KRS 151.723: Water use fees.

(1) The rate of the water use fees collected by the authority shall be set for each year of

the biennium based upon a total amount of funds necessary to carry out only those

functions, projects, and expenses authorized by the General Assembly in the

authority's biennial budget.

(2) At the time the authority submits its budget to the Governor's Office of Policy and

Management, it shall certify to the General Assembly the total amount of water use

reported for the preceding biennium by users subject to the water use fees. At least

thirty (30) days prior to the effective date of the authority's budget, the authority

shall establish a rate for each water use fee based upon an amount of water use

projected for each year of the biennium from the amount reported, calcu lated to

generate the amount of funds necessary to carry out the functions, projects, and

expenses which have been authorized by the General Assembly to be funded by the

fees. The rate shall be an amount for each one thousand (1,000) gallons of water use

and shall be effective for at least one (1) year.

(3) The authority shall define by administrative regulation those uses of the Kentucky

River or the waters of the Kentucky River basin subject to a water use fee. Water

use fees shall not apply to facilities using water for agricultural purposes. The

authority shall collect the fees on a quarterly basis and pay the collected fees into

the State Treasury to the credit of a restricted fund for use by the authority.

(4) Water withdrawal fees imposed by the autho rity shall not be subject to state and

local taxes. Notwithstanding KRS 151.710(10), Tier 1 water withdrawal fees shall

be used to support the operations of the authority and for contractual services for

water supply and quality studies.