Kentucky
General Assembly

Entity heads as defined by KRS 45.750(1)(j), or their designees, must submit transactions at least fourteen days prior to the meeting. Proceedings will livestream on the KY LRC Committee Meetings YouTube Channel. The next meeting is Wednesday, January 22, 2025 at 3:00 PM in Room 131 of the Capitol Annex (submissions due January 8).

The General Assembly established the Capital Projects and Bond Oversight Committee in 1979 as the Capital Construction and Equipment Purchase Oversight Committee. In 1988, the General Assembly changed the committee's name to reflect its broadening of the committee's jurisdiction to include state bond issues. Pursuant to KRS 45.790(1), the committee is composed of eight legislative members, appointed for two-year non-staggered terms. Committee members of each chamber elect a co-chair to serve for the two-year term. Actions taken by the committee require an affirmative vote from at least five members, the majority of the committee's membership.

KRS 45.795(1)(c) references the committee's oversight of the commonwealth's capital construction, including KRS 45A.077 public-private partnership agreements; debt issuance; and real property leases. Pursuant to KRS 224A.100 and KRS 154.12-100(6), the committee also approves Kentucky Infrastructure Authority (KIA) loans, Cleaner Water Program grants, and Kentucky Water and Wastewater Assistance for Troubled or Economically Restrained Systems funding as well as the Cabinet for Economic Development's economic development fund program grants. In addition to the above statutes and KRS 45.750 to 45.818, statutes relevant to the committee's oversight include KRS 26A.160 to 26A.168, KRS 164A.550 to 164A.630, KRS 65.4931, KRS 154.15-020(4), KRS 48.111, KRS 56.800 to 56.832, KRS 56.860 to KRS 56.869, KRS 45A.180, and KRS 45A.840 to 45A.879. The following entities submit transactions for committee approval.

• The Office of State Budget Director, on behalf of the Finance and Administration Cabinet, submits capital project additions and adjustments for executive branch agencies as well as Kentucky State University, after approval by the secretary of the Finance and Administration Cabinet. KRS 45.750(3)(a) excludes roads from the capital construction statutes. The Office of State Budget Director also reports certain equipment purchases, pool allocations, and emergency projects; which do not need committee approval.
• All state postsecondary institutions, except Kentucky State University, submit capital project additions and adjustments. The institutions' boards and under KRS 164.020(11)(a), the Council on Postsecondary Education, must approve new capital construction projects prior to committee submittal. This includes capital construction projects managed by the Finance and Administration Cabinet for Kentucky State University. Institutions report certain equipment purchases and, primarily through the quarterly capital projects status reports, pool allocations and emergency projects, which do not need committee approval.
• The Division of Real Properties, Department for Facilities and Support Services, Finance and Administration Cabinet, submits certain real property leases; including built-to suit, lease purchases, and certain lease modifications for executive branch agencies.
• All state postsecondary institutions submit public-private partnership agreements and certain real property leases; including built-to suit, lease purchases, and certain lease modifications.
• The Office of Financial Management, Finance and Administration Cabinet, submits KIA transactions, CED economic development fund program grants, the commonwealth's debt issuing entities' proposed debt issues, and proposed bond counsel or underwriter innovation agreements. The commonwealth's debt issuing entities are state postsecondary institutions, the State Property and Buildings Commission, Kentucky Asset/Liability Commission (ALCo), School Facilities Construction Commission (local school districts issue the debt and the Commission funds a portion of the debt service), Turnpike Authority of Kentucky (TAK), Kentucky Housing Corporation (KHC), Kentucky Higher Education Student Loan Corporation (KHESLC), KIA, Kentucky Public Transportation Infrastructure Authority (KPTIA), and Kentucky Economic Development Finance Authority (KEDFA). There is a state BondLink Investor Relations site and Debt Calendar. KRS 45.810(1) and KRS 56.866(3) are the respective statutes that exempt TAK debt and ALCo tax and revenue anticipation notes issuance from committee approval. KRS 175B.020(3) has separate provisions for KPTIA debt reporting.
  • KIA offers clean water and drinking water state revolving fund program loans based upon the utility's ranking in the Intended Use Plans with clean water and drinking water state revolving fund program federal compliance reporting.
  • KHC, KHESLC, KIA, and KPTIA issue non-appropriation supported debt. KHC's direct debt (non-conduit) is moral obligation debt.
  • KHC and KEDFA act as a conduit for private activity debt issuance.
• The Administrative Office of the Courts submits extensions of bond terms to greater than twenty-five years as well as increases in the appropriated use allowance to pay annual principal and interest costs for financing judicial facility construction or renovation. Debt to finance judicial facilities is issued by local governments and not submitted to the committee.

Pursuant to KRS 45.800(4), if the committee does not approve a proposed action (other than those listed below), then the head of the requesting entity must communicate to the committee in writing within thirty days whether he or she will revise the action to comply with the committee's objections, cancel the action, or proceed with the action.

Pursuant to KRS 45.810(4), if the committee does not recommend a proposed debt issuance or project for the use of debt proceeds, then the Secretary of the Finance and Administration Cabinet must notify the committee within thirty days whether he or she will revise the project in consideration of the committee's objections, cancel the project or the use of debt proceeds for the project, or proceed with the project.

Pursuant to KRS 45A.870(5), if the committee does not recommend a proposed bond counsel or underwriter innovation agreement, then the Secretary of the Finance and Administration Cabinet must notify the committee within thirty days whether he or she will revise the agreement in consideration of the committee's objections, cancel the agreement, or enter into the agreement.

Pursuant to KRS 48.111(6)(e) or KRS 56.832(8), if the committee disapproves a proposed interim or out-of-state lease authorization, then the Secretary of the Finance and Administration Cabinet must communicate to the committee in writing within thirty days whether he or she will revise the proposed lease authorization to comply with the committee's objections, cancel the proposed lease authorization, or proceed with the proposed lease authorization.

Pursuant to KRS 26A.162(3), if the committee does not approve a bond term greater than twenty-five years, or pursuant to KRS 26A.166(3), if the committee does not approve an increased use allowance for a judicial facility project; then the Director of the Administrative Office of the Courts must notify the committee in writing within 30 days whether he or she will revise the proposal to comply with the committee's objections, cancel the proposal, or proceed with the proposal.

Pursuant to KRS 45.795(2) and KRS 45.795(3), if the committee determines that a proposed transaction has not met statutory requirements, then the committee may request that the Legislative Research Commission seek an injunction to prohibit further action on it before, during, or after the committee's notification of non-approval.