to collect any referred debts.
    1. For those debts deemed unfeasible or cost ineffective to pursue, the department shall maintain written records of the debt and the reason the debt was deemed unfeasible or cost ineffective to pursue. (2) (a) For those debts deemed unfeasible or cost ineffective to pursue, the department shall maintain written records of the debt and the reason the debt was deemed unfeasible or cost ineffective to pursue.
    2. In the case of agencies, these debts shall be written off in accordance with administrative regulations promulgated under the authority of subsection (6) of this section.
    3. In the case of local governments, these debts shall be returned to the referring local government for further action.
    1. All certified debts of agencies received by the department after the sixty (60) day collection period allowed in KRS 45.237(4), and all certified debts of a local government received by the department after the ninety (90) day collection period allowed by KRS 45.237(5), shall be subject to: (3) (a) All certified debts of agencies received by the department after the sixty (60) day collection period allowed in KRS 45.237(4), and all certified debts of a local government received by the department after the ninety (90) day collection period allowed by KRS 45.237(5), shall be subject to:
      1. Interest at the tax interest rate determined under KRS 131.183 on the amount of the debt plus all accruals authorized by law, from the date the debt is certified to the department until it is satisfied; and
      2. A one (1) time twenty-five percent (25%) collection fee imposed on the amount of the debt plus all accruals authorized by law, as of the time of referral.
    2. The department may retain the collection fee.
    3. In the case of agencies and the Court of Justice, recovered funds and interest may, at the discretion of the secretary of the Finance and Administration Cabinet, be returned to the agency certifying the debt or improper payment or to the Court of Justice for allocation as otherwise provided by law. If the recovered funds and interest are not returned to the agency or Court of Justice, the amounts shall be deposited in the budget reserve trust fund established in KRS 48.705 , except for Medicaid benefits and funds required by law to be remitted to a federal agency.
    4. In the case of local governments, recovered funds and interest shall be returned to the referring local government for allocation as provided by ordinance, resolution, or as otherwise provided by law.
  2. The commissioner of the department may refer to the Attorney General any unsatisfied claim, demand, account, or judgment in favor of the Commonwealth for further civil or criminal action under KRS 15.060 .
    1. The department shall report annually by October 1 to the Legislative Research Commission on all referred certified debts, including at least a summary of the debts by agency, fund type, and age, the latter compiled in the following four (4) categories: (5) (a) The department shall report annually by October 1 to the Legislative Research Commission on all referred certified debts, including at least a summary of the debts by agency, fund type, and age, the latter compiled in the following four (4) categories:
      1. Debts from ninety (90) to one hundred seventy-nine (179) days old;
      2. Debts from one hundred eighty (180) to three hundred sixty-four (364) days old;
      3. Debts over one (1) year old but less than three (3) years old; and
      4. Debts three (3) years old or older.
    2. The annual report shall also include the collection amount of the debts in paragraph (a) of this subsection and the accounts to which the amounts are credited.
  3. The department shall promulgate administrative regulations in accordance with KRS Chapter 13A to establish standards that agencies shall use in determining when to write debts off the books.
  4. This section shall not affect the collection of delinquent taxes by sheriffs or county attorneys under KRS 91A.070 or 134.504 .

History. Enact. Acts 2004, ch. 192, § 2, effective April 21, 2004; 2005, ch. 85, § 62, effective June 20, 2005; 2008, ch. 44, § 1, effective July 15, 2008; 2013, ch. 88, § 4, effective June 25, 2013.

45.239. Debts owed Court of Justice — Identification and collection of debts and liquidated debts — Annual report.

  1. The Court of Justice shall initiate, by October 1, 2004, fully implement by October 1, 2005, and thereafter maintain a system for tracking and identifying debts.
  2. The Court of Justice shall establish and operate a system for collecting debt.
  3. In establishing the systems required by this section, the Court of Justice shall consider technology that could assist in the accurate, timely, and efficient delivery of payments of debts.
  4. The Court of Justice, Justice and Public Safety Cabinet, and the Department of Revenue shall collaborate to implement a system, if feasible, to identify and collect debts in existence prior to the implementation date of the system required by subsection (1) of this section. Confidential information shared among these entities to identify and collect debts shall not be divulged to any unauthorized person. Debts collected under this subsection shall be reported annually and designated separately as part of the report required pursuant to KRS 45.238 beginning on October 1, 2005, and ending with the report filed on or before October 1, 2009.
  5. The Court of Justice, Justice and Public Safety Cabinet, and Department of Revenue shall collaborate to implement a system, if feasible, to identify and collect liquidated debts in existence prior to the implementation date of the system required by subsection (1) of this section. Confidential information shared among these entities to identify and collect debts shall not be divulged to any unauthorized person. Debts collected under this subsection shall be reported annually to the Legislative Research Commission beginning on October 1, 2005, and ending with the report filed on or before October 1, 2009.

History. Enact. Acts 2004, ch. 192, § 3, effective April 21, 2004; 2005, ch. 85, § 63, effective June 20, 2005; 2007, ch. 85, § 125, effective June 26, 2007.

Legislative Research Commission Note.

(4/21/2004). This section was created by 2004 Ky. Acts chs. 118, sec. 7, and 192, sec. 3, which have been codified together. Subsection (1) of this statute was enacted identically in subsection (1) of ch. 118, sec. 7, and subsection (1) of ch. 192, sec. 3. Subsections (4) and (5) were enacted by the same two Acts with substantially similar, but nonidentical, text. Subsection (4) was created by ch. 192, sec. 3, subsec. (4), and subsection (5) was created by ch. 118, sec. 7, subsec. (2). Because the two subsections differ slightly in the texts, both have been codified in their entirety. Subsections (2) and (3) were enacted by subsections (2) and (3) of ch. 192, sec. 3.

45.240. Treatment of erroneous payments recovered within 60 days of identification — KRS 45.237 and 45.238 applicable to erroneous payments recovered after 60 days.

  1. Whenever any payment from public money is made in error, or for an amount in excess of the amount found to be properly due and payable, and the payment or excess amount is recovered within sixty (60) days from the date the erroneous or excess payment was identified, the funds shall be allocated to the fund from which the improper payment was expended, the balance in the appropriation from which the payment was made shall be increased by the amount recovered, and the amount recovered shall be deducted from the disbursements from that appropriation.
  2. If the payment or excess amount which is later recovered is in the form of an unnegotiated State Treasurer’s check, said check shall be transmitted direct to the State Treasurer who shall void it. After voiding the check, the State Treasurer shall notify the appropriate agency of the action taken concerning the check.
  3. Whenever any payment from public money is made in error, or for an amount in excess of the amount found to be properly due and payable, and the payment or excess amount is recovered after sixty (60) days from the date the erroneous or excess payment was identified, the provisions set forth in KRS 45.237 and 45.238 shall apply, and the funds shall be allocated as provided in those sections.

History. 1992b-39: amend. Acts 1964, ch. 179; 2004, ch. 192, § 5, effective April 21, 2004.

45.241. Definitions — State agencies and Court of Justice to develop inventory of each debt — Liquidated debts of agency, Court of Justice, or local government submitted to Department of Revenue — Accounting of uncollected debt — Treatment of collected debt — Annual reports.

  1. As used in this section:
    1. “Debt” means:
      1. For agencies, a sum certain which has been certified by an agency as due and owing; and
      2. For local governments, a sum certain which has been certified by a local government as due and owing, including but not limited to any delinquent taxes or fees other than delinquent real and personal property taxes;
    2. “Liquidated debt” means:
      1. For agencies, a legal debt for a sum certain which has been certified by an agency as final due and owing, all appeals and legal actions having been exhausted;
      2. For local governments, a legal debt for a sum certain which has been certified by a local government as final due and owing, all appeals and legal actions having been exhausted, including but not limited to any delinquent taxes or fees other than delinquent real and personal property taxes; and
      3. For the Court of Justice, a legal debt including any fine, fee, court costs, or restitution due the Commonwealth, which have been imposed by a final sentence of a trial court of the Commonwealth and for which the time permitted for payment pursuant to the provisions of KRS 534.020 has expired;
    3. “Agency” means an organizational unit or administrative body in the executive branch of state government, as defined in KRS 12.010 ;
    4. “Department” means the Department of Revenue;
    5. “Court of Justice” means the Administrative Office of the Courts, all courts, and all clerks of the courts;
    6. “Forgivable loan agreement” means a loan agreement entered into between an agency and a borrower that establishes specific conditions, which, if satisfied by the borrower, allows the agency to forgive a portion or all of the loan;
    7. “Improper payment” means a payment made to a vendor, provider, or recipient due to error, fraud, or abuse; and
    8. “Local government” means any city, county, urban-county government, consolidated local government, charter county, or unified local government of the Commonwealth.
  2. Each agency and the Court of Justice shall develop, maintain, and update in a timely manner an ongoing inventory of each debt owed to it, including debts due to improper payments, and shall make every reasonable effort to collect each debt. Within sixty (60) days after the identification of a debt, each agency shall begin administrative action to collect the debt.
  3. The Auditor of Public Accounts shall review each agency’s debt identification and collection procedures as part of the annual audit of state agencies.
  4. An agency shall not forgive any debt owed to it unless that agency has entered into a forgivable loan agreement with a borrower, or unless otherwise provided by statute.
  5. For those agencies without statutory procedures for collecting debts, the Department of Revenue shall promulgate administrative regulations in accordance with KRS Chapter 13A to prescribe standards and procedures with which those agencies shall comply regarding collection of debts, notices to persons owing debt, information to be monitored concerning the debts, and an appeals process.
    1. Each agency and the Court of Justice shall identify all liquidated debts, including debts due to improper payments, and shall submit a list of those liquidated debts in the form and manner prescribed by the department to the department for review. The department shall review the information submitted by the agencies and the Court of Justice and shall, within ninety (90) days of receipt of the information, determine whether it would be cost-effective for the department to further pursue collection of the liquidated debts. (6) (a) Each agency and the Court of Justice shall identify all liquidated debts, including debts due to improper payments, and shall submit a list of those liquidated debts in the form and manner prescribed by the department to the department for review. The department shall review the information submitted by the agencies and the Court of Justice and shall, within ninety (90) days of receipt of the information, determine whether it would be cost-effective for the department to further pursue collection of the liquidated debts.
    2. A local government, after making reasonable efforts to collect its debts, may by ordinance, resolution, or otherwise pursuant to law, submit a list of its liquidated debts that have been due and owing for more than ninety (90) days to the department for review to determine whether it would be cost-effective for the department to pursue collection of the liquidated debts. The department shall review the information submitted by a local government and shall, within ninety (90) days of receipt of the information, determine whether it would be cost-effective for the department to further pursue collection of the liquidated debts.
    3. The department may, after consultation with the agency, Court of Justice, or a local government, return the liquidated debt to the entity submitting the liquidated debt if:
      1. The request for review contains insufficient information; or
      2. The debt is not feasible to collect.

        Any return of a liquidated debt shall be in writing, and shall state why the debt is being returned.

    4. The department shall identify in writing to the submitting agency, Court of Justice, or local government, the liquidated debts it has determined that it can pursue in a cost-effective manner, and the agency, Court of Justice, or local government shall officially refer the identified liquidated debts to the department for collection.
    5. The agency, Court of Justice, and local government shall retain a complete record of all liquidated debts referred to the department for collection until the debt is collected, forgiven, or returned as uncollectible.
    6. Each agency, the Court of Justice, and local government shall make appropriate accounting of any uncollected debt as prescribed by law.
    1. If the agency recovers the debt funds prior to referral to the department, the agency shall retain the collected funds in accordance with its statutory authority. (7) (a) If the agency recovers the debt funds prior to referral to the department, the agency shall retain the collected funds in accordance with its statutory authority.
      1. Upon referral of a liquidated debt to the department, the liquidated debt shall accrue the following amounts: (b) 1. Upon referral of a liquidated debt to the department, the liquidated debt shall accrue the following amounts:
        1. Interest on the total amount of the debt plus legal accruals at the tax interest rate provided in KRS 131.183 , from the time of referral until paid; and
        2. A one (1) time twenty-five percent (25%) collection fee on the total amount of the debt plus legal accruals, as of the time of referral; unless the interest and collection fee are waived by the department.
      2. The interest and collection fee shall be in addition to any other costs accrued prior to the time of referral.
      3. The department may deduct and retain from the liquidated debt recovered an amount equal to the lesser of the collection fee or the actual expenses incurred in the collection of the debt.
      4. In the case of agencies and the Court of Justice, any funds recovered by the department after the deduction of the department’s cost of collection expenses may, at the discretion of the secretary of the Finance and Administration Cabinet, be returned to the agency identifying the liquidated debt or to the Court of Justice for allocation as otherwise provided by law. If the recovered funds and interest are not returned to the agency or Court of Justice, the amounts shall be deposited in the general fund, except for Medicaid benefits funds and funds required by law to be remitted to a federal agency, which shall be remitted as required by law.
      5. In the case of local governments, any funds recovered by the department after the deduction of the department’s cost of collection expenses shall be returned to the local government referring the liquidated debt, for allocation as provided by ordinance, resolution, or as otherwise provided by law.
    2. Nothing in this section shall prohibit the department from entering into a memorandum of agreement with an agency pursuant to KRS 131.130(11), for collection of debts prior to liquidation. If an agency enters into an agreement with the department, the agency shall retain funds collected according to the provisions of the agreement.
    3. This section shall not affect any agreement between the department and an agency entered into under KRS 131.130(11) that is in effect on July 13, 2004, that provides for the collection of liquidated debts by the department on behalf of the agency.
    4. This section shall not affect the collection of delinquent taxes by sheriffs or county attorneys under KRS 91A.070 or 134.504 .
    5. This section shall not affect the collection of performance or reclamation bonds.
  6. Upon receipt of a referred liquidated debt and after its determination that the debt is feasible and cost-effective to collect, the department shall pursue collection of the referred debt in accordance with KRS 131.030 .
  7. By administrative regulation promulgated under KRS Chapter 13A, the department shall prescribe the electronic format and form of, and the information required in, a referral.
    1. The department shall report annually by October 1 to the Interim Joint Committee on Appropriations and Revenue on the collection of debts, including debts due to improper payments, referred by agencies and the Court of Justice. The report shall include the total amount by agency and fund type of liquidated debt that has been referred to the department; the amount of each referring agency’s liquidated debt, by fund type, that has been collected by the department; and the total amount of each referring agency’s liquidated debt, by fund type, that the department determined to be cost-ineffective to collect, including the reasons for the determinations. (10) (a) The department shall report annually by October 1 to the Interim Joint Committee on Appropriations and Revenue on the collection of debts, including debts due to improper payments, referred by agencies and the Court of Justice. The report shall include the total amount by agency and fund type of liquidated debt that has been referred to the department; the amount of each referring agency’s liquidated debt, by fund type, that has been collected by the department; and the total amount of each referring agency’s liquidated debt, by fund type, that the department determined to be cost-ineffective to collect, including the reasons for the determinations.
    2. Each cabinet shall report annually by October 1 to the Interim Joint Committee on Appropriations and Revenue on:
      1. The amount of previous fiscal year unliquidated debt by agency, including debts due to improper payments, fund type, category, and age, the latter to be categorized as less than one (1) year, less than five (5) years, less than ten (10) years, and over ten (10) years; and
      2. The amount, by agency, of liquidated debt, including debts due to improper payments, not referred to the department; a summary, by criteria listed in subsection (6)(a) of this section, of reasons the department provided for not requesting referral of those liquidated debts; and a summary of the actions each agency is taking to collect those liquidated debts.
    3. Beginning on October 1, 2005, the Court of Justice shall report annually by October 1 of each year to the Interim Joint Committee on Appropriations and Revenue the amount of previous fiscal year unliquidated debt by county and whether in the Circuit Court or District Court; and fund type and age, the latter categorized as less than one (1) year, less than five (5) years, less than ten (10) years, and over ten (10) years. The first year for which the Court of Justice shall be required to report is the fiscal year beginning on July 1, 2004 and ending on June 30, 2005. The Court of Justice shall not be required to report unliquidated debts in existence prior to July 1, 2004.
    4. The Finance and Administration Cabinet shall report annually by October 1 to the Interim Joint Committee on Appropriations and Revenue on the amount of the General Government Cabinet’s unliquidated debt by agency, fund type, and age, the latter categorized as less than one (1) year, less than five (5) years, less than ten (10) years, and over ten (10) years.
  8. At the time of submission of a liquidated debt to the department for review, the referring agency, the Court of Justice, or, where feasible, the local government shall provide information about the debt to the State Treasurer for the Treasurer’s action under KRS 44.030(1).

HISTORY: Enact. Acts 2004, ch. 118, § 1, effective July 13, 2004; 2005, ch. 85, § 64, effective June 20, 2005; 2008, ch. 44, § 2, effective July 15, 2008; 2009, ch. 10, § 54, effective January 1, 2010; 2013, ch. 88, § 5, effective June 25, 2013; 2017 ch. 158, § 8, effective June 29, 2017.

Legislative Research Commission Note.

(7/13/2004). 2004 Ky. Acts ch. 142, sec. 9, provides, “Notwithstanding any statutory law or administrative regulations, any debt approved and funded by the Bluegrass State Skills Corporation or the Kentucky Economic Development Finance Authority may be renegotiated, amended, or forgiven with approval of their respective boards. Any debt collected on behalf of the Kentucky Economic Development Finance Authority or Bluegrass State Skills Corporation shall be returned to them subject to any reasonable fees due for services rendered by other agencies or private vendors in collecting the debt on their behalf and shall not be deemed general funds.”

45.242. Unauthorized allotment obligations.

No head of a budget unit or assistant designated by him shall approve any advice of employment, purchase order, contract requisition for reservation of funds, or letter of travel authorization request for travel outside of Kentucky that will involve an expenditure of any sum in excess of the unencumbered balance of the allotment to which the resulting expenditure will be chargeable.

History. Enact. Acts 1982, ch. 450, § 38, effective July 1, 1983; 1998, ch. 120, § 7, effective July 15, 1998.

2016-2018 Budget Reference.

See Transportation Cabinet Budget, 2016 Ky. Acts ch. 148, Pt. I, A, 4, (9) at 1034.

45.244. Obligations not authorized by appropriation or budget allotment.

Except as expressly authorized in this chapter, no person shall incur, or order or vote to incur, any obligation against the Commonwealth in excess of, or any expenditure not authorized by, an appropriation of the General Assembly and an allotment of funds provided by KRS Chapter 48. Any such obligation so incurred shall not be binding against the Commonwealth, and shall be void and incapable of ratification by any administrative authority of the Commonwealth.

History. Enact. Acts 1982, ch. 450, § 39, effective July 1, 1983.

2016-2018 Budget Reference.

See Transportation Cabinet Budget, 2016 Ky. Acts ch. 148, Pt. I, A, 4, (9) at 1034.

NOTES TO DECISIONS

1.Validation of Expenditures.

If a requisition revealed a good and sufficient reason for incurring the proposed expense and the purpose was within the scope of the appropriation for the department involved, the Commissioner of Finance (now Secretary of Finance and Administration) should have regarded it as prima facie valid and approve it, assuming there were funds for its payment. Reeves v. Talbott, 289 Ky. 581 , 159 S.W.2d 51, 1941 Ky. LEXIS 37 ( Ky. 1941 ) (decided under prior law).

The Commissioner of Finance (now Secretary of Finance and Administration) had discretion to determine propriety and justification of proposed expenditures. Reeves v. Talbott, 289 Ky. 581 , 159 S.W.2d 51, 1941 Ky. LEXIS 37 ( Ky. 1941 ) (decided under prior law).

Opinions of Attorney General.

KRS 45.251 and this section, taken together, indicate that there shall be no expenditure of state funds unless authorized by an appropriation of the General Assembly, and even then the expenditure shall be limited to the amounts and purposes for which the appropriations have been made. OAG 85-132 .

When a local development project is referred to by name in a branch budget appropriation, the use of the project name is inseparable from a local entity’s receipt of the state funds. The appropriated funds can only be lawfully applied to a facility as named in the appropriation, and any inconsistent use of those funds by the Governor’s Office for Local Development or by any local entity receiving the funds would lack authorization from the General Assembly and would therefore be contrary to state law. OAG 2005-05 .

Research References and Practice Aids

Cross-References.

Interstate compacts or agreements, limit on expenditures under, KRS 12.240 .

45.245. Submission of six (6) year road plan and appropriations to General Assembly. [Repealed.]

Compiler’s Notes.

This section (Enact. Acts 1990, ch. 502, § 2, effective April 11, 1990 and July 1, 1990; 1992, ch. 433, § 1, effective July 14, 1992; 1994, ch. 299, § 2, effective July 15, 1994; 1998, ch. 532, § 5, effective July 15, 1998) was repealed by Acts 2009, ch. 78, § 49, effective June 25, 2009.

45.2451. Definition of “project” for KRS 45.245, 45.247, and 45.248. [Repealed.]

Compiler’s Notes.

This section (Enact. Acts 1994, ch. 299, § 1, effective July 15, 1994) was repealed by Acts 1998, ch. 532, § 9, effective July 15, 1998.

45.246. Compliance with KRS 45.245 to 45.247. [Repealed.]

Compiler’s Notes.

This section (Enact. Acts 1990, ch. 502, § 3, effective April 11, 1990; 1994, ch. 387, § 15, effective July 15, 1994; 1998, ch. 532, § 6, effective July 15, 1998) was repealed by Acts 2009, ch. 78, § 49, effective June 25, 2009.

45.247. Highway construction contingency account.

There is created within the road fund the highway construction contingency account. The account shall consist of moneys appropriated to the account by the General Assembly. The Transportation Cabinet may transfer money from the highway construction contingency account to a highway construction project, for expenditure thereon. These moneys may be authorized by the secretary of the Transportation Cabinet for:

  1. Projects of an emergency nature;
  2. Promotion of economic or industrial development;
  3. Relief of a hazardous condition;
  4. Other purposes that the secretary determines to be a priority;
  5. Provision of required state match for any unanticipated federal funds made available by the Federal Highway Administration to the Commonwealth as a result of other states not utilizing their total federal obligation;
  6. The funding of any nonfederal share of a project in a previous or the current biennial highway construction programs that exceeds its cost estimate;
  7. The nonfederal share of federal emergency highway projects, federal discretionary projects, and federal demonstration projects; and
  8. The nonfederal share of projects due to an increase in the federal apportionment or federal obligation limits.

History. Enact. Acts 1990, ch. 502, § 4, effective April 11, 1990; 1992, ch. 433, § 2, effective July 14, 1992; 1994, ch. 299, § 3, effective July 15, 1994; 1998, ch. 532, § 7, effective July 15, 1998.

Research References and Practice Aids

2020-2022 Budget Reference.

See Transportation Cabinet Budget, 2020 Ky. Acts ch. 93, Pt. I, A, 4, (4) at 950.

45.248. Approval of proposed contingency account transfer by legislative committee — Monitoring of costs of state highway construction. [Repealed.]

Compiler’s Notes.

This section (Enact. Acts 1990, ch. 502, § 5, effective April 11, 1990; 1992, ch. 433, § 3, effective July 14, 1992; 1994, ch. 299, § 4, effective July 15, 1994) was repealed by Acts 1998, ch. 532, § 9, effective July 15, 1998.

45.250. Forms for use in state financial and business administration. [Repealed.]

Compiler’s Notes.

This section (1992b-40: amend. Acts 1974, ch. 74, Art. II, § 9(1)) was repealed by Acts 1982, ch. 450, § 79, effective July 1, 1983. For present law, see KRS 45.306 .

45.251. Expenditures — Scope — Methodology — Recordkeeping.

  1. Expenditures shall be limited to the amounts and purposes for which appropriations are made. All expenditures shall be reflected in the unified and integrated system of accounts as provided by KRS 45.305 .
  2. The Finance and Administration Cabinet shall prescribe all information technology standards, system attributes, and components to be used in, or in conjunction with, the unified accounting system. The components must be consistent with Commonwealth standards contained within the information technology architecture, as provided by the Commonwealth Office of Technology.
  3. The Governor, the Chief Justice, and the Legislative Research Commission shall designate the officer or employee authorized to approve advices of employment, purchase orders and contracts, and requisitions for reservation of funds, and no advice, order, contract, or requisition shall be honored as a commitment statement unless the designation has been conveyed to the Finance and Administration Cabinet.
  4. The Finance and Administration Cabinet may approve for payment any expenditure presented by a budget unit, provided that the Finance and Administration Cabinet is able to determine that the expenditure is to satisfy a liability of the Commonwealth of Kentucky created on behalf of that budget unit in fulfilling the governmental function assigned to that budget unit and that the expenditure is being made from the unexpended balance of a proper allotment.
  5. Subsidiary records shall be maintained to report the financial operation and condition of each budget unit. These subsidiary records shall be compatible with the unified accounting system prescribed by subsection (1) of this section and by KRS 45.305 , and may be on the accrual basis or cash basis. Expenditures may be by prior encumbrances or by straight disbursements. The subsidiary records may be maintained by the Finance and Administration Cabinet and by the budget unit involved. When a budget unit is authorized to maintain subsidiary records, the Finance and Administration Cabinet shall have authority to prescribe the accounting and preauditing procedures. The unified system of accounts shall conform to accepted management and accounting principles.

History. Enact. Acts 1982, ch. 450, 34, effective July 1, 1983; 1997 (1st Ex. Sess.), ch. 4, § 17, effective May 30, 1997; 2000, ch. 506, § 14, effective July 14, 2000; 2000, ch. 536, § 14, effective July 14, 2000; 2005, ch. 85, § 65, effective June 20, 2005.

NOTES TO DECISIONS

1.Applicability.

A subsequent statute creating an additional obligation was not subject to former law providing for procedures for authorizing disbursements. Shannon v. Dean, 279 Ky. 279 , 130 S.W.2d 812, 1939 Ky. LEXIS 290 ( Ky. 1939 ), overruled in part, D & W Auto Supply v. Department of Revenue, 602 S.W.2d 420, 1980 Ky. LEXIS 243 ( Ky. 1980 ), overruled on other grounds, D & W Auto Supply v. Department of Revenue, 602 S.W.2d 420, 1980 Ky. LEXIS 243 ( Ky. 1980 ) (decided under prior law).

Expenditure of state funds for out-of-state travel was subject to former law providing for procedures for authorizing disbursements. Reeves v. Talbott, 289 Ky. 581 , 159 S.W.2d 51, 1941 Ky. LEXIS 37 ( Ky. 1941 ) (decided under prior law).

2.Discretion of Department Head.

Administrative heads had a broad discretion in determining legitimacy of department expenses, and its exercise was entitled to high regard. Reeves v. Talbott, 289 Ky. 581 , 159 S.W.2d 51, 1941 Ky. LEXIS 37 ( Ky. 1941 ) (decided under prior law).

Opinions of Attorney General.

KRS 45.244 and this section, taken together, indicate that there shall be no expenditure of state funds unless authorized by an appropriation of the General Assembly, and even then the expenditure shall be limited to the amounts and purposes for which the appropriations have been made. OAG 85-132 .

When a local development project is referred to by name in a branch budget appropriation, the use of the project name is inseparable from a local entity’s receipt of the state funds. The appropriated funds can only be lawfully applied to a facility as named in the appropriation, and any inconsistent use of those funds by the Governor’s Office for Local Development or by any local entity receiving the funds would lack authorization from the General Assembly and would therefore be contrary to state law. OAG 2005-05 .

Research References and Practice Aids

Cross-References.

Compensation of special auditors or skilled aides employed by Governor may be charged against appropriation to agency investigated or served, KRS 11.110 .

Employees of General Assembly, how payment of compensation authorized, KRS 6.230 .

Judicial council, members, claims for expenses must be approved by chief justice, KRS 27A.130 .

Property valuation administrators, payment of compensation and expenses of, KRS 131.140 , 132.590 , 132.601 , 132.645 .

Refund of taxes, warrant not to be issued unless application made within two years of payment, KRS 134.590 .

State funds, how withdrawn from treasury, KRS 41.110 .

45.252. Receivable accounts.

Budget units having bona fide receivables may, with the permission of the secretary of the Finance and Administration Cabinet, establish receivable accounts with a corresponding credit to an allotment account.

History. Enact. Acts 1982, ch. 450, § 37, effective July 1, 1983.

NOTES TO DECISIONS

1.Construction.

Under Ky. Const., § 50, former identical section concerning receivable accounts could not validly be taken to mean that presently-existing receivables could be traded for access to future general revenues. McGuffey v. Hall, 557 S.W.2d 401, 1977 Ky. LEXIS 533 ( Ky. 1977 ) (decided under prior law).

45.253. Revolving, trust, or agency accounts — Charges for services by agencies.

  1. Revolving accounts may be established by appropriation in a branch budget bill to finance activities which are self-supporting in whole or in part.
  2. Trust and agency accounts may be established by a branch budget bill to receive and disburse contributions, gifts, donations, devises, and federal appropriations, and, when authorized by law, by depositing all of the fees (which include fees for maintenance in state institutions, incidental fees, tuition fees, fees for board and room, athletics, and student activities), rentals, admittance, sales, licenses collected by law, subventions, and other miscellaneous receipts of budget units.
  3. The head of the budget unit or other responsible fiscal agent of the unit for which a revolving, trust, or agency account has been established shall deposit with the State Treasury all receipts of the character above described, and the Finance and Administration Cabinet shall credit all receipts to the budget unit and shall keep separate accounting for each account so established.
  4. The amounts credited to any revolving, trust, or agency account so provided, shall be held available for disbursement for the purpose provided by law and shall not be diverted to any other purpose. Revolving, trust, or agency accounts shall be subject to withdrawal from the State Treasury by the head of each budget unit when actually needed, on requisition to the Finance and Administration Cabinet in the same manner provided by law as other state funds are withdrawn. Funds received from the federal government in the form of grants or otherwise may be expended for the purpose intended even though received in a fiscal year other than that in which the related original encumbrance or expenditure was incurred. Trust and agency funds shall be allotted before an expenditure is made; and the secretary of the Finance and Administration Cabinet may withhold allotment of general fund appropriations to the extent trust and agency funds are available.
  5. Subject to prior approval by the secretary of the Finance and Administration Cabinet, the Chief Justice, and the Legislative Research Commission for their respective branches, any budget unit which, as an incident to its authorized duties and functions, furnishes requested services or materials to any persons outside state government, where such services or materials are not required by law to be furnished gratuitously, may charge such persons an amount not to exceed the total expense to the budget unit of the services or materials furnished. The receipts from the approved charges shall be credited to the surplus account of the general fund. Payroll deductions for the Department of Kentucky State Police legal fund shall be made without any service fees or charges.
  6. The Commonwealth Office of Technology may charge any agency of local government an amount, not to exceed the total expense to the department, for services rendered or materials furnished at the request of the local government agency, unless the services or materials are required by law to be furnished gratuitously. The receipts from the authorized charges shall be deposited in the State Treasury and credited to the trust and agency fund, the Commonwealth Office of Technology’s operating account.
  7. All receipts which accrue as the result of the Commonwealth Office of Technology’s providing on-line computer access to public records by nongovernment entities shall be deposited in the State Treasury and credited to the trust and agency fund, the Commonwealth Office of Technology’s operating account.

History. Enact. Acts 1982, ch. 450, § 35, effective July 1, 1983; 1988, ch. 39, § 1, effective July 15, 1988; 1990, ch. 55, § 1, effective July 13, 1990; 1990, ch. 507, § 3, effective July 13, 1990; 1994, ch. 295, § 1, effective July 15, 1994; 2000, ch. 506, § 15, effective July 14, 2000; 2000, ch. 536, § 15, effective July 14, 2000; 2005, ch. 85, § 66, effective June 20, 2005; 2007, ch. 85, § 126, effective June 26, 2007.

NOTES TO DECISIONS

1.Trust and Agency Funds.

When any affected agency, board, commission, or other entity of state government receives fees, rental, sales, bond proceeds, gifts, or other income, those moneys are specifically appropriated by the General Assembly to those units of government. Commonwealth ex rel. Armstrong v. Collins, 709 S.W.2d 437, 1986 Ky. LEXIS 262 ( Ky. 1986 ).

Governor could not reduce state universities' appropriated allotments based on the universities' trust and agency funds because, inter alia, this exceeded the governor's authority to withdraw allotments, as Ky. Rev. Stat. Ann. § 45.253(4) conflicted with Ky. Rev. Stat. Ann. § 164A.555 , which controlled over the former statute and clearly mandated the secretary of the Finance and Administration Cabinet to allocate appropriated funds to the universities. Commonwealth ex rel. Andy Beshear v. Matthew Bevin, 498 S.W.3d 355, 2016 Ky. LEXIS 435 ( Ky. 2016 ).

Research References and Practice Aids

2020-2022 Budget Reference.

See State/Executive Branch Budget, 2021 Ky. Acts ch. 169, Pt. I, F, 7, (2) at 1089.See State/Executive Branch Budget, 2021 Ky. Acts ch. 169, Pt. V, E, 9 at 1158.

Cross-References.

Revolving and special funds of a permanent nature:

Agriculture, Department of, for administration, KRS 257.360 .

Agriculture, Department of, for enforcement, KRS 257.460 .

Airport development fund, KRS 183.772 .

Assessments against public utilities for expense of regulation by Energy Regulatory Commission and Utility Regulatory Commission, KRS 278.130 , 278.150 .

Banks, fees for examination of, KRS 286.3-480 .

County sinking fund, KRS 66.370 .

Deposits of insured, KRS 304.8-010 et seq.

Financial Institutions, Department of, for administration of securities law, KRS 286.1-485 .

Forest management fund, Department for Natural Resources and Environmental Protection, KRS 149.280 .

Frozen food locker plants, for enforcement of law concerning, KRS 221.020 .

Office of Housing, Buildings and Construction fees for administration of liquefied petroleum gas law, KRS 234.160 .

Soil and Water Resources Commission, for machinery, KRS 262.640 .

State board of accountancy, KRS 325.250 .

State Fair Board building and improvement fund, KRS 247.190 .

State police, for uniforms, equipment and vehicles, KRS 16.070 , 16.110 .

Teacher certification, for issuance of, KRS 161.010 et seq.

Teachers’ retirement fund, KRS Ch. 161.

Unemployment compensation administration fund, KRS 341.240 .

Unemployment compensation contingent fund, KRS 341.295 .

Unemployment insurance fund, KRS 341.490 to 341.520 .

45.260. Collection of fees and other amounts due the state through the budget units.

Fees for licenses, permits or certificates of any kind due any budget unit shall be collected by the budget unit at the time such licenses, permits or certificates are issued by it, and all other money accruing to the budget units or to the state through the budget units shall also, as far as practicable, be collected at the time the services are rendered or at the time of accrual by the budget units rendering the services or assessing the charges or otherwise giving rise to the claims in favor of the state. When collections cannot be so made, the budget units concerned shall render bills to the persons liable for the amounts due or accruing, and shall collect such bills. Each bill shall carry notice to the effect that checks and money orders shall be made payable to the State Treasurer.

History. 1992b-41: amend. Acts 1974, ch. 260, § 6.

Research References and Practice Aids

Cross-References.

Fees of certain officers, how reported to state, KRS Ch. 64.

Report and accounting of state funds by local officers, KRS Ch. 46.

45.270. Control of receivables. [Repealed.]

Compiler’s Notes.

This section (1992b-42, 1992b-43) was repealed by Acts 1974, ch. 260, § 10.

45.280. Petty cash funds. [Repealed.]

Compiler’s Notes.

This section (1992b-46: amend. Acts 1950, ch. 89; 1952, ch. 171) was repealed by Acts 1964, ch. 16, § 8.

45.285. Audit of state agency by auditor of public accounts — Contract for audit by certified public accountant — Right of review. [Repealed.]

Compiler’s Notes.

This section (Enact. Acts 1980, ch. 178, § 1, effective July 15, 1980) was repealed by Acts 1982, ch. 450, § 79, effective July 1, 1983. For present law, see KRS 45.149 .

45.290. Finance and Administration Cabinet to reconcile statements of depositories and State Treasurer’s accounts.

The Finance and Administration Cabinet shall, during the first ten (10) days of each month, reconcile the statements furnished by the state depositories and the accounts of the State Treasurer.

History. 1992b-53: amend. Acts 1974, ch. 74, Art. II, § 9(1).

Research References and Practice Aids

Cross-References.

Checking and verification of state warrants, KRS 41.170 .

45.300. System of state accounts. [Repealed.]

Compiler’s Notes.

This section (1992b-54, 1992b-56, 1992b-57: amend. Acts 1974, ch. 74, Art. II, § 9(1); 1978, ch. 384, § 11, effective June 17, 1978; 1980, ch. 16, § 1, effective July 15, 1980) was repealed by Acts 1982, ch. 450, § 79, effective July 1, 1983. For present law, see KRS 45.305 .

45.301. General administrative functions of Finance and Administration Cabinet.

  1. The Finance and Administration Cabinet shall have and exercise all administrative functions of the Commonwealth, except as otherwise provided by law, in relation to:
    1. Developing financial policies and plans for consideration by the Governor as the basis for his budget recommendations to the General Assembly, and preparing the detailed documents in accordance with the financial plans of the Governor for presentation to the General Assembly.
    2. Coordinating and supervising the fiscal affairs and fiscal procedures of the Commonwealth to insure the carrying out of the definite financial policies and plans approved by the General Assembly.
    3. Accounting, including budgetary accounting and accounting control.
    4. Fiscal reporting.
    5. Supervision of preauditing of expenditures and current auditing of receipts and receivables.
    6. Supervision of purchasing and storekeeping and control of property and stores.
    7. Supervision of all receivables of the Commonwealth.
    8. Maintaining and operating public buildings, except those provided for the exclusive use of any one (1) agency.
    9. Auditing the accounts of the Treasurer and the Auditor of Public Accounts, as contemplated by Section 53 of the Constitution.
    10. Coordination and supervision of data processing, computers, and government information systems.
  2. The Finance and Administration Cabinet shall be primarily responsible for maintaining management control over the activities of the several budget units of the executive branch. To perform this function, the Finance and Administration Cabinet shall:
    1. Keep in continuous touch with the operations, plans and needs of the budget units, and with the sources and amounts of revenue and other receipts of the Commonwealth.
    2. Appraise the quantity and quality of services rendered by each budget unit of the executive branch and the needs for such services and for any new services.
    3. Examine and recommend work programs and periodic allotments to the several budget units of the executive branch, and changes therein as provided by KRS 48.620 .
    4. Develop plans for improvements and economies in organization and operation of the budget units of the executive branch, and install such plans as are approved or directed by the Governor or the General Assembly.
    5. Devise and prescribe the forms of operations reports to be required periodically from each budget unit of the executive branch and require such budget units to make such reports.
    6. Examine and comment on all statements and reports on the financial condition, estimated future financial condition and operation of state government and its budget units.
    7. Receive and deal with all requests for information as to financial conditions and operations of the Commonwealth.
    8. Prepare such unit costs and cost statistics as are required from time to time.
    9. Advise and assist the Governor, the Chief Justice, the General Assembly, the appropriations committees of the General Assembly and the Legislative Research Commission, upon request, in any matters relating to the functions of the Finance and Administration Cabinet.
    10. Keep a summary of the financial transactions of all budget units.

History. Enact. Acts 1982, ch. 450, § 31, effective July 1, 1983.

NOTES TO DECISIONS

1.Authorized Claim.

The Department of Finance (now Finance and Administration Cabinet) had no authority to disapprove a claim specifically authorized by legislative resolution. Pennington v. Shannon, 270 Ky. 142 , 109 S.W.2d 389, 1937 Ky. LEXIS 37 ( Ky. 1937 ) (decided under prior law).

2.Secretary.

The duties of the Commissioner of Finance (now Secretary of the Finance and Administration Cabinet) that involved expenditure of public money embraced more than that of an accounting officer and he had some discretion in passing on the propriety and justification of proposed expenditures. However, he was entitled to rely upon a requisition for a proposed expenditure made by a department head, as a representation that the expenditure was proper and legitimate, and he was not liable for approving such a requisition if the purpose was within the scope of the appropriation for the department and was within the unexpended balance to the credit of the department. On the other hand, he might have disapproved the requisition if in his judgment the proposed expenditure was not legitimate or proper, or was excessive. Reeves v. Talbott, 289 Ky. 581 , 159 S.W.2d 51, 1941 Ky. LEXIS 37 ( Ky. 1941 ) (decided under prior law).

3.Executive Mansion Tour.

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, KRS 56.463(4)(a). Commonwealth ex rel. Beshear v. Brown, 672 S.W.2d 675, 1984 Ky. App. LEXIS 602 (Ky. Ct. App. 1984).

When the Governor and the Finance and Administration Cabinet 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).

Opinions of Attorney General.

KRS Chapters 45 and 45A concern public funds of the commonwealth such that these provisions are not applicable to the private funds and contributions covered in KRS 41.290 . OAG 82-520 .

Research References and Practice Aids

Cross-References.

Assessment and tax forms and blanks, Finance and Administration Cabinet to furnish on requisition of Revenue Cabinet, KRS 131.140 .

Bonds of political subdivision, duties of Finance and Administration Cabinet, KRS 66.310 .

Bonds of state employees, Secretary of the Finance and Administration Cabinet to fix amount of, KRS 62.170 , 62.190 .

Finance and Administration Cabinet, warrant for withdrawal of money from treasury, KRS 41.110 .

Flood control payments by federal government to counties, receipt and disbursement of, KRS 104.190 .

Investments of state fire and tornado insurance fund, Finance and Administration Cabinet to approve, KRS 56.140 .

Life insurance for state employees, KRS 18A.205 to 18A.220 .

Monthly settlement of accounts with treasurer, KRS 41.310 .

State fair appropriations, Finance and Administration Cabinet to supervise expenditure of, KRS 247.170 .

Treasury, statement of condition, Governor may require of Finance and Administration Cabinet, KRS 41.320 .

Unemployment insurance fund, powers of Finance and Administration Cabinet as to, KRS 341.490 to 341.520 .

Warrants on state treasury, duties as to issuance of, KRS 41.120 to 41.160 , 41.170 .

45.305. Accounting system — Fund structure.

  1. The Finance and Administration Cabinet shall install a unified and integrated system of accounts for the state which shall comply with generally accepted accounting principles, and which shall be in addition to other accounts required by this chapter, and which shall include:
    1. A set of budgetary control accounts for each fund, comprising an account with the available cash of the fund, an account with the budget estimate of the amount of money to be derived from each source of revenue and nonrevenue receipts, an account with the total of the unallotted balances of appropriations, an account with the total of the free balances of allotments, an account with the total commitments under allotments, and an account with the estimated cash surplus or deficit, so as to show at all times the status of the budget fund.
    2. A subsidiary appropriation ledger for each fund from which appropriations are made, embracing an account with each appropriation, and designed to show the budget unit to which the appropriation was made, the purpose of the appropriation, the amount appropriated, the additions to the appropriation, the allotments from the appropriation, the unallotted balance of the appropriation, the commitments charged to allotments, and the free balances of the total amount allotted.
    3. A set of general controlling proprietary and operating accounts for each fund, so as to record the transactions to the fund in summary form and to show the actual current assets, prepaid expenses, current liabilities, deferred credits to income, reserves, actual income, actual expenditures, and the current surplus or deficit.
    4. A uniform classification of the sources of revenue and nonrevenue receipts.
    5. Standard classifications of the expenditures of the budget units.
    6. A standard classification of the budget units.
    7. Such other accounts, records, and devices as the Finance and Administration Cabinet deems necessary for the production of needed information respecting financial condition, financial operations and costs.
  2. The accounts provided for in paragraphs (a), (b) and (c) of subsection (1) of this section or summary records shall be maintained by the Finance and Administration Cabinet.
  3. The Finance and Administration Cabinet shall keep controlling accounts with receipts, payments, and state depositories. The cabinet shall obtain from the State Treasurer the figures for the entries required to open the accounts, and thereafter it shall obtain the information required for the keeping of the accounts from deposits, lists of warrants drawn under appropriations, and vouchers requesting transfers of deposits among state depositories.
  4. The accounting system prescribed and installed by the Finance and Administration Cabinet shall provide for the settlement of transactions between budget units by making debit and credit entries on the books of the cabinet on the basis of adequate expenditure vouchers, without the issuance of warrants.
  5. The accounting system prescribed and installed by the Finance and Administration Cabinet shall include the following fund classifications:
    1. Governmental fund: This classification shall include those funds through which most governmental functions typically are financed including, but not limited to, the general fund, the road fund, bond debt related fund, federal fund, agency receipts funds, and the capital construction fund.
    2. Proprietary fund: This classification shall account for governmental activities which are similar to those activities found in the private sector. Activities which provide services to other governmental units and activities which provide services principally to the private sector are included.
    3. Fiduciary fund: This classification shall account for assets held by a governmental unit in a trustee capacity or as an agent for individuals, private organizations, other governmental units, or other funds. These include expendable trust funds, nonexpendable trust funds, pension trust funds and agency funds.
    4. Loan fund: This classification shall account for funds advanced or to be advanced to other governments, other governmental agencies, or private organizations or individuals.
  6. Account groups. In order to establish accounting control and accountability for general fixed assets and the unmatured principal of general long-term debt, a general fixed assets account group and a general long-term debt account group may be established.

History. Enact. Acts 1982, ch. 450, § 32, effective July 1, 1983; 1998, ch. 118, § 16, effective July 15, 1998.

45.306. Formats for state financial administration.

The Finance and Administration Cabinet shall examine all formats used or proposed for use by any budget unit for the purposes specified in this section, and shall design or redesign them with a view to providing for the simplification, unification, and integration of financial and business administrative records and procedures. This section shall apply to all financial and nonfinancial electronic commerce standards to ensure consistent internal control and system integration in accordance with Commonwealth information technology architecture for use in accounting, preauditing, State Treasury administration, personnel administration, purchasing, property control, and other matters of financial and business administration of the state or any budget unit thereof, with the exception of uniform forms for use in the preparation of budget estimates, requests, and recommendations provided for by KRS 48.040 .

History. Enact. Acts 1982, ch. 450, § 33, effective July 1, 1983; 1997 (1st Ex. Sess.), ch. 4, § 18, effective May 30, 1997.

45.310. Account of warrants and records of State Treasurer’s receipts.

The Finance and Administration Cabinet shall keep an accurate account of all warrants and certificates drawn or issued by the cabinet, showing in due succession the date and amount of each warrant, and for what and to whom issued. The cabinet shall also keep records of all receipts paid into the State Treasury.

History. 149, 153: amend. Acts 1974, ch. 74, Art. II, § 9(1); 1997 (1st Ex. Sess.), ch. 4, § 19, effective May 30, 1997; 1998, ch. 118, § 17, effective July 15, 1998.

45.313. Inventories.

Each budget unit shall maintain a current inventory of equipment having an original cost of five hundred dollars ($500) or more. The inventory shall be available for examination by the Finance and Administration Cabinet at all times.

History. Enact. Acts 1982, ch. 450, § 40, effective July 1, 1983; 1988, ch. 74, § 1, effective July 15, 1988; 1997 (1st Ex. Sess.), ch. 4, § 20, effective May 30, 1997.

Research References and Practice Aids

Cross-References.

Inventory of equipment of state police, KRS 16.070 .

45.320. Fiscal reporting. [Repealed.]

Compiler’s Notes.

This section (1922b-58: amend. Acts 1954, ch. 244, § 4; 1974, ch. 260, § 7; 1978, ch. 155, § 55, effective June 17, 1978) was repealed by Acts 1982, ch. 450 § 79, effective July 1, 1983. For present law see KRS 48.400 .

45.321. Receivable accounts. [Repealed.]

Compiler’s Notes.

This section (Enact. Acts 1974, ch. 260, § 8) was repealed by Acts 1982, ch. 450, § 79, effective July 1, 1983. For present law see KRS 45.252 .

45.322. Accounting system fund structure. [Repealed.]

Compiler’s Notes.

This section (Enact. Acts 1974, ch. 260, § 9; 1982, ch. 300, § 4, effective July 15, 1982) was repealed by Acts 1982, ch. 450, § 79, effective July 1, 1983. For present law, see KRS 45.305 .

45.330. Power of the department of finance to make investigations and secure evidence. [Repealed.]

Compiler’s Notes.

This section (1992b-62: amend. Acts 1974, ch. 74, Art. II, §§ 9(1), 9(2)) was repealed by Acts 1982, ch. 450, § 79, effective July 1, 1983. For present law, see KRS 45.142 .

45.340. Checks for salaries — When to be issued.

Except where otherwise provided by law, checks for salaries due to public officers and employees shall be issued weekly, semimonthly, monthly or for such other period of time not exceeding thirty (30) days which may be designated by the Finance and Administration Cabinet with the approval of the Governor. Checks shall be tendered to an officer or employee only after he has completed the work for which he is being paid and not later than fifteen (15) days after the designated pay period. The Finance and Administration Cabinet is authorized to effect such changes in the payroll system at any time as are necessary to pay salaries after work has been performed. The cabinet is further authorized to make such changes as are necessary and desirable in the posting of payroll expenditures and any other accounting and reporting procedures. In connection with such changes in accounting and reporting procedures, KRS 45.231 shall not be construed to prevent the issuance of salary checks for services rendered during a preceding fiscal year.

History. 156: amend. Acts 1954, ch. 244, § 5; 1964, ch. 135; 1974, ch. 74, Art. II, § 9(1).

NOTES TO DECISIONS

1.Construction.

This section deals with the payment of public officers generally and when it is in conflict with a specific statute passed at a later date the later specific statute governs. Shannon v. Burke, 276 Ky. 773 , 125 S.W.2d 238, 1939 Ky. LEXIS 582 ( Ky. 1939 ).

2.Advancements.

When specific statute passed after this section required that advancements be made to an officer on the first of each month such advancements must be made on the first of each month notwithstanding this section which deals with the payment of public officers generally. Shannon v. Burke, 276 Ky. 773 , 125 S.W.2d 238, 1939 Ky. LEXIS 582 ( Ky. 1939 ).

Opinions of Attorney General.

The semimonthly writing of checks to certain officers is controlled by KRS 64.345 rather than this section. OAG 74-484 .

A local payroll plan for officers enumerated under KRS 64.345 whereby the state sends to the elected official twice a month the total amount for two (2) weeks covering his salary, putting the checks on a current basis, thus making him current as to pay, is illegal as this section contemplates an after the fact approach to payroll, paying officers only for work already finished and not anticipating that the officer will put in his full time during a pay period. OAG 74-484 .

Any practice of making full or partial payments on state personal service contracts in advance of the actual and full performance of the contract is unconstitutional. OAG 80-38 .

Statutory law and Ky. Const., §§ 3 and 171 mandate the payment of state money only after the services have been rendered or performed. OAG 82-281 .

Where it is contemplated that state money must be turned over or advanced to private or corporate contractors before contractual services are actually rendered, and the state officials engaging in the contracts determine in good faith that such advancements are necessary in point of time and the ultimate rendering of the services sought, such advancements may be constitutional under these conditions: (1) the contract must expressly provide that the responsible contractor will not make final effective disbursement of the advanced state funds until the contractual services have in fact been rendered; (2) in order to protect the State Treasury, the contractor must execute a suitable bond or procure an insurance contract providing for full repayment to the state where advanced money has been disbursed without reflecting the concomitant contractual services to be rendered. OAG 82-281 .

Where the state’s money remains in the hands of officials or employees of state government and the money is not finally and effectively paid out until the services are performed, such an arrangement is valid under Ky. Const., §§ 3 and 171. OAG 82-281 .

45.345. Authorization of electronic payment methods for deposit in State Treasury — Provider fees.

  1. In addition to any payment method authorized by law, and notwithstanding any statute to the contrary, any state agency may accept the following methods of payment to secure funds for deposit into the State Treasury:
    1. Credit card;
    2. Debit card;
    3. Electronic check;
    4. Automated clearinghouse (ACH) debit; or
    5. Any other electronic payment method upon the prior written approval of both the Finance and Administration Cabinet and the Office of the State Treasurer.
  2. Any fees charged to a state agency by the provider of the payment services listed in subsection (1) of this section shall be deemed to represent collection expenses and may be considered normal operating expenses of the agency, or the agency may collect convenience fees from users to supplement agency costs of delivering services.

History. Enact. Acts 2003, ch. 191, § 1, effective June 24, 2003.

Federal Block Grants

45.350. Definitions.

As used in KRS 45.351 to 45.359 unless the context otherwise requires:

  1. “Block grant” means any federal block grant authorized by the federal Omnibus Budget Reconciliation Act of 1981 (P.L. 97-35) and any subsequent amendments thereto and any federal block grant authorized by the United States Congress after July 1, 1983.
  2. “Commission” means the Legislative Research Commission.
  3. “Designated review body” means either:
    1. Any interim joint committee, as designated by the Commission at any time when the General Assembly is not in session, whose subject jurisdiction relates to the block grant under review; or
    2. Any interim joint committee, as designated by the Commission at any time when the General Assembly is not in session, whose subject jurisdiction relates to the block grant under review plus the Interim Joint Committee on Appropriations and Revenue; or
    3. Any standing committee, as designated by the Committee on Committees during any legislative session, whose subject jurisdiction relates to the block grant under review; or
    4. Any standing committee, as designated by the Committee on Committees during any legislative session, whose subject jurisdiction relates to the block grant under review plus the Senate and House standing committees on appropriations and revenue.
  4. “Federal administering agency” means any agency of the United States government administering any block grant.
  5. “State administering agency” means any agency of the Commonwealth submitting an application for block grant funding to the secretary or chief public official of the federal administering agency.

History. Enact. Acts 1982, ch. 455, § 1, effective July 1, 1982; 1984, ch. 308, § 1, effective July 13, 1984.

45.351. Applications by state agencies — Requirements.

  1. Every state administering agency shall submit any block grant application for the following fiscal year to the Legislative Research Commission no less than ninety (90) days prior to the date of submission, as required by federal law, of the block grant application to the federal administering agency or no less than ninety (90) days before the state administering agency elects to submit the block grant application to the federal administering agency.
  2. Each state administering agency shall, upon request of the Commission, make available to the Commission all background data and supporting information related to each block grant application under review by the Commission as will enable the Commission to perform its functions in an informed and efficient manner.
  3. Each block grant application submitted by the state administering agency to the Legislative Research Commission shall specify the proposed use and distribution of the block grant and other funds to be allocated by the state administering agency to programs and services; and in addition, each application shall specify:
    1. Programmatic and other requirements applicable to the receipt and expenditures of block grant and other funds, including state matching funds, specified in the application, and the restrictions imposed on the use of these funds;
    2. Whether the block grant and other funds included in the application have been included specifically in an appropriation provision or any branch budget bill enacted by the General Assembly in anticipation of such application;
    3. Whether the funding is one-time, recurring or continuing;
    4. What costs will accrue to the state if federal funds diminish or are cut, and whether a budget reduction plan has been prepared for such contingency;
    5. Whether the programs and services to be provided under the block grant are mandated by the laws of the Commonwealth;
    6. Whether the programs and services to be provided under the block grant are those which the Commonwealth currently administers and funds;
    7. The agencies expected to provide the services including whether such agencies are public or private or state or local;
    8. The manner in which the allocation of funds will be targeted to need;
    9. Geographic areas to be served by the programs and services;
    10. Standards of eligibility for services;
    11. The criteria and method that will be used by the state administering agency to distribute the block grant funds;
    12. Whether and how block grant funds would be transferred from one (1) block grant to another and the amount of the transfer;
    13. The proportion of the block grant funds to be used for administrative costs; and
    14. Estimated receipt of federal funds applied for by block grant.

History. Enact. Acts 1982, ch. 455, § 2, effective July 1, 1982; 1984, ch. 308, § 2, effective July 13, 1984; 1994, ch. 387, § 16, effective July 15, 1994.

NOTES TO DECISIONS

Cited:

Legislative Research Com. by Prather v. Brown, 664 S.W.2d 907, 1984 Ky. LEXIS 300 ( Ky. 1984 ).

Research References and Practice Aids

Kentucky Law Journal.

Snyder and Irland, The Separation of Governmental Powers Under the Constitution of Kentucky: A Legal and Historical Analysis of L.R.C. v. Brown, 73 Ky. L.J. 165 (1984-85).

45.3511. Restrictions on applications — Counties without incorporated area.

  1. State administering agencies shall not have continuation block grant application requests. Each application for a block grant shall be deemed a new application.
  2. No state administering agency shall receive or expend any block grant or other funds included in a block grant application to a federal administering agency, which has not previously been specifically approved as a block grant by the General Assembly in the biennial budget process as having complied with the criteria specified in KRS 45.353 , unless the application is found to be in compliance with the standards and criteria as prescribed in KRS 45.353 , as well as the applicable federal and state laws.
  3. If a county contains no incorporated area, that county shall be permitted to submit two (2) applications per year, one (1) as a county and one (1) as a city, for any block grant program or any category of a block grant program that provides funding on a competitive basis.

History. Enact. Acts 1982, ch. 455, § 3, effective July 1, 1982 and July 1, 1983; 1984, ch. 308, § 3, effective July 13, 1984; 2006, ch. 252, Pt. XXV, § 1, effective April 25, 2006.

NOTES TO DECISIONS

1.Constitutionality.

Subsection (2) of this section which gave the Legislative Research Commission (LRC) certain duties and authority over federal block grant applications from various state agencies was unconstitutional because the budget and the budgetary process of the Commonwealth are purely an executive function and subsection (2) permitted a clear incursion by the LRC into this function, thus violating the separation of powers doctrine. Legislative Research Com. by Prather v. Brown, 664 S.W.2d 907, 1984 Ky. LEXIS 300 ( Ky. 1984 ) (Decision prior to 1984 amendment).

Research References and Practice Aids

Kentucky Law Journal.

Snyder and Irland, The Separation of Governmental Powers Under the Constitution of Kentucky: A Legal and Historical Analysis of L.R.C. v. Brown, 73 Ky. L.J. 165 (1984-85).

45.352. Hearings by designated review body.

  1. The Legislative Research Commission shall, within ten (10) days of receiving any block grant application from the state administering agency, provide for statewide notice, pursuant to KRS Chapter 424, of public hearings to be conducted by the designated review body for the purpose of receiving comments on the block grant application.
  2. The Commission shall, no later than sixty (60) days prior to the submission of the block grant application to the federal administering agency, provide for a public hearing on each block grant application. The hearing may be held at such time, place and location as the Commission shall determine. All hearings and deliberations of the Commission pursuant to KRS 45.351 to 45.359 shall be electronically recorded. The recordings shall constitute a public record.

History. Enact. Acts 1982, ch. 455, § 4, effective July 1, 1982; 1984, ch. 308, § 4, effective July 13, 1984.

45.353. Referral for review and consideration — Review standards and criteria — Vote required for approval.

  1. The Commission shall refer each block grant application received to the designated review body for review and consideration.
  2. The designated review body shall review and consider each block grant application according to the following standards and criteria, and shall make an affirmative finding of fact that:
    1. Except as provided in paragraph (b) of this subsection, block grant and other funds specified in the application have been included in an appropriation provision or any branch budget bill enacted by the General Assembly in anticipation of such application;
    2. Any excess in the total amount of block grant funds sought over the total amount of such funds anticipated and included in an appropriation provision or any branch budget bill, has been included in a surplus expenditure plan approved by the General Assembly;
    3. A budget reduction plan specifying programs and services to be eliminated or to be reduced in scope if federal funding diminishes or is cut, has been included;
    4. The budget reduction plan does not propose to increase the ratio of state funds to federal funds if federal funding diminishes or is cut;
    5. Block grant and other funds to be provided under the application are fairly and equitably distributed among those programs, services, or recipients eligible for block grant funding;
    6. Block grant and other funds to be provided under the application are not to be used to fund programs or services that would duplicate or supplant existing programs or services funded by the private sector;
    7. The intended uses of block grant and other funds specified in the application are in compliance with the applicable federal and state laws pertaining to such block grant funds; and
    8. The amount of block grant and other funds to be retained by the state administering agency for administrative purposes does not exceed an amount allowable under federal law.
  3. For the purpose of the review and consideration of a block grant application, the findings of fact and any other reports or recommendations of the designated review body need only be approved by a majority of the members present at the public hearing held according to KRS 45.352 .

History. Enact. Acts 1982, ch. 455, § 5, effective July 1, 1982; 1984, ch. 308, § 5, effective July 13, 1984; 1994, ch. 387, § 17, effective July 15, 1994; 1998, ch. 323, § 1, effective July 15, 1998.

45.3535. Funding consideration of block grant programs.

Under the economic development funding portion of the Commonwealth’s Community Development Block Grant program, economic development projects recommended for funding by the Cabinet for Economic Development shall be given consideration.

History. Enact. Acts 1992, ch. 105, § 75, effective July 14, 1992.

45.354. Report of designated review body — Findings of fact by Legislative Research Commission.

  1. No later than thirty (30) days prior to the state administering agency submission of each block grant application to the federal administering agency, the designated review body shall advise the Commission in writing of its findings of fact on each block grant application as provided under KRS 45.353 .
  2. The Commission shall within ten (10) days review the findings of the designated review body and make written findings of fact to the state administering agency and the Governor regarding each block grant application. The findings of fact shall be based upon the standards and criteria as prescribed in KRS 45.353 .

History. Enact. Acts. 1982, ch. 455, § 11, effective July 1, 1982; 1984, ch. 308, § 6, effective July 13, 1984.

45.355. Recommendations to legislative research commission by reviewing body. [Repealed.]

Compiler’s Notes.

This section (Enact. Acts 1982, ch. 455, § 6, effective July 1, 1983) was declared unconstitutional in Comm’n ex rel. Prather v. Brown, 664 S.W.2d 907 ( Ky. 1984 ) and was repealed by Acts 1984, ch. 308, § 17, effective July 13, 1984.

45.356. Revision and resubmission of application — Approval or disapproval. [Repealed.]

Compiler’s Notes.

This section (Enact. Acts 1982, ch. 455, § 7), subsections (2) and (3) of which were declared unconstitutional in Comm’n ex rel. Prather v. Brown, 664 S.W.2d 907 ( Ky. 1984 ), was repealed by Acts 1984, ch. 308, § 17, effective July 13, 1984.

45.357. Block grant program status report.

  1. The Commission or its designated review body shall review the actual use and distribution of all block grant funds made available during the preceding year to any state administering agency.
  2. Any state administering agency receiving block grant funds shall, within thirty (30) days following December 31, 1982, June 30, 1983, and each six (6) months thereafter, submit to the Commission a report for each block grant received to be known as the “Block Grant Program Status Report.”
  3. The Block Grant Program Status Report shall show for the programs and services provided under each block grant for the preceding six (6) months the following:
    1. Appropriations, allotments, expenditures, encumbrances, and available balance.
    2. The level of service budgeted, defined in terms of objectives and beneficiaries.
    3. The level of services delivered during the period.
    4. Alternatives for improved service delivery.
    5. Any changes in service authorized or necessary as a result of unanticipated changes in clientele, resources, or for other reasons.
    6. An evaluation of results, including a description of measurements used.
  4. Staff assigned by the Commission to review block grant applications and other block grant reports and documents submitted by state administering agencies shall be authorized to independently investigate and audit for the Commission all matters pertaining to the application for and expenditure of federal block grant and other funds included in any block grant program administered by any state administering agency.
  5. The Commission or its designated review body shall be authorized to subpoena any reports, or records or documents from any state agency regarding any block grant program administered by a state agency for the purposes of investigating or auditing such program.

History. Enact. Acts 1982, ch. 455, § 8, effective July 1, 1982; 1984, ch. 308, § 7, effective July 13, 1984.

45.358. Legislative oversight fund.

  1. There is hereby created a block grant legislative oversight fund which may be expended by the Commission for the purpose of implementing and administering the provisions of KRS 45.351 to 45.359 and 273.453 .
  2. Each state administering agency shall, to the extent permitted by federal law, withhold and place in the block grant legislative oversight fund one-fourth of one percent (0.25%) of the federal funds made available under the block grant. The funds placed in the block grant legislative oversight fund shall not lapse to the general fund.
  3. The Commission shall determine the actual cost to the Commission of implementing and administering the provisions of KRS 45.351 to 45.359 and 273.453 for each block grant under review. The Commission shall notify each state administering agency in writing of the actual cost determined.
  4. The Commission shall, for the purpose of implementing and administering the provisions of KRS 45.351 to 45.359 and 273.453 for each block grant under review and as permitted by federal law, expend no more than one-fourth of one percent (0.25%) of the federal funds made available under each block grant.
  5. The Commission shall return to the applicable state administering agency any unexpended federal moneys placed in the block grant legislative oversight fund under this section quarterly.

History. Enact. Acts 1982, ch. 455, § 9, effective July 1, 1982; 1984, ch. 308, § 8, effective July 13, 1984.

45.359. Construction of statutes relating to block grants.

  1. If any other section of KRS 45.351 to 45.358 is declared unconstitutional, any other statute to the contrary notwithstanding, no block grant money received from the United States government shall be spent or allocated unless appropriated by the General Assembly in regular or special session.
  2. This section shall supersede all statutes other than KRS 45.351 to 45.358 and any branch budget bills with respect to the expenditure of federal block grant funds and any statute in conflict herewith is repealed to the extent of the conflict.

History. Enact. Acts 1982, ch. 455, § 10, effective July 1, 1982; 1994, ch. 387, § 18, effective July 15, 1994.

NOTES TO DECISIONS

Cited:

Legislative Research Com. by Prather v. Brown, 664 S.W.2d 907, 1984 Ky. LEXIS 300 ( Ky. 1984 ).

State Purchasing

45.360. Finance and Administration Cabinet — Powers and duties. [Repealed.]

Compiler’s Notes.

This section (Enact. Acts 1964, ch. 16, § 1(2) to (10); 1966, ch. 235, § 1; 1974, ch. 74, Art. II, § 9(3); 1974, ch. 261, § 1; 1976, ch. 299, § 9; 1978, ch. 110, § 95, effective January 1, 1979; 1978, ch. 260, § 1, effective June 17, 1978; 1978, ch. 391, § 2, effective June 17, 1978; 1982, ch. 226, § 2, effective July 15, 1982; 1984, ch. 366, § 1, effective July 13, 1984; 1988, ch. 130, § 1, effective July 15, 1988) was repealed by Acts 1990, ch. 496, § 67, effective July 13, 1990. For present law, see KRS 45A.045 .

Legislative Research Commission Note.

(7-13-90) This section was amended by the 1990 Regular Session of the General Assembly and also repealed. Pursuant to KRS 446.260 , the repeal prevails.

45.365. Central purchasing. [Repealed.]

Compiler’s Notes.

This section (KRS 45.365 Reenacted Acts 1979 (Ex. Sess.), ch. 23, § 1, effective January 1, 1979) was repealed by Acts 1990, ch. 496, § 67, effective July 13, 1990. For present law, see KRS 45A.050 .

45.370. Standards and specifications fixed by regulations. [Repealed.]

Compiler’s Notes.

This section (Enact. Acts 1964, ch. 16, § 2; 1974, ch. 74, Art. II, § 9(3); 1978, ch. 384, § 12, effective June 17, 1978) was repealed by Acts 1978, ch. 110, § 105, effective January 1, 1979.

45.380. Inspection and quality control — Regulations, checks, testing. [Repealed.]

Compiler’s Notes.

This section (Enact. Acts 1964, ch. 16, § 7) was repealed by Acts 1978, ch. 110, § 105, effective January 1, 1979.

45.390. List of bidders — When sealed bids required — Time for invitations to bid. [Repealed.]

Compiler’s Notes.

This section (Enact. Acts 1964, ch. 16, § 3; 1966, ch. 235, § 2; 1974, ch. 74, Art. II, § 9(3); 1976, ch. 96, § 1; 1978, ch. 384, § 13, effective June 17, 1978) was repealed by Acts 1978, ch. 110, § 105, effective January 1, 1979.

45.395. Fair trade law not applicable to state purchases. [Repealed.]

Compiler’s Notes.

This section (Enact. Acts 1966, ch. 235, § 3) was repealed by Acts 1980, ch. 188, § 310, effective July 15, 1980.

45.400. Emergency purchases, procedure. [Repealed.]

Compiler’s Notes.

This section (Enact. Acts 1964, ch. 16, § 4; 1974, ch. 74, Art. II, § 9(2), 9(3)) was repealed by Acts 1990, ch. 496, § 67, effective July 13, 1990. For present law see KRS 45A.095 , 45A.650 to 45A.660 .

45.410. Purchases under fifty dollars — Petty cash account. [Repealed.]

Compiler’s Notes.

This section (Enact. Acts 1964, ch. 16, § 5; 1974, ch. 74, Art. II, § 9(2), 9(3); 1982, ch. 240, § 3, effective July 15, 1982) was repealed by Acts 1990, ch. 496, § 67, effective July 13, 1990. For present law see KRS 45A.095 , 45A.650 to 45A.660 .

45.420. Imprest cash funds — Establishment — Replenishment. [Repealed.]

Compiler’s Notes.

This section (Enact. Acts 1964, ch. 16, § 6; 1974, ch. 74, Art. II, § 9(1); 1978, ch. 110, § 96) was repealed by Acts 1990, ch. 496, § 67, effective July 13, 1990. For present law see KRS 45A.095 , 45A.650 to 45A.660 .

45.430. Waiver of law on purchases from government. [Repealed.]

Compiler’s Notes.

This section (Enact. Acts 1966, ch. 125, § 1; 1974, ch. 74, Art. II, § 9(3); 1978, ch. 110, § 97, effective January 1, 1979) was repealed by Acts 1990, ch. 496, § 67, effective July 13, 1990. For present law see KRS 45A.095 , 45A.650 to 45A.660 .

45.450. Purchase price to be set out in bill of sale or deed.

Where title to any property or any interest therein is transferred, for monetary or other consideration, by or to the Commonwealth of Kentucky by deed, bill of sale, or otherwise, the purchase price or other consideration shall be set out in full on the face of the deed, bill of sale, or other instrument.

History. Enact. Acts 1966, ch. 110, § 1.

45.451. Policy.

It is the policy of the Commonwealth that all bills shall be paid on time.

History. Enact. Acts 1984, ch. 61, § 1, effective January 1, 1985.

45.452. Definition of “purchasing agency.”

A “purchasing agency” is any state organizational unit or administrative body as defined in KRS 12.010 that actually receives goods or services from a vendor.

History. Enact. Acts 1984, ch. 61, § 2, effective January 1, 1985.

Opinions of Attorney General.

Under the literal wording of KRS 12.010 and 12.020 and this section, the 30-day payment rule established in KRS 45.453 applies to the Corrections Cabinet’s payment to the counties of the reimbursement fees occasioned by the detention of convicted felons in county jails, pursuant to KRS 431.215 ; the invoices submitted by such affected counties must be consistent with KRS 431.215 (2). OAG 84-357 .

45.453. Time period for payment.

All bills shall be paid within thirty (30) working days of receipt of goods and services or a vendor’s invoice except when the purchasing agency has transmitted a rejection notice to the vendor.

History. Enact. Acts 1984, ch. 61, § 3, effective January 1, 1985; 1997 (1st Ex. Sess.), ch. 4, § 21, effective May 30, 1997.

Opinions of Attorney General.

Under the literal wording of KRS 12.010 , 12.020 and 45.452 , the 30-day payment rule established in this section applies to the Corrections Cabinet’s payment to the counties of the reimbursement fees occasioned by the detention of convicted felons in county jails, pursuant to KRS 431.215 ; the invoices submitted by such affected counties must be consistent with KRS 431.215 (2). OAG 84-357 .

45.454. Penalty for late payment.

An interest penalty of one percent (1%) of any amount approved and unpaid shall be added to the amount approved for each month or fraction thereof after the thirty (30) working days which followed receipt of the goods or services or vendor’s invoice by a purchasing agency.

History. Enact. Acts 1984, ch. 61, § 4, effective January 1, 1985; 1998, ch. 118, § 18, effective July 15, 1998.

45.455. Transmission of authorization for payment to Finance and Administration Cabinet.

A purchasing agency shall transmit authorization for payment documentation to the Finance and Administration Cabinet within ten (10) working days of receipt of goods or services or the vendor’s invoice by the purchasing agency.

History. Enact. Acts 1984, ch. 61, § 5, effective January 1, 1985; 1997 (1st Ex. Sess.), ch. 4, § 22, effective May 30, 1997.

45.456. Warrant for payment.

The Finance and Administration Cabinet shall transmit a warrant for payment to the State Treasurer within ten (10) working days of receipt of the authorization for payment documentation from the purchasing agency. When the Finance and Administration Cabinet is the purchasing agency, the cabinet shall transmit a warrant for payment to the State Treasurer within twenty (20) working days of receipt of the authorization for payment documentation.

History. Enact. Acts 1984, ch. 61, § 6, effective January 1, 1985; 1997 (1st Ex. Sess.), ch. 4, § 23, effective May 30, 1997.

45.457. Check for payment.

The State Treasurer shall transmit to the purchasing agency or vendor a check for payment to a vendor within five (5) working days of receipt of a warrant for payment from the Finance and Administration Cabinet. The purchasing agency shall transmit the check for payment to a vendor within five (5) working days of receipt of the check from the State Treasurer.

History. Enact. Acts 1984, ch. 61, § 7, effective January 1, 1985; 1998, ch. 120, § 8, effective July 15, 1998.

45.458. Payment of interest penalty.

The interest penalty imposed by KRS 45.454 shall be paid from moneys already appropriated to the operating budget of the agency whose violation of KRS 45.455 , 45.456 or 45.457 caused the violation of KRS 45.453 . No agency shall budget money for the purpose of paying interest penalties. If the violation of KRS 45.453 is caused by two (2) or more agencies, including the Department of the Treasury and the Finance and Administration Cabinet, the cost of the penalty shall be prorated among the agencies on the basis of the number of days that each agency violated KRS 45.451 to 45.458 .

History. Enact. Acts 1984, ch. 61, § 8, effective January 1, 1985.

45.460. Collusion to restrain bids prohibited. [Repealed and reenacted.]

Compiler’s Notes.

This section (Enact. Acts 1964, ch. 178, § 1; 1966, ch. 126, § 1) was repealed and reenacted by Acts 1978, ch. 110, § 65, effective January 1, 1979, and reenacted as KRS 45A.325 .

Small or Small Minority Business Purchasing Act

45.470. Definitions. [Repealed.]

Compiler’s Notes.

This section (Enact. Acts 1976, ch. 353, § 2; 1984, ch. 149, § 1, effective July 13, 1984) was repealed by Acts 1990, ch. 496, § 67, effective July 13, 1990. For present law see KRS 45A.665 to 45A.685 .

45.480. Standards, classifications and definitions fixed by regulations. [Repealed.]

Compiler’s Notes.

This section (Enact. Acts 1976, ch. 353, § 3; 1984, ch. 149, § 2, effective July 13, 1984) was repealed by Acts 1990, ch. 496, § 67, effective July 13, 1990. For present law see KRS 45A.665 to 45A.685 .

45.490. Procedures, qualifications for bidding. [Repealed.]

Compiler’s Notes.

This section (Enact. Acts 1976, ch. 353, § 4; 1984, ch. 149, § 3, effective July 13, 1984) was repealed by Acts 1990, ch. 496, § 67, effective July 13, 1990. For present law see KRS 45A.665 to 45A.685 .

45.500. Rejection of bids. [Repealed.]

Compiler’s Notes.

This section (Enact. Acts 1976, ch. 353, § 5; 1984, ch. 149, § 4, effective July 13, 1984) was repealed by Acts 1990, ch. 496, § 67, effective July 13, 1990. For present law see KRS 45A.665 to 45A.685 .

45.510. Title. [Repealed.]

Compiler’s Notes.

This section (Enact. Acts 1976, ch. 353, § 1; 1984, ch. 149, § 5, effective July 13, 1984) was repealed by Acts 1990, ch. 496, § 67, effective July 13, 1990. For present law see KRS 45A.665 to 45A.685 .

Professional Employment Commission

45.530. Professional employment commission — Members — Chairman — Meetings — Compensation — Attached to executive department for finance and administration. [Repealed.]

Compiler’s Notes.

This section (Enact. Acts 1978, ch. 391, § 3, effective June 17, 1978) was repealed by Acts 1980, ch. 40, § 4, effective March 12, 1980.

45.535. Duties of commission — Procedures for review and approval of contracts. [Repealed.]

Compiler’s Notes.

This section (Enact. Acts 1978, ch. 391, § 4, effective June 17, 1978) was repealed by Acts 1980, ch. 40, § 4, effective March 12, 1980.

45.540. Procedures for awarding contracts to be developed by department of personnel. [Repealed.]

Compiler’s Notes.

This section (Enact. Acts 1978, ch. 391, § 5, effective June 17, 1978) was repealed by Acts 1980, ch. 40, § 4, effective March 12, 1980.

45.545. Notice of disqualification to applicant — Order of cancellation or modification of contract by commission. [Repealed.]

Compiler’s Notes.

This section (Enact. Acts 1978, ch. 391, § 6, effective June 17, 1978), was repealed by Acts 1980, ch. 40, § 4, effective March 12, 1980.

Equal Employment Opportunity

45.550. Title.

KRS 45.560 to 45.640 shall be known as the Kentucky Equal Employment Opportunity Act of 1978.

History. Enact. Acts 1978, ch. 130, § 1, effective June 17, 1978.

Opinions of Attorney General.

KRS 344.040 , KRS 45.550 to 45.560 , Kentucky Executive Orders 77-508 and 77-831, P.L. 92-256, and 23 CFR Part 633, Subpart A, Appendix A are all in pari materia. OAG 79-404 .

It was the legislative intent in KRS 45.550 to 45.640 to prohibit discrimination as it existed under Kentucky law, i.e., between 40 and 65 years of age in contracts. OAG 79-404 .

45.560. Definitions.

As used in KRS 45.570 to 45.640 , unless the context requires otherwise:

  1. “Contract” means any binding legal relationship between the Commonwealth of Kentucky and a contractor for supplies and services, including construction, or for the use of Commonwealth property, in which the parties, respectively, do not stand in the relationship of employer and employee;
  2. “Contractor” means any prime contractor holding a contract with the Commonwealth of Kentucky government, and shall include subcontractors when the context so indicates;
  3. “Contracting agency” means the person or persons, board, commission, court, council, governing body, employee, or official which is authorized by law to purchase or contract for supplies, materials, services, or equipment for the state;
  4. “Subcontractor” means any person, including a corporation, partnership, or business association of any kind, who holds an agreement or purchase order to perform all or any part of the work or to make or furnish any article or service required for the performance of a negotiated contract or of a subcontract entered thereunder;
  5. “Cabinet” means the Finance and Administration Cabinet; and
  6. “Equal employment opportunity job categories” means the major employment classifications described by the United States Equal Employment Opportunity Commission.

History. Enact. Acts 1978, ch. 130, § 2, effective June 17, 1978; 2007, ch. 137, § 171, effective June 26, 2007; repealed and reenact., Acts 2010, ch. 51, § 171, effective July 15, 2010.

Legislative Research Commission Note.

(7/15/2010). 2010 Ky. Acts ch. 51, sec. 183, provides, “The specific textual provisions of Sections 1 to 178 of this Act which reflect amendments made to those sections by 2007 Ky. Acts ch. 137 shall be deemed effective as of June 26, 2007, and those provisions are hereby made expressly retroactive to that date, with the remainder of the text of those sections being unaffected by the provisions of this section.”

Opinions of Attorney General.

The Equal Employment Opportunity Act, KRS 45.560 to 45.640 , applies only to an employer-employee relationship. It does not reach the situation wherein under a subcontract vending machines are placed in restaurants. OAG 82-219 .

The Equal Employment Opportunity Act, KRS 45.560 to 45.640 , relates only to equal “employment” opportunities. In other words, it involves people being hired by a contractor or subcontractor. OAG 82-219 .

Under subdivisions (1) and (2) of this section, there is no direct relationship of employer and employee between the state and the person engaging in “services” since the contractor procures the “services” or hires the labor whereas, under KRS 45.700(1)(d) (now repealed), a “personal service contract” involves a direct relationship between the state and the individual or corporation who is to furnish his, her, or its personal services and the contract extends between the state and the contracting party furnishing the services, i.e., performing certain duties, professional or otherwise; accordingly, the Equal Employment Opportunity Act does not embrace personal service contracts. OAG 83-6 .

45.565. Administrative regulations to carry out KRS 45.560 to 45.640.

The Finance and Administration Cabinet may promulgate administrative regulations in accordance with the provisions of KRS Chapter 13A to carry out the provisions of KRS 45.560 to 45.640 .

History. Enact. Acts 2007, ch. 137, § 178, effective June 26, 2007; repealed and reenact., Acts 2010, ch. 51, § 178, effective July 15, 2010.

Legislative Research Commission Note.

(7/15/2010). 2010 Ky. Acts ch. 51, sec. 183, provides, “The specific textual provisions of Sections 1 to 178 of this Act which reflect amendments made to those sections by 2007 Ky. Acts ch. 137 shall be deemed effective as of June 26, 2007, and those provisions are hereby made expressly retroactive to that date, with the remainder of the text of those sections being unaffected by the provisions of this section.”

45.570. Contents of contract.

  1. Except in contracts exempted in accordance with KRS 45.590 , all government contracting agencies of the Commonwealth of Kentucky, any county, city, town, school district, water district, hospital district, or other political subdivision of the state shall include in every directly or indirectly publicly funded contract for supplies, materials, services, or equipment hereinafter entered into the following provisions:
  2. During the performance of this contract, the contractor agrees as follows:
    1. The contractor shall not discriminate against any employee or applicant for employment because of race, color, religion, sex, age forty (40) and over, disability, veteran status, or national origin;
    2. The contractor shall take affirmative action in regard to employment, upgrading, demotion, transfer, recruitment, recruitment advertising, lay-off, termination, rates of pay or other forms of compensation, and selection for training, so as to ensure that applicants are employed and that employees during employment are treated without regard to their race, color, religion, sex, age forty (40) and over, disability, veteran status, or national origin;
    3. The contractor shall state in all solicitations or advertisements for employees placed by or on behalf of the contractor that all qualified applicants shall receive consideration for employment without regard to race, color, religion, sex, age forty (40) and over, disability, veteran status, or national origin;
    4. The contractor shall post notices in conspicuous places, available to employees and applicants for employment, setting forth the provisions of the nondiscrimination clauses required by this section; and
    5. The contractor shall send a notice to each labor union or representative of workers with which he has a collective bargaining agreement or other contract or understanding advising the labor union or workers’ representative of the contractor’s commitments under the nondiscrimination clauses.

History. Enact. Acts 1978, ch. 130, § 3, effective June 17, 1978; 1986, ch. 331, § 12, effective July 15, 1986; 2007, ch. 137, § 172, effective June 26, 2007; repealed and reenact., Acts 2010, ch. 51, § 172, effective July 15, 2010.

Legislative Research Commission Note.

(7/15/2010). 2010 Ky. Acts ch. 51, sec. 183, provides, “The specific textual provisions of Sections 1 to 178 of this Act which reflect amendments made to those sections by 2007 Ky. Acts ch. 137 shall be deemed effective as of June 26, 2007, and those provisions are hereby made expressly retroactive to that date, with the remainder of the text of those sections being unaffected by the provisions of this section.”

Opinions of Attorney General.

The Equal Employment Opportunity Act, KRS 45.560 to 45.640 , applies only to an employer-employee relationship. It does not reach the situation wherein under a subcontract vending machines are placed in restaurants. OAG 82-219 .

The Equal Employment Opportunity Act, KRS 45.560 to 45.640 , relates only to equal “employment” opportunities. In other words, it involves people being hired by a contractor or subcontractor. OAG 82-219 .

45.580. Failure to comply with KRS 45.570 constitutes breach of contract.

Failure to comply with any of the provisions of KRS 45.570 shall constitute a material breach of the contract.

History. Enact. Acts 1978, ch. 130, § 4, effective June 17, 1978.

45.590. Exemptions.

A contractor or subcontractor otherwise subject to the provisions of KRS 45.570 is exempt as to any affirmative action or reporting requirements if:

  1. The contract or subcontract awarded is in the amount of five hundred thousand dollars ($500,000) or less, and the amount of the contract is not a subterfuge to avoid compliance with the provisions of KRS 45.560 to 45.640 ;
  2. The contractor or subcontractor utilizes the services of fewer than eight (8) employees during the course of the contract;
  3. The contractor or subcontractor employs only family members or relatives;
  4. The contractor or subcontractor employs only persons having a direct ownership interest in the business, and such interest is not a subterfuge to avoid compliance with the provisions of KRS 45.560 to 45.640 ; or
  5. The subcontract is below the second-tier level of contracts.

History. Enact. Acts 1978, ch. 130, § 5, effective June 17, 1978; 2007, ch. 137, § 173, effective June 26, 2007; repealed and reenact., Acts 2010, ch. 51, § 173, effective July 15, 2010.

Legislative Research Commission Note.

(7/15/2010). 2010 Ky. Acts ch. 51, sec. 183, provides, “The specific textual provisions of Sections 1 to 178 of this Act which reflect amendments made to those sections by 2007 Ky. Acts ch. 137 shall be deemed effective as of June 26, 2007, and those provisions are hereby made expressly retroactive to that date, with the remainder of the text of those sections being unaffected by the provisions of this section.”

Opinions of Attorney General.

Louisville City Ordinance No. 68 deals with the same subject as this section, that of equal opportunity requirements for individuals and firms contracting with the city by requiring all such contractors to be prequalified by a local commission, while, at the same time, appearing to modify or alter the state statute by providing that no contractor shall be awarded a contract by the city requiring an expenditure in excess of $10,000 that is required to be advertised for bids under KRS Chapter 424 unless he is prequalified as an equal opportunity employer; therefore the ordinance is in contradiction to one or more of the exceptions under this section and is, as a consequence, more restrictive. OAG 78-596 .

45.600. Reporting compliance or breach.

  1. Any party not otherwise exempted by KRS 45.590 and intending to submit a bid on any contract covered by the provisions of KRS 45.560 to 45.640 shall within a time frame set by the contracting agency in the bid documents submit to the contracting agency upon being declared the successful bidder:
    1. A statement of intent to comply in full with all requirements of the Kentucky Civil Rights Act, and to submit data required by KRS 45.560 to 45.640 upon being designated the successful bidder.
    2. A breakdown of the bidding party’s existing workforce, indicating the race, ethnicity, gender, and equal employment opportunity job category of each employee.
    3. A breakdown of subcontracts valued at five hundred thousand dollars ($500,000) or more, indicating specific items of work on the contract for which the contractor has submitted or intends to submit a bid to the Commonwealth of Kentucky. The reports shall be submitted in a manner as shall be prescribed by the cabinet and on forms devised by the cabinet and supplied by the contracting agency.
  2. Within ten (10) days after the receipt of the reports, the cabinet shall determine whether the bidding party’s workforce is reflective of the percentage of available minorities and women in the area from which the bidding party’s employees are drawn. If a determination is made that the bidding party’s workforce is reflective of the percentage of available minorities and women in this drawn area, the bidding party shall be “certified” and be thereby qualified to bid on any contract covered by KRS 45.560 to 45.640 without filing additional data for a period of one (1) year.
  3. If it is determined by the cabinet that the bidding party’s workforce reflects an underutilization of minorities or women, the bidding party and contracting agency shall be so notified, and no certification shall be issued. The bidding party shall then have the option of filing with the contracting agency and the cabinet, an affirmative action program, indicating goals and timetables for recruiting and hiring minorities or women throughout the contractors’ workforce. The cabinet shall be available, upon the request of any contractor, to furnish technical assistance in fulfilling the requirements of KRS 45.560 to 45.640 .
  4. If the bidding party is subsequently awarded the contract being sought, failure to comply with the goals and timetables set forth in the affirmative action plan shall be an unlawful practice under KRS 45.560 to 45.640 and shall constitute a material breach of the contract.
  5. If the cabinet determines that the submitted affirmative action program does not fulfill the provisions of KRS 45.560 to 45.640 , the bidding party and contracting agency shall be so notified, and no certification shall be granted.
  6. If the bidding party’s workforce is not reflective of the percentage of minorities or women in the drawing area and the bidding party has complied with all other affirmative action requirements in KRS 45.560 to 45.640 , the bidding party may certify by verified affidavit that the bidding party has made every reasonable effort to comply with said percentage requirements, and the bidding party shall thereafter be entitled to all the benefits of KRS 45.560 to 45.640 .

History. Enact. Acts 1978, ch. 130, § 6, effective June 17, 1978; 2007, ch. 137, § 174, effective June 26, 2007; repealed and reenact., Acts 2010, ch. 51, § 174, effective July 15, 2010.

Legislative Research Commission Note.

(7/15/2010). 2010 Ky. Acts ch. 51, sec. 183, provides, “The specific textual provisions of Sections 1 to 178 of this Act which reflect amendments made to those sections by 2007 Ky. Acts ch. 137 shall be deemed effective as of June 26, 2007, and those provisions are hereby made expressly retroactive to that date, with the remainder of the text of those sections being unaffected by the provisions of this section.”

Opinions of Attorney General.

The Department of Finance (now Finance and Administration Cabinet) is meant to be the umbrella monitor agency for seeing that the contracts contain provisions excluding discrimination and that the contractor complies with the terms which forbid discrimination even if the contracting agency happens to be a city, a town, a county, or political subdivision of the state. OAG 79-404 .

Research References and Practice Aids

Cross-References.

The Kentucky Civil Rights Act, KRS 344.010 et seq.

45.610. Hiring minorities and women — Information required.

  1. For the length of the contract, each contractor shall hire minorities and women from other sources within the drawing area, should the union with which he has collective bargaining agreements be unwilling to supply sufficient minorities or women to satisfy the agreed upon goals and timetables.
  2. Each contractor shall, for the length of the contract, furnish such information as required by KRS 45.560 to 45.640 and by such rules, regulations, and orders issued pursuant thereto and will permit access to all books and records pertaining to his employment practices and work sites by the contracting agency and the cabinet for purposes of investigation to ascertain compliance with KRS 45.560 to 45.640 and such rules, regulations, and orders issued pursuant thereto.

History. Enact. Acts 1978, ch. 130, § 7, effective June 17, 1978; 2007, ch. 137, § 175, effective June 26, 2007; repealed and reenact., Acts 2010, ch. 51, § 175, effective July 15, 2010.

Legislative Research Commission Note.

(7/15/2010). 2010 Ky. Acts ch. 51, sec. 183, provides, “The specific textual provisions of Sections 1 to 178 of this Act which reflect amendments made to those sections by 2007 Ky. Acts ch. 137 shall be deemed effective as of June 26, 2007, and those provisions are hereby made expressly retroactive to that date, with the remainder of the text of those sections being unaffected by the provisions of this section.”

45.620. Action against contractor — Hiring of minority or woman contractor or subcontractor.

  1. The Finance and Administration Cabinet may investigate the employment practices of any contractor or subcontractor to determine if any of the provisions of KRS 45.560 to 45.640 have been violated. If any contractor is found by the cabinet to have engaged in an unlawful practice under KRS 45.560 to 45.640 during the course of performing under a contract or subcontract covered under KRS 45.560 to 45.640, the cabinet shall so certify to the contracting agency and such certification shall be binding upon the contracting agency unless it is reversed in the course of judicial review.
  2. If the contractor is found to have committed an unlawful practice under KRS 45.560 to 45.640 , the contracting agency may cancel or terminate the contract, conditioned upon a program for future compliance approved by the contracting agency and the cabinet. The contracting agency may declare such a contractor ineligible to bid on further contracts with that agency until such time as the contractor complies in full with the requirements of KRS 45.560 to 45.640 .
  3. The equal employment provisions of KRS 45.560 to 45.640 may be met in part by a contractor by subcontracting to a minority or woman contractor or subcontractor. For the provisions of KRS 45.560 to 45.640 , a minority or woman contractor or subcontractor shall mean a business that is owned and controlled by one (1) or more persons disadvantaged by racial, ethnic, or gender circumstances.

History. Enact. Acts 1978, ch. 130, § 8, effective June 17, 1978; 2007, ch. 137, § 176, effective June 26, 2007; repealed and reenact., Acts 2010, ch. 51, § 176, effective July 15, 2010.

Legislative Research Commission Note.

(7/15/2010). 2010 Ky. Acts ch. 51, sec. 183, provides, “The specific textual provisions of Sections 1 to 178 of this Act which reflect amendments made to those sections by 2007 Ky. Acts ch. 137 shall be deemed effective as of June 26, 2007, and those provisions are hereby made expressly retroactive to that date, with the remainder of the text of those sections being unaffected by the provisions of this section.”

45.630. Termination of existing employee not required, when.

Any provision of KRS 45.560 to 45.640 notwithstanding, no contractor shall be required to terminate an existing employee.

History. Enact. Acts 1978, ch. 130, § 9, effective June 17, 1978; 2007, ch. 137, § 177, effective June 26, 2007; repealed and reenact., Acts 2010, ch. 51, § 177, effective July 15, 2010.

Legislative Research Commission Note.

(7/15/2010). 2010 Ky. Acts ch. 51, sec. 183, provides, “The specific textual provisions of Sections 1 to 178 of this Act which reflect amendments made to those sections by 2007 Ky. Acts ch. 137 shall be deemed effective as of June 26, 2007, and those provisions are hereby made expressly retroactive to that date, with the remainder of the text of those sections being unaffected by the provisions of this section.”

45.640. Minimum skills.

Nothing in KRS 45.560 to 45.640 shall require a contractor to hire anyone who fails to demonstrate the minimum skills required to perform a particular job.

History. Enact. Acts 1978, ch. 130, § 10, effective June 17, 1978.

Personal Service Contracts

45.700. Definitions for KRS 45.705 to 45.720. [Repealed.]

Compiler’s Notes.

This section (Enact. Acts 1978, ch. 212, § 1, effective June 17, 1978; 1982, ch. 221, § 1, effective July 15, 1982; 1984, ch. 217, § 1, effective April 6, 1984; 1986, ch. 270, § 1, effective July 15, 1986; 1986, ch. 379, § 1, effective July 15, 1986), was repealed by Acts 1990, ch. 496, § 67, effective July 13, 1990. For present law see KRS 45A.690 .

45.705. Copies of personal service contracts to be filed. [Repealed.]

Compiler’s Notes.

This section (Enact. Acts 1978, ch. 212, § 2, effective June 17, 1978) was repealed by Acts 1990, ch. 496, § 67, effective July 13, 1990.

45.710. Copies to be filed with legislative research commission — Other documentation — File open to public inspection — Conditions for payment. [Repealed.]

Compiler’s Notes.

This section (Enact. Acts 1978, ch. 212, § 3, effective June 17, 1978; 1980, ch. 40, § 1, effective March 12, 1980; 1982, ch. 221, § 2, effective July 15, 1982) was repealed by Acts 1990, ch. 496, § 67, effective July 13, 1990. For present law see KRS 45A.695 .

45.712. Personal service contracts exempt from review — Filing for informational purposes — Effect of amendments on exempt contracts. [Repealed.]

Compiler’s Notes.

This section (Enact. Acts 1986, ch. 365, § 1, effective July 15, 1986) was repealed by Acts 1990, ch. 496, § 67, effective July 13, 1990. For present law see KRS 45A.700 .

45.715. Personal service contract review subcommittee — Objections or disapproval of contracts to be reviewed by secretary of finance and administration — Monthly report. [Repealed.]

Compiler’s Notes.

This section (Enact. Acts 1978, ch. 212, § 4, effective June 17, 1978; 1980, ch. 40, § 2, effective March 12, 1980; 1986 ch. 365, § 2, effective July 15, 1986) was repealed by Acts 1990, ch. 496, § 67, effective July 13, 1990. For present law see KRS 45A.705 .

45.716. Personal service contract prohibited for advertising, promotional or public relations service — When — Review and determination by commissioner of arts. [Repealed.]

Compiler’s Notes.

This section (Enact. Acts 1980, ch. 156, § 1, effective April 3, 1980; 1982, ch. 396, § 6, effective July 15, 1982) was repealed by Acts 1990, ch. 496, § 67, effective July 13, 1990. For present law see KRS 45A.690 .

45.717. Limitation on personal service contracts. [Repealed.]

Compiler’s Notes.

This section (Enact. Acts 1984, ch. 405, § 2, effective July 13, 1984) was repealed by Acts 1990, ch. 496, § 67, effective July 13, 1990. For present law see KRS 45A.715 .

45.718. Identity of executioner to be confidential. [Repealed.]

Compiler’s Notes.

This section (Enact. Acts 1986, ch. 149, § 1, effective March 28, 1986) was repealed by Acts 1990, ch. 496, § 67, effective July 13, 1990. For present law see KRS 45A.720 .

45.720. Duty of Legislative Research Commission. [Repealed.]

Compiler’s Notes.

This section (Enact. Acts 1978, ch. 212, § 5, effective June 17, 1978) was repealed by Acts 1990, ch. 496, § 67, effective July 13, 1990. For present law see KRS 45A.725 .

Capital Projects and Bonds

45.750. Definitions for KRS 45.760 to 45.810 — Application of KRS 45.760 to 45.810.

  1. As used in KRS 45.760 to 45.810 :
    1. “Committee” means the Capital Projects and Bond Oversight Committee;
    2. “Capital construction item” means:
      1. The construction, reconstruction, acquisition, and structural maintenance of buildings;
      2. The installation of utility services, including roads and sewers;
      3. The acquisition or improvement of real property;
      4. The purchase and installation initially or during major renovation of equipment, facilities, and furnishings of a permanent nature for buildings; or
      5. The acquisition of any building to be occupied by any:
        1. Subdivision of state government as defined in KRS 12.010 or enumerated in KRS 12.020 ;
        2. Municipal corporation which exercises its authority on a statewide basis including, but not limited to, the Kentucky Employees Retirement System, Teachers’ Retirement System of the State of Kentucky, Kentucky Higher Education Student Loan Corporation, Kentucky Lottery Corporation, Kentucky Housing Corporation, or any entity with a governing body whose membership is substantially similar to the membership of the governing body of a municipal corporation which exercises its authority on a statewide basis; and
        3. Institution of higher education;
    3. “Lease” means any lease, lease-purchase, or lease with an option to purchase of any real property space occupied by:
      1. Any entity listed in paragraph (b)5. of this subsection;
      2. The legislative branch; or
      3. The judicial branch when leased from a private sector landlord;
    4. “Equipment” means:
      1. Any major item of equipment, including aircraft;
      2. Any movable furnishing, appurtenance, or other equipment, necessary to make a building operable; and
      3. Equipment purchased or otherwise acquired, or equipment to be purchased or otherwise to be acquired, under a lease or lease-purchase contract or agreement or an arrangement equivalent to a lease or lease-purchase contract or agreement;
    5. “Information technology system” means any related computer or telecommunications components that provide a functional system for a specific business purpose and contain one (1) or more of the following:
      1. Hardware;
      2. Software, including application software, systems management software, utility software, or communications software;
      3. Professional services for requirements analysis, system integration, installation, implementation, or data conversion services; or
      4. Digital data products, including acquisition and quality control;
    6. “Capital projects” means, regardless of the source of cash or other consideration:
      1. Any capital construction item, or any combination of capital construction items necessary to make a building or utility installation complete, estimated to cost one million dollars ($1,000,000) or more in cash or other consideration;
      2. Any lease of real property space with an annual rental cost exceeding two hundred thousand dollars ($200,000);
      3. The use allowance paid by the judicial branch for a real property space pursuant to KRS 26A.090(2) and 26A.115 when the use allowance for the space exceeds two hundred thousand dollars ($200,000) on an annual basis;
      4. Any item of equipment estimated to cost two hundred thousand dollars ($200,000) or more in cash or other consideration;
      5. Any lease of an item of movable equipment if the annual cost of the lease is two hundred thousand dollars ($200,000) or more or if the total cost of the lease-purchase or lease with an option to purchase is two hundred thousand dollars ($200,000) or more; and
      6. Any new acquisition, upgrade, or replacement of an information technology system estimated to cost one million dollars ($1,000,000) or more in cash or other consideration;
    7. “Emergency repair, maintenance, or replacement project” means the maintenance, repair, or reconstruction of a capital construction project or the maintenance, repair, or replacement of a major item of equipment that is:
      1. Necessitated by injury or damage resulting from a disaster;
      2. Necessary to maintain government operations or to prevent or minimize injury or damage that could reasonably be expected to result from an impending disaster; or
      3. Necessitated by an unforeseen mechanical breakdown, electrical breakdown, or structural defect that must be corrected to make a facility or item of equipment usable;
    8. “Disaster” means a fire, flood, tornado, other natural disaster, riot, enemy attack, sabotage, explosion, power failure, energy shortage, transportation emergency, or other man-caused disaster;
    9. “Capital construction funds” means any funds used for capital construction, including, but not limited to, appropriated capital construction funds, agency funds, federal funds, private funds, or funds from any source held by an agency for management or investment purposes; and
    10. “Entity head” means the Chief Justice of the Supreme Court, the President of the Senate and the Speaker of the House of Representatives, the secretary of the Finance and Administration Cabinet, the president of any university which complies with KRS 164A.585 , 164A.595 , and 164A.600 , the board of trustees of the Kentucky Employees Retirement System, the board of trustees of the Teachers’ Retirement System of the State of Kentucky, the board of directors of the Kentucky Higher Education Student Loan Corporation, the board of directors of the Kentucky Lottery Corporation, or the board of directors of the Kentucky Housing Corporation.
  2. Except as provided in subsection (3) of this section, KRS 45.760 to 45.810 shall apply to capital projects and bonds for use by:
    1. The state government;
    2. One of its departments or agencies, as defined in KRS 12.010 or enumerated in KRS 12.020 ;
    3. A municipal corporation which exercises its authority on a statewide basis, including but not limited to the Kentucky Employees Retirement System, Teachers’ Retirement System of the State of Kentucky, Kentucky Higher Education Student Loan Corporation, Kentucky Lottery Corporation, and Kentucky Housing Corporation; and
    4. Institutions of higher education.
  3. KRS 45.760 to 45.810 shall not apply to:
    1. Capital projects or bonds used directly in or for the construction or maintenance of roads, including but not limited to bulldozers, graders, earth movers, and real estate purchased for rights-of-way; and
    2. Political subdivisions, except for those defined in KRS 12.010 , enumerated in KRS 12.020 , or created as a municipal corporation which exercises its authority on a statewide basis including, but not limited to, the Kentucky Employees Retirement System, Teachers’ Retirement System of the State of Kentucky, Kentucky Higher Education Student Loan Corporation, Kentucky Lottery Corporation, Kentucky Housing Corporation, or any entity with a governing body whose membership is substantially similar to the membership of the governing body of a municipal corporation which exercises its authority on a statewide basis. However, the provisions of KRS 45.750 to 45.810 shall not apply to acquisition or maintenance of any building or land which is purchased as a legal investment by any of the state retirement systems, which is not to be occupied by the retirement system, and which is financed solely with those assets of the retirement system used for investment purposes.

HISTORY: Enact. Acts 1979 (Ex. Sess.), ch. 4, § 1, effective January 1, 1980; 1982, ch. 300, § 6, effective July 15, 1982; 1984, ch. 72, § 1, effective July 13, 1984; 1988, ch. 16, § 1, effective July 15, 1988; 1988, ch. 145, § 3, effective July 15, 1988; 1992, ch. 47, § 1, effective July 14, 1992; 1994, ch. 7, § 1, effective July 15, 1994; 1994, ch. 31, § 2, effective July 15, 1994; 1994, ch. 486, § 19, effective July 15, 1994; 1998, ch. 119, § 1, effective July 15, 1998; 2000, ch. 506, § 16, effective July 14, 2000; 2000, ch. 536, § 16, effective July 14, 2000; 2003, ch. 188, § 1, effective June 24, 2003; 2006, ch. 199, § 2, effective July 12, 2006; 2016 ch. 138, § 2, effective April 27, 2016; 2018 ch. 20, § 2, effective July 14, 2018.

Legislative Research Commission Notes.

(7/15/94). This section was amended by 1994 Ky. Acts chs. 7, 31, and 486. Where these Acts are not in conflict they have been codified together. Where a conflict exists between Acts chs. 7 and 31, Acts ch. 31, which was last enacted by the General Assembly, prevails under KRS 446.250 .

Opinions of Attorney General.

The original enactment of this section (SB 44, Chapter 4, Section 1, 1979 Ex. Sess.) is unconstitutional under Ky. Const., § 51 because the definition of a “major item of equipment” in subsection (1)(d) of this section included movable equipment coming under the term “capital construction” and coming under “noncapital construction equipment” and, therefore, the enactment violated the prohibition against a law relating to more than one subject. OAG 80-217 .

The renovation of a fairgrounds stadium, to prepare it for use of a professional baseball team, if accomplished by a private nonprofit corporation using private capital, need not comply with the provisions of the Capital Construction and Equipment Financing Act which regulates the expenditure of certain funds appropriated by the General Assembly. OAG 81-341 .

Under subsection (2) of this section, the equipment used in state road planning, mapping, preparing roadway plans, acquisition of rights-of-way, etc., is equipment used in connection with the construction and maintenance of roads and the purchase of such equipment is explicitly exempt from the statutes (KRS 45.750 to 45.800 ) governing capital construction and equipment financing. OAG 82-589 .

The Capital Construction Financing Act does not apply to the financing of a building’s construction by a private corporation such as the University of Kentucky Alumni Association. OAG 94-63 .

Research References and Practice Aids

2020-2022 Budget Reference.

See State/Executive Branch Budget, 2021 Ky. Acts ch. 169, Pt. I, K, 1, (7) at 1107.

45.760. Limitations on project and equipment expenditures in State Capital Construction Program.

The provisions of any other law notwithstanding:

  1. During any biennium the amount allotted, from all sources, for expenditure on any project in the state capital construction program for that biennium shall not exceed the estimated cost of the project during that biennium, as shown in any branch budget bill enacted by the General Assembly, except as provided in this section and KRS 45.770 and 45.780 .
  2. When the General Assembly disapproves a capital project or item of equipment that was previously approved, it shall be eliminated as a capital project or major item of equipment in the Capital Projects Program. General fund moneys appropriated for that project or item of equipment but not allotted, and general fund moneys allotted but not expended to the project or equipment account, shall be transferred to the capital construction and equipment purchase contingency account in the capital construction fund. Agency or federal funds for a disapproved project or item, that have been appropriated but unallotted or allotted but unexpended, shall be returned to the appropriate agency fund. Road fund moneys for a disapproved project or item that have been appropriated but unallotted or allotted but unexpended, shall be returned to the Road Fund Surplus Account.
  3. Capital projects and major items of equipment disapproved under subsection (2) of this section shall be terminated.
  4. During any biennium, the amount allotted from all sources for expenditure for the purchase of any major item of equipment shall not exceed the estimated cost of the item as shown in any branch budget bill enacted by the General Assembly and authorizing the purchase, except as provided in subsections (5) and (6) of this section and in KRS 45.770 and 45.780 .
  5. A major item of equipment to be used for medical, scientific, or research purposes, excluding computer equipment and aircraft, may be authorized even though it is not specifically listed in any branch budget bill enacted for the current biennium, subject to the following conditions and procedures:
    1. Moneys specifically budgeted and appropriated by the General Assembly for another purpose shall not be reallotted for expenditure on the item; moneys utilized shall not jeopardize any existing program and shall not require the use of any current general funds specifically dedicated to existing programs;
    2. Funds are available for the purchase and the method of financing the purchase will not require an additional appropriation of state funds to acquire the item; and
    3. The purchasing agency shall, within thirty (30) days after making the purchase, report the purchase to the Capital Projects and Bond Oversight Committee. The report shall include a description of the item, the purpose for which it will be used, the necessity for the purchase, and the amount expended for the purchase from each source of funds used.
  6. Moneys from any source may be transferred to the allotment account of any capital project authorized by the General Assembly under this section, subject to the following conditions and procedures:
    1. The total amount transferred shall not exceed fifteen percent (15%) of the amount authorized by the General Assembly unless:
      1. The source of funds is private or federal; or
      2. An unforeseen decision by a federal or state court or regulatory agency requires the transfer.
    2. Moneys specifically budgeted and appropriated by the General Assembly for another purpose shall not be allotted or reallotted for expenditure on the capital project.
    3. Moneys utilized shall not jeopardize any existing program and shall not require the use of any current general funds specifically dedicated to existing programs.
    4. The relevant entity head, or his designee, shall submit the capital project to the Capital Projects and Bond Oversight Committee at least fourteen (14) days prior to the committee meeting. The submission shall include a written certification to the committee that the transfer, in excess of fifteen percent (15%) of the amount authorized by the General Assembly, is:
      1. Paid for out of private or federal funds; or
      2. Required by an unforeseen decision by a federal or state court or regulatory agency; and
      3. Not allotted or reallotted from moneys specifically budgeted and appropriated by the General Assembly for another purpose; and
      4. Not jeopardizing any existing program and not requiring the use of any current general funds specifically dedicated to existing programs.
    5. If a capital project is financed with road funds, the cost overruns or scope increases shall be paid out of the highway contingency account established pursuant to KRS 45.247 .
  7. A capital construction project or a major item of equipment may be authorized even though it is not specifically listed in any branch budget bill, subject to the following conditions and procedures:
    1. Fifty percent (50%) or more of the actual cost shall be funded by federal or private funds, and fifty percent (50%) or less of the actual cost shall be funded by moneys appropriated to the capital construction and equipment purchase contingency account or, if the purpose of the project or equipment is to reduce energy costs, the relevant entity head certifies projected energy cost savings associated with the project or equipment are reasonable and sufficient to produce an aggregate simple payback period, as defined by KRS 56.770 , of five (5) years or less;
    2. Moneys specifically budgeted and appropriated by the General Assembly for another purpose shall not be allotted or reallotted for expenditure on the project or major item of equipment; moneys utilized shall not jeopardize any existing program and shall not require the use of any current general funds specifically dedicated to existing programs; and
    3. The relevant entity head, or his designee, shall submit the project or major item of equipment to the committee for review as provided by KRS 45.800 .
  8. The capital construction and equipment purchase contingency fund may be used to advance funds to projects authorized to be financed by bonds, to finance feasibility studies for projects which may be contemplated for future funding, or to audit the capital projects program when authorized by the General Assembly.
  9. On or before October 1, each branch of government shall submit to the committee the following information:
    1. A complete list and summary description of every capital construction project and major item of equipment not completed as of June 30 of the prior fiscal year; and
    2. For each project and major item of equipment, as of July 1, of the current fiscal year:
      1. The project phase;
      2. The project account number, project name, and any other term employed to identify the project or major item of equipment;
      3. The available balance in the project or major item of equipment account, and any sums considered available for that project or major item of equipment;
      4. A statement of the transfers of funds to or from the project or major item of equipment account; and, any account to which transfers from each project or major item of equipment has been made;
      5. The year in which the project or major item of equipment was approved, with specific reference to the legislation by which the project or item was approved;
      6. Total expenditure on the project or major item of equipment;
      7. The current estimated completion cost, including the amount required for annual inflation; and
      8. A statement that additional funds for the completion of the project or major item of equipment are or are not required; and, if required, why sufficient funds for completion are not available; and
    3. The balance in the appropriated, but unallotted account; and the balance in any account, however designated, that contains appropriated, but unallotted funds for capital construction.
  10. When the General Assembly authorizes a capital construction item in the capital construction section of a branch budget bill, the entity head charged with executing the branch budget shall construct the capital construction item according to the requirements set forth in the branch budget bill, supporting documentation considered by the General Assembly, and branch budget records. The entity head shall not deviate from these requirements with regard to:
    1. Purpose or location to the extent that the capital construction item no longer meets the identified needs; or
    2. Configuration for reasons other than practical accommodation to the construction site or specific program to be accommodated within that capital construction item.

History. Enact. Acts 1979 (Ex. Sess.), ch. 4, § 2, effective January 1, 1980; 1982, ch. 300, § 7, effective July 15, 1982; 1982, ch. 450, § 60, effective July 1, 1983; 1984, ch. 410, § 2, effective July 13, 1984; 1986, ch. 46, § 1, effective July 15, 1986; 1990, ch. 30, § 3, effective July 13, 1990; 1990, ch. 507, § 4, effective July 13, 1990; 1992, ch. 47, § 2, effective July 14, 1992; 1994, ch. 387, § 19, effective July 15, 1994; 1998, ch. 375, § 1, effective July 15, 1998; 1998, ch. 423, § 2, effective July 15, 1998; 2001, ch. 58, § 23, effective June 21, 2001; 2009, ch. 78, § 31, effective June 25, 2009; 2011, ch. 73, § 6, effective June 8, 2011.

NOTES TO DECISIONS

Cited in:

Commonwealth ex rel. Armstrong v. Collins, 709 S.W.2d 437, 1986 Ky. LEXIS 262 ( Ky. 1986 ).

Opinions of Attorney General.

When a local development project is referred to by name in a branch budget appropriation, the use of the project name is inseparable from a local entity’s receipt of the state funds. The appropriated funds can only be lawfully applied to a facility as named in the appropriation, and any inconsistent use of those funds by the Governor’s Office for Local Development or by any local entity receiving the funds would lack authorization from the General Assembly and would therefore be contrary to state law. OAG 2005-05 .

Research References and Practice Aids

2020-2022 Budget Reference.

See State/Executive Branch Budget, 2021 Ky. Acts ch. 169, Pt. I, K, 1, (7) at 1107.

45.763. Requirement for General Assembly authorization before state agencies, institutions of higher education, or affiliated corporations enter into certain real property agreements — General Assembly approval of capital projects using public-private delivery method.

  1. Notwithstanding any statutory provisions to the contrary, any state agency as defined in KRS 7A.010 , institution of higher education defined as an institution in KRS 164A.550 , or affiliated corporation as defined in KRS 164A.550 , shall obtain authorization from the General Assembly prior to entering into an agreement identified in subsection (2) of this section. The General Assembly authorization shall occur only when the General Assembly enacts legislation specifically authorizing the agreement.
  2. General Assembly authorization shall be required for an agreement for the use, purchase, or acceptance of real property of any value, or equipment with a value in excess of four hundred thousand dollars ($400,000), if:
    1. The agreement provides that the state, a state agency, institution of higher education, or affiliated corporation will become the owner of the real property or equipment at any time; and
    2. All or any portion of the purchase price of the real property or equipment is funded through the issuance of a financial instrument which requires payment of principal and interest over time, including, but not limited to, notes, bonds, securities, and certificates of participation, regardless of the identity of the issuer.
  3. For any capital projects authorized by KRS 45A.077 and utilizing the public-private partnership delivery method, the General Assembly has authorization through the Capital Projects and Bond Oversight Committee to review and approve a project in accordance with KRS 45.800 . The contracting body shall report a capital project to the Capital Projects and Bond Oversight Committee after negotiations are complete with the project partner but prior to beginning work on the project for review and approval by the committee.

History. Enact. Acts 1998, ch. 423, § 1, effective July 15, 1998; 2017 ch. 132, § 4, effective March 27, 2017.

Research References and Practice Aids

2020-2022 Budget Reference.

See State/Executive Branch Budget, 2021 Ky. Acts ch. 169, Pt. I, K, 1, (7) at 1107.

45.765. Branch budget bills.

The draft branch budget bills submitted to the General Assembly, and the branch budget bills enacted by the General Assembly, shall comply with the provisions of KRS 45.750 to 45.810 . Expressions of general exclusion, including but not limited to, “any act or statute to the contrary notwithstanding,” and “the provisions of any other law notwithstanding,” shall not be effective as an exemption from the provisions of KRS 45.750 to 45.810 . Exemptions from the provisions of KRS 45.750 to 45.810 shall include the specific projects exempted.

History. Enact. Acts 1982, ch. 300, § 1, effective July 15, 1982; 1992, ch. 47, § 3, effective July 14, 1992; 1994, ch. 387, § 20, effective July 15, 1994.

Research References and Practice Aids

2020-2022 Budget Reference.

See State/Executive Branch Budget, 2021 Ky. Acts ch. 169, Pt. I, K, 1, (7) at 1107.

45.770. Contingency account.

  1. There is created within the capital construction fund the capital construction and equipment purchase contingency account. The account shall consist of moneys appropriated to the account by the General Assembly.
  2. Money in the capital construction and equipment purchase contingency account may be transferred to the allotment account of a capital construction project, authorized by the General Assembly under KRS 45.760 , subject to the following conditions and procedures:
    1. Except as provided in paragraphs (b) and (c) of this subsection, during any biennium, the amount that may be transferred from the capital construction and equipment purchase contingency account to the allotment account of an authorized project shall not exceed an amount equal to fifteen percent (15%) of the estimated cost of the project, for that biennium, approved by the General Assembly in the manner provided by KRS 45.760 .
    2. Subject to paragraph (c) of this subsection, if the cost of an authorized project exceeds, by more than fifteen percent (15%), its estimated cost, as approved by the General Assembly, due to an unforeseen decision by a federal or state court or regulatory agency, moneys in excess of fifteen percent (15%) of the estimated cost of the project may be transferred from the capital construction and equipment purchase contingency account to the allotment account of the project.
    3. The Finance and Administration Cabinet shall, prior to making any transfer under this subsection, present the proposed transfer to the Capital Projects and Bond Oversight Committee, at least fourteen (14) days prior to the committee meeting, for review as provided by KRS 45.800 . Presentation of a proposed transfer under paragraph (b) of this subsection shall include written certification to the committee from the commissioner of the Department for Facilities and Support Services, Finance and Administration Cabinet, that the transfer is necessitated by cost increases resulting from an unforeseen decision by a federal or state court or regulatory agency.
  3. Money in the capital construction and equipment purchase contingency account may be transferred to the allotment account of a major item of equipment, authorized by the General Assembly under KRS 45.760 , for expenditure on that item subject to the following conditions and procedures:
    1. Except as provided in paragraphs (b) and (c) of this subsection, during any biennium, the amount that may be transferred from the capital construction and equipment purchase contingency account to the allotment account of an authorized major item of equipment shall not exceed an amount equal to fifteen percent (15%) of the estimated cost of the item, for that biennium, approved by the General Assembly in the manner provided by KRS 45.760 .
    2. If the cost of an authorized major item of equipment exceeds, by more than fifteen percent (15%), its estimated cost, as approved by the General Assembly, due to an unforeseen decision by a federal or state court or regulatory agency, moneys in excess of fifteen percent (15%) of the estimated cost may be transferred from the capital construction and equipment purchase contingency account to the allotment account of the item.
    3. The Finance and Administration Cabinet shall, prior to making any transfer under this subsection, present the proposed transfer to the Capital Projects and Bond Oversight Committee, at least fourteen (14) days prior to the committee meeting, for review as provided by KRS 45.800 . Presentation of a proposed transfer under paragraph (b) of this subsection shall include written certification to the committee from the secretary of the Finance and Administration Cabinet that the transfer is necessitated by cost increases resulting from an unforeseen decision by a federal or state court or regulatory agency.
  4. Money in the capital construction and equipment purchase contingency account may be transferred to a capital project account to be used for nonrecurring moving expenses of state agencies to address issues of public health and safety or governmental efficiency, subject to the following conditions and procedures:
    1. The Finance and Administration Cabinet shall, prior to making any transfer under this subsection, present the proposed transfer to the Capital Projects and Bond Oversight Committee, at least fourteen (14) days prior to the committee meeting, for review as provided by KRS 45.800 .
    2. Presentation of a proposed transfer shall include written certification to the committee from the secretary of the Finance and Administration Cabinet that the moving costs are nonrecurring, and describing the specific benefits, including but not limited to fiscal and efficiency savings associated with the proposal.
    3. No transfer shall be used for capital improvements.
  5. No later than thirty (30) days after a project has been accepted by the Commonwealth of Kentucky and the contracts encumbered against that project have been closed, moneys constituting the available balance in the project or equipment account shall be transferred as follows:
    1. If the project was a line item in the budget and not funded with road funds, then the balance shall be transferred to the capital construction surplus account.
    2. If the project was a line item in the budget and funded with road funds, then the balance shall be transferred to the road fund surplus account.
    3. If the project was completed within the biennium in which it was authorized, and if the project was funded from a major maintenance pool, then the balance shall be transferred to that major maintenance pool.
    4. If the project was not completed within the biennium in which it was authorized, without being expressly reauthorized by a succeeding session of the General Assembly, then the balance shall be transferred to the capital construction surplus account.

History. Enact. Acts 1979 (Ex. Sess.), ch. 4, § 3, effective January 1, 1980; 1982, ch. 300, § 8, effective July 1, 1982; 1982, ch. 393, § 31, effective July 15, 1982; 1984, ch. 410, § 3, effective July 13, 1984; 1992, ch. 47, § 4, effective July 14, 1992; 2005, ch. 67, § 1, effective June 20, 2005.

NOTES TO DECISIONS

Cited:

Commonwealth ex rel. Armstrong v. Collins, 709 S.W.2d 437, 1986 Ky. LEXIS 262 ( Ky. 1986 ).

Research References and Practice Aids

2020-2022 Budget Reference.

See State/Executive Branch Budget, 2021 Ky. Acts ch. 169, Pt. I, K, 1, (7) at 1107.

45.775. Capital construction surplus account.

There is created within the capital construction fund the capital construction surplus account. This account shall consist of income derived from the investment of moneys appropriated to the capital construction fund, including income derived from the investment of moneys appropriated to any capital construction account, and shall be appropriated and allotted as provided in KRS 45.750 through 45.800 . Moneys and income derived from bond proceeds shall not be included.

History. Enact. Acts 1982, ch. 300, § 2, effective July 15, 1982.

Research References and Practice Aids

2020-2022 Budget Reference.

See State/Executive Branch Budget, 2021 Ky. Acts ch. 169, Pt. I, K, 1, (7) at 1107.

45.777. Sale of property purchased with capital construction funds.

  1. The proceeds from the sale of major items of equipment or real property, purchased in whole or in part with capital construction funds, shall be deposited into the general fund unless federal funding restraints require otherwise.
  2. The provisions of this section shall not apply to:
    1. The sale of real property held as right-of-way;
    2. The sale of equipment by the Transportation Cabinet; or
    3. The sale of confiscated firearms.

History. Enact. Acts 1982, ch. 300, § 3, effective July 15, 1982; 2010 (1st Ex. Sess.), ch. 2, § 1, effective June 4, 2010.

Research References and Practice Aids

2020-2022 Budget Reference.

See State/Executive Branch Budget, 2021 Ky. Acts ch. 169, Pt. I, I, 7, (1) at 1105.See State/Executive Branch Budget, 2021 Ky. Acts ch. 169, Pt. I, K, 1, (7) at 1107.See State/Executive Branch Budget, 2021 Ky. Acts ch. 169, Pt. I, K, 1, (8) at 1107.

45.780. Emergency repair, maintenance, and replacement account.

  1. There is created within the capital construction fund the emergency repair, maintenance, and replacement account. The account shall consist of moneys appropriated to the fund by the General Assembly.
  2. The Finance and Administration Cabinet may transfer money from the emergency repair, maintenance, and replacement account to the allotment account of an emergency repair, replacement, or maintenance project, for expenditure thereon, even though the specific project is not included in any branch budget bill enacted for that biennium. Moneys may be transferred from the emergency repair, maintenance, and replacement account to the allotment account of an emergency repair, replacement, or maintenance project only if no other funding source is available.
  3. The Finance and Administration Cabinet shall report each transfer, including the necessity, purpose, and amount of the transfer, to the Capital Projects and Bond Oversight Committee not later than thirty (30) days after the transfer.

History. Enact. Acts 1979 (Ex. Sess.), ch. 4, § 4, effective January 1, 1980; 1982, ch. 300, § 9, effective July 15, 1982; 1992, ch. 47, § 5, effective July 14, 1992; 1994, ch. 387, § 21, effective July 15, 1994; 1998, ch. 27, § 2, effective July 15, 1998; 2011, ch. 73, § 7, effective June 8, 2011.

Research References and Practice Aids

2020-2022 Budget Reference.

See State/Executive Branch Budget, 2021 Ky. Acts ch. 169, Pt. I, K, 1, (7) at 1107.

45.782. Statewide deferred maintenance fund.

  1. There is created within the capital construction fund the “Statewide Deferred Maintenance Fund”. The fund shall be used as a supplemental source for funding deferred maintenance and government mandate needs of state agencies. Maintenance includes equipment used primarily for maintenance purposes and expenditures related to deferred maintenance of infrastructure and capital assets. The balance of any moneys remaining in the fund at the close of any fiscal year shall not lapse but shall be carried forward to the next fiscal year.
  2. Priority for the funding from the statewide deferred maintenance fund shall be determined by the secretary of the Finance and Administration Cabinet in consultation with the state budget director and the commissioner of the Department for Facilities Management. State agencies that do not have separate agency-specific maintenance funds or that have inadequate maintenance funds shall be given priority for access to moneys in the statewide deferred maintenance fund.
  3. Moneys from the statewide deferred maintenance fund shall not be expended for:
    1. New capital projects; or
    2. Additional funding for any capital project that received line item authorization by the General Assembly in any branch budget bill.
  4. The secretary shall, by September 1 of each year, report to the Legislative Research Commission all transfers from the fund, including the purpose and amount of each transfer and the amount of funds carried forward for the fiscal year ending on June 30 of that year.

History. Enact. Acts 1998, ch. 27, § 1, effective July 15, 1998.

Research References and Practice Aids

2020-2022 Budget Reference.

See State/Executive Branch Budget, 2021 Ky. Acts ch. 169, Pt. I, K, 1, (7) at 1107.

45.790. Capital Projects and Bond Oversight Committee — Membership — Meetings — Vote required to act.

  1. There is created a permanent subcommittee of the Legislative Research Commission to be known as the Capital Projects and Bond Oversight Committee. The subcommittee shall be composed of eight (8) members appointed as follows: three (3) members of the Senate appointed by the President of the Senate; one (1) member of the minority party in the Senate appointed by the Minority Floor Leader in the Senate; three (3) members of the House of Representatives appointed by the Speaker of the House of Representatives; and one (1) member of the minority party in the House of Representatives appointed by the Minority Floor Leader in the House of Representatives. The members of the subcommittee shall serve for terms of two (2) years, and the members appointed from each chamber shall elect one (1) member from their chamber to serve as co-chair. Any vacancy which may occur in the membership of the subcommittee shall be filled by the appointing authority who made the original appointment.
  2. On an alternating basis, each co-chair shall have the first option to set the monthly meeting date. A monthly meeting may be canceled by agreement of both co-chairs. The co-chairs shall have joint responsibilities for subcommittee meeting agendas and presiding at subcommittee meetings. The members of the subcommittee shall be compensated for attending meetings as provided in KRS 7.090(3).
  3. Any professional, clerical, or other employees required by the subcommittee shall be provided in accordance with KRS 7.090(4) and (5).
  4. A majority of the entire membership of the Capital Projects and Bond Oversight Committee shall constitute a quorum, and all actions of the subcommittee shall be by vote of a majority of its entire membership.

History. Enact. Acts 1979 (Ex. Sess.), ch. 4, § 5, effective July 1, 1980; 2003, ch. 185, § 4, effective March 31, 2003.

Legislative Research Commission Notes.

(3/31/2003). Under the authority of KRS 7.136 , the Reviser of Statutes has changed two clearly erroneous references to “committee” in subsection (2) of this statute to “subcommittee.”

(6/21/93). The name of the Capital Construction and Equipment Purchase Oversight Committee was changed to the Capital Projects and Bond Oversight Committee in 1988. See 1988 Ky. Acts ch. 145. That same name change has been made in this statute pursuant to KRS 7.136(2).

Research References and Practice Aids

2020-2022 Budget Reference.

See State/Executive Branch Budget, 2021 Ky. Acts ch. 169, Pt. I, K, 1, (7) at 1107.

45.793. Quarterly status reports on incomplete capital projects to Capital Projects and Bond Oversight Committee.

The Finance and Administration Cabinet and any institution that manages its own capital construction under KRS 164A.580 shall provide to the committee at its January, April, July, and October regular meetings a status report of any capital project, excluding items of equipment, not yet completed which received line item authorization by the Kentucky General Assembly or was authorized pursuant to KRS 45.760(7). The Capital Projects and Bond Oversight Committee shall prescribe data elements to be included in the quarterly status reports. For each capital project, the status report shall include but not be limited to the:

  1. Project title;
  2. County or counties in which the project is located;
  3. Current phase of the project;
  4. Estimated completion date of the project;
  5. Explanation of any delay or major change in the project, including deletion or modification of project components; and
  6. Any other information that the committee requests.

History. Enact. Acts 1992, ch. 339, § 1, effective July 14, 1992; 1994, ch. 31, § 3, effective July 15, 1994; 1998, ch. 119, § 2, effective July 15, 1998; 2002, ch. 328, § 3, effective July 15, 2002; 2009, ch. 78, § 32, effective June 25, 2009.

Research References and Practice Aids

2020-2022 Budget Reference.

See State/Executive Branch Budget, 2021 Ky. Acts ch. 169, Pt. I, K, 1, (7) at 1107.

45.794. Semiannual status reports by Kentucky Public Transportation Infrastructure Authority.

The Kentucky Public Transportation Infrastructure Authority created pursuant to KRS 175B.015 shall provide to the committee at its January and July regular meetings a status report of any proposed or active project pursuant to KRS 175B.030 or 175B.035 . The report shall contain the same information as reports required by KRS 45.793 .

History. Enact. Acts 2009 (1st Ex. Sess.), ch. 1, § 98, effective June 26, 2009.

Research References and Practice Aids

2020-2022 Budget Reference.

See State/Executive Branch Budget, 2021 Ky. Acts ch. 169, Pt. I, K, 1, (7) at 1107.

45.795. Determinations to be made in reviewing projects — Request for Legislative Research Commission to seek injunction.

  1. In reviewing a project, the committee shall determine whether the project has met all the relevant requirements of:
    1. KRS 45.750 to 45.816 ;
    2. KRS 56.800 to 56.823 ; and
    3. Any other statutes relating to the committee’s oversight of:
      1. Capital projects;
      2. The allotment and expenditure of funds from the emergency repair, maintenance, and replacement account and the capital construction and equipment purchase contingency account;
      3. The state’s acquisition of capital assets, including the lease of real property;
      4. The issuance of bonds by the Commonwealth, and the related individual projects; and
      5. Bonds issued by or on behalf of local school districts.
  2. If the committee determines that any of the requirements in subsection (1) of this section have not been met, the committee may, by majority vote, request that the Legislative Research Commission file a civil court proceeding to seek an injunction to prohibit further action on the capital project, the acquisition of the capital asset, the initiation or modification of the lease of real property, the bond issue, or the allotment or expenditure of funds from the capital construction emergency or contingency accounts.
  3. The committee may take action requesting the Legislative Research Commission to seek an injunction before, during, or after its compliance with the provisions of KRS 45.800(2) or KRS 45.810(3), where applicable.

History. Enact. Acts 1994, ch. 23, § 1, effective July 15, 1994.

Research References and Practice Aids

2020-2022 Budget Reference.

See State/Executive Branch Budget, 2021 Ky. Acts ch. 169, Pt. I, K, 1, (7) at 1107.

45.800. Prerequisites to transfer of money from contingency account or other sources.

  1. Except as otherwise provided in KRS 45.770(2)(b), prior to transferring funds from any source to the allotment account of a capital construction project or major item of equipment, the relevant entity head, or his designee, shall present to the Capital Projects and Bond Oversight Committee, at least fourteen (14) days prior to the committee meeting, for its review, specification of the amount of the proposed transfer, documentation of the necessity for the transfer, and, with respect to capital construction projects, documentation of:
    1. The amount already expended on the project prior to and during the current biennium; and
    2. Any alterations made or planned in the project since its consideration by the General Assembly during the most recent even-numbered-year regular session.
  2. Within thirty (30) days after submission to the committee of a proposed capital construction and equipment purchase contingency account transfer, the committee shall determine whether the amount of the proposed transfer is reasonable and consistent with KRS 45.770 , whether the proposed transfer is necessary, and whether any alterations made or planned in a project materially change the project as considered and authorized by the General Assembly. If the committee does not approve a proposed transfer or other proposed action, the committee, unless the Legislative Research Commission directs otherwise, shall promptly transmit its findings and determination to the head of the entity that presented the proposal.
  3. If the committee does not approve a proposed transfer or other proposed action, the transfer shall not be made nor the action taken unless the relevant entity head, or his designee, shall:
    1. Revise the transfer or action to comply with the objections of the committee;
    2. Cancel the transfer or action; or
    3. Determine to make the transfer or take the action not approved by the committee.
  4. The decision made by the relevant entity head, or his designee, under the preceding subsection shall be communicated to the committee in writing within thirty (30) days of the committee’s not approving the proposed transfer or other proposed action.
  5. The committee, unless the Legislative Research Commission directs otherwise, shall maintain records of its findings and determinations and the relevant entity head’s, or his designee’s, report of his action on each proposed transfer from the capital construction and equipment purchase contingency account. If the committee determines that the amount of a proposed transfer is not reasonable or is not consistent with KRS 45.770 , or that the transfer is not necessary, or if the committee finds that any alteration in a project materially changes the project as considered and approved by the General Assembly, the committee’s determination and the action of the secretary of the Finance and Administration Cabinet, or other appropriate entity head, on the transfer shall be transmitted to the appropriate interim joint committees of the Legislative Research Commission and to the General Assembly when next convened.
  6. The committee, unless the Legislative Research Commission directs otherwise, shall maintain reports of purchases made under KRS 45.760 (5), reports of transfers made under KRS 45.760 to this section, reports of transfers made from the emergency repair, maintenance, and replacement account, and a record of any committee finding or recommendation relating to such purchases and transfers.
  7. The committee shall monitor the costs of state capital construction projects in comparison with the costs of construction for the private sector to determine whether the costs are comparable and, if not comparable, the reasons for any difference. The committee shall consider contractors’ charges to the state, land acquisition costs, costs and availability of materials, cost and availability of labor, and laws, regulations, and purchasing procedures pertaining to state capital construction projects that are not applicable to construction for the private sector. The committee’s findings and recommendations shall be transmitted to the appropriate interim joint committee of the Legislative Research Commission and to the General Assembly when convened.

History. Enact. Acts 1979 (Ex. Sess.), ch. 4, § 6, effective July 1, 1980; 1982, ch. 300, § 10, effective July 15, 1982; 1992, ch. 47, § 6, effective July 14, 1992; 2001, ch. 58, § 22, effective June 21, 2001; 2009, ch. 78, § 33, effective June 25, 2009.

Legislative Research Commission Notes.

(7/2/97). 1990 Ky. Acts ch. 30, sec. 3 renumbered the former subsection (10) of KRS 45.760 as subsection (12), but that Act failed to include a conforming amendment to change the reference to that subsection in subsection (6) of this statute. Under KRS 7.136(1)(e), that change has now been made.

Research References and Practice Aids

2020-2022 Budget Reference.

See State/Executive Branch Budget, 2021 Ky. Acts ch. 169, Pt. I, K, 1, (7) at 1107.

45.810. Procedure for review of proposed bond issue — Annual report to committee.

  1. Any state agency authorized to issue bonds shall, prior to the issuance of any bonds, submit the proposed bond issue to the Capital Projects and Bond Oversight Committee, at least fourteen (14) days prior to the committee meeting, for review and recommendation. The Turnpike Authority shall be exempt from this review.
  2. The Capital Projects and Bond Oversight Committee shall require documentation of the following:
    1. That the proposed bond project or subsequent use of bond funds is in compliance with all applicable regulatory or statutory provisions;
    2. That the debt service fund source has been identified and approved by all applicable authorities as provided by statute; and
    3. That the bond issue, if supported by appropriation, is consistent with the branch budget bill.
  3. If the committee does not recommend a proposed project for the use of bond proceeds as provided in subsection (1) of this section, the project shall be referred to the secretary of the Finance and Administration Cabinet, who shall:
    1. Revise the project in consideration of the committee’s objections; or
    2. Cancel the project or the use of bond proceeds for the project; or
    3. Determine to proceed with the project.
  4. The decision of the secretary of the Finance and Administration Cabinet with respect to the project or the bond funding for the project shall be transmitted to the committee within thirty (30) days.
  5. Any changes in the bond project after review and approval by the committee shall be transmitted to the next regularly scheduled meeting of the committee.
  6. The bonding authorities designated in subsection (1) of this section shall submit an annual report to the committee at the end of each fiscal year, which shall include:
    1. The principal amount of the bonds outstanding at the beginning of the fiscal year;
    2. The amount of any bonds issued during the fiscal year;
    3. All payments of principal, interest, trustee fees, and any other fees, during the fiscal year; and
    4. The principal balance of bonds outstanding at the end of the fiscal year.

History. Enact. Acts 1988, ch. 145, § 1, effective July 15, 1988; 1992, ch. 47, § 7, effective July 14, 1992; 1994, ch. 387, § 22, effective July 15, 1994.

Research References and Practice Aids

2020-2022 Budget Reference.

See State/Executive Branch Budget, 2021 Ky. Acts ch. 169, Pt. I, K, 1, (7) at 1107.

45.812. Listing of costs relating to issuance of revenue bonds authorized by appropriation of school district.

  1. Prior to the issuance of the revenue bonds or notes authorized by an appropriation of the General Assembly, or by or on behalf of any Kentucky school district, the agency, corporation, or school district authorized to issue the bonds or notes shall furnish to the Capital Projects and Bond Oversight Committee and the Interim Joint Committee on Appropriations and Revenue, and make available to the public, a listing of all costs associated, either directly or indirectly, with the issuance of the revenue bonds or notes. The costs shall be itemized as to amount and name of payee, and shall include fees or commissions paid to, or anticipated to be paid to, issuers, underwriters, placement agents and advisors, financial advisors, remarketing agents, credit enhancers, trustees, accountants, and the counsel of all these persons, bond counsel, and special tax counsel, and shall include the economic benefits received or anticipated to be received by any other persons from any source in return for services performed relating to the issuance of the bonds or notes. Changes in amounts or names of payees or recipients, or additions of amounts or names of payees or recipients, to the listing furnished and made available pursuant to this subsection, shall be furnished to the Capital Projects and Bond Oversight Committee and the Interim Joint Committee on Appropriations and Revenue and made available to the public within three (3) days following the change.
  2. The costs required to be furnished under the provisions of subsection (1) of this section shall not include the payment of wages or expenses to full-time, permanent employees of the Commonwealth of Kentucky.

History. Enact. Acts 1992, ch. 295, § 1, effective July 14, 1992.

45.814. Itemized listing of costs associated with issuance of revenue bonds or notes authorized by branch budget bill.

Prior to the issuance of the revenue bonds or notes authorized by a branch budget bill, the agency authorized to issue the bonds or notes shall furnish to the Capital Projects and Bond Oversight Committee and the Interim Joint Committee on Appropriations and Revenue, and make available to the public, a listing of all costs associated, either directly or indirectly, with the issuance of the revenue bonds or notes. The costs shall be itemized as to amount and name of payee, and shall include fees or commissions paid to, or anticipated to be paid to issuers, underwriters, placement agents and advisors, financial advisors, remarketing agents, credit enhancers, trustees, accountants, and the counsel of all these persons, bond counsel, and special tax counsel, and shall include the economic benefits received or anticipated to be received by any other persons from any source in return for services performed relating to the issuance of the bonds or notes. Changes in amounts or names of payees or recipients, or additions of amounts or names of payees or recipients, to the listing furnished and made available pursuant to this section shall be furnished to the Capital Projects and Bond Oversight Committee and the Interim Joint Committee on Appropriations and Revenue and made available to the public within three (3) days following the change.

History. Enact. Acts 1992, ch. 365, § 2, effective July 14, 1992; 1994, ch. 387, § 23, effective July 15, 1994.

45.816. Listing of costs relating to issuance of revenue bonds by state agency.

Prior to the issuance of the revenue bonds or notes, the agency authorized to issue the bonds or notes shall furnish to the Capital Projects and Bond Oversight Committee and the Interim Joint Committee on Appropriations and Revenue, and make available to the public, a listing of all costs associated, either directly or indirectly, with the issuance of the revenue bonds or notes. The costs shall be itemized as to amount and name of payee, and shall include fees or commissions paid to, or anticipated to be paid to, issuers, underwriters, placement agents and advisors, financial advisors, remarketing agents, credit enhancers, trustees, accountants, and the counsel of all such persons, bond counsel and special tax counsel, and shall include the economic benefits received or anticipated to be received by any other persons from any source in return for services performed relating to the issuance of the bonds or notes. Changes in amounts or names of payees or recipients, or additions of amounts or names of payees or recipients, to the listing furnished and made available pursuant to this section, shall be furnished to the Capital Projects and Bond Oversight Committee and the Interim Joint Committee on Appropriations and Revenue and made available to the public within three (3) days following the change.

History. Enact. Acts 1992, ch. 105, § 54, effective July 14, 1992.

45.818. Status report on information technology systems.

The executive director of the Commonwealth Office of Technology shall provide to the Capital Projects and Bond Oversight Committee at its January, April, July, and October regular meetings a status report on any information technology system not yet completed which received line item authorization by the Kentucky General Assembly or was authorized pursuant to KRS 45.760(7), excluding systems of an institution as defined under KRS 164.001 . The committee shall prescribe data elements to be included in the quarterly status reports.

History. Enact. Acts 2002, ch. 328, § 1, effective July 15, 2002; 2005, ch. 85, § 67, effective June 20, 2005; 2009, ch. 78, § 34, effective June 25, 2009.

Nuclear Waste Disposal Site

45.850. Appropriations for capital construction, operating budget, regulating, and monitoring of nuclear waste disposal site.

  1. Appropriations for the capital construction and for the operating budget of a nuclear waste disposal site owned by the Commonwealth shall be set forth as a major program cost in the executive budget document for the Energy and Environment Cabinet.
  2. Appropriations for the regulating and monitoring of a nuclear waste disposal site owned by the Commonwealth shall be set forth as a major program cost in the executive budget document for the Cabinet for Health and Family Services. Monitoring and water sampling and analyses shall be maintained and budgeted for at a level to provide frequent and continuing evidence of the safety of the site.
  3. Operating costs associated with the daily maintenance of the site in excess of allocations budgeted to the Energy and Environment Cabinet, regulating and monitoring costs associated with normal surveillance of the site in excess of allocations budgeted to the Cabinet for Health and Family Services, and costs associated with an emergency at the site so declared by the Governor shall be deemed necessary governmental expenses.
  4. In the event a request for funds is made pursuant to subsection (3) of this section, a copy of the request and the justification for additional funds shall be forwarded to the office of the Legislative Research Commission and to the Governor at the time the request is made but no later than fifteen (15) days prior to the actual expenditure of additional funds. The Legislative Research Commission or its designated subcommittee may request further explanation of the need for additional funds.
  5. Subsections (3) and (4) of this section shall apply only to sites located in the Commonwealth prior to July 15, 1980.

History. Enact. Acts 1980, ch. 17, § 5, effective July 15, 1980; 1998, ch. 426, § 85, effective July 15, 1998; 2005, ch. 99, § 106, effective June 20, 2005; 2010, ch. 24, § 37, effective July 15, 2010.

Penalties

45.990. Penalties.

  1. Any officer, agent, or employee of any budget unit who willfully fails or refuses to comply with any of the provisions of KRS 45.011 to 45.031 , 45.121 , 45.142 , 45.151 , 45.242 , 45.244 , 45.251 , 45.253 , 45.305 , or 45.313 , or who expends any money in violation of any of the provisions of those sections, shall be subject to prosecution in the Franklin Circuit Court, and upon conviction shall be guilty of a violation.
  2. If any person incurs, or orders or votes for the incurrence of, any obligations in violation of any of the provisions of KRS 45.244 , he and his sureties shall be jointly and severally liable therefor.
  3. Any employee of the Office of Material and Procurement Services established within the Office of the Controller, or any official of the Commonwealth of Kentucky, elective or appointive, who shall take, receive, or offer to take or receive, either directly or indirectly, any rebate, percentage of contract, money, or other things of value, as an inducement or intended inducement in the procurement of business, or the giving of business, including, but not limited to, personal service contracts, for, or to, or from, any person, partnership, firm, or corporation, offering, bidding for, or in open market seeking to make sales to the Commonwealth of Kentucky, shall be deemed guilty of a Class C felony.
  4. Every person, firm, or corporation offering to make, or pay, or give, any rebate, percentage of contract, money, or any other thing of value, as an inducement or intended inducement, in the procurement of business, or the giving of business, including, but not limited to, personal service contracts, to any employee of the Office of Material and Procurement Services or to any official of the Commonwealth, elective or appointive, in his efforts to bid for, or offer for sale, or to seek in the open market, shall be deemed guilty of a Class C felony.

History. 1992b-31, 1992b-63; Acts 1966, ch. 255, § 54; repealed and reenact., 1968, ch. 152, § 20; 1978, ch. 110, § 98, effective January 1, 1979; 1980, ch. 40, § 3 (1), (2), (3), (5), (6), effective March 12, 1980; 1984, ch. 111, § 39, effective July 13, 1984; 1986, ch. 365, § 3, effective July 15, 1986; 1990, ch. 496, § 23, effective July 13, 1990; 1992, ch. 463, § 6, effective July 14, 1992; 2000, ch. 5, § 6, effective July 14, 2000; 2005, ch. 85, § 68, effective June 20, 2005.

NOTES TO DECISIONS

1.State Purchasing.

Where former KRS 42.060 and 42.070 were repealed but KRS 42.990 (now repealed, see KRS 45.991 ), which imposed a penalty for violations of KRS 42.070 , was not repealed; where KRS 45.360 and 45.390 (repealed) were enacted to cover more explicitly the subjects previously governed by KRS 42.060 and 42.070 (now repealed), respectively, and where a reviser’s bill was subsequently enacted which transferred most of the provisions of KRS 42.990 (now repealed, see KRS 45.991 ) to KRS 45.990 but purported to apply the penalties to KRS 45.360 , which was derived from KRS 42.060, rather than to KRS 45.390 (repealed) which was derived from KRS 42.070 (now repealed), such bill was beyond the authority granted the reviser in KRS 7.123 since it grafted a penalty onto a class of statute that the Legislature had enacted without a penalty. Commonwealth v. McClure, 593 S.W.2d 92, 1979 Ky. App. LEXIS 501 (Ky. Ct. App. 1979).

The language of subsection (3) of this section does not have the definiteness to delineate a felony. Commonwealth v. McClure, 593 S.W.2d 92, 1979 Ky. App. LEXIS 501 (Ky. Ct. App. 1979).

2.Relationship to Other Laws.

After comparing Ky. Rev. Stat. Ann. § 45.990 to Ky. Rev. Stat. Ann. § 45.142 , it was clear that the enforcement provision did not identify the scope of the subpoena power. Lassiter v. Landrum, 610 S.W.3d 242, 2020 Ky. LEXIS 401 ( Ky. 2020 ).

Research References and Practice Aids

Cross-References.

Bribery and corrupt influences under Penal Code, KRS 521.010 et seq.

45.991. Penalties.

Any officer, agent, or employee of the Finance and Administration Cabinet who willfully fails or refuses to comply with any of the provisions of KRS 45.131 is subject to indictment in the Franklin Circuit Court and, upon conviction shall be fined not less than fifty dollars ($50) nor more than five hundred dollars ($500) for each offense.

History. 1992b-63, 3990-22; Acts 1942, ch. 122, §§ 1–4; 1954, ch. 187, § 5; 1964, ch. 16, § 8; 1964, ch. 178, § 2; 1966, ch. 126, § 2, 1966 ch. 255, § 283; repealed and reenact., Acts 1968, ch. 152, § 18; 1974, ch. 74, Art. II, § 9(1); repealed and reenact., Acts 1984, ch. 111, § 36, effective July 13, 1984.

Compiler’s Notes.

This section was formerly compiled as KRS 42.990 and was repealed and reenacted as this section by Acts 1984, ch. 111, § 36.

Research References and Practice Aids

Cross-References.

Bribery, KRS 432.350 .

CHAPTER 45A Kentucky Model Procurement Code

Research References and Practice Aids

2020-2022 Budget Reference.

See State/Executive Branch Budget, 2021 Ky. Acts ch. 169, Pt. I, A, 19, (12) at 1068.See State/Executive Branch Budget, 2021 Ky. Acts ch. 169, Pt. I, G, 8, (14) at 1097.

Kentucky Model Procurement Code

45A.005. Title.

This chapter shall be known as the “Kentucky Model Procurement Code.”

History. Enact. Acts 1978, ch. 110, § 1, effective January 1, 1979.

2016-2018 Budget Reference.

See State/Executive Branch Budget, 2016 Ky. Acts ch. 149, Pt. I, A, 19, (3) at 1046.

NOTES TO DECISIONS

1.Court Challenge.

Although prior to the Model Procurement Code (MPC) a disappointed bidder had no standing to challenge the award of a public contract absent fraud, collusion or dishonesty, the MPC provides access not previously available, so that procurement is now a regulated administrative procedure subject to a court challenge if the decision awarding a contract was contrary to law, or arbitrary and capricious, and this includes a challenge on grounds that statutory proceedings were disregarded for reasons of political patronage. Pendleton Bros. Vending, Inc. v. Commonwealth Finance & Admin. Cabinet, 758 S.W.2d 24, 1988 Ky. LEXIS 46 ( Ky. 1988 ).

Research References and Practice Aids

Kentucky Law Journal.

Sullivan, Disappointed Bidder Standing to Challenge a Government Contract Award: A Proposal for Change in Kentucky Procurement Law, 88 Ky. L.J. 161 (1999-2000).

45A.010. Construction — Purposes and policies.

  1. This code shall be liberally construed and applied to promote its underlying purposes and policies.
  2. The underlying purposes and policies of this code shall be:
    1. To simplify, clarify, and modernize the law governing purchasing by the Commonwealth;
    2. To permit the continued development of purchasing policies and practices;
    3. To make as consistent as possible the purchasing laws among the various states;
    4. To provide for increased public confidence in the procedures followed in public procurement;
    5. To insure the fair and equitable treatment of all persons who deal with the procurement system of the Commonwealth;
    6. To provide increased economy in state procurement activities by fostering effective competition; and
    7. To provide safeguards for the maintenance of a procurement system of quality and integrity.

History. Enact. Acts 1978, ch. 110, § 2, effective January 1, 1979; 1980, ch. 250, § 2, effective April 9, 1980.

NOTES TO DECISIONS

1.Purpose.

The primary function of the Procurement Code is to benefit the citizens. Ohio River Conversions, Inc. v. Owensboro, 663 S.W.2d 759, 1984 Ky. App. LEXIS 444 (Ky. Ct. App. 1984).

2.Court Challenge.

Although prior to the Model Procurement Code (MPC) a disappointed bidder had no standing to challenge the award of a public contract absent fraud, collusion or dishonesty, the MPC provides access not previously available, so that procurement is now a regulated administrative procedure subject to a court challenge if the decision awarding a contract was contrary to law, or arbitrary and capricious, and this includes a challenge on grounds that statutory proceedings were disregarded for reasons of political patronage. Pendleton Bros. Vending, Inc. v. Commonwealth Finance & Admin. Cabinet, 758 S.W.2d 24, 1988 Ky. LEXIS 46 ( Ky. 1988 ).

Bid protestor was entitled to seek judicial review of the award of the contract for statewide genetic testing services for the 2004 fiscal year, which was made to another vendor, even though the contract had expired, as a protestor has standing to seek judicial review as such a matter presents a case and controversy despite the contract ending. However, judgment in favor of the various Commonwealth of Kentucky agencies and the winning bid maker was upheld on appeal, because the substance of the protestor’s complaint alleged alternative interpretation of the bid terms, which was a discretion afforded to the Commonwealth as a contracting officer in a negotiated procurement, and the protestor provided no valid reason, such as fraud, in challenging the award to the winning bid maker. Lab. Corp. of Am. Holdings v. Rudolph, 184 S.W.3d 68, 2005 Ky. App. LEXIS 169 (Ky. Ct. App. 2005).

Bid protestor has standing to challenge a contract award and an actual case or controversy exists in spite of the underlying contract’s expiration. Since the Kentucky Model Procurement Code (KMPC) and Kentucky law affords judicial review of administrative actions if an award is arbitrary, capricious, or made in violation of the KMPC, the matter is not moot despite the contract having expired. Lab. Corp. of Am. Holdings v. Rudolph, 184 S.W.3d 68, 2005 Ky. App. LEXIS 169 (Ky. Ct. App. 2005).

3.Granting of Franchise.

Although the Model Procurement Code (MPC) governs purchasing, the granting of a franchise involves selling the right to utilize the public streets and ways, and accordingly, such sales are not subject to the provisions of the MPC, but rather, Ky. Const., § 164 governs the granting of a cable television franchise. Communications Systems, Inc. v. Danville, 880 F.2d 887, 1989 U.S. App. LEXIS 10840 (6th Cir. Ky. 1989 ).

Cited:

Ashley v. University of Louisville, 723 S.W.2d 866, 1986 Ky. App. LEXIS 1450 (Ky. Ct. App. 1986); Ram Eng’g & Constr., Inc. v. Univ. of Louisville, 127 S.W.3d 579, 2003 Ky. LEXIS 264 ( Ky. 2003 ); Yamaha Motor Mfg. Corp. of Am. v. Commonwealth, — S.W.3d —, 2005 Ky. App. LEXIS 239 (Ky. Ct. App. 2005); Laurel Constr. Co. v. Paintsville Util. Comm’n, 336 S.W.3d 903, 2010 Ky. App. LEXIS 40 (Ky. Ct. App. 2010).

Opinions of Attorney General.

Motor vehicle dealers in states other than Kentucky are eligible to respond to invitations to bid on new motor vehicles and subsequently sell the vehicles to Kentucky upon proper award even though they are not licensed as dealers under KRS 190.010 , since the statutes KRS Chapter 190 and the Model Procurement Code, KRS Chapter 45A are not in pari materia and do not have to be construed together; thus, the necessity for the state to purchase at the lowest possible cost under KRS 45.360 (now repealed) and this section and the policy against restraint of trade under KRS 367.175 combine to allow the state to purchase motor vehicles from out-of-state dealers who are not licensed in Kentucky. OAG 81-89 .

The necessity for the state to purchase at the lowest possible cost under KRS 45.360 (now repealed) and this section and the policy against restraint of trade reflected in KRS 367.175 combine to allow the state to purchase motor vehicles from out-of-state dealers who are not licensed in Kentucky. OAG 81-89 .

The fiscal court of a county may lease a portion of the tobacco base owned by the county to individuals, since the power of the court under KRS 67.080 to sell real property includes the power to lease, and the lease of county property does not come under the competitive bidding requirements of KRS 424.260 and the Model Procurement Code (KRS 45A.010 to 45A.460 , 45A.990 ) since the bidding principle applies only to governmental acquisitions, not situations where the government is the lessor; however, the lease must contain the precise consideration given, since the fiscal court must make full public disclosure of its transactions. OAG 81-107 .

The Kentucky Center for the Arts Corporation is not subject to the terms, provisions and requirements of the Model Procurement Code as it relates to procurement by the state since the corporation does not and will not expend public funds of the Commonwealth, is not a budget unit of the Commonwealth and receives operating revenues from external sources. OAG 81-129 .

The Model Procurement Code would not apply to a nonprofit corporation organized to raise money to provide a city facility suitable for a professional baseball team nor to the renovation contracts entered into by the corporation since the corporation is not a public agency within the meaning of the Code and because the Code only applies where the agency is a purchaser, buyer or lessee, not where, as here, the corporation would be a lessor. OAG 81-341 .

A plain reading of KRS 45A.420(2) shows that the General Assembly intended for that section to be an exception to the usual bidding requirements. OAG 90-75 .

Construing KRS 45A.420(2) as an exception to the usual bidding requirements is not contrary to the underlying policies of the code. OAG 90-75 .

The Model Procurement Code allows local public agencies to be flexible in order to take advantage of discounts or cost savings available by means of noncompetitive negotiations if competitive negotiations would not yield greater savings in a given circumstance. OAG 90-75 .

The whole thrust of the Model Procurement Code is to encourage and insist that local public agencies purchase services and supplies only after competitive sealed bidding unless good reason is shown why competitive sealed bidding is inappropriate. OAG 90-75 .

A Labor Agreement between a local Board of Education and a Labor Union in a school construction project is not prohibited provided the terms of the labor agreement do not offend or violate the Kentucky Model Procurement Code (KRS Chapter 45A) or the public school construction statute found at KRS 162.070 . OAG 10-006 .

Research References and Practice Aids

Cross-References.

Office of Material and Procurement Services, KRS 42.024 .

Facilities management, Department of, duties and organization, KRS 42.425 .

Fire and tornado insurance contracts of Department of Insurance, applicability of KRS Ch. 45A, KRS 56.095 .

Higher education institutions, purchase or lease of real property from officer or employee of board or institution, procedure, KRS 164A.575 .

Institutions of higher education governing boards bound by Model Procurement Code, KRS 164A.630 .

Kentucky arts council, procedure for purchasing and control of funds, KRS 153.220 , 153.235 .

Printing, Division of, duties, KRS 42.0172 .

Purchases by boards of education from United States, exception of applicability of KRS Ch. 45A and KRS 162.070 , KRS 162.075 .

45A.015. General provisions of law applicable — Obligation of good faith.

  1. Unless displaced by the particular provisions of this code, the principles of law and equity, including the Uniform Commercial Code, the law merchant, and law relative to capacity to contract, agency, fraud, misrepresentation, duress, coercion, mistake, and bankruptcy, shall supplement its provisions.
  2. Every contract or duty under this code shall impose an obligation of good faith in its performance or enforcement. “Good faith” shall mean honesty in fact in the conduct or transaction concerned and the observance of reasonable commercial standards of fair dealing.

History. Enact. Acts 1978, ch. 110, § 3, effective January 1, 1979.

NOTES TO DECISIONS

1.Contracts Subject to Standard.

Termination for convenience clauses required by KRS 45A.200(2) are subject to the good faith and fair dealing requirements set forth in KRS 45A.015(2). Ram Eng'g & Constr., Inc. v. Univ. of Louisville, 127 S.W.3d 579, 2003 Ky. LEXIS 264 ( Ky. 2003 ).

Opinions of Attorney General.

Any modifications or amendments to a competitively bid contract must be made by the Executive Branch pursuant to KRS Chapter 45A, unless such requirements are superseded by suspension of the procurement statutes by the General Assembly or declaration of a state of emergency by the Governor. Termination of a contract for convenience has as its central purpose the avoidance of payment of future anticipated profits by the Commonwealth. Termination of a contract for cause may be appropriate where a contract fails to meet the minimum standards imposed by statute. OAG 2004-09 .

45A.020. Application of code — Construction.

  1. This code shall apply to every expenditure of public funds by this Commonwealth and every payment by contingency fee under any contract or like business agreement, excepting only that this code shall not apply to contracts or like business agreements between the Commonwealth and its political subdivisions or other governments, except as provided in KRS 45A.295 to 45A.320 . It shall also apply to the disposal of state property.
  2. Since this code is a general act intended to provide model coverage of its subject matter, no part of it shall be deemed to be impliedly repealed by subsequent legislation if such construction of the subsequent legislation can be reasonably avoided.

HISTORY: Enact. Acts 1978, ch. 110, §§ 4, 5, effective January 1, 1979; 1980, ch. 250, § 3, effective April 9, 1980; 2018 ch. 87, § 3, effective July 14, 2018.

NOTES TO DECISIONS

1.Granting of Franchise.

Although the Model Procurement Code (MPC) governs purchasing, the granting of a franchise involves selling the right to utilize the public streets and ways, and accordingly, such sales are not subject to the provisions of the MPC, but rather, Ky. Const., § 164 governs the granting of a cable television franchise. Communications Systems, Inc. v. Danville, 880 F.2d 887, 1989 U.S. App. LEXIS 10840 (6th Cir. Ky. 1989 ).

Cited:

Laurel Constr. Co. v. Paintsville Util. Comm’n, 336 S.W.3d 903, 2010 Ky. App. LEXIS 40 (Ky. Ct. App. 2010).

Opinions of Attorney General.

The wording of this section and KRS 45A.030 is so broad that there is little, if any, doubt that they apply to purchases made by a property valuation administrator’s office, and since all PVA funds are deemed state funds, the state Model Procurement Code, rather than the local governmental procurement act, KRS 45A.345 , applies to PVA purchases. OAG 80-178 .

KRS Chapters 45 and 45A concern public funds of the Commonwealth such that these provisions are not applicable to the private funds and contributions covered in KRS 41.290 . OAG 82-520 .

Private funds and contributions received by a state university would not be subject to the state Model Procurement Code, as set out in Chapter 45A, if such procurement strictures were inconsistent with the terms attendant to receipt of the private funds or contributions. OAG 82-520 .

45A.022. Application of chapter to insurance contracts.

  1. This chapter shall apply to all insurance contracts purchased by the Commonwealth, except where the commissioner of insurance determines, with the concurrence of the secretary of Finance and Administration Cabinet, that:
    1. An emergency exists;
    2. Competition is not feasible; or
    3. The annual premium is less than ten thousand dollars ($10,000).
  2. Notwithstanding subsection (1) of this section, the health insurance contract or contracts for state employees as authorized by KRS 18A.225 shall be subject to the provisions of KRS 45A.080 , 45A.085 and 45A.090 .

History. Enact. Acts 1982, ch. 406, § 10, effective July 15, 1982; 1984, ch. 23, § 2, effective July 13, 1984; 1988, ch. 5, § 7, effective July 15, 1988; 1998, ch. 82, § 13, effective July 15, 1998; 2001, ch. 164, § 4, effective June 21, 2001; 2010, ch. 24, § 38, effective July 15, 2010.

Legislative Research Commission Note.

(10/19/2004). 2004 (1st Extra. Sess.) Ky. Acts ch. 1, sec. 2, provides, “Notwithstanding KRS 18A.225 , 45A.022 , 45A.080 , 45A.085 , 45A.090 , 45A.225 to 45A.290 , or any other provision of KRS Chapter 45A to the contrary, retroactive to August 12, 2004, the Finance and Administration Cabinet shall implement the provisions of this Act by amending the previously negotiated contracts for public employee health insurance. The secretary of the Finance and Administration Cabinet shall provide an actuarial certification that the self-insured contract amounts are actuarially sound. Any contracts entered into or modified pursuant to this section shall be forwarded to the Legislative Research Commission.”

45A.023. Multiyear federal grant project agreements — Legislative discontinuation.

  1. Notwithstanding any other provision of law to the contrary, the Department for Local Government, the Department of Military Affairs, and the Kentucky Office of Homeland Security may enter into multiyear contracts, memoranda of agreement, memoranda of understanding, grant agreements, or any other similar documents that exceed the biennium in which they are made for projects that are funded solely through federal grant money.
  2. All documents entered into in accordance with subsection (1) of this section shall contain a provision stating that the contract funding may be discontinued by the General Assembly in a subsequent budget.

History. Enact. Acts 2000, ch. 285, § 1, effective July 14, 2000; 2006, ch. 199, § 3, effective April 21, 2006; 2007, ch. 47, § 28, effective June 26, 2007; 2010, ch. 117, § 34, effective July 15, 2010.

Legislative Research Commission Note.

(7/12/2006). A reference to the “Office of Security Coordination” in subsection (1) of this section, as amended in 2006 Ky. Acts ch. 199, sec. 3, has been changed in codification to read the “Kentucky Office of Homeland Security” to reflect the reorganization of certain parts of the Executive Branch, as set forth in Executive Order 2005-563 and confirmed by the General Assembly in 2006 Ky. Acts ch. 193. This change was made by the Reviser of Statutes pursuant to 2006 Ky. Acts ch. 193, sec. 14.

45A.025. Determination.

Every determination required by this code shall be in writing and based upon written findings of the public official making the determination. These determinations and written findings shall be retained in an official contract file in the office of the chief purchasing officer or in the office of the using agency administering the contract.

History. Enact. Acts 1978, ch. 110, § 6, effective January 1, 1979; 1980, ch. 250, § 4, effective April 9, 1980.

45A.030. Definitions for code.

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

  1. “Business” means any corporation, partnership, individual, sole proprietorship, joint stock company, joint venture, or any other legal entity through which business is conducted;
  2. “Change order” means a written order signed by the purchasing officer, directing the contractor to make changes that the changes clause of the contract authorizes the purchasing officer to order without the consent of the contractor;
  3. “Chief purchasing officer” means the secretary of the Finance and Administration Cabinet, who shall be responsible for all procurement of the Commonwealth except as provided by KRS Chapters 150, 175, 175B, 176, 177, and 180;
  4. “Construction” means the process of building, altering, repairing, improving, or demolishing any public structures or buildings, or other public improvements of any kind to any public real property. It does not include the routine maintenance of existing structures, buildings, or real property;
  5. “Construction manager-agency” means services to assist the purchasing agency manage construction that are procured through a contract that is qualifications-based;
  6. “Construction management-at-risk” means a project delivery method in which the purchasing officer enters into a single contract with an offeror that assumes the risk for construction at a contracted guaranteed maximum price as a general contractor, and provides consultation and collaboration regarding the construction during and after design of a capital project. The contract shall be subject to the bonding requirements of KRS 45A.190 ;
  7. “Construction manager-general contractor” means a project delivery method in which the purchasing officer enters into a single contract with an offeror to provide preconstruction and construction services. During the preconstruction phase, the successful offeror provides design consulting services. During the construction phase, the successful offeror acts as general contractor by:
    1. Contracting with subcontractors; and
    2. Providing for management and construction at a fixed price with a completion deadline;
  8. “Contract” means all types of state agreements, including grants and orders, for the acquisition, purchase, or disposal of supplies, services, construction, or any other item. It includes: awards; contracts of a fixed-price, cost, cost-plus-a-fixed-fee, contingency fee, or incentive type; contracts providing for the issuance of job or task orders; leases; letter contracts; purchase orders; public-private partnership agreements; and insurance contracts except as provided in KRS 45A.022 . It includes supplemental agreements with respect to any of the foregoing;
  9. “Contract modification” means any written alteration in the specifications, delivery point, rate of delivery, contract period, price, quantity, or other contract provisions of any existing contract, whether accomplished by unilateral action in accordance with a contract provision or by mutual action of the parties to the contract. It includes bilateral actions, such as supplemental agreements, and unilateral actions, such as change orders, administrative changes, notices of termination, and notices of the exercise of a contract option;
  10. “Contractor” means any person having a contract with a governmental body;
  11. “Data” means recorded information, regardless of form or characteristic;
  12. “Design-bid-build” means a project delivery method in which the purchasing officer sequentially awards separate contracts, the first for architectural, engineering, or engineering-related services to design the project and the second for construction of the capital project according to the design. The contract shall be subject to the bonding requirements of KRS 45A.185 ;
  13. “Design-build” means a project delivery method in which the purchasing officer enters into a single contract for design and construction of a capital project. The contract shall be subject to the bonding requirements of KRS 45A.190 ;
  14. “Designee” means a duly authorized representative of a person holding a superior position;
  15. “Document” means any physical embodiment of information or ideas, regardless of form or characteristic, including electronic versions thereof;
  16. “Employee” means an individual drawing a salary from a governmental body, whether elected or not, and any nonsalaried individual performing personal services for any governmental body;
  17. “Governmental body” means any department, commission, council, board, bureau, committee, institution, legislative body, agency, government corporation, or other establishment of the executive or legislative branch of the state government;
  18. “Meeting” means all gatherings of every kind, including video teleconferences;
  19. “Negotiation” means contracting by either the method set forth in KRS 45A.085 , 45A.090 , or 45A.095 ;
  20. “Person” means any business, individual, organization, or group of individuals;
  21. “Private partner” means any entity that is a partner in a public-private partnership other than:
    1. The Commonwealth of Kentucky, or any agency or department thereof;
    2. The federal government;
    3. Any other state government; or
    4. Any agency of a state, federal, or local government;
  22. “Procurement” means the purchasing, buying, renting, leasing, or otherwise obtaining of any supplies, services, or construction. It includes all functions that pertain to the procurement of any supply, service, or construction item, including description of requirements, selection and solicitation of sources, preparation and award of contract, and all phases of contract administration;
  23. “Public-private partnership” means a project delivery method for construction or financing of capital projects, as defined in KRS 45.750 , or procurement of services, pursuant to a written public-private partnership agreement entered into pursuant to KRS 45A.077 and administrative regulations promulgated thereunder, between:
    1. At least one (1) private partner; and
    2. The Commonwealth of Kentucky, or any agency or department thereof;
  24. “Purchase request” or “purchase requisition” means that document whereby a using agency requests that a contract be obtained for a specified need, and may include, but is not limited to, the technical description of the requested item, delivery schedule, transportation, criteria for evaluation of solicitees, suggested sources of supply, and information supplied for the making of any written determination and finding required by KRS 45A.025 ;
  25. “Purchasing agency” means any governmental body that is authorized by this code or its implementing administrative regulations or by way of delegation from the chief purchasing officer to contract on its own behalf rather than through the central contracting authority of the chief purchasing officer;
  26. “Purchasing officer” means any person authorized by a governmental body in accordance with procedures prescribed by administrative regulations to enter into and administer contracts and make written determinations and findings with respect thereto. The term includes an authorized representative acting within the limits of authority;
  27. “Services” means the rendering by a contractor of its time and effort rather than the furnishing of a specific end product, other than reports that are merely incidental to the required performance of services;
  28. “Supplemental agreement” means any contract modification that is accomplished by the mutual action of the parties;
  29. “Supplies” means all property, including but not limited to leases of real property, printing, and insurance, except land or a permanent interest in land;
  30. “Using agency” means any governmental body of the state that utilizes any supplies, services, or construction purchased under this code;
  31. “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; and
  32. “Writing” or “written” means 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.

HISTORY: Enact. Acts 1978, ch. 110, § 7, effective January 1, 1979; 1980, ch. 250, § 5, effective April 9, 1980; 1982, ch. 406, § 9, effective July 15, 1982; 1998, ch. 120, § 9, effective July 15, 1998; 1998, ch. 486, § 1, effective July 15, 1998; 2003, ch. 98, § 1, effective June 24, 2003; 2015 ch. 105, § 9, effective June 24, 2015; 2016 ch. 67, § 1, effective April 8, 2016; 2018 ch. 87, § 4, effective July 14, 2018; 2022 ch. 197, § 2, effective March 30, 2022.

Legislative Research Commission Notes.

(4/8/2016). 2016 Ky. Acts ch. 67, sec. 16 provided that the amendments made to this statute and KRS 45A.075 and the creation of KRS 45A.077 in that Act shall apply only to a project for which the procurement process is initiated on or after the effective date of that Act, which was April 8, 2016, either through the initial invitation for bids, request for proposals, or otherwise.

(7/15/98). This section was amended by 1998 Ky. Acts chs. 120 and 486. Where these Acts are not in conflict, they have been codified together. Where a conflict exists, Acts ch. 486, which was last enacted by the General Assembly, prevails under KRS 446.250 .

NOTES TO DECISIONS

1.Employment Contracts.

It was not error to find the secretary of a university’s board of regents (board) had a one-year employment contract because minutes in which the board appointed the secretary for one year, under KRS 164.330 , and set the secretary’s compensation, under KRS 164.450 , constituted a lawfully authorized written contract, so KRS 45A.245(1) barred the university’s immunity defense to the secretary’s breach of contract claim. W.Ky.Univ. v. Esters, 2014 Ky. App. Unpub. LEXIS 1037 (Ky. Ct. App. Apr. 11, 2014).

Commonwealth and its agencies no longer enjoy immunity for the breach of a written contract entered into with a private citizen; therefore, a State university was not immune from a former employee's lawsuit alleging breach of a written employment contract because the waiver of immunity for actions brought on written contracts applied to employment contracts. Univ. of Louisville v. Lillard, 2016 Ky. App. LEXIS 2 (Ky. Ct. App. Jan. 8, 2016).

Cited:

Univ. of Louisville v. Rothstein, 2016 Ky. App. LEXIS 42 (Ky. Ct. App. Apr. 1, 2016).

Opinions of Attorney General.

The wording of KRS 45A.020 and this section is so broad that there is little, if any, doubt that they apply to purchases made by a property valuation administrator’s office, and since all PVA funds are deemed state funds, the state Model Procurement Code, rather than the local governmental procurement act, KRS 45A.345 , applies to PVA purchases. OAG 80-178 .

Since there is nothing in the subsection (4) of this section definition of “construction” which relates to road building, and subsection (1) of KRS 45A.050 excises road building from the operation of KRS chapter 45A, KRS Chapter 45A does not apply to the Department of Transportation (now Transportation Cabinet). OAG 81-349 .

45A.035. Secretary to adopt regulations.

  1. The secretary of the Finance and Administration Cabinet shall have power and authority over, and may, except as otherwise expressly provided in this code, adopt regulations pursuant to KRS Chapter 13A and consistent with this code governing the purchasing, management, and control of any and all supplies, services, and construction, and other items required to be purchased by the Commonwealth. The secretary shall consider and decide matters of policy with regard to state procurement. The secretary shall have the power of review with respect to the implementation of regulations and policy determinations.
  2. Regulations shall be adopted governing the following:
    1. Conditions and procedures for delegations of purchasing authority;
    2. Prequalification, suspension, debarment, and reinstatement of prospective bidders;
    3. Small purchase procedures;
    4. Conditions and procedures for the purchase of items for resale;
    5. Conditions and procedures for the purchase of agricultural products in accordance with KRS 45A.645 ;
    6. Conditions and procedures for the use of source selection methods authorized by this code, including emergency purchases;
    7. Opening and rejection of bids or offers, consideration of alternate bids, and waiver of informalities in offers;
    8. Confidentiality of technical data and trade secrets information submitted by actual or prospective bidders or offerors;
    9. Partial, progressive, and multiple awards;
    10. Supervision of storerooms and inventories, including determination of appropriate stock levels and the management, transfer, sale, or other disposal of state-owned property;
    11. Definitions and classes of contractual services and procedures for acquiring them;
    12. An appeals process to resolve disputes arising from specifications requiring items deemed to be equivalent or a sole brand as specified in KRS 45A.170 ; and
    13. Use of reverse auctions as defined in KRS 45A.070 .

The secretary may adopt such other regulations as deemed advisable to carry out the purposes of this code.

History. Enact. Acts 1978, ch. 110, § 8, effective January 1, 1979; 2002, ch. 344, § 8, effective July 15, 2002; 2008, ch. 47, § 1, effective July 15, 2008; 2010, ch. 63, § 1, effective July 15, 2010.

45A.040. Procurement activities — Distribution.

The secretary of the Finance and Administration Cabinet shall provide for the distribution of the cabinet’s procurement activities and functions among the various bureaus within the cabinet.

History. Enact. Acts 1978, ch. 110, § 9, effective January 1, 1979.

45A.045. Authority of cabinet — Authority to promulgate administrative regulations.

  1. The Finance and Administration Cabinet shall serve as the central procurement and contracting agency of the Commonwealth.
    1. The cabinet shall require all agencies to furnish an estimate of specific needs for supplies, materials, and equipment to be purchased by competitive bidding for the purpose of permitting scheduling of purchasing in large volume. The cabinet shall establish and enforce schedules for purchasing supplies, materials, and equipment. In addition, prior to the beginning of each fiscal year all agencies shall submit to the Finance and Administration Cabinet an estimate of all needs for supplies, materials, and equipment during that year which will have to be required through competitive bidding.
    2. The Finance and Administration Cabinet shall have power, with the approval of the secretary of the Finance and Administration Cabinet, to transfer between departments, to salvage, to exchange, and to condemn supplies, equipment, and real property.
    3. The Finance and Administration Cabinet shall attempt in every practicable way to ensure that state agencies are fulfilling their business needs through the application of the best value criteria.
  2. The Finance and Administration Cabinet shall recommend regulations, rules, and procedures and shall have supervision over all purchases by the various spending agencies, except as otherwise provided by law, and, subject to the approval of the secretary of the Finance and Administration Cabinet, shall promulgate administrative regulations to govern purchasing by or for all these agencies. The cabinet shall publish a manual of procedures which shall be incorporated by reference as an administrative regulation pursuant to KRS Chapter 13A. This manual shall be distributed to agencies and shall be revised upon issuance of amendments to these procedures. No purchase or contract shall be binding on the state or any agency thereof unless approved by the Finance and Administration Cabinet or made under general administrative regulations promulgated by the cabinet.
  3. The Finance and Administration Cabinet shall purchase or otherwise acquire, or, with the approval of the secretary, may delegate and control the purchase and acquisition of the combined requirements of all spending agencies of the state, including, but not limited to, interests in real property, contractual services, rentals of all types, supplies, materials, equipment, and services.
  4. The Finance and Administration Cabinet shall sell, trade, or otherwise dispose of any interest in real property of the state which is not needed, or has become unsuitable for public use, or would be more suitable to the public’s interest if used in another manner, as determined by the secretary of the Finance and Administration Cabinet. The determination of the secretary of the Finance and Administration Cabinet shall be set forth in an order and shall be reached only after review of a written request by the agency desiring to dispose of the property. This request shall describe the property and state the reasons why the agency believes the property should be disposed. All instruments required by law to be recorded which convey any interest in any real property so disposed of shall be executed and signed by the secretary of the Finance and Administration Cabinet and approved by the Governor. Unless the secretary of the Finance and Administration Cabinet deems it in the best interest of the state to proceed otherwise, all interests in real property shall be sold either by invitation of sealed bids or by public auction. The selling price of any interest in real property shall not be less than the appraised value thereof as determined by the cabinet, or the Transportation Cabinet for the requirements of that cabinet.
  5. The Finance and Administration Cabinet shall sell, trade, or otherwise dispose of all personal property of the state that is not needed, or has become unsuitable for public use, or would be more suitable to the public’s interest if used in another manner, or, with the approval of the secretary, may delegate the sale, trade, or other disposal of the personal property. In the event the authority is delegated, the method for disposal shall be determined by the agency head, in accordance with administrative regulations promulgated by the Finance and Administration Cabinet, and shall be set forth in a document describing the property and stating the method of disposal and the reasons why the agency believes the property should be disposed of. In the event the authority is not delegated, requests to the Finance and Administration Cabinet to sell, trade, or otherwise dispose of the property shall describe the property and state the reasons why the agency believes the property should be disposed of. The method for disposal shall be determined by the Division of Surplus Properties, and approved by the secretary of the Finance and Administration Cabinet or his or her designee.
  6. The Finance and Administration Cabinet shall exercise general supervision and control over all warehouses, storerooms, and stores and of all inventories of supplies, services, and construction belonging to the Commonwealth. The cabinet shall promulgate administrative regulations to require agencies to take and maintain inventories of plant property, buildings, structures, other fixed assets, and equipment. The cabinet shall conduct periodic physical audits of inventories.
  7. The Finance and Administration Cabinet shall establish and maintain programs for the development and use of purchasing specifications and for the inspection, testing, and acceptance of supplies, services, and construction.
  8. Nothing in this section shall prevent the Finance and Administration Cabinet from negotiating with vendors who maintain a General Services Administration price agreement with the United States of America or any agency thereof. No contract executed under this provision shall authorize a price higher than is contained in the contract between the General Services Administration and the vendor affected.
  9. Except as provided in KRS Chapters 175, 176, 177, and 180, and subject to the provisions of this code, the Finance and Administration Cabinet shall purchase or otherwise acquire all real property determined to be needed for state use, upon 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. The amount paid for this real property shall not exceed the appraised value as determined by the cabinet or the Transportation Cabinet (for such requirements of that cabinet), or the value set by eminent domain procedure. Subject to the provisions of this code, real property or any interest therein may be purchased, leased, or otherwise acquired from any officer or employee of any agency of the state upon a finding by the Finance and Administration Cabinet, based upon a written application by the head of the agency requesting the purchase, and approved by the secretary of the Finance and Administration Cabinet and the Governor, that the employee has not either himself or herself, or through any other person, influenced or attempted to influence either the agency requesting the acquisition of the property or the Finance and Administration Cabinet in connection with such acquisition. Whenever such an acquisition is consummated, the request and finding shall be recorded and kept by the Secretary of State along with the other documents recorded pursuant to the provisions of KRS Chapter 56.
  10. The Finance and Administration Cabinet shall maintain records of all purchases and sales made under its authority and shall make periodic summary reports of all transactions to the secretary of the Finance and Administration Cabinet, the Governor, and the General Assembly. The Finance and Administration Cabinet shall also report trends in costs and prices, including savings realized through improved practices, to the above authorities. The Finance and Administration Cabinet shall also compile an annual report of state purchases by all spending agencies in the state’s statewide accounting and reporting system. The report format shall include, but not be limited to, dollar amount, volume, type of purchase, and vendor.
  11. For capital construction projects, subject to the provisions of this code and KRS 45A.180 , the procurement may be on whichever of the following alternative project delivery methods, in the judgment of the secretary of the Finance and Administration Cabinet after first considering the traditional design-bid-build project delivery method, offers the best value to the taxpayer:
    1. A design-build basis; or
    2. A construction management-at-risk basis. Proposals shall be reviewed by the engineering staff to assure quality and value, and compliance with procurement procedures. All specifications shall be written to promote competition. Nothing in this section shall prohibit the procurement of phased bidding or construction manager-agency services.
  12. The Finance and Administration Cabinet shall have control and supervision over all purchases of energy-consuming equipment, supplies, and related equipment purchased or acquired by any agency of the state as provided in this code, and shall promulgate administrative regulations to designate the manner in which an energy-consuming item will be purchased so as to promote energy conservation and acquisition of energy efficient products. Major energy components shall be amortized on a seven (7) to ten (10) years’ recovery basis and shall take into consideration the projected cost of fuel. The Finance and Administration Cabinet, in consultation with the Cabinet for Economic Development, shall conduct a thorough economic feasibility analysis on any major energy-using component of at least three million (3,000,000) BTU’s per hour heat input and shall issue a certificate of economic feasibility prior to the Finance and Administration Cabinet’s purchasing or retrofitting any such component that utilizes any fuel other than coal. The economic feasibility analysis shall consist of life-cycle cost comparisons of a component that would utilize coal and one(s) that would utilize any fuel other than coal. For the analysis, the Finance and Administration Cabinet shall provide detailed estimates of equipment purchase price, installation cost, annual operation and maintenance costs, and usage patterns of energy-using components.

History. Enact. Acts 1978, ch. 110, § 10, effective January 1, 1979; 1990, ch. 496, § 1, effective July 13, 1990; 1994, ch. 277, § 4, effective July 15, 1994; 1997 (1st Ex. Sess.), ch. 4, § 24, effective May 30, 1997; 2000, ch. 5, § 7, effective July 14, 2000; 2003, ch. 98, § 2, effective June 24, 2003; 2005, ch. 85, § 69, effective June 20, 2005.

Research References and Practice Aids

2020-2022 Budget Reference.

See State/Executive Branch Budget, 2021 Ky. Acts ch. 169, Pt. I, I, 7, (1) at 1105.

45A.047. Disposition of firearms or ammunition owned by state agency — Disposition of proceeds upon sale — Restriction on purchase of body armor for service animal.

  1. When an agency of Kentucky state government or a public university safety and security department organized pursuant to KRS 164.950 disposes of firearms or ammunition owned by that agency, the disposition shall be by:
    1. Public auction to persons who are eligible under federal law to purchase the type of firearm or ammunition;
    2. Trade to the federally licensed firearms dealer providing new firearms or ammunition to the agency;
    3. Transfer to another government agency or government-operated museum in Kentucky for official use or display; or
    4. Sale to a current or retiring employee as authorized by law.
  2. If the firearms or ammunition are sold, the proceeds of the sale shall be utilized solely for the purchase of body armor for officers meeting or exceeding National Institute of Justice standards, firearms, ammunition, or range facilities, or a combination thereof, by the agency of government. The provisions of this subsection shall not apply to the Department of Fish and Wildlife.
  3. Body armor purchased for a service animal shall be purchased only for an animal owned by the law enforcement agency specified in subsection (1) of this section.

HISTORY: Enact. Acts 1998, ch. 606, § 129, effective July 15, 1998; 2002, ch. 281, § 2, effective July 15, 2002; 2015 ch. 20, § 2, effective June 24, 2015.

45A.050. Centralization of procurement — Exemptions.

  1. Except as provided in KRS 45A.800 to 45A.835 and KRS Chapters 175, 176, 177, and 180, all rights, powers, duties, and authority relating to the procurement of supplies, services, and construction, and the management, control, warehousing, sale, and disposal of supplies, services, and construction now vested in or exercised by any state agency under the several statutes relating thereto, are hereby transferred to the secretary of the Finance and Administration Cabinet as provided in this code, subject to the provisions of subsection (2) of this section.
  2. Unless otherwise ordered by the secretary of the Finance and Administration Cabinet, the acquisition of the following shall not be required through the Finance and Administration Cabinet:
    1. Works of art for museum and public display;
    2. Published books, maps, periodicals, and technical pamphlets; and
    3. Services of visiting speakers, professors, and performing artists.
  3. The Finance and Administration Cabinet shall include in all state agency price contracts for the purchase of materials or supplies a provision that, as approved by the secretary of the Finance and Administration Cabinet, any political subdivision, including cities of all classes, counties, school districts, or special districts, may participate in these contracts to the same extent as the Commonwealth. Any political subdivision may purchase materials and supplies in accordance with a contract for supplies and materials entered into by the Finance and Administration Cabinet for the Commonwealth, including those contracts negotiated by the cabinet with vendors who maintain a General Services Administration price agreement as provided in KRS 45A.045(8). Political subdivisions of the Commonwealth must comply with other provisions of the Kentucky Revised Statutes which require purchase by competitive bidding, before participating in the contract, unless the state contract has been let by competitive bidding, or the contract was negotiated as provided in KRS 45A.045(8).
  4. The Finance and Administration Cabinet shall inform the Department for Local Government, which shall then inform the appropriate purchasing agent of each political subdivision interested in participating under this section, of all state agency contracts in effect between the Commonwealth and vendors.
  5. The secretary of the Finance and Administration Cabinet shall promulgate administrative regulations necessary for the implementation of this section and necessary to provide that the Commonwealth be reimbursed for any additional expenses incurred by the Commonwealth in allowing political subdivisions to participate in contracts with vendors.
  6. The Finance and Administration Cabinet shall comply with all provisions relating to the methods of purchasing in the Kentucky Revised Statutes. This section is not intended to repeal or otherwise affect any provision of the Kentucky Revised Statutes regarding purchasing methods of the Finance and Administration Cabinet.
  7. Notwithstanding any other statute to the contrary, all public agencies as defined in KRS 45A.490 shall comply with the provisions for reciprocal preference for resident bidders in KRS 45A.490 to 45A.494 .

History. Enact. Acts 1978, ch. 110, § 11, effective January 1, 1979; 1990, ch. 496, § 2, effective July 13, 1990; 1994, ch. 95, § 8, effective July 15, 1994; 1997 (1st Ex. Sess.), ch. 4, § 25, effective May 30, 1997; 1998, ch. 69, § 17, effective July 15, 1998; 2007, ch. 47, § 29, effective June 26, 2007; 2010, ch. 117, § 35, effective July 15, 2010; 2010, ch. 162, § 6, effective July 15, 2010.

Legislative Research Commission Note.

(7/15/2010). This section was amended by 2010 Ky. Acts chs. 117 and 162, which do not appear to be in conflict and have been codified together.

Opinions of Attorney General.

Since there is nothing in the subsection (4) of KRS 45A.030 definition of “construction” which relates to road building, and subsection (1) of this section excises road building from the operation of KRS Chapter 45A, KRS Chapter 45A does not apply to the Department of Transportation (now Transportation Cabinet). OAG 81-349 .

45A.055. State purchasing regulations.

  1. Prior to January 1, 1979, the secretary of the Finance and Administration Cabinet shall publish the initial state purchasing regulations in accordance with current Finance and Administration Cabinet policies and procedures. The initial regulations may be promulgated on an interim basis, without regard to the provisions of KRS Chapter 13A, provided, however, that final regulations shall be promulgated pursuant to the provisions of KRS Chapter 13A within two hundred forty (240) days following the promulgation of the initial regulations.
  2. All additions, deletions, or other modifications of the final purchasing regulations issued pursuant to subsection (1) of this section shall be promulgated by the secretary in accordance with any applicable provisions of KRS Chapter 13A.
  3. The secretary shall not delegate his power to issue the state purchasing regulations under subsections (1) and (2) of this section to any other person or agency, and no state purchasing regulations shall be issued except as approved by the secretary.
  4. No state purchasing regulation shall change in any way a contract commitment by the Commonwealth nor of a contractor to the Commonwealth, which was in existence on the effective date of the regulation.
  5. The provisions of state purchasing regulations promulgated as authorized herein shall be considered to be incorporated by operation of law in all state contracts.

History. Enact. Acts 1978, ch. 110, § 12, effective January 1, 1979.

45A.060. Relationship with using agencies.

The secretary of the Finance and Administration Cabinet shall maintain a close and cooperative relationship with the using agencies of the Commonwealth. Any using agency may at any time make recommendations concerning procurement to the secretary.

History. Enact. Acts 1978, ch. 110, § 13, effective January 1, 1979.

45A.065. Advisory councils — Procurement institute.

  1. The secretary of the Finance and Administration Cabinet may appoint advisory councils to assist him with respect to specifications and procurement in specific commodity areas as well as other matters within his authority. Advisory council members may consist of such qualified representatives of government, industry, educational institutions, and the general public as the secretary may deem desirable. Members shall be reimbursed for expenses incurred in the performance of council duties subject to the provisions of KRS 45.101 .
  2. The secretary may also establish and maintain, either alone or in cooperation with other states, the federal government, municipalities, or other units of local government, a procurement institute for the purpose of disseminating information concerning state procurement and for training and educating officials and other persons in procurement, including persons not employed by the Commonwealth.

History. Enact. Acts 1978, ch. 110, § 14, effective January 1, 1979; 1982, ch. 450, § 61, effective July 1, 1983; 2009, ch. 12, § 27, effective June 25, 2009.

45A.067. Requirement for registration with Department of Revenue to collect and remit sales and use tax — Exemption — Applicability to foreign persons — Administrative regulation.

  1. As used in this section:
    1. “Affiliate” means a person who directly or indirectly owns or controls, is owned or controlled by, or is under common ownership or control with another person or group of persons; and
    2. “Person” includes any individual, firm, copartnership, pass-through entity as defined in KRS 141.010 , joint venture, association, social club, fraternal organization, corporation, estate, trust, business trust, receiver, trustee, syndicate, cooperative, assignee, governmental unit or agency, or any other group or combination acting as a unit.
  2. The Commonwealth shall not contract to acquire goods or services, and a person shall not contract to supply goods or services to the Commonwealth, unless, prior to or contemporaneous with entering into the contract, the person contracting to supply goods or services and its affiliates register with the Department of Revenue to collect and remit the sales and use tax imposed by KRS Chapter 139.
  3. Nothing in this section shall require a person or affiliate to register if the person or affiliate does not make sales to customers in the Commonwealth.
  4. The provisions of subsection (2) of this section are specifically applicable to foreign persons, notwithstanding the fact that the foreign person or the affiliate may not otherwise be legally obligated to collect and remit the sales and use tax.
  5. The secretary of the Finance and Administration Cabinet shall promulgate an administrative regulation to establish the procedure ensuring compliance with the provisions of this section.

HISTORY: Enact. Acts 2008, ch. 43, § 1, effective July 15, 2008; 2018 ch. 171, § 66, effective April 14, 2018; 2018 ch. 207, § 66, effective April 27, 2018.

Legislative Research Commission Notes.

(4/27/2018). This statute was amended by 2018 Ky. Acts chs. 171 and 207, which do not appear to be in conflict and have been codified together.

45A.070. Definitions for KRS 45A.070 to 45A.180.

As used in KRS 45A.070 to 45A.180 , unless the context in which they are used clearly requires a different meaning:

  1. “Best value” means a procurement in which the decision is based on the primary objective of meeting the specific business requirements and best interests of the Commonwealth. These decisions shall be based on objective and quantifiable criteria that shall include price and the reciprocal preference for a resident bidder required under KRS 45A.494 that have been communicated to the offerors as set forth in the invitation for bids.
  2. “Cost-reimbursement contract” means a contract under which the Commonwealth reimburses the contractor for those contract costs, within a stated ceiling, which are allowable and allocable in accordance with cost principles as provided in KRS 45A.215 , and a fee, if any.
  3. “Established catalogue price” means the price included in the most current catalogue, price list, schedule, or other form that:
    1. Is regularly maintained by the manufacturer or vendor of an item;
    2. Is either published or otherwise available for inspection by customers; and
    3. States prices at which sales are currently or were last made to a significant number of buyers constituting the general buying public for that item.
  4. “Invitation for bids” means all documents, whether attached or incorporated by reference, utilized for soliciting bids in accordance with the procedures set forth in KRS 45A.080 of this code.
  5. “Request for proposals” means all documents, whether attached or incorporated by reference, utilized for soliciting proposals in accordance with the procedures set forth in KRS 45A.085 , 45A.090 , 45A.095 , 45A.100 , or 45A.180 .
  6. “Responsible bidder or offeror” means a person who has the capability in all respects to perform fully the contract requirements, and the integrity and reliability which will assure good faith performance.
  7. “Responsive bidder” means a person who has submitted a bid under KRS 45A.080 which conforms in all material respects to the invitation for bids, so that all bidders may stand on equal footing with respect to the method and timeliness of submission and as to the substance of any resulting contract.
  8. “Reverse auction” means a real-time, structured bidding process, usually lasting less than one (1) hour, and taking place at a previously scheduled time and Internet location, during which multiple bidders, anonymous to each other, submit revised, lower bids to provide the solicited good or leased space. “Reverse auction” does not apply to construction projects, including but not limited to road, bridge, and building projects.

History. Enact. Acts 1978, ch. 110, § 15, effective January 1, 1979; 1990, ch. 496, § 3, effective July 13, 1990; 1997 (1st Ex. Sess.), ch. 4, § 26, effective May 30, 1997; 2003, ch. 98, § 3, effective June 24, 2003; 2010, ch. 63, § 2, effective July 15, 2010; 2010, ch. 162, § 7, effective July 15, 2010.

Legislative Research Commission Note.

(7/15/2010). This sections was amended by 2010 Ky. Acts chs. 63 and 162, which do not appear to be in conflict and have been codified together.

NOTES TO DECISIONS

1.Negotiation.

Even if the KRS 45A.470(5) negotiation requirement is applicable to competitive sealed bids, the Cabinet correctly concluded that negotiations were not required because the losing bidder failed to offer the service at a price comparable to that offered by the winning bidder, and summary judgment for the Cabinet and the winning bidder in the corporation’s case challenging the contract award was correct. Cmty. Servs. Project, Inc. v. BAWAC Cleaning Servs., 226 S.W.3d 852, 2007 Ky. App. LEXIS 162 (Ky. Ct. App. 2007).

Opinions of Attorney General.

A dealer who does not hold a franchise can be a responsible bidder, within the meaning of subsection (6) of this section. OAG 79-255 .

A Labor Agreement between a local Board of Education and a Labor Union in a school construction project is not prohibited provided the terms of the labor agreement do not offend or violate the Kentucky Model Procurement Code (KRS Chapter 45A) or the public school construction statute found at KRS 162.070 . OAG 10-006 .

2014-2016 Budget Reference.

See State/Executive Branch Budget, 2014 Ky. Acts ch. 117, Pt. I, A, 19, (2) at 616.

45A.075. Methods of awarding state contracts.

Except as otherwise authorized by law, all state contracts shall be awarded by:

  1. Competitive sealed bidding, pursuant to KRS 45A.080 ;
  2. Competitive negotiation, pursuant to KRS 45A.077 , 45A.085 , 45A.090 , or 45A.180 ;
  3. Noncompetitive negotiation, pursuant to KRS 45A.095 ; or
  4. Small purchase procedures, pursuant to KRS 45A.100 .

History. Enact. Acts 1978, ch. 110, § 16, effective January 1, 1979; 2003, ch. 98, § 4, effective June 24, 2003; 2016 ch. 67, § 2, effective April 8, 2016.

Legislative Research Commission Note.

(4/8/2016). 2016 Ky. Acts ch. 67, sec. 16 provided that the amendments made to this statute and KRS 45A.030 and the creation of KRS 45A.077 in that Act shall apply only to a project for which the procurement process is initiated on or after the effective date of that Act, which was April 8, 2016, either through the initial invitation for bids, request for proposals, or otherwise.

NOTES TO DECISIONS

Cited:

Pendleton Bros. Vending, Inc. v. Commonwealth Finance & Admin. Cabinet, 758 S.W.2d 24, 1988 Ky. LEXIS 46 ( Ky. 1988 ).

Opinions of Attorney General.

Where the Department of Finance (now Finance and Administration Cabinet) had the original power of award and administration of an area development fund project pursuant to KRS 42.355 , it was technically a “state contract”; therefore, the provisions of the Model Procurement Code, including this section, applicable to state contracts should have been applied to the bidding procedure, even though the Department of Finance (now Finance and Administration Cabinet) had delegated its authority to the beneficiary agency, and the provisions of the Model Procurement Code which apply to counties had not yet become effective. OAG 80-311 .

45A.077. Public-private partnership delivery method of awarding state contracts for capital construction projects. [Effective until July 14, 2022]

  1. A public-private partnership delivery method may be utilized as provided in this section and administrative regulations promulgated thereunder. State contracts using this method shall be awarded by competitive negotiation.
  2. A contracting body utilizing a public-private partnership shall continue to be responsible for oversight of any function that is delegated to or otherwise performed by a private partner.
  3. On or before December 31, 2016, the secretary of the Finance and Administration Cabinet shall promulgate administrative regulations setting forth criteria to be used in determining when a public-private partnership is to be used for a particular project. The administrative regulations shall reflect the intent of the General Assembly to promote and encourage the use of public-private partnerships in the Commonwealth. The secretary shall consult with design-builders, construction managers, contractors, design professionals including engineers and architects, and other appropriate professionals during the development of these administrative regulations.
  4. A request for proposal for a project utilizing a public-private partnership shall include at a minimum:
    1. The parameters of the proposed public-private partnership agreement;
    2. The duties and responsibilities to be performed by the private partner or partners;
    3. The methods of oversight to be employed by the contracting body;
    4. The duties and responsibilities that are to be performed by the contracting body and any other partners to the contract;
    5. The evaluation factors and the relative weight of each to be used in the scoring of awards;
    6. Plans for financing and operating the qualifying project and the revenues, service payments, bond financings, and appropriations of public funds needed for the qualifying project;
    7. Comprehensive documentation of the experience, capabilities, capitalization and financial condition, and other relevant qualifications of the private entity;
    8. The ability of a private partner or partners to quickly respond to the needs presented in the request for proposal, and the importance of economic development opportunities represented by the qualifying project. In evaluating proposals, preference shall be given to a plan that includes the involvement of small businesses as subcontractors, to the extent that small businesses can provide services in a competitive manner, unless any preference interferes with the qualification for federal or other funds; and
    9. Other information required by the contracting body or the cabinet to evaluate the proposals submitted by respondents and the overall proposed public- private partnership.
  5. A private entity desiring to be a private partner shall demonstrate to the satisfaction of the contracting body or the cabinet that it is capable of performing any duty, responsibility, or function it may be authorized or directed to perform as part of the public-private partnership agreement.
  6. When a request for proposal for a project utilizing a public-private partnership is issued for a capital project, the contracting body shall transmit a copy of the request for proposal to the Capital Projects and Bond Oversight Committee staff, clearly identifying to the staff that a public-private partnership is being utilized. The contracting body shall submit the final contract to the Capital Projects and Bond Oversight Committee under KRS 45.763 before work may be begun on the project.
  7. A request for proposal or other solicitation may be canceled, or all proposals may be rejected, if it is determined in writing that the action is taken in the best interest of the Commonwealth and approved by the purchasing officer.
    1. Beginning July 1, 2022 , in the case of any public-private partnership for a capital project with an aggregate value of twenty-five million dollars ($25,000,000) or more, the project shall be authorized by the General Assembly, by inclusion in the branch budget bill or by any other means specified by the General Assembly, explicitly identifying and authorizing the utilization of a public-private partnership delivery method for the applicable capital project. The authorization of a capital project required by this subsection is in addition to any other statutorily required authorization for a capital project. (8) (a) Beginning July 1, 2022 , in the case of any public-private partnership for a capital project with an aggregate value of twenty-five million dollars ($25,000,000) or more, the project shall be authorized by the General Assembly, by inclusion in the branch budget bill or by any other means specified by the General Assembly, explicitly identifying and authorizing the utilization of a public-private partnership delivery method for the applicable capital project. The authorization of a capital project required by this subsection is in addition to any other statutorily required authorization for a capital project.
    2. The provisions of this subsection shall not apply to any public-private partnership project made public through a request for proposal or a public notice of an unsolicited proposal issued prior to July 1, 2022.
  8. Any corporation as described 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 shall:
    1. Adhere to the administrative regulations promulgated under this section when utilizing a public-private partnership for financing capital projects;
    2. Report to legislative committees as specified in this section; and
    3. Submit public-private partnership agreements issued by it to the General Assembly for authorization as provided in subsection (8) of this section.
    1. The governing body of a postsecondary institution that manages its capital construction program under KRS 164A.580 shall report to the Capital Projects and Bond Oversight Committee staff as specified in this section. (10) (a) The governing body of a postsecondary institution that manages its capital construction program under KRS 164A.580 shall report to the Capital Projects and Bond Oversight Committee staff as specified in this section.
    2. Any provision of a public-private partnership agreement issued by a postsecondary institution which provides for a lease by or to the postsecondary institution shall be valid and enforceable if approved by the governing board of the institution.
    1. A person or business may submit an unsolicited proposal to a governmental body, which may receive the unsolicited proposal. (11) (a) A person or business may submit an unsolicited proposal to a governmental body, which may receive the unsolicited proposal.
    2. Within ninety (90) days of receiving an unsolicited proposal, a governmental body may elect to consider further action on the proposal, at which point the governmental body shall provide public notice of the proposal. Discussion of the project shall not be deemed a solicitation of the project or its concepts after public notice is given. The public notice shall:
      1. Provide specific information regarding the proposed nature, timing, and scope of the unsolicited proposal, except that trade secrets, financial records, or other records of the person or business making the proposal shall not be posted unless otherwise agreed to by the governmental body and the person or business; and
      2. Provide for a notice period for the submission of competing proposals as follows:
        1. Unsolicited proposals valued below five million dollars ($5,000,000) shall be posted for thirty (30) days;
        2. Unsolicited proposals valued between five million dollars ($5,000,000) and twenty-five million dollars ($25,000,000) shall be posted for sixty (60) days; and
        3. Unsolicited proposals valued over twenty-five million dollars ($25,000,000) shall be posted for ninety (90) days.
    3. Upon the end of the notice period provided under paragraph (b)2. of this subsection, the governmental body may consider the unsolicited proposal and any competing proposals received. If the governmental body determines it is in the best interest of the Commonwealth to implement some or all of the concepts contained within the unsolicited proposal or competing proposals received by it, the governmental body may begin an open, competitive procurement process to do so pursuant to this chapter.
    4. An unsolicited proposal shall be deemed rejected if no written response is received from the governmental body within ninety (90) days of submission, during which time the governmental body has not taken any action on the proposal under paragraph (b) of this subsection.

HISTORY: 2016 ch. 67, § 3, effective April 8, 2016; 2017 ch. 132, § 5, effective March 27, 2017; 2018 ch. 92, § 1, effective July 14, 2018; 2020 ch. 91, § 43, effective April 15, 2020.

Legislative Research Commission Note.

(4/8/2016). 2016 Ky. Acts ch. 67, sec. 16 provided that the amendments made to KRS 45A.030 and 45A.075 and the creation of this statute in that Act shall apply only to a project for which the procurement process is initiated on or after the effective date of that Act, which was April 8, 2016, either through the initial invitation for bids, request for proposals, or otherwise.

45A.077. Public-private partnership delivery method of awarding state contracts for capital construction projects. [Effective July 14, 2022]

  1. A public-private partnership delivery method may be utilized as provided in this section and administrative regulations promulgated thereunder. State contracts using this method shall be awarded by competitive negotiation.
  2. A contracting body utilizing a public-private partnership shall continue to be responsible for oversight of any function that is delegated to or otherwise performed by a private partner.
  3. On or before December 31, 2016, the secretary of the Finance and Administration Cabinet shall promulgate administrative regulations setting forth criteria to be used in determining when a public-private partnership is to be used for a particular project. The administrative regulations shall reflect the intent of the General Assembly to promote and encourage the use of public-private partnerships in the Commonwealth. The secretary shall consult with design-builders, construction managers, contractors, design professionals including engineers and architects, and other appropriate professionals during the development of these administrative regulations.
  4. A request for proposal for a project utilizing a public-private partnership shall include at a minimum:
    1. The parameters of the proposed public-private partnership agreement;
    2. The duties and responsibilities to be performed by the private partner or partners;
    3. The methods of oversight to be employed by the contracting body;
    4. The duties and responsibilities that are to be performed by the contracting body and any other partners to the contract;
    5. The evaluation factors and the relative weight of each to be used in the scoring of awards;
    6. Plans for financing and operating the qualifying project and the revenues, service payments, bond financings, and appropriations of public funds needed for the qualifying project;
    7. Comprehensive documentation of the experience, capabilities, capitalization and financial condition, and other relevant qualifications of the private entity;
    8. The ability of a private partner or partners to quickly respond to the needs presented in the request for proposal, and the importance of economic development opportunities represented by the qualifying project. In evaluating proposals, preference shall be given to a plan that includes the involvement of small businesses as subcontractors, to the extent that small businesses can provide services in a competitive manner, unless any preference interferes with the qualification for federal or other funds; and
    9. Other information required by the contracting body or the cabinet to evaluate the proposals submitted by respondents and the overall proposed public-private partnership.
  5. A private entity desiring to be a private partner shall demonstrate to the satisfaction of the contracting body or the cabinet that it is capable of performing any duty, responsibility, or function it may be authorized or directed to perform as part of the public-private partnership agreement.
  6. When a request for proposal for a project utilizing a public-private partnership is issued for a capital project, the contracting body shall transmit a copy of the request for proposal to the Capital Projects and Bond Oversight Committee staff, clearly identifying to the staff that a public-private partnership is being utilized. The contracting body shall submit the final contract to the Capital Projects and Bond Oversight Committee under KRS 45.763 before work may be begun on the project.
  7. A request for proposal or other solicitation may be canceled, or all proposals may be rejected, if it is determined in writing that the action is taken in the best interest of the Commonwealth and approved by the purchasing officer.
    1. Beginning July 1, 2024, in the case of any public-private partnership for a capital project with an aggregate value of twenty-five million dollars ($25,000,000) or more, the project shall be authorized by the General Assembly, by inclusion in the branch budget bill or by any other means specified by the General Assembly, explicitly identifying and authorizing the utilization of a public-private partnership delivery method for the applicable capital project. The authorization of a capital project required by this subsection is in addition to any other statutorily required authorization for a capital project. (8) (a) Beginning July 1, 2024, in the case of any public-private partnership for a capital project with an aggregate value of twenty-five million dollars ($25,000,000) or more, the project shall be authorized by the General Assembly, by inclusion in the branch budget bill or by any other means specified by the General Assembly, explicitly identifying and authorizing the utilization of a public-private partnership delivery method for the applicable capital project. The authorization of a capital project required by this subsection is in addition to any other statutorily required authorization for a capital project.
    2. The provisions of this subsection shall not apply to any public-private partnership project made public through a request for proposal or a public notice of an unsolicited proposal issued prior to July 1, 2024.
  8. Any corporation as described 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 shall:
    1. Adhere to the administrative regulations promulgated under this section when utilizing a public-private partnership for financing capital projects;
    2. Report to legislative committees as specified in this section; and
    3. Submit public-private partnership agreements issued by it to the General Assembly for authorization as provided in subsection (8) of this section.
    1. The governing body of a postsecondary institution that manages its capital construction program under KRS 164A.580 shall report to the Capital Projects and Bond Oversight Committee staff as specified in this section. (10) (a) The governing body of a postsecondary institution that manages its capital construction program under KRS 164A.580 shall report to the Capital Projects and Bond Oversight Committee staff as specified in this section.
    2. Any provision of a public-private partnership agreement issued by a postsecondary institution which provides for a lease by or to the postsecondary institution shall be valid and enforceable if approved by the governing board of the institution.
    1. A person or business may submit an unsolicited proposal to a governmental body, which may receive the unsolicited proposal. (11) (a) A person or business may submit an unsolicited proposal to a governmental body, which may receive the unsolicited proposal.
    2. Within ninety (90) days of receiving an unsolicited proposal, a governmental body may elect to consider further action on the proposal, at which point the governmental body shall provide public notice of the proposal. Discussion of the project shall not be deemed a solicitation of the project or its concepts after public notice is given. The public notice shall:
      1. Provide specific information regarding the proposed nature, timing, and scope of the unsolicited proposal, except that trade secrets, financial records, or other records of the person or business making the proposal shall not be posted unless otherwise agreed to by the governmental body and the person or business; and
      2. Provide for a notice period for the submission of competing proposals as follows:
        1. Unsolicited proposals valued below five million dollars ($5,000,000) shall be posted for thirty (30) days;
        2. Unsolicited proposals valued between five million dollars ($5,000,000) and twenty-five million dollars ($25,000,000) shall be posted for sixty (60) days; and
        3. Unsolicited proposals valued over twenty-five million dollars ($25,000,000) shall be posted for ninety (90) days.
    3. Upon the end of the notice period provided under paragraph (b)2. of this subsection, the governmental body may consider the unsolicited proposal and any competing proposals received. If the governmental body determines it is in the best interest of the Commonwealth to implement some or all of the concepts contained within the unsolicited proposal or competing proposals received by it, the governmental body may begin an open, competitive procurement process to do so pursuant to this chapter.
    4. An unsolicited proposal shall be deemed rejected if no written response is received from the governmental body within ninety (90) days of submission, during which time the governmental body has not taken any action on the proposal under paragraph (b) of this subsection.

HISTORY: 2016 ch. 67, § 3, effective April 8, 2016; 2017 ch. 132, § 5, effective March 27, 2017; 2018 ch. 92, § 1, effective July 14, 2018; 2020 ch. 91, § 43, effective April 15, 2020; 2022 ch. 212, § 27, effective July 14, 2022.

45A.080. Competitive sealed bidding.

  1. Contracts exceeding the amount provided by KRS 45A.100 shall be awarded by competitive sealed bidding, which may include the use of a reverse auction, unless it is determined in writing that this method is not practicable. Factors to be considered in determining whether competitive sealed bidding is not practicable shall include:
    1. Whether specifications can be prepared that permit award on the basis of best value; and
    2. The available sources, the time and place of performance, and other relevant circumstances as are appropriate for the use of competitive sealed bidding.
  2. The invitation for bids shall state that awards shall be made on the basis of best value. In any contract which is awarded under an invitation to bid which requires delivery by a specified date and imposes a penalty for late delivery, if the delivery is late, the contractor shall be given the opportunity to present evidence that the cause of the delay was beyond his control. If it is the opinion of the purchasing officer that there is sufficient justification for delayed delivery, the purchasing officer may adjust or waive any penalty that is provided for in the contract.
  3. Adequate public notice of the invitation for bids and any reverse auction shall be given a sufficient time prior to the date set forth for the opening of bids or beginning of the reverse auction. The notice may include posting on the Internet or publication in a newspaper or newspapers of general circulation in the state as determined by the secretary of the Finance and Administration Cabinet not less than seven (7) days before the date set for the opening of the bids and any reverse auction. The provisions of this subsection shall also apply to price contracts and purchase contracts of state institutions of higher education.
  4. Bids shall be opened publicly or entered through a reverse auction at the time and place designated in the invitation for bids. At the time the bids are opened, or the reverse auction has ended, the purchasing agency shall announce the agency’s engineer’s estimate, if applicable, and make it a part of the agency records pertaining to the letting of any contract for which bids were received. Each written or reverse auction bid, together with the name of the bidder and the agency’s engineer’s estimate, shall be recorded and be open to public inspection. Electronic bid opening and posting of the required information for public viewing shall satisfy the requirements of this subsection.
  5. The contract shall be awarded by written notice to the responsive and responsible bidder whose bid offers the best value.
  6. Correction or withdrawal of written or reverse auction bids shall be allowed only to the extent permitted by regulations issued by the secretary.

History. Enact. Acts 1978, ch. 110, § 17, effective January 1, 1979; 1979 (Ex. Sess.), ch. 9, § 1, effective February 10, 1979; 1982, ch. 282, § 1, effective July 15, 1982; 1994, ch. 278, § 1, effective July 15, 1994; 1996, ch. 60, § 2, effective July 15, 1996; 1997 (1st Ex. Sess.), ch. 4, § 27, effective May 30, 1997; 1998, ch. 120, § 10, effective July 15, 1998; 2000, ch. 509, § 1, effective July 14, 2000; 2010, ch. 63, § 3, effective July 15, 2010.

Legislative Research Commission Note.

(10/19/2004). 2004 (1st Extra. Sess.) Ky. Acts ch. 1, sec. 2, provides, “Notwithstanding KRS 18A.225 , 45A.022 , 45A.080 , 45A.085 , 45A.090 , 45A.225 to 45A.290 , or any other provision of KRS Chapter 45A to the contrary, retroactive to August 12, 2004, the Finance and Administration Cabinet shall implement the provisions of this Act by amending the previously negotiated contracts for public employee health insurance. The secretary of the Finance and Administration Cabinet shall provide an actuarial certification that the self-insured contract amounts are actuarially sound. Any contracts entered into or modified pursuant to this section shall be forwarded to the Legislative Research Commission.”

NOTES TO DECISIONS

1.Purpose.

The purpose of providing for manner of letting contracts for materials, supplies and equipment was to encourage competitive bidding so that governmental supplies might be secured at the most favorable prices. The Legislature had in mind the welfare of the public and not that of the bidder. R. G. Wilmott Coal Co. v. State Purchasing Com., 246 Ky. 115 , 54 S.W.2d 634, 1932 Ky. LEXIS 718 ( Ky. 1932 ) (decided under prior law).

2.Bids.

Quality of material was a factor in determining the best bid when standard of quality was not specified. Execution of bidder’s bond did not dispense with consideration of probability of prompt, efficient and faithful performance of the contract. R. G. Wilmott Coal Co. v. State Purchasing Com., 246 Ky. 115 , 54 S.W.2d 634, 1932 Ky. LEXIS 718 ( Ky. 1932 ) (decided under prior law).

The courts would intervene if the discretion of the commission (now department) regarding bids was exercised arbitrarily, dishonestly, or beyond its reasonable limits. R. G. Wilmott Coal Co. v. State Purchasing Com., 246 Ky. 115 , 54 S.W.2d 634, 1932 Ky. LEXIS 718 ( Ky. 1932 ) (decided under prior law).

3.— Low.

Letting contracts to the lowest and best bidder was mandatory. The purchasing commission (now department) had discretion to determine who was the lowest and best bidder. “Lowest and best bidder” was at least as comprehensive a term as “lowest responsible bidder,” which applied to the business judgment, capacity, skill, and responsibility, and of the bidder. R. G. Wilmott Coal Co. v. State Purchasing Com., 246 Ky. 115 , 54 S.W.2d 634, 1932 Ky. LEXIS 718 ( Ky. 1932 ) (decided under prior law).

The lowest bid might have been determined by monetary standards with the dollar as the unit. All else being equal, the lowest bid must have been accepted. R. G. Wilmott Coal Co. v. State Purchasing Com., 246 Ky. 115 , 54 S.W.2d 634, 1932 Ky. LEXIS 718 ( Ky. 1932 ) (decided under prior law).

4.— Procedure.

Mailing of specifications and invitations to bid to six of the seven automobile dealers in the county who were selected because they previously had registered with the division of purchases of the State Department of Finance (now Finance and Administration Cabinet) as being interested in the sale of automotive equipment to the state substantially complied with KRS 162.070 requiring a school board to advertise for bids on the purchase of supplies or equipment costing more than $250. Taylor v. Parker, 302 S.W.2d 125, 1957 Ky. LEXIS 180 ( Ky. 1957 ) (decided under prior law).

5.Negotiation.

Even if the KRS 45A.470(5) negotiation requirement is applicable to competitive sealed bids, the Cabinet correctly concluded that negotiations were not required because the losing bidder failed to offer the service at a price comparable to that offered by the winning bidder, and summary judgment for the Cabinet and the winning bidder in the corporation’s case challenging the contract award was correct. Cmty. Servs. Project, Inc. v. BAWAC Cleaning Servs., 226 S.W.3d 852, 2007 Ky. App. LEXIS 162 (Ky. Ct. App. 2007).

Cited:

Pendleton Bros. Vending, Inc. v. Commonwealth Finance & Admin. Cabinet, 758 S.W.2d 24, 1988 Ky. LEXIS 46 ( Ky. 1988 ); Yamaha Motor Mfg. Corp. of Am. v. Commonwealth, — S.W.3d —, 2005 Ky. App. LEXIS 239 (Ky. Ct. App. 2005); Laurel Constr. Co. v. Paintsville Util. Comm’n, 336 S.W.3d 903, 2010 Ky. App. LEXIS 40 (Ky. Ct. App. 2010).

Opinions of Attorney General.

Licensed dealers who do not hold a franchise may not be disqualified from participating as bidders solely because they are not franchised dealers if they can perform the contract and are otherwise reliable; lack of a franchise cannot be a disqualifying factor. OAG 79-255 .

A governmental unit has, in connection with competitive sealed bidding, one of two choices: (1) The invitation for bids shall be let on the basis of the lowest bid price; or (2) the invitation for bids shall be let on the basis of the lowest evaluated bid price, and only one basis can be used, not both, because the prospective bidders must be allowed to bid on the same thing and using the identical method. OAG 80-311 .

There is no statute making bids which have been opened on a public project exempt from the Open Records Law requirement; on the contrary, even without the Open Records Law, under subsection (4) of this section bidding documents are open to public inspection after the bids have been opened. OAG 80-327 .

The emergency clause of Acts 1982, ch. 282 related solely to § 3 of the act which amended KRS 45A.335 to exclude members of state boards and commissions from the term “officer or employe,” as used in the conflict of interest statute, KRS 45A.340(5); it not only did not relate to the other sections of the bill, which were separable, but it gave no reason to justify that an emergency existed with respect to these sections. In view of the fact that Ky. Const., § 55 requires an act to express in plain language what the emergency is in order for it to be effective, only § 3 became effective on April 2, 1982, upon the passage of the act and approval of the Governor, and the remaining sections of the act became effective as ordinary legislation on July 15, 1982. OAG 82-308 .

When enacting this section requiring that bids be open to public inspection, the legislature did not contemplate RFP (request for proposal) bids, only bids on advertised specifications. OAG 83-256 , 83-302.

If the Governor owned a controlling interest in a bookstore, any possible sales or agreements by the bookstore to or with any Commonwealth agency would have to be on a competitive bidding basis as required by subsection (5) of KRS 45A.340 and this section. OAG 87-65 .

Where the Governor owned a controlling interest in a hotel, and the state was the primary user of the hotel, the use of the facilities by Commonwealth employees and agencies would exceed $25 each and would not involve competitive bidding; therefore, these transactions would involve an illegal conflict of interest in violation of subsection (5) of KRS 45A.340 and this section. OAG 87-65 .

Competitive sealed bidding and competitive negotiation are two separate procurement processes that do not overlap; a public disclosure of bid documents associated with a competitive sealed bid cannot be delayed until a determination is made as to whether the contracting agency will move to competitive negotiation. OAG 98-11 .

If a decision is made to move from a competitive sealed bid procurement process to a competitive negotiation, the original sealed bids must be disclosed when they are opened and cannot remain closed until a contract is awarded or negotiations are canceled; the two processes are successive, and the competitive sealed bidding must end with the bids being disclosed so that the competitive negotiation may begin. OAG 98-11 .

A Labor Agreement between a local Board of Education and a Labor Union in a school construction project is not prohibited provided the terms of the labor agreement do not offend or violate the Kentucky Model Procurement Code (KRS Chapter 45A) or the public school construction statute found at KRS 162.070 . OAG 10-006 .

Research References and Practice Aids

Cross-References.

Schools, erection of new buildings and additions and repair, competitive bidding, KRS 162.070 .

45A.085. Competitive negotiation.

  1. When, under administrative regulations promulgated by the secretary or under KRS 45A.180 , the purchasing officer determines in writing that the use of competitive sealed bidding is not practicable, and except as provided in KRS 45A.095 and 45A.100 , a contract may be awarded by competitive negotiation, which may include the use of a reverse auction.
  2. Adequate public notice of the request for proposals and any reverse auction shall be given in the same manner and circumstances as provided in KRS 45A.080(3).
  3. Contracts other than contracts for projects utilizing an alternative project delivery method under KRS 45A.180 may be competitively negotiated when it is determined in writing by the purchasing officer that the bids received by competitive sealed bidding either are unreasonable as to all or part of the requirements, or were not independently reached in open competition, and for which each competitive bidder has been notified of the intention to negotiate and is given reasonable opportunity to negotiate.
  4. Contracts for projects utilizing an alternative project delivery method shall be processed in accordance with KRS 45A.180 .
  5. The request for proposals shall indicate the relative importance of price and other evaluation factors, and any reverse auction procedures.
  6. Award shall be made to the responsible and responsive offeror whose proposal is determined in writing to be the most advantageous to the Commonwealth, taking into consideration price and the evaluation factors set forth in the request for proposals and the reciprocal preference for resident bidders required under KRS 45A.494 .
  7. Written or oral discussions shall be conducted with all responsible offerors who submit proposals determined in writing to be reasonably susceptible of being selected for award. Discussions shall not disclose any information derived from proposals submitted by competing offerors. Discussions need not be conducted:
    1. With respect to prices, where the prices are fixed by law, reverse auction, or administrative regulation, except that consideration shall be given to competitive terms and conditions;
    2. Where time of delivery or performance will not permit discussions; or
    3. Where it can be clearly demonstrated and documented from the existence of adequate competition or prior experience with the particular supply, service, or construction item, that acceptance of an initial offer without discussion would result in fair and reasonable best value procurement, and the request for proposals notifies all offerors of the possibility that award may be made on the basis of the initial offers.

History. Enact. Acts 1978, ch. 110, § 18, effective January 1, 1979; 1979 (1st Ex. Sess.), ch. 9, § 2, effective February 10, 1979; 1997 (1st Ex. Sess.), ch. 4, § 28, effective May 30, 1997; 2003, ch. 98, § 5, effective June 24, 2003; 2010, ch. 63, § 4, effective July 15, 2010; 2010, ch. 162, § 8, effective July 15, 2010.

Legislative Research Commission Note.

(7/15/2010). This section was amended by 2010 Ky. Acts chs. 63 and 162, which do not appear to be in conflict and have been codified together.

(10/19/2004). 2004 (1st Extra. Sess.) Ky. Acts ch. 1, sec. 2, provides, “Notwithstanding KRS 18A.225 , 45A.022 , 45A.080 , 45A.085 , 45A.090 , 45A.225 to 45A.290 , or any other provision of KRS Chapter 45A to the contrary, retroactive to August 12, 2004, the Finance and Administration Cabinet shall implement the provisions of this Act by amending the previously negotiated contracts for public employee health insurance. The secretary of the Finance and Administration Cabinet shall provide an actuarial certification that the self-insured contract amounts are actuarially sound. Any contracts entered into or modified pursuant to this section shall be forwarded to the Legislative Research Commission.”

NOTES TO DECISIONS

Cited:

Pendleton Bros. Vending, Inc. v. Commonwealth Finance & Admin. Cabinet, 758 S.W.2d 24, 1988 Ky. LEXIS 46 ( Ky. 1988 ).

Opinions of Attorney General.

Subsection (6) (now subsection (7)) of this section not only prevents the disclosure of information derived from proposals submitted by competing offerors to other offerors, but to any person, including the media, until negotiations have been concluded by the final rejection of all proposals or the acceptance of a proposal and the awarding of a contract. OAG 85-68 .

Denial of a request to inspect records involved with an ongoing competitive negotiation process is correct under subsection (6) (now subsection (7)) of this section and KRS 61.878(1)(j). However, the public agency is required to make available for public inspection those records associated with the competitive negotiation process, which are not otherwise precluded from inspection, at the final conclusion of the process, i.e., the final rejection of all proposals or the acceptance of a proposal and the awarding of a contract. OAG 85-68 .

Competitive sealed bidding and competitive negotiation are two separate procurement processes that do not overlap; a public disclosure of bid documents associated with a competitive sealed bid cannot be delayed until a determination is made as to whether the contracting agency will move to competitive negotiation. OAG 98-11 .

If a decision is made to move from a competitive sealed bid procurement process to a competitive negotiation, the original sealed bids must be disclosed when they are opened and cannot remain closed until a contract is awarded or negotiations are canceled; the two processes are successive, and the competitive sealed bidding must end with the bids being disclosed so that the competitive negotiation may begin. OAG 98-11 .

45A.090. Negotiation after competitive sealed bidding when all bids exceed available funds.

  1. In the event that all bids submitted pursuant to competitive sealed bidding under KRS 45A.080 result in bid prices in excess of the funds available for the purchase, and the chief purchasing officer determines in writing:
    1. That there are no additional funds available from any source so as to permit an award to the responsive and responsible bidder whose bid offers the best value; and
    2. The best interest of the state will not permit the delay attendant to a resolicitation under revised specifications, or for revised quantities, under competitive sealed bidding as provided in KRS 45A.080 , then a negotiated award may be made as set forth in subsections (2) or (3) of this section.
  2. Where there is more than one (1) bidder, competitive negotiations pursuant to KRS 45A.085(3) shall be conducted with the three (3) (two (2) if there are only two (2)) bidders determined in writing to be the most responsive and responsible bidders, based on criteria contained in the bid invitation and the reciprocal preference for resident bidders under KRS 45A.494 . Such competitive negotiations shall be conducted under the following restrictions:
    1. If discussions pertaining to the revision of the specifications or quantities are held with any potential offeror, all other potential offerors shall be afforded an opportunity to take part in such discussions; and
    2. A request for proposals, based upon revised specifications or quantities, shall be issued as promptly as possible, shall provide for an expeditious response to the revised requirements, and shall be awarded upon the basis of best value.
  3. Where, after competitive sealed bidding, it is determined in writing that there is only one (1) responsive and responsible bidder, a noncompetitive negotiated award may be made with such bidder in accordance with KRS 45A.095 .

History. Enact. Acts 1978, ch. 110, § 19, effective January 1, 1979; 1997 (1st Ex. Sess.), ch. 4, § 29, effective May 30, 1997; 2003, ch. 98, § 6, effective June 24, 2003; 2010, ch. 162, § 9, effective July 15, 2010.

Legislative Research Commission Note.

(10/19/2004). 2004 (1st Extra. Sess.) Ky. Acts ch. 1, sec. 2, provides, “Notwithstanding KRS 18A.225 , 45A.022 , 45A.080 , 45A.085 , 45A.090 , 45A.225 to 45A.290 , or any other provision of KRS Chapter 45A to the contrary, retroactive to August 12, 2004, the Finance and Administration Cabinet shall implement the provisions of this Act by amending the previously negotiated contracts for public employee health insurance. The secretary of the Finance and Administration Cabinet shall provide an actuarial certification that the self-insured contract amounts are actuarially sound. Any contracts entered into or modified pursuant to this section shall be forwarded to the Legislative Research Commission.”

Opinions of Attorney General.

Competitive sealed bidding and competitive negotiation are two separate procurement processes that do not overlap; a public disclosure of bid documents associated with a competitive sealed bid cannot be delayed until a determination is made as to whether the contracting agency will move to competitive negotiation. OAG 98-11 .

If a decision is made to move from a competitive sealed bid procurement process to a competitive negotiation, the original sealed bids must be disclosed when they are opened and cannot remain closed until a contract is awarded or negotiations are canceled; the two processes are successive, and the competitive sealed bidding must end with the bids being disclosed so that the competitive negotiation may begin. OAG 98-11 .

45A.095. Definitions — Noncompetitive negotiation.

  1. For purposes of this section:
    1. “Emergency condition” means a situation which creates a threat or impending threat to public health, welfare, or safety such as may arise by reason of fires, floods, tornadoes, other natural or man-caused disasters, epidemics, riots, enemy attack, sabotage, explosion, power failure, energy shortages, transportation emergencies, equipment failures, state or federal legislative mandates, or similar events. The existence of the emergency condition creates an immediate and serious need for services, construction, or items of tangible personal property that cannot be met through normal procurement methods and the lack of which would seriously threaten the functioning of government, the preservation or protection of property, or the health or safety of any person; and
    2. “Sole source” means a situation in which there is only one (1) known capable supplier of a commodity or service, occasioned by the unique nature of the requirement, the supplier, or market conditions.
  2. A contract may be made by noncompetitive negotiation only:
    1. For sole source purchases;
    2. When competition is not feasible, as determined by the purchasing officer in writing prior to award, under administrative regulations promulgated by the secretary of the Finance and Administration Cabinet or the governing boards of universities operating under KRS Chapter 164A;
    3. When emergency conditions exist; or
    4. For sponsorships, naming rights, or other advertising or similar considerations for which competition is not feasible
  3. Insofar as it is practical, no fewer than three (3) suppliers shall be solicited to submit written or oral quotations whenever it is determined that competitive sealed bidding is not feasible. Award shall be made to the supplier offering the best value. The names of the suppliers submitting quotations and the date and amount of each quotation shall be placed in the procurement file and maintained as a public record.
  4. Competitive bids may not be required:
    1. For contractual services where no competition exists, such as telephone service, electrical energy, and other public utility services;
    2. Where rates are fixed by law or ordinance;
    3. For library books;
    4. For commercial items that are purchased for resale;
    5. For interests in real property;
    6. For visiting speakers, professors, expert witnesses, and performing artists;
    7. For personal service contracts executed pursuant to KRS 45A.690 to 45A.725 ; and
    8. For agricultural products in accordance with KRS 45A.645 .
  5. The chief procurement officer, the head of a using agency, or a person authorized in writing as the designee of either officer may make or authorize others to make emergency procurements when an emergency condition exists.
  6. The Finance and Administration Cabinet may negotiate directly for the purchase of contractual services, supplies, materials, or equipment in bona fide emergencies regardless of estimated costs. The existence of the emergency shall be fully explained, in writing, by the head of the agency for which the purchase is to be made. The explanation shall be approved by the secretary of the Finance and Administration Cabinet and shall include the name of the vendor receiving the contract along with any other price quotations and a written determination for selection of the vendor receiving the contract. This information shall be filed with the record of all such purchases and made available to the public. Where practical, standard specifications shall be followed in making emergency purchases. In any event, every effort should be made to effect a competitively established price for purchases made by the state.

HISTORY: Enact. Acts 1978, ch. 110, § 20, effective January 1, 1979; 1990, ch. 496, § 4, effective July 13, 1990; 1997 (1st Ex. Sess.), ch. 4, § 30, effective May 30, 1997; 2002, ch. 344, § 9, effective July 15, 2002; 2017 ch. 175, § 6, effective June 29, 2017.

Opinions of Attorney General.

If a local board of education adopts the provisions of the Model Procurement Code applicable to the state and also adopts a regulation similar to that which has been promulgated by the Department of Finance (now Finance and Administration Cabinet) relating to noncompetitive negotiations, then items for resale such as caps and gowns and graduation invitations may be handled through noncompetitive negotiation. OAG 80-108 .

Visiting speakers, professors, expert witnesses, and performing artists, are excluded from the provision of this section requiring personal service contracts under KRS 45A.690 to KRS 45A.725 , including KRS 45A.695(3). OAG 90-124 .

There is no indication of imminent harm to government, property, or lives where there are serious allegations regarding the financial affairs of Western Kentucky University. The emergency exception to the competitive bidding law does not apply. OAG 92-40 .

45A.096. Definitions for KRS 45A.096 and 45A.097.

As used in this section and KRS 45A.097 :

  1. “Business” has the same meaning as in KRS 11A.010 ;
  2. “Commemoration” means an object, such as a plaque or a sign, honoring a living person or an event, but does not include naming rights;
  3. “Does business with” or “doing business with” has the same meaning as in KRS 11A.010 ;
  4. “Donation” means a monetary or in-kind contribution given to a governmental body to further the governmental body’s mission with no tangible or intangible benefit to the donor. Name recognition in promotional materials or on a commemoration or memorial shall not constitute a tangible or intangible benefit to a donor;
  5. “Gift” means a payment, loan, subscription, advance, deposit of money, service, or anything of monetary value given to a governmental body to further a governmental body’s mission, where only the governmental body receives the tangible or intangible benefit, and no personal benefits accrue to any individual;
  6. “Memorial” means an object, such as a plaque or a sign, honoring a deceased person or an event, but does not include naming rights;
  7. “Naming rights” means a form of advertising sponsorship contracted by one (1) of the methods in KRS 45A.075(1) or (2) or 45A.077 , where a business or other entity purchases the right to name a building, structure, or any other physical property owned or operated by the Commonwealth for a defined period of time, for consideration. No naming rights shall be granted to alter the names of state parks, cemeteries, historical memorials, battlefields, state institutions of higher education, historical landmarks, the Capitol, the Capitol Annex, lakes, or rivers;
  8. “Person” means an individual or any legal entity through which business is conducted for profit;
  9. “Prohibited source” means any person, company, or organization that:
    1. Has a current contractual relationship with a governmental body;
    2. Conducts operations that are regulated by a governmental body;
    3. May be lobbying or attempting to influence matters of that governmental body;
    4. That has any interests that might be affected by the performance or nonperformance of official duties of the governmental body or the governmental body’s employees; or
    5. Is a person, company, or organization currently bidding on or proposing a contractual project with the governmental body under one (1) of the methods established in KRS 45A.075 or 45A.077 ;
  10. “Public benefit” means a benefit accrued to a governmental body of the Commonwealth to further the mission of or improve the governmental body or its infrastructure; and
  11. “Sponsorship” means an agreement for the receipt of cash or noncash value by a governmental body from a business or other entity in exchange for advertising or similar commercial considerations, including event sponsorships.

HISTORY: 2017 ch. 175, § 1, effective June 29, 2017.

45A.097. Governmental body’s acceptance of donation and gifts and consideration of establishing commemoration, memorial, naming rights, or sponsorships.

  1. A governmental body may accept donations and gifts from persons or businesses to further the governmental body’s mission or to benefit the Commonwealth. Donations and gifts shall not be from a prohibited source.
  2. In exchange for a donation or gift, a governmental body may consider an accompanying request for a commemoration or memorial, but all such requests involving state property shall be subject to approval by the secretary.
  3. Except as provided in KRS 45A.095(2)(d), naming rights of structures, buildings, or any other physical property owned or operated by the Commonwealth of Kentucky shall be competitively awarded pursuant to KRS Chapter 45A and subject to review and approval by the secretary. Naming rights shall not constitute an endorsement of a particular business by the Commonwealth.
  4. Notwithstanding KRS Chapter 11A, a governmental body may accept and solicit sponsorships from persons and businesses in the following manner:
    1. A sponsorship shall be for a defined period of time, a specific event, or a particular governmental body purchase or need;
    2. A governmental body seeking to solicit a sponsorship shall advertise the sponsorship opportunity on its Web site, newsletter, or other written media for a minimum of seven (7) calendar days. A sponsorship opportunity shall describe the number of potential sponsorships available, the relative importance of price and other evaluation factors used to ensure “best value” as defined in KRS 45A.070 , and the advertising or similar commercial considerations available from the Commonwealth for a particular sponsorship opportunity;
    3. The governmental body shall notify the Office of Material and Procurement Services in the Office of the Controller of the Finance and Administration Cabinet by providing copies of its sponsorship opportunity advertisements to the office. If the Office of Procurement Services approves or does not respond to the governmental body within one (1) business day of notification, the governmental body may proceed under this subsection;
    4. At the end of the advertising period for a sponsorship, all responses shall be evaluated in accordance with the evaluation factors set forth in the sponsorship opportunity;
    5. Written or oral discussions may be conducted with responsible bidders in accordance with KRS 45A.085(7);
    6. A sponsorship shall be awarded to the responsible bidder determined in writing to be most advantageous to the Commonwealth, taking into consideration the evaluation factors set forth in the sponsorship opportunity. All evaluation documentation, scoring, and summary conclusions of the award shall be made a part of the file or governmental body record;
    7. If insufficient eligible responses are received in response to the advertising of a sponsorship opportunity, and the purchasing officer determines in writing that further bidding would not likely result in additional responsive proposals being received by the Commonwealth, then noncompetitive negotiations with non-prohibited sources may be used to award contracts for the remaining number of sponsorships available;
    8. A sponsorship shall not constitute an endorsement of a particular business by the Commonwealth as the sole vendor of choice; and
    9. An entity that is a prohibited source may be considered for a sponsorship opportunity only if there is a written finding by the purchasing officer that:
      1. The entity is not lobbying or attempting to influence matters of the governmental body; and
      2. The sponsorship will provide:
        1. A public benefit to the Commonwealth; or
        2. Economic development or enhanced tourism in the Commonwealth.
  5. An entity that is a prohibited source due to its current contractual relationship with a governmental body may provide conferences or training events for the benefit of the governmental body only:
    1. When the entity does not have any interests that might be affected by the performance or nonperformance of the governmental body’s official duties; and
    2. The conference or training promotes safety, economic development, or tourism in the Commonwealth, or there is otherwise a public benefit to the Commonwealth.
  6. Governmental body employees whose official duties include acceptance or solicitation of donations, gifts, or sponsorships shall not be involved with:
    1. The solicitation or award of contracts by the governmental body; or
    2. The noncompetitive negotiation of naming rights of structures, buildings, or any physical property owned or operated by the Commonwealth.

HISTORY: 2017 ch. 175, § 2, effective June 29, 2017.

45A.100. Small purchases by state governmental bodies.

  1. Procurements may be made in accordance with small purchase administrative regulations promulgated by the secretary of the Finance and Administration Cabinet, pursuant to KRS Chapter 13A, as follows:
    1. Up to ten thousand dollars ($10,000) per project for construction and one thousand dollars ($1,000) for purchases by any state governmental body, except for those state administrative bodies specified in paragraph (b) of this subsection; and
    2. Up to forty thousand dollars ($40,000) per project for construction or purchases by the Finance and Administration Cabinet, state institutions of higher education, and the legislative branch of government.
  2. Procurement requirements shall not be artificially divided so as to constitute a small purchase under this section. Reverse auctions may be used for small purchase procurements. At least every two (2) years, the secretary shall review the prevailing costs of labor and materials and may make recommendations to the next regular session of the General Assembly for the revision of the then current maximum small purchase amount as justified by intervening changes in the cost of labor and materials.
  3. The secretary of the Finance and Administration Cabinet may grant to any state agency with a justifiable need a delegation of small purchasing authority which exceeds the agency’s small purchase limit provided in subsection (1) of this section. Delegations of small purchasing authority shall be granted or revoked by the secretary of the Finance and Administration Cabinet, in accordance with administrative regulations promulgated by the cabinet pursuant to KRS Chapter 13A. These administrative regulations shall establish, at a minimum, the criteria for granting and revoking delegations of small purchasing authority, including the requesting agency’s past compliance with purchasing regulations, the level of training of the agency’s purchasing staff, and the extent to which the agency utilizes the Kentucky Automated Purchasing System. The administrative regulations may permit the secretary of the Finance and Administration Cabinet to delegate small purchase procurements up to the maximum amount specified in subsection (1)(b) of this section.

History. Enact. Acts 1978, ch. 110, § 21, effective January 1, 1979; 1980, ch. 242, § 1, effective July 15, 1980; 1980, ch. 250, § 19, effective April 9, 1980; 1982, ch. 282, § 2, effective July 15, 1982; 1984, ch. 384, § 1, effective July 13, 1984; 1986, ch. 384, § 1, effective July 15, 1986; 1990, ch. 496, § 5, effective July 13, 1990; 1994, ch. 323, § 1, effective July 15, 1994; 1996, ch. 60, § 1, effective July 15, 1996; 2000, ch. 225, § 1, effective July 14, 2000; 2002, ch. 320, § 2, effective July 15, 2002; 2010, ch. 63, § 5, effective July 15, 2010.

Opinions of Attorney General.

The emergency clause of Acts 1982, ch. 282 related solely to § 3 of the act which amended KRS 45A.335 to exclude members of state boards and commissions from the term “officer or employe,” as used in the conflict of interest statute, KRS 45A.340(5); it not only did not relate to the other sections of the bill, which were separable, but it gave no reason to justify that an emergency existed with respect to these sections. In view of the fact that Ky. Const., § 55 requires an act to express in plain language what the emergency is in order for it to be effective, only § 3 became effective on April 2, 1982, upon the passage of the act and approval of the Governor, and the remaining sections of the act became effective as ordinary legislation on July 15, 1982. OAG 82-308 .

45A.105. Cancellation of invitations for bids or requests for proposals.

An invitation for bids, a request for proposals, or other solicitation may be canceled, or all bids or proposals may be rejected, if it is determined in writing that such action is taken in the best interest of the Commonwealth and approved by the purchasing officer.

History. Enact. Acts 1978, ch. 110, § 22, effective January 1, 1979.

45A.110. Responsibility of bidders and offerors — Determination — Right of nondisclosure.

  1. A written determination of responsibility of a bidder or offeror shall be made and it shall be made in accordance with administrative regulations promulgated by the secretary of the Finance and Administration Cabinet. A reasonable inquiry to determine the responsibility of a bidder or offeror may be conducted. The failure of a bidder or offeror to promptly supply information in connection with such an inquiry may be grounds for a determination of nonresponsibility with respect to such a bidder or offeror.
  2. A written determination of responsibility of a bidder or offeror shall not be made until the bidder or offeror provides the secretary of the Finance and Administration Cabinet with his sworn statement made under penalty of perjury that he has not knowingly violated any provision of the campaign finance laws of the Commonwealth and that the award of a contract to a bidder or offeror will not violate any provision of the campaign finance laws of the Commonwealth. “Knowingly” means, with respect to conduct or to a circumstance described by a statute defining an offense, that a person is aware or should have been aware that his conduct is of that nature or that the circumstance exists.
  3. Except as otherwise provided by law, information furnished by a bidder or offeror pursuant to this section may not be disclosed outside of the Division of State Purchasing or the purchasing agency administering the contract without prior written consent of the bidder or offeror.

History. Enact. Acts 1978, ch. 110, § 23, effective January 1, 1979; 1992, ch. 288, § 17, effective July 14, 1992.

45A.115. Prequalification of suppliers.

The secretary of the Finance and Administration Cabinet may provide for prequalification of suppliers as responsible prospective contractors for particular types of supplies, services, and construction. The secretary of the Finance and Administration Cabinet shall not prequalify a supplier as a responsible prospective contractor until the supplier provides the secretary with his sworn statement made under penalty of perjury that he has not knowingly violated any provision of the campaign finance laws of the Commonwealth and that the award of a contract to the supplier will not violate any provision of the campaign finance laws of the Commonwealth. “Knowingly” means, with respect to conduct or to a circumstance described by a statute defining an offense, that a person is aware or should have been aware that his conduct is of that nature or that the circumstance exists. Solicitation lists of potential contractors of such supplies, services, and construction shall include but shall not be limited to such prequalified suppliers. Prequalification shall not foreclose a written determination:

  1. Between the time of the bid opening or receipt of offers and the making of an award, that a prequalified supplier is not responsible; or
  2. That a supplier who is not prequalified at the time of bid opening or receipt of offers is responsible.

History. Enact. Acts 1978, ch. 110, § 24, effective January 1, 1979; 1992, ch. 288, § 18, effective July 14, 1992; 1998, ch. 120, § 11, effective July 15, 1998.

45A.120. Cost or pricing data — Price adjustment.

  1. A contractor shall submit cost or pricing data and shall certify that, to the best of his knowledge and belief, the cost or pricing data submitted was accurate, complete, and current as of a mutually determined specified date prior to the date of:
    1. The pricing of any negotiated contract where the total contract price is expected to exceed fifty thousand dollars ($50,000); or
    2. The pricing of any change order or contract modification which is expected to exceed twenty-five thousand dollars ($25,000), or such lesser amount in either instance as may be prescribed by the purchasing officer.
  2. Any contract, change, or modification thereto under which a certificate is required shall contain a provision that the price to the Commonwealth, including profit or fee, shall be adjusted to exclude any significant sums by which the purchasing officer finds that such price was increased because the contractor furnished cost or pricing data, as of the date agreed upon between the parties, which was inaccurate, incomplete, or not current.
  3. The requirements of this section need not be applied to contracts where the price negotiated is based on adequate price competition, established catalogue or market prices of commercial items sold in substantial quantities to the general public, prices set by law or regulation, or in exceptional cases where it is determined in writing by the chief purchasing officer that the requirements of this section may be waived, and the reasons for such waiver are stated in writing.

History. Enact. Acts 1978, ch. 110, § 25, effective January 1, 1979.

45A.125. Cost plus contract prohibited.

The cost plus a percentage of cost system of contracting shall not be used.

History. Enact. Acts 1978, ch. 110, § 26, effective January 1, 1979.

45A.130. Cost reimbursement contracts.

  1. No contract providing for the reimbursement of the contractor’s cost plus a fixed fee, hereinafter referred to as a cost reimbursement contract, may be made under KRS 45A.085 , 45A.090 or 45A.095 , unless it is determined in writing by the secretary of the Finance and Administration Cabinet that such contract is likely to be less costly to the Commonwealth than any other type of contract, or that it is impracticable to obtain supplies or services of the kind or quality required except under such a contract.
  2. Each contractor under a cost reimbursement type contract shall give notice, as provided for in the contract, before entering into:
    1. A cost reimbursement type subcontract; or
    2. Any other type of subcontract involving more than ten thousand dollars ($10,000), or ten percent (10%) of the estimated cost of the prime contract.
  3. All cost reimbursement type contracts shall contain a provision that only costs recognized as allowable, in accordance with cost principles set forth in regulations issued pursuant to KRS 45A.215 , will be reimbursable.

History. Enact. Acts 1978, ch. 110, § 27, effective January 1, 1979.

NOTES TO DECISIONS

1.Employer.

When a group of former state university maintenance workers were employed by a private company that managed the university’s facilities, the employee were not still employees of the university for purposes of participating in the Kentucky Employees Retirement System. The university was, thus, not required to continue making pension contributions on the employees’ behalf. Ky. Ret. Sys. v. W. Ky. Univ., 640 S.W.3d 62, 2021 Ky. App. LEXIS 93 (Ky. Ct. App. 2021).

45A.135. Types of contracts.

Subject to the limitations of KRS 45A.125 and 45A.130 , any type of contract which will promote the best interests of the Commonwealth may be used.

History. Enact. Acts 1978, ch. 110, § 28, effective January 1, 1979.

45A.140. Accounting system.

Except with respect to firm fixed price type contracts, no contract type shall be used unless it has been determined in writing that the proposed contractor’s accounting system will permit timely development of all necessary cost data in the form required by the specific contract type contemplated and that the contractor’s accounting system is adequate to allocate costs in accordance with generally accepted accounting principles.

History. Enact. Acts 1978, ch. 110, § 29, effective January 1, 1979.

45A.145. Multiyear contracts.

  1. Unless otherwise provided in the statute making appropriations therefor, multiyear contracts for supplies and services may be entered into for periods not extending beyond the end of the biennium in which the contract was made, if funds for the first fiscal year of the contemplated contract are available at the time of contracting. Payment and performance obligations for succeeding fiscal years shall be subject to the availability of funds therefor.
  2. Prior to the utilization of a contract as described in subsection (1) of this section, it shall be determined in writing by the chief purchasing officer:
    1. That estimated requirements cover the period of the contract and are reasonably firm and continuing; and
    2. That such contract will serve the best interests of the Commonwealth by encouraging effective competition or otherwise promoting economies in state procurement.
  3. When funds are not appropriated or otherwise made available to support continuation of performance in a subsequent year of a contract as described in subsection (1) of this section, the contract for such subsequent year may be canceled and the contractor shall be reimbursed for the reasonable value of any nonrecurring costs incurred but not amortized in the price of the supplies or services delivered under the contract. The cost of cancellation may be paid from:
    1. Appropriations currently available for performance of the contract; or
    2. Appropriations currently available for procurement of similar supplies or services and not otherwise obligated; or
    3. Appropriations made specifically for the payment of such cancellation costs.

History. Enact. Acts 1978, ch. 110, § 30, effective January 1, 1979.

NOTES TO DECISIONS

Cited in:

Commonwealth ex rel. Landrum v. Dolt, Thompson, Shepherd & Conway, P.S.C., 2019 Ky. App. LEXIS 9 (Ky. Ct. App. Jan. 25, 2019).

45A.150. Right to inspect — Right to audit.

  1. The Finance and Administration Cabinet may inspect the plant or place of business of a contractor or any subcontractor under any contract awarded or to be awarded by the Commonwealth.
  2. The Finance and Administration Cabinet may audit the books and records of any person who has submitted cost or pricing data under KRS 45A.120 at any time until the period of record retention as set forth in subsection (3) of this section shall have expired. The right to audit hereunder shall only extend to those books and records reasonably connected with cost or pricing data submitted under KRS 45A.120 , and such books and records shall be maintained by the contractor or subcontractor for the period specified in subsection (3) of this section.
  3. The Finance and Administration Cabinet shall be entitled to audit the books and records of a contractor or any subcontractor under any negotiated contract or subcontract other than a firm fixed-price type contract, provided, however, that this subsection shall not limit the right to audit as set forth in subsection (2) of this section. Such books and records shall be maintained by the contractor for a period of three (3) years from the date of final payment under the prime contract and by the subcontractor for a period of three (3) years from the date of final payment under the subcontract.

History. Enact. Acts 1978, ch. 110, § 31, effective January 1, 1979.

45A.155. Finality of determinations.

The determinations required by KRS 45A.085(1), (3), (6), and (7). 45A.090(1), (2) and (3); 45A.095 ; 45A.105 ; 45A.110(1); 45A.120(3); and 45A.130(1) shall be final and conclusive unless they are clearly erroneous, arbitrary, capricious, or contrary to law.

History. Enact. Acts 1978, ch. 110, § 32, effective January 1, 1979; 2003, ch. 98, § 22, effective June 24, 2003.

45A.160. Reporting of suspected collusion — Documents.

  1. When for any reason collusion is suspected among any bidders or offerors, a written notice of the facts giving rise to such suspicion shall be transmitted to the Attorney General.
  2. All documents involved in any procurement in which collusion is suspected shall be retained until the Attorney General gives notice that they may be released, and all such documents shall be made available to the Attorney General or his designee upon request.

History. Enact. Acts 1978, ch. 110, § 33, effective January 1, 1979.

45A.165. Report of contracts made under KRS 45A.095.

  1. A report shall be compiled annually by the chief purchasing officer, within ninety (90) days following the close of the fiscal year, of contracts made under KRS 45A.095 during that preceding fiscal year. The report shall:
    1. Name each contractor;
    2. State the amount and type of each contract;
    3. Describe the supplies, services, or construction purchased by each contract; and
    4. Include as attachments copies of all determinations and findings required to be made by provisions of this code and implementing regulations.
  2. Reports required under subsection (1) of this section shall be retained for a period of five (5) years and shall be made available to the General Assembly and the public upon request.

History. Enact. Acts 1978, ch. 110, § 34, effective January 1, 1979.

45A.170. Specifications — Items considered equal may be furnished.

  1. The Finance and Administration Cabinet shall have responsibility for issuing and maintaining all standard specifications for supplies, services, and construction required by the Commonwealth. Among its duties, it shall, to the greatest extent practicable:
    1. Prepare and issue standard specifications for supplies, services, and construction commonly required by the Commonwealth;
    2. Revise all standard specifications to conform to all technical and scientific advances pertaining to the supplies, services, and construction described in those specifications and to reflect changes in the Commonwealth’s requirements;
    3. Establish guidelines for drafting specifications; and
    4. Ensure that every invitation for bids or request for proposals shall provide that an item equal to that named or described in the specifications may be furnished. The specifications may identify a sole brand in cases where, in the written opinion of the chief procurement officer, documented unique and valid conditions require compatibility, continuity, or conformity with established standards. An item shall be considered equal to the item named or described if, in the opinion of the owner and the design professional responsible for the specifications:
      1. It is at least equal in quality, durability, strength, design, and other criteria deemed appropriate;
      2. It will perform at least equally the function imposed by the general design for the public work being contracted for or the material being purchased; and
      3. It conforms substantially to the detailed requirements for the item in the specifications.
  2. All specifications shall be drafted so as to maximize, to the extent practicable, competition in fulfillment of the Commonwealth’s requirements.

History. Enact. Acts 1978, ch. 110, § 35, effective January 1, 1979; 2008, ch. 47, § 2, effective July 15, 2008.

45A.175. Definitions of terms used in KRS 45A.170 to 45A.205. [Repealed.]

Compiler’s Notes.

This section (Enact. Acts 1978, ch. 110, § 35A, effective January 1, 1979) was repealed by Acts 1992, ch. 55, § 12, effective July 14, 1992.

45A.180. Selection of method of construction contracting management.

  1. The secretary of the Finance and Administration Cabinet shall promulgate administrative regulations by October 15, 2003, providing for as many alternative methods of management of construction contracting as he or she may determine to be feasible; setting forth criteria to be used in determining which method of management of construction is to be used for a particular project; establishing a model process parallel to the selection committee procedures established in 45A.810 for the procurement of alternative project services of “construction management-at-risk” and “design-build,” and for a “construction manager-general contractor” and a “construction manager-agency;” and providing that the chief purchasing officer shall execute and include in the contract file a written statement setting forth the facts recommending that a particular method of management of construction contracting be used. The administrative regulations shall include the establishment of:
    1. The relative weighing between qualifications and price, including the reciprocal preference for resident bidders required under KRS 45A.494 ; and
    2. The level of stipend, if any, available for the various types of projects.
  2. When a request for proposal for a project utilizing an alternative project delivery method is issued, the contracting body shall transmit a copy of the request for proposal to the Capital Projects and Bond Oversight Committee staff.
  3. Upon issuance of the contract for a project utilizing an alternative project delivery method, the contracting body shall submit the contract to the Government Contract Review Committee for review in accordance with KRS 45A.690 to 45A.725 . The contracting body shall insure the contract clearly identifies to the committee that an alternative project delivery method is being utilized. Upon disapproval of or objection to the contract by the committee, the contracting body shall determine whether the contract shall be revised to comply with the objections of the committee, be canceled, or remain in effect. Subsequent contract amendments relating to change orders shall not be required to be submitted to the Government Contract Review Committee.
  4. A request for proposal for a project utilizing an alternative project delivery method under this section shall specifically state the evaluation factors and the relative weight of each to be used in the scoring of awards.
  5. Any governing body of a postsecondary institution that manages its capital construction program under KRS 164A.580 shall adhere to the regulations promulgated under this section when utilizing an alternative project delivery method for capital projects, and shall report to legislative committees as specified in this section.
  6. Any corporation as described 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 shall adhere to the regulations promulgated under this section when utilizing an alternative project delivery method for capital projects, and shall report to legislative committees as specified in this section.

HISTORY: Enact. Acts 1978, ch. 110, § 36, effective January 1, 1979; 2003, ch. 98, § 7, effective June 24, 2003; 2010, ch. 162, § 10, effective July 15, 2010; 2015 ch. 105, § 10, effective June 24, 2015.

45A.181. Requirements for request for proposal when capital project is to be constructed utilizing the design-build construction method.

When a capital project is to be constructed utilizing the design-build construction method in accordance with KRS 45A.180 , the percentage of scoring to be attributed to the guaranteed maximum price shall be stated in the request for proposal. A request for proposal may allow for the payment of stipends for the technical proposal phase provided that the amount of the stipends and the terms under which stipends are to be paid are stated in the request for proposal.

History. Enact. Acts 2003, ch. 98, § 8, effective June 24, 2003.

45A.182. Selection committee procedures to apply when capital project is to be constructed utilizing the design-build method — Cancellation or rejection of requests or proposals.

  1. When a capital project is to be constructed utilizing the design-build method in accordance with KRS 45A.180 , a process parallel to the selection committee procedures established in KRS 45A.810 shall apply when procuring a design-build team and shall incorporate the following:
    1. The evaluation process may include a multiple phased proposal that is based on qualifications, experience, technical requirements, guaranteed maximum price, and other criteria as set forth in the request for proposal. The guaranteed maximum price component shall be submitted by the offeror independently of other documents and shall be held by the executive director of the Office of Facility Development and Efficiency.
    2. Each evaluator shall independently score each phase and indicate a total score for all evaluation factors as set forth in the request for proposal.
    3. Final phase proposals from the offerors on the short list shall be evaluated and scored by the evaluation committee members who shall not have knowledge of the guaranteed maximum price component. Each evaluator shall independently score the final phase proposals and indicate a total score. A total average score shall be calculated for each offeror. Then each offeror’s respective score for the guaranteed maximum price and any reciprocal preference for resident bidders required under KRS 45A.494 shall be added. The offeror with the highest point total in the final phase shall receive the contract award unless the guaranteed maximum price proposal is in excess of the authorized budget. If two (2) or more of the offerors achieve the same highest point total at the end of the final phase scoring, the purchasing officer shall request best-and-final proposals from each offeror.
    4. If the guaranteed maximum price of the offeror with the highest point total in the final phase is greater than the amount of funds identified in the request for proposal, then competitive negotiations may be conducted with the offerors under the following restrictions:
      1. If discussion pertaining to the revision of the specifications or quantities are held, the offerors shall be afforded an opportunity to take part in such discussions.
      2. Written revisions of the specifications shall be made available to each of the offerors and shall provide for an expeditious response.
      3. Information derived from revised maximum guaranteed price proposals shall not be disclosed to competing offerors.
  2. A request for proposal or other solicitation may be canceled, or all proposals may be rejected, if it is determined in writing that such action is taken in the best interest of the Commonwealth and approved by the purchasing officer.

History. Enact. Acts 2003, ch. 98, § 10, effective June 24, 2003; 2005, ch. 85, § 73, effective June 20, 2005; 2009, ch. 12, § 28, effective June 25, 2009; 2010, ch. 162, § 11, effective July 15, 2010.

45A.183. Selection committee procedures to apply when capital project is to be constructed using the construction management-at-risk method — Competitive process consistent with code to apply when construction project is to be constructed using the construction manager-general contractor method — Administrative regulations.

  1. When a capital project is to be constructed using the construction management-at-risk method, a process parallel to the selection committee procedures established in KRS 45A.810 shall apply when procuring a construction management-at-risk firm and regulations promulgated in accordance with KRS 45A.180 shall apply that set forth requirements for:
    1. Description of the bond, insurance, and other security provisions that apply to a project;
    2. Description of appropriate contract clauses and fiscal responsibility requirements that apply to each project; and
    3. Restrictions relating to conflicts of interest, including a provision that a construction management-at-risk entity shall be eligible to become an offeror of goods or services on a project it manages only when a subcontractor fails to perform and upon prior approval by the contracting body.
    1. When a construction project is to be constructed using the construction manager-general contractor method, a competitive process consistent with this code established by administrative regulations promulgated under KRS 45A.180 shall apply. (2) (a) When a construction project is to be constructed using the construction manager-general contractor method, a competitive process consistent with this code established by administrative regulations promulgated under KRS 45A.180 shall apply.
    2. The procurement process shall set forth the requirements for:
      1. Description of the bond, insurance, and other security provisions that apply to the project;
      2. Description of appropriate contract clauses and fiscal responsibility requirements that apply to the project; and
      3. Restrictions relating to conflicts of interest, including a provision that a construction manager-general contractor shall be eligible to become an offeror of goods or services on a project it manages only when a subcontractor fails to perform and upon prior approval by the contracting body.
    3. The selection of the construction manager-general contractor shall be based on:
      1. Qualifications; and
      2. Price, including preconstruction consulting services, overhead, and profit.
    4. Prior to the construction phase, the construction manager-general contractor shall competitively bid the subcontracts by public notice and award each subcontract to the lowest responsive and responsible bidder.
    5. The final construction cost and completion date for the project shall be established by change order after the construction manager-general contractor enters into all applicable subcontracts.

HISTORY: Enact. Acts 2003, ch. 98, § 11, effective June 24, 2003; 2015 ch. 105, § 11, effective June 24, 2015.

45A.184. Selection committee procedures to apply when procuring services of construction manager-agency for a fee.

The selection committee procedures established in KRS 45A.180 shall apply when procuring services of a construction manager-agency for a fee if the fee amount exceeds fifty thousand dollars ($50,000).

History. Enact. Acts 2003, ch. 98, § 12, effective June 24, 2003.

45A.185. Bid bonds.

  1. Bidder security shall be required for all competitive sealed bidding for construction contracts when the price is estimated by the Commonwealth to exceed forty thousand dollars ($40,000). Bidder’s security shall be a bond provided by a surety company authorized to do business in this Commonwealth, or the equivalent in cash, in a form satisfactory to the Commonwealth. Nothing herein prevents the requirement of such bonds on construction contracts under forty thousand dollars ($40,000) when the circumstances warrant.
  2. Bidder’s security shall be in an amount equal to at least five percent (5%) of the amount of the bid.
  3. When the invitation for bids requires that bidder security be provided, noncompliance requires that the bid be rejected, provided, however, that the secretary of the Finance and Administration Cabinet may set forth by regulation exceptions to this requirement in the event of substantial compliance.
  4. After the bids are opened, they shall be irrevocable for the period specified in the invitation for bids, provided that, if a bidder is permitted to withdraw his bid before award because of a mistake in the bid as allowed by law or regulation, no action shall be had against the bidder or the bidder’s security.

History. Enact. Acts 1978, ch. 110, § 37, effective January 1, 1979; 2005, ch. 85, § 70, effective June 20, 2005.

45A.187. Limitations on use of reverse auction process.

The reverse auction process shall not be used to procure architectural, engineering, or engineering-related services as described in KRS 45A.730 ; underwriter, bond counsel, or financial advisors as described in KRS 45A.850 ; or contracts for construction as described in KRS 45A.030 which are required to be bonded as described in KRS 45A.185 and 45A.190 or those projects which would require the preparation of stamped drawings.

History. Enact. Acts 2005, ch. 85, § 71, effective June 20, 2005.

45A.190. Performance bond and payment bond — Recommendations on whether performance bond should be required — Audit of contract performance — Release from performance bond.

  1. As used in this section, “agency contract administrator” means the state agency employee responsible for the administration of a contract.
  2. When a construction contract is awarded in an amount in excess of forty thousand dollars ($40,000), the following bonds shall be furnished to the Commonwealth, and shall be binding on the parties upon the award of the contract:
    1. A performance bond satisfactory to the Commonwealth executed by a surety company authorized to do business in this Commonwealth, or otherwise supplied, satisfactory to the Commonwealth, in an amount equal to one hundred percent (100%) of the contract price as it may be increased; and
    2. A payment bond satisfactory to the Commonwealth executed by a surety company authorized to do business in the Commonwealth, or otherwise supplied, satisfactory to the Commonwealth, for the protection of all persons supplying labor and material to the contractor or his subcontractors, for the performance of the work provided for in the contract. The bond shall be in an amount equal to one hundred percent (100%) of the original contract price.
  3. When any contract in an amount in excess of forty thousand dollars ($40,000) for commodities, supplies, equipment, or services of any kind, or when a contract for construction services costing forty thousand dollars ($40,000) or less is proposed for presentation to vendors or contractors, the agency contract administrator shall evaluate whether a performance bond should be required in the procurement document, and make his recommendation to the purchasing agency. The agency contract administrator shall note the reason that a performance bond is or is not recommended and his notation shall be a part of the permanent record relating to the contract. If a performance bond is required, the requirement shall be included in the invitation to bid, request for proposal, or other procurement document. The agency contract administrator shall make audits of the performance of contracts upon completion of one-third (1/3) of the contract and upon completion of two-thirds (2/3) of the contract. For contracts taking longer than one (1) year to complete, audits of performance shall be conducted at least annually. Before a vendor is released from a performance bond, the agency contract administrator shall review the audits of performance, make a final performance review, and promptly determine whether, in his or her opinion, the vendor has fully complied with the terms of the contract. The opinion of the agency contract administrator shall be made in writing or electronically, set forth the reasons for his or her opinion regarding compliance or noncompliance, and be signed by the agency contract administrator. This opinion may have an electronic signature. The using agency head shall, after consideration of the performance audits, the final performance review, and the opinion of the agency contract administrator regarding compliance or noncompliance, determine whether to recommend to the purchasing agency that the performance bond be released or whether a claim should be made against the performance bond. This determination of the using agency head shall be in writing, signed by the using agency head, and forwarded to the purchasing agency. This determination may have an electronic signature and be transmitted electronically. If the recommendation of the using agency is not followed by the purchasing agency, the purchasing agency shall place a statement in the file explaining why it is not followed.
  4. Nothing in this section shall be construed to limit the authority of the Commonwealth to require a performance bond or other security in addition to those bonds, or in circumstances other than specified in subsection (2) or (3) of this section.

History. Enact. Acts 1978, ch. 110, § 38, effective January 1, 1979; 1998, ch. 324, § 1, effective July 15, 1998; 2005, ch. 85, § 72, effective June 20, 2005.

NOTES TO DECISIONS

1.Subcontractors and Materialmen.

Where a window distributor was obligated only to supply for a construction project, a specific manufacturer’s windows, and where a general contractor did all on-site work related to the windows, both the window manufacturer and the distributor were deemed materialmen and not subcontractors. Safeco Ins. Co. v. W.B. Browning Constr. Co., 886 F.2d 807, 1989 U.S. App. LEXIS 14757 (6th Cir. Ky. 1989 ).

2.— Right to Claim Lien.

A materialman who supplies goods to another materialman, who in turn passes them along to the general contractor, is not entitled to claim a lien against the property to which those materials were delivered. Safeco Ins. Co. v. W.B. Browning Constr. Co., 886 F.2d 807, 1989 U.S. App. LEXIS 14757 (6th Cir. Ky. 1989 ).

3.Attorney Fees.

There was no abuse of discretion in the trial court’s determination of attorney fees and costs because the construction contract and the performance bond, which incorporated the contract, provided for the award and did not limit the amount of attorney fees. While the penal amount of the bond capped the liability at the penal amount only for damages attributable to defective construction by the general contractor, there was additional liability for the full amount of attorney fees and costs awarded to the obligee. Arete Ventures, Inc. v. Univ. of Kentucky, 619 S.W.3d 906, 2020 Ky. App. LEXIS 87 (Ky. Ct. App. 2020).

Cited:

Acuity, A Mutual Ins. Co. v. Planters Bank, Inc., 362 F. Supp. 2d 885, 2005 U.S. Dist. LEXIS 5293 ( Ky. 2005 ).

45A.195. Bond forms.

  1. The secretary of the Finance and Administration Cabinet shall promulgate by regulation the form of the bonds required by KRS 45A.180 to 45A.200 .
  2. The purchasing agency shall furnish a certified copy of a bond to any person who requests a copy and pays a reasonable fee for the copy. The copy shall be prima facie evidence of the contents, execution, and delivery of the original.

History. Enact. Acts 1978, ch. 110, § 39, effective January 1, 1979; 1992, ch. 55, § 9, effective July 14, 1992.

45A.200. Contract adjustment clauses — Termination clause.

  1. For all construction contracts expected to exceed fifty thousand dollars ($50,000) in price, the secretary of the Finance and Administration Cabinet shall specify clauses providing for adjustments to contract terms and conditions where there has been:
    1. A unilaterally ordered change by the Commonwealth; or
    2. A site condition differing from that indicated in the contract except for turnkey contracts or negotiated contracts when appropriate written findings of fact have been made; or
    3. Variation in the estimated quantities in a contract providing for estimated quantities; or
    4. A unilateral suspension of work by the Commonwealth.
  2. In addition, there shall also be specified for inclusion in all construction contracts expected to exceed fifty thousand dollars ($50,000) in price a clause providing that a contract may be terminated for the convenience of the Commonwealth or for default, and further providing for liquidated damages when appropriate and as specified in the contract schedule, with excuses for nonperformance specifically provided for therein.
  3. The above specified clauses and conditions required for inclusion in all construction contracts expected to exceed fifty thousand dollars ($50,000) in price shall be available for optional use in other construction contracts.

History. Enact. Acts 1978, ch. 110, § 40, effective January 1, 1979.

NOTES TO DECISIONS

1.Good Faith and Fair Dealing Obligation.

Termination for convenience clauses required by KRS 45A.200(2) are subject to the good faith and fair dealing requirements set forth in KRS 45A.015(2). Ram Eng'g & Constr., Inc. v. Univ. of Louisville, 127 S.W.3d 579, 2003 Ky. LEXIS 264 ( Ky. 2003 ).

2.Material Change in Circumstances.

Agreed order between a state university and a bidder did not void appellant’s prior bid contract, as the university’s own act could not constitute a material change in circumstances justifying its reliance on the contract’s “termination for convenience” clause. Ram Eng'g & Constr., Inc. v. Univ. of Louisville, 127 S.W.3d 579, 2003 Ky. LEXIS 264 ( Ky. 2003 ).

3.Construction of Contract.

“Termination for convenience” clause of a public contract should be liberally construed and applied to insure the fair and equitable treatment of all persons who deal with the procurement system of the Commonwealth. Ram Eng'g & Constr., Inc. v. Univ. of Louisville, 127 S.W.3d 579, 2003 Ky. LEXIS 264 ( Ky. 2003 ).

45A.205. Policy as to architectural and engineering services. [Repealed.]

Compiler’s Notes.

This section (Enact. Acts 1978, ch. 110, § 41, effective January 1, 1979) was repealed by Acts 1992, ch. 55, § 12, effective July 14, 1992.

45A.210. Issuance of regulations concerning modification and termination of contracts by Commonwealth.

  1. The secretary of the Finance and Administration Cabinet is authorized to issue regulations permitting or requiring the insertion, in contracts for the procurement of supplies or services, of appropriate clauses to enable the Commonwealth to effect desired changes and modifications to such contracts.
  2. The secretary is authorized to issue regulations relating to the termination of contracts for the procurement of supplies or services for the default of the contractor.
  3. The secretary is authorized to issue regulations relating to the termination of contracts for the procurement of supplies or services for the convenience of the Commonwealth.

History. Enact. Acts 1978, ch. 110, § 42, effective January 1, 1979.

Opinions of Attorney General.

Any modifications or amendments to a competitively bid contract must be made by the Executive Branch pursuant to KRS Chapter 45A, unless such requirements are superseded by suspension of the procurement statutes by the General Assembly or declaration of a state of emergency by the Governor. Termination of a contract for convenience has as its central purpose the avoidance of payment of future anticipated profits by the Commonwealth. Termination of a contract for cause may be appropriate where a contract fails to meet the minimum standards imposed by statute. OAG 2004-09 .

45A.215. Cost principles regulations required.

The secretary of the Finance and Administration Cabinet shall issue regulations setting forth cost principles which shall be used:

  1. As guidelines in the negotiation of:
    1. Estimated costs or fixed prices when the absence of open market competition precludes the use of competitive sealed bidding;
    2. Adjustments for state-directed changes or modifications in contract performance; and
    3. Settlements of contracts which have been terminated.
  2. To determine the allowability of incurred costs for the purpose of reimbursing costs under contract provisions which provide for the reimbursement of costs; and
  3. As appropriate in any other situation where the determination of the estimated or the incurred costs of performing contracts may be required.

History. Enact. Acts 1978, ch. 110, § 43, effective January 1, 1979.

NOTES TO DECISIONS

1.Applicability.

KRS 45A.215 did not apply and did not support a holding that federal cost principles applied to calculate a contractor’s damages due to contract termination where the contract to construct a replacement bridge was a fixed-price contract, not a cost-reimbursement contract. Ford Contr., Inc. v. Ky. Transp. Cabinet, 429 S.W.3d 397, 2014 Ky. App. LEXIS 22 (Ky. Ct. App. 2014).

2.Federal cost principles not appropriate.

Circuit court did not err in finding that use of federal cost principles was not appropriate in a contractor’s breach of contract claim where the contract was not a cost-reimbursement contract, and no authority nor rationale was offered to deviate from long-developed jurisprudence for determining breach-of-contract damages. Ford Contr., Inc. v. Ky. Transp. Cabinet, 429 S.W.3d 397, 2014 Ky. App. LEXIS 22 (Ky. Ct. App. 2014).

45A.225. Definitions and applicability.

  1. For purposes of KRS 45A.225 to 45A.290 , court means the court of this Commonwealth which would have original jurisdiction over the action if it were between private citizens of this Commonwealth; and in the event of an appeal from such a court, the court which would have jurisdiction over such an appeal if the action were between private citizens of this Commonwealth.
  2. KRS 45A.225 to 45A.290 apply only to each contract solicited or entered into after January 1, 1979.

History. Enact. Acts 1978, ch. 110, § 45, effective January 1, 1979.

Legislative Research Commission Note.

(10/19/2004). 2004 (1st Extra. Sess.) Ky. Acts ch. 1, sec. 2, provides, “Notwithstanding KRS 18A.225 , 45A.022 , 45A.080 , 45A.085 , 45A.090 , 45A.225 to 45A.290 , or any other provision of KRS Chapter 45A to the contrary, retroactive to August 12, 2004, the Finance and Administration Cabinet shall implement the provisions of this Act by amending the previously negotiated contracts for public employee health insurance. The secretary of the Finance and Administration Cabinet shall provide an actuarial certification that the self-insured contract amounts are actuarially sound. Any contracts entered into or modified pursuant to this section shall be forwarded to the Legislative Research Commission.”

45A.230. Authority of secretary to settle claims.

Prior to the institution of any action in a court concerning any contract, claim, or controversy, the secretary of the Finance and Administration Cabinet is authorized, subject to any limitations or conditions imposed by regulations, to settle, compromise, pay, or otherwise adjust the claim by or against, or controversy with, a contractor relating to a contract entered into by the Finance and Administration Cabinet on behalf of the Commonwealth or any state agency, including a claim or controversy based on breach of contract, mistake, misrepresentation, or other cause for contract modification or rescission, but excluding any claim or controversy involving penalties or forfeitures prescribed by statute or regulation where an official other than the secretary of the Finance and Administration Cabinet is specifically authorized to settle or determine such controversy.

History. Enact. Acts 1978, ch. 110, § 46, effective January 1, 1979.

45A.235. Action on contract claims or controversies.

This section shall apply to a claim or controversy arising under contracts between the Commonwealth and its contractors. If such a claim or controversy is not resolved by mutual agreement, the secretary of the Finance and Administration Cabinet, or his designee, shall promptly issue a decision in writing. A copy of that decision shall be mailed or otherwise furnished to the contractor. The decision shall be final and conclusive unless fraudulent, or unless the contractor sues pursuant to KRS 45A.245 . If the secretary of the Finance and Administration Cabinet does not issue a written decision within one hundred and twenty (120) days after written request for a final decision, or within such longer period as might be established by the parties to the contract in writing, then the contractor may proceed as if an adverse decision had been received.

History. Enact. Acts 1978, ch. 110, § 47, effective January 1, 1979.

NOTES TO DECISIONS

1.Oral Contracts.

Professor’s motion to reconsider, which requested that the court reconsider its determination that the professor was not terminated and its dismissal of his claims against a community college for due process violations, was denied because the professor’s claims rested on the breach of an alleged oral contract and the college was an arm of the State of Kentucky, which had waived its sovereign immunity only for written contracts under KRS 45A.245(1). Hardy v. Jefferson Cmty. College, 2000 U.S. Dist. LEXIS 22607 (W.D. Ky. Feb. 1, 2000).

Cited:

Geupel Constr. Co. v. Commonwealth Transp. Cabinet, 136 S.W.3d 43, 2003 Ky. App. LEXIS 39 (Ky. Ct. App. 2003).

45A.240. Definitions for terms used in KRS 45A.225 to 45A.290.

As used in KRS 45A.225 to 45A.290 , unless the context requires otherwise:

  1. “Commonwealth” means the Commonwealth of Kentucky and any of its departments or agencies.
  2. “Contracting agency” means any department or agency of the Commonwealth of Kentucky having entered into a lawfully authorized written contract.

History. Amend. and reenacted Acts 1978, ch. 110, § 48, effective January 1, 1979.

Compiler’s Notes.

This section (Enact. Acts 1966, ch. 180, § 1; 1974, ch. 181, § 1) was formerly compiled as KRS 44.260 and was amended and reenacted as this section by Acts 1978, ch. 110, § 48, effective January 1, 1979.

NOTES TO DECISIONS

1.Construction.

An action by a landowner against the highway department for the breach of an agreement to acquire real property of the landowner was permissible. Goss v. Sparta Stockyards, Inc., 481 S.W.2d 39, 1972 Ky. LEXIS 212 ( Ky. 1972 ).

Cited:

Martin v. University of Louisville, 541 F.2d 1171, 1976 U.S. App. LEXIS 7348 (6th Cir. 1976); University of Louisville v. Martin, 574 S.W.2d 676, 1978 Ky. App. LEXIS 627 (Ky. Ct. App. 1978).

Opinions of Attorney General.

The capital plaza authority as a state agency is subject to the immunity waivers involved in the Board of Claims Act and the Contract Claims Act. OAG 71-347 .

The capital plaza authority is subject to suits for alleged breach of contract subject to the express limitations provided in KRS 45A.245(2). OAG 71-347 .

Where the contract between the Kentucky air national guard and the United States provided for no assumption of liability in connection with the operation of the arresting gear system and the Department of Defense was planning to install the system for use by Kentucky Air National Guard and other federal agencies, the Commonwealth of Kentucky would have no liability for injuries or deaths resulting from these federal operations. OAG 73-403 .

Where a contract was properly canceled by the state for improper advertising of bid pursuant to KRS 45.390 (repealed January 1, 1979), but part of the materials were delivered to and used by the state prior to cancellation, the state should pay the bill for those materials as the other contracting party probably could recover against the state pursuant to this section (Contract Claims Act). OAG 75-689 .

Research References and Practice Aids

Kentucky Law Journal.

Kentucky Law Survey, Connelly, Torts, 68 Ky. L.J. 709 (1979-1980).

Snell, A Plea for a Comprehensive Liability Statute, 74 Ky. L.J. 521 (1985-86).

45A.245. Action on contract — Damages.

  1. Any person, firm or corporation, having a lawfully authorized written contract with the Commonwealth at the time of or after June 21, 1974, may bring an action against the Commonwealth on the contract, including but not limited to actions either for breach of contracts or for enforcement of contracts or for both. Any such action shall be brought in the Franklin Circuit Court and shall be tried by the court sitting without a jury. All defenses in law or equity, except the defense of governmental immunity, shall be preserved to the Commonwealth.
  2. If damages awarded on any contract claim under this section exceed the original amount of the contract, such excess shall be limited to an amount which is equal to the amount of the original contract.

History. Enact. Acts 1966, ch. 180, § 2, in part; 1974, ch. 181, § 2; 1976, ch. 297, § 1; repealed and reenact., Acts 1978, ch. 110, § 49, effective January 1, 1979.

Compiler's Notes.

This section (Acts 1966, ch. 180, § 2, in part; 1974, ch. 181, § 2; 1976, ch. 297, § 1) was formerly compiled as KRS 44.270 and was repealed and reenacted as this section by Acts 1978, ch. 110, § 49, effective January 1, 1979.

NOTES TO DECISIONS

1.Standing.

Circuit court erred in granting summary judgment against a golf cart manufacturer and a taxpayer on standing grounds, as the manufacturer, as a disappointed bid contractor, had standing to challenge the State of Kentucky Finance and Administration Cabinet’s decision awarding a government contract to a competitive bidder on the grounds that it was arbitrary and capricious; further, the taxpayer had standing to challenge a bid contract award where there was proof of arbitrariness or capriciousness, and under the general rule that taxpayers had standing to sue where they have suffered a distinct injury. Yamaha Motor Mfg. Corp. of Am. v. Commonwealth, 2005 Ky. App. LEXIS 239 (Ky. Ct. App. Nov. 10, 2005), aff'd, 237 S.W.3d 203, 2007 Ky. LEXIS 203 ( Ky. 2007 ).

Circuit court erred in granting summary judgment against a golf cart manufacturer and a taxpayer on standing grounds, as the manufacturer, as a disappointed bid contractor, had standing to challenge the State of Kentucky Finance and Administration Cabinet’s decision awarding a government contract to a competitive bidder on the grounds that it was arbitrary and capricious; further, the taxpayer had standing to challenge a bid contract award where there was proof of arbitrariness or capriciousness, and under the general rule that taxpayers had standing to sue where they have suffered a distinct injury. Yamaha Motor Mfg. Corp. of Am. v. Commonwealth, 2005 Ky. App. LEXIS 239 (Ky. Ct. App. Nov. 10, 2005), aff'd, 237 S.W.3d 203, 2007 Ky. LEXIS 203 ( Ky. 2007 ).

2.Waiver of Immunity.

One cannot sue the Commonwealth on a claim unless sovereign immunity has been waived, as it has been on lawfully authorized written contracts. All-American Movers, Inc. v. Commonwealth, 552 S.W.2d 679, 1977 Ky. App. LEXIS 732 (Ky. Ct. App. 1977).

Court of appeals properly affirmed the order denying a university immunity against a professor's lawsuit; the legislature has waived immunity for all claims arising out of lawfully authorized written contracts with the Commonwealth and its agencies. Univ. of Louisville v. Rothstein, 532 S.W.3d 644, 2017 Ky. LEXIS 449 ( Ky. 2017 ).

Statute clearly intends a waiver of the defense of governmental immunity, and there is no other “reasonable construction” of the statute; the legislature clearly stated that the defense of governmental immunity was not preserved for the Commonwealth on these contract claims. Univ. of Louisville v. Rothstein, 532 S.W.3d 644, 2017 Ky. LEXIS 449 ( Ky. 2017 ).

Subsection (1) waives the defense of governmental immunity in all claims based upon lawfully authorized written contracts, and the legislature chose to utilize this language, without restriction or limitation; there is no reason, therefore, to impose a constraint unintended or unexpressed by the General Assembly, and clearly, the legislature has waived governmental immunity on all claims brought by all persons on all lawfully authorized written contracts with the Commonwealth. Univ. of Louisville v. Rothstein, 532 S.W.3d 644, 2017 Ky. LEXIS 449 ( Ky. 2017 ).

In a university’s challenge to prejudgment interest awarded to a construction company in a breach of contract claim, KRS 45A.245 waived sovereign immunity in contract actions against the state with a cap on damages of twice the original contract price. Because the cap was the only limiting factor on damages, the trial court was correct in awarding prejudgment interest. Univ. of Louisville v. RAM Eng'g & Constr., Inc., 199 S.W.3d 746, 2005 Ky. App. LEXIS 244 (Ky. Ct. App. 2005).

That the legislature waived the Commonwealth’s immunity in some statutes under certain instances was evidenced by statutes like KRS 45A.245 . That statute allowed a party to bring an action against the Commonwealth to recover for breach of contract or the enforcement of a contract, and indicated that the retirement system members suing the Commonwealth due to a suspension of their retirement benefits while they came back to work for a public employer did not have to always be thwarted by the Commonwealth’s claim of sovereign immunity. Commonwealth v. Ky. Ret. Sys., 396 S.W.3d 833, 2013 Ky. LEXIS 84 ( Ky. 2013 ).

Claims by a Chapter 7 Trustee against the State for fraud in the inducement, breach of contract, and unenforceable penalty were dismissed. While the State waived its immunity for claims on written contracts under KRS 45A.245(1), it did so only for actions brought in Franklin County Circuit Court; Even if the court could consider KRS 45A.245(1) a waiver to proceed in federal court, that waiver applied only to actions on the contract, the claim for fraudulent inducement was not “on the contract” and was a tort-like claim for which the State did not waive its sovereign immunity. Lawrence v. Kentucky Transp. Cabinet (In re Shelbyville Rd. Shoppes, LLC), 486 B.R. 848, 2013 Bankr. LEXIS 648 (Bankr. W.D. Ky. 2013 ).

No language in the Kentucky Model Procurement Code (KMPC), KRS 45A.245(1), stated that the Commonwealth’s immunity for claims that it violated the KMPC was waived, and the subcontractor’s claims for monetary damages not based on a written contract were precluded by sovereign immunity. Louisville Arena Auth., Inc. v. Ram Eng'g & Constr., Inc., 415 S.W.3d 671, 2013 Ky. App. LEXIS 132 (Ky. Ct. App. 2013).

In a dispute involving Medicaid reimbursements, the Kentucky Legislature waived the Kentucky Cabinet for Health and Family Services’ immunity from a breach of contract claim by operation of this section; however, the hospital was only entitled to seek a declaration of its rights under a Medicaid provider services agreement since a direct recovery of contractual damages was outside the scope of declaratory relief. Commonwealth v. Samaritan Alliance, LLC, 439 S.W.3d 757, 2014 Ky. App. LEXIS 27 (Ky. Ct. App. 2014).

Commonwealth and its agencies no longer enjoy immunity for the breach of a written contract entered into with a private citizen; therefore, a State university was not immune from a former employee's lawsuit alleging breach of a written employment contract because the waiver of immunity for actions brought on written contracts applied to employment contracts. Univ. of Louisville v. Lillard, 2016 Ky. App. LEXIS 2 (Ky. Ct. App. Jan. 8, 2016).

3.Oral Contracts.

Where there has been no allegation or proof that KRS 45.360 (now repealed) has been complied with, alleged oral contract for services of moving company was void as contrary to public policy and the Commonwealth can recover payments made to moving company in excess of amount provided for in written contract. All-American Movers, Inc. v. Commonwealth, 552 S.W.2d 679, 1977 Ky. App. LEXIS 732 (Ky. Ct. App. 1977).

4.Agency of Commonwealth.

The turnpike authority is an agency of the commonwealth and any contract action against the turnpike authority must be brought pursuant to the provisions of the Contract Claims Act. H. E. Cummins & Sons Constr. Co. v. Turnpike Authority, 562 S.W.2d 651, 1977 Ky. App. LEXIS 899 (Ky. Ct. App. 1977).

Plaintiff student-athlete could not maintain a claim for breach of contract under Kentucky law against defendant university premised on a student athlete handbook because the state sovereign immunity doctrine barred suit with respect to the claim, and the immunity could not be waived in federal district court by any action of defendant’s own volition, such as the creation or adoption of any written document that may purport or appear to bind the university, its employees or both. Even assuming that any such contract or agreement between defendant and plaintiff existed and that any waiver was permitted, it would have been of a limited nature, and plaintiff would have needed to proceed on any written contract as set forth in KRS 45A.245(1) in a suit against the commonwealth in state court. Green v. Sandy, 2011 U.S. Dist. LEXIS 114718 (E.D. Ky. Oct. 3, 2011).

5.Claim for Extra Compensation.

The circuit court had jurisdiction over a contractor’s claim for extra compensation for additional work done on a highway construction project. Codell Constr. Co. v. Commonwealth, 566 S.W.2d 161, 1977 Ky. App. LEXIS 915 (Ky. Ct. App. 1977).

Trial court erred in allowing a highway construction contractor to proceed, albeit unsuccessfully, with an action to recover excess costs from the Kentucky Transportation Cabinet; an administrative appeals procedure was prescribed for such disputes, and, furthermore, the contractor had already elected an administrative remedy, which it had not abandoned at the time of filing its contract action. Geupel Constr. Co. v. Commonwealth Transp. Cabinet, 136 S.W.3d 43, 2003 Ky. App. LEXIS 39 (Ky. Ct. App. 2003).

6.Action by Assignee.

Where the Commonwealth paid a contractor for work done instead of the assignee after the Commonwealth had accepted the assignment, the assignee had a right to maintain an action for the amount paid to the contractor and the Commonwealth was not protected by sovereign immunity. Fidelity & Casualty Co. v. Commonwealth, 445 S.W.2d 113, 1969 Ky. LEXIS 138 ( Ky. 1969 ).

7.Employment Contracts.

Where the medical school employment contract was for the academic year 1977, which began on July 1, 1976, and ended June 30, 1977, a faculty member would have to have had his action filed by the end of June, 1978, which he did not do for it was commenced on June 27, 1979, and it would be of little avail to argue that the matter was brought under the Model Procurement Code, for KRS 45A.260 provides for the same one-year limitations on contract suits as did former KRS 44.310 . Kovachevich v. University of Louisville, 597 S.W.2d 621, 1980 Ky. App. LEXIS 307 (Ky. Ct. App. 1980).

It was not error to find the secretary of a university’s board of regents (board) had a one-year employment contract because minutes in which the board appointed the secretary for one year, under KRS 164.330 , and set the secretary’s compensation, under KRS 164.450 , constituted a lawfully authorized written contract, so KRS 45A.245(1) barred the university’s immunity defense to the secretary’s breach of contract claim. W.Ky.Univ. v. Esters, 2014 Ky. App. Unpub. LEXIS 1037 (Ky. Ct. App. Apr. 11, 2014).

University was not protected from a breach of contract lawsuit on the basis of sovereign immunity because the enactment of this statute plainly constituted an unqualified waiver of sovereign immunity on all written contracts with the Commonwealth of Kentucky, including employment contracts. Univ. of Louisville v. Rothstein, 2016 Ky. App. LEXIS 42 (Ky. Ct. App. Apr. 1, 2016), aff'd, 532 S.W.3d 644, 2017 Ky. LEXIS 449 ( Ky. 2017 ).

8.Authority to Contract.

Since signature of agent of Department of Education was necessary on contract to authorize the process which would pay company for services in modifying van of quadriplegic and such agent intended that the five conditions contained in the contract should be enforceable against quadriplegic should the need arise, therefore intending the document as a whole to be binding, agent had authority and intent to enter into contract with quadriplegic. Commonwealth Dep't of Education v. Gravitt, 673 S.W.2d 428, 1984 Ky. App. LEXIS 476 (Ky. Ct. App. 1984).

9.Valid Cause of Action.

Document in which Department of Education promised to modify van of quadriplegic in exchange for his acceptance of five conditions some of which would transfer title to the department should the quadriplegic fail to abide by Department’s directions constituted a lawfully authorized contract between Department and quadriplegic and since nothing in KRS 163.110 to 163.180 (now see KRS 151B.180 to 151B.210 ) prohibited such contract, quadriplegic had valid cause of action against Department under this section for major defects which occurred as a result of the modification. Commonwealth Dep't of Education v. Gravitt, 673 S.W.2d 428, 1984 Ky. App. LEXIS 476 (Ky. Ct. App. 1984).

10.Miscellaneous

Debtor charitable organization that provided behavioral health services was entitled to reject executory obligation to make payments to Kentucky Employees Retirement System (KERS) in that there was contractual relationship between debtor and KERS that could be rejected by debtor in its exercise of sound business judgment and Kentucky’s sovereign immunity statute did not control whether contract existed between debtor and KERS. Ky. Emples. Ret. Sys. v. Seven Counties Servs. (In re Seven Counties Servs.), 511 B.R. 431, 2014 Bankr. LEXIS 2370 (Bankr. W.D. Ky. 2014 ), aff'd in part and rev'd in part, 550 B.R. 741, 2016 U.S. Dist. LEXIS 43390 (W.D. Ky. 2016 ), rev'd in part, 823 Fed. Appx. 300, 2020 FED App. 0419N, 2020 U.S. App. LEXIS 22839 (6th Cir. Ky. 2020 ).

In a case involving preventative health services provided to eligible children by health department medical professionals within schools, the proper standard of review was de novo because this was an action concerning the interpretation and enforcement of a contract under this statute. Ky. Spirit Health Plan v. Commonwealth, 462 S.W.3d 723, 2015 Ky. App. LEXIS 64 (Ky. Ct. App. 2015).

Cited:

Goss v. Sparta Stockyards, Inc., 481 S.W.2d 39, 1972 Ky. LEXIS 212 ( Ky. 1972 ); University of Louisville v. Martin, 574 S.W.2d 676, 1978 Ky. App. LEXIS 627 (Ky. Ct. App. 1978); Bluegrass Concrete Constr. Co. v. Commonwealth, 664 S.W.2d 936, 1983 Ky. App. LEXIS 322 (Ky. Ct. App. 1983); Campbell v. Univ. of Louisville, 862 F. Supp. 2d 578, 2012 U.S. Dist. LEXIS 27907 (W.D. Ky. 2012 ).

NOTES TO UNPUBLISHED DECISIONS

1.Waiver of Immunity.

Unpublished decision: Circuit Court erred in denying the Cabinet for Health and Family Services' motion to dismiss a Medicaid enrollee's appeal for lack of standing because the enrollee's authorized agents also proceeded on behalf of a hospital, the exhibits attached to the petition provided enough information to comply with the statutory requirements, and the Cabinet's sovereign immunity was waived by the Medical Service Provider Agreement between the Cabinet and the managed care organization and the statute for contract actions against the Commonwealth. Commonwealth v. Sexton, 2016 Ky. App. LEXIS 151 (Ky. Ct. App. Sept. 2, 2016, sub. op., 2016 Ky. App. Unpub. LEXIS 888 (Ky. Ct. App. Sept. 2, 2016).

2.Venue.

Unpublished decision: Medicaid beneficiary, with a hospital as an authorized representative, contravened the statutory directives by filing the action in Harlan Circuit Court instead of the Franklin Circuit Court. Commonwealth v. Sexton, 2016 Ky. App. LEXIS 151 (Ky. Ct. App. Sept. 2, 2016, sub. op., 2016 Ky. App. Unpub. LEXIS 888 (Ky. Ct. App. Sept. 2, 2016).

Opinions of Attorney General.

A contract containing the major outlines of a computer program that was presented to the Department of Finance (now the Finance and Administration Cabinet) and was unequivocally accepted by the Commissioner (now Secretary) met the requirements of this section, with the result that the Department (now Cabinet) could submit the computer company’s claim for payment for services rendered to the General Assembly for approval by way of a specific appropriation, since the claim was not paid under the provisions of either KRS 45.230 (now repealed) or KRS 45.231 . OAG 72-125 .

Where the contract between the Kentucky Air National Guard and the United States provided for no assumption of liability in connection with the operation of the arresting gear system and the Department of Defense was planning to install the system for use by Kentucky Air National Guard and other federal agencies, the Commonwealth of Kentucky would have no liability for injuries or deaths resulting from these federal operations. OAG 73-403 .

Since a city has no authority to require a building permit fee in connection with the construction of a state building, a state project contractor who was pressured by a city into procuring a permit could recover the illegally collected fee from the city. OAG 76-72 .

Any modifications or amendments to a competitively bid contract must be made by the Executive Branch pursuant to KRS Chapter 45A, unless such requirements are superseded by suspension of the procurement statutes by the General Assembly or declaration of a state of emergency by the Governor. Termination of a contract for convenience has as its central purpose the avoidance of payment of future anticipated profits by the Commonwealth. Termination of a contract for cause may be appropriate where a contract fails to meet the minimum standards imposed by statute. OAG 2004-09 .

Research References and Practice Aids

Kentucky Law Journal.

Snell, A Plea for a Comprehensive Liability Statute, 74 Ky. L.J. 521 (1985-86).

45A.250. Findings of court.

The court shall enter its findings as a judgment of the court, and such judgment shall have the same effect and be enforceable as any other judgment of the court in civil cases subject to the provisions of KRS 45A.270 .

History. Amend. and reenacted 1978, ch. 110, § 50, effective January 1, 1979.

Compiler’s Notes.

This section (Enact. Acts 1966, ch. 180, § 2, in part; 1974, ch. 181, § 3) was formerly compiled as KRS 44.280 and was amended and reenacted as this section by Acts 1978, ch. 110, § 50, effective January 1, 1979.

NOTES TO DECISIONS

1.Applicability.

Where a declaratory judgment proceeding, rather than a direct appeal from the action of the agency, was instituted in the Franklin Circuit Court, the provision of this statute that the judgment shall be enforceable as any other judgment of the court in civil cases was not applicable. Commonwealth, Dep't of Highways v. Shamrock Corp. of Kentuckiana, Inc., 501 S.W.2d 584, 1973 Ky. LEXIS 137 ( Ky. 1973 ).

Cited:

Goss v. Sparta Stockyards, Inc., 481 S.W.2d 39, 1972 Ky. LEXIS 212 ( Ky. 1972 ).

45A.255. Appeals from Circuit Court.

Appeals may be taken to the Court of Appeals from Franklin Circuit Court under the same conditions and under the same practice as appeals are taken from judgments in civil causes rendered by Circuit Courts.

History. Enact. Acts 1966, ch. 180, § 4; 1974, ch. 181, § 4; repealed and reenact., Acts 1978, ch. 110, § 51, effective January 1, 1979.

Compiler’s Notes.

This section (Acts 1966, ch. 180, § 4; 1974, ch. 181, § 4) was formerly compiled as KRS 44.300 and was repealed and reenacted as this section by Acts 1978, ch. 110, § 51, effective January 1, 1979.

45A.260. Limitations on claims.

  1. Any claim arising from a construction contract executed and administered by the Transportation Cabinet pursuant to the provisions of KRS Chapters 175, 176, 177 and 180 shall be commenced in Franklin Circuit Court within one (1) year from the time the Commonwealth has determined final pay quantities and issues a final pay estimate to the contracting party, notifying him of its final determination, or from the receipt of a final adverse decision from the Commonwealth, whichever occurs later.
  2. Any other claim shall be commenced in Franklin Circuit Court within one (1) year from the date of completion specified in the contract.

History. Enact. Acts 1966, ch. 180, § 6; 1974, ch. 181, § 5; repealed and reenact., Acts 1978, ch. 110, § 52, effective January 1, 1979; 1984, ch. 354, § 1, effective July 13, 1984.

Compiler’s Notes.

This section (Enact. Acts 1966, ch. 180, § 6; 1974, ch. 181, § 5) was formerly compiled as KRS 44.310 and was repealed and reenacted as this section by Acts 1978, ch. 110, § 52, effective January 1, 1979.

NOTES TO DECISIONS

1.Date of Completion.

Where the cause of action did not arise until February 17, 1972, when the Commonwealth advised the appellant of what it was willing to pay, and the claim was then made by the appellant on August 30, 1972, such claim was made in timely fashion. Codell Constr. Co. v. Commonwealth, 566 S.W.2d 161, 1977 Ky. App. LEXIS 915 (Ky. Ct. App. 1977).

Where a contractor’s claim against the Department of Highways for additional compensation was filed more than one year after the date specified in a formal report accepted by the Department that all the construction work was completed, the claim was barred by this section despite the contractor’s contention that the cause of action did not actually arise until the Department denied its claim. Bluegrass Concrete Constr. Co. v. Commonwealth, 664 S.W.2d 936, 1983 Ky. App. LEXIS 322 (Ky. Ct. App. 1983).

Letters to subcontractor on a public construction project from a chief electrical engineer which referenced the established date for completion and contracting parties dissatisfaction with the work accomplished to date, and subsequent letters to it from the public contractor expressing dissatisfaction with the work accomplished to date and threatening to assess liquidated damages, did not act to extend the completion date on the contract and subcontractor’s contract action was untimely under this section. Jasper Contracting Co. v. Commonwealth, 890 S.W.2d 296, 1994 Ky. App. LEXIS 149 (Ky. Ct. App. 1994).

Subcontractor’s argument that literal interpretation of this section results in a violation of Ky. Const., § 14 inasmuch as it cuts off its claim before it even arose was without merit as subcontractor had not been paid within a year after the formal completion date of the project had passed and familiarity with this section would have informed subcontractor that time to file suit had commenced. Jasper Contracting Co. v. Commonwealth, 890 S.W.2d 296, 1994 Ky. App. LEXIS 149 (Ky. Ct. App. 1994).

2.Effect of Noncompliance.

In an action against the turnpike authority a contractor was bound by the limitations of this section and where the action was not brought within the specified time period, dismissal was proper. H. E. Cummins & Sons Constr. Co. v. Turnpike Authority, 562 S.W.2d 651, 1977 Ky. App. LEXIS 899 (Ky. Ct. App. 1977).

3.Term of Employment.

Where the medical school employment contract was for the academic year 1977, which began on July 1, 1976, and ended June 30, 1977, a faculty member would have to have had his action filed by the end of June, 1978, which he did not do for it was commenced on June 27, 1979, and it would be of little avail to argue that the matter was brought under the Model Procurement Code, for this section provides for the same one-year limitations on contract suits as did former KRS 44.310 . Kovachevich v. University of Louisville, 597 S.W.2d 621, 1980 Ky. App. LEXIS 307 (Ky. Ct. App. 1980).

Assistant professor’s breach of contract claim against the university was time-barred under Ky. Rev. Stat. Ann. § 45A.260 as the last written contract terminated on July 30, 2010, she was not guaranteed employment after that date, and she filed the action more than one year after the termination date. That she continued to work through the spring semester of 2011 without a written agreement did not affect the one-year limitations period. Britt v. Univ. of Louisville, 628 S.W.3d 1, 2021 Ky. LEXIS 118 ( Ky. 2021 ).

4.Toll of Action.

Where a subcontractor on a public construction project appealed dismissal of its action for breach of contract and denial of its motion to vacate in a matter involving a contention that the contracting party had extended a written completion date for work to be accomplished due to contracting parties dissatisfaction with the quality of the work performed to date, the subcontractor’s action for breach of contract was tolled by this section; subcontractor’s argument that the statute of limitations did not begin to run until all work on the project was completed was ineffective as it was based on KRS 44.310 , a repealed section re-enacted as this section. Jasper Contracting Co. v. Commonwealth, 890 S.W.2d 296, 1994 Ky. App. LEXIS 149 (Ky. Ct. App. 1994).

45A.265. One recovery only.

No person, firm, or corporation shall be permitted more than one (1) money recovery upon a claim for the enforcement of or for breach of contract with the Commonwealth.

History. Enact. Acts 1966, ch. 180, § 5; repealed and reenact., Acts 1978, ch. 110, § 53, effective January 1, 1979.

Compiler’s Notes.

This section (Enact. Acts 1966, ch. 180, § 5) was formerly compiled as KRS 44.320 and was repealed and reenacted as this section by Acts 1978, ch. 110, § 53, effective January 1, 1979.

45A.270. Presentation of judgment for payment — Appropriations.

  1. Each agency which has had an award or judgment against it upon a claim filed pursuant to KRS 45A.240 to 45A.270 shall furnish a certified copy of the award of judgment to the Finance and Administration Cabinet. The first five hundred thousand dollars ($500,000) of any award or judgment against the Department of Highways, Transportation Cabinet, shall be paid out of the state road fund, upon warrants drawn by the secretary of the Finance and Administration Cabinet upon the State Treasurer. The first five hundred thousand dollars ($500,000) of any award or judgment against other departments or agencies of the state, which are not maintained by appropriations out of the general fund, shall be paid out of the funds created or collected for the maintenance and operation of such department or agency, upon warrants drawn by the secretary of the Finance and Administration Cabinet upon the State Treasurer. The first five hundred thousand dollars ($500,000) of any award or judgment against all other departments and agencies of the state shall be paid out of the general fund, upon warrants drawn by the secretary of the Finance and Administration Cabinet upon the State Treasurer.
  2. The Finance and Administration Cabinet shall request an appropriation from the next even-numbered-year regular session of the General Assembly for the purpose of satisfying all such awards and judgments granted during the preceding two (2) fiscal years which are not satisfied under subsection (1) of this section.

History. Amend. and reenacted 1978, ch. 110, § 54, effective January 1, 1979; 2001, ch. 58, § 11, effective June 21, 2001.

Compiler's Notes.

This section (Enact. Acts 1966, ch. 180, § 7; 1974, ch. 74, Art. II, § 9(1); 1974, ch. 181, § 6) was formerly compiled as KRS 44.330 and was amended and reenacted as this section by Acts 1978, ch. 110, § 54, effective January 1, 1979.

NOTES TO DECISIONS

1.Payment.

The fact that the agency may have had funds on hand and could have voluntarily made the payment did not create an obligation to make the payment without first submitting the claim to the Department of Finance (now Finance and Administration Cabinet) for an appropriation. Commonwealth, Dep't of Highways v. Shamrock Corp. of Kentuckiana, Inc., 501 S.W.2d 584, 1973 Ky. LEXIS 137 ( Ky. 1973 ).

Research References and Practice Aids

2020-2022 Budget Reference.

See State/Executive Branch Budget, 2021 Ky. Acts ch. 169, Pt. I, A, 31, (2) at 1076.

45A.275. Judgments against Commonwealth up to $500,000 deemed necessary governmental expense.

The first five hundred thousand dollars ($500,000) of any Kentucky court judgment against the Commonwealth awarding damages on a contract claim under the provisions of KRS 45A.240 to 45A.270 shall be a necessary governmental expense and payment shall be approved by the Finance and Administration Cabinet and paid by the State Treasurer. Appropriations for these judgments shall be continued appropriations.

History. Amend. and reenacted 1978, ch. 110, § 55, effective January 1, 1979.

Compiler's Notes.

This section (Acts 1974, ch. 181, § 7) was formerly compiled as KRS 44.340 and was amended and reenacted as this section by Acts 1978, ch. 110, § 55, effective January 1, 1979.

Research References and Practice Aids

2020-2022 Budget Reference.

See State/Executive Branch Budget, 2021 Ky. Acts ch. 169, Pt. I, A, 31, (2) at 1076.

45A.280. Presumption of correctness.

The decision of any official, board, agent, or other person appointed by the Commonwealth concerning any controversy arising under, or in connection with, the solicitation or award of a contract, shall be entitled to a presumption of correctness and shall not be disturbed unless the decision was procured by fraud or the findings of fact by such official, board, agent or other person do not support the decision.

History. Enact. Acts 1978, ch. 110, § 56, effective January 1, 1979.

NOTES TO DECISIONS

1.In General.

Even if the KRS 45A.470(5) negotiation requirement is applicable to competitive sealed bids, the Cabinet correctly concluded that negotiations were not required because the losing bidder failed to offer the service at a price comparable to that offered by the winning bidder, and summary judgment for the Cabinet and the winning bidder in the corporation’s case challenging the contract award was correct. Cmty. Servs. Project, Inc. v. BAWAC Cleaning Servs., 226 S.W.3d 852, 2007 Ky. App. LEXIS 162 (Ky. Ct. App. 2007).

2.Court Challenge.

A company had standing to pursue a bid challenge, which claimed that a winning bidder’s proposal for a state government contract was not responsive to the solicitation for bids, under the Kentucky Model Procurement Code. Commonwealth v. Yamaha Motor Mfg. Corp. of Am., 237 S.W.3d 203, 2007 Ky. LEXIS 203 ( Ky. 2007 ).

Claims based merely on differing interpretations of bid terms, without more, do not rise to the level of arbitrary and capricious conduct required to sustain a bid challenge and the court action could have been dismissed for failure to state a claim upon which relief could have been granted. Commonwealth v. Yamaha Motor Mfg. Corp. of Am., 237 S.W.3d 203, 2007 Ky. LEXIS 203 ( Ky. 2007 ).

Cited:

Pendleton Bros. Vending, Inc. v. Commonwealth Finance & Admin. Cabinet, 758 S.W.2d 24, 1988 Ky. LEXIS 46 ( Ky. 1988 ); Laurel Constr. Co. v. Paintsville Util. Comm’n, 336 S.W.3d 903, 2010 Ky. App. LEXIS 40 (Ky. Ct. App. 2010).

45A.285. Filing of protest — Decision by secretary.

  1. The secretary of the Finance and Administration Cabinet, or his designee, shall have authority to determine protests and other controversies of actual or prospective bidders or offerors in connection with the solicitation or selection for award of a contract.
  2. Any actual or prospective bidder, offeror, or contractor who is aggrieved in connection with the solicitation or selection for award of a contract may file a protest with the secretary of the Finance and Administration Cabinet. A protest or notice of other controversy must be filed promptly and in any event within two (2) calendar weeks after such aggrieved person knows or should have known of the facts giving rise thereto. All protests or notices of other controversies must be in writing.
  3. The secretary of the Finance and Administration Cabinet shall promptly issue a decision in writing. A copy of that decision shall be mailed or otherwise furnished to the aggrieved party and shall state the reasons for the action taken.
  4. The decision by the secretary of the Finance and Administration Cabinet shall be final and conclusive.

History. Enact. Acts 1978, ch. 110, § 57, effective January 1, 1979.

NOTES TO DECISIONS

1.Court Challenge.

Although prior to the Model Procurement Code (MPC) a disappointed bidder had no standing to challenge the award of a public contract absent fraud, collusion or dishonesty, the MPC provides access not previously available, so that procurement is now a regulated administrative procedure subject to a court challenge if the decision awarding a contract was contrary to law, or arbitrary and capricious, and this includes a challenge on grounds that statutory proceedings were disregarded for reasons of political patronage. Pendleton Bros. Vending, Inc. v. Commonwealth Finance & Admin. Cabinet, 758 S.W.2d 24, 1988 Ky. LEXIS 46 ( Ky. 1988 ).

Bid protestor has standing to challenge a contract award and an actual case or controversy exists in spite of the underlying contract’s expiration. Since the Kentucky Model Procurement Code (KMPC) and Kentucky law affords judicial review of administrative actions if an award is arbitrary, capricious, or made in violation of the KMPC, the matter is not moot despite the contract having expired. Lab. Corp. of Am. Holdings v. Rudolph, 184 S.W.3d 68, 2005 Ky. App. LEXIS 169 (Ky. Ct. App. 2005).

Bid protestor was entitled to seek judicial review of the award of the contract for statewide genetic testing services for the 2004 fiscal year, which was made to another vendor, even though the contract had expired as a protestor has standing to seek judicial review as such a matter presents a case and controversy despite the contract ending. However, judgment in favor of the various Commonwealth of Kentucky agencies and the winning bid maker was upheld on appeal, because the substance of the protestor’s complaint alleged alternative interpretation of the bid terms, which was a discretion afforded to the Commonwealth as a contracting officer in a negotiated procurement, and the protestor provided no valid reason, such as fraud, in challenging the award to the winning bid maker. Lab. Corp. of Am. Holdings v. Rudolph, 184 S.W.3d 68, 2005 Ky. App. LEXIS 169 (Ky. Ct. App. 2005).

Circuit Court erred in granting summary judgment against a golf cart manufacturer and a taxpayer on standing grounds, as the manufacturer, as a disappointed bid contractor, had standing to challenge the State of Kentucky Finance and Administration Cabinet’s decision awarding a government contract to a competitive bidder on the grounds that it was arbitrary and capricious; further, the taxpayer had standing to challenge a bid contract award where there was proof of arbitrariness or capriciousness, and under the general rule that taxpayers had standing to sue where they have suffered a distinct injury. Yamaha Motor Mfg. Corp. of Am. v. Commonwealth, 2005 Ky. App. LEXIS 239 (Ky. Ct. App. Nov. 10, 2005), aff'd, 237 S.W.3d 203, 2007 Ky. LEXIS 203 ( Ky. 2007 ).

Claims based merely on differing interpretations of bid terms, without more, do not rise to the level of arbitrary and capricious conduct required to sustain a bid challenge and the court action could have been dismissed for failure to state a claim upon which relief could have been granted. Commonwealth v. Yamaha Motor Mfg. Corp. of Am., 237 S.W.3d 203, 2007 Ky. LEXIS 203 ( Ky. 2007 ).

A company had standing to pursue a bid challenge, which claimed that a winning bidder’s proposal for a state government contract was not responsive to the solicitation for bids, under the Kentucky Model Procurement Code. Commonwealth v. Yamaha Motor Mfg. Corp. of Am., 237 S.W.3d 203, 2007 Ky. LEXIS 203 ( Ky. 2007 ).

Cited:

Laurel Constr. Co. v. Paintsville Util. Comm’n, 336 S.W.3d 903, 2010 Ky. App. LEXIS 40 (Ky. Ct. App. 2010).

45A.290. Effect of protest.

In the event of a protest timely filed under KRS 45A.285(2), the Commonwealth shall not proceed further with the solicitation or award involved, until the secretary of the Finance and Administration Cabinet, or his designee, makes a written and adequately supported determination that continuation of the procurement is necessary to protect substantial interests of the Commonwealth.

History. Enact. Acts 1978, ch. 110, § 58, effective January 1, 1979.

NOTES TO DECISIONS

1.Standing.

Bid protestor has standing to challenge a contract award and an actual case or controversy exists in spite of the underlying contract’s expiration. Since the Kentucky Model Procurement Code (KMPC) and Kentucky law affords judicial review of administrative actions if an award is arbitrary, capricious, or made in violation of the KMPC, the matter is not moot despite the contract having expired. Lab. Corp. of Am. Holdings v. Rudolph, 184 S.W.3d 68, 2005 Ky. App. LEXIS 169 (Ky. Ct. App. 2005).

Bid protestor was entitled to seek judicial review of the award of the contract for statewide genetic testing services for the 2004 fiscal year, which was made to another vendor, even though the contract had expired as a protestor has standing to seek judicial review as such a matter presents a case and controversy despite the contract ending. However, judgment in favor of the various Commonwealth of Kentucky agencies and the winning bid maker was upheld on appeal, because the substance of the protestor’s complaint alleged alternative interpretation of the bid terms, which was a discretion afforded to the Commonwealth as a contracting officer in a negotiated procurement, and the protestor provided no valid reason, such as fraud, in challenging the award to the winning bid maker. Lab. Corp. of Am. Holdings v. Rudolph, 184 S.W.3d 68, 2005 Ky. App. LEXIS 169 (Ky. Ct. App. 2005).

45A.295. Definitions for terms used in KRS 45A.295 to 45A.320.

As used in KRS 45A.295 to 45A.320 :

  1. “State public purchasing unit” shall mean the Finance and Administration Cabinet and any other purchasing agency of this Commonwealth.
  2. “Local public purchasing unit” shall mean any county, city, governmental entity and other subdivision of the Commonwealth or public agency thereof, public authority, public educational, health, or other institution, any other entity which expends public funds for the acquisition or leasing of supplies, services, and construction, and any nonprofit corporation operating a charitable hospital.
  3. “Public purchasing unit” shall mean either a local public purchasing unit or a state public purchasing unit.
  4. “Foreign purchasing activity” shall mean any buying organization not located in this Commonwealth which, if located in this Commonwealth, would qualify as a public purchasing unit. An agency of the United States government is a foreign purchasing activity.
  5. “Cooperative purchasing” shall mean purchasing conducted by, or on behalf of, more than one (1) public purchasing unit, or by a public purchasing unit with a foreign purchasing activity.

History. Enact. Acts 1978, ch. 110, § 59, effective January 1, 1980.

45A.300. Cooperative purchasing.

  1. Any public purchasing unit may either participate in, sponsor, conduct, or administer a cooperative purchasing agreement for the acquisition of any supplies, services, or construction with any other public purchasing unit or foreign purchasing activity, in accordance with an agreement entered into between the participants. This cooperative purchasing may include, but is not limited to, joint contracts between public purchasing units and access by local public purchasing units to open-ended state public purchasing unit contracts.
  2. Nothing in this code shall limit any public purchasing unit from selling to, acquiring from, or using any property belonging to another public purchasing unit or foreign purchasing activity independent of the requirements of KRS 45A.070 to 45A.180 .
  3. Nothing in this code shall limit or restrict any public purchasing unit from entering into an agreement, independent of the requirements of KRS 45A.045(5) and KRS 45A.070 to 45A.165 , with any other public purchasing unit or foreign purchasing activity for the cooperative use of supplies or services.
  4. Any public purchasing unit may enter into an agreement for the joint or common use of warehousing facilities or the lease or common use of capital equipment or facilities with any other public purchasing unit or a foreign purchasing activity subject to the terms as may be agreed upon between the parties.
  5. Nothing in this code shall limit or restrict the ability of local school districts to acquire supplies outside of the public purchasing agreements when the supplies and equipment meeting the same specifications as the contract items are available at a lower price elsewhere and the purchase does not exceed two thousand five hundred dollars ($2,500).
  6. Nothing in this code shall limit any public purchasing unit from receiving notice of or accepting a price reduction on supplies or equipment when the supplies or equipment are being offered by the vendor with whom a price agreement has been made; the supplies or equipment are being offered in accordance with all terms and conditions that are specified in the price agreement, except those relating to price; and the price reduction is offered to all of the participants in the price agreement. Public purchasing units may accept special price reductions under this subsection even if the reduced price requires the purchase of a specified quantity of units different from the quantity stated in the original price agreement. Price reductions under this subsection shall not be considered to permanently alter the price of the supplies or equipment under the price agreement with the Commonwealth, except where the price reductions are to be made permanent under the express terms of the price agreement and where the purchasing agency which solicited the price agreement determines that the enforcement of those terms serves the best interest of the Commonwealth.

History. Enact. Acts 1978, ch. 110, § 60, effective January 1, 1980; 1990, ch. 496, § 28, effective July 13, 1990; 1996, ch. 89, § 1, effective July 15, 1996; 1997 (1st Ex. Sess.), ch. 4, § 31, effective May 30, 1997; 2003, ch. 98, § 21, effective June 24, 2003.

Opinions of Attorney General.

Based on the provisions of the Model Procurement Code, the Bureau (now Department) for the Blind may proceed with its plans for the bureau of rehabilitation services (BRS) to purchase short-term evaluation and adjustment services from the Bureau (now Department) for the Blind for disabled individuals eligible under the BRS program, even though such individuals may not be blind or visually impaired. OAG 82-293 .

The intent of the General Assembly was to provide for the maximum cooperation between state agencies in order to facilitate the achievement of the purposes for which these agencies were created. OAG 82-293 .

45A.305. Personnel, information, and technical services — Schedule of fees.

  1. Any public purchasing unit is authorized, within its discretion, upon written request from another public purchasing unit or foreign purchasing activity, to provide personnel to the requesting public purchasing unit or foreign purchasing activity. Payment to the public purchasing unit providing the personnel, by the public purchasing unit or foreign purchasing activity making the request, of direct and indirect costs of furnishing the personnel, and the terms relating thereto shall be agreed upon by the parties involved.
  2. The informational, technical, and other services of any public purchasing unit may be made available to any other public purchasing unit or foreign purchasing activity provided that the requirements of the public purchasing unit tendering the services shall have precedence over the requesting public purchasing unit or foreign purchasing activity. Additionally, and subject to agreement between the parties, the requesting public purchasing unit or foreign purchasing activity shall pay all of the expenses of the services so provided.
  3. This Commonwealth, through the Finance and Administration Cabinet, upon request may make available to all public purchasing units the following services, among others:
    1. Standard forms;
    2. Printed manuals;
    3. Product specifications and standards;
    4. Quality assurance testing services and methods;
    5. Qualified products lists;
    6. Source information;
    7. Common use commodities listings;
    8. Supplier prequalification information;
    9. Supplier performance ratings;
    10. Debarred and suspended bidders list;
    11. Forms for invitations for bids, requests for proposals, instructions to bidders, general contract provisions, and other contract forms; and
    12. Contracts or published summaries thereof, including price and time of delivery information.
  4. The Commonwealth, through the Finance and Administration Cabinet, may provide the following technical services, among others:
    1. Development of products specifications;
    2. Development of quality assurance test methods, including receiving, inspection, and acceptance procedures;
    3. Use of state product testing and inspection facilities; and
    4. Use of state personnel training programs.
  5. The Finance and Administration Cabinet may publish a schedule of fees for the services provided under subsections (3) and (4) of this section.

History. Enact. Acts 1978, ch. 110, § 61, effective January 1, 1980; 1982, ch. 393, § 32, effective July 15, 1982.

45A.310. Use of payments — Compliance with code requirements — Review of procurement requirements.

  1. All payments received by a supplying public purchasing unit from any other public purchasing unit or foreign purchasing activity shall be available or appropriated to the supplying public purchasing unit to defray the cost of the services provided.
  2. Where the public purchasing unit or foreign purchasing activity administering a cooperative purchase complies with the requirements of this code, any public purchasing unit participating in such a purchase shall be deemed to have complied with this code.
  3. Where the public purchasing unit or foreign purchasing activity administering a cooperative purchase does not follow this code, then the purchasing officer of a state public purchasing unit must determine, in writing, that he has examined the procurement system of the public purchasing unit or foreign purchasing activity administering the purchase, and has found that the proposed method of purchase substantially meets the requirements of this code.
  4. The Department for Local Government shall collect information concerning the type, cost, quality, and quantity of commonly used supplies, services, or construction being procured or used by state public purchasing units. The Department for Local Government may also collect this information from local public purchasing units. The Department for Local Government may make available all such information to any public purchasing unit upon request.
  5. Nothing in KRS 45A.295 to 45A.320 shall be deemed to require a local public purchasing unit to comply with any other provision of KRS Chapter 45A.

History. Enact. Acts 1978, ch. 110, § 62, effective January 1, 1980; 1980, ch. 250, § 6, effective April 9, 1980; 1998, ch. 69, § 18, effective July 15, 1998; 2007, ch. 47, § 30, effective June 26, 2007; 2010, ch. 117, § 36, effective July 15, 2010.

45A.315. Resolution of disputes.

Any local public purchasing unit is authorized to enter into an agreement with any other local public purchasing unit to establish a procedure to resolve disputes arising from the contracts of the participating local public purchasing units.

History. Enact. Acts 1978, ch. 110, § 63, effective January 1, 1980.

45A.320. Effect of federal grants upon public purchasing units.

If federal grant or other federal requirements differ from the provisions of this code or regulations adopted hereunder, nothing in this code or its regulations shall inhibit any public purchasing unit from complying with the terms and conditions of the federal grant or other federal requirements.

History. Enact. Acts 1978, ch. 110, § 64, effective January 1, 1980.

45A.325. Collusion to restrain bids prohibited.

Any agreement or collusion among bidders or prospective bidders which restrains, tends to restrain, or is reasonably calculated to restrain competition by agreement to bid at a fixed price, or to refrain from bidding, or otherwise, is prohibited.

History. Enact. Acts 1964, ch. 178, § 1; 1966, ch. 126, § 1; repealed and reenact., Acts 1978, ch. 110, § 65, effective January 1, 1979.

Compiler’s Notes.

This section (Enact. Acts 1964, ch. 178, § 1; 1966, ch. 126, § 1) was formerly compiled as KRS 45.460 and was repealed and reenacted as this section by Acts 1978, ch. 110, § 65, effective January 1, 1979.

45A.330. Purpose of KRS 45A.330 to 45A.340.

The purpose of KRS 45A.330 to 45A.340 is to prescribe specific standards to guide public officers and employees in the conduct of their offices or employment, and to proscribe improper conduct to the extent to which such conduct may be sufficiently described to enable statutory prohibitions against it to be properly enforced. It is at the same time recognized that under a free government it is both necessary and desirable that all citizens should have certain specific interests in the decisions of government, and that the activities and conduct of public officers and employees should not be unduly circumscribed.

History. Amend. and reenacted 1978, ch. 110, § 66, effective January 1, 1979.

Compiler’s Notes.

This section (Enact. Acts 1960, ch. 181, § 1, effective July 1, 1961) was formerly compiled as KRS 61.092 and was amended and reenacted as this section by Acts 1978, ch. 110, § 66, effective January 1, 1979.

Opinions of Attorney General.

Assuming that a fiscal court has adopted KRS 45A.330 and KRS 45A.340 , there was no direct or indirect pecuniary interest on the part of a fiscal court commissioner whose son owned and operated a travel agency which handled the purchase of airline tickets for county officials traveling on county business. OAG 81-360 .

45A.335. Definitions for terms used in KRS 45A.330 to 45A.340.

As used in KRS 45A.330 to 45A.340 except as may be otherwise indicated by the context:

  1. “Agency” means any of the departments of the state government, and any division, board, bureau, commission or other instrumentality within such department and any independent state authority, commission, instrumentality or agency, but it does not include a school district or other political subdivision nor an authority, commission, instrumentality or agency created pursuant to compact or agreement between or among the state of Kentucky and another state or states;
  2. “Officer or employee” means a member of the boards of trustees, or regents of a state university, except faculty and student members, and a person holding an office, position or employment in an agency, but it does not include other persons who serve without salary and it does not include members or employees of school boards or district boards of education or faculty or staff of state institutions of higher learning or, as used in KRS 45A.340(5), citizen members of boards, commissions or independent state authorities who may receive per diem allowances for attendance at meetings of the boards, commissions or authorities on which they serve;
  3. “Compensation” means any money, thing of value, or financial benefit conferred in return for services rendered or to be rendered, but it does not include the salary or other payment provided by law or appropriation for services rendered in a public office, position or employment.

History. Repealed and reenacted Acts 1978, ch. 110, § 67, effective January 1, 1979; 1978, ch. 392, § 2, effective June 17, 1978; 1980, ch. 250, § 7, effective April 9, 1980; 1982, ch. 282, § 3, effective April 2, 1982.

Compiler’s Notes.

This section (Enact. Acts 1960, ch. 181, § 2; 1970, ch. 163, § 1) was formerly compiled as KRS 61.094 and was repealed and reenacted as this section by Acts 1978, ch. 110, § 67, effective January 1, 1979.

Legislative Research Commission Note.

Pursuant to 1982 Acts Ch. 282, Section 5, this section became effective on April 2, 1982. However, the reason stated therein for the emergency pertains only to Section 3 of the Act and therefore may not be in compliance with Ky. Const., § 55, which requires a reason for the emergency.

Opinions of Attorney General.

Since the Governor is defined as a department of state government, he is covered under the terms of KRS 61.092 to 61.096 (now KRS 45A.330 to 45A.340 ) OAG 60-242 .

Although KRS 45A.340 prohibits a member of the General Assembly from being a state employee, this section excludes employees of school boards or district boards of education as officers or employees of the state, so a schoolteacher may serve in the State Legislature. OAG 73-99 .

The emergency clause of Acts 1982, ch. 282 related solely to § 3 of the act which amended this section to exclude members of state boards and commissions from the term “officer or employee,” as used in the conflict of interest statute, KRS 45A.340(5); it not only did not relate to the other sections of the bill, which were separable, but it gave no reason to justify that an emergency existed with respect to these sections. In view of the fact that Ky. Const., § 55 requires an act to express in plain language what the emergency is in order for it to be effective only § 3 became effective on April 2, 1982, upon the passage of the act and approval of the Governor, and the remaining sections of the act became effective as ordinary legislation on July 15, 1982. OAG 82-308 .

An employee of a local board of health is not an employee of a state agency as that term is used in KRS 45A.340 . OAG 82-338 .

Faculty or staff of the state universities are not to be included within the definition of “officer or employee” in subdivision (2) of this section and are likewise excluded from the prohibitions set out in KRS 45A.340 deemed to create conflicts of interest for public officers and employees. Accordingly, no conflict of interest was created where a University of Kentucky faculty member was also a shareholder and director of an architectural firm which occasionally contracted with the University. OAG 82-406 .

KRS 446.120 , concerning statutory construction, requires the reading of the word “to” in this section to mean in effect “through” so that this section actually defines terms used in KRS 45A.330 through 45A.340 . OAG 82-406 .

An “officer or employee” as defined in this section and as used in KRS 45A.340 does not include an attorney under a personal service contract to the Motor Vehicle Commission. OAG 84-174 .

The full or part owner of a livestock market cannot legally appoint himself or herself as the official market veterinarian for his or her own livestock market. OAG 87-47 .

45A.340. Conflicts of interest of public officers and employees.

  1. No officer or employee of the General Assembly, or officer or employee of an agency as defined in KRS 45A.335 , shall knowingly receive or agree to receive, directly or indirectly, compensation for any services to be rendered, either by himself or another, in negotiations with the state or an agency for the purchase by the state or an agency of an interest in real property. This section shall not apply to appearances before any court, except that negotiations shall be prohibited as aforesaid at any time.
  2. No officer or employee of an agency or member of a state board or commission, may be in any manner interested, either directly or indirectly, in his own name or in the name of any other person, association, trust, or corporation, in any contract for the performance of any work in the making or letting or administration of which such officer or employee may be called upon to act or vote. No such officer or employee may represent, either as agent or otherwise, any person, association, trust, or corporation, with respect to any application or bid for any contract or work in regard to which such officer or employee may be called upon to act or vote. Nor may any such officer or employee take, solicit, or receive, either directly or indirectly, any money or other thing of value as a gift or bribe or means of influencing his vote or action in his official character. Any contract made and procured in violation hereof is void. For the purposes of this section the holding of less than five percent (5%) of the stock of a corporation is not considered an interest.
  3. No officer or employee of the General Assembly or officer or employee of any agency shall, for compensation, appear before an agency as an expert witness.
  4. No officer or employee of the General Assembly, or officer or employee of any agency, shall act as officer or agent for the Commonwealth or any agency in the transaction of any business with himself, or with any corporation, company, association, or firm in which he or his spouse has any interest greater than five percent (5%) of the total value thereof.
  5. No officer or employee of an agency or appointee shall knowingly himself or by his partners or through any corporation which he controls or in which he owns or controls more than ten percent (10%) of the stock, or by any other person for his use or benefit or on his account, undertake, execute, hold, or enjoy, in whole or in part, any contract, agreement, sale, or purchase of the value of twenty-five dollars ($25) or more, made, entered into, awarded or granted by any agency, unless said contract, agreement, sale or purchase:
    1. Was made or let after public notice and competitive bidding; or
    2. Results from the sale of a craft item to a state park if the employee is an interim state park employee designated as a craftsperson under KRS 148.257 .
  6. No officer, employee, or appointee of an agency, including persons who serve without salary or other payment for their services, shall knowingly receive or agree to receive, directly or indirectly, compensation for any services rendered or to be rendered, either by himself or another, in any cause, proceeding, application, or other matter which is before said agency or before the department of state government in which said agency functions.
  7. No member of a board of trustees or regents shall have an interest in any contract with a state university unless such contract shall have been subjected to competitive bidding in compliance with KRS Chapter 45A, unless such trustee or regent shall have been the lowest bidder and unless such trustee or regent shall have first notified in writing the remaining members of the board, and to the newspaper having the largest circulation in the county in which the state university is located, of his intention to bid on such contract.

History. Amend. and reenacted Acts 1978, ch. 110, § 68, effective January 1, 1979; 1990, ch. 496, § 29, effective July 13, 1990; 2006, ch. 68, § 2, effective July 12, 2006.

Compiler’s Notes.

This section (Enact. Acts 1960, ch. 181, §§ 3 to 9; 1974, ch. 261, § 2; 1976, ch. 206, § 29; 1976, ch. 262, § 17) was formerly compiled as KRS 61.096 and was amended and reenacted as this section by Acts 1978, ch. 110, § 68, effective January 1, 1979.

Legislative Research Commission Note.

(7/14/92). The text of subsection (7) of this statute was enacted by 1978 Ky. Acts ch. 392, sec. 2, as subsection (4) of the former KRS 61.094 , which was reenacted as KRS 45A.335 by 1978 Ky. Acts ch. 110, sec. 67. In codifying the amendment to KRS 45A.335 in 1982 Ky. Acts ch. 282, sec. 3, the Revisor of Statutes acting under KRS 7.136(1) renumbered the former KRS 45A.335(4) as KRS 45A.340(7).

Opinions of Attorney General.

The Lieutenant Governor, by virtue of his membership on the Legislative Research Commission, is included under KRS 61.092 to 61.096 (now KRS 45A.330 to 45A.340 ). OAG 60-242 .

The officers and employees of the Governor’s department would be included under the terms of KRS 61.092 to 61.096 (now KRS 45A.330 to 45A.340 ). OAG 60-242 .

Membership in the house of representatives and on the Education Commission would be incompatible by reason of the fact that service on the Education Commission would constitute an appointment to an office in a state agency for which compensation is provided. OAG 60-539 .

There was no conflict of interests where a state employee presented a bill for acting as a court reporter and taking and transcribing hearings for the sole use of her department when such work was done outside of the employee’s salaried hours. OAG 61-845 .

There was no conflict of interest where an officer of a corporation submitting a competitive bid for a state contract was also a state employee in another department. OAG 63-1027 .

This statute clearly prohibits a member of the General Assembly from accepting any appointment as an officer or employee of the Kentucky Real Estate Commission. In addition, the two positions would be incompatible under Ky. Const., §§ 27 and 28 to the effect that no person exercising duties under one of the departments of government shall at the same time exercise a power properly belonging to either of the others. OAG 68-43 .

A prohibited conflict of interest exists where the State Department of Libraries (now Department for Libraries and Archives) employs a female librarian who is charged by the Department with the selection of children’s books whose husband is a book publisher’s representative. OAG 68-444 .

There is no conflict of interest where a member on the Council on Public Higher Education (now Council on Higher Education) is an owner of a company selling printing, office supplies and furniture to several of the state’s higher educational institutions but, should a matter of business be introduced for consideration by the council which involves directly or indirectly the financial interest of such company, the owner-member should as a matter of record declare such interest, refrain from deliberations and discussions designed to influence the voting, and abstain from voting. OAG 69-46 .

A state representative may legally sell land to a county without violating this statute which relates to the state or its agencies. OAG 69-48 .

There appears to be no violation of KRS 61.096 (now this section) for the Commissioner of the Department of Public Information, as a private person, to engage in the real estate business and to operate a public relations agency, so long as he refrains from dealing in any way with a state agency through the referred to business interests. OAG 69-444 .

It is a violation of the terms of this statute for a person to serve as chairman of the Kentucky Public Service Commission while he is a partner in a certified public accounting partnership that performs an annual audit of a state university and/or the Kentucky state auditor’s office. OAG 70-55 .

Members of the State Board of Examiners and registration of architects are officers of a state agency and are, as a consequence, subject to the provisions of this statute. OAG 70-128 .

The conflict of interests provisions did not apply to a situation where a grant was made to the state theater by way of a personal service contract where one of the members of the Arts Commission was involved in the theater but did not vote, since the contract was essentially a grant. OAG 70-480 .

There was no conflict of interests where a member of the board of regents of a state university, serving without compensation, was awarded a contract with another unrelated state agency. OAG 70-693 .

The offices of assistant Commonwealth attorney and state representative are incompatible. OAG 71-24 .

A candidate for state office who is a coowner or substantial stockholder in a firm doing business with or contracted to the commonwealth for the construction of highways could not take office without violating the Conflict of Interest Act. OAG 71-68 .

Where the Lieutenant Governor, while serving as a member of the turnpike authority of Kentucky by requirement, voted in favor of a turnpike project and his family business subsequently received the fee for selling the performance bond to cover the lowest bidder, the Lieutenant Governor did not violate subsection (6) or (7) (now subsections (5) and (6)) of this section. OAG 71-224 .

Under subsection (6) (now subsection (5)) of this section, part-time parole officer for the State Department of Corrections (now Corrections Cabinet) could not contract with the Kentucky Department of Highways as a title examiner, since such an arrangement would constitute a conflict of interest. OAG 72-144 .

An attorney who is a member of a law firm representing clients in matters before the Kentucky Board of Tax Appeals and the Department of Revenue (now Revenue Cabinet) could not be a member of the Board. OAG 72-188 .

A faculty member of the University of Louisville may not serve at the same time as a member of the state legislature. OAG 72-442 .

A person who is a full or part-time teacher at the university could become a candidate for the office of state representative but could not serve as a member of the state Legislature and continue his position with the university. OAG 72-827 .

A member of the General Assembly may not at the same time hold a teaching job at a college which is part of the University of Kentucky community college system. OAG 73-8 .

As community mental health boards are eligible for membership in the Kentucky employees’ retirement system under KRS 61.510 , board members and employees are state officers and employees for all purposes; therefore an officer or employee of the board could not at the same time serve as a member of the State Legislature but such prohibitions would not affect the officer’s or employee’s right to become a candidate for the State Legislature. OAG 73-94 .

A contracting company whose president has been elected a state representative is prohibited from contracting with the state or any of its agencies only if the contract was not let by competitive bidding but such prohibition does not apply to contracts awarded as a result of competitive bidding. OAG 73-760 .

Any contract entered into by an appointee or a member of a regional health board and/or board of health whereby he obtains any profits from the connected service center is prohibited by subsection (6) of this section unless approved under KRS 45.360 (now repealed) by the Executive Department for Finance and Administration (now Finance and Administration Cabinet). OAG 74-700 .

There is no impropriety in paying a per diem to three state employees for their attendance at meetings of the board for licensing hearing aid dealers as there is no constitutional or statutory incompatibility between the occupations of these people and their board membership as the per diem represents a payment for work or duties not job associated and, as most of the meetings fall on Saturdays, they fall without the normal work week and are truly additional hours of service given by the members to the Commonwealth. OAG 75-39 .

In the absence of a per se violation of the conflict of interests provisions under this section, there is no conflict of interests where a railroad commissioner continues to sell fuel products to a common carrier after taking office on the Railroad Commission, but the question of whether the opportunity for self-interest is more than a mere remote possibility is ultimately for the courts to decide. OAG 75-702 .

There is no conflict of interests where a railroad commissioner continues to supply gasoline to the State Highway Department after taking office on the Railroad Commission, if the contract with the highway department is let on a competitive bid basis. OAG 75-702 .

The employment by the office of judicial planning of a member of the Kentucky Crime Commission, an agency which approves a portion of its funding, does not represent either a statutory or common-law conflict of interest provided that the employee disqualifies himself from any situations where one position interferes or is subject to the supervision of the other. OAG 76-132 .

A member of the General Assembly who is a co-sponsor of a proposed apartment development would not be precluded from seeking a construction loan for such development from the Kentucky Housing Corporation since the 1976 amendment by § 17 of Chapter 262 removed the reference to “member of the legislature” from subsection (5) (formerly subsection (6)) of KRS 61.096 (now this section) and since the situation involves a loan application with a political subdivision of the Commonwealth and is not covered in KRS Chapter 45 dealing with state contracts. OAG 76-437 .

This section was amended twice in 1976 by Chapter 206 approved by the Governor on March 29, 1976 and by Chapter 262 approved by the governor on March 30, 1976 and since where two acts passed at the same session are repugnant to each other and cannot be executed without one offending the other the last one enacted is the later expression of the legislative will and must prevail; therefore Chapter 262, § 17 as it amends KRS 61.096 (amended and reenacted as this section by Acts 1978, ch. 110, § 68, effective January 1, 1979) prevails. OAG 76-437 .

There would be no conflict of interest where a doctor who was the director of a Kentucky state biological laboratory established and operated a private biological supply business as long as the business was completely separate from his duties with the state and no business was transacted with the state. OAG 76-486 .

Inasmuch as this section requires that an employee actually carry out an act that is incompatible with his employment responsibilities in order to be in a conflict of interest situation, the mere fact that property leased by a reclamation inspector to a coal company is located in the county in which he inspects an assigned number of coal companies does not show a violation. OAG 76-680 .

There is nothing under the state conflict of interest act, particularly this section or KRS 61.190 (now repealed) that would prohibit a person who is chairman of the State Personnel Board from accepting a federal grant pursuant to an application made to to the Kentucky heritage commission for a historical grant to restore certain property located in a historical zone. OAG 77-41 .

Membership on the Occupational Safety and Health Review Commission would not prohibit the proprietor of a consulting engineering firm from executing contracts with any other state agency. OAG 77-620 .

No conflict of interest exists in the simultaneous holding of membership on the Real Estate Commission and acting as principal officer of an independent commercial real estate school, provided no contractual interest exists between either the member or the school and the Commission. OAG 79-218 .

Nothing in the Constitution or laws of the Commonwealth prevents a contract between a state agency and a corporation whose vice-president is a member of the General Assembly where the legislator neither owns nor controls the corporation nor more than five percent of its stock. OAG 79-421 .

An Eastern Kentucky University professor who holds a consultant’s license from the Kentucky Department of Insurance, is a member of the Kentucky Insurance Regulatory Board and is a chairholder for insurance studies at Eastern Kentucky University may enter into a personal service contract with the Department of Insurance to revise study manuals for use by applicants for insurance agents’ licenses. OAG 80-5 .

Former KRS 45A.335(4) (now subsection (7) of this section) is applicable only to contracts executed during the board member’s tenure and no conflict of interest exists where the contracts were executed prior to the board member becoming a member of the board of trustees or regents. OAG 80-379 .

An employee of a local board of health is not an employee of a state agency as that term is used in this section. OAG 82-338 .

Faculty or staff of the state universities are not to be included within the definition of “officer or employee” in KRS 45A.335(2) and are likewise excluded from the prohibitions set out in this section deemed to create conflicts of interest for public officers and employees. Accordingly, no conflict of interest was created where a University of Kentucky faculty member was also a shareholder and director of an architectural firm which occasionally contracted with the University. OAG 82-406 .

KRS 446.120 , concerning statutory construction, requires the reading of the word “to” in KRS 45A.335 to mean in effect “through” so that KRS 45A.335 actually defines terms used in KRS 45A.330 through 45A.340 . OAG 82-406 .

This section was not applicable where an official of the Division of Licensing and Regulation of the Cabinet for Human Resources was married to an administrator of an intermediate care facility since this section only applies to matters of procurement and the division is not involved in the awarding of any type of contract to an intermediate care facility. OAG 83-33 .

The State Personnel Board could select an assistant Commonwealth attorney to serve as general counsel and hearing officer for the Board without first seeking competitive bidding for the professional services; further, such employment would not involve the attorney in a conflict of interest nor incompatibility of offices. OAG 83-138 .

An “officer or employee” as defined in KRS 45A.335 and as used in this section does not include an attorney under a personal service contract to the Motor Vehicle Commission. OAG 84-174 .

There is no statutory conflict of interest for an attorney under a personal service contract to the Motor Vehicle Commission to also represent an automobile dealers trade association. OAG 84-174 .

The full or part owner of a livestock market cannot legally appoint himself or herself as the official market veterinarian for his or her own livestock market. OAG 87-47 .

If the governor owned a controlling interest in a bookstore, any possible sales or agreements by the bookstore to or with any commonwealth agency would have to be on a competitive bidding basis as required by subsection (5) of this section and KRS 45A.080 . OAG 87-65 .

Subsection (2) of this section would prohibit the governor and chairman of the Property and Buildings Commission from being interested in the making or administration of a contract for the management of the parking structure as to which he may be called upon to act or vote. OAG 87-65 .

The Governor’s interest in the administration of the management agreement for the conference center in the hotel and his positions as chairman of the authority and chairman of the Property and Buildings Commission would make a violation of subsection (2) of this section unavoidable. OAG 87-65 .

This section, Ky. Const., § 173, KRS 61.190 (now repealed), and the common law rules that apply to conflicts of interest are applicable to anyone holding the office of Governor. OAG 87-65 .

Where the Governor owned a controlling interest in a hotel and the state was the primary user of the hotel, the use of the facilities by commonwealth employees and agencies would exceed $25 each and would not involve competitive bidding; therefore, these transactions would involve an illegal conflict of interest in violation of subsection (5) of this section and KRS 45A.080 . OAG 87-65 .

The Kentucky High School Athletic Association may purchase property from an entity in which the governor is a general partner, without violating this section. OAG 90-27 .

Attorney General opined that no statutory conflict of interest exists under this section and KRS 160.180 between the positions of member of the State Board for Elementary and Secondary Education and executive director of the Lincoln Foundation; but it was not possible for the Attorney General to provide a general ruling as to whether a potential conflict of interest may exist at common law. OAG 91-226 .

Research References and Practice Aids

Cross-References.

Abuse of public office, Penal Code, KRS 522.010 et seq.

Receiving unlawful compensation, KRS 521.040 .

Soliciting unlawful compensation, KRS 521.030 .

45A.340. Conflicts of interest of public officers and employees.

  1. No officer or employee of the General Assembly, or officer or employee of an agency as defined in KRS 45A.335 , shall knowingly receive or agree to receive, directly or indirectly, compensation for any services to be rendered, either by himself or another, in negotiations with the state or an agency for the purchase by the state or an agency of an interest in real property. This section shall not apply to appearances before any court, except that negotiations shall be prohibited as aforesaid at any time.
  2. No officer or employee of an agency or member of a state board or commission, may be in any manner interested, either directly or indirectly, in his own name or in the name of any other person, association, trust, or corporation, in any contract for the performance of any work in the making or letting or administration of which such officer or employee may be called upon to act or vote. No such officer or employee may represent, either as agent or otherwise, any person, association, trust, or corporation, with respect to any application or bid for any contract or work in regard to which such officer or employee may be called upon to act or vote. Nor may any such officer or employee take, solicit, or receive, either directly or indirectly, any money or other thing of value as a gift or bribe or means of influencing his vote or action in his official character. Any contract made and procured in violation hereof is void. For the purposes of this section the holding of less than five percent (5%) of the stock of a corporation is not considered an interest.
  3. No officer or employee of the General Assembly or officer or employee of any agency shall, for compensation, appear before an agency as an expert witness.
  4. No officer or employee of the General Assembly, or officer or employee of any agency, shall act as officer or agent for the Commonwealth or any agency in the transaction of any business with himself, or with any corporation, company, association, or firm in which he or his spouse has any interest greater than five percent (5%) of the total value thereof.
  5. No officer or employee of an agency or appointee shall knowingly himself or by his partners or through any corporation which he controls or in which he owns or controls more than ten percent (10%) of the stock, or by any other person for his use or benefit or on his account, undertake, execute, hold, or enjoy, in whole or in part, any contract, agreement, sale, or purchase of the value of twenty-five dollars ($25) or more, made, entered into, awarded or granted by any agency, unless said contract, agreement, sale or purchase:
    1. Was made or let after public notice and competitive bidding; or
    2. Results from the sale of a craft item to a state park if the employee is an interim state park employee designated as a craftsperson under KRS 148.257 .
  6. No officer, employee, or appointee of an agency, including persons who serve without salary or other payment for their services, shall knowingly receive or agree to receive, directly or indirectly, compensation for any services rendered or to be rendered, either by himself or another, in any cause, proceeding, application, or other matter which is before said agency or before the department of state government in which said agency functions.
  7. No member of a board of trustees or regents shall have an interest in any contract with a state university unless such contract shall have been subjected to competitive bidding in compliance with KRS Chapter 45A, unless such trustee or regent shall have been the lowest bidder and unless such trustee or regent shall have first notified in writing the remaining members of the board, and to the newspaper having the largest circulation in the county in which the state university is located, of his intention to bid on such contract.
  8. No officer, employee, or appointee of an agency, including persons who serve without salary or other payment for their services, may participate in the procurement of a contract under this chapter that relates to his or her prior employment until at least one (1) year has passed since his or her termination with that employer.

HISTORY: Amend. and reenacted Acts 1978, ch. 110, § 68, effective January 1, 1979; 1990, ch. 496, § 29, effective July 13, 1990; 2006, ch. 68, § 2, effective July 12, 2006; 2022 ch. 150, § 4.

45A.343. Local public agency may adopt provisions of KRS 45A.345 to 45A.460 — Effect of adoption — Contracts required to mandate revealing of violations of and compliance with specified KRS chapters — Effect of nondisclosure or noncompliance.

  1. Any local public agency may adopt the provisions of KRS 45A.345 to 45A.460 . No other statutes governing purchasing shall apply to a local public agency upon adoption of these provisions.
  2. After July 15, 1994, any contract entered into by a local public agency, whether under KRS 45A.345 to 45A.460 or any other authority, shall require the contractor and all subcontractors performing work under the contract to:
    1. Reveal any final determination of a violation by the contractor or subcontractor within the previous five (5) year period pursuant to KRS Chapters 136, 139, 141, 337, 338, 341, and 342 that apply to the contractor or subcontractor; and
    2. Be in continuous compliance with the provisions of KRS Chapters 136, 139, 141, 337, 338, 341, and 342 that apply to the contractor or subcontractor for the duration of the contract.
  3. A contractor’s failure to reveal a final determination of a violation by the contractor of KRS Chapters 136, 139, 141, 337, 338, 341, and 342 or to comply with these statutes for the duration of the contract shall be grounds for the local public agency’s:
    1. Cancellation of the contract; and
    2. Disqualification of the contractor from eligibility for future contracts awarded by the local public agency for a period of two (2) years.
  4. A subcontractor’s failure to reveal a final determination of a violation by the subcontractor of KRS Chapters 136, 139, 141, 337, 338, 341, and 342 or to comply with these statutes for the duration of the contract shall be grounds for the local public agency’s disqualification of the subcontractor from eligibility for future contracts for a period of two (2) years.

History. Enact. Acts 1980, ch. 250, § 9, effective April 9, 1980; 1994, ch. 491, § 2, effective July 15, 1994; 1998, ch. 520, § 2, effective July 15, 1998.

NOTES TO DECISIONS

1.Applicability.

The Kentucky Model Procurement Code (MPC), KRS 45A.010 to 45A.990 , was not applicable to a county riverport authority where neither the county, nor the authority, had adopted the provisions of the MPC as required by this section. E.M. Bailey Distributing Co. v. Conagra, Inc., 676 S.W.2d 770, 1984 Ky. LEXIS 235 ( Ky. 1984 ).

Where a city and its utility commission never adopted Kentucky’s Model Procurement Code (KMPC), but the commission entered into a grant agreement providing that it would construct a new water tank consistent with the KMPC, the language of the grant agreement did not bring the project within the scope of the KMPC, and a rejected contractor with the lowest bid lacked standing to assert a violation of the KMPC because it was not a party to the grant agreement. Laurel Constr. Co. v. Paintsville Util. Comm'n, 336 S.W.3d 903, 2010 Ky. App. LEXIS 40 (Ky. Ct. App. 2010).

Opinions of Attorney General.

Where the General Assembly in the 1980 session enacted Senate Bill 163 (ch. 250), which created this section and made the Model Procurement Code coverage optional for local public agencies, and at the same session they amended KRS 45A.350 (now repealed) by Senate Bill 368 (ch. 293), which section states that the Model Procurement Code mandatorily applies to all local public agencies, Senate Bill 163 is controlling because it deals minutely with specific and detailed legislation regarding public procurement, as contrasted with the general and broad brush policy expressed in Senate Bill 368 about prison-made goods, and because Senate Bill 163 contained an emergency clause, and Senate Bill 368 did not. It is presumed that the General Assembly intended the act with the emergency clause to prevail; thus the adoption of the Model Procurement Code by any local public agency is optional. OAG 80-279 (opinion prior to repeal of KRS 45A.350 in 1984).

A volunteer fire protection district, established under KRS Chapter 75, is a “local public agency,” as defined in KRS 45A.345 (9), since it is a “special district” and a “political subdivision”, thus the volunteer fire department district would come under the Model Procurement Code (KRS 45A.345 to 45A.460 ), provided that the district so chooses to come under the code. OAG 80-301 .

Acts 1982, ch. 282, which amended KRS 45A.080 , 45A.100 , 45A.335 , had no effect upon fiscal courts which had adopted KRS 45A.345 through 45A.460 . OAG 82-324 .

Any fiscal court adopting KRS 45A.345 through 45A.460 may, under KRS 45A.385 , effect purchases not exceeding $5,000 (now $7,500) without formal bidding procedures, while those fiscal courts, under current law, which have not adopted such sections, are governed by KRS 424.260 . OAG 82-324 .

Where a riverport authority, created pursuant to KRS 65.510 et seq., has chosen to not adopt provisions of the Model Procurement Code under this section, such riverport authority automatically comes under the mandatory terms of the bidding statute, KRS 424.260 . OAG 84-297 (modifying OAG 80-71 ).

KRS 45A.420(2) allows a public agency to contract, without bidding, with a vendor who is on the current state contract list but is offering the agency a price lower than on the state price list, provided the local agency has adopted the provisions of KRS 45A.345 through 45A.460 as authorized under this section. OAG 90-75 .

The Model Procurement Code did not apply to a mayor’s development contract with a company where the metro council had previously taken action to declare the project that was the subject of the contract as a “signature project” under former KRS 65.7075 [repealed, reenacted and amended as KRS 154.30-050 ] and identified the company with which the mayor contracted as the developer of the project. The Metro Council effectively placed the Development Agreement outside the scope of the Model Procurement Code. OAG 09-007 .

A local public agency that has not adopted the Model Procurement Code is not required to follow competitive bidding procedures for insurance, and may contract with an insurance broker to solicit and receive bids for insurance, although competitive bidding remains preferred. A local public agency that has adopted the Model Procurement Code must follow all applicable provisions in seeking contracts with insurance brokers. OAG 13-006 .

45A.345. Definitions for KRS 45A.343 to 45A.460.

As used in KRS 45A.343 to 45A.460 , unless the context indicates otherwise:

  1. “Aggregate amount” means the total dollar amount during a fiscal year of items of a like nature, function, and use the need for which can reasonably be determined at the beginning of the fiscal year. Items the need for which could not reasonably be established in advance or which were unavailable because of a failure of delivery need not be included in the aggregate amount.
  2. “Capital cost avoidance” means moneys expended by a local public agency to pay for an energy conservation measure identified as a permanent equipment replacement and whose cost has been discounted by any additional energy and operation savings generated from other energy conservation measures identified in the guaranteed energy savings contract, except that for school districts capital cost avoidance shall also mean moneys expended by the district from one (1) or more of the following sources:
    1. General fund;
    2. Capital outlay allotment under KRS 157.420 ; and
    3. State and local funds from the Facilities Support Program of Kentucky under KRS 157.440 .
  3. “Chief executive officer” means the mayor, county judge/executive, superintendent of schools, or the principal administrative officer of a local public agency, or the person designated by the chief executive officer or legislative body of the local public agency to perform the procurement function.
  4. “Construction” means the process of building, altering, repairing, or improving any public structure or building, or other public improvements of any kind to any public real property. It does not include the routine operation, routine repair, or routine maintenance of existing structures, buildings, or real property.
  5. “Contract” means all types of local public agency agreements, including grants and orders, for the purchase or disposal of supplies, services, construction, or any other item. It includes awards and notices of award; contracts of a fixed-price, cost, cost-plus-a-fixed-fee, or incentive type; contracts providing for the issuance of job or task orders; leases; letter contracts; and purchase orders. It also includes supplemental agreements with respect to any of the foregoing. It does not include labor contracts with employees of local public agencies.
  6. “Document” means any physical embodiment of information or ideas, regardless of form or characteristic, including electronic versions thereof.
  7. “Established catalogue price” means the price included in the most current catalogue, price list, schedule, or other form that:
    1. Is regularly maintained by the manufacturer or vendor of an item; and
    2. Is either published or otherwise available for inspection by customers; and
    3. States prices at which sales are currently or were last made to a significant number of buyers constituting the general buying public for that item.
  8. “Evaluated bid price” means the dollar amount of a bid after bid price adjustments are made pursuant to objective measurable criteria, set forth in the invitation for bids, which affect the economy and effectiveness in the operation or use of the product, such as reliability, maintainability, useful life, residual value, and time of delivery, performance, or completion.
  9. “Invitation for bids” means all documents, whether attached or incorporated by reference, utilized for soliciting bids in accordance with the procedures set forth in KRS 45A.365 .
  10. “The legislative body or governing board” means a council, commission, or other legislative body of a city, consolidated local government, or urban-county; a county fiscal court; board of education of a county or independent school district; board of directors of an area development district or special district; or board of any other local public agency.
  11. “Local public agency” means a city, county, urban-county, consolidated local government, school district, special district, or an agency formed by a combination of such agencies under KRS Chapter 79, or any department, board, commission, authority, office, or other sub-unit of a political subdivision which shall include the offices of the county clerk, county sheriff, county attorney, coroner, and jailer.
  12. “May” means permissive. However, the words “no person may . . ..” mean that no person is required, authorized, or permitted to do the act prescribed.
  13. “Negotiation” means contracting by either the method set forth in KRS 45A.370 , 45A.375 , or 45A.380 .
  14. “Noncompetitive negotiation” means informal negotiation with one (1) or more vendor, contractor, or individual without advertisement or notice.
  15. “Objective measurable criteria” means sufficient information in the invitation to bid as to weight and method of evaluation so that the evaluation may be determined with reasonable mathematical certainty. Criteria which are otherwise subjective, such as taste and appearance, may be established when appropriate.
  16. “Person” means any business, individual, union, committee, club, or other organization or group of individuals.
  17. “Procurement” means the purchasing, buying, renting, leasing, or otherwise obtaining any supplies, services, or construction. It also includes all functions that pertain to the obtaining of any public procurement, including description of requirements, selection, and solicitation of sources, preparation and award of contract, and all phases of contract administration.
  18. “Request for proposals” means all documents, whether attached or incorporated by reference, utilized for soliciting proposals in accordance with the procedures set forth in KRS 45A.370 , 45A.375 , 45A.380 , or 45A.385 .
  19. “Responsible bidder or offeror” means a person who has the capability in all respects to perform fully the contract requirements, and the integrity and reliability which will assure good faith performance.
  20. “Responsive bidder” means a person who has submitted a bid under KRS 45A.365 which conforms in all material respects to the invitation for bids, so that all bidders may stand on equal footing with respect to the method and timeliness of submission and as to the substance of any resulting contract.
  21. “Reverse auction” means a real-time, structured bidding process, usually lasting less than one (1) hour, and taking place during a previously scheduled time and Internet location, during which multiple bidders, anonymous to each other, submit revised, lower bids to provide the solicited good or leased space.
  22. “Services” means the rendering, by a contractor, of its time and effort rather than the furnishing of a specific end product other than reports which are merely incidental to the required performance of service. It does not include labor contracts with employees of local public agencies.
  23. “Shall” means imperative.
  24. “Specifications” means any description of a physical or functional characteristic of a supply, service, or construction item. It may include a description of any requirement for inspecting, testing, or preparing a supply, service, or construction item for delivery.
  25. “Supplemental agreement” means any contract modification which is accomplished by the mutual action of the parties.
  26. “Supplies” means all property, including but not limited to leases on real property, printing, and insurance, except land or a permanent interest in land.
  27. “Energy conservation measure” means a training program or facility alteration designed to reduce energy consumption or operating costs, and may include one (1) or more of the following:
    1. Insulation of the building structure or systems within the building;
    2. Storm windows or doors, caulking or weatherstripping, multiglazed windows or doors, heat absorbing or heat reflective glazed and coated window or door systems, additional glazing, reductions in glass area, or other window and door system 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 the energy efficiency of the lighting system without increasing the overall illumination of a facility, unless an increase in illumination is necessary to conform to the applicable state or local building code 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, water, or wastewater conservation measures that provide long-term operating cost reductions or billable revenue increases;
    9. Any life safety measures that provide long-term operating cost reductions;
    10. Water and wastewater conservation measures, including plumbing fixtures and infrastructure;
    11. Equipment upgrades that improve the accuracy of billable revenue generating systems; or
    12. Automated, electronic, or remotely controlled systems or measures that reduce direct personnel costs.
  28. “Guaranteed energy savings contract” means a contract for the evaluation and recommendation of energy, water, and wastewater conservation measures and for implementation of one (1) or more of those measures. The contract shall provide that all payments, except obligations on termination of the contract before its expiration, are to be made over time and the savings are guaranteed to the extent necessary to make payments for the cost of the design, installation, and maintenance of energy, water, and wastewater conservation measures.
  29. “Qualified provider” means a person or business experienced in the design, implementation, and installation of energy, water, and wastewater conservation measures and is determined to be qualified by the local public agency. The qualified provider shall be responsible for and shall provide the local public agency with the following information regarding guaranteed energy, water, and wastewater savings contracts:
    1. Project design and specifications;
    2. Construction management;
    3. Construction;
    4. Commissioning;
    5. On-going services as required;
    6. Measurement and verification of savings for guaranteed energy, water, and wastewater savings contracts; and
    7. Annual reconciliation statements as provided in KRS 45A.352(8).

History. Enact. Acts 1978, ch. 110, § 70, effective January 1, 1980; 1980, ch. 250, § 8, effective April 9, 1980; 1994, ch. 491, § 3, effective July 15, 1994; 1996, ch. 203, § 2, effective July 15, 1996; 1998, ch. 120, § 12, effective July 15, 1998; 1998, ch. 375, § 2, effective July 15, 1998; 2002, ch. 346, § 12, effective July 15, 2002; 2005, ch. 163, § 1, effective June 20, 2005; 2010, ch. 63, § 6, effective July 15, 2010.

NOTES TO DECISIONS

1.“May” Defined.

KRS 45A.425 does not make it mandatory that the agency follow the other sections of Chapter 45A in disposing or selling of its property, since it provides that it “may” sell in accordance with the code and, by virtue of subdivision (10) of this section, “may” means permissive. Ohio River Conversions, Inc. v. Owensboro, 663 S.W.2d 759, 1984 Ky. App. LEXIS 444 (Ky. Ct. App. 1984).

Opinions of Attorney General.

A city electric plant board, operating under KRS 96.550 to 96.900 , is a board or agency of that city, itself a subdivision of the state. OAG 79-618 .

The definition of “local public agency” in subsection (9) of this section clearly includes any agency of a city and its boards or commissions. OAG 79-618 .

The electric plant board of the city of Paducah, operating under KRS 96.550 to 96.900 , is required to abide by the terms of the Kentucky Model Procurement Code. OAG 79-618 . But see OAG 80-279 .

A fire protection district is a special district within the definition of a local public agency in subdivision (9) of this section; therefore, the model procurement code, KRS 45A.345 to 45A.460 , applies to fire protection districts. OAG 79-647 ; 80-12. But see OAG 80-279 .

The Kentucky Model Procurement Code is sufficiently flexible to permit the designation of more than one specific individual as a procurement or purchasing agent or officer. OAG 80-21 .

The Kentucky Model Procurement Act, which became effective for local public agencies as of January 1, 1980, applies to the purchasing procedures of a municipally owned electric distribution system operating under the Little TVA Act. OAG 80-63 . But see OAG 80-279 .

As of January 1, 1980, riverport authorities must look to the applicable provisions of the Kentucky Model Procurement Code in connection with their procurement programs. OAG 80-71 .

The term “authority,” as used in this section, includes a riverport authority. OAG 80-71 .

The Model Procurement Code, KRS Chapter 45A, does not govern any transaction unless there will be an expenditure of a local public agency’s funds for either services, supplies or construction; where no school funds, either general account or activity account, are expended in the purchasing of graduation rings, graduation invitations or caps and gowns, the provisions of the Model Procurement Code have no application. OAG 80-108 .

A local air board is a local public agency as defined in subsection (9) of this section, subject to those sections of the Kentucky Model Procurement Code dealing with procurement by a local public agency, KRS 45A.345 to 45A.460 ; if the air board is the lessor, the code does not have to be applied but if the air board is the lessee, the code does apply and must be utilized. OAG 80-117 . But see OAG 80-279 .

Under the literal language of subsection (9) of this section, a county hospital commission is a local public agency, since it is a commission and subunit of a political subdivision, i.e., of a county. OAG 80-128 .

Where a city has established a separate independent agency to administer the Urban Renewal Act pursuant to KRS 99.350 , that urban renewal agency would constitute a “local public agency” as defined in subsection (9) of this section and, therefore, the agency would have to follow the requirements of the Model Procurement Code. OAG 80-169 .

The enumerated county constitutional officers listed as subunits of a county in subsection (8) (now subsection (9)) of this section must generally integrate their procurement contracts with the fiscal court’s procurement program. OAG 80-180 .

A volunteer fire protection district, established under KRS Chapter 75, is a “local public agency,” as defined in subsection (9) of this section since it is a “special district” and a “political subdivision”, thus the volunteer fire department district would come under the Model Procurement Code (KRS 45A.345 to 45A.460 ), provided that the district so chooses to come under the code. OAG 80-301 .

A county metropolitan server district may, whether operating under KRS 424.260 , the bidding statute, or this section, the model procurement code, adopt a “Buy American” clause, which requires a contractor or supplier to furnish only goods manufactured in America, as a standard procurement policy, included in all purchasing contracts and bid specifications. OAG 81-34 .

Where a fiscal court has specifically adopted the Kentucky Model Procurement Code under KRS 45A.350 (now repealed) it must under subdivision (23) of this section purchase insurance under a competitive bidding system, even though KRS 424.260 excepts professional services such as insurance from competitive bidding. OAG 81-109 .

A statutory requirement of advertisement for bids is “jurisdictional,” and a fiscal court is without power to enter into a contract without such advertisement, where the purchase requires bidding. Further, a party deals with a public agency at its peril if it contracts with one and fails to inquire into the power of the agency to execute it. OAG 82-125 .

The matter of letting out for bids the gasoline and oil needed for the county road department is left to the good business judgment of the fiscal court in terms of the period of consumption, price fluctuations, availability of the commodity for a definite period, etc. However, a fiscal court should not deliberately buy the needed commodities in “dribbles and dabs” merely to circumvent advertised bidding. OAG 82-125 .

The number of months’ supply of any needed commodity which must be considered for bidding purposes is a matter, because of its nature, that must be left to the sound administrative discretion of the fiscal court. OAG 82-125 .

The three important benefits of the bidding process are: (a) an offering to the public, (b) an opportunity for competition and (c) a basis for an exact comparison of bids. OAG 82-125 .

Where a county is under KRS 45A.345 to 45A.460 , KRS 45A.365 , relating to the major policy of competitive sealed bidding, would apply to purchase of its gasoline, petroleum, and other supplies used by the county road department, except as otherwise provided by KRS 45A.370 to 45A.385 . OAG 82-125 .

If a school district has chosen to operate under the Model Procurement Code, competitive bidding for general liability insurance on buildings and vehicles, etc., is required absent a legitimate, written determination by the local public agency to the contrary; this conclusion is based on the fact that in subdivision (23) of this section, the term “supplies” is defined to include insurance, and that KRS 45A.380(10) authorizes an exemption from competitive bidding by written determination if the “contract is for group life insurance, group health and accident insurance, group professional liability insurance, workers’ compensation insurance, and unemployment insurance,” an exemption which does not include general liability insurance. OAG 82-170 .

There is no conflict between KRS 424.260 and the Model Procurement Code, KRS Ch. 45A, concerning the necessity of school boards taking competitive bids for general liability insurance, since local school districts, as local public agencies, have a choice as to whether to operate with respect to their procurement needs under either the local Model Procurement Code or KRS 424.260 . OAG 82-170 .

Acts 1982, ch. 282, which amended KRS 45A.080 , 45A.100 and 45A.335 , had no effect upon fiscal courts which had adopted KRS 45A.345 through 45A.460 . OAG 82-324 .

Any fiscal court adopting KRS 45A.345 through 45A.460 may, under KRS 45A.385 , effect purchases not exceeding $5,000 (now $7,500) without formal bidding procedures, while those fiscal courts, under current law, which have not adopted such sections, are governed by KRS 424.260 . OAG 82-324 .

The county sheriff is not required to follow the purchasing procedures of the urban county government and may or may not adopt KRS 45A.345 through 45A.460 of the Model Procurement Code. OAG 83-249 .

Should a fee officer have to purchase items of equipment or personal property that are not consumable but will have a reasonable life span, such as motor vehicles, the title would be taken in the name of the county and the purchases would be subject to the county’s handling of the purchases and applicable provisions relating to bidding law under KRS 424.260 or KRS Chapter 45A (where the fiscal court has adopted the provisions of KRS 45A.345 through 45A.460 ). Where the county clerk or sheriff has adopted KRS 45A.345 through 45A.460 , such officer could handle the purchase under the applicable bidding law in KRS Chapter 45A, but only with the approval of the fiscal court; and the title to the nonconsumable property or property of any reasonable life span would be in the name of the county. OAG 83-448 .

Even though a riverport authority is created jointly by a city and county, the created authority is still a body politic and corporate, it is still a special district and, thus, the district, i.e., the riverport authority, is subject to the bidding principle under KRS 424.260 , or the Model Procurement Code if adopted by the authority. OAG 84-196 .

The bidding statute, KRS 424.260 , applies to a riverport authority created pursuant to KRS 65.510 et seq., unless the authority has specifically adopted the Model Procurement Code (KRS 45A.345 to 45A.460 ), in which latter case the Model Procurement Code, with its bidding requirements, applies to the riverport authority. OAG 84-196 .

A fire protection district is a local public agency under subsection (9) of this section. OAG 85-65 .

KRS 45A.420(2) allows a public agency to contract, without bidding, with a vendor who is on the current state contract list but is offering the agency a price lower than on the state price list, provided the local agency has adopted the provisions of this section through KRS 45A.460 as authorized under KRS 45A.343 . OAG 90-75 .

The Model Procurement Code allows local public agencies to be flexible in order to take advantage of discounts or cost savings available by means of noncompetitive negotiations if competitive negotiations would not yield greater savings in a given circumstance. OAG 90-75 .

The requirements of KRS 45A.380 concerning “noncompetitive negotiation,” as that term is defined by subdivision (12) of this section, allow a local public agency to enter into contracts by noncompetitive negotiations and without bidding, if it simply makes a written determination that competitive negotiation is not feasible and the contract is for a sale of supplies at reduced prices that will afford a purchase at savings to the local public agency. OAG 90-75 .

The term “negotiating” used in KRS 45A.420(2) was intended to be the same term of art as defined by subdivision (11) of this section. OAG 90-75 .

The Model Procurement Code did not apply to a mayor’s development contract with a company where the metro council had previously taken action to declare the project that was the subject of the contract as a “signature project” under former KRS 65.7075 [repealed, reenacted and amended as KRS 154.30-050 ] and identified the company with which the mayor contracted as the developer of the project. The Metro Council effectively placed the Development Agreement outside the scope of the Model Procurement Code. OAG 09-007 .

A local public agency that has not adopted the Model Procurement Code is not required to follow competitive bidding procedures for insurance, and may contract with an insurance broker to solicit and receive bids for insurance, although competitive bidding remains preferred. A local public agency that has adopted the Model Procurement Code must follow all applicable provisions in seeking contracts with insurance brokers. OAG 13-006 .

45A.350. Application. [Repealed.]

Compiler’s Notes.

This section (Enact. Acts 1978, ch. 110, § 71, effective January 1, 1980; 1980, ch. 293, § 1, effective July 15, 1980) was repealed by Acts 1984, ch. 6, § 3, effective July 13, 1984.

45A.351. Declaration of public policy on preservation of Commonwealth’s natural resources through energy efficiency.

Recognizing the need in the Commonwealth to preserve to the greatest extent possible natural resources within the Commonwealth which produce energy for the citizens, businesses, schools, and governments within the Commonwealth, it shall be the policy of the Commonwealth to preserve these natural resources by maximizing the use of energy efficiency measures in the construction, renovation, and maintenance of buildings owned by local public agencies and to encourage local public agencies to incorporate cost-effective energy efficiency measures into their buildings.

History. Enact. Acts 1996, ch. 203, § 1, effective July 15, 1996.

45A.352. Guaranteed energy savings contracts involving local public agencies.

  1. A local public agency may enter into a guaranteed energy savings contract for innovative solutions for energy conservation measures. The local public agency shall submit a request for proposals. The request for proposals for competitive procurement of guaranteed energy savings contracts shall include the following:
    1. The name and address of the governmental unit;
    2. The name, address, title, and phone number of a contact person;
    3. Notice indicating that the local public agency is requesting qualified providers to propose energy conservation measures through a guaranteed energy savings contract;
    4. The following evaluation criteria for assessing the proposals:
      1. Construction management capabilities;
      2. Technical approach to facilities included;
      3. Financial attributes, as defined by total cost of contract and guaranteed savings and provider’s financial strength demonstrating ability to fulfill the guarantee term; and
      4. Provider’s capability, personnel, track record, and demonstrated ability to accomplish the contract;
    5. The date, time, and place where proposals must be received;
    6. Any other stipulations and clarifications the local public agency may require; and
    7. An overview prepared by the local public agency stating goals or objectives specific to facility needs to be considered by the qualified providers who are responding to the request. Detailed scope of construction is not required.
  2. Respondents to the request for proposal shall provide the following:
    1. A detailed list of the proposed energy conservation measures and the guaranteed savings which shall be supported with calculations. Any guaranteed energy and operational savings shall be determined by using one of the measurement and verification methodologies listed in the United States Department of Energy’s “Measurement and Verification Guideline for Federal Energy Projects” or in the “North American Energy Measurement and Verification Protocol.” If due to existing data limitations or the nonconformance of specific project characteristics, none of the methods listed in either the United States Department of Energy’s “Measurement and Verification Guideline for Federal Energy Projects” or in the “North American Energy Measurement and Verification Protocol” is sufficient for measuring guaranteed savings, the qualified provider shall develop an alternate method that is compatible with one (1) of the two (2);
    2. The estimated cost of the proposed energy conservation measures including engineering, construction, commissioning, measurement and verification, annual reconciliation statements, and required on-going services; and
    3. Proposed method and costs of financing.
  3. The value for total cost of the contract minus the calculated savings from the energy conservation measures listed in the qualified provider’s proposal, shall be within fifteen percent (15%) of the value for the total cost of the contract minus the calculated savings after the final contract has been negotiated. If the difference between the proposed and the final contract is not within fifteen percent (15%) and the local public agency and the qualified provider are unable to renegotiate the final contract to reconcile the difference between the proposed and final contract values, then the local public agency may:
    1. Stop negotiations with the current qualified provider; and
    2. Select an alternate provider.
  4. The local public agency may, as a component of the request for proposal, solicit and negotiate additional maintenance services for the affected proposed energy conservation measures. Additional services shall be subject to budget appropriations on an annual basis and may be discontinued at any time over the guarantee period with no negative impact to the guaranteed savings contract.
  5. The local public agency shall utilize the request for proposal process to enter into a guaranteed energy savings contract. The local public agency may, at its discretion, utilize a request for qualifications, provided that the local public agency solicits qualification statements from multiple potentially qualified providers. The local public agency shall use the qualification statements to select no fewer than two (2) providers and each provider shall then be subject to the request-for-proposal requirement provided in subsections (1) to (4) of this section.
  6. The local public agency shall select the provider best qualified to meet its needs. The local public agency shall provide public notice of the meeting at which it proposes to award a guaranteed energy savings contract, the name of the parties to the proposed contract, and the purpose of the contract. The public notice shall be made at least ten (10) days prior to the meeting. After reviewing the proposals, a local public agency may enter into a guaranteed energy savings contract with a qualified provider if it finds that the amount it would spend on the energy conservation measures recommended in the proposal would not exceed the amount to be saved in either energy or operational costs plus capital cost avoidance within the term of the contract from the date of installation, if the recommendations in the proposal are followed.
  7. The guaranteed energy savings contract shall include a written guarantee of the qualified provider that either the energy or operational costs savings plus capital cost avoidance will meet or exceed the costs of the energy conservation measures within the term of the contract. The qualified provider shall, on an annual basis, reimburse the local public agency for any shortfall in guaranteed energy savings projected in the contract. A qualified provider shall provide a sufficient bond to the local public agency for the installation and the faithful performance of all the measures included in the contract. The guaranteed energy savings contract may provide for payments over a period of time, not to exceed the term of the contract.
  8. The qualified provider shall provide the local public agency with an annual reconciliation statement. The statement shall disclose any shortfalls or surplus between guaranteed energy and operational savings specified in the guaranteed energy savings contract and actual energy and operational savings incurred during a given guarantee year. The guarantee year shall consist of a twelve (12) month term commencing from the time that the energy conservation measures became fully operational. The qualified provider shall pay the local public agency any short fall in the guaranteed energy and operation savings within thirty (30) days after the total year savings have been determined. If there is a surplus in the actual guaranteed energy and operational savings in a given year, that surplus savings may be carried forward and applied against any possible savings shortfall in the following guarantee year, except that the surplus carried forward is limited to a period not to exceed one (1) year. If the qualified provider pays the local public agency for a short fall in energy or operational savings incurred during a given guarantee year and there is a surplus in energy or operational savings in future guarantee years, the qualified provider shall bill the local public agency for an amount not to exceed the amount of the short fall in the given guarantee year.
  9. 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.
  10. The commissioner of education shall review, and approve or disapprove projects from local school districts relating to energy conservation measures under a guaranteed energy savings contract, on the basis of the following guidelines:
    1. The project design’s compliance with technical, health, and safety standards as required by administrative regulation;
    2. The availability of general funds, capital outlay allotments under KRS 157.420 or local and state funds from the Facilities Support Program of Kentucky as provided by KRS 157.440 , for projects that will use capital cost avoidance;
    3. The appropriate use of capital outlay allotments under KRS 157.420 , local and state funds from the Facilities Support Program of Kentucky as provided by KRS 157.440 , for projects using capital cost avoidance, based on the project’s compliance with the district’s approved facility plan;
    4. The funding capability of the school district; and
    5. The financing mechanism and proper financing documentation.
  11. The request for proposal as provided in subsections (1) to (4) of this section shall be deemed to satisfy the requirements set out in KRS 162.070 , and shall not be subject to an award determination based on the lowest competitive bid or a separate bidding process for each energy conservation measure listed in the proposal.
  12. A guaranteed energy savings contract that does not involve construction or the installation of physical improvements shall not require the approval of the commissioner of education and shall not be subject to other requirements of this section.

History. Enact. Acts 1996, ch. 203, § 3, effective July 15, 1996; 1998, ch. 375, § 3, effective July 15, 1998; 2007, ch. 122, § 3, effective June 26, 2007.

Legislative Research Commission Note.

(6/26/2007). A manifest clerical or typographical error in this section has been corrected by the Reviser of Statutes under the authority of KRS 7.136 .

45A.353. Extension of guaranteed energy savings contract — Documentation of savings — Lease-purchase agreements — Exemption from debt limitations.

  1. Guaranteed energy savings contracts may extend beyond the fiscal year in which they become effective. The local public agency shall include in its annual budget and appropriations act, for each subsequent fiscal year, any accounts payable under guaranteed energy savings contracts during the fiscal year.
  2. The local public agency shall document the operational and energy cost savings and capital cost avoidance specified in the guaranteed energy savings contract and designate and appropriate that amount for an annual payment of the contract. If the annual energy and operational savings are less than projected under the guaranteed savings contract, the qualified provider shall pay the difference as provided for in KRS 45A.352 .
  3. Notwithstanding any other provisions of law to the contrary, a local public agency may finance the installation of energy conservation measures for its buildings through a lease-purchase agreement, bonds, or whichever brings the most economic value to the local public agency, subject to the local public agency’s compliance with all other laws regarding approval of plans for additions, alterations, or renovations of its buildings.
  4. The component which is guaranteed as energy savings and as operational savings shall be exempt from current or future debt limitations, except that capital cost avoidance, as defined in KRS 45A.345 , shall be limited to current or future debt limitations.

History. Enact. Acts 1996, ch. 203, § 4, effective July 15, 1996; 1998, ch. 375, § 4, effective July 15, 1998.

45A.355. Determinations — Finality.

  1. Every determination required by this code shall be in writing and based upon written findings of the public official making the determination. These determinations and written findings shall be retained in the official contract file.
  2. The determinations required by KRS 45A.345 to 45A.460 shall be final and conclusive unless they are clearly erroneous, arbitrary, capricious, or contrary to law.

History. Enact. Acts 1978, ch. 110, § 72, effective January 1, 1980.

45A.360. Administrative regulations.

  1. A local public agency may adopt regulations, not inconsistent with KRS 45A.345 to 45A.460 , governing the following:
    1. Conditions and procedures for delegations of purchasing authority;
    2. Prequalification, suspension, debarment, and reinstatement of prospective bidders;
    3. Modification and termination of contracts;
    4. Conditions and procedures for the purchase of perishables and items for resale;
    5. Conditions, including emergencies, and procedures under which purchases may be made by means other than competitive sealed bids;
    6. Rejection of bids, consideration of alternate bids, and waiver of informalities in offers;
    7. Confidentiality of technical data and trade secrets information submitted by actual and prospective bidders or offerors;
    8. Partial, progressive, and multiple awards;
    9. Supervision of store rooms and inventories, including determination of appropriate stock levels and the management, transfer, sale, or other disposal of government-owned property;
    10. Definitions and classes of contractual services and procedures for acquiring them;
    11. Procedures for the verification and auditing of local public agency procurement records;
    12. Annual reports from those vested with purchasing authority as may be deemed advisable in order to insure that the requirements of this chapter are complied with; and
    13. Such other regulations as may be deemed advisable to carry out the purposes of KRS 45A.345 to 45A.460 or otherwise fulfill the local public agency’s procurement responsibilities.
  2. All local public agency ordinances and regulations pertaining to procurement, whether promulgated under KRS 45A.345 to 45A.460 or otherwise, shall be maintained by the local public agency and shall be available to the public upon request at a cost not to exceed the cost of reproduction.
  3. Local school districts may adopt policies, not inconsistent with KRS 45A.345 to 45A.460 , governing the conditions and procedures under which purchases of supplies may be made elsewhere. These policies shall include a provision that supplies purchased under this section shall meet any applicable contract specifications and not exceed two thousand five hundred dollars ($2,500).

History. Enact. Acts 1978, ch. 110, § 73, effective January 1, 1980; 1980, ch. 250, § 10, effective April 9, 1980; 1996, ch. 89, § 2, effective July 15, 1996.

Opinions of Attorney General.

A local public agency is not required to maintain a list of prequalified responsible prospective bidders. OAG 80-21 .

If action is taken pursuant to subdivision (1)(k) of this section, it must be done by the local public agency pursuant to regulations enacted by that particular agency. OAG 80-21 .

If a local board of education adopts the provisions of the Model Procurement Code applicable to the state and also adopts a regulation similar to that which has been promulgated by the Department of Finance (now Finance and Administration Cabinet) relating to noncompetitive negotiations, then items for resale such as caps and gowns and graduation invitations may be handled through noncompetitive negotiation. OAG 80-108 .

A county hospital commission may adopt regulations and establish small purchase procedures pursuant to KRS 45A.385 , but, since the fiscal court cannot delegate its overall fiscal control of the county hospital, such regulations and procedures would be subject to fiscal court approval. OAG 80-128 .

Since a county hospital commission is not an autonomous unit of government and is subject to the direct and overall fiscal and financial supervision of the fiscal court, proper regulations and small purchase procedures adopted by fiscal court for the general county operations could be made applicable to the county hospital, and in that way duplication of effort could be avoided and the county would be on a unified system. OAG 80-128 .

45A.365. Competitive sealed bidding.

  1. All contracts or purchases shall be awarded by competitive sealed bidding, which may include the use of a reverse auction, except as otherwise provided by KRS 45A.370 to 45A.385 and for the purchase of wholesale electric power by municipal utilities as provided in KRS 96.901(1).
  2. The invitation for bids shall state that the award shall be made on the basis of the lowest bid price or the lowest evaluated bid price. If the latter is used, the objective measurable criteria to be utilized shall be set forth in the invitation for bids. The invitation for bids shall include the reciprocal preference for resident bidders described in KRS 45A.494 .
  3. Adequate public notice of the invitation for bids and any reverse auction shall be given prior to the date set forth for the opening of bids. The notice may include posting on the Internet or publication in a newspaper of general circulation in the local jurisdiction at least seven (7) days before the date set for the opening of the bids and any reverse auction. Nothing in this section shall prohibit additional notice, posting, or publication, nor shall additional notification, posting, or publication extend the required notice period. The public notice shall include the time and place the bids will be opened and the time and place where the specifications may be obtained.
  4. The bids shall be opened publicly or entered through a reverse auction at the time and place designated in the invitation for bids. Each written or reverse auction bid, together with the name of the bidder, shall be recorded and be open to public inspection. Electronic bid opening and posting of the required information for public viewing shall satisfy the requirements of this subsection.
  5. A contract shall be awarded with reasonable promptness by written notice to the responsive and responsible bidder whose bid is either the lowest bid price or the lowest evaluated bid price after the application of any reciprocal preference for resident bidders required by KRS 45A.494 .
  6. The local public agency may allow the withdrawal of a bid where there is a patent error on the face of the bid document, or where the bidder presents sufficient evidence, substantiated by bid worksheets, that the bid was based upon an error in the formulation of the bid price.

History. Enact. Acts 1978, ch. 110, § 74, effective January 1, 1980; 1998, ch. 120, § 13, effective July 15, 1998; 2000, ch. 510, § 2, effective July 14, 2000; 2010, ch. 63, § 7, effective July 15, 2010; 2010, ch. 162, § 12, effective July 15, 2010; 2013, ch. 44, § 2, effective June 25, 2013.

NOTES TO DECISIONS

1.Low Bid.

City properly exercised its discretion for the benefit of its citizens by accepting a lower bid for purchase of city-owned boat dock in order to insure the retention of the facility in the city for the use of its boating residents. Ohio River Conversions, Inc. v. Owensboro, 663 S.W.2d 759, 1984 Ky. App. LEXIS 444 (Ky. Ct. App. 1984).

2.Unsuccessful Bidder.

An unsuccessful bidder, who was neither a resident nor a taxpayer of city, had no standing to request the judicial award of contract or seek damages from the municipality. Ohio River Conversions, Inc. v. Owensboro, 663 S.W.2d 759, 1984 Ky. App. LEXIS 444 (Ky. Ct. App. 1984).

Cited:

Laurel Constr. Co. v. Paintsville Util. Comm’n, 336 S.W.3d 903, 2010 Ky. App. LEXIS 40 (Ky. Ct. App. 2010).

Opinions of Attorney General.

Where an original price contract on printing equipment and supplies to be used by the state was established with a company after invitations to bid were sent out, and then that contract was converted into a lease-purchase agreement without further bidding, the lease-purchase agreement was not validly executed since the original bidders were not given an opportunity to bid on the conversion conditions, and the piggybacking of another company’s equipment, by the contracting supplier, into and onto the lease-purchase agreement was illegal. OAG 80-189 .

A county fiscal court, which plans to renovate a building to be used as the county court facility, may not restrict and apply the invitations to bid only to general contractors with home offices in that county, since the Model Procurement Code applies to fiscal courts and there is nothing in the applicable sections of KRS Chapter 45A that would support such a restriction. OAG 80-215 .

The whole thrust of the Model Procurement Code is to encourage and insist that local public agencies purchase services and supplies, which include personal property, only after competitive sealed bidding unless good reason is shown why competitive sealed bidding is inappropriate, and where through no fault of the city, the low bidder to whom the contract was awarded after the bids had been opened soon thereafter gave notice of their inability to perform at all under the contract due to the bankruptcy of the manufacturer of the buses relied on by the successful bidder, the circumstances of this situation warranted the accepting of the second low bid. OAG 80-559 .

If the fiscal court reasonably determines that competition in property insurance is actually competitive in an area, then the entire insurance package should be let out under this section which provides for competitive sealed bidding. OAG 81-109 .

A statutory requirement of advertisement for bids is “jurisdictional,” and a fiscal court is without power to enter into a contract without such advertisement, where the purchase requires bidding. Further, a party deals with a public agency at its peril if it contracts with one and fails to inquire into the power of the agency to execute it. OAG 82-125 .

The matter of letting out for bids the gasoline and oil needed for the county road department is left to the good business judgment of the fiscal court in terms of the period of consumption, price fluctuations, availability of the commodity for a definite period, etc. However, a fiscal court should not deliberately buy the needed commodities in “dribbles and dabs” merely to circumvent advertised bidding. OAG 82-125 .

The three important benefits of the bidding process are: (a) an offering to the public, (b) an opportunity for competition and (c) a basis for an exact comparison of bids. OAG 82-125 .

Where a county is operating under KRS 45A.345 to 45A.460 , this section, relating to the major policy of competitive sealed bidding, would apply to purchase of its gasoline, petroleum, and other supplies used by the county road department, except as otherwise provided by KRS 45A.370 to 45A.385 . OAG 82-125 .

For a city soliciting insurance proposals to limit its list of bidders to those insurance agencies having major offices within the boundaries of the city limits would violate the purpose and intent of requiring competitive bidding under the Model Procurement Code or, for that matter, any other statute that requires competitive bidding. OAG 82-337 .

The purpose of requiring bids is to invite competition and guard against favoritism, extravagance, fraud and corruption and to secure the best possible work at the least price that is prescribed. OAG 82-337 .

Where competitive bids are required, all persons desiring to bid must be afforded the opportunity to do so. OAG 82-337 .

Should two newspapers in a county come up with an identical figure for circulation in their published statements of ownership, then the fiscal court could request the two newspapers to submit affidavits as to the circulation; in the event the affidavits contain identical figures of circulation, the courts would be asked to resolve the question of which newspaper has the largest circulation. OAG 83-247 .

A fiscal court resolution requiring that tiles and tires be purchased from the cheapest places in the county is in restrictive conflict with KRS 424.260 and subsection (5) of this section and is invalid. OAG 83-258 .

No county fee officer can engage in a bidding contract of purchase of supplies or equipment, i.e., binding on the county, where the money for the purchase is to come directly out of the county treasury; the fiscal court is the authority in contracting for county supplies or equipment, payable out of the county treasury. OAG 83-448 .

Where a city commission authorized private companies to bid for a contract to provide fire protection for the city and replace the present city fire department, as documentary material retained by a public agency, the bid invitation, correspondence pertaining to the bids, and the bids themselves were public records subject to the Open Records Law. Unless exempted by the provisions of KRS 61.878 , these records are open to public inspection once the bids are publicly opened. OAG 84-284 .

A local public agency that has not adopted the Model Procurement Code is not required to follow competitive bidding procedures for insurance, and may contract with an insurance broker to solicit and receive bids for insurance, although competitive bidding remains preferred. A local public agency that has adopted the Model Procurement Code must follow all applicable provisions in seeking contracts with insurance brokers. OAG 13-006 .

45A.370. Competitive negotiation.

  1. A local public agency may contract or purchase through competitive negotiation, which may include a reverse auction, upon a written finding that:
    1. Specifications cannot be made sufficiently specific to permit award on the basis of either the lowest bid price or the lowest evaluated bid price, including, but not limited to, contracts for experimental or developmental research work, or highly complex equipment which requires technical discussions, and other nonstandard supplies, services, or construction; or
    2. Sealed bidding is inappropriate because the available sources of supply are limited, the time and place of performance cannot be determined in advance, the price is regulated by law, or a fixed price contract is not applicable; or
    3. The bid prices received through sealed bidding are unresponsive or unreasonable as to all or part of the requirements, or are identical or appear to have been the result of collusion; provided each responsible bidder is notified of the intention to negotiate and is given a reasonable opportunity to negotiate, and the negotiated price is lower than the lowest rejected bid by any responsible bidder.
  2. Proposals shall be solicited through public notice pursuant to KRS 45A.365(3) or any other means which can be demonstrated to notify an adequate number of qualified sources to permit reasonable competition consistent with the nature and requirement of the procurement. The request for proposals shall indicate the factors to be considered in the evaluation, including the reciprocal preference for resident bidders required by KRS 45A.494 , and the relative importance of each factor, and the procedures to be followed if a reverse auction is used in the procurement.
  3. Written or oral discussions shall be conducted with all responsible offerors who submit proposals determined in writing to be reasonably susceptible of being selected for award. Discussions shall not disclose any information derived from proposals submitted by competing offerors. Discussions need not be conducted:
    1. With respect to prices, where such prices are fixed by law, regulation, or reverse auction, except that consideration shall be given to competitive terms and conditions; or
    2. Where time of delivery or performance will not permit discussions; or
    3. Where it can be clearly demonstrated and documented from the existence of adequate competition or accurate prior cost experience with that particular supply, service, or construction item that acceptance of an initial offer without discussion would result in fair and reasonable prices and the request for proposal notifies all offerors of the possibility that award may be made on the basis of initial offers.
  4. If discussions pertaining to the revision of the specifications or quantities are held with any potential offeror, all other potential offerors shall be afforded an opportunity to take part in such discussions. A request for proposals based on revised specifications or quantities shall be issued as promptly as possible, shall provide for an expeditious response to the revised requirements and shall be awarded upon the basis of the lowest bid price or lowest evaluated bid price after application of the reciprocal preference for resident bidders required by KRS 45A.494 submitted by any responsive and responsible offeror. No discussion shall be conducted with offerors after submission of revised proposals except for a compelling reason as determined in writing by the local public agency. The request for proposals shall state that an award is to be made without discussion except as herein provided.
  5. Award shall be made to the responsible offeror whose proposal is determined in writing to be the most advantageous to the local public agency based upon the evaluation factors set forth in the request for proposals and the reciprocal preference for resident bidders required by KRS 45A.494 .

History. Enact. Acts 1978, ch. 110, § 75, effective January 1, 1980; 1998, ch. 120, § 14, effective July 15, 1998; 2010, ch. 63, § 8, effective July 15, 2010; 2010, ch. 162, § 13, effective July 15, 2010.

Legislative Research Commission Note.

(7/15/2010). This section was amended by 2010 Ky. Acts chs. 63 and 162, which do not appear to be in conflict and have been codified together.

Opinions of Attorney General.

Where a small town water company cannot accurately predict the amount of chemicals it will need, has limited storage space to store chemicals that deteriorate somewhat in storage and that are somewhat unstable in nature, and has a history of purchasing chemicals in small quantities, indicating that such a practice was not just recently instituted to avoid the requirements of the Model Procurement Code, each purchase of these types of chemicals is a legally and factually separate transaction which, if under $2,500, is not subject to the bidding requirements of the Model Procurement Code and may be handled as a small purchase if small purchase procedures have been adopted pursuant to KRS 45A.385 . OAG 80-125 .

A local public agency that has not adopted the Model Procurement Code is not required to follow competitive bidding procedures for insurance, and may contract with an insurance broker to solicit and receive bids for insurance, although competitive bidding remains preferred. A local public agency that has adopted the Model Procurement Code must follow all applicable provisions in seeking contracts with insurance brokers. OAG 13-006 .

45A.375. Negotiations after competitive sealed bidding when all bids exceed available funds — Action when no bids received.

  1. In the event that all bids submitted pursuant to competitive sealed bidding under KRS 45A.365 result in bid prices in excess of the funds available for the purchase, and the local public agency determines in writing:
    1. That there are no additional funds then available from any source so as to permit an award to the lowest responsive and responsible bidder; and
    2. The best interest of the local public agency will not permit the delay attendant to a resolicitation under revised specifications or revised quantities under competitive sealed bidding as provided in KRS 45A.365 ; then a negotiated award may be made as set forth in subsections (2) or (3) of this section.
  2. Where there is more than one (1) bidder, competitive negotiations pursuant to KRS 45A.370 shall be conducted with the three (3) (two (2) if there are only two (2)) bidders determined in writing by the local public agency to be the lowest responsive and responsible bidders to the competitive sealed bid invitation after application of the reciprocal preference for resident bidders required in KRS 45A.494 . Such competitive negotiations shall be conducted under the following restrictions:
    1. If discussions pertaining to the revision of the specifications or quantities are held with any potential offeror, all other potential offerors shall be afforded an opportunity to take part in such discussions; and
    2. A request for proposals, based upon revised specifications or quantities, shall be issued as promptly as possible, shall provide for an expeditious response to the revised requirements, and shall be awarded upon the basis of the lowest bid price or lowest evaluated bid price submitted by any responsive and responsible offeror after application of the reciprocal preference for resident bidders required in KRS 45A.494 . No discussion shall be conducted with offerors after submission of proposals except for a compelling reason as determined in writing by the local public agency. The request for proposals shall state that award is to be made without discussions except as herein provided.
  3. Where, after competitive sealed bidding, it is determined in writing that there is only one (1) responsive and responsible bidder, a noncompetitive negotiated award may be made with such bidder in accordance with KRS 45A.380 .
  4. Where, after invitation for bids has been made in accordance with KRS 45A.365 and no bids have been received from responsive and responsible bidders, the local public agency may proceed to acquire the supplies, services, or construction by noncompetitive negotiations in accordance with KRS 45A.380 .

History. Enact. Acts 1978, ch. 110, § 76, effective January 1, 1980; 1980, ch. 250, § 11, effective April 9, 1980; 2010, ch. 162, § 14, effective July 15, 2010.

45A.380. Noncompetitive negotiation.

A local public agency may contract or purchase through noncompetitive negotiation only when a written determination is made that competition is not feasible and it is further determined in writing by a designee of the local public agency that:

  1. An emergency exists which will cause public harm as a result of the delay in competitive procedures;
  2. There is a single source within a reasonable geographical area of the product or service to be procured;
  3. The contract is for the services of a licensed professional, such as attorney, physician, psychiatrist, psychologist, certified public accountant, registered nurse, or educational specialist; a technician such as a plumber, electrician, carpenter, or mechanic; or an artist such as a sculptor, aesthetic painter, or musician, provided, however, that this provision shall not apply to architects or engineers providing construction management services rather than professional architect or engineer services;
  4. The contract is for the purchase of perishable items purchased on a weekly or more frequent basis, such as fresh fruits, vegetables, fish or meat;
  5. The contract is for replacement parts where the need cannot be reasonably anticipated and stockpiling is not feasible;
  6. The contract is for proprietary items for resale;
  7. In school districts the contract relates to an enterprise in which the buying or selling by students is a part of the educational experience;
  8. The contract or purchase is for expenditures made on authorized trips outside of the boundaries of the local public agency;
  9. The contract is for the purchase of supplies which are sold at public auction or by receiving sealed bids;
  10. The contract is for group life insurance, group health and accident insurance, group professional liability insurance, worker’s compensation insurance, and unemployment insurance;
  11. The contract is for a sale of supplies at reduced prices that will afford a purchase at savings to the local public agency; or
  12. The contract is with a private real estate developer and contains a requirement:
    1. That the developer increase the size or otherwise improve the collection capacity of the sanitary sewer or storm water pipe serving the affected private real estate development; and
    2. That the local public agency pay only the proportional cost of increasing the size, or otherwise improving the collection capacity, of the sanitary sewer or storm water pipe over the original collection capacity.

History. Enact. Acts 1978, ch. 110, § 77, effective January 1, 1980; 1980, ch. 250, § 12, effective April 9, 1980; 2017 ch. 151, § 1, effective June 29, 2017.

Opinions of Attorney General.

The position of constructing manager over a construction project does not constitute professional services exemption from competitive bidding under subsection (1)(c) (now subdivision (3)) of this section. OAG 79-501 .

Where a small town water company cannot accurately predict the amount of chemicals it will need, has limited storage space to store chemicals that deteriorate somewhat in storage and that are somewhat unstable in nature, and has a history of purchasing chemicals in small quantities, indicating that such a practice was not just recently instituted to avoid the requirements of the Model Procurement Code, each purchase of these types of chemicals is a legally and factually separate transaction which, if under $2,500, is not subject to the bidding requirements of the Model Procurement Code and may be handled as a small purchase if small purchase procedures have been adopted pursuant to KRS 45A.385 . OAG 80-125 .

Computer billing services may be procured by a county clerk for preparing tax bills by applying the noncompetitive negotiation provisions of subdivision (1) of this section, if the county clerk makes a written determination that competition is not feasible, and that an emergency exists which will cause public harm as a result of the delay in competitive procedures, and the fiscal court enters an order confirming the county clerk’s written determinations. OAG 80-299 .

If a county has adopted the Model Procurement Code, the fiscal court may procure a private accounting or C.P.A. firm to audit the county’s funds (involving county budget and treasury) by way of noncompetitive negotiation. OAG 80-624 .

If the fiscal court reasonably determines that competition in property insurance is not feasible, then the fiscal court may procure the property insurance by noncompetitive negotiation under this section. OAG 81-109 .

Where a county fiscal court advertised for sealed bids for treated bridge lumber, but received only one nonresponsive bid, and the fiscal court then entered an order authorizing the county to purchase such lumber by noncompetitive negotiations, but no written determination was made that competition was not feasible or that any one of the other conditions described in this section was prevalent, there was nothing to indicate an emergency existed or that there was only a single source for bridge lumber and posts and none of the other conditions set out in subsections (1) through (11) of this section would seem to be even remotely applicable, the situation relative to the bridge lumber and posts was not subject to being handled by noncompetitive negotiation. OAG 82-65 .

If a school district has chosen to operate under the Model Procurement Code, competitive bidding for general liability insurance on buildings and vehicles, etc., is required absent a legitimate, written determination by the local public agency to the contrary; this conclusion is based on the fact that in KRS 45A.345(23) the term “supplies” is defined to include insurance and that subdivision (10) of this section authorizes an exemption from competitive bidding by written determination if the “contract is for group life insurance, group health and accident insurance, group professional liability insurance, workers’ compensation insurance, and unemployment insurance,” an exemption which does not include general liability insurance. OAG 82-170 .

Insofar as the Model Procurement Code is concerned, this section specifically lists those contracts that are professional in nature and excepted from competitive bidding, and the exception does not include insurance contracts with the exception of those contracts for group life insurance, group health and accident insurance, group professional liability insurance, workers’ compensation insurance and unemployment insurance. OAG 82-337 .

Under KRS 424.260 a cafeteria plan of insurance coverage for school teachers need not be bid; under the Model Procurement Code the contract may be noncompetitively negotiated. OAG 83-151 .

The Model Procurement Code allows local public agencies to be flexible in order to take advantage of discounts or cost savings available by means of noncompetitive negotiations if competitive negotiations would not yield greater savings in a given circumstance. OAG 90-75 .

The requirements of this section concerning “noncompetitive negotiation,” as that term is defined by KRS 45A.345(12), allows a local public agency to enter into contracts by noncompetitive negotiations and without bidding, if it simply makes a written determination that competitive negotiation is not feasible and the contract is for a sale of supplies at reduced prices that will afford a purchase at savings to the local public agency. OAG 90-75 .

A local public agency that has not adopted the Model Procurement Code is not required to follow competitive bidding procedures for insurance, and may contract with an insurance broker to solicit and receive bids for insurance, although competitive bidding remains preferred. A local public agency that has adopted the Model Procurement Code must follow all applicable provisions in seeking contracts with insurance brokers. OAG 13-006 .

45A.380. Noncompetitive negotiation.

A local public agency may contract or purchase through noncompetitive negotiation only when a written determination is made that competition is not feasible and it is further determined in writing by a designee of the local public agency that:

  1. An emergency exists which will cause public harm as a result of the delay in competitive procedures;
  2. There is a single source within a reasonable geographical area of the product or service to be procured;
  3. The contract is for the services of a licensed professional, such as attorney, physician, psychiatrist, psychologist, certified public accountant, registered nurse, or educational specialist; a technician such as a plumber, electrician, carpenter, or mechanic; or an artist such as a sculptor, aesthetic painter, or musician, provided, however, that this provision shall not apply to architects or engineers providing construction management services rather than professional architect or engineer services;
  4. The contract is for the purchase of perishable foods, such as meat, fish, poultry, egg products, fresh vegetables, and fresh fruits;
  5. The contract is for replacement parts where the need cannot be reasonably anticipated and stockpiling is not feasible;
  6. The contract is for proprietary items for resale;
  7. In school districts the contract relates to an enterprise in which the buying or selling by students is a part of the educational experience;
  8. The contract or purchase is for expenditures made on authorized trips outside of the boundaries of the local public agency;
  9. The contract is for the purchase of supplies which are sold at public auction or by receiving sealed bids;
  10. The contract is for group life insurance, group health and accident insurance, group professional liability insurance, worker’s compensation insurance, and unemployment insurance;
  11. The contract is for a sale of supplies at reduced prices that will afford a purchase at savings to the local public agency; or
  12. The contract is with a private real estate developer and contains a requirement:
    1. That the developer increase the size or otherwise improve the collection capacity of the sanitary sewer or storm water pipe serving the affected private real estate development; and
    2. That the local public agency pay only the proportional cost of increasing the size, or otherwise improving the collection capacity, of the sanitary sewer or storm water pipe over the original collection capacity.

HISTORY: Enact. Acts 1978, ch. 110, § 77, effective January 1, 1980; 1980, ch. 250, § 12, effective April 9, 1980; 2017 ch. 151, § 1, effective June 29, 2017; 2022 ch. 150, § 1.

45A.385. Small purchases by local public agencies.

The local public agency may use small purchase procedures for any contract for which a determination is made that the aggregate amount of the contract does not exceed thirty thousand dollars ($30,000) if small purchase procedures are in writing and available to the public.

History. Enact. Acts 1978, ch. 110, § 78, effective January 1, 1980; 1980, ch. 250, § 13, effective April 9, 1980; 1984, ch. 6, § 2, effective July 13, 1984; 1990, ch. 95, § 2, effective July 13, 1990; 2002, ch. 192, § 1, effective July 15, 2002; 2019 ch. 79, § 1, effective June 27, 2019.

Opinions of Attorney General.

This section and KRS 424.260 as amended in 1978 are pari materia and both are to be given effect by construing the $2,500 limitation to be an oversight by the Legislature that it was increasing the limitation of KRS 424.260 to $5,000 (since amended to $20,000). OAG 78-357 .

The provisions of this section must govern over KRS 424.260 , as amended since the procurement code is a detailed, comprehensive and specific kind of legislation as contrasted with the short, skeletal and general legal notices law, KRS 424.260 . OAG 79-429 ; OAG 79-447 .

The provision in KRS 80.130 , requiring bids for the construction of a low-cost housing project exceeding $2,000, has, in effect, been repealed by the provisions of this section relating to small purchases. OAG 80-21 .

There is no prohibition against any particular vendor entering into one or more small purchase contracts with a local public agency, assuming that all statutory requirements are satisfied, including the provision that the items and services normally supplied as a unit are not artificially divided just for the purpose of utilizing the small purchase procedures. OAG 80-21 .

Where a small town water company cannot accurately predict the amount of chemicals it will need, has limited storage space to store chemicals that deteriorate somewhat in storage and that are somewhat unstable in nature, and has a history of purchasing chemicals in small quantities, indicating that such a practice was not just recently instituted to avoid the requirements of the Model Procurement Code, each purchase of these types of chemicals is a legally and factually separate transaction which, if under $2,500 (now $20,000), is not subject to the bidding requirements of the Model Procurement Code and may be handled as a small purchase if small purchase procedures have been adopted pursuant to this section. OAG 80-125 .

A county hospital commission may adopt regulations pursuant to KRS 45A.360 , and establish small purchase procedures pursuant to this section, but, since the fiscal court cannot delegate its overall fiscal control of the county hospital, such regulations and procedures would be subject to fiscal court approval. OAG 80-128 .

Since a county hospital commission is not an autonomous unit of government and is subject to the direct and overall fiscal and financial supervision of the fiscal court, proper regulations and small purchase procedures adopted by fiscal court for the general county operations could be made applicable to the county hospital, and in that way duplication of effort could be avoided and the county would be on a unified system. OAG 80-128 .

Any fiscal court adopting KRS 45A.345 through 45A.460 may, under this section, effect purchases not exceeding $5,000 (now $20,000) without formal bidding procedures, while those fiscal courts, under current law, which have not adopted such sections, are governed by KRS 424.260 . OAG 82-324 .

If the reconstructing or paving of separate county road segments could involve unified specifications and work performance of such nature that bids on the total number of projects as a total package could be obtained, the total work should be let under advertisement for bids, pursuant to KRS 424.260 or KRS Ch. 45A, whichever is applicable to the county; however, if the fiscal court determines upon investigation that lump sum bids upon the total projects cannot be obtained from the road construction trade, then the various road segments should be treated as legally and factually separate and bidding would be necessary for any of the projects if they exceed for a single project the sum of $5,000 (if the Model Procurement Code applies in the county) or exceeds $7,500 (now $20,000) (if KRS 424.260 applies in the county). OAG 83-316 .

A local public agency that has not adopted the Model Procurement Code is not required to follow competitive bidding procedures for insurance, and may contract with an insurance broker to solicit and receive bids for insurance, although competitive bidding remains preferred. A local public agency that has adopted the Model Procurement Code must follow all applicable provisions in seeking contracts with insurance brokers. OAG 13-006 .

45A.390. Cancellation.

An invitation for bid, a request for proposal or other solicitation may be canceled, or all bids or proposals may be rejected, if it is determined in writing that such action is in the best interest of the local public agency.

History. Enact. Acts 1978, ch. 110, § 79, effective January 1, 1980.

45A.395. Determination of responsibility — Right of nondisclosure.

  1. A written determination of responsibility of a bidder or offeror shall be made, based on a reasonable inquiry conducted by the local public agency. The unreasonable failure of a bidder or offeror to promptly supply information upon request may be grounds for a determination of nonresponsibility of such bidder or offeror.
  2. A written determination of responsibility of a bidder or offeror shall not be made until the bidder or offeror provides the local public agency with a sworn statement made under penalty of perjury that he has not knowingly violated any provision of the campaign finance laws of the Commonwealth and that the award of a contract to the bidder or offeror will not violate any provision of the campaign finance laws of the Commonwealth. “Knowingly” means, with respect to conduct or to a circumstance described by a statute defining an offense, that a person is aware or should have been aware that his conduct is of that nature or that the circumstance exists.
  3. Except as otherwise provided by law, information furnished by a bidder or offeror pursuant to this section may not be disclosed outside of the local public agency without prior written consent of the bidder or offeror.

History. Enact. Acts 1978, ch. 110, § 80, effective January 1, 1980; 1992, ch. 288, § 19, effective July 14, 1992.

45A.400. Prequalification of bidders and offerors.

Suppliers may be prequalified as responsible prospective contractors for particular types of supplies, services, and construction. No supplier shall be prequalified as a responsible prospective contractor until the supplier provides the local public agency with a sworn statement made under penalty of perjury that he has not knowingly violated any provision of the campaign finance laws of the Commonwealth and that the award of a contract to the supplier will not violate any provision of the campaign finance laws of the Commonwealth. “Knowingly” means, with respect to conduct or to a circumstance described by a statute defining an offense, that a person is aware or should have been aware that his conduct is of that nature or that the circumstance exists. Solicitation mailing lists of potential contractors of such supplies, services, and construction shall include, but shall not be limited to, such prequalified prospective contractors. Prequalification shall not foreclose a written determination:

  1. Between the time of bid opening or receipt of offers in the making of an award that a prequalified prospective contractor is not responsible; or
  2. That a prospective contractor who is not prequalified at the time of bid opening or receipt of offers is responsible.

History. Enact. Acts 1978, ch. 110, § 81, effective January 1, 1980; 1992, ch. 288, § 20, effective July 14, 1992.

45A.405. Cost or pricing data.

  1. A contractor shall submit cost or pricing data and shall certify that, to the best of his knowledge and belief, the cost or pricing data submitted was accurate, complete, and current as of a mutually determined specified date prior to the date of:
    1. Pricing of any negotiated contract where the total contract price is expected to exceed fifty thousand dollars ($50,000), or such lesser amount as may be prescribed by the local public agency; or
    2. Pricing of any change order or contract modification which is expected to exceed twenty-five thousand dollars ($25,000), or such lesser amount as may be prescribed by the local public agency.
  2. Any contract, change, or modification thereto under which a certificate is required shall contain a provision that the price to the local public agency, including profit or fee, shall be adjusted to exclude any significant sums by which the local public agency finds that such price was increased because the contractor-furnished cost or pricing data which, as of the date agreed upon between the parties, was inaccurate, incomplete, or not current.
  3. The requirement of this section need not be applied to contracts where the price negotiated is based on adequate price competition, established catalogue or market prices of commercial items sold in substantial quantities to the general public, prices set by law or regulation, or in exceptional cases where it is determined in writing that the requirements of this section may be waived, and the reasons for such waiver are enumerated in the determination.

History. Enact. Acts 1978, ch. 110, § 82, effective January 1, 1980.

45A.410. Inspection of contractor’s place of business — Audit of records.

  1. The local public agency may inspect the plant or place of business of a contractor or any subcontractor under any contract awarded or to be awarded by the local public agency.
  2. The local public agency may audit the books and records of any person who has submitted cost or pricing data under KRS 45A.405 , at any time until the period of record retention as set forth in subsection (3) of this section shall have expired. The right to audit hereunder shall only extend to those books and records reasonably connected with cost or pricing data submitted under KRS 45A.420 , and such books and records shall be maintained by the contractor or subcontractor for the period specified in subsection (3) of this section.
  3. The local public agency shall be entitled to audit the books and records of a contractor or any subcontractor under any negotiated contract or subcontract other than a firm fixed-price type contract, provided, however, that this subparagraph shall not limit the right to audit as set forth in subsection (2) of this section. Such books and records shall be maintained by the contractor for a period of five (5) years from the date of final payment under the prime contract and by the subcontractor for a period of five (5) years from the date of final payment under the subcontract.

History. Enact. Acts 1978, ch. 110, § 83, effective January 1, 1980.

45A.415. Specifications — Items considered equal may be furnished — Proprietary products.

  1. The local public agency shall use specifications which assure the maximum practicable competition to meet the agency’s needs.
  2. Local public agencies shall ensure that every invitation for bids or request for proposals provides that an item equal to that named or described in the specifications may be furnished. The specifications may identify a sole brand in cases where, in the written opinion of the chief procurement officer, documented unique and valid conditions require compatibility, continuity, or conformity with established standards. An item shall be considered equal to the item named or described if, in the opinion of the owner and the design professional responsible for the specifications:
    1. It is at least equal in quality, durability, strength, design, and other criteria deemed appropriate;
    2. It will perform at least equally the function imposed by the general design for the public work being contracted for or the material being purchased; and
    3. It conforms substantially to the detailed requirements for the item in the specifications.
  3. A specification which describes a product which is proprietary to one (1) company may be used only when no other kind of specification is reasonably available to describe requirements.

History. Enact. Acts 1978, ch. 110, § 84, effective January 1, 1980; 2008, ch. 47, § 3, effective July 15, 2008.

45A.420. Cooperative purchasing — Price agreements with Commonwealth.

  1. Any local public agency may enter into an agreement for cooperative purchasing with any other local public agency. When the contracting local public agency contracts for supplies, services or construction pursuant to KRS 45A.365 , 45A.370 , 45A.375 , or 45A.380 , all other parties to the agreement shall be deemed to have complied with the provisions of those sections.
  2. Nothing in KRS 45A.345 to 45A.990 shall deprive a local public agency from negotiating with vendors for supplies where such supplies are the subject of a price agreement with the Commonwealth of Kentucky provided, however, that no contract executed under this section would authorize a price higher than is contained in the price agreement with the Commonwealth of Kentucky for such specific supplies.
  3. Nothing in KRS 45A.345 to 45A.990 shall deprive a local school district from acquiring supplies outside of price agreements with the Commonwealth of Kentucky if the supplies meet the same specifications as the contract items and the supplies are purchased at a lower price than is contained in the price agreement with the Commonwealth of Kentucky for such specific supplies and the purchase does not exceed two thousand five hundred dollars ($2,500).

History. Enact. Acts 1978, ch. 110, § 85, effective January 1, 1980; 1980, ch. 250, § 14, effective April 9, 1980; 1996, ch. 89, § 3, effective July 15, 1996.

Opinions of Attorney General.

A plain reading of subsection (2) of this section shows that the General Assembly intended for this section to be an exception to the usual bidding requirements. OAG 90-75 .

Construing subsection (2) of this section as an exception to the usual bidding requirements is not contrary to the underlying policies of the code. OAG 90-75 .

It is likely that the General Assembly intended to give local public agencies the same right to negotiate contracts with vendors offering supplies on the state price agreement list that it previously gave to the Finance and Administration Cabinet when negotiating with vendors offering goods on the general service administration price agreement list. OAG 90-75 .

Subsection (2) of this section allows a public agency to contract, without bidding, with a vendor who is on the current state contract list but is offering the agency a price lower than on the state price list, provided the local agency has adopted the provisions of KRS 45A.345 through 45A.460 as authorized under KRS 45A.343 . OAG 90-75 .

The Model Procurement Code allows local public agencies to be flexible in order to take advantage of discounts or cost savings available by means of noncompetitive negotiations if competitive negotiations would not yield greater savings in a given circumstance. OAG 90-75 .

The plain language of this section supports the view that a local public agency may, without bidding, negotiate with a vendor willing to offer that agency a contract on specific supplies which are the subject of a state price agreement, at a lower cost than on the list. OAG 90-75 .

The term “negotiating” used in subsection (2) of this section was intended to be the same term of art as defined by KRS 45A.345(11). OAG 90-75 .

45A.425. Surplus or excess property.

  1. A local public agency may sell or otherwise dispose of any personal property which is not needed or has become unsuitable for public use, or which would be suitable, consistent with the public interest, for some other use.
  2. A written determination as to need of suitability of any personal property of the local public agency shall be made; and such determination shall fully describe the personal property; its intended use at the time of acquisition; the reasons why it is in the public interest to dispose of the item; and the method of disposition to be used.
  3. Surplus or excess personal property as described in this section may be transferred, with or without compensation, to another governmental agency; or it may be sold at public auction or by sealed bids in accordance with KRS 45A.365 .
  4. In the event that a local public agency receives no bids for surplus or excess personal property, either at public auction or by sealed bid, such property may be disposed of, consistent with the public interest, in any manner deemed appropriate by the local public agency. In such instances, a written description of the property, the method of disposal, and the amount of compensation, if any, shall be made. Any compensation resulting from the disposal of surplus or excess personal property shall be transferred to the general fund of the local public agency.
  5. A local board of education may dispose of its surplus technology in accordance with KRS 160.335 .
  6. As an alternative procedure to that set out in this section, a county may dispose of personal property pursuant to KRS 67.0802 .
  7. Notwithstanding subsections (1) to (4) of this section, a city, urban-county government, or consolidated local government that has adopted KRS 45A.345 to 45A.460 may dispose of surplus property using the procedures in KRS 82.083 .

History. Enact. Acts 1978, ch. 110, § 86, effective January 1, 1980; 1984, ch. 199, § 1, effective July 13, 1984; 2008, ch. 14, § 2, effective July 15, 2008; 2019 ch. 69, § 2, effective March 25, 2019; 2019 ch. 59, § 1, effective June 27, 2019.

Legislative Research Commission Notes.

(6/27/2019). This statute was amended by 2019 Ky. Acts chs. 59 and 69, which do not appear to be in conflict and have been codified together.

NOTES TO DECISIONS

1.Sale of Property.
2.—Procedure.

This section does not make it mandatory that the agency follow the other sections of Chapter 45A in disposing or selling of its property, since it provides that it “may” sell in accordance with the code and, by virtue of KRS 45A.345(10), “may” means permissive. Ohio River Conversions, Inc. v. Owensboro, 663 S.W.2d 759, 1984 Ky. App. LEXIS 444 (Ky. Ct. App. 1984).

Cited in:

Communications Systems, Inc. v. Danville, 880 F.2d 887, 1989 U.S. App. LEXIS 10840 (6th Cir. 1989); Dennis v. Fiscal Court of Bullitt County, 784 S.W.2d 608, 1990 Ky. App. LEXIS 23 (Ky. Ct. App. 1990).

45A.430. Bid bonds.

  1. Bidder security shall be required for all competitive sealed bidding for construction contracts when the price is estimated by the local public agency to exceed one hundred thousand dollars ($100,000). Bidder’s security shall be a bond provided by a surety company authorized to do business in this Commonwealth, or the equivalent in cash, in a form satisfactory to the local public agency. Nothing herein prevents the requirement of such bonds on construction contracts under one hundred thousand dollars ($100,000) when the circumstances warrant.
  2. Bidder’s security shall be in an amount equal to at least five percent (5%) of the amount of the bid.
  3. When the invitation for bids requires that bidder security be provided, noncompliance requires that the bid be rejected, provided, however, that the local public agency may set forth by regulation exceptions to this requirement in the event of substantial compliance.
  4. After the bids are opened, they shall be irrevocable for the period specified in the invitation for bids, provided that, if a bidder is permitted to withdraw his bid before award because of a mistake in the bid as allowed by law or regulation, no action shall be had against the bidder or the bidder’s security.

History. Enact. Acts 1978, ch. 110, § 87, effective January 1, 1980; 2019 ch. 79, § 2, effective June 27, 2019.

NOTES TO DECISIONS

1.Waiver of Irregularity.

Where a regulation promulgated by a metropolitan sewer district (MSD) under subsection (3) of this section provided that the MSD could waive any informality or irregularity in bids, and at the bid opening it was discovered that the lowest bidder had submitted a bid bond for five percent, instead of the ten percent amount which the MSD had required in its invitation for bids, the MSD properly and with authority waived the bid bond discrepancy especially in light of the fact that the lowest bidder immediately rectified the mistake by providing a ten percent bid bond. Shannon H. Holloway Constr. Co. v. Louisville & Jefferson County Metropolitan Sewer Dist., 674 S.W.2d 523, 1983 Ky. App. LEXIS 403 (Ky. Ct. App. 1983).

45A.435. Contract performance and payment bonds.

  1. When a construction contract is awarded in an amount in excess of one hundred thousand dollars ($100,000), the following bonds shall be furnished to the local public agency, and shall become binding on the parties upon the award of the contract:
    1. A performance bond satisfactory to the local public agency executed by a surety company authorized to do business in this Commonwealth, or otherwise supplied, satisfactory to the local public agency, in an amount equal to one hundred percent (100%) of the contract price as it may be increased; and
    2. A payment bond satisfactory to the local public agency, executed by a surety company authorized to do business in this Commonwealth, or otherwise supplied, satisfactory to the local public agency, for the protection of all persons supplying labor and material to the contractor or his subcontractors for the performance of the work provided for in the contract. The bond shall be in an amount equal to one hundred percent (100%) of the original contract price.
  2. Nothing in this section shall be construed to limit the authority of the local public agency to require a performance bond or other security in addition to those bonds, or in circumstances other than specified in subsection (1) of this section, including, but not limited to, bonds for the payment of taxes and unemployment insurance premiums.

History. Enact. Acts 1978, ch. 110, § 88, effective January 1, 1980; 2019 ch. 79, § 3, effective June 27, 2019.

Research References and Practice Aids

Cited:

Acuity, A Mutual Ins. Co. v. Planters Bank, Inc., 362 F. Supp. 2d 885, 2005 U.S. Dist. LEXIS 5293 ( Ky. 2005 ).

45A.440. Bond forms, filings, and copies.

  1. The local public agency may promulgate by regulation the form of the bonds required by KRS 45A.430 and 45A.435 , or it may adopt the form established by the state under KRS 45A.180 to 45A.200 .
  2. The local public agency shall furnish a certified copy of a bond to any person who requests such and pays the reasonable fee for that copy. The copy shall be prima facie evidence of the contents, execution, and delivery of the original.

History. Enact. Acts 1978, ch. 110, § 89, effective January 1, 1980; 1992, ch. 55, § 10, effective July 14, 1992.

45A.445. Definitions for terms used in KRS 45A.445 to 45A.460.

As used in KRS 45A.445 to 45A.460 , unless the context indicates otherwise:

  1. “Conspicuously” shall mean written in such special or distinctive format, print, or manner that a reasonable person against whom it is to operate ought to have noticed it.
  2. “Confidential information” shall mean any information which is available to an employee only because of his status as an employee of the local public agency and is not a matter of public knowledge or available to the public on request.
  3. “Debarment” shall mean the disqualification of a person to receive invitations for bids or requests for proposals, or the award of a contract by the local public agency for a specified period of time.
  4. “Financial interest” shall mean:
    1. Ownership of any interest or involvement in any relationship from which, or as a result of which, a person has, within the past three (3) years, received or is presently or in the future entitled to receive more than one thousand dollars ($1,000) per year, or its equivalent; or
    2. Ownership of more than a ten percent (10%) interest in any business; or
    3. Holding a position in a business such as an officer, director, trustee, partner, employee, or the like, or holding any position of management.
  5. “Gratuity” shall mean a payment, loan, subscription, advance, deposit of money, services, or anything of more than fifty dollars ($50) value, present or promised, unless consideration of substantially equal or greater value is received.
  6. “Immediate family” shall mean a spouse, children, grandchildren, parents, grandparents, brothers and sisters, and such other relatives as designated by the local public agency.
  7. “Official responsibility” shall mean direct administrative or operating authority, whether intermediate or final, either exercisable alone or with others, either personally or through subordinates, to approve, disapprove, or otherwise direct local public agency actions.
  8. “Suspension” shall mean the disqualification of any person to receive invitations for bids or requests for proposals, or to be awarded a contract by a local public agency for a temporary period, pending the completion of an investigation and any legal proceedings that may ensue.

History. Enact. Acts 1978, ch. 110, § 90, effective January 1, 1980; 1980, ch. 250, § 15, effective April 9, 1980.

45A.450. Statement of public policy.

  1. Public employment is a public trust.
  2. It is the policy and purpose of KRS 45A.345 to 45A.460 to promote and balance the object of protecting government integrity and of facilitating the recruitment and retention of personnel needed by local public agencies by prescribing essential restrictions against conflict of interest without creating unnecessary barriers to public service and by facilitating development of fair and competitive access to local public agency purchasing by responsible contractors.
  3. Employees must discharge their duties and responsibilities fairly and impartially. They should also maintain a standard of conduct that will inspire public confidence in the integrity of the government of all local public agencies.

History. Enact. Acts 1978, ch. 110, § 91, effective January 1, 1980.

NOTES TO DECISIONS

1.Operation of Business on Public Property.

A county jailer who operated a commissary within the detention center, the existence of which contributed both to the security of the detention center and to the benefit of the county as a whole in terms of its cost effectiveness, and who received an amount of profit from the commissary which was neither unreasonable nor excessive, nevertheless violated Ky. Const., § 173, as the commissary was operated by a public employe on public property, and the trial court acted correctly in ruling that the jailer was prohibited from operating such commissary for profit, but erred in awarding a monetary judgment against him, as he relied on the advice of his own counsel, the county attorney, the Attorney General of Kentucky, as well as the advice and acquiescence of the county government officials, to his detriment, so that such officials were estopped from seeking any monetary damages from him. Buchignani v. Lexington-Fayette Urban County Government, 632 S.W.2d 465, 1982 Ky. App. LEXIS 212 (Ky. Ct. App. 1982).

45A.455. Conflict of interest — Gratuities and kickbacks — Use of confidential information.

  1. It shall be a breach of ethical standards for any employee with procurement authority to participate directly in any proceeding or application; request for ruling or other determination; claim or controversy; or other particular matter pertaining to any contract, or subcontract, and any solicitation or proposal therefor, in which to his knowledge:
    1. He, or any member of his immediate family has a financial interest therein; or
    2. A business or organization in which he or any member of his immediate family has a financial interest as an officer, director, trustee, partner, or employee, is a party; or
    3. Any other person, business, or organization with whom he or any member of his immediate family is negotiating or has an arrangement concerning prospective employment is a party. Direct or indirect participation shall include but not be limited to involvement through decision, approval, disapproval, recommendation, preparation of any part of a purchase request, influencing the content of any specification or purchase standard, rendering of advice, investigation, auditing, or in any other advisory capacity.
  2. It shall be a breach of ethical standards for any person to offer, give, or agree to give any employee or former employee, or for any employee or former employee to solicit, demand, accept, or agree to accept from another person, a gratuity or an offer of employment, in connection with any decision, approval, disapproval, recommendation, preparation of any part of a purchase request, influencing the content of any specification or purchase standard, rendering of advice, investigation, auditing, or in any other advisory capacity in any proceeding or application, request for ruling or other determination, claim or controversy, or other particular matter, pertaining to any contract or subcontract and any solicitation or proposal therefor.
  3. It is a breach of ethical standards for any payment, gratuity, or offer of employment to be made by or on behalf of a subcontractor under a contract to the prime contractor or higher tier subcontractor or any person associated therewith, as an inducement for the award of a subcontract or order.
  4. The prohibition against conflicts of interest and gratuities and kickbacks shall be conspicuously set forth in every local public agency written contract and solicitation therefor.
  5. It shall be a breach of ethical standards for any public employee or former employee knowingly to use confidential information for his actual or anticipated personal gain, or the actual or anticipated personal gain of any other person.

History. Enact. Acts 1978, ch. 110, § 92, effective January 1, 1980; 1980, ch. 250, § 16, effective April 9, 1980.

Opinions of Attorney General.

Subsection (1) of this section prohibits involvement in the procurement function by a school employee relative to any item sold to the school by a supply firm with which an immediate family member is involved, presently or prospectively, but this prohibition only acts to restrain the particular employee, not the entire school district employing him; thus, if the employee is not so involved, the district is free to purchase from such a firm. OAG 80-32 .

Subsection (1) of this section prohibits a fire department member’s fencing firm from contracting with the city, since he is an employee of the city, regardless of the fact that the contract may be awarded on a bid basis. OAG 80-133 .

This section had no application in 1980 to a rock sale to a county, which took place in 1976, by the father of an individual who became the county attorney in 1978, where the county attorney had no direct or indirect financial interest in that transaction within the three years prior to the effective date, January 1, 1980, of this conflict of interest statute. OAG 80-176 .

The chairperson of the city board of trustees would have to refrain from participating and voting on the granting of a rental contract for the use of a recreational room in a municipal building entered into with the daughter or sister of the chairperson, because such action would be considered as against public policy; also, the chairperson could not participate directly or indirectly in the granting of such a contract by the city involving a member of his immediate family in view of this section pertaining to the Model Procurement Act. OAG 80-198 .

It is an impermissible conflict of interest and against public policy for a trustee of a sixth-class city to participate as a member of the board in the awarding of the city’s insurance contract to his son, an insurance agent, even though his son is the only insurance agent in the city and despite the fact that the contract was awarded at the same rate as earlier contracts had been awarded before the trustee took office. OAG 80-293 .

Public policy dictates that the deputy county judge/executive must avoid participating, directly or indirectly, in any proceeding involving a county contract with her spouse. OAG 80-296 .

The Model Procurement Code would not prohibit an assistant school principal from submitting a competitive bid to the school board for services as a professional auctioneer. OAG 80-605 .

Where county police officer also owned a cleaning business which was a Kentucky corporation, there would be no statutory conflict of interest involved if the corporation were to submit a sealed bid on the cleaning of county and city buildings, assuming that the county fiscal court had adopted KRS 45A.345 through 45A.460 and that the county police officer had no procurement authority for the county. OAG 83-28 .

Since a city fireman lacks procurement authority, he or a member of his immediate family could contract with the city without violating this section. OAG 83-96 .

Where husband was a city fireman and wife was sole owner of a small printing shop, which had been doing printing business for the city, there was no legal objection, based on conflict of interest statutes, to the wife continuing to contract with the city for printing services. OAG 83-96 .

45A.460. Recovery of value of anything transferred or received in breach of ethical standards.

  1. The value of anything transferred or received in breach of the ethical standards of KRS 45A.345 to 45A.990 or regulations or rules issued thereunder by an employee or a nonemployee may be recovered from both the employee and the nonemployee.
  2. Upon a showing that a subcontractor made a kickback to a prime contractor or a higher tier subcontractor in connection with the award of a subcontract or order thereunder, it shall be conclusively presumed that the amount thereof was included in the price of the subcontract or order and ultimately borne by the local public agency and will be recoverable hereunder from the recipient. In addition, said value may also be recovered from the subcontractor making such kickbacks. Recovery from one (1) offending party shall not preclude recovery against other offending parties.

History. Enact. Acts 1978, ch. 110, § 93, effective January 1, 1980.

45A.465. Definitions for KRS 45A.470.

As used in KRS 45A.470 , the words:

  1. “Other individuals with severe disabilities” means an individual or class of individuals with a disability, other than blindness, that constitutes an obstacle to new or continued normal employment.
  2. “Products” means programs, books, tapes, records, processes, packaging, modification, supplies, food, clothing, materials, commodities, equipment of all kinds, and any other article of commerce originally manufactured or assembled or purchased for resale by a qualified nonprofit agency.
  3. “Qualified nonprofit agency for individuals with severe disabilities” means an organization that:
    1. Is organized and operated in the interest of individuals with severe disabilities; and
    2. Complies with any applicable occupational health and safety law of the United States and the Commonwealth; and
    3. In the manufacture or provision of products or services listed or purchased under KRS 45A.470 , during the fiscal year employs individuals with severe disabilities for not less than seventy-five percent (75%) of the man hours of direct labor required for the manufacture or provision of the products or services; and
    4. Is registered and in good standing as a nonprofit organization with the Secretary of State.
  4. “Services” means contractual services; rental services of all kinds; professional, technical, or artistic services; and other personal performance of work by officers, employees, or beneficiaries of a nonprofit agency.
  5. “State agency” means those spending agencies subject to the state purchasing requirements of this code and any regulations promulgated pursuant thereto.

History. Enact. Acts 1982, ch. 170, § 1, effective July 15, 1982; 1990, ch. 496, § 30, effective July 13, 1990; 1994, ch. 405, § 9, effective July 15, 1994.

NOTES TO DECISIONS

Cited:

Cmty. Servs. Project, Inc. v. BAWAC Cleaning Servs., 226 S.W.3d 852, 2007 Ky. App. LEXIS 162 (Ky. Ct. App. 2007).

Opinions of Attorney General.

Entities which are nonprofit agencies for the severely handicapped would need to be approved by the purchasing division as meeting the definition of subdivisions (3)(a) to (3)(d) of this section; they can then bid on contracts seeking products or services such entities produce. If their bids fall anywhere in the current price range and meet the necessary specifications and such entities can produce sufficient amounts of products needed, the purchasing division should choose such products, even if they are not the lowest bid price. OAG 84-134 .

45A.470. Preference to be given by governmental bodies and political subdivisions in purchasing commodities or services — List of commodities and services — Price range — Negotiation for identical products and services.

  1. Notwithstanding any provision of this chapter to the contrary, all governmental bodies and political subdivisions of this state shall, when purchasing commodities or services, give first preference to the products made by the Department of Corrections, Division of Prison Industries, as required by KRS 197.210 . Second preference shall be given to any products produced by Kentucky Industries for the Blind, Incorporated, or any other nonprofit corporation that furthers the purposes of KRS Chapter 163, and agencies of individuals with severe disabilities as described in KRS 45A.465 .
  2. The Finance and Administration Cabinet shall make a list of commodities and services provided by these agencies and organizations available to all governmental bodies and political subdivisions. The list shall identify in detail the commodity or service the agency or organization may supply and the price.
  3. The Finance and Administration Cabinet shall annually determine the current price range for the commodities and services offered from its experience in purchasing these commodities or services on the open market. The prices quoted by these agencies or organizations shall not exceed the current price range.
  4. The Office of Vocational Rehabilitation within the Education and Labor Cabinet and qualified agencies for individuals with severe disabilities shall annually cause to be made available to the Finance and Administration Cabinet, lists of the products or services available.
  5. If two (2) or more of the agencies or qualified nonprofit organizations wish to supply identical commodities or services, the Finance and Administration Cabinet shall conduct negotiations with the parties to determine which shall be awarded the contract. The decision of the Finance and Administration Cabinet shall be based upon quality of the commodity or service and the ability of the respective agencies to supply the commodity or service within the requested delivery time.

HISTORY: Enact. Acts 1982, ch. 170, § 2, effective July 15, 1982; 1986, ch. 331, § 13, effective July 15, 1986; 1992, ch. 211, § 10, effective July 14, 1992; 1994, ch. 126, § 4, effective July 15, 1994; 1994, ch. 209, § 8, effective July 15, 1994; 1994, ch. 405, § 10, effective July 15, 1994; 1998, ch. 393, § 1, effective July 15, 1998; 2006, ch. 211, § 11, effective April 21, 2006; 2009, ch. 11, § 10, effective June 25, 2009; 2010, ch. 162, § 24, effective July 15, 2010; 2019 ch. 146, § 6, effective June 27, 2019; 2022 ch. 236, § 19, effective July 1, 2022.

NOTES TO DECISIONS

1.Applicability.

Even if the KRS 45A.470(5) negotiation requirement is applicable to competitive sealed bids, the Cabinet correctly concluded that negotiations were not required because the losing bidder failed to offer the service at a price comparable to that offered by the winning bidder, and summary judgment for the Cabinet and the winning bidder in the corporation’s case challenging the contract award was correct. Cmty. Servs. Project, Inc. v. BAWAC Cleaning Servs., 226 S.W.3d 852, 2007 Ky. App. LEXIS 162 (Ky. Ct. App. 2007).

Opinions of Attorney General.

In order to ascertain the legislative intent behind this section ordinary meanings should be applied to the terms “preference” and “price range.” OAG 83-44 .

The word “preference” in subsection (1) of this section means that Kentucky must give second chance to the Kentucky Industries for the Blind and other agencies for the handicapped, as designated in Acts 1982, ch. 170, to sell their products if the products made by the Department of Corrections (now Corrections Cabinet), Division of Prison Industries do not fall within the stated price ranges mentioned in subsection (3) of this section; in subsection (3), the term “price range” means the level of cost of services and products on today’s open market. OAG 83-44 .

Entities which are nonprofit agencies for the severely handicapped would need to be approved by the purchasing division as meeting the definition of KRS 45A.465(3)(a) to (3)(d); they can then bid on contracts seeking products or services such entities produce. If their bids fall anywhere in the current price range and meet the necessary specifications and such entities can produce sufficient amounts of products needed, the purchasing division should choose such products, even if they are not the lowest bid price. OAG 84-134 .

Products of the Prison Industries and Bureau for the Blind (now Department for the Blind) can be purchased by state agencies without bidding where their prices fall within the current price range of other producers. OAG 84-134 .

45A.475. State depositories to render service pursuant to this chapter.

All services provided to the Commonwealth by qualified state depositories shall be rendered pursuant to this chapter.

History. Enact. Acts 1982, ch. 382, § 24, effective July 15, 1982.

45A.480. Compliance with workers’ compensation insurance and unemployment insurance laws required — Foreign entity to obtain certificate of authority — Penalty.

    1. No state contract for building, construction, reconstruction, renovation, demolition, or maintenance, or for any activity related to building, construction, reconstruction, renovation, demolition, or maintenance shall be awarded by any agency, department, or office of the Commonwealth of Kentucky or any political subdivision of the Commonwealth of Kentucky to any person until that person assures, by affidavit, that all contractors and subcontractors employed, or that will be employed, under the provisions of the contract shall be in compliance with Kentucky requirements for workers’ compensation insurance according to KRS Chapter 342 and unemployment insurance according to KRS Chapter 341. (1) (a) No state contract for building, construction, reconstruction, renovation, demolition, or maintenance, or for any activity related to building, construction, reconstruction, renovation, demolition, or maintenance shall be awarded by any agency, department, or office of the Commonwealth of Kentucky or any political subdivision of the Commonwealth of Kentucky to any person until that person assures, by affidavit, that all contractors and subcontractors employed, or that will be employed, under the provisions of the contract shall be in compliance with Kentucky requirements for workers’ compensation insurance according to KRS Chapter 342 and unemployment insurance according to KRS Chapter 341.
    2. An agency, department, office, or political subdivision of the Commonwealth of Kentucky shall not award a state contract to a person that is a foreign entity unless that foreign entity, on the records of the Secretary of State, holds a certificate of authority or a statement of foreign qualification.
  1. Any person who fails to comply with the requirements of subsection (1) of this section during the term of the state contract, upon such finding by a court of competent jurisdiction, shall be fined an amount not to exceed four thousand dollars ($4,000), or an amount equal to the sum of uninsured and unsatisfied claims brought under the provisions of KRS Chapter 342 and unemployment insurance claims for which no wages were reported as required by KRS Chapter 341, whichever is greater.
  2. The penalty imposed in subsection (2) of this section shall be enforced by the county attorney for the county in which the violation occurred.

History. Enact. Acts 1990, ch. 174, § 2, effective July 13, 1990; 2011, ch. 80, § 2, effective June 8, 2011; 2012, ch. 81, § 86, effective July 12, 2012.

NOTES TO DECISIONS

Cited:

Hensley v. Davis, — S.W.3d —, 2006 Ky. App. LEXIS 304 (Ky. Ct. App. 2006).

45A.485. Certain contracts required to mandate revealing of violations of and compliance with specified KRS chapters — Effect of nondisclosure or noncompliance.

  1. Any state contract awarded under KRS Chapter 45A, 175, 176, 177, or 180 after July 15, 1994, shall require the contractor and all subcontractors performing work under the contract to:
    1. Reveal any final determination of a violation by their respective company within the previous five (5) year period pursuant to KRS Chapters 136, 139, 141, 337, 338, 341, and 342 that apply to the contractor or subcontractor; and
    2. Be in continuous compliance with the provisions of KRS Chapters 136, 139, 141, 337, 338, 341, and 342 that apply to the contractor or subcontractor for the duration of the contract.
  2. A contractor’s failure to reveal a final determination of a violation by the contractor of KRS Chapters 136, 139, 141, 337, 338, 341, and 342 or to comply with these statutes for the duration of the contract shall be grounds for the Commonwealth’s:
    1. Cancellation of the contract; and
    2. Disqualification of the contractor from eligibility for future state contracts for a period of two (2) years.
  3. A subcontractor’s failure to reveal a final determination of a violation by the subcontractor of KRS Chapters 136, 139, 141, 337, 338, 341, and 342 or to comply with these statutes for the duration of the contract shall be grounds for the Commonwealth’s disqualification of the subcontractor from eligibility for future state contracts for a period of two (2) years.

History. Enact. Acts 1994, ch. 491, § 1, effective July 15, 1994; 1998, ch. 520, § 1, effective July 15, 1998.

45A.487. Definitions for KRS 45A.487 and 45A.488.

  1. “Public agency” as used in KRS 45A.487 and 45A.488 has the same meaning as KRS 61.870 .
  2. “Public works” as used in KRS 45A.487 and 45A.488 means all buildings, roads, streets, alleys, sewers, ditches, sewage disposal plants, waterworks, and all other structures or work, including “adult correctional facilities,” as defined in KRS 197.500 , constructed under contract with any public agency.

HISTORY: 2019 ch. 38, § 1, effective June 27, 2019.

45A.488. Restrictions on requirements relating to labor organizations in bid specifications and other contract documents — Grants, tax abatements, and tax credits — Exemption for threat to public health or safety.

  1. A public agency awarding a contract for a public works project shall not in the bid specifications, project agreements, or other contract documents:
    1. Require or give preference to a bidder, offeror, or contractor in any contractor tier to enter into or adhere to an agreement with a labor organization relating to the public works contract or any other public works project; or
    2. Prohibit a bidder, offeror, or contractor in any contractor tier from entering into or adhering to an agreement with a labor organization relating to the public works project or any other public works project.
  2. A public agency shall not award a grant, tax abatement, or tax credit that is conditioned upon a requirement that a person awarded the grant, tax abatement, or tax credit include a term described in subsection (1) of this section in a contract document for any public works project that is the subject of the grant, tax abatement, or tax credit.
  3. This section does not do any of the following:
    1. Prohibit a public agency from awarding a contract, grant, tax abatement, or tax credit to a private owner, bidder, or contractor in any contractor tier who is party to an agreement with a labor organization if being or becoming a party or adhering to an agreement with a labor organization is not a condition for award of the contract, grant, tax abatement, or tax credit;
    2. Prohibit a contractor in any contractor tier from voluntarily entering into or complying with an agreement entered into with a labor union in regard to a contract with a public agency or funded in whole or in part from a grant, tax abatement, or tax credit from a public agency;
    3. Prohibit employers or other parties from entering into agreements or engaging in any other activity protected by the National Labor Relations Act, 29 U.S.C. secs. 151 et seq.; or
    4. Interfere with labor relations of parties that are not regulated under the National Labor Relations Act, 29 U.S.C. secs. 151 et seq.
  4. A public agency may exempt a particular project, contract in any contractor tier, grant, tax abatement, or tax credit from the requirements of any or all of the provisions of this section if the public agency finds, after public notice and hearing, that special circumstances require an exemption to avert an imminent threat to public health or safety. A finding of special circumstances under this subsection may not be based on the possibility or presence of a labor dispute concerning:
    1. The use of contractors at any contractor tier who are not signatories to, or otherwise do not adhere to, agreements with one (1) or more labor organizations; or
    2. Employees on the project who are not members of, or affiliated with, a labor organization.

HISTORY: 2019 ch. 38, § 2, effective June 27, 2019.

Preference for Resident Bidders

45A.490. Definitions for KRS 45A.490 to 45A.494.

As used in KRS 45A.490 to 45A.494 :

  1. “Contract” means any agreement of a public agency, including grants and orders, for the purchase or disposal of supplies, services, construction, or any other item; and
  2. “Public agency” has the same meaning as in KRS 61.805 .

History. Enact. Acts 2010, ch. 162, § 1, effective July 15, 2010.

45A.492. Legislative declarations.

The General Assembly declares:

  1. A public purpose of the Commonwealth is served by providing preference to Kentucky residents in contracts by public agencies; and
  2. Providing preference to Kentucky residents equalizes the competition with other states that provide preference to their residents.

History. Enact. Acts 2010, ch. 162, § 2, effective July 15, 2010.

45A.494. Reciprocal preference to be given by public agencies to resident bidders — List of states — Administrative regulations.

  1. Prior to a contract being awarded to the lowest responsible and responsive bidder on a contract by a public agency, a resident bidder of the Commonwealth shall be given a preference against a nonresident bidder registered in any state that gives or requires a preference to bidders from that state. The preference shall be equal to the preference given or required by the state of the nonresident bidder.
  2. A resident bidder is an individual, partnership, association, corporation, or other business entity that, on the date the contract is first advertised or announced as available for bidding:
    1. Is authorized to transact business in the Commonwealth; and
    2. Has for one (1) year prior to and through the date of the advertisement, filed Kentucky corporate income taxes, made payments to the Kentucky unemployment insurance fund established in KRS 341.490 , and maintained a Kentucky workers’ compensation policy in effect.
  3. A nonresident bidder is an individual, partnership, association, corporation, or other business entity that does not meet the requirements of subsection (2) of this section.
  4. If a procurement determination results in a tie between a resident bidder and a nonresident bidder, preference shall be given to the resident bidder.
  5. This section shall apply to all contracts funded or controlled in whole or in part by a public agency.
  6. The Finance and Administration Cabinet shall maintain a list of states that give to or require a preference for their own resident bidders, including details of the preference given to such bidders, to be used by public agencies in determining resident bidder preferences. The cabinet shall also promulgate administrative regulations in accordance with KRS Chapter 13A establishing the procedure by which the preferences required by this section shall be given.
  7. The preference for resident bidders shall not be given if the preference conflicts with federal law.
  8. Any public agency soliciting or advertising for bids for contracts shall make KRS 45A.490 to 45A.494 part of the solicitation or advertisement for bids.

History. Enact. Acts 2010, ch. 162, § 3, effective July 15, 2010.

Recycled Material Content Products

45A.500. Legislative findings.

It is the finding of the General Assembly that a necessary component of waste management must be to reduce the quantity of waste; that recycling reduces the quantity of solid waste and reduces the costs to the state and local governments for collecting, transporting, landfilling, or incinerating solid waste, reduces litter on roadsides and waterways, creates income producing opportunities, and conserves energy and raw materials. It is also the finding of the General Assembly that government makes purchases in large volumes which significantly affects the availability, variety, price, and consumer acceptance of the products and services purchased by government. The General Assembly further finds that by eliminating policies and practices which discriminate against government procuring recycled material content products as well as products and services compatible with recycled material content goods, and that by requiring government purchases of products which contain the maximum possible amount of recycled materials, the availability and variety of recycled material content products will increase and removal and recycling of materials from the solid waste stream will grow. Finally, the General Assembly finds that instituting policies and practices to stimulate the availability and use of recycled material content products will help educate business and individual consumers about the value of recycling as a component of a waste management policy.

History. Enact. Acts 1990, ch. 367, § 1, effective July 13, 1990.

45A.505. Definitions.

As used in KRS 45A.500 to 45A.540 , unless the context clearly indicates otherwise, “state agency” means any agency of the executive, legislative, or judicial branch of state government which purchases goods or services through a centralized state purchasing agency or which is authorized to directly purchase goods and services.

History. Enact. Acts 1990, ch. 367, § 2, effective July 13, 1990.

45A.510. Nonrecyclable materials may be purchased, when.

Nothing in KRS 45A.500 to 45A.540 shall prohibit a state agency from purchasing goods, supplies, equipment, materials, and printing for which a recycled material content substitute is not available or when the state agency can justify specifications for goods, supplies, equipment, materials, and printing which cannot be met by recycled material content substitutes.

History. Enact. Acts 1990, ch. 367, § 3, effective July 13, 1990.

45A.515. Discrimination against purchase of recycled materials prohibited.

  1. Prior to the issuance of an invitation for bid pursuant to KRS 45A.080 or a request for proposal pursuant to KRS 45A.085 , the Finance and Administration Cabinet, the Legislative Research Commission, and the Administrative Office of the Courts on behalf of their respective branches of state government shall review and revise specifications for the purchase of goods, supplies, equipment, material, and printing to:
    1. Eliminate specifications that explicitly or indirectly discriminate against goods, supplies, equipment, material, and printing with recycled material content; and
    2. Eliminate unnecessary specifications for goods, supplies, equipment, material, and printing when less expensive alternative specifications may be substituted without affecting the intended use of what is purchased.

History. Enact. Acts 1990, ch. 367, § 4, effective July 13, 1990.

45A.520. Requirement of purchase of materials with minimum recycled content.

Every state agency shall when purchasing goods, supplies, equipment, materials, and printing require a minimum recycled material content for those goods, supplies, equipment, materials, and printing. The recycled material content shall be established by administrative regulations to be promulgated by the Finance and Administration Cabinet by September 1, 1991. For those products which the United States Environmental Protection Agency has established minimum recycled content procurement guidelines promulgated pursuant to the Resource Conservation and Recovery Act of 1976, as amended, the Finance and Administration Cabinet shall adopt, at a minimum, the recycled material content standards equal to those established by the United States Environmental Protection Agency.

History. Enact. Acts 1990, ch. 367, § 5, effective July 13, 1990; 1991 (1st Ex. Sess.), ch. 12, § 54, effective February 26, 1991.

Compiler’s Notes.

The Resource Conservation and Recovery Act of 1976 may be found as 42 USCS § 6901 et seq.

Research References and Practice Aids

Kentucky Law Journal.

Cox, What May States Do About Out-of-State Waste in Light of Recent Supreme Court Decisions Applying the Dormant Commerce Clause? Kentucky As Case Study in the Waste Wars, 83 Ky. L.J. 551 (1994-95).

45A.523. Report on procurement of products made from recovered materials.

The Finance and Administration Cabinet and any state agency which makes any purchase independent of the Finance and Administration Cabinet shall prepare a report by January 1 of each year to the General Assembly and the Governor on progress in procuring products made from recovered materials. The report shall include:

  1. The recycled content percentages of the various products being purchased;
  2. Relative costs of virgin and recycled products;
  3. Sources of recycled products being purchased;
  4. Types of performance tests conducted on recycled products, the results, and actual agency experience;
  5. Organizations participating in cooperative purchasing and volumes of materials purchased; and
  6. A list of products reviewed for changes in specifications relating to their minimum recycled content.

History. Enact. Acts 1991 (1st Ex. Sess.), ch. 12, § 60, effective February 26, 1991.

45A.525. Recycled material content provisions to be applied to contractors with a state agency.

The Finance and Administration Cabinet shall require, to the extent practicable, every person entering into a contract with a state agency for building, altering, repairing, improving, or demolishing any public structures or buildings or other improvements to any public real property to use goods, supplies, equipment, materials, and printing necessary to fulfill the contract which meet the requirements for recycled material content as adopted pursuant to KRS 45A.520 .

History. Enact. Acts 1990, ch. 367, § 6, effective July 13, 1990; 1991 (1st Ex. Sess.), ch. 12, § 55, effective February 26, 1991.

45A.530. Recycled material content provisions to be applied to projects financed by bonds issued by state agency.

The Finance and Administration Cabinet shall require, to the extent practicable, that every project within Kentucky financed fifty percent (50%) or more by bonds issued by a state agency be undertaken with goods, supplies, equipment, materials, and printing which meet the requirements for recycled material content as adopted pursuant to KRS 45A.520 .

History. Enact. Acts 1990, ch. 367, § 7, effective July 13, 1990; 1991 (1st Ex. Sess.), ch. 12, § 56, effective February 26, 1991.

45A.535. Vendors to be informed.

The Finance and Administration Cabinet, the Legislative Research Commission and the Administrative Office of the Courts shall, on behalf of their respective branches of state government inform all vendors offering goods, supplies, equipment, materials, and printing to state agencies of the requirements of KRS 45A.500 to 45A.540 .

History. Enact. Acts 1990, ch. 367, § 8, effective July 13, 1990.

45A.540. Purchase of materials with minimum recycled material content through central stores.

Every county, city, school district, and special district may purchase goods, supplies, equipment, material, and printing which meet the procurement standards for minimum recycled material content through the central stores branch of the Division of Material and Procurement Services in the Finance and Administration Cabinet. Counties, cities, school districts, and special districts which purchase goods, supplies, equipment, material, and printing which meet the procurement standards established pursuant to KRS 45A.520 for minimum recycled material content shall receive a fifty percent (50%) reduction in any administrative fee the central purchasing agency is authorized to charge.

History. Enact. Acts 1990, ch. 367, § 9, effective July 13, 1990; 1991 (1st Ex. Sess.), ch. 12, § 57, effective February 26, 1991; 2000, ch. 5, § 8, effective July 14, 2000.

Research References and Practice Aids

Kentucky Law Journal.

Cox, What May States Do About Out-of-State Waste in Light of Recent Supreme Court Decisions Applying the Dormant Commerce Clause? Kentucky As Case Study in the Waste Wars, 83 Ky. L.J. 551 (1994-95).

Privatization Contracts

45A.550. Definitions for KRS 45A.550 to 45A.554 and KRS 11A.130.

As used in KRS 45A.550 to 45A.554 and KRS 11A.130 , unless the context requires otherwise:

  1. “Privatize” means to contract out in order to procure the services of a private vendor to provide a service that is similar to, and in lieu of, a service provided by state employees of the privatizing agency;
  2. “Privatization contract” means an agreement or combination of a series of agreements by which a private vendor agrees to provide services that are substantially similar to, and in lieu of, services previously provided, in whole or in part, by at least ten (10) permanent, full-time, budgeted employees of the state agency. This term includes but is not limited to concession contracts. This term does not include personal service contracts as defined in KRS 45A.690 , contracts entered into pursuant to KRS Chapter 176, 177, 178, 179, 180, or 181, Medicaid provider contracts, architect and engineering contracts entered into pursuant to KRS 45A.800 to 45A.835 , price contracts, construction contracts, or memoranda of understanding or memoranda of agreements or program administration contracts with the Cabinet for Human Resources, including contracts for child support collections and enforcement with contracting officials as authorized by KRS 205.712 ; and
  3. “Services” shall not include administration and support functions of government. “Administration and support functions” shall include, but not be limited to, construction contracts, bond counsel and bond underwriting services, architect and engineering services, price contracts, personal service contracts, and memoranda of understanding and memoranda of agreement.

History. Enact. Acts 1998, ch. 492, § 1, effective July 15, 1998.

45A.551. Procedures for state agency privatization contracts.

  1. Upon approval of the Finance and Administration Cabinet, a state agency may enter into a privatization contract.
  2. Before a state agency recommends to the Finance and Administration Cabinet that it enter into a privatization contract, the state agency shall determine and set forth in writing:
    1. The necessity for the service and the intended goals of the service;
    2. Problems and inefficiencies existing with the current governmental operation of the service; and
    3. Whether the service can efficiently be provided by the agency.
  3. If the state agency determines that the service cannot efficiently be provided by the agency, the state agency shall be permitted to continue the normal contracting process for the service. However, if the state agency determines that the service can efficiently be provided by the agency and the state agency chooses to proceed with privatization, it shall set forth in writing to the Finance and Administration Cabinet:
    1. The tangible benefits of privatizing the service;
    2. Any state or federal legal restraints that may limit or prevent privatization of the government service;
    3. The availability of multiple qualified and competitive private vendors;
      1. A cost-benefit analysis comparison that shall include, but not be limited to, collection and analysis of the total assessible fixed and variable, direct and indirect, costs of: (d) 1. A cost-benefit analysis comparison that shall include, but not be limited to, collection and analysis of the total assessible fixed and variable, direct and indirect, costs of:
        1. The current governmental operation; and
        2. The private vendor contract.
      2. The costs shall include, but not be limited to:
        1. Facility and equipment maintenance;
        2. Inflation-adjusted costs, where comparison to past years is being conducted;
        3. Transition costs associated with shifting the service delivery from the government agency to a private vendor;
        4. Costs of monitoring, evaluating, and enforcing the contract;
        5. Personnel costs such as those providing for benefits, early retirements, retraining, and relocation in another position; and
        6. A plan for resuming government operation of the service if the privatization effort fails.
    4. A plan of assistance for all state employees who will be adversely affected by privatizing the service. The plan shall include at least:
      1. Efforts to place affected employees in vacant positions in another state agency and to retrain employees for another position in state government;
      2. Provisions in the contract, if feasible, for the hiring by the contractor of displaced employees at wages and benefits comparable to the wages and benefits paid to the state employees, subject to the provisions of KRS 11A.130 ; and
      3. Prior notification to affected state employees the day the contract is signed, or three (3) months before the day the adverse effect will occur, whichever is earlier.
    5. A process for monitoring, evaluating, and enforcing a contract with a private vendor which shall include, but not be limited to:
      1. Development of a method for ongoing, comprehensive performance evaluation of the private vendor; and
      2. Establishment of performance criteria and standards to evaluate the private vendor.
  4. All information required by subsections (2) and (3) of this section shall be submitted to the Finance and Administration Cabinet for its review and approval prior to proceeding with the contracting provisions of KRS Chapter 45A.
  5. The state agency shall retain responsibility for ensuring the quality and reliability of the services.
  6. All records in the possession of a state agency in conjunction with the approval, evaluation, or enforcement of a privatization contract unless exempt under another statute shall be public records, access to which shall be governed by KRS 61.870 to 61.884 .
  7. Any other statute to the contrary notwithstanding, all records prepared, owned, used, in the possession of, or retained by a state agency in conjunction with the approval, evaluation, or enforcement of a privatization contract shall be public records, access to which shall be governed by KRS 61.870 to 61.884 .

History. Enact. Acts 1998, ch. 492, § 2, effective July 15, 1998.

NOTES TO DECISIONS

1.Employer.

When a group of former state university maintenance workers were employed by a private company that managed the university’s facilities, the employee were not still employees of the university for purposes of participating in the Kentucky Employees Retirement System. The university was, thus, not required to continue making pension contributions on the employees’ behalf. Ky. Ret. Sys. v. W. Ky. Univ., 640 S.W.3d 62, 2021 Ky. App. LEXIS 93 (Ky. Ct. App. 2021).

Opinions of Attorney General.

An adult correctional facility may be operated by a private provider only where statutory requirements for resident law enforcement personnel are met. All statutory elements must be met before privatization of a prison may be accomplished. OAG 2004-13 .

45A.552. Cabinet to develop process for evaluating information when determining whether to approve privatization contract — Administrative regulations.

  1. The Finance and Administration Cabinet shall develop an objective and systematic process for evaluating the information in KRS 45A.551(2) and (3) for use in determining whether to approve privatization of a government service.
  2. The process shall be adopted by administrative regulation promulgated by the Finance and Administration Cabinet in accordance with KRS Chapter 13A.

History. Enact. Acts 1998, ch. 492, § 3, effective July 15, 1998.

45A.553. Contracting agency evaluation and report — Cabinet report.

  1. After approval of a privatization contract by the Finance and Administration Cabinet and issuance and execution of the privatization contract, the contracting agency shall annually evaluate the performance of the contract and report its findings to the Governor, the Auditor of Public Accounts, and the Legislative Research Commission.
  2. The state agency entering into the contract shall provide for an evaluation of the performance of any privatization contract awarded in excess of five hundred thousand dollars ($500,000) annually. The review shall include but not be limited to determining whether the contractor is complying with all applicable statutory requirements and the provisions of the contract. The performance evaluation shall be forwarded to the Auditor of Public Accounts and the Legislative Research Commission. The evaluation shall be subject to review by the Auditor of Public Accounts, who shall report any findings to the Legislative Research Commission.
  3. The secretary of the Finance and Administration Cabinet shall report the number of individuals working the equivalent of full-time hours under contracts or agreements identified by this section to the Legislative Research Commission on an annual basis.

History. Enact. Acts 1998, ch. 492, § 4, effective July 15, 1998; 2010, ch. 55, § 2, effective April 5, 2010.

45A.554. Construction of KRS 45A.550 to 45A.554 and KRS 11A.130.

The provision of KRS 45A.550 to 45A.554 and KRS 11A.130 shall not apply to privatization contracts awarded prior to July 15, 1998, or any renewals thereof.

History. Enact. Acts 1998, ch. 492, § 5, effective July 15, 1998.

Miscellaneous Procurement Provisions

45A.600. Purchase of firearm by state employee — Use of proceeds from sale.

    1. When an agency of Kentucky state government or a public university safety and security department organized pursuant to KRS 164.950 transitions from the use of one (1) firearm owned by that agency to another, the agency may sell the firearm that is being replaced directly to an employee of the agency if: (1) (a) When an agency of Kentucky state government or a public university safety and security department organized pursuant to KRS 164.950 transitions from the use of one (1) firearm owned by that agency to another, the agency may sell the firearm that is being replaced directly to an employee of the agency if:
      1. The firearm was issued to the employee in the course of employment; and
      2. The employee is otherwise authorized by law to own or possess the firearm.
      1. The agency shall notify employees of the intended replacement of firearms and that employees may purchase firearms pursuant to paragraph (a) of this subsection. (b) 1. The agency shall notify employees of the intended replacement of firearms and that employees may purchase firearms pursuant to paragraph (a) of this subsection.
      2. The employee desiring to purchase the firearm issued to the employee shall notify the head of the issuing agency of his or her intention not less than ten (10) days after receiving notice of the intended replacement.
    1. Upon retirement from state employment, a state employee to whom a firearm has been issued during the course of employment may purchase the firearm which was issued during the course of employment if the employee is otherwise authorized to privately own or possess the firearm. (2) (a) Upon retirement from state employment, a state employee to whom a firearm has been issued during the course of employment may purchase the firearm which was issued during the course of employment if the employee is otherwise authorized to privately own or possess the firearm.
    2. The employee desiring to purchase the firearm issued to the employee shall notify the head of the issuing agency of such intention not less than thirty (30) days prior to the scheduled date of retirement.
  1. The purchase price shall be the fair market value determined by the Finance and Administration Cabinet, Division of Personal Property. The proceeds from the sale of the firearm shall be deposited to the credit of an agency account for the issuing agency and shall be used for the purpose of purchasing replacement firearms.
  2. Any firearms that are not purchased by employees or retirees shall be disposed of pursuant to KRS 45A.047 .
  3. This statute shall supersede other state laws with regard to the disposition of state property for the purpose stated in this section and for no other purpose.

HISTORY: Enact. Acts 1986, ch. 58, § 1, effective July 15, 1986; 2015 ch. 20, § 1, effective June 24, 2015.

Legislative Research Commission Note.

Acts 1986, ch. 58, § 2 provides: KRS 45A.600 shall be retroactive to January 1, 1985. An employee who retired on or after January 1, 1985 may, within sixty (60) days after July 15, 1986 apply to the agency from which he retired to purchase the handgun which was issued to him subject to the conditions of subsection (2) of KRS 45A.600 and the availability of the handgun.

45A.605. Finance and Administration Cabinet’s authority to enter into contracts for “information highway” for state agencies — Mandatory use — Exceptions — Status as a state agency price contract — Access to contract by certain nonprofit schools, nonprofit organizations, and economic development entities.

  1. As used in this section:
    1. “Information highway” means a communication network for voice, data, and video communications technologies; and
    2. “Agencies of the Commonwealth of Kentucky” includes all authorities; boards; commissions; councils; departments; program cabinets; the Kentucky Lottery Corporation; vocational schools; the Kentucky School for the Deaf; the Kentucky School for the Blind; upon written request of the Chief Justice, the Court of Justice; upon written request of the co-chairmen of the Legislative Research Commission, the General Assembly and the Legislative Research Commission; and upon written request of presidents, state institutions of higher education.
  2. The provisions of any other law notwithstanding, the Finance and Administration Cabinet may enter into one (1) or more contracts, on behalf of agencies of the Commonwealth of Kentucky, with any person, partnership, or corporation that operates an information highway. The information highway shall enable the Commonwealth to benefit from cost-effective telecommunications technologies and shall provide opportunities for the private sector. These opportunities shall include but not be limited to the implementation of transactions and activities associated with the provision of telehealth by licensed health-care providers as provided in KRS Chapters 205, 211, 304.17A, 310, 311, 312, 313, 314, 314A, 315, 319, 319A, 320, 327, 334A, and 335.
  3. Upon implementation, all agencies of the Commonwealth of Kentucky shall obtain all available communications services under contracts executed pursuant to subsection (2) of this section, except as provided under subsection (4) of this section.
  4. The secretary of the Finance and Administration Cabinet may grant exceptions to the mandatory use of the information highway upon good cause shown.
  5. Any contract awarded under subsection (2) of this section shall be deemed, for purposes of KRS 45A.050 , a state agency price contract to which all political subdivisions and state-licensed nonprofit institutions of higher education may have access and use on the same terms as agencies of the Commonwealth of Kentucky. In addition, nonprofit schools providing elementary or secondary education and nonprofit health care organizations shall be allowed to have access and use the contract on the same terms as agencies of the Commonwealth of Kentucky. “Nonprofit schools” and “nonprofit health care organizations” mean those schools and health care organizations which have been granted tax-exempt status under the United States Internal Revenue Code.
  6. Any contract awarded under subsection (2) of this section shall be deemed a state agency price contract to which any entity that has been approved for economic development incentives under programs approved and administered by the Kentucky Economic Development Finance Authority may have access and use on the same terms as agencies of the Commonwealth of Kentucky.
  7. Any contract awarded under subsection (2) of this section shall be deemed a state agency price contract to which nonprofit organizations whose exclusive purpose is the delivery of services related to education, economic development, or cultural arts and humanities, may have access and use on the same terms as agencies of the Commonwealth of Kentucky. For the purposes of this section, “nonprofit organizations” means those organizations which have been granted tax-exempt status under Section 501(c)(3) of the United States Internal Revenue Code or those existing education based entities whose purpose is the delivery of services to state school systems, their employees, or their governing organizations and which have been granted tax-exempt status under Section 501(c)(6) of the United States Internal Revenue Code.

HISTORY: Enact. Acts 1994, ch. 439, § 1, effective July 15, 1994; 1997 (1st Ex. Sess.), ch. 4, § 35, effective May 30, 1997; 2000, ch. 362, § 1, effective July 14, 2000; 2000, ch. 376, § 1, effective July 14, 2000; 2005, ch. 30, § 6, effective March 8, 2005; 2017 ch. 80, § 4, effective June 29, 2017.

Compiler’s Notes.

Section 501(c)(3) and (6) of the United States Internal Revenue Code, referred to in (7), are codified as 26 USCS § 501(c)(3) and (6).

45A.607. Required contract provision restricting contractor from participating in certain boycott actions — Exceptions — Administrative regulations.

  1. As used in this section:
    1. “Boycott” means refusing to deal with, terminating business activities with, or otherwise taking any action that is intended to penalize, inflict economic harm on, or limit commercial relations with:
      1. A jurisdiction with which Kentucky can enjoy open trade; or
      2. A person or entity doing business with a jurisdiction with which Kentucky can enjoy open trade; but

        “boycott” does not mean an action taken for bona fide business or economic reasons or that is specifically required by federal or state law; and

    2. “Jurisdiction with which Kentucky can enjoy open trade” means:
      1. Any World Trade Organization member; and
      2. Any jurisdiction with which the United States has free trade or other agreements aimed at ensuring open and nondiscriminatory trade relations.
  2. A governmental body shall not enter into a contract under this chapter with a contractor unless the contract includes a representation by the contractor that the contractor is not currently engaged in, and will not for the duration of the contract engage in, the boycott of a person or an entity based in or doing business with a jurisdiction with which Kentucky can enjoy open trade. This subsection shall not apply to a:
    1. Contract with a value of less than one hundred thousand dollars ($100,000); or
    2. Contractor who:
      1. Is an individual; or
      2. Employs five (5) or fewer employees.
  3. A governmental body may terminate a contract with a contractor for:
    1. A false representation made under subsection (2) of this section; or
    2. Engaging in a boycott at the time of entering into the contract or during the duration of the contract.
  4. A request for proposal, invitation to bid, or other document issued by a governmental body with the intent of soliciting responses for the potential award of a contract shall include notice of the requirements under this section.
  5. The secretary shall promulgate administrative regulations under KRS Chapter 13A for the administration of this section.

HISTORY: 2019 ch. 58, § 1, effective March 25, 2019.

45A.610. Purchase of starch-based plastic garbage can liners by state agencies.

By January 1, 1991, a minimum of fifteen (15) percent of the purchases of garbage can liners by state agencies shall be starch-based plastic garbage can liners. The percentage shall increase by five (5) percent annually until fifty (50) percent of the purchase of garbage can liners are purchases of starch-based plastic garbage can liners.

History. Enact. Acts 1990, ch. 32, § 1, effective July 13, 1990; 2005, ch. 123, § 11, effective June 20, 2005.

45A.615. Life-cycle cost comparison of heating, ventilation, and air conditioning equipment in state buildings.

  1. On every bid for new construction or for upgrading existing facilities that is solicited under this chapter, the Finance and Administration Cabinet shall require, where feasible, a life-cycle cost comparison of at least two (2) types of energy-efficient heating, ventilation, and air conditioning (HVAC) equipment, including geothermal equipment when feasible.
  2. The Finance and Administration Cabinet shall give particular consideration in the awarding of a contract to energy-efficient HVAC equipment, including geothermal equipment when feasible, having a lower or lowest life-cycle cost, all other factors being equal.

History. Enact. Acts 2006, ch. 184, § 5, effective July 12, 2006.

Legislative Research Commission Note.

(7/12/2006). 2006 Ky. Acts ch. 184, sec. 6 provides that KRS 45A.615 and KRS 152.710 to 152.725 shall be known as the Kentucky Energy Security National Leadership Act.

45A.620. Preference to high-calcium foods and beverages in purchasing for school meals.

  1. This section shall apply to any contract entered into by an agency or a business that contracts with a local school board, local school district, or other agency to provide food or meal services.
  2. In addition to any requirements established by the United States Department of Agriculture under the National School Lunch Program, the School Breakfast Program, or other federally supported food service programs, an agency or business that provides food or meal services under contract with a local school board, local school district, or other agency shall give preference in purchasing contracts to high-calcium foods or beverages.
  3. For the purposes of this section, the term “high-calcium foods or beverages” means foods or beverages that contain a higher level of calcium and that are equal to or lower in price than other products of the same type and quality.
  4. Notwithstanding subsection (2) of this section, if the director of a program operated by an agency or business offering food or meal services on behalf of a local school board, local school district, or other agency determines that a high-calcium food or beverage would interfere with the proper treatment and care of an individual receiving services from the program, then the purchasing agent for that institution or business shall not be required to purchase a high-calcium food or beverage for that individual.
  5. A purchasing agent who has entered into a contract with a supplier to purchase food or beverages before July 1, 2002, is not required to purchase high-calcium foods or beverages if purchasing those products would change the terms of the contract.

History. Enact. Acts 2002, ch. 168, § 1, effective July 15, 2002.

45A.625. Procurement strategy for greater use of alternative fuel motor vehicles — Reports.

  1. The Finance and Administration Cabinet shall develop a strategy to:
    1. Replace at least fifty percent (50%) of the state-owned passenger vehicles and light-duty trucks managed by the Division of Fleet Management as of January 1, 2014, with:
      1. New qualified hybrid motor vehicles as defined in 26 U.S.C. sec. 30 B;
      2. New advanced lean burn technology motor vehicles as defined in 26 U.S.C. sec. 30 B;
      3. New qualified fuel cell motor vehicles as defined in 26 U.S.C. sec. 30B; or
      4. New qualified alternative fuel motor vehicles as defined in 26 U.S.C. sec. 30B; and
    2. Increase the use of ethanol, cellulosic ethanol, biodiesel, and other alternative transportation fuels as defined in KRS 152.715 to reduce state government’s dependence on petroleum-based transportation fuels, where possible.
  2. On or before December 1, 2013, and every December 1 thereafter, the cabinet shall report to the Legislative Research Commission:
    1. The strategy for transitioning to motor vehicles outlined in subsection (1) of this section, including a life-cycle cost comparison, and a projected timetable to replace motor vehicles in the state motor pool as provided in subsection (1) of this section; and
    2. The strategy for increased use of ethanol, cellulosic ethanol, biodiesel, and alternative transportation fuels, including the targeted amount and the dates by which these targets shall be achieved.

History. Enact. Acts 2007 (2nd Ex. Sess.), ch. 1, § 34, effective August 30, 2007; repealed, reenact., and amend., Acts 2013, ch. 116, § 8, effective June 25, 2013.

45A.625. Procurement strategy for greater use of alternative fuel motor vehicles — Reports.

  1. The Finance and Administration Cabinet shall develop a strategy to:
    1. Replace at least fifty percent (50%) of the state-owned passenger vehicles and light-duty trucks managed by the Office of Fleet Management as of January 1, 2014, with:
      1. New qualified hybrid motor vehicles as defined in 26 U.S.C. sec. 30 B;
      2. New advanced lean burn technology motor vehicles as defined in 26 U.S.C. sec. 30 B;
      3. New qualified fuel cell motor vehicles as defined in 26 U.S.C. sec. 30B; or
      4. New qualified alternative fuel motor vehicles as defined in 26 U.S.C. sec. 30B; and
    2. Increase the use of ethanol, cellulosic ethanol, biodiesel, and other alternative transportation fuels as defined in KRS 152.715 to reduce state government’s dependence on petroleum-based transportation fuels, where possible.
  2. On or before December 1, 2013, and every December 1 thereafter, the cabinet shall report to the Legislative Research Commission:
    1. The strategy for transitioning to motor vehicles outlined in subsection (1) of this section, including a life-cycle cost comparison, and a projected timetable to replace motor vehicles in the state motor pool as provided in subsection (1) of this section; and
    2. The strategy for increased use of ethanol, cellulosic ethanol, biodiesel, and alternative transportation fuels, including the targeted amount and the dates by which these targets shall be achieved.

HISTORY: Enact. Acts 2007 (2nd Ex. Sess.), ch. 1, § 34, effective August 30, 2007; repealed, reenact., and amend., Acts 2013, ch. 116, § 8, effective June 25, 2013; 2022 ch. 51, § 5.

45A.630. Definitions for KRS 45A.035, 45A.095, 45A.630, and 45A.645.

As used in this section and KRS 45A.035 , 45A.095 , and 45A.645 :

  1. “Agricultural product” means any unprocessed farm product raised or produced as a result of being in the business of “agriculture”, as defined by KRS 246.010 . “Agricultural product” does not include tobacco; and
  2. “Kentucky-grown agricultural product” means any agricultural product raised or produced in Kentucky.

History. Enact. Acts 2002, ch. 344, § 1, effective July 15, 2002.

45A.640. Guidelines for use of procurement to support agricultural economy — Changes to administrative regulations and policies.

By January 1, 2003, the secretary of the Finance and Administration Cabinet shall issue guidelines to the various agencies identified by the Commissioner of Agriculture in KRS 260.035 directing the manner in which those agencies shall employ the state’s procurement process to support and encourage the growth of Kentucky’s agricultural economy. Notwithstanding the provisions of KRS Chapter 45A, the secretary of the Finance and Administration Cabinet shall make necessary changes to administrative regulations and cabinet policy in accordance with this section and KRS 45A.035 , 45A.095 , and 260.035 .

History. Enact. Acts 2002, ch. 344, § 6, effective July 15, 2002.

45A.645. Agencies to purchase Kentucky-grown products meeting quality standards and pricing requirements if available — Reports — Marketing assistance — Annual report — Vendors’ duties.

    1. If purchasing agricultural products, state agencies, as defined by KRS 45A.505 , shall purchase Kentucky-grown agricultural products if the products are available and if the vendor can meet the applicable quality standards and pricing requirements of the state agency. (1) (a) If purchasing agricultural products, state agencies, as defined by KRS 45A.505 , shall purchase Kentucky-grown agricultural products if the products are available and if the vendor can meet the applicable quality standards and pricing requirements of the state agency.
    2. All state agencies that purchase agricultural products shall, on or before January 1 of each year, provide a report to the Legislative Research Commission and to the Department of Agriculture describing the types, quantities, and costs of each product purchased. The report shall be completed on a form provided by the department.
    1. Prospective vendors of Kentucky-grown agricultural products may apply to the Kentucky Department of Agriculture for marketing assistance for the authorized use of logos or labeling statements to be used on Kentucky-grown agricultural products under KRS 260.017 , the Kentucky Proud™ Program. (2) (a) Prospective vendors of Kentucky-grown agricultural products may apply to the Kentucky Department of Agriculture for marketing assistance for the authorized use of logos or labeling statements to be used on Kentucky-grown agricultural products under KRS 260.017 , the Kentucky Proud™ Program.
    2. Before a state agency may purchase Kentucky-grown agricultural products, the vendor shall be required to participate in the Kentucky Proud™ Program established by KRS 260.017, and shall provide to the purchasing officer written certification that the agricultural products under consideration for purchase meet the definition of Kentucky-grown agricultural product.
    3. All state agencies that purchase Kentucky-grown agricultural products shall, on or before January 1 of each year, provide a report to the Legislative Research Commission and to the Department of Agriculture describing the types, quantities, and costs of each product purchased. The report shall be completed on a form provided by the department.
  1. If a contract is awarded to a vendor that supplies agricultural products that are raised or produced outside the United States or its territories, the vendor shall be required to identify the country in which the agricultural product was raised or produced if the vendor is the producer or packager of the product or if the vendor is not the producer or packager, provided the information is available to the vendor from the producer or packager of the product. The producer or packager shall clearly label that information on any containers or packages holding the product.

History. Enact. Acts 2002, ch. 344, § 7, effective July 15, 2002; 2006, ch. 244, § 1, effective July 12, 2006; 2008, ch. 154, § 1, effective July 15, 2008; 2009, ch. 37, § 1, effective June 25, 2009.

45A.650. Purchases under $50 — Petty cash accounts.

Purchases of less than fifty dollars ($50), at the discretion of the Finance and Administration Cabinet, may be made on the open market by cash payment from petty cash accounts set aside for that purpose. The Finance and Administration Cabinet shall determine the amount of the petty cash account of each state agency, and inspect the petty cash accounts at least once each year to ensure that the total, plus amount of receipts for the unreplenished disbursements, is equal to the fixed sum of cash set aside. The Finance and Administration Cabinet shall make all necessary rules and regulations governing use and replenishment of petty cash funds. An agency shall not split or parcel purchases over a period of time to evade the provisions of this section or applicable regulations. If purchases are so split or parceled, the agency head is liable for the amount authorized to be expended. In the case of a shortage in a petty cash account, the agency head is liable for the amount of the shortage.

History. Enact. Acts 1990, ch. 496, § 6, effective July 13, 1990.

45A.655. Imprest cash funds.

  1. Subject to the provisions of this code, any budget unit may establish one (1) or more imprest cash funds when provided for by appropriation or when authorized by the Finance and Administration Cabinet for the purpose of making disbursements requiring prompt cash outlay, and to carry out the provisions of this code. The State Treasurer, upon warrants of the Finance and Administration Cabinet based upon a requisition from the head of the budget unit, shall pay to the head of the budget unit the amount necessary to establish a fund.
  2. A custodian shall be designated by the head of the budget unit and, after appropriate instruction and testing, certified by the Finance and Administration Cabinet as qualified to administer the fund. The custodian shall file with the Finance and Administration Cabinet a schedule of the disbursements from the fund as often as may be necessary to replenish the fund and at least once each month. The schedule of disbursements shall be accompanied by appropriate vouchers and statements of indebtedness therefor approved by the head of the budget unit, and by a certificate as to the condition of the fund. The amount of the total of the approved voucher shall be paid to the custodian of the fund on the warrant of the Finance and Administration Cabinet, and the amount shall be devoted to reimbursement of the fund. Any question relative to the amount to be allowed in any imprest cash fund, the expenditure thereof, the accounting thereof, and the repayment thereof to the State Treasurer, shall be determined by the Finance and Administration Cabinet.
  3. The agency head shall be responsible for expenditures authorized from the funds, and the custodian shall be responsible for administration of the fund. Each agency head and custodian shall be separately bonded in the amount by which the total authorization for the fund exceeds the state blanket bond for such officials.
  4. A post audit of each imprest fund shall be conducted as required by KRS 43.050 .
  5. Each imprest fund shall lapse with the appropriation on which it is based but may be reestablished by appropriation for the next ensuing year or when authorized by the Finance and Administration Cabinet.
  6. If work not subject to the provisions of the law for competitive bidding is done on public projects by the state through the use of its own personnel or facilities in whole or in part, the budget unit having the work performed may, when authorized by the Finance and Administration Cabinet, establish an imprest cash fund for the purpose of defraying the expenses of the proposed project. This fund shall not exceed at any time an amount equal to twenty-five percent (25%) of the anticipated total cost of the project.
  7. Imprest cash funds may be authorized by the Finance and Administration Cabinet to operate within the unified and integrated system of accounts, as defined in KRS 45.305 . These funds shall allow agencies to record expenses into the statewide system and to write the check at the agency site. The reimbursement and reconciliation processes shall be performed by the Treasurer.

History. Enact. Acts 1990, ch. 496, § 7, effective July 13, 1990; 1998, ch. 118, § 19, effective July 15, 1998.

45A.660. Waiver of requirements on purchase from government.

The Finance and Administration Cabinet may, for satisfactory reason consistent with its responsibility to attempt in every practical way to ensure that state agencies are acquiring their real needs through the application of best value criteria, waive any requirements of this code in instances where purchases are made by the Commonwealth of Kentucky or any agency thereof from the federal government or any agency thereof or from any other state government or any agency thereof.

History. Enact. Acts 1990, ch. 496, § 8, effective July 13, 1990; 1997 (1st Ex. Sess.), ch. 4, § 32, effective May 30, 1997.

45A.665. Definitions for KRS 45A.665 to 45A.685.

  1. “Agency” means any office, department, bureau, or other institution in Kentucky state government which awards contracts for purchase of property, goods, or services;
  2. “Cabinet” means the Finance and Administration Cabinet;
  3. “Small or small minority business set aside” means a purchase or contract request for which bids are to be invited and accepted only from small or small minority businesses by the cabinet;
  4. “Small or small minority business” shall be defined by the administrative regulations promulgated by the cabinet.

History. Enact. Acts 1990, ch. 496, § 9, effective July 13, 1990.

45A.670. Regulations relating to small or small minority businesses.

The cabinet may promulgate administrative regulations defining standards regarding classifications and definitions of small or small minority businesses as they relate to KRS 45A.670 to 45A.685 . These regulations may be adjusted as needed by the secretary of the Finance and Administration Cabinet in order to insure proper classification of small or small minority businesses.

History. Enact. Acts 1990, ch. 496, § 10, effective July 13, 1990.

45A.675. Small or small minority business set aside.

  1. The cabinet shall designate as small or small minority business set aside state contracts of goods, equipment, construction, or services requested to be purchased by or for any agency whenever there is a reasonable expectation that bids can be obtained from at least three (3) small or small minority businesses capable of furnishing the desired property or services at a fair and reasonable price. Such designation should be made prior to the public notice for bids, and the notice shall designate this invitation as a small or small minority business set aside.
  2. When an item has been designated as a small or small minority business set aside, invitations for bids shall be confined to small or small minority businesses and bids from other bidders may be rejected.
  3. The cabinet shall award contracts to the responsible bidder whose bid meets specifications and offers the best value to the Commonwealth.

History. Enact. Acts 1990, ch. 496, § 11, effective July 13, 1990; 1998, ch. 120, § 15, effective July 15, 1998.

45A.680. Withdrawal of designation of small or small minority business set aside.

If less than three (3) small or small minority businesses are considered capable of meeting the specifications and terms of the invitations for bids, or if the cabinet determines that the lowest and best bid results in an unreasonable price, the agency shall reject all bids and withdraw the designation of small or small minority business set aside. Notification of reasons for rejection shall be given to bidders. The cabinet may then seek additional bids without reference to the small or small minority business designation.

History. Enact. Acts 1990, ch. 496, § 12, effective July 13, 1990.

45A.685. Short title.

The provisions of KRS 45A.665 to 45A.685 may be cited as the Kentucky Small or Small Minority Business Purchasing Act.

History. Enact. Acts 1990, ch. 496, § 13, effective July 13, 1990.

45A.690. Definitions for KRS 45A.690 to 45A.725.

  1. As used in KRS 45A.690 to 45A.725 :
    1. “Committee” means the Government Contract Review Committee of the Legislative Research Commission;
    2. “Contracting body” means each state board, bureau, commission, department , division, authority, university, college, officer, or other entity, except the Legislature, authorized by law to contract for personal services. “Contracting body” includes the Tourism Development Finance Authority with regard to tax incentive agreements;
    3. “Governmental emergency” means an unforeseen event or set of circumstances that creates an emergency condition as determined by the committee by promulgation of an administrative regulation;
    4. “Memorandum of agreement” means any memorandum of agreement, memorandum of understanding, program administration contract, interlocal agreement to which the Commonwealth is a party, privatization contract, or similar device relating to services between a state agency and any other governmental body or political subdivision of the Commonwealth or entity qualified as nonprofit under 26 U.S.C. sec. 501(c)(3) not authorized under KRS Chapter 65 that involves an exchange of resources or responsibilities to carry out a governmental function. It includes agreements by regional cooperative organizations formed by local boards of education or other public educational institutions for the purpose of providing professional educational services to the participating organizations and agreements with Kentucky Distinguished Educators pursuant to KRS 158.782 . This definition does not apply to:
      1. Agreements between the Transportation Cabinet and any political subdivision of the Commonwealth for road and road-related projects;
      2. Agreements between the Auditor of Public Accounts and any other governmental agency or political subdivision of the Commonwealth for auditing services;
      3. Agreements between state agencies as required by federal or state law;
      4. Agreements between state agencies and state universities or colleges only when the subject of the agreement does not result in the use of an employee or employees of a state university or college by a state agency to fill a position or perform a duty that an employee or employees of state government could perform if hired, and agreements between state universities or colleges and employers of students in the Commonwealth work-study program sponsored by the Kentucky Higher Education Assistance Authority;
      5. Agreements involving child support collections and enforcement;
      6. Agreements with public utilities, providers of direct Medicaid health care to individuals except for any health maintenance organization or other entity primarily responsible for administration of any program or system of Medicaid managed health care services established by law or by agreement with the Cabinet for Health and Family Services, and transit authorities;
      7. Nonfinancial agreements;
      8. Any obligation or payment for reimbursement of the cost of corrective action made pursuant to KRS 224.60-140 ;
      9. Exchanges of confidential personal information between agencies;
      10. Agreements between state agencies and rural concentrated employment programs; or
      11. Any other agreement that the committee deems inappropriate for consideration;
    5. “Motion picture or entertainment production” means the same as defined in KRS 154.61-010 ;
    6. “Multicontract” means a group of personal service contracts between a contracting body and individual vendors providing the same or substantially similar services to the contracting body that, for purposes of the committee, are treated as one (1) contract;
    7. “Nurse aide” means an individual who has successfully completed the nurse aide training and competency evaluation program and may include a nursing student, medication aide, or a person employed through a nursing pool who provides nursing or nursing-related services to a resident in a nursing facility, excluding: (a) An individual who is a licensed health professional; (b) A volunteer who provides the nursing or nursing-related services without monetary compensation; or (c) A person who is hired by the resident or family to sit with the resident and who does not perform nursing or nursing-related services.;
    8. “Personal service contract” means an agreement whereby an individual, firm, partnership, or corporation is to perform certain services requiring professional skill or professional judgment for a specified period of time at a price agreed upon. It includes all price contracts for personal services between a governmental body or political subdivision of the Commonwealth and any other entity in any amount. This definition does not apply to:
      1. Agreements between the Department of Parks and a performing artist or artists for less than five thousand dollars ($5,000) per fiscal year per artist or artists;
      2. Agreements with public utilities, foster care parents, providers of direct Medicaid health care to individuals except for any health maintenance organization or other entity primarily responsible for administration of any program or system of Medicaid managed health care services established by law or by agreement with the Cabinet for Health and Family Services, individuals performing homemaker services, and transit authorities;
      3. Agreements between state universities or colleges and employers of students in the Commonwealth work study program sponsored by the Kentucky Higher Education Assistance Authority;
      4. Agreements between a state agency and rural concentrated employment programs;
      5. Agreements between the State Fair Board and judges, officials, and entertainers contracted for events promoted by the State Fair Board;
      6. Agreements between the Department of Public Advocacy and attorneys for the representation of indigent clients who are entitled to representation under KRS Chapter 31 and who, by reason of conflict or otherwise, cannot be represented by the department , subject to quarterly reports of all such agreements to the committee;
      7. Agreements between the Office of Kentucky Veterans’ Centers and licensed nurses and nurse aides in order to provide critically needed long-term care to Kentucky veterans who are residents in state veterans’ nursing homes pursuant to KRS 40.325 ; or
      8. Any other contract that the committee deems inappropriate for consideration;
    9. “Tax incentive agreement” means an agreement executed under KRS 154.61-030 ; and
    10. “Tourism Development Finance Authority” means the authority established by KRS 148.850 .
  2. Compliance with the provisions of KRS 45A.690 to 45A.725 does not dispense with the requirements of any other law necessary to make the personal service contract or memorandum of agreement valid.

History. Enact. Acts 1990, ch. 496, § 14, effective July 13, 1990; 1998, ch. 486, § 2, effective July 15, 1998; 2005, ch. 99, § 107, effective June 20, 2005; 2009 (1st Ex. Sess.), ch. 1, § 48, effective June 26, 2009; 2010, ch. 55, § 3, effective April 5, 2010; 2012, ch. 151, § 6, effective July 12, 2012; 2017 ch. 39, § 2, effective June 29, 2017; 2020 ch. 118, § 3, effective July 15, 2020; 2021 ch. 156, § 21, effective June 29, 2021.

Opinions of Attorney General.

A contract for employment of an executive director by a public agency, the Kentucky Housing Corporation, is a personal services contract, as the agreement contains contractual terms which satisfy all elements of the statutory definition of personal service contract as that phrase is defined by subdivision (1)(d) (now (1)(f)) of this section and most importantly, provides for performance of duties for a specified period of time. OAG 92-18 .

45A.690. Definitions for KRS 45A.690 to 45A.725.

  1. As used in KRS 45A.690 to 45A.725 :
    1. “Committee” means the Government Contract Review Committee of the Legislative Research Commission;
    2. “Contracting body” means each state board, bureau, commission, department, division, authority, university, college, officer, or other entity, except the Legislature, authorized by law to contract for personal services. “Contracting body” includes the Tourism Development Finance Authority with regard to tax incentive agreements;
    3. “Governmental emergency” means an unforeseen event or set of circumstances that creates an emergency condition as determined by the committee by promulgation of an administrative regulation;
    4. “Memorandum of agreement” means any memorandum of agreement, memorandum of understanding, program administration contract, interlocal agreement to which the Commonwealth is a party, privatization contract, or similar device relating to services between a state agency and any other governmental body or political subdivision of the Commonwealth or entity qualified as nonprofit under 26 U.S.C. sec. 501(c)(3) not authorized under KRS Chapter 65 that involves an exchange of resources or responsibilities to carry out a governmental function. It includes agreements by regional cooperative organizations formed by local boards of education or other public educational institutions for the purpose of providing professional educational services to the participating organizations and agreements with Kentucky Distinguished Educators pursuant to KRS 158.782 . This definition does not apply to:
      1. Agreements between the Transportation Cabinet and any political subdivision of the Commonwealth for road and road-related projects;
      2. Agreements between the Auditor of Public Accounts and any other governmental agency or political subdivision of the Commonwealth forauditing services;
      3. Agreements between state agencies as required by federal or state law;
      4. Agreements between state agencies and state universities or colleges only when the subject of the agreement does not result in the use of an employee or employees of a state university or college by a state agency to fill a position or perform a duty that an employee or employees of state government could perform if hired, and agreements between state universities or colleges and employers of students in the Commonwealth work-study program sponsored by the Kentucky Higher Education Assistance Authority;
      5. Agreements involving child support collections and enforcement;
      6. Agreements with public utilities, providers of direct Medicaid health care to individuals except for any health maintenance organization or other entity primarily responsible for administration of any program or system of Medicaid managed health care services established by law or by agreement with the Cabinet for Health and Family Services, and transit authorities;
      7. Nonfinancial agreements;
      8. Any obligation or payment for reimbursement of the cost of corrective action made pursuant to KRS 224.60-140 ;
      9. Exchanges of confidential personal information between agencies;
      10. Agreements between state agencies and rural concentrated employment programs; or
      11. Any other agreement that the committee deems inappropriate for consideration;
    5. “Motion picture or entertainment production” means the same as defined in KRS 154.61-010 ;
    6. “Multicontract” means a group of personal service contracts between a contracting body and individual vendors providing the same or substantially similar services to the contracting body that, for purposes of the committee, are treated as one (1) contract;
    7. “Nurse aide” means an individual who has successfully completed the nurse aide training and competency evaluation program and may include a nursing student, medication aide, or a person employed through a health care services agency as defined in Section 1 of this Act who provides nursing or nursing-related services to a resident in a nursing facility, excluding:
      1. An individual who is a licensed health professional;
      2. A volunteer who provides the nursing or nursing-related services without monetary compensation; or
      3. A person who is hired by the resident or family to sit with the resident and who does not perform nursing or nursing-related services;
    8. “Personal service contract” means an agreement whereby an individual, firm, partnership, or corporation is to perform certain services requiring professional skill or professional judgment for a specified period of time at a price agreed upon. It includes all price contracts for personal services between a governmental body or political subdivision of the Commonwealth and any other entity in any amount. This definition does not apply to:
      1. Agreements between the Department of Parks and a performing artist or artists for less than five thousand dollars ($5,000) per fiscal year per artist or artists;
      2. Agreements with public utilities, foster care parents, providers of direct Medicaid health care to individuals except for any health maintenance organization or other entity primarily responsible for administration ofany program or system of Medicaid managed health care services established by law or by agreement with the Cabinet for Health and Family Services, individuals performing homemaker services, and transit authorities;
      3. Agreements between state universities or colleges and employers of students in the Commonwealth work study program sponsored by the Kentucky Higher Education Assistance Authority;
      4. Agreements between a state agency and rural concentrated employment programs;
      5. Agreements between the State Fair Board and judges, officials, and entertainers contracted for events promoted by the State Fair Board;
      6. Agreements between the Department of Public Advocacy and attorneys for the representation of indigent clients who are entitled to representation under KRS Chapter 31 and who, by reason of conflict or otherwise, cannot be represented by the department, subject to quarterly reports of all such agreements to the committee;
      7. Agreements between the Office of Kentucky Veterans’ Centers and licensed nurses and nurse aides in order to provide critically needed long-term care to Kentucky veterans who are residents in state veterans’ nursing homes pursuant to KRS 40.325 ; or
      8. Any other contract that the committee deems inappropriate for consideration;
    9. “Tax incentive agreement” means an agreement executed under KRS 154.61-030 ; and
    10. “Tourism Development Finance Authority” means the authority established by KRS 148.850 .
  2. Compliance with the provisions of KRS 45A.690 to 45A.725 does not dispensewith the requirements of any other law necessary to make the personal service contract or memorandum of agreement valid.

HISTORY: Enact. Acts 1990, ch. 496, § 14, effective July 13, 1990; 1998, ch. 486, § 2, effective July 15, 1998; 2005, ch. 99, § 107, effective June 20, 2005; 2009 (1st Ex. Sess.), ch. 1, § 48, effective June 26, 2009; 2010, ch. 55, § 3, effective April 5, 2010; 2012, ch. 151, § 6, effective July 12, 2012; 2017 ch. 39, § 2, effective June 29, 2017; 2020 ch. 118, § 3, effective July 15, 2020; 2021 ch. 156, § 21, effective June 29, 2021; 2022 ch. 110, § 8.

45A.695. Personal service contract procedures — Tax incentive agreements.

  1. Except as provided in subsection (8) of this section, no one shall begin work on a personal service contract entered into by any contracting body or incur expenditures under a tax incentive agreement until notification of the personal service contract or tax incentive agreement is filed with the committee. Each personal service contract shall have a cancellation clause not to exceed thirty (30) days notice to the contractee.
  2. Each personal service contract, tax incentive agreement, and memorandum of agreement shall be filed with the committee prior to the effective date and shall be accompanied by a completed proof of necessity form as established by the committee by promulgation of an administrative regulation, or equivalent information if submitted electronically. The proof of necessity form shall document:
    1. The need for the service or benefit to the Commonwealth of the tax incentive agreement;
    2. For personal service contracts and memoranda of agreement, the unavailability of state personnel or the nonfeasibility of utilizing state personnel to perform the service;
    3. The total projected cost of the contract or agreement and source of funding;
    4. The total projected duration of the contract or tax incentive agreement;
    5. Payment information, in detail;
    6. In the case of memoranda of agreement or similar device, the reason for exchanging resources or responsibilities; and
    7. Such other information as the committee deems appropriate.
  3. Adequate notice of the need for a personal service contract shall be given by the contracting body through a request for proposals. The request for proposals shall describe the services required, list the type of information and data required of each offeror, state the relative importance of particular qualifications, and include the reciprocal preference for resident bidders required by KRS 45A.494 .
  4. The head of the contracting body or his or her designee may conduct discussions with any offeror who has submitted a proposal to determine the offeror’s qualifications for further consideration. Discussions shall not disclose any information derived from proposals submitted by other offerors.
  5. Award shall be made to the offeror determined by the head of the contracting body, or his or her designee, to be the best qualified of all offerors based on the evaluation factors set forth in the request for proposals and the negotiation of fair and reasonable compensation. If compensation cannot be agreed upon with the best qualified offeror and if proposals were submitted by one (1) or more other offerors determined to be qualified, negotiations may be conducted with the other offeror or offerors in the order of their respective qualification ranking. In this case, the contract may be awarded to the next best ranked offeror for a fair and reasonable compensation. All determinations of the qualification rankings of offerors by the head of the contracting body or a designee of the officer based on evaluation factors set forth in the request for proposals shall be made in writing. Written documentation shall be maintained concerning the final results of negotiation with each vendor and reasoning as to why each vendor was chosen.
  6. The committee shall maintain a record or have readily accessible records of the date on which each personal service contract, tax incentive agreement, and memorandum of agreement was received and shall maintain or have access to electronic or paper files on all personal service contracts, tax incentive agreements, and memoranda of agreement. Except for records exempt from inspection under KRS 61.870 to 61.884 , all personal service contracts, tax incentive agreements, and memoranda of agreement shall be made available for public inspection.
  7. Payment on personal service contracts, tax incentive agreements, and memoranda of agreement submitted to the committee for approval shall not be made for services rendered or projects undertaken after committee disapproval, unless the decision of the committee is overridden by the secretary of the Finance and Administration Cabinet or agency head, if the agency has been granted delegation authority by the secretary of the Finance and Administration Cabinet. All personal service contracts, tax incentive agreements, and memoranda of agreement shall contain a provision that stipulates that payments on personal service contracts and memoranda of agreement shall not be authorized for services rendered after committee disapproval, unless the decision of the committee is overridden by the secretary of the Finance and Administration Cabinet or agency head, if the agency has been granted delegation authority.
  8. In the event of a governmental emergency as defined under KRS 45A.690 , work may begin prior to filing notification of the personal service contract with the committee, if the secretary of the Finance and Administration Cabinet or his designee determines that the time involved in the normal review process would be detrimental to the Commonwealth’s ability to act or procure the services and the normal process will not accommodate the governmental emergency. Payment shall not be made until written notification and explanation of the reasons for this action are forwarded to the committee.
  9. If a governmental emergency exists as defined under KRS 45A.690 and work is authorized to begin on a personal service contact immediately, a copy of a statement, approved by the secretary of the Finance and Administration Cabinet or his designee, setting forth in detail the nature of the emergency shall be filed with the committee, along with a copy of the personal service contract.
    1. No payment shall be made on any personal service contract unless the individual, firm, partnership, or corporation awarded the personal service contract submits its invoice for payment on a form established by the committee. (10) (a) No payment shall be made on any personal service contract unless the individual, firm, partnership, or corporation awarded the personal service contract submits its invoice for payment on a form established by the committee.
    2. Invoices shall be submitted every ninety (90) days, unless the personal service contract specifies a different submission time period.
    3. Separate invoices shall be submitted for each distinct matter covered by the personal service contract, and shall be signed by the individual responsible for that matter.
    4. Each invoice shall contain the following information:
      1. A description of the matter covered by the invoice;
      2. The date each service was performed;
      3. A full description of each service;
      4. The name and title of each individual who worked on the matter, and the time the individual spent on the matter;
      5. The subject matter and recipient of any correspondence;
      6. A full description of any work product produced, designating the way in which the work product is associated with the matter being invoiced;
      7. The hourly rate for each individual working on the matter, and the total charge for that individual for each matter invoiced;
      8. An itemized list of all disbursements to be reimbursed by the state for each matter invoiced;
      9. The total charge for each matter;
      10. The combined total for services and disbursements for the billing period;
      11. The tax identification number of the entity awarded the personal service contract; and
      12. An indication on each invoice of whether or not the invoice is final.
    5. The issuance of an invoice to the Commonwealth constitutes an affirmation by the individual, firm, partnership, or corporation awarded the personal service contract that the invoice truly and accurately represents work actually performed and expenses actually incurred.
    6. The head of the contracting body shall approve the invoice, indicating that the charges in the invoice reflect the value of the work performed, and all recorded costs and disbursements were reasonably and necessarily incurred in connection with the matter invoiced.

History. Enact. Acts 1990, ch. 496, § 15, effective July 13, 1990; 1992, ch. 55, § 11, effective July 14, 1992; 1997 (1st Ex. Sess.), ch. 4, § 33, effective May 30, 1997; 1998, ch. 120, § 16, effective July 15, 1998; 1998, ch. 486, § 3, effective July 15, 1998; 2009 (1st Ex. Sess.), ch. 1, § 49, effective June 26, 2009; 2010, ch. 55, § 4, effective April 5, 2010; 2010, ch. 162, § 15, effective July 15, 2010.

Legislative Research Commission Note.

(7/15/10). This section was amended by 2010 Ky. Acts chs. 55 and 162 which do not appear to be in conflict and have been codified together.

(7/15/98). This section was amended by 1998 Ky. Acts chs. 120 and 486 which are in conflict. Under KRS 446.250 , Acts ch. 486, which was last enacted by the General Assembly, prevails.

NOTES TO DECISIONS

1.Bid Protest.

Bid protestor has standing to challenge a contract award and an actual case or controversy exists in spite of the underlying contract’s expiration. Since the Kentucky Model Procurement Code (KMPC) and Kentucky law affords judicial review of administrative actions if an award is arbitrary, capricious, or made in violation of the KMPC, the matter is not moot despite the contract having expired. Lab. Corp. of Am. Holdings v. Rudolph, 184 S.W.3d 68, 2005 Ky. App. LEXIS 169 (Ky. Ct. App. 2005).

Bid protestor was entitled to seek judicial review of the award of the contract for statewide genetic testing services for the 2004 fiscal year, which was made to another vendor, even though the contract had expired as a protestor has standing to seek judicial review as such a matter presents a case and controversy despite the contract ending. However, judgment in favor of the various Commonwealth of Kentucky agencies and the winning bid maker was upheld on appeal, because the substance of the protestor’s complaint alleged alternative interpretation of the bid terms, which was a discretion afforded to the Commonwealth as a contracting officer in a negotiated procurement, and the protestor provided no valid reason, such as fraud, in challenging the award to the winning bid maker. Lab. Corp. of Am. Holdings v. Rudolph, 184 S.W.3d 68, 2005 Ky. App. LEXIS 169 (Ky. Ct. App. 2005).

Opinions of Attorney General.

A state university, when procuring the services of an attorney, must comply with KRS 12.210 by first obtaining the approval of the Attorney General and the Governor; if the attorney is hired on a contract basis, as opposed to an employee basis, then the university must comply with the personal service contract procedures set out in this section. OAG 92-19 .

The purpose of a “funding out” provision is to ensure, for the contract holder’s benefit, that the contract holder has actual knowledge of the General Assembly’s power to refuse funding for the contract in future budgets, although actual knowledge of the power of the General Assembly is technically not required. A “funding out” provision would accomplish this purpose more effectively than the termination provision alone mandated by KRS 45A.695(1). OAG 07-06 .

45A.700. Certain personal service contracts in aggregate amounts of $10,000 or less exempt from routine review — Memoranda of agreement and price contracts of $50,000 or less exempt from routine review — Review requirement for amendments.

  1. Personal service contracts in aggregate amounts of ten thousand dollars ($10,000) or less during any one (1) fiscal year shall be exempt from routine review by the committee and shall be filed with the committee not more than thirty (30) days after their effective date for informational purposes only. The committee shall examine all personal service contracts in aggregate amounts of ten thousand dollars ($10,000) or less submitted more than thirty (30) days after the effective date. The committee may periodically examine the informational copies of personal service contracts in aggregate amounts of ten thousand dollars ($10,000) or less and may request agency participation in discussions relative to their contracts or payments. The provisions of this subsection shall not apply to price contracts for personal services.
  2. Memoranda of agreement and price contracts for personal services in aggregate amounts of fifty thousand dollars ($50,000) or less during in any one fiscal year shall be exempt from routine review by the committee and shall be filed with the committee not more than thirty (30) days after their effective date for informational purposes only. The committee shall examine all memoranda of agreement and price contracts for personal services in aggregate amounts of fifty thousand dollars ($50,000) or less submitted more than thirty (30) days after the effective date. The committee may periodically examine memoranda of agreement and price contracts for personal services in aggregate amounts of fifty thousand dollars ($50,000) or less and may request agency participation in discussions relative to their agreements or payments.
  3. If a personal service contract of less than ten thousand dollars ($10,000) is amended to the extent the amended total of the contract exceeds ten thousand dollars ($10,000) per fiscal year per contractor, the amended contract shall be placed on the agenda for the committee’s routine review. The provisions of this subsection shall not apply to price contracts for personal services.
  4. If a memorandum of agreement or price contract for personal services of less than fifty thousand dollars ($50,000) is amended to the extent the amended total of the agreement or contract exceeds fifty thousand dollars ($50,000) per fiscal year per governmental body, the amended agreement or contract shall be placed on the agenda for the committee’s routine review.

History. Enact. Acts 1990, ch. 496, § 16, effective July 13, 1990; 1996, ch. 60, § 3, effective July 15, 1996; 1998, ch. 486, § 4, effective July 15, 1998.

45A.705. Government Contract Review Committee — Membership — Duties — Meeting — Vote required to act.

  1. There is hereby created a permanent committee of the Legislative Research Commission to be known as the Government Contract Review Committee. The committee shall be composed of eight (8) members appointed as follows: three (3) members of the Senate appointed by the President of the Senate; one (1) member of the minority party in the Senate appointed by the Minority Floor Leader in the Senate; three (3) members of the House of Representatives appointed by the Speaker of the House of Representatives; and one (1) member of the minority party in the House of Representatives appointed by the Minority Floor Leader in the House of Representatives. Members shall serve for terms of two (2) years, and the members appointed from each chamber shall elect one (1) member from their chamber to serve as co-chair. Any vacancy that may occur in the membership of the committee shall be filled by the appointing authority who made the original appointment.
  2. On an alternating basis, each co-chair shall have the first option to set the monthly meeting date. A monthly meeting may be canceled by agreement of both co-chairs. The co-chairs shall have joint responsibilities for committee meeting agendas and presiding at committee meetings. A majority of the entire membership of the Government Contract Review Committee shall constitute a quorum, and all actions of the committee shall be by vote of a majority of its entire membership. The members of the committee shall be compensated for attending meetings, as provided in KRS 7.090(3).
  3. Any professional, clerical, or other employees required by the committee shall be provided in accordance with the provisions of KRS 7.090(4) and (5).
  4. All proposed personal service contracts, tax incentive agreements, and memoranda of agreement received by the Legislative Research Commission shall be submitted to the committee to:
    1. Examine the stated need for the service or benefit to the Commonwealth of the motion picture or entertainment production;
    2. Examine whether the service could or should be performed by state personnel, for personal service contracts and memoranda of agreement;
    3. Examine the amount and duration of the contract or agreement; and
    4. Examine the appropriateness of any exchange of resources or responsibilities.
  5. If the committee determines that the contract service or agreement, other than an emergency contract approved by the secretary of the Finance and Administration Cabinet or his or her designee, is not needed or inappropriate, the motion picture or entertainment production is not beneficial or is inappropriate, the service could or should be performed by state personnel, the amount or duration is excessive, or the exchange of resources or responsibilities are inappropriate, the committee shall attach a written notation of the reasons for its disapproval or objection to the personal service contract, tax incentive agreement, or memorandum of agreement and shall return the personal service contract, tax incentive agreement, or memorandum of agreement to the secretary of the Finance and Administration Cabinet or his or her designee. The committee shall act on a personal service contract, tax incentive agreement, or memorandum of agreement submitted to the Legislative Research Commission within forty-five (45) days of the date received.
    1. Upon receipt of the committee’s disapproval or objection to a personal service contract, tax incentive agreement, or memorandum of agreement, the secretary of the Finance and Administration Cabinet or his or her designee shall determine whether the personal service contract, tax incentive agreement, or memorandum of agreement shall: (6) (a) Upon receipt of the committee’s disapproval or objection to a personal service contract, tax incentive agreement, or memorandum of agreement, the secretary of the Finance and Administration Cabinet or his or her designee shall determine whether the personal service contract, tax incentive agreement, or memorandum of agreement shall:
      1. Be revised to comply with the objections of the committee;
      2. Be canceled and, if applicable, payment allowed for services rendered under the contract or amendment; or
      3. Be appealed within ten (10) days to the State Treasurer, who shall make a final determination within ten (10) days of receipt of the appeal of whether the personal service contract, tax incentive agreement, or memorandum of agreement shall:
        1. Be revised to comply with the objection of the committee;
        2. Be canceled and, if applicable, payment allowed for services already rendered under the contract or amendment; or
        3. Remain effective as originally submitted.
    2. Paragraph (a)3. of this subsection shall not apply to any personal service contract, tax incentive agreement, or memorandum of agreement insofar as the contract or agreement is based upon the enumerated powers specifically granted to the Governor pursuant to Sections 75, 76, 77, 78, 79, and 80 of the Constitution of Kentucky, or any subsequent amendments to the Constitution of Kentucky which specifically designate enumerated powers to the Governor.
  6. Contracting bodies shall make annual reports to the committee not later than December 1 of each year. The committee shall establish reporting procedures for contracting bodies related to personal service contracts, tax incentive agreements, and memoranda of agreement submitted by the secretary of the Finance and Administration Cabinet or his or her designee.

HISTORY: Enact. Acts 1990, ch. 496, § 17, effective July 13, 1990; 1998, ch. 120, § 17, effective July 15, 1998; 1998, ch. 486, § 5, effective July 15, 1998; 2003, ch. 185, § 5, effective March 31, 2003; 2009 (1st Ex. Sess.), ch. 1, § 50, effective June 26, 2009; 2021 ch. 151, § 3, effective June 29, 2021; 2022 ch. 205, § 1, effective March 24, 2022.

45A.710. Personal service contracts for advertising, promotional, or public relations services. [Repealed.]

Compiler’s Notes.

This section (Enact. Acts 1990, ch. 496, § 18, effective July 13, 1990; 1992, ch. 159, § 4, effective July 14, 1992; 1994, ch. 216, § 8, effective July 15, 1994) was repealed by Acts 1997 (Ex. Sess), ch. 4, § 44, effective May 30, 1997.

45A.715. Certain contracts by Department of Revenue prohibited.

The Department of Revenue shall not enter into any personal service contract for the collection of revenue for the state or for the prosecution of any action or proceeding for the collection of delinquent taxes owed by a resident and the assessment of omitted property owned by a resident.

History. Enact. Acts 1990, ch. 496, § 19, effective July 13, 1990; 2005, ch. 85, § 74, effective June 20, 2005.

45A.717. Contingency fee for legal services under personal service contract — Powers and duties of head of contracting body — Review of responses to requests for proposals — Limits on contingency fee — Payment only from money received pursuant to judgment or settlement — Standard addendum to contract — Posting on Web sites — Records — Report — Common law authority abrogated.

  1. The head of a contracting body, which includes constitutional officers, shall not award a personal service contract for legal services that provides for payment by contingency fee unless, prior to the award, the head of the contracting body determines in writing:
    1. The contingency fee is both cost-effective and in the public interest;
    2. Sufficient and appropriate legal and financial resources do not exist within the contracting body;
    3. The amount of time and labor required to perform the requested services;
    4. The novelty, complexity, and difficulty of the matter;
    5. The skill required to perform the requested services properly;
    6. The geographic area where the legal services are to be provided; and
    7. The experience desired for the particular kind of legal services to be provided.
  2. The head of the contracting body or his or her designee shall participate in reviewing and evaluating the responses to the requests for proposals and discussions with offerors.
  3. A contingency fee shall not exceed:
    1. Twenty percent (20%) of the amount recovered up to ten million dollars ($10,000,000);
    2. Fifteen percent (15%) of the amount recovered between ten million dollars ($10,000,000) and fifteen million dollars ($15,000,000);
    3. Ten percent (10%) of the amount recovered between fifteen million dollars ($15,000,000) and twenty million dollars ($20,000,000); and
    4. Five percent (5%) of the amount recovered of twenty million dollars ($20,000,000) or more.
  4. A contingency fee shall not exceed twenty million dollars ($20,000,000), regardless of the number of actions or proceedings or the number of attorneys or law firms involved in the matter, and exclusive of any costs and expenses provided for by the contract and actually incurred by the legal services contractor.
  5. A contingency fee shall be payable only from money that is actually received pursuant to a judgment or settlement agreement, and any judgment or settlement funds shall be disbursed in accordance with KRS 48.005 .
  6. During the contract period and any extension:
    1. The head of the contracting body or his or her designee shall retain control over the course and conduct of the case and shall retain veto authority over any decision made by the contract attorney;
    2. The head of the contracting body or his or her designee with authority over the contract shall:
      1. Attend all settlement conferences;
      2. Be personally involved in overseeing the litigation; and
      3. Have exclusive decision-making power regarding any settlement of the matter for which the contract was entered; and
    3. Any opposing party to the matter for which the contract was entered into may directly contact the head of the contracting body or his or her designee with authority over the contract, without having to notify the contract attorney.
  7. The Finance and Administration Cabinet shall develop a standard addendum to be added to each personal service contract for legal services to include the terms of this section.
    1. Within five (5) business days after the contract award, the Finance and Administration Cabinet shall post on its Web site each personal service contract for legal services that provides for payment by contingency fee and the accompanying written determinations described in subsection (1) of this section. The contract and accompanying determinations shall remain on the Web site during the duration of the contract and any extension. (8) (a) Within five (5) business days after the contract award, the Finance and Administration Cabinet shall post on its Web site each personal service contract for legal services that provides for payment by contingency fee and the accompanying written determinations described in subsection (1) of this section. The contract and accompanying determinations shall remain on the Web site during the duration of the contract and any extension.
    2. Any payment of contingency fees shall be posted on the contracting body’s Web site within fifteen (15) days after the payment of such contingency fees to the legal services contractor and shall remain posted on the Web site for at least three hundred sixty-five (365) days.
    1. In addition to the information required of each contingency fee contract by the Kentucky Model Procurement Code and KRS 45A.695 , a contractor awarded a personal service contract for legal services that provides for payment by contingency fee shall maintain detailed current records, including documentation of: (9) (a) In addition to the information required of each contingency fee contract by the Kentucky Model Procurement Code and KRS 45A.695 , a contractor awarded a personal service contract for legal services that provides for payment by contingency fee shall maintain detailed current records, including documentation of:
      1. Expenses;
      2. Disbursements;
      3. Charges and credits;
      4. Underlying receipts and invoices; and
      5. Any other financial transactions that concern the attorney services rendered under the contract.
      1. All records described in this subsection shall become public records subject to KRS 61.870 to 61.884 after a judgment or agreement is entered in the case and all appeals have been exhausted, but shall not be public records until that time. (b) 1. All records described in this subsection shall become public records subject to KRS 61.870 to 61.884 after a judgment or agreement is entered in the case and all appeals have been exhausted, but shall not be public records until that time.
      2. Any information that is subject to an evidentiary privilege and is contained within any record described in this subsection shall not be a public record. The privileged information shall be redacted before any public disclosure of the record.
    1. The Finance and Administration Cabinet and the contracting body shall submit a joint report to the Government Contract Review Committee by September 1 of each year identifying all contingency fee contracts for legal services: (10) (a) The Finance and Administration Cabinet and the contracting body shall submit a joint report to the Government Contract Review Committee by September 1 of each year identifying all contingency fee contracts for legal services:
      1. Awarded in the previous fiscal year;
      2. Active in the previous fiscal year, but awarded in prior fiscal years; or
      3. Concluded in the previous fiscal year.
    2. For each contract, the report shall include:
      1. The written determinations made under subsection (1) of this section;
      2. Any determination made that the contract was not to be procured through the request for proposal process; and
      3. Any determination made that the contract may be entered into despite a finding of disapproval by the committee.
    3. In addition, the report shall describe:
      1. The name of the attorney or law firm with whom the contract was made;
      2. The nature and status of the legal matter that is the subject of the contract;
      3. The name of the parties to the legal matter that is the subject of the contract;
      4. The amount of recovery, if any; and
      5. The amount of the contingency fee paid, if any.
  8. The common law authority of any duly elected statewide constitutional officer is specifically abrogated to the extent it is inconsistent with the provisions of this section.

HISTORY: 2018 ch. 87, § 1, effective July 14, 2018.

45A.720. Contract for executioner not subject to KRS 45A.690 to 45A.725.

Agreements with an individual to provide the services of executioner for the Department of Corrections shall not be subject to the provisions of KRS 45A.690 to 45A.725 . The identity of an individual performing the services of executioner shall remain confidential and shall not be considered as public record for the purposes of KRS 61.870 to 61.884 .

History. Enact. Acts 1990, ch. 496, § 20, effective July 13, 1990; 1992, ch. 211, § 9, effective July 14, 1992.

45A.725. Authority of committee to establish policies and procedures relating to manner and form of notification and documentation to accompany personal service contract, tax incentive agreement, or memorandum of agreement.

  1. The Government Contract Review Committee may establish policies and procedures concerning the manner and form of notification and the documentation to accompany the proposed personal service contract, tax incentive agreement, or memorandum of agreement.
  2. Nothing in this code shall prohibit the committee from accepting personal service contracts, tax incentive agreement, or memoranda of agreement through the use of electronic instrumentalities.

History. Enact. Acts 1990, ch. 496, § 21, effective July 13, 1990; 1998, ch. 486, § 6, effective July 15, 1998; 2009 (1st Ex. Sess.), ch. 1, § 51, effective June 26, 2009.

Procurement of Architectural and Engineering Services

45A.730. Definitions for KRS 45A.730 to 45A.750.

As used in KRS 45A.730 to 45A.750 , unless the context requires otherwise:

  1. “Architectural services” means any professional service involved in the practice of architecture as defined in KRS 323.010 ;
  2. “Engineering services” means any professional service as defined in KRS 322.010(4) and (5);
  3. “Firm” means any individual, firm, partnership, corporation, or other legal entity permitted by law to practice the profession of architecture or engineering and provide the services defined in subsections (1) and (2) of this section;
  4. “Local public agency” shall have the same meaning given in KRS 45A.345 ;
  5. “Project” means any capital improvement project, study, plan, survey, or new or existing program activity of a political subdivision that requires architectural or professional engineering services;
  6. “Qualification statement” means federal form SF254 and any other supporting documents that present a firm’s qualifications and performance data.

History. Enact. Acts 1992, ch. 249, § 1, effective July 14, 1992; 1998, ch. 214, § 44, effective January 1, 1999.

45A.735. Authorization for local public agency to adopt KRS 45A.740, 45A.745, and 45A.750 — Effect of adoption — Qualification statements.

  1. In the procurement of architectural and engineering services, each local public agency may adopt the provisions of KRS 45A.740 , 45A.745 , and 45A.750 . Upon adoption of these provisions, each local public agency shall:
    1. Establish a monetary limit; and
    2. Use the process set out in KRS 45A.740 , 45A.745 , and 45A.750 to procure architectural or engineering services for projects whose costs exceed this limit.
  2. If any agency adopts the provisions of KRS 45A.740 , 45A.745 , and 45A.750 , then it shall accept qualification statements from firms engaged in the lawful practice of their professions. These qualification statements shall remain on file for one (1) year from the date they are submitted.

History. Enact. Acts 1992, ch. 249, § 2, effective July 14, 1992.

Compiler’s Notes.

Section 6 of Acts 1992, ch. 249, provides: “When any local public agency chooses to adopt the provisions of Section 2 of this Act, it may contact the Kentucky League of Cities, the Kentucky County Judge/Executives Association, or the Kentucky Magistrates and Commissioners Association, each of which has consented to administer programs provided by the Consulting Engineers Council of Kentucky, the Kentucky Society of Architects, and the Kentucky Society of Professional Engineers to train participating local public agencies in this type of qualification based procurement.”

45A.740. Procedures for proposed project requiring architectural or engineering services.

  1. When a project requiring architectural or engineering services is proposed by a local public agency, except as provided by subsections (2) and (3) of this section, the agency shall:
    1. Transmit a notice requesting a statement of interest in the proposed project from all firms that have a current qualifications statement on file;
    2. Give adequate public notice of the proposed project, which may include posting on the Internet or newspaper advertisement, requesting firms to submit qualification statements and statements of interest in the proposed project; or
    3. Contact an appropriate professional organization for a list of firms capable of providing the necessary services.
  2. If the regulations of a federal department or agency require a procurement process that is different from the process in KRS 45A.730 to 45A.750 in order that financial aid can be granted, then the local government agency may exempt itself from the provisions of KRS 45A.730 to 45A.750 .
  3. When a local public agency has formed a working relationship with one (1) or more firms based on work previously contracted between them, then the local public agency may enter directly into negotiations according to KRS 45A.750 . If no contract is successfully negotiated, then the local public agency shall comply with this section, KRS 45A.745 , and KRS 45A.750 .

History. Enact. Acts 1992, ch. 249, § 3, effective July 14, 1992; 1998, ch. 120, § 18, effective July 15, 1998.

45A.745. Criteria for evaluation of interested firms.

  1. A local public agency shall evaluate those firms submitting statements of interest in a proposed project according to the following criteria:
    1. Qualifications;
    2. Ability of professional personnel;
    3. Past record and experience;
    4. Performance data on file;
    5. Willingness to meet time and budget requirements;
    6. Location;
    7. Workload; and
    8. Any other factors that the local public agency has set forth in writing, including the reciprocal preference for resident bidders required by KRS 45A.494 .
  2. The local public agency may then conduct discussions and require interviews with firms deemed to be the most qualified according to the criteria in subsection (1) of this section. Bids for the cost of the proposed project shall not be a factor in the evaluation of firms until negotiations are begun in accordance with KRS 45A.750 .
  3. The local public agency shall select, on the basis of the evaluations done in subsections (1) and (2) of this section, at least three (3) firms that are judged to be the most qualified and rank them accordingly. If fewer than three (3) firms are judged to be qualified, then those firms that remain shall be ranked in like manner.

History. Enact. Acts 1992, ch. 249, § 4, effective July 14, 1992; 2010, ch. 162, § 16, effective July 15, 2010.

45A.750. Negotiation of contract.

  1. Based on the rankings developed in KRS 45A.745(3), the local public agency shall contact the highest-ranked firm and attempt to negotiate a contract for a fair and reasonable value that takes the following into account:
    1. The estimated value of the services needed;
    2. The scope and complexity of the proposed project;
    3. The business risk anticipated; and
    4. The professional nature of the services required.
  2. If the local public agency is unable to negotiate a satisfactory contract with the highest-ranked firm, negotiations with that firm shall be terminated. The local public agency shall then go through the negotiation process with the next firm in the rankings, continuing this procedure until an agreement is reached or the list of ranked firms is exhausted.
  3. If negotiations with all of the ranked firms fail to result in a satisfactory contract, the local public agency shall reevaluate the architectural or engineering services involved in the proposed project and proceed to comply with KRS 45A.740 and 45A.745 until a contract is successfully negotiated.

History. Enact. Acts 1992, ch. 249, § 5, effective July 14, 1992.

Architectural and Engineering Services

45A.800. Definitions for KRS 45A.800 to 45A.835, 45A.195, 45A.440, and 45A.695.

As used in KRS 45A.800 to 45A.835 , 45A.195 , 45A.440 , and 45A.695 , unless the context requires otherwise:

  1. “Architect” means an architect licensed under KRS Chapter 323 or a landscape architect licensed under KRS Chapter 323A;
  2. “Engineer” means an engineer licensed under KRS Chapter 322;
  3. “Procuring agency” means either the Finance and Administration Cabinet or the Transportation Cabinet;
  4. “Project” means any undertaking requiring professional architectural, engineering, or engineering-related services, except as provided in KRS 45A.100 ;
  5. “User agency” means the state agency or any public supported institution of higher education, when it declines to exercise the authority granted under KRS 164A.590 , that will occupy or otherwise be the primary beneficiary of a completed Finance and Administration Cabinet project;
  6. “User division” means the division of the Transportation Cabinet that requires the procuring of engineering or engineering-related services for a project;
  7. “Engineering-related services” means specialized professional services performed by individuals, consultants, or other organizations of recognized technical competence, education, or experience that are involved in the planning, design, construction, maintenance, or operation of Kentucky’s transportation systems or construction projects in accordance with applicable licensing statutes; and
  8. “Firm” means an individual or other entity that offers professional architectural, engineering, or engineering-related services.

History. Enact. Acts 1992, ch. 55, § 1, effective July 14, 1992; 1994, ch. 95, § 1, effective July 15, 1994; 1998, ch. 319, § 3, effective April 3, 1998.

45A.803. Engineering or related services for federal highway project.

When the Transportation Cabinet provides engineering or related services for a federal highway project pursuant to 23 U.S.C. sec. 112(b)(2) , the Transportation Cabinet shall follow the process established in KRS 45A.800 to 45A.835 as the only alternative to the process established in federal law.

History. Enact. Acts 1996, ch. 246, § 1, effective July 15, 1996.

45A.805. Legislative findings of policy.

  1. The General Assembly finds and declares it to be the policy of the Commonwealth of Kentucky to:
    1. Insure the fair and equitable treatment of all firms interested in providing architectural, engineering, or engineering-related services to the Commonwealth;
    2. Announce publicly all requirements for architectural, engineering, and engineering-related services; and
    3. Award a contract for architectural, engineering, or engineering-related services to the best firm, qualified to perform the work on a project, on the basis of demonstrated competence and qualification for the type of professional services required and at fair and reasonable prices.

History. Enact. Acts 1992, ch. 55, § 2, effective July 14, 1992; 1998, ch. 319, § 8, effective April 3, 1998.

45A.807. Deadline for promulgation of certain administrative regulations by Finance and Administration Cabinet and Transportation Cabinet.

By January 1, 1995:

  1. The Finance and Administration Cabinet shall promulgate administrative regulations to implement its procurement of architectural and engineering services pursuant to KRS 45A.800 to 45A.835 ; and
  2. The Transportation Cabinet shall promulgate administrative regulations to implement its procurement of engineering services pursuant to KRS 45A.800 to 45A.835 .

History. Enact. Acts 1994, ch. 95, § 7, effective July 15, 1994.

45A.810. Architectural services selection committees — Engineering or engineering-related services selection committees — Uses — Membership.

    1. One (1) or more architectural services selection committees and one (1) or more engineering or engineering-related services selection committees shall be created in the Finance and Administration Cabinet. (1) (a) One (1) or more architectural services selection committees and one (1) or more engineering or engineering-related services selection committees shall be created in the Finance and Administration Cabinet.
    2. One (1) or more engineering and engineering-related services selection committees shall be created in the Transportation Cabinet.
  1. Except when an emergency condition exists as defined by KRS 45A.095(1)(a), when architectural, engineering, or engineering-related services are procured under KRS 45A.837 and 45A.838 , or when the project is constructed under KRS 45A.045(11)(a) or (b):
    1. An architectural services selection committee created in the Finance and Administration Cabinet shall participate in every instance of that cabinet’s procuring architectural services;
    2. An engineering and engineering-related services selection committee created in the Finance and Administration Cabinet shall participate in every instance of that cabinet’s procuring engineering or engineering-related services; and
    3. An engineering and engineering-related services selection committee created in the Transportation Cabinet shall participate in every instance of that cabinet’s procuring engineering or engineering-related services.
  2. An architectural services selection committee created in the Finance and Administration Cabinet shall consist of six (6) or more members selected in the manner specified within each paragraph:
    1. Two (2) architects. The secretary of the Finance and Administration Cabinet shall appoint a pool of at least six (6) architects who are employees of the cabinet. At least three (3) of the architects shall be merit employees of the cabinet. The secretary, or his designee, under the supervision of the Auditor of Public Accounts, or his designee, shall randomly select architects from the pool. The first employee selected shall be placed on the selection committee. If the first employee selected is a merit employee, the second employee selected shall be placed on the selection committee. If the first employee selected is a nonmerit employee, the selection process shall continue until a merit employee is selected. That merit employee shall be placed on the selection committee;
    2. One (1) or more additional employees of the Department for Facilities Management, appointed by the commissioner of the Department for Facilities Management, to serve as a nonvoting technical adviser for a given project selection. Advisory members shall serve on a project-by-project basis and shall have the requisite knowledge, training, or experience pertaining to the professional requirements of the project.
    3. Two (2) merit employees of the user agency appointed by the head of that agency to serve for the duration of the selection committee’s participation in the project for which they were appointed by the user agency;
    4. An individual. The Kentucky Society of Architects shall nominate nine (9) individuals, and the Governor shall appoint three (3) of these individuals to serve in the pool from which the secretary of the Finance and Administration Cabinet, or his designee, under the supervision of the Auditor of Public Accounts, or his designee, shall randomly select one (1) individual to serve on the committee;
    5. One (1) or more merit employees of the Auditor of Public Accounts, appointed by the Auditor, who may, at the discretion of the Auditor, serve as nonvoting members of the committee. If one (1) employee is appointed, then that employee may attend any committee proceedings. If more than one (1) employee is appointed, then either of the employees may attend any committee proceeding; and
    6. Upon completion of the selection process set forth in this subsection, the commissioner of the Department of Facilities Management shall submit a statement to the Auditor of Public Accounts attesting to full compliance with the selection process for each architectural firm appointed to provide architectural services. In addition, a complete record of the selection process for each project shall be maintained by the department and shall be subject to audit by the Auditor of Public Accounts.
  3. The engineering and engineering-related services selection committee created in the Finance and Administration Cabinet shall consist of six (6) or more members selected in the manner specified in each paragraph:
    1. Two (2) engineers. The secretary of the Finance and Administration Cabinet shall appoint a pool of at least six (6) engineers who are employees of the cabinet. At least three (3) of the engineers shall be merit employees of the cabinet. The secretary, or his designee, under the supervision of the Auditor of Public Accounts, or his designee, shall randomly select engineers from the pool. The first employee selected shall be placed on the selection committee. If the first employee selected is a merit employee, the second employee selected shall be placed on the selection committee. If the first employee selected is a nonmerit employee, the selection process shall continue until a merit employee is selected. That merit employee shall be placed on the selection committee;
    2. Two (2) merit employees of the user agency appointed by the head of that agency to serve for the duration of the selection committee’s participation in the project for which they were appointed by the user agency;
    3. An individual. The Kentucky Society of Professional Engineers and the Kentucky Consulting Engineers Council shall together nominate nine (9) individuals, and the Governor shall appoint three (3) of these individuals to serve in the pool from which the secretary of the Finance and Administration Cabinet, or his designee, under the supervision of the Auditor of Public Accounts, or his designee, shall randomly select one (1) individual to serve on the committee;
    4. One (1) or more merit employees of the Auditor of Public Accounts, appointed by the Auditor, who may, at the discretion of the Auditor, serve as nonvoting members of the committee. If one (1) employee is appointed, then that employee may attend any committee proceedings. If more than one (1) employee is appointed, then either of the employees may attend any committee proceeding;
    5. One (1) or more additional employees of the Department for Facilities Management to serve as nonvoting technical adviser for a specific project selection. Advisory members shall serve on a project-by-project basis and shall have the requisite knowledge, training, or experience pertaining to the professional requirements of the project; and
    6. Upon completion of the selection process set forth in this subsection, the commissioner of the Department of Facilities Management shall submit a statement to the Auditor of Public Accounts attesting to full compliance with the selection process for each firm appointed to provide engineering or engineering-related services. In addition, a complete record of the selection process for each project shall be maintained by the department and shall be subject to audit by the Auditor of Public Accounts.
  4. The engineering and engineering-related services selection committee created in the Transportation Cabinet shall consist of six (6) or more members selected in the manner specified in each paragraph:
    1. Two (2) engineers. The secretary of the Transportation Cabinet shall appoint a pool of six (6) engineers who are employees of the cabinet. At least three (3) of the engineers shall be merit employees of the cabinet. The secretary, or his designee, under the supervision of the Auditor of Public Accounts, or his designee, shall randomly select engineers from the pool. The first employee selected shall be placed on the selection committee. If the first employee selected is a merit employee, the second employee selected shall be placed on the selection committee. If the first employee selected is a nonmerit employee, the selection process shall continue until a merit employee is selected. That merit employee shall be placed on the selection committee;
    2. Two (2) engineers who are merit employees of the user division appointed by the head of that division to serve for the duration of the selection committee’s participation in the project for which they were appointed by the user agency. However, if two (2) user divisions have approximately equal responsibilities or separate responsibilities for the project, each user division head shall appoint one (1) member to the selection committee;
    3. An individual. The Kentucky Society of Professional Engineers and the Kentucky Consulting Engineers Council shall together nominate nine (9) individuals, and the Governor shall appoint three (3) of these individuals to serve in the pool from which the secretary of the Transportation Cabinet, or his designee, under the supervision of the Auditor of Public Accounts, or his designee, shall randomly select one (1) individual to serve on the committee;
    4. One (1) or more merit employees of the Auditor of Public Accounts, appointed by the Auditor, who may, at the discretion of the Auditor, serve as nonvoting members of the committee. If one (1) employee is appointed, then that employee may attend any committee proceedings. If more than one (1) employee is appointed, then either of the employees may attend any committee proceeding; and
    5. Upon completion of the selection process set forth in this subsection, the commissioner of the Department of Highways shall submit a statement to the Auditor of Public Accounts attesting to full compliance with the selection process for each firm appointed to provide engineering or engineering-related services. In addition, a complete record of the selection process for each project shall be maintained by the department and shall be subject to audit by the Auditor of Public Accounts.
    1. All selection committee members shall have experience which qualifies them to serve on the committee. (6) (a) All selection committee members shall have experience which qualifies them to serve on the committee.
    2. The same appointment procedures set out in this section apply to any user agency or user division listed in subsection (3), (4), or (5) of this section that does not operate under a merit system.
    3. Any individual appointed to serve in a pool from which selection committee members are drawn shall serve in the pool for an initial one (1) year term and may be reappointed to succeed himself. He shall serve until his successor is appointed and qualified. A successor or a replacement, in the case of a vacancy in the pool, shall be appointed in the same manner as the initial appointee. If a selection committee member, drawn from a pool, leaves a selection committee, his replacement shall be drawn from the pool in the same manner as he. The replacement shall have the merit or nonmerit status of his predecessor.
    4. Any individual appointed by the Auditor of Public Accounts to serve on selection committees shall serve an initial one (1) year term and may be reappointed to succeed himself. He shall serve until his successor is appointed and qualified. A successor or a replacement, in the case of a vacancy, shall be appointed in the same manner as the initial appointee.
    5. The selection committee members appointed by the head of a user agency or user division shall serve on a project-by-project basis. These members shall participate only in committee action related to the project for which they were appointed. A replacement, in the case of a vacancy, shall be appointed in the same manner as the initial appointee.

History. Enact. Acts 1992, ch. 55, § 3, effective July 14, 1992; 1994, ch. 95, § 2, effective July 15, 1994; 1996, ch. 246, § 2, effective July 15, 1996; 1998, ch. 319, § 4, effective April 3, 1998; 2017 ch. 175, § 7, effective June 29, 2017.

45A.815. Requirements of procuring agency for selection committee.

  1. Before a person joins a selection committee, he shall receive an orientation from the procuring agency whose secretary appointed members to the committee. The orientation shall include, but not be limited to, an explanation of all statutes and administrative regulations pertaining to the person’s service on the selection committee.
  2. For administrative purposes, a selection committee shall be attached to the procuring agency whose secretary appointed members to the committee.
  3. A procuring agency shall provide a 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 a selection committee’s duties and responsibilities; and
    3. Office supplies.

History. Enact. Acts 1992, ch. 55, § 4, effective July 14, 1992.

45A.820. Compensation and expense reimbursement of selection committee members.

  1. Selection committee members who are not employees of state agencies or state universities shall receive a salary of two hundred dollars ($200) per day for those days authorized by the selection committee for selection committee activities.
  2. Selection committee members who are employees of state agencies or state universities 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 procuring agency shall pay all costs generated under this section by a selection committee.

History. Enact. Acts 1992, ch. 55, § 5, effective July 14, 1992; 1998, ch. 319, § 6, effective April 3, 1998.

45A.825. Prequalification of interested firms — Request for proposals — Responses — Procedures for evaluating proposals and negotiating contract — Exception.

    1. A firm shall not be considered for providing architectural, engineering, or engineering-related services to the Finance and Administration Cabinet or engineering or engineering-related services to the Transportation Cabinet unless the relevant procuring agency has prequalified the firm prior to notice of a request for proposals to which that firm intends to respond. (1) (a) A firm shall not be considered for providing architectural, engineering, or engineering-related services to the Finance and Administration Cabinet or engineering or engineering-related services to the Transportation Cabinet unless the relevant procuring agency has prequalified the firm prior to notice of a request for proposals to which that firm intends to respond.
    2. A firm’s prequalification shall remain in effect for twelve (12) months from the date of prequalification.
    1. The procuring agency shall consult with the user agency or user division before arriving at a request for proposals. (2) (a) The procuring agency shall consult with the user agency or user division before arriving at a request for proposals.
    2. The request for proposals:
      1. Shall include as an evaluation factor whether the work tasks are to be performed in Kentucky or outside Kentucky;
      2. Shall indicate the relative weight of evaluation factors, including the reciprocal preference for resident bidders required by KRS 45A.494 ; and
      3. Shall establish a timetable for:
        1. The selection committee’s first meeting held pursuant to subsection (6) of this section; and
        2. The selection committee’s activities conducted pursuant to subsection (7)(b) of this section or subsection (8)(b), (d), and (e) of this section, as appropriate.
    3. The procuring agency shall provide adequate public notice of a request for proposals and notice of the materials that the procuring agency 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 project evaluation sheet to be used by the relevant selection committee. The notice shall also set a deadline for filing responses to a request for proposals with the procuring agency. It shall be the intent of this subsection that firms in all regions of the Commonwealth are given an equal opportunity to be selected.
  1. A firm shall respond to a request for proposals by submitting before the deadline, a completed form, devised by the procuring agency, which states the firm’s experience and its qualifications for the project as described in the request for proposals. A firm which fails to meet the deadline shall be barred from the procurement process.
  2. The employees of a procuring agency and the members of the selection committee shall keep all responses to a request for proposals confidential until the procuring agency has awarded a contract.
  3. The secretary of the procuring agency shall designate a procuring agency employee to determine which firms have prequalified pursuant to subsection (1) of this section and have filed, in a timely fashion, responses to a request for proposals. He shall create a list of the firms which have done so and certify the list.
  4. The procuring agency shall organize the selection committee’s first meeting. At that meeting, each selection committee member shall sign a statement of confidentiality. Also, at that meeting, the selection committee shall:
    1. Elect from among the voting members of the committee a chairman and a vice chairman who shall hold their positions for the duration of the selection committee’s participation in the project;
    2. Be provided with:
      1. The certified list created pursuant to subsection (5) of this section;
      2. The firms’ responses to the request for proposals;
      3. The request for proposals;
      4. The notice of request for proposals; and
      5. The project evaluation sheets; and
    3. Discuss the future conduct of its affairs.
    1. When the Transportation Cabinet procures any engineering or engineering-related services, or when the Finance and Administration Cabinet procures architectural services for an estimated fee of less than fifty thousand dollars ($50,000) or engineering or engineering-related services for an estimated fee of less than one hundred thousand dollars ($100,000), this subsection and subsection (9) of this section shall govern the procurement process. (7) (a) When the Transportation Cabinet procures any engineering or engineering-related services, or when the Finance and Administration Cabinet procures architectural services for an estimated fee of less than fifty thousand dollars ($50,000) or engineering or engineering-related services for an estimated fee of less than one hundred thousand dollars ($100,000), this subsection and subsection (9) of this section shall govern the procurement process.
    2. The selection committee shall meet in executive session to:
      1. Evaluate the materials with which it has been provided;
      2. Select the three (3) most qualified firms and rank them in order of preference, based upon the weighted evaluation factors established in the request for proposals; and
      3. Notify the procuring agency of the ranking.
    3. The procuring agency shall notify each firm which responded to the request for proposals, informing the firm of:
      1. The three (3) finalists;
      2. Their ranking; and
      3. The rest of the procedure that will be followed in the awarding of the contract.
    4. The procuring agency shall then begin negotiations with the top-ranked firm pursuant to subsection (9) of this section.
    1. When the Finance and Administration Cabinet is procuring architectural services for an estimated fee of fifty thousand dollars ($50,000) or more or engineering or engineering-related services for an estimated fee of one hundred thousand dollars ($100,000) or more, this subsection and subsection (9) of this section shall govern the procurement process. (8) (a) When the Finance and Administration Cabinet is procuring architectural services for an estimated fee of fifty thousand dollars ($50,000) or more or engineering or engineering-related services for an estimated fee of one hundred thousand dollars ($100,000) or more, this subsection and subsection (9) of this section shall govern the procurement process.
    2. The selection committee shall meet in executive session 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 weighted evaluation factors established in the request for proposals; and
      3. Notify the procuring agency of the three (3) finalists.
    3. The procuring agency 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 contract.
    4. 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 until the procuring agency has awarded a contract.
    5. The selection committee shall meet in executive session to:
      1. Rank the three (3) finalists based upon the weighted evaluation factors established in the request for proposals; and
      2. Forward the ranking to the procuring agency.
    6. The procuring agency shall notify each finalist, informing the finalist of:
      1. His ranking; and
      2. The rest of the procedure that will be followed in the awarding of the contract.
    7. The procuring agency shall then begin negotiations with the top-ranked firm pursuant to subsection (9) of this section.
  5. The secretary of the procuring agency shall designate a procuring agency employee as the procuring officer in charge of negotiating a contract with the top-ranked firm, as determined by the selection committee, at compensation which the procuring officer determines in writing to be fair and reasonable to the Commonwealth. In making this decision, the employee shall take into account the estimated value of the services to be rendered, and the scope, complexity, and professional nature thereof. Should the procuring officer be unable to negotiate a satisfactory contract with the top-ranked firm, at a price that he considers fair and reasonable to the Commonwealth, he shall formally terminate negotiations with the firm. The procuring officer shall then undertake negotiations with the second-ranked firm. Failing accord with the second-ranked firm, the purchasing officer shall formally terminate negotiations. The purchasing officer shall then undertake negotiations with the third-ranked firm. Should the purchasing officer be unable to negotiate a satisfactory contract with any of the selected firms, he shall formally terminate negotiations, and the procurement procedure shall start again from the beginning pursuant to KRS 45A.810 .
  6. Once a procuring officer has negotiated a contract, the procuring agency shall notify the other finalists, informing them of:
    1. Which firm has successfully negotiated a contract; and
    2. The rest of the procedure that will be followed in the awarding of the contract.
  7. Notwithstanding the provisions of KRS 45A.045 , when the Transportation Cabinet is the procuring agency, the negotiated contract shall take effect without the approval of the secretary of the Finance and Administration Cabinet.
  8. The provisions of this section shall not apply to the procurement of architectural, engineering, or engineering-related services under KRS 45A.837 and 45A.838 .

History. Enact. Acts 1992, ch. 55, § 6, effective July 14, 1992; 1994, ch. 95, § 3, effective July 15, 1994; 1996, ch. 246, § 3, effective July 15, 1996; 1998, ch. 120, § 19, effective July 15, 1998; 1998, ch. 319, § 5, effective April 3, 1998; 2010, ch. 162, § 17, effective July 15, 2010.

45A.827. Criterion to break tie vote of selection committee.

If a selection committee vote results in a tie between two (2) firms, one (1) of which will perform more of the work tasks in Kentucky than the other, then the former firm shall be ranked one (1) place ahead of the latter.

History. Enact. Acts 1994, ch. 95, § 6, effective July 15, 1994.

45A.830. Copies of proposed contracts to be made available to selection committee — Certifications to be made upon negotiation of contract — Filing with Government Contract Review Committee.

  1. For architectural, engineering, and engineering-related construction services procured under KRS 45A.180 and 45A.825 , the procuring officer shall make available a copy of the proposed contract to each member of the selection committee involved in the procurement process for that contract after the procuring officer has negotiated an architectural, engineering, or engineering-related services contract for the Finance and Administration Cabinet or an engineering or engineering-related services contract for the Transportation Cabinet, but before the contract is submitted to the Government Contract Review Committee.
  2. For architectural, engineering, and engineering-related construction services procured under KRS 45A.180 and 45A.825 , the secretary of the procuring agency, the procuring officer, and each voting member of the selection committee shall sign separate certificates, devised by the procuring agency, that shall provide the signatory with the option of certifying that, to the best of his knowledge, he is either aware or unaware of circumstances that may constitute a violation of this chapter occurring in the procurement process. Any employee of the Auditor of Public Accounts, who served as a nonvoting member of the selection committee and who attended any committee proceeding, may participate in the preparation of a report for filing with the Government Contract Review Committee certifying that the applicable procedural provisions of subsections (4), (6), (7), and (8) of KRS 45A.825 were or were not met. Before filing the report, the employee or employees who participated in its preparation shall sign it.
  3. For architectural, engineering, and engineering-related construction services procured under KRS 45A.180 and 45A.825 , the procuring agency shall maintain the following information, readily available to the Government Contract Review Committee upon request:
    1. The certificates;
    2. The selection committee’s ranking of firms; and
    3. A statement affirming that responding firms in all regions of the Commonwealth were given equal consideration for selection.

History. Enact. Acts 1992, ch. 55, § 7, effective July 14, 1992; 1994, ch. 95, § 4, effective July 15, 1994; 1996, ch. 246, § 4, effective July 15, 1996; 1998, ch. 120, § 20, effective July 15, 1998; 1998, ch. 319, § 7, effective April 3, 1998; 1998, ch. 486, § 7, effective July 15, 1998; 2003, ch. 98, § 13, effective June 24, 2003.

45A.835. Persons who are prohibited from serving in pool or on selection committee.

    1. A person shall not serve in a pool from which selection committee members are drawn or on a selection committee if that person, his spouse, either of his parents, any of his siblings, or any of his children is employed by a firm which has been prequalified by the procuring agency relevant to the selection committee pursuant to KRS 45A.825(1) or owns one percent (1%) or more of a firm which has been prequalified by the procuring agency relevant to the selection committee pursuant to KRS 45A.825(1). (1) (a) A person shall not serve in a pool from which selection committee members are drawn or on a selection committee if that person, his spouse, either of his parents, any of his siblings, or any of his children is employed by a firm which has been prequalified by the procuring agency relevant to the selection committee pursuant to KRS 45A.825(1) or owns one percent (1%) or more of a firm which has been prequalified by the procuring agency relevant to the selection committee pursuant to KRS 45A.825(1).
    2. If, in the course of an individual’s service, he, his spouse, either of his parents, any of his siblings, or any of his children becomes employed by a firm which has been prequalified by the procuring agency relevant to the selection committee pursuant to KRS 45A.825(1) or owns one percent (1%) or more of a firm which has been prequalified by the procuring agency relevant to the selection committee pursuant to KRS 45A.825(1), then his service shall end.
  1. 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 an architectural, engineering, or engineering related services contract if that person, his spouse, either of his parents, any of his siblings or any of his children is employed by a firm which was awarded a contract by a selection committee on which he served or owns one percent (1%) or more of a firm which was awarded a contract by a selection committee on which he served.

History. Enact. Acts 1992, ch. 55, § 8, effective July 14, 1992; 1994, ch. 95, § 5, effective July 15, 1994.

45A.836. Eligibility of entities selected under KRS 45A.810 to act as offerors in certain circumstances.

The entity selected under KRS 45A.810 to draft the preliminary project design or specifications that forms the basis of a request for proposal for a project utilizing the design-build project delivery method shall not be eligible to act as an offeror to the request for proposal for procuring a design-build team for that project.

History. Enact. Acts 2003, ch. 98, § 9, effective June 24, 2003.

45A.837. Price contracts for architectural, engineering, and engineering-related services — Review procedure required.

  1. Notwithstanding the provisions of KRS 45A.800 to 45A.835 , the Finance and Administration Cabinet and the Transportation Cabinet may enter into price contracts for architectural, engineering, and engineering-related services. If the agencies choose to enter into a price contract, subsection (2) of this section shall apply.
  2. Price contracts shall be awarded to firms qualified by the Finance and Administration Cabinet, Department of Facilities Management or by the Transportation Cabinet, Department of Highways. The Finance and Administration Cabinet selection committee established by KRS 45A.810 shall meet at least quarterly during each fiscal year to review and make recommendations to the commissioner of the Department for Facilities Management for qualification of interested firms. The Transportation Cabinet selection committee established by KRS 45A.810 shall meet at least quarterly during each fiscal year to review and make recommendations to the commissioner of the Department of Highways for qualification of interested firms.
    1. The respective committees shall evaluate those firms submitting statements of interest in obtaining a price contract. The submitting firms shall be reviewed according to the following criteria:
      1. Qualifications;
      2. Ability of professional personnel; and
      3. Past record and experience.
    2. Firms qualified by the commissioner of the Department for Facilities Management or by the commissioner of the Department of Highways shall be awarded price contracts by the respective departments for the type of work for which they have been qualified.
    3. The commissioner of the Department for Facilities Management or the commissioner of the Department of Highways may select firms to perform work under price contract for small projects for which the architectural, engineering, or engineering-related fees do not exceed seventy-five thousand dollars ($75,000). However, no firm that has received more than one hundred fifty thousand dollars ($150,000) in price contract fees in any one (1) fiscal year in the contract discipline being awarded shall be selected to work under a price contract unless the secretary of finance and administration or the secretary of transportation makes a written determination that the selection is in the best interest of the Commonwealth and the determination is confirmed by the appropriate cabinet’s selection committee established by KRS 45A.810.
  3. Notwithstanding any provision of the Kentucky Revised Statutes, no price contract shall be awarded under the provisions of this section before completion of the review procedure provided for in KRS 45A.695 and 45A.705 .

HISTORY: Enact. Acts 1998, ch. 319, § 1, effective April 3, 1998; 2015 ch. 105, § 12, effective June 24, 2015.

45A.838. Establishment and operation of pool of firms to provide professional contract services — Administrative regulations to be promulgated by Transportation Cabinet.

  1. If choosing to operate under this section, the Transportation Cabinet shall, by administrative regulations promulgated under KRS Chapter 13A, designate each type of project for which a pool of firms is to be established and from which the firm to provide the needed architectural, engineering, or engineering-related contract services is to be selected. The project types designated by these administrative regulations shall be limited to those projects for which the professional services to be rendered for each individual contract are substantially similar and to those project types for which architectural, engineering, or engineering-related fees are expected to be at least fifty thousand dollars ($50,000).
  2. The Transportation Cabinet selection committee established under KRS 45A.810 shall annually select the engineering or engineering-related services firms for each pool in accordance with the standards for application and selection established by administrative regulation under subsection (4) of this section.
  3. Once selected for a particular pool, a firm providing architectural, engineering, or engineering-related services shall remain in the pool for two (2) years unless disqualified under subsection (6) of this section. Upon the expiration of the two (2) year period, a firm may reapply for selection.
  4. The procedures and criteria for qualifying and selecting the firms to be placed in each annual pool shall be set forth in administrative regulations promulgated by the Transportation Cabinet. The administrative regulations shall provide for adequate notice to firms of the establishment of the individual pools, an application procedure for a firm interested in the pool for a particular type of project, the deadline for submission of the application, and the criteria to be used for the establishment of each pool.
  5. The procedures for determining which firm is to be selected from the pool to provide services for a particular project shall be set forth in administrative regulations promulgated by the Transportation Cabinet.
  6. The secretary of transportation may remove a firm from a pool for good cause. Any firm that has been removed from a pool may, within thirty (30) days after the removal, petition the secretary for reinstatement. Within sixty (60) days following the secretary’s receipt of a petition, the selection committee shall meet to consider the request for reinstatement. If the selection committee recommends that the firm be reinstated to the pool and the secretary accepts the recommendation, the affected firm shall be reinstated.
  7. After one (1) year of disqualification, a firm that has been removed from a pool under subsection (6) of this section may reapply to be qualified.
  8. Nothing in this section shall be construed to require use of any pool for a particular project if the responsible cabinet has determined that the project does not meet the criteria established for pool projects.

History. Enact. Acts 1998, ch. 319, § 2, effective April 3, 1998.

Underwriter and Bond Counsel Services

45A.840. Definitions for KRS 45A.840 to 45A.879.

As used in KRS 45A.840 to 45A.879 , unless the context requires otherwise:

  1. “Bond counsel” means an attorney who provides legal counsel to a bond issuing agency with regard to bond issuance and provides an unqualified legal opinion to the agency with respect to validity and tax treatment;
  2. “Bond issuance” means the formulation, authorization, and issuance of bonds by a bond issuing agency;
  3. “Bond issuing agency” means the State Property and Buildings Commission, Kentucky Asset/Liability Commission, Turnpike Authority of Kentucky, Kentucky Housing Corporation, Kentucky Infrastructure Authority, Kentucky Higher Education Student Loan Corporation, Kentucky River Authority, Kentucky Agricultural Finance Corporation, Kentucky Local Correctional Facilities Construction Authority, School Facilities Construction Commission, Murray State University, Western Kentucky University, University of Louisville when it declines to exercise the authority granted under KRS 164A.585(1) and 164A.605 , Northern Kentucky University, Kentucky State University, University of Kentucky when it declines to exercise the authority granted under KRS 164A.585(1) and 164A.605 , Morehead State University, Eastern Kentucky University, and the Kentucky Community and Technical College System;
  4. “Bonds” means the revenue bonds, notes, or other debt obligations issued by a bond issuing agency;
  5. “Executive director” means the executive director of the Office of Financial Management;
  6. “Office” means the Office of Financial Management established by KRS 42.0201 ;
  7. “Underwriter” means:
    1. The financial institution which structures and underwrites the bond issuing agency’s issuance of bonds; or
    2. The financial advisor or fiscal agent which provides advice or services to the bond issuing agency with respect to the structure, timing, terms, or other matters concerning bond issuance;
  8. “Underwriter’s counsel” means an attorney who provides legal counsel to an underwriter with respect to its work on behalf of a bond issuing agency.

History. Enact. Acts 1994, ch. 409, § 1, effective July 15, 1994; 1997 (1st Ex. Sess.), ch. 1, § 34, effective May 30, 1997; 1997 (1st Ex. Sess.), ch. 4, § 12, effective May 30, 1997; 2000, ch. 46, § 12, effective July 14, 2000; 2005, ch. 29, § 1, effective June 20, 2005; 2005, ch. 85, § 75, effective June 20, 2005.

Legislative Research Commission Note.

(6/20/2005). This section was amended by 2005 Ky. Acts chs. 29 and 85, which do not appear to be in conflict and have been codified together.

45A.843. Selection committees.

  1. One (1) or more selection committees shall be created in the Office of Financial Management. Each selection committee shall have the authority to participate in the selection of both underwriters and bond counsel.
  2. Except as provided in KRS 45A.867 and 45A.870 , a selection committee shall participate in every instance of a bond issuing agency hiring an underwriter or bond counsel on behalf of a bond issuing agency.
  3. A selection committee created in the office shall consist of the following six (6) or more members selected in the manner specified within each paragraph:
    1. Three (3) employees of the office other than the executive director. The executive director shall select the three (3) employees;
    2. Two (2) employees of the bond issuing agency appointed by the head of that agency to participate in the hiring of an underwriter or a bond counsel for that agency. However, at the discretion of the head of the bond issuing agency, he may substitute for one (1) of his employees an employee of the agency whose project will be funded by the bond proceeds; and
    3. One (1) or more merit employees of the Auditor of Public Accounts, appointed by the Auditor. The merit employees shall serve as nonvoting members of the committee. If one (1) employee is appointed, then that employee shall attend all committee proceedings. If more than one (1) employee is appointed, then at least one (1) of the employees shall attend any committee proceeding.
    1. All selection committee members shall have experience which qualifies them to serve on the committee. (4) (a) All selection committee members shall have experience which qualifies them to serve on the committee.
    2. Any individual appointed to serve by the executive director or the Auditor of Public Accounts shall serve an initial one (1) year term and may be reappointed to serve for additional successive one (1) year terms. He shall serve until his successor is appointed and qualified. A successor or a replacement, in the case of a vacancy, shall be appointed in the same manner as the initial appointee.
    3. A selection committee member appointed by the head of a bond issuing agency shall serve for the duration of the selection committee’s participation in the hiring of an underwriter and a bond counsel for his agency. A replacement, in the case of a vacancy, shall be appointed in the same manner as the initial appointee.

History. Enact. Acts 1994, ch. 409, § 2, effective July 15, 1994; 1996, ch. 139, § 1, effective July 15, 1996; 2000, ch. 46, § 13, effective July 14, 2000.

45A.847. Orientation of committee members — Committee to be attached to office.

  1. After a person has been appointed to a selection committee, he shall receive an orientation from the office. The orientation shall include, but not be limited to, an explanation of all statutes and administrative regulations pertaining to the person’s service on the selection committee.
  2. For administrative purposes, a selection committee shall be attached to the office.
  3. The office shall provide a selection committee with:
    1. Suitable quarters in Frankfort, Kentucky, in which to conduct its business;
    2. Staff support necessary for the expeditious conduct of a selection committee’s duties and responsibilities; and
    3. Office supplies.

History. Enact. Acts 1994, ch. 409, § 3, effective July 15, 1994; 1998, ch. 92, § 1, effective July 15, 1998.

45A.850. Selection of underwriter and bond counsel for various agencies — Comanaging underwriters — Review by Capital Projects and Bond Oversight Committee.

    1. Pursuant to KRS 45A.853 and 45A.857 , one (1) or more underwriters and one (1) or more bond counsel firms shall be chosen for each of the following agencies: (1) (a) Pursuant to KRS 45A.853 and 45A.857 , one (1) or more underwriters and one (1) or more bond counsel firms shall be chosen for each of the following agencies:
      1. Turnpike Authority of Kentucky;
      2. Kentucky Housing Corporation;
      3. Kentucky Infrastructure Authority;
      4. Kentucky Higher Education Student Loan Corporation;
      5. Kentucky River Authority;
      6. Kentucky Agricultural Finance Corporation;
      7. Kentucky Local Correctional Facilities Construction Authority;
      8. State Property and Buildings Commission; and
      9. Kentucky Public Transportation Infrastructure Authority.
    2. The underwriter and the bond counsel chosen for each agency shall provide their services for all bond issuances over a period of twelve (12) months from their selection. At the conclusion of the twelve (12) month period, the executive director may continue the employment of the underwriter or the bond counsel, on the same terms and conditions, for another twelve (12) month period. If the employment is not continued, the choosing of an underwriter or bond counsel, as appropriate, shall be conducted pursuant to KRS 45A.853 and 45A.857.
    1. Pursuant to KRS 45A.853 and 45A.857 , one (1) or more underwriters and one (1) or more bond counsel firms shall be chosen to provide their services for all of the following agencies: (2) (a) Pursuant to KRS 45A.853 and 45A.857 , one (1) or more underwriters and one (1) or more bond counsel firms shall be chosen to provide their services for all of the following agencies:
      1. School Facilities Construction Commission;
      2. Murray State University;
      3. Western Kentucky University;
      4. University of Louisville when it declines to exercise the authority granted under KRS 164A.585(1) and 164A.605 ;
      5. Northern Kentucky University;
      6. Kentucky State University;
      7. University of Kentucky when it declines to exercise the authority granted under KRS 164A.585(1) and 164A.605 ;
      8. Morehead State University;
      9. Eastern Kentucky University; and
      10. Kentucky Community and Technical College System.
    2. The underwriter and the bond counsel chosen for all of the agencies shall provide their services for all bond issuances of the agencies for a period of twelve (12) months from the underwriter’s and the bond counsel’s selection. At the conclusion of the twelve (12) month period, the executive director may continue the employment of the underwriter or the bond counsel, on the same terms and conditions, for another twelve (12) month period. If the employment is not continued, the choosing of an underwriter or bond counsel, as appropriate, shall be conducted pursuant to KRS 45A.853 and 45A.857.
  1. Pursuant to KRS 45A.853 and 45A.857 , one (1) or more financial advisors, managing underwriters, and remarketing agents and one (1) bond counsel shall be chosen for the Kentucky Asset/Liability Commission. The commission shall enter into agreements with the individuals or entities for a maximum contract period of twenty-four (24) months. At the conclusion of the contract period, the executive director may continue the employment of the financial advisor, underwriter, remarketing agent, or bond counsel for another contract period, not to exceed twenty-four (24) months. If the employment is not continued or terminated, the selection of a financial advisor, underwriter, remarketing agent, or bond counsel, as appropriate, shall be conducted pursuant to KRS 45A.853 and 45A.857 .
  2. The office may select national comanaging underwriters and Kentucky comanaging underwriters who shall provide national and local marketing expertise for bond issuances. The executive director shall recommend to the secretary of the Finance and Administration Cabinet the number of national and Kentucky comanaging underwriters, if any, to be utilized on each bond issuance. The executive director shall consider the following issues when making the recommendations:
    1. Principal amount of bonds being issued;
    2. Structure of the bond issue; and
    3. Composition of expected buyers of the bonds.

      Kentucky comanaging underwriters shall be selected pursuant to a request for proposals. National comanaging underwriters shall be selected pursuant to an administrative regulation promulgated by the office. For specific bond transactions under subsection (1) of this section, the executive director may recommend to the secretary of the Finance and Administration Cabinet as a managing underwriter the Kentucky underwriter which received the highest score for its proposal pursuant to this section. Comanaging underwriters selected pursuant to this subsection shall provide their services to a bond issuing agency as needed over the appropriate period of time stated in this section.

  3. If the executive director recommends to the secretary of the Finance and Administration Cabinet a Kentucky underwriter as provided by subsection (4) of this section, and the secretary orders that procurement proceed pursuant to KRS 45A.857 , the requirements, review, and recommendation of the Capital Projects and Bond Oversight Committee as provided by KRS 45.810 shall apply.

HISTORY: Enact. Acts 1994, ch. 409, § 4, effective July 15, 1994; 1996, ch. 139, § 2, effective July 15, 1996; 1997 (1st Ex. Sess.), ch. 1, § 35, effective May 30, 1997; 1997 (1st Ex. Sess.), ch. 4, § 13, effective May 30, 1997; 1998, ch. 92, § 2, effective July 15, 1998; 2012, ch. 110, § 17, effective April 11, 2012; 2015 ch. 81, § 1, effective June 24, 2015.

45A.853. Prequalification of underwriters and bond counsels — Request for proposals — Response — First meeting of selection committee — Second meeting.

    1. A firm shall not be considered for providing underwriting or bond counsel services unless the office has prequalified the firm prior to the date of issuance of the request for proposals. (1) (a) A firm shall not be considered for providing underwriting or bond counsel services unless the office has prequalified the firm prior to the date of issuance of the request for proposals.
    2. A firm’s prequalification shall remain in effect for twenty-four (24) months from the date of prequalification.
    1. The office shall consult with the bond issuing agency before arriving at a request for proposals. The request for proposals shall include, but not be limited to: (2) (a) The office shall consult with the bond issuing agency before arriving at a request for proposals. The request for proposals shall include, but not be limited to:
      1. The deadline for posing written questions about the request for proposals to the selection committee chairman elected pursuant to subsection (7)(b) of this section. This deadline shall occur before the deadline for filing a written response to a request for proposals;
      2. The deadline for filing a written response;
      3. A description of the services sought;
      4. A description of the skills required to perform the services;
      5. A description of evaluation factors and their relative weight, including the reciprocal preference for resident bidders required by KRS 45A.494 ; and
      6. In the case of a request for proposals from bond counsel firms, a requirement to submit proposed fees and expenses.
    2. The office shall provide materials to the firms which have prequalified pursuant to subsection (1) of this section. The materials shall include, but not be limited to, the request for proposals and the evaluation sheet to be used by the relevant selection committee.
  1. Prior to the deadline for posing questions established in the request for proposals, a firm may pose written questions about the request for proposals to the selection committee chairman. The chairman shall respond in writing. If, in the discretion of the chairman, an answer could have a material effect on other respondents’ proposals, then both the question and the answer shall be distributed to all firms at the same time prior to the deadline for the filing of responses to the request for proposals.
  2. A firm shall file a written response to the request for proposals prior to the deadline for filing a written response established in the request for proposals. A firm which fails to meet the deadline shall be barred from the procurement process.
  3. The employees of the office and the members of the selection committee shall keep all responses to a request for proposals confidential until the contract to the winning firm has been awarded.
  4. The executive director of the office shall designate an office employee to identify which firms prequalified pursuant to subsection (1) of this section and filed, in a timely fashion, a written response to a request for proposals. He shall create a list of firms which have done so and certify the list.
  5. The office shall organize the selection committee’s first meeting. At that meeting, each selection committee member shall sign a statement of confidentiality. Also, at that meeting, the selection committee shall:
    1. Determine whether a majority of the voting members are merit employees of the Commonwealth. If a majority are not merit employees, the selection committee shall disband, and another selection committee shall be selected pursuant to KRS 45A.843 . A majority of its voting members shall be merit employees of the Commonwealth;
    2. Elect from among the voting members of the committee a chairman and vice chairman who shall hold their positions for the duration of the selection committee’s involvement in the bond issuance;
    3. Be provided with:
      1. The certified list created pursuant to subsection (6) of this section;
      2. If applicable, an out-of-state firm’s preference handicap created pursuant to KRS 45A.873(1);
      3. The request for proposals;
      4. Forms for keeping a log of all contacts with firms which have responded to the request for proposals as well as contacts with persons acting on behalf of those firms. Each committee member shall keep a log which shall summarize the subject of any contact and state the date and place of the contact; and
      5. The selection evaluation sheets; and
    4. Discuss the future conduct of its affairs.
  6. At the second meeting of a selection committee, the committee shall:
    1. Be provided with the following:
      1. Written questions and answers produced pursuant to subsection (3) of this section; and
      2. The firms’ responses to the request for proposals; and
    2. Discuss the future conduct of its affairs.

History. Enact. Acts 1994, ch. 409, § 5, effective July 15, 1994; 1996, ch. 139, § 3, effective July 15, 1996; 1998, ch. 92, § 3, effective July 15, 1998; 2010, ch. 162, § 18, effective July 15, 2010.

45A.857. Executive sessions of selection committee — Ranking — Interviews — Awarding of contract.

  1. A selection committee shall meet in executive session to:
    1. Evaluate the materials with which it has been provided;
    2. Select the two (2) to five (5) most qualified firms based upon the weighted evaluation factors in the request for proposals; and
    3. Rank the firms.
  2. In executive session, a selection committee, at its discretion by majority vote, shall determine whether not to interview and to leave the rankings in place, or to interview the two (2) to five (5) firms to arrive at new rankings. If the selection committee decides not to interview and to leave the rankings in place, the winning firm shall be chosen pursuant to paragraph (a) or paragraph (b) of subsection (4) of this section, as appropriate.
    1. If the selection committee decides to interview the two (2) to five (5) firms, it shall do so preferably on the same day. The firms shall be interviewed one (1) at a time, and each interview shall be attended only by representatives of the firm and members of the selection committee. Members of the selection committee shall keep confidential the substance of an interview until the contract to the winning firm is awarded. (3) (a) If the selection committee decides to interview the two (2) to five (5) firms, it shall do so preferably on the same day. The firms shall be interviewed one (1) at a time, and each interview shall be attended only by representatives of the firm and members of the selection committee. Members of the selection committee shall keep confidential the substance of an interview until the contract to the winning firm is awarded.
    2. After the two (2) to five (5) firms have been interviewed, the selection committee shall meet in executive session to:
      1. Rank the firms interviewed based upon the weighted evaluation factors established in the request for proposals; and
      2. Forward the rankings to the executive director.
    3. The winning firm shall be awarded pursuant to paragraph (a) or paragraph (b) of subsection (4) of this section, as appropriate.
    1. For underwriter services: (4) (a) For underwriter services:
      1. The name of the top-ranked underwriter firm shall be provided to the executive director. He shall state in writing to the secretary of the Finance and Administration Cabinet his reasons for agreeing or not agreeing with the selection. The secretary shall order that procurement proceed under subparagraph 2. of this paragraph, or he shall order that the procurement procedure start again from the beginning pursuant to KRS 45A.843 . The secretary shall state in writing the reasons for his actions.
      2. The executive director of the office shall negotiate a contract with the top-ranked underwriter firm, as determined by the selection committee, at compensation which the executive director determines in writing to be fair and reasonable to the Commonwealth. In making this decision, he shall take into account the estimated value of the services to be rendered, and the scope, complexity, and professional nature thereof. Should the executive director be able to negotiate a satisfactory price, the top-ranked firm shall be awarded the contract. The executive director shall state in writing to the secretary of the Finance and Administration Cabinet his justifications for the negotiated price.
      3. Should the executive director be unable to negotiate a satisfactory contract with the top-ranking firm at a price that he considers fair and reasonable to the Commonwealth, he shall formally terminate negotiations with the firm. The selection committee shall provide the executive director the name of the second-ranked firm. The executive director shall then undertake price negotiations with the second-ranked firm. Should the executive director be able to negotiate a satisfactory price, the second-ranked firm shall be awarded the contract. The executive director shall state in writing to the secretary of the Finance and Administration Cabinet his justifications for the negotiated price.
      4. Failing accord with the second-ranked firm, the executive director shall formally terminate negotiations. The selection committee shall provide the executive director the name of the third-ranked firm, if any. The executive director shall then undertake price negotiations with the third-ranked firm. Should the executive director be able to negotiate a satisfactory price, the third-ranked firm shall be awarded the contract. The executive director shall state in writing to the secretary of the Finance and Administration Cabinet his reasons for agreeing or not agreeing with the price. Should the executive director be unable to negotiate a satisfactory contract with the third-ranked firm, he shall formally terminate negotiations, and the procurement procedure shall start again from the beginning pursuant to KRS 45A.843 .
    2. For bond counsel services:
      1. The name of the top-ranked firm shall be provided to the executive director. If the executive director does not agree with the selection recommended by the selection committee, the name of the second-ranked firm shall be submitted to the executive director.
      2. The executive director shall submit the name of the first-ranked firm, or the second-ranked firm if the executive director did not agree with the first selection made by the selection committee, to the secretary of the Finance and Administration Cabinet. The executive director shall state in writing to the secretary of the Finance and Administration Cabinet his reasons for agreeing or not agreeing with the selection. The secretary shall order the hiring of the selected firm, or he shall order that the procurement procedure shall start again from the beginning pursuant to KRS 45A.843. The secretary shall state in writing the reasons for his actions.

History. Enact. Acts 1994, ch. 409, § 6, effective July 15, 1994; 1996, ch. 139, § 4, effective July 15, 1996; 1998, ch. 92, § 4, effective July 15, 1998.

45A.860. Certification of circumstances that may or may not constitute violation of statutes — Retention and inspection of logs and evaluation sheets.

  1. After a winning underwriter or bond counsel contract has been awarded by the secretary of the Finance and Administration Cabinet pursuant to KRS 45A.853 and 45A.857 , the executive director shall supply the name of the firm to each member of the selection committee. The executive director shall also send a letter to each firm which responded to the request for proposals, informing the firm of the name of the underwriter or bond counsel which has been awarded the contract.
  2. The secretary of the Finance and Administration Cabinet, executive director, head of the relevant bond issuing agency, and each voting member of the selection committee shall sign separate certificates, devised by the office, which shall certify that, to the best of his knowledge, he is either aware or unaware of circumstances which may constitute a willful violation of KRS 45A.840 to 45A.879 which has arisen in the procurement process.
  3. Any employee of the Auditor of Public Accounts, who was appointed to serve as a nonvoting member of the selection committee and who attended any committee proceeding, shall participate in the preparation of a report for filing with the Capital Projects and Bond Oversight Committee certifying that the applicable procedural provisions of KRS 45A.840 to 45A.879 were, or were not, met. Before filing the report, the employee or employees who participated in its preparation shall sign it.
  4. The Finance and Administration Cabinet shall retain the logs created pursuant to KRS 45A.853(7)(c)4. and the completed selection evaluation sheets required by KRS 45A.853(7)(c)5. The Finance and Administration Cabinet shall permit the public to inspect these documents. Each evaluation sheet and each log shall be signed by the person who completed it. The cabinet shall permit the public to inspect these documents and shall not black out the signature of the person who signed the evaluation sheet or the log.

History. Enact. Acts 1994, ch. 409, § 7, effective July 15, 1994; 1996, ch. 139, § 5, effective July 15, 1996; 1998, ch. 92, § 5, effective July 15, 1998.

45A.863. Antinepotism provisions.

  1. A person shall not serve on an underwriter or bond counsel selection committee if that person, his spouse, either of his parents, any of his siblings, or any of his children is employed by a bond counsel or underwriter which has prequalified pursuant to KRS 45A.853(1) or owns one percent (1%) or more of a bond counsel or underwriter firm which has prequalified pursuant to KRS 45A.853(1).
  2. If, in the course of an individual’s service on a selection committee, he, his spouse, either of his parents, any of his siblings, or any of his children is employed by an underwriter or bond counsel which has prequalified pursuant to KRS 45A.853(1) or owns one percent (1%) or more of an underwriter or bond counsel firm which has prequalified pursuant to KRS 45A.853(1), then his membership on the selection committee shall end and the vacancy shall be filled as prescribed in KRS 45A.843 .
  3. For a period of one (1) year after a person ends his service on a selection committee, the Commonwealth shall not consider employing an underwriter or a bond counsel if that person, his spouse, either of his parents, any of his siblings, or any of his children is employed by a firm which was awarded a contract by a selection committee on which he served or owns one percent (1%) or more of a firm which was awarded a contract by a selection committee on which he served.

History. Enact. Acts 1994, ch. 409, § 8, effective July 15, 1994.

45A.867. Emergency procedure.

  1. Notwithstanding the other provisions of KRS 45A.840 to 45A.879 , this section shall govern the selection of an underwriter or a bond counsel in the case of a bona fide emergency.
  2. A bona fide emergency shall be deemed to exist only where the executive director has certified to the secretary of the Finance and Administration Cabinet that an emergency, threatening substantial interests of the Commonwealth, has arisen from:
    1. A change in the federal tax law; or
    2. A situation other than a change in the federal tax law, and the secretary of the Finance and Administration Cabinet has stated in writing that he has independently concluded that the situation constitutes an emergency which threatens substantial interests of the Commonwealth.
    1. The cabinet secretary shall forward to the Capital Projects and Bond Oversight Committee the certificate created pursuant to subsection (2)(a) of this section or the certificate and the secretary’s independent conclusion written pursuant to subsection (2)(b) of this section. (3) (a) The cabinet secretary shall forward to the Capital Projects and Bond Oversight Committee the certificate created pursuant to subsection (2)(a) of this section or the certificate and the secretary’s independent conclusion written pursuant to subsection (2)(b) of this section.
    2. The secretary shall also confer with the executive director to determine what measures should be taken to select an underwriter or a bond counsel.
  3. Within thirty (30) days of the selection of an underwriter or a bond counsel pursuant to this section, the executive director, or his designee, shall appear before the Capital Projects and Bond Oversight Committee to report on the emergency selection. The report shall include:
    1. The materials referred to in subsection 3(a) of this section;
    2. His own description of the bona fide emergency;
    3. The procedure used for selecting the underwriter or bond counsel;
    4. The nature of the services that the underwriter or bond counsel will provide;
    5. The length of time for which the firm will provide these services; and
    6. The costs connected with employing the underwriter or bond counsel.

History. Enact. Acts 1994, ch. 409, § 9, effective July 15, 1994.

45A.870. Procedure to take advantage of an innovation developed by a firm.

  1. Notwithstanding the other provisions of KRS 45A.840 to 45A.879 , this section shall govern the selection of an underwriter or a bond counsel to take advantage of an innovation developed by that firm.
  2. The executive director may discuss with an underwriter or a bond counsel an innovation which the firm has developed or is developing.
  3. If the executive director concludes that the Commonwealth will benefit from using the innovation, then the executive director shall negotiate with the firm for it to provide the innovation to the Commonwealth in exchange for the firm’s employment on certain bond issues.
  4. After an agreement is reached, but before it is executed, the executive director shall seek the review and recommendation of the Capital Projects and Bond Oversight Committee.
  5. If the committee does not recommend the agreement, the agreement shall be referred to the secretary of the Finance and Administration Cabinet who shall:
    1. Revise the agreement in consideration of the committee’s objections;
    2. Cancel the agreement; or
    3. Determine to enter into the agreement.
  6. Within thirty (30) days after the secretary reaches his decision, it shall be transmitted to the committee.

History. Enact. Acts 1994, ch. 409, § 10, effective July 15, 1994.

45A.873. Preference for Kentucky firms. [Repealed.]

Compiler’s Notes.

This section (Enact. Acts 1994, ch. 409, § 11, effective July 15, 1994) was repealed by Acts 2010, ch. 162, § 25, effective July 15, 2010.

45A.877. Reimbursement of underwriters for counsel retained by them for bond issuance — Prohibition against state employee’s recommending selection.

  1. The office shall establish and maintain a schedule of rates at which underwriters will be reimbursed for fees and expenses of counsel they retain for a bond issuance.
  2. Employees of the Commonwealth shall be prohibited from directly or indirectly recommending the selection of the underwriter’s counsel. This section shall not be deemed to prohibit the creation of a list of qualified firms to assist underwriters in the selection of their counsel or from otherwise making general information regarding law firms available to underwriters.
  3. For each bond issuance, the secretary of the Finance and Administration Cabinet and the executive director shall certify to the Capital Projects and Bond Oversight Committee that neither they, or, to the best of their knowledge, anyone involved in the selection process, attempted to recommend the hiring of any law firm by an underwriter.
  4. If the Capital Projects and Bond Oversight Committee determines that an employee of the Commonwealth has, at the request of a law firm, recommended the selection of an underwriter’s counsel relating to a bond issuance in an attempt to exercise influence on the selection process, the committee shall recommend to the secretary of the Finance and Administration Cabinet that the firm be prohibited from serving as bond counsel or underwriter’s counsel for a bond issuance for a period of two (2) years, commencing on the date of the determination. The secretary shall follow the recommendation or submit the reasons for not following the recommendation in writing to the committee.

History. Enact. Acts 1994, ch. 409, § 12, effective July 15, 1994.

45A.879. Administrative regulations to be promulgated by January 1, 1995.

By January 1, 1995, the office shall promulgate administrative regulations to carry out the provisions of KRS 45A.840 to 45A.879 .

History. Enact. Acts 1994, ch. 409, § 13, effective July 15, 1994.

Penalties

45A.990. Penalties.

  1. Any violation of KRS 45A.045 shall be deemed a Class D felony.
  2. Any person who violates any of the provisions of KRS 45A.325 shall be guilty of a Class D felony. Any firm, corporation, or association which violates any of the provisions of KRS 45A.325 shall, upon conviction, be fined not less than ten thousand dollars ($10,000) nor more than twenty thousand dollars ($20,000).
  3. Any person who violates any provisions of KRS 45A.330 to 45A.340 shall be guilty of a Class B misdemeanor, and in addition he shall be adjudged to have forfeited any statutory office or employment which he may hold.
  4. Any willful violation of KRS 45A.690 to 45A.725 shall be a Class A misdemeanor.
  5. Any person who willfully violates this code shall be guilty of a Class A misdemeanor.
  6. Any employee or any official of the Commonwealth of Kentucky, elective or appointive, who shall take, receive, or offer to take or receive, either directly or indirectly, any rebate, percentage of contract, money, or other things of value, as an inducement or intended inducement, in the procurement of business, or the giving of business, for, or to, or from, any person, partnership, firm, or corporation, offering, bidding for, or in open market seeking to make sales to the Commonwealth of Kentucky, shall be deemed guilty of a Class C felony.
  7. Every person, firm, or corporation offering to make, or pay, or give, any rebate, percentage of contract, money or any other thing of value, as an inducement or intended inducement, in the procurement of business, or the giving of business, to any employee or to any official of the Commonwealth, elective or appointive, in his efforts to bid for, or offer for sale, or to seek in the open market, shall be deemed guilty of a Class C felony.
  8. Criminal penalties for violations of the laws which are in existence on January 1, 1980, shall not be impaired.
  9. This section shall not apply to any officer or employee of a political subdivision, including a school district, nor to the procurement activities of any such political subdivision unless such political subdivision has elected to operate under KRS 45A.345 through 45A.460 .

History. Enact. Acts 1978, ch. 110, §§ 69, 94; 1980, ch. 40, § 3, effective March 12, 1980; 1980, ch. 250, § 17, effective April 9, 1980; 1990, ch. 496, § 22, effective July 13, 1990; 1992, ch. 463, § 7, effective July 14, 1992.

CHAPTER 46 Report and Accounting of State Funds by Local Officers

46.010. Uniform system of accounting and reporting of state funds by local officers.

  1. The Department for Local Government shall prescribe and keep in operation a uniform system of accounting and reporting on the receipt, use and handling of all public funds, other than taxes, due and payable to the state from county, district, and other local officers and agencies.
  2. The system so adopted shall require each county treasurer, and each county officer who receives or disburses state funds, to keep an accurate account of receipts and disbursements, showing a daily balance of receipts and disbursements.
  3. The system shall require all county officers handling state funds, other than taxes, to make an annual report to the Department for Local Government showing receipts and disbursements, and to make other financial statements as the Department for Local Government requires.
  4. The Department for Local Government, subject to the approval of the Governor, may from time to time change the system, or any book, report, form, or record provided for by the system, whenever in its opinion a change is necessary in order to conform to existing conditions.

History. 4606a-1, 4606a-6: amend. Acts 1974, ch. 74, Art. II, § 9(1); 1986, ch. 374, § 8, effective July 15, 1986; 1998, ch. 69, § 19, effective July 15, 1998; 2007, ch. 47, § 31, effective June 26, 2007; 2010, ch. 117, § 37, effective July 15, 2010.

Research References and Practice Aids

Cross-References.

Certificate of delinquency redeemed by payment to state, how payment reported and accounted for, KRS 134.450 , 134.480 .

Collection of public claims by action, KRS Ch. 135.

Constitutional provisions as to report and accounting of state funds, Ky. Const., § 53.

Fees of county officers, when to be accounted for and paid into State Treasury:

Circuit clerk, county clerk, sheriff and jailer in certain counties, KRS 64.345 .

Fines, forfeitures and officers’ fees, sheriff to collect and account for, KRS 6.071 , 70.090 .

Motor vehicle operator’s license fees:

Circuit clerk to report and pay into State Treasury, KRS 186.400 , 186.490 .

Penalties for failure of clerk to report and pay in, disposition of, KRS 186.490 .

Motor vehicle registration and chauffeur’s fees:

County clerk to report and pay into State Treasury, KRS 186.230 , 186.240 .

Penalties for failure of clerk to report and pay in, disposition of, KRS 186.230 .

Receipts of state budget units, how collected and accounted for, KRS 45.260 .

Receipts of state budget units to be deposited directly in State Treasury, KRS 41.070 .

Receipts to be given to persons paying money into State Treasury, KRS 41.100 .

Revenue Cabinet, functions of:

Actions against delinquent collecting officers, KRS 135.060 .

Investigation of records and accounts of collecting officers, KRS 131.210 .

System of uniform accounts for counties and county officers, Revenue Cabinet to prescribe and install, KRS 68.210 , 131.140 .

Taxes, when sheriff or collector to report and pay into State Treasury, KRS 134.320 .

Tax forms and records, department of revenue to prescribe use and manner of keeping, KRS 131.130 .

Textbooks, money received from sale of to pupils, how accounted for, KRS 157.170 .

Tobacco warehouse license fees, how collected and paid into State Treasury, KRS 248.290 .

46.020. Books and forms for system of uniform accounting.

The Department for Local Government shall prepare, and shall cause to be printed and paid for in the same manner as other books, blanks, and records for counties and county officers, all books, blanks, and records necessary for the system of uniform accounting established under KRS 46.010 . The Department for Local Government shall deliver to each county, district, or other local officer charged with the duty of collecting, disbursing, or handling state funds the books, blanks, and records as are necessary for that officer. Each county, district, or other local officer receiving the books, blanks, or records shall use them in the performance of his duties with reference to the handling and disbursing of state funds. Any of these books, blanks, or records used by state officers or employees shall be printed and paid for in the same manner as other state printing.

History. 4606a-3, 4606a-4: amend. Acts 1974, ch. 74, Art. II, § 9(1); 1986, ch. 374, § 9, effective July 15, 1986; 1998, ch. 69, § 20, effective July 15, 1998; 2007, ch. 47, § 32, effective June 26, 2007; 2010, ch. 117, § 38, effective July 15, 2010.

NOTES TO DECISIONS

Cited:

State Budget Com. v. Adams, 249 Ky. 680 , 61 S.W.2d 314, 1933 Ky. LEXIS 584 ( Ky. 1933 ).

46.030. Records of state funds collected by local officers.

  1. Each circuit clerk and each county clerk shall keep a well-bound book in his office, and shall enter therein at the time it is receivable, or when received, all tax on suits and other money received by him for the state, showing of whom received, on what account, the amount received, and the date. The books so kept shall at all times be open to public inspection.
  2. All county and district officers charged with the duty of collecting funds due the state shall keep a cash book and shall enter thereon, as collected, the amounts collected, from whom and on what account collected, and the date and amounts of payments into the State Treasury.

History. 4243, 4701a-2: amend. Acts 1976 (Ex. Sess.), ch. 14, § 14, effective January 2, 1978.

NOTES TO DECISIONS

1.Judges and Court Clerks.

Judges and court clerks must maintain records of receipts. National Surety Co. v. Commonwealth, 253 Ky. 607 , 69 S.W.2d 1007, 1934 Ky. LEXIS 694 ( Ky. 1934 ).

2.Sheriffs.

Sheriffs must maintain records of receipts. Shipp v. Rodes, 196 Ky. 523 , 245 S.W. 157, 1922 Ky. LEXIS 565 ( Ky. 1922 ).

3.Bond Recorders.

Bond recorders of first-class cities are required to keep a record of collections. Commonwealth use of Louisville v. Ross, 135 Ky. 315 , 122 S.W. 161, 1909 Ky. LEXIS 290 ( Ky. 1909 ).

46.040. When funds to be reported and paid in.

Except as provided in KRS 134.191 , all county, district and other local officers authorized to collect money for the state shall, on the last day of each month, report to the Finance and Administration Cabinet and pay into the State Treasury all such funds on hand.

History. 4606a-5: amend. Acts 1974, ch. 74, Art. II, § 9(1); 2009, ch. 10, § 55, effective January 1, 2010.

NOTES TO DECISIONS

1.In General.

This section imposes a new duty on collecting officers, but does not affect their authority to collect. National Surety Co. v. Commonwealth, 253 Ky. 607 , 69 S.W.2d 1007, 1934 Ky. LEXIS 694 ( Ky. 1934 ).

46.050. Fines and forfeitures collected by circuit clerk, how paid in and accounted for. [Repealed.]

Compiler’s Notes.

This section (2290-1) was repealed by Acts 1968, ch. 152, § 168.

46.060. Report of judgments in favor of state. [Repealed.]

Compiler’s Notes.

This section (4246) was repealed by Acts 1976, ch. 28, § 4.

46.070. Proceedings against state debtors and delinquent officers collecting state funds.

The Finance and Administration Cabinet shall report to the Attorney General all public officers or public debtors who fail to render their accounts at the proper time, or to pay the money in their hands due the state into the State Treasury, and shall cause actions to be brought against them. If in any such action it is found that nothing is due the state, the defendant shall nevertheless pay the costs.

History. 145: amend. Acts 1974, ch. 74, Art. II, § 9(1).

Opinions of Attorney General.

Although the Attorney General shall institute any necessary actions to collect and cause the payment into the Treasury of all unsatisfied claims and accounts and judgments in favor of the Commonwealth, KRS 15.060 does not apply to the collection of those fines and forfeitures adjudged by the county judge (now county judge/executive) such as the forfeiture of a replevin bond. OAG 68-526 .

Where a Circuit Court Clerk has not sent all of the excess fees in his office to the Finance Department (now Finance and Administration Cabinet), a state claim, as mentioned in KRS 15.060 and this section, would generally not arise and the Attorney General’s office would not be required to pursue the collection of such accounts. OAG 70-604 .

Research References and Practice Aids

Cross-References.

Costs not to be taxed against state, KRS 453.010 .

46.080. Jurisdiction of violations.

The Franklin Circuit Court shall have concurrent jurisdiction of all civil and criminal actions brought to enforce any of the provisions of subsection (2) of KRS 46.030 or of subsection (1) of KRS 46.990 .

History. 4701a-5.

46.990. Penalties.

  1. Any county or district officer authorized by law to make collections of funds for the state who fails or refuses to pay over to the state the funds so collected at the time he is required by law to report the collections to any state department shall be required to pay a penalty of ten percent (10%) on all funds not so paid.
  2. Any officer who fails or neglects to perform any duty required of him by KRS 46.030(1) shall be fined not less than fifty dollars ($50) nor more than one hundred dollars ($100) for each offense.
  3. Any officer who fails to use any book, blank, or record required to be used under KRS 46.020 , or who willfully refuses to make any report required by the Department for Local Government under the provisions of KRS 46.010 or 46.020 , shall be subject to indictment in the Franklin Circuit Court, and upon conviction shall be fined not less than twenty-five dollars ($25) nor more than five hundred dollars ($500) for each offense.

History. 4248, 4606a-3, 4701a-3: amend. Acts 1974, ch. 74, Art. II, § 9(1); 1976, ch. 28, § 3; 1986, ch. 374, § 10, effective July 15, 1986; 1998, ch. 69, § 21, effective July 15, 1998; 2007, ch. 47, § 33, effective June 26, 2007; 2010, ch. 117, § 39, effective July 15, 2010.

Research References and Practice Aids

Kentucky Law Journal.

Moreland, Criminal Jurisdiction of the Kentucky Courts: A Tentative Codification, 47 Ky. L.J. 7 (1958).

CHAPTER 47 Appropriations

Continuing Appropriations

47.010. State revenue, to what funds credited.

  1. Except as provided in this chapter and in KRS 342.480 , all state revenue shall be credited to the general fund.
  2. All revenues realized from the gasoline tax imposed by KRS 138.220 or from any gasoline tax hereafter imposed by law, shall be credited to the state road fund.
  3. All fees and taxes collected under the provisions of KRS Chapter 281, and all revenue realized from any motor bus license tax hereafter imposed by law, shall be credited to the state road fund.
  4. All funds appropriated by law to revolving funds pursuant to the provisions of KRS 45.253 shall be credited to such revolving funds.
  5. All funds collected under the provisions of KRS 278.120 to 278.150 for the support of the Public Service Commission shall be credited as provided in those sections.

History. 2739g-63, 2739j-44, 2739L-16, 4281g-3, 4281h-3, 4281w-1 to 4281w-3, 4356t-26: amend. Acts 1942, ch. 78, § 11(3); 1962, ch. 210, § 7; 1966, ch. 255, § 55; 1978, ch. 379, § 56, effective April 1, 1979; 1980, ch. 188, § 17, effective July 15, 1980; 1984, ch. 111, § 40, effective July 13, 1984.

Compiler’s Notes.

KRS 342.480 referred to in subsection (1) of this section has been repealed.

Research References and Practice Aids

Cross-References.

Act or resolution to appropriate money, vote of majority of each house required for, Ky. Const., § 46.

Appropriation bill, Governor may veto separate items, Ky. Const., § 88.

Auditors, accountants and skilled or professional and employed by Governor, when compensation and expenses charged against appropriation of department or agency, KRS 11.110 .

Budget and financial administration, KRS ch. 45.

Cities other than first-class, finance and revenue of, KRS Ch. 92.

Claim against state, when General Assembly may appropriate money to pay, Ky. Const., § 58.

Claims upon the Treasury, KRS Ch. 44.

County finance and county treasurer, KRS ch. 68.

County or district Cabinet for Health and Human Services, annual allocation of funds to, KRS 212.120 .

County roads, allocation of state appropriation for, KRS 179.410 et seq.

Finance and Administration Cabinet, KRS Ch. 42.

Department of the Treasury, KRS Ch. 41.

First-class cities, finance and revenue of, KRS Ch. 91.

Lapsing of appropriations, KRS 45.229 .

Money derived from excise or license taxation relating to gasoline and other motor fuels, and from fees, excise or license taxation relating to registration, operation or use of motor vehicles, to go to road fund, Ky. Const., § 230.

Money not to be withdrawn from State Treasury except by appropriation, Ky. Const., § 230; KRS 41.110 .

Motor vehicle license fees go to road fund, KRS 186.240 .

Schools, funds raised for:

Church, sectarian or denominational school, school funds not to be appropriated to, Ky. Const., § 189.

Distribution of school funds, Ky. Const., § 186.

Diversion of school funds forbidden, Ky. Const., § 184.

Incidental expenses not to be paid out of school fund, KRS 157.030 .

Kentucky Law Journal.

Garrison and Martin, History of Kentucky Commercial Motor Vehicle Transportation Tax Legislation, 33 Ky. L.J. 3 (1944).

47.011. Coin machine tax revenue to be credited to general fund. [Repealed.]

Compiler’s Notes.

This section (Enact. Acts 1948, ch. 110, § 11; 1962, ch. 210, § 8) was repealed by Acts 1994, ch. 13, § 3, effective June 30, 1994.

47.012. Pari-mutuel tax revenue to be credited to general fund.

All moneys paid to the Department of Revenue under the provisions of KRS 138.510 to 138.550 shall be deposited with the State Treasurer and be credited to the general expenditure fund.

History. Enact. Acts 1948, ch. 35, § 6; 2005, ch. 85, § 76, effective June 20, 2005.

47.020. Motor truck registration fees, distribution among counties.

Thirty percent (30%) of all revenue raised by the tax imposed by subsections (3) through (14) of KRS 186.050 shall be evenly distributed among all the counties for the county road funds.

History. 2739g-2d, 4281w-3: amend. Acts 1944, ch. 59, § 2; 1966, ch. 139, § 1; 1974, ch. 68, § 1.

NOTES TO DECISIONS

1.Disposition of Funds.

Money received by a county under this section should not be mingled with general funds charging all expenditures against a single fund but where disbursements on this account are larger than receipts the difference can be charged against the general revenues as a portion of the regular tax rate available for county road purposes. Fulton County Fiscal Court v. Southern Bell Tel. & Tel. Co., 285 Ky. 17 , 146 S.W.2d 15, 1940 Ky. LEXIS 591 ( Ky. 1940 ).

No part of the motor truck registration fees which is required to be distributed to the counties under this section is committed for payment of bonded debt to match federal funds because that part of the receipts never gets into the “State Road Fund” which is the resource of the bonded debt specified in the law providing for construction of highways, bridges and tunnels. Dalton v. State Property & Bldgs. Com., 304 S.W.2d 342, 1957 Ky. LEXIS 276 ( Ky. 1957 ).

Opinions of Attorney General.

A county may not maintain an area around county schools for the purpose of parking. Road money must be spent for roads and cannot be diverted to some other purpose. OAG 69-100 .

Although the General Assembly amended KRS 186.050 to add subsection (14) providing for proportional registration of motor vehicles engaged in interstate commerce upon agreement with other jurisdictions, but did not amend this section to include subsection (14) of KRS 186.050 , it is clear the legislature intended to share all fees collected under the provisions of KRS 186.050 with the counties, except for those fees collected under subsections (1) and (2), and thus the fees collected pursuant to KRS 186.050 (14) are required to be included with all fees distributable pursuant to this section. OAG 73-428 (opinion prior to 1972 amendment).

47.030. Appropriation to Department of Revenue for enforcement of laws relating to alcoholic beverages. [Repealed.]

Compiler’s Notes.

This section (2554e-11) was repealed by Acts 1944 (2nd Ex. Sess.), ch. 1, Part Four, 3.

47.040. Kentucky Aeronautics Commission; revolving fund. [Repealed.]

Compiler’s Notes.

This section (165-56) was repealed by Acts 1944 (2nd Ex. Sess.), ch. 1, Part Four, 3.

47.050. Stockyard license fees; revolving fund. [Repealed.]

Compiler’s Notes.

This section (63d-9) was repealed by Acts 1944 (2nd Ex. Sess.), ch. 1, Part Four, 3.

47.060. Tobacco warehouse license fees; revolving fund. [Repealed.]

Compiler’s Notes.

This section (4814c-16) was repealed by Acts 1944 (2nd Ex. Sess.), ch. 1, Part Four, 3.

47.070. Revolving fund for Division of Banking. [Repealed.]

Compiler’s Notes.

This section (165a-9) was repealed by Acts 1944 (2nd Ex. Sess.), ch. 1, Part Four, 3.

47.080. Fees and penalties under credit union law; how appropriated. [Repealed.]

Compiler’s Notes.

This section (883g-6) was repealed by Acts 1944 (2nd Ex. Sess.), ch. 1, Part Four, 3.

47.090. Fees for appointing railroad policemen; revolving fund. [Repealed.]

Compiler’s Notes.

This section (779a-2) was repealed by Acts 1944 (2nd Ex. Sess.), ch. 1, Part Four, 3.

47.100. Fees for appointing special local peace officers; revolving fund. [Repealed.]

Compiler’s Notes.

This section (3766a-22) was repealed by Acts 1944 (2nd Ex. Sess.), ch. 1, Part Four, 3.

47.110. Percentage of tax on marriage licenses and conveyances to be distributed among counties.

Twelve and one-half percent (12.5%) of the revenue received from the taxes imposed by paragraphs (a) and (b) of subsection (1) of KRS 142.010 , shall be returned to the county in which the tax was paid and be credited to the general fund of the county.

History. Enact. Acts 1948, ch. 113, § 1.

Research References and Practice Aids

Cross-References.

Withholding from county’s share for cost of auditing, KRS 43.070 .

47.115. Commonwealth’s attorneys’ expense account — Advancement of funds — Repayment — Disposition of surplus. [Repealed.]

Compiler’s Notes.

This section (Enact. Acts 1956, ch. 37, § 3) was repealed by Acts 1976 (Ex. Sess.), ch. 17, § 52, effective January 1, 1978.

47.120. Judicial Expense Account. [Repealed.]

Compiler’s Notes.

This section (Enact. Acts 1948, ch. 61, §§ 4, 5) was repealed by Acts 1950, ch. 123, § 29.

47.130. Agency fund account for administration of securities law. [Repealed.]

Compiler’s Notes.

This section (Enact. Acts 1950, ch. 179, § 4) was repealed by Acts 1982, ch. 251, § 18, effective April 1, 1982. For present law, see KRS 287.485 .

CHAPTER 48 Budget

48.005. Public accountability for funds or assets recovered by duly elected statewide constitutional officers through judgment or settlement — Applicability of Open Records and Open Meetings Laws — Administration and disbursement of trust funds or assets by Office of the Controller — Exceptions — Costs of litigation — Limitation regarding constitutional challenge.

  1. The General Assembly hereby finds and declares that:
    1. Public accountability for funds or other assets recovered in a legal action by or on behalf of the general public, the Commonwealth, or its duly elected statewide constitutional officers is appropriate and required, whether the character of the assets or funds recovered is public or private;
    2. Accountability for assets or funds recovered by duly elected statewide constitutional officers is essential to the public trust, and is even more critical when that officer was a party to the action that resulted in the recovery by virtue of the public office he or she holds;
    3. Public accountability demands the applicability of the Kentucky Model Procurement Code, KRS Chapter 45A, Kentucky Open Records Law, KRS 61.870 to 61.884 , and the Kentucky Open Meetings Law, KRS 61.805 to 61.850 , so that the actions of individuals or agencies who are charged with the administration of funds or other assets are conducted in full view, and are open to public scrutiny; and
    4. The power to appropriate funds for public purposes is solely within the purview of the legislative branch of government, and the General Assembly, as a steward of the budgetary process, shall take steps to assure that future settlements are handled in a manner that assures maximum accountability to the citizens of the Commonwealth and their duly elected legislative representatives.
  2. Therefore, any other provision of the common law or statutory law to the contrary notwithstanding:
    1. The provisions of subsection (3) of this section shall apply whenever the Attorney General or other duly elected statewide constitutional officer is a party or has entered his appearance in a legal action on behalf of the Commonwealth of Kentucky, including ex rel. or other type actions, and a disposition of that action has resulted in the recovery of funds or assets to be held in trust by the Attorney General or other duly elected statewide constitutional officer or a person, organization, or entity created by the Attorney General or the Commonwealth, through court action or otherwise, to administer the trust funds or assets, for charitable, eleemosynary, benevolent, educational, or similar public purposes;
    2. Except as otherwise provided in paragraph (a) of this subsection, the provisions of subsection (4) of this section shall apply when any funds or assets of any kind or nature whatsoever, including but not limited to public funds as defined in KRS 446.010 and private funds or assets are recovered by judgment or settlement of a legal action by or on behalf of the Commonwealth of Kentucky, including ex rel. or other type actions filed by a duly elected statewide constitutional officer under that officer’s statutory or common law authority.
  3. Whenever the Attorney General or other duly elected statewide constitutional officer is a party to or has entered his appearance in, a legal action on behalf of the Commonwealth of Kentucky, including ex rel. or other type actions, and a disposition of that action has resulted in the recovery of funds or assets to be held in trust by the Attorney General or other duly elected statewide constitutional officer or by a person, organization, or entity created by the Attorney General, or the Commonwealth, through court action or otherwise, to administer the trust funds or assets, for charitable, eleemosynary, benevolent, educational, or similar public purposes, those funds shall be deposited in the State Treasury and the funds or assets administered and disbursed by the Office of the Controller.
  4. The Office of Attorney General may first recover its reasonable costs of litigation, as determined by the court and approved by the secretary of the Finance and Administration Cabinet. After recovering the reasonable costs of litigation, any required consumer restitution or payments shall be made. All remaining funds shall be deposited in the general fund surplus account. Any costs recovered under this subsection shall be reported to the Interim Joint Committee on Appropriations and Revenue.
  5. The common law, including the common law authority of any duly elected statewide constitutional officer, is specifically abrogated to the extent it is inconsistent with the provisions of this section.
  6. Notwithstanding any statute or common law to the contrary, and except as provided in this subsection, an elected statewide constitutional officer or any other state official or agency shall not file or participate as a plaintiff, petitioner, party, intervening party, attorney, or amicus curiae in any litigation challenging the constitutionality of this section. State funds and employee time shall not be expended by any person or agency in support of such a challenge. If the constitutionality of this section is challenged, the Finance and Administration Cabinet shall be the sole named respondent in that litigation, and shall consult with the Legislative Research Commission regarding defense of that litigation.

HISTORY: Enact. Acts 2000, ch. 483, § 1, effective April 21, 2000; 2009, ch. 12, § 29, effective June 25, 2009; 2012, ch. 110, § 9, effective April 11, 2012; 2018 ch. 87, § 2, effective July 14, 2018.

Research References and Practice Aids

Kentucky Law Journal.

Frost, Financing Public Health Through Nonprofit Conversion Foundations, 90 Ky. L.J. 935 (2001-02).

2020-2022 Budget Reference.

See State/Executive Branch Budget, 2021 Ky. Acts ch. 169, Pt. I, H, 1, (1) at 1098.See State/Executive Branch Budget, 2021 Ky. Acts ch. 169, Pt. V, A, 5 at 1157.

48.010. Definitions for chapter.

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

  1. “Account” is a technical accounting term meaning a formal record in which related transactions and events, (i.e., expenditures, receipts, encumbrances, and inter-account charges or credits) which occur during a specific period of time, are summarized and accumulated;
  2. “Activities” means those actions or services performed by a budget unit which depict in a quantitative manner the fulfillment of lawful purposes;
  3. Appropriation-related terms are defined for procedures prescribed by this chapter as follows:
    1. “Appropriation” means an authorization by the General Assembly to expend a sum of money not in excess of the sum specified, for the purposes specified in the authorization and under the procedure prescribed in this chapter;
    2. “Appropriation provision” means a section of any enactment by the General Assembly which is not provided for by this chapter and which authorizes the expenditure of funds other than by a general appropriation bill; and
    3. “General appropriation bill” means an enactment by the General Assembly that authorizes the expenditure of funds in a branch budget bill as provided for by this chapter;
  4. “Biennial highway construction plan” means the specifically identified individual transportation projects or portions thereof identified for funding during the upcoming biennium, which correspond to the first two (2) years of the six (6) year road plan;
  5. “Budget” means the complete financial plan for each fiscal year contained in a branch budget bill provided for by this chapter;
  6. “Branch budget bill” or “branch budget” means an enactment by the General Assembly which provides appropriations and establishes fiscal policies and conditions for the biennial financial plan for the judicial branch, the legislative branch, and the executive branch, which shall include a separate budget bill for the Transportation Cabinet;
  7. “Branch budget recommendation” means the recommendations made to the General Assembly by:
    1. The Governor for the executive branch, including a separate recommendation for the Transportation Cabinet;
    2. The Chief Justice for the judicial branch; and
    3. The Legislative Research Commission for the legislative branch;
  8. “Budget unit request” means a detailed statement of the financial requirements of a budget unit by principal budget class, and an estimate of its receipts and expenditures for the next two (2) fiscal years, with the accompanying explanations provided for by this chapter;
  9. “Budget unit” or “appropriation unit” means any subdivision of any branch of government, however designated in any branch budget bill;
  10. “Capital outlay” means the exchange of values involved in acquiring lands, buildings, equipment, or other permanent properties, or in their construction, development, or permanent improvement;
  11. “Consensus forecasting group” means the group established by KRS 48.115 that is responsible for developing consensus revenue forecasts for the Commonwealth;
  12. “Disbursement” means cash actually paid out for any purpose;
  13. “Enacted estimates” means the revenue estimates used by the General Assembly as the basis for appropriations made in the enacted branch budget bills;
  14. “Expenditure” means cash actually paid out or an exchange of value for any purpose;
  15. “Fund” means an independent fiscal and accounting entity with a self-balancing set of accounts recording cash or other resources or both together with all related liabilities, obligations, reserves, and equities which are segregated for the purpose of carrying on specific activities in accordance with legal restrictions or other limitations, to include:
    1. “General Fund.” This fund shall consist of all moneys, not otherwise restricted, available for the general operations of state government;
    2. “Bond Debt Related Fund.” This fund shall consist of all outstanding bonded debt liability and related funds of state government, including all revenue bonds issued by or approved by the State Property and Buildings Commission. Accounts necessary to assure integrity of trust indentures shall be maintained. Funds appropriated for debt service shall be allotted to these accounts and any excess of appropriation over net requirements for principal, interest, and reserves for any issue shall lapse to the surplus account of the general fund if general funds are a part of the appropriation for that budget unit;
    3. “Capital Construction Fund.” This fund shall consist of moneys appropriated under the provision of KRS 45.750 to 45.800 for capital construction projects, except road construction projects, for all budget units of state government;
    4. “Federal Fund.” This fund shall include all receipts from the federal government for any purpose;
    5. “Fiduciary Fund.” This fund shall consist of moneys held by a budget unit in a trustee capacity;
    6. “Restricted Fund.” This fund shall consist of budget unit receipts restricted as to purpose by statute; and
    7. “Road Fund.” This fund shall consist of money derived from excise or license taxation relating to gasoline and other motor fuels, and moneys derived from fees, excise or license taxation relating to registration, operation, or use of vehicles for use on public highways. A separate record of each source of receipt within this fund group shall be maintained;
  16. “Principal budget class” includes the following:
    1. “Capital outlay” means the exchange of values involved in acquiring lands, buildings, or other permanent properties, or in their construction, development, or permanent improvement estimated to cost less than six hundred thousand dollars ($600,000), and items of equipment or other capital items estimated to cost less than two hundred thousand dollars ($200,000);
    2. “Debt service” means the amount of money required to pay the interest, principal, and required contributions to accumulate moneys for future retirement of lawfully incurred debt;
    3. “Grants, loans, or benefits” means expenditures for any grant, aid, loan, or relief payment to individuals, organizations, or jurisdictions not otherwise classified pursuant to this chapter;
    4. “Operating expenses” means expenditures directly attributable to the operation of state government not otherwise classified pursuant to this chapter; and
    5. “Personnel costs” means the salaries, wages, benefits (including but not limited to, employer share of FICA, retirement contributions, insurance, unemployment insurance, workers’ compensation), and increments of all officers and employees, and payment to persons awarded personal service contracts;
  17. “Receipts” includes the following:
    1. “Nonrevenue receipts” means values accruing that either decrease an asset or create a liability;
    2. “Operating receipts” means cash received by a budget unit for services rendered, or from the sale of materials, goods, or supplies created by the budget unit or of items held for resale; and
    3. “Revenue receipts” means values accruing as a result of taxation or revenues, or both, and without resultant increase in liabilities or decrease in assets, whether such values are represented by cash actually received or by amounts due and payable, or partly by each;
  18. “Revenue shortfall” means either:
    1. An official revenue estimate for either the general fund or road fund that is less than the enacted estimates; or
    2. Actual receipts at the end of the fiscal year for either the general fund or road fund that are less than the enacted estimates, as determined by the Office of State Budget Director;
  19. “Surplus” means the undesignated fiscal year ending fund balance for the general fund or road fund, reduced by amounts designated to carry forward for appropriation in a subsequent fiscal year;
  20. “Six (6) year road plan” means the road plan developed under KRS 176.430 ; and
  21. “Writing” or “written” means 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.

History. Enact. Acts 1982, ch. 450, § 1, effective July 1, 1983; 1990, ch. 507, § 5, effective July 13, 1990; 1994, ch. 31, § 4, effective July 15, 1994; 1994, ch. 387, § 1, effective July 15, 1994; 1998, ch. 120, § 21, effective July 15, 1998; 2009, ch. 78, § 1, effective June 25, 2009.

NOTES TO DECISIONS

1.Game and Fish Commission.

The game and fish commission is a “budget unit.” Game & Fish Com. v. Talbott, 251 Ky. 268 , 64 S.W.2d 889, 1933 Ky. LEXIS 850 ( Ky. 1933 ) (decided under prior law).

Opinions of Attorney General.

Bond proceeds and subsequent receipts that go toward debt service, and state agency bond issues for which no request of state funds is anticipated, should be deposited in a state depository as a part of the Treasury system; bond moneys include bond proceeds (sale of bonds) and project revenues. OAG 83-241 .

Proceeds of general obligation bonds and revenue bonds should be deposited directly into the State Treasury system, i.e., into properly established state depositories subject to fund accounting pursuant to KRS 41.070 (using depositories in the most prompt and cost efficient manner available) and KRS subdivision (13)(b) of this section. OAG 83-241 .

Research References and Practice Aids

Cross-References.

Claims upon the treasury, KRS Ch. 44.

Constitutional provisions as to state financial administration, Ky. Const., §§ 49, 50, 176 to 178, 184, 185, 186.

County budget system, KRS 68.210 et seq.

Finance and Administration Cabinet, functions relating to budget and financial administration, KRS 45.301 .

Interstate compacts or agreements, limit on expenditures under, KRS 12.240 .

Mismanagement of state funds investigation by Finance and Administration Cabinet, KRS 45.131 .

Post-auditing of accounts of state agencies, KRS Ch. 43.

Private funds and contributions, how handled, KRS 41.290 .

Receipts of budget units to be deposited directly in Treasury, KRS 41.070 .

Refund of taxes by Revenue Cabinet, how handled, KRS 134.580 , 134.590 .

Report and accounting of state funds by local officers, KRS Ch. 46.

School fund, Ky. Const., §§ 184 to 186.

Special deposit trust funds, how handled, KRS 41.300 .

State funds, how withdrawn from Treasury, KRS 41.110 .

Tax revenue, to what funds credited, KRS 47.010 , 47.020 .

Treasury administration, KRS Ch. 41.

Warrants, provisions as to, KRS 41.120 to 41.150 .

48.020. Continuous financial planning.

Each branch of government shall have in continuous process of preparation and revision, in the light of its direct studies of the operations, plans and needs of its budget units and of the existing and prospective sources of income, a branch budget recommendation for the next two (2) fiscal years for which a budget recommendation is required to be prepared. Upon receipt of the estimates from its budget units, each branch of government shall check these estimates in the light of its own information, and shall make such further inquiries and investigations and revise its branch budget recommendation as it deems warranted. The branch budget recommendation when approved shall be certified together with the budget statements provided for in KRS 48.110 and submitted as provided for in KRS 48.100 .

History. Enact. Acts 1982, ch. 450, § 2, effective July 1, 1983.

48.025. Tax dollars not to be used to advocate for or against public question on ballot.

Local, state, and federal tax dollars shall not be used to advocate, in partial terms, for or against any public question that appears on the ballot. For purposes of this section, “local” means and includes any city, county, urban-county government, consolidated local government, unified local government, charter county government, or special district.

HISTORY: 2021 ch. 197, § 73, effective June 29, 2021.

Pre-Session Preparation of Requests

48.030. Preparation of branch budget recommendations — Legislative assistance to judicial branch.

  1. Each branch of government, during the preparation of its budget recommendation and before its submission to the General Assembly, shall examine its statements and estimates and shall make or cause to be made such further investigations with such hearings as deemed advisable, and shall direct such changes or revisions as warranted.
  2. Upon request, the Legislative Research Commission shall assist the judicial branch in the preparation of its budget.

History. Enact. Acts 1982, ch. 450, § 3, effective July 1, 1983.

48.040. Budget forms — Projections of actuarially required contribution rates — Executive branch assistance in preparation of budgets.

  1. On or before April 1 of each odd-numbered year, representatives designated by the Governor, the Chief Justice and the Legislative Research Commission for their respective branches shall propose drafts of uniform forms to be used by all budget units in submitting their budget estimates, requests and recommendations, and shall recommend to the Legislative Research Commission such rules and regulations deemed necessary for the preparation of such budget estimates, requests and recommendations.
  2. On or before July 1 of each odd-numbered year, the Legislative Research Commission shall prescribe uniform forms, records, and instructions to be used by branch budget units. Included in such forms shall be a section requiring budget units to identify the amount of funds to be spent on agency publications.
    1. On or before August 15 of each odd-numbered year, each of the state-administered retirement systems as defined by KRS 6.350(5) shall submit to the state budget director’s office and the Legislative Research Commission a preliminary projection of the actuarially required contribution rates payable for the budget biennium that begins in the following fiscal year. (3) (a) On or before August 15 of each odd-numbered year, each of the state-administered retirement systems as defined by KRS 6.350(5) shall submit to the state budget director’s office and the Legislative Research Commission a preliminary projection of the actuarially required contribution rates payable for the budget biennium that begins in the following fiscal year.
    2. On or before November 15 of each odd-numbered year, the state-administered retirement systems as defined by KRS 6.350(5) shall submit revised projections to the state budget director’s office and the Legislative Research Commission, based upon the most recently completed actuarial valuation, of the actuarially required contribution rates payable for the budget biennium that begins in the following fiscal year.
    3. The Legislative Research Commission shall distribute the information received under this subsection to the committee staff and co-chairs of any committee that has jurisdiction over a state-administered retirement system.
  3. On or before September 1 of each odd-numbered year, the Finance and Administration Cabinet shall supply each branch of government with at least three (3) complete sets of the prescribed uniform forms and instructions for the preparation of estimates and statements, and one (1) copy of the complete statement of the expenditures of each budget unit of the branch to aid each branch of government in preparing its estimates and statements.
  4. Upon request, the Finance and Administration Cabinet shall provide such additional assistance to each branch of government as may be required.

History. Enact. Acts 1982, ch. 450, § 4, effective July 1, 1983; 1986, ch. 303, § 1, effective July 15, 1986; 2016 ch. 133, § 7, effective July 15, 2016.

NOTES TO DECISIONS

1.Purpose.

This section provides that the General Assembly, in exercising its constitutional prerogatives with respect to the preparation and adoption of the budget of this commonwealth, directs its agent, the Legislative Research Commission, to prepare certain standardized forms upon which all branches of government shall make their budget requests. This statute provides for a mechanism to provide information to the General Assembly; and it comports with the duty of the General Assembly to approve and adopt a budget. Legislative Research Com. by Prather v. Brown, 664 S.W.2d 907, 1984 Ky. LEXIS 300 ( Ky. 1984 ).

Research References and Practice Aids

Kentucky Law Journal.

Snyder and Irland, The Separation of Governmental Powers Under the Constitution of Kentucky: A Legal and Historical Analysis of L.R.C. v. Brown, 73 Ky. L.J. 165 (1984-85).

48.050. Submission of budget unit requests.

The head of each budget unit shall submit its budget unit request to the Office of State Budget Director, in the case of the executive branch, to the Chief Justice, in the case of the judicial branch, to the director of the Legislative Research Commission, in the case of the legislative branch; and to the Legislative Research Commission, not later than November 15 of each odd-numbered year.

History. Enact. Acts 1982, ch. 450, § 5, effective July 1, 1983; 2009, ch. 78, § 2, effective June 25, 2009.

48.060. Governor-elect and statewide constitutional officers-elect to be informed.

  1. The Governor-elect shall receive all budget unit requests and supporting documentation for the executive branch no later than November 10, of the year of his election. He and those persons named by him shall be entitled to participate in the budget making process for the executive branch.
  2. Any statewide constitutional officers-elect shall, upon request, receive all budget requests and supporting documentation relating to their offices.

History. Enact. Acts 1982, ch. 450, § 6, effective July 1, 1983.

Branch Budget Recommendations

48.100. Submission of branch budget recommendations.

  1. A branch budget recommendation shall be submitted to the General Assembly by the Governor for the executive branch, the Chief Justice for the judicial branch, and the Legislative Research Commission for the legislative branch. The budget recommendations shall be submitted to the General Assembly on or before the tenth legislative day of each even-numbered-year regular session, except in the year following the election of a new Governor when the budget recommendations shall be submitted not later than the fifteenth legislative day of an even-numbered-year regular session.
  2. Budget recommendations shall be submitted on the first day of any extraordinary session called for the purpose of amending a branch budget bill.

History. Enact. Acts 1982, ch. 450, § 7, effective July 1, 1983; 1990, ch. 507, § 6, effective July 13, 1990; 2001, ch. 32, § 1, effective June 21, 2001; 2001, ch. 58, § 1, effective June 21, 2001.

Legislative Research Commission Note.

(6/21/2001). This section was amended by 2001 Ky. Acts chs. 32 and 58, which do not appear to be in conflict and have been codified together.

Research References and Practice Aids

Kentucky Law Journal.

Snyder and Irland, The Separation of Governmental Powers Under the Constitution of Kentucky: A Legal and Historical Analysis of L.R.C. v. Brown, 73 Ky. L.J. 165 (1984-85).

48.110. Contents of branch budget recommendations.

Each branch budget recommendation shall contain a complete financial plan for the branch of government for each of the next two (2) fiscal years. Each branch budget recommendation shall include:

  1. A budget message signed by:
    1. The Governor for the executive branch;
    2. The Chief Justice for the judicial branch; and
    3. The co-chairmen of the Legislative Research Commission for the legislative branch;
    1. Statements of income and receipts for the two (2) fiscal years last concluded, and the estimated income and receipts, for each budget unit of the branch of government for the current fiscal year and each of the next two (2) fiscal years. (2) (a) Statements of income and receipts for the two (2) fiscal years last concluded, and the estimated income and receipts, for each budget unit of the branch of government for the current fiscal year and each of the next two (2) fiscal years.
    2. The statements of income and estimated income shall be itemized by budget unit and fund, and shall show separately receipts from:
      1. Current income;
      2. Refunds and reimbursements of expenditures;
      3. The sale of assets; and
      4. Receipts on account of the income of prior years.
    3. Existing sources of income and receipts shall be analyzed as to their equity, productivity and need for revision, and any proposed new sources of income or receipts shall be explained;
  2. A statement of the surplus in any account and in any special fund of the branch of government. If a surplus exists in any account of the branch of government the statement shall show the excess of all current assets over all current liabilities as of the beginning of each of the two (2) fiscal years last concluded, and all changes in these accounts during each of such two (2) fiscal years;
  3. A statement as of the close of the last completed fiscal year and as of the close of the current fiscal year showing, for each budget unit the total funded debt, the value of sinking fund assets, the net funded debt, the floating liabilities as of the end of the current fiscal year, and the total debt as of the close of the last completed fiscal year and as of the close of the current fiscal year;
  4. Summary and detailed comparative statements of expenditures itemized by budget unit for each of the two (2) fiscal years last concluded and requests for appropriations by funds or accounts, the budget of the current year, and the recommendations for appropriations for each of the next two (2) fiscal years. Following the lists of actual and proposed expenditures of each budget unit there shall be a detailed explanation of the actual and proposed expenditures, to include activities, beneficiaries and expected results of the programs or services of the budget units;
  5. A draft of the proposed branch budget bill containing:
    1. Recommendations of the branch of government for appropriations for the next two (2) fiscal years, and drafts of such revenue and other acts as may be recommended for implementing the proposed financial plan;
    2. Recommended appropriations for extraordinary expenses and capital outlays, which shall be itemized in the proposed branch budget bill for the branch by budget unit. The title of each budget unit shall be worded to limit each appropriation to the specific use or purpose intended;
    3. A plan for the reduction of the branch budget if there is a revenue shortfall of five percent (5%) or less in the general fund or road fund. In recommending budget reductions, the Governor, the Chief Justice, and the Legislative Research Commission shall not recommend universal percentage reductions, but shall weigh the needs of all budget units and shall strive to protect the highest possible level of service in their respective branches. Services which are not essential to constitutional functions shall be subject to reduction. Transfer of funds may be authorized by the budget reduction plan;
      1. A plan for the expenditure of a general fund or road fund surplus of up to two and one-half percent (2.5%). (d) 1. A plan for the expenditure of a general fund or road fund surplus of up to two and one-half percent (2.5%).
      2. The plan shall include provisions for the expenditure of a surplus, and may provide for additional moneys for nonrecurring expenditures for which an appropriation was not made in a branch budget bill, or for a program or service authorized by law for which an appropriation was not made, or which was not fully funded.
      3. In lieu of recommending the appropriation of funds, the plan may instead recommend the retention of surplus funds in the surplus account of the general fund or road fund for investment until appropriated by the General Assembly;
      1. A recommended state capital projects program and a recommended program for the purchase of major items of equipment. (e) 1. A recommended state capital projects program and a recommended program for the purchase of major items of equipment.
      2. The recommended capital construction program shall include:
        1. A complete list and summary description of each specific capital construction project recommended for funding during the biennium; and
        2. For each project:
          1. The agency and purpose for which it will be used;
          2. The justification for the project;
          3. Its estimated completion date;
          4. The total estimated cost of completing the project;
          5. The estimated cost of the project during the biennium;
          6. The recommended sources of funds for the entire project; and
          7. The dollar amounts recommended for appropriation and the dollar amounts, listed by source, that are anticipated from every other source of funds for the biennium.
      3. All information required by subparagraph 2. of this paragraph shall be included in each branch budget recommendation. Each branch budget bill shall contain only a complete list of the specific capital construction projects recommended for funding during the biennium and, for each project, the information specified in subparagraph 2.b.v., vi., and vii. of this paragraph.
      4. A report which details the effect of recommended new debt on the debt position of the Commonwealth shall be submitted at the same time the recommended capital program is submitted. Information shall be presented separately, and in total, for the general fund, road fund, and any affected restricted fund account.
      5. Information in the report shall include but not be limited to the following:
        1. Debt service on existing appropriation-supported debt, as a percentage of anticipated total revenues;
        2. Debt service on existing appropriation-supported debt, as a percentage of anticipated available revenues;
        3. The sum of debt service on existing appropriation-supported debt and debt service on recommended new appropriation-supported debt, as a percentage of anticipated total revenues;
        4. The sum of debt service on existing appropriation-supported debt and debt service on recommended new appropriation-supported debt, as a percentage of anticipated available revenues;
        5. The sum of debt service on existing appropriation-supported debt and debt service on recommended new appropriation-supported debt, as a percentage of estimated state total personal income; and
        6. The sum of existing appropriation-supported debt and recommended new appropriation-supported debt, as a percentage of estimated state total personal income.
      6. The recommended program for the purchase of major items of equipment submitted by the head of each branch of government shall include:
        1. A complete list and summary description of each specific major item of equipment recommended for purchase during the biennium; and
        2. For each major item of equipment:
          1. The agency and purpose for which it will be used;
          2. The justification for the purchase;
          3. The estimated cost of the item, including ancillary expenses and any expenses necessary to make the equipment functional and operational;
          4. The recommended sources of funds; and
          5. The dollar amounts recommended for appropriation and anticipated from every other source of funds for the purchase.
      7. All information required by subparagraph 5. of this paragraph shall be included in the executive branch budget recommendation. The branch budget bill for the executive branch shall contain only a complete list of each specific item of major equipment recommended for purchase during the biennium and, for each item, the information specified in subparagraph 6.b.iii., iv., and v. of this paragraph;
    4. The branch budget recommendation for the Transportation Cabinet shall include the following information:
      1. A separate branch budget bill;
      2. A recommended biennial highway construction plan, which shall be presented as a separate bill, and which shall include a list of individual transportation projects included in the last four (4) years of the six (6) year road plan, not to exceed ten percent (10%) of the recommended biennial highway construction appropriation, which can be advanced if:
        1. Additional funds are received; and
        2. All projects included in the biennial highway construction plan have been advanced or completed to the extent possible; and
      3. The six (6) year road plan. The Governor shall have ten (10) working days after submission of the branch budget recommendation and the recommended biennial highway construction plan to submit the six (6) year road plan. The six (6) year road plan shall be submitted in a form and format cooperatively developed by the Transportation Cabinet and the General Assembly and approved by the Legislative Research Commission; and
      1. In the executive branch budget recommendation, as a separate section, an amount sufficient to meet unexpected contingencies or emergencies, including but not limited to natural or man-made disasters, civil disorders, court orders requiring or resulting in the expenditure of state funds, or other related causes. (g) 1. In the executive branch budget recommendation, as a separate section, an amount sufficient to meet unexpected contingencies or emergencies, including but not limited to natural or man-made disasters, civil disorders, court orders requiring or resulting in the expenditure of state funds, or other related causes.
      2. The amount shall be based on the nature, type, and frequency of named categories of events which may, from past experience, be reasonably anticipated.
      3. This portion of the budget recommendation shall detail similar incidents and the nature and amount of the expenditures for each during the ten (10) years immediately preceding.

        The total amount of appropriations recommended from any fund shall not exceed the cash resources estimated to be available and to become available to meet expenditures under the appropriations;

  6. A certificate of the branch of government as to the accuracy of the statements of financial condition, of income and receipts, and of expenditures; and.
  7. Such other information as is deemed desirable, or is required by law or regulation.

History. Enact. Acts 1982, ch. 450, § 8, effective July 1, 1983; 1990, ch. 507, § 7, effective July 13, 1990; 2009, ch. 78, § 3, effective June 25, 2009.

Legislative Research Commission Notes.

(6/25/2009). The Reviser of Statutes has altered the numbering of subsection (6)(d), (e),and (g) of this statute from the way it appeared in 2009 Ky. Acts ch. 78, sec. 3, under KRS 7.136(1)(c).

Research References and Practice Aids

2020-2022 Budget Reference.

See State/Executive Branch Budget, 2021 Ky. Acts ch. 169, Pt. IX at 1161.

Cross-References.

Auditor of Public Accounts to examine estimates in budget report and certify results of examination and recommendations to General Assembly, KRS 43.050 .

48.111. Governor to include in executive budget recommendation a recommended program for rental of space costing more than $200,000 annually — Restriction on certain leases — Exception.

  1. The Governor shall include in the executive branch budget recommendation and in the draft branch budget bill for the executive branch submitted to each even-numbered-year regular session of the General Assembly pursuant to KRS 48.110 , for the biennium period beginning July 1, 1992, and for each biennium thereafter, a recommended program for rental of any space for which the annual rental cost will exceed two hundred thousand dollars ($200,000).
  2. The recommended program for leased space shall include:
    1. A summary description of each specific two hundred thousand dollar ($200,000) lease project recommended for funding during the biennium; and
    2. For each project:
      1. The name of the agency for which space will be leased;
      2. The purpose and justification for the lease;
      3. Whether the lease contains a purchase option which will be exercised during the biennium pursuant to KRS 56.806(4) and the estimated purchase price;
        1. Whether the lease contains a lease-purchase which will be completed during the biennium pursuant to KRS 56.806(5) 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; and 4. a. Whether the lease contains a lease-purchase which will be completed during the biennium pursuant to KRS 56.806(5) 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; and
        2. The estimated sum of money that will have to be paid in addition to rent paid to complete the purchase;
      4. The estimated cost of the lease; and
      5. The recommended sources of funds.
  3. All information required by subsection (2) of this section shall be included in the executive branch budget recommendation. The branch budget bill for the executive branch shall contain only the information specified in subparagraphs 1. and 2. of subsection (2)(b) of this section.
  4. Except as provided in subsection (5) of this section, no lease with an annual rental cost which will exceed two hundred thousand dollars ($200,000) shall be executed unless the lease has been identified and included in the branch budget bill. The branch budget bill for the executive branch shall authorize the expenditure by the budget unit that will occupy the premises.
  5. A lease with an annual rental cost exceeding two hundred thousand dollars ($200,000) may be authorized even though it is not specifically listed in the branch budget bill, subject to the following conditions and procedures:
    1. A lease is awarded as the result of the consolidation of leases in which case, in addition to subsection (6) of this section, the provisions of KRS 56.803 and 56.823(2) or of KRS 56.805(2) and 56.823(3) shall apply, as appropriate; or
    2. A lease is awarded as the result of an agency occupying substantially less space than it should, under the standards for space set by the Department for Facilities Management, in which case, in addition to subsection (6) of this section, the provisions of KRS 56.803 and 56.823(2) or of KRS 56.805(2) and 56.823(3) shall apply, as appropriate. The space allocated under the new lease shall not exceed the space which should be allocated pursuant to the standards for space; or
    3. A lease with an annual rental cost of less than two hundred thousand dollars ($200,000) is renewed or replaced for an annual rental cost that exceeds two hundred thousand dollars ($200,000), but only if that request and subsequent renewal or replacement lease is:
      1. From the same state agency lessee whose initial lease was under two hundred thousand dollars ($200,000);
      2. For the same or substantially the same square footage as the initial lease that was under two hundred thousand dollars ($200,000);
      3. The result of the competitive leasing process authorized by KRS 56.803;
      4. For an annual lease payment of less than two hundred and fifty thousand dollars ($250,000); and
      5. Effective only until June 30 of the next even-numbered year unless authorized in the branch budget bill; or
    4. A lease is awarded as the result of an emergency in which case the provisions of KRS 56.805(3) and (4) and KRS 56.823(5) shall apply; or
      1. Fifty percent (50%) or more of the actual cost shall be funded by federal or private funds; and (e) 1. Fifty percent (50%) or more of the actual cost shall be funded by federal or private funds; and
      2. Money specifically budgeted and appropriated by the General Assembly for another purpose shall not be allotted or reallotted for expenditure on the lease. Money utilized shall not jeopardize any existing program and shall not require the use of current general funds specifically dedicated to existing programs; and
      3. The Finance and Administration Cabinet shall comply with the requirements of subsection (6) of this section.
    1. No later than five (5) business days after an advertisement for lease proposals pursuant to paragraph (a) or (b) of subsection (5) of this section, the cabinet shall provide the Capital Projects and Bond Oversight Committee with a copy of the advertisement and shall state in writing to the committee that the copy is being provided in compliance with this paragraph. (6) (a) No later than five (5) business days after an advertisement for lease proposals pursuant to paragraph (a) or (b) of subsection (5) of this section, the cabinet shall provide the Capital Projects and Bond Oversight Committee with a copy of the advertisement and shall state in writing to the committee that the copy is being provided in compliance with this paragraph.
    2. Prior to final authorization of a lease pursuant to paragraph (e) of subsection (5) of this section, the cabinet shall report to the Capital Projects and Bond Oversight Committee:
      1. The name of the agency for which space will be leased;
      2. The purpose and justification for the lease;
      3. The estimated cost of the lease;
      4. The source of funds; and
      5. Whether the requirements of paragraph (e) of subsection (5) of this section have been met.
    3. Within thirty (30) days after the report required in paragraph (b) of this subsection has been submitted to the committee, the committee shall conduct its review and decide whether to approve or disapprove the proposed lease authorization. The Legislative Research Commission shall promptly transmit the committee’s findings and determinations to the Finance and Administration Cabinet.
    4. 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; or
      2. Cancel the proposed lease authorization; or
      3. Determine to proceed with the proposed lease authorization disapproved by the committee.
    5. The decision made by the secretary of the Finance and Administration Cabinet under paragraph (d) of this subsection shall be communicated to the committee in writing within thirty (30) days of the committee’s disapproval.
    6. The Legislative Research Commission shall maintain records of the committee’s disapproval of a proposed lease authorization and the cabinet’s report of its actions on a disapproved proposed lease authorization. If the committee disapproves a proposed lease authorization, the Legislative Research Commission shall transmit the committee’s disapproval and the cabinet’s action on the disapproval to the appropriate interim joint committee of the Legislative Research Commission and to the General Assembly when next convened in an even-numbered-year regular session.
    7. If, after committee review, a lease is authorized, the lease shall be awarded pursuant to this section and KRS 43.050 and 56.800 to 56.823 and shall be subsequently reviewed pursuant to the appropriate subsection of KRS 56.823 .

History. Enact. Acts 1990, ch. 512, § 1, effective July 13, 1990; 1994, ch. 44, § 1, effective July 15, 1994; 1994, ch. 177, § 1, effective July 15, 1994; 1994, ch. 387, § 24, effective July 15, 1994; 1998, ch. 539, § 1, effective July 15, 1998; 2000, ch. 50, § 1, effective July 14, 2000; 2001, ch. 58, § 2, effective June 21, 2001; 2009, ch. 78, § 43, effective June 25, 2009; 2011, ch. 73, § 8, effective June 8, 2011.

48.112. Governor to include certain appropriations within budget recommendations for benefit reserve fund within Kentucky Workers’ Compensation Funding Commission. [Repealed.]

Compiler’s Notes.

This section (Enact. Acts 1996 (1st Ex. Sess.), ch. 1, § 45, effective December 12, 1996; 2001, ch. 58, § 3, effective June 21, 2001) was repealed by Acts 2012, ch. 110, § 24, effective April 11, 2012.

48.115. Planning report, preliminary revenue estimates, and official revenue estimates required by KRS 48.120 to be developed by consensus forecasting group — Revision of official revenue estimates — Threshold for implementation of enacted budge reduction plan.

  1. The revenue estimates for the general fund and the road fund required by KRS 48.120 shall be based on a consensus revenue forecast. The planning report, preliminary revenue estimates, and official revenue estimates required by KRS 48.120 shall be developed by the consensus forecasting group. The members of the consensus forecasting group shall be jointly selected by the state budget director and the Legislative Research Commission. The members shall be knowledgeable about the state and national economy and the revenue and financial conditions of the Commonwealth.
  2. If the Legislative Research Commission or state budget director determines that a revision to the official revenue estimates is needed, the Legislative Research Commission or state budget director shall request a revision from the consensus forecasting group. The revised revenue estimates shall become the official revenue estimates.
  3. The enacted budget reduction plan required by KRS 48.130 shall be implemented only:
    1. Upon the issuance of an official revenue estimate from the consensus forecasting group reflecting a revenue shortfall of five percent (5%) or less; or
    2. At the end of a fiscal year, upon the existence of an actual revenue shortfall of five percent (5%) or less, as determined by the Office of State Budget Director.
  4. The state budget director shall coordinate with the Department of Revenue and the Transportation Cabinet to ensure that the financial and revenue data required for the forecasting process is made available to the consensus forecasting group.
  5. Staff for the consensus forecasting group shall be provided by the Legislative Research Commission.

History. Enact. Acts 1996, ch. 14, § 1, effective July 15, 1996; 2000, ch. 46, § 14, effective July 14, 2000; 2003, ch. 151, § 1, effective June 24, 2003; 2005, ch. 85, § 77, effective June 20, 2005; 2009, ch. 78, § 4, effective June 25, 2009.

48.117. Budget planning report. [Repealed.]

Compiler’s Notes.

This section (Enact. Acts 1997 (1st Ex. Sess.), ch. 1, § 26, effective May 30, 1997; 2000, ch. 46, § 15, effective July 14, 2000) was repealed by Acts 2009, ch. 78, § 49, effective June 25, 2009.

48.120. Budget planning report and preliminary and official revenue estimates to be provided by Office of State Budget Director — Appropriations to be based on official revenue estimates.

  1. By August 15 of each odd-numbered year, the Office of State Budget Director, in conjunction with the consensus forecasting group, shall provide to each branch of government a budget planning report. The budget planning report shall include:
    1. A baseline analysis and projections of economic conditions and outlook;
    2. Any potential consequences of the analysis and projections for the Commonwealth’s fiscal condition;
    3. The revenue estimates and implications for the general fund and road fund for the current fiscal year and next four (4) fiscal years; and
    4. Projections of personal income, employment, and economic indicators that reflect economic conditions.
  2. By October 15 of each odd-numbered year, the Office of State Budget Director shall provide to each branch of government preliminary revenue estimates made by the consensus forecast group for the general fund and road fund for the current and next two (2) fiscal years, including explanatory statements, and a comparative record of the actual revenues of these funds for each of the last two (2) years concluded.
  3. On or before the fifteenth legislative day, the Office of State Budget Director shall certify and present to the General Assembly the official revenue estimates made by the consensus forecasting group for the general fund and road fund for the current and next two (2) fiscal years.
  4. Appropriations made in the branch budget bills enacted for each branch of government shall be based upon the official revenue estimates presented to the General Assembly by the Office of State Budget Director under subsection (3) of this section, as modified by the General Assembly.
  5. The enacted estimates shall become the official revenue estimates of the Commonwealth upon the branch budget bills becoming law, and shall remain the official revenue estimates of the Commonwealth until revised by the consensus forecasting group as provided in KRS 48.115 .

History. Enact. Acts 1982, ch. 450, § 12, effective July 1, 1983; 1988, ch. 273, § 4, effective July 15, 1988; 1990, ch. 507, § 8, effective July 13, 1990; 1996, ch. 14, § 2, effective July 15, 1996; 2000, ch. 46, § 16, effective July 14, 2000; 2009, ch. 78, § 5, effective June 25, 2009.

Research References and Practice Aids

2020-2022 Budget Reference.

See State/Executive Branch Budget, 2021 Ky. Acts ch. 169, Pt. III, 30 at 1152.

48.130. Budget reduction plan for revenue shortfall of five percent or less to be included in each enacted branch budget bill — Shortfalls over five percent require legislative action.

  1. The General Assembly shall include in each enacted branch budget bill a budget reduction plan for a revenue shortfall in the general fund or road fund of five percent (5%) or less. The budget reduction plan shall direct how budget reductions shall be implemented if there is a revenue shortfall of five percent (5%) or less.
  2. A lay-off of state employees in the executive branch under the budget reduction plan enacted by the General Assembly shall comply with the provisions of KRS 18A.1132 .
  3. Any revenue shortfall in the general fund or road fund of greater than five percent (5%) shall require action by the General Assembly.
  4. Upon the issuance of an official revenue estimate by the consensus forecasting group reflecting a revenue shortfall in the general fund or road fund, or upon the existence of an actual revenue shortfall in the general fund or road fund at the close of a fiscal year as determined by the Office of State Budget Director, the Office of State Budget Director shall notify all branches of government. If the revenue shortfall is five percent (5%) or less, the following actions shall be taken:
    1. The unappropriated balance of funds in the surplus accounts of the general fund or road fund shall first be used to meet the shortfalls in those respective funds; and
    2. If the amounts described in paragraph (a) of this subsection are insufficient to address the revenue shortfall, the enacted budget reduction plan included in each branch budget bill shall be implemented.
  5. The budget reduction plan for each branch of government may provide that the annual increment granted state employees under KRS 18A.355 shall be reduced as provided by KRS 18A.355 . Any reduction of the annual increment shall be uniform for all employees.
  6. No budget reduction action shall be taken by any branch head in excess of the actual or projected deficit.
  7. If general fund or road fund tax receipts increase over the revenues estimated in the official revenue estimate that resulted in reductions, then services may be restored in the reverse order of the reduced services.

History. Enact. Acts 1982, ch. 450, § 13, effective July 1, 1983; 1986, ch. 494, § 23, effective July 15, 1986; 1988, ch. 273, § 5, effective July 15, 1988; 1990, ch. 507, § 9, effective July 13, 1990; 1994, ch. 387, § 2, effective July 15, 1994; 2000, ch. 46, § 17, effective July 14, 2000; 2009, ch. 78, § 6, effective June 25, 2009.

NOTES TO DECISIONS

1.Purpose.

This section simply provides that the submitting branch of government shall provide a plan for reducing expenditures in the event of a revenue shortfall of between 21/2 percent and 5 percent; no control is delegated to the Legislative Research Commission. Thus, there appears to be no constitutional infirmity since each branch of government is simply directed to carry out the reduction plan which was enacted by the General Assembly. Legislative Research Com. by Prather v. Brown, 664 S.W.2d 907, 1984 Ky. LEXIS 300 ( Ky. 1984 ).

2.Applicability.

Ky. Rev. Stat. Ann. § 48.130 did not allow a Governor to reduce state universities' appropriated allotments because the statute did not apply, as there was no budget shortfall. Commonwealth ex rel. Andy Beshear v. Matthew Bevin, 498 S.W.3d 355, 2016 Ky. LEXIS 435 ( Ky. 2016 ).

Cited in:

Beshear v. Haydon Bridge Co., 304 S.W.3d 682, 2010 Ky. LEXIS 8 ( Ky. 2010 ).

Opinions of Attorney General.

The transferring of surplus funds in the law enforcement foundation program and the professional firefighters foundation program to the state’s general fund was permissible provided that an “equitable reduction” scheme was employed. OAG 84-60 .

The secretary of transportation acted within his authority in curtailing the allotment of funds to the debt payment acceleration fund. OAG 92-7 .

Research References and Practice Aids

2020-2022 Budget Reference.

See State/Executive Branch Budget, 2021 Ky. Acts ch. 169, Pt. VI at 1159.See State/Executive Branch Budget, 2021 Ky. Acts ch. 169, Pt. VII, (1) at 1160.See State/Executive Branch Budget, 2021 Ky. Acts ch. 169, Pt. VIII at 1161.See Transportation Cabinet Budget, 2021 Ky. Acts ch. 198, Section 2 at 1513.

Kentucky Law Journal.

Snyder and Irland, The Separation of Governmental Powers Under the Constitution of Kentucky: A Legal and Historical Analysis of L.R.C. v. Brown, 73 Ky. L.J. 165 (1984-85).

48.140. Surplus expenditure plan to be included in each enacted branch budget bill — Surplus in excess of two and one–half percent to accrue to surplus account.

  1. The General Assembly shall include in each enacted branch budget bill a plan for the expenditure of a general fund or road fund surplus.
  2. If there is a surplus, the Office of State Budget Director shall notify all branches of government.
  3. Except as provided in KRS 48.705 , any surplus in the general or road fund in excess of two and one-half percent (2.5%) of the enacted estimates shall not be expended but shall accrue to the surplus account of the general fund or road fund for investment until appropriated by the General Assembly.
  4. Unless required by the budget reduction provisions in a branch budget bill, no funds shall be transferred from one budget unit to another budget unit.
  5. Surplus funds in any account, unless a statute requires otherwise, shall lapse to the surplus account of the general fund for investment until appropriated by the General Assembly.
  6. Funds in the surplus account of the general fund may be used for current expenditures as authorized by the budget reduction provisions of a branch budget bill.

History. Enact. Acts 1982, ch. 450, § 14, effective July 1, 1983; 1988, ch. 273, § 6, effective July 15, 1988; 1990, ch. 507, § 10, effective July 13, 1990; 1995 (3rd Ex. Sess.), ch. 2, § 3, effective November 3, 1995; 2009, ch. 78, § 7, effective June 25, 2009.

Research References and Practice Aids

2020-2022 Budget Reference.

See State/Executive Branch Budget, 2021 Ky. Acts ch. 169, Pt. VII, (1) at 1160.See State/Executive Branch Budget, 2021 Ky. Acts ch. 169, Pt. IX at 1161.See Transportation Cabinet Budget, 2021 Ky. Acts ch. 198, Section 2 at 1513.

48.150. Appropriations to address unexpected emergencies and contingencies.

  1. As used in this section, “unexpected emergencies and contingencies” includes but is not limited to natural or man-made disasters, civil disorders, court orders requiring or resulting in the expenditure of state funds, or other related causes.
  2. Any appropriations made in an enacted branch budget bill to address unexpected emergencies and contingencies:
    1. Shall not be expended for contingencies relating to capital construction projects or major items of equipment as defined by KRS 45.770 ; and
    2. Shall not be expended unless appropriations made for the same or similar purposes have been exhausted.
  3. Each branch of government shall report expenditures for unexpected emergencies and contingencies, whether paid from appropriated funds or as a necessary governmental expenditure, to the standing appropriations committees of the General Assembly or the Interim Joint Committee on Appropriations and Revenue as appropriate.

History. Enact. Acts 1982, ch. 450, § 15, effective July 1, 1983; 2009, ch. 78, § 8, effective June 25, 2009.

48.160. State matching for federal funds.

Each branch, by budget unit, shall submit in its budget recommendation a request for funds reasonably necessary to match anticipated federal funds which may become available during the biennium. The amount of anticipated federal funds shall also be specified. These matching funds shall not be utilized for federal block grants as defined by the Federal Omnibus Budget Reconciliation Act of 1981 (P.L. 97-35) and any subsequent amendments thereto, including federal block grants authorized after July 1, 1983, unless such block grant applications are in compliance with the applicable federal and state laws, as well as the standards and criteria prescribed in KRS 45.353 .

History. Enact. Acts 1982, ch. 450, § 16, effective July 1, 1983; 1984, ch. 308, § 15, effective July 13, 1984.

Compiler’s Notes.

The Federal Omnibus Budget Reconciliation Act of 1981, referred to in this section, is compiled throughout the United States Code.

NOTES TO DECISIONS

1.Constitutionality.

The former provisions of this section which had given the Legislative Research Commission (LRC) certain duties and authority over federal block grant applications from various state agencies were unconstitutional because the budget and the budgetary process of the Commonwealth are purely an executive function and those provisions permitted a clear incursion by the LRC into this function, thus violating the separation of powers doctrine. Legislative Research Com. by Prather v. Brown, 664 S.W.2d 907, 1984 Ky. LEXIS 300 ( Ky. 1984 ) (Decision prior to 1984 amendment).

48.165. Restrictions as to “necessary government expense” or items without specified dollar amounts.

In the submission of a branch budget recommendation to the General Assembly no branch of government shall submit any item as a “necessary government expense” or submit any item without a dollar amount affixed thereto, unless the entire proceeds of a particular trust and agency or other designated fund or account are to be assigned to specific budget units. In the event that all proceeds from a particular fund or account are to be assigned to specific budget units, an estimate of the receipts of each budget unit for each year of the biennium shall be provided together with the receipts from the previous two (2) bienniums.

History. Enact. Acts 1982, ch. 450, § 17, effective July 1, 1983.

48.170. Additional information.

In addition to the requirements set forth in this chapter, the appropriations committees of each house or the Legislative Research Commission, as appropriate, may require additional information and may prescribe the form in which such additional information shall be submitted as a part of, or in support of, a branch budget recommendation.

History. Enact. Acts 1982, ch. 450, § 18, effective July 1, 1983.

48.180. Financial information submitted as part of executive branch budget request.

In addition to the information required by KRS 48.110 , the Governor shall submit the following information as a separate part of the branch budget request for the executive branch of government:

  1. Summary statements of the financial condition of the state, which shall include such detailed schedules of revenues and summary of expenditures by fund as specified by law in addition to those the Governor deems desirable; and summary statements of the estimated fund balances for the current fiscal year and each of the next two (2) fiscal years; and statement of the surplus account for the general fund and the road fund, for the budget reserve trust fund account, and for each special fund. Each surplus account shall show the excess of all current revenues over all current expenditures as of the beginning of each of the two (2) fiscal years last concluded, and all changes in each surplus account during each of such two (2) fiscal years.
  2. A statement as of the close of the last completed fiscal year and as of the close of the current fiscal year, showing for the Commonwealth the total funded debt, the value of sinking fund assets, the net funded debt, the floating liabilities as of the close of the last completed fiscal year and the estimated floating liabilities as of the end of the current fiscal year, and the total debt as of the close of the last completed fiscal year and as of the close of the current fiscal year.
  3. A summary statement for each major fund of the cash resources estimated to be available at the beginning of each of the next two (2) fiscal years, and the estimated cash receipts of the fiscal year.
  4. Such other information as is deemed desirable or is required by law or regulation.

History. Enact. Acts 1982, ch. 450, § 9, effective July 1, 1983; 1995 (3rd Ex. Sess.), ch. 2, § 4, effective November 3, 1995.

48.185. Area development fund recommendations.

  1. The provisions of any other law notwithstanding, the Governor shall include in the budget recommendation for the executive branch and in the draft branch budget bill for the executive branch submitted to each even-numbered-year regular session of the General Assembly for the biennium period beginning July 1, 1980, and for each biennium thereafter, recommendations for appropriations from the general fund to be made by the General Assembly to the area development fund established by KRS Chapter 42.
  2. The amount to be recommended for the appropriation to the area development fund shall be four and four-tenths percent (4.4%) of the severance tax estimate for each fiscal year of the biennium.

History. Enact. Acts 1982, ch. 450, § 11, effective July 1, 1983; 1990, ch. 507, § 11, effective July 13, 1990; 2001, ch. 58, § 4, effective June 21, 2001.

Research References and Practice Aids

2020-2022 Budget Reference.

See State/Executive Branch Budget, 2021 Ky. Acts ch. 169, Pt. I, A, 13, (1) at 1066.

48.190. Capital construction and space rental recommendations. [Repealed.]

Compiler’s Notes.

This section (Enact. Acts 1982, ch. 450, § 10, effective July 1, 1983; 1990, ch. 512, § 2, effective July 13, 1990) was repealed by Acts 2009, ch. 78, § 49, effective June 25, 2009.

48.192. Commonwealth postsecondary prepaid tuition trust fund recommendations.

Notwithstanding any other provision of law, if the report of the actuary submitted in an odd-numbered year pursuant to KRS 164A.704(7)(b) reflects that there will be a real liability expected to accrue during the upcoming biennium that cannot be met with existing resources of the Commonwealth postsecondary education prepaid tuition trust fund created pursuant to KRS 164A.701 , the Governor shall include in the budget recommendation for the executive branch and in the draft branch budget bill for the executive branch submitted to the General Assembly an appropriation to the board in an amount necessary to meet the real liability expected to accrue in each fiscal year of the biennium.

History. Enact. Acts 2006, ch. 252, Pt. XXXI, § 8, effective April 25, 2006.

48.195. Financial information on salaries and on filing fees and costs to be submitted as part of the judicial branch budget recommendation — Treatment of salaries in judicial branch budget bill.

  1. The General Assembly shall set the salaries of the justices and judges of the Court of Justice in the judicial branch budget bill. The Chief Justice shall include in the judicial branch budget recommendation the salaries of the justices and the judges. If the General Assembly concurs with the recommended judicial salaries contained in the judicial branch budget recommendation, then the judicial salaries shall be set in the judicial branch budget bill by incorporating by reference the judicial branch budget recommendation. If the General Assembly sets judicial salaries different from the judicial branch budget recommendation, then the General Assembly shall set forth the salaries of the justices and judges or the incremental changes in the judicial branch budget bill.
  2. The Chief Justice shall include in the judicial branch budget recommendation:
    1. The filing fees and costs, and any changes in the fees and costs, set under KRS 23A.200 or 24A.170 during the fiscal biennium immediately preceding the biennium for which the recommendation is submitted; and
    2. A statement of whether, and to what extent, the Supreme Court intends to raise or anticipates raising the fees and costs set under KRS 23A.200 or 24A.170 during the biennium for which the recommendation is submitted.

History. Enact. Acts 1994, ch. 134, § 1, effective April 1, 1994; 2011, ch. 73, § 9, effective June 8, 2011.

In-Session Procedure

48.200. Printing of budget recommendations — Copies for General Assembly members and clerks.

Each branch of government shall have its budget recommendations printed in such number of copies thereof as to insure that each member of the General Assembly and the clerks of the House of Representatives and the Senate have individual copies.

History. Enact. Acts 1982, ch. 450, § 19, effective July 1, 1983.

48.210. Assistance to General Assembly by representatives of each branch of government.

From the time of the submission of the budget recommendation of each branch of government to the General Assembly until the enactment of all branch budget bills, representatives of each branch of government shall be at the disposal of the General Assembly and its appropriations committees and shall devote as much of their time as may be required to the work of those committees, under the direction of their respective chairmen. The Finance and Administration Cabinet and the Office of State Budget Director shall provide such additional assistance to each branch of government as may be required.

History. Enact. Acts 1982, ch. 450, § 20, effective July 1, 1983; 1990, ch. 507, § 12, effective July 13, 1990; 2009, ch. 78, § 9, effective June 25, 2009.

48.300. Adoption of branch budget bills — Separate branch budget bill required for Transportation Cabinet — Enactment of biennial highway construction plan.

  1. The financial plan for each fiscal year as presented in the branch budget recommendation shall be adopted, with any modifications made by the General Assembly, by the passage of a branch budget bill for each branch of government, and any revenue and other acts as necessary.
  2. With regard to the Transportation Cabinet, the General Assembly shall:
    1. Enact, as a separate bill, a branch budget for the Transportation Cabinet;
    2. Enact, as a separate bill, the biennial highway construction plan, as amended by the General Assembly, including identification of projects from the last four (4) years of the six (6) year road plan that may be moved forward, and the conditions and requirements under which the identified projects may be moved forward; and
    3. Adopt the last four (4) years of the six (6) year road plan, as amended by the General Assembly, as a joint resolution.

History. Enact. Acts 1982, ch. 450, § 21, effective July 1, 1983; 1984, ch. 410, § 4, effective July 13, 1984; 1990, ch. 507, § 13, effective July 13, 1990; 2001, ch. 58, § 5, effective June 21, 2001; 2009, ch. 78, § 10, effective June 25, 2009; 2011, ch. 73, § 10, effective June 8, 2011.

NOTES TO DECISIONS

1.Allocation Beyond Appropriation.

Unless the appropriation of the General Assembly is unreasonably inadequate or unless the General Assembly acted arbitrarily or capriciously in making the appropriation mandamus will not lie to compel the Commissioner of Finance (now Secretary of the Finance and Administration Cabinet) to allocate money beyond the appropriation limits to cover deficits in the budget accounts and to provide money for the purchase of office equipment. Ferguson v. Oates, 314 S.W.2d 518, 1958 Ky. LEXIS 295 ( Ky. 1958 ) (decided under prior law).

Opinions of Attorney General.

The budget memorandum is to facilitate an understanding of any difference between the financial plan for a branch budget submitted to the General Assembly’s consideration and what changes the legislative appropriations committees have wrought to the recommended budget plan submitted and such memorandum is to be detailed enough to convey the intent of the appropriations committees for the changes. OAG 84-314 .

Language in budget memorandum recommending and directing that 705 KAR 2:030 Section 8 be amended to change the local district transfer provision from 20% to the established value of the capital outlay component of a foundation unit with difference in the transfer to be used to fund the operational costs of the New Rowan County State Vocational-Technical School and the expanded facilities in Ashland and Elizabethtown is precatory in nature and in light of Ky. Const., §§ 184 and 186 cannot be carried out for funds involved, are foundation program funds and not just general funds appropriated for education and using the difference in the transfer amount of funds to support the operational cost of the New Rowan County State Vocational-Technical School and expanded facilities in Ashland and Elizabethtown would be using foundation program funds for nonfoundation purposes. OAG 84-314 .

Research References and Practice Aids

2020-2022 Budget Reference.

See State/Executive Branch Budget, 2020 Ky. Acts ch. 92, Pt. I, (1) at 852.See Transportation Cabinet Budget, 2020 Ky. Acts ch. 93, Pt. I, (1) at 948.See Legislative Branch Budget, 2020 Ky. Acts ch. 84, Pt. I at 698.See Judicial Branch Budget, 2020 Ky. Acts ch. 96, Pt. I, (1) at 1141.

Kentucky Law Journal.

Snyder and Irland, The Separation of Governmental Powers Under the Constitution of Kentucky: A Legal and Historical Analysis of L.R.C. v. Brown, 73 Ky. L.J. 165 (1984-85).

48.310. Operation of budget bill.

  1. No provision of a branch budget bill shall be effective beyond the second fiscal year from the date of its enactment. A budget bill enacted at a special session or in an odd-numbered-year regular session of the General Assembly shall not be effective past July 1 of the year in which the next even-numbered-year regular session takes place.
  2. A budget bill may contain language which exempts the budget bill or any appropriation or the use thereof from the operation of a statute for the effective period of the budget bill.

History. Enact. Acts 1982, ch. 450, § 22, effective July 1, 1983; 1984, ch. 410, § 5, effective July 13, 1984; 1990, ch. 507, § 14, effective July 13, 1990; 2001, ch. 58, § 6, effective June 21, 2001.

NOTES TO DECISIONS

1.Constitutionality.

The former provisions of this section which required the budget to be introduced as a joint resolution, rather than as a bill, flew directly in the face of the provisions of Ky. Const., §§ 47 and 88, and were, therefore, unconstitutional to that extent. Legislative Research Com. by Prather v. Brown, 664 S.W.2d 907, 1984 Ky. LEXIS 300 ( Ky. 1984 ) (Decision prior to 1984 amendment).

2.Transfers to General Fund.

Transfers to the general fund of regulatory agency surpluses did not violate KRS 48.315 by not being listed therein because (1) a concluding “etc.” brought the funds within the statute’s grant of authority, and (2) KRS 48.310(2) more generally allowed suspension of statutes in budget bills. Klein v. Flanery, 439 S.W.3d 107, 2014 Ky. LEXIS 227 ( Ky. 2014 ).

Cited:

Beshear v. Haydon Bridge Co., 304 S.W.3d 682, 2010 Ky. LEXIS 8 ( Ky. 2010 ).

Research References and Practice Aids

Cross-References.

Accounts kept by State Treasurer, KRS 41.280 .

Filing, bookkeeping and accounting system to be installed for each state department and agency, KRS 12.130 .

State parks, accounting system for, KRS 148.041 .

Transfer of money between state depositories, KRS 41.260 .

Uniform system of accounting for state receipts by local officers, KRS 46.010 .

Kentucky Law Journal.

Snyder and Irland, The Separation of Governmental Powers Under the Constitution of Kentucky: A Legal and Historical Analysis of L.R.C. v. Brown, 73 Ky. L.J. 165 (1984-85).

48.311. Structure of branch budget bills — Severability of provisions.

Any branch budget bill enacted by the General Assembly shall be enacted so that each section, each subsection, and each appropriation sum by specified fund or funds accounts shall be a separate and specific appropriation and law. If any section, any subsection, or any provision is found by a court of competent jurisdiction in a final, unappealable order to be invalid or unconstitutional, the decision of the courts shall not affect or impair any of the remaining sections, subsections, or provisions contained in that branch budget bill.

History. Enact. Acts 1994, ch. 387, § 10, effective July 15, 1994.

48.312. Duplicate appropriations.

Any appropriation in any branch budget bill and any other enactment by the General Assembly which contains an appropriation provision for the same purpose and in the same amount shall be construed as duplicate sums, and no additional moneys shall be provided for the duplicate appropriations. Questions of interpretation of duplicate appropriations shall be determined as prescribed by this chapter.

History. Enact. Acts 1994, ch. 387, § 11, effective July 15, 1994.

48.313. Status of totals and subtotals — Priority of individual appropriations — Correction of erroneous totals and subtotals.

Totals and subtotals given within any branch budget bill and any appropriation provision in any other enactment are provided as a convenience and shall not constitute appropriations of funds. If a total or subtotal conflicts with the sum of the appropriation figures of which it consists, the amounts of the individual appropriations shall control. If a conflict of this nature arises, either as a result of an inadvertent error in initial entry of a total or subtotal or through an amendment to any of its component appropriations, the director of the Legislative Research Commission shall apprise the reviser of statutes in writing of the existence of and reason for the variation and of the correct amount of the total or subtotal. If the requested change is within the scope of this section, the reviser of statutes shall cause that corrected total or subtotal to be substituted in the Acts and journals of the General Assembly and in the Kentucky Revised Statutes.

History. Enact. Acts 1994, ch. 387, § 12, effective July 15, 1994.

48.315. Transfer of agency, special, and other funds to general fund in budget bill.

  1. The General Assembly may provide in a budget bill for the transfer to the general fund for the purpose of the general fund all or part of the agency funds, special funds, or other funds established under the provisions of KRS 15.430 ; 21.347 ; 21.540 ; 21.560 ; 42.500 ; 47.010 ; 48.010(15)(g); 56.100 ; 61.470 ; 64.345 ; 64.350 ; 64.355 ; 95A.220 ; 136.392 ; 138.510 ; 161.420 ; 161.430 ; 164A.020 ; 164A.110 ; 164A.800 ; 164A.810 ; 216A.110 ; 230.218 ; 230.400 ; 230.770 ; 248.540 ; 248.550 ; 278.130 ; 278.150 ; 286.1-485 ; 304.35-030 ; 311.450 ; 311.610 ; 312.019 ; 313.022 ; 314.161 ; 315.195 ; 316.210 ; 317.530 ; 317A.080 ; 319.131 ; 320.360 ; 321.320 ; 322.290 ; 322.330 ; 322.420 ; 323.080 ; 323.190 ; 323.210 ; 323A.060 ; 323A.190 ; 323A.210 ; 324.286 ; 324.410 ; 325.250 ; 326.120 ; 327.080 ; 330.050 ; 334.160 ; 334A.120 ; 335.140 ; 342.122 ; 342.480 , etc.
  2. The transfer of moneys from the agency funds, special funds, or other funds to the general fund provided for in subsection (1) of this section shall be for the period of time specified in the budget bill.
  3. Any provisions of any statute in conflict with the provisions of subsections (1) and (2) of this section are hereby suspended or modified. Any suspension or modification shall not extend beyond the duration of the budget bill.

History. Enact. Acts 1984, ch. 410, § 6, effective July 13, 1984; 1992, ch. 109, § 39, effective March 30, 1992; 2003, ch. 169, § 4, effective March 31, 2003; 2006, ch. 207, § 1, effective July 12, 2006; 2009, ch. 78, § 11, effective June 25, 2009; 2010, ch. 85, § 18, effective July 15, 2010.

Compiler’s Notes.

KRS 342.480 referred to at the end of subsection (1) of this section has been repealed.

The transfer of money as authorized by subsection (1) of this section, from agencies in which public funds and private employee contributions are commingled and cannot be differentiated (KRS 16.565 , 61.580 , 78.650 , 161.420 , 342.122 , and 342.480 (now repealed)), was declared unconstitutional in Commonwealth ex rel. Armstrong v. Collins, 709 S.W.2d 437 ( Ky. 1986 ).

Legislative Research Commission Note.

(7/12/2006). 2006 Ky. Acts ch. 247 instructs the Reviser of Statutes to adjust KRS references throughout the statutes to conform with the 2006 renumbering of the Financial Services Code, KRS Chapter 286. Such an adjustment has been made in this statute.

NOTES TO DECISIONS

1.Constitutionality.
2.— Transfer of Private Funds.

The transfers of funds which are merely temporary, determinable suspensions of the operation of the statutes relating to appropriations of public funds are within the legislative authority as set out in KRS 446.085 and Ky. Const., § 51; however, the transfers of funds which relate to appropriations of private contributions cannot be termed suspensions or modifications of the operation of the statutes. Because the General Assembly has no authority to transfer private funds to the general fund, the transfer of money from agencies in which public funds and private employee contributions are commingled, and cannot be differentiated, is unconstitutional. Commonwealth ex rel. Armstrong v. Collins, 709 S.W.2d 437, 1986 Ky. LEXIS 262 ( Ky. 1986 ).

Transfers of millions of dollars from a workers’ compensation special fund to the general fund and to a mining budget were invalid transfers because public funds and private contributions were commingled, could not be differentiated, and could not be considered a valid suspension of the operation of a statute under Ky. Const. § 15 and Ky. Const. § 51, but the Kentucky Legislature could properly suspend an annual appropriation to the Kentucky Workers’ Compensation Funding Commission and the Workers’ Compensation Benefit Reserve Fund to the extent the funds had yet to be transferred to them. Beshear v. Haydon Bridge Co., 304 S.W.3d 682, 2010 Ky. LEXIS 8 ( Ky. 2010 ).

Transfers to the general fund of regulatory agency surpluses did not violate KRS 48.315 by not being listed therein because (1) a concluding “etc.” brought the funds within the statute’s grant of authority, and (2) KRS 48.310(2) more generally allowed suspension of statutes in budget bills. Klein v. Flanery, 439 S.W.3d 107, 2014 Ky. LEXIS 227 ( Ky. 2014 ).

48.316. Temporary suspension or modification of statutory provisions due to conflict with provisions of budget bill.

To the extent that the provisions of a budget bill are in conflict with any provisions of KRS Chapters 12, 42, 56, 152, 177, or 341, the provisions of those chapters are hereby suspended or modified. Such suspension or modification shall not extend beyond the duration of the budget bill.

History. Enact. Acts 1984, ch. 410, § 7, effective July 1, 1984.

NOTES TO DECISIONS

Cited:

Beshear v. Haydon Bridge Co., 304 S.W.3d 682, 2010 Ky. LEXIS 8 ( Ky. 2010 ).

Monitoring and Revision of Budget

48.400. Office of State Budget Director to monitor financial condition of Commonwealth — Quarterly reports — Notification of actual or anticipated surplus or decrease in tax receipts.

  1. The Office of State Budget Director shall continuously monitor the financial situation of the Commonwealth. Based upon reports from budget units and its own estimates, the office shall no later than the tenth day of each month or more often if necessary, report to the Governor, the Chief Justice, and the Legislative Research Commission on the financial condition of the Commonwealth and its budget units.
  2. Within thirty (30) days of the close of each fiscal quarter, the state budget director shall report to the head of each branch budget the actual revenue receipts from the just-concluded quarter, as well as the projected revenue receipts for the next three (3) fiscal quarters. The report shall include a comparison with the enacted estimates and shall note any potential consequences to the Commonwealth’s fiscal condition as a result of revenue receipts that differ from those used in the enacted estimates.
  3. If there is an actual or anticipated surplus or decrease in total estimated tax receipts, as reflected in the report required by subsection (2) of this section, immediate notification shall be given to all branches of government.

History. Enact. Acts 1982, ch. 450, § 23, effective July 1, 1983; 1994, ch. 387, § 3, effective July 15, 1994; 2000, ch. 46, § 18, effective July 14, 2000; 2009, ch. 78, § 12, effective June 25, 2009.

NOTES TO DECISIONS

1.Purpose.

This section directs the executive branch to monitor the Commonwealth’s financial position and to give monthly reports to each branch. Thus, this section simply provides a means whereby a branch of government is made cognizant of a shortfall and thereby may take the requisite statutory action to remedy the situation; there is no violation of an executive function here, in fact, it places the responsibility on the executive branch, to participate in the overall statutory scheme dealing with revenue shortfalls. Legislative Research Com. by Prather v. Brown, 664 S.W.2d 907, 1984 Ky. LEXIS 300 ( Ky. 1984 ).

Research References and Practice Aids

Cross-References.

Annual reports of heads of statutory administrative departments, KRS 12.110 .

Kentucky Law Journal.

Snyder and Irland, The Separation of Governmental Powers Under the Constitution of Kentucky: A Legal and Historical Analysis of L.R.C. v. Brown, 73 Ky. L.J. 165 (1984-85).

48.500. Interpretation of branch budget bills — Legislative review.

  1. Subject to the provisions of this section, when the General Assembly is not in session, all questions that arise as to the meaning of items in a branch budget bill shall be decided by the Finance and Administration Cabinet for the executive branch budget bill and the Transportation Cabinet budget bill, and by the Chief Justice and the Legislative Research Commission for their respective branches of government.
  2. The secretary of the Finance and Administration Cabinet, the Chief Justice, and the Legislative Research Commission shall transmit decisions made under subsection (1) of this section to the Interim Joint Committee on Appropriations and Revenue of the Legislative Research Commission and shall include, in detail, the reasons for such decisions.
  3. If the Interim Joint Committee on Appropriations and Revenue disapproves a decision made under this section, the decision shall not be implemented unless it is:
    1. Revised to comply with the objections of the committee; or
    2. The committee is informed, in writing, in detail, within thirty (30) days of the committee’s disapproval, that a determination has been made not to comply with the objections of the committee.

History. Enact. Acts 1982, ch. 450, § 24, effective July 1, 1983; 1990, ch. 507, § 15, effective July 13, 1990; 2009, ch. 78, § 13, effective June 25, 2009; 2011, ch. 73, § 11, effective June 8, 2011.

NOTES TO DECISIONS

1.Legislative Veto.

The trial court erred when it determined that this section was void because it permitted a veto of executive action in administering the budget by a legislative committee; a careful reading of the statute shows that this is not true. While the committee may disagree or object to a contested interpretation, the bottom line is that it may not veto the decision of the affected branch; thus, there is no legislative veto and there is no out of session action by the General Assembly or its designee, the Legislative Research Commission, that can effectively prevent the affected branch of government from acting on its own budget with respect to matters of interpretation. Legislative Research Com. by Prather v. Brown, 664 S.W.2d 907, 1984 Ky. LEXIS 300 ( Ky. 1984 ).

Opinions of Attorney General.

The Governor did not violate provision of 2003 budget bill (Part IV, Item Three of HB 269) in establishing the initial salaries of his newly appointed Cabinet Secretaries and other appointees pursuant to his authority under KRS 64.640(2). OAG 04-003 .

Research References and Practice Aids

2020-2022 Budget Reference.

See State/Executive Branch Budget, 2021 Ky. Acts ch. 169, Pt. III, 10 at 1150.

48.600. Appropriation reductions in accordance with budget reduction plans upon actual or official revenue estimate shortfall of five percent or less.

  1. If an official revenue estimate is issued reflecting a revenue shortfall in the general fund or road fund of five percent (5%) or less, or if there is an actual revenue shortfall at the close of a fiscal year in the general fund or road fund of five percent (5%) or less, as determined by the Office of State Budget Director, the Governor, the Chief Justice, and the Legislative Research Commission shall make any appropriation reductions for the budget units of their respective branches of government in accordance with the budget reduction plan included in the enacted branch budget bill.
  2. No budget revision action shall be taken by any branch head in excess of the actual or projected revenue shortfall.
  3. Appropriation reductions shall be reported to the standing Appropriations and Revenue Committees of each house or to the Interim Joint Committee on Appropriations and Revenue, as appropriate.

History. Enact. Acts 1982, ch. 450, § 25, effective July 1, 1983; 1988, ch. 273, § 7, effective July 15, 1988; 1994, ch. 387, § 4, effective July 15, 1994; 2000, ch. 46, § 19, effective July 14, 2000; 2009, ch. 78, § 14, effective June 25, 2009.

NOTES TO DECISIONS

1.Legislative Intent.

The General Assembly, in this section, recognizes that each branch of government (the Governor, the Chief Justice, and the Legislative Research Commission) is best equipped to make its own decisions during a revenue emergency and requires that the branch report its actions to the appropriate legislative committee; accordingly, this section comports with the separation of powers doctrine and is not an incursion into the executive duty to administer the budget of the executive branch of government. Legislative Research Com. by Prather v. Brown, 664 S.W.2d 907, 1984 Ky. LEXIS 300 ( Ky. 1984 ).

Opinions of Attorney General.

The transferring of surplus funds in the law enforcement foundation program and the professional firefighters foundation program to the state’s general fund was permissible provided that an “equitable reduction” scheme was employed. OAG 84-60 .

The secretary of transportation acted within his authority in curtailing the allotment of funds to the debt payment acceleration fund. OAG 92-7 .

Kentucky Law Journal.

Snyder and Irland, The Separation of Governmental Powers Under the Constitution of Kentucky: A Legal and Historical Analysis of L.R.C. v. Brown, 73 Ky. L.J. 165 (1984-85).

48.605. Revision of allotments within appropriations.

  1. Allotments within appropriations for the activities and purposes contained in an enacted branch budget bill may be revised as follows:
    1. For the executive branch, upon authorization of the state budget director at the request of the head of a budget unit;
    2. For the judicial branch, upon authorization of the director of the Administrative Office of the Courts, or his designee; and,
    3. For the legislative branch, upon authorization of the director of the Legislative Research Commission, or his designee.
  2. A copy of the request and determinations shall be transmitted to the Interim Joint Committee on Appropriations and Revenue prior to the implementation of the revision of the allotment.

History. Enact. Acts 1994, ch. 387, § 7, effective July 15, 1994.

48.610. Schedule of quarterly allotments of appropriations.

By June 1 of the preceding fiscal year, each branch of government shall submit to the Finance and Administration Cabinet a schedule of quarterly allotments of appropriations for each budget unit of the branch for the next fiscal year. Allotments shall conform with the appropriations in the enacted branch budget bills or other appropriation provisions.

History. Enact. Acts 1982, ch. 450, § 26, effective July 1, 1983; 1994, ch. 387, § 5, effective July 15, 1994; 2011, ch. 73, § 12, effective June 8, 2011.

48.620. Revision of allotment schedule.

  1. Allotments shall be made as provided by the allotment schedule, and may be revised upon the written certification of the Governor, the Chief Justice, and the Legislative Research Commission for their respective branches of government. No revisions of the allotment schedule may provide for an allotment or allotments in excess of the amount appropriated to that budget unit in a branch budget bill, or for expenditure for any other purpose than specified in a branch budget bill.
  2. Revisions of allotments under this section shall be reported and reviewed as provided by KRS 48.500(3).

History. Enact. Acts 1982, ch. 450, § 27, effective July 1, 1983; 1990, ch. 507, § 16, effective July 13, 1990; 2009, ch. 78, § 15, effective June 25, 2009; 2011, ch. 73, § 13, effective June 8, 2011.

NOTES TO DECISIONS

1.Applicability.

Governor could not reduce state universities' appropriated allotments because, inter alia, this exceeded the governor's authority to revise allotments, as any reduction had to be, but was not, offset by an increase in another allotment. Commonwealth ex rel. Andy Beshear v. Matthew Bevin, 498 S.W.3d 355, 2016 Ky. LEXIS 435 ( Ky. 2016 ).

48.630. Allotment of unbudgeted appropriation — Legislative committee review — Use of unanticipated restricted or federal funds — Exemptions.

  1. An unbudgeted appropriation shall not be allotted without prior review and action by the Interim Joint Committee on Appropriations and Revenue as provided for in this section.
  2. Except as otherwise provided in this section, any request for allotment of unbudgeted appropriations from any fund source shall be made in writing by the head of the budget unit and transmitted simultaneously to the state budget director and the Interim Joint Committee on Appropriations and Revenue.
  3. The state budget director may recommend a proposed revision to a specified appropriation in any branch budget bill to the Interim Joint Committee on Appropriations and Revenue by the seventh day of each month.
  4. If the Interim Joint Committee on Appropriations and Revenue fails to review and act upon the proposed revision by the last day of the month, the proposed revision shall be deemed to have been reviewed and favorably acted upon.
  5. The Interim Joint Committee on Appropriations and Revenue shall review the proposed expenditure of the unbudgeted appropriation for conformance with the purposes of the proposed appropriation and the enacted branch budget bill, and any other relevant statute, by the last day of each month.
  6. If the Interim Joint Committee on Appropriations and Revenue disapproves of the proposed revision of the enacted appropriation, the budget adjustment shall be invalid unless it is:
    1. Revised to comply with the objections of the committee; or
    2. The committee is informed, in writing, in detail, within thirty (30) days of the committee’s disapproval, that a determination has been made not to comply with the objections of the committee.
  7. If an emergency unbudgeted appropriation revision is required due to a declared natural disaster, calamity, or impending deficit in an enacted appropriation as certified by the Governor, the state budget director may effect an emergency revised appropriation, with the approval of the secretary of the Finance and Administration Cabinet, and with concurrent notification to the Interim Joint Committee on Appropriations and Revenue of the action and its justification.
  8. If a budget unit not listed in any enacted branch budget bill receives unanticipated restricted funds or federal funds, the secretary of the Finance and Administration Cabinet, upon written request from the agency head with appropriate documentation of the amount, source, purpose, necessity, and use of the moneys, may authorize the credit and expenditure of these funds for statutory purposes, upon recommendation of the state budget director and review and action by the Interim Joint Committee on Appropriations and Revenue pursuant to the conditions and procedures prescribed by this section. The secretary shall cause to be established a separate discrete restricted funds or federal funds account, as appropriate, for the receipt and disbursement of these funds and shall establish the maximum sum which may be credited and expended from the authorized account.
  9. Institutions of higher education shall be exempt from all conditions and procedures in this section with respect to the authority of the state budget director and the secretary of the Finance and Administration Cabinet to review and approve unbudgeted restricted funds or federal funds or revisions to appropriations in excess of any enacted branch budget bill; however, in the event of a revision, an institution of higher education shall report unbudgeted restricted funds and federal funds to the state budget director and the Interim Joint Committee on Appropriations and Revenue.
  10. Unbudgeted appropriations for expenditure in the judicial branch budget and the legislative branch budget shall be exempt from all conditions and procedures in this section, except that each branch head, or its designee, shall report unbudgeted restricted funds and federal funds to the Interim Joint Committee on Appropriations and Revenue and transmit an informational copy to the state budget director.
  11. The Legislative Research Commission shall maintain records of the findings of the Interim Joint Committee on Appropriations and Revenue and the determinations and reports of actions by the state budget director and transmit these records to the General Assembly when next convened.

History. Enact. Acts 1994, ch. 387, § 6, effective July 15, 1994; 2011, ch. 73, § 14, effective June 8, 2011.

Research References and Practice Aids

2020-2022 Budget Reference.

See State/Executive Branch Budget, 2021 Ky. Acts ch. 169, Pt. III, 2 at 1150.See State/Executive Branch Budget, 2021 Ky. Acts ch. 169, Pt. III, 3 at 1150.See State/Executive Branch Budget, 2021 Ky. Acts ch. 169, Pt. III, 38 at 1155.See Legislative Branch Budget, 2021 Ky. Acts ch. 118, Pt. II, 6 at 781.See Judicial Branch Budget, 2021 Ky. Acts ch. 170, Pt. III, 8 at 1170.

48.700. General fund — Surplus fund account.

There is hereby created in the general fund of the State Treasury a surplus fund account subject to the following terms and conditions:

  1. It shall contain all surplus tax receipts accruing to the general fund as provided by KRS 48.140(3);
  2. Except as provided in KRS 48.705 , it shall contain all funds lapsed from general fund receipts not otherwise appropriated;
  3. It shall contain all receipts from the sale of surplus property purchased with general fund tax receipts and not otherwise appropriated;
  4. Except as provided in KRS 48.705 , it shall contain all general fund tax revenues in excess of estimates;
  5. It shall contain all moneys saved as a result of a reorganization of state government operations funded by the general fund;
  6. Funds in the account shall be invested at interest and the interest shall also accrue to this account;
  7. It shall contain any other funds which are required by law or regulation to accrue to the surplus account of the general fund; and
  8. No expenditures shall be made from this account unless appropriated by the General Assembly or unless required by the budget reduction provisions of a branch budget bill, or as provided by KRS 48.130 .

History. Enact. Acts 1982, ch. 450, § 28, effective July 1, 1983; 1990, ch. 507, § 17, effective July 13, 1990; 1995 (3rd Ex. Sess.), ch. 2, § 5, effective November 3, 1995; 2009, ch. 78, § 16, effective June 25, 2009.

Research References and Practice Aids

2020-2022 Budget Reference.

See State/Executive Branch Budget, 2021 Ky. Acts ch. 169, Pt. III, 22 at 1151.See State/Executive Branch Budget, 2021 Ky. Acts ch. 169, Pt. VII, (1) at 1160.See Transportation Cabinet Budget, 2021 Ky. Acts ch. 198, Section 2 at 1513.

48.705. General fund — Budget reserve trust fund account.

  1. A budget reserve trust fund account is hereby created in the general fund, pursuant to KRS 45.305 . The budget reserve trust fund account shall be funded through direct appropriations, and surplus amounts as provided in subsection (2) of this section. Moneys in the account shall remain unallotted unless required by the provisions of this section.
    1. Each fiscal year, except as provided in subsection (3) of this section, within thirty (30) days of the end of the fiscal year, the secretary of the Finance and Administration Cabinet shall cause to be deposited to the budget reserve trust fund account the lesser of the following amounts: (2) (a) Each fiscal year, except as provided in subsection (3) of this section, within thirty (30) days of the end of the fiscal year, the secretary of the Finance and Administration Cabinet shall cause to be deposited to the budget reserve trust fund account the lesser of the following amounts:
      1. Fifty percent (50%) of the general fund surplus; or
      2. The amount necessary from the general fund surplus to make the balance of the budget reserve trust fund account equal to five percent (5%) of the actual general fund receipts collected during the fiscal year just ended, as determined by the Finance and Administration Cabinet.
    2. Any amounts to be deposited to the budget reserve trust fund account from the general fund surplus shall be determined after the surplus has been reduced by the amount necessary to implement the provisions of any surplus expenditure plan authorized by KRS 48.140 and enacted as a part of a branch budget bill.
  2. If, at the close of any fiscal year, the budget reserve trust fund account has a balance equal to or greater than five percent (5%) of the actual general fund receipts collected during the fiscal year just ended, as determined by the Finance and Administration Cabinet, the deposits required under subsection (2) of this section shall be suspended for that year.
  3. Moneys in the budget reserve trust fund account may be appropriated by the General Assembly in a regular or special session.
  4. Before authorizing any allotments from the budget reserve trust fund account, the secretary of the Finance and Administration Cabinet shall notify in writing the Interim Joint Committee on Appropriations and Revenue. The notice shall include the amount and purpose for the proposed allotment.
  5. Within thirty (30) days of the close of each fiscal year, the secretary of the Finance and Administration Cabinet shall report to the Interim Joint Committee on Appropriations and Revenue the general fund receipts collected for the fiscal year just ended, the balance of the budget reserve trust fund account, and any amounts deposited to the budget reserve trust fund account pursuant to the provisions of subsection (2) of this section.
  6. All sums appropriated or deposited to the budget reserve trust fund account shall not lapse at the close of the fiscal year but shall carry forward into the next fiscal year.

History. Enact. Acts 1995 (3rd Ex. Sess.), ch. 2, § 1, effective November 3, 1995; 2000, ch. 46, § 20, effective July 14, 2000; 2009, ch. 78, § 17, effective June 25, 2009.

Research References and Practice Aids

2020-2022 Budget Reference.

See State/Executive Branch Budget, 2021 Ky. Acts ch. 169, Pt. III, 23 at 1151.See State/Executive Branch Budget, 2021 Ky. Acts ch. 169, Pt. VII, (1) at 1160.See Transportation Cabinet Budget, 2021 Ky. Acts ch. 198, Section 2 at 1513.

48.710. Road fund — Surplus fund account.

There is hereby created in the road fund of the State Treasury a surplus fund account subject to the following terms and conditions:

  1. It shall contain all surplus tax receipts accruing to the road fund as provided by KRS 48.140(3).
  2. It shall contain all funds lapsed from moneys originating from road fund receipts;
  3. It shall contain all receipts from the sale of surplus property purchased with road fund receipts;
  4. It shall contain all road fund receipts in excess of estimates;
  5. It shall contain all moneys saved as a result of a reorganization of state government operations funded by the road fund;
  6. Funds in the account shall be invested at interest and the interest shall also accrue to this account;
  7. It shall contain any other funds which are required by law or regulation to accrue to the surplus account of the road fund; and
  8. No expenditures shall be made from this account unless appropriated by the General Assembly or unless required by budget reduction provisions of a branch budget bill, or as provided by KRS 48.130 .

History. Enact. Acts 1982, ch. 450, § 29, effective July 1, 1983; 1990, ch. 507, § 18, effective July 13, 1990; 2009, ch. 78, § 18, effective June 25, 2009.

Research References and Practice Aids

2020-2022 Budget Reference.

See State/Executive Branch Budget, 2021 Ky. Acts ch. 169, Pt. IX at 1161.

48.715. Emergency disaster relief account.

  1. An emergency disaster relief account is hereby created in the road fund.
  2. The account shall contain moneys directly appropriated by the General Assembly from the road fund.
  3. Moneys in the emergency disaster relief account shall only be expended on projects specifically designated by the General Assembly in a regular or special session.
  4. Interest earned on moneys in the account shall accrue to the account.
  5. All sums appropriated or deposited to the account shall not lapse at the close of the fiscal year but shall carry forward into the next fiscal year.

HISTORY: 2021 ch. 156, § 32, effective March 29, 2021.

48.720. Lapse of appropriated general or road fund debt service for canceled projects and excess amounts.

In the event that any authorized capital construction or equipment purchase projects are canceled, or if conditions imposed by any branch budget bill are not met, any appropriated general or road fund debt service for those projects shall remain unallotted and lapse to the credit of the respective surplus account. In the event that general or road fund appropriated debt service is more than is required due to favorable interest rates, refinancing, or timing variances, the excess debt service in each fiscal year shall remain unallotted and lapse to the credit of the respective surplus account.

History. Enact. Acts 1994, ch. 387, § 9, effective July 15, 1994.

2016-2018 Budget Reference.

See State/Executive Branch Budget, 2016 Ky. Acts ch. 149, Pt. I, A, 32 (1) at 1055.

See State/Executive Branch Budget, 2016 Ky. Acts ch. 149, Pt. III, 32 at 1133.

48.730. Required notifications by state agency when declining entitlement to federal funds.

No state agency entitled to federal funds which would represent one hundred percent (100%) of the cost of a program in which the state participates shall decline to accept or receive that entitlement without notification to the state budget director and the Interim Joint Committee on Appropriations and Revenue.

History. Enact. Acts 1994, ch. 387, § 8, effective July 15, 1994.

48.800. Fiscal reporting to branches of government — Annual financial and program status reports.

The Finance and Administration Cabinet shall prepare and submit to each branch of government:

  1. Within ten (10) days after the close of each month copies of the accounts of the budget units of that branch of government with the appropriations and allotments in favor of its budget units and the balances as of the beginning and end of that month.
  2. Within ten (10) days after the close of each month, prepare and transmit to each branch of government a report embodying a summary statement of the actual financial condition of each fund of the major fund groups as of the close of the previous month, a summary statement showing the receipts and payments of each such fund for the previous month and for the current fiscal year to the close of the previous month, a summary budget statement for each such fund showing the available cash balance as of the end of the previous month, the amount of cash estimated to be realized from each source during the remaining months of the fiscal year, the total means of financing, the amount of the unallotted balances of all appropriations, the estimated amount of unliquidated commitments, and the estimated cash surplus or deficit.
  3. Within ninety (90) days of the close of a fiscal year, file with each branch of government a complete report of the financial transactions of the preceding fiscal year and of the financial condition of the Commonwealth as of the end of that fiscal year, with such comments and supplementary data necessary to make the report complete and easy to understand.
  4. Each branch of government shall publish a financial and program status report, within ninety (90) days of the close of a fiscal year, detailing for that period, activities, appropriations, allotments, expenditures, receipts, transfers, encumbrances and available balances of each budget unit of the branch, and an explanation of the programs and services provided by the branch.
  5. In order to effectuate the budget review function of the General Assembly, each branch of government shall make available, on a continuing basis, records which detail activities, appropriations, allotments, expenditures, receipts, transfers, encumbrances and available balances of each budget unit of the branch. Such records shall be made available in the form necessary to facilitate their read only accession by means of electronic data processing procedures employed by the Legislative Research Commission.

History. Enact. Acts 1982, ch. 450, § 30, effective July 1, 1983; 1984, ch. 131, § 4, effective July 13, 1984.

48.810. Strategic plan — Progress report — Methodology — Training course — Electronic database.

Each program cabinet, the Department for Local Government, the Department of Military Affairs, and the Commonwealth Office of Technology shall develop and submit a four (4) year strategic plan to meet the broad goals outlined by the Governor and shall submit an electronic copy of the full plan and an electronic copy of a brief summary of that plan to the state budget director, the secretary of the Executive Cabinet, and the Legislative Research Commission with each biennial budget request.

  1. Each strategic plan shall include but not be limited to:
    1. A statement of the cabinet or administrative entity’s value, vision, and mission;
    2. A statement of how the cabinet or administrative entity’s strategic plan is aligned with the Governor’s goals and linked to the budget request and the six (6) year capital plan of the cabinet or administrative entity;
    3. A brief summary of a situation analysis conducted by the program cabinet or administrative entity;
    4. Identification of measurable goals for the next four (4) years;
    5. Specification of objectives to meet the stated goals;
    6. Identification of performance indicators to be used to measure progress toward meeting goals and objectives; and
    7. A progress report providing data and information on the performance indicators set forth in the program cabinet or administrative entity’s most recent strategic plan.
  2. On or before September 1 of each even-numbered fiscal year, program cabinets and administrative entities which have submitted strategic plans in the previous fiscal year shall submit a progress report to the Office of the State Budget Director, or its designee, which provides data and information regarding the progress the program cabinet or entity has made toward meeting its goals as measured by performance indicators set forth in the cabinet’s or entity’s most recent strategic plan.
  3. The state budget director shall designate an entity to develop and implement a methodology for strategic planning and progress reporting for use by program cabinets and administrative entities submitting strategic plans and progress reports pursuant to this section. The entity designated by the state budget director shall develop and make available a training course in strategic planning that is appropriate for and targeted to state government managers, and shall make that training course available to state managers and their designees who have responsibility for the completion of a strategic plan as required by this section.
  4. The Commonwealth Office of Technology shall maintain uniform electronic strategic plan and progress report submission forms and a procedure that allows all plans and progress reports to be entered into an electronic database that is searchable by interested parties. The database shall be developed and maintained in a form that complies with all provisions of KRS 48.950 , 48.955 , and 48.960 . The Commonwealth Office of Technology shall develop and maintain a program to provide public access to submitted plans and progress reports.

History. Enact. Acts 2002, ch. 144, § 1, effective July 15, 2002; 2005, ch. 85, § 78, effective June 20, 2005; 2007, ch. 47, § 34, effective June 26, 2007; 2010, ch. 117, § 40, effective July 15, 2010.

Automated Central Budget Information System

48.950. Continuous budget information system — Contents — Responsibility for.

  1. In order to effectuate the constitutional power and duty of the General Assembly to raise and appropriate revenue and approve and adopt a balanced budget, and in order that members and committees of the General Assembly and the Legislative Research Commission may be informed on a continuous basis about current and prospective financial conditions and budgetary needs of the Commonwealth and its budget units, the Kentucky General Assembly finds and declares that uniform detailed budget data and records relating to expenditures, receipts and activities and the budgetary operations of all budget units must be available in electronic and print form to the General Assembly and the Legislative Research Commission on a continuous and timely basis.
  2. The contents of all electronic and print forms, records, data and procedures established under KRS 48.955 and 48.960 shall pertain to:
    1. The submission of budget unit requests and branch budget recommendations;
    2. The adoption of budget bills;
    3. The allotments under, and authorized adjustments and revisions to, the enacted budget;
    4. The receipts and disbursements of budget funds pursuant to appropriations enacted by the General Assembly; and
    5. The financial and budgetary conditions of the Commonwealth and branch budget units. These contents, forms and records shall be standard and uniform for all budget units.
  3. The Governor, the Chief Justice and the Legislative Research Commission for their respective branches and budget units, shall cause to be created, maintained and transmitted in electronic form the data, records and procedures necessary to fulfill the intent and purposes of KRS 48.955 and 48.960 and which may be provided by KRS 48.955 and 48.960 .

History. Enact. Acts 1988, ch. 3, § 1, effective February 10, 1988.

48.955. System to be prescribed by Legislative Research Commission — Data germane to appropriations to be included — Schedule for transmission of information — Availability of data — Reports.

  1. The Legislative Research Commission, or its designee, shall prescribe standard electronic and print forms, records, data elements, guidelines, and instructions to be used by all branches and budget units. Such electronic and printed detailed records shall be made available and transmitted by the heads of each branch of government, or their designees, on a continuous and timely basis, in the form and technology used by the General Assembly and the Legislative Research Commission through electronic data processing procedures.
    1. Representatives designated by the Governor, Chief Justice, and the Legislative Research Commission for their respective branches shall assist, upon request, the Legislative Research Commission in the creation and maintenance of an automated central budget information system which shall consist of uniform electronic detailed records concerning appropriations, expenditures, receipts, and activities; (2) (a) Representatives designated by the Governor, Chief Justice, and the Legislative Research Commission for their respective branches shall assist, upon request, the Legislative Research Commission in the creation and maintenance of an automated central budget information system which shall consist of uniform electronic detailed records concerning appropriations, expenditures, receipts, and activities;
    2. This system shall include all data germane to the appropriations of current and prospective budgetary resources and funds, including personnel-related data;
    3. Preliminary work papers shall not be considered germane; however, all documentation upon which final budget decisions are made shall be considered germane and shall be included in the system.
  2. Each branch of government shall transmit the prescribed forms, records, and detailed data authorized under KRS 48.950 to 48.960 on such schedule and dates as may be determined necessary by the General Assembly, the Legislative Research Commission or their appropriations committees or budget review committees.
  3. The Legislative Research Commission shall make available the contents and data contained on electronic records in the automated central budget information system, upon request, to each branch of government.
  4. At the request of the General Assembly, the Legislative Research Commission or their appropriations committees and budget review committees, the Legislative Research Commission shall issue a report, in electronic or print form, on the current and prospective budget condition and operations of the Commonwealth and its branch budget units.

History. Enact. Acts 1988, ch. 3, § 2, effective February 10, 1988.

48.960. Conflicting provisions superseded — Electronic imprint data as additional data — Ownership of data.

  1. KRS 48.950 and 48.955 shall supersede all other provisions in law which may be in conflict, including but not limited to KRS Chapters 6, 7, 11, 12, 15, 18 and 18A, 27A, 42, 43, 44, 45, 46, 47, 48, 56, 58, 131, 152, 157, 164, 171, 174, and 177.
  2. Data and records in electronic or print form which are authorized under KRS 48.950 and 48.955 shall be in addition to all other data, records and forms which may be provided by law, including but not limited to, KRS 42.005 to 42.990 , 45.001 to 45.991 , and 48.010 to 48.800 .
  3. The General Assembly declares that:
    1. All data collected by or in the custody of any budget unit resulting from the expenditure of appropriated funds and which is not confidential under law shall be deemed to be the property right of the Commonwealth; and
    2. No property right or privilege of confidentiality may be asserted or maintained by such custodial budget unit for the production of public records not exempted pursuant to KRS Chapter 61 which may be created and required pursuant to KRS 48.950 and 48.955 .

History. Enact. Acts 1988, ch. 3, § 3, effective February 10, 1988.

CHAPTER 49 Kentucky Claims Commission

HISTORY: 2017 ch. 74, § 1, effective June 29, 2017.

49.010. Office of Claims and Appeals — Administrative boards within office — Executive director — Powers and duties.

  1. The Office of Claims and Appeals is created within the Public Protection Cabinet and shall constitute a statutory administrative office of the state government within the meaning of KRS Chapter 12.
  2. The Office of Claims and Appeals shall consist of three (3) separate and distinct administrative boards attached to the office within the meaning of KRS 12.020 :
    1. The Board of Tax Appeals;
    2. The Board of Claims; and
    3. The Crime Victims Compensation Board.
  3. The executive director of the Office of Claims and Appeals shall be appointed by the secretary of the Public Protection Cabinet with the approval of the Governor in accordance with KRS 12.050 . The secretary of the Public Protection Cabinet is the appointing authority for the Office of Claims and Appeals, and the executive director shall be directly responsible to the secretary of the Public Protection Cabinet and shall perform the functions, powers, and duties provided by law and prescribed by the secretary of the Public Protection Cabinet. The executive director shall:
    1. Carry out the policy and program directives of the boards;
    2. Be responsible for the day-to-day operations of the office;
    3. Establish appropriate organizational structures and personnel policies;
    4. Prepare annual reports on the office’s and boards’ activities;
    5. Prepare budgets; and
    6. Perform all other duties as directed by the secretary and the boards and necessary for the operations of the office.
  4. The Office of Claims and Appeals shall be authorized to:
    1. Employ necessary staff, secure adequate office space, and execute other administrative and logistical matters as may be necessary to ensure proper functioning of the office;
    2. Promulgate, amend, and repeal suitable administrative regulations to carry out the provisions and purposes of the office’s statutory authority;
    3. Publicize widely the functions and purposes of the Office of Claims and Appeals and its attached boards; and
    4. Enter into agreements with any state agency, political subdivision of the state, postsecondary education institution, or other person or entity to enlist assistance to implement the duties and responsibilities of the office.
  5. The principal office of the Office of Claims and Appeals shall be at Frankfort, Kentucky, and shall be open during regular working hours for the conduct of its business.

HISTORY: 2017 ch. 74, § 1, effective June 29, 2017; 2021 ch. 185, § 12, effective June 29, 2021.

49.010. Office of Claims and Appeals — Administrative boards within office — Executive director — Powers and duties.

  1. The Office of Claims and Appeals is created within the Public Protection Cabinet and shall constitute a statutory administrative office of the state government within the meaning of KRS Chapter 12.
  2. The Office of Claims and Appeals shall consist of three (3) separate and distinct administrative boards attached to the office within the meaning of KRS 12.020 :
    1. The Board of Tax Appeals;
    2. The Board of Claims; and
    3. The Crime Victims Compensation Board.
  3. The executive director of the Office of Claims and Appeals shall be appointed by the secretary of the Public Protection Cabinet with the approval of the Governor in accordance with KRS 12.050 . The secretary of the Public Protection Cabinet is the appointing authority for the Office of Claims and Appeals, and the executive director shall be directly responsible to the secretary of the Public Protection Cabinet and shall perform the functions, powers, and duties provided by law and prescribed by the secretary of the Public Protection Cabinet. The executive director shall:
    1. Carry out the policy and program directives of the boards;
    2. Be responsible for the day-to-day operations of the office;
    3. Establish appropriate organizational structures and personnel policies;
    4. Prepare annual reports on the office’s and boards’ activities;
    5. Prepare budgets;
    6. Perform all other duties as directed by the secretary and the boards and necessary for the operations of the office; and
    7. Keep written records documenting the completion of training by staff for and members of the Crime Victims Compensation Board.
  4. The Office of Claims and Appeals shall be authorized to:
    1. Employ necessary staff, secure adequate office space, and execute other administrative and logistical matters as may be necessary to ensure proper functioning of the office;
    2. Promulgate, amend, and repeal suitable administrative regulations to carry out the provisions and purposes of the office’s statutory authority;
    3. Publicize widely the functions and purposes of the Office of Claims and Appeals and its attached boards;
    4. Enter into agreements with any state agency, political subdivision of the state, postsecondary education institution, or other person or entity to enlist assistance to implement the duties and responsibilities of the office; and
    5. Ensure that staff for the Crime Victims Compensation Board receives trauma-informed training to understand the challenges faced by victims of crime, including factors that may result in the delayed filing of a claim. Staff shall receive six (6) hours of training under this paragraph within thirty (30) days of being hired, and three (3) hours of training each year thereafter. Training pursuant to this paragraph may be developed in collaboration with organizations and agencies that specialize in victim services and victim advocacy.
  5. The principal office of the Office of Claims and Appeals shall be at Frankfort, Kentucky, and shall be open during regular working hours for the conduct of its business.

HISTORY: 2017 ch. 74, § 1, effective June 29, 2017; 2021 ch. 185, § 12, effective June 29, 2021; 2022 ch. 98, § 1.

49.020. Membership and duties of Board of Tax Appeals, Crime Victims Compensation Board, and Board of Claims.

    1. As used in this section and KRS 49.220 , “revenue and taxation agency” means and includes any agency of state or county government that issues final rulings, orders, or determinations affecting revenue and taxation. (1) (a) As used in this section and KRS 49.220 , “revenue and taxation agency” means and includes any agency of state or county government that issues final rulings, orders, or determinations affecting revenue and taxation.
    2. The Board of Tax Appeals created by KRS 49.010 shall have the power and authority to hear and determine appeals from final rulings, orders, and determinations of any revenue and taxation agency.
    1. The Board of Tax Appeals shall consist of three (3) members appointed by the Governor, subject to Senate confirmation in accordance with KRS 11.160 for each appointment or reappointment. One (1) member shall be appointed initially for a two (2) year term. One (1) member shall be appointed initially for a three (3) year term. One (1) member shall be appointed initially for a four (4) year term. Thereafter, all appointments to the board shall be for a four (4) year term. There shall be no limit to the amount of reappointments a member shall receive. (2) (a) The Board of Tax Appeals shall consist of three (3) members appointed by the Governor, subject to Senate confirmation in accordance with KRS 11.160 for each appointment or reappointment. One (1) member shall be appointed initially for a two (2) year term. One (1) member shall be appointed initially for a three (3) year term. One (1) member shall be appointed initially for a four (4) year term. Thereafter, all appointments to the board shall be for a four (4) year term. There shall be no limit to the amount of reappointments a member shall receive.
    2. Vacancies for unexpired terms shall be filled in the same manner as regular appointments, but the appointees shall hold office only to the end of the unexpired term of the member replaced.
    3. The Governor shall appoint a chairperson for the board, subject to Senate confirmation in accordance with KRS 11.160 for each appointment or reappointment. The chairperson shall be appointed for a four (4) year term and shall be an attorney with the qualifications required of candidates for Circuit Judge. The chairperson shall be the presiding officer over appeals heard by the board.
    4. The Governor shall establish the compensation, not to include benefits, of the members of the board pursuant to KRS 64.640 .
    5. Two (2) of the members shall be attorneys with the qualifications required of candidates for Circuit Judge. One (1) of the members shall have a background in taxation. No member shall engage in any occupation or business inconsistent with his or her duties as such a member.
  1. The Crime Victims Compensation Board created by KRS 49.010 shall have the power and authority to hear and determine all matters relating to a claim by a crime victim or a person authorized by law to act on behalf of a crime victim for compensation.
    1. The Crime Victims Compensation Board shall consist of three (3) members appointed by the Governor, not all of whom shall be engaged in the same occupation or profession. Appointed board members shall be subject to Senate confirmation in accordance with KRS 11.160 for each appointment or reappointment. Members shall be appointed for a four (4) year term. There shall be no limit to the amount of reappointments a member may receive. One (1) member shall be appointed initially for a two (2) year term. One (1) member shall be appointed initially for a three (3) year term. One (1) member shall be appointed initially for a four (4) year term. Thereafter, all appointments to the board shall be for a four (4) year term. Two (2) of the appointees shall be a victim as defined in KRS 421.500(1), the parent, spouse, sibling, or child of a victim as defined in KRS 421.500(1), whether or not the victim is deceased, or a victim advocate as defined in KRS 421.570(1); and the other appointee shall be an attorney licensed to practice law in this state with two (2) years of experience. (4) (a) The Crime Victims Compensation Board shall consist of three (3) members appointed by the Governor, not all of whom shall be engaged in the same occupation or profession. Appointed board members shall be subject to Senate confirmation in accordance with KRS 11.160 for each appointment or reappointment. Members shall be appointed for a four (4) year term. There shall be no limit to the amount of reappointments a member may receive. One (1) member shall be appointed initially for a two (2) year term. One (1) member shall be appointed initially for a three (3) year term. One (1) member shall be appointed initially for a four (4) year term. Thereafter, all appointments to the board shall be for a four (4) year term. Two (2) of the appointees shall be a victim as defined in KRS 421.500(1), the parent, spouse, sibling, or child of a victim as defined in KRS 421.500(1), whether or not the victim is deceased, or a victim advocate as defined in KRS 421.570(1); and the other appointee shall be an attorney licensed to practice law in this state with two (2) years of experience.
    2. Vacancies for unexpired terms shall be filled in the same manner as regular appointments, but the appointees shall hold office only to the end of the unexpired term of the member replaced.
    3. The Governor shall appoint a chairperson for the board, subject to Senate confirmation in accordance with KRS 11.160 for each appointment or reappointment. The chairperson shall be appointed for a four (4) year term.
    4. The Governor shall establish the compensation, not to include benefits, of the members of the board pursuant to the provisions of KRS 64.640 .
  2. The Board of Claims created by KRS 49.010 shall have the following powers and authority to investigate, hear proof, and compensate persons for damages sustained to either person or property as a proximate result of negligence on the part of the Commonwealth, any of its cabinets, departments, bureaus, or agencies, or any of its officers, agents, or employees while acting within the scope of their employment by the Commonwealth or any of its cabinets, departments, bureaus, or agencies; except, however, regardless of any provision of law to the contrary, the Commonwealth, its cabinets, departments, bureaus, and agencies, and its officers, agents, and employees, while acting within the scope of their employment by the Commonwealth or any of its cabinets, departments, bureaus, or agencies, shall not be liable for collateral or dependent claims which are dependent on loss to another and not the claimant or damages for mental distress or pain or suffering, and compensation shall not be allowed, awarded, or paid for such claims for damages.
    1. The Board of Claims shall consist of three (3) members appointed by the Governor, subject to Senate confirmation in accordance with KRS 11.160 for each appointment or reappointment. One (1) member shall be appointed initially for a two (2) year term. One (1) member shall be appointed initially for a three (3) year term. One (1) member shall be appointed initially for a four (4) year term. Thereafter, all appointments to the board shall be for a four (4) year term. There shall be no limit to the amount of reappointments a member shall receive. (6) (a) The Board of Claims shall consist of three (3) members appointed by the Governor, subject to Senate confirmation in accordance with KRS 11.160 for each appointment or reappointment. One (1) member shall be appointed initially for a two (2) year term. One (1) member shall be appointed initially for a three (3) year term. One (1) member shall be appointed initially for a four (4) year term. Thereafter, all appointments to the board shall be for a four (4) year term. There shall be no limit to the amount of reappointments a member shall receive.
    2. Vacancies for unexpired terms shall be filled in the same manner as regular appointments, but the appointees shall hold office only to the end of the unexpired term of the member replaced.
    3. The Governor shall appoint a chairperson for the board, subject to Senate confirmation in accordance with KRS 11.160 for each appointment or reappointment. The chairperson shall be appointed for a four (4) year term, and shall be an attorney with the qualifications required of a candidate for Circuit Judge. The chairperson shall be the presiding officer over appeals heard by the board.
    4. The Governor shall establish the compensation, not to include benefits, of the members of the board pursuant to the provision of KRS 64.640 .
    5. Two (2) of the members shall be attorneys with the qualifications required of candidates for Circuit Judge and have a background and working knowledge in Kentucky tort law. One (1) member shall have a background in business. No member shall engage in any occupation or business inconsistent with his or her duties as such a member.
  3. The Board of Tax Appeals, the Board of Claims, and the Crime Victims Compensation Board shall each be separately authorized to:
    1. Promulgate, amend, and repeal suitable administrative regulations to carry out the provisions and purposes of the board’s statutory authority;
    2. Issue subpoenas and discovery orders, and to petition a court of competent jurisdiction for any order necessary to carry out the board’s powers and duties;
    3. Take or cause to be taken affidavits or depositions within or without the state;
    4. Administer or cause to be administered oaths;
    5. Except for the power to issue final decisions on the merits of a claim or appeal, to delegate any of its power or authority to the Office of Claims and Appeals; and
    6. Publicize widely the functions and purposes of the board.
  4. If any appointed board member has a conflict of interest, as contemplated by KRS 11A.030 , involving any matter pending before the board, the secretary of the cabinet shall appoint a member of one (1) of the other boards administered by the Office of Claims and Appeals as a substitute member. Following appointment, the substitute board member shall serve in place of the member who has a conflict for all actions and votes relevant to that matter.
  5. Members of the Board of Tax Appeals, Board of Claims, and Crime Victims Compensation Board shall receive new member orientation and annual training to discuss new legislation, pertinent court decisions, and board policies and procedures.
  6. The boards shall meet as often as necessary to perform their statutory responsibilities as outlined in this chapter. A majority of the members of the commission shall constitute a quorum for the transaction of business.
  7. Immediately following June 29, 2021, the Governor shall review the current board, determine any members that are no longer qualified, and appoint new members to the board if necessary.

HISTORY: 2017 ch. 74, § 2, effective June 29, 2017; 2021 ch. 185, § 13, effective June 29, 2021; 2022 ch. 36, § 2, effective March 22, 2022.

NOTES TO DECISIONS

Cited in:

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

49.020. Membership and duties of Board of Tax Appeals, Crime Victims Compensation Board, and Board of Claims.

    1. As used in this section and KRS 49.220 , “revenue and taxation agency” means and includes any agency of state, county, and local government, including special taxing districts, that issues final rulings, orders, or determinations affecting revenue and taxation. (1) (a) As used in this section and KRS 49.220 , “revenue and taxation agency” means and includes any agency of state, county, and local government, including special taxing districts, that issues final rulings, orders, or determinations affecting revenue and taxation.
    2. The Board of Tax Appeals created by KRS 49.010 shall have the power and authority to hear and determine appeals from final rulings, orders, and determinations of any revenue and taxation agency.
    1. The Board of Tax Appeals shall consist of three (3) members appointed by the Governor, subject to Senate confirmation in accordance with KRS 11.160 for each appointment or reappointment. One (1) member shall be appointed initially for a two (2) year term. One (1) member shall be appointed initially for a three (3) year term. One (1) member shall be appointed initially for a four (4) year term. Thereafter, all appointments to the board shall be for a four (4) year term. There shall be no limit to the amount of reappointments a member shall receive. (2) (a) The Board of Tax Appeals shall consist of three (3) members appointed by the Governor, subject to Senate confirmation in accordance with KRS 11.160 for each appointment or reappointment. One (1) member shall be appointed initially for a two (2) year term. One (1) member shall be appointed initially for a three (3) year term. One (1) member shall be appointed initially for a four (4) year term. Thereafter, all appointments to the board shall be for a four (4) year term. There shall be no limit to the amount of reappointments a member shall receive.
    2. Vacancies for unexpired terms shall be filled in the same manner as regular appointments, but the appointees shall hold office only to the end of the unexpired term of the member replaced.
    3. The Governor shall appoint a chairperson for the board, subject to Senate confirmation in accordance with KRS 11.160 for each appointment or reappointment. The chairperson shall be appointed for a four (4) year term and shall be an attorney with the qualifications required of candidates for Circuit Judge. The chairperson shall be the presiding officer over appeals heard by the board.
    4. The Governor shall establish the compensation, not to include benefits, of the members of the board pursuant to KRS 64.640 .
    5. Two (2) of the members shall be attorneys with the qualifications required of candidates for Circuit Judge. One (1) of the members shall have a background in taxation. No member shall engage in any occupation or business inconsistent with his or her duties as such a member.
  1. The Crime Victims Compensation Board created by KRS 49.010 shall have the power and authority to hear and determine all matters relating to a claim by a crime victim or a person authorized by law to act on behalf of a crime victim for compensation.
    1. The Crime Victims Compensation Board shall consist of three (3) members appointed by the Governor, not all of whom shall be engaged in the same occupation or profession. Appointed board members shall be subject to Senate confirmation in accordance with KRS 11.160 for each appointment or reappointment. Members shall be appointed for a four (4) year term. There shall be no limit to the amount of reappointments a member may receive. One (1) member shall be appointed initially for a two (2) year term. One (1) member shall be appointed initially for a three (3) year term. One (1) member shall be appointed initially for a four (4) year term. Thereafter, all appointments to the board shall be for a four (4) year term. Two (2) of the appointees shall be a victim as defined in KRS 421.500(1), the parent, spouse, sibling, or child of a victim as defined in KRS 421.500(1), whether or not the victim is deceased, or a victim advocate as defined in KRS 421.570(1); and the other appointee shall be an attorney licensed to practice law in this state with two (2) years of experience. (4) (a) The Crime Victims Compensation Board shall consist of three (3) members appointed by the Governor, not all of whom shall be engaged in the same occupation or profession. Appointed board members shall be subject to Senate confirmation in accordance with KRS 11.160 for each appointment or reappointment. Members shall be appointed for a four (4) year term. There shall be no limit to the amount of reappointments a member may receive. One (1) member shall be appointed initially for a two (2) year term. One (1) member shall be appointed initially for a three (3) year term. One (1) member shall be appointed initially for a four (4) year term. Thereafter, all appointments to the board shall be for a four (4) year term. Two (2) of the appointees shall be a victim as defined in KRS 421.500(1), the parent, spouse, sibling, or child of a victim as defined in KRS 421.500(1), whether or not the victim is deceased, or a victim advocate as defined in KRS 421.570(1); and the other appointee shall be an attorney licensed to practice law in this state with two (2) years of experience.
    2. Vacancies for unexpired terms shall be filled in the same manner as regular appointments, but the appointees shall hold office only to the end of the unexpired term of the member replaced.
    3. The Governor shall appoint a chairperson for the board, subject to Senate confirmation in accordance with KRS 11.160 for each appointment or reappointment. The chairperson shall be appointed for a four (4) year term.
    4. The Governor shall establish the compensation, not to include benefits, of the members of the board pursuant to the provisions of KRS 64.640 .
  2. The Board of Claims created by KRS 49.010 shall have the following powers and authority to investigate, hear proof, and compensate persons for damages sustained to either person or property as a proximate result of negligence on the part of the Commonwealth, any of its cabinets, departments, bureaus, or agencies, or any of its officers, agents, or employees while acting within the scope of their employment by the Commonwealth or any of its cabinets, departments, bureaus, or agencies; except, however, regardless of any provision of law to the contrary, the Commonwealth, its cabinets, departments, bureaus, and agencies, and its officers, agents, and employees, while acting within the scope of their employment by the Commonwealth or any of its cabinets, departments, bureaus, or agencies, shall not be liable for collateral or dependent claims which are dependent on loss to another and not the claimant or damages for mental distress or pain or suffering, and compensation shall not be allowed, awarded, or paid for such claims for damages.
    1. The Board of Claims shall consist of three (3) members appointed by the Governor, subject to Senate confirmation in accordance with KRS 11.160 for each appointment or reappointment. One (1) member shall be appointed initially for a two (2) year term. One (1) member shall be appointed initially for a three (3) year term. One (1) member shall be appointed initially for a four (4) year term. Thereafter, all appointments to the board shall be for a four (4) year term. There shall be no limit to the amount of reappointments a member shall receive. (6) (a) The Board of Claims shall consist of three (3) members appointed by the Governor, subject to Senate confirmation in accordance with KRS 11.160 for each appointment or reappointment. One (1) member shall be appointed initially for a two (2) year term. One (1) member shall be appointed initially for a three (3) year term. One (1) member shall be appointed initially for a four (4) year term. Thereafter, all appointments to the board shall be for a four (4) year term. There shall be no limit to the amount of reappointments a member shall receive.
    2. Vacancies for unexpired terms shall be filled in the same manner as regular appointments, but the appointees shall hold office only to the end of the unexpired term of the member replaced.
    3. The Governor shall appoint a chairperson for the board, subject to Senate confirmation in accordance with KRS 11.160 for each appointment or reappointment. The chairperson shall be appointed for a four (4) year term, and shall be an attorney with the qualifications required of a candidate for Circuit Judge. The chairperson shall be the presiding officer over appeals heard by the board.
    4. The Governor shall establish the compensation, not to include benefits, of the members of the board pursuant to the provision of KRS 64.640 .
    5. Two (2) of the members shall be attorneys with the qualifications required of candidates for Circuit Judge and have a background and working knowledge in Kentucky tort law. One (1) member shall have a background in business. No member shall engage in any occupation or business inconsistent with his or her duties as such a member.
  3. The Board of Tax Appeals, the Board of Claims, and the Crime Victims Compensation Board shall each be separately authorized to:
    1. Promulgate, amend, and repeal suitable administrative regulations to carry out the provisions and purposes of the board’s statutory authority;
    2. Issue subpoenas and discovery orders, and to petition a court of competent jurisdiction for any order necessary to carry out the board’s powers and duties;
    3. Take or cause to be taken affidavits or depositions within or without the state;
    4. Administer or cause to be administered oaths;
    5. Except for the power to issue final decisions on the merits of a claim or appeal, to delegate any of its power or authority to the Office of Claims and Appeals; and
    6. Publicize widely the functions and purposes of the board.
  4. If any appointed board member has a conflict of interest, as contemplated by KRS 11A.030 , involving any matter pending before the board, the secretary of the cabinet shall appoint a member of one (1) of the other boards administered by the Office of Claims and Appeals as a substitute member. Following appointment, the substitute board member shall serve in place of the member who has a conflict for all actions and votes relevant to that matter.
  5. Members of the Board of Tax Appeals, Board of Claims, and Crime Victims Compensation Board shall receive new member orientation and annual training to discuss new legislation, pertinent court decisions, and board policies and procedures. Members of the Crime Victims Compensation Board shall receive trauma-informed training to understand the challenges faced by victims of crime, including factors that may result in the delayed filing of a claim. Members shall receive six (6) hours of training under this subsection within thirty (30) days of appointment, and three (3) hours of training each year thereafter. Training pursuant to this subsection may be developed in collaboration with organizations and agencies that specialize in victim services and victim advocacy.
  6. The boards shall meet as often as necessary to perform their statutory responsibilities as outlined in this chapter. A majority of the members of the commission shall constitute a quorum for the transaction of business.
  7. Immediately following June 29, 2021, the Governor shall review the current board, determine any members that are no longer qualified, and appoint new members to the board if necessary.

HISTORY: 2017 ch. 74, § 2, effective June 29, 2017; 2021 ch. 185, § 13, effective June 29, 2021; 2022 ch. 98, § 2.

Investigations, Hearings, and Compensation for Negligent Acts

49.030. KRS 49.040 to 49.180 applicable to power and authority outlined in KRS 49.020(5).

KRS 49.040 to 49.180 shall apply to the power and authority of the Board of Claims outlined in KRS 49.020(5).

HISTORY: 2017 ch. 74, § 3, effective June 29, 2017; 2021 ch. 185, § 14, effective June 29, 2021.

49.040. Exclusive jurisdiction of Board of Claims — Limitation on damage awards — Hearing officers — Official records — Agreed judgment or dismissal if settlement reached.

  1. Regardless of any provision of law to the contrary, the jurisdiction of the Board of Claims is exclusive, and a single claim for the recovery of money or a single award of money shall not exceed two hundred fifty thousand dollars ($250,000), exclusive of interest and costs. However, if a single act of negligence results in multiple claims, the total award may not exceed four hundred thousand dollars ($400,000), to be equitably divided among the claimants, but in no case may any claimant individually receive more than two hundred fifty thousand dollars ($250,000).
  2. Hearing officers, upon the direction of the board, the board chair, or the executive director of the Office of Claims and Appeals shall conduct hearings and otherwise supervise the presentation of evidence and perform any other duties assigned to them by the board, the board chair, or the executive director of the Office of Claims and Appeals, except that such hearing officers shall not render final decisions, orders, or awards. However, such hearing officers may, in receiving evidence on behalf of the board, make such rulings affecting the competency, relevancy, and materiality of the evidence about to be presented and upon motions presented during the taking of evidence as will expedite the preparation of the case.
  3. The board shall maintain the official record of the claim, including evidence entered into the record at a hearing on the claim, and the final action taken on each claim. All records of proceedings shall be public records.
  4. Upon recommendation to the board by the attorney for the Commonwealth, its cabinet, department, bureau, agency, or employee thereof, that a settlement has been reached between the parties to the claim, and upon approval by the board that the settlement is reasonable for all parties concerned, an agreed judgment or dismissal may be entered accordingly, even without a party’s admission to liability.

History. Enact. Acts 1946, ch. 189, §§ 1, 3, par. 1; 1950, ch. 50, § 1; 1956 (1st Ex. Sess.), ch. 7, Art. XIII, § 1; 1958, ch. 52, § 1; 1960, ch. 25, § 1; 1972, ch. 234, § 1; 1976, ch. 326, § 2; 1978, ch. 15, § 1, effective June 17, 1978; 1986, ch. 279, § 1, effective July 15, 1986; 1986, ch. 499, § 3, effective July 15, 1986; 2000, ch. 304, § 4, effective July 14, 2000; Former § 44.070 was renumbered to be § 49.040 , by 2017, ch. 74, § 4, effective June 29, 2017; 2021 ch. 185, § 15, effective June 29, 2021.

49.050. Jurisdiction of Board of Claims as to municipal maintenance of state-owned traffic control devices.

  1. The Board of Claims created by KRS 49.010 is hereby vested with full power, authority, and jurisdiction to investigate, hear proof, and compensate persons for damages sustained to either person or property as a proximate result of negligence on the part of any municipality, or any of its officers, agents, or employees while acting within the scope of their employment by the municipality, or any agency thereof, relating to the maintenance by the municipality of state- owned traffic control devices pursuant to a contract with the Commonwealth.
  2. Claims for personal injury or property damage against any municipality, or any of its officers, agents, or employees while acting within the scope of their employment of the municipality, arising out of negligence in the maintenance of state-owned traffic control devices pursuant to a contract with the Commonwealth, shall be limited and reduced in the same manner as described in KRS 49.040 with respect to claims against the Commonwealth.
  3. It is the intention of subsections (1) and (2) of this section to provide every municipality and agency thereof, and their respective officers, agents, or employees with the same liability protection, restrictions, and reductions when such municipalities and agencies are performing maintenance on state-owned traffic control devices pursuant to a contract with the Commonwealth as the Commonwealth and its agencies, officers, and employees would enjoy if performing the work itself.

HISTORY: Enact. Acts 1990, ch. 225, § 1, effective July 13, 1990; Former § 44.071 was renumbered to be § 49.050 , by 2017, ch. 74, § 5, effective June 29, 2017; 2021 ch. 185, § 16, effective June 29, 2021.

49.060. Legislative intent as to sovereign immunity in negligence claims.

It is the intention of the General Assembly to provide the means to enable a person negligently injured by the Commonwealth, any of its cabinets, departments, bureaus, or agencies, or any of its officers, agents, or employees while acting within the scope of their employment by the Commonwealth or any of its cabinets, departments, bureaus, or agencies to be able to assert their just claims as herein provided. The Commonwealth thereby waives the sovereign immunity defense only in the limited situations as herein set forth. It is further the intention of the General Assembly to otherwise expressly preserve the sovereign immunity of the Commonwealth, its cabinets, departments, bureaus, and agencies and its officers, agents, and employees while acting in the scope of their employment in all other situations except where sovereign immunity is specifically and expressly waived as set forth by statute. The Board of Claims shall have exclusive jurisdiction to hear claims for damages, except as otherwise specifically set forth by statute, against the Commonwealth, its cabinets, departments, bureaus, or agencies, or any of its officers, agents, or employees while acting within the scope of their employment.

History. Enact. Acts 1986, ch. 499, § 1, effective July 15, 1986; Former § 44.072 was renumbered to be § 49.060 , by 2017, ch. 74, § 6, effective June 29, 2017; 2021 ch. 185, § 17, effective June 29, 2021.

NOTES TO DECISIONS

1.Immunity.

University of Kentucky was entitled to immunity based on caselaw; plaintiffs chose not to bring their claims through the Kentucky Claims Commission, for which the university could not have raised an immunity defense, and the court declined plaintiffs’ request to create an exception to Ky. Const. § 231 and hold that the university was not immune because its institutional control of the arena was not an integral state function. Saunier v. Lexington Ctr. Corp., 2020 Ky. App. LEXIS 68 (Ky. Ct. App. Apr. 17, 2020, sub. op., 2020 Ky. App. Unpub. LEXIS 825 (Ky. Ct. App. Apr. 17, 2020).

49.070. State institutions of higher education declared agencies of state government for purposes of KRS 49.060 — Jurisdiction of Board of Claims — Sovereign immunity — Exposure to asbestos claims.

  1. For purposes of KRS 49.060 , state institutions of higher education under KRS Chapter 164 are agencies of the state.
  2. The Board of Claims shall have primary and exclusive jurisdiction over all negligence claims for the negligent performance of ministerial acts against the Commonwealth, any of its cabinets, departments, bureaus, or agencies, or any officers, agents, or employees thereof while acting within the scope of their employment.
  3. The board shall have primary and exclusive jurisdiction to make findings of fact, conclusions of law, and legal determinations with regard to whether the alleged negligent act was on the part of the Commonwealth or any of its cabinets, departments, bureaus, or agencies or any officers, agents, or employees thereof.
  4. The board shall have primary and exclusive jurisdiction to make findings of fact, conclusions of law, and legal determinations with regard to whether the alleged negligent act was on the part of the Commonwealth or any of its cabinets, departments, bureaus, or agencies, or any of its officers, agents, or employees while acting within the scope of their employment by the Commonwealth or any of its cabinets, departments, bureaus, or agencies.
  5. No action for negligence against the Commonwealth, any of its cabinets, departments, bureaus, or agencies, or any officers, agents, or employees thereof may be brought in any other court or forum in the Commonwealth except the board unless the board makes a final determination that it does not have primary and exclusive jurisdiction over the claim.
  6. The determination by the board becomes final only after all appellate rights have been finalized or waived.
  7. Any applicable statute of limitations for bringing negligence actions in any court or forum other than the board shall be tolled pending the final determination that the board does not have primary and exclusive jurisdiction of the negligence claim.
  8. No action for negligence may be brought in any court or forum other than the board against the Commonwealth, any of its cabinets, departments, bureaus, or agencies or any of its officers, agents, or employees while acting within the scope of their employment by the Commonwealth or any of its cabinets, departments, bureaus, or agencies.
  9. Negligence as used herein includes negligence, gross negligence, or wanton negligence.
  10. The defense of contributory negligence is not a complete bar to recovery of a plaintiff’s claim in the board, and the doctrine of comparative negligence shall be utilized by the board.
  11. Except as otherwise provided by KRS 49.040 to 49.180 , nothing contained herein shall be construed to be a waiver of sovereign immunity or any other immunity or privilege maintained by the Commonwealth, its cabinets, departments, bureaus, and agencies and its officers, agents, and employees.
  12. Except as otherwise specifically set forth by statute and in reference to subsection (11) of this section, no action for damages may be maintained in any court or forum against the Commonwealth, any of its cabinets, departments, bureaus, or agencies or any of its officers, agents, or employees while acting within their official capacity and scope of their employment by the Commonwealth or any of its cabinets, departments, bureaus, or agencies.
  13. The preservation of sovereign immunity referred to in subsections (11) and (12) of this section includes but is not limited to the following:
    1. Discretionary acts or decisions;
    2. Executive decisions;
    3. Ministerial acts;
    4. Actions in the performance of obligations running to the public as a whole;
    5. Governmental performance of a self-imposed protective function to the public or citizens; and
    6. Administrative acts.
  14. The filing of an action in court or any other forum or the purchase of liability insurance or the establishment of a fund for self-insurance by the Commonwealth, its cabinets, departments, bureaus, or agencies or its agents, officers, or employees thereof for a government-related purpose or duty shall not be construed as a waiver of sovereign immunity or any other immunity or privilege thereby held. Except as specifically set forth by statute, no counterclaim, set-off, recoupment, cross-claim, or other form of avoidance of the claim for damages may be asserted by any person when suit is brought against said person by the Commonwealth or any of its cabinets, departments, bureaus, or agencies thereof.
  15. Neither the Commonwealth nor any of its cabinets, departments, bureaus, or agencies or any officers, agents, or employees thereof shall be liable under a respondeat superior theory or any other similar theory for the acts of independent contractors, contractors, or subcontractors thereof or anyone else doing work or providing services for the state on a volunteer basis or pursuant to a contract therewith.
  16. Any claim against the Commonwealth or its departments, agencies, officers, agents, or employees, or a school district board of education or its members, officers, agents, or employees, for damages sustained as a result of exposure to asbestos before, during, or after its removal from a facility owned, leased, occupied, or operated by the Commonwealth or a school district board of education shall be brought before the Board of Claims.

History. Enact. Acts 1986, ch. 499, § 2, effective July 15, 1986; Former § 44.073 was renumbered to be § 49.070 , by 2017, ch. 74, § 7, effective June 29, 2017; 2021 ch. 185, § 18, effective June 29, 2021.

NOTES TO DECISIONS

1.Immunity.

University of Kentucky was entitled to immunity based on caselaw; plaintiffs chose not to bring their claims through the Kentucky Claims Commission, for which the university could not have raised an immunity defense, and the court declined plaintiffs’ request to create an exception to Ky. Const. § 231 and hold that the university was not immune because its institutional control of the arena was not an integral state function. Saunier v. Lexington Ctr. Corp., 2020 Ky. App. LEXIS 68 (Ky. Ct. App. Apr. 17, 2020, sub. op., 2020 Ky. App. Unpub. LEXIS 825 (Ky. Ct. App. Apr. 17, 2020).

49.080. Venue of hearings — Expenses of hearings outside offices.

  1. Hearings involving claimants who are residents of the Commonwealth shall be conducted in the county wherein the claim accrues, provided, however, that the parties may, with the approval of the Board of Claims, agree upon a place not within such county for the conduct of hearings. Hearings involving claimants who are nonresidents shall be conducted in the county wherein the claim accrues, provided, however, that a hearing, with the approval of the board, may be conducted in Franklin County.
  2. When any member of the board is attending hearings at any place other than Frankfort, Kentucky, expenses necessarily incurred in the performance of such duty shall be paid by the state upon certification by the executive director of the Office of Claims and Appeals of an itemized statement of such expenses in accordance with Finance and Administration Cabinet administrative regulations.

History. Enact. Acts 1960, ch. 25, § 2; Former § 44.084 was renumbered to be § 49.080 , by 2017, ch. 74, § 8, effective June 29, 2017; 2021 ch. 185, § 19, effective June 29, 2021.

49.090. Investigation of claims — Claims under $2,500 may be investigated in-house — Hearings on contested claims of $2,500 or more — Order — Filing fee.

  1. The Board of Claims may require affected state agencies to investigate claims and the incidents on which they are based and to furnish to the board and the claimant in writing the facts learned by investigation. Such response shall be sufficiently specific to support a decision by the board to pay or deny the claim. If the agency believes the state should refute a claim, the agency shall cite the facts about the incident that support its belief.
  2. If the claim is under two thousand five hundred dollars ($2,500), it may be investigated by the board in-house and if the board believes it needs additional facts before deciding the claim, the parties may provide the needed information by letter or as directed by the board.
  3. The board shall hold hearings on contested claims whose value is two thousand five hundred dollars ($2,500) or greater but may decide claims under two thousand five hundred dollars ($2,500) without a hearing.
  4. At its hearings, the board, or any of its members, or any of its hearing officers appointed by the board shall hear the parties at issue and their representatives and witnesses.
  5. The award or order shall be made within thirty (30) days after final submission, except in cases involving large or complicated records or unusual questions of law, and shall be made within ninety (90) days after final submission in any event. The order or award, together with a statement of the findings of fact, rulings of law, and other matters pertinent to the question at issue shall be filed with the record of the claim and a copy of the order or award shall immediately be sent to the parties in dispute.
  6. In cases over two thousand five hundred dollars ($2,500) that have been assigned to a hearing officer or a member, the hearing officer or member shall tender a recommended order to the full board. The final order in any claim heard by a single member or hearing officer shall be made and entered by a majority of the board.
  7. In cases of two thousand five hundred dollars ($2,500) or less decided by a member, a claimant may make an application for review to the full board within fourteen (14) days from the date of the order or award. If an application is made, the full board shall, as soon as practicable, review the evidence, or, if deemed advisable, hear the parties at issue, their representatives and witnesses, and shall make an order or award and file it as specified in subsection (5) above.
  8. The Office of Claims and Appeals may promulgate an administrative regulation authorizing a filing fee of no more than two hundred dollars ($200) for all appeals that are brought before the Board of Tax Appeals and the Board of Claims.

History. Enact. Acts 1960, ch. 25, § 3; 1978, ch. 299, § 1, effective June 17, 1978; 1982, ch. 355, § 1, effective July 15, 1982; 2000, ch. 304, § 2, effective July 14, 2000; Former § 44.086 was renumbered to be § 49.090 , by 2017, ch. 74, § 9, effective June 29, 2017; 2021 ch. 185, § 20, effective June 29, 2021.

49.100. Defense to claims.

The attorneys appointed by the Governor to represent the Commonwealth’s cabinets, departments, bureaus, agencies, or officers, agents, or employees thereof may present any opposition the Commonwealth or any of its cabinets, departments, bureaus, agencies, or officers, agents, or employees thereof may have to the allowance of any claim filed with the Board of Claims. If such attorney is unavailable to represent his respective cabinet, department, bureau, agency, or employee thereof, then the Attorney General, either by regular or special assignment, shall designate one (1) of his assistants to present any opposition the Commonwealth or any of its cabinets, departments, bureaus, agencies, or officers, agents, or employees thereof may have to the allowance of any claim filed with the board.

History. Enact. Acts 1946, ch. 189, § 6; 1950, ch. 50, § 2; 1986, ch. 499, § 4, effective July 15, 1986; Former § 44.090 was renumbered to be § 49.100 , by 2017, ch. 74, § 10, effective June 29, 2017; 2021 ch. 185, § 21, effective June 29, 2021.

49.110. Compensation and expenses of Board of Claims, assistant Attorneys General, or attorneys appointed by Governor — Payment of awards — Operating costs paid out of general fund.

  1. The assistant Attorneys General or attorneys appointed by the Governor to represent the Commonwealth’s cabinets, departments, agencies or employees, agents, or officers thereof, assigned to defend claims filed with the Board of Claims shall receive no additional compensation for the performance of their duties before the board; provided, however, members of the board, assistant Attorneys General, and all employees acting for the board shall be recompensed for all necessary and actual expenses they may incur incident to their duties for or before the commission.
  2. All awards and cost of operation assessed by the commission against the Department of Highways shall be paid out of the state road fund upon warrants drawn by the secretary of the Finance and Administration Cabinet upon the State Treasurer.
  3. All awards and costs of operation assessed by the board against other cabinets or agencies of the state, which are not maintained by appropriations out of the general fund, shall be paid out of the funds created or collected for the maintenance and operation of such cabinets or agencies respectively, upon warrants drawn by the secretary of the Finance and Administration Cabinet upon the State Treasurer.
  4. All amounts necessary to pay awards and costs of operation assessed by the board against all other cabinets or agencies of the Commonwealth shall be paid out of the general fund of the Commonwealth, upon warrants drawn by the secretary of the Finance and Administration Cabinet upon the State Treasurer.
  5. The executive director of the board shall maintain accurate records reflecting the costs incident to the operation of the board. At the close of each quarter-year period, he shall summarize the cost and shall bill each cabinet, commission, board, or agency which has had cases before the board for a pro-rata share of the cost of operation for the appropriate calendar quarter computed in a manner deemed just and equitable by the board. Each cabinet, commission, board, or agency shall remit quarterly their share of the cost of operation to the board in the manner provided by law.
  6. The board shall have the power and authority to determine the right of any successful party to an action before it to recover from the opposing party the costs incurred by him or it in such action; and such decision shall not be subject to appeal. Costs shall not include attorneys’ fees.

History. Enact. Acts 1946, ch. 189, §§ 7, 8; 1950, ch. 50, § 3; 1956 (1st Ex. Sess.), ch. 7, Art. XIII, § 2; 1958, ch. 52, § 2; 1960, ch. 25, § 5; 1986, ch. 499, § 5, effective July 15, 1986; Former § 44.100 was renumbered to be § 49.110 , by 2017, ch. 74, § 11, effective June 29, 2017; 2021 ch. 185, § 22, effective June 29, 2021.

49.120. When claims must be presented.

  1. All claims must be filed with the board within one (1) year from the time the claim for relief accrued.
  2. The claim for relief shall be deemed to accrue at the time of the negligent act with regard to property damage.
  3. The claim for relief for personal injury shall be deemed to accrue at the time the personal injury is first discovered by the claimant or in the exercise of reasonable care should have been discovered; however, no action for personal injury shall be commenced beyond two (2) years from the date on which the alleged negligent act or omission actually occurred.
  4. Notwithstanding subsection (3) of this section, the claim for relief for medical malpractice shall be deemed to accrue at the time the personal injury is first discovered by the claimant or in the exercise of reasonable care should have been discovered; however, no action for personal injury as a result of medical malpractice shall be commenced beyond three (3) years from the date on which the alleged negligent act or omission of malpractice actually occurred.
  5. If at the time the alleged negligent act or omission occurred or if at the time the claim for relief accrued or thereafter, the claimant is an infant or of unsound mind or under any other legal disability to file suit, a guardian or next friend or committee or other qualified representative shall bring such action in the board on behalf of such person within the same time limitation set forth herein or the claim is barred, notwithstanding KRS 413.170 and 413.280 . If there is no guardian or committee or he is unwilling or unable to act or is himself a claimant, the board shall appoint a guardian ad litem to represent the interests of the claimant under legal disability. The board shall allow the guardian ad litem a reasonable fee for his services, to be taxed as costs.

History. Enact. Acts 1946, ch. 189, § 3(a); 1950, ch. 50, § 4; 1958, ch. 52, § 5; 1962, ch. 304, § 2; 1966, ch. 255, § 53; 1986, ch. 499, § 6, effective July 15, 1986; 1990, ch. 176, § 1, effective July 13, 1990; Former § 44.110 was renumbered to be § 49.120 , by 2017, ch. 74, § 12, effective June 29, 2017; 2021 ch. 185, § 23, effective June 29, 2021.

49.130. Conditions of awards — Reduction of award.

  1. An award shall be made only after consideration of the facts surrounding the matter in controversy, and no award shall be made unless the Board of Claims is of the opinion that the damage claimed was caused by such negligence on the part of the Commonwealth or its agents as would entitle claimant to a judgment in an action at law if the state were amenable to such action.
  2. Furthermore, any damage claim awarded shall be reduced by the amount of payments received or the right to receive payment from workers’ compensation insurance, Social Security programs, or other federal, state, or private programs designed to supplement income or pay claimant’s expenses or damages incurred.

History. Enact. Acts 1946, ch. 189, § 2; 1950, ch. 50, § 5; 1960, ch. 25, § 6; Former § 44.120 was renumbered to be § 49.130 , by 2017, ch. 74, § 13, effective June 29, 2017; 2021 ch. 185, § 24, effective June 29, 2021.

49.140. Enforcement and entry of orders, awards, and judgments.

Orders, awards, and judgments of the Board of Claims may be enforced by filing in the office of the clerk of the Franklin Circuit Court an authenticated copy of the order, award, or judgment, which, when ordered entered by the judge of the court, shall be entered on the order book and become to all effects and purposes an order, award, or judgment of the court, and be enforceable in a like manner.

History. Enact. Acts 1946, ch. 189, § 4; Former § 44.130 was renumbered to be § 49.140 , by 2017, ch. 74, § 14, effective June 29, 2017; 2021 ch. 185, § 25, effective June 29, 2021.

49.150. Appeal from award of Board of Claims.

  1. Appeals may be taken by a state agency from all awards of the Board of Claims where the amount in controversy, exclusive of interest and costs, is more than two thousand five hundred dollars ($2,500). Appeals shall be taken to the Circuit Court of the county wherein the hearing was conducted, provided, however, that an appeal involving a nonresident claimant may be taken by a state agency to the Franklin Circuit Court. Appeals shall be taken within thirty (30) days from the rendition of the award, and the method of appeals shall follow as nearly as may be the rules of civil procedure, except the Commonwealth shall not be required to execute bond.
  2. Any claimant whose claim is two thousand five hundred dollars ($2,500) or greater may within thirty (30) days after receipt of the copy of the report containing the final decision of the board, file a proceeding in the Circuit Court of the county wherein the hearing was conducted to review the decision of the board. A copy of the filing and complaint shall be served on the Attorney General in the manner provided by the rules of civil procedure.
  3. The board, the state agency, and the claimant shall be necessary parties to such appeals. It shall not be necessary for the board to file responsive pleadings unless it so desires.
  4. The executive director of the Office of Claims and Appeals shall within thirty (30) days after service of the summons file the entire original record, with the clerk of the Circuit Court, after certifying that such record is the entire original record of the Board of Claims and such record shall be considered by the Circuit Court in its review. If either party requests a transcript of the evidence in writing, the requesting party shall bear the cost of the original copy of the transcript and it shall be furnished within ninety (90) days from the date of the written request.
  5. On appeal no new evidence may be introduced, except as to fraud or misconduct of some person engaged in the hearing before the board. The court sitting without a jury shall hear the cause upon the record before it, and dispose of the appeal in a summary manner, being limited to determining: Whether or not the board acted without or in excess of its powers; the award was procured by fraud; the award is not in conformity to the provisions of KRS 49.040 to 49.180 ; and whether the findings of fact support the award. The court shall enter its findings on the order book as a judgment of the court, and such judgment shall have the same effect and be enforceable as any other judgment of the court in civil causes.

History. Enact. Acts 1946, ch. 189, § 9; 1958, ch. 52, § 3; 1960, ch. 25, § 7; 1980, ch. 291, § 1, effective July 15, 1980; 1982, ch. 355, § 2, effective July 15, 1982; 1984, ch. 310, § 1, effective July 13, 1984; 2000, ch. 304, § 3, effective July 14, 2000; Former § 44.140 was renumbered to be § 49.150 , by 2017, ch. 74, § 15, effective June 29, 2017; 2021 ch. 185, § 26, effective June 29, 2021.

49.160. Appeal to Court of Appeals.

Appeals may be taken to the Court of Appeals under the same conditions and under the same practice as appeals are taken from judgments in civil causes rendered by the Circuit Court, but no motion for a new trial or bill of exceptions shall be necessary. The Court of Appeals shall review only the matters subject to review by the Circuit Court and also errors of law arising in the Circuit Court and made reviewable by the Rules of Civil Procedure, where not in conflict with KRS 49.040 to 49.180 .

History. Enact. Acts 1948, ch. 189, § 10; Former § 44.150 was renumbered to be § 49.160 , by 2017, ch. 74, § 16, effective June 29, 2017.

49.170. Exclusiveness of Board of Claims’ award or judgment.

  1. Any action prosecuted to award, judgment, or final decision, including dismissal, under the provisions of KRS 49.040 to 49.180 shall preclude the right of a claimant to sue the Commonwealth, its cabinets, departments, bureaus, and agencies, and its officers, agents, or employees in the Board of Claims or any other forum, except as provided in KRS 49.070(5) when the board determines that it has no jurisdiction over the claim.
  2. The final determination of the board shall be given the same res judicata and collateral estoppel effect as any other judicial determination; and , if entered as provided in KRS 49.140 , it shall be granted the full faith and credit given to judgments from the Commonwealth’s courts in this state and the courts of the United States.

History. Enact. Acts 1946, ch. 189, § 3(b); 1950, ch. 50, § 6; 1958, ch. 52, § 4; 1986, ch. 499, § 7, effective July 15, 1986; Former § 44.160 was renumbered to be § 49.170 , by 2017, ch. 74, § 17, effective June 29, 2017; 2021 ch. 185, § 27, effective June 29, 2021.

49.180. Monetary threshold for claims brought before Board of Claims.

No claim shall be brought before the Board of Claims unless the value of the total amount of damages claimed therein is two hundred fifty dollars ($250) or greater.

History. Former § 44.165 was renumbered to be § 49.180 , by 2017, ch. 74, § 18, effective June 29, 2017; 2021 ch. 185, § 28, effective June 29, 2021.

Appeals from Revenue and Taxation Decisions of State or County Government

49.190. KRS 49.200 to 49.250 applicable to power and authority outlined in KRS 49.020(1).

KRS 49.200 to 49.250 shall apply to the power and authority of the Board of Tax Appeals outlined in KRS 49.020(1).

HISTORY: 2017 ch. 74, § 19, effective June 29, 2017; 2021 ch. 185, § 29, effective June 29, 2021.

49.200. Record of Board of Tax Appeals.

The Board of Tax Appeals shall maintain the following records:

  1. A register wherein the board shall enter by its title any proceedings appealed to it according to the date of its commencement. Thereafter, until after entry of the board’s opinion and final order, there shall be noted therein according to the date, the filing or return of any paper or process or the making of any order, ruling, or other directive in or concerning such proceeding, and any other steps therein; and
  2. The files of the board consisting of all papers or other process filed with or by the board.

History. Enact. Acts 1964, ch. 141, § 4; Former § 131.325 was renumbered to be § 49.200 , by 2017, ch. 74, § 20, effective June 29, 2017; 2021 ch. 185, § 30, effective June 29, 2021.

49.210. Location of hearings — Expenses of hearings outside offices.

The Board of Tax Appeals may hold hearings at any location within the Commonwealth, with a view to securing opportunity to taxpayers to appear before it with as little inconvenience and expense as practicable. When any member or employee of the board is attending hearings at any place other than Frankfort, Kentucky, expenses necessarily incurred in the performance of such duty shall be paid by the state upon certification by the executive director of the Office of Claims and Appeals of an itemized statement of such expenses in accordance with the Finance and Administration Cabinet administrative regulations.

History. Enact. Acts 1964, ch. 141, § 5 (2); Former § 131.335 was renumbered to be § 49.210 , by 2017, ch. 74, § 21, effective June 29, 2017; 2021 ch. 185, § 31, effective June 29, 2021.

Legislative Research Commission Notes.

(6/29/2021). This statute was amended in 2021 Ky. Acts ch. 185, sec. 31. In that section, the existing language of subsection (2) of this statute was added nearly identically as new language to the existing language of subsection (1) of this statute, but subsection (2) was not deleted, as it is clear was the intent. In codification of this statute, the Reviser of Statutes has modified the text of this statute to eliminate the duplicative language.

49.220. Exclusive jurisdiction of Board of Tax Appeals — Notice of rulings of revenue and taxation agencies — Appeals to board — Procedure.

  1. The Board of Tax Appeals is vested with exclusive jurisdiction to hear and determine appeals from final rulings, orders, and determinations of any revenue and taxation agency affecting revenue and taxation. Administrative hearings before the board shall be de novo and conducted in accordance with KRS Chapter 13B and administrative regulations promulgated by the board.
  2. Any revenue and taxation agency charged with the administration of any taxing or licensing measure which is under the jurisdiction of the board shall mail by certified mail notice of its ruling, order, or determination within three (3) working days from the date of the decision.
  3. Any party aggrieved by any ruling, order, or determination of any revenue and taxation agency charged with the administration of any taxing or licensing measure may prosecute an appeal to the board by filing a complaint or petition of appeal before the board within thirty (30) days from the date of the mailing of the agency’s ruling, order, or determination.
  4. If the Department of Revenue is aggrieved by the decision of any county board of assessment appeals on an assessment recommended by the department and prosecutes an appeal to the board as authorized in subsection (3) of this section, the commissioner of revenue shall, within twenty (20) days, certify in writing to the board the assessment recommended.
  5. The board shall immediately forward copies of the certification to the parties to the appeal. The assessed value shall be prima facie evidence of the value at which the property should be assessed.

History. Enact. Acts 1964, ch. 141, § 6; 1984, ch. 111, § 71, effective July 13, 1984; 1986, ch. 410, § 1, effective July 15, 1986; 1996, ch. 318, § 32, effective July 15, 1996; 2005, ch. 85, § 133, effective June 20, 2005; Former § 131.340 was renumbered to be § 49.220 , by 2017, ch. 74, § 22, effective June 29, 2017; 2021 ch. 185, § 32, effective June 29, 2021.

49.230. Official records of proceedings of Board of Tax Appeals public in nature — Exception — Appeal procedure.

  1. The Board of Tax Appeals shall maintain the official record of the appeal, including evidence entered into the record at a hearing on the appeal, and the final action taken on each appeal. All records of proceedings shall be public records, except in cases of appeals of unmined mineral assessments where the records before the board include information provided to the Department of Revenue by the taxpayer or its lessees, and were generated at the taxpayer’s expense. Furthermore, no recorded or transcribed testimony concerning these records shall be considered a public record. Examples of these records would include, but are not limited to, mineral exploration records; photographs; core data information; maps whether acquired for ownership information, for coal seam thickness, for depletion by mining or otherwise; and /or records calculating production or reserves, leased and/or unleased. Neither records containing confidential information nor testimony concerning same shall be disclosed to parties outside the appeals proceedings. A protective order shall be entered and shall remain in effect during the entire appeals process, including appeals to the courts, and thereafter, preventing the parties, their agents and representatives, except the taxpayer, from disclosing the information.
  2. The full board may hear an appeal or assign one (1) of its members or a hearing officer to hear an appeal. The final order in any appeal heard by a single member or a hearing officer shall be made and entered by a majority of the board. In any appeal referred to a hearing officer or one (1) member, the hearing officer or member shall tender a recommended order to the full board. The final order in any appeal heard by a single member or hearing officer shall be made and entered by a majority of the board.
  3. In cases heard by the full board, the board may request that a hearing officer assist the board with the following:
    1. Hear discovery issues and disputes prior to a scheduled hearing;
    2. Receive evidence on behalf of the board during the prehearing phase in a particular case;
    3. Make interlocutory rulings affecting the competency, relevancy, and materiality of the evidence about to be presented and upon motions presented during the taking of evidence as will expedite the preparation of the case;
    4. Draft the final order as directed by the board; and
    5. Perform any other duties assigned.

History. Enact. Acts 1964, ch. 141, § 9; 1972, ch. 316, § 1; 1990, ch. 288, § 1, effective July 13, 1990; 1996, ch. 255, § 1, effective April 4, 1996; 1996, ch. 318, § 33, effective July 15, 1996; 2005, ch. 85, § 134, effective June 20, 2005; Former § 131.355 was renumbered to be § 49.230 , by 2017, ch. 74, § 23, effective June 29, 2017; 2021 ch. 185, § 33, effective June 29, 2021.

49.240. Effect of final orders of Board of Tax Appeals — Remand to agency — Refund.

  1. The final orders of the Board of Tax Appeals shall be binding upon all parties until changed or modified by the courts of this state. If no appeal to the courts is prosecuted, the final order of the board shall constitute a final determination.
  2. If the board finds that other issues are necessary to a full determination of the controversy, it may remand the whole proceeding to the agency from which the appeal was prosecuted for further determination. The parties may stipulate to the determination of the other issues without remand.
  3. Any changes in ad valorem property tax assessment rolls, tax bills, or the application by any agency of the tax laws of the state shall be in conformity with the board’s final order.
  4. In the case of any appeal, any taxes, interest, or penalty paid but found by the board to be in excess of that legally due shall be ordered refunded to the taxpayer.

History. Enact. Acts 1964, ch. 141, § 11; 1996, ch. 318, § 34, effective July 15, 1996; Former § 131.365 was renumbered to be § 49.240 , by 2017, ch. 74, § 24, effective June 29, 2017; 2021 ch. 185, § 34, effective June 29, 2021.

49.250. Judicial review of final orders of Board of Tax Appeals — Stay of collection of tax.

  1. Any party aggrieved by any final order of the Board of Tax Appeals, except on appeals from a county board of assessment appeals, may appeal to the Franklin Circuit Court or to the Circuit Court of the county in which the party aggrieved resides or conducts his place of business in accordance with KRS Chapter 13B. Any final orders entered on the rulings of a county board of assessment appeals may be appealed in like manner to the Circuit Court of the county in which the appeal originated.
  2. If the appeal is from an order sustaining a tax assessment, collection of the tax shall be stayed by the filing of a petition or an appeal to any court. Full payment of the tax or a supersedeas bond is not required to appeal an order sustaining a tax assessment.

HISTORY: Enact. Acts 1964, ch. 141, § 12; 1968, ch. 152, § 99; 1978, ch. 233, § 33, effective June 17, 1978; 1990, ch. 140, § 1, effective July 13, 1990; 1994, ch. 65, § 21, effective July 15, 1994; 1996, ch. 318, § 35, effective July 15, 1996; 2017 ch. 74, § 25, effective June 29, 2017; 2018 ch. 171, § 101, effective April 14, 2018; 2018 ch. 207, § 101, effective April 27, 2018; 2021 ch. 185, § 35, effective June 29, 2021.

Claims for Compensation by Crime Victims

49.260. KRS 49.270 to 49.490 applicable to power and authority of Crime Victims Compensation Board outlined in KRS 49.020.

KRS 49.270 to 49.490 shall apply to the power and authority of the Crime Victims Compensation Board outlined in KRS 49.020 .

HISTORY: 2017 ch. 74, § 26, effective June 29, 2017; 2021 ch. 185, § 36, effective June 29, 2021.

49.270. Public purpose of indemnifying injured crime victims.

The General Assembly hereby declares that it serves a public purpose and is of benefit to the state to indemnify those needy persons who are innocent victims of criminal acts and who suffer bodily or psychological injury or death as a consequence thereof. Such persons or their dependents may thereby suffer disability, incur financial hardships and become dependent upon public assistance. To that end, it is the General Assembly’s intent that aid, care, and support be provided by the state, as a matter of grace, for such victims of crime.

History. Enact. Acts 1976, ch. 263, § 1; 1984, ch. 382, § 16, effective July 13, 1984; 1986, ch. 299, § 1, effective July 15, 1986; Former § 346.010 was renumbered to be § 49.270 , by 2017, ch. 74, § 27, effective June 29, 2017.

49.280. Definitions for KRS 49.270 to 49.490.

As used in KRS 49.270 to 49.490 , unless the context otherwise requires:

  1. “Child” means any person less than eighteen (18) years of age;
  2. “Claimant” means any of the following claiming compensation under KRS 49.270 to 49.490 : a victim, a dependent of a deceased victim, a third person other than a collateral source, or an authorized person acting on behalf of any of them who is legally responsible for the expenses incurred by the victim as a result of the crime committed against the victim;
  3. “Criminally injurious conduct” means conduct that occurs or is attempted in this jurisdiction, poses a substantial threat of personal physical, psychological injury, or death, and is punishable by fine, imprisonment, or death. Criminally injurious conduct shall include an act of terrorism, as defined in 18 U.S.C. sec. 2331 , committed outside of the United States against a resident of Kentucky. Acts which, but for the insanity or mental irresponsibility or lack of capacity of the perpetrator, would constitute criminal conduct shall be deemed to be criminally injurious conduct. The operation of a motor vehicle, motorcycle, train, boat, aircraft, or other vehicle in violation of law does not constitute a criminally injurious conduct unless the injury or death was intentionally inflicted or involved a violation of KRS 189A.010 , driving under the influence;
  4. “Family,” when used with reference to a person, shall mean:
    1. Any person related to such person within the third degree of consanguinity;
    2. Any person maintaining a sexual relationship with such person; or
    3. Any person residing in the same household with such person; and
    1. “Victim” means a needy person who suffers personal physical or psychological injury or death from a criminal act in Kentucky as a result of: (5) (a) “Victim” means a needy person who suffers personal physical or psychological injury or death from a criminal act in Kentucky as a result of:
      1. Criminally injurious conduct;
      2. A good-faith effort to prevent criminally injurious conduct; or
      3. A good-faith effort to apprehend a person reasonably suspected of engaging in criminally injurious conduct.
    2. “Victim” shall also mean a resident who is a victim of a crime occurring outside this state if:
      1. The crime would be compensable had it occurred inside this state; and
      2. The crime occurred in a state which does not have a crime victim compensation program, for which the victim is eligible as eligibility is set forth in KRS 49.310 .
    3. “Victim” shall also mean a resident of this state who is injured or killed by an act of terrorism, as defined in 18 U.S.C. sec. 2331 , committed outside the United States.

History. Enact. Acts 1976, ch. 263, § 2; 1978, ch. 213, § 2, effective June 17, 1978; 1980, ch. 172, § 1, effective July 15, 1980; 1984, ch. 165, § 22, effective July 13, 1984; 1984, ch. 382, § 17, effective July 13, 1984; 1986, ch. 299, § 2, effective July 15, 1986; 1990, ch. 409, § 1, effective July 13, 1990; 1998, ch. 368, § 1, effective July 15, 1998; Former § 346.020 was renumbered to be § 49.280 , by 2017, ch. 74, § 28, effective June 29, 2017.

49.290. Nonresident victims of criminal acts occurring in Kentucky — Limits on operation of statute.

  1. “Victim” shall also include nonresidents of this state who suffer losses as a direct result of criminal acts occurring within this state.
  2. This section shall be operative only during those time periods during which the Crime Victims Compensation Board determines that federal funds are available to the state for the compensation of victims of crime.

History. Enact. Acts 1990, ch. 409, § 2, effective July 13, 1990; Former § 346.025 was renumbered to be § 49.290 , by 2017, ch. 74, § 29, effective June 29, 2017; 2021 ch. 185, § 37, effective June 29, 2021.

49.300. Powers and duties of Crime Victims Compensation Board.

In addition to the powers and authority outlined in KRS 49.020 , the Crime Victims Compensation Board shall have the following powers and duties:

  1. To promulgate, amend, and repeal suitable administrative regulations to carry out the provisions and purposes of KRS 49.270 to 49.490 , including administrative regulations for the approval of attorney’s fees for representation before the board or upon judicial review;
  2. To hear and determine all matters relating to claims for compensation, and the power to reinvestigate or reopen claims without regard to statutes of limitations;
  3. To request from prosecuting attorneys and law enforcement officers investigations and data to enable the board to determine whether, and the extent to which, a claimant qualifies for compensation. The statute providing confidentiality for juvenile session of District Court records does not apply to proceedings under KRS 49.270 to 49.490 ;
  4. To hold hearings in accordance with the provisions of KRS Chapter 13B. The powers provided in this subsection may be delegated by the board to any member or employee thereof. If necessary to carry out any of its powers and duties, the board may petition any Circuit Court for an order;
  5. Upon the filing of an application by a claimant, to negotiate binding fee settlements with the providers of services to claimants that may be eligible for an award under KRS 49.370(3);
  6. To make available for public inspection all board decisions and opinions, administrative regulations, written statements of policy, and interpretations formulated, promulgated, or used by it in discharging its functions;
  7. To publicize widely the availability of reparations and information regarding the claims therefor; and
  8. To make an annual report, by January 1 of each year, of its activities for the preceding fiscal year to the Office of the State Budget Director and to the Interim Joint Committee on Appropriations and Revenue. Each such report shall set forth a complete operating and financial statement covering its operations during the year.

History. Enact. Acts 1976, ch. 263, § 4; 1980, ch. 188, § 179, effective July 15, 1980; 1996, ch. 318, § 328, effective July 15, 1996; 2002, ch. 183, § 23, effective August 1, 2002; 2013, ch. 69, § 2, effective June 25, 2013; Former § 346.040 was renumbered to be § 49.300 , by 2017, ch. 74, § 30, effective June 29, 2017; 2021 ch. 185, § 38, effective June 29, 2021.

Legislative Research Commission Notes.

(6/25/97). 1996 Ky. Acts ch. 318, sec. 357, effective July 15, 1996, repealed KRS 346.110 , which is cited in subsection (2) of this statute. Judicial review in this area is now treated by KRS 346.080(8).

49.310. Eligibility for awards pursuant to KRS 49.270 to 49.490.

  1. Except as provided in subsections (2) and (3) of this section, the following persons shall be eligible for awards pursuant to KRS 49.270 to 49.490 :
    1. A victim of criminally injurious conduct;
    2. A surviving spouse, parent, or child of a victim of criminally injurious conduct who died as a direct result of such conduct;
    3. Any other person dependent for his principal support upon a victim of criminally injurious conduct who died as a direct result of such crime; and
    4. Any person who is legally responsible for the medical expenses or funeral expenses of a victim.
  2. No victim or dependent shall be denied compensation solely because he is she is a relative of the offender or was living with the offender as a family or household member at the time of the injury or death. However, the Crime Victims Compensation Board may award compensation to a victim or dependent who is a relative, family, or household member of the offender only if the board can reasonably determine the offender will not receive significant economic benefit or unjust enrichment from the compensation.
  3. No compensation of any kind shall be awarded when injury occurred while the victim was confined in any state, county, urban-county, or city jail, prison, or other correctional facility, or any state institution maintained and operated by the Cabinet for Health and Family Services.

History. Enact. Acts 1976, ch. 263, § 5; 1986, ch. 299, § 3, effective July 15, 1986; 1990, ch. 409, § 3, effective July 13, 1990; 1998, ch. 426, § 567, effective July 15, 1998; 2005, ch. 99, § 612, effective June 20, 2005; Former § 346.050 was renumbered to be § 49.310 , by 2017, ch. 74, § 31, effective June 29, 2017; 2021 ch. 185, § 39, effective June 29, 2021.

49.320. Victim of hate crime deemed victim of criminally injurious conduct.

A person who suffers personal injury as a result of conduct in violation of KRS 532.031 is a victim of criminally injurious conduct as defined in KRS 49.280 and is eligible for awards pursuant to KRS 49.270 to 49.490 .

History. Enact. Acts 1998, ch. 606, § 53, effective July 15, 1998; Former § 346.055 was renumbered to be § 49.320 , by 2017, ch. 74, § 32, effective June 29, 2017.

49.330. Application for award — Filing of claim form — Effect of pending criminal prosecution on proceedings of Crime Victims Compensation Board.

  1. A claim form may be filed by a person eligible to receive an award, as provided in KRS 49.310 or, if such person is a minor, by his parent or guardian.
  2. A claim form must be filed by the claimant not later than five (5) years after the occurrence of the criminally injurious conduct upon which such claim is based, or not later than five (5) years after the death of the victim; provided, however, that upon good cause shown, the Crime Victims Compensation Board may extend the time for filing if, in a particular case, the interest of justice so requires.
  3. Claims shall be filed with the board in accordance with the administrative regulations promulgated by the board. Only printed claim forms supplied by the board shall be accepted. The board shall accept for filing all claims submitted by persons eligible under subsection (1) of this section and alleging the jurisdiction requirements set forth in KRS 49.270 to 49.490 and meeting the requirements as to form in the rules and regulations of the board.
  4. Upon filing of a claim pursuant to KRS 49.270 to 49.490 , the board shall promptly notify the United States attorney (if a federal offense is involved), the Commonwealth’s attorney or county attorney of the county wherein the crime is alleged to have occurred. If, within ten (10) days after such notification, such United States attorney, Commonwealth’s attorney, or county attorney advises the board that a criminal prosecution is pending upon the same alleged crime and requests that action by the board be deferred, the board shall defer all proceedings under KRS 49.270 to 49.490 until such time as such criminal prosecution has been concluded and shall so notify such United States attorney, Commonwealth’s or county attorney, and the claimant. When such criminal prosecution has been concluded, such United States attorney, Commonwealth’s, or county attorney shall promptly so notify the board. Nothing in this section shall limit the authority of the board to grant emergency awards pursuant to KRS 49.360 .

History. Enact. Acts 1976, ch. 263, § 6; 1978, ch. 297, § 2, effective June 17, 1978; 1980, ch. 172, § 2, effective June 15, 1980; 1986, ch. 299, § 4, effective July 15, 1986; 1990, ch. 409, § 4, effective July 13, 1990; 1998, ch. 606, § 37, effective July 15, 1998; Former § 346.060 was renumbered to be § 49.330 , by 2017, ch. 74, § 33, effective June 29, 2017; 2021 ch. 185, § 40, effective June 29, 2021.

49.340. Investigation of claim — Examination of records and reports — Hearing — Expenses of hearings outside offices — Order — Appeal.

  1. A claim, when accepted for filing, shall be assigned by the executive director of the Office of Claims and Appeals to an investigator for investigation. All claims arising from the death of an individual as a direct result of a crime shall be considered together.
  2. The investigator to whom such claim is assigned shall examine the papers filed in support of the claim and the validity of the claim. The investigation shall include but not be limited to an examination of police, court, and official records and reports concerning the crime.
  3. If the mental, physical, or emotional condition of a victim or claimant is material to a claim, the board may order the victim or claimant to submit to a mental or physical examination by a physician or psychiatrist, and may order an autopsy of a deceased victim. A report upon an examination shall be filed with the investigator setting out findings, including results of all tests made, diagnosis, prognosis, and other conclusions.
  4. For purposes of KRS 49.270 to 49.490 , there is no privilege, except privileges arising from the attorney-client relationship, as to communications or records relevant to an issue of the physical, mental, or emotional condition of the claimant or victim in a proceeding under KRS 49.270 to 49.490 in which that condition is an element.
  5. Claims shall be investigated and determined, regardless of whether the alleged criminal has been apprehended or prosecuted for or convicted of any crime based upon the same incident, or has been acquitted, or found not guilty of the crime in question owing to criminal irresponsibility or other legal exemption.
  6. Upon completion of the investigator’s report, the claim shall be assigned to a board member who may decide the claim in favor of a claimant in the amount claimed on the basis of the papers filed in support thereof and the report of the investigation of the claim within thirty (30) days of the assignment of the claim. If the board member is unable to decide the claim upon the basis of the documents and the report, a hearing shall be ordered.
  7. The hearing shall be conducted in accordance with KRS Chapter 13B and may be held at any location within the Commonwealth, with a view to securing opportunity for crime victims to appear before it with as little inconvenience and expense as practicable. When any member of the board is attending hearings at any place other than Frankfort, Kentucky, expenses necessarily incurred in the performance of such duty shall be paid by the state upon certification by the executive director of the Office of Claims and Appeals of an itemized statement of such expenses in accordance with Finance and Administration Cabinet administrative regulations.
  8. After examining the papers filed in support of the claim and the report of investigation, and after a hearing, if any, the board member to whom the claim was assigned shall issue a recommended order either granting an award pursuant to KRS 49.370 or deny the claim. The board shall review the recommended order and any exceptions filed to it, and shall by majority vote issue a final order.
  9. A final order of the board may be appealed by filing a petition for judicial review in the county where the claim accrued or in Franklin Circuit Court in accordance with KRS Chapter 13B.

History. Enact. Acts 1976, ch. 263, § 8; 1990, ch. 409, § 5, effective July 13, 1990; 1996, ch. 318, § 329, effective July 15, 1996; Former § 346.080 was renumbered to be § 49.340 , by 2017, ch. 74, § 34, effective June 29, 2017; 2021 ch. 185, § 41, effective June 29, 2021.

49.350. Failure to perfect claim — Denial and bar to reassertion of claim.

Following the initial filing of a claim, if a claimant or victim does not take such further steps as may be necessary to support or perfect the claim as may be required by the Crime Victims Compensation Board within thirty (30) days after such requirement is made by the board, the claimant or victim shall be deemed in default. In such case the board shall summarily deny the claim and the claimant or victim shall be forever barred from reasserting the claim. The board may remit such proceedings on good cause shown that the failure to take the steps required by the board was totally and completely beyond the control of the claimant or victim.

History. Enact. Acts 1976, ch. 263, § 10; Former § 346.100 was renumbered to be § 49.350 , by 2017, ch. 74, § 35, effective June 29, 2017; 2021 ch. 185, § 42, effective June 29, 2021.

49.360. Emergency award pending final decision.

  1. Notwithstanding the provisions of KRS 49.340 , if it appears to the Crime Victims Compensation Board member to whom a claim is assigned, prior to taking action upon such claim that:
    1. Such claim is one with respect to which an award probably will be made; and
    2. Undue hardship will result to the claimant if immediate payment is not made; emergency payment under subsection (2) of this section may be made.
  2. Upon such findings under subsection (1) of this section, the board member may make an emergency award to the claimant pending a final decision in the case provided that:
    1. The amount of such emergency award shall not exceed five hundred dollars ($500);
    2. The amount of such emergency award shall be deducted from any final award made to the claimant; and
    3. The excess of the amount of such emergency award over the amount of the final award, or the full amount of the emergency award if no final award is made, shall be repaid by the claimant to the board.

History. Enact. Acts 1976, ch. 263, § 12; Former § 346.120 was renumbered to be § 49.360 , by 2017, ch. 74, § 36, effective June 29, 2017; 2021 ch. 185, § 43, effective June 29, 2021.

49.370. Awards, findings, and amounts.

  1. No award shall be made unless the Crime Victims Compensation Board or board member, as the case may be, finds that:
    1. Criminally injurious conduct occurred;
    2. Such criminally injurious conduct resulted in personal physical or psychological injury to, or death of, the victim; and
    3. Police or court records show that such crime was promptly reported to the proper authorities; and in no case may an award be made where the police or court records show that such report was made more than forty-eight (48) hours after the occurrence of such crime unless the board, for good cause shown, finds the delay to have been justified.
  2. Except for claims related to sexual assault, human trafficking, and domestic violence, the board upon finding that the claimant or victim has not fully cooperated with appropriate law enforcement agencies shall deny, reconsider, or reduce an award.
  3. Any award made pursuant to KRS 49.270 to 49.490 shall be in an amount not exceeding out-of-pocket expenses, including indebtedness reasonably incurred for medical or other services, including mental health counseling, necessary as a result of the injury upon which the claim is based, together with loss of earnings or support resulting from such injury. Mental health counseling shall be paid for a maximum of two (2) years, but only after proper documentation is submitted to the board stating what treatment is planned and for what period of time. The board shall have the power to discontinue payment of mental health counseling at any time within the two (2) year period. Replacement of eyeglasses and other corrective lenses shall be included in an award, provided they were stolen, destroyed, or damaged during the crime.
  4. Any award made for loss of earnings or financial support may be considered for a claimant who has loss of support or wages due to the crime for which the claim is filed. Unless reduced pursuant to other provisions of KRS 49.270 to 49.490 , the award shall be equal to net earnings at the time of the criminally injurious conduct; however, no such award shall exceed one hundred fifty dollars ($150) for each week of lost earnings or financial support. The wage earner or source of support must have been employed or paying support at the time the crime occurred. Said employment or support shall be verified by the staff of the board after information is provided by the claimant or victim. Should the claimant or victim fail to supply the board with the information requested, the portion of the claim for lost wages or support shall be denied. If there are two (2) or more persons entitled to an award as a result of the injury or death of a person which is the direct result of criminally injurious conduct, the award shall be apportioned by the board among the claimants.
  5. The board is authorized to set a reasonable limit for the payment of funeral and burial expenses which shall include funeral costs, a monument, and grave plot. In no event shall an award for funeral expenses exceed five thousand dollars ($5,000).
  6. Any award made under KRS 49.270 to 49.490 shall not exceed twenty-five thousand dollars ($25,000) in total compensation to be received by or paid on behalf of a claimant from the fund.
  7. No award shall be made for any type of property loss or damage, except as otherwise permitted in KRS 49.270 to 49.490 .

History. Enact. Acts 1976, ch. 263, § 13; 1978, ch. 213, § 1, effective June 17, 1978; 1980, ch. 172, § 4, effective June 15, 1980; 1986, ch. 299, § 5, effective July 15, 1986; 1990, ch. 409, § 7, effective July 13, 1990; 1998, ch. 606, § 38, effective July 15, 1998; 2013, ch. 69, § 4, effective June 25, 2013; Former § 346.130 was renumbered to be § 49.370 , by 2017, ch. 74, § 37, effective June 29, 2017; 2020 ch. 75, § 2, effective July 15, 2020; 2021 ch. 185, § 44, effective June 29, 2021.

49.380. Collection actions against crime victim for debt related to expense covered under KRS 49.370(3) to cease pending resolution of claim submitted to board.

  1. Upon the filing of an application for a claim with the Crime Victims Compensation Board, all debt collection actions by a creditor or the creditor’s agent, against the claimant for a debt or expense covered under KRS 49.370(3) and related to the substance of the claim shall cease pending a resolution of the claim by the board, if the claimant:
    1. Provides written notice to the creditor or creditor’s agent that a claim has been submitted to the board; and
    2. Authorizes the creditor or creditor’s agent to confirm with the board the claimant’s application with the board and that the debt or expense upon which the collection action is based may be covered under KRS 49.370(3).
  2. The board shall, upon the written request of a creditor or creditor’s agent, notify the creditor or creditor’s agent when a claim has been resolved.

History. Enact. Acts 2013, ch. 69, § 3, effective June 25, 2013; Former § 346.135 was renumbered to be § 49.380 , by 2017, ch. 74, § 38, effective June 29, 2017; 2021 ch. 185, § 45, effective June 29, 2021.

49.390. Reduction of award — Determination of victim’s contribution — Basis of denial of claim.

  1. Any award made pursuant to KRS 49.270 to 49.490 shall be reduced by the amount of any payments received or to be received by the claimant as a result of the injury from the following sources:
    1. From or on behalf of the person who committed the crime;
    2. Under insurance programs mandated by law;
    3. From public funds;
    4. Under any contract of insurance wherein the claimant is the insured or beneficiary;
    5. As an emergency award pursuant to KRS 49.360 ; and
    6. From donations made on behalf of the victim or claimant toward expenses incurred as a result of the crime.
  2. In determining the amount of an award, the Crime Victims Compensation Board or board member shall determine whether, because of his or her conduct, the claimant or the victim of such crime contributed to the infliction of the victim’s injury, and shall reduce the amount of the award or reject the claim altogether, in accordance with such determination; however, the board or board member may disregard for this purpose the responsibility of the claimant or the victim for the victim’s injury where the record shows that such responsibility was attributable to efforts by the claimant or victim to prevent a crime or an attempted crime from occurrence in his or her presence or to apprehend a person who had committed a crime in his or her presence or had in fact committed a felony. The board or board members may request that either the county attorney or Commonwealth’s attorney or both state whether in their opinion, the victim suffered injuries as the result of a crime and has cooperated with the prosecution and law enforcement authorities. The board or board member shall not be bound by such opinions and recommendations and if needed may order a further investigation of the claim.
  3. The board or board member may consider whether the victim’s injuries were the ordinary and foreseeable result of unlawful and criminal activities in determining the claimant’s eligibility for an award. If the board or board member finds that the claimant will not suffer serious financial hardship if not granted financial assistance pursuant to KRS 49.270 to 49.490 , the board or board member shall deny an award. In determining such serious financial hardship, the board or board member shall consider all of the financial resources of the claimant. The board shall establish specific standards by rule for determining such serious financial hardships.

History. Enact. Acts 1976, ch. 263, § 14; 1980, ch. 172, § 5, effective July 15, 1980; 2013, ch. 69, § 5, effective June 25, 2013; renumbered from § 346.140 , by 2017 ch. 74, § 39, effective June 29, 2017; 2021 ch. 185, § 46, effective June 29, 2021.

Compiler’s Notes.

This section was formerly compiled as KRS 346.140 and was renumbered as this section effective June 29, 2017.

49.400. Effect of filing false information.

Any person who procures or attempts to procure compensation with the Crime Victims Compensation Board by filing false information shall have the claim denied and be forever barred from filing a claim with this board.

History. Enact. Acts 1990, ch. 409, § 8, effective July 13, 1990; Former § 346.145 was renumbered to be § 49.400 , by 2017, ch. 74, § 40, effective June 29, 2017; 2021 ch. 185, § 47, effective June 29, 2021.

49.410. Manner of payment — Annual reconsideration.

  1. The award shall be paid in a lump sum, except that in the case of death or protracted disability the award shall provide for periodic payments to compensate for loss of earnings or support. No award made pursuant to KRS 49.270 to 49.490 shall be subject to execution or attachment other than for expenses resulting from the injury which is the basis for the claim.
  2. The Crime Victims Compensation Board shall reconsider at least annually every award being paid in installments. An order or reconsideration of an award shall not require refund of amounts previously paid unless the award was obtained by fraud.

History. Former § 346.150 was renumbered to be § 49.410 , by 2017, ch. 74, § 41, effective June 29, 2017; 2021 ch. 185, § 48, effective June 29, 2021.

49.420. Lump-sum payment to survivors of police officer killed in line of duty.

  1. The Crime Victims Compensation Board may award a lump-sum payment not to exceed twenty-five thousand dollars ($25,000) to the family of a police officer employed by a city, county, or urban-county government who is killed in the line of duty as a police officer for such city, county, or urban-county and who is not eligible to receive death or disability benefits under a pension plan of the city, county, or urban-county.
  2. This section shall apply to any officer killed in the line of duty since January 1, 1986.

History. Enact. Acts 1986, ch. 324, § 1, effective April 4, 1986; 1990, ch. 409, § 9, effective July 13, 1990; Former § 346.155 was renumbered to be § 49.420 , by 2017, ch. 74, § 42, effective June 29, 2017; 2021 ch. 185, § 49, effective June 29, 2021.

49.430. Federal participation.

The Crime Victims Compensation Board may apply for funds from, and submit all necessary forms to, any federal agency participating in a cooperative program to compensate victims of crime.

History. Enact. Acts 1990, ch. 409, § 10, effective July 13, 1990; Former § 346.157 was renumbered to be § 49.430 , by 2017, ch. 74, § 43, effective June 29, 2017; 2021 ch. 185, § 50, effective June 29, 2021.

49.440. Records of proceedings are public records — Confidentiality protected.

The Crime Victims Compensation Board shall maintain the official record of the claim, including evidence entered into the record at a hearing on the claim, and the final action taken on each claim. All records of proceedings shall be public records; provided, however, that any record or report obtained by the board, the confidentiality of which is protected by any other law or regulation, shall remain confidential subject to such law or regulation.

History. Enact. Acts 1976, ch. 263, § 16; Former § 346.160 was renumbered to be § 49.440 , by 2017, ch. 74, § 44, effective June 29, 2017; 2021 ch. 185, § 51, effective June 29, 2021.

49.450. Contracts regarding crime — Money to be paid to Crime Victims Compensation Board — Disposition.

  1. Every person contracting with any person or the representative or assignee of any person accused or convicted of a crime in this state, with respect to the reenactment of such crime, by way of a movie, book, magazine article, radio, or television presentation, live entertainment of any kind, or from the expression of such person’s thoughts, feelings, opinions, or emotions regarding such crime, shall pay over to the Crime Victims Compensation Board any moneys which would otherwise, by terms of such contract, be owing to the person so accused or convicted or his representatives.
  2. After deducting all sums paid to the victim by the board, the board shall deposit such moneys in its accounts for the benefit of and payable to any victim of crimes committed by such person, provided that such person is eventually convicted of the crime and provided further that such victim, within five (5) years of the date of the crime, brings a civil action in a court of competent jurisdiction and recovers a money judgment against such person or his or her representatives.
  3. Upon disposition of charges favorable to any person accused of committing a crime, or upon a showing by such person that five (5) years have elapsed from the board’s receipt of such funds and that such person has not been convicted of said crime and further that no actions are pending against such person in connection with the crime or pursuant to this section, the board shall immediately pay over any such moneys to such person.
  4. Notwithstanding any inconsistent provision of the civil practice law and rules with respect to the timely bringing of an action, the five (5) year period provided for in subsection (2) of this section shall not begin to run until the board has received such moneys.
  5. Any action taken by any person convicted of a crime, whether by way of execution of a power of attorney, creation of corporate entities, or otherwise, to defeat the purpose of this section shall be null and void as against the public policy of this state.
  6. The failure of a person to pay moneys to the board in accordance with subsection (1) shall create a debt due and owing to the board from that person and shall constitute a preferential lien to the state which may be collected by the board by civil process.

History. Enact. Acts 1978, ch. 297, § 1, effective June 17, 1978; Former § 346.165 was renumbered to be § 49.450 , by 2017, ch. 74, § 45, effective June 29, 2017; 2021 ch. 185, § 52, effective June 29, 2021.

49.460. Subrogation.

  1. No right of action at law against a person who has committed a criminal act for damages as a consequence of such act shall be lost as a consequence of receiving benefits under the provisions of KRS 49.270 to 49.490 . In the event any person receiving benefits under KRS 49.270 to 49.490 additionally seeks a remedy for damages from the person or persons who have committed the criminal act resulting in damages, then and in that event the Crime Victims Compensation Board shall be subrogated to and have a lien upon any recovery so made to the extent of the payments made by the state to or on behalf of such person under KRS 49.270 to 49.490.
  2. If compensation is awarded, the state is subrogated to all the claimant’s rights to receive or recover benefits or advantages, for economic loss for which and to the extent only that compensation is awarded from a source which is, or, if readily available to the victim or claimant would be, a collateral source.

History. Enact. Acts 1976, ch. 263, § 17; Former § 346.170 was renumbered to be § 49.460 , by 2017, ch. 74, § 46, effective June 29, 2017; 2021 ch. 185, § 53, effective June 29, 2021.

49.470. Award constitutes debt owed state — Manner of payment.

  1. Any payment of benefits to or on behalf of a victim under KRS 49.270 to 49.490 creates a debt due and owing to the state by any person found to have committed such criminal act in either a civil or criminal court proceeding in which he is a party.
  2. The court when placing any convicted person, who owes a debt to the state as a consequence of a criminal act, on probation and conditional discharge as provided in KRS 533.020 may set as a condition of the probation or conditional discharge the payment of the debt to the state. The court also may set the schedule or amounts of payments to be made subject to modification based on change of circumstances.
  3. The parole board shall also have the right to make payment of the debt to the state a condition of parole under the provisions of KRS Chapter 439 subject to modification based on change of circumstances.

History. Enact. Acts 1976, ch. 263, § 18; Former § 346.180 was renumbered to be § 49.470 , by 2017, ch. 74, § 47, effective June 29, 2017.

49.480. Crime victims’ compensation fund.

  1. There is established in the State Treasury the crime victims’ compensation fund, hereinafter referred to as the “fund,” to be administered by the Crime Victims Compensation Board. Nothing herein shall be construed to limit the power of the court to order additional forms of restitution, including public or charitable work or reparation to the victim, to the fund, or otherwise as authorized by law.
  2. The fund shall consist of moneys from the following: appropriations by the General Assembly; the federal government; disbursements provided under KRS 42.320(2)(g); and any other public or private source. Any unexpended balance remaining in the fund at the end of the biennium shall not lapse and be transferred to the general fund, but shall remain in the crime victims’ compensation fund. Any funds not utilized by the board shall be used to provide assistance to programs for victims, and the board shall allocate such funds to any agency providing services to victims. In the event there are insufficient funds in the fund to pay all claims in full, all claims shall be paid at seventy percent (70%). If there are no moneys in the fund, then no claim shall be paid until moneys have again accumulated. In addition to payment of claims, moneys in the fund shall be used to pay all the necessary and proper expenses of the board.

History. Enact. Acts 1982, ch. 420, § 1, effective July 15, 1982; 1986, ch. 299, § 6, effective July 15, 1986; 1990, ch. 409, § 11, effective July 13, 1990; 1998, ch. 606, § 42, effective July 15, 1998; 2002, ch. 183, § 24, effective August 1, 2002; Former § 346.185 was renumbered to be § 49.480 , by 2017, ch. 74, § 48, effective June 29, 2017; 2021 ch. 185, § 54, effective June 29, 2021.

49.490. Sexual assault victim assistance fund.

  1. There is established in the State Treasury the sexual assault victim assistance fund to be administered by the Crime Victims Compensation Board for the purpose of funding medical examinations for victims of sexual assault as provided in subsection (4) of this section and in KRS 216B.400 . All moneys deposited or paid into the sexual assault victim assistance fund are appropriated and shall be available to the board. Funds shall be disbursed by the State Treasurer upon the warrant of the board.
  2. The sexual assault victim assistance fund may receive state general fund appropriations, gifts, grants, federal funds, or other public or private funds or donations. Any federal matching funds received by the board or the crime victims’ compensation fund for sexual assault victim assistance payments shall be deposited into the sexual assault victim assistance fund.
  3. Any unencumbered or unallocated balances in the sexual assault victim assistance fund shall be invested as provided in KRS 42.500(9). Any income earned from investment, along with the unallocated or unencumbered balances in the fund, shall not lapse and shall be deemed a trust and agency account available solely for the purposes specified in subsection (1) of this section.
    1. For purposes of this section, a children’s advocacy center is a center as defined in KRS 620.020 that operates consistent with administrative regulations promulgated by the Cabinet for Health and Family Services. (4) (a) For purposes of this section, a children’s advocacy center is a center as defined in KRS 620.020 that operates consistent with administrative regulations promulgated by the Cabinet for Health and Family Services.
    2. Upon receipt of a completed original claim form supplied by the board and itemized bill for a child sexual abuse medical examination performed at a children’s advocacy center, the board shall reimburse the children’s advocacy center for actual costs up to but not exceeding the amount of reimbursement established through administrative regulation promulgated by the Department for Medicaid Services.
    3. Independent investigation by the board shall not be required for payment of claims under this section; however, the board may require additional documentation as proof that the medical examination was performed.
  4. If sexual assault victim assistance funds are insufficient to pay claims under subsection (4) of this section or KRS 216B.400 , payment shall be made from the crime victims’ compensation fund.

History. Former § 346.200 was renumbered to be § 49.490 , by 2017, ch. 74, § 49, effective June 29, 2017; 2021 ch. 185, § 55, effective June 29, 2021.

Penalties

49.990. Penalty for failure or refusal to obey subpoena or order of Board of Tax Appeals, Crime Victims Compensation Board, or Board of Claims.

Any person who fails or refuses to obey a subpoena or order of the Board of Tax Appeals, the Crime Victims Compensation Board, or the Board of Claims made pursuant to KRS Chapter 13B shall be fined not less than twenty-five dollars ($25) nor more than five hundred dollars ($500).

History. Enact. Acts 2017, ch. 74 § 50, effective June 29, 2017; 2021 ch. 185, § 56, effective June 29, 2021.