602 KAR 15:010. Airport development loans

Link to law: http://www.lrc.ky.gov/kar/602/015/010.htm
Published: 2015

      602 KAR 15:010.

Airport development loans.

 

      RELATES TO: KRS

183.200-183.213

      STATUTORY

AUTHORITY: KRS 183.213(1)

      NECESSITY,

FUNCTION, AND CONFORMITY: KRS 183.213(1) provides that the Transportation

Cabinet shall promulgate administrative regulations governing airport loans

made under KRS 183.200 to 183.210. This administrative regulation is

promulgated to set forth specifications regarding applications for and terms of

the loans.

 

      Section 1.

Definition. "Airport development loan" means a loan authorized by KRS

183.200 to 183.213.

 

      Section 2. An

airport board that seeks an airport development loan shall file an original and

one (1) copy of Transportation Cabinet form TC 56-15L, "Airport

Development Loan Application" with the Transportation Cabinet, Director,

Division of Aeronautics, Frankfort, Kentucky 40622.

 

      Section 3.

Content of Application. The following information and exhibits shall be

included in the application:

      (1) Name and

address of the airport board.

      (2) The amount

of airport development loan requested from the cabinet.

      (3) The

description of the proposed airport project including an attached exhibit

consisting of an engineer's plat which shows the following as each exists at

the time of the application and proposed improvement:

      (a) Site boundaries;

      (b) Total

acreage;

      (c) The

airstrip;

      (d) Facilities;

      (e) Servicing

utilities; and

      (f) Access road;

      (4) An exhibit

showing the ownership and encumbrances on the land described in subsection (3)

of this section.

      (5) An exhibit

stating the itemized detailed cost or estimated cost of the:

      (a) Land and all

proposed improvements;

      (b) Engineering

and legal expenses; and

      (c) Other

expenses necessary to the cost of the airport project.

      (6) An exhibit

providing:

      (a) The method

and amount of financing for the proposed project including:

      1. Federal

participants;

      2. State

participants; and

      3. Local

participants;

      (b) The

percentage of the total project cost contributed by a participant;

      (c) Evidence of

the availability of funds from the participants;

      (d) The proposed

terms of an:

      1. Airport

development loan; and

      2. Schedule of

repayment; and

      (e) The

percentage of the total project cost to be covered by an airport development

loan.

      (7) An exhibit

with documentation of the financial standing of the airport board in the form

of a current financial statement containing a full disclosure of all assets,

liabilities, and income.

      (8) A statement

of when the proceeds of the loan will be needed and a proposed schedule for

site acquisition or development.

      (9) An exhibit

containing a letter from each appointing authority attesting that if the

airport board defaults on the loan, the authority accepts full responsibility

for payment of the following:

      (a) Loan

principal;

      (b) Interest;

and

      (c) Late penalty

payment.

 

      Section 4. The

annual rate of interest to be charged throughout the life of an airport

development loan shall be two (2) percent per annum.

 

      Section 5.

Determination Standards. The following standards shall be used by the cabinet

to determine the soundness and feasibility of a project and whether a loan

application shall be granted:

      (1) The

availability of project funds from a:

      (a) Federal;

      (b) State; or

      (c) Other;

      (2) Whether the

proceeds of the loan will be expended for:

      (a) Initial construction

of an airport facility; or

      (b) The

improvement of the safety or adequacy of an existing airport facility;

      (3) The

foreseeability that the airport development project will generate adequate

revenue to repay the loan; and

      (4) The need for

the proposed facility to provide better service to operators anticipated to use

the facility, based upon the:

      (a) Airport

master plan; or

      (b) Airport

layout plan.

 

      Section 6. Terms

of Loan. The airport development loan agreement entered into between the airport

board and the cabinet shall have the following terms in addition to those

stated in KRS 183.210:

      (1) The

principal amount loaned shall be repaid to the cabinet in annual installments

plus accrued interest or as otherwise provided in the agreement.

      (2) The first

installment payment shall be due within one (1) year after the proceeds of the

loan are paid to the airport board.

      (3) The airport

board may repay any of the unpaid balance without penalty if the interest is

computed to the date the advance repayment is made.

      (4) All payments

on principal and interest shall be made to the Transportation Cabinet, or as

otherwise provided in the agreement.

      (5) The loan

shall be used by the airport board for the purpose stated in the application.

      (6) For value

received and for the purpose of affording credit to the airport board, the

appointing authority or authorities jointly and severally, absolutely and

unconditionally, guarantee the payment at maturity of all obligations under the

loan agreement.

      (7) The agreement

may contain other terms agreed upon by the airport board and the cabinet.

 

      Section 7.

Material Incorporated by Reference. (1) Transportation Cabinet form TC 56-15L

(March 1997 edition) is incorporated by reference as a part of this

administrative regulation.

      (2) A copy of

the form incorporated by reference may be viewed, copied, or obtained free of

charge from the Transportation Cabinet, Division of Aeronautics, 125 High

Street, Frankfort, Kentucky 40622. The hours of operation of the division are 8

a.m. to 4:30 p.m. weekdays. (2 Ky.R. 228; eff. 12-10-75; Am. 6 Ky.R. 580; eff.

7-2-80; 9 Ky.R. 1235; eff. 6-1-83; 11 Ky.R. 244; eff. 9-11-84; 1074; eff.

2-12-85; 14 Ky.R. 262; eff. 9-10-87; 23 Ky.R. 3615; 4117; eff. 6-2-97.)
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