200 KAR | Title 200 KAR — Finance and Administration Cabinet

Chapter 1 General Administration

200 KAR 1:016 Data breach notification forms {#sec-200-kar-1-016 omnilex-key=us-ky-regs-official--title-200--200 KAR 1:016}

Section 1. Administrative – Required Forms.

(1) Finance Form FAC-001, Suspected and Determined Breach Notification Form, or a form substantially similar thereto, shall be completed by a state agency or nonaffiliated third party to provide written notification of a suspected or determined security breach of personal information collected, maintained, or stored by the agency or nonaffiliated third party.

(2) Finance Form FAC-002, Delay Notification Record, or a form substantially similar thereto, shall be completed by a state agency or nonaffiliated third party if the notification of a suspected or determined breach of personal information collected, maintained, or stored by the agency or nonaffiliated third party has been delayed pursuant to a request from a law enforcement agency or with the approval of the Office of the Attorney General. All documentation related to the delay shall be attached to the form.

Section 2. Incorporation by Reference.

(1) The following material is incorporated by reference:

(a) "Finance Form FAC-001, Suspected and Determined Breach Notification Form", September 13, 2022; and

(b) "Finance Form FAC-002, Delay Notification Record", September 13, 2022.

(2) This material may be inspected, copied, or obtained, subject to applicable copyright law, at the Commonwealth Office of Technology, 101 Cold Harbor Drive, Frankfort, Kentucky 40601, Monday through Friday, 8 a.m. to 5 p.m., and on the Finance and Administration Cabinet's Web site, https://finance.ky.gov/office-of-the-secretary/Pages/finance-forms.aspx.

History

RELATES TO: KRS 61.931, 61.932, 61.933
STATUTORY AUTHORITY: KRS 42.726(3)(b), 61.932(2)(b)2., 61.933
NECESSITY, FUNCTION, AND CONFORMITY: KRS 42.726(3)(b) authorizes the Finance and Administration Cabinet, Commonwealth Office of Technology (COT) to promulgate administrative regulations relating to COT's duties. KRS 61.933 specifically authorizes COT to promulgate administrative regulations prescribing the notification form to be used by state agencies and nonaffiliated third parties when they suspect or have determined that a breach of personal information has occurred with respect to personal information that the state agency or nonaffiliated third party maintains or otherwise possesses on behalf of another agency. KRS 61.932(2)(b)2. specifically authorizes COT to promulgate administrative regulations prescribing the form to be used if a law enforcement agency has requested a delay in notification of a security breach to allow for investigation of the breach. This administrative regulation establishes the data breach notification forms.
History: 49 Ky.R. 190, 758; eff. 1-3-2023.

200 KAR 1:020 Access to public records {#sec-200-kar-1-020 omnilex-key=us-ky-regs-official--title-200--200 KAR 1:020}

Section 1. General. Consistent with the provisions of KRS 61.870 to 61.884, the public records of all administrative agencies of the Kentucky State Government, except as provided in Section 4 of this administrative regulation, shall be open for inspection by any person in accordance with the procedures established by this administrative regulation.

Section 2. Definitions. The following terms shall have the meaning assigned herein:

(1) "State administrative agency" means every program cabinet, department and administrative body of the Kentucky State Government as defined by KRS 12.010, headed by, or whose membership is composed of, persons appointed by the Governor, and their component organizational subdivisions.

(2) "Public record" means all books, papers, maps, photographs, cards, tapes, discs, diskettes, records or other documentary materials prepared, owned, used, in the possession of or retained by a state administrative agency, but does not include any records owned by a private person or corporation in the possession of a state administrative agency or an officer or employee thereof, and not related to any function, activity, program or operation funded by the state.

(3) "Official custodian" means the chief administrative officer of a state administrative agency who by virtue of his position, is responsible for the maintenance, care and keeping of all the public records of his agency, or if so designated in writing by the chief administrative officer of a state administrative agency, the head of each office, bureau, division or other organizational subdivision within a state administrative agency, who is responsible for the maintenance, care and keeping of all the public records of his organizational unit.

(4) "Custodian" means any officer or employee of a state administrative agency having public records in his personal custody and control.

Section 3.

(1) Any person may, on written application to the official custodian describing the records, inspect and make abstracts and memoranda of the contents of any of the public records, except those listed in Section 4 of this administrative regulation, of all state administrative agencies. Copies of any written material shall be furnished, on request, to any person requesting them, on payment of fee of ten (10) cents a page for each record copies; copies of photographs, maps and other nonwritten material, and records stored in computer files or libraries, shall be furnished to any person requesting them on payment of a fee equal to the actual cost to the agency of producing the copies. Persons requesting copies of records shall be advised of the total actual cost of copies of written material, and the actual, if known, or approximate cost or producing copies of nonwritten material or of records stored in computer files or libraries before the copies are prepared. The fee shall be collected before the copies are handed or sent to the person requesting them. The fees established herein shall not be collected, for copies of records requested in the course of their employment by employees of state administrative agencies, and shall be inapplicable in cases of documents printed for sale for which a fee is fixed by or pursuant to law or which are customarily distributed without charge.

(2) The inspection of public records of state administrative agencies shall in all cases be made in the presence of an employee of the agency, on premises occupied by the agency having custody of the records, during the usual office hours of the particular office or other organizational unit having physical possession of the records. The official custodian of the records of each state administrative agency, and of each administrative subdivision of the agency, shall be responsible for the assignment of agency employees, as a duty in addition to their usual duties, to assist persons applying to inspect the public records of the agency and to insure protection of the records against damage and disorganization.

Section 4. The public records enumerated in subsections (1) through (10) of this section shall, except as provided herein, be subject to inspection only upon an Order of the Court of this Commonwealth or of the United States. The exemptions under this section notwithstanding, nothing herein shall prohibit or limit the exchange of public records or the sharing of information between state administrative agencies and other public agencies when the exchange of such records or sharing of such information will serve legitimate governmental needs or is necessary in the performance of legitimate governmental functions, nor shall the enumeration of any material herein prohibit disclosure of statistical information not readily identifiable of any person. If any public record contains material subject to public inspection only by court order, and other material not so excluded from public inspection, the custodian of the record shall, on application by any person for inspection of such record, segregate or remove the excluded material from the record and the nonexcluded material shall then be available for inspection in accordance with the application for inspection. The official custodian of the records of each state administrative agency shall generally exclude from public inspection, except by an order of court as provided in this section.

(1) Public records containing information of a personal nature where public disclosure would constitute a clearly unwarranted invasion of personal privacy.

(2) Records confidentially disclosed to an agency and compiled and maintained for: scientific research; in conjunction with an application for a loan; the administrative regulation of commercial enterprise, including mineral exploration records; unpatented, secret, commercially valuable plans, appliances, formulas, or processes, which are used for making, preparing, compounding, treating, or processing of articles or materials which are trade commodities obtained from a person and which are generally recognized as confidential; or for the grant or review of a license to do business which if openly disclosed, would permit an unfair advantage to competitors of the subject enterprise, unless the disclosure or publication of such records is directed by law.

(3) Public records pertaining to the prospective location of a business or industry where no previous public disclosure has been made of the business' or industry's interest in locating in, relocated within, or expanding within the Commonwealth. (Provided, however, that this exemption shall not include applications filed with state administrative agencies for permits or licenses necessary to do business or to expand business operations within the state, except as provided in subsection (2) of this section).

(4) The contents of real estate appraisals, engineering or feasibility estimates and evaluations made by or for an agency relative to the acquisition of real property, until such time as all of the property has been acquired.

(5) Test questions, scoring keys and other examination data used to administer a licensing examination, or an examination for employment before the examination is given or if it is to be given again.

(6) Centralized criminal history records maintained by the Kentucky Justice Cabinet and intelligence and investigative reports maintained by state criminal justice agencies except as provided in KRS 17.150, and records of law enforcement or administrative agencies compiled in the process of detecting and investigating statutory or regulatory violations if the disclosure of the information contained in such records would harm the agency by revealing the identity of informants not otherwise known or by the premature release of information to be used in a prospective prosecution or suit or an administrative adjudication. Except as provided by KRS 17.150, public records exempted under this subsection shall be open for inspection after adjudicative action is completed or a decision has been made to take no action.

(7) The official custodian shall have the burden of justifying with specificity a refusal of a demand for inspection of any public records covered by the exemptions provided in this subsection except centralized criminal history records maintained by the Kentucky Justice Cabinet. Preliminary drafts, notes, correspondence between state administrative agencies and private individuals, other than correspondence intended to give notice of final action by an agency.

(8) Preliminary recommendations and memoranda in which opinions are expressed or policies formulated or recommended.

(9) All public records or information, the disclosure of which is prohibited by federal law or regulation.

(10) Public records or information, the disclosure of which is prohibited or restricted or otherwise made confidential by the statutes of this Commonwealth.

Section 5. Application for Inspection of Public Records.

(1) Persons requesting to inspect public records of state administrative agencies shall file a written application describing the records requested to be inspected, on a form prescribed by the Finance and Administration Cabinet, with the official custodian of the records of the office of the agency having physical custody of the records. Agency employees shall assist, on request of the applicant, in completing the form; the applicant shall sign the application form. The application form shall include a receipt to be completed and signed by the custodian of the records for payment received for copies of records requested by applicants and one (1) copy of the receipt shall be furnished to the applicant.

(2) Application forms for the inspection of public records of state administrative agencies will be stocked by and available from the Central Stores of the Finance and Administration Cabinet. Each state administrative agency shall be responsible for obtaining from Central Stores an adequate supply of the application forms for use by each of its administrative subdivisions so that at all times there will be sufficient number of forms on hand to comply with requests for inspection of the agency's records.

Section 6. Agency Responsibility.

(1) Each state administrative agency shall display a copy of this administrative regulation in a prominent location in each of its offices to which the general public has access. Copies of this administrative regulation, suitable for posting, shall be printed and each agency shall be responsible for obtaining the number of copies of the printed administrative regulation required to comply with this section from the Central Stores of the Finance and Administration Cabinet.

(2) The printed copies of this administrative regulation shall bear the following caption which shall be appropriately completed by each agency and its subdivisions: NOTICE ADMINISTRATIVE REGULATIONS GOVERNING INSPECTION OF THE PUBLIC RECORDS OF THE ___________________________________________________ (Name of State Administrative Agency) ___________________________________________________ (Office, Bureau, Division, etc.) Pursuant to KRS 61.870 to 61.884, the public is notified that, as provided herein, the public records of the above named Agency of the Commonwealth of Kentucky are open for inspection by any person on written application to __________ (name), _________ (title), official custodian of the public records of the _____________ (state administrative agency) whose address is ___________ or to __________ (name), __________ (title), official custodian of the public records of the ____________, (office, bureau, division, etc.) whose address is ______________, from ____ a.m. to ____ p.m., Monday through Friday, each week, except holidays. Application forms for the inspection of the public records of this agency will be furnished on request to any person by an employee in this office. Assistance in completing the application form will be provided by an employee on request. Applicants for the inspection of public records shall be advised of the availability of the records requested for inspection, and shall be notified in writing not later than three (3) working days after receipt of an application for inspection of any reason the records requested are not available for public inspection. Copies of written material in the public records of this agency shall be furnished to any person requesting them on payment of a fee of ten (10) cents a page; copies of nonwritten records (photographs, maps, material stored in computer files or libraries, etc.) shall be furnished on request, on payment of a charge equal to the actual cost of producing copies of such records by the most economic process not likely to damage or alter the record. This the ______ day of ___________, 19. ___________________________________________________ (Agency Head or Designated Representative)

(3) The official custodian of records requested for public inspection shall promptly determine the availability of such records for inspection; if it is determined that the records are not available for inspection, the applicant, if present, will be orally advised, subject to written confirmation, or notified in writing, not later than three (3) working days after the date of receipt of the written application for inspection of the records of the reason or reasons why the records are not available for inspection. If the record sought is in active use, in storage or not otherwise available, the applicant will be advised of the reason for the delay in providing access to the record and of the earliest practicable date, time and place that the record will be available for inspection. If an application for inspection of a record is denied because it is of a kind, or contains material enumerated in Section 4 of this administrative regulation, the official custodian shall advise the applicant in writing of the reason for denial, in whole or in part, and shall include a statement of the specific exception contained in Section 4 of this administrative regulation, and in KRS 61.878, authorizing denial of the application and an explanation of how the exception applies to the record withheld. A copy, signed by the official custodian of the records, of the writing denying any application for the inspection of the public records of any state administrative agency, shall be sent to the Attorney General. If any person who has been denied the right to inspect any public records of a state administrative agency requests the Attorney General to review the denial of his application, the agency shall furnish such additional documentation concerning the circumstances of the denial of inspection of the records and a copy of the records, as the Attorney General may request. If any person denied the right to inspect the records of a state administrative agency elects to file suit against an agency to compel inspection of the records denied, the agency shall immediately advise the Attorney General of the action and forward to the Attorney General on the day served, a copy of the Summons in the action.

History

RELATES TO: KRS Chapter 61
STATUTORY AUTHORITY: KRS 61.876(3)
NECESSITY, FUNCTION, AND CONFORMITY: The Finance and Administration Cabinet is authorized by KRS 61.876(3) to promulgate uniform rules governing public access to public records maintained by administrative agencies of the state government. This administrative regulation establishes the general rules to be followed by all state administrative agencies in affording public access to their records and by persons applying to inspect such records. This amendment adds the word diskettes to the definition of "public record" in accordance with Chapter 150, Section 2, 1986 Acts of the General Assembly, as requested by the Interim State Government Committee.
History: 3 Ky.R. 175; eff. 9-1-76; Am. 16 Ky.R. 373; eff. 10-11-89; Crt eff. 2-10-2020.

Chapter 2 Travel Expense and Reimbursement

200 KAR 2:006 Employees' reimbursement for travel {#sec-200-kar-2-006 omnilex-key=us-ky-regs-official--title-200--200 KAR 2:006}

Section 1. Definitions.

(1) "Agency" means a budget unit.

(2) "Agency head" means the elected or appointed head of a budget unit.

(3) "Approval" means approval granted in either written or electronic format.

(4) "Budget unit" is defined by KRS 48.010(9).

(5) "Cabinet" means the Finance and Administration Cabinet.

(6) "High rate area" means a city, state, or metropolitan area in which it has been recognized that higher meal costs and lodging rates have historically prevailed, and that has been designated by the Secretary of the Finance and Administration Cabinet as a high rate area listed on the Office of the Controller's Web site at http://finance.ky.gov/services/statewideacct/Pages/travel.aspx.

(7) "Incidental expense" means unexpected minor expenses arising from travel situations, or minor expenses authorized by an agency head to be reimbursed to an employee as a matter of efficiency or convenience.

(8) "Lodging receipt" means any preprinted invoice, from a hotel or motel or type of lodging, showing the date of service, the amount charged for the service, the location where the service was performed, and a description of the expenditure.

(9) "Office" means the Office of the Controller, Finance and Administration Cabinet.

(10) "Others in the official service of the commonwealth" means individuals who:

(a) Are not state employees as defined in KRS Chapter 18A;

(b)

Are traveling on official business for the commonwealth; or
Officially represent a state agency, at the direction or request of a state official authorized to give the direction or make the request; and

(c) Are not contractors who are entitled to reimbursement for travel and related expenses only as provided in their contracts with the commonwealth.

(11) "Receipt" means any preprinted invoice, from a hotel, motel, restaurant, or other establishment, showing the date of service, the amount charged for the service, the location where the service was performed, and a description of the expenditure.

(12) "Residence" means address of the employee designated in the official records of the Personnel Cabinet.

(13) "Secretary" means the Secretary of the Finance and Administration Cabinet.

(14) "Subsistence" means amounts expended by a state officer, agent, employee, or other person authorized to receive reimbursement out of the State Treasury for meals, such as tax and tips, while traveling on official state business, except for any meals which may be included in charges for lodging or in registration fees paid by or on behalf of a state officer or employee.

(15) "Travel software" means the software used by the commonwealth to process travel authorizations and travel reimbursement documents.

(16) "Work station" means an employee's duty station and shall include:

(a) The official work station assigned by the appointing authority; and

(b) One (1) or more alternate work stations optionally assigned by the appointing authority.

Section 2. General.

(1) Affected agencies. Except as otherwise provided by law, this administrative regulation shall apply to all departments, agencies, boards, and commissions, and institutions of the executive branch of state government, except state-supported universities. It shall not apply to the legislative and judicial branches and their employees.

(2) Enforcement.

(a) Each agency head shall be responsible for ensuring that travel reimbursement conforms to the provisions of this administrative regulation and that all travel expense from that agency is as economical as is feasible.

(b) A person who travels on official state business shall:

Identify if reimbursement is being requested based on Section 7 or 8 of this administrative regulation;
Prior to trip, submit, if applicable, a:

a. Request for Authorization of Out-of-State Travel document; or

b. Request for Authorization of Out-of-Country Travel document;

After travel, submit a Travel Voucher document for reimbursement of official state business related expenses;
If expenses requested to be paid or reimbursed under the provisions of this administrative regulation are attributable to multiple funding sources or projects, attach a Travel Voucher Prepaid Registration Fees: Multiple Cost Distribution document to any Travel Voucher submitted;
Maintain records and receipts to support the claim; and
Take sufficient personal funds to defray the travel expense.

Disallow or reduce the amount of a claim that violates the provisions of this administrative regulation; or
Require written justification for amounts claimed by an agency for its employee.

(d) The secretary or his designee may authorize reimbursement for an employee's actual and necessary expenses for authorized travel if the head of the agency, or designee, submits a written determination that establishes the reimbursement is:

Required to avoid an undue economic hardship on the employee; or
Economically advantageous for the commonwealth.

(3) Eligibility. Except as provided by state law or by this administrative regulation, reimbursement shall not be claimed for expenses of any person other than state officers, members of boards and commissions, employees, bona fide wards, or other persons in the official service of the commonwealth. Only necessary expenses of official travel authorized by an agency head or designee shall be reimbursed.

(4) Interpretation. All final interpretations of this administrative regulation shall be made by the secretary. These determinations shall be the final and conclusive interpretation adopted by the agency.

Section 3. Work Station.

(1) The official work station or alternate work station of an employee shall be established by the employee's appointing authority.

(2) The official work station or alternate work station may be changed by the appointing authority to better meet the needs of the agency.

Section 4. Authorizations.

(1) For travel within Kentucky, the person requesting reimbursement shall obtain authorization from the agency head or a designated representative.

(2) Travel to a bordering state that does not require airfare or an overnight stay shall be authorized in the same manner as travel in Kentucky.

(3) For travel outside of Kentucky, but within the United States, possessions of the United States, or Canada, the person requesting reimbursement shall obtain authorization from:

(a) The agency head or a designated representative; and

(b) The secretary or a designated representative.

(4) For travel outside the United States, possessions of the United States, or Canada, the person requesting reimbursement shall have obtained authorization from:

(a) The agency head or a designated representative;

(b) The secretary or a designated representative; and

(5) Travel expenses shall be reimbursed if travel was authorized in advance as provided by subsections (6), (7), or (8) of this section.

(6) For travel inside Kentucky, authorization shall be requested in the manner prescribed by the agency head or a designated representative.

(7) For travel outside Kentucky, but within the United States, possessions of the United States, or Canada, authorizations shall be requested by submitting a Request for Authorization of Out-of-State Travel document.

(8) For travel outside the United States, possessions of the United States, or Canada, authorization shall be requested by submitting a Request for Authorization of Out-of-Country Travel document.

(9) If direct billing is to be utilized for state park expenses, a State Park Travel Authorization document shall be submitted.

(10) A travel request for travel specified in subsections (7), (8), or (9) of this section shall be received by the agency or cabinet at least five (5) working days before the start of travel, except if a shorter prior submission period is necessitated by an emergency.

Section 5. Transportation.

(1) Economy shall be required.

(a) State officers, agents, employees, and others in the official service of the commonwealth shall use the most economical, standard transportation available and the most direct and usually-traveled routes. Expenses added by use of other transportation or routes shall be assumed by the individual.

(b)

Round-trip, excursion, or other negotiated reduced-rate rail or plane fares shall be obtained if practical.

a. Tickets prepaid by the commonwealth shall be purchased through agency business travel accounts provided by a major charge card company or commercial travel agencies.

b. Tickets purchased through the Internet shall be paid by the traveler and reimbursed on a Travel Voucher, Other Expenses document.

Exceptions may be made with the approval of the agency head if other arrangements will be in the best interest of the commonwealth.
Agencies shall be billed monthly by the charge card company.
Related payments shall be processed via a Travel Voucher, Other Expenses document.

(2) State vehicles. State-owned vehicles with their credit cards shall be used for state business travel if available and feasible. Mileage payment shall not be claimed if state-owned vehicles are used.

(3) Privately-owned vehicles. Mileage claims for use of privately-owned vehicles shall be allowed if a state vehicle was not available or feasible.

(4) Buses, subways. For city travel, employees shall be encouraged to use buses and subways. Taxi fare shall be allowed if more economical transportation is not feasible.

(5) Airline travel. Commercial airline travel shall be the lowest negotiated coach or tourist class. Additional expense for first-class travel shall not be reimbursed by the state. Payment shall be made in accordance with subsection (1)(b) of this section.

(6) Special transportation.

(a) The cost of hiring cars or other special conveyances in lieu of ordinary transportation shall be allowed if written justification from the employee is submitted and approved by the agency head or his designated representative.

(b) Privately-owned aircraft may be used if it is determined to be to the advantage of the state, measured both by travel costs and travel time.

(c) An employee may submit a written request for approval from the state controller for an increased reimbursement rate greater than that calculated in Section 7, if the employee drives a personal vehicle modified to:

Facilitate operation by altering controls for the brakes, accelerator, or steering wheel; or
Allow a driver to enter the vehicle by installing a wheelchair lift, hoist, or ramp.

Section 6. Accommodations.

(1) Lodging shall be the most economical, as determined by considering location of the lodging.

(2) Facilities providing special government rates or commercial rates shall be used if feasible.

(3) State-owned facilities shall be used for meetings and lodging if available, practicable, and economical.

(4) Location. Cost for lodging within forty (40) miles of the claimant's official work station, alternate work station, or home shall be reimbursed if:

(a) In attendance at a conference; and

(b) The lodging is a necessary expense of official travel, in accordance with Section 2(2)(d) of this administrative regulation.

(5) Group lodging, by contract.

(a) State agencies and institutions may contract with hotels, motels, and other establishments for four (4) or more employees to use a room or rooms on official business. Group rates shall be requested.

(b) The contract may also apply to meals and gratuities. The contract rates and the costs of rooms and meals per person shall not exceed limits set in Section 7 of this administrative regulation.

(c) The traveler shall not claim reimbursement or subsistence for room and meals paid direct to an establishment providing these services.

(d) A request for payment shall be made on a Travel Voucher document and shall not include personal charges of employees or others in the official service of the commonwealth.

(e) Payment shall be made to the hotel, motel, or other establishment.

(f) Contracted group meeting rooms and lodging and meal charges shall be exempt from Kentucky sales tax and the agency sales-use tax number assigned by the Department of Revenue shall be specified on the payment document.

(g) Tax exempt numbers shall not be used by individual employees to avoid point of sale payment of Kentucky sales tax connected with lodging costs. Sales tax payments shall be reimbursed on a Travel Voucher document.

(6) State parks. A state agency or institution using state park facilities may pay for rooms and meals by an Internal Exchange Transaction (IET) process in the eMars program to transfer funds, within the limits of this administrative regulation.

Section 7. Reimbursement Rates.

(1) The following persons shall be exempted from the provisions of this section:

(a) Governor;

(b) Governor's staff;

(d) State employees traveling on assignment with the governor, lieutenant governor, elected constitutional officers, or cabinet secretaries;

(e) Elected constitutional officers;

(f) Cabinet secretaries;

(g) State officers and employees authorized to travel outside the United States;

(h) Members of statutory boards and commissions; and

(i) Others in the official service of the commonwealth.

(2) Lodging.

(a) Except as provided in paragraph (b) of this subsection, a state officer or employee shall be reimbursed for the actual cost of lodging if the:

Lodging is determined to be the most economical; and
State officer or employee has provided the hotel, motel, or other establishment's receipt to be reimbursed for the travel expenses.

(b) Reimbursement for lodging shall not exceed the cost of a single room rate, except that if employees share lodging, each employee shall be reimbursed the lesser of single rate or one-half (1/2) the double rate.

(3) Subsistence and incidentals.

(a) Breakfast and lunch. A state officer or employee shall be eligible for reimbursement for subsistence for breakfast and lunch expenses while traveling in Kentucky, if authorized work requires an overnight stay and absence during the mealtime hours established by paragraph (e) of this subsection. An employee shall be in travel status during the entire mealtime. For example, to be eligible for breakfast reimbursement, an employee shall leave at or before 6:30 a.m. and return at or after 9 a.m. This requirement shall apply to all meals.

(b) Dinner expenses. A state officer or employee shall be eligible for reimbursement for dinner expenses while traveling in Kentucky, if authorized work requires an absence:

At a destination more than forty (40) miles from the individual's official work station, alternate work station, and home; and
During the mealtime hours established by paragraph (e) of this subsection.

(c) A state officer or employee shall be eligible for reimbursement for meals while on authorized travel outside Kentucky, but within the United States, its possessions, or Canada, at the reimbursement rates established in paragraph (d) of this subsection.

(d) The secretary shall specify the meal reimbursement rates via secretary order as appropriate in the following manner:

The order shall be posted on the Web site of the Office of the Controller;
The order shall specify the reimbursement rate for high rate areas and non-high rate areas; and
The order shall designate reimbursement rates for breakfast, lunch, and dinner.

(e) To be eligible for meal reimbursement, an employee shall be in travel status for the entire duration of the following time periods:

Breakfast: authorized travel is 6:30 a.m. through 9 a.m.;
Lunch: authorized travel is 11 a.m. through 2 p.m.; or
Dinner: authorized travel is 5 p.m. through 9 p.m.

(f) A state officer or employee authorized to travel outside the United States, its possessions, or Canada shall be reimbursed for their actual and necessary expenses for subsistence.

(g) A state officer or an employee may, with prior approval of the agency head or designee, be reimbursed for the actual cost charged for meals, if the individual is assigned to attend meetings and training sessions.

(h) Gratuities may be reimbursed if:

The total payment of the meal and gratuity do not exceed the limits established in paragraph (d) of this subsection; and
The gratuity does not exceed twenty (20) percent of the cost of the meal.

(i) Lodging receipts, or other credible evidence, shall be attached to the Travel Voucher.

(4) Transportation expenses.

(a) Reimbursement for authorized use of a privately-owned vehicle shall be:

At a rate designated on the Office of the Controller's Web site;
Set and adjusted based on the American Automobile Association (AAA) Daily Fuel Gauge Report for Kentucky for regular grade gasoline. The rate shall be adjusted on January 1, April 1, July 1, and October 1 each calendar year based on the average retail price of regular grade gasoline for the week beginning on the second Sunday of the prior month as follows:

a. If the fuel cost is between one (1) cent and one dollar forty-nine and nine-tenths cents ($1.499), the employee shall be reimbursed thirty-six (36) cents per mile;

b. If the fuel cost is between one dollar fifty cents ($1.50) and one dollar sixty-nine and nine-tenths cents ($1.699), the employee shall be reimbursed thirty-seven (37) cents per mile;

c. If the fuel cost is between one dollar seventy cents ($1.70) and one dollar eighty-nine and nine-tenths cents ($1.899), the employee shall be reimbursed thirty-eight (38) cents per mile;

d. If the fuel cost is between one dollar ninety cents ($1.90) and two dollars nine and nine-tenths cents ($2.099), the employee shall be reimbursed thirty-nine (39) cents per mile;

e. If the fuel cost is between two dollars ten cents ($2.10) and two dollars twenty-nine and nine-tenths cents ($2.299), the employee shall be reimbursed forty (40) cents per mile; or

f. If the fuel cost is greater than two dollars twenty-nine and nine-tenths cents ($2.299), the amount the employee is reimbursed shall increase one (1) cent for every twenty (20) cent increase in the rate; and

Not exceed the cost of commercial coach round-trip airfare.

(b) Mileage for in-state travel shall be based on the Kentucky Official Highway Map, MapQuest Web site, Google Maps Web site, or similar web mapping service. Out-of-state mileage shall be based on the most recent edition of the Rand McNally Road Atlas, MapQuest Web site, Google Maps Web site, or similar web mapping service.

(c) Reimbursement for the actual cost of commercial transportation shall be made upon submission of receipts with the Travel Voucher.

(d) Reimbursement for use of privately-owned aircraft shall be made if, prior to use, written justification was submitted to and approved by the agency head, or a designated representative.

(e)

Actual parking, bridge, and highway toll charges shall be reimbursed.
A toll receipt for authorized in-state travel by two (2) axle vehicles shall not be required.

(f) Reimbursement shall be made for reasonable incidental expenses for:

Baggage handling;
Delivery of baggage to or from a common carrier, lodging, or storage; and
Overweight baggage charges, if the charges relate to official business.

(5)

(a) Registration fees required for admittance to meetings shall be reimbursed.

(b) If a registration fee entitles the registrant to meals, claims for those meals shall be reduced accordingly.

(6) Telephone costs for necessary official business shall be reimbursed.

(7) Other incidental expenses may be allowed by the agency head or designee if they are determined to be necessary expenses of official travel.

Section 8. Actual and Necessary Expenses.

(1) The following persons shall be eligible for actual and necessary expenses:

(a) Governor;

(b) Governor's staff;

(d) Elected constitutional officers;

(e) Cabinet secretaries;

(f) State employees traveling on assignment with the governor, lieutenant governor, elected constitutional officers, or cabinet secretaries;

(g) State officers and employees authorized to travel outside the United States, its possessions, or Canada;

(h) Members of statutory boards and commissions; and

(i) Others in the official service of the commonwealth.

(2)

(a) Actual and necessary expenses of official business travel shall be reimbursed upon submission of receipts for items over ten (10) dollars. The secretary may reduce the amount of any actual expense to be reimbursed if the secretary determines that the expense is unreasonably excessive.

(b) Actual and necessary expenses for official business travel shall include:

Lodging;
Meals;
Commercial transportation;
Taxes related to actual and necessary expenses; and
Reasonable gratuities.

(c) A credit card receipt shall be accepted for a meal if the receipt prepared by the establishment clearly shows that it is a receipt for a meal.

(d) Reimbursement for official use of a privately-owned vehicle shall be:

At the rate designated on the Office of the Controller's Web site listed in Section 1(6) of this administrative regulation;
Adjusted based on the American Automobile Association (AAA) Daily Fuel Gauge Report for Kentucky for regular grade gasoline. The rate shall be adjusted on January 1, April 1, July 1, and October 1 each calendar year based on the average retail price of regular grade gasoline for the week beginning on the second Sunday of the prior month as follows:

a. If the fuel cost is between one (1) cent and one dollar forty-nine and nine-tenths cents ($1.499), the employee shall be reimbursed thirty-six (36) cents per mile;

b. If the fuel cost is between one dollar fifty cents ($1.50) and one dollar sixty-nine and nine-tenths cents ($1.699), the employee shall be reimbursed thirty-seven (37) cents per mile;

c. If the fuel cost is between one dollar seventy cents ($1.70) and one dollar eighty-nine and nine-tenths cents ($1.899), the employee shall be reimbursed thirty-eight (38) cents per mile;

d. If the fuel cost is between one dollar ninety cents ($1.90) and two dollars nine and nine-tenths cents ($2.099), the employee shall be reimbursed thirty-nine (39) cents per mile;

e. If the fuel cost is between two dollars ten cents ($2.10) and two dollars twenty-nine and nine-tenths cents ($2.299), the employee shall be reimbursed forty (40) cents per mile; or

Not exceed the cost of commercial coach round-trip airfare.

(e)

The governor and cabinet secretaries may be reimbursed for actual and necessary costs of entertaining official business guests, upon certification of these expenses to the secretary or designee.
The secretary or the secretary's designee may:

a. Question a claim for reimbursement; and

b. Reduce the amount to be reimbursed, if the secretary determines that it is unreasonably excessive.

(f) An employee of the Cabinet for Economic Development or the Tourism, Arts and Heritage Cabinet shall be reimbursed for actual and necessary costs of entertaining official business guests of the commonwealth if the costs were:

Related to the promotion of industry, travel, or economic development;
Substantiated by receipts; and
Certified by the head of the cabinet.

Section 9. Mileage.

(1) Mileage commuting between residence, official work station, or alternate work station(s) shall not be paid. If an employee's residence is the employee's official or alternate work station, the employee's work station shall also include the location where the employee obtains a state vehicle or supplies for use during the workday.

(2)

(a) If an employee's point of origin for travel is the employee's residence, mileage shall be paid for the shorter of mileage between:

Residence and travel destination; or
Official work station or alternate work station and travel destination.

(b) If an employee's point of origin for travel is the employee's official work station or an alternate work station, and after proceeding to a travel destination, the employee's final destination is the employee's residence, mileage shall be paid for the shorter of mileage between:

Residence and travel destination; or
Official work station or alternate work station and travel destination.

(3) Vicinity travel, and authorized travel within a claimant's official work station or alternate work station shall be listed on separate lines on the Travel Voucher document.

Section 10. Travel Documents.

(1) A person shall use the following forms to request prior authorization or reimbursement for travel:

(a) For in-state travel, any forms required by the person's agency head or designee;

(b) For out-of-state travel, a Request for Authorization of Out-of-State Travel document; and

(2) If applicable, a traveler shall attach the following to a Travel Voucher document:

(a) If a state park facility will be used, a State Park Travel Authorization document.

(b) If a rental vehicle, registration fee, or similar expense requires advance payment: a Prepaid Registration document;

(c) If reimbursement relates to out-of-state or out-of-country travel: the appropriate completed authorization form required by subsection (1) of this section; and

(d) For any expense that cannot be listed on a Travel Voucher document: a Travel Voucher, Other Expenses document.

(3) A contract for group accommodations shall be made on the standard form used by the establishment providing the services.

(4) Authorization for reimbursement of others in the official service of the commonwealth shall be requested on a Travel Voucher document.

(5) The Travel Voucher document shall be limited to the expenses made by one (1) person for the:

(a) Traveler; and

(b) If applicable, another person:

Who is a ward of the commonwealth; or
For whom the traveler is officially responsible.

(6) A Travel Voucher document for expenses made for a person specified in subsection (5)(b) of this section shall include the person's:

(a) Name; and

(b) Status or official relationship to the claimant's agency.

(7)

(a) A Travel Voucher document shall be submitted:

For one (1) major trip; or
Every two (2) weeks for employees that are in travel status for an extended period.

(b) A Travel Voucher document shall include:

Employee ID Number (KHRIS) of the claimant; and
Purpose of each trip.

Claimant; and
Agency head or authorized representative.

(d) If monthly expenses total less than ten (10) dollars, a Travel Voucher may include expenses for six (6) months of a fiscal year.

(e) A Travel Voucher document shall be:

Legibly printed in ink or typed; or
Processed electronically through travel software.

(f) A receipt shall provide the following information for each expense:

Amount;
Date;
Location; and
Type.

(g) Receipts shall be maintained at the agency if documents are processed electronically.

(h) If leave interrupts official travel, the dates of leave shall be stated on the Travel Voucher.

(i) Lodging receipts, or other credible evidence, shall be attached to the Travel Voucher.

Section 11. Incorporation by Reference.

(1) The following material is incorporated by reference:

(a) "Pre-paid Registration" document, Form eMARS-37, 06/19/06;

(b) "Request for Authorization of Out-of-State Travel" document, Form DOA-28, 1/2003;

(d) "State Park Travel Authorization" document, 1/13/15;

(e) "Travel Voucher" document, Form eMARS-34, 10/27/06;

(f) "Travel Voucher Prepaid Registration Fees: Multiple Cost Distribution" document, Form eMARS-36, 06/19/06;

(g) "Travel Voucher, Other Expenses" document, Form eMARS-34B, 04/17/06;

(h) "Kentucky Official Highway Map", 2016; and

(i) "Rand McNally Road Atlas", 2017.

(2) This material may be inspected, copied, or obtained, subject to applicable copyright law, at the Office of the Controller, Finance and Administration Cabinet, Capitol Annex Building, Room 484, Frankfort, Kentucky 40601, Monday through Friday, 8 a.m. to 4:30 p.m. and online at the Office of the Controller's Web site at http://finance.ky.gov/services/statewideacct/Pages/travel.aspx.

History

RELATES TO: KRS 44.060, 45.101
STATUTORY AUTHORITY: KRS 44.060, 45.101
NECESSITY, FUNCTION, AND CONFORMITY: KRS 45.101 authorizes the Finance and Administration Cabinet to promulgate an administrative regulation that establishes requirements and reimbursement rates for the travel expenses of state employees. KRS 44.060 requires the secretary to promulgate administrative regulations fixing the amount allowed for the expense of traveling in a motor vehicle in the discharge of official state duties. This administrative regulation establishes the eligibility requirements relating to rates and forms for reimbursement of travel expense and other official expenses out of the State Treasury.
History: 8 Ky.R. 997; eff. 5-5-1982; Am. 16 Ky.R. 2252; 2649; eff. 6-10-1990; 19 Ky.R. 971; 1737; eff. 1-13-1993; 22 Ky.R. 779; eff. 12-7-1995; 24 Ky.R. 922; eff. 12-15-1997; 26 Ky.R. 862; 1114; eff. 12-16-1999; 27 Ky.R. 2220; 2704; eff. 4-9-2001; 31 Ky.R. 135; 730; 927; eff. 11-22-2004; 32 Ky.R. 116; 472; 712; 932; 1385; eff. 3-3-2006; 43 Ky.R. 761, 1164; eff. 2-3-2017; 47 Ky.R. 1811; eff. 8-31-2021.

Chapter 3 State-owned Buildings and Grounds

200 KAR 3:010 Vehicle parking and traffic control {#sec-200-kar-3-010 omnilex-key=us-ky-regs-official--title-200--200 KAR 3:010}

Section 1. Parking areas or spaces on state grounds not specifically designated as reserved or restricted as provided in this administrative regulation shall be available for use by all state employees and visitors. Employee and visitor parking in posted parking areas or spaces is prohibited. Unauthorized vehicles parking in these spaces may be removed at the owner's or operator's expense. Privately owned vehicles left overnight may be removed from the grounds at the owner's expense unless authorization for overnight parking has been obtained from the Facilities Security Section, Department of State Police.

Section 2.

(1) Specific parking areas or spaces may be reserved for:

(a) Elected officials and their principal assistants;

(b) Members of the Judiciary;

(d) Members of the cabinet and their deputies;

(e) Heads of departments, their deputies, or employees of comparable grade and position;

(f) Emergency vehicles;

(g) Temporarily or permanently handicapped employees; and

(h) State employees who have submitted a written request approved by the head of their respective agency stating a justifiable need for the requested reserved space. These requests shall be subject to the availability of parking space.

(2) Persons eligible for reserved parking, shall apply to Division of Real Properties, Finance and Administration Cabinet, for a reserved parking permit. All persons authorized to have a reserved parking space shall display the appropriate tag or bumper sticker issued by the Division of Real Properties, Finance and Administration Cabinet. Any vehicle that does not properly display the appropriate tag or bumper sticker and is parked in a reserved parking space may be removed at the operator's or owner's expense.

Section 3. Sections of the parking lots of state-owned facilities may be posted as restricted areas for carpool parking. For purposes of determining eligibility for parking in a carpool parking area, a carpool must consist of three (3) or more state employees who ride together to commute between their homes and official work stations.

Section 4. When the General Assembly is in session, all or portions of any level of the Capital parking structure may be reserved for members of the General Assembly and staff. Sections of any level may be reserved or restricted between legislative sessions for parking by members of the Interim Committees of the General Assembly and for meetings of the Legislative Research Commission of the General Assembly.

Section 5. Vehicles parked parallel to the roadway shall be parked within the lines, with the vehicle headed in the direction of the traffic flow. No vehicle shall be double parked or parked or left standing unattended next to any yellow line or on any yellow striped area, or in a fire lane, or in any area in which a "no parking" sign has been posted.

Section 6. Speed limits on roads on the grounds of state-owned facilities shall be twenty-five (25) miles per hour unless a lower speed limit is posted. All laws and administrative regulations governing the movement and operation of motor vehicles on the public highways of this Commonwealth shall be enforced on the grounds of state-owned facilities. All accidents occurring on the grounds of state-owned facilities shall be reported to the Facilities Security Police or the State Police. Accident reports shall be compiled by the State Police.

History

RELATES TO: KRS Chapter 56
STATUTORY AUTHORITY: KRS 56.850
NECESSITY, FUNCTION, AND CONFORMITY: This administrative regulation establishes the rules for the operation and parking of motor vehicles on the grounds of the State Capitol and all other state-owned facilities except those exclusively used by and in the custody of any state agency authorized by law to control vehicular traffic and parking. The proposed amendments to this administrative regulation are for the purpose of correcting those deficiencies raised by the Interim Joint Committee on State Government during its quadrennial review of this administrative regulation. The proposed amendments also clarify the regulatory provisions governing reserved parking at state-owned facilities.
History: KFinR-Serv 1-1; 1 Ky.R. 591; eff. 4-9-75; Am. 7 Ky.R. 778; eff. 5-6-81; 18 Ky.R. 325; eff. 9-11-91; Crt eff. 2-10-2020.

200 KAR 3:020 Use of state-owned facilities and grounds {#sec-200-kar-3-020 omnilex-key=us-ky-regs-official--title-200--200 KAR 3:020}

Section 1. Definitions.

(1) "Agency" means a "budget unit," as defined by KRS 48.010(9).

(2) "Applicant" means a visitor who has submitted an Application to Use State Facilities and Grounds.

(3) "Application" means the Application to Use State Facilities and Grounds form maintained by the Department for Facilities and Support Services, or a substantially similar agency specific application approved by the department, that allows individuals, organizations, and entities to request approval to conduct an event at a state facility or on state grounds.

(4) "Cabinet" means the Finance and Administration Cabinet.

(5) "Commissioner" means the Commissioner of the Department for Facilities and Support Services.

(6) "Deadly Weapon" is defined by KRS 500.080(4).

(7) "Demonstration activity" means any gathering of twelve (12) or more visitors demonstrating, parading, picketing, speech making, holding vigils, sit-ins, or rallies, or conducting other activities for the purpose of demonstrating approval or disapproval of governmental policies or practices (or the lack there-of), expressing a view on public issues, or bringing into public notice any issue or other matter.

(8) "Department" means the Department for Facilities and Support Services.

(9) "Division" means the Division of Historic Properties, established by KRS 42.425(1)(d)4.

(10) "Event" means any demonstration activity, performance, ceremony, presentation, meeting, or rally held in a state facility or on state grounds.

(11) "Face covering" means material covering, consisting of at least two (2) layers of fabric, fit snuggly to the face that completely covers the nose, mouth, and optionally chin of the wearer, but does not otherwise materially obscure the face, head, or neck area. "Face covering" does not mean face shields, bandanas, scarves, gaiters, or any face covering with exhalation valves, slits, or holes.

(12) "Firearm" is defined by KRS 237.060(2).

(13) "Handgun" is defined by KRS 527.010(5).

(14) "Historic properties" means state-owned historic properties under the management and preservation authority of the Division of Historic Properties, pursuant to KRS 42.019.

(15) "Livestock" is defined by KRS 257.010(11).

(16) "Long Gun" means any firearm that is not a handgun, including:

(a) Rifles;

(b) Carbines; and

(17) "Normal business hours" means:

(a) The hours in which a facility is declared or posted as open and accessible to individuals other than employees or agents of the commonwealth; and

(b) Any time period during which a facility hosts a legislative session, public meeting, or court session.

(18) "Organization" means any group or association of individuals joined together to accomplish shared goals or to advance shared interests or values, inclusive of its employees, agents, invitees, or guests.

(19) "Public meeting" means a "meeting," as defined by KRS 61.805(1).

(20) "Rally" means a gathering of twelve (12) or more visitors for the purpose of actively promoting a cause.

(21) "Solicit" and "solicitation" are defined by KRS 367.650(4).

(22) "Spontaneous event" means an event where twelve (12) or more visitors gather to exercise their First Amendment rights in facilities and on grounds open to the general public in response to a triggering event that has occurred within the preceding calendar week, or is currently occurring. Regularly scheduled events, or events that are advertised by any means seven (7) or more calendar days prior to the starting date of the event are presumptively not "spontaneous events."

(23) "State facilities" or "facilities" means any buildings owned or managed by the Finance and Administration Cabinet pursuant to KRS 56.463.

(24) "State grounds" or "grounds" means any lands owned or managed by the Finance and Administration Cabinet pursuant to KRS 56.463.

(25) "Tenant" means an individual or organization, except for an agency that is:

(a) Occupying land or property rented from the commonwealth; and

(b) Limited to the specific state facility or state grounds where the land or property is located.

(26) "Tenant agency" means an agency that is:

(a) Assigned commonwealth land or property; and

(b) Limited to the specific state facilities or state grounds assigned for agency use.

(27) "Triggering event" means a previously unknown or unpredicted event where, because of its unknown or unpredicted nature, a group of visitors could not reasonably be expected to submit an application seven (7) days in advance.

(28) "Visitor" means:

(a) Any person, organization, or entity present at a State Facility or on State Grounds that is not a tenant agency, nor employed or contracted to perform work there on behalf of the commonwealth;

(b) A person or organization employed or contracted to perform work on behalf of the commonwealth if present at a state facility or on state grounds for reasons other than performing work on behalf of the commonwealth; and

Section 2. Request to Use State Facilities or Grounds.

(1) Each visitor seeking to hold an event at a state facility or on state grounds shall submit a completed "Application to Use State Facilities and Grounds" to the department, or delegee, at least seven (7) calendar days prior to the anticipated date of the event.

(a) Applications shall not be submitted, and an event shall not be scheduled, more than 365 calendar days prior to the date of an event.

(b) An applicant may only make one (1) application for one (1) event at a time.

(c) Applications shall be reviewed and approved on a first come, first served basis, except that state sponsored activities shall be given priority over applications received by the department, or delegee, on the same date as a request by an agency regarding a state-sponsored event.

(d) The department, or delegee, shall deny an application if:

The application is incomplete;
The proposed event requests space allocated for a state sponsored activity, a previously scheduled event, the normal operation of state business, or a legislative session;
The proposed event poses a safety or security risk;
Applicant has made material misrepresentations regarding the nature or scope of an event or solicitation, inclusive of misrepresentations contained in prior applications; or
Applicant has failed to pay costs or damages due for a prior event.

(e) If an application is approved, the department, or delegee, shall issue a written approval specifying:

The property or portion of property for which approval is granted;
The date and time period for which approval is granted;
Any fee or costs to be paid for use of state property or equipment;
The amount of any advance deposit required;
Whether proof of liability insurance shall be required for the requested use; and
Any applicable restrictions.

(f) If an application is denied, the department, or delegee, shall issue a written denial specifying:

The Section 2(1)(d) provision the denial is based upon;
If the application is incomplete, a description of the missing information;
If the applicant has made prior misrepresentations, a description of the misrepresentation; and
If the applicant has failed to pay costs or damages for a prior event, a description of the costs or damages and the amount remaining due.

(g) Any written approval to use Commonwealth facilities is non-transferable and the purpose, time, place, or other conditions specified for use shall not be changed without the written consent of the department, or delegee.

(h) Except as provided by paragraph (j)2. of this subsection, the department, or delegee, may revoke prior approval to hold an event at a state facility or on state grounds if the property is requested for a state sponsored activity. If the department, or delegee, revokes prior approval for an applicant to use state property, it shall either:

Provide a refund of any fee paid for the use of the state property; or
Provide alternate dates that the facility is available for use.

(i) The department may delegate authority to review and approve applications for use of specific facilities and grounds to a tenant agency of the facility or grounds assigned for the tenant agency's use.

Delegation of review and approval authority shall be posted on the department's website at: https://finance.ky.gov/department-for-facilities-and-support-services/Pages/default.aspx.
The division, or its designee, shall review and approve applications for the use of historic properties.
The department shall post a link on its Web site to any delegated tenant agency review and approval process regarding specific facilities or grounds.

(j) Historic properties.

The division may relocate a previously approved event at a historic property as established in the Rules for Use of Public Areas for the Capitol and Grounds.
The division shall not reschedule or relocate a previously approved event at a historic property less than three (3) days prior to the scheduled event date except as established in the Rules for Use of Public Areas for the Capitol and Grounds.

(2) Except for spontaneous events, visitors who make use of a state facility or state grounds without written approval:

(a) May be charged a fee equal to the amount normally charged for approved uses, if applicable; and

(b) May be removed from a state facility or state grounds if their use interferes with a use approved by the department, or delegee, or with a state sponsored activity.

(3) Each visitor seeking to hold an event at a state facility or on state grounds, other than a demonstration activity, shall submit a completed Rental Application and Lease Agreement to the department, or delegee.

(4) The department may delegate authority to review and approve a Rental Application and Lease Agreement to a tenant agency of the facility or grounds assigned for the tenant agency's use.

(a) Delegation of review and approval authority shall be posted on the department's website at: https://finance.ky.gov/department-for-facilities-and-support-services/Pages/default.aspx.

(b) The division, or its designee, shall review and approve rental applications for the use of historic properties.

(c) The department shall post a link on its Web site to any delegated tenant agency review and approval process regarding specific facilities or grounds.

(5) An agency may adapt the Rental Application and Lease Agreement for its own use as follows:

(a) Inserting the Rental Application and Lease Agreement onto agency-specific letterhead;

(b) Altering the Rental Application and Lease Agreement to reflect contact information for the agency; and

Identification of available areas;
Capacity of available areas;
Whether food or drink may be consumed in available areas;
Equipment available to rent; and
Hours when available areas may be rented.

(6) An agency that adapts the Rental Application and Lease Agreement for its own use shall enter into a written agreement with the commissioner addressing:

(a) Which facilities and grounds are covered by the Rental Application and Lease Agreement;

(b) The agency responsible for processing Rental Application and Lease Agreement submissions; and

Section 3. Conditions Governing Use of State Facilities and Grounds.

(1) General conditions governing all state facilities and grounds to which visitors, applicants, and other persons visiting under application agree to abide.

(a) Visitors shall agree to be, and are, responsible for any vandalism, damage, breakage, loss, or other destruction caused by that individual, organization, or entity. In regards to historic properties, costs may include costs for the services of specialists in relevant historical restoration skills.

(b) An agency agrees to reimburse, and shall reimburse, the department for any damage caused to state facilities assigned to its use.

(c) This administrative regulation is not intended to waive or preclude recovery by an agency from visitors for damages caused by them.

(d) Visitors shall indemnify and hold harmless the Commonwealth of Kentucky, its departments, agents, employees, and contractors from and against any and all suits, damages, claims, or liabilities due to personal injury or death; damage to or loss of property; or for any other injury or damage arising out of or resulting from the use of state facilities or grounds, except as provided by in KRS Chapter 49.

(e) Visitors shall not dig, excavate, or use metal detectors.

(f) Visitors shall not post or affix signs, announcements, or other documents on any exterior or interior wall, ceiling, floor, door, window, or other surface not specifically designated for that purpose.

(g) Visitors shall promptly remove items or materials owned or used by them after an exhibit, event, or visitation. Failure to do so may result in the department billing the individual, organization, or entity with the costs of disposal, inclusive of use of staff time, which the individual, organization, or entity agrees to be responsible for as a condition of using the state facility or grounds.

(h) Smoking shall not be permitted in state facilities or on state grounds.

(i) Visitors shall not wear masks or hoods that conceal the identity of the wearer, except for:

Religious dress of a generally recognized religion;
Minor children celebrating Halloween; and
Face coverings, worn to prevent or mitigate the spread of communicable disease.

(j) Public use of state facilities by visitors shall not interfere with the conduct of normal public business, including any legislative session, court proceedings, or any other public business.

(k) Use of state facilities and state grounds by visitors shall conform to any applicable limits or requirements contained in the Kentucky Building Code, 815 KAR 7:120; the Kentucky Standards of Safety contained in 815 KAR 10:060; orders of the State Fire Marshal, local fire codes, inclusive of any applicable occupancy limits; and the provisions of this administrative regulation or the materials incorporated herein.

(l) Visitors shall not congregate in, or otherwise obstruct, passageways or office entrance areas in a manner that would impair the normal conduct of state business or the safe evacuation of people in the event of a fire or similar emergency.

(m) Use or parking of a motorized vehicle on lawns, sidewalks, or terraces shall be restricted to emergency, maintenance, construction, development, delivery, or authorized building access purposes as determined by the department.

(n) The operation of aircraft, other than at designated landing areas, shall be prohibited.

(o) The mass release of birds, butterflies, or other living creatures shall be prohibited.

(p) Livestock shall be prohibited, except at facilities designated for livestock-related purposes, unless express written approval is granted by the department, or delegee.

(q) In addition to any use limitations imposed by this administrative regulation, within areas assigned to its use, an agency may impose such additional use restrictions as are necessary and proper to ensure:

Efficient operation and conduct of state business;
The safety of state employees and visitors;
The security of public assets and data; and
Restrictions necessary to conform to requirements of state and federal law.

(r) The following items shall be prohibited, unless owned or controlled by the state:

Hot-air balloons and similar lighter-than-air objects and aircraft;
Powered aircraft, including drones and remotely-operated aircraft;
Remotely controlled toys and vehicles;
Rockets and similar missiles; and
Fireworks and other explosive items.

(s) The following items shall not be permitted in any state facility, unless the items are owned or controlled by the state:

Any equipment, apparatus, or machinery that fails to conform with local fire codes;
Skateboards, roller skates, rollerblades, bicycles, mopeds, motor bicycles, motorcycles, and hoverboards; exclusive of mobility devices used by a disabled individual; and
Any personal property that interferes with any electrical or mechanical system in a state facility.

(t) Individuals openly carrying a deadly weapon may be ordered to leave state facilities and grounds when:

Brandishing a firearm or other deadly weapon in an unsafe manner, including:

a. Pointing the muzzle of a firearm at another individual;

b. Failing to keep the safety of a firearm in the "on" position while carrying a firearm;

c. Failing to keep their finger outside of the trigger guard of a firearm; or

d. Threatening another person with a firearm or other deadly weapon; and

Failing to fully comply with the provisions of paragraph (v) of this subsection, the other provisions of this administrative regulation, or the lawful direction of facility security personnel.

(u) Individuals ordered to leave state facilities and grounds pursuant to paragraph (t) of this subsection may be subject to criminal prosecution if they refuse to leave state facilities and grounds or comply with the lawful direction of facility security personnel.

(v) Individuals authorized to enter a state facility with one (1) or more firearms shall:

Securely maintain handguns in a holster with two (2) or more retention security features;
Securely maintain long guns behind the back using a strap slung over the shoulder, muzzle pointing up, in a manner to prevent muzzle rocking rearward during movement;
Be in possession of no more ammunition than can be loaded into the firearm at one (1) time; and
Possess no more than one (1) magazine, whether attached or detached from the firearm.

(w) The terms of this administrative regulation shall not apply to:

Tourism, Arts, and Heritage Cabinet administered facilities and properties;
Tenants of state facilities;
Inmates and other incarcerated persons; or
Other individuals in the care, custody, or control of the state.

(2) Operating hours and access requirements.

(a) The commissioner, in consultation with agencies using each facility, shall establish normal business hours to designate when state facilities and grounds are open for public access. The commissioner may delegate authority to set normal business hours for all state facilities and grounds or for specific state facilities and grounds.

(b) Normal business hours of operation shall be posted at public entrances of state facilities and prominently posted on state grounds.

(c) Public entrances, operating hours, and scope of access may be changed due to maintenance, emergency, disaster, safety threats, and similar concerns as determined by the commissioner.

(d) For purposes of public security and safety, all packages, backpacks, purses, bags, briefcases, or other similar items brought into a state facility shall be subject to search.

(e) A visitor shall not enter or remain on state facilities or grounds after normal business hours of operation without express approval, except state employees, contract workers for the state, or members of the public who are:

Meeting with an agency or legislator in regard to a public matter;
Attending a scheduled public meeting; or
Escorted by a state employee for the purpose of conducting state business.

(f) Visitors present at a state facility or on state grounds may be given up to thirty (30) minutes after normal business hours have ended to vacate the state facility or state grounds before being subject to immediate removal.

(g) If an agency allows individuals to remain in a state facility after normal business hours, it may be found to be jointly liable for damage caused by unescorted visitors.

(h) Visitors shall not camp or remain overnight in state facilities or on state grounds.

(i) As a condition to their use of, or presence on, state facilities and grounds, applicant and visitors agree that state and local law enforcement officers may physically remove them from state facilities and grounds if they remain longer than thirty (30) minutes after normal business hours have ended and waive any claim against the law enforcement officers and the commonwealth unless undue force is used resulting in serious physical injury as defined by KRS 500.080(15).

(3) Commercial activity.

(a) The following commercial activity shall be prohibited in state facilities or on state grounds:

Selling, displaying, or vending commercial products;
Solicitation; and
Advertising.

(b) The restrictions in paragraph (a) of this subsection regarding commercial activity shall not apply to:

State agencies;
State-affiliated or approved charitable fund-raising campaigns;
Individuals or organizations who have contracted with the state to conduct commercial activity at state facilities or on state grounds;
Nominal employee activity, if it otherwise conforms with applicable employee ethics restrictions and does not interfere with state business; and
Notice boards specifically set aside for public posting.

(4) Administration of usage conditions.

(a) In addition to any civil or criminal penalties provided for under Kentucky law, visitors who violate the restrictions contained in this administrative regulation, agree to be, and shall be subject to immediate removal from state grounds and facilities as follows:

If a violation concerns damage to state facilities or grounds, or disruption of state business, the commissioner or agency head of the affected agency may request removal by officers of the Kentucky State Police, contract security staff, or other state or local law enforcement officers; or
If a violation concerns a safety concern or threat, removal may be done at the request of the commissioner or agency head of the affected agency, or upon exercise of independent discretion of the Kentucky State Police, contract security staff assigned to the state facility or grounds, or other state and local law enforcement offices.

(b) The commissioner, agency head of a tenant agency, officers of the Kentucky State Police, contract security staff, or other state or local law enforcement officers may place limitations on total number of participants, the area in which an event may be conducted, and may direct the clearing of an area or separation of groups, in order to ensure compliance with applicable health and safety standards, maintain public order, or ensure that normal public business may be conducted.

Prohibit the regular conduct of agency operations in a state facility or on state grounds after normal business hours regarding state facilities or grounds assigned to the agency's use; or
Limit the ability of an agency to make full and unencumbered use of state facilities or grounds assigned to them, subject to any specific conditions placed upon their use by the department.

Section 4. Additional Conditions Regarding Access and Use for Historic Properties.

(1) Visitors to historic properties shall comply with the additional restrictions regarding the use of the capitol grounds and state historic properties included in the Rules for Use of Public Areas for the Capitol and Grounds.

(2) A visitor seeking to hold an event at a historic property shall comply with the requirements in the Areas Available for Governmental Events, Business-Oriented Events and Rental Use form.

(3) The Department of Parks and Kentucky Horse Park may advise and consult the division in regard to any restrictions or use guidelines relating to state shrines or museums.

Section 5. Enforcement.

(1) Authority to initiate civil proceedings in the name of the Commonwealth for any trespass or injury to state property under the cabinet's control shall be vested with the cabinet's Office of General Counsel.

(2) The cabinet's Office of General Counsel may delegate authority to initiate civil proceedings to counsel for an agency affected by a trespass or injury to state property, to another agency, or to outside counsel.

(3) Nothing in this regulation is intended to waive or restrict in any way any normal criminal or civil remedies available under law that relates to improper trespass on, or misuse of, state facilities; obstruction of governmental operations; nuisance; or any other legal remedy otherwise available to the Commonwealth or its subdivisions.

(4) Nothing in this regulation is intended to limit, waive, or otherwise alter the authority the rules for the operation and parking of motor vehicles on state grounds, as enumerated in 200 KAR 3:010.

Section 6. Incorporation by Reference.

(1) The following material is incorporated by reference:

(a) "Application to Use State Facilities and Grounds", August 2025;

(b) "Rental Application and Lease Agreement", October 2021;

(d) "Areas Available for Governmental Events, Business-Oriented Events and Rental Use", June 2021.

(3) This material is also available on the cabinet's website at https://finance.ky.gov/office-of-the-secretary/Pages/finance-forms.aspx.

History

RELATES TO: KRS 42.019, 42.425, 56.010, 56.463
STATUTORY AUTHORITY: KRS 42.019(1), 42.425(1)(c), 56.010, 56.463(8)
NECESSITY, FUNCTION, AND CONFORMITY: This administrative regulation establishes uniform rules for the governance of state facilities and grounds. While all state facilities and grounds are owned by the people of the Commonwealth at large, it is sometimes detrimental to the effective carrying-out of the people's business for persons, or groups of persons, to disregard reasonable conditions established for use of state facilities and state grounds. The purpose of this administrative regulation is to balance the interests of the citizens of the commonwealth at large with the interests of individual citizens, or groups of citizens, to use state facilities and grounds in a reasonable fashion in order to redress their grievances and coordinate various uses of public buildings and Grounds, to preserve Historic Properties, to ensure the health and safety of the public and state employees while on state property, and to protect the public from unnecessary financial losses. KRS 42.019(1) requires the Division of Historic Properties to oversee the management and preservation of state-owned historic properties. KRS 42.425(1)(c) entrusts the Department for Facilities and Support Services with primary responsibility for developing and implementing policies applicable to all state agencies to ensure effective planning for and efficient operation of state office buildings. KRS 56.010 requires the Finance and Administration Cabinet to institute civil proceedings in the name of the Commonwealth for any trespass or injury to state property under its control. KRS 56.463(8) requires the Finance and Administration Cabinet to promulgate administrative regulations as may be necessary to govern the acquisition, control, and disposition of the commonwealth's real property.
History: 200 KAR 003:020. 45 Ky.R. 2528, 3190; 46 Ky.R.28; eff. 8-2-2019; 48 Ky.R. 510, 1517; eff. 2-1-2022; TAm eff. 9-26-2025.

200 KAR 3:045 Monthly meal charges at mansions {#sec-200-kar-3-045 omnilex-key=us-ky-regs-official--title-200--200 KAR 3:045}

Section 1.

(1) Monthly maintenance charges shall be paid by the Governor, Lieutenant Governor, and all state employees required by their regular job duties to receive meals on a regular basis in the Executive Mansion or the Lieutenant Governor's Mansion.

(2) Payment shall be made by means of a twice monthly deduction from the salary paid on the regular payroll.

Section 2. The monthly maintenance charges to be paid by the Governor and Lieutenant Governor for members of their respective families living at the respective mansions shall be as follows:

(1) The Governor, Lieutenant Governor, and adult members of their respective families, 200 dollars each.

(2) Children between the ages of twelve (12) and seventeen (17) years, 120, dollars each.

(3) Children under twelve (12) years of age, ninety (90) dollars each.

Section 3. Monthly maintenance charges to be paid by state employees and the security detail, required by their regular duties to receive meals at the respective mansions, shall be sixty (60) dollars.

History

RELATES TO: KRS 42.035, 42.037
STATUTORY AUTHORITY: KRS 42.035, 42.037
NECESSITY, FUNCTION, AND CONFORMITY: KRS 42.035 and 42.037 direct that reasonable amounts shall be deducted from the salary or other allowance, of the Governor and Lieutenant Governor for the consumption of food by them and their families, and of other state employees required by their regular duties to receive meals at the Governor's or Lieutenant Governor's mansions. This administrative regulation sets forth the maintenance charges to be paid by the Governor and the Lieutenant Governor relative to members of their families living at the respective mansions and by other state employees required by their regular duties to receive meals at the respective mansions.
History: 2 Ky.R. 274; eff. 1-14-76; Am. 15 Ky.R. 1126; 1467; eff. 11-9-88; 18 Ky.R. 1352; 2199; eff. 1-10-92; 30 Ky.R. 2172; eff. 7-2-2004; Crt eff. 2-10-2020.

Chapter 5 Purchasing

200 KAR 5:021 Manual of policies and procedures {#sec-200-kar-5-021 omnilex-key=us-ky-regs-official--title-200--200 KAR 5:021}

Section 1. A state agency shall follow the procurement requirements in the Finance and Administration Cabinet Manual of Policies and Procedures.

Section 2. Incorporation by Reference.

(1) "Finance and Administration Cabinet Manual of Policies and Procedures", Revised May 2026 is incorporated by reference.

(2) This material may be inspected, copied, or obtained, subject to applicable copyright law, at the Finance and Administration Cabinet, Office of General Counsel, 200 Mero Street, 5th Floor, Frankfort, Kentucky 40622, Monday through Friday, 8 a.m. to 4:00 p.m. This material may also be obtained at the Finance and Administration Cabinet's website, https://finance.ky.gov/office-of-the-secretary/office-of-policy-and-audit/Pages/Finance-Policies.aspx.

History

RELATES TO: KRS 45A.045(2)
STATUTORY AUTHORITY: KRS 45A.045(2)
CERTIFICATION STATEMENT: This is to certify that this administrative regulation complies with the requirements of 2025 RS HB 6, Section 8, as this amended administrative regulation will not have a major economic impact, as defined by KRS 13A.010(13). The Governor's signature is included after the body of the regulation to indicate his acknowledgement of this certification.
NECESSITY, FUNCTION, AND CONFORMITY: KRS 45A.045(2) requires the Finance and Administration Cabinet to publish a manual of policies and procedures, which is to be incorporated by reference as an administrative regulation pursuant to KRS Chapter 13A. This administrative regulation incorporates the Finance and Administration Cabinet Manual of Policies and Procedures.
History: 200 KAR 005:021. 21 Ky.R. 709; eff. 9-14-1994; Am. 22 Ky.R. 2044; eff. 7-5-1996; 23 Ky.R. 1403; eff. 11-11-1996; 3072; eff. 3-26-1997; 24 Ky.R. 926; 1294; eff. 1-12-1998; 25 Ky.R. 903; eff. 2-18-1999; 28 Ky.R. 1905; 2187; eff. 4-15-2002; 30 Ky.R. 667; 1459; eff. 1-5-2004; 31 Ky.R. 139; 702; eff. 11-5-2004; 1875; 32 Ky.R. 47; 8-5-2005; 937; 1389; eff. 3-3-2006; 42 Ky.R. 1906; 2471; eff. 4-1-2016; Cert. eff. 2-22-2023; 51 Ky.R. 82, 658; eff. 12-31-2024; 52 Ky.R. 196, 973, 1115; eff. 4-7-2026; TAm eff. 5-26-2026.

200 KAR 5:076 Small and small minority business set asides {#sec-200-kar-5-076 omnilex-key=us-ky-regs-official--title-200--200 KAR 5:076}

Section 1. Definitions.

(1) "Small business" means a business, including its affiliates, which:

(a) Is independently owned and operated;

(b) Is not dominant in the field of operation in which it is bidding; and

(2) "Small minority business" means a business, which, in addition to meeting the definition of a small business under subsection (1) of this section, is owned and operated by fifty-one (51) percent or more females or persons of African American, Hispanic, Asian, Pacific Islander, American Indian, or Alaskan native heritage.

Section 2. Capital Construction Projects. Highly technical and single source projects shall be exempt from the small business and small minority business set aside designation. Single or limited trade projects estimated to cost $10,000 or less, and multitrade projects estimated to cost $25,000 or less, may be designated as small business and small minority business set asides.

Section 3. Certification. A bidder submitting a bid in response to a solicitation designated as a small business or small minority business set aside shall certify as a part of the bid, that the bidding firm is a small business or small minority business as defined in Section 1 of this administrative regulation. The bidder shall supply any information requested by the purchasing agency for the purpose of verifying the bidder's eligibility for the set aside designation.

History

RELATES TO: KRS 45A.675, 45A.680, 13 C.F.R. 121.201
STATUTORY AUTHORITY: KRS 45A.665, 45A.670
NECESSITY, FUNCTION, AND CONFORMITY: KRS 45A.665(4) requires the Finance and Administration Cabinet to define "small or small minority business". KRS 45A.670 authorizes the Finance and Administration Cabinet to promulgate administrative regulations defining standards regarding the classifications and definitions for small and small minority business as they relate to KRS 45A.665 to 45A.685. This administrative regulation establishes standards for small and small minority business set asides in contracts issued by the Commonwealth of Kentucky.
History: 18 Ky.R. 1724; eff. 1-10-92; 30 Ky.R. 667; 1459; eff. 1-5-2004; Crt eff. 2-10-2020.

200 KAR 5:302 Delegation of authority {#sec-200-kar-5-302 omnilex-key=us-ky-regs-official--title-200--200 KAR 5:302}

Section 1. Delegation of Purchasing Authority Other than for Small Purchases.

(1) A secretary's order may delegate Finance and Administration Cabinet purchasing authority pursuant to KRS 45A.045(3). A government agency requesting a delegation from the Finance and Administration Cabinet under KRS 45A.045(3) shall submit to the secretary proof of competency in the proposed delegated area, demonstrated by staff experience and training and the resources available to the agency to perform the purchase delegation.

(2) The secretary's order shall specify the authority the agency shall receive, the purpose for which the delegation is given, and the period of time for which the delegation is valid.

(3) An agency receiving delegation shall comply with the provisions of KRS Chapter 45A and all other purchasing statutes, administrative regulations, policies and procedures of the Finance and Administration Cabinet.

(4) An agency holding a delegation shall certify annually to the secretary by July 1, that it is in compliance with all purchasing laws, administrative regulations and policies.

(5) A delegation of purchasing authority by the secretary shall remain in force according to the original terms unless modified, or until rescinded by the secretary.

(6) A delegation of purchasing authority for an agency's individual requirements, or to authorize procurement activities by an agency for preestablished and limited periods of time may be granted by the Commissioner of the Department for Administration or the Commissioner for the Department for Facilities Management, or their designees, as appropriate, setting forth the type of procurement activity or function and fixing the limits and restrictions on the exercise of the delegation and its duration. A delegation granted under this section shall not be extended or renewed except with the approval of the Secretary of the Finance and Administration Cabinet.

Section 2. Small Purchase Authority Delegation Exceeding an Agency's Statutory Small Purchase Limit Under KRS 45A.100.

(1) The Secretary of the Finance and Administration Cabinet may delegate purchasing authority that exceeds the agency's small purchase limit set out in KRS 45A.100 by secretary's order. The order shall set forth the type of procurement activity or function delegated and any limitations or restrictions on the exercise of the authority.

(2) An agency request for small purchase delegation above the limits established in KRS 45A.100 shall be submitted to the secretary, approved by the head of the agency submitting the request, and shall contain the following information:

(a) Total dollars spent each of the two (2) preceding fiscal years under the agency's existing small purchase authority;

(b) Number of small purchase transactions represented by those dollar figures for each fiscal year;

(c) A description of the agency's organizational structure, which shall demonstrate that the delegation is appropriate to the agency's size and procurement needs;

(d) A description of the agency's internal controls, which shall ensure adequate safeguarding of assets and the separation of purchasing, accounting, and receiving functions;

(e) Documentation that the agency has prepared and implemented a plan to identify and utilize small business and small minority business suppliers and the agency's future goals in this respect;

(f) An action plan showing how the agency plans to reach its goals;

(g) Acknowledgment that the agency is aware of, and in compliance with, the provisions of KRS 45A.500 and 200 KAR 5:330 relating to recycled material content products;

(h) Every record of control weakness or noncompliance relating to procurement practices issued to the agency by the Auditor of Public Accounts, internal auditors, or the Finance and Administration Cabinet Division of Administrative Policy and Audit, for each of the past two (2) fiscal years, the agency's response to the finding, and any corrective measure taken; and

(i) A list of the agency's procurement personnel, below the level of branch manager, to whom the agency will give authority for purchases at the requested higher small purchase limits and their professional purchasing certification or training.

(3) An agency shall set a minimum goal of five (5) percent utilization of small business and small minority business suppliers.

(4) An agency shall report its progress toward meeting its utilization goal upon the secretary's request.

(5) Procurement personnel of an agency granted delegated purchasing authority shall, within one (1) year after the granting of the delegation or within one (1) year of employment in government in a procurement position, whichever is sooner, have completed a course in purchasing offered by the Finance and Administration Cabinet's Division of Material and Procurement Services and Division of Contracting and Administration, or the introductory course in purchasing offered by the National Institute of Governmental Purchasing, or an equivalent course offered by the National Association of Purchasing Management.

(6) An agency requesting delegated purchasing authority shall utilize each on-line function of the state's procurement system that has been offered to the agency.

(7) The Division of Material and Procurement Services and the Division of Contracting and Administration may request periodic procurement audits by the Division of Administrative Policy and Audit of the agencies to which small purchase delegation above the limits established in KRS 45A.100 has been granted. Such audits shall investigate an agency's compliance with the provisions of KRS Chapter 45A, purchasing administrative regulations and the Finance and Administration Cabinet Manual of Policies and Procedures. If an agency demonstrates deficiencies in procurement expertise or practice, the division shall recommend that the secretary revoke or amend any delegations granted under this administrative regulation. Authority shall not be extended or renewed except with the approval of the secretary.

Section 3. Delegation of Authority to Declare and Dispose of Surplus Personal Property.

(1) A secretary's order may delegate Finance and Administration Cabinet authority pursuant to KRS 45A.045(5).

(2) A delegation shall only be granted to the agency head.

(3) An agency head requesting delegation of authority to declare and dispose of surplus personal property from the Finance and Administration Cabinet under KRS 45A.045(5) shall submit a request to the Secretary of the Finance and Administration Cabinet.

(4) The request shall assure that:

(a) Only property surplus to the agency's need shall be declared surplus and disposed of;

(b) No employee of the Commonwealth shall personally benefit from the disposal of surplus property; and

(c) Disposition shall be in accordance with applicable federal and state laws and regulations, including the executive branch code of ethics and Finance and Administration Cabinet manual of policies and procedures established in 200 KAR 5:021.

History

RELATES TO: KRS 45A.045(3), 45A.675
STATUTORY AUTHORITY: KRS 45A.035(2)(a), 45A.045(3), (5), 45A.100(3)
NECESSITY, FUNCTION, AND CONFORMITY: KRS 45A.035(2)(a) requires the Secretary of the Finance and Administration Cabinet to promulgate administrative regulations relating to conditions and procedures for delegations of purchasing authority. KRS 45A.045(5) requires the secretary of the cabinet to promulgate administrative regulations establishing the method of disposal for personal property of the state, if disposal has been delegated to a state agency. KRS 45A.100(3) requires the secretary of the cabinet to promulgate administrative regulations concerning the granting or revocation of delegations of small purchasing authority by the cabinet. This administrative regulation establishes requirements that will provide uniformity for all delegations of authority by the Finance and Administration Cabinet and ensure the competency of the agency receiving the delegated authority in the proposed delegated area of purchasing. In addition, this administrative regulation establishes the requirements for the Secretary of the Finance and Administration Cabinet to waive the small purchase authority limitations pursuant to KRS 45A.100.
History: 23 Ky.R. 1468; Am. 1924; eff. 11-11-96; 24 Ky.R. 927; eff. 12-15-97; 30 Ky.R. 668; 1460; eff. 1-5-2004; Crt eff. 2-12-2020.

200 KAR 5:305 Performance bonds; forms; payments {#sec-200-kar-5-305 omnilex-key=us-ky-regs-official--title-200--200 KAR 5:305}

Section 1. A contract shall not be awarded to a contractor who fails or refuses to give bond to the Commonwealth if required as provided by KRS 45A.190.

Section 2. A contractor may be declared in default of a contract with the Commonwealth of Kentucky, and bond forfeited, if it is determined by the purchasing official that the contractor is in breach of the terms and conditions of the contract, including, in contracts for construction services, failure to make timely payment of bills for labor, materials and supplies as evidenced by liens filed against the construction fund by laborers and suppliers pursuant to KRS 376.195 to 376.260, or by letters of indebtedness filed with the purchasing agency evidencing that these bills are due and have not been paid by the contractor.

Section 3.

(1) The form of performance and payment bond required to be given by construction contractors pursuant to Sections 1 and 2 of this administrative regulation, including the terms and conditions of the performance and payment bond, shall be published in the Finance and Administration Cabinet "Manual of Policies and Procedures" incorporated by reference as an administrative regulation pursuant to 200 KAR 5:021. The form of bond shall be applicable to, and included in all contracts for construction services if required by KRS 45A.190 and this administrative regulation; except that the bond form or terms may be modified, if in connection with a particular procurement, it is determined, in writing, by the purchasing officer that the modification is reasonably required for the procurement in the best interest of the Commonwealth of Kentucky.

(2) The form of bond required to secure the performance of all other contracts for the purchase of commodities, supplies, equipment or services by the Commonwealth shall be the standard form of performance or payment bond customarily issued by surety companies authorized to do business in Kentucky, plus any additional terms required by the purchasing agency and agreed to by the surety.

History

RELATES TO: KRS 45A.190, 45A.195
STATUTORY AUTHORITY: KRS 45A.035, 45A.195
NECESSITY, FUNCTION, AND CONFORMITY: KRS 45A.035 authorizes the Secretary of the Finance and Administration Cabinet to promulgate administrative regulations for the implementation of the Kentucky Model Procurement Code (KRS Chapter 45A). KRS 45A.195(1) requires the secretary to promulgate administrative regulations establishing the form of the bonds required by KRS 45A.180 to 45A.200. This administrative regulation implements the provisions of KRS 45A.190 and 45A.195.
History: 5 Ky.R. 572; Am. 945; eff. 7-17-79; 18 Ky.R. 1356; eff. 1-10-92; 30 Ky.R. 670; 1461; eff. 1-5-2004; Crt eff. 2-10-2020.

200 KAR 5:306 Competitive sealed bidding {#sec-200-kar-5-306 omnilex-key=us-ky-regs-official--title-200--200 KAR 5:306}

Section 1.

(1) The purchasing agencies of the Commonwealth shall provide adequate public notice of solicitations pursuant to KRS 45A.080(3).

(2) In addition to any other public notice given pursuant to KRS 45A.080(3), solicitations shall be posted to the Finance and Administration Cabinet's procurement website.

Section 2. The purchasing officer or other employee of the purchasing agency designated to open the bids shall determine when the time set for opening bids has arrived and shall so declare the time to those present for the bid opening. The purchasing officer or designee shall, in the presence of all persons in attendance, open all bids received as of that date and hour. If practical, the names of the bidders and the amounts of their bids may be read aloud to the persons present. Except if it is deemed impractical, due to the nature or complexity of a solicitation, a bid tabulation summary sheet shall be prepared for each solicitation recording the name of each bidder, a description of the supplies or services bid, and the amounts of the bids received. The bid tabulation summary sheet shall be permanently retained in the solicitation file and shall be available for public inspection. Inspection of bids by interested persons shall not be permitted during the formal bid opening process.

Section 3. The bids shall be examined by the purchasing officer responsible for the procurement for any clerical or technical errors, reviewed for technical compliance with the terms of the solicitation, and the supplies or services bid evaluated for conformity with the specifications contained in the solicitation. A bidder shall, if requested by the purchasing officer responsible for the procurement, clarify, in the format specified by the purchasing officer, any matter contained in the submitted bid about which the purchasing officer has question or believes in good faith needs to be clarified. The bid of any bidder who fails or refuses, within a reasonable time, to give a clarification, if requested to do so by the purchasing officer, shall not be considered further for an award on the basis of that solicitation. The clarification shall be incorporated in any contract awarded on the basis of that bid. After a reasonable bid evaluation period, the contract shall be awarded to the responsive and responsible bidder whose bid offers the best value to the Commonwealth. After evaluation of the bids, including consideration of any clarifying information submitted, the purchasing officer may determine that no satisfactory bid has been received and all bids may be disqualified. At the discretion of the purchasing officer, the solicitation may be cancelled and new bids solicited on the basis of the same or revised specifications, or competitive negotiations undertaken for the procurement. The basis for the disqualification of all bids and subsequent action taken or to be taken with respect to the solicitation shall be recorded and filed in the solicitation file relating to the procurement.

Section 4.

(1) The right to disqualify any bid and to waive technicalities and minor irregularities in bids shall be preserved in the case of all solicitations issued by purchasing agencies within the Finance and Administration Cabinet or pursuant to delegations of purchasing authority by the Finance and Administration Cabinet.

(2) Grounds for the disqualification of bids include:

(a) Failure of a bid to conform to the essential requirements of a solicitation.

(b) Failure to conform to the specifications contained or referenced in a solicitation, unless the solicitation authorized the submission of alternate bids and the items offered as alternatives meet the requirements specified in the solicitation.

(d) Imposition of conditions which modify the terms and conditions of the solicitation, or limit the bidder's liability to the state on the contract awarded on the basis of a solicitation.

(e) Submission of an unreasonable price. Any determination by the purchasing officer that a bid is unreasonable as to price shall be documented.

(f) Nonresponsibility of a bidder.

(g) Failure to furnish a bid guarantee if required by a solicitation.

(h) Other cause as documented by the purchasing officer in a determination and finding.

(3) Technicalities or minor irregularities in bids, which may be waived if the purchasing officer determines that it will be in the Commonwealth's best interest to do so, are mere matters of form not affecting the material substance of a bid or an immaterial deviation from or variation in the precise requirements of the solicitation having no or a trivial or negligible effect on price, quality, quantity, delivery of supplies, or performance of the services being procured, the correction or waiver of which will not affect the relative standing of, or be otherwise prejudicial to other bidders. The purchasing officer may give a bidder an opportunity to cure any deficiency resulting from a technicality or minor irregularity in a bid, or waive the deficiency if it is advantageous to the Commonwealth to do so.

Section 5. If a mistake in a bid is claimed, and the purchasing officer determines that a material mistake was made in the bid and that due to this mistake, the bid submitted was not the bid intended, the bidder shall be permitted to withdraw the bid. If a mistake in a bid is claimed after the award and execution of a contract, the contractor shall be required to perform according to the terms and conditions of the contract, unless it is determined in writing by the Finance and Administration Cabinet that a material mistake had been made in the original bid and the contractor will sustain a financial loss if required to perform the contract according to its terms. A reduction or diminution in profit margin shall not be deemed a financial loss under this section. If it is determined that a material mistake has been made in a bid after the award of a contract, and the contractor will sustain a financial loss if required to perform the contract, the contract shall be rescinded and the contractor shall be ineligible to submit a bid upon resolicitation for the commodity or service.

History

RELATES TO: KRS 45A.080
STATUTORY AUTHORITY: KRS 45A.035, 45A.080
NECESSITY, FUNCTION, AND CONFORMITY: KRS 45A.035 authorizes the Secretary of the Finance and Administration Cabinet to promulgate administrative regulations for the implementation of the Kentucky Model Procurement Code (KRS Chapter 45A). This administrative regulation implements KRS 45A.080.
History: 5 Ky.R. 573; Am. 946; eff. 7-17-79; 18 Ky.R. 1357; 2201; eff. 1-10-92; 23 Ky.R. 1405; 1925; eff. 11-11-96; 24 Ky.R. 929; eff. 12-15-97; 30 Ky.R. 672; 1462; eff. 1-5-2004; Crt eff. 2-12-2020.

200 KAR 5:307 Competitively negotiated contracts {#sec-200-kar-5-307 omnilex-key=us-ky-regs-official--title-200--200 KAR 5:307}

Section 1. A contract may be awarded by competitive negotiation if the purchasing officer determines in writing that:

(1) Due to the complex nature or technical detail of a particular procurement, specifications cannot be fairly and objectively prepared so as to permit competition in the solicitation of sealed bids;

(2) High technology electronic equipment is available from a limited number of sources of supply and specifications cannot practicably be prepared except by reference to the specifications of the equipment of a single source of supply;

(3) Solicitation of competitive sealed bids is not practicable; or

(4) Conditions described in KRS 45A.085(3) or 45A.090(1) exist.

Section 2.

(1) If it has been determined that it is not practical to solicit competitive bids as provided in Section 1 of this administrative regulation, except if such determination is based on the existence of the conditions mentioned in KRS 45A.085(3) or 45A.090(1), action to obtain a procurement by competitive negotiations shall commence by solicitation of written proposals in the manner specified by KRS 45A.080(3), 200 KAR 5:306, and 200 KAR 5:307.

(2) A solicitation of proposals for competitive negotiations shall state:

(a) That the purchasing agency proposes to enter into competitive negotiations with responsible offerors;

(b) The date, hour and place that written proposals shall be received;

(d) A description of the supplies or services sought;

(e) Detailed specifications, or the location where detailed specifications may be obtained;

(f) The evaluation factors to be considered in determining the proposal most advantageous to the Commonwealth;

(g) The proposed method of award of contract;

(h) Other information as, in the opinion of the purchasing officer, may be desirable or necessary to reasonably inform potential offerors about the requirements of the procurement or the limits of the competitive negotiations;

(i) The existence of a funding limitation, if determined to be in the best interest of the Commonwealth; and

(j) The amount of the funding limit, if it is determined by the Director of the Division of Material and Procurement Services or the Director of the Division of Contracting and Administration for procurements undertaken by those divisions that disclosure of the amount of the funding limit will promote competition and will be in the best interest of the Commonwealth.

(3) If a funding limit has been established, proposals that exceed the funding limit may be rejected.

Section 3. All written proposals received by the purchasing agency in response to a solicitation shall be kept secure and unopened until the date and hour set for opening the proposals. Proposals not clearly marked as such may be opened for identification purposes, and shall be appropriately identified with reference to the particular procurement and resealed until the time for opening proposals.

Section 4. At the close of business on, or at the beginning of the next business day after the date fixed for receiving proposals for competitive negotiations, all proposals received as of the close of business on that date shall be transmitted to the purchasing officer for the procurement for opening. Proposals shall not be subject to public inspection until negotiations between the purchasing agency and all offerors have been concluded and a contract awarded to the responsible offeror submitting the proposal determined by the purchasing officer in writing to be the most advantageous to the Commonwealth, based upon the price and the evaluation factors set forth in the solicitation.

Section 5.

(1) The purchasing officer shall examine each written proposal received for general conformity with the terms of the procurement. If it has been provided in the solicitation that an award may be made without written or oral discussions, the purchasing officer may, upon the basis of the written proposals received, award the contract to the responsible offeror submitting the proposal determined in writing to be the most advantageous to the Commonwealth. If, after the proposals have been examined, it is determined that written or oral discussions should be had with the offerors, the purchasing officer shall determine in writing, based on an individual review, those proposals received that are eligible to be selected for award of a contract. Each responsible offeror that is eligible to be selected for award of a contract shall be contacted by the purchasing officer and a meeting scheduled for discussion of the offeror's proposals. The purchasing officer shall not be required to conduct discussions under the circumstances of or relative to the topics enumerated in KRS 45A.085(6)(a), (b) or (c).

(2) Discussions with offerors shall be held informally and may be conducted orally, in writing, or both, as determined by the purchasing officer to be the most advantageous to the Commonwealth. If, after discussions with all responsible offerors have concluded, or after examination of the written proposals initially submitted, it is determined that no acceptable proposal has been submitted, all proposals may be rejected and, in the discretion of the purchasing officer, new proposals may be solicited as provided in Sections 1 to 4 of this administrative regulation, or the procurement may be abandoned.

(3) Procedures for conducting negotiations and for the manner in which proposals will be evaluated shall be established by the purchasing officer for each procurement and shall be set forth in the request for proposals. The purchasing officer may request offerors to submit written clarification or explanation of their proposals and the proposal of any offeror who fails to respond or to request an extension of time to respond within the time requested, may be rejected.

(4) Proposals shall be evaluated based on factors stated in the request for proposals. Numerical or other appropriate rating systems may be used. All evaluation documentation, scoring, and summary conclusions shall be in writing, and made a part of the file records for the procurement.

(5) The purchasing officer may notify offerors that as of a date stated negotiations shall be closed and further negotiations modifications or clarifications of proposals shall not be received.

Section 6. The purchasing officer shall prepare a written summary of all oral discussions in competitive negotiations setting forth both the dates and the general substance of the discussions. Verbatim records of the discussion shall not be required.

Section 7. If, after solicitation for proposals to enter into competitive negotiations only one (1) proposal responsive to the solicitation is received, the purchasing officer may commence negotiations with the single offeror and any resulting contract entered into with that offeror shall be deemed to have been competitively negotiated and awarded in accordance with KRS 45A.085 and this administrative regulation. The terms and conditions of the contract shall not in any material respect deviate in a manner detrimental to the purchasing agency from the terms and conditions specified in the solicitation for proposals.

History

RELATES TO: KRS 45A.085, 45A.090
STATUTORY AUTHORITY: KRS 45A.035, 45A.085
NECESSITY, FUNCTION, AND CONFORMITY: KRS 45A.035 authorizes the Secretary of the Finance and Administration Cabinet to promulgate administrative regulations for the implementation of the Kentucky Model Procurement Code (KRS Chapter 45A). KRS 45A.085 authorizes the secretary to promulgate administrative regulations concerning contracts awarded by competitive negotiation. This administrative regulation implements the provisions of KRS 45A.085 and 45A.090 relating to competitively negotiated contracts.
History: 5 Ky.R. 574; Am. 947; eff. 7-17-79; 9 Ky.R. 1025; 1194; eff. 4-6-83; 18 Ky.R. 1359; eff. 1-10-92; 30 Ky.R. 674; 1463; eff. 1-5-2004; Crt eff. 2-12-2020.

200 KAR 5:309 Noncompetitive negotiations {#sec-200-kar-5-309 omnilex-key=us-ky-regs-official--title-200--200 KAR 5:309}

Section 1. Contracts may be awarded on the basis of noncompetitive negotiations only for:

(1) Telephone, electrical energy, and other public utility services;

(2) Other services provided within a defined geographic area pursuant to a franchise awarded pursuant to law by a city, county, or other political subdivision authorized to award the franchise;

(3) Purchase or lease of a telephone system to serve the internal needs of state agencies or institutions;

(4) Commodities, equipment, or services available from a sole source, as determined by the purchasing officer in writing;

(5) Instructional materials, equipment, or supplies available from a sole source and necessary to a particular instructional program, as determined by the purchasing officer in writing;

(6) Special supplies or equipment required for laboratory or experimental studies and necessary to a particular study, as determined by the purchasing officer in writing;

(7) Contracts or subscriptions for the purchase of published books, maps, periodicals, technical pamphlets, and except for those specially commissioned for use by an agency which shall be contracted for as provided by subsection (9) of this section, recordings, films, and works of art for museum or public display;

(8) Commercial items purchased from a wholesaler, manufacturer, or producer of the item for, and not requiring modification or alteration prior to, resale to the general public through a resale outlet maintained by a state agency;

(9) Professional, technical, scientific, or artistic services, or agreements with multiple vendors of medical or health care and related services, and fixed rates of payment for those services as prescribed by state or federal law or administrative regulations, and entered into for the benefit of persons who are wards of the Commonwealth, or who are otherwise entitled pursuant to law to the provision of health care and related services by the Commonwealth;

(10) Commodities, supplies, equipment, or construction services that would ordinarily be purchased on a competitive basis if an emergency has been declared in the manner prescribed by KRS 45A.095(2) and (3);

(11) Supplies, equipment or services from the Government of the United States, another state, or a political subdivision of the Commonwealth, or nonprofit organization organized under the laws of the Commonwealth, another state or the District of Columbia, or chartered under an Act of Congress, and lawfully doing business in the Commonwealth of Kentucky, and serving a public purpose of an essentially government, civic, educational or charitable nature;

(12) Contracts with vendors who maintain a general service administration price agreement with the United States of America, if the contract between the Commonwealth and the vendor does not authorize a price higher than is contained in the contract between general service administration and the vendor;

(13) Purchase of real property or interests in real property;

(14) Purchase of fresh food and perishable items which cannot reasonably be acquired through competitive sealed bidding; and

(15) Purchase of limited goods or services that cannot reasonably or practically be obtained through competitive sealed bidding as determined by the executive director of the Office of Material and Procurement Services.

Section 2. Contracts for professional, technical, scientific, or artistic services under Section 1(9) of this administrative regulation shall be awarded as provided in KRS 45A.690 to 45A.725, except that contracts for architectural or engineering services shall be awarded in accordance with KRS 45A.800 to 45A.838.

History

RELATES TO: KRS 45A.095
STATUTORY AUTHORITY: KRS 45A.035, 45A.045, 45A.095
NECESSITY, FUNCTION, AND CONFORMITY: KRS 45A.035 authorizes the Secretary of the Finance and Administration Cabinet to promulgate administrative regulations for the implementation of the Kentucky Model Procurement Code (KRS Chapter 45A). KRS 45A.095(1) requires the cabinet to promulgate administrative regulations concerning noncompetitive negotiations. This administrative regulation implements the provisions of KRS 45A.095.
History: 5 Ky.R. 576; Am. 949; eff. 7-17-79; 18 Ky.R. 1362; eff. 1-10-92; 30 Ky.R. 676; eff.1465; eff. 1-5-2004; 31 Ky.R. 1876; 32 Ky.R. 47; eff. 8-5-05; Crt eff. 2-12-2020.

200 KAR 5:310 Multiple contracts {#sec-200-kar-5-310 omnilex-key=us-ky-regs-official--title-200--200 KAR 5:310}

Section 1. Multiple contracts may be awarded on the basis of a single solicitation, if it is determined in writing by the purchasing officer in advance of the solicitation that the award of multiple contracts may be in the commonwealth's best interests. A determination that multiple contracts may be awarded shall not preclude the award of a single contract for the procurement.

Section 2. If it is determined in writing by the purchasing officer after the evaluation of competitive bids, or the closing of competitive negotiations, that bids or offers substantially and materially responsive to the terms of the procurement have been received for only a part of the requirements of the procurement, a contract or contracts may be awarded as to the part of the procurement for which responsive bids or offers have been received. Bids or offers determined nonresponsive shall be disqualified and new bids or proposals may be solicited, on the same or revised terms, conditions, and specifications.

History

RELATES TO: KRS Chapter 45A
STATUTORY AUTHORITY: KRS 45A.035
NECESSITY, FUNCTION, AND CONFORMITY: KRS 45A.035 authorizes the Secretary of the Finance and Administration Cabinet to promulgate administrative regulations for the implementation of the Kentucky Model Procurement Code (KRS Chapter 45A). This administrative regulation implements the provisions of KRS 45A.035(2)(i).
History: 5 Ky.R. 577; Am. 950; 6 Ky.R. 10; eff. 7-17-79; 18 Ky.R. 1363; eff. 1-10-92; 30 Ky.R. 677; 1466; eff. 1-5-2004; Crt eff. 2-12-2020.

200 KAR 5:311 Contract modifications {#sec-200-kar-5-311 omnilex-key=us-ky-regs-official--title-200--200 KAR 5:311}

Section 1. The purchasing agencies within the Finance and Administration Cabinet, and any state agency to whom purchasing authority has been delegated by the Finance and Administration Cabinet, may provide by appropriate clauses to contracts for supplies or services for changes and modifications, and for the method of calculating the costs of any change in the contract price resulting from the modification. In contracts, other than construction contracts, for the purchase in fixed amounts of commodities, supplies and equipment, an increase in quantity of more than ten (10) percent shall not be permitted unless the solicitation informed prospective bidders or offerors that an increase in quantity might be forthcoming, nor shall increases in unit prices be permitted except as provided by a price escalation clause authorized by the solicitation or request for proposals.

Section 2. All changes to contracts for the purchase of commodities, supplies, equipment and construction services shall be effected by a modification to the contract. A copy of the modification and documentation from the purchasing officer stating the reason and basis for the modification shall be maintained in the contract file by the purchasing agency.

History

RELATES TO: KRS Chapter 45A
STATUTORY AUTHORITY: KRS 45A.210(1)
NECESSITY, FUNCTION, AND CONFORMITY: KRS 45A.210(1) authorizes the Secretary of the Finance and Administration Cabinet to promulgate administrative regulations permitting or requiring inclusion in procurement contracts of clauses enabling the commonwealth to effect changes or modifications in contracts. This administrative regulation establishes policies and procedures for modifying contracts issued by state agencies.
History: 5 Ky.R. 577; Am. 950; eff. 7-17-79; 18 Ky.R. 1364; eff. 1-10-92; 30 Ky.R. 678; 1466; eff. 1-5-2004; Crt eff. 2-12-2020.

200 KAR 5:312 Termination of contracts {#sec-200-kar-5-312 omnilex-key=us-ky-regs-official--title-200--200 KAR 5:312}

Section 1. General Terms.

(1) Any contractor who is determined in writing by the purchasing officer to be in breach of any of the terms and conditions of a contract with the commonwealth of Kentucky, shall be declared in default and the contract may be terminated.

(2) Termination notice. The purchasing officer shall terminate a contract by written notice to the contractor. The notice to the contractor shall be sent certified mail, return receipt requested, and shall state:

(a) The contract is being terminated for the convenience of the commonwealth, for default by the contractor, or for nonappropriation, in accordance with Sections 2 to 4 this administrative regulation;

(b) The effective date of termination;

(d) Any special instructions.

Section 2. Termination for Default.

(1) The commonwealth may terminate a contract because of the contractor's failure to perform its contractual duties.

(2) If a contractor is determined to be in default, the commonwealth shall notify the contractor of the determination in writing, and may include a specified date by which the contractor shall cure the identified deficiencies. The commonwealth may proceed with termination if the contractor fails to cure the deficiencies within the specified time.

(3) A default in performance by a contractor for which a contract may be terminated shall include, but shall not necessarily be limited to:

(a) Failure to perform the contract according to its terms, conditions and specifications;

(b) Failure to make delivery within the time specified or according to a delivery schedule fixed by the contract;

(c) Late payment or nonpayment of bills for labor, materials, supplies, or equipment furnished in connection with a contract for construction services as evidenced by mechanics' liens filed pursuant to the provisions of KRS Chapter 376, or letters of indebtedness received from creditors by the purchasing agency;

(d) Failure to diligently advance the work under a contract for construction services;

(e) The filing of a bankruptcy petition by or against the contractor; or

(f) Actions that endanger the health, safety or welfare of the commonwealth or its citizens.

(4) The commonwealth shall not be liable for any further payment to a contractor under a contract terminated for the contractor's default after the date of termination as determined by the purchasing officer except for commodities, supplies, equipment or services delivered and accepted on or before the date of termination and for which payment had not been made as of that date. The commonwealth may require the contractor to transfer title and deliver to commonwealth completed supplies and manufacturing materials. The contractor, and his surety, if a performance or payment bond has been required under the contract, shall be jointly and severally liable to the commonwealth for all loss, cost or damage sustained by the commonwealth as a result of the contractor's default. A contractor's surety liability shall not exceed the final sum specified in the contractor's bond.

(5) The contractor shall be liable to the commonwealth for any excess costs incurred in acquiring supplies and services similar to those terminated for default, and for any other damages or remedies available either at law or in equity, whether or not repurchase is affected.

Section 3. Termination for Convenience of the commonwealth.

(1) The commonwealth may terminate a contract for convenience if the purchasing officer has determined that termination will be in the commonwealth's best interests. The commonwealth shall provide the contractor thirty (30) calendar days written notice of termination of the contract, unless the secretary of the Finance and Administration Cabinet, or his designee, makes a written determination that a shorter notice of termination for convenience is in the best interest of the commonwealth.

(2) If a contract is terminated for the convenience of the commonwealth, the contractor shall have the burden of establishing the amount of compensation to which the contractor believes he is entitled by the submission of complete and accurate cost data employed in submitting his bid or proposal for the contract, and evidence of expenses paid or incurred in performance of the contract from the date of award through the date of termination. The contractor shall specify and provide documentation of all revenues resulting from the contract, expenditures associated with the contract, and all profit or loss attributable to the contract. The purchasing officer may request the contractor submit additional documents and data, and may request appropriate accounting, investigations and audits.

(3) After issuing a notice of termination for convenience, the purchasing officer may negotiate a settlement with the contractor according to terms deemed just and equitable by the purchasing agency and in accordance with this administrative regulation. The settlement shall be subject to the prior approval of the Secretary of the Finance and Administration Cabinet, or his designee. If the contractor and the purchasing officer cannot negotiate a settlement, the Secretary of the Finance and Administration Cabinet shall issue a determination of the amount, if any, due the contractor.

(4) Contractor responsibilities. After receipt of the notice of termination, the contractor shall take all steps necessary to minimize waste, including:

(a) Stop work immediately on the terminated portion of the contract;

(b) Terminate all subcontracts related to the terminated portion of the prime contract;

(d) Perform the continued portion of the contract;

(e) Take action to protect and preserve property in the contractor's possession in which the commonwealth has or may acquire an interest, and, if directed by the purchasing officer, deliver the property to the commonwealth;

(f) Promptly notify the purchasing officer in writing of any legal proceedings resulting from any subcontract or other commitment related to the terminated portion of the contract;

(g) Settle outstanding liabilities and proposals arising out of the termination; and

(h) If there is a terminated construction contract, ensure the cleanup of the site, protection of serviceable materials, removal of hazards, and other actions necessary to leave a safe and healthful site.

(5) Payment.

(a) Payment of the sum agreed to in settlement of a contract terminated for convenience of the commonwealth shall be made from the same source of funds or account as the original contract.

(b) The commonwealth shall not pay interest on the amount due under the settlement.

Section 4. Funding Out Provision. The commonwealth may terminate a contract if funds are not appropriated to the contracting agency or are not otherwise available for the purpose of making payments without incurring any obligation for payment after the date of termination, regardless of the terms of the contract. The contracting agency shall provide the contractor thirty (30) calendar days written notice of termination of the contract.

History

RELATES TO: KRS Chapter 45A
STATUTORY AUTHORITY: KRS 45A.210(2), (3)
NECESSITY, FUNCTION, AND CONFORMITY: KRS 45A.210(2) and (3) authorize the Secretary of the Finance and Administration Cabinet to promulgate administrative regulations for the termination of contracts for the procurement of supplies or services, or both supplies and services. This administrative regulation establishes requirements for the termination of contracts.
History: 5 Ky.R. 578; Am. 951; eff. 7-17-79; 18 Ky.R. 1365; eff. 1-10-92; 30 Ky.R. 679; 1467; eff. 1-5-2004; Crt eff. 2-12-2020.

200 KAR 5:314 Disclosure of contractor's financial records and information to certain governmental entities {#sec-200-kar-5-314 omnilex-key=us-ky-regs-official--title-200--200 KAR 5:314}

Section 1. All state contracts, as defined in KRS 45A.030(7), shall contain the following language: "The contractor, as defined in KRS 45A.030(9) agrees that the contracting agency, the Finance and Administration Cabinet, the Auditor of Public Accounts, and the Legislative Research Commission, or their duly authorized representatives, shall have access to any books, documents, papers, records, or other evidence, which are directly pertinent to this contract for the purpose of financial audit or program review. Records and other prequalification information confidentially disclosed as part of the bid process shall not be deemed as directly pertinent to the contract and shall be exempt from disclosure as provided in KRS 61.878(1)(c). The contractor also recognizes that any books, documents, papers, records, or other evidence, received during a financial audit or program review shall be subject to the Kentucky Open Records Act, KRS 61.870 to 61.884.

History

RELATES TO: KRS 45A.030, 61.870-61.884
STATUTORY AUTHORITY: KRS 45A.035(2)(h)
NECESSITY, FUNCTION, AND CONFORMITY: KRS 45A.035(2)(h) requires the Secretary of the Finance and Administration Cabinet to promulgate this administrative regulation to govern confidentiality of technical data and trade secrets information submitted by actual or prospective bidders or offerors. This administrative regulation establishes requirements which allow governmental oversight agencies to obtain access to the financial data of state contractors.
History: 22 Ky.R. 1510; eff. 5-16-96; 30 Ky.R. 682; 1468; eff. 1-5-2004; 36 Ky.R. 1300; 2177; eff. 6-4-2010; Crt eff. 2-12-2020.

200 KAR 5:315 Disciplinary action for failure to perform {#sec-200-kar-5-315 omnilex-key=us-ky-regs-official--title-200--200 KAR 5:315}

Section 1. Any bidder or contractor to the Commonwealth of Kentucky who, except for good cause shown, shall have committed, or failed to perform, as the context may require, one or more of the following acts or omissions, may be subject to disciplinary action by the Finance and Administration Cabinet as set forth in Section 2 of this administrative regulation. Specific grounds for disciplinary action shall include:

(1) Failure to post bid or performance bonds, or to provide alternate bid or performance guarantee in a form acceptable to the purchasing agency in lieu of a bond, as required by a solicitation;

(2) Substitution of commodities without the prior written approval of the purchasing agency;

(3) Failure to comply with the terms and conditions of a solicitation or contract, including failure to complete performance within the time specified in the contract;

(4) Failure to replace inferior or defective materials, supplies or equipment immediately after notification by the purchasing agency or the agency to which the materials, supplies, or equipment have been delivered;

(5) Refusal to accept a contract awarded pursuant to the terms of a solicitation, or following the close of competitive negotiations;

(6) Falsifying invoices, or making false representations to any state agency or official, about any payment under a contract, or to procure award of a contract, or to induce a modification in the price or the terms of a contract to the contractor's advantage;

(7) Collusion or collaboration with another bidder or other bidders in the submission of bids for the purpose of reducing competition;

(8) Failure to report, or to pay the Kentucky Revenue Cabinet any sales or use taxes as may be due in connection with a procurement contract as provided by law; and

(9) Failure to comply with the prevailing wage law requirements of state or federal laws as may be applicable to any public works contract of the Commonwealth or any political subdivision or public authority.

Section 2.

(1) Any contractor determined to have committed any act prohibited, or to have failed to perform any act required by Section 1(1) to (5) of this administrative regulation may, in the discretion of the commissioner of the department having jurisdiction over the procurement, be placed on probation, or suspended from bidding to the Commonwealth of Kentucky, or a combination of suspension from bidding and probation, for not more than twelve (12) months.

(2) Any contractor determined to have committed any act prohibited by Section 1(6), (7), or (8) of this administrative regulation may, in the discretion of the commissioner of the department having jurisdiction over the procurement, be placed on probation, or suspended from bidding to the Commonwealth of Kentucky, or a combination of suspension from bidding and probation, for not more than twenty-four (24) months.

(3) Any contractor, or any subcontractor to a contractor, determined by the Labor Cabinet to have violated the prevailing wage requirements of KRS Chapter 337 shall be suspended from bidding to the Commonwealth of Kentucky, or participating in a public works contract of the Commonwealth of Kentucky, effective on the date the Finance and Administration Cabinet receives notice from the Labor Cabinet that the contractor or subcontractor has been determined to have violated the prevailing wage law, and until the time the Labor Cabinet has determined the contractor or subcontractor to be in compliance with the requirements of the law.

Section 3. Except for the grounds stated in Section 1(5) and (9) of this administrative regulation, a preliminary written determination shall be made concerning the facts of any allegation or claim that a bidder or contractor has either committed an act prohibited, or failed to perform an act required, by Section 1 of this administrative regulation before any disciplinary action is taken against the contractor. The preliminary determination shall be submitted to the General Counsel of the Finance and Administration Cabinet, for review prior to the administration of any disciplinary action as authorized by Section 2 of this administrative regulation. Notice of disciplinary action shall be sent to the bidder or contractor at the address shown in the cabinet's records by certified mail, return receipt requested.

Section 4. A bidder or contractor against whom disciplinary action has been taken under this administrative regulation may appeal the action to the Secretary of the Finance and Administration Cabinet. The appeal shall be filed in the office of the secretary within ten (10) working days after the date of notice of the disciplinary action has been received by the bidder or contractor as shown by the certified mail receipt. The appeal shall be filed in writing and shall state facts showing cause why the disciplinary action should be set aside. An appeal constituting a general denial of the charges contained in the notice of disciplinary action, unless supported by specific facts rebutting the charges, shall be preemptorily dismissed. The appellant may request either a formal hearing pursuant to KRS Chapter 13B, or an informal hearing to be conducted by the commissioner of the department having jurisdiction over the particular procurement activity or function, or his designee. A written report of the substance of the matters raised in an informal hearing shall be prepared and submitted to the secretary recommending that the appeal be sustained or denied. The rules of evidence shall not apply in informal hearings conducted under this section and any matter considered pertinent to the issues of the hearing shall be admissible.

Section 5. No purchase shall be made by any state agency from a bidder or contractor who has been suspended from bidding. All state agencies shall be promptly informed about bidders or contractors suspended from bidding.

Section 6. The administration of disciplinary action against a bidder, potential bidder or contractor under this administrative regulation shall not preclude the taking of other action by the Commonwealth, based on the same facts, as may be otherwise available, either at law or in equity, including suits for damages or actions for specific performance.

History

RELATES TO: KRS 45A.080, 45A.085, 45A.185, 45A.190, 45A.230, 45A.325
STATUTORY AUTHORITY: KRS 45A.035(2)(b)
NECESSITY, FUNCTION, AND CONFORMITY: KRS 45A.035 authorizes the Secretary of the Finance and Administration Cabinet to promulgate administrative regulations for the implementation of the Kentucky Model Procurement Code (KRS Chapter 45A). KRS 45A.035(2)(b) requires the cabinet to promulgate administrative regulations governing prequalification, suspension, debarment, and reinstatement of prospective bidders. This administrative regulation establishes those requirements.
History: 5 Ky.R. 579; Am. 952; 6 Ky.R. 11; eff. 7-17-79; 18 Ky.R. 1367; eff. 1-10-92; 30 Ky.R. 683; 1469; eff. 1-5-2004; Crt eff. 2-12-2020.

200 KAR 5:330 Purchase of goods, supplies, equipment, materials and printing with minimum recycled content {#sec-200-kar-5-330 omnilex-key=us-ky-regs-official--title-200--200 KAR 5:330}

Section 1. Definitions.

(1) "Mill broke" means any paper generated in a paper mill prior to completion of the paper manufacturing process which is unsuitable for end use applications and is subsequently reused in the paper manufacturing process.

(2) "Postconsumer waste" means products or materials which have been discarded by a consumer.

(3) "Recovered fly ash" means the component of coal which results from the combustion of coal, and is the finely divided mineral residue which is typically collected from boiler stack gases by electrostatic precipitator or mechanical collection devices.

(4) "Recovered material" means those materials which have been separated, diverted or removed from the solid waste stream after a manufacturing process.

(5) "Recovered paper material" means paper products and paper byproducts which, if not recovered, would otherwise be solid waste, and which are intended for sale, use, reuse, or recycling, whether such materials or byproducts require subsequent separation and processing, excluding the virgin content of mill broke and sawdust.

(6) "Re-refined oil" means used oils from which the physical and chemical contaminants acquired through previous use have been removed through a refining process.

(7) "Solid waste stream" means a path of discarded material from point of origin to ultimate disposition.

(8) "State agency" is defined by KRS 45A.505.

Section 2. Minimum Recycled Content for State Agency Purchases. Except as provided under KRS 45A.510, any goods, supplies, equipment, materials and printing purchased by a state agency shall contain the following minimum recycled content:

(1) Xerographic paper (all sizes and colors) shall contain fifty (50) percent recovered paper material of which ten (10) percent shall be postconsumer waste.

(2) Carbonless printing paper (all sizes and colors) shall contain thirty (30) percent recovered paper material.

(3) Flat sheet printing papers.

(a) Paper, offset and opaque (all sizes and colors) shall contain fifty (50) percent recovered paper material of which ten (10) percent shall be postconsumer waste.

(b) Paper, text (all sizes and colors) shall contain fifty (50) percent recovered paper material of which ten (10) percent shall be postconsumer waste.

(c) Paper, parchtex (all sizes and colors) shall contain fifty (50) percent recovered paper material of which fifteen (15) percent shall be postconsumer waste.

(d) Paper, cover, antique or wove or text (all sizes and colors) shall contain fifty (50) percent recovered paper material of which ten (10) percent shall be postconsumer waste.

(e) Paper, index (all sizes and colors) shall contain fifty (50) percent recovered paper material of which twenty (20) percent shall be postconsumer waste.

(4) Business papers.

(a) Paper, mimeographic (all sizes and colors) shall contain fifty (50) percent recovered paper material of which ten (10) percent shall be postconsumer waste.

(b) Paper, spirit process (all sizes and colors) shall contain fifty (50) percent recovered paper material of which ten (10) percent shall be postconsumer waste.

(c) Paper, rag bond (all sizes) shall contain fifty (50) percent recovered paper material of which ten (10) percent shall be postconsumer waste.

(d) Paper, sulfite bond (all sizes and colors) shall contain fifty (50) percent recovered paper material of which ten (10) percent shall be postconsumer waste.

(5) Computer paper.

(a) Continuous stock paper, carbon interleaved (all sizes and colors) shall contain fifty (50) percent recovered paper material of which ten (10) percent is postconsumer waste.

(b) Continuous stock paper, plain (all sizes and colors) shall contain fifty (50) percent recovered paper material of which ten (10) percent shall be postconsumer waste.

(6) Miscellaneous office supplies.

(a) Blotters, desk (all sizes and colors) shall contain fifty (50) percent recovered paper material of which ten (10) percent shall be postconsumer waste.

(b) Calendars (all types, sizes and colors) shall contain fifty (50) percent recovered paper material of which ten (10) percent shall be postconsumer waste.

(c) File pockets (all types, sizes and colors) shall contain fifty (50) percent recovered paper material of which ten (10) percent shall be postconsumer waste.

(d) Notebook filler (all types, sizes and colors) shall contain fifty (50) percent recovered paper material of which ten (10) percent shall be postconsumer waste.

(e) Angular heavy celluloid tab folder (all types, sizes and colors) shall contain fifty (50) percent recovered paper material of which thirty (30) percent shall be postconsumer waste.

(f) File folder (all types, sizes and colors) shall contain fifty (50) percent recovered paper material of which thirty (30) percent shall be postconsumer waste.

(g) Hanging folder (all types, sizes and colors) shall contain fifty (50) percent recovered paper material of which thirty (30) percent shall be postconsumer waste.

(h) Open shelf file folder (all types, sizes and colors) shall contain fifty (50) percent recovered paper material of which thirty (30) percent shall be postconsumer waste.

(i) Top tab folder (all types, sizes and colors) shall contain fifty (50) percent recovered paper material of which thirty (30) percent shall be postconsumer waste.

(j) Two (2) inch expansion bottom gusset folder (all types, sizes and colors) shall contain fifty (50) percent recovered paper material of which thirty (30) percent shall be postconsumer waste.

(k) Twenty-five (25) point classification folder (all types, sizes and colors) shall contain fifty (50) percent recovered paper material of which thirty (30) percent shall be postconsumer waste.

(l) Guides, index monthly (all types, sizes and colors) shall contain fifty (50) percent recovered paper material of which ten (10) percent shall be postconsumer waste.

(m) Indexes, alphabetical (all types, sizes and colors) shall contain fifty (50) percent recovered paper material of which twenty (20) percent shall be postconsumer waste.

(n) Mailing tubes (all types, sizes and colors) shall contain fifty (50) percent recovered paper material of which ten (10) percent is postconsumer waste.

(o) Memo books (all types, sizes and colors) shall contain fifty (50) percent recovered paper material of which ten (10) percent shall be postconsumer waste.

(p) Memo case (all types, sizes and colors) shall contain fifty (50) percent recovered paper material of which ten (10) percent is postconsumer waste.

(q) Memo sheets (all types, sizes and colors) shall contain fifty (50) percent recovered paper material of which ten (10) percent shall be postconsumer waste.

(r) Notebooks, three (3) hole punched (all types, sizes and colors) shall contain fifty (50) percent recovered paper material of which ten (10) percent shall be postconsumer waste.

(s) Notebooks, stenographic (all types, sizes and colors) shall contain fifty (50) percent recovered paper material of which ten (10) percent shall be postconsumer waste.

(t) Fan folded notes (all types, sizes and colors) shall contain fifty (50) percent recovered paper material of which ten (10) percent shall be postconsumer waste.

(u) Columnar green pads (all types and sizes) shall contain fifty (50) percent recovered paper material of which ten (10) percent shall be postconsumer waste.

(v) Desk pads (all types, sizes and colors) shall contain fifty (50) percent recovered paper material of which ten (10) percent shall be postconsumer waste.

(w) Scratch pads (all types, sizes and colors) shall contain fifty (50) percent recovered paper material of which ten (10) percent shall be postconsumer material.

(x) Adding machine paper (all types, sizes and colors) shall contain fifty (50) percent recovered paper material of which ten (10) percent shall be postconsumer waste.

(y) Tablets (all types, sizes and colors) shall contain fifty (50) percent recovered paper material of which ten (10) percent shall be postconsumer waste.

(z) Tags, shipping (all types, sizes and colors) shall contain fifty (50) percent recovered paper material of which ten (10) percent shall be postconsumer waste.

(aa) Wallet, elastic cord (all types, sizes and colors) shall contain fifty (50) percent recovered paper material of which ten (10) percent shall be postconsumer waste.

(bb) Wallet, expanding, string tie (all types, sizes and colors) shall contain fifty (50) percent recovered paper material of which ten (10) percent shall be postconsumer waste.

(cc) Legal pads, legal (all types, all sizes, all colors) shall contain fifty (50) percent recovered paper material of which ten (10) percent shall be postconsumer waste.

(dd) Telephone message pads (all types, sizes and colors) shall contain fifty (50) percent recovered paper material of which ten (10) percent shall be postconsumer waste.

(7) Toilet tissue shall contain fifty (50) percent recovered paper material of which twenty (20) percent shall be postconsumer waste.

(8) Paper towels shall contain fifty (50) percent recovered paper material of which forty (40) percent shall be postconsumer waste.

(9) Napkins shall contain fifty (50) percent recovered paper material of which thirty (30) percent shall be postconsumer waste.

(10) Industrial wipes shall contain fifty (50) percent recovered paper material of which forty (40) percent shall be postconsumer waste.

(11) Building insulation.

(a) Cellulose loose-fill and spray-on shall contain seventy-five (75) percent postconsumer waste.

(b) Product shall contain Perlite composite board twenty-three (23) percent postconsumer waste.

Polyisocyanurate/polyurethane shall contain the following:

a. Rigid foam: nine (9) percent recovered material.

b. Foam-in-place: five (5) percent recovered material.

c. Glass fiber reinforcer: six (6) percent recovered material.

Phenolic rigid foam shall contain five (5) percent recovered material.

(d) Rock wool shall contain seventy-five (75) percent recovered material.

(12) Engine lubricating oils shall contain twenty-five (25) percent re-refined oil.

(13) Hydraulic fluid shall contain twenty-five (25) percent re-refined oil.

(14) Gear oils shall contain twenty-five (25) percent re-refined oil.

(15) Plastic sign blanks shall contain 100 percent postconsumer waste.

(16) Envelopes (all types, sizes and colors) shall contain fifty (50) percent recovered material.

(17) Doilies (all types, sizes and colors) shall contain fifty (50) percent postconsumer waste.

(18) Corrugated boxes (all types and sizes) shall contain thirty-five (35) percent postconsumer waste.

(19) Fiber boxes (all types and sizes) shall contain forty (40) percent postconsumer waste.

(20) Recycled paperboard (all types and sizes) shall contain eighty (80) percent postconsumer waste.

(21) Brown papers (all types and sizes) shall contain five (5) percent postconsumer waste.

(22) Pad backing (all types and sizes) shall contain ninety (90) percent postconsumer waste.

(23) Aluminum bars shall contain twelve (12) percent recovered material.

(24) Aluminum bolts and nuts shall contain twelve (12) percent recovered material.

(25) Aluminum channels shall contain twelve (12) percent recovered material.

(26) Aluminum handrail post shall contain twelve (12) percent recovered material.

(27) Aluminum sign blanks shall contain twelve (12) percent recovered material.

(28) Aluminum sign panels shall contain twelve (12) percent recovered material.

(29) Aluminum pipe shall contain twelve (12) percent recovered material.

(30) Hot-mix asphalt shall contain ten (10) percent postconsumer waste or recovered material.

(31) Cement shall contain five (5) percent replacement of cement by weight with recovered fly ash.

(32) Concrete cribbing shall contain five (5) percent replacement of cement by weight with recovered fly ash.

(33) Gabionss shall contain ten (10) percent postconsumer waste or recovered material.

(34) Glass beads shall contain fifty (50) percent postconsumer waste.

(35) Guardrail, guardrail post, and component parts shall contain twenty (20) percent postconsumer waste or recovered material.

(36) Metal bridge planks shall contain ten (10) percent postconsumer waste or recovered material.

(37) Metal pipe shall contain ten (10) percent postconsumer waste or recovered material.

(38) Ready-mix concrete shall contain five (5) percent replacement of cement by weight with recovered fly ash.

(39) Reflective powder shall contain fifty (50) percent postconsumer waste.

(40) Slag (boiler) shall contain 100 percent postconsumer waste or recovered material.

(41) Sign brackets shall contain ten (10) percent postconsumer waste or recovered material.

(42) Steel cribbing shall contain ten (10) percent postconsumer waste or recovered material.

(43) Steel piling shall contain ten (10) percent postconsumer waste or recovered material.

(44) Steel post, sign and delineator shall contain ten (10) percent postconsumer waste or recovered material.

(45) Steel, open grid flooring shall contain ten (10) percent postconsumer waste or recovered material.

(46) Railroad rails shall contain 100 percent postconsumer waste or recovered material.

Section 3. State Agency Contracts for Construction, Repair, Renovation, and Demolition of Public Facilities and Improvements to Public Real Properties. In accordance with KRS 45A.525, every state agency shall require, to the extent practicable, that every person, corporation, or other entity with whom it enters into a contract for building, altering, repairing, improving or demolishing any public structures or buildings or other improvements to any public real property, shall use goods, supplies, equipment, materials, and printing to fulfill the contract, which meet the requirements for minimum recycled content established in Section 2 of this administrative regulation.

Section 4. Projects Financed with Commonwealth Bond Proceeds. In accordance with KRS 45A.530, every state agency authorized to issue bonds shall require, to the extent practicable, that every project within the Commonwealth, fifty (50) percent or more of the cost of which is financed with the proceeds of bonds issued by the agency, be undertaken with goods, supplies, equipment, materials and printing which meet the requirements for minimum recycled material content established in Section 2 of this administrative regulation.

History

RELATES TO: KRS 45A.500-45A.540
STATUTORY AUTHORITY: KRS 45A.520
NECESSITY, FUNCTION, AND CONFORMITY: KRS 45A.520 requires the Finance and Administration Cabinet to promulgate administrative regulations establishing a minimum recycled material content to be used by every state agency when purchasing goods, supplies, equipment, materials, and printing. KRS 45A.520 further provides that if the United States Environmental Protection Agency has established a minimum recycled content for certain products, then the Finance and Administration Cabinet shall adopt at a minimum, those standards established by the United States Environmental Protection Agency pursuant to the Resource Conservation and Recovery Act of 1976, as amended. This administrative regulation establishes requirements concerning recycled material content.
History: 18 Ky.R. 1255; Am. 1894; eff. 1-10-92; 30 Ky.R. 687; 1471; eff. 1-5-2004; Crt eff. 2-26-2020.

200 KAR 5:340 Privatization evaluation process {#sec-200-kar-5-340 omnilex-key=us-ky-regs-official--title-200--200 KAR 5:340}

Section 1. Request to Privatize.

(1) An agency desiring to enter into a privatization contract, as defined in KRS 45A.550, shall submit a Request to Privatize, signed by the agency head, and accompanied by the written documentation described in KRS 45A.551(2) and (3), to the Secretary of the Finance and Administration Cabinet.

(2) The secretary shall:

(a) Appoint an ad hoc committee to review the request;

The committee shall consist of:

a. Two (2) employees from the Personnel Cabinet; and

b. Four (4) employees from the Finance and Administration Cabinet.

The committee:

a. Shall verify the accuracy and completeness of the information submitted by the agency;

b. Shall develop a method and benchmarks for evaluating a request, document the method and benchmarks in writing, and attach the document to the committee's recommendation to the secretary;

c. May request a meeting with the agency to discuss or clarify the information submitted;

d. Shall score the request based on the information submitted pursuant to KRS 45A.551(2) and (3) and the method and benchmarks established by the committee; and

e. Shall issue a written recommendation to the secretary, including data compiled by the committee, within thirty (30) days of submission of the request to the secretary.

(b) Issue a written determination approving or rejecting the Request to Privatize, within ten (10) days from receipt of the committee's recommendation, and forward a copy of the secretary's determination and the committee's recommendation to the Government Contract Review Committee.

Section 2. Basis of Determination.

(1) The secretary shall base the determination to approve or reject a Request to Privatize on the following factors:

(a) The agency analysis provided pursuant to KRS 45A.551(2) and (3);

(b) The committee's recommendation; and

Continuation of funds currently available;
Other programs and responsibilities;
The exercise of discretion in applying governmental authority;
The making of value judgments in decisions affecting the government;
Quality of services; and
Overall cost.

(2) If the information submitted by the agency is insufficient, the committee or the secretary shall request additional information or clarification from the requesting agency.

(3) If the information demonstrates that it would be in the best interest of the Commonwealth to privatize the service, the secretary shall approve the Request to Privatize.

Section 3. Incorporation by Reference.

(1) The following material is incorporated by reference:

(a) "Request to Privatize" 9/1999; and

(b) "Cost Benefit Analysis" 9/1999.

(2) This material may be inspected, copied, or obtained at the Finance and Administration Cabinet, Office of the Secretary, Room 383 Capitol Annex, Frankfort, Kentucky, 40601, Monday through Friday, 8 a.m. to 4:30 p.m.

History

RELATES TO: KRS 45A.550-45A.554
STATUTORY AUTHORITY: KRS 45A.552
NECESSITY, FUNCTION, AND CONFORMITY: KRS 45A.552 requires the Finance and Administration Cabinet to develop an objective and systematic process for evaluating the information required to be submitted by state agencies for use in determining whether to approve privatization of a government service. This administrative regulation establishes the process for evaluating information when determining whether to approve a request for privatization.
History: 25 Ky.R. 2709; Am. 26 Ky.R. 717; 1403; eff. 11-16-99; Crt eff. 2-12-2020.

200 KAR 5:350 Guaranteed energy savings performance contracting {#sec-200-kar-5-350 omnilex-key=us-ky-regs-official--title-200--200 KAR 5:350}

Section 1. Definitions.

(1) "GESPC" means a guaranteed energy savings performance contract as defined in KRS 56.770(5), and further described at KRS 56.774(5).

(2) "Memorandum of understanding" is defined alternatively as "memorandum of agreement" at KRS 45A.690(1)(d).

(3) "Offeror" is defined at KRS 45A.070(6).

(4) "Owner" means:

(a) The Finance and Administration Cabinet; or

(b) The governing board of an institution of postsecondary education that, pursuant to KRS 164A.560(1), has elected to perform in accordance with KRS 164A.555 to 164A.630 regarding capital construction.

(5) "RFP" means a request for proposals as defined in KRS 45A.070(5).

Section 2. Contracting Process.

(1) A GESPC shall be awarded by competitive negotiation in accordance with KRS 45A.085, 200 KAR 5:307, and this administrative regulation.

(2) If a GESPC is needed, owner shall form a selection committee and issue an RFP.

(3) The selection committee shall conduct a walk-through of the proposed project facility which interested potential offerors shall attend, if indicated in the RFP.

(4) An offeror shall submit qualifications, a preliminary proposal, and other information and documentation as set out in the RFP.

(5) The selection committee shall evaluate, rank, and interview each offeror in accordance with the criteria set out in the RFP.

(6) The top-ranked offeror shall:

(a) Be notified and authorized to perform a technical energy audit; and

(b) Submit a final proposal indicating the scope of the guaranteed energy savings performance project.

(7) If an acceptable energy audit and project proposal have not been approved by the selection committee within sixty (60) days from the date of notification provided for in subsection (6) of this section, negotiations with the next highest ranked offeror shall be initiated, unless owner has granted an extension of time to the top-ranked offeror.

(8) Owner shall enter into a memorandum of understanding with an entity occupying facilities involved in a guaranteed energy savings performance project. The memorandum shall state the responsibilities and obligations of each party, including reporting, administration, and repayment.

Section 3. Required Contract Terms. A GESPC shall contain the following language.

(1) "All savings projected shall be guaranteed to owner."

(2) "A professional engineer licensed in the state of Kentucky shall supervise, review, and approve all design work done in relation to this project."

(3) "The term of this contract shall not exceed the life of the energy savings generated from implementation of the energy efficiency measures financed by the contract, in accordance with KRS 56.770(5)."

(4) "The contractor shall maintain specific standards of comfort, safety, and functionality as determined by the owner. Persistent failure to maintain the defined climate and lighting conditions shall constitute a breach of contract by the contractor."

(5) "Combined savings achieved by the installed projects shall be sufficient to cover all project costs, including debt service and contractor fees maintenance, monitoring, and other services, for the duration of the contract term. If a project does not generate the guaranteed level of savings in any predefined reconciliation term, the contractor shall be liable to owner for the amount of the shortfall plus related costs, in accordance with KRS 56.770(5)."

(6) "The contractor shall provide a sufficient number of sets of operation and maintenance manuals for all equipment replacements or upgrades at each location. The number of sets of manuals shall be determined by owner."

(7) "Owner shall have the right to inspect, test, and approve the work conducted under this contract during construction and operation."

(8) "All drawings, reports, and materials prepared by the contractor in performance of the contract shall become the property of owner and shall be delivered to owner as needed or upon completion of construction."

History

RELATES TO: KRS 56.770-56.784
STATUTORY AUTHORITY: KRS 56.784(2)
NECESSITY, FUNCTION, AND CONFORMITY: KRS 56.784(2) requires the Finance and Administration Cabinet to promulgate administrative regulations to establish a process for procurement of energy savings performance contracts, including required contract language. This administrative regulation establishes the process for procurement of energy-savings performance contracts.
History: 29 Ky.R. 1429; Am. 2087; eff. 2-16-03; Crt eff. 2-10-2020.

200 KAR 5:355 Public-private partnership delivery method {#sec-200-kar-5-355 omnilex-key=us-ky-regs-official--title-200--200 KAR 5:355}

Section 1. Definitions.

(1) "Cabinet" means the Finance and Administration Cabinet.

(2) "Capital project" is defined by KRS 45.750(1)(f), except that for purposes of this administrative regulation, capital project shall include all projects regardless of the size or scope of same.

(3) "Contract" is defined by KRS 45A.030(8).

(4) "General fund revenues" means the total combined revenue receipts of the local government or local governments that are a party to the public-private partnership agreement from the imposition of ad valorem taxes, occupational license taxes, insurance premium taxes, and franchise fees.

(5) "Governmental body" is defined by KRS 45A.030(17).

(6) "Kentucky Local Government Public-Private Partnership Board" is established and defined by KRS 65.028(11).

(7) "Local government" is defined by KRS 65.028(1)(c).

(8) "Private partner" is defined by KRS 45A.030(21) and KRS 65.025(1)(g).

(9) "Public-private partnership" is defined by KRS 45A.030(23).

(10) "Total contractual value" means the cumulative amount to be paid or reasonably estimated to be paid over the entire term of the public-private partnership agreement between the local government or local governments and the private partner or private partners in consideration of the performance of the private partner or partners.

(11) "Using agency" is defined by KRS 45A.030(30).

Section 2. Use of a Public-Private Partnership.

(1) A public-private partnership may be utilized for construction or financing of a capital project or the procurement of services if the head of a governmental body or a local government issues a written determination that due to the nature or circumstances of a capital project or services, a public-private partnership is the most advantageous method of awarding and administering a capital project or other contract.

(2) In determining if the use of a public-private partnership is the most advantageous method of awarding and administering a capital project or other contract, the head of a governmental body or local government, or a person authorized in writing as his or her designee, shall undertake an analysis of the proposed capital project or other contract to determine if a public-private partnership is the procurement method most advantageous to the governmental body or local government that incorporates the components established in this subsection.

(a) Qualitative considerations. The using agency or local government shall evaluate the potential public-private partnership utilizing the following criteria:

The ability of the using agency or local government to allocate and control risks, responsibilities, and rewards between itself and a private partner in a way that ultimately benefits the using agency or local government and the citizens it serves;
The timeliness of completion and efficiency of delivery of a capital project or other contract via a public-private partnership as compared with other project delivery methods;
A determination that the tangible and intangible benefits to be gained by using a public-private partnership equals or exceeds the cost of developing and maintaining a public-private partnership;
The ability and expertise of the using agency or local government to measure and monitor performance and operational controls;
The ability of the using agency or local government to capture and utilize incentives, efficiencies, and expertise derived from the involvement of a private partner;
If the capital project or other contract is likely to be developed or entered into in the absence of private sector involvement;
If the public interest is best served through the use of a public-private partnership; and
The urgency of need for the capital project or services by the governmental body or local government.

(b) Quantitative Analysis. The using agency or local government shall conduct a quantitative analysis of using a public-private partnership for a given capital project or other contract. The analysis shall include:

Net present value of the cost of the capital project or other contract over its entire useful life, including, if applicable:

a. Financing, planning, design, and construction costs;

b. Operation and management costs;

c. Any payments the using agency or local government is required to make to the private partner; and

d. Maintenance costs;

The allocation of risks and contingencies between the using agency or local government and the private partner;
Operating cash flows reasonably expected to provide a return on investment to a private partner;
The net present value of payment the using agency or local government is likely to receive from the private partner or third parties over the life of the capital project or other contract; and
The anticipated value of the capital project or other contract deliverables at the end of the term of the public-private partnership, if any.

(c) Privatization Analysis. Before award of a contract for a public-private partnership, the using agency and the cabinet shall satisfy all of the requirements of KRS 45A.550-45A.554 and 200 KAR 5:340 related to privatization of existing governmental services, if applicable.

(d) Local Government Public-Private Partnerships Subject to Review by the Kentucky Local Government Public-Private Partnership Board. If the total contractual value of a proposed public-private partnership between a local government and a private partner equals or exceeds thirty (30) percent of the general fund revenues received by the local government in the immediately preceding fiscal year, the local government shall submit the proposed public-private partnership agreement to the cabinet and the Department for Local Government for evaluation and presentation to the Kentucky Local Government Public-Private Partnership Board in accordance with KRS 65.028(12) or 65.028(16).

Section 3. Submission of Unsolicited Proposals.

(1) Persons, businesses, or other entities may submit unsolicited proposals for a capital project or other contract utilizing a public-private partnership to a governmental body with a copy to the Secretary of the Finance and Administration Cabinet.

(2) Persons, businesses, or other entities wishing to submit an unsolicited proposal for a public-private partnership with a local government shall submit the proposals to the local government with a copy to the Department for Local Government. If the total contractual value of the proposed public-private partnership equals or exceeds thirty (30) percent of the general fund revenues received by the local government in the immediately preceding fiscal year, the Department for Local Government with the assistance of the cabinet shall evaluate each proposal and present same to the Kentucky Local Government Public-Private Partnership Board in accordance with KRS 65.028(12) or 65.028(16).

(3) Proposals submitted pursuant to subsection (1) of this section shall be considered in the manner prescribed in KRS 45A.077(12) and evaluated pursuant to the criteria set forth in Section 2 of this administrative regulation.

(4) Proposals submitted pursuant to subsection (2) of this section shall be considered in the manner prescribed in KRS 65.028(17) and evaluated pursuant to the criteria set forth in Section 2 of this administrative regulation.

(5) A valid unsolicited proposal shall:

(a) Be independently originated and developed by the person or persons, business or businesses, or other entities submitting the proposal;

(b) Be prepared without government supervision, endorsement, direction or direct government involvement; and

(c) Include sufficient detail to permit a determination that government support would be worthwhile and that the proposal could benefit the using agency or local government's constituency.

(6) All unsolicited proposals shall be submitted in a sealed envelope marked "unsolicited proposal." If an unsolicited proposal contains trade secrets, financial records, or other information that would be exempt from public disclosure pursuant to KRS 61.878 or other applicable law, persons, businesses, or other entities submitting unsolicited proposals shall:

(a) Include a cover letter with the proposal, notifying the governmental body or local government that exempt information is contained in the proposal;

(b) Mark all portions of the proposal that contain exempt information as "confidential" or "proprietary"; and

(c) Submit a second copy of the proposal from which the trade secrets, financial records, or other information that would be exempt from public disclosure pursuant to KRS 61.878 or other applicable law have been redacted.

(7) Except for each portion of an unsolicited proposal that contains trade secrets, financial records, or other information that would be exempt from public disclosure pursuant to KRS 61.878 or other applicable law, all unsolicited proposals shall be available for public inspection after the latter of:

(a) The date of the written notification sent by a governmental body or local government that it has rejected the unsolicited proposal;

(b) Sixty (60) days after the end of the notice period provided under KRS 45A.077(12)(b)2. or KRS 65.028(17)(b)2.; or

(c) The date of the award of a contract by a governmental body or local government following an open, competitive procurement process conducted pursuant to KRS 45A.077(12)(c) or KRS 65.028(17)(c).

Section 4. Other considerations.

(1) The using agency and the cabinet or local government may ascribe relative weight to the criteria established in Section 2 of this administrative regulation, giving due consideration to the size and nature of the capital project or other contract as well as the previous experience of the using agency or local government, if any, in utilizing public-private partnerships under similar circumstances.

(2) All requests for proposals involving the use of a public-private partnership shall comply with KRS 45A.077(4) or 65.028(7) as applicable.

(3) All performance and payment bonding requirements set forth in KRS 45A.190, 45A.435, and any other statute or local ordinance, shall remain in effect for capital projects and other contracts using the public-private partnership project delivery method.

Section 5. Professional Assistance. The using agency and the cabinet are authorized to retain any professional services deemed necessary by the using agency or the cabinet to enable an adequate review and evaluation of a public-private partnership proposal, including those involving local government that shall be approved by the Kentucky Local Government Public-Private Partnership Board in accordance with KRS 65.028(12) or 65.028(16), if the necessary expertise to perform the review or evaluation within the using agency or the cabinet is inadequate or unavailable. The cost of any professional service, including the cost of any study performed, shall be borne by the private partner if possible. If it is deemed necessary by the using agency or local government for the governmental body to bear a portion of the cost of the professional services needed to assist with the evaluation set forth in this administrative regulation, then the cost may be paid by the using agency or local government.

History

RELATES TO: KRS 45A.030, 45A.077, 45A.085, 45A.090, 45A.180, 45A.183, 45A.190, 45A.435, 45A.550-45A.554, 61.878, 65.025, 65.028
STATUTORY AUTHORITY: KRS 45A.035, 45A.077, 45A.085, 45A.180, 45A.183, 65.028
NECESSITY, FUNCTION, AND CONFORMITY: KRS 45A.035 authorizes the Secretary of the Finance and Administration Cabinet to promulgate administrative regulations for the implementation of the Kentucky Model Procurement Code (KRS Chapter 45A). KRS 45A.077 and 65.028 require the secretary to promulgate administrative regulations setting forth the criteria to be used in determining when a public-private partnership is to be used for a particular project. KRS 45A.085 authorizes the secretary to promulgate administrative regulations concerning contracts awarded by competitive negotiation. KRS 45A.180 requires the secretary to promulgate administrative regulations for the implementation of as many recognized alternative methods of management of construction contracting as are determined to be feasible. This administrative regulation establishes guidelines pursuant to KRS 45A.077 and 65.028 relating to public-private partnerships for entities requesting to utilize this procurement delivery method.
History: 43 Ky.R.477, 704, 947; eff. 1-6-2017; Cert. eff. 12-18-2023.

200 KAR 5:365 Alternative project delivery methods for capital construction {#sec-200-kar-5-365 omnilex-key=us-ky-regs-official--title-200--200 KAR 5:365}

Section 1. Definitions.

(1) "Alternative construction delivery method" means a delivery method other than design-bid-build.

(2) "Chief purchasing officer" is defined by KRS 45A.030(3).

(3) "Construction management-at-risk" is defined by KRS 45A.030(6).

(4) "Construction manager-agency" is defined by KRS 45A.030(5).

(5) "Construction manager-general contractor" is defined by KRS 45A.030(7).

(6) "Design-bid-build" is defined by KRS 45A.030(12).

(7) "Design-build" is defined by KRS 45A.030(13).

Section 2. Use of Alternative Construction Delivery Methods.

(1) An alternative construction delivery method may be appropriate for a competitive process, consistent with KRS Chapter 45A, if the chief purchasing officer issues a written determination that due to the nature, detail, or circumstances of a project:

(a) It is not appropriate to solicit competitive bids using the conventional design-bid-build delivery method; and

(b) An alternative construction delivery method is justified. The determination shall include a description of facts justifying use of an alternative construction delivery method, and shall state whether the method to be used shall be one of "construction management-at-risk," "design-build," "construction manager-general contractor," or "construction manager-agency."

(2) The criteria for determining the utilization of a specific alternative delivery method for a particular project shall include factors, such as the project's:

(a) Dollar scope;

(b) Anticipated schedule;

Section 3.

(1) If it has been determined that it is not appropriate to solicit competitive bids using the conventional design-bid-build delivery method, action to deliver a capital construction project using a specific alternative construction delivery method shall commence by solicitation of written proposals as provided in this section. A copy of the request for proposals shall be transmitted to the Capital Projects and Bond Oversight Committee staff.

(2) A solicitation of proposals for competitive negotiation shall state:

(a) That the purchasing agency proposes to enter into competitive negotiation with responsible offerors;

(b) The date, hour, and place that written proposals shall be received;

(d) A description of the services sought and the procurement procedures to be followed;

(e) Specifications, or the location where specifications may be obtained;

(f) The specific qualitative and pricing evaluative factors, with associated scoring values or weights, to be considered in determining the proposal most advantageous to the commonwealth, with qualifications and price to be weighted at not less than twenty-five (25) percent and fifty (50) percent respectively;

(g) The level or quantity of information required from each offeror to allow for equitable evaluation;

(h) The proposed method of award of contract;

(i) Other information as may be desirable or necessary to reasonably inform potential offerors of technical, performance, and any other data and requirements of the procurement;

(j) The existence of a funding limitation, if determined to be in the best interest of the commonwealth;

(k) The amount of the funding limit, if it is determined by the Director of the Division of Contracting and Administration that disclosure of the amount of the funding limit will promote competition and will be in the best interest of the commonwealth; and

(l) The level or amount of stipends, if any, to be provided and to whom, contingent upon funding limitations. Stipends shall only be provided if adequate funds are available over and above the required project costs.

(3) If a funding limit has been established, proposals that exceed the funding limit may be rejected.

Section 4.

(1) Procedures for the manner in which proposals will be evaluated shall be established by the purchasing officer per the requirements of the competitive negotiation for each procurement and shall be set forth in the request for proposals. The purchasing officer may request offerors to submit written clarification or explanation of their proposals, and the proposal of any offeror who fails to respond or to request an extension of time to respond within the time requested may be rejected.

(2) Proposals shall be evaluated based upon factors stated in the request for proposals. Numerical rating systems shall be used.

Section 5. The Director of the Division of Contracting and Administration shall appoint an evaluation committee of scoring and nonscoring (technical) members with membership comprised of personnel from the Finance and Administration Cabinet and the user agency for which the project is being constructed. The Director of the Division of Contracting and Administration shall determine, in writing, the number of committee members based upon the financial scope and technical complexity of the subject project, with no less than four (4), nor more than seven (7), scoring members.

Section 6. Interim preproposal meetings may be conducted with potential offerors to allow for questions and clarifications regarding project plans and specifications provided as a part of the request for proposals. A written confirmation of all information presented in these meetings shall become an official addendum to the procurement documents and provided to all potential offerors. The number of preproposal meetings shall be determined by the Director of the Division of Contracting and Administration and stated in the request for proposals.

Section 7. All written proposals received by the procurement agency in response to a solicitation shall be kept secure and unopened by the purchasing officer until the date and hour established for opening the proposals. If a proposal is not clearly marked, it may be opened for identification purposes, and shall be appropriately identified with reference to the particular procurement and resealed until the time for opening proposals.

Section 8. At the close of the proposal submission deadline, all proposals received shall be opened by the purchasing officer. The purchasing officer shall examine each written proposal received for general conformity with the terms of the procurement. If, after examination of the written proposals initially submitted, there is a written determination that no acceptable proposal has been submitted:

(1) All proposals may be rejected and new proposals may be solicited on the basis of the same, or revised terms; or

(2) The procurement may be abandoned.

Section 9. If, after solicitation of proposals to enter into competitive negotiations, only one (1) proposal responsive to the solicitation is received, the purchasing officer may commence negotiations with the single offeror and any resulting contract entered into with that offeror shall be valid as if it was a competitively negotiated contract and awarded in accordance with KRS 45A.085 and this administrative regulation. The terms and conditions of the contract shall not in any material respect deviate in a manner detrimental to the purchasing agency from the terms and conditions specified in the solicitation for proposals.

Section 10. The purchasing officer shall hold separate any pricing information before forwarding all conforming proposals to the appropriate, designated evaluation committee for qualitative evaluation. Pricing information shall be kept separate and secure until it is combined with the evaluation committee aggregate qualitative scoring to achieve the final score for the procurement process as set forth in the request for proposals.

Section 11. Proposals shall not be subject to public inspection until the procurement process has been completed and a contract awarded to the highest scoring, responsible offeror submitting the proposal determined to be the most advantageous to the commonwealth, based upon the pricing and qualitative evaluation factors set forth in the solicitation.

Section 12. Discussions with offerors by any member of the evaluation committee relative to the procurement shall be discouraged except during the selection committee interview process. Any ex parte communications between offerors and members shall be documented by each member with a written summary of all discussions setting forth both the dates and the general substance of the discussions. Verbatim records of the discussion shall not be required. The written summaries shall become part of the procurement file.

Section 13. An awarded contract utilizing an alternative project delivery method shall be submitted to the Government Contract Review Committee for review in accordance with KRS 45A.690 to 45A.725.

History

RELATES TO: KRS 45A.030, 45A.085, 45A.180, 45A.183, 45A.690-45A.725
STATUTORY AUTHORITY: KRS 45A.180, 45A.183
NECESSITY, FUNCTION, AND CONFORMITY: KRS 45A.180 requires the Secretary of the Finance and Administration Cabinet to promulgate administrative regulations for the implementation of as many recognized alternative methods of management of construction contracting as are determined to be feasible. This administrative regulation implements the provisions of KRS 45A.180 and 45A.183 relating to alternative construction delivery methods.
History: 31 Ky.R. 229; 931, eff. 11-22-2004; 42 Ky.R. 456; 1130; eff. 11-6-2015; TAm eff. 9-12-2018; Crt eff. 3-29-2022.

200 KAR 5:375 Multistep Competitive Sealed Bidding {#sec-200-kar-5-375 omnilex-key=us-ky-regs-official--title-200--200 KAR 5:375}

Section 1. Definitions.

(1) "Acceptable" means the unpriced technical offer is compliant with technical specifications described in the solicitation.

(2) "Multistep sealed bidding" means a two (2) phase process consisting of a technical first phase composed of one (1) or more steps in which bidders may submit unpriced technical offers to be evaluated by the purchasing agency, and a second phase in which those bidders whose technical offers are determined to be acceptable during the first phase have their price bids considered.

(3) "Potentially acceptable" means the unpriced technical offer.

(4) "Prebid conference" means a meeting or discussion with the purchasing officer and interested bidders.

(5) "Reverse auction" means a real-time, structured bidding process, usually lasting less than one (1) hour and taking place during a previously scheduled time and Internet location, during which multiple suppliers, anonymous to each other, submit revised, lower bids to provide the solicited good or service.

(6) "Unacceptable" means the unpriced technical offer is not materially compliant with the technical specifications described in the solicitation to such an extent that there is no reasonable assurance that, by amendment, the offer will meet or exceed the specifications and other requirements.

Section 2. General Terms.

(1) Except for the variations described in this administrative regulation, the provisions of 200 KAR 5:306 shall apply to multistep bidding.

(2) Reverse auction may be used as a form of competitive bidding in a multistep bidding process, and as an alternative to sealed bidding if it is determined by the purchasing officer that it is in the best interest of the commonwealth.

(3) A contract resulting from multistep bidding shall not be awarded for an amount greater than the published price in an existing fixed-price contract with the commonwealth for a substantially similar good or service that was solicited through competitive sealed bids.

Section 3. Multistep Sealed Bidding.

(1) The multistep sealed bidding method may be used if the procurement officer determines in writing that:

(a) Definite criteria exist for evaluation of technical proposals and more than one (1) technically qualified source is expected to be available; or

(b) A reverse auction is in the best interest of the commonwealth; and

Invite and evaluate technical offers to determine their acceptability to fulfill the purchase description requirements;
Conduct discussions for the purposes of facilitating understanding of the technical offer and, if appropriate, obtaining supplemental information, permitting amendments of technical offers, or amending the purchase description;
Accomplish paragraphs (a) and (b) of this section prior to soliciting priced bids; and
Award the contract to the responsive and responsible bidder providing the best value to the commonwealth.

(2) Prebid conferences in multistep sealed bidding. Prior to the submission of unpriced technical offers, the procurement officer may conduct a prebid conference. If a reverse auction shall be part of Phase Two, the process shall be explained during the prebid conference. The issuing agency may respond to questions and concerns during the conference, but the official response from the issuing agency shall be in writing and shall be provided to all potential bidders who attended the prebid conference.

Section 4. Procedure for of Multistep Sealed Bidding.

(1) Multistep sealed bidding shall be initiated by the issuance of a solicitation as required by KRS 45A.080 and FAP 111-35-00, incorporated by reference in 200 KAR 5:021. The multistep solicitation shall state:

(a) That unpriced technical offers are requested;

(b) Whether price bids are to be submitted at the same time as unpriced technical offers or if a reverse auction shall be conducted. If a price bid is required with the unpriced technical offer, the price bids shall be submitted in a separate sealed envelope;

(c) That it is a multistep sealed bid procurement, and priced bids shall be considered only in the second phase and only from those bidders whose unpriced technical offers are found acceptable in the first phase;

(d) The criteria to be used in the evaluation of the unpriced technical offers;

(e) That the purchasing agency, to the extent the procurement officer finds necessary, may conduct oral or written discussions of the unpriced technical offers in accordance with subsection (5) of this section;

(f) That bidders may designate those portions of the unpriced technical offers which contain trade secrets or other proprietary data that are to remain confidential;

(g) That the good or service being procured shall be furnished generally in accordance with the bidder's technical offer as found to be finally acceptable; and

(h) The manner in which the second phase reverse auction shall be conducted, if applicable.

(2) Amendments to the solicitation. After receipt of unpriced technical offers, amendments to the solicitation shall be distributed only to bidders who submitted unpriced technical offers, and those bidders shall be allowed to submit new unpriced technical offers or to amend those submitted. If, in the opinion of the procurement officer, a contemplated amendment will significantly change the nature of the procurement, the solicitation shall be canceled in accordance with KRS 45A.105, and a new solicitation issued.

(3) Receipt and handling of unpriced technical offers. Unpriced technical offers shall be opened publicly, identifying only the names of the bidders. Technical offers and modifications shall be time stamped upon receipt and held in a secure place until the specified date and time. After the date established for receipt of bids, a register of bids shall be open to public inspection and shall include the name of each bidder. Prior to the completion of phase two of the multi-step bidding process, documents related to the bid evaluation process shall be considered preliminary and may only be disclosed to authorized state personnel and those involved in the evaluation process who have a legitimate interest in a particular matter.

(4) Evaluation of unpriced technical offers. The unpriced technical offers submitted by bidders shall be evaluated solely in accordance with the criteria set forth in the solicitation. A bidder shall submit a technical offer in sufficient detail so as to substantially comply with the technical specifications of the solicitation. The unpriced technical offers shall be categorized as:

(a) Acceptable;

(b) Potentially acceptable; or

(5) If the unpriced technical offer is categorized as "potentially acceptable," the bidder shall amend the offer by the specified date. If the offer is not amended by the specified date, the offer shall be classified as unacceptable.

(6) Discussion of unpriced technical offers.

(a) The procurement officer may hold a conference with all bidders at any time during the evaluation of the unpriced technical offers. The purchasing officer may discuss with bidders, including any subcontractor or supplier of goods or services, acceptable and potentially acceptable bids. Discussions may be conducted for the purposes of facilitating understanding of technical offers and specifications and may include:

Obtaining supplemental information;
Amendments to the technical offer;
Amendments to the solicitation; or
A potentially-acceptable offer being amended to become an acceptable offer.

(b) During the course of these discussions the procurement officer shall not disclose any information derived from one (1) unpriced technical offer to any other bidder. Once discussions have begun, any bidder who has submitted an offer found acceptable or potentially acceptable may submit supplemental information modifying or otherwise amending its technical offer at any time until the closing date established by the procurement officer. The procurement officer shall notify all acceptable or potentially acceptable bidders in writing when no additional supplemental information may be submitted.

(7) Technical evaluation. The evaluation of technical offers shall be in writing. If the solicitation is for computer hardware, software and related services, the purchasing agency shall comply with FAP 111-15-00(2), incorporated by reference in 200 KAR 5:021. A written record shall be maintained and become a part of the bid file.

(8) Unacceptable unpriced technical offer. The procurement officer shall record in writing the basis for finding an offer unacceptable and make it part of the procurement file. A bidder whose technical offer is determined to be unacceptable shall not be allowed to amend or supplement the technical offer.

(9) The procurement officer may initiate Phase Two of the multistep bidding if, in the procurement officer's opinion, there are sufficient acceptable unpriced technical offers to assure effective price competition in the second phase without modification or alteration of the offers. If the procurement officer finds that there are not sufficient acceptable unpriced technical offers to assure effective price competition in the second phase without modification or alteration of the offers, the procurement officer shall issue an amendment to the solicitation or engage in technical discussions as set forth in subsection (5) of this section.

(10) Mistakes during multistep sealed bidding. Mistakes may be corrected or bids may be withdrawn during:

(a) Before unpriced technical offers are evaluated;

(b) After any discussions have commenced under subsection (5) of this section;

(d) In accordance with 200 KAR 5:306 and FAP 111-35-00, incorporated by reference in 200 KAR 5:021.

Section 5. Procedure for Phase Two of Multistep Sealed Bidding.

(1) Upon the completion of the multistep bidding process, public notice shall not be required for Phase Two. The procurement officer shall either:

(a) Open price bids submitted in from bidders whose unpriced technical offers were found to be acceptable; if the offers have remained unchanged and the solicitation has not been amended;

(b) Invite each bidder whose technical offer was determined to be acceptable to submit a price bid; or

(2) If in the best interest of the commonwealth, the reverse auction shall be an open and interactive process where pricing is submitted, made public immediately, and bidders are given opportunity to submit revised, lower bids, until the bidding process is closed.

(3) The solicitation of price bids for a reverse auction shall establish a date and time for the beginning and close of the reverse auction. The closing date and time may be a fixed point in time or may remain dependent on a variable specified in the solicitation.

(4)

(a) Following receipt of the first bid after the beginning of the reverse auction, the lowest bid price shall be posted electronically, and updated as other bidders submit bids.

(b) At any time before the closing date and time, a bidder may submit a lower bid.

(5) Mistakes during reverse auctions.

(a) Withdrawal. If a mistake in a bid is attributable to an error in judgment, the bid may not be withdrawn. If a mistake in a bid is inadvertent, withdrawal or correction may be permitted to the extent it is not contrary to the interest of the purchasing agency or the fair treatment of other bidders. If a bid is withdrawn, a later bid submitted by the same bidder may not be for a higher price. If the lowest responsive bid is withdrawn due to an inadvertent mistake after the closing date and time, the procurement officer shall determine in writing whether to:

Award the contract to the next lowest responsive vendor;
Cancel the solicitation; or
Reopen Phase Two bidding to all bidders whose technical offers were determined acceptable during.

(b) If Phase Two bidding is reopened, the procurement office shall notify all other bidders whose technical offers were determined acceptable during of the new date and time for the beginning and close of Phase Two bidding.

(c) Confirmation of bid. If it appears from a review of the bid that a mistake has been made, the bidder shall be requested to confirm the bid. Situations in which confirmation shall be requested include obvious, apparent errors on the face of the bid or a bid unreasonably lower than the other bids submitted. If the bidder alleges mistake, the bid may be corrected or withdrawn if the conditions set forth in subsection (5)(a) of this section are met.

History

RELATES TO: KRS 45A.080
STATUTORY AUTHORITY: KRS 45A.035
NECESSITY, FUNCTION, AND CONFORMITY: KRS 45A.035 authorizes the secretary of the Finance and Administration Cabinet to promulgate administrative regulations for the implementation of the Kentucky Model Procurement Code (KRS Chapter 45A). This administrative regulation implements a multistep bidding process under the provisions of KRS 45A.080.
History: 31 Ky.R. 508: Am. 1233; eff. 1-21-2005; Crt eff. 2-12-2020.

200 KAR 5:380 Protests {#sec-200-kar-5-380 omnilex-key=us-ky-regs-official--title-200--200 KAR 5:380}

Section 1.

(1) For purposes of computing the two (2) calendar week deadline for the submission of protests pursuant to KRS 45A.285(2), the following presumptions shall apply:

(a) For protests based upon alleged improprieties in a solicitation for bids or proposals which relate to the solicitation documents themselves, the facts giving rise to the protest shall be presumed to have been known to the protester on the date the solicitation, or a modification to it, was posted to the Commonwealth of Kentucky's eProcurement Web site, www.eprocurement.ky.gov. Alleged improprieties in a solicitation for bids or proposals may include disputes arising from specifications requiring items deemed to be equivalent or a sole brand in accordance with KRS 45A.170(d).

(b) For protests based upon alleged improprieties in the award of a contract, the facts giving rise to the protest shall be presumed to have been known to the protester on the date the notice of award of a contract was posted to the Commonwealth of Kentucky's eProcurement Web site, www.eprocurement.ky.gov.

(2) The presumption may be overcome by a showing that the facts giving rise to the protest were not and should not have been known to the protester on the date established by subsection (1)(a) or (b) of this section.

Section 2. A protest filed in accordance with KRS 45A.285 shall be in writing and shall contain the following information:

(1) Name, address, fax and telephone numbers, and e-mail address of the protester;

(2) Solicitation or contract number;

(3) Detailed statement of the legal and factual grounds for the protest, including a description of the prejudice resulting to the protester;

(4) Identification of documents which the protestor believes necessary to assess the factual or legal basis of the protest;

(5) Statement as to the nature of relief requested;

(6) The date the facts giving rise to the protest became known to the protester; and

(7) If necessary to rebut the presumption established by Section 1(1) of this administrative regulation, all relevant factual information establishing the timeliness of the protest under KRS 45A.285(2) and purported to be sufficient for a justifiable finding of timeliness under that statutory provision. Failure to comply with this subsection, if necessary, shall conclusively render the protest untimely.

Section 3.

(1) A protest shall be filed with the Secretary of the Finance and Administration Cabinet by personal delivery, U.S. mail, or by a private express mail service. The Secretary of the Finance and Administration Cabinet shall not accept a protest submitted by electronic transmission, including facsimile transmission or electronic mail.

(2) For the purposes of KRS 45A.285, "filed" shall mean actual receipt by the Office of the Secretary of the Finance and Administration Cabinet.

(3) A protest which, on its face, is untimely, fails to establish standing to protest, or fails to include the information required by Section 2 of this administrative regulation, shall be summarily determined and denied.

History

RELATES TO: KRS 45A.170(d), 45A.285
STATUTORY AUTHORITY: KRS 45A.035
NECESSITY, FUNCTION, AND CONFORMITY: KRS 45A.035 authorizes the Secretary of the Finance and Administration Cabinet to promulgate administrative regulations for the implementation of the Kentucky Model Procurement Code, KRS Chapter 45A. This administrative regulation establishes a more definitive filing deadline for written protests relative to individual solicitations and defines the information required to be contained in all written protests in order to allow more efficient, expeditious, and on the record resolution of protests.
History: 31 Ky.R. 2584; 702; eff. 11-5-2004; 35 Ky.R. 2331; 2663; eff. 7-6-2009; Crt eff. 2-12-2020.

200 KAR 5:390 Registration to collect Kentucky sales and use tax {#sec-200-kar-5-390 omnilex-key=us-ky-regs-official--title-200--200 KAR 5:390}

Section 1.

(1) Any person awarded a contract with the Commonwealth to provide goods or services subject to sales and use tax pursuant to KRS 139.200 and 139.310 shall submit to the contracting agency, prior to execution of a contract:

(a) A copy of the appropriate sales and use tax permit or permit update form, using Form 51A101(a), (b), (c), or (d), which are incorporated by reference in 103 KAR 3:020, for the person and each of its affiliates if they are registered with the Department of Revenue to collect and remit the sales and use tax imposed by KRS Chapter 139; or

(b) Form 10A100, Kentucky Tax Registration application, which is incorporated by reference in 103 KAR 3:010, for the person and each of its affiliates, if not registered.

(2) If a person or an affiliate is not registered but an application for registration is made, any contract awarded to the person shall be conditional upon the registration process being completed.

(3) The person and each of its affiliates shall remain registered for the duration of any contract awarded.

Section 2. Failure to submit the required documentation or to remain registered and in compliance with the sales and use tax filing and remittance requirements of KRS 139.540 and 139.550 throughout the duration of the contract shall constitute a material breach of the contract and the contract may be terminated, unless the secretary of the Finance and Administration Cabinet, or his designee, makes a written determination that continuation of the procurement is necessary to protect substantial interests of the Commonwealth.

History

RELATES TO: KRS 45A.067, 139.200, 139.310, 139.540, 139.550
STATUTORY AUTHORITY: KRS 45A.067(5)
NECESSITY, FUNCTION, AND CONFORMITY: KRS 45A. 067(2) requires a person contracting with the Commonwealth to register with the Department of Revenue to collect and remit the sales and use tax imposed by KRS Chapter 139, and KRS 45A.067(5) requires the secretary of the Finance and Administration Cabinet to promulgate an administrative regulation to establish the procedure for ensuring compliance with this requirement. This administrative regulation establishes the registration procedure for ensuring compliance.
History: 35 Ky.R. 676, Am. 1151, eff. 12-5-2008; Crt eff. 2-12-2020.

200 KAR 5:400 Kentucky resident bidder reciprocal preference {#sec-200-kar-5-400 omnilex-key=us-ky-regs-official--title-200--200 KAR 5:400}

Section 1. Definitions.

(1) "Contract" is defined by KRS 45A.490(1).

(2) "Nonresident bidder" is defined by KRS 45A.494(3).

(3) "Public Agency" is defined by KRS 45A.490(2).

(4) "Resident bidder" is defined by KRS 45A.494(2).

(5) "Response" means any bid or response submitted to a solicitation.

(6) "Solicitation" means an invitation for bid, request for proposal, advertisement for bid, or another formal method of soliciting a contract issued by a public agency.

Section 2. Claiming Resident Bidder Status.

(1) Any individual, partnership, association, corporation, or other business entity claiming resident bidder status shall submit along with its response a notarized affidavit that affirms that it meets the criteria to be considered a resident bidder as set forth in KRS 45A.494(2).

(2) If requested, failure to provide documentation to a public agency proving resident bidder status shall result in disqualification of the bidder or contract termination.

Section 3. Determination of Residency for Nonresident Bidders.

(1) The state of residency for a nonresident bidder, for purposes of this administrative regulation, shall be its principal office as identified in the bidder's certificate of authority to transact business in Kentucky as filed with the Commonwealth of Kentucky, Secretary of State.

(2) If the bidder is not required to obtain a certificate of authority to transact business in Kentucky, its state of residency shall be the mailing address provided in its bid.

Section 4. Applying the Reciprocal Preference.

(1) Once all responsible and responsive bidders to a solicitation have been scored and ranked, the residency of each bidder shall be identified.

(2) A preference equal to the preference given or required by the state of the highest evaluated nonresident bidders shall be given to all responsive and responsible resident bidders.

(3) The responses shall then be rescored and re-ranked to account for any applicable preferences.

(4) In awarding a contract, resident bidders shall only receive preference against nonresident bidders residing in a state that gives a preference to bidders from that state. This preference shall not be applied against nonresident bidders residing in states that do not give preference against Kentucky bidders.

(5) If a procurement determination results in a tie between a resident bidder and a nonresident bidder, preference shall be given to the resident bidder.

(6) This administrative regulation shall not result in a nonresident bidder receiving a preference over another nonresident bidder.

History

RELATES TO: KRS 45A.050(7), 45A.070(1), 45A.090(2), 45A.180(1), 45A.182(1)(c), 45A.365, 45A.370, 45A.375, 45A.695, 45A.745, 45A.825, 45A.853, 160.303, 162.070, 164A.575, 164A.590, 176.010, 176.082.
STATUTORY AUTHORITY: KRS 45A.494
NECESSITY, FUNCTION, AND CONFORMITY: KRS 45A.494(6) requires that the Finance and Administration Cabinet promulgate administrative regulations to establish the procedure by which a reciprocal preference shall be given to Kentucky resident bidders. This administrative regulation establishes the procedures by which a reciprocal preference shall be given to Kentucky resident bidders.
History: 37 Ky.R. 1109; Am. 1627; eff. 2-4-2011; Crt eff. 2-12-2020.

200 KAR 5:410 Preferences for purchases of commodities or services {#sec-200-kar-5-410 omnilex-key=us-ky-regs-official--title-200--200 KAR 5:410}

Section 1. Definitions.

(1) "Bidder" means any entity submitting a response to a solicitation.

(2) "Qualified bidder" means Kentucky Industries for the Blind, Incorporated; any nonprofit corporation that furthers the purposes of KRS Chapter 163; or a qualified nonprofit agency for individuals with severe disabilities as described in KRS 45A.465(3).

(3) "Solicitation" means any invitation for bids, request for proposals, advertisement for bid, or any other method of soliciting a contract issued by a public agency.

Section 2. Percentage Preference.

(1) Products made by the Department of Corrections, Division of Prison Industries, shall receive a preference equal to twenty (20) percent of the maximum points awarded to a bidder in a solicitation.

(2) Products or services provided by a qualified bidder shall receive a preference equal to fifteen (15) percent of the maximum points awarded to a bidder in a solicitation.

Section 3. Claiming Qualified Bidder Status.

(1) Except for Kentucky Industries for the Blind, Incorporated, a bidder claiming qualified bidder status shall submit along with its response to a solicitation a notarized affidavit which affirms that it meets the requirements to be considered a qualified bidder.

(2) If requested, failure to provide documentation to a public agency proving qualified bidder status may result in disqualification of the bidder or contract termination.

History

RELATES TO: KRS 45A.465, 45A.470
STATUTORY AUTHORITY: KRS 45A.470, 45A.045(2), 45A.055
NECESSITY, FUNCTION, AND CONFORMITY: KRS 45A.045(2) requires the Finance and Administration Cabinet to promulgate administrative regulations to govern purchasing by or for agencies. This administrative regulation establishes requirements setting forth the preference given to qualified entities identified in KRS 45A.470(1).
History: 37 Ky.R. 1111; Am. 1411; eff. 1-3-2011; Crt eff. 2-19-2020.

Chapter 6 Property

200 KAR 6:015 Real property inventories {#sec-200-kar-6-015 omnilex-key=us-ky-regs-official--title-200--200 KAR 6:015}

Section 1. The Division of Real Properties of the Finance and Administration Cabinet shall be responsible for maintenance of inventory records for all state-owned land and buildings.

Section 2. The inventory shall be supplied to the Division of Real Properties by each agency. The report will be as of June 30th and received by the Division of Real Properties no later than September 30th. All inventory records shall be kept current.

Section 3. Forms for reporting the inventory of both land and buildings shall be supplied by the Division of Real Properties.

(1) Land: each installation shall require a separate inventory report Form B 117-6/FTR-10. For purposes of inventory reporting, an installation shall be state-owned land that completely encloses a definable area of land that is administered by a single state agency. If a tract of land is completely separated by privately owned land, then each tract of land shall be reported by the agency as a separate installation. Contiguous tracts of state-owned land administered by different state agencies shall be reported by these agencies as separate installations.

(2) Buildings.

(a) Each individual building valued at more than $5,000 shall be reported on a separate inventory report Form B 117-6/FTR-10.

(b) If acquisition costs are not known for the land or buildings, the current appraisal price as established by the Department of Insurance shall be used for the cost.

Section 4. Periodic inspections may be made by the Division of Real Properties to determine accuracy of reports. When changes in the state agency's inventory become necessary because of sales, purchases, demolitions, and modifications to the state-owned buildings, the state agency shall adjust their inventory records accordingly and shall provide a copy of the adjusted inventory record to the Division of Real Properties on Form B 117-6/FTR-10.

History

RELATES TO: KRS 45A.045(4)
STATUTORY AUTHORITY: KRS 45A.045
NECESSITY, FUNCTION, AND CONFORMITY: KRS 45A.045 authorizes the Finance and Administration Cabinet to promulgate administrative regulations as necessary to serve as the central procurement and contracting agency for the Commonwealth. KRS 45A.045(4) authorizes the cabinet to promulgate an administrative regulation for the sale, transfer, or disposal of state property. This administrative regulation provides for taking of inventories of real property and buildings and the filing of inventories with the Division of Real Properties, Finance and Administration Cabinet.
History: 2 Ky.R. 572; eff. 7-7-76; Am. 18 Ky.R. 1370; eff. 1-10-92; Crt eff. 2-10-2020; 46 Ky.R. 1800; eff. 3-3-2020.

200 KAR 6:040 Floodplain management {#sec-200-kar-6-040 omnilex-key=us-ky-regs-official--title-200--200 KAR 6:040}

Section 1. General.

(1) Purpose. The purpose of this administrative regulation is to minimize the loss of lives and property due to floods. Each state agency undertaking a development activity within the base flood plains of the state shall comply with this administrative regulation.

(2) Definitions. Unless otherwise defined, terms in this administrative regulation shall be interpreted to give them the meaning they commonly have.

(a) "Addition to an existing building" means any walled and roofed expansion to the perimeter of a building in which the addition is connected by a common load-bearing wall other than a fire wall. Any walled and roofed addition which is connected by a fire wall or is separated by independent perimeter load-bearing walls is new construction.

(b) "Allowable base flood elevation" means an increase of no more than one (1) foot in the water surface elevation above the existing base flood elevation.

(c) "Area of shallow flooding" means a designated AO Zone on a community's Flood Insurance Rate Map (FIRM) with base flood depths from one (1) to three (3) feet where a clearly defined channel does not exist, where the path of flooding is unpredictable and indeterminate, and where velocity flow may be evident.

(d) "Base flood" means the flood having a one (1) percent chance of being equaled or exceeded in any given year (i.e., 100-year frequency flood).

(e) "Base flood elevation" means the elevation of the existing base flood.

(f) "Base flood plain" means any land area susceptible to a base flood.

(g) "Basement" means that portion of a building having its floor subgrade (below ground level) on all sides.

(h) "Building" means any structure built for support, shelter, or enclosure for any occupancy or storage.

(i) "Development activity" means any manmade change to improved or unimproved real estate by a state agency including, but not limited to, the construction of buildings or other structures, mining, dredging, filling, grading, paving, excavation or drilling operations.

(j) "Elevated building" means a nonbasement building built to have the lowest floor elevated above the ground level by means of fill, solid foundation perimeter walls, pilings, columns (posts and piers), shear walls, or breakaway walls.

(k) "FEMA" means Federal Emergency Management Agency.

(l) "Flood" or "flooding" means a general and temporary condition of partial or complete inundation of normally dry land areas from:

The overflow of inland or tidal waters;
The unusual and rapid accumulation or run-off of surface waters from any source.

(m) "Flood Hazard Boundary Map (FHBM)" means an official map of a community, issued by the Federal Emergency Management Agency, where the boundaries of the areas of special flood hazard have been defined as Zone A.

(n) "Flood Insurance Rate Map (FIRM)" means an official map of a community, on which the Federal Emergency Management Agency has delineated both the areas of special flood hazard and the risk premium zones applicable to the community.

(o) "Flood insurance study" is the official report provided by the Federal Emergency Management Agency. The report contains flood profiles, as well as the Flood Boundary Floodway Map and the water surface elevation of the base flood.

(p) "Flood proofing" means any combination of structural and nonstructural additions, changes, or adjustments to structures which reduce or eliminate flood damage to real estate or improved real property, water and sanitary facilities, structures or their contents.

(q) "Floodway" means the channel of a river or other watercourse and the adjacent land areas that shall be reserved in order to discharge the base flood without cumulatively increasing the water surface elevation more than one (1) foot.

(r) "Floor" means the top surface of an enclosed area in a building (including basement), i.e., top of slab in concrete slab construction or top of wood flooring in wood frame construction. The term does not include the floor of a garage used solely for parking vehicles.

(s) "Functionally dependent facility" means a facility which cannot be used for its intended purpose unless it is located or carried out in close proximity to water, such as a docking or port facility necessary for the loading and unloading of cargo or passengers, shipbuilding, ship repair, or seafood processing facilities. The term does not include long-term storage, manufacture, sales, or service facilities.

(t) "Mean sea level" means the average height of the sea for all stages of the tide.

(u) "Manufactured home" means a structure, transportable in one or more sections, which is built on a permanent chassis and designed to be used with or without a permanent foundation when connected to the required utilities. It does not include recreational vehicles or travel trailers. This term also includes park trailers, travel trailers, and similar transportable structures placed on a site for 180 consecutive days or longer and intended to be improved property.

(v) "New construction" means facilities for which the "start of construction" began on or after the effective date of this administrative regulation.

(w) "Riverine" means relating to, formed by, or resembling a river (including tributaries), streams, brooks, etc.

(x) "Secretary" means the Secretary of the Finance and Administration Cabinet.

(y) "Start of construction" (for other than new construction or substantial improvements under the Coastal Barrier Resources Act (PL 97-348)), includes substantial improvement, and means the date on which the work order was issued by the Finance and Administration Cabinet, provided the actual start of construction, repair, reconstruction, or improvement was within 180 days from the work order date. The actual start means the first placement of permanent construction of a structure (including a manufactured home) on a site, such as the pouring of slabs or footings, installation of piles, construction of columns, or any work beyond the stage of excavation or the placement of a manufactured home on a foundation. Permanent construction does not include land preparation, such as clearing, grading and filling; nor does it include the installation of streets and/or walkways; nor does it include excavation for a basement, footings, piers or foundations or the erection of temporary forms; nor does it include the installation on the property of accessory buildings, such as garages or sheds not occupied as dwelling units or not part of the main structure.

(z) "State" means Commonwealth of Kentucky.

(aa) "State agency" means any state administrative body, department, bureau or division as defined in KRS Chapter 12, and any institution, commission, board, program cabinet, instrumentality, independent state authority, office, or other agency of the state.

(bb) "State facility" means all structures including, but not limited to, buildings, manufactured homes, storage tanks, docks, piers, dams, levees, utilities, roads, and bridges, constructed or placed, and associated land disturbance activities or state-owned lands.

(cc) "Substantial improvement" means any repair, reconstruction, or improvement of a state facility, the cost of which equals or exceeds fifty (50) percent of the current value of the facility either: before the improvement or repair is started; or if the facility has been damaged and is being restored, before the damage occurred. The term does not include: any project for improvement of a structure to comply with existing state health, sanitary, or safety codes solely necessary to assure safe living conditions; or any alteration of a structure listed on the "National Register of Historic Places" or a "State Inventory of Historic Places."

(dd) "Water surface elevation" means the projected heights in relation to mean sea level reached by floods in the flood plains of riverine areas.

Section 2. Application. This administrative regulation shall apply to all base flood plains of the state.

Section 3. Establishing Flood Plains. Base flood plains in the state will be identified in writing by the Natural Resources and Environmental Protection Cabinet. The Finance and Administration Cabinet will use this in determining whether a permit is to be issued.

Section 4. Abrogation and Greater Restrictions. This administrative regulation is not intended to repeal, abrogate, or impair any existing state easements, covenants, or deed restrictions. Where this administrative regulation and another state administrative regulation conflict or overlap, whichever imposes the more stringent restrictions shall apply. Compliance with this administrative regulation does not relieve responsibility for complying with other statutory requirements. All permits as required under CFR 44, Chapter 1, Section 60.3(a)(2) of the National Flood Insurance Program shall be obtained where applicable.

Section 5. Interpretation. In interpreting and applying this administrative regulation, all provisions shall be construed in favor of the state.

Section 6. Warning and Disclaimer of Liability. This administrative regulation shall not subject the state or any officer, agency or employee thereof to any liability for any damages from flooding that may occur or result from compliance with or reliance on this administrative regulation or any administrative decision made pursuant to this administrative regulation.

Section 7. Development Permit.

(1) The Secretary shall administer this administrative regulation by granting, granting with conditions, refusing to grant, or otherwise determining the appropriate action as provided in Section 9 of this administrative regulation, a development permit to state agencies proposing to undertake development activity within the base flood plain, excluding only those activities of the Department of Highways in the Transportation Cabinet relating to the acquiring of right-of-way for, and constructing and maintaining of highways.

(2) The Secretary of the Transportation Cabinet, subject to this administrative regulation, shall grant, grant with conditions, or refuse to grant, a permit for development activities for the Department of Highways. The permit shall include a certification that it was issued pursuant to this administrative regulation and a copy of it shall be provided to the Finance and Administration Cabinet.

Section 8. Flood Plain Management.

(1) Every state agency (except as provided in Section 7 of this administrative regulation) proposing development activity within the base flood plain shall notify the Finance and Administration Cabinet prior to initiating this activity. The notice shall contain a complete description of the proposed development and likely effects of it on the base flood plain; an explanation of why the development shall be located in the flood plain, whether alternative sites were considered, and why alternative sites not in the flood plain were rejected.

(2) The plans and specifications for all construction covered by this administrative regulation shall meet the following criteria:

(a) All development activity within a floodway, except as provided in this section, is prohibited. Necessary utilities are permitted. Except as provided in subparagraph 3 of this paragraph, the following are also permitted in the floodway only if their construction does not cause the flood to exceed the base flood elevation: necessary marine use facilities (other than buildings) when the construction is considered together with full usage of the floodway on the opposite bank; and bridges, with their appurtenances. Construction within the floodway shall be designed to withstand at least the water velocity of the base flood. Dams are permitted only if the base flood plain is held entirely in fee simple. To meet the requirements of this administrative regulation, the following methods shall be acceptable in order of preference:

Design the facility so there is no encroachment within the floodway;
Fully offset the effect of any encroachment into the floodway by stream improvements; or
Determine the increased backwater over the base flood elevation caused by an encroachment and secure any affected land by flood easement or fee simple purchase.
In areas where no floodway is designated, an engineering analysis shall be conducted to establish an appropriate floodway or it shall be demonstrated that the proposed development, in combination with all present and planned development, will not cause the flood to exceed the allowable base flood elevation. The methodology for conducting this analysis may be obtained from FEMA.
If subparagraphs 2, 3, or 4 of this paragraph are used, new flood plain information shall be provided to FEMA.

(b) Development outside the floodway limits, but in the remaining portion of the flood plain, is permitted as follows:

Water supply, sewage, electrical, gas, and all other utilities shall be so located and constructed as to eliminate infiltration of flood waters which could damage the utilities. In the case of on site waste disposal systems, they shall also be located to avoid contamination from them during flooding.
All structures shall be anchored to prevent flotation, collapse, or lateral movement and constructed with materials resistant to flood damage by methods that minimize flood damage.
Electrical, heating, ventilation, plumbing, air conditioning equipment, and other service facilities shall be designed and/or located so as to prevent water from entering or accumulating within the components during conditions of flooding.
No manufactured home shall be allowed in the base flood plain.
Buildings shall be constructed so as to be protected to at least the base flood elevation. Flood protection for these buildings may consist of the following methods in order of preference:

a. Elevation of the lowest floor (including basement) using open works such as columns, walls, piles.

b. Elevation of the lowest floor (including basement) using fill.

c. For nonresidential buildings only, together with attendant utility and sanitary facilities, completely flood proofed watertight with walls substantially impermeable to the passage of water and with structural components able to resist the hydrostatic and hydrodynamic loads and buoyancy effects of the base flood. The adequacy of the flood proofing shall be certified by a professional engineer registered in Kentucky.

(c) New construction or substantial improvements of elevated buildings that include fully enclosed areas formed by foundation and other exterior walls below the base flood elevation shall be designed to preclude finished living space and designed to allow for the entry and exit of floodwaters to automatically equalize hydrostatic flood forces on exterior walls.

Designs for complying with these requirements shall either be certified by a professional engineer or architect or meet the following minimum criteria:

a. Provide a minimum of two (2) openings having a total net area of not less than one (1) square inch for every square foot of enclosed area subject to flooding;

b. The bottom of all openings shall be no higher than one (1) foot above grade; and

c. Openings may be equipped with screens, louvers, valves or other coverings or devices provided they permit the automatic flow of floodwaters in both directions.

a. Electrical, plumbing, and other utility connections are prohibited below the base flood elevation;

b. Access to the enclosed area shall be the minimum necessary to allow for parking of vehicles (garage door) or limited storage or maintenance equipment used in connection with the premises (standard exterior door) or entry to the living area (stairway or elevator); and

c. The interior portion of the enclosed area shall not be partitioned or finished into separate rooms.

(d) Standards for areas of shallow flooding (AO Zones). Located within the areas of special flood hazard are areas designated as shallow flooding areas. These areas have special flood hazards associated with base flood depths of one (1) to three (3) feet where a clearly defined channel does not exist and where the path of flooding is unpredictable and indeterminate; therefore, the following provisions shall apply:

All new construction and substantial improvements of residential structures shall have the lowest floor, including basement, elevated to the depth number specified on the Flood Insurance Rate Map, in feet, above the highest adjacent grade. If no depth number is specified, the lowest floor, including basement, shall be elevated, at least two (2) feet above the highest adjacent grade.
All new construction and substantial improvements or nonresidential structures shall:

a. Have the lowest floor, including basement, elevated to the depth number specified on the Flood Insurance Rate Map, in feet, above the highest adjacent grade. If no depth number is specified, the lowest floor, including basement shall be elevated at least two (2) feet above the highest adjacent grade; or

b. Together with attendant utility and sanitary facilities be completely flood-proofed to or above that level so that any space below that level is watertight with walls substantially impermeable to the passage of water and with structural components having the capability of resisting hydrostatic and hydrodynamic loads and effects of buoyancy.

(e) Improvements to existing facilities are permitted within the flood plain provided:

For facilities located in the floodway, no additions, alterations, encroachments, or relocations will cause flood levels to increase.
Practical alternatives are considered and used to minimize or eliminate flood damages.
Facilities substantially improved shall meet all requirements of new development as contained in this section.

Section 9. Administrative Procedures.

(1) Upon receipt and review by the secretary of notice from a state agency proposing development activity within the flood plain, the secretary shall: issue a development permit; issue a permit with conditions; refuse to issue a permit and provide the reasons for denial; or, in his discretion, determine that such a permit is not required under this administrative regulation.

(2) When a development permit for building construction is issued, the agency undertaking the development in accordance with the terms of the permit shall:

(a) Secure a certification from a land surveyor or professional engineer registered in Kentucky of the elevation of the lowest floor (including basement) or, if flood proofing is utilized, the actual level of flood proofing in relation to the mean sea level and provide the certificate to the secretary within thirty (30) days following its issuance.

(b) Secure certifications, as applicable under Section 8(2)(b)5c of this administrative regulation and provide same to the secretary within sixty (60) days after completion of the building.

(3) The Finance and Administration Cabinet shall maintain for public inspection all certifications and permit records required by these administrative regulations.

History

RELATES TO: KRS Chapters 45, 56
STATUTORY AUTHORITY: KRS 56.185
NECESSITY, FUNCTION, AND CONFORMITY: In order for the Commonwealth of Kentucky to qualify for the purchase of flood insurance for state structures under the National Flood Insurance Program it shall comply with the federal National Flood Insurance Program regulations administered by the Federal Emergency Management Agency. The amendments to 200 KAR 6:040 bring this administrative regulation into compliance with KRS 13A.222.
History: 7 Ky.R. 695; Am. 813; eff. 4-1-81; 14 Ky.R. 1931; 2181; eff. 5-9-88; 18 Ky.R. 1371; eff. 1-10-92; Crt eff. 2-10-2020.

200 KAR 6:060 Lease of new construction {#sec-200-kar-6-060 omnilex-key=us-ky-regs-official--title-200--200 KAR 6:060}

Section 1.

(1) In addition to the information requested in the advertisement made pursuant to KRS 56.803, proposals for new construction in response to invitations to lease office space shall include:

(a) Documentation of ownership of proposed property (i.e. copy of deed or option to purchase);

(b) Scaled plot of the site identifying the location of the proposed building and parking area(s);

(d) Scaled or dimensioned floor plan showing the exterior layout of the proposed building, including walls, doors, windows, columns, and any other structural considerations which may affect design of the interior space; and

(e) Certification that the property is properly zoned.

(2) Subsection (1)(a), (b), and (c) of this section shall be submitted with the initial proposal.

(3) Subsection (1)(d) and (e) of this section shall be submitted no later than the date of the site inspection conducted pursuant to KRS 56.803(10).

Section 2.

(1) Persons with an option to purchase property may submit a proposal to lease such property if a valid, executed option contract is submitted with the proposal.

(2) If a person submits a proposal to lease property under an option contract and is awarded a lease, the purchase of the proposed property shall be completed and proof in the form of a deed submitted along with the signed lease contract.

History

RELATES TO: KRS 56.463, 56.800, 56.803
STATUTORY AUTHORITY: KRS 56.463(2), (8), HB 704
NECESSITY, FUNCTION, AND CONFORMITY: HB 704 requires proposed new construction to be considered in state procurement of leased office space pursuant to KRS 56.803 without going through the build-to-suit process, so long as the proposed new construction does not contain provision for a lease-purchase or an option to purchase by the state. This administrative regulation is necessary in order to set minimum requirements for documentation to be submitted with a proposal for lease of new construction.
History: 25 Ky.R. 946; eff. 12-17-98; Crt eff. 2-10-2020.

200 KAR 6:070 High performance building standards {#sec-200-kar-6-070 omnilex-key=us-ky-regs-official--title-200--200 KAR 6:070}

Section 1. Definitions.

(1) "Committee" means the High-Performance Buildings Advisory Committee established by KRS 56.777.

(2) "ENERGY STAR" is defined by KRS 56.770(17).

(3) "High performance building" is defined by KRS 56.770(7).

(4) "LEED" is defined by KRS 56.770(19).

(5) "Major renovation building project" means a renovation project for which the budget exceeds half of the replacement value of the building being renovated.

(6) "Replacement value" means the insured value.

Section 2. High Performance Building Standards. The standards established in this section shall apply to high performance buildings, in accordance with KRS 56.777.

(1) All new construction and major renovation building projects for the amount of $25 million or more in budget shall be designed, built, and submitted for certification to achieve a rating of Silver Level or higher using the LEED 2009 - New Construction Project Scorecard.

(2) All new construction and major renovation building projects between $5 million and $25 million in budget shall be designed, built, and submitted for certification to achieve a rating of Certified level or higher using the LEED 2009 - New Construction Project Scorecard.

(3) All new construction and major renovation building projects greater than $5 million in budget shall additionally achieve a minimum of 7 points for new and for existing buildings under the LEED Energy and Atmosphere Credit 1, Optimize Energy Performance in the LEED 2009 - New Construction for Member Ballot.

(4) All new construction and major renovation building projects between $600,000 and $5 million in budget shall be designed and built using the LEED Rating System as guidance.

(5) Any new construction or major renovation building project that fails to achieve the LEED rating required under this section shall be considered to have met the requirements of this section, if:

(a) The required rating was not achieved due to the sole failure to receive a point for certified wood, credit 7 in the Material and Resource category of the LEED Rating System; and

(b) The project used wood products certified under the American Tree Farm System (ATFS) or the Sustainable Forestry Initiative (AFI).

Section 3. Exemption From Standards. A new construction or major renovation building project that is required, or that it will otherwise be in the best interest of the Commonwealth to grant an exemption. to meet the high performance building standards may be granted an exemption from the standards if there is an extraordinary undue burden in accordance with subsections (2) and (3) of this section.

(1) An affected agency may request that the Secretary of the Finance and Administration Cabinet, or in the case of a state university, which manages its own capital construction projects under KRS 164A.580, the university's governing board, grant an exemption from the standards in Section 2 of this administrative regulation. This request for exemption shall be made in writing and fully justified.

(2) The Secretary, or the university's governing board with actual jurisdiction, shall have the nondelegable authority to grant an exemption from the standards in Section 2, if the agency adequately demonstrates that an extraordinary undue burden will be placed upon the agency if project compliance is required, or that it will otherwise be in the best interest of the Commonwealth to grant an exemption. If the Secretary or the university's governing board grants an exemption, the exemption shall specify the extent to which the standards in Section 2 of this administrative regulation shall be waived.

(3) Factors to be considered in determining whether to grant an exemption shall include:

(a) Whether the cost of compliance exceeds a building's life-cycle cost savings;

(b) Whether compliance will increase costs beyond the appropriated funding capacity for a project;

(d) Whether compliance will violate federal, state, or local law;

(e) Whether the unique nature of a project makes compliance impractical or not feasible.

(f) Whether another high performance building program, such as the ENERGY STAR rating system or the Green Globes rating system, will be utilized even if an exemption from the standards in Section 2 of this administrative regulation is granted.

(4) If a university's governing board grants an exemption, a copy of the exemption shall be promptly provided to the Secretary of the Finance and Administration Cabinet for informational purposes only.

Section 4. Mandatory Requirement. Pursuant to KRS 56.777(7), each high-performance building shall be designed, constructed, or renovated so that it is capable of being rated as an ENERGY STAR building. An exemption shall not be granted from this requirement.

Section 5. For all new construction and major renovation building projects, agencies shall consider and encourage the use of the items identified in KRS 56.777(8). The use of locally grown lumber shall include wood products certified under the Forest Stewardship Council (FSC), the American Tree Farm System (ATFS), or the Sustainable Forestry Initiative (SFI).

Section 6. In accordance with KRS 56.777(2), the Finance and Administration Cabinet and universities that manage their own capital construction projects under KRS 164A.580 shall give a preference in the leasing process to high performance buildings over other buildings that do not meet these standards, unless an exemption is granted in accordance with Section 2 of this administrative regulation.

Section 7. Universities that manage their own capital construction projects under KRS 164.580 shall provide the Finance and Administration Cabinet with a report on or before September 1 of each odd-numbered year, on the use of energy-efficiency measures, including improvements in energy efficiency planned or realized through the use of high performance buildings standards, in order to allow the Finance and Administration Cabinet to comply with the reporting requirements of KRS 56.782.

Section 8. Incorporation by Reference.

(1) The following material is incorporated by reference:

(a) "LEED 2009 - New Construction Project Scorecard"; and

(b) "LEED 2009 - New Construction for Member Ballot".

(2) This material may be inspected, copied, or obtained, subject to applicable copyright law, at the Department for Facilities and Support Services, Room 340, Bush Building, Frankfort, Kentucky 40601, Monday through Friday, 8 a.m. to 4:30 p.m.

History

RELATES TO: KRS 56.770, 56.775, 56.777, 56.872, 164A.580
STATUTORY AUTHORITY: KRS 56.777
NECESSITY, FUNCTION, AND CONFORMITY: KRS 56.777(7) requires that the Finance and Administration Cabinet promulgate administrative regulations to establish high performance building standards for state building projects, considering recommendations from the High-Performance Buildings Advisory Committee established by KRS 56.777(7). This administrative regulation establishes the criteria for the high performance building standards and the benchmarks by which the standards will be measured in consideration of the Committee's recommendations.
History: 35 Ky.R. 2371; Am. 2764; 36 Ky.R. 20; eff. 7-29-2009; Crt eff. 2-10-2020.

Chapter 12 Personnel

200 KAR 12:020 Unemployment insurance payments {#sec-200-kar-12-020 omnilex-key=us-ky-regs-official--title-200--200 KAR 12:020}

Section 1. All agencies of this state employing persons in positions of "covered employment" as defined in KRS 341.050, may draw from funds as are properly available for the operation of each agency an amount or amounts sufficient to make unemployment insurance payments for each employee engaged in "covered employment." These amounts shall be paid over to the Division of Unemployment Insurance in the Cabinet for Human Resources by interaccount transfer between funds upon receipt of appropriate billing as contemplated by KRS 341.282.

History

RELATES TO: KRS Chapter 341
STATUTORY AUTHORITY: KRS 341.282
NECESSITY, FUNCTION, AND CONFORMITY: KRS 341.050 defines "covered employment." This administrative regulation provides that agencies employing persons in positions of "covered employment" are to draw from funds available amounts sufficient to make unemployment insurance payments for each such employee. These amendments make revisions to the administrative regulation to bring it into compliance with KRS 13A.220(3) and 13A.222(4)(c).
History: Fin-3; 2 Ky.R. 72; eff. 9-10-75; Am. 18 Ky.R. 1378; eff. 1-10-92; Crt eff. 2-10-2020.

200 KAR 12:030 Computing compensation due a state employee after adjudicated penalization {#sec-200-kar-12-030 omnilex-key=us-ky-regs-official--title-200--200 KAR 12:030}

Section 1. Definitions. The following terms, words or phrases shall have the meaning assigned herein, unless the context indicates otherwise:

(1) "Adjudicated penalization" shall include, but not be limited to, the demotion, dismissal, suspension, fine or any other personnel action for which, after appeal, an employee is ordered either by the Personnel Board or by a court of competent jurisdiction to be reinstated to his former position or like position without loss of pay.

(2) "Corrective dates or corrective period" are synonymous terms for the period between the date of adjudicated penalization or removal from the payroll and the date of reinstatement to a former position or a position of like status and pay as provided by KRS 18A.095.

(3) "Gross pay" means the gross amount of pay which an employee would have earned during the corrective period.

Section 2. Time of Payment. When the Personnel Board or a court of competent jurisdiction has ordered an employee reinstated to his former position or a like position without loss of pay, the appointing authority shall within a reasonable time thereafter cause the amount of compensation to which such employee is entitled for the corrective period to be calculated as provided in this administrative regulation.

Section 3. Calculation of Gross Pay.

(1) Calculation of gross pay shall be limited to the amount of gross salary or wages which would have been earned by the employee during the corrective period. If the employee dies or becomes permanently and totally disabled for the performance of duties of the position to which he is entitled to be reinstated prior to his reinstatement, the date of death or the date of total disability shall be deemed to be the last date to which such employee shall be entitled to be paid. In the case of a permanently and totally disabled employee, the last date may be extended by the number of days of sick or annual leave days accrued and to which he is entitled as provided in Section 7 of this administrative regulation.

(2) Gross pay for a full-time employee shall be based on the following:

(a) The grade, classification and monthly pay rate in effect at the time of the adjudicated penalization, plus;

(b) Changes in classification in employee's position or the pay rate by reason of wage surveys, administrative action or legislation;

(c) Allowable increments for which the employee could have been considered eligible by the appointing authority during the corrective period;

(d) Any other changes which would affect the amount of compensation which the employee would otherwise have received if the adjudicated penalization had not occurred.

(3) Part-time employees shall be entitled to all pay increases applicable to full-time employees as set out in paragraph (2) of this subsection, if such employee would otherwise have been eligible to receive them during the corrective period under the administrative regulations of the Department of Personnel.

(4) Gross pay for a part-time employee shall be determined by one (1) of the following methods:

(a) Averaging the number of hours worked by other employees of the agency in the same locality under the same type of appointment, performing the same kind of work that the employee would have performed during the corrective period;

(b) Averaging the hours per week the employee worked during the calendar year preceding the adjudicated penalization.

(5) An employee demoted in grade, and consequently, ordered reinstated to his former position or to a position of like status and pay pursuant to KRS 18A.095, shall be eligible to be paid the difference in salary that he would have earned at his former pay rate and the salary that he earned at the pay rate to which he was demoted for all the entire period of his demotion.

Section 4. Retirement Calculations.

(1) Employer and employee contributions to the Kentucky Employees' Retirement System shall be calculated on the basis of the employee's gross pay. Reductions in the amount due the retirement system shall be made if a portion of these costs were paid during the corrective period, as in the case of a demoted employee.

(2) An employee ordered reinstated by the Personnel Board or a court of competent jurisdiction and who has previously withdrawn his contributions to the retirement system, may elect after reinstatement, to repay the amount withdrawn by deduction from any compensation due him; or, if no compensation is due the employee, then the employee may pay this amount by check. The appointing authority shall in any event pay the employer's share of contributions to the retirement system plus interest at the current legal rate on the employer-employee contributions provided that the employer's share has not previously been paid to the system during the corrective period.

Section 5. Setoff Income.

(1) Except as provided in this subsection, the employee's gross earnings from other employment during the corrective period, shall be setoff against his gross pay as determined in Section 3 of this administrative regulation, to the extent that this income was earned in a number of hours not in excess of the hours the employee would have worked prior to the adjudicated penalization. Furthermore, the income earned during the corrective period shall not be setoff against an employee's gross earnings from other employment, if the income was being earned prior to the corrective period.

(2) In order to determine an employee's gross earnings from other employment during the corrective period, the employee shall furnish the appointing authority with an employee's affidavit, on that form to be provided by the Department of Personnel stating the amounts and sources of all his income during the corrective period.

(3) The income, property or assets of the spouse of the employee shall not be considered in determining the amount of the employee's income to be setoff against the employee's gross pay.

Section 6. Deductions. The appointing authority shall make deductions for the following:

(1) Federal and state income taxes;

(2) Any applicable local payroll and occupational license taxes;

(3) Social Security taxes required by federal and state laws and the applicable regulations of the federal Internal Revenue Service, the Kentucky Revenue Cabinet, and Social Security Administration; and

(4) The amount required to reimburse the state unemployment fund for those unemployment compensation benefits received by the employee during the corrective period.

Section 7. Annual and Sick Leave.

(1) The appointing authority shall calculate the number of days of annual and sick leave that the employee would have accumulated during the corrective period.

(2) When an employee has been ordered reinstated to his former position or a like position, all annual leave and sick leave and compensatory time that the employee accrued and for which he was not paid at the time of dismissal, shall be reinstated.

(3) An employee who does not desire to be reinstated, but who seeks only compensation, may be paid for annual leave time which would have accrued to him during the corrective period based on the Department of Personnel administrative regulations governing the accumulation of annual leave time in effect during the corrective period.

History

RELATES TO: KRS Chapter 18A
STATUTORY AUTHORITY: KRS 18A.105
NECESSITY, FUNCTION, AND CONFORMITY: This administrative regulation repeals 200 KAR 12:010, relating to the calculation of compensation due a state employee following the Personnel Board's or a court's adjudication of an appealed personnel action. This administrative regulation also establishes a modified procedure for calculating the foregoing compensation. Furthermore, this administrative regulation repeals 200 KAR 6:035, pertaining to the leasing of real property on behalf of various state agencies. The provisions of that administrative regulation have been codified under KRS 56.830.
History: 15 Ky.R. 1986; 2149; eff. 3-8-1989; TAm eff. 9-12-2018; Crt eff. 2-10-2020.

Chapter 14 State Investment Commission

200 KAR 14:011 Qualified investments {#sec-200-kar-14-011 omnilex-key=us-ky-regs-official--title-200--200 KAR 14:011}

Section 1. Definitions.

(1) "Commission" means the State Investment Commission.

(2) "Hedge" means a position in a financial instrument taken to minimize or eliminate the risk associated with an existing instrument or portfolio of instruments.

(3) "Interest rate swaps" means an agreement governed by an International Swap and Derivatives Association master contract between two (2) parties to exchange, or have the conditional right to exchange, specified cash flows.

(4) "NRSRO" means "Nationally Recognized Statistical Ratings Organization", which is a credit rating agency that is registered with the Securities and Exchange Commission, and which provides its opinion on the creditworthiness of an entity and the financial obligations issued by that entity.

(5) "Office" means the Office of Financial Management.

(6) "Options" means a contract that provides the right, but not the obligation, to buy or sell a specific amount of a security within a predetermined time period and includes specific bonds or notes, an exchange traded futures contract, or the cash value of an index.

(7) "Pools" means the investment pools that are managed by the Office of Financial Management, under the guidance of the commission.

Section 2. The commission shall:

(1) Not invest state funds in an institution or instrument that it deems unsafe and a threat to the security of state funds;

(2) Maintain adequate liquidity to meet the cash needs of the state; and

(3) Within the limits established by this administrative regulation, invest in securities that maximize yield or return to the Commonwealth.

Section 3.

(1) The commission may:

(a) Engage in securities lending; and

(b) Allow internal transfers between pools to meet short term cash needs.

(2) Within the limited term pool, if borrowing exceeds thirty-three (33) percent of the value of the pool's total assets resulting from a change in values of net pool assets at any time, the pool shall then reduce borrowing to no more than thirty-three (33) percent within three (3) business days and shall continue to use prudence in bringing the percentage of borrowing back into conformity.

Section 4. Interest earned on the cash balances shall be calculated daily on an accrual basis.

Section 5. Investment Criteria.

(1) The criteria to determine the amount of funds per investment instrument shall be the:

(a) Safety of principal and interest;

(b) Liquidity needs of the state in aggregate as budgeted; and

(2) An investment instrument shall qualify if it is specified by:

(a) KRS 42.500;

(b) This administrative regulation;

(d) 200 KAR 14:091.

Section 6. Investment Securities. The commission shall invest only in the following security types as established in this section.

(1) Securities issued by the U.S. Treasury, agency, and government-sponsored enterprises with a maturity of less than seven (7) years, or an embedded put of less than three (3) years.

(2) Mortgage pass-through securities issued by U.S. government agencies or by government-sponsored enterprises, including the Government National Mortgage Association, Fannie Mae, Freddie Mac, and Small Business Administration with an average life of less than four (4) years at the time of purchase, using Bloomberg consensus prepayment projections, if available, or other reasonable prepayment assumptions if there is no consensus. The commission may hold pass-throughs purchased under this subsection that have an average life of less than six (6) years, using Bloomberg consensus prepayment projections, if available, or other reasonable prepayment assumptions if there is no consensus.

(3) Real estate mortgage investment conduit obligations, as defined by the Internal Revenue Code, 26 U.S.C. 1-9834, also known as collateralized mortgage obligations, or CMOs, rated in the highest category by a commission approved NRSRO with an average life of less than four (4) years at the time of purchase, using Bloomberg consensus prepayment projections, if available, or other reasonable prepayment assumptions if there is no consensus. The commission may hold CMOs purchased under this subsection that have an average life of less than six (6) years, using Bloomberg consensus prepayment projections, if available, or other reasonable prepayment assumptions if there is no consensus.

(4) Asset-backed securities (ABS) rated in the highest category by a commission approved NRSRO with an average life of four (4) years or less.

(5) U.S. dollar denominated corporate and Yankee securities issued by foreign and domestic issuers, rated in one (1) of the three (3) highest categories by a commission approved NRSRO, with a maturity not longer than five (5) years, or an embedded put of less than three (3) years.

(6) U.S. dollar denominated sovereign debt rated in one (1) of the three (3) highest categories by a commission approved NRSRO, with a maturity not to exceed five (5) years.

(7) Money market securities including commercial paper, certificates of deposit, and bankers' acceptances issued by banks with the highest short-term rating by a commission approved NRSRO. Maturities shall be limited to 180 days for bankers' acceptances and 270 days for all other money market securities.

(8) Repurchase agreements collateralized at a minimum of 102 percent (marked to market daily) with treasuries, agencies, and agency mortgage backed obligations with a maximum maturity of one (1) year and a maximum of three (3) years for the Kentucky Bank Repurchase Program participants.

(9) Municipal obligations rated in one (1) of the three (3) highest categories by a commission approved NRSRO, with a maturity not to exceed five (5) years. The maturity and credit restriction shall be waived for obligations issued by the Commonwealth of Kentucky or any entity within the Commonwealth of Kentucky.

(10) Mutual funds in which the underlying holdings of the fund are in securities that meet the investment criteria listed in Section 5 of this administrative regulation.

(11) In meeting credit standards listed previously in this section, the lowest rating issued by a commission approved NRSRO shall be used to determine compliance. The commission, at a minimum on an annual basis, shall determine which NRSRO's shall be used.

Section 7. Limits Per Pool on Investment Securities.

(1) U.S. agency mortgage backed securities and collateralized mortgage obligations shall not exceed twenty-five (25) percent of pool assets.

(2) Asset-backed securities shall not exceed twenty (20) percent of pool assets.

(3) U.S. dollar denominated corporate and Yankee and sovereign securities issued by foreign and domestic issuers shall not exceed thirty-five (35) percent of pool assets or $25,000,000 per issuer, inclusive of commercial paper, bankers' acceptances, and certificates of deposit unless these securities are guaranteed by the full faith and credit of the United States government.

(4) Municipal securities shall not exceed $25,000,000 per issuer.

(5) U.S. dollar denominated sovereign debt shall not exceed five (5) percent of pool assets and $25,000,000 per issuer.

(6) The investment amount for a single mutual fund shall not exceed ten (10) percent of pool assets with an exception of twenty-five (25) percent for the short-term pool.

(7) The credit and diversification requirements documented in this administrative regulation shall apply at the time of purchase based on book value for the limited term pool and market value for other pools.

(8) The limits set forth in this section may be waived by unanimous vote of the commission.

Section 8. Risk Management. The pools may utilize interest rate swaps, over-the-counter and exchange traded U.S. Treasury contracts, and options to manage the portfolio's exposure to interest rate risk. These instruments shall only be used if the results are superior to cash market transactions.

Section 9. Pools and Operating Procedures.

(1) Limited term pool.

(a) The pool shall not purchase a security with a final maturity exceeding 365 days.

(b)

The weighted average maturity, adjusted for interest rate resets and demand features, shall not exceed sixty (60) days; and
The weighted average life, adjusted for demand features only, but not interest rate resets, shall not exceed 120 days.

Ten (10) percent of the pool shall be invested in cash, direct obligations of the U.S. government or securities that mature or are subject to a demand feature payable within one (1) business day; and
Thirty (30) percent of the pool shall be invested in cash, direct obligations of the U.S. government, government agency discount note maturing in sixty (60) days or less or securities that mature or are subject to a demand feature payable within five (5) business days.

(d) All securities purchased for the pool shall be rated by a commission approved NRSRO.

(e) The net asset value of pool shares shall be computed using the amortized cost method of valuing the pool's investments.

(f) The shadow net asset value using the market value of pool holdings shall be computed at least monthly and made public within sixty (60) days of the calculation date.

(g) Stress testing of the pool based on redemption and changes in market value shall be performed at least quarterly and reported to the commission.

(h) Monthly portfolio listings shall be published to a public Web site and shall remain available for at least six (6) months.

(2) Operating procedures.

(a) Except as provided by paragraph (b) of this subsection, state funds held in agency or university accounts, the interest of which accrues to the agency or university, shall be placed in the intermediate pool.

(b) These funds may be placed in the limited-term pool, if the commission determines that the liquidity needs of an agency require shorter term investment.

Section 10. Approved Broker-Dealers.

(1) A broker-dealer who was approved by the commission prior to the effective date of this administrative regulation shall be considered an approved broker-dealer.

(2) Except as provided by subsection (1) of this section, a broker-dealer shall be approved by the commission if the broker-dealer has met the requirements established by subsection (3), (4), or (5) of this section, as applicable.

(3) An approved broker-dealer shall be a broker dealer who meets one (1) of the following qualifications:

(a) Is a primary dealer of the Federal Reserve;

(b) Maintains an office in Kentucky, and has either $50,000,000 in excess net capital or has trades that are guaranteed by a primary dealer of the Federal Reserve;

(d) Is an alternative trading system as defined by the Securities and Exchange Commission.

(4) An approved broker-dealer for hedge vehicles shall:

(a) Have at least $130,000,000 in excess net capital;

(b) Have market value transactions limited to his excess net capital; and

International Swap and Derivatives Association Agreement prior to the implementation of a swap; and
Commonwealth of Kentucky Master Agreement, Over-the-counter Option Transactions - U.S. Treasury Securities, prior to the implementation of an over the counter option transaction.

(5) Within 180 days of the end of each broker-dealer's fiscal year, a broker-dealer shall submit a copy of the broker-dealer's audited financial statements for that fiscal year.

(6) A broker-dealer who wishes to be approved by the commission as an approved broker-dealer shall submit a copy of the broker-dealer's current audited financial statements.

(7) Notwithstanding the broker-dealer requirements described in this section, the state may purchase securities directly from the issuer.

Section 11. Incorporation by Reference.

(1) The following material is incorporated by reference:

(a) "Securities Industry and Financial Markets Association Master Repurchase Agreement", 12/08;

(b) "Custodial Undertaking in Connection with Master Repurchase Agreement, Bank of New York", 12/08;

(d) "International Swap and Derivatives Association Agreement", 12/02; and

(e) "Commonwealth of Kentucky Master Agreement, Over-the-counter Option Transactions - U.S. Treasury Securities", 12/97.

(2) This material may be inspected, copied, or obtained, subject to applicable copyright law, at State Investment Commission, 200 Mero Street, 5th Floor, Frankfort, Kentucky 40622Monday through Friday, 8 a.m. to 4:30 p.m. and online at the Office of Financial Management's Web site at https://finance.ky.gov/office-of-the-controller/office-of-financial-management/Pages/default.aspx.

History

RELATES TO: KRS 42.500(9)-(14), 42.520, 42.525, 17 C.F.R. 270.2a-7, 15 U.S.C. 80a, 26 U.S.C. 1-9834
STATUTORY AUTHORITY: KRS 42.500(10), 42.520(2), 42.525
NECESSITY, FUNCTION, AND CONFORMITY: KRS 42.500(10) requires the State Investment Commission to promulgate administrative regulations for the investment and reinvestment of state funds. KRS 42.520(2) requires the commission to promulgate administrative regulations concerning the assignment of priorities to public depositories. KRS 42.525(1) requires the commission to promulgate administrative regulations for the investment and reinvestment of state funds and the acquisition, retention, management, and disposition of investments. This administrative regulation establishes the standards that govern the commonwealth's investment and cash management programs.
History: 19 Ky.R. 537; Am. 1065; eff. 10-22-1992; 24 Ky.R. 1353; 1645; eff. 2-10-1998; 26 Ky.R. 418; 993; eff. 10-28-1999; 29 Ky.R. 2727; 30 Ky.R. 20; eff. 7-17-2003; 31 Ky.R. 1878; 32 Ky.R. 47; eff. 8-5-2005; 35 Ky.R. 2332; 2664; eff. 7-6-2009; 39 Ky.R. 814; 1108; eff. 1-4-2013; 41 Ky.R. 2604; eff. 9-4-2015; Cert. eff. 3-29-2022; 51 Ky.R. 515, 1074; eff. 3-4-2025.

200 KAR 14:081 Repurchase agreement {#sec-200-kar-14-081 omnilex-key=us-ky-regs-official--title-200--200 KAR 14:081}

Section 1. Definitions.

(1) "Commission" means the State Investment Commission.

(2) "Eligible financial institution" means an entity approved for repurchase agreements by the commission.

(3) "Office" means the Office of Financial Management.

(4) "Repurchase agreement" means an actual, conditional purchase or sale of securities of the United States Treasury, an agency, instrumentality, or corporation of the United States, or another security authorized for investment pursuant to KRS 42.500(9)(a) or (b), with an agreement to resell or repurchase the securities to their original owner on a specific date in the future.

Section 2. Minimum Interest Rates. The commission shall not invest public funds in a repurchase agreement with a yield less than may be received on a directly purchased United States Treasury security of comparable maturity.

Section 3. Reporting Requirements for Eligible Investment Institutions. The commission shall inform eligible financial institutions of the reporting requirements for the investment of state funds in eligible financial institutions established by this section. An eligible financial institution shall:

(1) Submit a copy of its quarterly financial reports including accompanying schedules, to the commission within thirty (30) days from the end of each quarter; and

(2) Complete and sign the Securities Industry and Financial Markets Association Master Repurchase Agreement, including completion of the Custodial Undertaking in Connection with Master Repurchase Agreement as needed or required, incorporated by reference in 200 KAR 14:011.

Section 4. Eligible Securities. Investment securities authorized for investment pursuant to KRS 42.500(9)(a) and (b) shall be considered eligible securities for repurchase agreements.

Section 5. Sufficiency of Securities Purchased.

(1) The securities purchased shall have a market value, including accrued interest, of at least 102 percent of the face value of the repurchase agreement.

(2) The review for the sufficiency of collateral on all repurchase agreements shall occur every business day excluding holidays by the office.

(3) The commission shall demand additional securities to be delivered immediately, during market conditions that cause the value of the securities purchased to drop below 102 percent of the face value of the repurchase agreement.

Section 6. Status of Parties.

(1) The commission and the eligible financial institutions authorized to enter into repurchase agreements:

(a) Shall be considered principals in repurchase agreements; and

(b) Shall not be considered agents for third parties.

(2) Contractual obligations shall apply to and be binding on the commission and the specific eligible financial institution with which the repurchase agreement is initially negotiated and settled.

(3) The commission shall approve the eligible financial institutions quarterly following fundamental analysis of the most recent financial releases.

(4) The office shall monitor credit worthiness of eligible financial institutions daily based on financial market indicators.

Section 7. Default.

(1) If an eligible financial institution with which the commission has entered into a repurchase agreement defaults, or is determined by the commission to be in danger of default, the commission shall set off claims and liquidate property held in respect to the repurchase agreement against obligations owing to the eligible financial institution under other repurchase agreements.

(2) Payments, deliveries, and other transfers made under a repurchase agreement shall be deemed to have been made in consideration of payments, deliveries, and other transfers made under any other repurchase agreement by the eligible financial institution.

(3) The obligation to make payments, deliveries, and other transfers under a repurchase agreement may be applied against the obligation to make payments, deliveries, and other transfers under any other repurchase agreements of the eligible financial institution and netted.

(4) From the proceeds of liquidated property, the commission shall pay itself the full principal and accrued interest due as of the date of liquidation.

(5) Remaining cash balances shall be forwarded to the financial institution with which the repurchase agreement was originally executed.

Section 8. Kentucky Bank Repurchase Program.

(1) Repurchase agreements with commercial banks and savings and loan associations chartered by the Commonwealth of Kentucky or by the U.S. government with offices located in Kentucky before being placed shall meet the following criteria:

(a) A loan to deposit ratio equal to or greater than seventy (70) percent;

(b) A nonperforming loan to capital ratio of equal to or less than twenty-five (25) percent;

(d) A return on assets ratio greater than one-half (0.5) percent.

(2) Repurchase agreements with maturities equal to or greater than 365 days with commercial banks and savings and loan associations chartered by the Commonwealth of Kentucky or by the U.S. government with offices located in Kentucky shall be limited to $5,000,000 per institution.

(3) The office shall review the financial ratios listed quarterly to determine eligibility of institutions. Existing repurchase agreements with institutions which fail to meet the minimum criteria for two (2) consecutive quarters shall be subject to call at par value by the commission. Repurchase agreements shall be placed according to:

(a) Availability of funds;

(b) Demand for funds by the institutions; and

(4) A repurchase agreement with a commercial bank or savings and loan shall not be an amount in excess of its capital structure or ten (10) percent of the institution's deposits, whichever is less.

(5) The commission shall not enter into a Kentucky Bank Repurchase Program repurchase agreement with a commercial bank or savings and loan association that will cause that institution to exceed in aggregate a total of $50,000,000 in repurchase agreements.

(6) Yield charged and collateral requirements for commercial banks and savings and loans.

(a) A commercial bank or savings and loan submitting U.S. Treasuries and agencies excluding mortgage backed securities and collateralized mortgage obligations as collateral shall be charged the repurchase rate with an equivalent term as quoted by Bloomberg L.P.and shall have a market value of 102 percent of the repurchase agreement face value.

(b) A commercial bank or savings and loan submitting mortgage-backed securities and collateralized mortgage obligations shall be charged the repurchase rate with an equivalent term as posted on Bloomberg L.P., plus fifty (50) basis points and shall have a market value of 105 percent of the repurchase agreement face value.

(7) Payment for and holding collateral of purchases.

(a) Each transaction shall be conducted on a payment-versus-delivery basis.

(b) The office shall not allow state funds to be released until delivery of adequate, negotiable collateral has been verified.

(c) Securities purchased from commercial banks or savings and loan associations in a repurchase agreement shall be received, verified, and held by the state's custodial bank or its agent.

History

RELATES TO: KRS 42.500(9)-(14), 42.520, 42.525
STATUTORY AUTHORITY: KRS 42.500(10), 42.520(2), 42.525
NECESSITY, FUNCTION, AND CONFORMITY: KRS 42.500(10) requires the State Investment Commission to promulgate administrative regulations for the investment and reinvestment of state funds. KRS 42.520(2) requires the commission to promulgate administrative regulations concerning the assignment of priorities to public depositories. KRS 42.525(1) requires the commission to promulgate administrative regulations for the investment and reinvestment of state funds and the acquisition, retention, management, and disposition of investments. This administrative regulation establishes the general standards which shall apply to the employment of repurchase agreements as investment vehicles with eligible financial institutions.
History: 19 Ky.R. 538; Am. 1066; eff. 10-22-1992; 24 Ky.R. 1355; 1647; eff. 2-10-1998; 26 Ky.R. 420; 994; eff. 10-28-1999; 31 Ky.R. 1880; 32 Ky.R. 49; eff. 8-5-2005; 39 Ky.R. 817; 1110; eff. 1-4-2013; 41 Ky.R. 2607; eff. 9-4-2015; Cert. eff. 3-2-2022; 51 Ky.R. 518, 1076; eff. 3-4-2025.

200 KAR 14:091 Guidelines for money market instruments {#sec-200-kar-14-091 omnilex-key=us-ky-regs-official--title-200--200 KAR 14:091}

Section 1. Definitions.

(1) "Bankers' acceptance" means a short-term negotiable discount note drawn on and accepted by a bank or trust company which is obligated to pay the face value amount at maturity.

(2) "Commercial paper" means an unsecured promissory obligation having a maturity of less than 270 days.

(3) "Commission" means the State Investment Commission.

(5) "Office" means the Office of Financial Management.

Section 2. Bankers' Acceptances.

(1) The office may purchase bankers' acceptances if rated in the highest short-term rating category by a commission approved NRSRO.

(2) The purchase of these instruments shall be:

(a) Made on a delivery versus payment basis; and

(b) Held in the Commonwealth's account in whatever depository shall be designated as eligible by the commission.

(3) Investment in bankers' acceptances shall be made for a period of no longer than 180 days per investment.

Section 3. Commercial Paper.

(1) The office may purchase commercial paper rated in the highest short-term rating category by a commission approved NRSRO.

(2) The purchase of these instruments shall be:

(a) Made on a delivery versus payment basis; and

(b) Held in the Commonwealth's account in whatever depository shall be designated as eligible by the commission.

(3) Investments in commercial paper shall be made for a period of no longer than 270 days per investment.

Section 4. Negotiable Certificates of Deposit, Collateralized and Uncollateralized.

(1) The office may purchase collateralized certificates of deposit if issued by banks rated in one (1) of the three (3) highest categories by a commission approved NRSRO.

(2) The office may purchase uncollateralized negotiable certificates of deposit if issued by banks rated in one (1) of the two (2) highest categories by a commission approved NRSRO.

(3) The purchase of these instruments shall be:

(a) Made on a delivery versus payment basis; and

(b) Held in the Commonwealth's account in whatever depository shall be designated as eligible by the commission.

(4) Investment in negotiable certificates of deposits shall be made for a period of no longer than 270 days per investment.

Section 5. Limits of Money Market Instruments Per Pool. The aggregate investment in bankers' acceptances, commercial paper, and negotiable certificates of deposit shall not exceed thirty-five (35) percent of pool assets or $25,000,000 per issuer.

History

RELATES TO: KRS 42.014(1), 42.500, 42.505-42.545
STATUTORY AUTHORITY: KRS 42.500(10), 42.520(2), 42.525
NECESSITY, FUNCTION, AND CONFORMITY: KRS 42.500(10) requires the State Investment Commission to promulgate administrative regulations for the investment and reinvestment of state funds. KRS 42.520(2) requires the commission to promulgate administrative regulations concerning the assignment of priorities to public depositories. KRS 42.525 requires the State Investment Commission to prescribe standards for the operation of the state's investment program. This administrative regulation establishes the standards which shall apply to the use of certain money market instruments which include bankers' acceptances, commercial paper, and negotiable collateralized and uncollateralized certificates of deposit.
History: 19 Ky.R. 540; Am. 1068; eff. 10-22-1992; 26 Ky.R. 422; 996; eff. 10-28-1999; 39 Ky.R. 820; 1111; eff. 1-4-2013; Crt eff. 5-10-2019; 51 Ky.R. 520, 1078; eff. 3-4-2025.

Chapter 15 Kentucky Private Activity Bond Allocation Committee

200 KAR 15:010 Formula for allocation of private activity bonds {#sec-200-kar-15-010 omnilex-key=us-ky-regs-official--title-200--200 KAR 15:010}

Section 1. Definitions.

(1) "Additional federal volume cap" means federal volume cap allocated above the annual state allocation provided by 26 U.S.C 146(d).

(2) "Affected bonds" means "private activity bonds" as defined by 26 U.S.C. 146, excluding any obligations not subject to the state ceiling under the Code.

(3) "Allocation" means the amount of volume cap that was approved by the Kentucky Private Activity Bond Allocation Committee for a local issuer or state issuer.

(4) "Available volume cap" means the amount of unallocated volume cap remaining at the close of business on June 30.

(5) "Bonds" is defined by KRS 103.200(2).

(6) "Committee" means the Kentucky Private Activity Bond Allocation Committee.

(7) "Eligible volume cap applicants" means issuers and local issuers who file a notice of intent to issue bonds relating to volume cap.

(8) "Energy efficiency project" means a project meeting the requirements of KRS 103.282.

(9) "Energy efficiency project reserve" means the percentage of the state ceiling that shall be reserved for an energy efficiency project through June 30.

(10) "Issued" means delivered and paid for.

(11) "Issuer" means the public or authorized governmental body which issues the bonds.

(12) "Local issuer" means a public or authorized governmental body which issues bonds on behalf of a local project.

(13) "Local issuer pool" means the portion of the state ceiling from which allocations for local projects are made to issuers of affected bonds issued on behalf or for the benefit of an entity which is not a state agency.

(14) "Local project" means a project, other than a project for creation or financing of residential single family or multifamily affordable housing which are included under the "state projects", for which bonds are issued on behalf or for the benefit of an entity which is not a state agency.

(15) "Lottery" means any process of random selection utilized to allocate available volume cap and which is conducted:

(a) By staff at a public meeting of the Committee; and

(b) In accordance with Section 4 of this administrative regulation.

(16) "Staff" means the Office of Financial Management of the Finance and Administration Cabinet.

(17) "State ceiling" means the cap imposed by 26 U.S.C. 146 on private activity bonds issued within the Commonwealth of Kentucky.

(18) "State project" means a project, including creation or financing of residential single family or multifamily affordable housing projects and student loans, for which bonds are issued by, on behalf, or for the benefit of a state agency.

(19) "Year" means calendar year.

Section 2. Evaluation of Local Projects. Local projects seeking allocation from the state ceiling shall be allocated according to rankings based on the following factors:

(1) Creation of new jobs, as well as preservation of existing jobs, by the project;

(2) Average hourly wage and benefits of new employees proposed for the project;

(3) Capital investment in Kentucky being made as a result of the project;

(4) Unemployment rate in the county of the project;

(5) Any state economic development incentives awarded to the company; and

(6) Previous state ceiling allocated to the benefited borrower within the last ten (10) years.

Section 3. Evaluation of Energy Efficiency Projects. Energy efficiency projects seeking allocation from the state ceiling under the Energy Efficiency Project Reserve shall be allocated according to rankings based on the following factors:

(1) Annual energy savings associated with the project;

(2) Capital investment in Kentucky being made as a result of the project;

(3) Unemployment rate in the county of the project;

(4) Any state economic development incentives awarded to the company; and

(5) Previous state ceiling allocated to the benefited borrower within the last ten (10) years.

Section 4. Allocation of Available Volume Cap.

(1) Allocations from the available volume cap shall be made to eligible volume cap applicants as follows:

(a) First, a lottery shall be conducted to determine the order of disbursement to local projects which did not receive an allocation from the local issuer pool;

(b) Second, to the extent there is remaining available volume cap, a lottery shall be conducted to determine the order of disbursement to local projects which received an allocation from the local issuer pool, whether the allocation was issued or not; and

(c) Finally, any remaining available volume cap shall be allocated by the committee to one (1) or more state issuers for use during the year or as carry forward.

(2) The committee shall choose a reasonable method of random selection for the lottery process.

Section 5. Committee Meetings. The committee shall meet as necessary to allocate the state ceiling. Special meetings may be held on the call of the committee chairman.

Section 6. An issuer shall obtain a confirmation authorizing the issuance of affected bonds by filing with the committee a written notice of intent to issue bonds, using a Notice of Intent form. The committee shall issue a confirmation, using a Confirmation of Allocation of State Ceiling form, allocating to the issuer a portion of the state ceiling. Affected bonds shall not be issued by any issuer prior to receiving confirmation by the committee of an allocation under the state ceiling. Confirmations shall be dated and numbered in the order issued.

Section 7. Notice of Issuance for Local Projects and Energy Efficiency Projects. A confirmation shall expire ninety (90) calendar days from the date of allocation by the committee, or December 15, whichever is earlier. The issuer shall deliver to the committee a notice that the affected bonds have been issued, using a Notice of Issuance form. The notice of issuance may be sent by any means, but the committee shall receive it by the close of business on the 90th day after the confirmation. If the notice period ends on a Saturday, Sunday, or other day upon which state offices are closed for business, the notice period shall be extended to the next business day.

Section 8. Notice of Issuance for State Projects. The issuer shall deliver to the committee a notice of issuance. The notice of issuance may be sent by any means, but the committee shall receive it by the close of business on or before December 15. If the notice period ends on a Saturday, Sunday, or other day upon which state offices are closed for business, the notice period shall be extended to the next business day.

Section 9. Issuance of Bonds in Lesser Amounts than Confirmation. A confirmation of affected bonds shall be effective if the issued amount of the bonds is not less than eighty-five (85) percent of the original confirmation. The issuer shall notify the committee if the bonds issued are within the eighty-five (85) percent requirement and the unused part of the allocation shall revert to the local issuer pool, or if this reversion occurs after June 30 of any year, the amount shall become available volume cap.

Section 10. Carry Forward Allocations.

(1) In any year, the committee shall allocate any remaining state ceiling as carry forward allocations if the aggregate amount of affected bonds issued during the year is less than the state ceiling on December 15th. An issuer shall, in order to receive a carry forward allocation, file with the committee by December 15th:

(a) A notice of intent; and

(b) A carry forward election of unused private activity bond volume cap, using U.S. Treasury Department Form 8328.

(2) The carry forward of any unallocated portion of the state ceiling may be for any purpose authorized by 26 U.S.C. 146(f).

(3) The committee shall issue a confirmation of the notice and election to carry forward, using a Confirmation of Carry Forward Allocation of State Ceiling form.

(4) The committee may, but shall not be required to, allocate a carry forward notice or election filed after December 15th.

Section 11. The committee shall not confirm a notice of intent after the aggregate amount of bond confirmations, including carry forwards, have reached the state ceiling for that year.

Section 12. Form and Manner.

(1) The committee and issuer shall use the notice and confirmation forms incorporated by reference in Section 15 of this administrative regulation.

(2) An issuer of a local project or energy efficiency project shall not:

(a) File a notice of intent unless the issuance shall be made within the ninety (90) day confirmation period established in Section 7 of this administrative regulation; or

(b) Seek an allocation of the state ceiling in excess of the amount necessary to finance all costs of a local project.

(3) An issuer of a state project shall not:

(a) File a notice of intent unless the issuance shall be made by December 15; or

(b) Seek allocation of the state ceiling in excess of the amount necessary to finance all costs of a state project.

Section 13. Delegation of Functions. The committee shall review and allocate all requests for state ceiling. The committee shall not delegate authority to make allocations of the state ceiling to staff except if there are surplus or carry forward allocations. Any delegation of authority and the limit of that authority shall be recorded verbatim in the minutes of the committee meeting at which the delegation is made.

Section 14. Additional Federal Volume Cap Allocations.

(1) If federal regulations allocate volume cap directly to the Commonwealth or allow for transfer or waiver of any direct volume cap allocation to a local government back to the Commonwealth, the committee shall:

(a) Accept any notice of waiver of volume cap as authorized by the local governing body on behalf of the Commonwealth;

(b) Accept applications of eligible volume cap recipients consistent with federal regulation; and

Any federally mandated standards and objectives; and
Expected value to the Commonwealth.

(2) Notice of Issuance. The issuer shall deliver to the committee a notice that the affected bonds have been issued within the time constraints established in the applicable federal regulation, if any.

Section 15. Incorporation by Reference.

(1) The following material is incorporated by reference:

(a) "Notice of Intent", December 2014;

(b) "Confirmation of Allocation of State Ceiling", March 1998;

(d) "Notice of Issuance", March 1998; and

(e) "U.S. Treasury Department Form 8328", August 2022.

(2) This material may be inspected, copied, or obtained, subject to applicable copyright law, at the Office of Financial Management, 200 Mero Street, 5th Floor, Frankfort, Kentucky 40622, Monday through Friday, 8 a.m. to 4:30 p.m. and online at the Office of Financial Management's Web site at https://finance.ky.gov/office-of-the-controller/office-of-financial-management/Pages/default.aspx.

History

RELATES TO: KRS 103.200(1)(k), (l), (m), (n), (2), 103.2101, 103.282, 103.286, 26 U.S.C. 146
STATUTORY AUTHORITY: KRS 103.286(3), 26 U.S.C. 146
NECESSITY, FUNCTION, AND CONFORMITY: KRS 103.286(3) requires the Secretary of the Finance and Administration Cabinet to promulgate administrative regulations to provide for the allocation of the state ceiling for the issuance of private activity bonds. This administrative regulation establishes the formula for that allocation and the Commonwealth's role in the allocation of additional federal volume cap.
History: 200 KAR 015:010. 15 Ky.R. 2125; eff. 5-11-1989; Am. 22 Ky.R. 101; 715; eff. 9-28-1995; 1334; eff. 2-20-1996; 23 Ky.R. 462; 1927; eff. 10-24-1996; 25 Ky.R. 400; eff. 10-22-1998; 31 Ky.R. 610; 1053; eff. 1-4-2005; 32 Ky.R. 1460; 1904; eff. 6-2-2006; 36 Ky.R. 836; 1435; eff. 2-5-2010; 41 Ky.R. 1852; 2068; eff. 5-1-2015; Cert. eff. 3-29-2022; 51 Ky.R. 522, 1078; eff. 3-4-2025.

Chapter 17 Kentucky Infrastructure Authority

200 KAR 17:010 Guidelines for Infrastructure Revolving Fund {#sec-200-kar-17-010 omnilex-key=us-ky-regs-official--title-200--200 KAR 17:010}

Section 1. Definitions.

(1) "Applicant" means any eligible applicant, pursuant to Section 2 of this administrative regulation, that has submitted an application for funds to the Authority.

(2) "Authority" is defined by KRS 224A.011(4).

(3) "Closing date" means the date established by the Authority for execution of the assistance agreement upon satisfaction of the conditions contained in the conditional commitment letter.

(4) "Conditional commitment letter" means a letter delivered to the applicant stating the Authority's commitment to provide financial assistance subject to the satisfaction of certain conditions by the applicant on or before the closing date.

(5) "Kentucky eClearinghouse" means the automated Kentucky State Clearinghouse coordinating the Federal Executive Review Process and Kentucky Intergovernmental Review Process, for which the Department for Local Government, Office of the Governor, has been designated as the single point of contact for federal or state funding financial assistance as required by KRS 147A.021(3)(k).

(6) "Kentucky State Data Center" means the agency within the Urban Studies Institute of the University of Louisville designated by the Commonwealth to serve as the repository and analyst of data and information generated by the U. S. Census Bureau.

(7) "Median household income" means the statistical middle value in household income, considering all households in Kentucky, with an equal number of households above and below the middle value, as determined by the Kentucky State Data Center.

(8) "Regionalization" means the creation of expanded service areas which take in a large geographic area of multiple systems; the creation of multijurisdictional utility commissions, special districts, authorities, or corporations; the utilization of interlocal cooperation agreements; the consolidated operation or management of multiple systems which may include regional facilities, smaller systems, or onsite systems; or the merger, consolidation, or combination of two (2) or more existing facilities or systems.

Section 2. Eligible Applicants.

(1) Any governmental agency, as defined in KRS 224A.011, or investor-owned water system, as provided for in KRS 96.540, 224A.306, 224A.308, and 224A.310, shall be eligible to apply to receive financial assistance for construction or acquisition of infrastructure projects.

(2) Each applicant shall have or shall attain the legal authority necessary for constructing, operating, and maintaining, the proposed infrastructure project. The applicant shall also have the legal authority to obtain, give security for, and repay a proposed loan. The applicant shall be responsible for operating, maintaining and managing the infrastructure project and providing for its continued availability and use at rates and terms that shall be adequate to meet its obligations as they become due, including any loan or loans outstanding. If the infrastructure project is to be operated, maintained, or managed by a third party under contract, management agreement, or written lease, the applicant shall continue to be responsible for compliance with the requirements of this section.

Section 3. Eligible Infrastructure Projects. Monies in the Infrastructure Revolving Fund shall be used for infrastructure projects that will enhance the health, safety, and welfare in local communities. Eligible activities shall include infrastructure projects as defined in KRS 224A.011(16).

Section 4. Submission Requirements and Review Process.

(1) An application shall be submitted to the Kentucky Infrastructure Authority, 1024 Capital Center Drive, Suite 340, Frankfort, Kentucky 40601, Attention: Executive Director.

(2) Application forms may be obtained from the Authority.

(3) Applicants may supplement their applications during the review process to clarify or explain the project scope, funds pledged as repayment of the loan, or make adjustments in the application to enhance the programmatic or financial feasibility of the project.

(4) Applicants shall be required to submit to the Authority a current endorsement letter from the Kentucky eClearinghouse.

Section 5. Criteria for Awarding Financial Assistance.

(1) The Authority shall select eligible projects for financial assistance taking into consideration the following:

(a) Total cost of the project;

(b) Availability of other funding for the project;

(d) Regional impact of the project; and

(e) Consistency with the Area Water Management Plan (if applicable).

(2) Financial review of the project applications shall include analysis of:

(a) The appropriateness and adequacy of revenues pledged for the repayment of financial assistance;

(b) The validity of the assumptions used to project new revenues resulting from the project;

(d) Ability of the applicant to provide for maintenance and operations cost of the project and related public service system;

(e) Ability of the applicant to service existing debt of the system and debt related to the project; and

(f) Ability of the Authority to finance the applicant project using the financing programs permitted by state and federal law or regulation.

Section 6. Financial Assistance Process.

(1) Upon completion of the credit review by the Authority, the application shall be submitted to the Authority's board for final action. The credit review shall include an analysis of the applicant's ability to generate sufficient revenue based on financial statements provided by the applicant to cover operating costs and to repay the required principal, interest, fees, and reserves required by receipt of the financial assistance.

(2) If the Authority's board approves the application, a Conditional Commitment Letter shall be issued to the applicant. This letter shall set forth the conditions and documentations required prior to execution of an assistance agreement. Funds shall not be provided until the assistance agreement is fully executed. The commitment shall be made upon the Authority's satisfaction that the project proposed is financially feasible, the applicant is credit worthy and the project shall comply with all technical and program requirements set forth in state and federal law and regulations including certification by the applicant as to compliance with KRS 224A.306 requiring a uniform system of accounts and cost-based rates.

(3)

(a) The Authority shall establish interest rates based on:

Prevailing market conditions;
Availability of funds; and
Demand for financial assistance.

(b) The executive director of the Authority shall recommend rates to the Authority's board for approval at least annually.

(d) Interest rates shall be offered at the:

Standard rate; and
A nonstandard rate or rates, which may be lower than the standard rate.

(e) Applicants shall receive the standard rate of interest unless they qualify for a nonstandard rate.

(f) An applicant shall qualify for a nonstandard rate if:

The median household income of the applicant's jurisdiction or service area as published by the Kentucky State Data Center is below the state median household income;
The applicant can document that the median household income of the users in the project area is lower than the state median household income published by the Kentucky State Data Center;
There is as set out in Section 1(8) of this administrative regulation and verified by the Authority; or
There exists an order or judgment addressing environmental noncompliance; or
Other criteria relating to public health or safety, environmental concerns, or financial considerations that the Authority may determine from time to time.

(g) If the nature of the project financed by the Authority's financial assistance causes interest on any Authority bonds issued to fund the project to become taxable, the Authority may consider adjustments in the interest rate to reflect the additional costs of Authority funds.

(4) Financial assistance repayments shall not exceed thirty (30) years. Principal and interest shall be payable semiannually, unless the Authority establishes a more frequent payment schedule. The repayment period may be less than thirty (30) years upon election of the Authority.

(a) Interest payments on the outstanding principal amount of the financial assistance shall be paid semiannually and shall commence within six (6) months of the initial disbursement of financial assistance proceeds.

(b) Principal and interest payments shall commence on June 1 or December 1 immediately succeeding the date of the last draw of funds unless the principal payments are directly dependent upon revenues generated from the project. If the principal payments are directly dependent upon revenues, principal payments shall commence on the June 1 or December 1 immediately succeeding the date the project is completed. Principal payments shall be payable semiannually, unless the Authority establishes a more frequent payment schedule. The Authority may also require that repayment occurs via an electronic debit of the applicant's account.

(5) The principal amount of financial assistance shall be equal to the amount approved by the Authority. The final amount of financial assistance may be adjusted by the Authority's director up to ten (10) percent of the amount stated in the Conditional Commitment Letter without further action by the Authority's board, subject to availability of user fees to service the debt, the Commonwealth's Capital Projects and Bond Oversight Committee approval, and Authority funds to provide the increase.

(6) The assistance agreement between the Authority and applicant shall contain terms and conditions that maintain the financial integrity of the Infrastructure Revolving Fund according to the circumstances of each project.

Section 7. Financial Assistance Closing and Extensions. An applicant shall meet all conditions for closing and take action to award contracts for the project within not more than twelve (12) calendar months after the date of the conditional commitment letter. Otherwise, the commitment shall expire. One (1) extension period of up to six (6) months may be granted if needed. If the extension is denied, the financial assistance offer may be rescinded. If a request for a time extension is granted, but all the conditions still cannot be met during the extension period, the commitment may be rescinded. The applicant may reapply for any project for which the commitment has expired or rescinded under this section.

Section 8. Authority to Administer the Program. The Authority shall monitor the assistance agreements and require that financial reports be made available to the Authority by the applicant at reasonable intervals. The Authority shall monitor the cash flows of the project and perform all actions that shall be required to assure that the agreements continuously meet the program standards established by this administrative regulation.

Section 9. Administrative Fees. There shall be an annual administrative fee of two-tenths (0.2) percent charged on the unpaid balance of all financial assistance. This fee shall apply to the unpaid balance of the financial assistance and shall be used to defray the Authority's expenses of servicing the financial assistance and necessary operating expenses of the program.

History

RELATES TO: KRS 96.540, 147A.021, Chapter 224A
STATUTORY AUTHORITY: KRS 224A.070(1), 224A.112, 224A.113
NECESSITY, FUNCTION, AND CONFORMITY: KRS 224A.070(1) and 224A.113 authorize the Kentucky Infrastructure Authority to promulgate administrative regulations in accordance with KRS Chapter 13A to govern the application for and provision of financial assistance to governmental agencies for the construction or acquisition of infrastructure projects from the Infrastructure Revolving Fund established pursuant to KRS 224A.112.
History: 16 Ky.R. 89; Am. 341; eff. 8-22-1989; 35 Ky.R. 2474; 36 Ky.R. 21; eff. 7-29-09; Crt eff. 2-28-2020.

200 KAR 17:030 Guidelines for Water Resources Loan Fund {#sec-200-kar-17-030 omnilex-key=us-ky-regs-official--title-200--200 KAR 17:030}

Section 1. Definitions. For the purposes of this administrative regulation the words and terms used shall have the same meaning as in KRS 224A.011, with the following additions:

(1) "Applicant" shall mean any governmental agency that has submitted an application to the authority for a loan from the Water Resources Loan Fund.

(2) "Application" shall mean the application submitted by an applicant for a loan from the Water Resources Loan Fund.

(3) "State clearinghouse review" shall mean a review conducted within the Department of Local Government pursuant to federal or state law or regulations.

(4) "Authority staff" shall mean the Office of Financial Management and Economic Analysis.

(5) "Conditional commitment letter" shall mean a letter delivered to the applicant issuing the authority's commitment to provide a loan under specific terms and subject to the satisfaction of certain conditions by the applicant on or before the closing date.

(6) "Department" shall mean the Department of Local Government.

(7) "Closing date" shall mean the date established by the authority for execution of the assistance agreement upon satisfaction of the conditions contained in the conditional commitment letter.

(8) "Water Resources Loan Fund" shall mean the Water Resources Loan Fund established pursuant to the authority of KRS Chapter 224A.

(9) "Capital investment plan" shall mean the plan developed by the applicant for investment in capital projects as required by KRS 224A.112(6)(b).

(10) "Index rate" shall mean the average of the Bond Buyer's Index of twenty (20) G.O. Bonds as published weekly in the Bond Buyer (a financial newspaper published in New York) calculated based on the weeks falling within each calendar quarter. This average shall be rounded the nearest one-tenth (.1) of one (1) percent.

(11) "Special Depreciation Fund" shall mean the Special Depreciation Fund required to be established by an applicant by Section 6 of this administrative regulation in connection with a loan from the Water Resources Loan Program.

Section 2. General Eligibility Requirements and Conditions to Financial Assistance.

(1) Applications shall only be submitted by applicants for water resources projects located in the Big Sandy, Cumberland Valley, Kentucky River, or Gateway Area Development Districts.

(2) Only applicants that certify in writing that they are unable to finance the entire water resources project from their own resources shall be eligible for a loan. Documentation evidencing such inability shall include the following:

(a) Letters from local lending institutions.

(b) Letters from financial advisors, accountants or fiscal agents, if applicable.

(c) If the applicant is in an area which qualifies for assistance through the Farmer's Home Administration, (FmHA), a statement stating either:

The applicant will not qualify for funding;
The applicant has previously applied for FmHA funding and has failed to receive assistance in two (2) consecutive attempts; or
The applicant needs to supplement the FmHA funds with Water Resources Loan Funds.

(d) Statements from any other sources or other certifications having a bearing on the application which the authority in its discretion deems relevant for purposes of making the determination that an applicant is unable to finance the entire water resources project from its own resources.

(3) Each applicant shall have or shall attain the legal authority necessary for constructing, operating and maintaining the proposed water resources project.

Section 3. Eligible Water Resources Projects. Monies in the Water Resources Loan Fund shall be used for water resources projects which shall enhance the health, safety and welfare, and encourage economic development opportunities in local communities as determined by the authority based upon each application.

Section 4. Submission Requirements and Review Process.

(1) The original and two (2) copies of each application shall be submitted to: Department of Local Government, Capital Plaza Tower, 2nd Floor, Frankfort, Kentucky 40601, Attention: Director, Division of Community Programs.

(2) The application form, substantially in the form as in effect on April 15, 1991, which is incorporated by reference and is made a part hereof as if fully set forth herein, may be obtained at the Department of Local Government from 8 a.m. to 4:30 p.m., Monday through Friday. Only a completed application, including all supporting documentation, shall be submitted before an application will be considered for assistance from the Water Resources Loan Fund.

(3) Applications shall be subject to Kentucky state clearinghouse review, shall be reviewed by the Department of Local Government, and shall be subject to authority credit review. Extensions of any review periods that are established may be necessary if the applicable reviewing agency determines that additional time is required for a more thorough review, or if any such agency determines that additional information or clarification is required to complete review of the application. Applicants may supplement their applications during the review process to:

(a) Clarify or explain the water resources project scope;

(b) To provide additional information or clarification concerning the funds pledged as repayment of the loan; or

(c) To make adjustments in the application to enhance the programmatic or financial feasibility of the water resources project.

Section 5. Criteria for Selecting Eligible Water Resources Projects.

(1) The Department of Local Government shall select and determine eligible water resources projects for loans. The department shall take into consideration the following:

(a) Unemployment data, which shall be specific to the county or counties from which the application originates and shall reflect the most recent figures available from each county.

(b) The extent to which the water resources project fits into the economic development strategy of the community. A water resources project which relates to economic development is one that stimulates the potential for economic growth. A water resources project shall be considered based on the degree to which it enhances economic development efforts and its level of priority in the community's capital investment plan.

(c) The extent of the need for the water resources project and the impact which the water resources project will have on the local economic development efforts.

(d) Whether the proposed costs of completing the water resources project are reasonable given the geographic location of the water resources project, current pricing trends, required professional services, and any other factors that may have a bearing on the water resources project. Cost figures submitted in the application will be reviewed to determine whether the proposed budget is sound. Any costs considered questionable will be analyzed to determine whether the integrity of the water resources project is suspect.

(e) Whether, based upon the department's evaluation of the overall water resources project effectiveness, the most beneficial water resources project has been designed for the use of the Water Resources Loan Fund.

(2) The department shall review applications and assign a priority ranking based on the selection criteria. Water resources projects shall be ranked as Priority I, Priority II, or Priority III.

(a) A Priority I ranking shall be assigned when, having considered all of the criteria, the water resources project will have a significant economic impact on the community; is well designed; cost effective; and, generally, determined by the department to be the most suitable solution to the community's needs.

(b) Priority II shall be assigned when one (1) or more factors exist which would limit the success or feasibility of the water resources project.

(c) Priority III shall be assigned when, having considered all the criteria, the department finds that the water resources project is premature, is not feasible, or is inappropriate for assistance from the Water Resources Loan Fund.

(d) The department shall recommend Priority I rankings to the authority's staff for financial review.

(3) Authority staff shall conduct a financial review of the Priority I designated water resources project applications.

(a) The financial review shall include an analysis of:

The adequacy and quality of the revenues pledged for the repayment of the loan;
The validity of the assumptions used to project new revenues resulting from the water resources project;
Whether monies other than the water resources loan have been committed and shall be available to fund the cost of the water resources project;
The ability of the applicant to provide for maintenance and operations cost of the water resources project and related public service system;
The ability of the applicant to service existing debt of the system related to the water resources project;
The nature of any funds pledged or committed by entities, other than the applicant, to repay the water resources loan; and
The ability of the authority to finance the applicant's water resources project using the financing programs permitted by Kentucky and federal laws or regulations.

(b) At any time during the financial analysis, an applicant may be notified of a deficiency. If the problem cannot be resolved through negotiation, the authority may remove the application from consideration.

Section 6. Loan Process.

(1) Upon completion of the credit review by the authority's staff, the application shall be submitted to the authority for final action.

(2) If the authority approves the application, a conditional commitment letter shall be issued to the applicant. This letter shall set forth the conditions and documentation required by the authority prior to execution of an assistance agreement. No funds shall be provided until the assistance agreement is fully executed. The commitment shall be made upon the authority's satisfaction that the water resources project proposed is financially feasible, the applicant is credit worthy and that the water resources project will comply with all technical and program requirements set forth in state and federal laws and regulations.

(3) The authority shall establish the interest rate quarterly based on prevailing market conditions. The rate of interest on each loan shall be set forth in the conditional commitment letter. There shall be one (1) rate of interest offered which will be the index rate less four (4) percent. If the nature of a water resources project financed by the authority's loan causes interest on any authority bonds issued to fund the water resources project to become taxable, the authority may consider adjustments in the interest rate to reflect the additional costs of authority funds.

(4) Loan repayment shall not exceed thirty (30) years, and principal shall be payable annually and interest semiannually unless the authority establishes a more frequent payment schedule due to credit concerns. The loan repayment period may be less than thirty (30) years upon election of the authority. Loan repayment shall commence within six (6) months after the start of construction, unless repayment is dependent upon revenues generated from the specific water resources project. In such cases, loan repayment shall begin within six (6) months after the water resources project is operational, and interest to cover the authority's cost of money during the construction period may be added to the amount of the loan.

(5) The principal amount of each loan shall be equal to the amount approved by the authority. The final loan amount may be adjusted by up to ten (10) percent of the commitment without further action by the authority, subject to availability of funds to service the debt.

(6) Upon certification by the water resources project engineer of construction of the water resources project as eighty (80) percent complete, and submission by the applicant of evidence of the exact cost of the water resources project, an inspection shall be conducted by the authority staff to provide for any adjustments in the loan amount.

(7) To assure adequate funds for major maintenance and replacement of the water resources projects funded by this program, the applicant shall be required to set aside annually, to a Special Depreciation Fund, from current revenues, after taking into account costs of operations and maintenance and debt service requirements, an amount to be determined by the authority. Monies may be withdrawn from the account when major maintenance or replacements of equipment in excess of budgeted amounts are required.

(8) The assistance agreement between the authority and applicant shall contain such terms and conditions as the authority deems necessary to maintain the integrity of the Water Resources Loan Fund according to the circumstances of each water resources project.

Section 7. Applicant's Management Capacity. The department and the authority's staff shall require as a condition of any loan that the applicant perform any or all of the following:

(1) Document compliance with statutory mandates for financial accountability and personnel management.

(2) Demonstrate the ability to operate, as well as maintain, the water resources project in a proper manner through the final maturity date of the loan.

(3) Document compliance with any other state or federal laws or regulations.

Section 8. Loan Closing and Extensions. An applicant shall meet all conditions of the conditional commitment letter and take bids for the water resources project within not more than eleven (11) calendar months after the date of the conditional commitment letter, otherwise, the loan commitment shall expire. (For example, if an application was approved on January 1, 1992, bids for the project must be accepted and the assistance agreement signed by November 30, 1992.) One (1) extension period of up to six (6) months may be granted upon request of the applicant, if the authority determines that circumstances warrant the granting of the extension. If the extension is denied, the loan commitment shall be rescinded. If a request for a time extension is granted, but all the conditions still cannot be met during the extension period, the loan commitment may be rescinded. The applicant may reapply for any water resources project for which the loan commitment has expired or been rescinded under this section.

Section 9. Authority to Administer the Program. The authority shall monitor the assistance agreements and require that financial reports be made available to the authority by the applicant at such intervals as shall be deemed necessary by the authority. The authority shall monitor the economic impact on the community, the cash flows of the project, and perform all actions that shall be required to assure that the agreements continuously meet the program standards established by this administrative regulation. There shall be an annual administrative fee of two-tenths (.2) of one (1) percent charged on the unpaid balance of all loans. This fee shall be applied to the servicing costs of the loans and necessary operating expenses of the program.

History

RELATES TO: KRS Chapter 224
STATUTORY AUTHORITY: KRS Chapter 13A, 224A.070(1), 224A.113, Part I, OPERATING BUDGET, sec. E. -Finance and Administration Cabinet, 44. a. General Administration, Part II, CAPITAL PROJECTS BUDGET, sec. D. -Finance and Administration Cabinet, 4. a. Ky. Infrastructure Authority of Chapter 514 of the 1990 Ky. Acts, provides for funds-administer the Water Resources Loan Fund.
NECESSITY, FUNCTION, AND CONFORMITY: KRS 224A.070(1) and 224A.113 authorize the Kentucky Infrastructure Authority to promulgate administrative regulations in accordance with KRS Chapter 13A, to govern the application for and provision of financial assistance to governmental agencies for the construction or acquisition of water resources projects from the Drinking Water Loan Fund.
History: 17 Ky.R. 3321; Am. 18 Ky.R. 674; eff. 8-22-91; Crt eff. 2-28-2020.

200 KAR 17:050 Clean Water State Revolving Fund {#sec-200-kar-17-050 omnilex-key=us-ky-regs-official--title-200--200 KAR 17:050}

Section 1. Definitions.

(1) "Applicant" means any governmental agency that has submitted an application to the authority for financial assistance from the Clean Water State Revolving Fund.

(2) "Application" means the information submitted by an applicant to the authority to obtain financial assistance, including the need for a specific project or infrastructure, and including financial information necessary to determine eligibility for financial assistance from the Clean Water State Revolving Fund.

(3) "Assistance agreement" is defined by KRS 224.011(3).

(4) "Authority" is defined by KRS 224A.011(4).

(5) "Cabinet" means the Environmental and Public Protection Cabinet established in accordance with KRS 224.10-100.

(6) "Clean Water Act" is defined by KRS 224A.011(12) and is otherwise known as the Federal Water Pollution Control Act.

(7) "Clean Water State Revolving Fund" means the federally-assisted wastewater revolving fund created by KRS 224A.111. The Federally-assisted State Revolving Fund was established by the Water Quality Act of 1987 (amending the Clean Water Act), Pub.L. 100-4, and replaced the traditional federal Municipal Wastewater Treatment Construction Grant Program to include other water quality needs, including nonpoint sources. This fund is now designed to address the greatest remaining environmental challenges to improve Kentucky's water resources.

(8) "Closing date" means the date established by the authority for execution of the assistance agreement upon satisfaction of the conditions contained in the conditional commitment letter.

(9) "Conditional commitment letter" means a letter delivered to the applicant stating the authority's commitment to provide financial assistance under specifications and subject to the satisfaction of certain conditions by the applicant on or before the closing date.

(10) "Kentucky eClearinghouse" means the automated Kentucky State Clearinghouse coordinating the Federal Executive Review Process and Kentucky Intergovernmental Review Process, for which the Governor's Office for Local Development has been designated as the single point of contact for federal or state funding financial assistance as required by KRS 147A.021(3)(k).

(11) "Kentucky state data center" means the agency within the Urban Studies Institute of the University of Louisville designated by the Commonwealth to serve as the repository and analyst of data and information generated by the United States Census Bureau.

(12) "Median household income" means the statistical middle value in household income, considering all households in Kentucky with an equal number of households above and below the middle value, as determined by the Kentucky State Data Center.

(13) "Municipality" means a governmental unit as defined in 33 U.S.C. 1362(4).

(14) "NEPA-like process" means the state environmental review process that is functionally equivalent to the review undertaken by the U.S. Environmental Protection Agency under the National Environmental Policy Act, 42 U.S.C. 4321 et seq.

(15) "Project priority list" means the integrated list of projects developed annually by the cabinet, which includes a priority ranking of applicants eligible for State Revolving Fund funding pursuant to 33 U.S.C. 1381 and 33 U.S.C. 1296, and a list of activities eligible for funding under 33 U.S.C. 1329 and 33 U.S.C. 1330.

(16) "Regionalization" means the creation of expanded service areas which take in a large geographic area of multiple systems; the creation of multijurisdictional utility commissions, special districts, authorities, or corporations; the utilization of interlocal cooperation agreements; the consolidated operation or management of multiple systems which may include regional facilities, smaller systems, or onsite systems; or the merger, consolidation, or combination of two (2) or more existing facilities or systems.

(17) "Replacement reserve fund" means the special depreciation fund that may be established and funded by an applicant in connection with financial assistance from the Clean Water State Revolving Fund.

(18) "Safe Drinking Water Act" means the federal Safe Drinking Water Act, 33 U.S.C. 300 f-j.

Section 2. Eligible Applicants. Any governmental agency shall be eligible to apply for financial assistance for planning, design and construction of eligible projects described in Section 3 of this administrative regulation.

Section 3. Eligible Projects.

(1) Funds in the Clean Water State Revolving Fund shall be used for:

(a) Planning, design and construction of wastewater or stormwater collection, conveyance, and treatment facilities;

(b) The implementation of nonpoint source pollution control management programs;

(c) Refinancing or buying eligible debt obligations of municipalities and intermunicipal and interstate agencies within Kentucky at or below market rates, if the debt obligations were incurred after March 7, 1985;

(d) Guaranteeing or purchasing insurance for a local obligation to improve credit market access or reduce the interest rate of the obligations;

(e) Transferring fund assets between the Clean Water State Revolving Fund and the Drinking Water State Revolving Fund as allowed by the Clean Water Act and the Safe Drinking Water Act;

(f) Providing a source of revenue or security for the payment of principal and interest on revenue or general obligations bonds issued by the state if the proceeds of the sale of the bonds will be deposited in the fund; and

(g) Purchase of another wastewater system eligible under 33 U.S.C. 1383(d).

(2) Fundable projects may include any applicant's project eligible for funding under 33 U.S.C. 1383.

(3) Only projects identified on the cabinet's project priority list shall be considered for funding.

(4) Funds in the Clean Water State Revolving Fund shall not be used for:

(a) Laboratory fees and other monitoring expenses; and

(b) Operation and maintenance expenses.

Section 4. Submission Requirements.

(1) Projects proposed to be placed on the project priority list shall be submitted to the cabinet.

(2) After inclusion on the project priority list, a complete application package, including all supporting documentation, shall be submitted to the authority for consideration for financial assistance from the Clean Water State Revolving Fund.

(3) The procurement of professional services and construction contracts shall conform to KRS Chapter 45A or 424. Allowable engineering service fees shall be determined using procedures similar to those used by federal agencies conducting similar loan programs.

Section 5. Criteria for Ranking and Recommending Eligible Projects.

(1) The cabinet shall determine the priority for funding eligible projects to be included on the project priority list based on criteria established in 33 U.S.C. 1296; and

(a) Whether the project promotes compliance with the Clean Water Act and KRS Chapter 224;

(b) The impact the wastewater project has on any existing drinking water supply;

(d) Populations to be served that presently do not have sewer systems available.

(2) The authority and the cabinet shall take into consideration the following factors in recommending projects for funding:

(a) Whether the cost of completing the wastewater project is reasonable given the geographic location of the project, current pricing trends, required professional services, and any other factors that may have a bearing on the wastewater project.

(b) Whether the most beneficial and cost effective project has been planned for the use of the Clean Water State Revolving Fund.

(d) Whether the project will result in greater efficiency and effectiveness.

Section 6. Project Requirements.

(1) In addition to other requirements stated in this administrative regulation, the following specific requirements shall be met:

(a) If the related sewer collection system is subject to excessive inflow/infiltration, assurance for necessary repairs shall be provided.

(b) The project is consistent with plans developed pursuant to the applicable requirements under 33 U.S.C. 1285, 33 U.S.C. 1288, 33 U.S.C. 1313, and 33 U.S.C. 1329.

(c) The applicant has developed an adequate user charge system and the applicant has the legal, institutional, managerial and financial capability to construct, operate and maintain the wastewater project.

(d) The project has undergone appropriate reviews to ensure compliance with the state NEPA-like review process as required by 40 C.F.R. 35.3140.

(e) The applicant shall ensure compliance with all applicable federal laws and regulations.

(f) The applicant shall certify that it has complied with the procurement requirements as described in the application

(g) Construction contracts shall be awarded to the lowest responsive responsible bidder.

(2) The NEPA-like review process shall include consideration of regionalization, and shall be reviewed through the Kentucky eClearinghouse process.

Section 7. Provisions for Financial Assistance.

(1) Upon completion of the credit review by the authority's staff, the application shall be submitted to the authority's board for action, subject to the cabinet's priority ranking and favorable recommendation of the project. The credit review shall include an analysis of the applicant's ability to generate sufficient revenue based on financial statements provided by the applicant to cover operating costs and to repay the required principal, interest, fees, and reserves required by receipt of the financial assistance. The cabinet's recommendation shall be based on the project's compliance with the technical and environmental requirements of the Clean Water Act.

(3)

(a) The authority shall establish interest rates annually based on:

Prevailing market conditions;
Availability of funds; and
Demand for financial assistance.

(b) The executive director of the authority shall recommend rates to the authority board for approval at least annually.

(d) Interest rates shall be offered at the:

Standard rate; and
A nonstandard rate, which may be lower than the standard rate.

(e) Applicants shall receive the standard rate of interest unless they qualify for the nonstandard rate.

(f) The authority may establish one (1) or more nonstandard rates and shall use the following criteria in establishing a nonstandard rate:

Whether the median household income of the applicant's jurisdiction or service area as published by the Kentucky State Data Center is below the state median;
Whether the median household income of the service area as identified by income surveys is below the state median;
Regionalization as set out in Section 1(16) of this regulation and verified by the authority;
The existence of an order or judgment addressing environmental noncompliance; or
Other criteria relating to public health or safety, environmental concerns, or financial considerations that the authority may determine.

(g) If the nature of a project financed by the authority's financial assistance causes interest on any authority bonds issued to fund the project to become taxable, the authority may consider adjustments in the interest rate to reflect the additional costs of authority funds.

(4) Principal on any financial assistance shall be repaid over a period not to exceed federal requirements or the life of the facilities being financed. Repayment of principal shall commence within one (1) year of the initiation of operation of the project or upon another date as many be set forth in the financial assistance agreement. Principal shall be payable semiannually, unless the authority establishes a more frequent payment schedule based on the credit review. The financial assistance repayment period may be equal to less than the federally-permitted maximum at the discretion of the authority.

(5) Interest payments on the outstanding principal amount of the financial assistance shall be paid semiannually and shall commence within six (6) months of initial disbursement of financial assistance proceeds, unless the interest payments are directly dependent upon revenues generated from the project. If interest payments are directly dependent upon revenues, interest payments shall begin within six (6) months after the project is completed, and interest to cover the authority's cost money during the construction period may be added to the amount of the financial assistance.

(6) The principal amount of financial assistance shall be equal to the amount approved by the authority's board financial assistance. The amount may be adjusted by the authority's executive director up to ten (10) percent of the amount stated in the conditional commitment letter without further actions by the authority, subject to the availability of user fees sufficient to service the debt and authority funds to provide the increase.

(7) To ensure adequate funds for major maintenance and replacement of the projects funded by this program, the applicant may be required to set aside annually to a replacement reserve fund from current revenues, after taking into account costs of operations and maintenance and debt service requirements, an amount to be determined by the authority. Monies may be withdrawn from the account if major maintenance or replacement of equipment in excess of budgeted amounts is required.

(8) The financial assistance agreement between the authority and applicant shall contain terms and conditions as the authority deems necessary to maintain the financial integrity of the Clean Water State Revolving Fund according to the circumstances of each project.

Section 8. Submission and Review of Requisition for Funds.

(1) The requisition for funds with the required invoices attached shall be submitted to the authority and one (1) copy of each requisition for funds with the required invoices attached shall be submitted to the cabinet.

(2) The cabinet shall review requisitions for funds for compliance with federal and state requirements as defined in the conditional commitment letter and assistance agreement before approving payment by the authority.

Section 9. Financial Assistance Closing.

(1) If an applicant does not meet all condition for financial assistance closing and take action to award contracts for the project as outlined in the conditional commitment letter, the financial assistance commitment shall expire.

(2) An extension may be granted upon request of the applicant, if the authority staff, after consultation with the cabinet, determines that circumstances warrant the granting of the extension. If the extension is denied, the loan commitment shall be rescinded. If a request for a time extension is granted, but all the conditions still cannot be met during the extension period, the loan commitment may be rescinded.

(3) The applicant may reapply for a loan for any wastewater project for which the loan commitment has expired or has been rescinded under this section. An applicant that reapplies for a loan for substantially the same project shall be given, at the authority's discretion, the standard or hardship interest rate applicable when reapplying or the initial rate assigned, depending on affordability. Except, the interest rate shall not be lower than the initial rate assigned to the project.

Section 10. Financial Assistance Conditions.

(1) In order to establish and maintain or improve technical, financial, and managerial capacity, the applicant shall:

(a) Adopt a uniform system of accounting, consistent with nationally recognized standards and approved by the authority, which includes an annual budget, a chart of accounts, and a monthly management reporting;

(b) Certify that rates and charges for wastewater service are, or will be adjusted to be, adequate to cover costs and that same are based upon the cost of providing such service; and

(2) If an applicant is found by a administrative or court order to have violations which were cited by the cabinet or other regulatory agency, the applicant shall be subject to a financial review by the authority, and may be subject to a management assessment or other review by the authority and shall comply with the recommendations contained in the review or assessment.

Section 11. Authority to Administer the Program. The authority staff shall monitor the assistance agreements and require that financial reports be made available to the authority by the governmental agency at intervals as shall be deemed necessary by the authority based on financial performance or the compilation of a program report. The authority staff shall monitor the cash flows of the wastewater project, and perform all actions that shall be required to assure that the agreements continuously meet the program standards established by this administrative regulation.

Section 12. Administrative Fees. At the beginning of each state fiscal year, the authority shall set an administrative fee to be charged for all financial assistance approved during that year. The fee shall apply to the unpaid balance of the financial assistance and shall be used to defray the authority's expenses of servicing the financial assistance and necessary operating expenses of the program.

Section 13. Incorporation by Reference.

(1) The following material is incorporated by reference:

(a) "Fund A Loan Form", 2006; and

(b) "Request for Payment", 2006.

(2) This material may be inspected, copied, or obtained, subject to applicable copyright law, at Kentucky Infrastructure Authority, 1024 Capital Center Drive, Suite 340, Frankfort, Kentucky 40601, Monday through Friday, 8 a.m. to 4:30 p.m. This material may also be obtained on the Kentucky Infrastructure Authority Internet Web site at http://kia.ky.gov.

History

RELATES TO: KRS Chapter 224A, 33 U.S.C. 1285, 1288, 1296, 1313, 1329, 1383, 40 C.F.R. 35.3140
STATUTORY AUTHORITY: KRS 224A.070(1), 224A.113, 33 U.S.C. 1383
NECESSITY, FUNCTION, AND CONFORMITY: KRS 224A.070(1) and 224A.113 authorize the Kentucky Infrastructure Authority to promulgate administrative regulations to implement KRS 224A.111. This administrative regulation governs the application for and provision of financial assistance to governmental agencies for the planning, design, and construction of projects funded from the Clean Water State Revolving Fund.
History: 17 Ky.R. 3327; 679; eff. 8-22-91; 22 Ky.R. 104; 589; eff. 8-24-95; 32 Ky.R. 1319; 1906; 2239; eff. 7-7-2006; Crt eff. 2-28-2020.

200 KAR 17:070 Drinking Water State Revolving Fund {#sec-200-kar-17-070 omnilex-key=us-ky-regs-official--title-200--200 KAR 17:070}

Section 1. Definitions.

(1) "Applicant" means any governmental agency, except a federal agency, that has submitted an application to the authority for financial assistance from the Drinking Water State Revolving Fund.

(2) "Application" means the information submitted by an applicant to the authority to obtain assistance, including the need for a specific project or infrastructure, and including financial information necessary to determine eligibility for assistance from the federally-assisted Drinking Water State Revolving Fund.

(3) "Area water management plan" means the community-based plan, as authorized by KRS 224A.300(1), and 151.603, identifying needs and service projects to address water supply and drinking water with the goal of making potable water treatment available to all Kentuckians.

(4) "Area water management planning council" means the group of elected and appointed leaders, utility representatives, health department representatives, and citizens at large designated pursuant to KRS 151.601 to develop an area water management plan for water-related services in regions which are generally coterminus with Kentucky's Area Development Districts.

(5) "Assistance agreement" is defined by KRS 224A.011(3).

(6) "Authority" is defined by KRS 224A.011(4).

(7) "Best practicable treatment and distribution technology" means a treatment and distribution technology which, in the best professional judgment of the cabinet's engineers, will adequately treat and deliver the water from the raw water source to assure public health and compliance with existing and future national drinking water standards, in a cost effective manner.

(8) "Cabinet" means the Environmental and Public Protection Cabinet established in accordance with KRS 224.10-100.

(9) "Capacity" means the financial, managerial, and technical ability of a public water system to comply with all applicable state and federal regulations.

(10) "Capacity development strategy" means the strategic planning process used to determine how to assure the long-term ability of public water systems to obtain or retain the capacity to comply with all applicable state and federal requirements.

(11) "Clean Water Act" is defined by KRS 224A.011(12) and is otherwise known as the Federal Water Pollution Control Act.

(12) "Closing date" means the date established by the authority for execution of the assistance agreement upon satisfaction of the conditions contained in the conditional commitment letter.

(13) "Conditional commitment letter" means a letter delivered to the applicant stating the authority's commitment to provide financial assistance under specifications and subject to the satisfaction of certain conditions by the applicant on or before the closing date.

(14) "Disadvantaged community" means the service area of a public water system that meets the affordability criteria established by the authority after public review and comment and may qualify for additional subsidization of the financial assistance terms.

(15) "Drinking water project" means a drinking water project consistent with Section 3 of this administrative regulation.

(16) "Drinking Water State Revolving Fund" means the federally-assisted water supply revolving fund created by KRS 224A.1115.

(17) "Intended use plan" means the document prepared annually by the cabinet and the authority, after public review and comment, which identifies intended uses of all Drinking Water State Revolving Fund Program funds and describes how those uses support the overall goals of the Drinking Water State Revolving Fund Program and the Safe Drinking Water Act.

(18) "Kentucky eClearinghouse" means the automated Kentucky State Clearinghouse coordinating the federal executive review process and the Kentucky intergovernmental review process, for which the Governor's office for Local Development has been designated as the single point of contact for federal or state financial assistance as required by KRS 147A.021(3)(k).

(19) "Kentucky State Data Center" means the agency within the Urban Studies Institute of the University of Louisville designated by the Commonwealth to serve as the repository and analyst of data and information generated by the U.S. Census Bureau.

(20) "Median household income" means the statistical middle value in household income, considering all households in Kentucky with an equal number of households above and below the middle value, as determined by the Kentucky State Data Center.

(21) "NEPA-like process" means the state environmental review process that is functionally equivalent to the review undertaken by the U.S. Environmental Protection Agency under the National Environmental Policy Act, 42 U.S.C. 4321 et seq.

(22) "Project priority list" means a list of all drinking water projects, with the exception of projects funded on an emergency basis, that are scored using the cabinet's priority system, go through a public review process prior to receiving financial assistance, and are included in the intended use plan.

(23) "Public water system" means a water system for the provision to the public of water for human consumption, if the system has at least fifteen (15) service connections or regularly serves an average of at least twenty-five (25) individuals daily at least sixty (60) days of the year. The term includes collection, treatment, storage and distribution facilities under the control of the operator of the system and used primarily in connection with the system and collection and pretreatment storage facilities not under the control of the operator of the water system which are used primarily in connection with the water system.

(24) "Regionalization" means the creation of expanded service areas which take in a large geographic area or multiple systems; the creation of multijurisdictional utility commissions, special districts, authorities or corporations; the utilization of interlocal cooperation agreements; the consolidated operation or management of multiple systems which may include regional facilities, smaller systems, or on-site systems; or the merger, consolidation, or combination of two (2) or more existing facilities or systems.

(25) "Replacement reserve fund" means the special depreciation fund that may be established and funded by an applicant in connection with financial assistance from the Drinking Water State Revolving Fund.

(26) "Safe Drinking Water Act" means the federal Safe Drinking Water Act, 33 U.S.C. 300f-j.

Section 2. Eligible Applicants.

(1) Any governmental agency, except a federal agency, shall be eligible to apply for financial assistance for planning, design and construction of eligible drinking water supply projects described in Section 3 of this administrative regulation.

(2) Financial assistance under this administrative regulation shall not be provided to an agency for a public water system that:

(a) Does not have capacity to insure compliance with the requirements of 401 KAR Chapter 8 and the Safe Drinking Water Act; or

(b) Is not in compliance with requirements of 401 KAR Chapter 8 or the Safe Drinking Water Act, unless:

The use of the assistance will insure compliance; and
The owner or operator of the system agrees to undertake feasible and appropriate changes in operations, including ownership, management, accounting, rates, maintenance, consolidation, alternative water supply, or other procedures, that the cabinet and the Authority determine are necessary to insure that the system has the capacity to comply with the requirements of 401 KAR Chapter 8 and the Safe Drinking Water Act.

Section 3. Eligible Drinking Water Projects.

(1) Funds in the Drinking Water State Revolving Fund may be used for:

(a) Planning, design, and construction of drinking water intake, treatment, and distribution systems;

(b) Refinancing or buying eligible debt obligations of a public water system;

(d) Guaranteeing or purchasing insurance for a local obligation to improve credit market access or reduce the interest rate of the obligation;

(e) Transferring fund assets between the Clean Water State Revolving Fund and the Drinking Water State Revolving Fund as allowed in the Clean Water Act and the Safe Drinking Water Act; and

(f) Providing a source of revenue or security for the payment of principal and interest on revenue or general obligation bonds issued by the state if the proceeds of the sale of the bonds will be deposited in the fund.

(2) Drinking water projects shall address Safe Drinking Water Act health goals, or situations where compliance standards have been exceeded, or prevent future violations of the rules. The projects may include:

(a) Drinking water treatment plants, including basins for rapid mix, flocculation, coagulation, filtration, pretreatment disinfection, and disinfection prior to entry to the distribution system;

(b) Distribution systems;

(d) Intake lines and short-term raw water storage;

(e) Clearwells;

(f) Drilled wells and wellhead areas;

(g) Security related facilities;

(h) Emergency measures for the protection of public health; and

(i) Any other structure or facility that the cabinet considers necessary to the efficient and sanitary operation of a public water system.

(3) Funds shall not be used for:

(a) Projects not listed on the project priority list, except for emergency projects as provided in subsection (2)(h) of this section.

(b) Dams or rehabilitation of dams.

(d) Reservoirs, except for finished water reservoirs and those reservoirs that are part of a treatment process and are located on the property where the treatment facility is located.

(e) Laboratory fees and other monitoring expenses.

(f) Operation and maintenance expenses.

(g) Projects needed mainly for fire protection.

(h) Projects for systems that lack adequate capacity, unless financial assistance will assure capacity and compliance.

(i) Land acquisition where eminent domain is necessary.

(j) Projects primarily intended to finance the expansion of any public water system in anticipation of future population growth.

(k) Projects not favorably considered by the area water management council unless the board finds circumstances that justify overriding the council's recommendation.

Section 4. Process for Selecting Eligible Drinking Water Projects.

(1) The cabinet shall develop the project priority list once a year and shall provide public notice and seek public comment of the contents of the project priority list in accordance with 40 C.F.R. Part 25.

(2) The project priority list may be divided into a fundable list of projects that are expected to receive financial assistance from available funds designated for use in the current intended use plan and a comprehensive list of projects that are expected to receive financial assistance in the future, or the cabinet may combine the fundable and comprehensive lists into one (1) list.

(3) The project priority list shall identify the projects to be funded, both in the current year and in future years.

(4) The order on the list shall be determined by the priorities set forth in Section 5 of this administrative regulation.

(5) If a project is not ready to proceed, it shall be bypassed. The next highest priority project which meets the requirements of this administrative regulation shall be considered for funding.

(6) In accordance with 42 U.S.C. 300j-12 of the Safe Drinking Water Act and this subsection, at least fifteen (15) percent of the funds available for projects shall be awarded to projects for public water systems serving fewer than 10,0000 people, unless all projects for systems serving fewer than 10,000 people have been funded, or are not ready to be funded, due to a failure to comply with all of the requirements of this administrative regulation.

(7) Funds may be designated in the intended use plan to be used for financial assistance pursuant to the provisions of 42 U.S.C. 300j-12(k) of the Safe Drinking Water Act for land acquisition or a conservation easement for source water protection. The Cabinet shall prioritize these projects separately from other projects, based on public health protection and how the financial assistance will aid compliance.

(8) All projects shall be assessed in accordance with a NEPA-like review process, which shall include consideration of regionalization, and shall be reviewed through the Kentucky eClearinghouse process.

Section 5. Criteria for Prioritization.

(1) Priority shall be given by the cabinet to the projects that are necessary to:

(a) Ensure compliance with the requirements of the Safe Drinking Water Act;

(b) Address the most serious risk to human health; and

(2) The cabinet shall make these determinations based on the following factors:

(a) Resource development. Projects shall include:

Projects that will improve a public water system's ability to achieve capacity to comply with existing and future national drinking water standards.
Projects to assure a sufficient quantity and quality of raw water for treatment.
Projects which allow one (1) or more public water systems to consolidate to achieve capacity to meet national standards, such as intakes, wells, raw and finished water lines, and pump stations.

(b) Improved treatment. Projects to prevent or correct compliance problems and produce potable water, such as presettling basins; aeration towers; full water treatment plant processes such as rapid mix, coagulation, flocculation, sedimentation, filtration, and clearwell; baffling; and chemical feeders.

(c) Improved water distribution systems, which includes projects to allow public water systems to prevent and correct compliance problems and deliver potable water through the existing distribution system, such as installation, refurbishment, or replacement of finished water lines; storage facilities or pump stations; elimination of constantly running or hydropneumatic pump stations; looping of water lines; flushing devices; baffling of storage facilities; and disinfection booster stations.

(d) Improving public health through extension of new service lines and connections, including projects where there is insufficient raw water available, or where the raw water is of a quality that is unsuitable for an individual to treat to potable water standards.

(e) Eligible security-related projects such as fences, alarms, security cameras, or other system improvements that will assist in preventing vandalism, terrorism, or other deliberate adverse acts that will damage the system or pose a risk to public health.

Section 6. Submission Requirements.

(1) Projects proposed to be placed on the project priority list shall be submitted to the local area water management planning council for inclusion in the area water management plan. All project proposals shall be electronically forwarded by the area water management planning council to the authority. The authority shall electronically forward the necessary project information to the cabinet.

(2) After inclusion on the project priority list, a complete application package, including all supporting documentation, shall be required for consideration for financial assistance from the Drinking Water State Revolving Fund.

Section 7. Drinking Water Project Requirements. In addition to other requirements stated in this administrative regulation, the following specific requirements shall be met:

(1) The drinking water project shall use the best practicable treatment and distribution technology.

(2) Any drinking water project with a related distribution system shall assure that the distribution system is in good repair, or shall include a component to address system problems, to assure that water loss will be within acceptable ranges for the system.

(3) The drinking water project shall be consistent with long range water supply plans developed pursuant to KRS Chapter 151, and with capacity development strategies developed pursuant to the Safe Drinking Water Act.

(4) The applicant shall demonstrate that the public water system that is to benefit from the project, has capacity to operate in accordance with 401 KAR Chapter 8 and this administrative regulation; or, the applicant shall demonstrate that the project will create capacity for the public water system to operate or be operated in accordance with 401 KAR Chapter 8 and this administrative regulation.

(5) The applicant shall have an adequate revenue stream to assure the repayment of the financial assistance while allowing capacity to efficiently operate the public water system.

(6) The drinking water project shall be cost effective.

(7) All construction contracts shall be awarded to the lowest responsive responsible bidder.

Section 8. Provision for Financial Assistance.

(3)

(a) The authority shall establish interest rates based on:

Prevailing market conditions;
Availability of funds; and
Demand for financial assistance.

(b) The executive director of the authority shall recommend rates to the authority board for approval at least annually.

(d) Interest rates shall be offered at the:

Standard rate; and
A nonstandard rate, which may be lower than the standard rate.

(e) Applicants shall receive the standard rate of interest unless they qualify for the nonstandard rate.

(f) The authority may establish one (1) or more nonstandard rates and shall use the following criteria in establishing a nonstandard rate:

The median household income of the applicant's jurisdiction or service area as published by the Kentucky State Data Center:
The median household income of the service area as identified by income surveys;
Regionalization as set out in Section 1(24) of this administrative regulation and verified by the authority;
Qualification as a disadvantaged community as set out in Section 1(14) of this administrative regulation and verified by the authority;
The existence of an order or judgment addressing environmental noncompliance; or
Other criteria relating to public health or safety or financial considerations that the authority may determine.

(g) If the nature of a drinking water project financed by the authority's financial assistance causes interest on any authority bonds issued to fund the drinking water project to become taxable, the authority may consider adjustments in the interest rate to reflect the additional costs of authority funds.

(4) Principal on any financial assistance shall be repaid over a period not to exceed federal requirements or the life of the facilities being financed. Repayment of principal shall commence within one (1) year of the initiation of operation of the drinking water project or upon another date as may be set forth in the assistance agreement. Principal shall be payable semiannually, unless the authority establishes a more frequent payment schedule based on the credit review. The repayment period may be equal to or less than the federally-permitted maximum at the discretion of the authority.

(5) Interest payments on the outstanding principal amount of the financial assistance shall be paid semiannually and shall commence within six (6) months of initial disbursement of financial assistance proceeds, unless the interest payments are dependent upon revenues generated from the drinking water project. If interest payments are directly dependent upon revenues, interest payments shall begin within six (6) months after the drinking water project is completed, and interest to cover the authority's cost of money during the construction period may be added to the amount of the financial assistance.

(6) The principal amount of financial assistance shall be equal to the amount approved by the authority's board. The financial assistance amount may be adjusted by the authority's executive director up to ten (10) percent of the amount stated in the conditional commitment letter without further action by the board, subject to the availability of user fees sufficient to service the debt and authority funds to provide the increase.

(7) To ensure adequate funds for major maintenance and replacement of the drinking water projects funded by this program, the applicant may be required to set aside annually to a replacement reserve fund from current revenues, after taking into account costs of operations and maintenance and debt service requirements, an amount to be determined by the authority. Monies may be withdrawn from the account if major maintenance or replacement of equipment in excess of budgeted amounts is required.

(8) The assistance agreement between the authority and applicant shall contain terms and conditions as the authority deems necessary to maintain the financial integrity of the Drinking Water State Revolving Fund.

Section 9. Applicants' Capacity. The cabinet and the authority may require as a condition of any financial assistance that the applicant perform any or all of the following:

(1) Document compliance with requirements for adequate capacity to operate the public water system;

(2) Demonstrate the ability to operate as well as maintain, the project in a proper manner through the final maturity date of the financial assistance or the useful life of the project, whichever is greater; and

(3) Document compliance with any other state or federal requirements that apply to this program.

Section 10. Submission and Review of Requisition for Funds.

(1) The original requisition for funds with the required invoices attached shall be submitted to the authority and one (1) copy of each requisition for funds with the required invoices attached shall be submitted to the cabinet.

Section 11. Financial Assistance Closing.

(1) If an applicant does not meet all conditions for financial assistance closing and take action to award contracts for the drinking water project as outlined in the conditional commitment letter, the financial assistance commitment shall expire.

(2) An extension may be granted upon request of the applicant if the authority staff, after consultation with the cabinet, determines that circumstances warrant the granting of the extension. If the extension is denied, the loan commitment shall be rescinded.

(3) If a request for a time extension is granted but all the conditions still cannot be met during the extension period, the loan commitment may be rescinded. The applicant may reapply for a loan for any project for which the loan commitment has expired or has been rescinded under this section. An applicant that reapplies for a loan for substantially the same project shall be given, at the authority's discretion, the standard or hardship interest rate applicable when reapplying or the initial rate assigned, depending on affordability. Except, the interest rate shall not be lower than the initial rate assigned to the project.

Section 12. Financial Assistance Conditions.

(1) In order to establish and maintain or improve capacity, the applicant shall:

(a) Adopt a uniform system of accounting, consistent with nationally-recognized standards and approved by the authority, which includes an annual budget, a chart of accounts, and a monthly management reporting;

(b) Certify that rates and charges for drinking water services are, or will be adjusted to be adequate to cover costs and that they are based upon the cost of providing the service; and

(2) If an applicant is found by an administrative or court order to have violations which were cited by the cabinet or other regulatory agency, the applicant shall be subject to a financial review by the authority, and may be subject to a management assessment or other review by the authority and shall comply with the recommendations contained in the review or assessment.

Section 13. Authority to Administer the Program. The authority staff shall monitor the assistance agreements and require that financial reports be made available to the authority by the governmental agency at intervals as shall be deemed necessary by the authority based on financial performance or the compilation of a program report. The authority staff shall monitor the cash flows of the project and perform all actions that shall be required to assure that the agreements continuously meet the program standards established by this administrative regulation.

Section 14. Administrative Fees. At the beginning of each state fiscal year, the authority shall set an administrative fee to be charged for all financial assistance approved during that year. The fee shall apply to the unpaid balance of the financial assistance and shall be used to defray the authority's expenses of servicing the financial assistance and necessary operating expenses of the program.

Section 15. Incorporation by Reference.

(1) The following material is incorporated by reference:

(a) "Fund F Loan Form", 2006; and

(b) "Request for Payment", 2006.

History

RELATES TO: KRS 151.601, 151.603, Chapter 224A, 42 U.S.C. 300f, 300g, 300j, 40 C.F.R. Part 25, Part 35 Subpart L
STATUTORY AUTHORITY: KRS 224A.070, 224A.1115, 224A.113, 224A.300
NECESSITY, FUNCTION, AND CONFORMITY: KRS 224A.070(1) and 224A.113 authorize the Kentucky Infrastructure Authority to promulgate administrative regulations to implement KRS 224A.1115. This administrative regulation establishes requirements for applying for funding from the Drinking Water State Revolving Fund for the planning, design, or construction of new and expanded facilities to deliver potable water for public use and establishes requirements and criteria to prioritize the projects to receive funds. This administrative regulation conforms to federal requirements, except is more stringent in that projects must be consistent with state drinking water planning requirements contained in KRS Chapter 151.
History: 23 Ky.R. 4246; Am. 24 Ky.R. 855; eff. 9-25-97; 32 Ky.R. 1323; 1910; 2242; eff. 7-7-2006; Crt eff. 2-28-2020.

200 KAR 17:080 Guidelines for 2020 water service account {#sec-200-kar-17-080 omnilex-key=us-ky-regs-official--title-200--200 KAR 17:080}

Section 1. Definitions.

(1) "Applicant" means a governmental agency or investor-owned utility that has submitted an application to the authority for a loan or grant from the 2020 water service account.

(2) "Application" means an application submitted by an applicant for a loan or grant from the 2020 water service account.

(3) "Conditional commitment letter" means a letter delivered to the applicant stating the authority's commitment to provide a grant or a loan or a combination thereof under specifications and subject to the satisfaction of certain conditions by the applicant.

(4) "Index" means an index selected by the board of directors at least once annually setting forth interest rates for municipal bonds published by an organization or corporation recognized in the municipal bond market as being a publisher of municipal bond interest rate indices.

(5) "Index rate" means rates of interest published in an index.

(6) "Investor-owned utility" means a partnership, corporation, individual, association, limited liability company or other legal entity:

(a) Not owned, operated or controlled by a governmental agency;

(b) Which owns a water production or distribution facility; and

(7) "Kentucky State Clearinghouse" means the project review mechanism, attached to the Department for Local Government, established in KRS 45.031

(8) "Kentucky Uniform System of Accounting" means the elements of a basic accounting system, including a standardized format for an annual budget, a chart of accounts with definitions, and a monthly operating report to system managers established by the authority, which shall be used by a water or wastewater system seeking or using funds of the authority if an alternative accounting system has not been approved by the authority.

(9) "Project" means an infrastructure project, including:

(a) An activity which may involve establishing accounting systems meeting the requirements of KRS 224A.306;

(b) An activity related to establishing a new uniform accounting system for the use of applicants that merge or consolidate their water services;

(d) Repair or replacement of a distribution facility deemed reasonable by the authority and undertaken as a result a water loss audit;

(e) An activity necessary to regionalize, merge or consolidate water systems and to eliminate structural and administrative duplication;

(f) An action to encourage new projects to provide service to unserved areas and improve service to underserved areas of the state; and

(g) An activity taken by the Kentucky Geological Survey for the purpose of continuing and expanding the identification and study of the water resource potential of underground coal mines and high yield water wells.

(10) "Project priority list" means the list developed by the authority for funding of projects in priority order.

Section 2. Eligible Projects.

(1) Funds in the 2020 water service account shall be used to fund projects.

(2) Only projects identified on the authority's project priority list shall be eligible for funding from the 2020 water service account.

Section 3. Applications.

(1) Each applicant shall submit one (1) original application to the authority at the address specified in the application.

(2) An application shall be submitted on forms prescribed by the authority, incorporated by reference, and posted on the following Web site: http://wris.state.ky.us/kia/. Only a completed application, including all supporting documentation, shall be considered for financial assistance from the 2020 water service account.

Section 4. Project Priority List.

(1) The authority shall maintain a project priority list on a continuous basis.

(2) A project shall be ranked using the following criteria:

(a) Number of households served by the project;

(b) Involvement of more than one (1) system in a project;

(d) The cost per household for the project; and

(e) Identification of the project in an area water management planning council plan.

(3) Projects shall be selected for financial assistance based on:

(a) The level of funding available in the 2020 water service account; and

(b) The position of the project on the project priority list at the time funding is available.

Section 5. Additional Conditions to Project Funding.

(1) A water supply and distribution system seeking funding for a project shall:

(a) Submit with the application current information regarding the financial, managerial and technical aspects of its system;

(b) Update the information provided pursuant to paragraph (a) of this subsection, at least once each year; and

(c) Agree, in writing, to adopt and utilize the Kentucky Uniform System of Accounting on or before July 1, 2004, and to charge rates for services based on the actual cost of that service.

(2) Before funds may be disbursed to an applicant whose project has been approved for funding, the applicant shall demonstrate to the authority that the project:

(a) Has been reviewed through the Kentucky State Clearinghouse process; and

(b) Is in compliance with other state and federal requirements.

Section 6. Terms of Financial Assistance.

(1) An application for funding shall be:

(a) Subject to financial viability review by authority staff; and

(b) Referred to the board of directors of the authority for final action.

(2) A project may be funded by loans or grants or a combination of loans and grants, as approved by the board of directors of the authority.

(3) Upon approval of an application for funding of a project, the authority shall issue a conditional commitment letter to the applicant setting forth the requirements to be satisfied by the applicant prior to execution of an assistance agreement, including:

(a) Accounting standards or financial reporting conditions;

(b) Rate covenants;

(d) Engineering or technical requirements;

(e) Receipt of additional funding commitments from other sources; or

(f) Other relevant requirements.

(4) Financial assistance by the authority shall be made available only upon:

(a) Execution of an assistance agreement; and

(b) Satisfaction by the applicant of the conditions set forth in the conditional commitment letter.

(5) A loan shall bear interest payable semiannually, commencing with a date not greater than six (6) months after completion of the project. Principal on a loan shall be payable at least annually over a term not exceeding thirty (30) years, commencing with a date not more than one (1) year after completion of the project.

(6) A grant or loan principal amount may be adjusted by up to ten (10) percent from the principal amount approved by the board of directors without the need for further action by the board if:

(a) Requested by an applicant; and

(b) The staff of the authority finds that:

The additional requested amount is needed for the project; and
The applicant possesses the requisite creditworthiness to make loan payments when due.

(7) Each loan shall bear interest at a rate to be established by the board at least annually, utilizing an index or indices recognized in the municipal bond market for tax-exempt or taxable obligations of comparable term and tax status to the loans to be funded. The rate or rates shall be established using the following additional guidelines:

(a) The index rates shall be the rates published for the index or indices used in a newspaper or financial journal of recognition in the municipal debt markets;

(b) The loan rates shall be based on a reduction from the published index rates as the board shall determine to be financially reasonable to:

Promote use of the 2020 water service account for projects; and
Manage the 2020 water service account for the purposes for which it was established; and

(c) There shall be one (1) rate for all loans of the same term which do not cause interest on the authority's bonds to become includable in gross income for federal income tax purposes by the recipients of the loans, and another rate for all loans of the same term to be funded by authority bonds, the interest on which is includable in gross income for federal income tax purposes by the recipients of the loans.

Section 7. Incorporation by Reference.

(1) "Form KIA-01-02 Uniform Funding Application for Water and Wastewater Projects, 3/2002" is incorporated by reference.

(2) This material may be inspected, copied, or obtained, subject to applicable copyright law, at the Kentucky Infrastructure Authority, 375 Versailles Road, Frankfort, Kentucky 40602, (502) 573-0260, Monday through Friday, 8 a.m. to 4:30 p.m.

History

RELATES TO: KRS 45.031, 224A.011, 224A.112, 224A.300-224A.314
STATUTORY AUTHORITY: KRS 224A.070(1), 224A.113, 224A.300(4)
NECESSITY, FUNCTION, AND CONFORMITY: KRS 224A.070(1) and 224A.113 authorize the Kentucky Infrastructure Authority to promulgate administrative regulations to implement KRS 224A.112. KRS 224A.300(4) requires the authority to promulgate administrative regulations requiring an entity receiving funding to provide specific operational information and updates of its system. This administrative regulation establishes procedures for the application for and provision of financial assistance to governmental agencies and investor-owned utilities for the construction of infrastructure projects from the 2020 water service account of the infrastructure revolving fund.
History: 28 Ky.R. 2115; Am. 2326; eff. 5-16-2002; Crt eff. 2-28-2020.

200 KAR 17:090 Guidelines; Kentucky Infrastructure Authority Grants from Unobligated Bond Pool Funds {#sec-200-kar-17-090 omnilex-key=us-ky-regs-official--title-200--200 KAR 17:090}

Section 1. Definitions.

(1) "Applicant" means a governmental agency that has submitted an application to the authority for a loan or grant from authority funds.

(2) "Application" means an application submitted by an applicant for grant from the authority funds.

(3) "Conditional commitment letter" means a letter delivered to the applicant stating the authority's commitment to provide a grant under specifications and subject to the satisfaction of certain conditions by the applicant.

(4) "Kentucky State Clearinghouse" means the project review mechanism, attached to the Department for Local Government, established in KRS 45.031

(5) "Kentucky Uniform System of Accounting" means the elements of a basic accounting system, including a standardized format for an annual budget, a chart of accounts with definitions, and a monthly operating report to system managers established by the authority, which is used by a water or wastewater system seeking or using funds of the authority if an alternative accounting system has not been approved by the authority.

(6) "Project" means an infrastructure project related to drinking water or wastewater.

Section 2. Eligible Projects.

(1) Funds available to the authority shall be used to fund projects.

(2) Only projects addressing one (1) or more of the following conditions shall be eligible for funding:

(a) The proposed project to be funded shall be water or sewer related;

(b) The proposed project shall address the provisions of KRS 224A.300-224.314;

(d) The proposed project shall alleviate existing conditions that pose a serious and immediate threat to the health and welfare of the community;

(e) The proposed project shall promote economic development;

(f) Funds for economic development projects shall not be used for creation of industrial sites without committed occupants;

(g) Funds are needed to complete funding package;

(h) Funds are needed to cover cost overrun for funding package;

(i) All proposed projects shall be subject to availability of funds; and

(j) Project applications meeting the guidelines established in paragraphs (a) through (i) of this subsection shall be funded in the order received.

(3) Grants shall be limited to not more than $500,000 per project.

Section 3. Applications.

(1) Each applicant shall submit one (1) original application to the authority at the address specified in the application.

(2)

(a) An application shall be submitted on Form KIA-08-01, Unobligated Bond Pool Fund Uniform Grant Application, posted on the following Web site: http://wris.state.ky.us/kia/.

(b) Only a completed application, including all supporting documentation, shall be considered for financial assistance from the Unobligated Bond Pool.

Section 4. Project Priority. Eligible projects shall be funded in the order received subject to the availability of funds.

Section 5. Additional Conditions to Project Funding.

(1) A water supply and distribution system seeking funding for a project shall:

(a) Submit with the application current information regarding the financial, managerial, and technical aspects of its system;

(b) Update the information provided pursuant to paragraph (a) of this subsection, at least once each year; and

(c) Agree, in writing, to adopt and utilize the Kentucky Uniform System of Accounting and to charge rates for services based on the actual cost of that service.

(2) Before funds shall be disbursed to an applicant whose project has been approved for funding, the applicant shall demonstrate to the authority that the project:

(a) Has been reviewed through the Kentucky State Clearinghouse process; and

(b) Is in compliance with applicable state and federal requirements.

Section 6. Terms of Financial Assistance.

(1) An application for funding shall be:

(a) Subject to financial viability review by authority staff; and

(b) Referred to the board of directors of the authority for final action.

(2) A project shall be funded if approved by the board of directors of the authority and the Capital Projects and Bond Oversight Committee.

(3) Upon approval of an application for funding of a project, the authority shall issue a conditional commitment letter to the applicant establishing the requirements to be satisfied by the applicant prior to execution of an assistance agreement, including:

(a) Accounting standards or financial reporting conditions;

(b) Rate covenants;

(d) Engineering or technical requirements; and

(e) Receipt of additional funding commitments from other sources.

(4) Financial assistance by the authority shall be made available only upon:

(a) Execution of an assistance agreement; and

(b) Satisfaction by the applicant of the conditions established in the conditional commitment letter.

(5) A grant amount may be adjusted by up to ten (10) percent from the principal amount approved by the board of directors without the need for further action by the board if:

(a) Requested by an applicant; and

(b) The staff of the authority finds that:

The additional requested amount is needed for the project; and
Adequate funds are available up to $500,000 total per grant.

(6) The Authority shall monitor the assistance agreements and require that financial reports be made available to the authority by the governmental agency.

(7) The Authority shall monitor the cash flows of the project and perform all actions that shall be required to assure that the agreements continuously meet the program standards established by this administrative regulation.

(8)

(a) The authority shall collect an annual administrative fee of one-half(1/2) of one (1) percent charged on the principal grant amount.

(b) This fee shall be applied to the administrative processing servicing costs of the grants and necessary operating expenses of the program.

Section 7. Incorporation by Reference.

(1) "Form KIA-08-01 Unobligated Bond Pool Fund Uniform Grant Application", is incorporated by reference.

(2) This material may be inspected, copied, or obtained, subject to applicable copyright law, at the Kentucky Infrastructure Authority, 1024 Capital Center Drive, Suite 340, Frankfort, Kentucky 40602, (502) 573-0260, Monday through Friday, 8 a.m. to 4:30 p.m.

History

RELATES TO: KRS 224A.011, 224A.035, 224A.040, 224A.050, 224A.050 -224A.314
STATUTORY AUTHORITY: KRS 224A.040, 224A.070(1), 224A.113, 224A.300
NECESSITY, FUNCTION, AND CONFORMITY: KRS 224A.040 authorizes the Kentucky Infrastructure Authority to make grants as funds are available, and KRS 224A.070(1) authorizes the Kentucky Infrastructure Authority to promulgate administrative regulations that shall define with specificity conditions precedent under which applications for loans or grants may be made and the order of priority upon which applications shall be acted upon. KRS 224A.300 requires the authority to promulgate administrative regulations requiring a government agency, as defined by KRS 224A.011(4), or a water association administering a water or wastewater system. This administrative regulation establishes procedures for the application for and provision of financial assistance to governmental agencies for the construction of infrastructure projects from funds available to the Kentucky Infrastructure Authority.
History: 35 Ky.R. 453; 778; eff. 10-31-2008; Crt eff. 2-28-2020.

200 KAR 17:111 Guidelines for Kentucky Infrastructure Authority Drinking Water and Wastewater Grant Program {#sec-200-kar-17-111 omnilex-key=us-ky-regs-official--title-200--200 KAR 17:111}

Section 1. Definitions.

(1) "Applicant" means a governmental agency that has submitted a request to the authority for a grant from authority funds.

(2) "Authority" is defined by KRS 224A.011(6).

(4) "Kentucky State Clearinghouse" means the project review mechanism, attached to the Department for Local Government, established in KRS 45.031.

(5) "Kentucky Uniform System of Accounting" means the elements of a basic accounting system established in KRS 224A.306, which is used by a water or wastewater system seeking or using funds of the authority if an alternative accounting system has not been approved by the authority.

(6) "Project" means an infrastructure project related to drinking water or wastewater.

(7) "Unserved" means a customer who does not have access to publicly available potable drinking water or a properly functioning wastewater system.

Section 2. Eligible Costs Timeline.

(1) Applicants may use funds to cover costs incurred for eligible projects planned or started prior to March 3, 2021, if the project costs covered by the funds were incurred by the applicant after March 3, 2021.

(2) Applicants may use funds to cover eligible costs incurred during the period that begins on March 3, 2021 and ends on December 31, 2024, if the award funds for the obligations incurred by December 31, 2024 are expended by December 31, 2026.

Section 3. Eligible Projects.

(1) Funds available to the authority shall be used to fund projects that make necessary investments in water or sewer infrastructure as defined in 31 C.F.R. 35.6(e)(1).

(2) Only water or wastewater projects addressing one (1) or more of the conditions established in paragraphs (a) through (h) of this subsection shall be eligible for funding:

(a) The proposed project shall provide drinking water services to unserved rural customers.

(b) The proposed project shall address provisions in a federal consent decree related to water or wastewater.

(d) The proposed project shall address an emergency situation.

(e) The proposed project shall alleviate existing conditions that pose a serious and immediate threat to the health and welfare of the community.

(f) The proposed project shall promote social, economic, or environmental benefits; but with respect to industrial sites funds may only be awarded if the site has committed occupants.

(g) Funds are needed to complete a funding package previously awarded by the authority.

(h) Funds are needed to cover cost overrun for a project previously awarded by the authority.

(3) Project applications meeting the guidelines established in subsection (2) of this section shall be funded based on the project's:

(a) Readiness to proceed;

(b) Social, economic, and environmental benefits; and

Section 4. Funding Request.

(1) Each applicant shall request that the water service coordinator, as established in KRS 151.605, designate the project for funding. If a water service coordinator is not available, the request may be made directly to the authority in writing and mailed.

(2) The authority shall request additional information about the project or the applicant if needed to comply with local, state, or federal laws.

(3) Only a completed Water Resource Information System project profile, including all supporting documentation, shall be considered for financial assistance from the Drinking Water and Wastewater Grant Program.

Section 5. Project Priority. Eligible projects shall be funded subject to:

(1) A project's readiness to proceed;

(2) A project's social, economic, and environmental benefits;

(3) The water management council's approval; and

(4) The availability of funds.

Section 6. Additional Conditions to Project Funding.

(1) A water supply and distribution system seeking funding for a project shall agree, in writing, to adopt and utilize the Kentucky Uniform System of Accounting and to charge rates for services based on the actual cost of that service.

(2) Before funds shall be disbursed to an applicant whose project has been approved for funding, the applicant shall demonstrate to the authority that the project:

(a) Has been reviewed through the Kentucky State Clearinghouse process; and

(b) Is in compliance with applicable state and federal requirements.

Section 7. Terms of Financial Assistance.

(1) A funding request shall be:

(a) Subject to financial viability review by authority staff; and

(b) Referred to the authority chair for final action.

(2) A project shall be funded if approved by the authority chair and reviewed by the Legislative Research Commission's Capital Projects and Bond Oversight Committee.

(3) Upon approval of a funding request, the authority shall issue a conditional commitment letter to the applicant establishing the requirements to be satisfied by the applicant prior to execution of an assistance agreement, including:

(a) Accounting standards or financial reporting conditions;

(b) Rate covenants;

(d) Engineering or technical requirements; and

(e) Receipt of additional funding commitments from other sources.

(4) Financial assistance by the authority shall be made available only upon:

(a) Execution of an assistance agreement; and

(b) Satisfaction by the applicant of the conditions established in the conditional commitment letter.

(5) A grant amount may be adjusted by up to ten (10) percent from the principal amount approved without further action if:

(a) Requested by an applicant; and

(b) The staff of the authority finds that:

The additional requested amount is needed for the project; and
Adequate funds are available.

(6) The authority shall monitor the assistance agreements and require that financial reports be made available to the authority by the applicant.

(7) The authority may collect an administrative fee of one-half (1/2) of one (1) percent charged on the principal grant amount, as allowed by law. This fee shall be applied to the administrative processing servicing costs of the grants and necessary operating expenses of the program.

History

RELATES TO: KRS 45.031, 151.601, 151.605, 224A.011, 224A.020, 224A.035, 224A.040, 224A.050 -224A.314, Pub.L. 117-2, 31 C.F.R. Part 35
STATUTORY AUTHORITY: KRS 224A.040, 224A.070(1), 224A.113, 224A.300, 2021 Ky Acts ch. 195, 2022 Ky Acts ch. 199
NECESSITY, FUNCTION, AND CONFORMITY: On March 11, 2021, the American Rescue Plan Act, Pub.L. 117-2, was signed into law, and established the Coronavirus State Fiscal Recovery Fund and Coronavirus Local Fiscal Recovery Fund, which together make up the Coronavirus State and Local Fiscal Recovery Funds (SLFRF) program. This program is intended to provide support to State, territorial, local, and Tribal governments in responding to the economic and public health impacts of COVID-19 and in their efforts to contain impacts on their communities, residents, and businesses. Effective April 1, 2022, the United States Department of the Treasury issued its final rule for the funds, 31 C.F.R. Part 35, which necessitates withdrawal of the existing emergency regulation and the promulgation of a new and substantially different emergency regulation. KRS 224A.040 authorizes the Kentucky Infrastructure Authority to make grants as funds are available, and KRS 224A.070(1) authorizes the Kentucky Infrastructure Authority to promulgate administrative regulations that shall define with specificity conditions precedent under which applications for loans or grants may be made and the order of priority upon which applications shall be acted upon. 2021 Ky Acts ch. 195, requires the authority to promulgate administrative regulations to ensure that project approvals are based on rational criteria and include a project's readiness to proceed and the project's social, economic, and environmental benefits. This administrative regulation establishes procedures for governmental agencies to request and receive financial assistance for the construction of drinking water and wastewater infrastructure projects from funds available to the Kentucky Infrastructure Authority.
History: 49 Ky.R. 488, 1411; eff. 4-4-2023.

Chapter 21 Underwriter and Bond Counsel Selection Process

200 KAR 21:010 Procedure for prequalification of underwriters and bond counsel for state bond issues {#sec-200-kar-21-010 omnilex-key=us-ky-regs-official--title-200--200 KAR 21:010}

Section 1. General Requirements for Prequalification of Underwriters and Bond Counsel.

(1) The office shall determine, in consultation with each bond issuing agency, the need for issuing requests for proposals for underwriting and bond counsel services for bond issuing agencies.

(2) Based on the determination of need, the office shall draft a request for qualifications for underwriting and bond counsel services for a bond issuing agency which needs the services.

(3) A request for qualifications shall include the following:

(a) A description of the bond issuing agency for which the request for qualifications is being issued;

(b) A requirement that the firm disclose information which would impair the firm's ability to provide the level and type of services needed by the bond issuing agency;

(c) A requirement that the firm certify, by sworn statement, that the firm has complied with campaign finance laws established in KRS 121.015 to 121.056, 121.150, 121.310, 121.320, 121.330;

(d) A requirement that the firm certify that it has complied with and is not prohibited by the Executive Branch Code of Ethics, KRS 11A.001 to 11A.990, from entering into a contract with the Commonwealth of Kentucky;

(e) A requirement that the firm certify that it has complied with KRS 45A.485;

(f) A statement that the firm is not prohibited by KRS 45A.863 from entering into a contract with the Commonwealth of Kentucky;

(g) A statement that the Commonwealth shall not be liable for costs associated with a firm's preparation and submission of a response to a request for qualifications; and

(h) A description of the process by which a response to the request for qualifications shall be evaluated by the office.

Section 2. Request for Qualifications for Underwriter Services.

(1) If the nature of the requested underwriting services requires the inclusion of information in addition to the requirements established in Section 1 of this administrative regulation, the following elements shall be included:

(a) A description of the history and organization of the firm and its municipal finance department;

(b) If applicable, a summary of the relevant financial advisory experience of the firm;

(d) A list of the relevant underwriter experience of the firm on negotiated municipal bond transactions of issuers of similar type as that of the state bond issuing agencies;

(e) A list of experience and qualifications of the firm representatives proposed to work on issues of the bond issuing agency;

(f) If applicable, a list of the relevant comanaging underwriter experience of the firm on negotiated municipal bond transactions;

(g) If applicable, identification of the lead banker or contact person at the firm and description of that individual's experience and qualifications;

(h) Identification of the person in the firm proposed to perform cash flow and debt structuring analyses and a description of that individual's experience and qualifications; and

(i) Specific references for the firm's experience and the lead or principal contact person.

(2) If a request for qualifications is for a Kentucky comanaging underwriter, the request for qualifications shall require the firm to:

(a) State the authority of the firm's office located in the Commonwealth to commit capital to an underwriting, independent of some other office of the firm, and the dollar limit, if any;

(b) Identify the firm's underwriter who has responsibility for competitive bond sales in the Commonwealth, and a description of that individual's experience and qualifications;

(d) Provide evidence that the firm has bid on twenty (20) percent of School Facilities Construction Commission supported debt issues and twenty (20) percent of the 100 percent locally-funded school bond issues, within the previous calendar year; and

(e) Describe the emphasis the firm's office located in the Commonwealth places on selling the Commonwealth's bonds to retail buyers located in the Commonwealth.

Section 3. Request for Qualifications for Bond Counsel Services. If the nature of the requested bond counsel services requires the inclusion of information in addition to the requirements established in Section 1 of this administrative regulation, the following elements shall be included:

(1) A description of the history and organization of the firm and its municipal finance and tax law department;

(2) A statement of the relevant bond counsel experience of the firm in applicable areas of finance as required by the bond issuing agency for which the request for qualifications is being issued;

(3) A statement of the experience and qualifications of the firm's personnel proposed to work on bond issues of the bond issuing agency;

(4) Proof that the firm is listed as a "municipal bond attorney" in the most recently published edition of "The Bond Buyer's Municipal Marketplace";

(5) A statement of professional liability insurance coverage showing the limits of the coverage; and

(6) A statement of specific references for the experience of the firm and personnel proposed to work on the bond issues of the bond issuing agency.

Section 4. Advertisement and Mailing of Requests for Qualifications.

(1) The office shall advertise the request for qualifications in a financial newspaper or financial publication with national circulation.

(2)

(a) A request for qualifications shall be mailed to:

Firms that were prequalified during the prior period; and
Firms that have requested, in writing, a request for qualifications from the office.

(b) A firm shall notify the office of a change in mailing address.

(3) An interested firm shall file a written response to the request for qualifications prior to the deadline designated in the request for qualifications. A firm that fails to meet the deadline shall be prohibited from participating in the prequalification process for that qualification period.

(4) The office shall inform each responding firm, in writing, of the results of the prequalification process.

Section 5. Certification of Prequalification.

(1) A master list of firms prequalified for providing underwriter and bond counsel services shall be certified and maintained by the office.

(2) The office shall conduct the prequalification process on at least a biennial basis.

(3) The office shall accept prequalification applications for consideration outside of the scheduled prequalification period from a firm that, since the last prequalification period:

(a) Has been newly incorporated; or

(b) Has opened a new office in the Commonwealth.

History

RELATES TO: KRS 11A.001-11A.990, 45A.485, 45A.853, 45A.863, 121.015-121.056, 121.150, 121.310, 121.320, 121.330
STATUTORY AUTHORITY: KRS 45A.879
NECESSITY, FUNCTION, AND CONFORMITY: KRS 45A.879 requires the Office of Financial Management to promulgate administrative regulations to carry out the provisions of KRS 45A.840 to 45A.879, pertaining to underwriter and bond counsel services. This administrative regulation establishes the procedure for prequalifying underwriting and bond counsel firms.
History: 200 KAR 021:010. 21 Ky.R. 1985; eff. 3-22-1995; 25 Ky.R. 2648; 26 Ky.R. 41; eff. 6-23-1999; 38 Ky.R. 500; eff. 9-28-2011; Crt eff. 4-8-2019; Crt eff. 2-19-2026.

200 KAR 21:020 Evaluation factors for bond counsel and underwriters {#sec-200-kar-21-020 omnilex-key=us-ky-regs-official--title-200--200 KAR 21:020}

Section 1. Evaluation Factors for Bond Counsel and Underwriters. The Office of Financial Management, after consulting with the bond issuing agency, shall develop a request for proposals for bond counsel or underwriter, as applicable, for the bond issuing agency or bond project. The request for proposals shall include the relative weight of the evaluation factors. The total points for all evaluation factors shall not exceed 100 points. The evaluation factors shall include, but not be limited to, the following:

(1) For requests for proposals for bond counsel services:

(a) Relevant experience of the firm.

(b) Experience and availability of the individual firm members proposed to work on the bond issuance.

(2) For requests for proposals for underwriter services:

(a) Relevant experience of the firm.

(b) Experience and availability of individual firm members proposed to work on the bond issuance.

(d) Proposal of alternative and recommended financing structure(s).

(e) Proposal of a marketing plan for proposed transaction(s) and description of the municipal bond distribution capabilities of the firm, where applicable.

History

RELATES TO: KRS 45A.853
STATUTORY AUTHORITY: KRS 45A.853, 45A.879
NECESSITY, FUNCTION, AND CONFORMITY: KRS 45A.853 provides that the Office of Financial Management shall consult with the bond issuing agency to arrive at a request for proposals for bond counsel and underwriter for a bond issuance. KRS 45A.853 further provides that the relative weight of the evaluation factors shall be included in the request for proposals. This administrative regulation establishes some of the evaluation factors which shall be included in a request for proposals for bond counsel or underwriters.
History: 200 KAR 21:020. 21 Ky.R. 1987; eff. 3-22-1995; TAm eff. 11-15-2018; Crt eff. 4-8-2019; Crt eff. 2-19-2026.

200 KAR 21:040 Selection of national comanaging underwriters {#sec-200-kar-21-040 omnilex-key=us-ky-regs-official--title-200--200 KAR 21:040}

Section 1. Definition. For purposes of this administrative regulation the term "national comanaging underwriter" shall mean a financial institution whose headquarters are located outside the Commonwealth of Kentucky, which has offices in multiple states, and which assists in the structuring, underwriting and marketing of bonds issued by governmental agencies.

Section 2. Selection of National Comanaging Underwriters.

(1) National comanaging underwriters for bond issuances of state bond issuing agencies, as defined in KRS 45A.840(3), shall be selected pursuant to the request for proposal process established by KRS 45A.853 and 45A.857 for the same bond issuing agency or bond project for which the request for proposals was issued for underwriters.

(2) After an underwriter has been selected for a bond issuing agency or bond project, a national comanaging underwriter may be selected based on the rankings of the selection committee. The national comanaging underwriter, if any, shall be the highest ranked firm, other than the underwriter selected, which has a municipal bonds sales office located in the Commonwealth.

(3) If the Executive Director of the Office of Financial Management recommends, pursuant to KRS 45A.850(4), that more than one (1) national comanaging underwriter should be utilized on a bond issuance, any additional national comanaging underwriters shall be selected in the order of the ranking as determined by the selection committee for the respective bond issuing agency or bond project.

History

RELATES TO: KRS 45A.850(4)
STATUTORY AUTHORITY: KRS 45A.850(4), 45A.879
NECESSITY, FUNCTION, AND CONFORMITY: KRS 45A.850(4) provides that national comanaging underwriters for bond issues of state bond issuing agencies shall be selected pursuant to an administrative regulation promulgated by the Office of Financial Management. This administrative regulation establishes the procedure for selecting national comanaging underwriters for bond issues of state bond issuing agencies.
History: 200 KAR 21:040. 21 Ky.R. 1990; eff. 3-22-1995; TAm eff. 11-15-2018; Crt eff. 4-8-2019: Crt eff. 2-19-2026.

200 KAR 21:050 Establishment of rates to reimburse underwriters for counsel {#sec-200-kar-21-050 omnilex-key=us-ky-regs-official--title-200--200 KAR 21:050}

Section 1. Rates to be Reimbursed for Counsel to Underwriters. When an underwriter is utilized on a bond issuance of a state bond issuing agency, the amount of expenses to be paid to the underwriter for reimbursement of its cost of retaining legal counsel for legal services relating to the bond issuance shall be as follows:

(1) For bond issuances with principal amounts from zero to $10,000,000, the rate shall be equal to the fee paid to bond counsel on the same bond issuance.

(2) For bond issuances with principal amounts greater than $10,000,000 to $25,000,000, the rate shall be equal to seventy-five (75) percent of the fee paid to bond counsel on the same bond issuance.

(3) For bond issuances with principal amounts greater than $25,000,000 to $50,000,000, the rate shall be equal to sixty-five (65) percent of the fee paid to bond counsel on the same bond issuance.

(4) For bond issuances with principal amounts in excess of $50,000,000, the rate shall be equal to fifty-five (55) percent of the fee paid to bond counsel on the same bond issuance.

(5) Notwithstanding the provisions of subsections (1) through (4) of this section, the minimum rate at which an underwriter shall be reimbursed for its legal counsel for legal services related to the issuance of bonds of a state bond issuing agency shall be equal to ten (10) cents per $1,000 of principal amount of bonds issued, not to exceed the fee paid to bond counsel on the same bond issuance.

(6) All rates reimbursed pursuant to this administrative regulation shall be inclusive of all expenses.

History

RELATES TO: KRS 45A.877
STATUTORY AUTHORITY: KRS 45A.877, 45A.879
NECESSITY, FUNCTION, AND CONFORMITY: KRS 45A.877 requires the Office of Financial Management to establish and maintain a schedule of rates at which underwriters will be reimbursed for fees and expenses of the counsel they retain for a bond issuance of a state bond issuing agency. This administrative regulation establishes the rate schedule for underwriters' counsel.
History: 200 KAR 21:050. 21 Ky.R. 1991; eff. 3-22-1995; TAm eff. 11-15-2018; Crt eff. 4-8-2019; Crt eff. 2-19-2026.

Chapter 23 Kentucky Asset/Liability Commission

200 KAR 23:010 Guidelines for use of financial agreements {#sec-200-kar-23-010 omnilex-key=us-ky-regs-official--title-200--200 KAR 23:010}

Section 1. Definitions. For the purpose of this administrative regulation:

(1) "Hedge" means a position in a financial agreement taken to minimize or eliminate the risk associated with an existing instrument or portfolio of instruments;

(2) "Net exposure" means the difference between the sum of the notional amount of financial agreements based on interest-sensitive assets or interest-sensitive liabilities under which variable payments are owed, less the sum of the notional amount of financial agreements based on interest-sensitive assets or interest-sensitive liabilities under which fixed payments are owed, respectively;

(3) "Notional amount" means the nominal amount on which a financial agreement is based;

(4) "Obligations" means notes, leases, bonds, or other financial liabilities;

(5) "Par amount" means the face or nominal value of a security.

Section 2. Guidelines of the Commission in the Use of Financial Agreements. The commission shall enter into financial agreements pursuant to the following guidelines:

(1) The commission shall utilize financial agreements in a prudent and nonspeculative manner;

(2) The commission shall only enter into financial agreements with parties which are rated in one (1) of the three (3) highest rating categories by one (1) of the following rating agencies:

(a) Fitch Investors Service, L.P.;

(b) Moody's Investors Service; or

(3) Financial agreements resulting in variable rate obligations for the Commonwealth shall be entered into only if the aggregate of all variable rate obligations under financial agreements does not exceed a net exposure of more than ten (10) percent of state obligations outstanding which are supported by appropriations by the General Assembly at the time the agreement is executed. Financial agreements utilized related to the issuance of tax and revenue anticipation notes shall be excluded from this limitation;

(4) Financial agreements utilized for the purpose of refunding or aiding in the refunding of obligations of the Commonwealth shall be limited to a notional amount not to exceed the par amount and stated final maturity of the refunding obligations;

(5) Financial agreements utilized as part of a debt service reserve fund investment strategy shall be limited to a notional amount not to exceed the maximum required debt service reserve fund amount required under the resolution, trust indenture, or agreement establishing the debt service reserve fund;

(6) Financial agreements utilized for the purpose of maximizing investment income and alleviating mismatches between an advance refunding escrow and debt service payments due on an obligation shall be limited to a notional amount not to exceed the par amount of the securities held in the escrow plus interest; and

(7) No more than ten (10) percent of the Commonwealth's investment portfolio shall be subject to financial agreements utilized for the purpose of managing the net interest margin. Financial agreements based on the Commonwealth's interest-sensitive assets shall be coordinated with the State Investment Commission.

History

RELATES TO: KRS 56.863(9)
STATUTORY AUTHORITY: KRS 56.863(2), (9)
NECESSITY, FUNCTION, AND CONFORMITY: KRS 56.863(9) requires that the Kentucky Asset/Liability Commission promulgate administrative regulations that limit the net exposure of the Commonwealth as a result of the commission entering into financial agreements. This administrative regulation establishes the limits under which the commission may enter into financial agreements.
History: 200 KAR 23:010. 24 Ky.R. 790; 1055; eff. 10-22-1997; Crt eff. 4-8-2019; Crt eff. 2-19-2026.

Chapter 26 Kentucky Gas Pipeline Authority

200 KAR 26:010 KGPA operating procedures {#sec-200-kar-26-010 omnilex-key=us-ky-regs-official--title-200--200 KAR 26:010}

Section 1. Definitions.

(1) "Full-time job" means a position filled by an employee, except for contract or part-time employees, that the company projects will work on an annual basis 1,820 hours.

(2) "KGPA" means the Kentucky Gas Pipeline Authority, created and established by KRS 353.750.

(3) "KPABAC" means the Kentucky Private Activity Bond Allocation Committee, created and established by KRS 103.286.

(4) "Project" is defined in KRS 353.750(5).

Section 2. Application Process.

(1) Eligible projects may be financed by the issuance of revenue bonds by the KGPA pursuant to an agreement between the KGPA and the applicant related to the project.

(2) Before filing an application requesting the issuance of revenue bonds by the KGPA, an applicant shall contact:

(a) Bond counsel to determine if financing by the KGPA is feasible and any relevant federal tax issues associated with the issuance of any revenue bonds for the project;

(b) The KPABAC if the bond issue qualifies as a private activity bond and the applicant intends to request an allocation of a portion of the state private activity bond volume cap;

(c)

Potential underwriters, to receive a commitment to purchase the bonds, if the issue is to be publicly sold; or
Other purchasers, to receive a commitment to purchase the bonds, if the issue is to be privately placed; and

(d) Governmental entities that will be impacted by expected lost property tax revenues as a result of the proposed bond issue.

(3) An applicant requesting the issuance of revenue bonds by the KGPA shall submit an application using the KGPA application. The application shall be submitted to the KGPA at least ninety (90) days prior to the anticipated date of issuance of the revenue bonds, and shall be accompanied by:

(a) A $500 nonrefundable application fee;

(b) Resolutions or other documents of support from governmental entities impacted by expected lost property tax revenues as a result of the proposed bond issue; and

Section 3. Evaluation Criteria. The following criteria may be considered by the KGPA when evaluating a project application and issuance of revenue bonds for the project:

(1) Number of new full-time jobs expected to be created or retained as a result of the project for which the bonds are to be issued;

(2) Average hourly wage expected to be paid for each full-time job created or retained;

(3) Employee benefits expected to be offered;

(4) Amount of capital investment being made in the project by the applicant;

(5) Unemployment rate in the county or counties of the proposed project;

(6) State tax incentive programs and grant or loan programs in which the applicant has previously participated with another project or is seeking to participate in with the proposed project;

(7) Whether the proposed project would be eligible to participate in a tax incentive, grant, or loan program offered under KRS Chapter 148 or 154;

(8) New tax revenues which the applicant anticipates will be produced by the project over the life of the bond issue, i.e. severance tax revenue, corporate income tax, sales tax, occupational tax, etc.;

(9) Approximate amount and percentage of state and local ad valorem taxes expected to be lost as a result of the applicant leasing all or a portion of the project from the KGPA;

(10) Whether the proposed project will result in an increase in current user rates;

(11) Whether the rate structure will be regulated by the Kentucky Public Service Commission or any other public regulatory body;

(12) Whether the project is financially viable, as evidenced by a willing applicant and a willing lender; or

(13) Whether the project will increase transmission of gas.

Section 4. Approval Process.

(1) The KGPA shall evidence its approval or disapproval of the proposed project and related bond issue through the adoption of a resolution authorizing the project and issuance, execution, and delivery of the bonds. The resolution shall also approve any related lease agreement, loan agreement, or similar agreement, and authorize the appropriate officials of the KGPA to negotiate the terms of and execute any agreement. A copy of the resolution shall be sent to the applicant.

(2) Sale of the bonds shall not occur before receipt of the resolution.

(3) As a condition of approval of the proposed bond issuance, the KGPA shall require the execution and delivery of a lease agreement, loan agreement, or similar agreement between the applicant and the KGPA providing for or relating to the financing of the construction, reconstruction, improvement, or repair of the proposed project, if the applicant will be leasing all or a portion of the industrial project from the KGPA.

(4) Upon approval of the project by the KGPA and prior to any bonds being issued for the project:

(a) An applicant shall seek final approval by the applicable regulatory body or authority;

(b) The listed entities shall review and approve the proposed bond issue:

State Property and Buildings Commission (SPBC), pursuant to KRS 56.450;
Capitol Projects and Bond Oversight Committee, pursuant to KRS 45.810; and
Office of Financial Management in the Office of the Controller within the Finance and Administration Cabinet, pursuant to KRS 42.420; and

(c) The Secretary of the Finance and Administration Cabinet shall certify that the issuance of revenue bonds in relation to the project and the terms of the issue shall not require an appropriation of state general funds, in accordance with KRS 56.870(3).

(5) The applicant shall complete a KGPA Bond Information Disclosure Form and submit it to the Office of Financial Management no later than five (5) days after the bond or note sale.

Section 5. Reporting Requirements.

(1) The KGPA shall make an annual report in accordance with the provisions of KRS 353.776.

(2) The KGPA shall provide for an audit in accordance with the provisions of KRS 353.776.

Section 6. Incorporation by Reference.

(1) The following material is incorporated by reference:

(a) "KGPA Application (8/05)";

(b) "KGPA New Bond Issue Report (8/05)"; and

(2) This material may be inspected, copied, or obtained, subject to applicable copyright law, at the Finance and Administration Cabinet, Office of the Secretary, Room 383 Capitol Annex, Frankfort, Kentucky 40601, Monday through Friday, 8 a.m. to 4:30 p.m.

History

RELATES TO: KRS 42.420, 45.810, 56.450, 56.870(3), Chapter 148, Chapter 154, 353.750-353.776
STATUTORY AUTHORITY: KRS 353.754(5)
NECESSITY, FUNCTION, AND CONFORMITY: KRS 353.754(5) requires the Kentucky Gas Pipeline Authority to promulgate administrative regulations for the conducting of its business and affairs. This administrative regulation establishes the operating procedures for the Kentucky Gas Pipeline Authority.
History: 32 Ky.R. 706; 1082; eff. 12-16-2005; Crt eff. 2-10-2020.

Chapter 38 Office of the Controller

200 KAR 38:040 Allocation of fees for disabled permit parking violations {#sec-200-kar-38-040 omnilex-key=us-ky-regs-official--title-200--200 KAR 38:040}

Section 1. Monthly, district court clerks shall deposit the general fund of the state treasury and report to the Finance and Administration Cabinet the $250 fines collected pursuant to KRS 189.990 for violation of the disabled parking provisions.

Section 2. The fines and costs collected shall be allocated as follows:

(1) Ninety (90) percent of the amount remitted to the state treasury shall be distributed monthly by the Finance and Administration Cabinet to the Health and Family Services Cabinet to be used for the Personal Care Assistance Program pursuant to KRS 205.900 to 205.920.

(2) Ten (10) percent of the amount remitted to the State Treasury shall be distributed annually by the Finance and Administration Cabinet to the fiscal court in the county where the violation occurred, and then distributed equally by the fiscal court to all law enforcement agencies within the county.

History

RELATES TO: KRS 24A.180, 189.456, 189.459, 189.990, 205.900-205.920
STATUTORY AUTHORITY: KRS 42.0201(3), (5)(a)
NECESSITY, FUNCTION, AND CONFORMITY: KRS 189.990 imposes a $250 fine on a person for violating disabled parking provisions set out in KRS 189.459(2) and (3). This administrative regulation provides for the allocation of those fines for the purposes specified in KRS 189.990.
History: 31 Ky.R. 1033; eff. 1-21-2005; Crt eff. 2-10-2020.

200 KAR 38:050 Advancements to sheriffs {#sec-200-kar-38-050 omnilex-key=us-ky-regs-official--title-200--200 KAR 38:050}

Section 1. Definitions.

(1) "Branch" means the County Fee Systems Branch.

(2) "Cabinet" means the Finance and Administration Cabinet.

(3) "Secretary" means the secretary of the Finance and Administration Cabinet.

Section 2. Application. Sheriffs of counties containing a population of less than 70,000 may make application to the State Treasurer to be advanced monies to operate their offices during those periods of the year when the fees of the office are inadequate to provide for operational expenses. Application shall be in the form of a letter addressed to the Finance and Administration Cabinet, Office of the Controller, Division of Local Government Services, County Fee Systems Branch, signed by the sheriff, and notarized by a notary public in and for the Commonwealth of Kentucky. The application shall state:

(1) The fees received by the sheriff are insufficient to provide the necessary funds for the operation of the office;

(2) The sheriff desires to receive an advancement of funds from the State Treasury to defray office expenses;

(3) The sheriff agrees to comply with this administrative regulation; and

(4) The documents filed with the application are true and correct statements of fact.

Section 3. Accompanying Documents. The following documents shall accompany a letter of application:

(1) A copy of the sheriff's settlement with the fiscal court of the sheriff's county for the year immediately preceding the year in which application for an advancement is made, certified as true and correct by the county court clerk. If the sheriff's settlement with the fiscal court has not been filed, the sheriff may substitute an affidavit setting out the actual fees of the office for the immediate preceding year.

(2) A copy of the last quietus from the state, certified by an authorized representative of the Finance and Administration Cabinet, Department of Revenue.

(3) A detailed budget for the sheriff's office, approved by fiscal court, for the year in which the advancement is to be made. The budget statement shall contain detailed breakdowns of monthly expenditures and receipts.

(4) A detailed statement, approved by fiscal court, of the amount to be advanced in each month.

(5) An affidavit setting out receipts for the year up to and including the last day of the previous month and actual expenses to the last day of the month in which application is made, if the sheriff first requests an advance in a month other than January.

(6) A bond in favor of the commonwealth for an amount not to exceed the total advance requested for the year. The bond shall be:

(a) Issued by a surety company authorized to do business in the Commonwealth of Kentucky;

(b) Conditioned upon the full repayment by the sheriff of all monies advanced by the commonwealth;

(d) Approved by the fiscal court; and

(e) Prepared in duplicate, with the original to be filed with the branch and a copy with the county court clerk of the sheriff's county.

(7) Any other document, report, or information which:

(a) Describes or facilitates understanding of the fiscal condition, history, or management of the sheriff's office; and

(b) Is requested by the cabinet to enable it to adequately evaluate the advisability of making advancement.

Section 4. Initial Advancement; Procedure. Upon receipt of an application for advancement to a sheriff, the branch manager shall examine the application for compliance with this administrative regulation. If the request and supporting documents are found to be in proper order, the branch manager shall recommend to the secretary that an advance be made and a suggested amount. The branch manager shall be guided by the following considerations in making a recommendation:

(1) If the first advance is requested for the month of January, the branch manager shall recommend that the cabinet issue a warrant for the lesser of:

(a) The sheriff's request; or

(b) The estimated expenditures minus receipts for the month of January as set out in the sheriff's budget; except that the monthly advance shall not exceed the lesser of $60,000 or one-twelfth (1/12) of the sheriff's receipts for the previous year.

(2) If the first advance request is for a month other than January, the branch manager shall add the expenses of the sheriff for the months of the year preceding the application as set out in the affidavit to the estimated expenses for the month in which the advance is requested, subtract the receipts of the office, and recommend that a warrant be issued for the lesser of:

(a) The figure representing the difference between the sum of the actual expenses and the estimated expenses for the month of the advance and the receipts of the office; or

(b) The amount requested; except that the recommendation shall not exceed $60,000 or one-twelfth (1/12) of the sheriff's receipts of the previous year, whichever is the lesser.

Section 5. Subsequent Advancements.

(1) After receiving an initial advancement, a sheriff may receive subsequent advancements upon filing with the cabinet a request for advancement accompanied by an affidavit setting out the receipts and expenditures of the sheriff's office through the previous month.

(2) Upon receipt of a request for a subsequent advancement, the branch shall add the actual expenditures to date to the estimated expenditures for the current month, subtract the actual receipts of the office, and cause a warrant to be issued for the lesser of:

(a) The difference; or

(b) The amount requested; except that the warrant shall not exceed the lesser of $60,000 or one-twelfth (1/12) of the sheriff's receipts for the previous year.

Section 6. Refund Procedure.

(1) A sheriff who has received an advancement of funds shall, on or before the tenth day of November, December, and January, file with the cabinet an affidavit stating the actual receipts and expenditures of the office for the preceding month. The affidavit shall be accompanied by a check made payable to the Treasurer of the Commonwealth of Kentucky in the amount that the receipts exceed the expenditures for the previous month; except that the total amount of money payable to the commonwealth shall not exceed the total of the advancements made to the sheriff during the preceding year.

(2) If the payment submitted as provided in Section 6(1) of this administrative regulation is less than the amount advanced to the sheriff during the preceding year, the sheriff shall, on or before January 15 of the year following the year in which the advancements are made, forward a check made payable to the Treasurer of the Commonwealth of Kentucky in the amount of the unpaid balance.

(3) An advancement shall not be made to a sheriff unless the total amount advanced in the previous year has been repaid to the commonwealth.

History

RELATES TO: KRS 64.140
STATUTORY AUTHORITY: KRS 42.0201(3)
NECESSITY, FUNCTION, AND CONFORMITY: KRS 42.0201(3) requires the state controller to be responsible for all aspects of accounting policies and procedures, financial accounting systems, and internal accounting control policies and procedures. KRS 64.140 provides for advancements to county sheriffs to defray official expenses. This administrative regulation provides for advancement to sheriffs of counties with a population of less than 70,000.
History: 31 Ky.R. 1918; Am. 32 Ky.R. 51; eff. 7-27-05; Crt eff. 2-10-2020.

200 KAR 38:060 Reimbursement to law enforcement officers for certain expenses {#sec-200-kar-38-060 omnilex-key=us-ky-regs-official--title-200--200 KAR 38:060}

Section 1. Definitions

(1) "Branch" means the County Fee Systems Branch in the Division of Local Government Services.

(2) "Cabinet" means the Finance and Administration Cabinet.

(3) "Officer" means the sheriff, city police, or city marshal incurring expenses pursuant to KRS 29A.180.

Section 2. For expenses incurred for sequestered grand or petit jurors, as authorized by KRS 29A.180(1), each officer, upon presenting the branch an order of the court requiring sequestration and an invoice for the expenses, shall be reimbursed for:

(1) The actual cost of meals, tips and delivery service for no more than fourteen (14) jurors and no more than two (2) officers. Meals for additional jurors and officers may be reimbursed upon presenting the branch with an order of the court documenting the need. Sales tax incurred shall not be reimbursed.

(2) The actual cost of housing for jurors and appropriate officers.

(3) Any other expense incurred in service to sequestered jurors.

Section 3. For expenses incurred in transporting jurors and other authorized persons as authorized by KRS 29A.180(2), each officer, upon presenting the branch an order of the court requiring the transport, shall be reimbursed for each vehicle used at the rate set forth in KRS 64.070 for transporting a prisoner to the penitentiary.

Section 4. For expenses incurred in providing specialized security personnel, equipment or services as authorized by KRS 29A.180(3), each officer, upon presenting the branch an order of the court requiring the personnel, equipment or services, and a copy of any consenting correspondence from the Chief Justice, shall be reimbursed for:

(1) Specialized security personnel at the rate authorized by KRS 64.092 for court attendance.

(2) Equipment and services requested by the judge at a reasonable rate to be fixed by the judge and entered upon the order book of the court.

History

RELATES TO: KRS 29A.180
STATUTORY AUTHORITY: KRS 29A.180
NECESSITY, FUNCTION, AND CONFORMITY: KRS 29A.180 requires the Finance and Administration Cabinet to promulgate administrative regulations concerning the reimbursement of law enforcement officers for certain jury and juror expenses. This administrative regulation establishes the method of reimbursing law enforcement officers for expenses incurred for sequestered jurors, for transporting jurors or other authorized persons to views of the scene and for providing specialized security personnel, equipment or services to the court.
History: 32 Ky.R. 170; eff. 10-7-2005; Crt eff. 2-10-2020.

200 KAR 38:070 Internal controls and pre-audit {#sec-200-kar-38-070 omnilex-key=us-ky-regs-official--title-200--200 KAR 38:070}

Section 1. Definitions.

(1) "Agency" is defined by KRS 12.010.

(2) "Agency head" means the cabinet secretary or executive and administrative head of an agency that does not have a secretary at the top of its organizational structure.

(3) "Control environment" means the atmosphere or organizational culture in which state employees conduct activities and carry out their jobs. It encompasses the organizational structure, management philosophy and operating styles, integrity and ethical values, commitment to competence, and human resource policies and practices.

(4) "FAP" means Finance and Administrative Polices incorporated by reference in 200 KAR 5:021.

(5) "Fiscal officer" means the employee appointed by the agency head, in accordance with FAP 120-07-00, with responsibilities including establishing and maintaining a proper internal control structure, establishing and maintaining the chart of accounts for the state's accounting system, providing assurances that agency financial reports accurately reflect underlying activity, conducting fiscal operations under Generally Accepted Accounting Principles (GAAP), and acting as a single point of contact with the Office of the Controller.

(6) "Internal control" means a procedure or activity implemented to provide reasonable assurance that the agency achieves effectiveness and efficiency of operations, reliability of financial reporting, and compliance with applicable laws, administrative regulations, policies, and procedures.

(7) "Monitor" means quantifiable and qualitative assessment of the effectiveness and efficiency of the system of internal controls and pre-audit policies and procedures.

(8) "Risk assessment" means the identification and analysis of risks to the achievement of operations, financial reporting, and compliance objectives, forming the basis for determining how those risks should be managed.

Section 2. Fiscal Officer to Develop Internal Control Plan.

(1) The agency head shall perform the responsibilities of fiscal officer or delegate the responsibilities to an employee with adequate skills to perform the job duties. The fiscal officer shall be specified in the delegation agreement between the agency and the Office of the Controller.

(2) Each fiscal officer shall develop and document internal controls to both prevent and detect abuse, unintentional errors, and the fraudulent disbursement of funds or use of state assets. In addition, the fiscal officer shall work with agency personnel to implement the internal controls and monitor their effectiveness.

(3) An internal control plan shall include the following:

(a) Organizational structure and alignment of job duties that provide the appropriate segregation of duties for the proper safeguarding of agency assets to prevent one (1) individual from controlling or processing a transaction from beginning to end.

(b) Limited number of agency personnel authorized to access agency assets and records in the performance of their assigned duties.

(c) Procedure that provides for the internal review of all transactions processed by the agency, as required by the agency's Pre-audit Delegation Agreement with the Office of the Controller and FAP 120-13-00. The internal review shall include, but is not limited to, the following:

Authenticity of transactions or documents including vendor invoices, claims for refund amounts previously paid or withheld, and other documents;
Legality and propriety of transactions;
Authorized approvals of transactions;
Review of transactions for appropriate accounting codes and accuracy; and
Review for compliance with GAAP.

(d) Authorization and recordkeeping procedures, including document retention in accordance with agency established retention schedules and the General Schedule for state agencies, FAP 111-28-00, and FAP 120-21-00.

(e) Reconciliation of agency accounts on a timely basis.

(f) Detailed procedures to be followed in the performance of job duties and functions, to emphasize duties that comprise the overall framework of accountability and internal controls, and to help assure the continuation of agency operations in the event of staffing changes.

(g) Procedures for safeguarding agency assets;

(h) Assessment of the control environment, risks, impact of abuse, unintentional errors, and potential fraud for the following:

Receipts;
Disbursements;
Procurement practices;
Procurement card use;
Fixed assets;
Pre-audit of agency transactions;
Routing of MARS documents;
Document retention;
Grant and program administration;
Compliance and noncompliance with statutes, administrative regulations, policies, and procedures;
Accounts Receivables;
Journal Vouchers;
Adjustment transactions;
Physical security; and
Other relevant agency activities.

(i) Cost-effective control activities to address identified risks that may result in improper or unnecessary payments.

(j) Written communication regarding agency internal controls to employees.

(k) System of monitoring compliance with internal control and pre-audit procedures.

(l) Procedures for employees to report violations of internal control and pre-audit procedures requested by the Office of the Controller in the delegation agreement with the agency.

Section 3. Agency Reports to the Finance and Administration Cabinet.

(1) Each fiscal officer shall submit information about internal controls and pre-audit procedures requested by the Office of the Controller in the delegation agreement with the agency.

(2) Upon request, each fiscal officer shall complete and submit to the Office of the Controller information related to the system of internal control and pre-audit policies and procedures in place to prevent and detect errors, waste, abuse, and fraud.

(3) Each fiscal officer shall report amounts paid to a vendor, provider, or recipient due to errors, fraud, or abuse in the annual financial closing package to the Office of the Controller.

(4) In compliance with 200 KAR 5:302, Section 2(2)(h), each agency that requests or obtains a small purchase delegation above the limits established in KRS 45A.100 shall submit to the secretary of the Finance and Administration Cabinet every record of control weakness or noncompliance, related to procurement practices, issued to the agency by the Auditor of Public Accounts, internal auditors, or the Finance and Administration Cabinet's Office of Policy and Audit, for each of the past two (2) fiscal years, the agency's response to the finding, and any corrective measure taken.

(5) Financial or administrative abuse or fraud discovered by the agency shall be reported to the Office of the Controller as soon as practicable. After the appropriate agency authorities and state or federal officials have investigated the fraud or abuse, the agency shall submit an analysis of the internal control weakness that allowed the fraud or abuse to occur to the Office of the Controller. The agency shall also submit the internal controls that have been implemented by the agency to correct the weakness.

Section 4. Additional Internal Controls or Pre-Audit Procedures.

(1) The Finance and Administration Cabinet may require an agency to implement additional internal controls or pre-audit procedures necessary to correct a control weakness or to meet the unique needs of the agency.

(2) When applicable, the Office of the Controller shall perform additional review to ensure that the internal controls or pre-audit procedures have been implemented, as required by KRS 45.237 and this administrative regulation.

History

RELATES TO: KRS 42.0201, 45.121, 45.240
STATUTORY AUTHORITY: KRS 45.237
NECESSITY, FUNCTION, AND CONFORMITY: KRS 45.237 requires the Finance and Administration Cabinet to develop, for the executive branch, a system of internal controls and pre-audit policies and procedures applicable to disbursement transactions for the purpose of prevention and detection of errors or fraud and abuse prior to the issuance of a check or warrant. This administrative regulation requires agencies to draft and submit internal control plans to the Finance and Administration Cabinet. Agencies will also be required to provide information related to internal controls and pre-audit procedures as requested by the Office of the Controller, per the delegation agreement with each agency. Based on agency internal control plans and activities reported, the Finance and Administration Cabinet shall assist agencies, when appropriate, in the implementation of policies and procedures to reduce improper and unnecessary payments.
History: 32 Ky.R. 171; 477; eff. 9-22-2005; Crt eff. 2-10-2020.

Chapter 40 Fleet Management

200 KAR 40:010 Motor pool procedure {#sec-200-kar-40-010 omnilex-key=us-ky-regs-official--title-200--200 KAR 40:010}

Section 1. In order to facilitate the administration and operation of the state motor pool, the Guide for Drivers of the Commonwealth's Vehicles and the Agency Guide for the Commonwealth's Vehicles shall govern the use and assignment of state motor pool vehicles, the operation and care of those vehicles, and the use of fuel credit cards.

Section 2. Any employee who fails to adhere to the requirements of this administrative regulation is subject to disciplinary action pursuant to KRS 18A.095.

Section 3. Incorporation by Reference.

(1) The following material is incorporated by reference:

(a) "Guide for Drivers of the Commonwealth's Vehicles", 2/2015; and

(b) "Agency Guide for the Commonwealth's Vehicles", 2/2015.

(2) This material may be inspected, copied, or obtained, subject to applicable copyright law, at the Finance and Administration Cabinet, 392 Capitol Annex, Frankfort, Kentucky 40601, Monday through Friday, 8 a.m. to 4:30 p.m., and is available from the Division of Fleet Management Web site at http://finance.ky.gov/services/fleet/Pages/FleetGuidanceandRates.aspx.

History

RELATES TO: KRS 42.0171(2), 44.045
STATUTORY AUTHORITY: KRS 44.045(6)
NECESSITY, FUNCTION, AND CONFORMITY: KRS 44.045(6) authorizes the secretary of the Finance and Administration Cabinet to promulgate an administrative regulation governing the use of state-owned vehicles. This administrative regulation establishes the procedures by which a state employee may use a motor pool vehicle and the employee's resulting responsibility for the motor vehicle.
History: 11 Ky.R. 523; eff. 10-9-84; Am. 1074; eff. 2-12-1985; 14 Ky.R. 55; eff. 8-5-1987; 19 Ky.R. 208; 869; eff. 10-8-1992; Recodified from 600 KAR 1:070; 8-2-2006; 41 Ky.R. 1701; 1973; eff. 4-3-2015; Crt eff. 3-29-2022.

200 KAR 40:020 Purchase, use, lease, maintenance, and disposal of state-owned motor vehicles {#sec-200-kar-40-020 omnilex-key=us-ky-regs-official--title-200--200 KAR 40:020}

Section 1. Definitions.

(1) "Agency-specific motor pool" means the fleet of passenger carrying motor vehicles owned, operated, and maintained by a state agency other than the Finance and Administration Cabinet.

(2) "Cabinet" means the Finance and Administration Cabinet.

(3) "Division" means the Finance and Administration Cabinet, Division of Fleet Management.

(4) "Exempt vehicle" means a motor vehicle that is not part of the statewide motor pool.

(5) "Motor vehicle" is defined in KRS 281.011(2).

(6) "Nonexempt vehicle" means a motor vehicle under the control of the statewide motor pool.

(7) "Passenger carrying vehicle" means a motor vehicle whose primary purpose is to transport people.

(8) "Secretary" means the Secretary of the Finance and Administration Cabinet.

(9) "Statewide motor pool" means the fleet of passenger carrying motor vehicles operated, controlled, and maintained by the Finance and Administration Cabinet, Division of Fleet Management.

Section 2. General.

(1) This administrative regulation shall apply to:

(a) An executive branch state agency in regard to the purchase, licensure, use, lease, maintenance, and disposal of a motor vehicle; and

(b) A legislative or judicial branch state agency in regard to the use, lease, and maintenance of a nonexempt motor vehicle.

(2) The cabinet shall establish a statewide motor pool of vehicles for the purpose of providing safe, reasonably priced, necessary, and essential vehicular transportation for a cabinet, agency, or entity of state government. This fleet shall be made available for lease by a state agency.

(3)

(a) The secretary may, upon written justification from an agency head, authorize the establishment of an agency-specific motor pool.

(b) An agency-specific motor pool shall provide a similar service level at costs less than or equal to the costs the cabinet could provide a comparable service.

(c) An agency with authority delegated pursuant to this subsection shall submit cost effectiveness and inventory reports to the cabinet on an annual basis or as requested by the cabinet to demonstrate the agency-specific motor pool meets the requirements of this subsection.

(d) The establishment of an agency-specific motor pool shall not exempt the agency from the provisions of this administrative regulation.

(4) Except as provided in Section 3(2) of this administrative regulation, a state-supported university and the Kentucky State Police shall be exempt from the provisions of this administrative regulation.

(5) A nonpassenger carrying motor vehicle with a weight rating greater than three-fourths (3/4) ton shall be exempt from the statewide motor pool.

Section 3. Vehicle Identification.

(1) The cabinet shall have inventory responsibility for all state-owned motor vehicles.

(2) A state agency controlling an exempt vehicle shall submit an annual inventory report to the cabinet.

(3) A copy of each vehicle purchase order authorized by the secretary pursuant to KRS 44.045(2) shall be submitted to the cabinet. The submittal shall include the agency responsible for reporting inventory information to the cabinet.

(4) At the time of its purchase, a nonexempt motor vehicle shall be delivered to the division in Frankfort, where licensing, identification, and other required markings shall be performed. The agency controlling an exempt vehicle shall pay the division the actual costs incurred for the licensing, identification, and other required markings for the vehicles.

Section 4. Purchase of Motor Vehicles.

(1) A price contract for the purchase of a motor vehicle shall be established by the cabinet's Office of Procurement Services.

(2)

(a) The cabinet shall approve the purchase of a motor vehicle, except one (1) exempted by the provisions of Section 2(4) of this administrative regulation and an exempt vehicle deemed necessary by the secretary pursuant to KRS 44.045(2). A state agency desiring to purchase a motor vehicle shall submit a written request to the cabinet.

(b) The request shall include the following:

Name of the requesting agency;
Description of the requested vehicle, including type of fuel used in the vehicle;
Intended use of the vehicle;
Number of vehicles requested;
Estimated annual vehicle mileage;
Whether the vehicle is a replacement or a program expansion;
Source of funds for the purchase;
If funding for the vehicle was approved in the budget;
If the vehicle will be assigned to a motor pool, and if not, an explanation of its planned uses; and
The name, address, telephone number, and signature of the person in the agency authorized to request the purchase.

(3) The cabinet shall consider for replacement a nonexempt motor vehicle that:

(a) Is seven (7) years old;

(b) Has been driven 140,000 miles;

(d) Is unsafe; or

(e) Is in need of extensive repair that would not be economically feasible.

Section 5. Use of Motor Vehicles.

(1)

(a) A state employee shall comply with 200 KAR 40:010 when using a vehicle from the motor pool.

(b) It shall be the responsibility of each agency head to ascertain that state-owned motor vehicles are used only for official purposes in accordance with KRS 44.045(2) and the agency head shall ensure that the use of these vehicles is not abused.

(2)

(a) The request for permanent assignment shall set forth the reasons why the assignment is necessary and in the best interests of the Commonwealth.

(b) If the vehicle is to be parked at a private residence, the request shall include significant justification for this action.

(3) Before a motor vehicle may be used by a state agency, it shall be marked in accordance with the provisions of KRS 44.045.

Section 6. Licensure of Motor Vehicles.

(1)

(a) A request to license a state-owned motor vehicle with a nonofficial license plate, pursuant to KRS 44.045(4) and 186.020, shall set forth the investigatory purposes for which the vehicle shall be used.

(b) It shall be the responsibility of the agency head to ascertain that the vehicle is used only for investigatory purposes and the agency head shall ensure that the use of the vehicle is not abused.

(2) An official license plate attached to a motor vehicle which is being replaced shall be turned in to the cabinet.

(3) The cabinet shall be responsible for the licensing and titling of all nonexempt vehicles.

Section 7. Lease of Motor Vehicles from Statewide Motor Pool.

(1) The fleet of vehicles in the statewide motor pool shall be available for use by a state agency for official business of the Commonwealth. These vehicles shall be made available for a lease to a state agency.

(2)

(a) A request to use a motor vehicle available in the statewide motor pool shall be submitted to the cabinet on the forms and in the manner prescribed in 200 KAR 40:010.

(b) Billing shall be performed by the cabinet and necessary documentation shall be provided to a user agency.

(3) Except for vehicles for lease under a master agreement procured by the cabinet, an agency shall not lease a motor vehicle from a private individual or business without prior written approval of the secretary.

Section 8. Maintenance of Motor Vehicles.

(1) It shall be the responsibility of the agency to which a motor vehicle from the statewide motor pool has been permanently assigned to maintain it properly and in accordance with the manufacturer's instructions.

(2)

(a) Nonexempt motor vehicle repair and maintenance shall be the responsibility of the cabinet.

(b) The cabinet shall repair and maintain vehicles in the most economical means possible.

(3) A record of maintenance history and costs for an exempt motor vehicle shall be kept by the agency and submitted to the cabinet on an annual basis or as requested by the cabinet to demonstrate the agency-specific motor pool meets the requirements of this section.

Section 9. Disposal of Motor Vehicles.

(1) An agency may advise the cabinet of its desire to dispose of a motor vehicle if the motor vehicle:

(a) Is at least seven (7) years old;

(b) Has been driven at least 140,000 miles; or

(2) All proceeds from the sale of a nonexempt surplus motor vehicle shall be deposited into the cabinet motor pool agency fund unless precluded by:

(a) Federal law; or

(b) State law.

(3)

(a) The disposal of an exempt motor vehicle shall be the responsibility of the individual agency.

(b) For inventory control purposes, the agency shall immediately notify the cabinet of the disposal of an exempt vehicle.

History

RELATES TO: KRS 42.0171(2), 44.045
STATUTORY AUTHORITY: KRS 44.045(6)
NECESSITY, FUNCTION, AND CONFORMITY: KRS 44.045(6) authorizes the Secretary of the Finance and Administration Cabinet to promulgate administrative regulations governing the use of state-owned vehicles. This administrative regulation establishes procedures governing the purchase, licensure, use, lease, maintenance, and disposal of state-owned vehicles.
History: 22 Ky.R. 821; eff. 12-7-1995; Am. 3409; 3817; 4113; eff. 6-2-1997; Recodified from 600 KAR 1:120; eff. 8-2-2006; 41 Ky.R. 1703; 1974; eff. 4-3-2015; Crt eff. 3-29-2022.

Chapter 41 Geographic Information Systems

200 KAR 41:010 The Kentucky State Plane Coordinate System {#sec-200-kar-41-010 omnilex-key=us-ky-regs-official--title-200--200 KAR 41:010}

Section 1. Definitions.

(1) "COT" means Commonwealth Office of Technology.

(2) "Customary foot" means the foot as a linear unit of measure in a generic sense outside the context of a specific conversion regimen.

(3) "Geodetic datum" means a geometric model representing the earth's size and shape. The mathematical surface of a geodetic datum is an oblate spheroid, called a reference ellipsoid, generally designed to best fit mean sea level either globally or for a stated region. In the context of a geometric framework in which horizontal coordinates are expressed in angular units as latitude and longitude, a geodetic datum is also referred to as a terrestrial reference frame, or simply, reference frame.

(4) "Geodetically referenced mapping projection" means a planar surface mathematically associated with a geodetic datum, or terrestrial reference frame, such that unique positions relative to that datum or terrestrial reference frame can be converted to and from commensurately unique positions on that plane.

(5) "GIAC" means Geographic Information Advisory Council.

(6) "NGS" means National Geodetic Survey.

(7) "NOAA" means National Oceanic and Atmospheric Administration.

(8) "KSPCS" means Kentucky State Plane Coordinate System and is the collection of all series applicable to the Commonwealth of Kentucky.

(9) "NSRS" means National Spatial Reference System.

(10) "SPCS" means State Plane Coordinate System.

(11) "State plane layer" means a collection of one (1) or more zones, all defined on a common geodetic datum or terrestrial reference frame and designed to achieve, in aggregate, a common theme based on similar performance characteristics that may cover the Commonwealth in part or in whole.

(12) "State plane series" means a collection of one (1) or more layers defined on a common and unique geodetic datum or terrestrial reference frame representing a complete implementation of the national State Plane Coordinate System (SPCS) for the Commonwealth on that datum or terrestrial reference frame.

(13) "State plane zone", or "zone," is a geographic region covered by a uniquely defined geodetically referenced mapping projection and generally comprised of a collection of mutually adjacent whole counties such that all included counties lie completely within a given zone. In special cases a zone may partially cover a county or parts of mutually adjacent counties to represent a geographic area of specific interest. A zone may cover the Commonwealth either in part or in whole.

Section 2.

(1) The KSPCS shall be based on a series of layered zones covered by geodetically referenced mapping projections adopted and supported by the NGS as a component of the NSRS.

(2) The KSPCS shall consist of the following plane series:

(a) Series 1: North American Datum of 1927 (NAD 27);

(b) Series 2: North American Datum of 1983 (NAD 83);

(c) Series 3: North American Terrestrial Reference Frame of 2022 (NATRF2022), except that this series shall not be utilized until the terrestrial reference frames defining SPCS2022 have been officially adopted and are supported by the National Geodetic Survey; and

(d) Additional series based on new datums or terrestrial reference frames as they are officially adopted and supported by NGS as part of the NSRS.

(3) The Commonwealth Office of Technology (COT), as advised by the Geographic Information Advisory Council (GIAC), shall develop and maintain the Kentucky State Plane Coordinate System Standards and Specifications Document, referred to as the KSPCS Standards and Specifications Document.

(4) The KSPCS Standards and Specifications Document shall describe, in detail, the standards and specifications for each series of layered zones adopted in subsection (2) of this section. Anticipated series based on new datums or terrestrial reference frames under development by the National Geodetic Survey may be addressed within the KSPCS Standards and Specifications Document but shall not be implemented or utilized until officially adopted and supported by NGS as part of the NSRS.

(5) The KSPCS Standards and Specifications Document shall provide pertinent information and narratives required to adequately describe implementation of the KSPCS, including historical context, underlying concepts, and policy. Additional information not specifically required but deemed necessary to facilitate greater understanding of the KSPCS may also be included within the document.

(6) The KSPCS Standards and Specifications Document shall reconcile or otherwise clarify nomenclature and terminology adopted or refined by NGS when the adaptations result in ambiguities relating to similar terms and language utilized within KRS 1.010, 1.020, or this administrative regulation.

(7) For each state plane series adopted in subsection (2) of this section, the KSPCS Standards and Specifications Document shall provide a detailed description containing:

(a) The series name;

(b) The datum or terrestrial reference frame upon which the series is defined, including the reference ellipsoid and its defining parameters; and

(c) The linear units of measure used to define the series and, when applicable, the forward and reverse conversion factors to be used for converting between the meter and customary foot when representing linear measurements.

(8) For each layer within a KSPCS series, a detailed description shall be provided containing:

(a) The name of the layer; and

(b) The purpose of the layer.

(9) For each zone within a KSPCS layer a detailed description shall be provided containing:

(a) The zone name.

(b) The conformal projection type utilized for that zone.

(c) The Central Parallel, expressed as degrees and whole minutes of latitude including the North direction indicator from the equator. When implementing the double standard parallel definition of the Lambert Conformal Conic projection type, the North Standard Parallel and South Standard Parallel, both expressed as degrees and whole minutes including the North direction indicator from the equator shall be provided in lieu of the Central Parallel.

(d) The Central Meridian, expressed as degrees and whole minutes of longitude including the East or West direction indicator from the prime meridian.

(e) When implementing the double standard parallel definition of the Lambert Conformal Conic projection type, the Base Parallel is provided, expressed as degrees and whole minutes of latitude including the North direction indicator from the equator, representing the basis of the false northing and false easting coordinate values for establishing the location of the projected grid origin. For all other projection types, the Central Parallel shall be used as the basis for the false northing and false easting coordinate values for establishing the location of the projected grid origin.

(f) When defined by the transverse Mercator (TM) or oblique Mercator (OM) projection types, or implementing the single standard parallel definition of the Lambert Conformal Conic projection type, the projection axis scale factor shall be provided and expressed to six (6) full decimal places representing the nearest one (1) part per million increment.

(g) The False Northing value, including linear units of measure, to be applied on the projection grid at the intersection of the Central Meridian with the Base Parallel or Central Parallel as specified in paragraph (e) of this subsection.

(h) The False Easting value, including linear units of measure, to be applied on the projection grid at the intersection of the Central Meridian with the Base Parallel or Central Parallel as specified in paragraph (e) of this subsection.

(i) When the oblique Mercator conformal projection type is utilized, the Skew Azimuth of the projection axis, as measured clockwise from geodetic north and expressed in whole positive degrees. When expressed as a quadrant measure regardless of direction, the absolute value of the Skew Azimuth shall fall between five (5) degrees and eghty-five (85) degrees inclusively. The Skew Azimuth is defined at the intersection of the Central Meridian and Central Parallel.

(j) When the zone represents a portion of the Commonwealth, a list of the whole counties to which the zone shall exclusively apply. When the zone represents statewide coverage then a statement declaring so shall be provided.

(k) A zone may be utilized beyond its defined counties when doing so results in improved performance over the default zone applicable to an area of interest.

(10) The use of the KSPCS shall be mandatory for all Executive Branch Agencies and their contractors to manage geospatial data.

(11) The use of the KSPCS shall be voluntary for all private and non-executive branch uses or applications, but is strongly recommended as the desired method for referencing geographic positions and spatial data pertaining to the Commonwealth of Kentucky. However, an election to utilize KSPCS shall require compliance with this administrative regulation.

Section 3. Incorporation by Reference.

(1) "The Kentucky State Plane Coordinate System Standards and Specifications Document", May 2021, is incorporated by reference.

(2) This material may be inspected, copied, or obtained, subject to applicable copyright law at the Commonwealth Office of Technology, 101 Cold Harbor Drive Frankfort, Kentucky 40601, Monday through Friday, 8 a.m. to 4:30 p.m. or online at https://geodesy.ky.gov/.

History

RELATES TO: KRS 1.020, 42.630, 42.650, 42.740
STATUTORY AUTHORITY: KRS 1.020(2), 42.650(5)
NECESSITY, FUNCTION, AND CONFORMITY: KRS 42.650(5) authorizes the Division of Geographic Information Systems within the Commonwealth Office of Technology (COT) to promulgate administrative regulations to implement that statute. KRS 1.020 (2) requires the Commonwealth Office of Technology (COT) to establish and publish a series of layered zones covered by geodetically referenced mapping projections adopted and supported by the National Geodetic Survey (NGS) as a component of the National Spatial Reference System (NSRS).
History: 49 Ky.R. 943, 1412; eff. 4-4-2023.

Title 200 KAR — Finance and Administration Cabinet

Chapter 1 General Administration

200 KAR 1:016 Data breach notification forms {#sec-200-kar-1-016 omnilex-key=us-ky-regs-official--title-200--200 KAR 1:016}

200 KAR 1:020 Access to public records {#sec-200-kar-1-020 omnilex-key=us-ky-regs-official--title-200--200 KAR 1:020}

Chapter 2 Travel Expense and Reimbursement

200 KAR 2:006 Employees' reimbursement for travel {#sec-200-kar-2-006 omnilex-key=us-ky-regs-official--title-200--200 KAR 2:006}

Chapter 3 State-owned Buildings and Grounds

200 KAR 3:010 Vehicle parking and traffic control {#sec-200-kar-3-010 omnilex-key=us-ky-regs-official--title-200--200 KAR 3:010}

200 KAR 3:020 Use of state-owned facilities and grounds {#sec-200-kar-3-020 omnilex-key=us-ky-regs-official--title-200--200 KAR 3:020}

200 KAR 3:045 Monthly meal charges at mansions {#sec-200-kar-3-045 omnilex-key=us-ky-regs-official--title-200--200 KAR 3:045}

Chapter 5 Purchasing

200 KAR 5:021 Manual of policies and procedures {#sec-200-kar-5-021 omnilex-key=us-ky-regs-official--title-200--200 KAR 5:021}

200 KAR 5:076 Small and small minority business set asides {#sec-200-kar-5-076 omnilex-key=us-ky-regs-official--title-200--200 KAR 5:076}

200 KAR 5:302 Delegation of authority {#sec-200-kar-5-302 omnilex-key=us-ky-regs-official--title-200--200 KAR 5:302}

200 KAR 5:305 Performance bonds; forms; payments {#sec-200-kar-5-305 omnilex-key=us-ky-regs-official--title-200--200 KAR 5:305}

200 KAR 5:306 Competitive sealed bidding {#sec-200-kar-5-306 omnilex-key=us-ky-regs-official--title-200--200 KAR 5:306}

200 KAR 5:307 Competitively negotiated contracts {#sec-200-kar-5-307 omnilex-key=us-ky-regs-official--title-200--200 KAR 5:307}

200 KAR 5:309 Noncompetitive negotiations {#sec-200-kar-5-309 omnilex-key=us-ky-regs-official--title-200--200 KAR 5:309}

200 KAR 5:310 Multiple contracts {#sec-200-kar-5-310 omnilex-key=us-ky-regs-official--title-200--200 KAR 5:310}

200 KAR 5:311 Contract modifications {#sec-200-kar-5-311 omnilex-key=us-ky-regs-official--title-200--200 KAR 5:311}

200 KAR 5:312 Termination of contracts {#sec-200-kar-5-312 omnilex-key=us-ky-regs-official--title-200--200 KAR 5:312}

200 KAR 5:314 Disclosure of contractor's financial records and information to certain governmental entities {#sec-200-kar-5-314 omnilex-key=us-ky-regs-official--title-200--200 KAR 5:314}

200 KAR 5:315 Disciplinary action for failure to perform {#sec-200-kar-5-315 omnilex-key=us-ky-regs-official--title-200--200 KAR 5:315}

200 KAR 5:330 Purchase of goods, supplies, equipment, materials and printing with minimum recycled content {#sec-200-kar-5-330 omnilex-key=us-ky-regs-official--title-200--200 KAR 5:330}

200 KAR 5:340 Privatization evaluation process {#sec-200-kar-5-340 omnilex-key=us-ky-regs-official--title-200--200 KAR 5:340}

200 KAR 5:350 Guaranteed energy savings performance contracting {#sec-200-kar-5-350 omnilex-key=us-ky-regs-official--title-200--200 KAR 5:350}

200 KAR 5:355 Public-private partnership delivery method {#sec-200-kar-5-355 omnilex-key=us-ky-regs-official--title-200--200 KAR 5:355}

200 KAR 5:365 Alternative project delivery methods for capital construction {#sec-200-kar-5-365 omnilex-key=us-ky-regs-official--title-200--200 KAR 5:365}

200 KAR 5:375 Multistep Competitive Sealed Bidding {#sec-200-kar-5-375 omnilex-key=us-ky-regs-official--title-200--200 KAR 5:375}

200 KAR 5:380 Protests {#sec-200-kar-5-380 omnilex-key=us-ky-regs-official--title-200--200 KAR 5:380}

200 KAR 5:390 Registration to collect Kentucky sales and use tax {#sec-200-kar-5-390 omnilex-key=us-ky-regs-official--title-200--200 KAR 5:390}

200 KAR 5:400 Kentucky resident bidder reciprocal preference {#sec-200-kar-5-400 omnilex-key=us-ky-regs-official--title-200--200 KAR 5:400}

200 KAR 5:410 Preferences for purchases of commodities or services {#sec-200-kar-5-410 omnilex-key=us-ky-regs-official--title-200--200 KAR 5:410}

Chapter 6 Property

200 KAR 6:015 Real property inventories {#sec-200-kar-6-015 omnilex-key=us-ky-regs-official--title-200--200 KAR 6:015}

200 KAR 6:040 Floodplain management {#sec-200-kar-6-040 omnilex-key=us-ky-regs-official--title-200--200 KAR 6:040}

200 KAR 6:060 Lease of new construction {#sec-200-kar-6-060 omnilex-key=us-ky-regs-official--title-200--200 KAR 6:060}

200 KAR 6:070 High performance building standards {#sec-200-kar-6-070 omnilex-key=us-ky-regs-official--title-200--200 KAR 6:070}

Chapter 12 Personnel

200 KAR 12:020 Unemployment insurance payments {#sec-200-kar-12-020 omnilex-key=us-ky-regs-official--title-200--200 KAR 12:020}

200 KAR 12:030 Computing compensation due a state employee after adjudicated penalization {#sec-200-kar-12-030 omnilex-key=us-ky-regs-official--title-200--200 KAR 12:030}

Chapter 14 State Investment Commission

200 KAR 14:011 Qualified investments {#sec-200-kar-14-011 omnilex-key=us-ky-regs-official--title-200--200 KAR 14:011}

200 KAR 14:081 Repurchase agreement {#sec-200-kar-14-081 omnilex-key=us-ky-regs-official--title-200--200 KAR 14:081}

200 KAR 14:091 Guidelines for money market instruments {#sec-200-kar-14-091 omnilex-key=us-ky-regs-official--title-200--200 KAR 14:091}

Chapter 15 Kentucky Private Activity Bond Allocation Committee

200 KAR 15:010 Formula for allocation of private activity bonds {#sec-200-kar-15-010 omnilex-key=us-ky-regs-official--title-200--200 KAR 15:010}

Chapter 17 Kentucky Infrastructure Authority

200 KAR 17:010 Guidelines for Infrastructure Revolving Fund {#sec-200-kar-17-010 omnilex-key=us-ky-regs-official--title-200--200 KAR 17:010}

200 KAR 17:030 Guidelines for Water Resources Loan Fund {#sec-200-kar-17-030 omnilex-key=us-ky-regs-official--title-200--200 KAR 17:030}

200 KAR 17:050 Clean Water State Revolving Fund {#sec-200-kar-17-050 omnilex-key=us-ky-regs-official--title-200--200 KAR 17:050}

200 KAR 17:070 Drinking Water State Revolving Fund {#sec-200-kar-17-070 omnilex-key=us-ky-regs-official--title-200--200 KAR 17:070}

200 KAR 17:080 Guidelines for 2020 water service account {#sec-200-kar-17-080 omnilex-key=us-ky-regs-official--title-200--200 KAR 17:080}

200 KAR 17:090 Guidelines; Kentucky Infrastructure Authority Grants from Unobligated Bond Pool Funds {#sec-200-kar-17-090 omnilex-key=us-ky-regs-official--title-200--200 KAR 17:090}

200 KAR 17:111 Guidelines for Kentucky Infrastructure Authority Drinking Water and Wastewater Grant Program {#sec-200-kar-17-111 omnilex-key=us-ky-regs-official--title-200--200 KAR 17:111}

Chapter 21 Underwriter and Bond Counsel Selection Process

200 KAR 21:010 Procedure for prequalification of underwriters and bond counsel for state bond issues {#sec-200-kar-21-010 omnilex-key=us-ky-regs-official--title-200--200 KAR 21:010}

200 KAR 21:020 Evaluation factors for bond counsel and underwriters {#sec-200-kar-21-020 omnilex-key=us-ky-regs-official--title-200--200 KAR 21:020}

200 KAR 21:040 Selection of national comanaging underwriters {#sec-200-kar-21-040 omnilex-key=us-ky-regs-official--title-200--200 KAR 21:040}

200 KAR 21:050 Establishment of rates to reimburse underwriters for counsel {#sec-200-kar-21-050 omnilex-key=us-ky-regs-official--title-200--200 KAR 21:050}

Chapter 23 Kentucky Asset/Liability Commission

200 KAR 23:010 Guidelines for use of financial agreements {#sec-200-kar-23-010 omnilex-key=us-ky-regs-official--title-200--200 KAR 23:010}

Chapter 26 Kentucky Gas Pipeline Authority

200 KAR 26:010 KGPA operating procedures {#sec-200-kar-26-010 omnilex-key=us-ky-regs-official--title-200--200 KAR 26:010}

Chapter 38 Office of the Controller

200 KAR 38:040 Allocation of fees for disabled permit parking violations {#sec-200-kar-38-040 omnilex-key=us-ky-regs-official--title-200--200 KAR 38:040}

200 KAR 38:050 Advancements to sheriffs {#sec-200-kar-38-050 omnilex-key=us-ky-regs-official--title-200--200 KAR 38:050}

200 KAR 38:060 Reimbursement to law enforcement officers for certain expenses {#sec-200-kar-38-060 omnilex-key=us-ky-regs-official--title-200--200 KAR 38:060}

200 KAR 38:070 Internal controls and pre-audit {#sec-200-kar-38-070 omnilex-key=us-ky-regs-official--title-200--200 KAR 38:070}

Chapter 40 Fleet Management

200 KAR 40:010 Motor pool procedure {#sec-200-kar-40-010 omnilex-key=us-ky-regs-official--title-200--200 KAR 40:010}

200 KAR 40:020 Purchase, use, lease, maintenance, and disposal of state-owned motor vehicles {#sec-200-kar-40-020 omnilex-key=us-ky-regs-official--title-200--200 KAR 40:020}

Chapter 41 Geographic Information Systems

200 KAR 41:010 The Kentucky State Plane Coordinate System {#sec-200-kar-41-010 omnilex-key=us-ky-regs-official--title-200--200 KAR 41:010}

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