224A.165 Reserve funds or replacement funds -- Maintaining required level --
473 words·~2 min read·
/ky/224a-165A research copy — for the controlling text, always check the official state or federal source. Not legal advice.
Approval of General Assembly required for certain bond or note issuances.
(1)The authority may, in connection with the issuance of its revenue bonds and notes
for the accomplishment of its public purposes pursuant to this chapter, establish in
respect of the revenue bonds and notes reserve funds or replacement funds required
in the sound discretion of the board of the authority in order to enable the authority
to effectuate its proper public purposes, and to issue revenue bonds and notes in the
most advantageous manner. If any reserve fund or replacement fund created by the
authority in connection with any revenue bond issue or note issue should, in
violation of any contract made by the authority with any bond holder or note holder,
be monetarily deficient in any respect as of any date of accounting stipulated by the
authority, the authority shall immediately make formal request in writing to the
secretary of the Finance and Administration Cabinet, and to the Governor of
Kentucky, that sums adequate to restore the reserve fund or replacement fund to its
contractually required level and to pay any overdue principal and interest on any
outstanding revenue bonds and notes of the authority be included in the next
succeeding executive budget, and that the budget request be presented to the
General Assembly of Kentucky with recommendation for approval by the General
Assembly for payment to the authority for the use and benefit of the reserve fund or
replacement fund.
(2)If the provisions of KRS 56.870(3) are determined to apply to a revenue bond or
note, and if the proceeds of the bond or note are made available to a governmental
agency or private entity, and if the debt is not fully guaranteed by the United States
government or secured by a nationally recognized entity authorized to issue
guarantees and rated in the highest rating category by at least one
(1)of the
nationally recognized rating services, the authority shall obtain approval from the
General Assembly in accordance with the provisions of KRS 56.870(1) prior to the
issuance of the bonds or notes. Notwithstanding the foregoing, no such approval
shall be required for the following issues of bonds or notes:
(a)Refunding bonds or notes which are issued for the purpose of achieving debt
service savings and which do not extend the term of the refunded bonds;
(b)Bonds or notes if the aggregate principal amount of the bonds or notes
outstanding under any trust indenture or bond resolution does not exceed the
sum of five hundred million dollars ($500,000,000).
The incremental amount of principal debt incurred by issuing refunding bonds or
notes which are issued for the purpose of achieving debt service savings and which
do not extend the term of the refunded bond or note shall not be subject to the limits
defined in paragraph (b).