KRS 342.829: Funding of authority -- Restrictions on use of funds.

(1) The authority shall not receive any direct state general fund appropriation.

(2) Initial funding for the authority shall be determined by the Governor and the

secretary of the Finance and Administration Cabinet. Funding methods may include,

but not be limi ted to, a loan from an existing state agency or agencies to the

authority. The maximum amount borrowed from all state agencies shall not exceed

seven million dollars ($7,000,000), to be repaid over a period not to exceed ten (10)

years from the original lo an date. The Governor shall have the authority to provide

or secure additional funding necessary to maintain, for the first thirty -six (36)

months of its operation, the surplus the Governor deems proper. The additional

funding may come from any funds which may be expended directly by the Governor

or from nonstate -agency sources and, regardless of source, shall be a loan to the

authority. The rate of interest to be applied to the loan shall be one percent (1%)

higher than the average for the long-term investment folder of the lending agency on

the anniversary date of the original loan. The interest rate shall be adjusted annually

on the anniversary date of the original loan. To minimize cash requirements and

interest obligations, the loan shall be executed as a line of credit against the lending

agency, so that only those funds actually required for initial start -up operations,

including the establishment of a surplus and reinsurance expenses, are drawn down

on an "as needed" basis.

(3) Any executive branch ag ency of the Commonwealth and any public corporation

created by the Commonwealth, any statute to the contrary notwithstanding, may

lend money to the authority subject to the terms and conditions of this section, and

any loan made pursuant to this section sh all not be construed as a breach or

violation of fiduciary duties contained in KRS Chapter 386.

(4) Funds collected by the authority shall not:

(a) Be loaned to the Commonwealth or any instrumentality or agency thereof;

(b) Be subject to transfer to the Co mmonwealth or any agency or instrumentality

thereof, except for repayment of the loan authorized in subsections (2) and (3)

of this section; or

(c) Be expended for any other purposes than as authorized by KRS 342.801 to

342.843 and KRS 304.13-340.