KRS 42.200: Water project interest rate buy down fund -- Funding sources, purposes,

uses, and administration.

(1) The water project interest rate buy down fund is hereby created as a special fund in

the State Treasury. The fund may receive state appropriations, gi fts, grants, and

federal funds and shall include earnings from investments of moneys in the fund.

Any fund balance at the close of the fiscal year shall not lapse but shall be carried

forward to the next fiscal year, and moneys in this fund shall be contin uously

appropriated only for the purposes specified in this section.

(2) The fund shall be used to provide financial assistance to government agencies for

the construction of publicly owned water supply projects located in rural areas of

the Commonwealth. In order to qualify for the financial assistance, the

governmental agency shall obtain a loan from a bank or combined bank and trust

company organized under the laws of this Commonwealth and at an interest rate no

greater than two (2) percentage points hig her than the current prime rate. The

financial assistance provided shall consist of an annual grant to the governmental

agency to be made over the life of the loan obtained by the governmental agency for

the construction of the publicly owned water supply project. The amount of the

annual grant shall be calculated over the life of the loan to provide to the

governmental agency each year the portion of the interest on the loan calculated at a

four percent (4%) interest rate. The governmental agency shall be responsible for

the payment of the interest on the loan in excess of the four percent (4%) interest

rate and for the payment of the principal on the loan.

(3) The Finance and Administration Cabinet shall administer the fund and may

promulgate administrative regulations as necessary to implement the provisions of

this section. The Department for Local Government shall advise government

agencies of the fund and how to apply for moneys from the fund.

(4) The provisions of this section shall be known and may be cited as the Kentucky

Rural Water Act.