KRS 58.155: Grant anticipation notes.

(1) In the case of any public work or public project, in connection with which the

Commonwealth of Kentucky, or any department, agency or bureau thereof, or any

political subdivision or governmental unit of the Commonwealth of Kentucky

("governmental agency") has applied for and received federal grants -in-aid or is

entitled as a matter of law to receipt of federal grants -in-aid which may be applied

for the purpose of providing a portion of or all of the funds required for construction

and installation of any su ch public work or public project, such governmental

agency may authorize and issue grant anticipation notes payable from grant

proceeds when received, and any other assets which may be lawfully pledged by any

such governmental agency and which are so pledged.

(2) Any grant anticipation notes issued pursuant to authority of this section shall be

scheduled to mature at such time or times, not to exceed three (3) years from the

date of issuance thereof, and shall bear such rate or rates of interest as the governing

body of the governmental agency shall determine. Grant anticipation notes may be

sold at public sale or pursuant to private, negotiated sale at the election of the

governing body of the governmental agency issuing any such grant anticipation

notes. I nterest on any such grant anticipation notes may be capitalized in grant

anticipation note issues for periods not exceeding three (3) years.

(3) Grant anticipation notes issued pursuant to the authority of this section shall be

payable as to principal and interest, if interest is capitalized, from the federal grants

in anticipation of which the grant anticipation notes are authorized and issued, and

any governmental agency is authorized and empowered to pledge such grant

proceeds when received, either as so le security for the repayment of grant

anticipation notes, or together with any other assets and revenues of such

governmental agency which may be lawfully pledged for such repayment.

(4) Grant anticipation notes issued pursuant to the authority of this se ction are hereby

declared to be issued for public, governmental purposes and the interest derived

thereon shall be exempt from taxation by the Commonwealth and by all political

subdivisions of the Commonwealth. Grant anticipation notes shall also be exempt

from ad valorem taxation by the Commonwealth or any political subdivision

thereof.