{"data":{"id":"us-ky/krs-154.20-589","jurisdiction":"us-ky","citation":"KRS 154.20-589","heading":"Western Kentucky risk assistance fund.","body":"(1) (a) There is hereby established in the State Treasury a trust and agency account to\nbe known as the western Kentucky risk assistance fund.\n(b) The fund shall be maintained by the Cabinet for Economic Development.\n(c) Amounts deposited in the fund shall be used  as required under subsection (2)\nof this section.\n(d) Notwithstanding KRS 45.229, moneys not expended at the close of a fiscal\nyear shall not lapse but shall be carried forward into the next fiscal year.\n(e) Any interest earnings of the fund shall become a part of the fund and shall not\nlapse.\n(f) Moneys deposited in the fund are hereby appropriated for the purposes set\nforth in this section.\n(2) The fund shall be used to pay a qualified lender on the unpaid principal balance of a\ncommercial loan in an amount up to the lesser of the first twenty-five percent (25%)\nof the loss suffered on the unpaid principal balance on a commercial loan or one\nmillion dollars ($1,000,000), as evidenced by the loss being determined by the\nfollowing method:\n(a) The amount of loan loss reserve the lending institution establishes based on\nthe current expected credit losses methodology for estimating allowances for\ncredit losses, as reflected in an official, filed call report which reflects the\nchanges in the allowance for credit  loss relating to the loan originated under\nthis section; or\n(b) The amount of the estimated loss as documented by an updated appraisal of\nthe underlying collateral, or a change in economic value of the loan based on\nexpected cash flows.\n(3) The western Kentucky risk assistance fund shall be used to provide loan loss\nsupport payments to qualified lenders for commercial loans that, in the aggregate,\nhave outstanding principal balances not exceeding one hundred million dollars\n($100,000,000) and have been approved for enrollment in the program following\nthe application pro cess set forth in subsections (4) and (5) of this section. The one\nhundred million dollar ($100,000,000) maximum amount for eligible loans shall be\nproportionally reduced as the loss payments are disbursed.\n(4) The cabinet shall accept applications for ind ucements on a form created by the\ncabinet, which shall include the following:\n(a) The name of the qualified lender;\n(b) The qualified lender's status of good standing by the Department of Financial\nInstitutions;\n(c) The Kentucky address of the physical location of the qualified lender;\n(d) The name, e-mail address, and phone number of an employee of the qualified\nlender who can be contacted regarding questions about the application; and\n(e) The amount of the commercial loan.\n(5) (a) The cabinet shall accept  applications for access to the western Kentucky risk\nassistance fund only for a commercial loan that originated before December\n31, 2027.\n(b) Applications from qualified lenders shall be approved in the order in which\nthe applications are received, with e ach qualified lender being limited to a\nmaximum of applications totaling ten million dollars ($10,000,000) in\ncommercial loans.\n(6) Once a loss has been suffered by a qualified lender, the cabinet shall accept requests\nfor loss payments from the western Kentucky risk assistance fund on a form created\nby the cabinet that provides the following:\n(a) The name of the qualified lender;\n(b) The qualified lender's status of good standing by the Department of Financial\nInstitutions;\n(c) The Kentucky address of the physical location of the qualified lender;\n(d) The name, e-mail address, and phone number of an employee of the qualified\nlender, who can be contacted regarding questions about the application;\n(e) The amount of the commercial loan;\n(f) The requested loss payment amount calculated in accordance with subsection\n(2) of this section; and\n(g) Documentation of the suffered loss.\n(7) (a) An application for a loss payment may only be submitted for losses suffered\nwithin five (5) years from the origination of the loan.\n(b) Once a complete loss application has been submitted to the cabinet, a decision\nto approve or deny the application shall be made within thirty (30) days of\nsubmission.\n(c) Within sixty (60) days of a complete submission:\n1. If approved, the amount due shall be issued to the qualified lender; or\n2. If denied, an explanation shall be sent to the qualified lender for the\ndenial.\n(8) Should the qualified lender, at any time after the receipt of a loss payment from the\nwestern Kentucky risk assistance fu nd, collect more than seventy -five percent\n(75%) of the previously considered uncollectable balance, any portion over\nseventy-five percent (75%) shall be repaid to the cabinet for deposit into western\nKentucky risk assistance fund, however, no more than on e million dollars\n($1,000,000) shall be recovered.\n(9) Inducements shall be paid in the order that requests for loss payments are received\nin accordance with subsection (6) of this section, as long as moneys are available in\nthe fund from the initial funding or subsequent loss collection by qualified lenders\non commercial loans originating before December 31, 2027.\n(10) An administrative fee equal to one percent (1%) of the approved inducement\namount shall be applied to the loss payment and may be deducted from the\napproved inducement amount.","path":[],"source_url":"https://apps.legislature.ky.gov/law/statutes/statute.aspx?id=53844","current_through":"Includes enactments through the 2026 Regular Session","vintage":"09/05/2026","retrieved_at":"2026-09-05T20:50:54Z","sha256":"163854ce82459281e2c6304174380f94af7fb0f242df6844c1954562bfbecc0f","source_id":"us-ky","stale":false,"prev":"us-ky/krs-154.20-586","next":"us-ky/krs-154.21-010"},"notice":"GroundRules: Original legal text. Not legal advice."}