Current through Register Vol. 50, No. 9, March 1, 2024
RELATES TO:
KRS
45.031,
151.601,
151.605,
224A.011,
224A.020,
224A.035,
224A.040,
224A.050
-224A.314
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. Senate Bill 36, 2021 Regular Session Acts of the General
Assembly, Chapter 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 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.
Section 1. Definitions.
(1) "Applicant" means a governmental agency
that has submitted an application to the Authority for a grant from Authority
funds.
(2) "Application" means the
project information contained within the Water Resource Information System
Project Profile and designated by an applicant as applying for a grant from the
Drinking Water and Wastewater Grant Program funds.
(3) "Authority" means the Kentucky
Infrastructure Authority, which is created by KRS Chapter 224A.
(4) "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.
(5)
"Kentucky State Clearinghouse" means the project review mechanism, attached to
the Department for Local Government, established in
KRS
45.031.
(6) "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.
(7) "Project" means an infrastructure project
related to drinking water or wastewater.
(8) "Unserved" means a customer who does not
have access to publicly available potable drinking water or a properly
functioning wastewater system.
Section 2. Eligible Projects.
(1) Funds available to the Authority shall be
used to fund Projects.
(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.
(c) The proposed
project shall address the provisions of
KRS
224A.300 - 224A.314.
(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) shall be funded based on the
Project's:
(a) Readiness to proceed;
(b) Social, economic, and environmental
benefits; and
(c) Receipt of a
Project approval from a water management planning council as created in
KRS
151.601.
Section 3. Applications.
(1) Each applicant shall submit an
application to the Authority by requesting 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 application, including all supporting documentation, shall be
considered for financial assistance from the Drinking Water and Wastewater
Grant Program.
Section
4. 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 5.
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 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 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 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;
(c) Other federal or
state legal requirements relating to the project or the applicant;
(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:
1. The additional requested amount
is needed for the project; and
2.
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.
STATUTORY AUTHORITY:
KRS
224A.040,
224A.070(1),
224A.113,
224A.300
