KRS 56.867: Project notes -- Sale and issuance -- Purposes -- Approval -- Status of notes

with respect to the Commonwealth and its political subdivisions.

(1) The commission may issue and sell project notes for authorized projects upon

request by the cabinet. Proj ect notes may be sold and issued in a manner and have

terms relating to the payment of interest, principal, and premiums or discounts as

market conditions warrant.

(2) Appropriations requests for payments under the financing agreements on project

notes shall be made by the state agency requesting an authorized project unless the

payments are to be payable from funds not subject to appropriation. Project notes,

together with interest thereon, shall be repaid from payments received by the

commission from the cabinet under a financing agreement. The cabinet shall enter

into financing agreements with the commission for the issuance of project notes.

State agencies requesting funding for an authorized project shall enter into an

agreement with the cabinet for the issuance of project notes by the commission for

that state agency. Agreements authorized by this section shall be either financing

agreements, or alternative agreements which specify that any payments shall be

made from funds that are not subject to appropriation by the General Assembly.

(3) Project notes may be issued for the following purposes:

(a) To pay any or all the costs of an authorized project for any state agency; and

(b) To refund outstanding project notes or other obligations of any state agency.

(4) Project notes shall have a maximum maturity not to exceed one hundred twenty

percent (120%) of the expected useful economic life of the project as estimated by

the commission, and if more than one (1) project is being financed by the project

notes, then the weighted average of the expected useful economic lives shall be

used.

(5) The issuance of project notes shall be subject to KRS 56.870, to approval by the

State Property and Buildings Commission, and to review by the Capital Projects and

Bond Oversight Committee pursuant to KRS 45.810.

(6) Project notes may be refunded, in whole or in part, from the proceeds of bonds or

other obligations issued by any state agency authorized to issue bonds or other

obligations.

(7) Project notes shall not constitut e a debt of the Commonwealth or any political

subdivision thereof or a pledge of the faith and credit of the Commonwealth or any

political subdivision.