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66.310 Approval of county bonds.
(1)
(2)
(3)
(4)
No county may issue bonds which, together with all other net indebtedness of
the county plus the principal amount of any outstanding self-supporting
obligations, is in excess of one-half of one percent (0.5%) of the value of the
taxable property therein, as determined by the next preceding certified
assessment, without having first secured the written approval of the state local
debt officer. Any other bonds to be issued by any county may be submitted for
approval as hereinafter provided. When the fiscal court of any county has
petitioned the state local debt officer under KRS 66.320 for assistance in
formulating a plan for reorganizing its debt structure, or has received the
approval of any issue of county bonds voluntarily as provided in this section, all
bonds thereafter issued by the county must be approved as provided in this
section.
Without the approval of the state local debt officer a county may not lease, as
lessee, a building or public facility that has been or is to be financed at the
county's request or on its behalf through the issuance of bonds by another
public body or by a nonprofit corporation serving as an agency and
instrumentality of the county for that purpose, unless the bonds, if issued by the
county itself as its own general obligations, would be exempt under the
provisions of subsection (1). If his or her approval is required, the state local
debt officer shall hold a hearing for the purpose of considering the terms of the
lease upon the same basis as is provided under subsections (3) and (4) of this
section, and interested parties shall have the same right of appeal as is therein
provided. This subsection does not apply to leases entered into before July 1,
1964, nor to renewals thereafter of leases entered into before that date, nor to
bonds referred to in this subsection if those bonds have been sold prior to that
date, whether or not actually delivered to the purchaser or purchasers thereof
before that date.
The state local debt officer shall hold a hearing in accordance with KRS
Chapter 13B for the purpose of determining whether any issue of bonds
submitted to him or her for approval should be approved or disapproved. The
state local debt officer shall provide notice of the hearing to the county
judge/executive of the county proposing to issue bonds, and the county
judge/executive shall cause a copy of that notice to be published not less than
twenty (20) days in advance of the date set for the hearing. Any person having
a material interest in the issuance of the bonds shall have an opportunity to be
heard and to present evidence at the hearing held by a hearing officer
appointed by the state local debt officer. A record of the proceedings of the
hearing shall be made, and the state local debt officer shall review the record
and prepare a written decision approving or disapproving the issuance of the
proposed bonds. The decision shall set forth the findings of fact upon which the
state local debt officer bases his or her decision. On the day that the state local
debt officer issues a decision, he or she shall mail a copy to the county
judge/executive of the county proposing to issue the bonds and to any person
who attended the hearing and requested to receive a copy of the decision.
The state local debt officer shall disapprove the issuance of the proposed
bonds if he or she finds that one (1) or more of the following conditions exist:
(a)
(5)
(6)
(7)
(8)
(9)
The financial condition and prospects of the county do not warrant a
reasonable expectation that interest and principal maturities can be met
when due without seriously restricting other expenditures of the county,
including the debt service on the other outstanding obligations of the
county;
(b) The issue of bonds will not serve the best interests of both the county
issuing the bonds and a majority of its creditors; or
(c) The bonds or the issuance thereof will be invalid.
If the state local debt officer is petitioned by any county to approve the
issuance of bonds to refund outstanding county bonds, and if the state local
debt officer is unable to find that the bonds sought to be refunded were in their
entirety validly issued, he or she shall nevertheless find that bonds may be
issued validly for the purpose of refunding the bonds, in equivalent or lesser
par principal amount, provided that the interest rate to be borne by the
refunding bonds shall be sufficient to make possible their liquidation within their
life at no greater average annual cost to the county than would be required to
liquidate, within the same number of years, the portion of the outstanding
indebtedness found to be valid at the interest rate borne by it before refunding.
Within thirty (30) days after the date of a decision by the state local debt officer
approving a county's proposal to issue bonds, any interested party or taxpayer
of the county may appeal to the Circuit Court of the county proposing to issue
the bonds. Appeal shall be taken by filing a complaint with the clerk of the court
and serving a copy of the complaint upon the state local debt officer by certified
mail, return receipt requested. The fiscal court and, in the case of funding or
refunding bonds, the creditors whose claims or bonds are proposed to be
funded or refunded, shall be made parties to the appeal. The state local debt
officer shall not be named as a party to an appeal under this subsection, but
shall be allowed to intervene in the appeal upon his or her motion. Summons
shall be served and class representatives designated as provided in the Rules
of Civil Procedure. Within thirty (30) days of receipt of the complaint, the state
local debt officer shall certify and file a copy of the record of the proceedings
and his or her decision with the Circuit Court.
A county proposing to issue bonds may appeal a decision of the state local
debt officer disapproving the issuance of the bonds by filing a complaint with
the Franklin Circuit Court within thirty (30) days after the date of the decision.
The state local debt officer shall be named as a defendant in an appeal under
this subsection. Summons shall be issued and served as provided in the Rules
of Civil Procedure. With his or her answer, the state local debt officer shall
certify and file a copy of the record of the proceedings and his or her decision.
Appeals to the Circuit Court shall be advanced on the docket and shall be
heard and decided upon the record certified by the state local debt officer. The
findings of fact of the state local debt officer shall be final if supported by any
substantial evidence; however, if only the question of the validity of the bonds
proposed to be funded or refunded is in issue, additional evidence relating to
the validity of the bonds may be presented.
An appeal may be taken from the Circuit Court to the Court of Appeals in the
manner provided in the Rules of Civil Procedure.
(10) If no appeal is taken from the approval of a bond issue by the state local debt
officer as provided in this section, the decision as to the legality of the bonds
shall be res judicata in any subsequent case or cases raising the question of
their legality.
(11) Record of the approval of bonds as provided in this section shall be made in
the minutes of the next meeting of the fiscal court of the county issuing the
bonds so approved, and copies of all decisions of the state local debt officer
shall be filed with the Secretary of State.
(12) As used in this section, bonds means bonds and obligations.
Effective:June 24, 2003
History: Amended 2003 Ky. Acts ch. 82, sec. 2, effective June 24, 2003. -Amended 1996 Ky. Acts ch. 280, sec. 20, effective July 15, 1996. -- Amended
1994 Ky. Acts ch. 508, sec. 29, effective July 15, 1994. -- Amended 1976 (1st
Extra. Sess.) Ky. Acts ch. 20, sec. 6, effective January 2, 1978. -- Amended
1976 Ky. Acts ch. 62, sec. 66. -- Amended 1966 Ky. Acts ch. 239, sec. 10. -Amended 1964 Ky. Acts ch. 191, sec. 1. -- Amended 1962 Ky. Acts ch. 25,
sec. 3. -- Amended 1960 Ky. Acts ch. 104, sec. 2. -- Amended 1952 Ky. Acts
ch. 84, sec. 55. -- Amended 1942 Ky. Acts ch. 179, secs. 2 and 6. -- Recodified
1942 Ky. Acts ch. 208, sec. 1, effective October 1, 1942, from Ky. Stat.
secs. 938a-4, 938a-5.
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