200 KAR 26:010. KGPA operating
procedures.
RELATES TO: KRS 42.420, 45.810, 56.450,
56.870(3), Chapter 148, Chapter 154, 353.750-353.776
STATUTORY AUTHORITY: KRS 353.754(5)
NECESSITY, FUNCTION, AND CONFORMITY: KRS
353.754(5) requires the Kentucky Gas Pipeline Authority to promulgate
administrative regulations for the conducting of its business and affairs. This
administrative regulation establishes the operating procedures for the Kentucky
Gas Pipeline Authority.
Section 1. Definitions. (1)
"Full-time job" means a position filled by an employee, except for
contract or part-time employees, that the company projects will work on an
annual basis 1,820 hours.
(2) "KGPA" means the Kentucky
Gas Pipeline Authority, created and established by KRS 353.750.
(3) "KPABAC" means the Kentucky
Private Activity Bond Allocation Committee, created and established by KRS
103.286.
(4) "Project" is defined in KRS
353.750(5).
Section 2. Application Process. (1)
Eligible projects may be financed by the issuance of revenue bonds by the KGPA
pursuant to an agreement between the KGPA and the applicant related to the
project.
(2) Before filing an application
requesting the issuance of revenue bonds by the KGPA, an applicant shall contact:
(a) Bond counsel to determine if financing
by the KGPA is feasible and any relevant federal tax issues associated with the
issuance of any revenue bonds for the project;
(b) The KPABAC if the bond issue
qualifies as a private activity bond and the applicant intends to request an
allocation of a portion of the state private activity bond volume cap;
(c)1. Potential underwriters, to receive
a commitment to purchase the bonds, if the issue is to be publicly sold; or
2. Other purchasers, to receive a
commitment to purchase the bonds, if the issue is to be privately placed; and
(d) Governmental entities that will be
impacted by expected lost property tax revenues as a result of the proposed
bond issue.
(3) An applicant requesting the issuance
of revenue bonds by the KGPA shall submit an application using the KGPA
application. The application shall be submitted to the KGPA at least ninety
(90) days prior to the anticipated date of issuance of the revenue bonds, and
shall be accompanied by:
(a) A $500 nonrefundable application fee;
(b) Resolutions or other documents of
support from governmental entities impacted by expected lost property tax
revenues as a result of the proposed bond issue; and
(c) A KGPA New Bond Issue Report.
Section 3. Evaluation Criteria. The
following criteria may be considered by the KGPA when evaluating a project
application and issuance of revenue bonds for the project:
(1) Number of new full-time jobs expected
to be created or retained as a result of the project for which the bonds are to
be issued;
(2) Average hourly wage expected to be
paid for each full-time job created or retained;
(3) Employee benefits expected to be
offered;
(4) Amount of capital investment being
made in the project by the applicant;
(5) Unemployment rate in the county or
counties of the proposed project;
(6) State tax incentive programs and
grant or loan programs in which the applicant has previously participated with
another project or is seeking to participate in with the proposed project;
(7) Whether the proposed project would be
eligible to participate in a tax incentive, grant, or loan program offered
under KRS Chapter 148 or 154;
(8) New tax revenues which the applicant
anticipates will be produced by the project over the life of the bond issue,
i.e. severance tax revenue, corporate income tax, sales tax, occupational tax,
etc.;
(9) Approximate amount and percentage of
state and local ad valorem taxes expected to be lost as a result of the
applicant leasing all or a portion of the project from the KGPA;
(10) Whether the proposed project will
result in an increase in current user rates;
(11) Whether the rate structure will be
regulated by the Kentucky Public Service Commission or any other public
regulatory body;
(12) Whether the project is financially
viable, as evidenced by a willing applicant and a willing lender; or
(13) Whether the project will increase
transmission of gas.
Section 4. Approval Process. (1) The KGPA
shall evidence its approval or disapproval of the proposed project and related
bond issue through the adoption of a resolution authorizing the project and
issuance, execution, and delivery of the bonds. The resolution shall also
approve any related lease agreement, loan agreement, or similar agreement, and
authorize the appropriate officials of the KGPA to negotiate the terms of and
execute any agreement. A copy of the resolution shall be sent to the applicant.
(2) Sale of the bonds shall not occur
before receipt of the resolution.
(3) As a condition of approval of the
proposed bond issuance, the KGPA shall require the execution and delivery of a
lease agreement, loan agreement, or similar agreement between the applicant and
the KGPA providing for or relating to the financing of the construction,
reconstruction, improvement, or repair of the proposed project, if the
applicant will be leasing all or a portion of the industrial project from the
KGPA.
(4) Upon approval of the project by the
KGPA and prior to any bonds being issued for the project:
(a) An applicant shall seek final
approval by the applicable regulatory body or authority;
(b) The listed entities shall review and
approve the proposed bond issue:
1. State Property and Buildings
Commission (SPBC), pursuant to KRS 56.450;
2. Capitol Projects and Bond Oversight
Committee, pursuant to KRS 45.810; and
3. Office of Financial Management in the
Office of the Controller within the Finance and Administration Cabinet,
pursuant to KRS 42.420; and
(c) The Secretary of the Finance and
Administration Cabinet shall certify that the issuance of revenue bonds in
relation to the project and the terms of the issue shall not require an
appropriation of state general funds, in accordance with KRS 56.870(3).
(5) The applicant shall complete a KGPA
Bond Information Disclosure Form and submit it to the Office of Financial Management
no later than five (5) days after the bond or note sale.
Section 5. Reporting Requirements. (1)
The KGPA shall make an annual report in accordance with the provisions of KRS
353.776.
(2) The KGPA shall provide for an audit
in accordance with the provisions of KRS 353.776.
Section 6. Incorporation by Reference.
(1) The following material is incorporated by reference:
(a) "KGPA Application (8/05)";
(b) "KGPA New Bond Issue Report
(8/05)"; and
(c) "KGPA Bond Information
Disclosure (8/05)".
(2) This material may be inspected,
copied, or obtained, subject to applicable copyright law, at the Finance and
Administration Cabinet, Office of the Secretary, Room 383 Capitol Annex,
Frankfort, Kentucky 40601, Monday through Friday, 8 a.m. to 4:30 p.m. (32 Ky.R.
706; 1082; eff. 12-16-2005.)