200 Kar 26:010. Kgpa Operating Procedures

Link to law: http://www.lrc.ky.gov/kar/200/026/010.htm
Published: 2015

      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.)
Read Entire Law on www.lrc.ky.gov