KRS 42.355: Examination and approval of projects -- Grants -- Administration --

Conditions.

(1) The Department for Local Government shall examine each capital project selected

by the area development districts, and when it finds that a proposed project

conforms to the requirements of KRS 42.350 to 42.370; that the estimated costs of

the project are reasonable; that the costs proposed to be paid from the fund are

within the amount available; and that the proposed beneficiary agency will be

reasonably able to fi nance the operation and maintain the capital project during its

estimated useful life, the commissioner of the Department for Local Government

shall approve it. If the Department for Local Government determines that a capital

project proposal does not conf orm to the requirements of KRS 42.350 to 42.370,

that the estimated costs of the project are excessive or unreasonable in light of the

public benefit to be derived from the project, or the unencumbered balance in the

fund available for expenditure in the a rea development district is insufficient to pay

the costs of the project, or the part thereof proposed to be paid out of the fund, or

the beneficiary agency cannot reasonably finance the operation of or maintain the

capital project during its estimated use ful life, the project proposal shall be

disapproved by the Department for Local Government. The final decision to either

approve or disapprove any project proposal shall be made no later than forty -five

(45) days following official submittal of a complete proposal by the area

development district, and the area development district shall be accordingly notified

at that time.

(2) The commissioner of the Department for Local Government may make direct

grants-in-aid of money out of the fund to any beneficiary a gency for the

construction or acquisition of any approved capital project. When a direct grant -in-

aid has been made to a beneficiary agency, all contracts awarded for the purchase of

materials, supplies, equipment, or services, except professional and tech nical

services, required for the construction or acquisition of the project shall be awarded

to the lowest and best bidder in the discretion of the beneficiary agency after public

advertisement as required by KRS Chapter 424 or other applicable law. All

contracts awarded under this section for the construction, reconstruction, or

renovation of a building or other improvement to real estate shall be deemed

contracts for public works within the meaning of KRS 341.317 and KRS Chapter

376 and other applicable s tatutes. All beneficiary agencies receiving a direct grant -

in-aid under this subsection shall keep and maintain complete and accurate records

of accounts of all expenditures of the grant moneys which shall be subject to audit

by the Commonwealth for a peri od of five (5) years after completion of the capital

project. Beneficiary agencies shall complete approved capital projects within a

reasonable period of time as determined by the Department for Local Government.

Upon completion of capital projects, benefi ciary agencies shall submit project

completion reports to the Department for Local Government as prescribed by the

Department for Local Government and containing documents and information as

may be necessary to determine compliance with KRS 42.350 to 42.36 0 and other

applicable statutes and administrative regulations. Beneficiary agencies shall be

liable to repay to the fund any granted funds for failure to submit full project

completion reports within a reasonable period of time or for expenditure of grant ed

funds in violation of statutes and regulations. No additional area development funds

may be approved until compliance, except at the discretion of the commissioner of

the Department for Local Government. Any grant moneys not required after all of

the costs of the capital project have been paid by the beneficiary agency shall be

promptly returned to the Commonwealth for reallocation for expenditure for other

capital projects in the area development district to which the funds had been

originally allocated.

(3) No capital project shall be constructed under KRS 42.350 to 42.370 except upon

land to which (a) the Commonwealth, a political subdivision of the Commonwealth,

or the beneficiary agency of the capital project has a good and marketable title, free

of encumbrances, or (b) the beneficiary agency of the project has the right to the

uninterrupted use, occupancy, and possession for a period longer than the estimated

useful life of the capital project; provided nothing herein shall prohibit the

construction or renovation of public buildings on land with an existing

encumbrance to secure payment of funds obtained for the acquisition or

improvement of said land. Each beneficiary agency shall execute and deliver to the

Commonwealth its written assurances, which shall be binding on the agencies'

successors and assigns, guaranteeing that during its estimated useful life, the capital

project shall be operated and maintained for public purposes and pledging that no

mortgage or other encumbrances shall be placed again st any capital project wholly

financed out of the fund, except industrial development projects, for the breach of

which assurances the Commonwealth shall have right of entry to the capital project

and the beneficiary agency, or its successors and assigns, shall forthwith convey the

title to the capital project to the Commonwealth. Similar assurances shall be

executed and delivered to the Commonwealth by the beneficiary agencies of capital

projects financed in part out of the fund and in part from other sour ces, except that

when additional funding is derived from the issuance and sale of revenue bonds or

under other statutorily authorized financing methods, to secure the repayment of

which funds a statutory mortgage lien is granted in favor of any person or g roup of

persons, the capital project may be encumbered to the extent authorized or required

by the law under which the financing method was undertaken; nor shall anything in

this section prohibit the encumbrance of any real property located within an

industrial park or constituting an industrial site, developed or improved as a capital

project under KRS 42.350 and this section, by any person, firm, company,

partnership, or corporation to which the property has been conveyed, to obtain

financing for the cons truction upon the property of industrial and commercial

buildings. The written assurances provided by beneficiary agencies under this

section shall be lodged for recording and recorded in the office of the county clerk

of the county in which the proposed project shall be located.