Kentucky Statutes 441.635 – Leases between authority and local governments authorized — Contents
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The authority and any local government are authorized and empowered to enter into a lease with respect to any project according to any agreement or agreements made pursuant to KRS § 441.630. Any lease may contain, in substance, any of the following provisions and such other provisions not inconsistent herewith as the authority and local government may deem appropriate and desirable:
(1) That the lease is for the remainder of the fiscal period in which it is dated and executed, and is automatically renewable for the succeeding fiscal period, one (1) at a time, until the final maturity date of the bond issue to which the lease is related, or until the local government notifies the authority in writing within sixty (60) days before the expiration of the lease that the local government will not renew said lease;
(2) That with respect to the fiscal period in which the lease is dated and executed, the local government shall otherwise be firmly bound only (a) to contribute to the authority such portions, if any, of the cost of the project as the agreement prescribes shall be paid by the local government; and (b) to pay the authority the rental prescribed for such fiscal period;
(3) That if the local government shall fully perform all such obligations during such initial term of the lease, it shall have an exclusive option to automatically renew the lease at the time and in the manner prescribed for the ensuing fiscal period, effective on the first day thereof; no local government shall be or become in any way obligated to pay the rental stipulated for such fiscal year unless the lease be so automatically renewed; and that the local government shall, upon any such renewal, be firmly bound to pay to the authority the rental stipulated for such fiscal period as a general obligation of the local government to be paid from any funds available to the local government required by law or by previous binding contract to be devoted to some other purpose;
(4) In like manner and subject to the same conditions and provisions as are set forth in subsection (3) of this section, if the local government shall in the first ensuing fiscal year fully perform its obligations and pay to the authority the rental stipulated for such fiscal period, the local government shall have another exclusive option to automatically renew such lease for another fiscal year, and so on for successive fiscal periods until the final fiscal period for which the lease may be renewed;
(5) That so long as the lease is renewed from time to time and the local government fully performs all its obligations as lessee, including payment of the rental stipulated in the lease,
(a) The revenues of the project shall be collected, segregated, distributed, deposited, secured, disbursed and accounted for in strict conformity with the proceedings and trust indenture of the authority, and the aggregate of such revenues properly accounted for and deposited pursuant to said proceedings and trust indenture shall, to the extent provided in the lease, be a credit against the local government’s rental or other obligations for the current fiscal period under the term of the lease, and
(b) Any revenues collected pursuant to KRS § 441.685, or other funds as may be provided and made available to the authority by the Commonwealth or other
sources, and set aside pursuant to an agreement, shall be applied as provided in said proceedings and trust indenture and shall, to the extent provided in the lease, be a credit against the local government’s rental or other obligations for the then current fiscal period under the lease.
Effective: July 15, 1982
History: Created 1982 Ky. Acts ch. 235, sec. 7, effective July 15, 1982.
2022-2024 Budget Reference. See State/Executive Branch Budget, 2022 Ky. Acts ch.
199, Pt. I, H, 5, c, (2) at 1687.
(1) That the lease is for the remainder of the fiscal period in which it is dated and executed, and is automatically renewable for the succeeding fiscal period, one (1) at a time, until the final maturity date of the bond issue to which the lease is related, or until the local government notifies the authority in writing within sixty (60) days before the expiration of the lease that the local government will not renew said lease;
Terms Used In Kentucky Statutes 441.635
- branch budget: means an enactment by the General Assembly which provides appropriations and establishes fiscal policies and conditions for the biennial financial plan for the judicial branch, the legislative branch, and the executive branch, which shall include a separate budget bill for the Transportation Cabinet. See Kentucky Statutes 446.010
- Contract: A legal written agreement that becomes binding when signed.
- Fiscal year: The fiscal year is the accounting period for the government. For the federal government, this begins on October 1 and ends on September 30. The fiscal year is designated by the calendar year in which it ends; for example, fiscal year 2006 begins on October 1, 2005 and ends on September 30, 2006.
- Lease: A contract transferring the use of property or occupancy of land, space, structures, or equipment in consideration of a payment (e.g., rent). Source: OCC
- Obligation: An order placed, contract awarded, service received, or similar transaction during a given period that will require payments during the same or a future period.
- Remainder: An interest in property that takes effect in the future at a specified time or after the occurrence of some event, such as the death of a life tenant.
- Year: means calendar year. See Kentucky Statutes 446.010
(2) That with respect to the fiscal period in which the lease is dated and executed, the local government shall otherwise be firmly bound only (a) to contribute to the authority such portions, if any, of the cost of the project as the agreement prescribes shall be paid by the local government; and (b) to pay the authority the rental prescribed for such fiscal period;
(3) That if the local government shall fully perform all such obligations during such initial term of the lease, it shall have an exclusive option to automatically renew the lease at the time and in the manner prescribed for the ensuing fiscal period, effective on the first day thereof; no local government shall be or become in any way obligated to pay the rental stipulated for such fiscal year unless the lease be so automatically renewed; and that the local government shall, upon any such renewal, be firmly bound to pay to the authority the rental stipulated for such fiscal period as a general obligation of the local government to be paid from any funds available to the local government required by law or by previous binding contract to be devoted to some other purpose;
(4) In like manner and subject to the same conditions and provisions as are set forth in subsection (3) of this section, if the local government shall in the first ensuing fiscal year fully perform its obligations and pay to the authority the rental stipulated for such fiscal period, the local government shall have another exclusive option to automatically renew such lease for another fiscal year, and so on for successive fiscal periods until the final fiscal period for which the lease may be renewed;
(5) That so long as the lease is renewed from time to time and the local government fully performs all its obligations as lessee, including payment of the rental stipulated in the lease,
(a) The revenues of the project shall be collected, segregated, distributed, deposited, secured, disbursed and accounted for in strict conformity with the proceedings and trust indenture of the authority, and the aggregate of such revenues properly accounted for and deposited pursuant to said proceedings and trust indenture shall, to the extent provided in the lease, be a credit against the local government’s rental or other obligations for the current fiscal period under the term of the lease, and
(b) Any revenues collected pursuant to KRS § 441.685, or other funds as may be provided and made available to the authority by the Commonwealth or other
sources, and set aside pursuant to an agreement, shall be applied as provided in said proceedings and trust indenture and shall, to the extent provided in the lease, be a credit against the local government’s rental or other obligations for the then current fiscal period under the lease.
Effective: July 15, 1982
History: Created 1982 Ky. Acts ch. 235, sec. 7, effective July 15, 1982.
2022-2024 Budget Reference. See State/Executive Branch Budget, 2022 Ky. Acts ch.
199, Pt. I, H, 5, c, (2) at 1687.