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42.355 Examination and approval of projects -- Grants -- Administration -- Conditions.

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42.355 Examination and approval of projects -- Grants -- Administration -- Conditions. (1) The Department for Local Government shall examine each capital project selected by the area development districts, and when it finds that a proposed project <br>conforms to the requirements of KRS 42.350 to 42.370; that the estimated costs of <br>the project are reasonable; that the costs proposed to be paid from the fund are <br>within the amount available; and that the proposed beneficiary agency will be <br>reasonably able to finance the operation and maintain the capital project during its <br>estimated useful life, the commissioner of the Department for Local Government <br>shall approve it. If the Department for Local Government determines that a capital <br>project proposal does not conform to the requirements of KRS 42.350 to 42.370, <br>that the estimated costs of the project are excessive or unreasonable in light of the <br>public benefit to be derived from the project, or the unencumbered balance in the <br>fund available for expenditure in the area development district is insufficient to pay <br>the costs of the project, or the part thereof proposed to be paid out of the fund, or <br>the beneficiary agency cannot reasonably finance the operation of or maintain the <br>capital project during its estimated useful life, the project proposal shall be <br>disapproved by the Department for Local Government. The final decision to either <br>approve or disapprove any project proposal shall be made no later than forty-five <br>(45) days following official submittal of a complete proposal by the area <br>development district, and the area development district shall be accordingly notified <br>at that time. (2) The commissioner of the Department for Local Government may make direct grants-in-aid of money out of the fund to any beneficiary agency for the <br>construction or acquisition of any approved capital project. When a direct grant-in-<br>aid has been made to a beneficiary agency, all contracts awarded for the purchase of <br>materials, supplies, equipment, or services, except professional and technical <br>services, required for the construction or acquisition of the project shall be awarded <br>to the lowest and best bidder in the discretion of the beneficiary agency after public <br>advertisement as required by KRS Chapter 424 or other applicable law. All <br>contracts awarded under this section for the construction, reconstruction, or <br>renovation of a building or other improvement to real estate shall be deemed <br>contracts for public works within the meaning of KRS 341.317 and KRS Chapter <br>376 and other applicable statutes. All beneficiary agencies receiving a direct grant-<br>in-aid under this subsection shall keep and maintain complete and accurate records <br>of accounts of all expenditures of the grant moneys which shall be subject to audit <br>by the Commonwealth for a period of five (5) years after completion of the capital <br>project. Beneficiary agencies shall complete approved capital projects within a <br>reasonable period of time as determined by the Department for Local Government. <br>Upon completion of capital projects, beneficiary agencies shall submit project <br>completion reports to the Department for Local Government as prescribed by the <br>Department for Local Government and containing documents and information as <br>may be necessary to determine compliance with KRS 42.350 to 42.360 and other <br>applicable statutes and administrative regulations. Beneficiary agencies shall be <br>liable to repay to the fund any granted funds for failure to submit full project completion reports within a reasonable period of time or for expenditure of granted <br>funds in violation of statutes and regulations. No additional area development funds <br>may be approved until compliance, except at the discretion of the commissioner of <br>the Department for Local Government. Any grant moneys not required after all of <br>the costs of the capital project have been paid by the beneficiary agency shall be <br>promptly returned to the Commonwealth for reallocation for expenditure for other <br>capital projects in the area development district to which the funds had been <br>originally allocated. (3) No capital project shall be constructed under KRS 42.350 to 42.370 except upon land to which (a) the Commonwealth, a political subdivision of the Commonwealth, <br>or the beneficiary agency of the capital project has a good and marketable title, free <br>of encumbrances, or (b) the beneficiary agency of the project has the right to the <br>uninterrupted use, occupancy, and possession for a period longer than the estimated <br>useful life of the capital project; provided nothing herein shall prohibit the <br>construction or renovation of public buildings on land with an existing <br>encumbrance to secure payment of funds obtained for the acquisition or <br>improvement of said land. Each beneficiary agency shall execute and deliver to the <br>Commonwealth its written assurances, which shall be binding on the agencies' <br>successors and assigns, guaranteeing that during its estimated useful life, the capital <br>project shall be operated and maintained for public purposes and pledging that no <br>mortgage or other encumbrances shall be placed against any capital project wholly <br>financed out of the fund, except industrial development projects, for the breach of <br>which assurances the Commonwealth shall have right of entry to the capital project <br>and the beneficiary agency, or its successors and assigns, shall forthwith convey the <br>title to the capital project to the Commonwealth. Similar assurances shall be <br>executed and delivered to the Commonwealth by the beneficiary agencies of capital <br>projects financed in part out of the fund and in part from other sources, except that <br>when additional funding is derived from the issuance and sale of revenue bonds or <br>under other statutorily authorized financing methods, to secure the repayment of <br>which funds a statutory mortgage lien is granted in favor of any person or group of <br>persons, the capital project may be encumbered to the extent authorized or required <br>by the law under which the financing method was undertaken; nor shall anything in <br>this section prohibit the encumbrance of any real property located within an <br>industrial park or constituting an industrial site, developed or improved as a capital <br>project under KRS 42.350 and this section, by any person, firm, company, <br>partnership, or corporation to which the property has been conveyed, to obtain <br>financing for the construction upon the property of industrial and commercial <br>buildings. The written assurances provided by beneficiary agencies under this <br>section shall be lodged for recording and recorded in the office of the county clerk <br>of the county in which the proposed project shall be located. Effective: July 15, 2010 <br>History: Amended 2010 Ky. Acts ch. 117, sec. 22, effective July 15, 2010. -- Amended 2007 Ky. Acts ch. 47, sec. 16, effective June 26, 2007. -- Amended 1998 Ky. Acts <br>ch. 69, sec. 8, effective July 15, 1998. -- Amended 1984 Ky. Acts ch. 404, sec. 43, <br>effective July 13, 1984. -- Created 1978 Ky. Acts ch. 187, sec. 3, effective June 17, <br>1978.