KRS 224A.111: Creation of federally assisted wastewater revolving fund -- Purpose --

Duties of authority.

(1) The federally assisted wastewater revolving fund shall be established in the State

Treasury and shall be administered by the authority under an agreement with the

Energy and Environment Cabinet to assure compliance with the federal act.

(2) The fund shall be a dedicated fund and all moneys in the fund shall be dedicated

solely to securing the payment of the principal of, interest on, and premium, if any,

of revenue bonds issued by the authority under subsection (5) of this section which

are to be secured solely by loan payments made by governmental agencies that have

been deposited in the fund, making transfers to the federally assisted water supply

revolving fund, and providing financial assistance to government agencies for the

construction of publicly owned treatment works as defined in Section 212 of the

federal act and for the implementation of a management program established under

Section 319 of the federa l act and for the development and implementation of a

conservation and management plan under Section 320 of the federal act.

(3) The authority may enter into grant agreements with the administrator of the United

States Environmental Protection Agency and a ccept capitalization grants for the

revolving fund in accordance with payment schedules established with the

administrator.

(4) All payments from the administrator pursuant to subsection (3) of this section shall

be deposited in the dedicated revolving fund.

(5) The authority may issue its revenue bonds or seek appropriations for deposit into

the revolving fund, including the amounts required to match the capitalization

grants from the administrator. An amount not exceeding the amount permitted by

the federal act may be used for the reasonable costs of administering the fund, for

reviewing and regulating project construction and for other reasonable costs of

complying with the federal act.

(6) The financial assistance which may be provided to governmental ag encies by the

revolving fund shall be limited to:

(a) Making loans, on the condition that the loans are made at or below market

interest rates, including interest free loans; that annual principal and interest

payments will commence no later than when project construction is completed

or one (1) year after initiation of operations, and all loans will be fully

amortized not later than thirty (30) years after project construction is

completed; that the recipient of a loan will establish a dedicated source of

revenue for repayment of loans; and that the fund will be credited with all

payments of principal and interest on all loans;

(b) Guaranteeing, or purchasing insurance for obligations of the fund where the

action would improve credit market access or reduce interest rates;

(c) Providing moneys with which to carry out the requirements of assistance

agreements; and

(d) Providing a source of revenue or security for the payment of principal and

interest on bonds or notes issued by the authority or agencies of the state if the

proceeds of the sale of the bonds will be deposited in the fund.

(7) The revolving fund shall be established, maintained and credited with repayments

and the fund balance shall be available in perpetuity solely for its stated purposes.

(8) The authority shall obligate all payments from the administrator of the United States

Environmental Protection Agency as well as the required state match, within one (1)

year after the receipt of the payments.

(9) Financial assistance may be provided from t he fund only for those infrastructure

projects which the Finance and Administration Cabinet has approved from the

prioritization schedule prepared by the Energy and Environment Cabinet.

(10) The authority may make and condition loans from the fund as requi red by state or

federal law.

(11) The authority shall establish fiscal controls and accounting procedures sufficient to

assure proper accounting during appropriate accountin g periods for payments and

disbursements received and made by the revolving fund and for fund balances at the

beginning and end of the accounting period.

(12) The authority or the Energy and Environment Cabinet may make or prepare any

necessary or required plan or report.

(13) The authority or the Energy and Environment Cabinet or the loan recipient shall

make available to the administrator of the United States Environmental Protection

Agency records which the administrator reasonably requires to review in order to

determine compliance with any applicable provision of law.

(14) The authority may enter into any necessary or required agreement and give or make

any necessary or required assurance or certification with any person to receive

payments or grants or to make or provide any financial assistance.

(15) The authority may enter into any necessary or required agreement with federal or

state agencies or persons to carry out the provisions of this section.

(16) If a loan is made from the federally assisted wa stewater revolving fund which will

finance the cost of facility planning and the preparation of plans, specifications, and

estimates for construction of publicly owned treatment works, the state shall ensure

that if the recipient of the loan receives a gra nt under section 201(g) of the federal

act for construction of such treatment works and an allowance under section

201(1)(l) of the federal act for nonfederal funds expended for the planning and

preparation, the recipient shall promptly repay the loan to t he extent of the

allowance.

(17) Financial assistance may be provided from the federally assisted wastewater

revolving fund only with respect to a project which is consistent with plans, if any,

developed under Sections 205(j), 208, 303(e), 319, and 320 of the federal act, as

amended.

(18) The authority shall require as a condition of making a loan or providing other

assistance, as described in KRS 224A.100(6), from the fund that the recipient of the

assistance shall maintain project accounts in accordance with generally accepted

governmental accounting standards.

(19) Assistance may be provided from the fund, other than under subsection (6)(a) of

this section, to a governmental agency with respect to the nonfederal share of the

costs of a treatment works pr oject for which the governmental agency is receiving

assistance from the administrator of the United States Environmental Protection

Agency under any other authority only if the assistance, as determined by the

Finance and Administration Cabinet, is necessary to allow the project to proceed.