Title 702 | Chapter 003 | Regulation 340
SUPERSEDED
This document is no longer current.
EDUCATION AND LABOR CABINET
Board of Education
Department of Education
(New Administrative Regulation)
702 KAR 3:340.Approval of school district lease agreements.
Section 1.
Administrative Guidelines.(1)
To request approval of a lease agreement in excess of $100,000 from the Commissioner of Education pursuant to KRS 65.944(1)(b), the district shall submit a copy of the proposed lease and a completed Local Board Attorney Certification form to the Department of Education prior to finalization of the lease agreement.(2)
The school district shall submit the proposed lease to the Department of Education who shall approve or disapprove the lease within thirty (30) business days.(3)
During the evaluation process, the Department of Education may request additional documentation to properly evaluate the proposed lease agreement.Section 2.
Final Approval and Reconsideration.(1)
Final approval of a proposed school district lease agreement in excess of $100,000 shall be granted by the Commissioner of Education before the agreement takes effect.(2)
Upon receiving written approval from the Commissioner of Education, a school district may enter into the lease.(3)
(a)
The Commissioner of Education shall send written notification to the school district if the agreement is not approved.(b)
The notice shall contain the reasons the agreement was not approved.(c)
A school district may request reconsideration by the Commissioner of Education if alterations are made to the proposed lease which alleviate the concerns expressed by the Commissioner of Education.Section 3.
Incorporation by Reference.(1)
"Local Board Attorney Certification", August 2023, is incorporated by reference.(2)
This material may be inspected, copied, or obtained, subject to applicable copyright law, at the Department of Education, 300 Sower Boulevard, 5th Floor, Frankfort, Monday through Friday, 8:00 a.m. through 4:30 p.m. This material may be viewed at: https://education.ky.gov/districts/legal/Pages/Kentucky-Revised-Statutes.aspx.This is to certify that the chief state school officer has reviewed and recommended this administrative regulation prior to its adoption by the Kentucky Board of Education, as required by KRS 156.070(5).
JASON E. GLASS, Ed.D., Commissioner
SHARON ROBINSON, Chairperson
APPROVED BY AGENCY: August 7, 2023
FILED WITH LRC: August 8, 2023 at 3:30 p.m.
PUBLIC HEARING AND COMMENT PERIOD: A public hearing on this administrative regulation shall be held on October 31, 2023 at 10:00 a.m., in the State Board Room, Fifth Floor, 300 Sower Boulevard, Frankfort, Kentucky. Individuals interested in being heard at this hearing shall notify this agency in writing by 5 workdays prior to the hearing, of their intent to attend. If no notification of intent to attend the hearing is received by that date, the hearing may be cancelled. This hearing is open to the public. Any person who wishes to be heard will be given an opportunity to comment on the proposed administrative regulation. A transcript of the public hearing will not be made unless a written request for a transcript is made. If you do not wish to be heard at the public hearing, you may submit written comments on the proposed administrative regulation. Written comments shall be accepted through October 31, 2023. Send written notification of intent to be heard at the public hearing or written comments on the proposed administrative regulation to:
CONTACT PERSON: Todd G. Allen, General Counsel, Kentucky Department of Education, 300 Sower Boulevard, 5th Floor, Frankfort, Kentucky 40601, phone 502-564-4474, fax 502-564-9321, email regcomments@education.ky.gov.
REGULATORY IMPACT ANALYSIS AND TIERING STATEMENT
Contact Person:
Todd G. Allen
(1) Provide a brief summary of:
(a) What this administrative regulation does:
The proposed administrative regulation creates an approval process for school district leases in excess of one hundred thousand dollars ($100,000) as required pursuant to KRS 65.944(1)(b).
(b) The necessity of this administrative regulation:
KRS 65.944(1)(b) requires the Kentucky Board of Education to promulgate an administrative regulation establishing an approval process by the Commissioner of Education for school districts leases that exceed one hundred thousand dollars ($100,000).
(c) How this administrative regulation conforms to the content of the authorizing statutes:
The proposed administrative regulation is required pursuant to KRS 65.944(1)(b).
(d) How this administrative regulation currently assists or will assist in the effective administration of the statutes:
The proposed regulation creates an approval process for local school district leases that exceed one hundred thousand dollars ($100,000).
(2) If this is an amendment to an existing administrative regulation, provide a brief summary of:
(a) How the amendment will change this existing administrative regulation:
N/A.
(b) The necessity of the amendment to this administrative regulation:
N/A.
(c) How the amendment conforms to the content of the authorizing statutes:
N/A. (d) How the amendment will assist in the effective administration of the statues: N/A.
(d) How the amendment will assist in the effective administration of the statutes:
(3) List the type and number of individuals, businesses, organizations, or state and local governments affected by this administrative regulation:
School districts.
(4) Provide an analysis of how the entities identified in question (3) will be impacted by either the implementation of this administrative regulation, if new, or by the change, if it is an amendment, including:
(a) List the actions that each of the regulated entities identified in question (3) will have to take to comply with this administrative regulation or amendment:
School districts will have their legal counsel complete the incorporated "Local Board Attorney Certification" form certifying that the lease complies with applicable laws and submit the form and lease to the Commissioner of Education for approval. The Commissioner will approve or deny the lease. If the lease is denied, then the Commissioner must provide the reasons and the district may correct any defects in the lease and/or request reconsideration.
(b) In complying with this administrative regulation or amendment, how much will it cost each of the entities identified in question (3):
The proposed lease approval process should have minimal cost to the school district as the district should already have legal counsel involved in the review of leases in excess of one hundred thousand dollars ($100,000). Completion of the "Local Board Attorney Certification" form will help the district save money by ensuring that the lease contains all the legally required terms.
(c) As a result of compliance, what benefits will accrue to the entities identified in question (3):
The proposed regulation will ensure that districts have legal counsel review and certify that the agreement meets legal requirements for leases that exceed one hundred thousand dollars ($100,000). This should ensure that district leases are compliant with applicable law. (5) Provide an estimate of how much it will cost to implement this administrative regulation:
(5) Provide an estimate of how much it will cost the administrative body to implement this administrative regulation:
(a) Initially:
It is believed that there will be minimal costs to school districts to implement.
(b) On a continuing basis:
District costs for legal review and certification of a lease will depend on the number of districts leases in excess of one hundred thousand dollars ($100,000).
(6) What is the source of the funding to be used for the implementation and enforcement of this administrative regulation:
School district general funds.
(7) Provide an assessment of whether an increase in fees or funding will be necessary to implement this administrative regulation, if new, or by the change if it is an amendment:
No additional fees or funding.
(8) State whether or not this administrative regulation establishes any fees or directly or indirectly increases any fees:
The proposed regulation does not establish any fees.
(9) TIERING: Is tiering applied?
Tiering was not applied. The proposed regulation is uniformly applicable to all school districts.
FISCAL NOTE
(1) What units, parts, or divisions of state or local government (including cities, counties, fire departments, or school districts) will be impacted by this administrative regulation?
School districts.
(2) Identify each state or federal statute or federal regulation that requires or authorizes the action taken by the administrative regulation.
The proposed regulation is required by KRS 65.944(1)(b) and authorized by KRS 156.070 and 156.160
(3) Estimate the effect of this administrative regulation on the expenditures and revenues of a state or local government agency (including cities, counties, fire departments, or school districts) for the first full year the administrative regulation is to be in effect.
(a) How much revenue will this administrative regulation generate for the state or local government (including cities, counties, fire departments, or school districts) for the first year?
The proposed administrative regulation establishes a school district lease approval process. It will not generate revenue.
(b) How much revenue will this administrative regulation generate for the state or local government (including cities, counties, fire departments, or school districts) for subsequent years?
The proposed administrative regulation establishes a school district lease approval process. It will not generate revenue.
(c) How much will it cost to administer this program for the first year?
It is expected that districts will incur some unknown additional costs. The proposed regulation requires district legal counsel to certify leases exceeding one hundred thousand dollars comply with legal requirements. Many districts already involve legal counsel in the preparation and review of leases. For such districts, the proposed administrative regulation should only minimally impact costs.
(d) How much will it cost to administer this program for subsequent years?
Unknown. Districts will incur some cost related to legal review of leases exceeding one hundred thousand dollars ($100,000). Costs will depend on the number of leases and legal counsel costs.
Note: If specific dollar estimates cannot be determined, provide a brief narrative to explain the fiscal impact of the administrative regulation.
Revenues (+/-):
Expenditures (+/-):
Other Explanation:
(4) Estimate the effect of this administrative regulation on the expenditures and cost savings of regulated entities for the first full year the administrative regulation is to be in effect.
(a) How much cost savings will this administrative regulation generate for the regulated entities for the first year?
Unknown. The proposed regulation centralizes the approval process for school district leases in excess of one hundred thousand dollars ($100,000). The "Local Board Attorney Certification" form incorporated by reference ensures that submitted leases are compliant with Kentucky law. The review and certification by local board counsel should ensure district leases are approvable by the Commissioner of Education as required by KRS 65.944 thereby avoiding unnecessary delay in entering into the lease which may have some economic benefit to the district.
(b) How much cost savings will this administrative regulation generate for the regulated entities for subsequent years?
Unknown. The proposed regulation centralizes the approval process for school district leases in excess of one hundred thousand dollars ($100,000). The "Local Board Attorney Certification" form incorporated by reference ensures that submitted leases are compliant with Kentucky law. The review and certification by local board counsel should ensure district leases are approvable by the Commissioner of Education as required by KRS 65.944 thereby avoiding unnecessary delay in entering into the lease which may have some economic benefit to the district.
(c) How much will it cost the regulated entities for the first year?
Unknown. Districts will incur the cost of legal review and certification of all leases above one hundred thousand dollars ($100,000). However, this review will ensure that leases above the one hundred thousand dollar ($100,000) threshold are compliant with Kentucky law which may reduce legal costs in the future.
(d) How much will it cost the regulated entities for subsequent years?
Unknown. Districts will incur the cost of legal review and certification of all leases above one hundred thousand dollars ($100,000). However, this review will ensure that leases above the one hundred thousand dollar ($100,000) threshold are compliant with Kentucky law which may reduce legal costs in the future.
Note: If specific dollar estimates cannot be determined, provide a brief narrative to explain the fiscal impact of the administrative regulation.
Cost Savings (+/-):
Expenditures (+/-):
Other Explanation:
(5) Explain whether this administrative regulation will have a major economic impact, as defined below.
"Major economic impact" means an overall negative or adverse economic impact from an administrative regulation of five hundred thousand dollars ($500,000) or more on state or local government or regulated entities, in aggregate, as determined by the promulgating administrative bodies. [KRS 13A.010(13)] The proposed regulation is not expected to have a major economic impact on the department or local school districts.
EDUCATION AND LABOR CABINET
Board of Education
Department of Education
(New Administrative Regulation)
702 KAR 3:340.Approval of school district lease agreements.
Section 1.
Administrative Guidelines.(1)
To request approval of a lease agreement in excess of $100,000 from the Commissioner of Education pursuant to KRS 65.944(1)(b), the district shall submit a copy of the proposed lease and a completed Local Board Attorney Certification form to the Department of Education prior to finalization of the lease agreement.(2)
The school district shall submit the proposed lease to the Department of Education who shall approve or disapprove the lease within thirty (30) business days.(3)
During the evaluation process, the Department of Education may request additional documentation to properly evaluate the proposed lease agreement.Section 2.
Final Approval and Reconsideration.(1)
Final approval of a proposed school district lease agreement in excess of $100,000 shall be granted by the Commissioner of Education before the agreement takes effect.(2)
Upon receiving written approval from the Commissioner of Education, a school district may enter into the lease.(3)
(a)
The Commissioner of Education shall send written notification to the school district if the agreement is not approved.(b)
The notice shall contain the reasons the agreement was not approved.(c)
A school district may request reconsideration by the Commissioner of Education if alterations are made to the proposed lease which alleviate the concerns expressed by the Commissioner of Education.Section 3.
Incorporation by Reference.(1)
"Local Board Attorney Certification", August 2023, is incorporated by reference.(2)
This material may be inspected, copied, or obtained, subject to applicable copyright law, at the Department of Education, 300 Sower Boulevard, 5th Floor, Frankfort, Monday through Friday, 8:00 a.m. through 4:30 p.m. This material may be viewed at: https://education.ky.gov/districts/legal/Pages/Kentucky-Revised-Statutes.aspx.This is to certify that the chief state school officer has reviewed and recommended this administrative regulation prior to its adoption by the Kentucky Board of Education, as required by KRS 156.070(5).
JASON E. GLASS, Ed.D., Commissioner
SHARON ROBINSON, Chairperson
APPROVED BY AGENCY: August 7, 2023
FILED WITH LRC: August 8, 2023 at 3:30 p.m.
PUBLIC HEARING AND COMMENT PERIOD: A public hearing on this administrative regulation shall be held on October 31, 2023 at 10:00 a.m., in the State Board Room, Fifth Floor, 300 Sower Boulevard, Frankfort, Kentucky. Individuals interested in being heard at this hearing shall notify this agency in writing by 5 workdays prior to the hearing, of their intent to attend. If no notification of intent to attend the hearing is received by that date, the hearing may be cancelled. This hearing is open to the public. Any person who wishes to be heard will be given an opportunity to comment on the proposed administrative regulation. A transcript of the public hearing will not be made unless a written request for a transcript is made. If you do not wish to be heard at the public hearing, you may submit written comments on the proposed administrative regulation. Written comments shall be accepted through October 31, 2023. Send written notification of intent to be heard at the public hearing or written comments on the proposed administrative regulation to:
CONTACT PERSON: Todd G. Allen, General Counsel, Kentucky Department of Education, 300 Sower Boulevard, 5th Floor, Frankfort, Kentucky 40601, phone 502-564-4474, fax 502-564-9321, email regcomments@education.ky.gov.
REGULATORY IMPACT ANALYSIS AND TIERING STATEMENT
Contact Person:
Todd G. Allen
(1) Provide a brief summary of:
(a) What this administrative regulation does:
The proposed administrative regulation creates an approval process for school district leases in excess of one hundred thousand dollars ($100,000) as required pursuant to KRS 65.944(1)(b).
(b) The necessity of this administrative regulation:
KRS 65.944(1)(b) requires the Kentucky Board of Education to promulgate an administrative regulation establishing an approval process by the Commissioner of Education for school districts leases that exceed one hundred thousand dollars ($100,000).
(c) How this administrative regulation conforms to the content of the authorizing statutes:
The proposed administrative regulation is required pursuant to KRS 65.944(1)(b).
(d) How this administrative regulation currently assists or will assist in the effective administration of the statutes:
The proposed regulation creates an approval process for local school district leases that exceed one hundred thousand dollars ($100,000).
(2) If this is an amendment to an existing administrative regulation, provide a brief summary of:
(a) How the amendment will change this existing administrative regulation:
N/A.
(b) The necessity of the amendment to this administrative regulation:
N/A.
(c) How the amendment conforms to the content of the authorizing statutes:
N/A. (d) How the amendment will assist in the effective administration of the statues: N/A.
(d) How the amendment will assist in the effective administration of the statutes:
(3) List the type and number of individuals, businesses, organizations, or state and local governments affected by this administrative regulation:
School districts.
(4) Provide an analysis of how the entities identified in question (3) will be impacted by either the implementation of this administrative regulation, if new, or by the change, if it is an amendment, including:
(a) List the actions that each of the regulated entities identified in question (3) will have to take to comply with this administrative regulation or amendment:
School districts will have their legal counsel complete the incorporated "Local Board Attorney Certification" form certifying that the lease complies with applicable laws and submit the form and lease to the Commissioner of Education for approval. The Commissioner will approve or deny the lease. If the lease is denied, then the Commissioner must provide the reasons and the district may correct any defects in the lease and/or request reconsideration.
(b) In complying with this administrative regulation or amendment, how much will it cost each of the entities identified in question (3):
The proposed lease approval process should have minimal cost to the school district as the district should already have legal counsel involved in the review of leases in excess of one hundred thousand dollars ($100,000). Completion of the "Local Board Attorney Certification" form will help the district save money by ensuring that the lease contains all the legally required terms.
(c) As a result of compliance, what benefits will accrue to the entities identified in question (3):
The proposed regulation will ensure that districts have legal counsel review and certify that the agreement meets legal requirements for leases that exceed one hundred thousand dollars ($100,000). This should ensure that district leases are compliant with applicable law. (5) Provide an estimate of how much it will cost to implement this administrative regulation:
(5) Provide an estimate of how much it will cost the administrative body to implement this administrative regulation:
(a) Initially:
It is believed that there will be minimal costs to school districts to implement.
(b) On a continuing basis:
District costs for legal review and certification of a lease will depend on the number of districts leases in excess of one hundred thousand dollars ($100,000).
(6) What is the source of the funding to be used for the implementation and enforcement of this administrative regulation:
School district general funds.
(7) Provide an assessment of whether an increase in fees or funding will be necessary to implement this administrative regulation, if new, or by the change if it is an amendment:
No additional fees or funding.
(8) State whether or not this administrative regulation establishes any fees or directly or indirectly increases any fees:
The proposed regulation does not establish any fees.
(9) TIERING: Is tiering applied?
Tiering was not applied. The proposed regulation is uniformly applicable to all school districts.
FISCAL NOTE
(1) What units, parts, or divisions of state or local government (including cities, counties, fire departments, or school districts) will be impacted by this administrative regulation?
School districts.
(2) Identify each state or federal statute or federal regulation that requires or authorizes the action taken by the administrative regulation.
The proposed regulation is required by KRS 65.944(1)(b) and authorized by KRS 156.070 and 156.160
(3) Estimate the effect of this administrative regulation on the expenditures and revenues of a state or local government agency (including cities, counties, fire departments, or school districts) for the first full year the administrative regulation is to be in effect.
(a) How much revenue will this administrative regulation generate for the state or local government (including cities, counties, fire departments, or school districts) for the first year?
The proposed administrative regulation establishes a school district lease approval process. It will not generate revenue.
(b) How much revenue will this administrative regulation generate for the state or local government (including cities, counties, fire departments, or school districts) for subsequent years?
The proposed administrative regulation establishes a school district lease approval process. It will not generate revenue.
(c) How much will it cost to administer this program for the first year?
It is expected that districts will incur some unknown additional costs. The proposed regulation requires district legal counsel to certify leases exceeding one hundred thousand dollars comply with legal requirements. Many districts already involve legal counsel in the preparation and review of leases. For such districts, the proposed administrative regulation should only minimally impact costs.
(d) How much will it cost to administer this program for subsequent years?
Unknown. Districts will incur some cost related to legal review of leases exceeding one hundred thousand dollars ($100,000). Costs will depend on the number of leases and legal counsel costs.
Note: If specific dollar estimates cannot be determined, provide a brief narrative to explain the fiscal impact of the administrative regulation.
Revenues (+/-):
Expenditures (+/-):
Other Explanation:
(4) Estimate the effect of this administrative regulation on the expenditures and cost savings of regulated entities for the first full year the administrative regulation is to be in effect.
(a) How much cost savings will this administrative regulation generate for the regulated entities for the first year?
Unknown. The proposed regulation centralizes the approval process for school district leases in excess of one hundred thousand dollars ($100,000). The "Local Board Attorney Certification" form incorporated by reference ensures that submitted leases are compliant with Kentucky law. The review and certification by local board counsel should ensure district leases are approvable by the Commissioner of Education as required by KRS 65.944 thereby avoiding unnecessary delay in entering into the lease which may have some economic benefit to the district.
(b) How much cost savings will this administrative regulation generate for the regulated entities for subsequent years?
Unknown. The proposed regulation centralizes the approval process for school district leases in excess of one hundred thousand dollars ($100,000). The "Local Board Attorney Certification" form incorporated by reference ensures that submitted leases are compliant with Kentucky law. The review and certification by local board counsel should ensure district leases are approvable by the Commissioner of Education as required by KRS 65.944 thereby avoiding unnecessary delay in entering into the lease which may have some economic benefit to the district.
(c) How much will it cost the regulated entities for the first year?
Unknown. Districts will incur the cost of legal review and certification of all leases above one hundred thousand dollars ($100,000). However, this review will ensure that leases above the one hundred thousand dollar ($100,000) threshold are compliant with Kentucky law which may reduce legal costs in the future.
(d) How much will it cost the regulated entities for subsequent years?
Unknown. Districts will incur the cost of legal review and certification of all leases above one hundred thousand dollars ($100,000). However, this review will ensure that leases above the one hundred thousand dollar ($100,000) threshold are compliant with Kentucky law which may reduce legal costs in the future.
Note: If specific dollar estimates cannot be determined, provide a brief narrative to explain the fiscal impact of the administrative regulation.
Cost Savings (+/-):
Expenditures (+/-):
Other Explanation:
(5) Explain whether this administrative regulation will have a major economic impact, as defined below.
"Major economic impact" means an overall negative or adverse economic impact from an administrative regulation of five hundred thousand dollars ($500,000) or more on state or local government or regulated entities, in aggregate, as determined by the promulgating administrative bodies. [KRS 13A.010(13)] The proposed regulation is not expected to have a major economic impact on the department or local school districts.