{"data":{"id":"us-ky/krs-224a.320","jurisdiction":"us-ky","citation":"KRS 224A.320","heading":"Definitions for KRS 224A.320 to 224A.325 -- Kentucky Water and","body":"Wastewater Assistance for Troubled or Economically Restrained Systems\n(WWATERS) Program -- Purpose -- Duties -- Application for funding --\nEvaluation of application -- Annual report.\n(1) As used in KRS 224A.320 to 224A.325:\n(a) \"Board\" means the Kentucky Infrastructure Authority board established in\nKRS 224A.030;\n(b) \"Eligible funding recipient\" means a public water or wastewater system that\nmeets three (3) or more of the criteria lis ted in subsection (7)(d)1. to 8. of this\nsection;\n(c) \"Eligible project\":\n1. Means a project that would require capital or non -capital expenses\nincluding but not limited to expenses relating to:\na. Developing technical, operational, and maintenance resourc es and\nexpertise;\nb. Improving utility infrastructure planning, repair, maintenance,\nrenovation, and management of plants and assets;\nc. Obtaining technical expertise in areas of rate -setting, cost -of-\nservice, and proper utility accounting standards for the utility type;\nd. Performing and correcting deficiencies from drinking water,\nwastewater, and financial audits;\ne. Providing financing for financial inadequacies, including debt\nservice coverage through relief or refinance of the drinking water\nor wastewater system's debt;\nf. Providing payment assistance for other financial inadequacies\nincluding but not limited to excessive maintenance costs, fines and\npenalties from past violations, or consultants; and\ng. Extending financing for inadequately maintained distribution,\ncollection, or treatment works, including service extensions to\nunserved or underserved areas and the r enovation of treatment\nworks to conserve resources; and\n2. Does not include any project to expand the utility service area of a\nfunding applicant;\n(d) \"Kentucky Water and Wastewater Assistance for Troubled or Economically\nRestrained Systems Program\" or \"Kentucky WWATERS Program\" means the\nprogram established under this section and administered by the Kentucky\nInfrastructure Authority under the direction of its board; and\n(e) \"Public water or wastewater system\" means any of the following that serve a\ncommunity:\n1. A water district, water association, or joint water commission formed\nunder KRS Chapter 74;\n2. A sewer district or sanitation district formed under KRS Chapter 67, 76,\nor 220;\n3. A municipal water utility and water works, sewer utility, sewage syste m\nor works, or combined electric and water plant formed under KRS\nChapter 96; and\n4. Any combination of two (2) or more of the entities listed in\nsubparagraphs 1. to 3. of this paragraph.\n(2) The Kentucky WWATERS Program is hereby established under the aut hority to\nprovide for an orderly process for eligible public water or wastewater systems to\napply for funds for eligible projects and for those applications to be evaluated,\nscored, and presented to the General Assembly for consideration for funding. The\nadministration of the program by the authority, under the direction of the board,\nincludes but is not limited to the following:\n(a) Creating and making available standardized funding applications and regional\nfunding applications;\n(b) Verifying the eligibil ity of proposed funding recipients, including but not\nlimited to engaging in financial reviews of proposed funding recipients to\nensure that they will be able to repay the requested amounts;\n(c) Verifying that the proposed funding recipient seeks money for  an eligible\nproject;\n(d) Awarding funding to selected eligible funding recipients, which shall be\naccomplished within sixty (60) days of the effective date of legislation\nenacted by the General Assembly that authorizes and appropriates the\nfunding;\n(e) Administering the funding and monitoring funding recipients for their success\nin improving on any of the performance criteria described in subsection\n(7)(d)1. to 8. of this section;\n(f) Enforcing compliance with the requirements of this section for eligible\nfunding recipients; and\n(g) On or before October 1, 2025, and each quarter thereafter, submitting a report\non the status of all funding awarded and administered by the authority\npursuant to this section and KRS 224A.322 to the Legislative Research\nCommission for referral to the Interim Joint Committee on Appropriations\nand Revenue, or to the House and Senate Standing Committees on\nAppropriations and Revenue when the General Assembly is in session.\n(3) (a) To participate in the Kentucky WWATERS Program, a fu nding applicant\nshall submit an application to the board, which shall include:\n1. A corrective action plan detailing how the requested funds would be\nused to address the performance deficiencies that made the applicant\neligible for the funding; and\n2. A de tailed budget for all proposed project expenses, including but not\nlimited to depreciation plans and explanations for expenses categorized\nas administrative, miscellaneous, or other expenses.\n(b) Funding applications may be shared with third -party independent consultants,\nstate agencies, or special purpose governmental entities in reviewing the\nfunding application as allowed under subsection (4) of this section. Once the\napplication process is complete and the funding application is ready for\nreview, it shall be made available to the public.\n(c) Funding applicants wishing to engage in a regional project shall submit a\nsingle application.\n(d) A funding application for a capital construction project shall include cost and\ntimeline estimates.\n(e) The board may evaluate and score funding applications for proposed projects\nin phases as it deems appropriate.\n(4) The board may contract or consult with a third -party independent consultant, state\nagencies, or special purpose governmental entities to assi st with the funding\napplicant analysis and scoring described in this section.\n(5) If a funding applicant is selected as an eligible funding recipient approved under the\nKentucky WWATERS Program, it shall:\n(a) Comply with any reporting or other requirements  deemed necessary by the\nauthority to verify that the awarded funding goes toward an eligible project\nand that the funding recipient is making improvements on the performance\ncriteria described in subsection (7)(d)1. to 8. of this section;\n(b) Comply with any internal management and governance procedures that the\nauthority may impose in order to correct any performance deficiencies that\ngave rise to the need for the requested funds; and\n(c) Adopt best management practices as established and administered by the\nboard that would address the performance deficiencies that made the applicant\neligible for the funding, including but not limited to practices relating to:\n1. Regulatory compliance;\n2. Minimum debt service coverage ratios;\n3. Operating ratio targets;\n4. Regular rate reviews and adjustments;\n5. Minimum cash reserve requirements;\n6. Accounts receivable turnover and collection rates;\n7. Asset management, lifecycle planning, capital depreciation, and capital\nreserve funding;\n8. Audits, financial reporting, and rate transparency;\n9. Water loss reduction; and\n10. Training, certification, and emergency preparedness.\n(6) (a) A funding recipient shall forfeit all moneys received pursuant to this section\nand KRS 224A.322 and all outstanding funding amounts, includ ing accrued\ninterest, shall be immediately due to the authority if the selected funding\nrecipient:\n1. Fails to comply with any of the requirements of this section;\n2. Uses the awarded funding for any purpose other than the eligible project\nfor which the funding was awarded; or\n3. Transfers or assigns the obligation to repay the funding amounts to any\nother entity, including any successor in interest.\n(b) Funding recipients may also forfeit funds and be subject to immediate\nrepayment to the authority of all outstanding funding amounts, including\naccrued interest, if the authority finds that the recipient has not made adequate\nimprovements on the performance criteria described in subsection (7)(d)1. to\n8. of this section.\n(7) In the implementation of the Kentucky WWATERS Program, the board shall:\n(a) Hold at least monthly meetings, which may be in conjunction with regularly\nscheduled board meetings, to discharge its duties under this section;\n(b) Determine whether a funding applicant is an eligible funding reci pient and is\nseeking funding for an eligible project;\n(c) Based on the criteria listed in paragraph (d) of this subsection, develop an\nobjective score card or rubric, which may be amended from time to time, to\naid in the analysis and scoring of funding applications;\n(d) Separately evaluate and score each funding applicant's individual project\naccording to the extent to which it meets the following criteria:\n1. The median household income within the service area of the funding\napplicant is less than the Commonwealth's median household income;\n2. User rates for the public drinking water or wastewater services provided\nby the funding applicant are at or above one percent (1%) of annual\nhousehold income for its service area;\n3. The funding applicant has failed to produce a fin ancial statement audit\nin at least one (1) of the prior three (3) years;\n4. The funding applicant has negative income in any two (2) of the\nprevious five (5) years;\n5. The funding applicant's debt service coverage ratio, calculated by\ndividing its annual n et operating income by its annual debt payments,\nwas less than one and one -tenth (1.1) in any three (3) of the previous\nfive (5) years;\n6. The funding applicant has received a notice of violation or has entered\ninto an agreed order or consent decree as a r esult of a violation of the\nrequirements of the Safe Drinking Water Act, 42 U.S.C. sec. 300f et\nseq., or the Clean Water Act, 33 U.S.C. sec. 1251 et seq., and the\nfunding applicant's proposed project would contribute to resolving the\nviolation, ensuring it s continued compliance with the relevant\nrequirements of law, or both;\n7. The percentage of water loss of the funding applicant's system is greater\nthan thirty percent (30%);\n8. The funding applicant can demonstrate, in the form and to the extent\nthat the board may require, that the amount of stormwater inflow and\ngroundwater infiltration entering the funding applicant's system\nseriously impairs its effectiveness;\n9. The funding applicant can demonstrate that the estimated costs of the\nproposed project are comparable to the actual costs incurred for similar\nrecently completed projects in the same or other systems;\n10. The funding applicant has previously received funding through the\nKentucky WWATERS Program for a prior phase of the proposed\nproject that has been completed in accordance with the requirements of\nthe program and the funding applicant is seeking additional funding to\ncomplete the next phase;\n11. For a funding application for a capital construction project, the cost and\ntimeline estimates have bee n reviewed by a licensed professional\nengineer permitted to provide such service in the Commonwealth;\n12. The funding applicant is willing to use the funding for regionalization,\nconsolidation, or partnerships, consistent with the policy stated in KRS\n224A.300(1);\n13. The funding applicant, after receiving the funding, will be able to fully\nresolve the pending issues that are the subject of its application using the\nfunding and other funding sources, if available; and\n14. The funding applicant's proposed pr oject demonstrates a high level of\ncommunity or regional impact potential if funding is awarded;\n(e) Separately score and individually rank all eligible projects, including\nproposed projects from the same funding applicant, with additional\nconsideration given to how important the completion of the proposed project\nwould be in providing or restoring safe water or wastewater utility service that\nis compliant with state and federal law;\n(f) Within sixty (60) days of a funding application being deemed complete under\nsubsection (3)(b) of this section, make determinations on the eligibility of the\nproposed project and the applicant and issue a project score for the\napplication;\n(g) Provide detailed feedback to all funding applicants within fourteen (14) days\nof the project score being completed; and\n(h) No later than December 1, 2024, and each December 1 thereafter, submit to\nthe Legislative Research Commission for referral to the Interim Joint\nCommittee on Appropriations and Revenue an annual report containing:\n1. The evaluations and scores of the proposed funding recipients for the\nyear to allow for the General Assembly to make the determinations for\nfunding the proposed funding recipients. For each proposed funding\nrecipient that meets the eligibility requirement s for funding, the board\nshall provide a proposal for the structure and the terms of the funding,\nincluding but not limited to whether the funding should be awarded in\nwhole or in part as a grant, loan, no -interest loan, or forgivable loan, the\nrepayment t erms and interest rates for loans or portions of loans, and\nany other conditions that the board proposes to be placed on the funding;\n2. A list of all program applicants;\n3. The identity of applicants who did not meet the eligibility requirements\nfor participation in the program;\n4. Trends found in feedback given to applicants who did not meet the\neligibility requirements for participation in the program; and\n5. Eligible uses of funding cited in the funding applications.","path":["KRS Chapter 224A"],"source_url":"https://apps.legislature.ky.gov/law/statutes/statute.aspx?id=56862","current_through":"Includes enactments through the 2026 Regular Session","vintage":"09/05/2026","retrieved_at":"2026-09-05T20:52:43Z","sha256":"53c1d92347bfc77563edc0072474aee926e34c59d8c02dffd773e730df663906","source_id":"us-ky","stale":false,"prev":"us-ky/krs-224a.318","next":"us-ky/krs-224a.322"},"notice":"GroundRules: Original legal text. Not legal advice."}