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164A.608 Interception of appropriated funds when institution is unable to make bond payments -- Action by governing board to generate additional revenues.

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Page 1 of 1 164A.608 Interception of appropriated funds when institution is unable to make bond payments -- Action by governing board to generate additional revenues. If the governing board is unable to pay the required principal and interest payments due <br>on agency bonds issued by the postsecondary institution from system revenues or from <br>other available agency revenues and the governing board fails to transmit to the paying <br>agent bank or trustee the debt service and administrative payments when due as required <br>by the bond issuance resolution, the paying agent bank or trustee shall notify the secretary <br>of the Finance and Administration Cabinet in writing and request that the cabinet <br>withhold or intercept from the governing board a sufficient portion of any appropriated <br>state funds not yet disbursed to the institution to satisfy the required payment on the <br>bonds. If the secretary determines that the institution is in risk of defaulting on the <br>payment of the bonds or has defaulted, the secretary shall notify the governing board and <br>within five (5) days remit payment to the paying agent bank or trustee such funds as are <br>required from the appropriation to the institution. Thereafter, the governing board shall, <br>to the extent it is otherwise legally permitted, take action within sixty (60) days to adopt a <br>resolution to generate additional revenues, such as increasing the minimum rents, tolls, <br>fees, and other charges, in order to positively adjust remittances to the funds accounts. <br>Nothing in this section shall be construed to create any obligation on the part of the <br>Commonwealth to make any payment on behalf of the defaulting institution other than <br>from funds previously appropriated to the governing board of that institution. Effective: July 13, 2004 <br>History: Created 2004 Ky. Acts ch. 111, sec. 10, effective July 13, 2004.