Current through Register Vol. 50, No. 9, March 1, 2024
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
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.
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;
(c) The audited financial statements of the
firm for the previous fiscal year or years;
(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;
(c) Specify
references for the firm's experience and the underwriter in the office located
in the Commonwealth;
(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:
1. Firms that were prequalified
during the prior period; and
2.
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.
STATUTORY AUTHORITY:
KRS
45A.879