Title 416 KAR — Soil and Water Conservation Commission

title-416416 KARRegulation

Apri la fonte

Chapter 1 Administration

416 KAR 1:001 Definitions for 416 KAR Chapter 1 {#sec-416-kar-1-001 omnilex-key=us-ky-regs-official--title-416--416 KAR 1:001}

Section 1. Definitions.

(1) "Agricultural or silvicultural production" means any farm operation on a tract of land, including all income-producing improvements and farm dwellings, together with other farm buildings and structures incident to the operation and maintenance of the farm, used for the production of livestock, livestock products, poultry, poultry products, milk, milk products, or silviculture products, or for the growing of crops such as tobacco, corn, soybeans, small grains, fruit, and vegetables; or devoted to and meeting the requirements and qualifications for payments to agriculture programs under an agreement with the state or federal government.

(2) "Agriculture water quality plan" is defined by KRS 224.71-100(10).

(3) "Animal waste" means feces, urine, or other excrement, digestive emission, urea, or similar substance emitted by animals, including from any form of livestock, poultry, or fish. This includes animal waste that is mixed or commingled with bedding, compost, feed, soil, or any other material typically found with this waste.

(4) "Applicant" for purposes of 416 KAR 1:010, means a person who applies for cost-share assistance from the Kentucky Soil Erosion and Water Quality Cost-share Fund.

(5) "Available funds" means moneys budgeted, unobligated, and distributed to the commission for the purposes of KRS 146.115.

(6) "Best management practices" means, for agricultural or silvicultural production, the most effective, practical, and economical means of reducing and preventing water pollution provided by the United States Department of Agriculture Natural Resources Conservation Service or the Soil and Water Conservation Commission.

(7) "Case file" means the collection of materials that are assembled and maintained for each application for cost-share assistance.

(8) "Conservation district" or "district" is defined by KRS 262.010(3).

(9) "Cost-share assistance" means cost-share funds awarded by the commission from the Kentucky Soil Erosion and Water Quality Cost-share Fund.

(10) "Direct aid" means appropriated funds awarded to conservation districts by the commission.

(11) "District supervisor" means a member of the governing board of a conservation district.

(12) "Division" means the Kentucky Division of Conservation.

(13) "Eligible land" means land on which agricultural or silvicultural production is being conducted.

(14) "Equipment" means heavy or specialized equipment purchased through the Equipment Revolving Loan Program for the purpose of conserving soil resources, the prevention and control of soil erosion, or the conservation and protection of water resources related to those purposes.

(15) "Groundwater" means subsurface water occurring in the zone of saturation beneath the water table and any perched water zones below the B soil horizon.

(16) "Infrastructure" is defined by KRS 262.010(5).

(17) "Performance and maintenance agreement" means a written agreement between an eligible person and the district in which the eligible person agrees to implement and to maintain the best management practices for which cost-share assistance is being awarded.

(18) "Primary applicant":

(a) For purposes of 416 KAR 1:020, means:

  1. A conservation district applying on its own for equipment;

  2. The person applying jointly with a conservation district for equipment; or

  3. A conservation district applying for infrastructure; and

(b) Means the entity responsible for monthly payments, insurance, liability, and operational and reporting requirements.

(19) "Program year" means the period from July 1 to June 30.

(20) "Soil and Water Conservation Commission" or "commission" means the commission established by KRS 146.090.

(21) "Surface water":

(a) Means those waters having well-defined banks and beds, either constantly or intermittently flowing; lakes and impounded waters, marshes, and wetlands; and any subterranean waters flowing in well-defined channels and having a demonstrable hydrologic connection with the surface; and

(b) Does not mean effluent ditches and lagoons used for waste treatment that are situated on property owned, leased, or under valid easement by a permitted discharger.

(22) "Surplus equipment" means heavy or specialized equipment that is no longer needed or has become unsuitable for use by the district.

(23) "Water priority protection region" means an area specifically delineated where water pollution from agricultural or silvicultural production has been scientifically documented.

(24) "Watershed" means all the area from which all drainage passes a given point downstream.

History

  • RELATES TO: KRS 146.080 - 146.115, 224.71-100 - 224.71-140, 262.610 - 262.660
  • STATUTORY AUTHORITY: KRS 146.110, 146.115, 262.090, 262.610, 262.660
  • NECESSITY, FUNCTION, AND CONFORMITY: KRS 146.110 and 146.115 authorizes the Soil and Water Conservation Commission to promulgate administrative regulations governing administration of the Kentucky Soil Erosion and Water Quality Cost-share Fund. KRS 262.660 authorizes the Soil and Water Conservation Commission to promulgate administrative regulations governing the administration of the Equipment Revolving Loan Fund as expressed in KRS 262.610 through 262.650. This administrative regulation establishes definitions for terms used in 416 KAR Chapter 1.
  • History: 50 Ky.R. 1799; eff. 6-6-2024.
416 KAR 1:010 Administration of Kentucky Soil Erosion and Water Quality Cost-share Fund {#sec-416-kar-1-010 omnilex-key=us-ky-regs-official--title-416--416 KAR 1:010}

Section 1. Eligibility of Persons.

(1) Eligible persons. A person conducting agricultural or silvicultural production shall be eligible to receive cost-share assistance for best management practices if the person:

(a) Has prepared an agriculture water quality plan; and

(b) Agrees to perform and to maintain best management practices for the period of time established for each practice in accordance with the Kentucky Soil Erosion and Water Quality Cost-share Handbook.

(2) Ineligible persons. A person engaged in agricultural or silvicultural production shall not be eligible for further cost-share assistance if the applicant has failed:

(a) Or refused to comply with agriculture water quality planning requirements and has been deemed a "bad actor" pursuant to KRS 224.71-130(2); or

(b) To comply with practice lifespans or complete previous cost-share projects within five (5) years prior to the application date.

Section 2. Eligible Best Management Practices.

(1) Purposes of best management practices. The Kentucky Soil Erosion and Water Quality Cost-share Funds shall be used to provide cost-share assistance for development and implementation of best management practices for:

(a) Providing cleaner water through the reduction in sediment loading of Kentucky streams, rivers, and lakes;

(b) Reducing the loss of topsoil vital to sustain production of food and fiber; and

(c) Preventing surface water and groundwater pollution.

(2) Approved best management practices. Complete listings of eligible best management practices are contained in the Kentucky Soil Erosion and Water Quality Cost-Share Practice Handbook.

Section 3. Solicitation of Applications.

(1) The commission shall establish for each program year, a deadline for submittal of applications for cost-share assistance.

(2) Each conservation district shall provide an opportunity for persons within the district to submit applications in time for the next program year by advertising the availability of cost-share assistance in appropriate news media, such as electronic media, local newspapers, local radio stations, and any newsletters published by the district.

Section 4. Contents and Completion of Applications.

(1) Contents of application. An applicant shall submit to the district in which the eligible land is located the Kentucky Soil and Water Cost Share Program Application, found at https://dep.gateway.ky.gov/eForms/Main/Forms.aspx, in order to apply for cost-share assistance. The applicant shall include with the application:

(a) An agriculture water quality plan in effect for the eligible land that is compliant with KRS 224.71-120 and updated to be current with the Statewide Agriculture Water Quality Plan authorized by KRS 224.71-110; and

(b) If known to the applicant or as made in consultation with the appropriate technical agency, the anticipated total cost of the best management practice to be implemented and the percentage, if any, of the cost that the applicant proposes to bear, which percentage shall not be less than minimums established by the commission for the particular best management practice.

(2) An applicant applying for cost-share funds for best management practices involving nutrient storage shall include a nutrient management plan as established in the Statewide Agriculture Water Quality Plan.

(3)

(a) Completion of applications. An applicant who does not have an agriculture water quality plan that is compliant with KRS 224.71-120 and updated to be current with the Statewide Agriculture Water Quality Plan authorized by KRS 224.71-110, in effect for the eligible land, or who has not determined the anticipated total cost of the requested best management practice, may request technical assistance from the district in developing a best management practices plan and determining costs.

(b) If the best management practices plan has been developed and the anticipated total cost determined, the application shall be reviewed in accordance with the eligibility and prioritization criteria established by this administrative regulation.

Section 5. Review of Applications.

(1) Each district shall review and verify an applicant's eligibility in accordance with Section 1 of this administrative regulation by the established deadline.

(2) The board of supervisors for the district shall vote upon eligibility at a meeting conducted in accordance with the Open Meetings Law, KRS 61.805 through 61.850, and record the outcome in the minutes of the board of supervisors for that meeting.

(3) A district supervisor who is also an applicant for cost-share assistance shall not vote on eligibility.

(4) The district shall forward the applications to the commission within fifteen (15) days after determining eligibility.

Section 6. Prioritization of Applications. The commission shall prioritize the applications of persons determined by the districts to be eligible for cost-share assistance and shall make the final award of cost-share assistance.

(1) Classification of priorities. Applications shall be prioritized based on:

(a) Applicants conducting agricultural or silvicultural production needing animal waste management systems in which animal waste has been identified by the Energy and Environment Cabinet as a water pollution problem; and

(b) Applicants who are members of agricultural districts.

(2) Applications within each classification established in subsection (1) of this section shall be prioritized based on:

(a)

  1. Presence of water pollution, based on:

a. Notification by a local, state, or federal agency that the applicant's agricultural or silvicultural production has caused or contributed to water pollution;

b. Determination of the Energy and Environment Cabinet that a surface water affected by the applicant's agricultural or silvicultural production is not meeting its designated use;

c. Identification by the Energy and Environment Cabinet of a water priority protection region encompassing the location of the applicant's agricultural or silvicultural production; or

d. Other documentation of water pollution, such as through a biological assessment; or

  1. Potential for development of water pollution from agricultural or silvicultural production in the watershed in which the applicant's agricultural or silvicultural production is being conducted;

(b) Types of water pollutants:

  1. Animal waste;

  2. Sediment run-off;

  3. Nutrient loading; or

  4. Pesticide application, storage or disposal;

(c) Proximity of pollutant to groundwater or surface water;

(d) Magnitude of water pollution; and

(e) Location in a priority watershed as established by the Agriculture Water Quality Authority or Division of Water including a source water protection area.

Section 7. Allocation of Cost-share Assistance.

(1) The available funds received by the commission for the cost-share program shall be held by the Division of Conservation and disbursed to the districts based on requests from the districts approved by the commission after a practice has been completed and all paperwork has been signed as complete and submitted for payment. The district shall be granted a share of the Kentucky Soil Erosion and Water Quality Cost-share Fund that shall be held by the division based on the commission's approval of an initial district request in accordance with the prioritization system established in Section 6 of this administrative regulation.

(2) Any funds granted by the commission and distributed by the division to a district for a practice that results in overpayment shall revert to the commission if the district has not received prior permission to obligate the funds to another applicant within one (1) year from receipt.

(3) The commission shall retain ten (10) percent of the annual appropriation in a contingency fund to be allocated to assist persons engaged in agricultural or silvicultural productions and implementing the agriculture water quality program mandated by KRS Subchapter 224.71.

Section 8. Design of Best Management Practices. Once cost-share assistance has been awarded by the commission, the local district shall designate a technician to develop final design and layout for the approved best management practices.

Section 9. Execution of Performance and Maintenance Agreements. After an application has been awarded cost-share assistance and before the applicant has received payment of the cost-share funds, the applicant and the district shall execute a performance and maintenance agreement.

(1) Requirements of performance and maintenance agreements. The performance and maintenance agreement shall require the applicant to comply with paragraphs (a) through (d) of this subsection.

(a) The applicant shall agree to perform those best management practices approved in accordance with this administrative regulation.

(b) The applicant shall agree to maintain approved best management practices for the expected life of each practice agreed upon in the performance and maintenance agreement.

(c) Upon completion of the approved best management practice, the applicant shall notify the district that the practice has been installed and shall provide to the district for its inspection all vouchers, bills, and receipts associated with the practice.

(d) The applicant shall agree that, at the time of transfer of ownership of land where a best management practice has been applied using cost-share assistance and the expected life assigned the practice has not expired, the applicant shall execute a contract with the transferee requiring continuation of those practices until completed.

(e) Approved applicants shall complete the practice within one (1) year from the date of approval. Upon request, the division shall grant a six (6) month extension per approved application. After two (2) extensions have been granted and expired, the landowner shall forfeit the right to the funds.

(2) Effect of performance and maintenance agreement. Requirements for performance and maintenance of best management practices applied using cost-share assistance shall be established in the performance and maintenance agreement and reviewed with the applicant at the time of application submittal and before completion of a certification of practices.

(3) Refund of funds disbursed.

(a) The district shall require a refund of cost-share assistance funds if the district determines:

  1. An approved best management practice has not been maintained in compliance with approved design standards and specifications for the practice during its expected life as agreed in the performance and maintenance agreement; or

a. The applicant voluntarily relinquishes control or title to the land on which the best management practice that was installed using cost-share funds and the new owner, heir, or operator does not agree in writing to properly maintain the practice for the remainder of the lifespan.

b. If the applicant voluntarily relinquishes control or title to the land on which the best management practice that was installed using cost-share funds pursuant to clause a. of this subparagraph, then the applicant shall only be responsible for refunding to the district the amount of funds prorated on the number of years remaining in the best management practice maintenance agreement.

(b)

  1. If the district determines that the applicant shall refund the amount of the cost-share, the applicant shall have thirty (30) days to make payment to the district. The district may grant the applicant an extension of time to make the refund upon the submission of a written request by the applicant.

  2. If the applicant fails to timely refund the amount of the cost-share, the district shall refer the matter to the commission.

  3. If the district declines to seek a refund, the district shall state its reason for not doing so and notify the commission and the applicant. The commission shall review the matter, applying the criteria established in paragraphs (a)1. and 2. of this subsection, to verify the district's decision to not seek a refund.

  4. If the commission becomes aware of a situation as established in in paragraphs (a)1. or (a)2. of this subsection, and the district fails to review the matter, the commission shall conduct the commission's own review of the matter and determine whether or not to seek a refund.

  5. The commission shall be authorized to recover the amount of the cost-share by initiating a legal action in the Franklin Circuit Court.

(4) Application for future cost-share assistance. Best management practices that have been successfully completed and that later fail as the result of floods, drought, or other natural disasters, and not the fault of the applicant, shall not prohibit the applicant from applying for additional cost-share assistance to restore the practices to their original design standards and specifications.

(5) Certification. Upon notification by the applicant that the approved best management practice has been completed and before disbursement of funds from the district, the appropriate technical agency shall certify to the district that the practice has been installed in accordance with the Kentucky Soil Erosion and Water Quality Cost-Share Practice Handbook.

(6) Limitations on awards.

(a) Cost-share assistance awarded to an applicant shall be limited to a maximum of seventy-five (75) percent of the actual cost, not to exceed an amount approved by the commission, for each best management practice, with the assisted applicant providing twenty-five (25) percent of the cost, which may include in-kind support, with a maximum of $20,000 per year.

(b) An applicant shall only submit one (1) application per program year.

(c) Cost-share assistance may be used with federal or local cost-share funds on the same practices if the total cost share payment does not exceed seventy-five (75) percent of the practice cost.

(d) Cost-share assistance shall not be awarded to best management practices in progress prior to cost-share approval or previously-installed practices by the applicant.

Section 10. Reporting and Accounting. District reporting and accounting. A district shall:

(1) Maintain a control ledger showing the current approved applications to the commission and cost share approved amounts for approved applications, based on estimated cost;

(2) Submit a monthly report to the commission indicating any unobligated balance of allocated and disbursed cost-share funds as shown on each ledger;

(3) Submit an annual progress report to the commission showing accomplishments "to date" for the current program year; and

(4) Assemble case files for each approved application, filed by program year and accessible for public inspection, containing:

(a) The approved application for allocated funds;

(b) A copy of the estimated cost sheet;

(c) Certification of practice completion;

(d) Applicant's vouchers, bills, or receipts;

(e) Final designs for best management practices;

(f) The performance and maintenance agreement;

(g) Any amendments to the performance and maintenance agreement; and

(h) A map locating the practices.

Section 11. Appeals.

(1) Procedure for filing appeal. An applicant aggrieved by a decision of the commission denying an application or limiting the amount of financial assistance may file a written appeal with the commission. The appeal shall be filed within thirty (30) days of the decision and shall state the basis for the appeal.

(2) Procedure for hearing appeal.

(a) The commission shall notify the applicant and the local district that they may appear before the commission and present testimony or written documentation on the issues presented by the appeal.

(b) The commission shall have sixty (60) days in which to make a decision and to notify the local district and the applicant.

(3) Review of final decision. The decisions of the commission may be appealed to the Franklin Circuit Court.

Section 12. Incorporation by Reference.

(1) "Kentucky Soil Erosion and Water Quality Cost-Share Practice Handbook", December 2023 is incorporated by reference.

(2) This material may be inspected, copied, or obtained, subject to applicable copyright law, at the Division of Conservation, 300 Sower Boulevard, Frankfort, Kentucky 40601, Monday through Friday, 8 a.m. to 4:30 p.m., Eastern Standard Time.

(3) This material may also be obtained at the Division of Conservation's Web site at https://eec.ky.gov/Natural-Resources/Conservation/Pages/State-Cost-Share.aspx.

History

  • RELATES TO: KRS 61.805 – 61.850, 146.080 - 146.115, 224.71-100 - 224.71-140, 262.010 – 262.660
  • STATUTORY AUTHORITY: KRS 146.110, 146.115
  • NECESSITY, FUNCTION, AND CONFORMITY: KRS 146.110 and 146.115 authorize the Soil and Water Conservation Commission to promulgate administrative regulations governing administration of the Kentucky Soil Erosion and Water Quality Cost-share Fund, which provides cost-share assistance to persons engaged in agricultural and silvicultural production for implementation of best management practices for purposes, such as providing cleaner water through the reduction in the loading of sediment, nutrients, and pesticides in Kentucky streams, rivers, and lakes, reducing the loss of topsoil vital to the sustained production of food and fiber and preventing surface water and groundwater pollution. This administrative regulation establishes criteria for participation in that cost-share program.
  • History: 22 Ky.R. 142; eff. 8-24-1995; TAm eff. 8-9-2007; Cert eff. 6-27-2018; 46 Ky.R. 2120, 2919; eff. 7-9-2020; TAm eff. 4-2-2021; 50 Ky.R. 1775; eff. 6-6-2024.
416 KAR 1:020 Equipment Revolving Loan Program {#sec-416-kar-1-020 omnilex-key=us-ky-regs-official--title-416--416 KAR 1:020}

Section 1. Applicability.

(1) The provisions of this administrative regulation shall apply to persons and conservation districts applying for Equipment Revolving Loan Program funding for heavy or specialized equipment and infrastructure.

(2) The Equipment Revolving Loan Program shall be limited to the:

(a) Purchase cost of heavy or specialized equipment used for conserving soil resources, prevention and control of soil erosion, and conservation and protection of water resources related to those purposes; and

(b) Purchase or lease costs for infrastructure, including costs of improvements to infrastructure, if sought by a conservation district.

(3) The Equipment Revolving Loan Program shall not be used to reimburse for previous purchases of equipment or infrastructure.

(4) Equipment purchased using funds from the Equipment Revolving Loan Program shall not be used for:

(a) Activities that do not comply with subsection (2)(a) of this section; or

(b) Clear cutting operations or strip mining activities.

Section 2. General Requirements.

(1) Conservation districts, or a district jointly with a person residing within the district, that purchase heavy or specialized equipment using funds from the Equipment Revolving Loan Program shall comply with the requirements in paragraphs (a) through (e) of this subsection.

(a) A person residing within the district shall be the primary applicant if applying jointly with a conservation district. If a person residing within the district is the primary applicant, the district shall procure the equipment and execute a lease agreement with the person.

(b) Any two (2) or more conservation districts may combine efforts to purchase an eligible piece of equipment, with one (1) district designated as the primary applicant.

(c) The primary applicant shall provide one-third (1/3) the amount of the total cost of the equipment.

(d) The district shall adhere to the provisions in KRS Chapter 45A.

(e) All equipment shall be new, or warrantied as new, from a licensed equipment dealer.

(2) Conservation districts that use funds from the Equipment Revolving Loan Program for infrastructure shall;

(a) Adhere to the provisions in KRS Chapters 45A and 56;

(b) Provide, at a minimum, ten (10) percent of the total purchase cost or lease payments;

(c) Pay for all necessary property taxes and maintain infrastructure; and

(d) Not convey or encumber any interest in infrastructure if the division holds title to the infrastructure.

(3) Conservation districts that are also the primary applicant for infrastructure may:

(a) Add costs incurred for completing Finance and Administration Cabinet requirements pursuant to KRS Chapter 56 to the total loan amount advanced by the division. Those funds shall be included in the total funds the primary applicant agrees to repay; and

(b) Sublease portions of purchased infrastructure that are not essential to the operation of the district to a capable party or vendor, with the district maintaining primary occupancy of the infrastructure. The primary applicant shall ensure that taxes and insurance requirements shall be maintained.

(4) Districts shall grant access to the division, Finance and Administration Cabinet, and Auditor of Public Accounts to any books, documents, papers, records, or other evidence directly related to the loan for the purpose of financial audit or program review.

(5) Any legal action brought to enforce the terms of a promissory note or loan shall be filed in a court in Franklin County, Kentucky.

Section 3. Equipment Revolving Loan Program Application Procedures.

(1) Conservation districts, or a district applying jointly with a person residing within the district, seeking funding for the purchase of heavy or specialized equipment, or districts seeking funding for infrastructure shall apply to the Soil and Water Conservation Commission by submitting a completed Conservation District Equipment Loan Application, DOC-01, to the Division of Conservation.

(2) Prior to applying to the commission, funding requests for equipment and infrastructure shall be voted upon by the board of supervisors for a district at a meeting conducted in accordance with the Open Meetings Law, KRS 61.805 through 61.850.

(3) Upon district approval pursuant to subsection (2) of this section, applications shall be submitted in accordance with subsections (4) through (6) of this section.

(4) A district requesting funding for heavy or specialized equipment shall:

(a) Complete a Conservation District Equipment Loan Application, DOC-01, which shall include a copy of the district's most recent Annual Financial Report, a minimum of three (3) bids for each piece of equipment, and documentation demonstrating how the model procurement code shall be followed; and

(b) Submit completed applications to the division. If two (2) or more districts are applying jointly, each district shall complete an application. The district designated as the primary applicant shall submit applications from all parties in one (1) application package, including all required documentation, to the division.

(5) A district requesting funding jointly with a person residing within the district for heavy or specialized equipment shall:

(a) Complete a Conservation District Equipment Loan Application, DOC-01, which shall include a copy of the district's most recent Annual Financial Report and documentation demonstrating how the model procurement code shall be followed;

(b) Require the person residing within the district to complete and submit a Joint Equipment Loan Application, DOC-02, which shall include a copy of the person's credit report, and a minimum of three (3) bids for each piece of equipment; and

(c) Submit applications, including the required documentation, from all parties in one (1) application package to the division.

(6) A district requesting funding for infrastructure shall:

(a) Complete an Infrastructure Equipment Loan Application, DOC-03, which shall include a copy of the district's most recent Annual Financial Report, current Annual Budget, and documentation demonstrating how the model procurement code shall be followed; and

(b) Submit completed applications to the division. If two (2) or more districts are applying jointly, each district shall complete an application. The district designated as the primary applicant shall submit applications from all parties in one (1) application package, including all required documentation, to the division.

(7) The division shall review submitted applications for administrative completeness.

(a) A district shall be notified of application deficiencies and have the opportunity to make corrections.

(b) Complete applications shall be referred to the commission for consideration.

(8) The commission shall consider the proposed use of the equipment or infrastructure, the district's financial ability to repay the loan, and the district's reporting and payment history in considering application approval.

(9) A district shall be notified of the commission's final decision on the request for funds from the Equipment Revolving Loan Program.

(10) For loans on heavy or specialized equipment, the district shall submit to the division:

(a) The signed loan contract;

(b) A filing fee in an amount established in KRS 355.9-525. The filing fee shall be made by check payable to the Kentucky State Treasurer; and

(c) In cases in which the district applies jointly with a person residing within the district, the legally executed lease agreement in accordance with Section 2(1)(a) of this administrative regulation.

(11) Infrastructure loans shall be contingent upon the district complying with the Finance and Administration Cabinet requirements pursuant to KRS Chapters 45A and 56.

(12) Upon completion of the requirements established in subsections (9) and (10) of this section, the division shall file:

(a) A lien on purchased equipment with the Kentucky Secretary of State office; and

(b) Titles to infrastructure at the courthouse in the county where the infrastructure project is located.

Section 4. Interest Rates.

(1) Loan interest rates shall be determined by the Soil and Water Conservation Commission.

(2)

(a) The commission may adjust interest rates for new loans at each commission meeting.

(b) Interest rates shall not be adjusted by the commission for open loans.

(3) The factors in paragraphs (a) and (b) of this subsection shall be considered by the commission for recommending an interest rate adjustment, and by the Commissioner of the Department for Natural Resources for making the final determination on the interest rate adjustment. Factors shall include:

(a) The available balance in the fund; and

(b) The current interest rate as established by the Federal Open Market Committee.

Section 5. Loan Repayment Terms.

(1) Repayment terms for equipment purchases shall be:

(a) Three (3) to five (5) years for loans of less than $100,000; or

(b) Five (5) to seven (7) years for loans over $100,000.

(2) Repayment terms for infrastructure shall be determined by the commission based on the district's financial ability to repay the loan.

(3) Monthly loan payments shall be submitted to the division by the tenth day of each month accompanied by the Equipment Loan Monthly Report, DOC-04, in accordance with Section 7(6) of this administrative regulation. Loan payments shall be submitted by check made payable to the Kentucky State Treasurer.

(4) Repayment penalties shall be applied if a loan is paid off in fewer than eighteen (18) months. The calculated penalty shall be the amount of interest lost by the early payoff.

(5) If a person fails to submit monthly payments under a joint application, the district shall be responsible for delinquent payments.

Section 6. Insurance Requirements.

(1) The primary applicant purchasing equipment using funds from the Equipment Revolving Loan Program shall carry property insurance coverage in accordance with paragraphs (a) and (b) of this subsection.

(a) Insurance coverage for property or assets against all risk of physical loss or damage, including flood and rising water, to the equipment. The insurance shall be for the full replacement value of the equipment, parts, attachments, and accessories purchased with the Equipment Revolving Loan Program funds, regardless of where the equipment is stored. The primary applicant shall be responsible for the total value of the loan even in the event of loss.

(b) Liability coverage, to include bodily injury and property damage, with a combined single limit of a minimum of $500,000 per occurrence.

(2) Districts purchasing infrastructure using funds from the Equipment Revolving Loan Program shall carry property insurance coverage in accordance with paragraphs (a) and (b) of this subsection.

(a) Insurance coverage for real property against all risk of physical loss or damage, including flood and rising water, to the infrastructure. The insurance shall be for the full replacement value of the infrastructure purchased with the Equipment Revolving Loan Program funds. The division and primary applicant shall receive remuneration in proportion to the amount of equity each party holds in the infrastructure at time of loss. The primary applicant shall be responsible for the total value of the loan even in the event of loss; and

(b) Liability coverage, to include bodily injury and property damage, with a combined single limit of a minimum of $1 million per occurrence.

(3) All insurance policies shall include the Commonwealth of Kentucky as an additional insured and loss payee.

(4) Insurance coverage shall be maintained until the loan is fully amortized or until the district or primary applicant has been formally released of further responsibility by the division.

(5) Copies of all insurance policies, endorsements, and certificates of renewal shall be submitted to the division within sixty (60) days of issuance or amendment.

Section 7. Operational, Reporting, and Record Keeping Requirements.

(1) Equipment purchased using funds from the Equipment Revolving Loan Program shall meet the operational requirements in paragraphs (a) through (d) of this subsection. Equipment shall be:

(a) Operated within the district, or districts, identified in the loan contract unless the district or districts approve for the operation outside county boundaries;

(b) Advertised by publication in accordance with the provisions of KRS Chapter 424, at a minimum, annually to inform the public of availability for use.

  1. The publication area shall be the district, or districts, identified in the loan contract.

  2. The primary applicant shall be the responsible person for publishing advertisements.

  3. If the primary applicant is a district or districts, alternative internet and publication procedures may be utilized if the requirements of KRS 424.145 are met;

(c) Made readily available for rental or hire by the public; and

(d) Rented or operated for a minimum of twenty (20) days within a six (6) month period.

(2) Equipment shall not be used more than sixty-five (65) percent of the time on:

(a) Land owned by district supervisors or employees of the district if the district is the primary applicant; and

(b) Lands owned by the primary applicant if a district applies jointly with a person residing within the district.

(3) Lease or rental fees on equipment shall be established sufficient to assist in amortization payments, operation and maintenance, operator costs, and transportation of equipment to jobs. Districts shall notify the commission within thirty (30) days of any changes to approved lease or rental fees.

(4) Administrative fees may be charged to the person by the district, if a district applies jointly with a person residing within the district for equipment, not to exceed five (5) percent of the monthly amortization amount.

(5) Equipment shall be maintained, kept in working order, and reasonably protected from the weather.

(6) Reporting requirements for equipment and infrastructure loans shall be as established in paragraphs (a) and (b) of this subsection.

(a) A person residing within the district, who is the primary applicant of an equipment loan, shall document and report monthly to the district, at a minimum, the information in Section 5 of the Equipment Loan Monthly Report, DOC-04.

(b) A district shall complete and submit, to the division by the tenth day of each month, the Equipment Loan Monthly Report, DOC-04. If two (2) or more districts applied jointly, the district designated as the primary applicant shall complete and submit the Equipment Loan Monthly Report, DOC-04, to the division.

(7) Districts using funding from the Equipment Revolving Loan Program shall maintain records on the:

(a) Description of the equipment or infrastructure;

(b) Terms of the purchase or lease;

(c) Terms of the loan;

(d) Description of insurance coverage and premiums paid;

(e) Major repairs and circumstances impairing the use of purchased equipment or infrastructure; and

(f) Dollar amount paid to the division for the purpose of amortizing the loan.

Section 8. Default on a Contract.

(1) Failure to make payments over a three (3) month period or to comply with the requirements in accordance with Sections 5 through 7 of this administrative regulation shall constitute a default on a contract.

(2) The division shall notify the primary applicant in writing of a default and describe the cause of the default with specificity.

(a) The notice shall provide the primary applicant with thirty (30) days from mailing to cure the default.

(b) The notice shall be complete upon mailing by certified mail, return receipt requested, to the mailing address listed on the application.

(3) For equipment purchases:

(a) Resolutions and remedies for an uncured default shall be as established in subparagraphs 1. and 2. of this paragraph.

  1. If a person residing within the district is the primary applicant, the district shall repossess equipment that was purchased using funds from the Equipment Revolving Loan Program. The district shall be responsible for delinquent payments in accordance with Section 5(5) of this administrative regulation and any remaining payments. Following repossession, the district shall:

a. Lease the equipment to another person residing within the district with the approval of the commission based on the proposed use of the equipment and the financial ability to repay the loan;

b. Enroll as the primary applicant; or

c. Sell the equipment pursuant to KRS Chapter 45A.

  1. If a district is the primary applicant, the district shall sell the equipment pursuant to KRS Chapter 45A.

(b) If a district fails to comply with paragraph (a) of this subsection, direct aid shall be withheld until the outstanding loan balance is paid.

(c)

  1. A person aggrieved by the decision of the district to repossess equipment pursuant to paragraph (a)1. of this subsection may file a written appeal with the commission. An appeal shall be filed within thirty (30) days of the repossession and shall state the basis for the appeal.

  2. Procedure for hearing appeal.

a. The commission shall notify the district and person that they may appear before the commission to present testimony or written documentation on the issues presented by the appeal. Any hearing for an appeal shall comply with KRS Chapter 13B.

b. The commission shall have 100 days to make a final decision and to notify the district and person.

  1. Final decisions of the commission may be appealed by the district or person to a court in Franklin County, Kentucky.

(4) For infrastructure:

(a) Resolutions and remedies for an uncured default shall be as established in subparagraphs 1. and 2. of this paragraph.

  1. Purchased infrastructure shall be disposed as surplus property pursuant to the provisions of KRS Chapters 45A and 56; or

  2. Terminate the lease agreement.

(b) If the primary applicant fails to remedy any default on a contract:

  1. The division shall notify the Finance and Administration Cabinet; and

  2. Direct aid shall be withheld until the outstanding loan balance is paid.

(c) A district that is aggrieved by the Finance and Administration Cabinet's decision may seek a review of the decision. The review shall be conducted pursuant to KRS 45A.230.

Section 9. Loan Completion.

(1) Once the loan contract has been satisfied, the division shall issue a letter of completion formally releasing the loan.

(2) Upon receipt of a letter of completion:

(a) Purchased equipment and infrastructure shall be the property of the primary applicant;

(b) For infrastructure loans, the primary applicant shall file a transfer of title at the courthouse in the county where the infrastructure is located and shall take full possession of the infrastructure; or

(c) The primary applicant shall be responsible for meeting the requirements of lease agreement or terminate the lease agreement.

(3) The district shall:

(a) Maintain all records for equipment and infrastructure for at least five (5) years past the release of the title or termination of loan agreement; and

(b) Submit to the division, within ninety (90) days from the receipt of the letter of completion, all loan records related to the equipment or infrastructure, and for equipment purchases a lien termination fee in an amount established in KRS 355.9-525. The filing fee shall be made by check payable to the Kentucky State Treasurer.

(4) For equipment purchases, the division shall file a lien release with the Kentucky Secretary of State's office.

Section 10. Incorporation by Reference.

(1) The following material is incorporated by reference:

(a) "Conservation District Equipment Loan Application", DOC-01, December 2023;

(b) "Equipment Loan Monthly Report", DOC-04, December 2023;

(c) "Infrastructure Equipment Loan Application", DOC-03, December 2023; and

(d) "Joint Equipment Loan Application", DOC-02, December 2023.

(2) This material may be inspected, copied, or obtained, subject to applicable copyright law, at the Division of Conservation, 300 Sower Boulevard, Frankfort, Kentucky 40601, Monday through Friday, 8 a.m. to 4:30 p.m., Eastern Standard Time.

(3) This material may also be obtained at the Division of Conservation's Web site at https://eec.ky.gov/Natural-Resources/Conservation/Pages/Equipment-Revolving-Loan-Program.aspx.

History

  • RELATES TO: KRS Chapter 45A, 56, 61.805 – 61.850, 262.610 - 262.650, 262.660, 355.9-525, Chapter 424
  • STATUTORY AUTHORITY: KRS 262.090(4), 262.610, 262.660(1)
  • NECESSITY, FUNCTION, AND CONFORMITY: KRS 262.660(1) authorizes the Soil and Water Conservation Commission to promulgate administrative regulations governing the administration of the Equipment Revolving Loan Fund as expressed in KRS 262.610 through 262.650. This administrative regulation establishes the requirements and procedures for participation in the Equipment Revolving Loan Program.
  • History: 50 Ky.R. 1801; eff. 6-6-2024.

Continua la tua ricerca in ChatGPT o Claude

Collega Omnilex per cercare nel corpus legale dal tuo assistente IA.