KRS 154.20-560: Restrictions on insurance commitment.

The authority shall not recommend to the insurance corporation, and the insurance

corporation shall not approve the insurance of any loan or bond under its contract with the

authority, if the insurance of such loan or bond will result in a total commitment by the

insurance corporation in excess of ten (10) times the amount in the trust account. No

insurance commitment shall be made by the insurance corporation unless the authority

has made the following findings:

(1) That the loan or bond is to be secured by a first mortgage of real or personal

property or both satisfactory to the authority;

(2) That the mortgagor and mortgagee are responsible parties;

(3) That the occupant of the project or projects is a responsible occupant;

(4) That the provisions of the mortgage loan or bond are reasonable and proper, and in

making such determination the authority may take into account such factors as it

deems relevant including, without limitation, the provisions for maintaining,

insuring and repairing the project by th e mortgagee and the remedies of the

authority or the insurance corporation upon default of the mortgagee;

(5) That the project will provide employment having a reasonable relationship to the

principal amount of the loan or bond issue to be insured therefor , taking into

account, among other things, the investment per employee of comparable facilities;

(6) That adequate provision is being or will be made to meet any increased demand

upon community public facilities that might result from the project;

(7) That the size and scope of the project is such that a definite benefit to the economy

of the Commonwealth may reasonably be expected to result from the construction

or improvement thereof; and the employment created shall be substantially primary

employment;

(8) That the principal amount of the loan or bond does not exceed ninety -five percent

(95%) of the cost of the land, buildings, and improvements and eighty percent

(80%) of the cost of the machinery and equipment;

(9) That the duration of the loan or bond s hall not exceed thirty (30) years on land,

buildings and improvements exclusive of machinery and equipment, and fifteen

(15) years on machinery and equipment; and that the authorization provisions are

satisfactory to the authority;

(10) That the insurance agreement provides for subrogation upon payment of insured

debt service from the trust account;

(11) That the public interest is adequately protected by the terms of the loan or bond and

of the insurance agreement;

(12) That the insurance of the loan or b ond will not cause the insured debt service

coming due in any one (1) calendar year on account of an insured loan or bond for

any one (1) mortgagor to exceed twenty percent (20%) of the amount in the trust

account when the finding is made; and

(13) That th e insurance of the loan or bond will not cause the insured debt service

coming due in any one (1) calendar year on account of permanent guarantees to

exceed one hundred percent (100%) of the amount in the mortgage insurance trust

when the finding is made.

The authority shall consult with the appropriate local and regional planning agencies to

ascertain the relationship of a proposed project to any existing local or regional

comprehensive plan; that, so far as feasible, the project is to be located in an are a of

generally high unemployment; and that employment opportunities will become available

to the residents of such area.