KRS 56.863: Powers and duties of the commission.

The commission shall have the power and duty to:

(1) Maintain the records and perform the functions necessary and proper to accomplish

the purposes of KRS 56.860 to 56.869;

(2) Promulgate administrative regulations relating to KRS 56.860 to 56.869;

(3) Conduct analysis to determine the impact of fluctuating receipts of revenues on the

budget of the Commonwealth, fluctuating interest rates upon the interest -sensitive

assets and interest -sensitive liabilities of the Commonwealth, and the resulting

change in the net interest margin on the budget of the Commonwealth;

(4) Develop strategies to mitigate the impact of fluctuating receipts of revenues on the

budget of the Commonwealth and of fluctuating interest rates on the

Commonwealth's interest-sensitive assets and interest-sensitive liabilities;

(5) Report its findings to the State Investment Commission at least annually to assist

the State Investment Commission in developing and implementing its investment

strategy. The State Investment Commission shall provide the commission with a

copy of its monthly investment income report to aid the commission in developing

and implementing its strategies;

(6) Issue funding notes, project notes, and tax and revenue anticipation notes or other

obligations on behalf of any st ate agency to fund authorized projects or to satisfy

judgments;

(7) Refund any funding notes, project notes, or tax and revenue anticipation notes

issued under KRS 56.860 to 56.869 to achieve economic savings, to better match

receipts with expenditures, or as a part of a continuing finance program;

(8) Designate individual employees or officers of the Office of Financial Management

within the Office of the Controller as agents for purposes of approving the principal

amount of tax and revenue anticipation no tes, the interest rate, the discount,

maturity date, and other relevant terms of tax and revenue anticipation notes, project

notes, and funding notes or refunding notes issued within constraints established by

the commission and to execute agreements, incl uding notes and financial

agreements, for the commission;

(9) Enter into financial agreements for the purpose of hedging its current or projected

interest-sensitive assets and interest -sensitive liabilities to stabilize the

Commonwealth's net interest marg in, as deemed necessary by the commission,

subject to administrative regulations promulgated by the commission that limit the

net exposure of the Commonwealth as a result of these financial agreements;

(10) Deposit net interest payments and premiums receiv ed by the commission under

financial agreements into a restricted account, which shall not lapse at the end of the

fiscal year but shall continue to accumulate to act as security for these financial

agreements. This duty is mandatory in nature. Any accumul ated funds in excess of

the amount determined by the commission to be necessary to establish this security

may be applied to debt service payments, net interest payments, and premiums and

expenses related to interest-sensitive liabilities; and

(11) Report to the Capital Projects and Bond Oversight Committee and the Interim Joint

Committee on Appropriations and Revenue on a semiannual basis, by September 30

and March 31 of each year, the following:

(a) A description of the Commonwealth's investment and debt structure;

(b) The plan developed to mitigate the impact of fluctuating revenue receipts on

the budget of the Commonwealth and fluctuating interest rates on the interest -

sensitive assets and interest -sensitive liabilities of the Commonwealth,

including an analysis of the impact that a change in the net interest margin

would have on the budget of the Commonwealth. The report due by March 31

of each year shall reflect the strategy for January through June of the fiscal

year, and the report due by September 30 shall reflect the strategy for July

through December of the fiscal year;

(c) The principal amount of notes issued, redeemed, and outstanding; and a

description of all financial agreements entered into during the reporting

period. The report due by March 31 shall include information about

agreements entered into from July through December of the fiscal year. The

report due by September 30 shall include information about agreements

entered into between January and June of the prior fiscal year; and

(d) A summary of gains a nd losses associated with financial agreements and any

other cash flow strategies undertaken by the commission to mitigate the effect

of fluctuating interest rates during each reporting period. The report due by

March 31 shall include information about agr eements and strategies entered

into or undertaken from July through December of the fiscal year. The report

due by September 30 shall include information about agreements and

strategies entered into or undertaken from January through June of the prior

fiscal year.