739 KAR 2:070. Volunteer fire
department loan fund.
RELATES TO: KRS 95A.262(4), (5),
STATUTORY AUTHORITY: KRS 95A.240
NECESSITY, FUNCTION, AND CONFORMITY:
KRS 95A.262 authorizes the Commission on Fire Protection Personnel Standards
and Education to make low interest loans for the purchase of major equipment
and construction of facilities to properly trained volunteer fire departments
which do not have other sources of funds at rates which are favorable given
their financial resources. This administrative regulation is necessary to
establish the criteria for qualifying for the loan and the mandatory procedures
to be followed in obtaining and repaying the loan.
Section 1. Definitions. (1)
"Accessory equipment" means ladders, hoses, self-contained breathing
apparatus, portable pump and hard suction hoses, nozzles, power extrication
tools and protective equipment necessary to carry out the ordinary functions of
supporting fire fighting activities.
(2) "Apparatus equipment"
means pumpers, tankers and other large equipment used for fighting fires and
emergencies. This equipment is more specifically categorized as follows:
(a) "Pumper" means any
pumper which can pump 500, 750, 1,000, 1,250 or 1,500 gallons per minute at 150
pounds per square inch net pumping pressure.
(b) "Tanker" means a mobile
water supply fire apparatus with a water capacity of 1,000 gallons or more and
a minimum flow rate to pump connection of 500 gallons per minute except when a
booster pump is provided.
(c) "Rescue-pumper" means
an apparatus capable of pumping a minimum of 250 gallons per minute at 150 PSI
net pumping pressure, carrying a minimum of 500 gallons of water.
(3) "Approved" means
approved by the commission or its authorized designee for a particular purpose.
(4) "Commission" means
commission as defined by KRS 95A.210.
(5) "Committee" means the
loan committee of the Commission on Fire Protection Personnel Standards and
equipment" means equipment or system, or both, necessary for the
transmission and reception of signals, by voice, required to support the
operations of the volunteer fire department.
(7) "Eligible" means a
volunteer fire department that has met the training requirements and is in good
standing for receipt of state aid pursuant to 739 KAR 2:050 and the loan
request requirements of this administrative regulation.
(8) "Emergency" means fire
department equipment, apparatus or facilities have been damaged, destroyed or
rendered inoperable and established firefighting capacity is reduced to a level
affecting public safety.
(9) "Facilities" means any
structure or portion of a structure intended for storage or protection of
firefighting equipment including rooms or spaces designed and used for
(10) "Local government" as
defined by KRS 95A.210(3).
(11) "NFPA" means the
National Fire Protection Association.
(12) "Protective equipment"
means clothing or equipment used by firefighters which affords protection from
injury to the wearer or user including, but not limited to, fire coats, boots,
helmets and turnout pants meeting current NFPA standards.
(13) "UL" means
(14) "Volunteer fire
department" means a fire department recognized by the Commission on Fire
Protection Personnel Standards and Education as having a membership of more
than fifty (50) percent of its members being full-time volunteer firefighters.
(15) "Volunteer fire department
loan fund" means the fund established pursuant to KRS 95A.262(14).
Section 2. Eligibility. (1) A
volunteer fire department may apply to the commission to receive low interest
loans for the purchase of major equipment and facility construction pursuant to
the requirements of this administrative regulation.
(2) Eligibility to participate in the
loan fund shall be limited to those volunteer fire departments meeting the
training requirements of KRS 95A.262(2) and continue in good standing to
receive state aid, and which the commission finds are unable to obtain loans
from conventional financial institutions at the rate of three (3) percent.
(3) A loan shall be considered from
only one (1) fire department when more than one (1) department resides at the
same physical location.
Section 3. Loan Purposes and
Prohibitions. (1) Purposes. The commission shall consider a loan for the
(a) The acquisition of apparatus
(b) The acquisition of communication
(c) The acquisition of accessory
equipment or protective equipment;
(d) The construction of new facilities;
(e) The modernization of existing
(f) The repair or rehabilitation of
apparatus equipment where it has been determined that existing apparatus
equipment no longer meets the standards of the NFPA and where the repair or
rehabilitation, or both, of the equipment will bring it in compliance with NFPA
(2) Prohibitions. A loan granted
under this administrative regulation shall not be used for the following:
(a) Operating expenses;
(b) For payment of fees for the
designing or planning of facilities or preparation of application; or
(c) For investment or reinvestment.
Section 4. General Loan Requirements.
(1) Loan period. A loan period shall not exceed twelve (12) years. The period
of time for repayment of the loan shall depend upon the amount of the loan and
shall be set forth in the loan agreement. Except in the case of approved
emergency loans, the minimum amount of a loan shall be $5,000.
(2) Title of property. Any apparatus
equipment or facilities financed by a loan from the fund shall be titled in the
name of the volunteer fire department or in the name of the political
subdivision with the commission as lien holder for the property. In the event
the commission is supplying secondary funding, the commission shall become holder
of a secondary encumbrance.
(3) Fire department matching funds. A
prerequisite to obtaining a loan for facilities, vehicles, or rehabilitation of
facilities, vehicles, or equipment, the volunteer fire department shall verify
the availability of unobligated funds in the amount of twenty-five (25) percent
of the total cost of the facility, vehicle, or equipment or rehabilitation of
the facility, vehicle, or equipment.
(4) Financial responsibility. A copy
of the last twelve (12) monthly bank statements must accompany the loan
(5) Repayment of loans.
(a) Interest on the principal amount
of the loan shall accrue at the rate of three (3) percent per annum and shall
be due and payable on the unpaid balance annually.
(b) The principal of the loan shall
be repaid proportionally over the period of the loan. The principal may be
reduced at anytime through advanced payment.
(c) The principal and interest of the
loan shall be payable at the office designated on the loan approval form, with
the payment being deducted from the state aid allotment for that year with any
additional payment due or desired be made by check made payable to the Kentucky
(d) A payment shall be made before
the close of business on the due date or it shall be considered delinquent.
(e) Delinquent accounts shall not
receive further loans or grants for state aid or training facilities until the
delinquency is cured. If the delinquency of the account extends beyond three
(3) months of distribution of the state aid check, foreclosure or repossession
procedures shall begin.
(f) A portion of future state aid
grants may be committed by the volunteer fire department to satisfy its loan
(g) Insurance. The volunteer fire
department shall provide collateral protection insurance for the apparatus,
equipment and facility construction sufficient to secure and protect the loan.
(6) Emergency loans. An eligible
volunteer fire department may be granted an approved emergency loan pursuant to
this administrative regulation.
Section 5. Loan Requirements for Fire
Department Facility Construction. A request for a construction loan for fire
department facilities shall meet the requirements of this section and other
applicable requirements of this administrative regulation.
(1) A facility loan shall be granted
for establishing or modernizing those facilities that house firefighting
(2) A facility loan shall not exceed
seventy-five (75) percent of the total cost of the construction of the facility
or $75,000, whichever is less.
(3) A facility loan shall not be used
for land acquisition.
(4) Land title. The title to the land
upon which facilities are to be constructed or modernized under the loan shall
be in the name of the volunteer fire department or the local government which
the volunteer fire department serves.
(5) Clear title. The volunteer fire
department or the political subdivision for which the volunteer fire department
provides service shall have clear title to the land upon which the facility is to
be constructed or modernized.
(6) Real property liens. Concurrent
with the receipt of the loan, the volunteer fire department shall provide a
copy of the deed and execute a lien document to be filed in the county court
clerk's office in which the property is located.
(7) Plans approval. Final plans for
construction shall be submitted for approval to the Department of Housing,
Buildings and Construction or to an authorized local building official with a
copy to the commission. The volunteer fire department shall be responsible for
complying with the Kentucky Building Code, the Americans with Disabilities Act
and other applicable laws. If any change to the plans or specifications is
desired or required, the volunteer fire department shall furnish all additional
labor and materials necessary to complete the project and the improvements in
compliance with the changes to the plans and specifications.
(8) A certificate of occupancy shall
be submitted to the commission by the volunteer fire department prior to
release of loan funds.
Section 6. Apparatus Equipment. (1)
(a) The amount of a loan for the
purchase of a single apparatus equipment shall not exceed $75,000 or
seventy-five (75) percent of the total cost, whichever is less. The apparatus being
purchased with the loan funding shall not be more than twenty (20) years old
and a copy of a pump test conducted within the last year must accompany
necessary documentation for the loan.
(b) The amount of a loan for the
repair or rehabilitation for a single apparatus equipment shall not exceed
$35,000 or seventy-five (75) percent of the cost of repair or rehabilitation,
whichever is less, and the apparatus shall not be more than twenty (20) years
(2) Apparatus loans. An apparatus
loan shall be for the purpose designated in the loan request and approved by
the commission for the following purposes:
(a) The purchase of firefighting
(b) The rehabilitation of existing
apparatus equipment for the purpose of upgrading the apparatus to meet
applicable National Fire Protection Association standards; and
(c) Repair of existing apparatus.
(3) Mandatory description or
specification of equipment.
(a) New apparatus. The volunteer fire
department shall submit one (1) complete set of specifications of the new
(b) Repairs and rehabilitation. For
the repair or rehabilitation of existing apparatus equipment, the volunteer
fire department shall submit one (1) complete set of specifications along with
three (3) estimates from qualified manufacturers for the repair or
rehabilitation. If less than three (3) estimates are available, a statement
shall be submitted explaining the reason why there are less than three (3).
(c) Purchase of used apparatus
equipment. For used apparatus equipment, the volunteer fire department shall
submit documentation of the type and quality of the equipment.
(d) Refurbished fire apparatus. For
refurbished fire apparatus, the volunteer fire department shall submit the
1. Certification of refurbished
2. Pump test at time of purchase.
3. Any additional information which
the loan committee may request.
(e) Loans will only be granted on
repairable equipment and apparatus which are not more than twenty (20) years
old and a pump test shall be submitted upon completion of repairs and must meet
NFPA pump test requirements and acceptance.
(4) Compliance with National Fire
Codes. The volunteer fire department shall submit to the commission
verification that the new equipment is NFPA 1901-91 equipment.
(5) Prerequisite materials. The
volunteer fire department shall record a lien on the affected vehicle title
documents in the local county court clerk's office.
Section 7. Protective, Accessory and
Communication Equipment. (1) An equipment loan shall be used for the purchase
of protective, accessory and communication equipment.
(2) Equipment compliance.
(a) A volunteer fire department shall
select protective and accessory equipment that shall be labeled as having been
tested and listed by an approved nationally recognized testing agency.
(b) A volunteer fire department shall
select communications equipment identified as meeting Federal Communications
Commission regulations, 5 CFR Part 89.
(3) The amount of a loan for the
purchase of equipment shall not exceed the lesser of $75,000 or seventy-five
(75) percent of the total cost price quote accepted by the borrower and
submitted by the borrower as the accepted quote for purchase.
(4) Security interest. The commission
shall retain a security interest in the property for the life of the loan.
Section 8. Loan Request Procedure.
(1) An applicant seeking a low interest loan shall submit Form FPPSE-1, April,
1993, to the commission.
(2) The commission administrator
shall review the application and status of the volunteer fire department to
determine if the minimum criteria for obtaining the loan has been met.
(3) The commission administrator
shall notify the volunteer fire department of the disposition of the loan
application, forwarding final forms to those eligible volunteer fire
departments whose applications are satisfactory.
Section 9. Establishing Priorities.
(1) A loan shall be reviewed for the applicant's stated purpose in the
following order of preference:
(a) A request for replacement or
repairs of unsafe or unusable fire apparatus, equipment or facilities.
(b) A request for replacement of outmoded
fire apparatus, equipment or facilities.
(c) A request for additional
apparatus, equipment or facilities because of unusual demands or present
(2) Priority shall first be given to
applicants establishing the greatest need, utilizing the following criteria,
not excluding other considerations.
(a) Financial need.
(b) Low economic base.
(c) Unusual fire hazards.
(d) County fire death rate.
(e) Population over sixty-five (65).
(f) Population growth.
(g) Tax exempt properties.
(h) New construction.
(i) Natural disaster.
(j) High mileage/usage.
(k) Existing equipment.
(3) Approval shall be granted in
order of need and availability of funds for each qualifying volunteer fire
Section 10. Formal Application and
Qualification Procedure. (1) To qualify for a loan, an eligible volunteer fire
department shall submit Form FPPSE-2, April, 1993, to the commission.
(2) The commission shall render its
decision at its next regularly scheduled meeting. Approved emergency loans may
be granted prior to the regularly scheduled meeting.
(3) An eligible volunteer fire
department aggrieved by a decision of the commission, may petition the
commission, in writing, for reconsideration and the commission, upon receiving
the request, shall provide the applicant with an opportunity to be heard at its
Section 11. Incorporation by
Reference. (1) The following material is incorporated by reference:
(a) Form FPPSE-1, April, 1993, Loan
Application Request Form.
(b) Form FPPSE-2, April, 1993, Low
Interest Loan Application.
(2) This material may be inspected,
copied or obtained at the Commission on Fire Protection Personnel Standards and
Education, 1049 U.S. 127 South, Suite 5, Frankfort, Kentucky 40601, Monday
through Friday, 8 a.m. to 4:30 p.m. (19 Ky.R. 2577; Am. 20 Ky.R. 85; eff.
7-12-93; 25 Ky.R. 1213; 1616; 2377; eff. 2-24-99; recodified from 815 KAR