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AN ACT relating to public water and wastewater systems. 1
Be it enacted by the General Assembly of the Commonwealth of Kentucky: 2
ď˘Section 1. KRS 224A.320 is amended to read as follows: 3
(1) As used in KRS 224A.320 to 224A.325: 4
(a) "Board" means the Kentucky Infrastructure Authority board established in 5
KRS 224A.030; 6
(b) "Eligible funding recipient" means a public water or wastewater system that 7
meets three (3)[one (1)] or more of the criteria listed in subsection (7)(d)1. to 8
7.[9.] of this section; 9
(c) "Eligible project" means a project that would require capital or non-capital 10
expenses including but not limited to expenses relating to: 11
1. Developing technical, operational, and maintenance resources and 12
expertise; 13
2. Improving utility infrastructure planning, repair, maintenance, 14
renovation, and management of plants and assets; 15
3. Obtaining technical expertise in areas of rate-setting, cost-of-service, 16
and proper utility accounting standards for the utility type; 17
4. Performing and correcting deficiencies from drinking water, wastewater, 18
and financial audits; 19
5. Providing financing for financial inadequacies, including debt service 20
coverage through relief or refinance of the drinking water or wastewater 21
system's debt; 22
6. Providing payment assistance for other financial inadequacies including 23
but not limited to excessive maintenance costs, fines and penalties from 24
past violations, or consultants; and 25
7. Extending financing for inadequately maintained distribution, collection, 26
or treatment works, including service extensions to unserved or 27 UNOFFICIAL COPY 25 RS BR 1361
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underserved areas and the renovation of treatment works to conserve 1
resources; 2
(d) "Kentucky Water and Wastewater Assistance for Troubled or Economically 3
Restrained Systems Program" or "Kentucky WWATERS Program" means the 4
program established under this section and administered by the Kentucky 5
Infrastructure Authority under the direction of its board; and 6
(e) "Public water or wastewater system" means any of the following that serve a 7
community: 8
1. A water district, water association, or joint water commission formed 9
under KRS Chapter 74; 10
2. A sewer district or sanitation district formed under KRS Chapter 67, 76, 11
or 220; 12
3. A municipal water utility and water works, sewer utility, sewage system 13
or works, or combined electric and water plant formed under KRS 14
Chapter 96; and 15
4. Any combination of two (2) or more of the entities listed in 16
subparagraphs 1. to 3. of this paragraph. 17
(2) The Kentucky WWATERS Program is hereby established under the authority to 18
provide for an orderly process for eligible public water or wastewater systems to 19
apply for funds for eligible projects and for those applications to be evaluated, 20
scored, and presented to the General Assembly for consideration for funding. The 21
administration of the program by the authority, under the direction of the board, 22
includes but is not limited to the following: 23
(a) Creating and making available standardized funding applications and regional 24
funding applications; 25
(b) Verifying the eligibility of proposed funding recipients, including but not 26
limited to engaging in financial reviews of proposed funding recipients to 27 UNOFFICIAL COPY 25 RS BR 1361
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ensure that they will be able to repay the requested amounts; 1
(c) Verifying that the proposed funding recipient seeks money for an eligible 2
project; 3
(d) Awarding funding to selected eligible funding recipients, which shall be 4
accomplished within sixty (60) days of the effective date of legislation 5
enacted by the General Assembly that authorizes and appropriates the 6
funding; 7
(e) Administering the funding and monitoring funding recipients for their success 8
in improving on any of the performance criteria described in subsection 9
(7)(d)1. to 7.[9.] of this section; 10
(f) Enforcing compliance with the requirements of this section for eligible 11
funding recipients; and 12
(g) On or before October 1, 2025, and each quarter thereafter, submitting a report 13
on the status of all funding awarded and administered by the authority 14
pursuant to this section and KRS 224A.322 to the Legislative Research 15
Commission for referral to the Interim Joint Committee on Appropriations 16
and Revenue, or to the House and Senate Standing Committees on 17
Appropriations and Revenue when the General Assembly is in session. 18
(3) (a) To participate in the Kentucky WWATERS Program, a funding applicant 19
shall submit an application to the board, which shall include a corrective 20
action plan detailing how the requested funds would be used to address the 21
performance deficiencies that made the applicant eligible for the funding. 22
(b) Funding applications may be shared with third-party independent consultants, 23
state agencies, or special purpose governmental entities in reviewing the 24
funding application as allowed under subsection (4) of this section. Once the 25
application process is complete and the funding application is ready for 26
review, it shall be made available to the public. 27 UNOFFICIAL COPY 25 RS BR 1361
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(c) Funding applicants wishing to engage in a regional project shall submit a 1
single application. 2
(d) A funding application for a capital construction project shall include cost 3
and timeline estimates prepared and signed with an attestation of veracity by 4
a licensed professional engineer for the project to be eligible for funding 5
under this section. 6
(e) The board may evaluate and score funding applications for proposed 7
projects in phases as it deems appropriate. 8
(4) The board may contract or consult with a third-party independent consultant, state 9
agencies, or special purpose governmental entities to assist with the funding 10
applicant analysis and scoring described in this section. 11
(5) If a funding applicant is selected as an eligible funding recipient approved under the 12
Kentucky (WWATERS) Program, it shall comply with any reporting or other 13
requirements deemed necessary by the authority to verify that the awarded funding 14
goes toward an eligible project and that the funding recipient is making 15
improvements on the performance criteria described in subsection (7)(d)1. to 7.[9]. 16
of this section. The eligible funding recipient shall also comply with any internal 17
management and governance procedures that the authority may impose in order to 18
correct any performance deficiencies that gave rise to the need for the requested 19
funds. 20
(6) (a) A funding recipient shall forfeit all moneys received pursuant to this section 21
and KRS 224A.322 and all outstanding funding amounts, including accrued 22
interest, shall be immediately due to the authority if the selected funding 23
recipient: 24
1. Fails to comply with any of the requirements of this section; 25
2. Uses the awarded funding for any purpose other than the eligible project 26
for which the funding was awarded; or 27 UNOFFICIAL COPY 25 RS BR 1361
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3. Transfers or assigns the obligation to repay the funding amounts to any 1
other entity, including any successor in interest. 2
(b) Funding recipients may also forfeit funds and be subject to immediate 3
repayment to the authority of all outstanding funding amounts, including 4
accrued interest, if the authority finds that the recipient has not made adequate 5
improvements on the performance criteria described in subsection (7)(d)1. to 6
7. [9.] of this section. 7
(7) In the implementation of the Kentucky WWATERS Program, the board shall: 8
(a) Hold at least monthly meetings, which may be in conjunction with regularly 9
scheduled board meetings, to discharge its duties under this section; 10
(b) Determine whether a funding applicant is an eligible funding recipient and is 11
seeking funding for an eligible project; 12
(c) Based on the criteria listed in paragraph (d) of this subsection, develop an 13
objective score card or rubric, which may be amended from time to time, to 14
aid in the analysis and scoring of funding applications; 15
(d) Evaluate and score each funding applicant's project according to the extent to 16
which it meets the following criteria: 17
1. The median household income within the service area of the funding 18
applicant is less than the Commonwealth's median household income; 19
2. User rates for the public drinking water or wastewater services provided 20
by the funding applicant are at or above one percent (1%) of annual 21
household income for its service area; 22
3. The funding applicant has failed to produce a financial statement audit 23
in at least one (1) of the prior three (3) years; 24
4. The funding applicant has negative income in any two (2) of the 25
previous five (5) years; 26
5. The funding applicant's debt service coverage ratio, calculated by 27 UNOFFICIAL COPY 25 RS BR 1361
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dividing its annual net operating income by its annual debt payments, 1
was less than one and one-tenth (1.1) in any three (3) of the previous 2
five (5) years; 3
6.[ The funding applicant's current accounts payable turnover ratio, 4
calculated by dividing its monthly net credit purchases from suppliers by 5
its average accounts payable balance for the month, is less than one (1); 6
7. The funding applicant's current days' sales in accounts receivable ratio, 7
calculated by dividing its monthly accounts receivable by its monthly 8
credit sales value and multiplying the resulting quotient by the number 9
of days in that month, is greater than forty-five (45) days; 10
8.] The funding applicant has received a notice of violation or has entered 11
into an agreed order or consent decree as a result of a violation of the 12
requirements of the Safe Drinking Water Act, 42 U.S.C. sec. 300f et 13
seq., or the Clean Water Act, 33 U.S.C. sec. 1251 et seq., and the 14
funding applicant's proposed project would contribute to resolving the 15
violation or ensuring its continued compliance with the relevant 16
requirements of law or both[in the past year]; 17
7.[9.] The percentage of water loss of the funding applicant's system is greater 18
than thirty percent (30%); 19
8. The funding applicant has previously received funding through the 20
Kentucky WWATERS Program for a prior phase of the proposed 21
project that has been completed in accordance with the requirements 22
of the program and the funding applicant is seeking additional 23
funding to complete the next phase; 24
9.[10.] The funding applicant is willing to use the funding for 25
regionalization, consolidation, or partnerships, consistent with the policy 26
stated in KRS 224A.300(1); 27 UNOFFICIAL COPY 25 RS BR 1361
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10.[11.] The funding applicant, after receiving the funding, will be able to 1
fully resolve the pending issues that are the subject of its application 2
using the funding and other funding sources, if available; and 3
11.[12.] The funding applicant's proposed project demonstrates a high level 4
of community or regional impact potential if funding is awarded; 5
(e) Within sixty (60) days of a funding application being deemed complete under 6
subsection (3)(b) of this section, make determinations on the eligibility of the 7
proposed project and the applicant and issue a project score for the 8
application; 9
(f) Provide detailed feedback to all funding applicants within fourteen (14) days 10
of the project score being completed; and 11
(g) No later than December 1, 2024, and each December 1 thereafter, submit to 12
the Legislative Research Commission for referral to the Interim Joint 13
Committee on Appropriations and Revenue an annual report containing: 14
1. The evaluations and scores of the proposed funding recipients for the 15
year to allow for the General Assembly to make the determinations for 16
funding the proposed funding recipients. For each proposed funding 17
recipient that meets the eligibility requirements for funding, the board 18
shall provide a proposal for the structure and the terms of the funding, 19
including but not limited to whether the funding should be awarded in 20
whole or in part as a grant, loan, no-interest loan, or forgivable loan, the 21
repayment terms and interest rates for loans or portions of loans, and 22
any other conditions that the board proposes to be placed on the funding; 23
2. A list of all program applicants; 24
3. The identity of applicants who did not meet the eligibility requirements 25
for participation in the program; 26
4. Trends found in feedback given to applicants who did not meet the 27 UNOFFICIAL COPY 25 RS BR 1361
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eligibility requirements for participation in the program; and 1
5. Eligible uses of funding cited in the funding applications. 2