{"data":{"id":"us-ky/krs-154.10-035","jurisdiction":"us-ky","citation":"KRS 154.10-035","heading":"Issuance of economic development revenue bonds and anticipation","body":"notes -- Uses -- Treatment.\n(1) Notwithstanding any other provisions of the Kentucky Revised Statutes, the board\nis authorized to exercise the following power:\n(a) The board may provid e for the issuance of economic development revenue\nbonds by the cabinet, for the purpose of providing funds and moneys to enable\nthe cabinet to exercise and fulfill the powers and authority set forth in KRS\n154.10-030, to enter into agreements with governm ental agencies and private\ncompanies, corporations, partnerships, and other such entities, acquire and\nlease projects to governmental agencies and private companies, corporations,\ncabinets, and other such entities, purchase obligations of governmental\nagencies issued for economic development projects, and make loans or grants\nfor economic development projects, and to enable the cabinet generally to\ncarry out and effectuate its proper purposes under this chapter. In anticipation\nof the issuance of the revenu e bonds, the board may provide for the issuance\nat one (1) time, or from time to time, of revenue bond anticipation notes\npursuant to the general laws of the state. The principal of and the interest on\nthe revenue bonds or notes shall be payable solely fro m revenues made\navailable to the cabinet for bond purposes. Any such notes may be made\npayable from the proceeds of bonds or renewal notes, or in the event bond or\nrenewal note proceeds are not available, or should the board deem it\nfinancially practicable to pay the notes directly from revenues made available\nto the cabinet for bond purposes, the notes may be paid from any revenues\nmade available to the cabinet for bond purposes. Prior to the issuance of the\nbonds or notes, the cabinet shall submit any pro posed issue to the Capital\nProjects and Bond Oversight Committee for its review and determination in\naccordance with provisions of KRS 45.810.\n(b) The revenue bonds or notes of the cabinet shall be dated and may be\nredeemable prior to maturity at the optio n of the board at prices and under\nterms and conditions determined by the board. Any bonds or notes shall bear\ninterest at the rate or rates, shall be payable annually or at shorter intervals,\nand may bear conversion privileges determined by the board. Not es shall\nmature at the time or times not exceeding five (5) years from their date or\ndates, and revenue bonds shall mature at the time or times not exceeding forty\n(40) years from their date or dates as may be determined by the board. The\nboard shall determine the form and manner of execution of the bonds or notes,\nand shall fix the denomination or denominations and the place or places of\npayment of principal and interest, which may be any bank or trust company\nwithin or without the state. In case any officer of the board whose signature or\nfacsimile of whose signature shall appear on any revenue bonds or notes shall\ncease to be such officer before the delivery thereof, the signature of the\nfacsimile shall be valid and sufficient for all purposes, the same a s if the\nofficer had remained in office until the delivery. At the time of issuance of\nvariable rate revenue bonds, the board may designate individuals or\ninstitutions which, in the sole judgment of the board, have financial market\nexpertise to serve as ag ent for the board for establishing and changing from\ntime to time, while the variable rate revenue bonds remain outstanding, the\nrate of interest to be borne by and the price to be paid for the revenue bonds.\nThe rate-setting procedures and authority of ea ch agent shall be set forth in\nwriting, and may include a formula or an index or indices based upon market\nfactors, and shall be established by the board at the time of issuance of the\nrevenue bonds. At the time of the issuance of the revenue bonds, the bo ard\nshall establish the maximum interest rate to be borne by the revenue bonds.\nThe board shall retain the right to remove or replace any agent at any time and\nfor any reason. The board may provide that said bonds or notes may be\nexecuted only with the fac simile signatures of its officers, but said bonds or\nnotes shall be executed with the manual signature of a bank or trust company\ndesignated by the board as registrar and paying agent.\n(c) All revenue bonds or notes issued under the provisions of this chap ter shall\nhave and are hereby declared to possess all of the qualities and incidents of\nnegotiable instruments under the laws of the state. The board may sell the\nrevenue bonds or notes in the manner, either at public or private negotiated\nsale, and for th e price, as it may determine will best effect the purpose of this\nchapter. If revenue bonds are sold at public, competitive sale, the revenue\nbonds shall be sold after newspaper advertising conforming to the\nrequirements of KRS Chapter 424 and competitive bids for the sale of the\nrevenue bonds shall be opened and read publicly by the board at a designated\nplace, day and hour, all of which shall be announced in the advertising made\nrelative thereto.\n(d) In its proceedings authorizing the issuance of revenue bonds or notes, the\nboard shall fix and determine contractual provisions with the bondholders\nrelating to the receipt, allocation, pledging, and disbursement of revenues\nmade available to the cabinet for bond purposes, and may enact and determine\nterms, conditions, and restrictions pursuant to which additional revenue bonds\nof the cabinet may be authorized and issued from time to time. The\nproceedings, determinations, and enactments of the board shall specify that\nthe payment of principal of and interest on all cabinet revenue bonds and notes\nshall constitute a first charge and lien against all revenues made available to\nthe cabinet for bond purposes before any such revenues are used, applied, and\ndisbursed for any other valid purposes of the cabinet, including the payment of\noperation and maintenance costs incident to the operation of the cabinet.\n(e) The proceeds of all revenue bonds or notes shall be used solely for the\npurpose of enabling the cabinet to enter into agreements or interim financing\nagreements with governmental agencies and private companies, corporations,\npartnerships, and other entities, to acquire and lease projects to governmental\nagencies, private companies, corporations, partnerships and other entities, to\npurchase obligations of governm ental agencies issued for economic\ndevelopment projects, to make loans or grants to governmental agencies,\nprivate companies, corporations, partnerships, and other such entities for\neconomic development projects, or for any purpose authorized in this chapt er.\nRevenue bond or note proceeds may also be used and applied for the payment\nof ordinary and necessary expenses in connection with issuance of the revenue\nbonds or notes, including, but not by way of limitation, a sum equal to any\ndiscount in the sale th ereof, if discount bids are authorized and permitted by\nthe board, administrative expenses, including the preparation of revenue\nbonds or notes, publication of notices, printing and other costs, attorneys' fees,\nand other ordinary and necessary costs of fi nancing, including the payment of\nfees to fiscal agents for advice and assistance in the preparation and marketing\nof revenue bonds or notes.\n(f) Prior to the preparation of definitive revenue bonds or notes, the board may,\nunder like restrictions, issue i nterim receipts or temporary bonds,\nexchangeable for definitive revenue bonds or notes when the revenue bonds or\nnotes shall have been executed, and are available for delivery. The board shall\nalso provide for the replacement of any revenue bonds or notes that shall have\nbecome mutilated or shall have been destroyed or lost. Revenue bonds or\nnotes may be issued under the provisions of this chapter directly by the board\nwithout obtaining the consent or acquiescence of any cabinet, division,\ncommission, board, department, or agency of the state other than the Finance\nand Administration Cabinet, and as provided in KRS 42.420, and without any\nother proceedings or the happening of any other conditions or things except as\nspecifically required by this chapter and the provisions of the resolution or\nresolutions of the board authorizing the issuance of the revenue bonds or\nnotes.\n(2) The board shall assume all bond issuance and refunding authority, power, duties,\nand obligations as existed on July 14, 1992, for the K entucky Development Finance\nAuthority, and the Kentucky Rural Economic Development Authority; the ability of\nany of the foregoing organizations to issue industrial revenue bonds under KRS\nChapter 103; and the ability of any of the foregoing authorities to issue economic\ndevelopment revenue bonds as provided in this chapter. The board shall also have\nthe authority and power to issue revenue bonds for any other economic development\nactivity as set forth in this chapter.\n(3) The board shall for purposes of the  Kentucky Revised Statutes be deemed to be the\nsuccessor issuer for all of the currently issued and outstanding bond issues by the\norganizations set forth in subsection (2) of this section. The board shall have the\nauthority and the power to reaffirm all e xisting bond obligations of the\norganizations in subsection (2) of this section and shall perform all duties,\nobligations, and requirements as may be necessary and required under the bond\ndocuments relating to each and every such issue. The board shall als o, in regard to\neach and every such issue, exercise its authority and power as set forth in this\nchapter.\n(4) In the discretion of the board, any revenue bonds or notes issued under the\nprovisions of this chapter may be secured by a trust indenture by and between the\ncabinet and corporate trustee which may be any trust company or bank having the\npowers of a trust company within or without the Commonwealth. A trust indenture,\nor the resolution of the board providing for the issuance of revenue bonds or notes ,\nmay pledge or assign for the security of the revenue bonds or notes, all or any part\nof the totality of revenues made available to the cabinet for bond purposes received\nand to be received. The trust indenture or resolution of the board may contain\nprovisions for protecting and enforcing the rights and remedies of the bondholders\nwhich may be reasonable and proper, and not in violation of law, including, but not\nlimited to, covenants and provisions setting forth the duties of the cabinet in relation\nto th e purposes to which revenue bonds and note proceeds may be applied; the\ndisposition or pledging of assets and revenues made available to the cabinet for\nbond purposes; and the custody, safeguarding, and application of all such revenues.\nIt shall be lawful for any bank or trust company incorporated under the laws of the\nCommonwealth which may act as depository of the proceeds of revenue bonds,\nnotes, or revenues made available to the cabinet for bond purposes, to furnish such\nindemnifying bonds, or to pledge  such securities as may be required by a trust\nindenture or resolution of the board. Any trust indenture or board resolution may set\nforth the rights and remedies of the bondholders and of the trustee, and may restrict\nthe individual right of action by bon dholders, where a trust indenture has been\nentered into. In addition to the foregoing, any trust indenture or board resolution\nmay contain other provisions which the board determines to be reasonable and\nproper for the further security of the holders of an y revenue bonds or notes. All\nexpenses incurred in carrying out the provisions of a trust indenture or bond\nproceedings may be treated as a part of the cost of operating the cabinet, and may be\npaid from revenues pledged or assigned to the payment of the p rincipal of and the\ninterest on revenue bonds or notes, or from any other funds properly available to the\ncabinet for bond purposes. However, the payment of operational costs from\nrevenues made available to the cabinet for bond purposes shall, as provided in\nsubsection (1) of this section, be subordinate to the payment of principal of and\ninterest on cabinet revenue bonds or notes from revenues made available to the\ncabinet for bond purposes, it being intended that these principal and interest\nrequirements shall be secured by a prior and paramount lien on gross revenues made\navailable to the cabinet for bond purposes.\n(5) Notwithstanding any other provision to the contrary, any trust indenture or board\nresolution shall provide that, except to the extent the rights afforded to bondholders\nby this section shall be enforceable and enforced by a trustee under a trust indenture\nrather than by the bondholders, any holder of revenue bonds or notes issued by the\ncabinet or any of the coupons appurtenant thereto, may, either at law or in equity, by\nsuit, action, mandamus, or other proceedings, protect and enforce any and all rights\ngenerally arising under the laws of the Commonwealth, or granted under this\nchapter, or under a trust indenture, or by the resolution of th e board authorizing the\nissuance of revenue bonds or notes, and may specifically enforce and compel by\nmandamus the performance of all duties required by this chapter, or by trust\nindenture, or board resolution, to be performed by the cabinet or by any off icer or\nemployee thereof, including, but not limited to, the prompt and full enforcement of\nthe terms and conditions of all assistance agreements to which the cabinet is a party.\n(6) The cabinet is hereby authorized to provide for the issuance of refunding  revenue\nbonds or notes for the purpose of refunding any revenue bonds or notes then\noutstanding, whether issued by the cabinet under the provisions of this chapter or\none (1) of the agencies, authorities or organizations referenced in subsections (2)\nand (3) of this section, including the payment of any redemption premium thereon\nand any interest accrued or to accrue to the date of redemption of these revenue\nbonds or notes, and, if determined advisable by the board, for the additional purpose\nof providing  further funds for the carrying out of the proper public and\ngovernmental purposes of the cabinet. The issuance and sale of the refunding\nrevenue bonds or notes, the maturities and other details thereof, the rights of the\nholders thereof, and the rights, d uties, and obligations of the cabinet in respect of\nthe same, shall be governed by the provisions of this chapter which relate to the\nissuance of revenue bonds or notes, insofar as these provisions may be applicable.\n(7) Refunding revenue bonds or notes ma y be sold or exchanged directly for\noutstanding revenue bonds or notes of the cabinet, and if sold, the proceeds thereof\nshall be applied, in addition to any other authorized purposes, to the purchase,\nredemption, or payment of these outstanding revenue bo nds or notes. Pending the\napplication of the proceeds of any refunding revenue bonds, with any other\navailable funds, to the payment of the principal, accrued interest, and any\nredemption premium on the revenue bonds or notes being refunded (and if so\nprovided or permitted in the board resolution authorizing the issuance of the\nrefunding revenue bonds or notes, or in the trust indenture securing the same, to the\npayment of any interest on the refunding revenue bonds or notes and any expenses\nin connection w ith the refunding), the proceeds may be invested in direct\nobligations of, or obligations the principal of and interest on which are\nunconditionally guaranteed by the United States of America which shall mature or\nwhich shall be subject to redemption by th e holders thereof at the option of such\nholders not later than the respective dates when the proceeds, together with the\ninterest accruing thereon, will be required for the purposes intended.\n(8) Revenue bonds and notes issued by the cabinet under the prov isions of this chapter\nare hereby declared and deemed to be securities in which all public officers and\npublic bodies of the Commonwealth and its political subdivisions, all insurance\ncompanies, trust companies, banking associations, investment companies,\nexecutors, administrators, trustees, and other fiduciaries may properly and legally\ninvest funds, including capital in their control or belonging to them. These\nobligations of the cabinet are hereby declared and determined to be securities which\nmay properly and legally be deposited with and received by any state or municipal\nofficer or any agency or political subdivision of the Commonwealth, for the purpose\nfor which the deposit of bonds, notes, or obligations of the Commonwealth is now,\nor may hereafter be, authorized by law.\n(9) Revenue bonds or notes issued by the cabinet under the provisions of this chapter\nshall not be deemed to constitute a debt of the Commonwealth or of any political\nsubdivision thereof, or a pledge of the faith and cred it of the Commonwealth or of\nany political subdivision thereof; but the bonds shall be payable as to principal and\ninterest solely from revenues made available to the cabinet for bond purposes\nprovided therefor under the provisions of this chapter. All suc h revenue bonds or\nnotes shall contain on the face thereof a statement to the effect that neither the\nCommonwealth nor the cabinet shall be obligated to pay the same, or the interest\nthereon, except from revenues made available to the cabinet for bond purp oses, as\ndefined in this chapter; and that neither the faith and credit, nor the taxing power of\nthe Commonwealth or any political subdivision thereof is pledged to the payment of\nthe principal of and interest on such revenue bonds or notes.\n(10) The Commonwealth, for the specific use and benefit of the cabinet, may cause to be\nsubmitted to the voters of the state in a manner provided by Sections 49 and 50 of\nthe Constitution of Kentucky, from time to time, propositions for the incurring of\nstate indebtedness represented by general obligation bonds of the Commonwealth,\nthe proceeds of which are to be made available to the cabinet and used and\nemployed by the cabinet for all proper purposes.\n(11) Subject to the provisions of KRS 56.870 to 56.873, the State Property and Buildings\nCommission or the Kentucky Turnpike Authority may issue bonds for which debt\nservice originates with an appropriation of the General Assembly, and may make\nthe proceeds available to the cabinet for all proper purposes.\n(12) Funds appro priated to the cabinet by the General Assembly, including but not\nlimited to repayments of revolving funds established with appropriations of the\nGeneral Assembly or established with bond issues for which the debt service,\nissuance costs, reserve fund requ irements, insurance premiums or any other\nexpenditures associated with bond issuance are appropriated by the General\nAssembly, shall not be commingled with other funds made available to the cabinet\nand shall only be expended for the purposes specified by t he General Assembly\nwhen the appropriation is made or as approved in subsequent actions of the General\nAssembly.","path":[],"source_url":"https://apps.legislature.ky.gov/law/statutes/statute.aspx?id=2601","current_through":"Includes enactments through the 2026 Regular Session","vintage":"09/05/2026","retrieved_at":"2026-09-05T20:50:52Z","sha256":"28baaa0067433e187f7d36d803d45ed1e4e45f6a2b68bfabae1c916cc485c722","source_id":"us-ky","stale":false,"prev":"us-ky/krs-154.10-030","next":"us-ky/krs-154.10-040"},"notice":"GroundRules: Original legal text. Not legal advice."}