KRS 65.7061: Special fund to be pledged for retirement of increment bonds --

Requirements governing disbursal of funds.

During any time when incremental revenues have been pledged pursuant to a local

participation agreement or local development area agreement, or that increment bonds are

outstanding, the city, county, or issuer, as the case may be, shall maintain a special fund,

which shall be pledged for the retirement of increment bonds, if such bonds are

outstanding, and the payment of costs related to a project in a development area or local

development area, or providing redevelopment assistance in a development area.

(1) Officials charged with collecting revenues for any taxing district that has pledged

incremental revenues under a local participation agreemen t or a local development

area agreement shall, for each year a local participation agreement or local

development area agreement is in effect or any increment bonds are outstanding

with respect to a development area or local development area, submit those

incremental revenues for deposit in the special fund. The amount of incremental

revenues shall be determined under KRS 65.7083.

(2) Funds deposited in a special fund shall be disbursed at the times and in the amounts

required to pay the costs of any debt c harges on incremental bonds, approved costs,

and redevelopment assistance. However, there shall be no disbursements for other

redevelopment assistance or approved costs in a development area or local

development area, if the funds are required to pay debt charges on increment bonds.

(3) Amounts in a special fund which exceed the amount required to pay debt charges

and, in a development area, and costs of redevelopment assistance in any fiscal year

shall be used to provide for the retirement or defeasance of all or a portion of the

remaining debt charges secured by the incremental revenues. Amounts beyond this

may be used to pay the costs of additional projects or redevelopment assistance.