{"data":{"id":"us-ky/krs-154.20-035","jurisdiction":"us-ky","citation":"KRS 154.20-035","heading":"Purposes for borrowing money or issuing bonds or notes -- Sale of","body":"bonds or notes -- Terms -- Tax exemption.\n(1) The authority may, upon approval of the board, borrow money and issue bonds or\nnotes in accordance with KRS 154.10 -035 and other pr ovisions of this chapter\nappertaining, subject to KRS 42.420, for the following purposes:\n(a) To provide sufficient funds for achieving the authority's purposes and\nobjectives, including but not limited to, amounts necessary to pay the costs of\nacquiring p rojects or any part thereof; to make loans for the maintenance,\noperation, expansion, or development of riverport facilities that are under the\nauthority of a developmental riverport authority established under KRS\n65.520; to make loans for the cost of a p roject or any part thereof; to make\nloans pursuant to KRS 154.10 -030(11) for an export -related transaction; to\nmake grants; to provide money to guarantee or insure loans, leases, bonds,\nnotes, or other indebtedness; to make working capital loans; for all o ther\nexpenditures of the authority incident to and necessary or convenient to carry\nout the authority's purposes, objectives, and powers; or for any combination of\nthe foregoing;\n(b) To refund bonds or notes of the authority issued under this chapter, by t he\nissuance of new bonds, whether or not the bonds or notes to be refunded have\nmatured or are subject to prior redemption or are to be paid, redeemed, or\nsurrendered at the time of issuance of the refunding bonds or notes; and to\nissue bonds or notes part ly to refund such bonds or notes and partly for any\nother purpose provided for by this section; or\n(c) To pay the costs of issuance of bonds or notes under this chapter; to pay\ninterest on bonds or notes becoming payable prior to the receipt of the first\nrevenues available for payment thereof as determined by the board; and to\nestablish, in full or in part, a reserve for the payment of the principal and\ninterest on the bonds or notes in such amount as shall be determined by the\nboard.\n(2) The bonds and note s, including, but not limited to, commercial paper, shall be\nauthorized by resolution adopted by the authority, shall bear the date or dates, and\nshall mature at the time or times, not exceeding fifty (50) years from the date of\nissuance, as the resolution  provides. The bonds and notes shall bear interest at the\nrate or rates set, reset, or calculated from time to time as provided in the resolution.\nThe bonds and notes shall be in the denominations; be in the form, either coupon or\nregistered; carry the reg istration privileges; be transferable; be executed in the\nmanner; be payable in the medium of payment, at the place or places; and be\nsubject to the terms of prior redemption at the option of the authority or the holders\nthereof as the resolution or resolu tions provide. The bonds and notes of the\nauthority may be sold at public or private, negotiated sale, at the price or prices the\nauthority determines. Bonds and notes may be sold at a discount.\n(3) Bonds or notes may be:\n(a) Made the subject of a put or a greement to repurchase by the authority or\nothers;\n(b) Secured by a letter of credit or by any other collateral which the resolution\nmay authorize;\n(c) Resold by the authority, once acquired by the authority, pursuant to any put or\nrepurchase agreement wit hout the acquisition being considered the\nextinguishment of the bond or note.\n(4) The authority may authorize its chairman or other officer to, by order:\n(a) Sell and deliver, and receive payment for notes or bonds;\n(b) Refund notes or bonds by the delivery of new notes or bonds, whether or not\nthe notes or bonds to be refunded have matured, are subject to prior\nredemption, or are to be paid, redeemed, or surre ndered at the time of the\nissuance of refunding bonds or notes;\n(c) Deliver notes or bonds, partly to refund notes or bonds and partly for any\nother authorized purposes;\n(d) Buy notes or bonds so issued at not more than the face value of the notes or\nbonds; or\n(e) Approve interest rates or methods for fixing interest rates, prices, discounts,\nmaturities, principal amounts, denominations, dates of issuance, interest\npayment dates, redemption rights at the option of the authority or the holder,\nthe place of d elivery and payment, and other matters and procedures\nnecessary to complete the transactions authorized.\n(5) Except as provided by the authority, every issue of its notes or bonds shall be\ngeneral obligations of the authority payable out of revenues, properties, or money of\nthe authority, subject only to agreements with the holders of particular notes or\nbonds pledging particular receipts, revenues, properties, or money as security\ntherefor.\n(6) The notes or bonds of the authority shall be and are hereby ma de negotiable\ninstruments within the meaning of and for all purposes of the Uniform Commercial\nCode, subject only to the provisions of the notes or bonds for registration.\n(7) A resolution authorizing notes or bonds may contain any or all of the following\ncovenants which shall be a part of the contract with the holders thereof:\n(a) A pledge of all or a part of the fees, charges, and revenues made or received\nby the authority, or all or a part of the money received in payment of lease\nrentals, or loans and i nterest thereon, and other money received or to be\nreceived to secure the payment of the notes or bonds or an issue thereof,\nsubject to agreements with bondholders or noteholders as may then exist;\n(b) A pledge of all or a part of the assets of the authori ty, including leases, or\nnotes or mortgages and obligations securing the same to secure the payment\nof the notes or bonds or of an issue of notes or bonds, subject to agreements\nwith noteholders or bondholders as may then exist;\n(c) A pledge of a loan, gra nt, or contribution from the federal, state, or\nmunicipality, or source in aid of a project as provided for in this chapter;\n(d) A provision as to the use and disposition of the revenues and income from\nleases, or from loans, notes, and mortgages owned by the authority;\n(e) A provision as to the establishment and setting aside of reserves or sinking\nfunds and the regulation and disposition thereof subject to this chapter;\n(f) Limitations on the purpose to which the proceeds of sale of the notes or bonds\nmay be applied and limitations on pledging those proceeds to secure the\npayment of other bonds or notes;\n(g) Authority for and limitations on the issuance of additional notes or bonds for\nthe purposes provided for in the resolution and the terms upon which\nadditional notes or bonds may be issued and secured;\n(h) A provision for the procedure, if any, by which the terms of a contract with\nnoteholders or bondholders may be amended or abrogated, the number of\nnoteholders or bondholders who are required to consent  thereto, and the\nmanner in which the consent may be given;\n(i) Vesting in a trustee, or a secured party, such property, income, revenues,\nreceipts, rights, remedies, powers, and duties in trust or otherwise as the\nauthority may determine necessary to appr opriate to adequately secure and\nprotect noteholders and bondholders or to limit or abrogate the rights of the\nnoteholders and bondholders. A trust agreement may be executed by the\nauthority with any trustee who may be located inside or outside this state to\naccomplish any of the foregoing;\n(j) Providing for the payment of maintenance and repair costs of a project;\n(k) Establishing the insurance to be carried on a project and the use and\ndisposition of insurance money and condemnation awards;\n(l) Establishing the terms, conditions, and agreements upon which the holder of\nthe bonds, or a portion thereof, shall be entitled to the appointment of a\nreceiver by the Circuit Court. A receiver may enter and take possession of the\nproject and maintain it or lease or sell it for cash or on an installment sales\ncontract and prescribe rentals and payments therefor and collect, receive, and\napply all income and revenues thereafter arising in the same manner and to\nthe same extent as the authority; and\n(m) Providing for an y other matters, of like or different character, which in any\nway affect the security or protection of the notes or bonds.\n(8) A pledge made by the authority shall be valid and binding from the time the pledge\nis made. The money or property pledged and rec eived by the authority shall\nimmediately be subject to the lien of the pledge without a physical delivery or\nfurther act. The lien of the pledge shall be valid and binding as against parties\nhaving claims of any kind in tort, contract, or otherwise against  the authority and\nshall be valid and binding against the transfer of the money or property pledged,\nirrespective of whether the parties have notice. It shall not be necessary to record\nthe resolution, the trust agreement, or any other instrument by which a pledge is\ncreated.\n(9) Neither the members of the authority nor any person executing the notes or bonds\nshall be liable personally on the notes or bonds or be subject to personal liability or\naccountability by reason of the issuance thereof.\n(10) The state shall not be liable for any financial obligations of the authority nor shall\nany such obligations or bonds be considered a debt of the state. The obligations\nshall contain on the face thereof a statement indicating this fact.\n(11) The notes and bonds of the authority shall be securities in which the public officers\nand bodies of this state and municipalities and municipal subdivisions, insurance\ncompanies, associations, and other persons carrying on an insurance business,\nbanks, trust companies, savings banks and savings associations, savings and loan\nassociations, investment companies, and administrators, guardians, executors,\ntrustees, and other fiduciaries, and all other persons who are authorized to invest in\nbonds or other obligations of the state, may properly and legally invest funds.\n(12) The property of the authority and its income and operation shall be exempt from all\ntaxation by this state or any of its political subdivisions. All bonds and notes of the\nauthority, the interest thereon, and thei r transfer shall be exempt from all taxation\nby this state or any of its political subdivisions, except for estate, gift, and\ninheritance taxes, notwithstanding that interest on bonds or notes of the authority\nmay be or become subject to federal income taxation as a result of legislative action\nby the federal government. The state covenants with the purchasers and all\nsubsequent holders and transferees of notes and bonds issued by the authority under\nthis chapter, in consideration of the acceptance of and p ayment for the notes and\nbonds, that the notes and bonds of the authority, issued pursuant to this chapter, the\ninterest thereon, the transfer thereof, and all its fees, charges, gifts, grants, revenues,\nreceipts, and other money received or to be received  and pledged to pay or secure\nthe payment of the notes or bonds shall at all times be free and exempt from all\nstate or local taxation provided by the laws of this state, except for estate, gift, and\ninheritance taxes.","path":[],"source_url":"https://apps.legislature.ky.gov/law/statutes/statute.aspx?id=2667","current_through":"Includes enactments through the 2026 Regular Session","vintage":"09/05/2026","retrieved_at":"2026-09-05T20:50:53Z","sha256":"e8a8d397ee0f4b25af2e69a32d5f6c65fc1eafd194796b153c2a9ad5a3fd17c1","source_id":"us-ky","stale":false,"prev":"us-ky/krs-154.20-033","next":"us-ky/krs-154.20-040"},"notice":"GroundRules: Original legal text. Not legal advice."}