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42.355 Examination and approval of projects -- Grants -- Administration -Conditions.
(1)
(2)
The Department for Local Government shall examine each capital project
selected by the area development districts, and when it finds that a proposed
project conforms to the requirements of KRS 42.350 to 42.370; that the
estimated costs of the project are reasonable; that the costs proposed to be
paid from the fund are within the amount available; and that the proposed
beneficiary agency will be reasonably able to finance the operation and
maintain the capital project during its estimated useful life, the commissioner of
the Department for Local Government shall approve it. If the Department for
Local Government determines that a capital project proposal does not conform
to the requirements of KRS 42.350 to 42.370, that the estimated costs of the
project are excessive or unreasonable in light of the public benefit to be derived
from the project, or the unencumbered balance in the fund available for
expenditure in the area development district is insufficient to pay the costs of
the project, or the part thereof proposed to be paid out of the fund, or the
beneficiary agency cannot reasonably finance the operation of or maintain the
capital project during its estimated useful life, the project proposal shall be
disapproved by the Department for Local Government. The final decision to
either approve or disapprove any project proposal shall be made no later than
forty-five (45) days following official submittal of a complete proposal by the
area development district, and the area development district shall be
accordingly notified at that time.
The commissioner of the Department for Local Government may make direct
grants-in-aid of money out of the fund to any beneficiary agency for the
construction or acquisition of any approved capital project. When a direct
grant-in-aid has been made to a beneficiary agency, all contracts awarded for
the purchase of materials, supplies, equipment, or services, except
professional and technical services, required for the construction or acquisition
of the project shall be awarded to the lowest and best bidder in the discretion of
the beneficiary agency after public advertisement as required by KRS Chapter
424 or other applicable law. All contracts awarded under this section for the
construction, reconstruction, or renovation of a building or other improvement
to real estate shall be deemed contracts for public works within the meaning of
KRS 341.317 and KRS Chapter 376 and other applicable statutes. All
beneficiary agencies receiving a direct grant-in-aid under this subsection shall
keep and maintain complete and accurate records of accounts of all
expenditures of the grant moneys which shall be subject to audit by the
Commonwealth for a period of five (5) years after completion of the capital
project. Beneficiary agencies shall complete approved capital projects within a
reasonable period of time as determined by the Department for Local
Government. Upon completion of capital projects, beneficiary agencies shall
submit project completion reports to the Department for Local Government as
prescribed by the Department for Local Government and containing documents
and information as may be necessary to determine compliance with KRS
42.350 to 42.360 and other applicable statutes and administrative regulations.
Beneficiary agencies shall be liable to repay to the fund any granted funds for
failure to submit full project completion reports within a reasonable period of
(3)
time or for expenditure of granted funds in violation of statutes and regulations.
No additional area development funds may be approved until compliance,
except at the discretion of the commissioner of the Department for Local
Government. Any grant moneys not required after all of the costs of the capital
project have been paid by the beneficiary agency shall be promptly returned to
the Commonwealth for reallocation for expenditure for other capital projects in
the area development district to which the funds had been originally allocated.
No capital project shall be constructed under KRS 42.350 to 42.370 except
upon land to which (a) the Commonwealth, a political subdivision of the
Commonwealth, or the beneficiary agency of the capital project has a good and
marketable title, free of encumbrances, or (b) the beneficiary agency of the
project has the right to the uninterrupted use, occupancy, and possession for a
period longer than the estimated useful life of the capital project; provided
nothing herein shall prohibit the construction or renovation of public buildings
on land with an existing encumbrance to secure payment of funds obtained for
the acquisition or improvement of said land. Each beneficiary agency shall
execute and deliver to the Commonwealth its written assurances, which shall
be binding on the agencies' successors and assigns, guaranteeing that during
its estimated useful life, the capital project shall be operated and maintained for
public purposes and pledging that no mortgage or other encumbrances shall
be placed against any capital project wholly financed out of the fund, except
industrial development projects, for the breach of which assurances the
Commonwealth shall have right of entry to the capital project and the
beneficiary agency, or its successors and assigns, shall forthwith convey the
title to the capital project to the Commonwealth. Similar assurances shall be
executed and delivered to the Commonwealth by the beneficiary agencies of
capital projects financed in part out of the fund and in part from other sources,
except that when additional funding is derived from the issuance and sale of
revenue bonds or under other statutorily authorized financing methods, to
secure the repayment of which funds a statutory mortgage lien is granted in
favor of any person or group of persons, the capital project may be
encumbered to the extent authorized or required by the law under which the
financing method was undertaken; nor shall anything in this section prohibit the
encumbrance of any real property located within an industrial park or
constituting an industrial site, developed or improved as a capital project under
KRS 42.350 and this section, by any person, firm, company, partnership, or
corporation to which the property has been conveyed, to obtain financing for
the construction upon the property of industrial and commercial buildings. The
written assurances provided by beneficiary agencies under this section shall be
lodged for recording and recorded in the office of the county clerk of the county
in which the proposed project shall be located.
Effective:July 15, 2010
History: Amended 2010 Ky. Acts ch. 117, sec. 22, effective July 15, 2010. -Amended 2007 Ky. Acts ch. 47, sec. 16, effective June 26, 2007. -- Amended
1998 Ky. Acts ch. 69, sec. 8, effective July 15, 1998. -- Amended 1984 Ky. Acts
ch. 404, sec. 43, effective July 13, 1984. -- Created 1978 Ky. Acts ch. 187,
sec. 3, effective June 17, 1978.
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