KRS 224A.165: Reserve funds or replacement funds -- Maintaining required level --

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 Administra tion 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 f und 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 guarantee d 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 fro m 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 note s 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).