KRS 65.058: Definitions for section -- Forbearance period after acquisition of public

water or wastewater system -- Duties of acquiring utility -- Duties of Energy

and Environment Cabinet and Public Service Commission upon expiration of

forbearance period.

(1) As used in this section:

(a) "Acquiring utility" means a public water or wastewater system, or a utility

described in KRS 278.010(3)(d) or (f);

(b) "Cabinet" means the Energy and Environment Cabinet;

(c) "Commission" means the Public Service Commission;

(d) "Forbearance period" means a three (3) year period of time that begins on the

day that the sale of the public water or wastewater system to the acquiring

utility closes;

(e) "Governing body" means the appointed officials having control and

responsibility for the governance of the public water or wastewater system;

and

(f) "Public water or wastewater system" means any of the following that serve a

community:

1. A water district, water association, or joint water commission formed

under KRS Chapter 74;

2. A sewer district or sanitation district formed under KRS Chapter 67, 76,

or 220;

3. A municipal water utility and water works, sewer utility, or sewage

system or works, or combined electric and water plant formed under this

chapter; and

4. Any combinati on of two (2) or more of the entities listed in

subparagraphs 1. to 3. of this paragraph.

(2) Notwithstanding any provision of law to the contrary, when a public water or

wastewater system is sold, the acquiring utility shall have a forbearance period

during which the acquiring utility shall:

(a) Not be required to pay any of the acquired public water or wastewater

system's fines or penalties imposed for violations of KRS Chapter 224 or 278,

or the administrative regulations promulgated thereunder, includin g any fines

and penalties imposed prior to April 12, 2024;

(b) Make all necessary improvements to the public water or wastewater system

and its public works to correct past violations and bring the water system,

wastewater system, or both into compliance with state and federal law; and

(c) Be given priority for any eligible financing from the Kentucky Infrastructure

Authority to correct all deficiencies in the system identified in state and

federal violations.

(3) The public water or wastewater system shal l maintain and make accessible all

books and records associated with the actions taken during the forbearance period

to the cabinet, the Kentucky Infrastructure Authority, and the commission to

demonstrate compliance with this section. The acquiring utilit y shall comply with

any law requiring audits of its books, records, or operations of its facilities or

works.

(4) Within thirty (30) days of receiving a notice of intent to purchase a public water or

wastewater system by the governing body or owner of the acquiring utility, the

cabinet and the commission shall each prepare and submit a list to the acquiring

utility detailing the fines, penalties, and other deficiencies that have accrued to the

acquired public water or wastewater system and the length of tim e that those

amounts may be deferred during the forbearance period.

(5) After the forbearance period has expired, the cabinet and the commission shall

either:

(a) Waive all fines and penalties incurred prior to the commencement of the

forbearance period if all of the deficiencies giving rise to the fines and

penalties have been resolved and:

1. The deficient public water or wastewater system is placed under a

management and operations agreement with all day -to-day management

and operations handled by a well-operated utility; or

2. The deficient public water or wastewater system is sold to an acquiring

utility;

(b) Proceed to collect all past due fines and penalties if the deficiencies have not

been resolved or the deficient public water or wastewater system is not under

a management and operations agreement or sold to an acquiring utility; or

(c) Grant an extension of the forbearance period of no longer than six (6) months

if the commission and the cabinet determine that all of the conditions for

waiver of f ines and penalties in paragraph (a) of this subsection will be

satisfied by that time.

Notwithstanding any provision of law to the contrary, interest or additional charges

shall not be imposed by the cabinet or the commission on those accrued amounts

during the forbearance period.

(6) An acquired public water or wastewater system to which a forbearance period has

been applied under this section shall not be eligible for any additional forbearance

periods.