{"data":{"id":"us-ky/krs-67a.883","jurisdiction":"us-ky","citation":"KRS 67A.883","heading":"Ordinance of bond authorization -- Trust indenture.","body":"(1) Following compliance with the foregoing provisions of KRS 67A.871 to 67A.882,\nthe urban-county council of the government may adopt an ordinance known as the\nordinance of bond authorization.  The ordinance of bond authorization shall make\nprovision, for the following:\n(a) Determining and confirming the nature and scope of the project, the real\nproperties to be benefited thereby (which shall be all benefited properties\nidentified in the ordinance of initiation and the ordinance of determination,\nexcepting properties as to which lump sum payment of improvement benefit\nassessment levies has been made within the statutory period), the exact\nmethod of assessment of benefited properties and the costs of the projects;\n(b) Authorizing the issuance of bonds of the g overnment from time to time which\nshall be designated \"improvement lien bonds\" and which shall additionally\nidentify the project by reference to its name or title;\n(c) Determining the principal amount of the bond issue, subject to the provisions\nof KRS 67A.891;\n(d) Establishing the denomination and maturity dates of the bonds, which may be\nterm or serial maturities not to exceed thirty (30) years from date of issue, and\nproviding for the issuance of the bonds in series, if so ordered, each such\nseries to be equally secured on a pari passus basis by improvement benefit\nassessments levied on all benefited properties and by liens in respect thereto;\n(e) Levying an annual improvement benefit assessment effective upon the\nbenefited properties, except such prop erties for which lump sum payment of\nthe improvement benefit assessment has been made pursuant to KRS\n67A.882(3), pursuant to the assessed value basis according to either their\nrespective assessed land values as determined for purposes of general ad\nvalorem taxation, or upon a basis of equality by zones, pursuant to findings of\nfact by the urban -county council that benefited properties in particular zone\nclassifications are to be treated equally for assessment purposes because of\nsubstantial equality of ben efits conferred, such assessments to be made\nwithout regard to any constitutional or other limits otherwise applicable to\ntaxation for general ad valorem purposes, the annual rate of such improvement\nassessment to be fixed when regular county ad valorem taxes are levied and to\nbe sufficient in each year to provide for the payment of the bonds and interest\ncoupons as they mature; and, in each year until accrual of the debt service\nreserve requirement, to be sufficient to provide in addition a sum equal to\ntwenty percent (20%) of maximum annual principal and interest requirements,\nthe same to constitute a debt service reserve fund as a precaution against\npossible default by reason of failures in the collection of the annual levies as\nhereinafter provided; prov ided, however, that in the event the government\nshall have provided that the debt service reserve requirement be financed from\nbond proceeds as one of the costs of the project, such additional levies to\naccrue, the debt service reserve requirement shall be  omitted, but it shall be\npromptly instituted at any time in order to maintain the debt service reserve\nrequirement at its prescribed level;\n(f) Covenanting with the holders of the bonds and coupons that until the payment\nin full thereof the government wi ll levy annually an improvement benefit\nassessment upon each benefited property, as provided in the foregoing\nsubsection (e) hereof; provided, that the government may provide by\nordinance that certain benefited properties shall be omitted from assessment\nduring initial periods not to exceed three (3) years because of construction\nscheduling;\n(g) Covenanting with the holders of the bonds and coupons that until payment in\nfull thereof, the government will pursue and exhaust at the expense of the\ngovernment a ll remedies available to the government for the benefit and\nprotection of the bondholders, including both termination of water service to\ndelinquent real properties and enforcement of judgment and decretal sale of\nthe liens upon benefited properties which are granted by KRS 67A.871 to\n67A.894;\n(h) Designating one or more places of payment of principal and interest within or\nwithout the Commonwealth;\n(i) Specifying or omitting provisions for redemption and payment prior to stated\nmaturities and the terms thereof;\n(j) Providing for the payment by the government of any and all reasonable and\ncustomary charges for the services of trustees and paying agents to the end\nthat the holders of the bonds and coupons will receive the sums therein\nstipulated without deduction for such charges; and\n(k) Any other provisions not contrary to law.  The government is expressly\nauthorized and empowered to finance any particular project by an issue of\nbonds which may be sold and delivered in one or more series, each of which\nseries is equally and indistinguishably secured, as provided in KRS 67A.871\nto 67A.894, by improvement benefit assessments levied upon all benefited\nproperties, except such properties for which lump sum payment of the\nimprovement benefit assessment has been  made pursuant to KRS 67A.882(3)\nand liens granted for the security of bondholders by KRS 67A.871 to 67A.894\non benefited properties shall apply to each such benefited property and in\nfavor of every bond of each such series, whenever issued.\n(2) In the di scretion of the urban -county council of the government, any improvement\nlien bonds or bond anticipation notes issued under the provisions of KRS 67A.871\nto 67A.894 may be secured by a trust indenture by and between the government and\na corporate trustee, which may be any trust company or bank having the powers of a\ntrust company within or without the Commonwealth of Kentucky.  The trust\nindenture of the government providing for the issuance of improvement lien bonds\nor notes may pledge or assign for the sec urity of improvement lien bonds or notes\nall or any part of the totality of improvement benefit assessments levied, collected,\nenforced and received by the government. The trust indenture shall contain\nprovisions for protecting and enforcing the rights and  remedies of the bondholders\nas may be reasonable, proper and not in violation of law, including covenants and\nprovisions setting forth the duties of the government in relation to the purposes to\nwhich improvement lien bond proceeds may be applied; the dis position and\npledging of receipts of improvement benefit assessments; and the custody,\nsafeguarding and application of all improvement benefit assessment revenues.  It\nshall be lawful for any bank or trust company incorporated under the laws of the\nCommonwealth which may act as depository of the proceeds of bonds, notes or of\ngovernment revenues, to furnish indemnity bonds or to pledge securities as may be\nrequired by the trust indenture of the government.  Any trust indenture may set forth\nthe rights and r emedies of the bondholders and of the indenture trustee and may\nrestrict the individual right of action by bondholders. In addition to the foregoing,\nany trust indenture may contain any other provisions as the government may\ndetermine to be reasonable and proper for the further security of the holders of the\nbonds.  All expenses incurred in carrying out the provisions of the trust indenture\nshall be treated as a part of the costs of the project and shall be paid from either the\nproceeds of the bonds or, dur ing the life of the bond issue, from the proceeds of\nimprovement benefit assessments levied against and collected from, benefited\nproperties.\n(3) All bonds issued under the provisions of KRS 67A.871 to 67A.894 shall have and\nare hereby declared to possess  all of the qualities and incidences of negotiable\ninstruments under the laws of Kentucky.  The bonds may be issued in coupon or in\nregistered form or in both, as the government may determine, and provision may be\nmade for the registration of any coupon bo nds as to principal only and also as to\nboth principal and interest and for the reconversion into coupon bonds of any bonds\nregistered as to both principal and interest.  The government may sell the bonds in\nany manner either at public or private sale, and  for any price as it may determine\nwill best effect the purposes of KRS 67A.871 to 67A.894.\n(4) Any government initiating a project pursuant to KRS 67A.871 to 67A.894 shall\nhave and possess all powers and the authority set forth in KRS 58.150.","path":["KRS Chapter 67A"],"source_url":"https://apps.legislature.ky.gov/law/statutes/statute.aspx?id=23966","current_through":"Includes enactments through the 2026 Regular Session","vintage":"09/05/2026","retrieved_at":"2026-09-05T20:49:28Z","sha256":"b90743590a8dec1c56ec7df057abac302c4d79b7c976ad8da9e8153694fc720d","source_id":"us-ky","stale":false,"prev":"us-ky/krs-67a.882","next":"us-ky/krs-67a.884"},"notice":"GroundRules: Original legal text. Not legal advice."}