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The previous document that this document is based upon is available.

200 KAR 17:111.Guidelines for Kentucky Infrastructure Authority Drinking Water and Wastewater Grant Program.

RELATES TO:

KRS 45.031, 151.601, 151.605, 224A.011, 224A.020, 224A.035, 224A.040, 224A.050 -224A.314, Pub.L. 117-2, 31 C.F.R. Part 35

STATUTORY AUTHORITY:

KRS 224A.040, 224A.070(1), 224A.113, 224A.300, 2021 Ky Acts ch. 195, 2022 Ky Acts ch. 199

NECESSITY, FUNCTION, AND CONFORMITY:

On March 11, 2021, the American Rescue Plan Act, Pub.L. 117-2, was signed into law, and established the Coronavirus State Fiscal Recovery Fund and Coronavirus Local Fiscal Recovery Fund, which together make up the Coronavirus State and Local Fiscal Recovery Funds (SLFRF) program. This program is intended to provide support to State, territorial, local, and Tribal governments in responding to the economic and public health impacts of COVID-19 and in their efforts to contain impacts on their communities, residents, and businesses. Effective April 1, 2022, the United States Department of the Treasury issued its final rule for the funds, 31 C.F.R. Part 35, which necessitates withdrawal of the existing emergency regulation and the promulgation of a new and substantially different emergency regulation. KRS 224A.040 authorizes the Kentucky Infrastructure Authority to make grants as funds are available, and KRS 224A.070(1) authorizes the Kentucky Infrastructure Authority to promulgate administrative regulations that shall define with specificity conditions precedent under which applications for loans or grants may be made and the order of priority upon which applications shall be acted upon. 2021 Ky Acts ch. 195, requires the authority to promulgate administrative regulations to ensure that project approvals are based on rational criteria and include a project's readiness to proceed and the project's social, economic, and environmental benefits. This administrative regulation establishes procedures for governmental agencies to request and receive financial assistance for the construction of drinking water and wastewater infrastructure projects from funds available to the Kentucky Infrastructure Authority.

Section 1.

Definitions.

(1)

"Applicant" means a governmental agency that has submitted a request to the authority for a grant from authority funds.

(2)

"Authority" is defined by KRS 224A.011(6).

(3)

"Conditional commitment letter" means a letter delivered to the applicant stating the authority's commitment to provide a grant under specifications and subject to the satisfaction of certain conditions by the applicant.

(4)

"Kentucky State Clearinghouse" means the project review mechanism, attached to the Department for Local Government, established in KRS 45.031.

(5)

"Kentucky Uniform System of Accounting" means the elements of a basic accounting system established in KRS 224A.306, which is used by a water or wastewater system seeking or using funds of the authority if an alternative accounting system has not been approved by the authority.

(6)

"Project" means an infrastructure project related to drinking water or wastewater.

(7)

"Unserved" means a customer who does not have access to publicly available potable drinking water or a properly functioning wastewater system.

Section 2.

Eligible Costs Timeline.

(1)

Applicants may use funds to cover costs incurred for eligible projects planned or started prior to March 3, 2021, if the project costs covered by the funds were incurred by the applicant after March 3, 2021.

(2)

Applicants may use funds to cover eligible costs incurred during the period that begins on March 3, 2021 and ends on December 31, 2024, if the award funds for the obligations incurred by December 31, 2024 are expended by December 31, 2026.

Section 3.

Eligible Projects.

(1)

Funds available to the authority shall be used to fund projects that make necessary investments in water or sewer infrastructure as defined in 31 C.F.R. 35.6(e)(1).

(2)

Only water or wastewater projects addressing one (1) or more of the conditions established in paragraphs (a) through (h) of this subsection shall be eligible for funding:

(a)

The proposed project shall provide drinking water services to unserved rural customers.

(b)

The proposed project shall address provisions in a federal consent decree related to water or wastewater.

(c)

The proposed project shall address the provisions of KRS 224A.300 - 224A.314.

(d)

The proposed project shall address an emergency situation.

(e)

The proposed project shall alleviate existing conditions that pose a serious and immediate threat to the health and welfare of the community.

(f)

The proposed project shall promote social, economic, or environmental benefits; but with respect to industrial sites funds may only be awarded if the site has committed occupants.

(g)

Funds are needed to complete a funding package previously awarded by the authority.

(h)

Funds are needed to cover cost overrun for a project previously awarded by the authority.

(3)

Project applications meeting the guidelines established in subsection (2) of this section shall be funded based on the project's:

(a)

Readiness to proceed;

(b)

Social, economic, and environmental benefits; and

(c)

Receipt of a project approval from a water management planning council as created in KRS 151.601.

Section 4.

Funding Request.

(1)

Each applicant shall request that the water service coordinator, as established in KRS 151.605, designate the project for funding. If a water service coordinator is not available, the request may be made directly to the authority in writing and mailed.

(2)

The authority shall request additional information about the project or the applicant if needed to comply with local, state, or federal laws.

(3)

Only a completed Water Resource Information System project profile, including all supporting documentation, shall be considered for financial assistance from the Drinking Water and Wastewater Grant Program.

Section 5.

Project Priority. Eligible projects shall be funded subject to:

(1)

A project's readiness to proceed;

(2)

A project's social, economic, and environmental benefits;

(3)

The water management council's approval; and

(4)

The availability of funds.

Section 6.

Additional Conditions to Project Funding.

(1)

A water supply and distribution system seeking funding for a project shall agree, in writing, to adopt and utilize the Kentucky Uniform System of Accounting and to charge rates for services based on the actual cost of that service.

(2)

Before funds shall be disbursed to an applicant whose project has been approved for funding, the applicant shall demonstrate to the authority that the project:

(a)

Has been reviewed through the Kentucky State Clearinghouse process; and

(b)

Is in compliance with applicable state and federal requirements.

Section 7.

Terms of Financial Assistance.

(1)

A funding request shall be:

(a)

Subject to financial viability review by authority staff; and

(b)

Referred to the authority chair for final action.

(2)

A project shall be funded if approved by the authority chair and reviewed by the Legislative Research Commission's Capital Projects and Bond Oversight Committee.

(3)

Upon approval of a funding request, the authority shall issue a conditional commitment letter to the applicant establishing the requirements to be satisfied by the applicant prior to execution of an assistance agreement, including:

(a)

Accounting standards or financial reporting conditions;

(b)

Rate covenants;

(c)

Other federal or state legal requirements relating to the project or the applicant;

(d)

Engineering or technical requirements; and

(e)

Receipt of additional funding commitments from other sources.

(4)

Financial assistance by the authority shall be made available only upon:

(a)

Execution of an assistance agreement; and

(b)

Satisfaction by the applicant of the conditions established in the conditional commitment letter.

(5)

A grant amount may be adjusted by up to ten (10) percent from the principal amount approved without further action if:

(a)

Requested by an applicant; and

(b)

The staff of the authority finds that:

1.

The additional requested amount is needed for the project; and

2.

Adequate funds are available.

(6)

The authority shall monitor the assistance agreements and require that financial reports be made available to the authority by the applicant.

(7)

The authority may collect an administrative fee of one-half (1/2) of one (1) percent charged on the principal grant amount, as allowed by law. This fee shall be applied to the administrative processing servicing costs of the grants and necessary operating expenses of the program.

HISTORY: (49 Ky.R. 488, 1411; eff. 4-4-2023.)

FILED WITH LRC: December 13, 2022

CONTACT PERSON: Matt Stephens, Executive Director, Department for Local Government, 100 Airport Road, 3rd Floor, Frankfort, KY 40601; phone 502-564-0318; fax 502-227-8691; email Matt.Stephens@ky.gov.

200 KAR 17:111.Guidelines for Kentucky Infrastructure Authority Drinking Water and Wastewater Grant Program.

RELATES TO:

KRS 45.031, 151.601, 151.605, 224A.011, 224A.020, 224A.035, 224A.040, 224A.050 -224A.314, Pub.L. 117-2, 31 C.F.R. Part 35

STATUTORY AUTHORITY:

KRS 224A.040, 224A.070(1), 224A.113, 224A.300, 2021 Ky Acts ch. 195, 2022 Ky Acts ch. 199

NECESSITY, FUNCTION, AND CONFORMITY:

On March 11, 2021, the American Rescue Plan Act, Pub.L. 117-2, was signed into law, and established the Coronavirus State Fiscal Recovery Fund and Coronavirus Local Fiscal Recovery Fund, which together make up the Coronavirus State and Local Fiscal Recovery Funds ("SLFRF") program. This program is intended to provide support to State, territorial, local, and Tribal governments in responding to the economic and public health impacts of COVID-19 and in their efforts to contain impacts on their communities, residents, and businesses. Effective April 1, 2022, the United States Department of the Treasury issued its final rule for the funds, 31 C.F.R. Part 35, which necessitates withdrawal of the existing emergency regulation and the promulgation of a new and substantially different emergency regulation. KRS 224A.040 authorizes the Kentucky Infrastructure Authority to make grants as funds are available, and KRS 224A.070(1) authorizes the Kentucky Infrastructure Authority to promulgate administrative regulations that shall define with specificity conditions precedent under which applications for loans or grants may be made and the order of priority upon which applications shall be acted upon. 2021 Ky Acts ch.~~Senate Bill 36, 2021 Regular Session Acts of the General Assembly, Chapter~~ 195, requires the authority to promulgate administrative regulations to ensure that project approvals are based on rational criteria and include a project's readiness to proceed and the project's social, economic, and environmental benefits. This administrative regulation establishes procedures for governmental agencies to request and receive~~the application for and provision of~~ financial assistance ~~to governmental agencies~~ for the construction of drinking water and wastewater infrastructure projects from funds available to the Kentucky Infrastructure Authority.

Section 1.

Definitions.

(1)

"Applicant" means a governmental agency that has submitted a request~~an application~~ to the authority for a grant from authority funds.

(2)

"Application" means the project information contained within the Water Resource Information System Project Profile and designated by an applicant as applying for a grant from the Drinking Water and Wastewater Grant Program funds.

(3)

"Authority" is defined by KRS 224A.011(6)~~means the Kentucky Infrastructure Authority, which is created by KRS Chapter 224A~~.

(3)(4)

(4)(5)

"Kentucky State Clearinghouse" means the project review mechanism, attached to the Department for Local Government, established in KRS 45.031.

(5)(6)

(6)(7)

"Project" means an infrastructure project related to drinking water or wastewater.

(7)(8)

"Unserved" means a customer who does not have access to publicly available potable drinking water or a properly functioning wastewater system.

Section 2.

Eligible Costs Timeline.

(1)

Applicants may use funds to cover costs incurred for eligible projects planned or started prior to March 3, 2021, if~~provided that~~ the project costs covered by the funds were incurred by the applicant after March 3, 2021.

(2)

Applicants may use funds to cover eligible costs incurred during the period that begins on March 3, 2021 and ends on December 31, 2024, if~~as long as~~ the award funds for the obligations incurred by December 31, 2024 are expended by December 31, 2026.

Section 3.

Eligible Projects.

(1)

Funds available to the authority shall be used to fund projects that make necessary investments in water or sewer infrastructure as defined in 31 C.F.R. 35.6(e)(1)~~CFR Part 35~~.

(2)

Only water or wastewater projects addressing one (1) or more of the conditions established in paragraphs (a) through (h) of this subsection shall be eligible for funding:

(a)

The proposed project shall provide drinking water services to unserved rural customers.

(b)

The proposed project shall address provisions in a federal consent decree related to water or wastewater.

(c)

The proposed project shall address the provisions of KRS 224A.300 - 224A.314.

(d)

The proposed project shall address an emergency situation.

(e)

The proposed project shall alleviate existing conditions that pose a serious and immediate threat to the health and welfare of the community.

(f)

The proposed project shall promote social, economic, or environmental benefits; but with respect to industrial sites funds may only be awarded if the site has committed occupants.

(g)

Funds are needed to complete a funding package previously awarded by the authority.

(h)

Funds are needed to cover cost overrun for a project previously awarded by the authority.

(3)

Project applications meeting the guidelines established in subsection (2) of this section shall be funded based on the project's:

(a)

Readiness to proceed;

(b)

Social, economic, and environmental benefits; and

(c)

Receipt of a project approval from a water management planning council as created in KRS 151.601.

Section 4.

Funding Request~~Applications~~.

(1)

Each applicant shall request~~submit an application to the authority by requesting~~ that the water service coordinator, as established in KRS 151.605, designate the project for funding. If a water service coordinator is not available, the request may be made directly to the authority in writing and mailed.

(2)

The authority shall request additional information about the project or the applicant if needed to comply with local, state, or federal laws.

(3)

Only a completed Water Resource Information System project profile~~application~~, including all supporting documentation, shall be considered for financial assistance from the Drinking Water and Wastewater Grant Program.

Section 5.

Project Priority. Eligible projects shall be funded subject to:

(1)

A project's readiness to proceed;

(2)

A project's social, economic, and environmental benefits;

(3)

The water management council's approval; and

(4)

The availability of funds.

Section 6.

Additional Conditions to Project Funding.

(1)

(2)

Before funds shall be disbursed to an applicant whose project has been approved for funding, the applicant shall demonstrate to the authority that the project:

(a)

Has been reviewed through the Kentucky State Clearinghouse process; and

(b)

Is in compliance with applicable state and federal requirements.

Section 7.

Terms of Financial Assistance.

(1)

A~~An application for~~ funding request shall be:

(a)

Subject to financial viability review by authority staff; and

(b)

Referred to the authority chair for final action.

(2)

A project shall be funded if approved by the authority chair and reviewed by the Legislative Research Commission's Capital Projects and Bond Oversight Committee.

(3)

Upon approval of a~~an application for~~ funding request~~of a project~~, the authority shall issue a conditional commitment letter to the applicant establishing the requirements to be satisfied by the applicant prior to execution of an assistance agreement, including:

(a)

Accounting standards or financial reporting conditions;

(b)

Rate covenants;

(c)

Other federal or state legal requirements relating to the project or the applicant;

(d)

Engineering or technical requirements; and

(e)

Receipt of additional funding commitments from other sources.

(4)

Financial assistance by the authority shall be made available only upon:

(a)

Execution of an assistance agreement; and

(b)

Satisfaction by the applicant of the conditions established in the conditional commitment letter.

(5)

A grant amount may be adjusted by up to ten (10) percent from the principal amount approved without further action if:

(a)

Requested by an applicant; and

(b)

The staff of the authority finds that:

1.

The additional requested amount is needed for the project; and

2.

Adequate funds are available.

(6)

The authority shall monitor the assistance agreements and require that financial reports be made available to the authority by the applicant.

(7)

HISTORY: (49 Ky.R. 488, 1411; eff. 4-4-2023.)

FILED WITH LRC: December 13, 2022

CONTACT PERSON: Matt Stephens, Executive Director, Department for Local Government, 100 Airport Road, 3rd Floor, Frankfort, KY 40601; phone 502-564-0318; fax 502-227-8691; email Matt.Stephens@ky.gov.

Page Generated: 5/12/2023, 4:33:50 PM

Title 200 | Chapter 017 | Regulation 111

200 KAR 17:111.Guidelines for Kentucky Infrastructure Authority Drinking Water and Wastewater Grant Program.

RELATES TO:

STATUTORY AUTHORITY:

NECESSITY, FUNCTION, AND CONFORMITY:

Section 1.

(1)

(2)

(3)

(4)

(5)

(6)

(7)

Section 2.

(1)

(2)

Section 3.

(1)

(2)

(a)

(b)

(c)

(d)

(e)

(f)

(g)

(h)

(3)

(a)

(b)

(c)

Section 4.

(1)

(2)

(3)

Section 5.

(1)

(2)

(3)

(4)

Section 6.

(1)

(2)

(a)

(b)

Section 7.

(1)

(a)

(b)

(2)

(3)

(a)

(b)

(c)

(d)

(e)

(4)

(a)

(b)

(5)

(a)

(b)

1.

2.

(6)

(7)

200 KAR 17:111.Guidelines for Kentucky Infrastructure Authority Drinking Water and Wastewater Grant Program.

RELATES TO:

STATUTORY AUTHORITY:

NECESSITY, FUNCTION, AND CONFORMITY:

Section 1.

(1)

(2)

(3)

(3)(4)

(4)(5)

(5)(6)

(6)(7)

(7)(8)

Section 2.