HIGHER EDUCATION FINANCE

KRS tit. XIII, ch. 164A

in effect

KRS 164A.010 Findings -- Determinations -- Intent

164A.010. Findings -- Determinations -- Intent The General Assembly of the Commonwealth of Kentucky hereby makes the following findings and determinations and promulgates the following statements of legislative intent: (1) That the attainment by every citizen of his or her educational goals will inure to the general welfare, well-being, and productivity of the Commonwealth. Accordingly, it is hereby determined and declared that providing higher education assistance to needy, qualified students is in the best interest of the Commonwealth and constitutes the implementation of a public purpose of statewide import of the Commonwealth. (2) Pursuant to KRS 164.740 to 164.764, the Kentucky Higher Education Assistance Authority has heretofore been created and has rendered valuable and material services to the Commonwealth and its citizens in the effectuation of the public policy stated in the foregoing subsection. Pursuant to said cited statutory authority, the Kentucky Higher Education Assistance Authority is legally authorized to make and to guarantee student loans, and is eligible to reinsure student loans with the United States of America pursuant to the Higher Education Act of 1965, as amended. The United States Secretary of Education has been authorized to enter into insurance or reinsurance agreements with the Kentucky Higher Education Assistance Authority, and other lending institutions in the Commonwealth pursuant to which insured student loans have been made possible for the benefit, welfare, and well-being and for the future benefit of citizens, residents and inhabitants of the Commonwealth. (3) The 1976 amendments (P.L. 94-482) to the Higher Education Act of 1965 (P.L. 89- 329), provided incentives for states to establish and implement programs of student loan insurance by providing federal reinsurance of any losses due to the death, disability, bankruptcy or default of the borrower. The education amendments of 1976 (P.L. 94-482) offered further incentives to states to establish insured student loan programs including the payment of certain administrative expenses to a state agency, the payment of interest on student loans directly by the federal government while qualified students are pursuing a course of education at an eligible institution, the payment of special allowances to holders of state insured student loans and the reimbursement of costs of collection to state student loan insurance agencies in the event of defaults. The Omnibus Budget Reconciliation Act of 1993 (P.L. 103-66) further amended the Higher Education Act of 1965 by reducing the rate of insurance payable to holders of insured student loans first disbursed on or after October 1, 1993, to ninety-eight percent (98%) of losses resulting from the default of the borrower, and reduced the federal reimbursements to the guarantee agency to a maximum of ninety-eight percent (98%) of the principal and interest amount on defaulted insured student loans, with further reductions to eighty-eight percent (88%) and seventy-eight percent (78%) when the amount of reinsurance claims paid in any one (1) year exceeds five percent (5%) and nine percent (9%), respectively, of insured student loan amounts in repayment as of the end of the preceding federal fiscal year. (4) The General Assembly hereby determines and declares that in order to continue the Insured Student Loan Program in Kentucky, to enable eligible lenders including banks and trust companies and the Kentucky Higher Education Assistance Authority to be able to continue to make student loans available to qualified students and to ensure that the Commonwealth of Kentucky shall not lose the benefits of the Insured Student Loan Program, it is necessary that there be created a body corporate and politic to act as a financing agency, and to assure that a secondary market for insured student loans be created and maintained. The actions and duties of such body corporate and politic to be carried out in such manner so as to assure that any student loans acquired by such entity have the benefit of state insurance with federal reinsurance to the end that the assets of the Commonwealth be not committed to such purposes. Effective: July 15, 1996 History: Amended 1996 Ky. Acts ch. 350, sec. 5, effective July 15, 1996. -- Created 1978 Ky. Acts ch. 387, sec. 1, effective June 17, 1978.

KRS 164A.011 Plans for organization and operation of corporation and of Kentucky Higher Education Assistance Authority -- Code of ethics

164A.011. Plans for organization and operation of corporation and of Kentucky Higher Education Assistance Authority -- Code of ethics (1) By January 1, 1997, the board of the Kentucky Higher Education Assistance Authority and the board of the Kentucky Higher Education Student Loan Corporation shall prepare and submit to the Governor, the Legislative Research Commission, and the Finance and Administration Cabinet a plan for the future organization and operation of the respective agencies. The plans shall be prepared according to the preprivatization guide established by the Privatization Commission and shall include, but not be limited to, detailed information on the following: (a) The new or expanded businesses or services the boards may want to engage in, and the financing thereof, or which may be available to enhance the boards' role in the student loan business; (b) The new or expanded businesses or services the boards may want to engage in, and the financing thereof, or which may be available to enhance the boards' role in the financial market; (c) A proposed and transitional personnel system to meet the needs of any proposed organization and operations of the authority or corporation that shall include but not be limited to: 1. A salary and compensation plan; and 2. Personnel benefits including health insurance coverage, deferred compensation opportunities, workers' compensation, life insurance coverage, a retirement plan and merit system rights; and (d) The process to be used by the authority and the corporation in the development and implementation of their respective operating budgets, including the methodology for the transfer of funds between the entities and the involvement of the executive branch and the General Assembly in their budget process. (2) The plan shall include a proposed code of ethics to apply to all members of the boards, officers, and employees of the respective agencies. The code of ethics adopted shall include, but not be limited to, provisions that set forth: (a) Standards of conduct; (b) Requirements for filing and maintaining annual financial disclosure statements, which shall be open to public inspection; (c) A policy on the employment of members of the families of members of the boards, officers, and employees; (d) The designation of a person or group responsible for enforcement of the code of ethics, maintenance of financial disclosure records, and receipt and investigation of complaints of violation of the code of ethics; and (e) The penalties for violation of the code of ethics. Effective: July 15, 1996 History: Created 1996 Ky. Acts ch. 350, sec. 2, effective July 15, 1996.

KRS 164A.020 Definitions

164A.020. Definitions The following words and terms, unless the context clearly indicates a different meaning, shall have the following respective meanings: (1) "Board" means the board of directors of the corporation. (2) "Bonds" or "notes" means the bonds or bond anticipation notes authorized to be issued by the corporation pursuant to this chapter. (3) "Corporation" means the Kentucky Higher Education Student Loan Corporation, an independent de jure municipal corporation and political subdivision of the Commonwealth of Kentucky created to perform essential governmental services. (4) "Eligible institution" means any educational institution described as an eligible institution in the federal act which has, if required by the guarantee agency, a contract in force with the guarantee agency pursuant to the federal act and this chapter. (5) "Eligible lender" means the Kentucky Higher Education Assistance Authority, a de jure political subdivision of the Commonwealth of Kentucky and the corporation and all other entities described as eligible lenders in the federal act which have in force a contract with the guarantee agency providing for loan guarantees to be issued by the guarantee agency to the subject lender under the federal act and this chapter. (6) "Federal act" means the Higher Education Act of 1965, as from time to time amended, codified as 20 U.S.C. secs. 1001 et seq. (7) "Guarantee agency" means the Kentucky Higher Education Assistance Authority duly organized and existing pursuant to the statutory laws of the Commonwealth of Kentucky or any agency authorized as a guarantor pursuant to the federal act. (8) "Qualified student" means a student who qualifies for an insured student loan under the federal act. (9) "Insured student loan" means a loan to a qualified student on which the payment of principal and interest is at least ninety-five percent (95%) insured by the guarantee agency and reinsured by the Secretary of Education of the United States in accordance with the requirements of the federal act, or at least ninety-five percent (95%) insured as to principal amount by the United States under the federal act or the Health Professions Educational Assistance Act of 1976, codified as 42 U.S.C. secs. 294 et seq. as from time to time amended. As used in connection with the purchase, making, or acquisition of insured student loans by the corporation, the term insured student loan shall further mean and refer to any contingent interest, security interest, pledge, commitment, chose in action, or other property interest in any such loan. Effective: July 15, 1996 History: Amended 1996 Ky. Acts ch. 350, sec. 6, effective July 15, 1996. -- Amended 1994 Ky. Acts ch. 35, sec. 1, effective March 8, 1994; and ch. 53, sec. 2, effective July 15, 1994. -- Amended 1988 Ky. Acts ch. 272, sec. 1, effective July 15, 1988. -- Created 1978 Ky. Acts ch. 387, sec. 2, effective June 17, 1978.

KRS 164A.030 Corporation is de jure municipal corporation and political subdivision

164A.030. Corporation is de jure municipal corporation and political subdivision The General Assembly of the Commonwealth of Kentucky hereby finds and determines that in carrying out its functions, powers and duties as prescribed in this chapter, the corporation will be performing vital public purposes in improving and promoting the public welfare and prosperity of the people of the Commonwealth of Kentucky by promoting the availability of higher educational opportunities. Accordingly, the corporation is constituted as and shall be an independent de jure municipal corporation and political subdivision of the Commonwealth of Kentucky. Effective: June 17, 1978 History: Created 1978 Ky. Acts ch. 387, sec. 3, effective June 17, 1978.

KRS 164A.040 Purpose

164A.040. Purpose (1) The General Assembly of the Commonwealth of Kentucky hereby finds and determines that as a result of the adoption of the education amendments of 1976 by the Congress of the United States, being Public Law 94-482, it is essential, in order that the Commonwealth of Kentucky may continue to provide adequate educational opportunities to all of its citizens and residents, that the corporation be created and empowered to finance student loan operations in Kentucky by the issuance of its bonds and notes for the purpose of making and purchasing student loans. (2) The General Assembly hereby finds and declares further that in the performance of its duties, powers and responsibilities, the corporation will be performing essential public and governmental functions and shall be and constitute an independent de jure municipal corporation and political subdivision of the Commonwealth of Kentucky for the purpose of promoting higher educational opportunities through a program of financing, making, and purchasing of student loans. Effective: June 29, 2023 History: Amended 2023 Ky. Acts ch. 176, sec. 1, effective June 29, 2023. -- Created 1978 Ky. Acts ch. 387, sec. 4, effective June 17, 1978.

KRS 164A.050 Kentucky Higher Education Student Loan Corporation -- Establishment -- Organization -- Terms -- Duties -- Removal -- Expenses -- Relationship with other educational entities

164A.050. Kentucky Higher Education Student Loan Corporation -- Establishment -- Organization -- Terms -- Duties -- Removal -- Expenses -- Relationship with other educational entities (1) There is hereby created and established an independent de jure municipal corporation and political subdivision of the Commonwealth of Kentucky which shall be a body corporate and politic to be known and identified as the Kentucky Higher Education Student Loan Corporation. (2) The Kentucky Higher Education Student Loa n Corporation is created and established as an independent de jure municipal corporation and political subdivision of the Commonwealth of Kentucky to perform essential governmental and public functions and purposes in improving and otherwise promoting the educational opportunities of the citizens and inhabitants of the Commonwealth of Kentucky and other qualified students by a program of financing, making, and purchasing of student loans. (3) (a) The corporation shall be governed by a board of directors con sisting of: 1. Ten (10) voting members of the board of directors of the Kentucky Higher Education Assistance Authority appointed by the Governor pursuant to KRS 164.746(1)(a), who shall serve terms of office on the corporation board coextensive with their respective terms of office on the Kentucky Higher Education Assistance Authority board; and 2. The secretary of the Finance and Administration Cabinet, or a designee who shall be another official of the same cabinet, who shall serve as an ex officio voting member. (b) The president of the Council on Postsecondary Education, the president of the Association of Independent Kentucky Colleges and Universities, the State Treasurer, and the commissioner of education, or their designees who shall be another official of the same cabinet or agency, shall serve as ex officio nonvoting advisors to the board. (4) The Governor shall appoint directors according to subsection (3)(a)1. of this section from nominees submitted by the Governor's Postsecondary Education Nominat ing Committee under KRS 164.005 to take office and to exercise all powers thereof immediately. The terms shall be staggered and shall be for a period of four (4) years each. Each director shall serve for the appointed term and shall serve until a successor has been appointed and has duly qualified. (5) In the event of a vacancy, the Governor may appoint a replacement director from nominees submitted by the Governor's Postsecondary Education Nominating Committee under KRS 164.005 who shall hold office during the remainder of the term so vacated. (6) The Governor may remove any director from the general public in case of incompetency, neglect of duties, gross immorality, or malfeasance in office; and may thereupon declare such office vacant and may appoint a person to fill such vacancy as provided in other cases of vacancy. (7) The board shall elect from its voting membership a chair, chair -elect, and secretary- treasurer. The executive director of the Kentucky Higher Education Assistance Authority shall serve as executive director of the corporation. (8) The executive director shall administer, manage, and direct the affairs and business of the corporation, subject to the policies, control, and direction of the board of the corporation. The secretary-treasurer of the corporation shall keep a record of the proceedings of the corporation and shall be custodian of all books, documents, and papers filed with the corporation, the minute book or journal of the corporation, and its official seal. The secretary-treasurer may copy all minutes and other records and documents of the corporation and give certificates under the official seal of the corporation to the effect that such copies are true copies and all persons dealing with the corporation may rely upon such certificates. (9) A majority of the board of the corporation shall constitute a quorum for the purpose of conducting its business and exercising its powers and for all other purposes notwithstanding the existence of any vacancies on the board. (10) Official actions may be taken by the corporation at meetings duly called by the chair upon three (3) days' written notice to each director or upon the concurrence of at least a majority of the directors. In lieu of personal attendance by members of the board at the same location, the board may conduct meetings by teleconference or other available technological means suitable for conducting its business. Meetings of the board shall be open and accessible to the public in accordance with KRS 61.805 to 61.850, and any alternate method of conducting a meeting in lieu of personal attendance shall ensure public access. (11) Directors, except officers or employees of the state, shall receive one hundred dollars ($100) compensation per day for their services and shall be entitled to payment of any reasonable and necessary expense actually incurred in discharging their duties under this chapter. (12) Recognizing that the corporation and the Kentucky Higher Education Assistance Authority are governed by the same board members appointed by the Governor and managed by a common executive director and otherwise share staff functions, the two (2) organizations shall provide technical, clerical, and administrative assistance to each other and for the Asset Resolution Corporation, the Kentucky Educational Savings Plan Trust, and the Commonwealth postsecondary education prepaid tuition trust fund, together with necessary office space and personnel, and shall assist each other in all ways by the performance of any and all actions which may be useful or beneficial in the performance of their public functions. (13) The corporation shall enter into contracts with the Kentucky Higher Education Assistance Authority, the Asset Resolution Corporation, the Kentucky Educational Savings Plan Trust, and the Commonwealth postsecondary education prepaid tuition trust fund as may be proper and appropriate in respect to services which may include but not be limited to the servicing and collection of student loans or to facilitate the common administration, operation, and management of the contracting entities. Effective: March 14, 2024 History: Amended 2024 Ky. Acts ch. 5, sec. 2, effective March 14, 2024. -- Amended 2023 Ky. Acts ch. 176, sec. 2, effective June 29, 2023. -- Amended 2012 Ky. Acts ch. 84, sec. 2, effective July 12, 2012. -- Amended 2004 Ky. Acts ch. 111, sec. 7, effective July 13, 2004. -- Amended 2003 Ky. Acts ch. 180, sec. 10, effective June 24, 2003. -- Amended 2002 Ky. Acts ch. 253, sec. 2, effective July 15, 2002. -- Amended 1998 Ky. Acts ch. 152, sec. 1, effective July 15, 1998; and ch. 282, sec. 1, effective July 15, 1998. -- Amended 1997 (1st Extra. Sess.) Ky. Acts ch. 1, sec. 135, effective May 30, 1997. -- Amended 1994 Ky. Acts ch. 91, sec. 5, effective March 22, 1994; and ch. 447, sec. 5, effective April 11, 1994. -- Amended 1988 Ky. Acts ch. 271, sec. 1, effective July 15, 1988. -- Created 1978 Ky. Acts ch. 387, sec. 5, effective June 17, 1978.

KRS 164A.055 Asset Resolution Corporation -- Purpose -- Powers -- Compensation

164A.055. Asset Resolution Corporation -- Purpose -- Powers -- Compensation (1) As used in this section: (a) "Board" means the board of directors of the Asset Resolution Corporation; and (b) "Corporation" means the Asset Resolution Corporation create d in this section. (2) There is hereby created and established an independent de jure municipal corporation and political subdivision of the Commonwealth to be known as Asset Resolution Corporation for the purpose of promoting higher educational opportunities for the citizens of the Commonwealth by providing debt resolution services for student loan obligations and any other student loan or student service - or education-related activity to the extent such activity is not limited or prohibited by statute or other governing authority. (3) The corporation shall be governed, managed, and administered as a separate and distinct instrumentality of the Commonwealth in accordance with this section. (4) The board shall have the power and authority to: (a) Sue and be sued; (b) Promulgate administrative regulations and adopt procedures to implement this section; (c) Make and enter into contracts necessary for the administration of the corporation; (d) Adopt a corporate seal and change and amend it from time to time; (e) Make, execute, and effectuate any and all agreements or other documents with the United States Department of Education, this Commonwealth, any federal or state agency, or any person, corporation, association, partnership, or other organization or entity and perform other acts necessary or appropriate for the effectuation of its rights and duties pursuant to this section; (f) Carry out the duties and obligations of the corporation pursuant to this section, and to have any and all other powers as may be r easonably necessary for the effectuation of the purposes of the corporation; (g) Adopt bylaws for the conduct of its business, including the designation of directors, and prescribe rules, regulations, and policies in connection with the performance of its functions and duties; (h) Employ consultants, attorneys, counselors, and such employees as may be required in the judgment of the corporation and to fix and pay their compensation and benefits; (i) Provide any service to schools or students related to stud ent education loans, including but not limited to the areas of financial awareness, counseling, default aversion or prevention, servicing, and collecting; and (j) Provide support services for postsecondary education and workforce development training and programs to students, families, schools, and training centers. (5) Board members, except officers or employees of the state, shall receive compensation for their services in the amount of one hundred dollars ($100) per day for attendance at each board meeting and shall be entitled to payment of any reasonable and necessary expenses actually incurred in discharging their duties under this section. Effective: March 14, 2024 History: Amended 2024 Ky. Acts ch. 5, sec. 3, effective March 14, 2024. -- Amended 2021 Ky. Acts ch. 79, sec. 4, effective June 29, 2021. -- Amended 2014 Ky. Acts ch. 44, sec. 1, effective July 15, 2014. -- Created 2012 Ky. Acts ch. 84, sec. 1, effective July 12, 2012.

KRS 164A.060 Powers of corporation

164A.060. Powers of corporation The corporation shall have all of the powers necessary or convenient to carry out and effectuate the purposes and provisions of this chapter, including, but without limiting the generality of the foregoing, the following powers: (1) To make or participate in the making of student loans; (2) To purchase or participate in the purchase of student loans, which purchase may be from eligible lenders; (3) To sell or participate in the sale of student loans, which sale may be to eligible lenders or to the student loan marketing association; (4) To collect and pay reasonable fees and charges in connection with making, purchasing, and servicing or causing to be made, purchased, or serviced student loans by the corporation, including payment to the guarantee agency for services performed for the corporation; (5) To procure insurance in respect of all student loans made or purchased by the corporation; (6) To consent whenever it deems it necessary or desirable in the fulfillment of its corporate purposes to the modification of the rate of interest, time of payment of any installment of principal or interest or any other terms of any student loan to which the corporation is a party; provided, that no such consent shall be made or given if the effect of same would be to obviate insurance coverage in respect of any student loan; (7) To include in any borrowing such amounts as may be deemed necessary by the corporation to pay financing charges, interest on its obligations for a period not exceeding two (2) years from their date, consulting, advisory and legal fees, and such other expenses as are necessary or incident to any such borrowing; (8) To make and publish rules and regulations respecting its lending programs and such other rules and regulations as are necessary to effectuate its corporate purposes; (9) To make, execute, and effectuate any and all agreements or other documents with any federal or state agency or any person, corporation, association, partnership, or other organization or entity and perform other acts necessary or appropriate to accomplish effectively the purposes of this chapter; (10) To accept appropriations, loans, grants, revenue sharing, devises, gifts, bequests and federal grants, and any other aid from any source whatsoever and to agree to, and to comply with, conditions incident thereto; (11) To sue and be sued in its own name and to plead and be impleaded; (12) To maintain an office in the city of Frankfort, Kentucky, in conjunction with or in close proximity to the Kentucky Higher Education Assistance Authority and such other regional offices as may be required; (13) To adopt an official seal and alter the same at pleasure; (14) To adopt bylaws for the regulation of its affairs and the conduct of its business and to prescribe rules, regulations, and policies in connection with the performance of its functions and duties; (15) To employ fiscal consultants, attorneys, counselors, and such other consultants and employees as may be required in the judgment of the corporation and to fix and pay their compensation; (16) To invest any funds held in reserves or in sinking fund accounts or any moneys not required for immediate disbursement in obligations guaranteed by the United States or its agencies and instrumentalities; provided, however, that the return on such investments shall not be violative of any laws and regulations regarding investment of the proceeds of any federal tax-exempt bond issue; (17) To issue its bonds and notes for the purpose of carrying out its corporate powers and duties as set forth in this chapter; (18) To service and collect educational loans for other lenders, holders, and educational institutions; and (19) Except where specifically prohibited by law, to secure data from any other Commonwealth of Kentucky agency or instrumentality or from any other source in furtherance of any purposes of the corporation related to any program or function administered by the corporation. Effective: June 29, 2023 History: Amended 2023 Ky. Acts ch. 176, sec. 3, effective June 29, 2023. -- Amended 2004 Ky. Acts ch. 111, sec. 8, effective July 13, 2004. -- Amended 1996 Ky. Acts ch. 350, sec. 7, effective July 15, 1996. -- Created 1978 Ky. Acts ch. 387, sec. 6, effective June 17, 1978.

KRS 164A.065 Powers of corporation as to supplemental student loans

164A.065. Powers of corporation as to supplemental student loans The corporation is hereby authorized to exercise all powers granted by this chapter in furtherance of programs of supplemental loans for students, parent loans for undergraduate student loans, and consolidation loans pursuant to Section 428A, Section 428B, and Section 428C of the Federal Higher Education Act of 1965, as amended, and health education assistance loans pursuant to the Health Professions Educational Assistance Act of 1976, Public Law 94-484, as amended. Any reference in this chapter, without limitation, to student loan or insured student loan shall be deemed to include a loan to parents authorized by Section 428B of the Federal Higher Education Act of 1965, as amended, and health education assistance loan. Effective: July 15, 1988 History: Amended 1988 Ky. Acts ch. 256, sec. 3, effective July 15, 1988. -- Created 1982 Ky. Acts ch. 179, sec. 2, effective April 1, 1982.

KRS 164A.070 Status of obligations issued by corporation

164A.070. Status of obligations issued by corporation (1) Obligations issued under the provisions of this chapter shall not be deemed to constitute a debt, liability or obligation of the state or a pledge of the faith and credit of the state, but shall be payable solely from the revenues or assets of the corporation. Each obligation issued under this chapter shall contain on the face thereof a statement to the effect that the corporation shall not be obligated to pay the same nor the interest thereon except from the revenues or assets pledged therefor and that neither the faith and credit nor the taxing power of the state is pledged to the payment of the principal of or the interest on such obligation. (2) Expenses incurred by the corporation in carrying out the provisions of this chapter may be made payable from funds provided pursuant to this chapter and no liability shall be incurred by the corporation hereunder beyond the extent to which moneys shall have been so provided. Effective: June 17, 1978 History: Created 1978 Ky. Acts ch. 387, sec. 7, effective June 17, 1978.

KRS 164A.080 Bond issue -- Amount -- Interest -- Use of proceeds -- Approval of General Assembly required for certain bond or note issuances -- Exception

164A.080. Bond issue -- Amount -- Interest -- Use of proceeds -- Approval of General Assembly required for certain bond or note issuances -- Exception (1) The corporation may provide for the issuance, at one (1) time or from time to time, of not exceeding five billion dollars ($5,000,000,000) in bonds of the corporation to carry out and effectuate its corporate purposes and powers. In anticipation of the issuance of bonds, the corporation may provide for the issuance, at one (1) time or from time to time, of bond anticipation notes. The principal of and the interest on bonds or notes shall be payable solely from the funds provided for payment. Any notes may be made payable from the proceeds of bonds or renewal notes or, if bond or renewal note proceeds are not available, notes may be paid from any available revenues or assets of the corporation. The bonds or notes of each issue shall be dated and may be made redeemable before maturity at the option of the corporation at the price or prices and under the terms and conditions determined by the corporation. Any bonds or notes shall bear interest at a rate or rates determined by the corporation. Notes shall mature at a time or times not exceeding five (5) years from their date or dates and bonds shall mature at a time or times not exceeding thirty (30) years from their date or dates, as determined by the corporation. The corporation shall determine the form and manner of execution of the bonds or notes, including any interest coupons to be attached, and shall fix the denomination or denominations and the place or places of payment of principal and interest, which may be any bank or trust company within or without the state. If any officer whose signature or a facsimile of whose signature appears on any bonds or notes or coupons attached to them shall cease to be an officer before the delivery of the bonds or notes, the signature or facsimile shall be valid and sufficient for all purposes as if he had remained in office until the delivery. The corporation may also provide for the authentication of the bonds or notes by a trustee or fiscal agent. The bonds or notes may be issued in coupon or in registered form, or both, as the corporation may determine, and provision may be made for the registration of any coupon bonds or notes as to principal alone and also as to both principal and interest, and for the reconversion into coupon bonds or notes of any bonds or notes registered as to both principal and interest, and for the interchange of registered and coupon bonds or notes. Upon the approval of a resolution of the corporation authorizing the sale of its bonds or notes, the bonds or notes may be sold in a manner, either at public or private sale, and for a price the corporation shall determine to be for the best interest of the corporation and best effectuate the purposes of this chapter if the sale is approved by the corporation. (2) The proceeds of any bonds or notes shall be used solely for the purposes for which they are issued and shall be disbursed in a manner and under restrictions, if any, the corporation may provide in the resolution authorizing the issuance of bonds or notes or in the trust agreement securing the bonds or notes. The principal of and interest on any bonds issued by the corporation shall be payable only from the proceeds derived by the corporation from insured student loans made and purchased from the proceeds of the bonds. (3) (a) Prior to the issuance of any bonds or notes that are not secured by the repayment of student loans at least ninety-five percent (95%) insured by the guarantee agency and reinsured by the United States of America, the corporation shall obtain approval of the issuance from the General Assembly in accordance with the provisions of KRS 56.870(1). This requirement shall not apply to refunding bond or note issues which are for the purpose of achieving debt service savings and which do not extend the term of the refunded bond or note. (b) Notwithstanding paragraph (a) of this subsection, if during the interim of sessions of the General Assembly, the federal act is amended to reduce to less than ninety-five percent (95%) the maximum rate of insurance payable by the guarantee agency or reinsurance payable by the Secretary of Education of the United States on insured student loans, upon notification by the corporation to the Legislative Research Commission of the change in the federal act, the corporation may, until the adjournment of the next even-numbered-year regular session of the General Assembly, issue bonds or notes for student loans insured by the guarantee agency and reinsured by the Secretary of Education of the United States to the maximum extent permitted by the federal act. Effective: June 20, 2005 History: Amended 2005 Ky. Acts ch. 161, sec. 1, effective June 20, 2005. -- Amended 2002 Ky. Acts ch. 6, sec. 1, effective July 15, 2002. -- Amended 2001 Ky. Acts ch. 58, sec. 30, effective June 21, 2001. -- Amended 2000 Ky. Acts ch. 52, sec. 1, effective July 14, 2000. -- Amended 1996 Ky. Acts ch. 350, sec. 8, effective July 15, 1996. -- Amended 1994 Ky. Acts ch. 35, sec. 2, effective March 8, 1994; and ch. 53, sec. 3, effective July 15, 1994. -- Amended 1984 Ky. Acts ch. 314, sec. 1, effective July 13, 1984. -- Amended 1982 Ky. Acts ch. 179, sec. 1, effective April 1, 1982. -- Amended 1980 Ky. Acts ch. 124, sec. 1, effective April 3, 1980. -- Created 1978 Ky. Acts ch. 387, sec. 8, effective June 17, 1978. Legislative Research Commission Note (7/15/94). This section was amended by 1994 Ky. Acts chs. 35 and 53. Where these Acts are not in conflict, they have been codified together. Where a conflict exists, Acts ch. 53, which was last enacted by the General Assembly, prevails under KRS 446.250.

KRS 164A.090 Trust agreements authorized

164A.090. Trust agreements authorized In the discretion of the corporation any obligation issued under the provisions of this chapter may be secured by a trust agreement by and between the corporation and a corporate trustee, which may be any trust company or bank having the powers of a trust company within or without the state. Such trust agreement or the resolution providing for the issuance of such obligations may pledge or assign all or any part of the revenues or assets of the corporation, including, without limitation, insured student loans, insured student loan commitments, temporary loans, contracts, agreement and other security or investment obligations, the fees or charges made or received by the corporation, the moneys received in payment of insured student loans and interest thereon, including the proceeds of insurance thereon, and any other moneys received or due to be received by the corporation. Such trust agreement or resolution may contain such provisions for protecting and enforcing the rights and remedies of the holders of any such obligations as may be reasonable and proper and not in violation of law, including covenants setting forth the duties of the corporation in relation to the purposes to which obligation proceeds may be applied, the disposition or pledging of the revenues or assets of the corporation, the terms and conditions for the issuance of additional obligations, and the custody, safeguarding and application of all moneys. It shall be lawful for any bank or trust company incorporated under the laws of the state which may act as depository of the proceeds of obligations, revenues or other money hereunder to furnish such indemnifying bonds or to pledge such securities as may be required by the corporation. Any such trust agreement or resolution may set forth the rights and remedies of the holders of any obligations and of the trustee, and may restrict the individual right of action by any such holders. In addition to the foregoing, any such trust agreement or resolution may contain such other provisions as the corporation may deem reasonable and proper for the security of the holders of any obligations. All expenses incurred in carrying out the provisions of such trust agreement or resolution may be paid from the revenues or assets pledged or assigned to the payment of the principal of and the interest on obligations or from any other funds available to the corporation. Effective: June 17, 1978 History: Created 1978 Ky. Acts ch. 387, sec. 9, effective June 17, 1978.

KRS 164A.100 Pledge of assets or revenues of corporation

164A.100. Pledge of assets or revenues of corporation The pledge of any assets or revenues of the corporation to the payment of the principal of or the interest on any obligations of the corporation shall be valid and binding from the time when the pledge is made and any such assets or revenues shall immediately be subject to the lien of such pledge without any physical delivery thereof or further act, and the lien of any such pledge shall be valid and binding as against all parties having claims of any kind in tort, contract or otherwise against the corporation, irrespective of whether such parties have notice thereof. Nothing herein shall be construed to prohibit the corporation from selling any assets subject to any such pledge except to the extent that any such sale may be restricted by the trust agreement or resolution providing for the issuance of such obligations. Effective: June 17, 1978 History: Created 1978 Ky. Acts ch. 387, sec. 10, effective June 17, 1978

KRS 164A.110 All moneys received deemed trust funds

164A.110. All moneys received deemed trust funds Notwithstanding any other provisions of law to the contrary, all moneys received pursuant to the authority of this chapter shall be deemed to be trust funds to be held and applied solely as provided in this chapter. The resolution authorizing any obligations or the trust agreement securing the same may provide that any of such moneys may be temporarily invested pending the disbursement thereof and shall provide that any officer with whom, or any bank or trust company with which, such moneys shall be deposited shall act as trustee of such moneys and shall hold and apply the same for the purposes hereof, subject to such regulations as this chapter and such resolution or trust agreement may provide. Any such moneys or any other moneys of the corporation may be invested as provided in KRS 386.020. Effective: June 17, 1978 History: Created 1978 Ky. Acts ch. 387, sec. 11, effective June 17, 1978.

KRS 164A.120 Rights of holders of obligations

164A.120. Rights of holders of obligations Any holder of obligations issued under the provisions of this chapter or any coupons appertaining thereto, and the trustee under any trust agreement or resolution authorizing the issuance of such obligations, except the rights herein given may be restricted by such trust agreement or resolution, may, either at law or in equity, by suit, action, mandamus or other proceeding, protect and enforce any and all rights under the laws of the state or granted hereunder or under such trust agreement or resolution, or under any other contract executed by the corporation pursuant to this chapter, and may enforce and compel the performance of all duties required by this chapter or by such trust agreement or resolution to be performed by the corporation or by any officer thereof. Effective: June 17, 1978 History: Created 1978 Ky. Acts ch. 387, sec. 12, effective June 17, 1978.

KRS 164A.130 Obligations issued under chapter are negotiable instruments

164A.130. Obligations issued under chapter are negotiable instruments Notwithstanding any of the foregoing provisions of this chapter or any recitals in any obligations issued under the provisions of this chapter, all such obligations and interest coupons appertaining thereto shall be and are hereby made negotiable instruments under the laws of this state, subject only to any applicable provisions for registration. Effective: June 17, 1978 History: Created 1978 Ky. Acts ch. 387, sec. 13, effective June 17, 1978.

KRS 164A.140 Public agencies, political subdivisions and others may invest in the securities issued by the corporation

164A.140. Public agencies, political subdivisions and others may invest in the securities issued by the corporation Obligations issued under the provisions of this chapter are hereby made securities in which all public officers and public bodies of the Commonwealth and its political subdivisions, all insurance companies, trust companies, banking associations, investment companies, executors, administrators, trustees and other fiduciaries may properly and legally invest funds, including capital in their control or belonging to them. Such obligations are hereby made securities which may properly and legally be deposited with and received by any state or municipal officer or any agency or political subdivision of the Commonwealth for any purpose for which the deposit of bonds, notes or obligations of the state is now or may hereafter be authorized by law. Effective: June 17, 1978 History: Created 1978 Ky. Acts ch. 387, sec. 14, effective June 17, 1978.

KRS 164A.150 Issuance of refunding obligations

164A.150. Issuance of refunding obligations (1) The corporation is hereby authorized to provide for the issuance of refunding obligations for the purpose of refunding any obligations then outstanding which shall have been issued under the provisions of this chapter, including the payment of any redemption premium thereon and any interest accrued or to accrue to the date of redemption of such obligations and, if deemed advisable by the corporation, for any corporate purpose of the corporation. The issuance of such obligations, the maturities and other details thereof, the rights of the holders thereof, and the rights, duties and obligations of the corporation in respect of the same shall be governed by the provisions of this chapter which relate to the issuance of obligations, insofar as such provisions may be appropriate therefor. (2) Refunding obligations may be sold or exchanged for outstanding obligations issued under this chapter and, if sold, the proceeds thereof may be applied, in addition to any other authorized purposes, to the purchase, redemption or payment of such outstanding obligations. Pending the application of the proceeds of any such refunding obligations, with any other available funds, to the payment of the principal, accrued interest and any redemption premium on the obligations being refunded, and, if so provided or permitted in the resolution authorizing the issuance of such refunding obligations or in the trust agreement securing the same, to the payment of any interest on such refunding obligations and any expenses in connection with such refunding, such proceeds may be invested in direct obligations of, or obligations the principal of and the interest on which are unconditionally guaranteed by, the United States of America which shall mature or which shall be subject to redemption by the holders thereof, at the option of such holders, not later than the respective dates when the proceeds, together with the interest accruing thereon, will be required for the purposes intended. Effective: June 17, 1978 History: Created 1978 Ky. Acts ch. 387, sec. 15, effective June 17, 1978.

KRS 164A.160 Reserve or replacement funds

164A.160. Reserve or replacement funds The corporation shall be authorized and empowered in connection with the issuance of its bonds and notes for student loan purposes pursuant to this chapter to establish in respect of such bonds and notes such reserve funds or replacement funds as may be required in the sound discretion of the board of directors of the corporation to enable the corporation to effectuate its proper public purposes. In the event any such reserve fund or replacement fund created by the corporation in connection with any such bonds or notes issued pursuant to a general bond resolution adopted prior to January 1, 2003, should, in violation of any contract made by the corporation with any bondholder or noteholder, be monetarily deficient in any respect as of any date of accounting so stipulated by the corporation, the corporation shall immediately make formal request in writing to the secretary of the Finance and Administration Cabinet, and to the Governor of Kentucky that sums adequate to restore such reserve fund or replacement fund to its contractually required level and to pay any overdue principal and interest on any outstanding bonds and notes of the corporation be included in the next succeeding executive budget, and that such budget request with recommendation for approval by the General Assembly of an appropriated legislative appropriation by the General Assembly to the corporation for the use and benefit of such reserve fund or replacement fund be submitted to such session of the General Assembly. In the event the next scheduled even-numbered-year regular session of the General Assembly of Kentucky shall occur more than six (6) months after any such request by the corporation, the corporation shall request that sums adequate to restore such reserve fund or replacement fund to such contractually required level and to pay any overdue principal and interest on any outstanding bonds and notes of the corporation be made available from the Governor's contingency fund, and if such funds are so made available the budget request hereinabove described in this section shall be correspondingly reduced. Effective: June 24, 2003 History: Amended 2003 Ky. Acts ch. 8, sec. 2, effective June 24, 2003. -- Amended 2001 Ky. Acts ch. 58, sec. 28, effective June 21, 2001. -- Created 1978 Ky. Acts ch. 387, sec. 16, effective June 17, 1978.

KRS 164A.170 Annual report and audit

164A.170. Annual report and audit The corporation shall, promptly following the close of each fiscal year, submit an annual report of its activities for the preceding year to the Governor and the General Assembly. Each such report shall set forth a complete operating and financial statement of the corporation during the year. The corporation shall also cause an annual audit to be made by a resident independent certified public accountant of its books, accounts, and records, with respect to its receipts, disbursements, contracts, mortgages, leases, assignments, loans and all other matters relating to its financial operations. The persons performing such audit shall furnish copies of the audit report to the secretary of the Finance and Administration Cabinet, where they shall be placed on file and made available for inspection by the general public. Effective: June 17, 1978 History: Created 1978 Ky. Acts ch. 387, sec. 17, effective June 17, 1978.

KRS 164A.180 Exemption from personal liability

164A.180. Exemption from personal liability No member or other officer of the corporation shall be subject to any personal liability or accountability by reason of his execution of any obligations or the issuance thereof. Effective: June 17, 1978 History: Created 1978 Ky. Acts ch. 387, sec. 18, effective June 17, 1978.

KRS 164A.190 Acceptance of and expenditure of moneys received from General Assembly

164A.190. Acceptance of and expenditure of moneys received from General Assembly The corporation is authorized to accept and expend such moneys as may be appropriated from time to time by the General Assembly or such moneys as may be received from any source including income from the corporation's operations, for effectuating its corporate purposes including, without limitation, the payment of the initial expenses of administration and operation and the establishment of a reserve or contingency fund to be available for the payment of the principal of and interest on any bonds or notes of the corporation. Effective: June 17, 1978 History: Created 1978 Ky. Acts ch. 387, sec. 19, effective June 17, 1978.

KRS 164A.200 Corporation exempt from taxation -- Interest on bonds issued by corporation may be subject to federal income taxation

164A.200. Corporation exempt from taxation -- Interest on bonds issued by corporation may be subject to federal income taxation The Kentucky Higher Education Student Loan Corporation has been duly created as an independent de jure municipal corporation and political subdivision of the Commonwealth of Kentucky. As the corporation will in all respects be performing essential governmental and public functions, the corporation shall not be required to pay any taxes or assessments upon any of its property, real, personal, or mixed, nor upon the income therefrom; and bonds, notes or other obligations issued by the corporation under this chapter, the income thereon, and the transfer thereof, including any profit made on the sale thereof, shall at all times be exempt from taxation or assessment of any type by the Commonwealth, its agencies and departments, and by all political subdivisions within the state. Nothing contained in this chapter shall preclude or prevent the authorization and issuance by the corporation from time to time of bonds, notes or other obligations, the receipt of interest on which may be subject to federal income taxation. Effective: July 13, 1984 History: Amended 1984 Ky. Acts ch. 356, sec. 1, effective July 13, 1984. -- Created 1978 Ky. Acts ch. 387, sec. 20, effective June 17, 1978.

KRS 164A.210 Conflicts of interest

164A.210. Conflicts of interest If any member, officer or employee of the corporation shall be interested either directly or indirectly, or shall be an officer or employee of or have an ownership interest in any firm or corporation interested directly or indirectly in any contract with the corporation, such interest shall be disclosed to the corporation and shall be set forth in the minutes of the corporation, and the member, officer or employee having such interest therein shall not participate on behalf of the corporation in the authorization of any such contract. Effective: June 17, 1978 History: Created 1978 Ky. Acts ch. 387, sec. 21, effective June 17, 1978.

KRS 164A.220 Chapter deemed supplemental to other laws

164A.220. Chapter deemed supplemental to other laws The foregoing sections of this chapter shall be deemed to provide an additional and alternative method for the doing of the things authorized thereby and shall be regarded as supplemental and additional to powers conferred by other laws, and shall not be regarded as in derogation of any powers now existing; provided, however, that the issuance of bonds or notes under the provisions of this chapter need not comply with the requirements of any other law applicable to the issuance of bonds or notes. Effective: June 17, 1978 History: Created 1978 Ky. Acts ch. 387, sec. 22, effective June 17, 1978.

KRS 164A.230 Dissolution of corporation

164A.230. Dissolution of corporation Upon termination or dissolution, all rights and properties of the corporation shall pass to and be vested in the Commonwealth of Kentucky, subject to the rights of lienholders and other creditors, unless the board of directors directs at such times that they be distributed among one (1) or more corporations, trusts, community chests, funds or foundations organized and operated exclusively for religious, charitable, scientific, literary, or educational purposes, no part of the net earnings of which inures to the benefit of any private shareholder, member or individual and no substantial part of whose activities consists of carrying on propaganda, or otherwise attempting to influence legislation. Effective: June 17, 1978 History: Created 1978 Ky. Acts ch. 387, sec. 23, effective June 17, 1978.

KRS 164A.240 "Eligible borrower" defined -- Additional student loans permitted -- Garnishment -- Administrative regulations -- Bonds to finance loans -- Maximum annual loan amount

164A.240. "Eligible borrower" defined -- Additional student loans permitted -- Garnishment -- Administrative regulations -- Bonds to finance loans -- Maximum annual loan amount (1) (a) As used in this section, the term "eligible borrower" means a student, a former student, or the parent of a dependent student or former student, who demonstrates an intention and capacity to repay an educational loan and meets the loan criteria established by the promulgation of administrative regulations by the corporation. (b) Notwithstanding KRS 164A.020, with respect to any educational loan made or financed under this section, and any bonds or notes of the corporation to finance educational loans under this section, as used in KRS 164A.010 to 164A.240, the term: 1. "Disposable pay" means the amount remaining of a borrower's employment earnings after the deduction of all amounts withheld as required by law; 2. "Eligible institution" shall be deemed to include any educational institution approved by the corporation; 3. "Eligible lender" shall be deemed to include any financial institution approved by the corporation; and 4. "Insured student loan" or "student loan" shall be deemed to include any educational loan. (2) (a) In addition to the authority granted by KRS 164A.010 to 164A.240, the corporation is authorized to: 1. Establish, finance, and operate educational loan programs deemed necessary by the Kentucky Higher Education Assistance Authority to make or cause to be made educational loans to meet the financial needs of eligible borrowers; 2. Exercise any of its powers with respect to educational loans pursuant to KRS 164A.010 to KRS 164A.240; and 3. Establish an administrative garnishment process for the collection of defaulted educational loans and promulgate regulations pursuant to KRS Chapter 13A pertaining to the process. The process shall begin no sooner than one hundred eighty (180) days after the borrower fails to make payments on the debt that has been due and owing. The process shall limit garnishment to no more than ten percent (10%) of the disposable pay of the defaulted borrower and ensure that the borrower's due process rights are protected. (b) The corporation may, in connection with the program, enter into agreements with loan servicing organizations, guarantors, insurers, financial institutions, eligible lenders, and eligible institutions. The educational loan programs may provide for either the making of educational loans to eligible institutions and the relending to eligible borrowers or the making and purchasing of educational loans by the corporation. (3) The corporation may promulgate administrative regulations to implement the provisions of KRS 164A.010 to 164A.240. (4) The corporation may finance the educational loan programs through the issuance of its bonds or notes subject to the provisions set forth in KRS 164A.010 to 164A.240, except that KRS 164A.080(3) shall not apply to any loans and KRS 164A.160 shall not apply to any bonds or notes issued to fund loans authorized in this section. The proceeds of the bonds or notes used for the educational loan programs may be commingled with the proceeds of bonds or notes financing insured student loans as defined by KRS 164A.020. The bonds or notes issued under the provisions of this subsection shall be special and limited obligations, payable solely and only from the receipts pledged and shall not constitute an indebtedness or liability of the Commonwealth or a pledge of the faith and credit of the Commonwealth. (5) The corporation may establish reserve funds or replacement funds in connection with the issuance of bonds and notes for educational loan purposes as determined to be necessary by the board to enable the corporation to accomplish its proper public purposes. (6) (a) The maximum annual loan amount shall not exceed: 1. The costs incurred by the eligible borrower related to attendance less other financial aid, as certified by the eligible institution; 2. The repayment amount of loans to fund the borrower's cost; or 3. A lesser amount established by the board. (b) The loan proceeds shall be used by the eligible borrower solely for these purposes. (7) The corporation may issue taxable bonds or notes for the financing of any program authorized by this chapter. (8) The Kentucky Higher Education Assistance Authority shall provide the services as the corporation may require to efficiently carry out the purposes of this section. (9) A person under the age of eighteen (18) years shall be deemed to have full capacity to act and shall have all rights, powers, privileges, and obligations of a person of full age for the purpose of applying for, receiving, and repaying educational loans authorized pursuant to this section. Notwithstanding any other statute to the contrary, a repayment obligation imposed by this section shall not be voidable by reason of the age of the recipient at the time of receiving the educational loan. (10) The corporation shall establish the interest rates and other terms and conditions for educational loans in a manner that it determines is financially sound. No provision of any other law of the Commonwealth of Kentucky that limits the rate or amount of interest payable on a loan shall apply to an educational loan authorized by this section. (11) A loan made pursuant to this section shall be governed by Kentucky law. (12) KRS 164.774 and 131.565 are applicable to loans made pursuant to this section. Effective: June 27, 2019 History: Amended 2019 Ky. Acts ch. 6, sec. 4, effective June 27, 2019. -- Amended 2013 Ky. Acts ch. 28, sec. 1, effective June 25, 2013. -- Amended 2003 Ky. Acts ch. 8, sec. 1, effective June 24, 2003; and ch. 115, sec. 5, effective June 24, 2003. -- Repealed, reenacted, and amended as KRS 164A.240, 1988 Ky. Acts ch. 35, sec. 1, effective July 15, 1988. -- Created 1982 Ky. Acts ch. 403, sec. 8, effective July 15, 1982. Formerly codified as KRS 164.755.

KRS 164A.250 Student loan forgiveness program for graduates in energy-related fields

164A.250. Student loan forgiveness program for graduates in energy-related fields (1) It is the intent of the General Assembly to establish a student loan forgiveness program for individuals who receive a bachelor's degree or graduate degree from a Kentucky college or university after August 30, 2007, and who are employed in an energy-related field as engineers, engineering technologists, chemists, geologists, or hydrologists in Kentucky. The loan forgiveness program shall be funded by the Commonwealth of Kentucky using state appropriations and shall be administered by the Kentucky Higher Education Student Loan Corporation. All costs associated with the program shall be paid for by the Commonwealth of Kentucky, including the reimbursement of any expenses incurred by the corporation in its administration of the program. (2) To the extent funds are available, the corporation shall provide eligible individuals forgiveness of loans within the Federal Family Education Loan Program held by the corporation up to a maximum of: (a) Twenty percent (20%) of the loan balance principal; and (b) Accrued interest; for each year of qualified employment in Kentucky after August 30, 2007, in an eligible occupation as set forth in subsection (4) of this section. (3) An individual shall be eligible for the loan forgiveness if he or she: (a) Is a Kentucky resident, as determined by the corporation using the criteria established by the Council on Postsecondary Education for the purposes of postsecondary admission and tuition assessment; (b) Is a citizen of the United States; (c) Received a bachelor's degree or graduate degree after August 30, 2007, from a postsecondary education institution in Kentucky that is accredited by a regional or national accrediting association; and (d) Is employed full-time in Kentucky in an eligible occupation as set forth in subsection (4) of this section. (4) Qualified employment in an eligible occupation shall be employment in an energy- related field as an engineer, including environmental engineer; engineering technologist, including environmental engineering technologist; chemist; geologist; or hydrologist. The corporation shall establish the specific eligible occupational titles within the eligible occupations set forth in this subsection through the promulgation of administrative regulations using the Standard Occupational Classification System of the Bureau of Labor Statistics within the U.S. Department of Labor. The corporation shall consult with the Council on Postsecondary Education in determining eligible occupational titles. (5) The corporation shall promulgate administrative regulations in accordance with KRS Chapter 13A as may be needed for the administration of the loan forgiveness program. Effective: August 30, 2007 History: Created 2007 (2d Extra. Sess.) Ky. Acts ch. 1, sec. 53, effective August 30, 2007.

KRS 164A.260 STABLE Kentucky account

164A.260. STABLE Kentucky account (1) As used in this section, "STABLE Kentucky account" means an account established by or for the benefit of an eligible individual, as that term is defined by 26 U.S.C. sec. 529A, and established and maintained by the Commonwealth of Kentucky or pursuant to any agreement between the Commonwealth and any other state. (2) A STABLE Kentucky account and any investment income earned on a STABLE Kentucky account shall be exempt from all taxation by the Commonwealth of Kentucky or any of its political subdivisions. (3) Moneys in a STABLE Kentucky account or a qualified withdrawal from a STABLE Kentucky account shall: (a) Be exempt from attachment, execution, or garnishment; (b) Be disregarded for the purposes of determining eligibility for or the amount of any public assistance program, unless required by federal law; (c) Not be subject to claims by the Cabinet for Health and Family Services, unless required by federal law; and (d) Be, on the death of the designated beneficiary, transferred to the estate of the designated beneficiary, unless prohibited by federal law. (4) (a) Distributions from a STABLE Kentucky account shall not be subject to Kentucky income tax if the distributions are for qualified disability expenses as defined by 26 U.S.C. sec. 529A. (b) A rollover of funds from one (1) STABLE Kentucky account to another STABLE Kentucky account or to an account established under 26 U.S.C. sec. 529 shall not be treated as a distribution so long as: 1. The funds are being transferred into an account for: a. The same eligible individual; or b. An eligible individual who is a member of the same household; and 2. The amount is paid into the new account within sixty (60) days of being removed from the original account. (c) Any change in the designated beneficiary of a STABLE Kentucky account shall not be treated as a distribution for purposes of taxation so long as the new beneficiary is a member of the same household. Effective: June 29, 2023 History: Amended 2023 Ky. Acts ch. 157, sec. 2, effective June 29, 2023 . -- Created 2018 Ky. Acts ch. 177, sec. 1, effective July 14, 2018. Legislative Research Commission Note (7/14/2018). Under the authority of KRS 7.136(1), the Reviser of Statutes has modified the internal numbering of subsection (3) of this statute from the way it appeared in 2018 Ky. Acts ch. 177, sec. 1. The words in the text were not changed.

KRS 164A.300 Legislative findings and intent

164A.300. Legislative findings and intent (1) The General Assembly of the Commonwealth of Kentucky hereby declares as a legislative finding of fact that the general welfare and well-being of the Commonwealth are directly related to the educational levels and skills of the citizens of the Commonwealth. Therefore, a vital and valid public purpose of the Commonwealth is served by the creation and implementation of programs which encourage and make possible the attainment of higher education by the greatest number of citizens of the Commonwealth. (2) The General Assembly finds, declares, and recognizes that the Commonwealth has limited resources to provide additional programs for higher education funding and that the continued operation and maintenance of the institutions of higher education in Kentucky and the general welfare of the citizens and the Commonwealth will be enhanced by creation of a program pursuant to which citizens and others may invest money in a public trust for future application to the payment of higher education costs in the Commonwealth and elsewhere and that the creation of a means of encouragement of citizens in the investment of funds for such future higher education application represents the carrying out of a valid and vital public purpose of the Commonwealth. In order to make available to the citizens of the Commonwealth an opportunity to fund future higher education needs for beneficiaries, it is necessary that a public trust be established in which the citizens of the Commonwealth and others may invest moneys for future educational use. (3) It is the intent of the General Assembly of the Commonwealth of Kentucky to create the Kentucky Educational Savings Plan Trust. The implementation and effectuation of the Kentucky Educational Savings Plan Trust as provided by KRS 164A.300 to 164A.380 constitutes the carrying out of a valid and vital public purpose for which public funds of the Commonwealth may be expended. (4) It is in the best interest of the people of the Commonwealth to establish and provide for the operation of the Kentucky Educational Savings Plan Trust in a manner conforming to federal law that allows participants and beneficiaries federal income taxation benefits on contributions and earnings on contributions expended by the trust for the higher education costs of a beneficiary. Effective: July 14, 2000 History: Amended 2000 Ky. Acts ch. 382, sec. 1, effective July 14, 2000. -- Amended 1998 Ky. Acts ch. 132, sec. 1, effective March 26, 1998. -- Amended 1992 Ky. Acts ch. 190, sec. 2, effective July 14, 1992. -- Created 1988 Ky. Acts ch. 88, sec. 1, effective July 15, 1988.

KRS 164A.305 Definitions for KRS 164A.300 to 164A.380

164A.305. Definitions for KRS 164A.300 to 164A.380 As used in KRS 164A.300 to 164A.380, except where the context clearly requires another interpretation: (1) "Act" means the Kentucky Educational Savings Plan Trust Act codified at KRS 164A.300 to 164A.380; (2) "Administrative fund" means the funds used to administer the Kentucky Educational Savings Plan Trust; (3) "Beneficiary" means: (a) Any person designated at the commencement of participation by a participation agreement to benefit from payments for education costs at an educational institution; (b) The new beneficiary, in the case of a change of beneficiaries pursuant to KRS 164A.330(4); or (c) The scholarship recipient, in the case of a participation agreement entered into as part of a scholarship program operated by a state or local government organization or an organization described in Section 501(c)(3) of the Internal Revenue Code, 26 U.S.C. sec. 501(c)(3), that is exempt from federal income taxation pursuant to Section 501(a) of that code; (4) "Benefits" means the payment of education costs on behalf of a beneficiary by the savings plan trust during the beneficiary's attendance at an educational institution; (5) "Board" means the board of directors of the Kentucky Higher Education Assistance Authority; (6) "Educational institution" means an eligible educational institution under 26 U.S.C. sec. 529(e)(5) or an elementary or secondary public, private, or religious school; (7) "Institution of higher education" means an institution as defined in Section 529(e)(5) of the Internal Revenue Code of 1986, as amended; (8) "Kentucky Educational Savings Plan Trust" or "savings plan trust" means the trust created pursuant to KRS 164A.310; (9) "Participant" means an organization described in Section 501(c)(3) of the Internal Revenue Code, 26 U.S.C. sec. 501(c)(3), that is exempt from federal income taxation pursuant to Section 501(a) of that code, an individual, firm, corporation, a state or local government organization, or a legal representative of any of the foregoing who has entered into a participation agreement pursuant to KRS 164A.300 to 164A.380 for the advance payment of educational costs on behalf of a beneficiary; (10) "Participation agreement" means an agreement between a participant and the savings plan trust, pursuant to and conforming with the requirements of KRS 164A.300 to 164A.380; (11) "Program administrator" means the administrator of the savings plan trust appointed by the board to administer and manage the trust; (12) "Program fund" means the program fund established by KRS 164A.335 which shall be held as a separate fund within the savings plan trust; (13) "Qualified educational expenses" means: (a) With regard to higher education expenses, the costs specified in 26 U.S.C. sec. 529(e)(3) for attendance at an institution of higher education; (b) With regard to elementary and secondary education expenses, tuition of up to ten thousand dollars ($10,000) per year in connection with enrollment or attendance at an elementary or secondary public, private, or religious school; (c) With regard to qualified education loan repayments, the amounts paid as principal or interest on any qualified education loan, as defined in 26 U.S.C. sec. 221(d), of the beneficiary or his or her sibling, not to exceed an aggregate amount of ten thousand dollars ($10,000) per person; and (d) With regard to registered apprenticeship programs, expenses for fees, books, supplies, and equipment for participation in an apprenticeship program registered and certified with the United States Secretary of Labor; (14) "Tuition" means the quarterly or semester charges imposed to attend an educational institution and required as a condition of enrollment; and (15) "Vested participation agreement" means a participation agreement which has been in full force and effect during eight (8) continuous years of residency of the beneficiary in the Commonwealth while participating in the savings plan trust. Effective: July 15, 2020 History: Amended 2020 Ky. Acts ch. 65, sec. 1, effective July 15, 2020. -- Amended 2018 Ky. Acts ch. 137, sec. 1, effective July 14, 2018. -- Amended 2000 Ky. Acts ch. 382, sec. 2, effective July 14, 2000. -- Amended 1998 Ky. Acts ch. 132, sec. 3, effective March 26, 1998. -- Amended 1996 Ky. Acts ch. 11, sec. 1, effective July 15, 1996. -- Amended 1992 Ky. Acts ch. 190, sec. 3, effective July 14, 1992. -- Created 1988 Ky. Acts ch. 88, sec. 2, effective July 15, 1988.

KRS 164A.310 Kentucky Educational Savings Plan Trust -- Powers of board

164A.310. Kentucky Educational Savings Plan Trust -- Powers of board There is hereby created an instrumentality of the Commonwealth to be known as the Kentucky Educational Savings Plan Trust. The board, in the capacity of trustee, shall have the power and authority to: (1) Sue and be sued; (2) Make and enter into contracts necessary for the administration of the savings plan trust pursuant to KRS 164A.300 to 164A.380; (3) Adopt a corporate seal and to change and amend it from time to time; (4) Invest moneys within the program fund in any investments determined by the board to be appropriate, notwithstanding any other statutory limitations contained in the Kentucky Revised Statutes, which are specifically determined to be inapplicable to the savings plan trust; (5) Enter into agreements with any educational institution, the Commonwealth of Kentucky, or any federal or other state agency or other entity as required for the effectuation of its rights and duties pursuant to KRS 164A.300 to 164A.380; (6) Accept any grants, gifts, legislative appropriations, and other moneys from the Commonwealth, any unit of federal, state, or local government or any other person, firm, partnership, or corporation for deposit to the administrative fund or the program fund, which, in the case of any contributions from other than general funds of the Commonwealth, may be limited in application to definite classes of beneficiaries; (7) Enter into participation agreements with participants; (8) Make payments to an educational institution pursuant to participation agreements on behalf of beneficiaries; (9) Make refunds to participants upon the termination of participation agreements pursuant to the provisions, limitations, and restrictions set forth in KRS 164A.300 to 164A.380; (10) Appoint a program administrator and to determine the duties of the program administrator and other staff as necessary and fix their compensation within the provisions of KRS Chapter 18A; (11) Delegate to the program administrator general supervision and direction over the administrative function of the trust and its employees in carrying out the policies, programs, administrative regulations, and directives of the board; (12) Make provision for the payment of costs of administration and operation of the savings plan trust; (13) Carry out the duties and obligations of the savings plan trust pursuant to KRS 164A.300 to 164A.380 and to have any and all other powers as may be reasonably necessary for the effectuation of the purposes of the savings plan trust and KRS 164A.300 to 164A.380; and (14) Promulgate administrative regulations to implement the provisions of KRS 164A.300 to 164A.380 consistent with the federal Internal Revenue Code and administrative regulations issued pursuant to that code. Effective: July 14, 2018 History: Amended 2018 Ky. Acts ch. 137, sec. 2, effective July 14, 2018. -- Amended 2000 Ky. Acts ch. 382, sec. 3, effective July 14, 2000. -- Amended 1998 Ky. Acts ch. 132, sec. 2, effective March 26, 1998. -- Amended 1992 Ky. Acts ch. 190, sec. 4, effective July 14, 1992. -- Amended 1990 Ky. Acts ch. 321, sec. 9, effective July 13, 1990. -- Created 1988 Ky. Acts ch. 88, sec. 3, effective July 15, 1988.

KRS 164A.315 Repealed, 2015

164A.315. Repealed, 2015 Catchline at repeal: Office facilities, clerical and administrative support for endowment trust. History: Repealed 2015 Ky. Acts ch. 94, sec. 2, effective June 24, 2015. -- Amended 1992 Ky. Acts ch. 190, sec. 5, effective July 14, 1992. -- Created 1988 Ky. Acts ch. 88, sec. 4, effective July 15, 1988.

KRS 164A.320 Repealed, 1992

164A.320. Repealed, 1992 Catchline at repeal: Board of the trust - Membership - Terms - Meetings. History: Repealed 1992 Ky. Acts ch. 190, sec. 13, effective July 14, 1992. -- Created 1988 Ky. Acts ch. 88, sec. 5, effective July 15, 1988.

KRS 164A.325 Additional powers of board as to savings plan trust

164A.325. Additional powers of board as to savings plan trust In addition to effectuating and carrying out all of the powers granted by KRS 164A.300 to 164A.380, the board, as trustee, shall have all powers necessary to carry out and effectuate the purposes, objectives, and provisions of KRS 164A.300 to 164A.380 pertaining to the savings plan trust, including, but not limited to, the power to: (1) Engage investment advisors to assist in the investment of savings plan trust assets; (2) Carry out studies and projections in order to advise participants regarding present and estimated future education costs and levels of financial participation in the trust required in order to enable participants to achieve their educational funding objectives; (3) Contract, in accordance with the provisions of KRS 45A.345 to 45A.460 under KRS 45A.343, for goods and services and engage personnel as necessary, including consultants, actuaries, managers, counsel, and auditors for the purpose of rendering professional, managerial, and technical assistance and advice, all of which contract obligations and services shall be payable from any moneys of the trust; (4) Participate in any other way in any federal, state, or local governmental program for the benefit of the savings plan trust; (5) Promulgate, impose, and collect administrative fees and charges in connection with transactions of the savings plan trust, and provide for reasonable service charges, including penalties for cancellations and late payments in respect of participation agreements; (6) Procure insurance against any loss in connection with the property, assets or activities of the savings plan trust; (7) Administer the funds of the savings plan trust; (8) Procure insurance indemnifying any member of the board from personal loss or accountability arising from liability resulting from a member's action or inaction as a member of the board; and (9) Promulgate reasonable rules and regulations for the administration of the savings plan trust. Effective: July 14, 2018 History: Amended 2018 Ky. Acts ch. 137, sec. 3, effective July 14, 2018. -- Amended 2000 Ky. Acts ch. 382, sec. 4, effective July 14, 2000. -- Amended 1992 Ky. Acts ch. 190, sec. 6, effective July 14, 1992. -- Amended 1990 Ky. Acts ch. 321, sec. 10, effective July 13, 1990. -- Created 1988 Ky. Acts ch. 88, sec. 6, effective July 15, 1988.

KRS 164A.330 Participation agreements for savings plan trust -- Confidentiality of information

164A.330. Participation agreements for savings plan trust -- Confidentiality of information The savings plan trust shall have the authority to enter into participation agreements with participants on behalf of beneficiaries pursuant to the following terms and agreements: (1) Each participation agreement shall require a participant to agree to invest a specific amount of money in the trust for a specific period of time for the benefit of a specific beneficiary. Participation agreements may be amended to provide for adjusted levels of contributions based upon changed circumstances or changes in educational plans and may contain penalties for failure to make contributions when scheduled; (2) Notwithstanding the provisions of subsection (1) of this section, participants may elect to enter into a lump-sum contribution participation agreement in connection with which a single, lump-sum contribution is made by the participant for the benefit of a beneficiary; (3) Execution of a participation agreement by the trust shall not guarantee in any way that educational costs will be equal to projections and estimates provided by the trust or that the beneficiary named in any participation agreement will: (a) Be admitted to an educational institution; (b) Be allowed to continue attendance at the educational institution following admission; (c) Graduate from the educational institution; or (d) With regard to an institute of higher education, if admitted, be determined to be a resident for tuition purposes by the institution, unless the participation agreement is vested; (4) Beneficiaries may be changed as permitted by the rules and regulations of the board upon written request of the participant provided, however, that the substitute beneficiary shall be eligible; (5) Participation agreements shall be freely amended throughout their terms in order to enable participants to increase or decrease the level of participation, change the designation of beneficiaries, and carry out similar matters; (6) Each participation agreement shall provide that for vested participation agreements, the beneficiary shall be considered a resident of the Commonwealth for tuition purposes if the beneficiary enrolls in an institution of higher education in Kentucky; (7) Each participation agreement shall provide that it may be canceled under the terms and conditions, including payment of the fees and costs, set forth in the rules and regulations promulgated by the board; (8) The participation agreement shall ensure that contributions made pursuant to subsections (1) and (2) of this section shall not be made in real or personal property other than cash and shall not exceed the anticipated education costs of the beneficiary; (9) The participation agreement shall provide that the participant and the beneficiary shall not directly or indirectly or otherwise control the investment of contributions or earnings on contributions; (10) Information obtained from a participant or a beneficiary and other personally identifiable records made by the trust in the administration of this chapter shall not be published or be open for public inspection pursuant to KRS 61.870 to 61.884, except as provided below: (a) Upon written request, a participant or beneficiary or his legal representative shall be entitled to be advised of the aggregate balance of contributions and earnings for all participation agreements that designate that same beneficiary; (b) Information may be made available to public employees in the performance of their duties, but the agency receiving the information shall assure the confidentiality, as provided for in this section, of all information so released; (c) Statistical information derived from information and records obtained or made by the trust may be published, if it in no way reveals the identity of any participant or beneficiary; and (d) Nothing in this section shall preclude the program administrator or any employee of the board from testifying or introducing as evidence information or records obtained or made by the trust in any proceeding under this chapter, in an action to which the trust is a party, or upon order of a court. Effective: July 14, 2018 History: Amended 2018 Ky. Acts ch. 137, sec. 4, effective July 14, 2018. -- Amended 2000 Ky. Acts ch. 382, sec. 5, effective July 14, 2000. -- Amended 1998 Ky. Acts ch. 132, sec. 4, effective March 26, 1998. -- Amended 1996 Ky. Acts ch. 11, sec. 2, effective July 15, 1996. -- Amended 1992 Ky. Acts ch. 190, sec. 7, effective July 14, 1992. -- Created 1988 Ky. Acts ch. 88, sec. 7, effective July 15, 1988.

KRS 164A.335 Program and administrative funds for savings plan trust -- Investment and payments from funds

164A.335. Program and administrative funds for savings plan trust -- Investment and payments from funds The board, as trustee, shall segregate moneys received by the savings plan trust into two (2) funds, which shall be identified as the program fund and the administrative fund. Transfers may be made from the program fund to the administrative fund for the purpose of paying operating costs associated with administering the trust and as required by KRS 164A.300 to 164A.380. All moneys credited to the administrative fund shall be deposited in accordance with KRS 41.070. All moneys paid by participants in connection with participation agreements shall be deposited as received into the program fund and shall be promptly invested and accounted for separately. Contributions shall be accounted for separately for each beneficiary. Deposits and interest thereon accumulated on behalf of participants in the program fund of the savings plan trust may be used for payments to any institution of higher education. Effective: July 14, 2000 History: Amended 2000 Ky. Acts ch. 382, sec. 6, effective July 14, 2000. -- Amended 1998 Ky. Acts ch. 132, sec. 5, effective March 26, 1998. -- Amended 1992 Ky. Acts ch. 190, sec. 8, effective July 14, 1992. -- Created 1988 Ky. Acts ch. 88, sec. 8, effective July 15, 1988.

KRS 164A.337 Repealed, 2015

164A.337. Repealed, 2015 Catchline at repeal: Endowment trust for student financial assistance benefits -- Authority to establish corporation to administer -- Annual report. History: Repealed, reenacted, and amended as KRS 164.7534, 2015 Ky. Acts ch. 94, sec. 1, effective June 24, 2015. -- Created 1992 Ky. Acts ch. 190, sec. 1, effective July 14, 1992.

KRS 164A.340 Repealed, 1992

164A.340. Repealed, 1992 Catchline at repeal: Substitution of beneficiaries. History: Repealed 1992 Ky. Acts ch. 190, sec. 13, effective July 14, 1992. -- Created 1988 Ky. Acts ch. 88, sec. 8, effective July 15, 1988.

KRS 164A.345 Repealed, 1998

164A.345. Repealed, 1998 Catchline at repeal: Cancellation of participation agreements. History: Repealed 1998 Ky. Acts ch. 132, sec. 7, effective March 26, 1998. -- Amended 1992 Ky. Acts ch. 190, sec. 9, effective July 14, 1992. -- Created 1988 Ky. Acts ch. 88, sec. 10, effective July 15, 1988.

KRS 164A.350 Ownership of contributions and interest -- Cancellation of participation agreement -- Transfer of ownership rights -- Penalty on earnings refunded due to cancellation or nondistribution -- Exemption from creditor's execution

164A.350. Ownership of contributions and interest -- Cancellation of participation agreement -- Transfer of ownership rights -- Penalty on earnings refunded due to cancellation or nondistribution -- Exemption from creditor's execution For all purposes of Kentucky law, the following shall be applicable: (1) The trust shall exercise ownership of all contributions made under any participation agreement and all interest derived from the investment of the contributions made by the participant up to the date of utilization for payment of educational costs for the beneficiary. All contributions made under any participant agreement and interest derived from the investment of the contributions made by the participant shall be deemed to be held in trust for the benefit of the beneficiary; (2) Any participant may cancel a participation agreement at any time, and terminate the trust's ownership rights thereby created in whole or in part, by delivering an instrument in writing signed and delivered to the program administrator or his designee. In the event the participation agreement is terminated in part, the trust shall retain ownership of all contributions made under the participation agreement not previously expended for the qualified educational expenses of the beneficiary and not returned to the participant. The participant shall retain a reversionary right to receive upon termination the actual market value of the participant's account at the time of the cancellation, including interest, except that the participant may be required to pay a penalty upon the interest that has been credited to the participant's account in accordance with subsection (6) of this section; (3) The educational institution shall obtain ownership of the distributions made from the participant's account for the qualified educational expenses paid to the institution at the time each payment is made to the institution; (4) Any amounts received by the trust pursuant to the Kentucky Educational Savings Plan Trust which are not listed in this section shall be owned by the trust; (5) A participant may transfer the participant's rights to another eligible participant, including, but not limited to, a gift of the participant's rights to a minor beneficiary pursuant to KRS Chapter 385, except that, notwithstanding KRS 385.202(1), the transfer shall be effected and the property distributed in accordance with administrative regulations promulgated by the board or the terms of the participation agreement; (6) Notwithstanding any other law to the contrary, if any earnings on contributions are refunded due to cancellation of the participation agreement by the participant or nondistribution of the funds for payment of the beneficiary's qualified educational expenses, the board may charge a penalty to the participant against the earnings on contributions. No penalty shall be charged when a refund is made due to: (a) The death, permanent disability, or mental incapacity of the beneficiary; or (b) The beneficiary's receipt of a scholarship, an educational assistance allowance under Chapters 30, 31, 32, 34, or 35 of Title 38, United States Code, or a payment exempt from income taxation by any law of the United States, other than a gift, bequest, devise, or inheritance within the meaning of Section 102(a) of the Internal Revenue Code, 26 U.S.C. sec. 102(a), for educational expenses, or attributable to attendance at an institution of higher education, to the extent that the amount refunded does not exceed the amount of the scholarship, allowance, or payment; and (7) Notwithstanding any other provision of law to the contrary, contributions and earnings on contributions held by the trust shall be exempt from levy of execution, attachment, garnishment, distress for rent, or fee bill by a creditor of the participant or the beneficiary. No interest of the participant or beneficiary in the trust shall be pledged or otherwise encumbered as security for a debt. Effective: July 14, 2018 History: Amended 2018 Ky. Acts ch. 137, sec. 5, effective July 14, 2018. -- Amended 2004 Ky. Acts ch. 111, sec. 9, effective July 13, 2004. -- Amended 2003 Ky. Acts ch. 180, sec. 5, effective June 24, 2003. -- Amended 2000 Ky. Acts ch. 163, sec. 10, effective July 14, 2000; and ch. 382, sec. 7, effective July 14, 2000. -- Amended 1998 Ky. Acts ch. 132, sec. 6, effective March 26, 1998. -- Amended 1992 Ky. Acts ch. 190, sec. 10, effective July 14, 1992. -- Created 1988 Ky. Acts ch. 88, sec. 11, effective July 15, 1988.

KRS 164A.355 Effect of payments on determination of need and eligibility for student aid

164A.355. Effect of payments on determination of need and eligibility for student aid No student loan program, student grant program or other program administered by any agency of the Commonwealth, except as may be otherwise provided by federal law or the provisions of any specific grant applicable thereto, shall take into account and consider amounts available for the payment of higher education costs pursuant to the Kentucky Educational Savings Plan Trust in determining need and eligibility for student aid. Effective: July 15, 1988 History: Created 1988 Ky. Acts ch. 88, sec. 12, effective July 15, 1988.

KRS 164A.360 Repealed, 2018

164A.360. Repealed, 2018 Catchline at repeal: Borrowing from the trust. History: Repealed 2018 Ky. Acts ch. 137, sec. 7, effective July 14, 2018. -- Amended 2000 Ky. Acts ch. 382, sec. 8, effective July 14, 2000. -- Created 1988 Ky. Acts ch. 88, sec. 13, effective July 15, 1988.

KRS 164A.365 Annual audited financial report to Governor, General Assembly, and State Auditor

164A.365. Annual audited financial report to Governor, General Assembly, and State Auditor (1) The board shall submit an annual audited financial report, prepared in accordance with generally accepted accounting principles, on the operations of the savings plan trust by the first day of November to the Governor, the General Assembly, and the Auditor of Public Accounts. The annual audit shall be made by an independent certified public accountant and shall include, but not be limited to, direct and indirect costs attributable to the use of outside consultants, independent contractors, and any other persons who are not state employees. (2) The annual audit shall be supplemented by the following information prepared by the board: (a) Any studies or evaluations prepared in the preceding year; (b) A summary of the benefits provided by the trusts including the number of participants and beneficiaries in the trust; and (c) Any other information which is relevant in order to make a full, fair, and effective disclosure of the operations of the savings plan trust and the endowment trust. Effective: July 14, 1992 History: Amended 1992 Ky. Acts ch. 190, sec. 11, effective July 14, 1992. -- Created 1988 Ky. Acts ch. 88, sec. 14, effective July 15, 1988.

KRS 164A.370 Tax exemption

164A.370. Tax exemption The property of the trust and its income from operations shall be exempt from all taxation by the Commonwealth of Kentucky or any of its political subdivisions. Investment income earned on contributions paid by any participant and used for qualified educational expenses defined in KRS 164A.305(13) or refunded under KRS 164A.350 shall not be subject to Kentucky income tax by either a participant or any beneficiary of a participation agreement, the purposes for which the investment income was accrued being deemed and declared to be entirely public in nature. Earnings that are not used for qualified educational expenses as defined in KRS 164A.305(13) and are refunded shall be subject to Kentucky income tax, except for earnings refunded pursuant to KRS 164A.350. Effective: July 14, 2018 History: Amended 2018 Ky. Acts ch. 137, sec. 6, effective July 14, 2018. -- Amended 2003 Ky. Acts ch. 150, sec. 2, effective June 24, 2003; and ch. 180, sec. 6, effective June 24, 2003. -- Amended 2000 Ky. Acts ch. 382, sec. 9, effective July 14, 2000. -- Created 1988 Ky. Acts ch. 88, sec. 15, effective July 15, 1988.

KRS 164A.375 Property rights to assets in trust

164A.375. Property rights to assets in trust The assets of the trust, including the program fund, shall at all times be preserved, invested and expended solely and only for the purposes of the trust and shall be held in trust for the participants and beneficiaries and no property rights therein shall exist in favor of the Commonwealth. The assets shall not be transferred or used by the Commonwealth for any purposes other than the purposes of the trust. Effective: July 14, 2000 History: Amended 2000 Ky. Acts ch. 382, sec. 10, effective July 14, 2000. -- Created 1988 Ky. Acts ch. 88, sec. 16, effective July 15, 1988.

KRS 164A.380 Liberal construction

164A.380. Liberal construction KRS 164A.300 to 164A.380 shall be construed liberally in order to effectuate its legislative intent. The purposes of KRS 164A.300 to 164A.380 and all provisions of KRS 164A.300 to 164A.380 with respect to powers granted shall be broadly interpreted to effectuate such intent and purposes and not as to any limitation of powers. Effective: July 15, 1988 History: Created 1988 Ky. Acts ch. 88, sec. 17, effective July 15, 1988.

KRS 164A.550 Definitions for KRS 164A.555 to 164A.630

164A.550. Definitions for KRS 164A.555 to 164A.630 As used in KRS 164A.555 to 164A.630 unless the context otherwise requires: (1) "Governing board" means the board of trustees or board of regents constituting the corporate bodies established by KRS 164.160 and 164.310 for the purpose of governing universities and colleges and technical institutions. (2) "Institutions" means all public supported postsecondary educational institutions in Kentucky recognized in KRS 164.100, 164.290, 164.580, or 164.810(1)(a). (3) "Affiliated corporation" means a corporate entity which is not a public agency and which is organized pursuant to the provisions of KRS Chapter 273 over which an institution exercises effective control, by means of appointments to its board of directors, and which could not exist or effectively operate in the absence of substantial assistance from an institution. (4) "Depository bank" means any bank so designated by the Treasurer of the Commonwealth as appropriate for receiving public moneys. Effective: May 30, 1997 History: Amended 1997 (1st Extra. Sess.) Ky. Acts ch. 1, sec. 136, effective May 30, 1997. -- Amended 1988 Ky. Acts ch. 257, sec. 6, effective July 15, 1988. -- Created 1982 Ky. Acts ch. 391, sec. 1, effective July 15, 1982.

KRS 164A.555 Transfer of funds to institutions

164A.555. Transfer of funds to institutions The secretary of the Finance and Administration Cabinet shall issue warrants authorizing the Treasurer of the Commonwealth of Kentucky to pay to the treasurer of each institution any amounts due by virtue of the state appropriations for that institution, or transfer the amount due electronically if electronic transfer is authorized by statute. The transfer of funds shall be handled in a manner to assure a zero (0) balance in the general fund account at the university. Effective: July 15, 1982 History: Created 1982 Ky. Acts ch. 391, sec. 2, effective July 15, 1982.

KRS 164A.560 Election by institution to perform in accordance with KRS 164A.555 to 164A.630

164A.560. Election by institution to perform in accordance with KRS 164A.555 to 164A.630 (1) The governing boards of the postsecondary educational institutions electing to perform in accordance with KRS 164A.555 to 164A.630 regarding the acquisition of funds, accounting, purchasing, capital construction, and affiliated corporations shall do so by regulation. The responsibility for this election is vested with the governing boards, any other statute to the contrary notwithstanding. The governing board may delegate these responsibilities by regulation to appropriate officials of the institution. The anticipated investment earnings which have been credited to the general fund and the anticipated investment earnings on funds in the capital construction account, excluding revenue bonds, for fiscal years 1982-83 and 1983- 84 may be deducted from the respective institution's trust and agency funds on deposit prior to the issuance of a check or transfer to the governing board. (2) The governing boards of institutions may elect to receive, deposit, collect, retain, invest, disburse, and account for all funds received or due from any source including, but not limited to, state and federal appropriations for the support or maintenance of the general operations or special purpose activities of such institutions. In the event of such election by the governing board: (a) The treasurer of the institution shall deposit on a timely basis all tuition fees, fees for room and board, incidental fees, contributions, gifts, donations, devises, state and federal appropriations, moneys received from sales and services, admittance fees, and all other moneys received from any source, in a depository bank or banks designated by the governing board. (b) The governing board shall promulgate rules and regulations limiting disbursements to the amounts and for the purposes for which state appropriations have been made, or for which other moneys have been received. All disbursements shall be recorded in a system of accounts as set forth in KRS 164A.555 to 164A.630. The treasurer of each institution shall prescribe forms to be used with the system of accounts, and no treasurer shall approve any disbursement document unless he determines that the disbursement is to satisfy a liability of the institution incurred for authorized purposes and that the disbursement is to be made from the unexpended balance of a proper allotment. Effective: May 30, 1997 History: Amended 1997 (1st Extra. Sess.) Ky. Acts ch. 1, sec. 137, effective May 30, 1997. -- Created 1982 Ky. Acts ch. 391, sec. 3, effective July 15, 1982.

KRS 164A.565 Accrual basis accounting system -- Other records -- Annual report -- Budgets, financial statements, and meetings information to be publicly available on Web site

164A.565. Accrual basis accounting system -- Other records -- Annual report -- Budgets, financial statements, and meetings information to be publicly available on Web site (1) The governing board of each postsecondary educational institution making the election authorized in KRS 164A.560 shall as a condition of such election install an accrual basis accounting system conforming with generally accepted accounting principles and procedures established for colleges and universities by the National Association of College and University Business Officers and the American Institute of Certified Public Accountants. The accounting system shall include but not be limited to the following fund structure: (a) An operating fund group (unrestricted current funds), consisting of all moneys not otherwise restricted, available for general operations, including state appropriations, federal funds, and unrestricted institutional receipts. Separate accounting fund groups may be established for auxiliary enterprises, athletics, hospitals, and other similar operations; (b) A restricted fund group consisting of appropriations and other receipts restricted as to purpose which shall not be included in the operating fund; (c) A loan fund group consisting of gifts, grants, and other funds provided and available for loans to students; (d) An endowment fund group consisting of funds, the principal of which is not currently expendable; (e) An agency fund group consisting of resources held by the institutions as custodian or fiscal agent for individual students, faculty, staff members, and organizations; (f) A plant fund group consisting of: 1. Unexpended plant funds to be used for the acquisition of long-lived assets for institutional purposes (capital construction funds); 2. Funds for renewal, maintenance, and replacement of institutional buildings, equipment, and other properties; and 3. Funds set aside for debt service charges and retirement of indebtedness on institutional plant. (2) A record of each general fund appropriation shall be maintained so as to identify the institutional budgets to which such funds are allotted. Any uncommitted state general funds remaining after the close of business on the last day of the fiscal year shall lapse and be returned to the Treasury of the Commonwealth. Each appropriation shall be used for the intended purpose and where questions of intent arise subject to the provisions of KRS 45.750 and 45.800 in the case of capital construction projects and major items of equipment as defined by these sections, the decision of the secretary of finance and administration, based upon budget work papers, shall be final. (3) A separate account showing sources of revenue and all expenditures shall be maintained for each capital construction project. At the end of each fiscal year, a report containing a listing of all capital construction projects, with sources of funds, expenditures, and current status for each, shall be submitted to the Capital Projects and Bond Oversight Committee. (4) Within thirty (30) days after July 15, 1982, the secretary of the Finance and Administration Cabinet shall submit to the Capital Projects and Bond Oversight Committee a complete record of all funds and project records transferred to institutions under the provisions of KRS 164A.555 to 164A.630. (5) Within thirty (30) days after July 15, 1982, the governing boards shall submit to the Capital Projects and Bond Oversight Committee a report containing a complete list of capital construction projects and unexpended plant funds in existence on July 15, 1982. The source of funds, expenditures, and current status of each project shall be shown. (6) State general funds appropriated by the General Assembly for capital construction projects and equipment purchases as defined in KRS 45.750 through 45.800 shall not lapse at the end of a fiscal year. They shall be carried forward until the project is completed. Any such unexpended funds remaining after acceptance of the project as complete shall be returned to a surplus account of the capital construction fund for investment until appropriated and allotted as provided in KRS 45.750 through 45.800. (7) Long lived assets of the institution, including land, buildings, and capital equipment shall be accounted for in the plant fund group. (8) The governing boards of each institution shall make an annual report of the financial activity to the Council on Postsecondary Education. The report shall meet the requirements of the council's system of uniform financial reporting for institutions of higher education. (9) By January 1, 2012, the governing boards of each institution shall make available on the institution's Web site: (a) The board-approved operating and capital budgets for the current and prior two (2) fiscal years; (b) The institution's audited financial statements for the previous three (3) fiscal years; and (c) The agendas and actions of all meetings of the governing board for the previous three (3) years. Effective: June 8, 2011 History: Amended 2011 Ky. Acts ch. 105, sec. 4, effective June 8, 2011. -- Amended 1997 (1st Extra. Sess.) Ky. Acts ch. 1, sec. 138, effective May 30, 1997. -- Created 1982 Ky. Acts ch. 391, sec. 4, effective July 15, 1982.

KRS 164A.570 Annual audit

164A.570. Annual audit The governing board of any postsecondary educational institution making the election prescribed in KRS 164A.560 shall engage a qualified firm of certified public accountants experienced in the auditing of institutions to conduct an annual examination of the institution's financial statements in accordance with generally accepted auditing standards for the purpose of submitting an independent opinion, and preparing a report of findings and recommendations concerning internal accounting controls and procedures, and compliance with KRS 164A.555 to 164A.630. The secretary of the Finance and Administration Cabinet may prescribe the minimum scope of any such audit. The opinion, with the findings and recommendations, shall be forwarded to the Governor, the secretary of the Finance and Administration Cabinet, the Auditor of Public Accounts, the director of the Legislative Research Commission, the president of the Council on Postsecondary Education, and members of the governing board. Effective: May 30, 1997 History: Amended 1997 (1st Extra. Sess.) Ky. Acts ch. 1, sec. 139, effective May 30, 1997. -- Created 1982 Ky. Acts ch. 391, sec. 5, effective July 15, 1982.

KRS 164A.575 Purchasing -- Inventories -- Lease renewals -- Sales of surplus property -- Bidding procedures -- Kentucky-grown agricultural products -- Reports -- Capital construction projects and equipment not listed in budget bill -- Reciprocal preference for resident bidders -- Reverse auctions

164A.575. Purchasing -- Inventories -- Lease renewals -- Sales of surplus property -- Bidding procedures -- Kentucky-grown agricultural products -- Reports -- Capital construction projects and equipment not listed in budget bill -- Reciprocal preference for resident bidders -- Reverse auctions (1) The governing boards of each institution may elect to purchase interest in real property, contractual services, rentals of all types, supplies, materials, equipment, printing, and services, except that com petitive bids may not be required for: (a) Contractual services where no competition exists; (b) Food, clothing, equipment, supplies, or other materials to be used in laboratory and experimental studies; (c) Instructional materials available from only one (1) source; (d) Where rates are fixed by law or ordinance; (e) Library books; (f) Commercial items that are purchased for resale; (g) Professional, technical, scientific, or artistic services, but contracts shall be submitted in accordance with KRS 45A.690 to 45A.725; (h) All other commodities, equipment, and services which, in the reasonable discretion of the board, are available from only one (1) source; and (i) Interests in real property. (2) Nothing in this section shall deprive the boards from negotiating with vendors who maintain a General Services Administration price agreement with the United States of America or any agency thereof, provided, however, that no contract executed under this provision shall authorize a price higher than is contained in the contract between General Services Administration and the vendor affected. (3) The governing board shall require the institution to take and maintain inventories of plant and equipment. (4) The governing board shall establish procedures to identify items of common general usage among all departments to foster volume purchasing. It shall establish and enforce schedules for purchasing supplies, materials, and equipment. (5) The governing board shall have power to salvage, to exchange, and to condemn supplies, equipment, and real property. (6) Upon the approval of the secretary of the Finance and Administration Cabinet, the governing board may purchase or otherwise acquire all real property determined to be needed for the institution's use. The amount paid shall not exceed the fair market value as determined by a qualified appraiser or the value set by the eminent domain procedure. Any real property acquired under this section shall be in name of the Commonwealth for the use and benefit of the institution. (7) (a) Notwithstanding KRS 56.806, the governing board may renegotiate the cost of a lease after the expiration of the lease term and any renewal terms provided in the lease prior to any renewal not provided for in the terms of the lease. (b) Except when a lease incorporates a lease-purchase under KRS 56.806, the governing board shall reserve the right to cancel a lease upon at least thirty (30) days' written notice. (c) Notwithstanding KRS 56.823(2) and (3), any lease renewals, except automatic renewals permitted under KRS 56.803, 56.805(2), and 56.806(1), for which the annual rental cost will exceed two hundred thousand dollars ($200,000) shall be reported to the Capital Projects and Bond Oversight Committee in the same format as set out in KRS 56.823(2). (d) Notwithstanding KRS 56.813, a public college or university may pay for improvements to leased property costing in excess of ten thousand dollars ($10,000) but less than one million dollars ($1,000,000) in a lump sum upon approval of its board using non-general fund appropriations and without incurring debt. (8) The governing board shall sell or otherwise dispose of all real or personal property of the institution which is not needed or has become unsuitable for public use, or would be more suitable consistent with the public interest for some other use, as determined by the board. The determination of the board shall be set forth in an order, and shall be reached only after review of a written request by the institution desiring to dispose of the property. Such request shall describe the property and state the reasons why the institution believes disposal should be effected. All instruments required by law to be recorded which convey any interest in any such real property so disposed of shall be executed and signed by the appropriate officer of the board. Unless the board deems it in the best interest of the institution to proceed otherwise, all such real or personal property shall be sold either by invitation of sealed bids or by public auction; provided, however, that the selling price of any interest in real property shall not be less than the fair market value thereof as determined by the Finance and Administration Cabinet or the Transportation Cabinet for such requirements of that department. (9) Real property or any interest therein may, subject to the provisions of KRS Chapter 45A, be purchased, leased, or otherwise acquired from any officer or employee of any board of the institution, based upon a written application by the grantor or lessor approved by the board, that the employee has not either himself or through any other person influenced or attempted to influence either the board requesting the purchase of the property. In any case in which such an acquisition is consummated, the said request and finding shall be recorded and kept by the Secretary of State along with the other documents recorded pursuant to the provisions of KRS Chapter 56. (10) (a) As used in this section, "construction manager-agency," "construction management-at-risk," "design-bid-build," "design-build," and "construction manager-general contractor" shall have the same meaning as in KRS 45A.030. (b) For capital construction projects, the procurement may be on a total de sign- bid-build basis, a design-build basis, construction manager -general contractor basis, or construction management-at-risk basis, whichever in the judgment of the board offers the best value to the taxpayer. Best value shall be determined in accordance with KRS 45A.070. Proposals shall be reviewed by the institution's engineering staff to assure quality and value, and compliance with procurement procedures. All specifications shall be written to promote competition. Services for projects delivered on the design-build basis, construction manager-general contractor basis, or construction management- at-risk basis shall be procured in accordance with KRS 45A.180, KRS 45A.183, and the regulations promulgated in accordance with KRS 45A.180. Nothing in this section shall prohibit the procurement of construction manager-agency services. (c) Notwithstanding KRS 45A.185, for all capital construction projects, bidder security for competitive sealed bidding for construction contracts shall only be required when the price is estimated to exceed one million dollars ($1,000,000). (11) The governing board shall attempt in every practicable way to insure the institution's supplying its real needs at the lowest possible cost. To accomplish this the board may enter into cooperative agreements with other public or private institutions of education or health care. (12) The governing board shall have control and supervision over all purchases of energy consuming equipment, supplies, and related equipment purchased or acquired by the institution, and shall designate by regulation the manner in which an energy consuming item will be purchased so as to promote energy conservation and acquisition of energy efficient products. (13) The governing board may negotiate directly for the pur chase of contractual services, supplies, materials, or equipment in bona fide emergencies regardless of estimated costs. The existence of the emergency must be fully explained, in writing, by the vice president responsible for business affairs and such exp lanation must be approved by the institution president. The letter and approval shall be filed with the record of all such purchases. Where practical, standard specifications shall be followed in making emergency purchases. A good faith effort shall be mad e to effect a competitively established price for emergency purchases. (14) (a) All governing boards that purchase agricultural products, as defined by KRS 45A.630, shall, on or before January 1 of each year, provide a report to the Legislative Research Co mmission and to the Department of Agriculture describing the types, quantities, and costs of each product purchased. The report shall be completed on a form provided by the department. (b) If purchasing agricultural products, a governing board shall encour age the purchase of Kentucky-grown agricultural products in accordance with KRS 45A.645. If a governing board purchases agricultural products through a contract with a vendor or food service provider, the contract shall require that if Kentucky-grown agricultural products are purchased, the products shall be purchased in accordance with KRS 45A.645. Only contracts entered into or renewed after July 15, 2008, shall be required to comply with the provisions of this subsection. (c) All governing boards that pu rchase Kentucky-grown agricultural products shall, on or before January 1 of each year, provide a report to the Legislative Research Commission and to the Department of Agriculture describing the types, quantities, and costs of each product purchased. The report shall be completed on a form provided by the department. (15) Notwithstanding KRS 45.760, the governing board may authorize a capital construction project or a major item of equipment even though it is not specifically listed in any branch budget bill, subject to the following conditions and procedures: (a) The full cost shall be funded solely by non-general fund appropriations; (b) Moneys specifically budgeted and appropriated by the General Assembly for another purpose shall not be allotted or reallotted for expenditure on the project or major item of equipment. Moneys utilized shall not jeopardize any existing program and shall not require the use of any current general funds specifically dedicated to existing programs; and (c) The institution's president, or designee, shall submit the project or major item of equipment to the Capital Projects and Bond Oversight Committee for review as provided by KRS 45.800. (16) Governing boards shall apply the reciprocal resident bidder preference described in KRS 45A.494 prior to the award of any contract. (17) Governing boards may authorize the use of reverse auctions as defined in KRS 45A.070 for the procurement of goods and leases. Effective: July 15, 2024 History: Amended 2024 Ky. Acts ch. 50, sec. 2, effective July 15, 2024. -- Amended 2018 Ky. Acts ch. 200, sec. 3, effective April 26, 2018. -- Amended 2015 Ky. Acts ch. 105, sec. 13, effective June 24, 2015. -- Amended 2010 Ky. Acts ch. 63, sec. 12, effective July 15, 2010; and ch. 162, sec. 21, effective July 15, 2010. -- Amended 2009 Ky. Acts ch. 37, sec. 2, effective June 25, 2009. -- Amended 2008 Ky. Acts ch. 37, sec. 1, effective July 15, 2008. -- Amended 2005 Ky. Acts ch. 29, sec. 7, effective June 20, 2005. -- Amended 2003 Ky. Acts ch. 56, sec. 1, effective June 24, 2003; and ch. 98, sec. 16, effective June 24, 2003. -- Amended 1997 (1st Extra. Sess.) Ky. Acts ch. 1, sec. 140, effective May 30, 1997. -- Amended 1990 Ky. Acts ch. 496, sec. 50, effective July 13 , 1990. -- Created 1982 Ky. Acts ch. 391, sec. 6, effective July 15, 1982.

KRS 164A.577 Private loss insurance or self-insurance pool option -- Requirements -- Resumption of state insurance coverage -- Annual inspection -- Coverage requirements and minimums

164A.577. Private loss insurance or self-insurance pool option -- Requirements -- Resumption of state insurance coverage -- Annual inspection -- Coverage requirements and minimums (1) Notwithstanding KRS 56.065 to 56.180 and any other law to the co ntrary: (a) Instead of insurance coverage provided through the Commonwealth's property and casualty insurance fund, the governing board of each institution may, subject to paragraph (b) of this subsection, elect to obtain insurance under this section to cover all of the state property in the institution's possession against loss by fire and other hazards; (b) An institution whose governing board elects to obtain insurance under this section shall: 1. Not be required to obtain approval by the Finance and Adm inistration Cabinet or any other state agency or official to terminate the institution's insurance coverage through the Commonwealth's property and casualty insurance fund; 2. Notify the secretary of the Finance and Administration Cabinet at least sixty (60) days before terminating the institution's insurance coverage through the Commonwealth's property and casualty insurance fund; 3. Ensure that the insurance is in place immediately following termination of the institution's insurance coverage through the Commonwealth's property and casualty insurance fund; 4. Comply with any bidding or advertising requirements under KRS Chapters 45A and 424; and 5. Comply with subsection (2) of this section; and (c) 1. An institution that terminates the institution's insurance coverage through the Commonwealth's property and casualty insurance fund under this subsection shall be permitted to resume that coverage, without any need for approval by the Finance and Administr ation Cabinet or any other state agency or official, by providing the following notices to the secretary of the Finance and Administration Cabinet: a. At least six (6) months prior to the effective date of the institution's resumption of coverage through t he Commonwealth's property and casualty insurance fund, as provided under subparagraph 2. of this paragraph, a notice that the institution intends but is not obligated to resume coverage through the fund; and b. At least three (3) months prior to the effec tive date of the institution's resumption of coverage through the Commonwealth's property and casualty insurance fund, as provided under subparagraph 2. of this paragraph, a notice that the institution is resuming coverage through the fund. 2. Upon receipt of the notices required under subparagraph 1. of this paragraph, the Finance and Administration Cabinet shall insure all of the state property in the institution's possession against loss by fire and other hazards through the Commonwealth's property and casualty insurance fund, and coverage shall become effective not later than: a. The next date of renewal of the coverage provided through the fund; or b. Any other date agreed upon by the institution and the cabinet. (2) An institution that obtains insuranc e under this section shall ensure that an annual inspection is made of each state building and its contents in the institution's possession, for the purpose of determining the unnecessary causes of a fire hazard therein, and recommendations are received fo r corrective actions, by either: (a) 1. Allowing the Finance and Administration Cabinet to have the inspection made and to make recommendations for corrective actions, consistent with the inspections and recommendations made under KRS 56.170. 2. The institution shall pay a fee to the Finance and Administration Cabinet for an inspection made under this paragraph if: a. i. A fee is charged; and ii. The fee is not in excess of the fee charged; to agencies for an inspection made under KRS 56.170; and b. The fee is reasonable; or (b) 1. Having a qualified third party approved by the institution's insurer conduct the inspection and make recommendations for corrective actions. 2. The institution may pay a reasonable fee for an inspection made under this paragraph if the fee is not included in the premium charged by the insurer. (3) Insurance obtained under this section: (a) May be provided: 1. By an authorized insurer as defined in KRS 304.1-100; or 2. Through a self-insurance pool if the pool is: a. Adequately reinsured by an authorized insurer as defined in KRS 304.1-100; and b. Capable of insuring all of the state property in the institution's possession; (b) Shall state the following for each insured building and its contents: 1. Estimated replacement cost; and 2. The amount of coverage provided; (c) 1. Except as provided in subsection (4) of this section, shall insure each building and its contents for an amount equal to one hundred percent (100%) of the replacement cost determined through a certified replacement cost appraisal performed at the direction of the institution by an appraiser: a. Licensed to perform appraisal services under KRS Chapter 324A; and b. Experienced in appraising commercial or governmental property. 2. As used in this paragraph, "replacement cost" includes the increased cost of construction brought about by code changes that: a. Have occurred since the original structure was built; and b. Are required to be incorporated within a rebuilt structure; (d) Shall contain an agreed amount provisio n; and (e) Shall include: 1. Ordinance and law coverage at not less than five million dollars ($5,000,000); 2. Debris removal coverage at not less than one million dollars ($1,000,000); 3. Extra expense coverage at not less than five million dollars ($5,000,000); and 4. For any building containing a steam boiler, boiler and machinery coverage at not less than the total value of the real and personal property in the building in which the steam boiler is located. (4) A governing board may obtain actual cash v alue coverage of a building and its contents if a certification signed by the governing board chair is attached to the insurance policy or contract, or self -insurance pool contract, stating that it would not be fiscally responsible to provide replacement c ost coverage for the building being insured. Effective: March 31, 2025 History: Amended 2025 Ky. Acts ch. 136, sec. 13, effective March 31, 2025. -- Created 2024 Ky. Acts ch. 50, sec. 1, effective July 15, 2024.

KRS 164A.580 Management of capital construction projects

164A.580. Management of capital construction projects Subject to the provisions of KRS 45.750 through 45.800, 45A.180, 45A.183, and 56.870 to 56.874, the governing board of each institution may provide for the management and administration of capital construction projects authorized for such institution including, but not limited to: (1) The procurement of necessary consulting services; (2) The supervision and control of the making of all contracts for building projects, renovation projects, repair projects, and supervision of same; (3) The prescription of the amount and form of evidences of indebtedness submitted in connection with bids and contracts when not otherwise provided by law; (4) The preparation of plans and specifications for any construction, alteration, or enlargement of buildings, structures, and other improvements; (5) The advertisement of bids and the awarding of contracts in connection with such projects; (6) The supervision and inspection of all related work; (7) The approval of changes in plans or specifications; and (8) The acceptance of such improvements when completed according to such plans and specifications. Effective: June 24, 2015 History: Amended 2015 Ky. Acts ch. 105, sec. 14, effective June 24, 2015. -- Amended 2003 Ky. Acts ch. 98, sec. 17, effective June 24, 2003. -- Created 1982 Ky. Acts ch. 391, sec. 8, effective July 15, 1982.

KRS 164A.585 Contracting for capital construction projects -- Items considered equal to specifications may be furnished

164A.585. Contracting for capital construction projects -- Items considered equal to specifications may be furnished (1) Subject to authorization by the General Assembly and KRS 164A.580, the governing boards may make plans and specifications, advertise for bids, let contracts or incur any financing commitments, either in the way of a charge against institution funds or in the way of negotiations for issuance of revenue bonds, for any capital construction projects involving the improvement of lands or the construction, alteration, reconstruction, or major repair of any building or other structure, or sewage disposal, water supply system or other utility system. (2) Review of construction plans for conformance with the uniform state building code shall be conducted by the Department of Housing, Buildings and Construction. The board shall not approve any such project requiring its approval in any instance where it finds that the project is not needed, or that the proposed method of financing is not sound, or in cases where the project will exceed the amount of the funds available therefor, or the work contemplated will be insufficient to accomplish the purpose of the project, or that after providing for the ordinary recurring expenses of administration and debt service and for payments under existing allotments for extraordinary expenses and capital outlay, cash will not be available in the Treasury to promptly pay for the work or that the work is to be done by employees of the institution. (3) Any capital construction project, except as provided in subsection (4) of this section, shall be contracted for on a competitive bid basis, and the execution of such contracts shall be approved and authorized by the board. When a capital construction project has been approved as provided in this section, in whole or in part, the board shall prepare the plans and specifications, advertise for bids, award the contracts, supervise the construction and handle the financial negotiations. (a) The governing board shall ensure that every invitation for bids or request for proposals shall provide that an item equal to that named or described in the specifications may be furnished. (b) The specifications may identify a sole brand in cases where, in the written opinion of the chief procurement officer, documented unique and valid conditions require compatibility, continuity, or conformity with established standards. (c) An item shall be considered equal to the item named or described if, in the opinion of the governing board and the design professional responsible for the specifications: 1. It is at least equal in quality, durability, strength, design, and other criteria deemed appropriate; 2. It will perform at least equally the function imposed by the general design for the public work being contracted for or the material being purchased; and 3. It conforms substantially to the detailed requirements for the item in the specifications. (4) A capital construction project, the total cost of completion of which will not exceed two hundred fifty thousand dollars ($250,000), may be performed by the employees of the institution or by individuals hired specifically for the project. Necessary materials and supplies shall be procured in accordance with the standard purchasing procedures and policies of the board as defined in KRS 164A.575. Effective: July 15, 2010 History: Amended 2010 Ky. Acts ch. 24, sec. 225, effective July 15, 2010. -- Amended 2009 Ky. Acts ch. 72, sec. 2, effective June 25, 2009. -- Amended 2008 Ky. Acts ch. 47, sec. 6, effective July 15, 2008. -- Amended 2006 Ky. Acts ch. 93, sec. 1, effective July 12, 2006. -- Amended 2003 Ky. Acts ch. 98, sec. 18, effective June 24, 2003. -- Amended 1986 Ky. Acts ch. 338, sec. 2, effective July 15, 1986. -- Created 1982 Ky. Acts ch. 391, sec. 9, effective July 15, 1982.

KRS 164A.590 Contracting for architectural and engineering services

164A.590. Contracting for architectural and engineering services (1) In the procurement of architectural and engineering services, the governing board of the institution shall encourage firms engaged in the lawful practice of their profession to submit an annual statement of qualifications and performance data. (2) When the need for architectural and engineering services arise for specific projects, the governing board shall evaluate current statements of qualifications and performance data on file with the Commonwealth, together with those that may be submitted by other firms and shall conduct discussions with no less than three (3) firms regarding anticipated design concepts and the relative utility of alternative methods of approach for furnishing the required services, and after applying the reciprocal preference for resident bidders under KRS 45A.494, shall then select therefrom, in order of preference, based upon criteria established and published, no less than three (3) of the firms deemed to be the most highly qualified to provide the services required. (3) The governing board shall negotiate a contract with the highest qualified firm for architectural and engineering services at compensation which the governing board determines in writing to be fair and reasonable to the Commonwealth. In making this decision, the governing board shall take into account the estimated value of the services to be rendered, the scope, complexity, and professional nature thereof. Should the governing board be unable to negotiate a satisfactory contract with the firm considered to be the most qualified, at a price it determines to be fair and reasonable to the institution, negotiations with that firm shall be formally terminated. The governing board shall then undertake negotiations with the second most qualified firm. Failing accord with the second most qualified firm, the governing board shall formally terminate negotiations with that firm. The governing board shall then undertake negotiations with the third most qualified firm. Should the governing board be unable to negotiate a satisfactory contract with any of the selected firms, it shall select additional firms in order of their competence and qualification and the governing board shall continue negotiations in accordance with this section until an agreement is reached. Effective: July 15, 2010 History: Amended 2010 Ky. Acts ch. 162, sec. 22, effective July 15, 2010. -- Created 1982 Ky. Acts ch. 391, sec. 10, effective July 15, 1982.

KRS 164A.595 Carrying out of capital construction projects

164A.595. Carrying out of capital construction projects Capital construction projects shall be carried out as follows: (1) Subject to the provisions of KRS 45.750 through 45.800, 45A.180, and 45A.183, the governing boards of the institutions may acquire, erect, construct, reconstruct, improve, rehabilitate, remodel, repair, complete, extend, enlarge, equip, furnish, and operate any buildings, structures, improvements, or facilities, including any utilities, other related services and appurtenances and land required as the respective governing boards shall deem necessary for carrying on the educational, research or public service programs or discharging the statutory responsibilities of the universities and colleges and various divisions under the jurisdiction of the boards, or for the management, operation, or servicing of the universities and colleges. (2) The governing boards may acquire real or personal property, by purchase, lease, sublease, condemnation, trade or exchange, gift, devise, or otherwise, and improve such property whenever in the judgment of the governing board it shall be necessary. The title to any real estate acquired under this section shall vest in the Commonwealth for the use and benefit of the appropriate institution. Effective: June 24, 2015 History: Amended 2015 Ky. Acts ch. 105, sec. 15, effective June 24, 2015. -- Amended 2003 Ky. Acts ch. 98, sec. 19, effective June 24, 2003. -- Created 1982 Ky. Acts ch. 391, sec. 11, effective July 15, 1982.

KRS 164A.600 Procedures and limitations of KRS 45.750 through 45.800 and KRS Chapter 45A apply -- Projects limited to scope authorized by General Assembly

164A.600. Procedures and limitations of KRS 45.750 through 45.800 and KRS Chapter 45A apply -- Projects limited to scope authorized by General Assembly (1) The procedures and limitations related to capital construction and equipment purchases set forth in KRS 45.750 through 45.800 and for construction of capital projects set forth in KRS Chapter 45A shall apply to the governing boards. The governing boards shall establish a contingency fund and an emergency repair, maintenance and replacement fund in their plant fund records. Transfer and use of these funds shall be governed by the provisions of KRS 45.770 and 45.780, as appropriate, except that the governing boards of each university shall perform the functions assigned to the Finance and Administration Cabinet in KRS 45.770 and 45.780. (2) Capital construction and equipment purchase projects established by the governing boards shall be limited to the scope authorized by the General Assembly, and the total costs of each project shall not exceed the appropriation; except for emergency projects that may arise. In such instances, the governing boards may transfer funds from other projects or from operating funds; however each emergency project that is authorized by the board and sources of funds shall be promptly reported to the Capital Projects and Bond Oversight Committee. Effective: June 24, 2003 History: Amended 2003 Ky. Acts ch. 98, sec. 20, effective June 24, 2003. -- Created 1982 Ky. Acts ch. 391, sec. 12, effective July 15, 1982.

KRS 164A.605 Procedures and limitations on issuance of consolidated educational building revenue bonds, housing bonds, or bond anticipation notes

164A.605. Procedures and limitations on issuance of consolidated educational building revenue bonds, housing bonds, or bond anticipation notes Subject to the provisions of KRS 45.750 to 45.800 and KRS 56.870 to 56.874, the governing boards may issue, under the provisions of KRS 162.340 to 162.380, consolidated educational building revenue bonds, housing bonds, or bond anticipation notes. The board of the institution shall submit to the State Property and Buildings Commission a request for approval of the project before any financial commitment of any sort may be made in connection therewith, including employment of architects, engineers, fiscal agents, or attorneys. Personal service contracts for fiscal agents and bond counsel shall be subject to KRS 45A.690 to 45A.725 and architects and engineers shall be selected as provided in KRS 164A.590. After approval by the commission, the governing board shall appoint fiscal agents, bond counsel, and architects and engineers as may be required to make plans and specifications or financial arrangements for the project. The date of sale on such issues shall be coordinated with the Finance and Administration Cabinet to avoid a conflict with other state bond issues. Effective: July 13, 1990 History: Amended 1990 Ky. Acts ch. 496, sec. 51, effective July 13, 1990. -- Created 1982 Ky. Acts ch. 391, sec. 13, effective July 15, 1982.

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

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

KRS 164A.610 Organization and operation of affiliated corporations

164A.610. Organization and operation of affiliated corporations (1) An institution may organize and operate one (1) or more affiliated corporations to assist it in carrying out its programs, missions or other functions. A qualified firm of certified public accountants experienced in the auditing of colleges and universities and their affiliated corporations shall be engaged to conduct an annual examination of the corporation's financial statements in accord with generally accepted auditing standards for the purpose of rendering an independent opinion thereon and preparing a report of findings and recommendations concerning appropriate accounting controls and compliance with applicable statutes. The affiliated corporation shall adhere to the principles of accounting and purchasing used by the institution with which it is affiliated. (2) The affiliated corporation shall provide the institution with an accounting at least quarterly, of all income and expenditures of said corporation in connection with contracts or grants with entities external to the institution and the corporation, for the conduct of research or other projects carried out, in whole or in part, through the use of institutional facilities or personnel. (3) The affiliated corporation shall pay to, or for the benefit of, the institution any and all funds received by it from any person, corporation, association or governmental agency external to the institution and the affiliated corporation as reimbursement for indirect expenses incurred by the institution in carrying out research or furnishing other goods or services, deducting from such payments only the expenses attributable to the procurement and performance of research grants and contracts and other contracts for the provision of such goods and services and such sums as may be essential to meet contractual obligations incurred at the request of the institution's governing board. Effective: July 15, 1982 History: Created 1982 Ky. Acts ch. 391, sec. 14, effective July 15, 1982.

KRS 164A.615 Acceptance of gifts -- Awarding of scholarships, grants, etc

164A.615. Acceptance of gifts -- Awarding of scholarships, grants, etc Nothing contained in KRS 164A.555 to 164A.630 shall be construed to prevent an institution or an affiliated corporation from enforcing or carrying out the bona fide terms of any gift, grant, conveyance, devise or bequest from any private person, corporation, foundation, estate or other entity contributing funds or any other thing of value to the institution or affiliated corporation, nor shall same be construed to prevent an affiliated corporation from awarding athletic scholarships or other scholarship, fellowship, assistantship or similar grants, loans or awards to students, faculty or other employees of an institution, or from performing such other functions as may be assigned by the institution's governing board. Effective: July 15, 1982 History: Created 1982 Ky. Acts ch. 391, sec. 15, effective July 15, 1982.

KRS 164A.620 Fund for excellence

164A.620. Fund for excellence The governing board is authorized to establish a "fund for excellence" trust fund into which gifts, grants, and special appropriations by the General Assembly intended for such purpose may be deposited. The governing board may also deposit into this fund proceeds from the sale of surplus property. Investment income from moneys in this fund shall be used only to enhance academic programs of the institutions. Effective: July 15, 1982 History: Created 1982 Ky. Acts ch. 391, sec. 17, effective July 15, 1982.

KRS 164A.625 Severability clause

164A.625. Severability clause If any provisions of KRS 164A.555 to 164A.630 or the application thereof to any persons or circumstance is held invalid, the invalidity shall not affect other provisions or applications of KRS 164A.555 to 164A.630 which can be given effect without the invalid provision or application, and to this end the provisions of KRS 164A.555 to 164A.630 are severable. Effective: July 15, 1982 History: Created 1982 Ky. Acts ch. 391, sec. 18, effective July 15, 1982.

KRS 164A.630 Statutes binding the board

164A.630. Statutes binding the board (1) In carrying out the provisions of KRS 164A.555 to 164A.630 the governing boards shall be bound by the following statutes: (a) KRS 56.610 to 56.820 regarding relocation assistance and lease of property for state use, and 56.870 to 56.874 regarding legislative approval of state fiscal obligations. (b) The Kentucky Model Procurement Code as set forth in KRS Chapter 45A. (c) KRS Chapter 56 as it relates to the approval of revenue bond issues by the State Property and Buildings Commission, and the issuance of revenue bonds and bond anticipation notes. (d) KRS 45.550 to 45.640 regarding equal employment opportunity. (2) Any other provisions of KRS Chapters 41, 42, 45, 56, 57 to the contrary notwithstanding, KRS 164A.555 to 164A.630 shall govern the financial management of higher education with the exception of KRS 45.990 and 45A.990 having to do with penalties which shall be applicable to violations of KRS 164A.555 to 164A.630. (3) Any officer, agent or employee of any institution who willfully fails or refuses to comply with any other provisions of KRS 164A.555 to 164A.630 is subject to indictment in the appropriate Circuit Court and upon conviction shall be fined not less than fifty dollars ($50) nor more than one thousand dollars ($1000) for each offense. Effective: July 15, 1982 History: Created 1982 Ky. Acts ch. 391, sec. 19, effective July 15, 1982.

KRS 164A.700 Definitions for KRS 164A.700 to 164A.709

164A.700. Definitions for KRS 164A.700 to 164A.709 As used in KRS 164A.700 to 164A.709, unless the context requires otherwise: (1) "Academic year" means the time period specified by each eligible educational institution; (2) "Board" means the board of directors of the Kentucky Higher Education Assistance Authority acting in the capacity of the board of directors of the Commonwealth postsecondary education prepaid tuition trust fund; (3) "Eligible educational institution" means an institution defined in the Internal Revenue Code of 1986, as amended, 26 U.S.C. sec. 529(e)(5); (4) "Fund" means the prepaid tuition payment fund created in KRS 164A.701 and known as the "Commonwealth Postsecondary Education Prepaid Tuition Trust Fund" or "Kentucky's Affordable Prepaid Tuition" (KAPT); (5) "Prepaid tuition" means the amount of tuition estimated by the board for the tuition plan under the prepaid tuition contract; (6) "Prepaid tuition academic year conversion" means the difference between the amount of prepaid tuition required in the original prepaid tuition contract and the amount of prepaid tuition required in an amended prepaid tuition contract as the result of the change in the academic year; (7) "Prepaid tuition academic year conversion shortfall" means the amount by which the prepaid tuition required in an amended prepaid tuition contract as the result of the change in the academic year exceeds the amount of prepaid tuition required in the original prepaid tuition contract; (8) "Prepaid tuition account" means the account for a qualified beneficiary as specified in the prepaid tuition contract; (9) "Prepaid tuition contract" means the contract entered into by the board and the purchaser for the purchase of prepaid tuition for a qualified beneficiary to attend any eligible educational institution as provided in KRS 164A.700 to 164A.709; (10) "Prepaid tuition conversion" means the difference between the value of a prepaid tuition account and the tuition at an eligible educational institution; (11) "Prepaid tuition conversion shortfall" means the amount by which the actual tuition cost at an eligible educational institution exceeds the amount of the value of a prepaid tuition account; (12) "Purchaser" means a person, corporation, association, partnership, or other legal entity who enters into a prepaid tuition contract; (13) "Qualified beneficiary" means a designated beneficiary, as defined in 26 U.S.C. sec. 529(e)(1), who is: (a) A Kentucky resident designated as beneficiary at the time a purchaser enters into a prepaid tuition contract; or (b) A nonresident designated at the time a purchaser enters into a prepaid tuition contract who intends to attend an eligible institution in Kentucky; or (c) A new beneficiary, in the case of a change of beneficiaries under provisions of KRS 164A.707; or (d) An individual receiving a scholarship in the case of a prepaid tuition contract purchased by a state or local government or agency or instrumentality thereof or an organization described in 26 U.S.C. sec. 501(c)(3), and exempt from federal income taxation pursuant to 26 U.S.C. sec. 501(a) as part of a scholarship program offered by the government entity or the organization; (14) "Qualified postsecondary education expenses" means qualified higher education expenses as defined in 26 U.S.C. sec. 529(e)(3); (15) "Tuition" means the prevailing tuition and all mandatory fees charged as a condition of full-time enrollment in an undergraduate program for an academic year for a qualified beneficiary to attend an eligible educational institution; (16) "Tuition Account Program Office" or "office" means the office in the Kentucky Higher Education Assistance Authority that is responsible for administering the prepaid tuition program and its accounts; (17) "Tuition plan" means a tuition plan approved by the board and provided under a prepaid tuition contract; (18) "Utilization period" means: (a) For a prepaid tuition account depleted or terminated prior to June 27, 2019, the period of time in which a prepaid tuition contract is to be used beginning with the projected college entrance year and continuing for the number of prepaid tuition years purchased; or (b) For a prepaid tuition account not depleted or terminated as of June 27, 2019, the period of time in which a prepaid tuition contract is to be used beginning with the projected college entrance year and continuing for eight (8) years; and (19) "Value of a prepaid tuition account" means the amount which the fund is obligated to pay for a prepaid tuition contract, when a purchaser has paid it in full, that is calculated by multiplying the plan tuition amount for the academic period by the number of prepaid tuition years purchased, less any portion previously paid; except, under a tuition plan for private colleges and universities, tuition shall be calculated based on the same percentage that University of Kentucky tuition is increased from the year the prepaid tuition contract is purchased to the year of payment. Effective: June 27, 2019 History: Amended 2019 Ky. Acts ch. 9, sec. 1, effective June 27, 2019. -- Amended 2014 Ky. Acts ch. 34, sec. 1, effective July 15, 2014. -- Amended 2006 Ky. Acts ch. 252, Pt. XXXI, sec. 1, effective April 25, 2006. -- Amended 2005 Ky. Acts ch. 162, sec. 3, effective July 1, 2005. -- Amended 2002 Ky. Acts ch. 25, sec. 1, effective July 15, 2002. -- Created 2000 Ky. Acts ch. 163, sec. 1, effective July 14, 2000.

KRS 164A.701 Commonwealth postsecondary education prepaid tuition trust fund -- Prepaid postsecondary tuition administrative account

164A.701. Commonwealth postsecondary education prepaid tuition trust fund -- Prepaid postsecondary tuition administrative account (1) (a) There is hereby created an instrumentality of the Commonwealth to be known as the "Commonwealth postsecondary education prepaid tuition trust fund", to be governed by the board and administered by the Tuition Account Program Office. The fund shall be attached to the Kentucky Higher Education Assistance Authority for administrative and reporting purposes, and shall be governed, managed, and administered as a separate and distinct instrumentality of the Commonwealth under the provisions of KRS 164A.700 to 164A.709. (b) The fund shall consist of payments received from prepaid tuition contracts under KRS 164A.700 to 164A.709. Payments received relating to contracts in existence on April 25, 2006, and income earned from the investment of those payments shall be maintained separately from payments received relating to contracts entered into after April 25, 2006, and income earned from the investment of those payments. Income earned from the investment of payments to the fund shall remain in the fund and be credited to it. (c) Notwithstanding any other statute to the contrary, all moneys received under the authority of KRS 164A.700 to 164A.709 shall be deemed to be trust funds to be held and applied solely for payment to qualified beneficiaries and purchasers and to meet the expenses necessary for the administration and maintenance of the fund as provided in KRS 164A.700 to 164A.709. (d) The fund shall not constitute an investment company as defined in KRS 291.010. (e) Obligations under a prepaid tuition contract incurred in accordance with the provisions of KRS 164A.700 to 164A.709 shall not be deemed to constitute a debt, liability, or obligation of the Kentucky Higher Education Assistance Authority, but shall be payable solely from the fund. Each prepaid tuition contract shall contain a statement that the obligation shall be payable solely from the fund. (2) The purposes of the fund are: (a) To provide affordable access to participating institutions for the qualified beneficiaries; and (b) To provide students and their parents economic protection against rising tuition costs. (3) The Tuition Account Program Office and the facilities of the Kentucky Higher Education Assistance Authority shall be used and employed in the administration of the fund including, but not limited to, the keeping of records, the employment of staff to assist in the administration of the fund, the management of accounts and other investments, the transfer of funds, and the safekeeping of securities evidencing investments. (4) (a) Assets of the fund shall be invested in any of the following security types that are deemed appropriate by the board: 1. Government and agency bonds; 2. Investment grade asset-backed securities and corporate bonds; 3. Mortgages, excluding interest-only (IO), principal-only (PO), and inverse floaters; and 4. Equities. (b) Equities shall constitute no greater than sixty percent (60%) of the entire portfolio, including up to ten percent (10%) in equities from outside the United States. (c) The duration of the fixed-income portion of the portfolio shall reflect the future liability of the fund for tuition payments. (d) Assets may be pooled for investment purposes with any other investment of the Commonwealth that is eligible for asset pooling. (e) Leveraging is strictly prohibited. (5) The board may receive and deposit into the fund gifts made by any individual or agency as deemed acceptable by the board together with funds that are obtained from sources legally available and determined by the board to be applicable for the purposes of KRS 164A.700 to 164A.709. (6) There is created a separate account within the Kentucky Higher Education Assistance Authority to be known as the prepaid postsecondary tuition administrative account for the purposes of implementing and maintaining the fund. (a) Moneys shall be transferred from the fund to the administrative account to meet the expenses necessary for the administration and maintenance of the fund. Expenses incurred by the board and the Tuition Account Program Office in carrying out the provisions of KRS 164A.700 to 164A.709 shall be made payable from the fund through the administrative account, and no administrative expenses shall be incurred by the Kentucky Higher Education Assistance Authority beyond those for which moneys are provided by the fund. (b) The board may establish administrative fees for handling prepaid tuition contracts and deposit the funds attributable to the fees in the administrative account. Effective: July 14, 2018 History: Amended 2018 Ky. Acts ch. 163, sec. 88, effective July 14, 2018. -- Amended 2006 Ky. Acts ch. 252, Pt. XXXI, sec. 3, effective April 25, 2006. -- Amended 2005 Ky. Acts ch. 162, sec. 4, effective July 1, 2005. -- Amended 2002 Ky. Acts ch. 25, sec. 2, effective July 15, 2002. -- Created 2000 Ky. Acts ch. 163, sec. 2, effective July 14, 2000.

KRS 164A.703 Repealed, 2005

164A.703. Repealed, 2005 Catchline at repeal: Board of directors. History: Repealed 2005 Ky. Acts ch. 162, sec. 162, sec. 9, effective July 1, 2005; and amended ch. 85, sec. 600, effective June 20, 2005. -- Amended 2002 Ky. Acts ch. 25, sec. 3, effective July 15, 2002. -- Created 2000 Ky. Acts ch. 163, sec. 3, effective July 14, 2000. Legislative Research Commission Note (7/01/2005). Under KRS 446.260, the repeal of this section in 2005 Ky. Acts ch. 162 prevails over its amendment in 2005 Ky. Acts ch. 85.

KRS 164A.704 Duties of board

164A.704. Duties of board The board shall: (1) Promulgate administrative regulations, set fees, and adopt procedures as are necessary to implement the provisions of KRS 164A.700 to 164A.709; (2) Enter into contractual agreements, including contracts for legal, actuarial, financial, and consulting services; (3) Invest moneys in the fund in any instruments, obligations, securities, or property as permitted by KRS 164A.701(4) and deemed appropriate by the board; (4) Procure insurance to protect against any loss in connection with the fund's property, assets, or activities and to indemnify board members from personal loss or accountability from liability arising from any action or inaction as a board member; (5) Make arrangements with eligible educational institutions in the Commonwealth to fulfill obligations under prepaid tuition contracts, including, but not limited to, payment from the fund of the tuition cost on behalf of a qualified beneficiary to attend an eligible educational institution in which the beneficiary is admitted and enrolled; (6) Develop requirements, procedures, and guidelines regarding prepaid tuition contracts, including but not limited to, the termination, withdrawal, or transfer of payments under a prepaid tuition contract; tuition shortfalls; number of participants; time limitations for prepaid tuition contracts and the use of tuition benefits; tuition conversions; payment schedules; payroll deductions; penalties for failure of purchasers to adhere to contracts; and transfer of prepaid tuition credits towards private education in the Commonwealth or for out-of-state institutions; (7) Have the actuarial soundness of the fund evaluated by a nationally recognized independent actuary annually, by October 1 of each year, to determine: (a) The amount of prepaid tuition for each tuition plan; and for each eligible educational institution for specific academic years, the corresponding value; (b) Whether additional assets are necessary to defray the obligations of the portion of the fund relating to contracts entered into before April 25, 2006, and when those funds will be needed. 1. For purposes of this paragraph, a "real liability expected to accrue during the next biennium" exists if the amount in the fund representing contracts entered into before April 25, 2006, is not sufficient to meet all anticipated distributions under contracts entered into before April 25, 2006, and the expense of maintaining and operating the fund for the upcoming biennium. 2. If the report of the actuary submitted in an odd-numbered year reflects that there will be a real liability expected to accrue during the next biennium, the secretary of the Finance and Administration Cabinet shall include in the budget request for the cabinet an appropriation to the board in an amount necessary to meet the real liability in each fiscal year of the biennium, and the General Assembly shall appropriate the necessary funds; and (c) Whether additional assets are necessary to defray the obligations of the portion of the fund relating to contracts entered into after April 25, 2006, and when those funds will be needed. If the assets of the portion of the fund relating to contracts entered into after April 25, 2006, are insufficient to ensure the actuarial soundness of that portion of the fund, as reported by the actuary, the board shall adjust the price of subsequent purchases of prepaid tuition contracts to the extent necessary to restore the actuarial soundness of the fund. The board may suspend the sale of prepaid tuition contracts until the next annual actuarial evaluation is completed if the board determines the action is needed to restore the actuarial soundness of the fund. During a suspension of sales of contracts, the board and Tuition Account Program Office shall continue to service existing contract accounts and meet all obligations under existing prepaid tuition contracts; and (8) Make an annual report each year by November 1 to the Legislative Research Commission and the Governor showing the fund's condition, and whether additional assets will be necessary to defray the obligations of the fund. Effective: April 25, 2006 History: Amended 2006 Ky. Acts ch. 252, Pt. XXXI, sec. 4, effective April 25, 2006. -- Amended 2005 Ky. Acts ch. 162, sec. 5, effective July 1, 2005. -- Amended 2002 Ky. Acts ch. 25, sec. 4, effective July 15, 2002. -- Created 2000 Ky. Acts ch. 163, sec. 4, effective July 14, 2000.

KRS 164A.705 Obligations of fund and of purchaser or qualified beneficiary -- Limitation of liability -- Use of tuition account

164A.705. Obligations of fund and of purchaser or qualified beneficiary -- Limitation of liability -- Use of tuition account (1) The prepaid tuition contract entered into by the purchaser and the board shall constitute an irrevocable pledge and guarantee by the fund to pay for the tuition of a qualified beneficiary upon acceptance and enrollment at an eligible educational institution in accordance with the tuition plan purchased. (2) A board member or any employee of the Tuition Account Program Office or the Kentucky Higher Education Assistance Authority shall not be subject to any personal liability by reason of his or her issuance or execution of a prepaid tuition contract under KRS 164A.700 to 164A.709. (3) Under a tuition plan for private colleges and universities, tuition shall be paid based on the same percentage that University of Kentucky tuition is increased from the year the prepaid tuition contract is purchased to the year of payment. (4) The purchaser or qualified beneficiary shall pay to the eligible educational institution the amount of any prepaid tuition academic year conversion shortfall and the amount of any prepaid tuition conversion shortfall. (5) A qualified beneficiary attending an eligible educational institution may apply the value of a prepaid tuition account to a specific academic year at the maximum course load or maximum number of credit hours generally permitted to full-time undergraduates at that institution. (6) The value of a prepaid tuition account remaining after tuition is paid may be used for other qualified educational expenses under administrative regulations promulgated by the board in compliance with 26 U.S.C. sec. 529. The board may permit the use of the value of a prepaid tuition account for part-time undergraduate enrollment or graduate programs at eligible educational institutions. (7) During an account's utilization period, the value of the prepaid tuition account shall increase consistent with tuition rates for the applicable tuition plan and academic year. If all tuition benefits have not been used at the conclusion of this period, no additional value shall be added to the prepaid tuition account, except that, for an account with a utilization period defined in KRS 164A.700(18)(a), the account value shall increase at a rate of three percent (3%) per annum or the applicable tuition plan value increase, whichever is less, for a period not to exceed two (2) additional years. (8) If a qualified beneficiary attends an eligible educational institution for which payment of tuition is not guaranteed by the fund in whole or in part, and if the cost of tuition exceeds the value of a prepaid tuition account, the fund shall have no responsibility to pay the difference. If the value of a prepaid tuition account exceeds the cost of tuition, the excess may be used for other qualified postsecondary education expenses as directed by the purchaser. (9) The value of a prepaid tuition account shall not be used in calculating personal asset contribution for determining eligibility and need for student loan programs, student grant programs, or other student aid programs administered by any agency of the Commonwealth, except as otherwise may be provided by federal law. Effective: June 27, 2019 History: Amended 2019 Ky. Acts ch. 9, sec. 2, effective June 27, 2019. -- Amended 2014 Ky. Acts ch. 34, sec. 2, effective July 15, 2014. -- Amended 2006 Ky. Acts ch. 252, Pt. XXXI, sec. 5, effective April 25, 2006. -- Amended 2005 Ky. Acts ch. 162, sec. 6, effective July 1, 2005. -- Amended 2002 Ky. Acts ch. 25, sec. 5, effective July 15, 2002. -- Created 2000 Ky. Acts ch. 163, sec. 5, effective July 14, 2000.

KRS 164A.707 Prepaid tuition contracts -- Amendments -- Accounts not subject to creditors or taxes -- No guarantee of attendance at institution -- Payment of contracts -- Beneficiaries -- Investments and earnings -- Contracts not securities or annuities -- Contracts subject to amendment by subsequent change to statute, regulation, or policy

164A.707. Prepaid tuition contracts -- Amendments -- Accounts not subject to creditors or taxes -- No guarantee of attendance at institution -- Payment of contracts -- Beneficiaries -- Investments and earnings -- Contracts not securities or annuities -- Contracts subject to amendment by subsequent change to statute, regulation, or policy (1) Purchasers buying prepaid tuition for a qualified beneficiary shall enter into prepaid tuition contracts with the board. These contracts shall be in a form as shall be determined by the office. The contract shall provide for the purchase of a tuition plan for prepaid tuition for the qualified beneficiary from one (1) to five (5) specific academic years. (2) Upon written notification to the office a purchaser may amend the prepaid tuition contract to change: (a) The qualified beneficiary, in accordance with 26 U.S.C. sec. 529; (b) The projected college entrance year for which prepaid tuition is purchased. Beginning July 15, 2014, if the amendment extends the projected college entrance year, the utilization period shall begin with the initial projected college entrance year; (c) A tuition plan designation to another tuition plan designation; (d) The number of years for which prepaid tuition is purchased; or (e) Other provisions of the prepaid tuition contract as permitted by the board. (3) A prepaid tuition account shall not be subject to attachment, levy, or execution by any creditor of a purchaser or qualified beneficiary. Prepaid tuition accounts shall be exempt from all state and local taxes including, but not limited to, intangible personal property tax levied under KRS 132.020, individual income tax levied under KRS 141.020, and the inheritance tax levied under KRS Chapter 140. Payments from a prepaid tuition account used to pay qualified postsecondary education expenses, or disbursed due to the death or disability of the beneficiary, or receipt of a scholarship by the beneficiary shall be exempt from tax liabilities. (4) Nothing in KRS 164A.700 to 164A.709 or in a prepaid tuition contract shall be construed as a promise or guarantee that a qualified beneficiary shall be admitted to an eligible educational institution, be allowed to continue to attend an eligible educational institution after having been admitted, or be graduated from an eligible educational institution. (5) Prepaid tuition contract payments shall not be made in real or personal property other than cash and shall not exceed the prepaid tuition. Prepaid tuition contract payments may be made in a lump sum or installments. (6) The purchaser shall designate the qualified beneficiary at the time the purchaser enters into a prepaid tuition contract, except for a prepaid tuition contract purchased in accordance with KRS 164A.700(13)(d). In the case of gifts made to the fund, the board shall designate a qualified beneficiary at the time of the gift. (7) The prepaid tuition contract shall provide that the purchaser and the qualified beneficiary shall not directly or indirectly or otherwise control the investment of the prepaid tuition account or earnings on the account. Payments made for prepaid tuition shall be accounted for separately for each qualified beneficiary. No interest or earnings on a prepaid tuition contract of the purchaser or qualified beneficiary shall be pledged or otherwise encumbered as security of a debt. (8) A prepaid tuition contract does not constitute a security as defined in KRS 292.310 or an annuity as defined in KRS 304.5-030. (9) Each prepaid tuition contract is subject to, and shall incorporate by reference, all operating procedures and policies adopted by the board, the statutes governing prepaid tuition contracts in KRS 164A.700 to 164A.709, and administrative regulations promulgated thereunder. Any amendments to statutes, administrative regulations, and operating procedures and policies shall automatically amend prepaid tuition contracts, with retroactive or prospective effect, as applicable. Effective: July 14, 2018 History: Amended 2018 Ky. Acts ch. 163, sec. 89, effective July 14, 2018. -- Amended 2014 Ky. Acts ch. 34, sec. 3, effective July 15, 2014. -- Amended 2006 Ky. Acts ch. 252, Pt. XXXI, sec. 6, effective April 25, 2006. -- Amended 2005 Ky. Acts ch. 162, sec. 7, effective July 1, 2005; and ch. 173, Pt. XXI, sec. 1, effective March 20, 2005. -- Amended 2002 Ky. Acts ch. 25, sec. 6, effective July 15, 2002. -- Created 2000 Ky. Acts ch. 163, sec. 6, effective July 14, 2000.

KRS 164A.708 Prepaid tuition contracts entered into before and after April 25, 2006 -- Obligations of the Commonwealth

164A.708. Prepaid tuition contracts entered into before and after April 25, 2006 -- Obligations of the Commonwealth (1) (a) All prepaid tuition contracts in existence on April 25, 2006, shall be supported by the full faith and credit of the Commonwealth. (b) If the report of the actuary submitted under KRS 164A.704(7) reflects that there will be a real liability expected to accrue for contracts in existence on April 25, 2006, during the next biennium, the secretary of the Finance and Administration Cabinet shall include in the budget request for the cabinet an appropriation to the board in an amount necessary to meet the real liability in each fiscal year of the biennium, and the General Assembly shall appropriate the necessary funds to meet the liability. (2) (a) New contracts entered into after April 25, 2006, for a tuition plan approved by the board shall contain actuarially sound premiums sufficient to prevent their contribution to a program fund deficit. (b) Payments received from contracts entered into after April 25, 2006, shall be maintained separately from contracts in existence on April 25, 2006. (c) The Commonwealth shall have no obligation to support contracts entered into after April 25, 2006, with appropriations if a shortfall occurs. Effective: April 25, 2006 History: Created 2006 Ky. Acts ch. 252, Pt. XXXI, sec. 2, effective April 25, 2006.

KRS 164A.709 Termination of prepaid tuition contract or account -- Transfer of funds - - Operations of Commonwealth postsecondary education prepaid tuition trust fund and the Tuition Account Program Office to end on June 30, 2030

164A.709. Termination of prepaid tuition contract or account -- Transfer of funds - - Operations of Commonwealth postsecondary education prepaid tuition trust fund and the Tuition Account Program Office to end on June 30, 2030 (1) A purchaser may terminate a prepaid tuition contract at any time upon written request to the office. (2) Upon termination of a prepaid tuition contract at the request of a purchaser, the office shall pay from the fund to the purchaser: (a) The value of the prepaid tuition account or, if the contract has not been paid in full, a pro rata amount calculated according to the portion of the plan that had been paid, if the contract is terminated for the death of the qualified beneficiary or the disability of the qualified beneficiary that, in the opinion of the office, would make attendance by the beneficiary at an eligible educational institution impossible or unreasonably burdensome; (b) The amounts paid on the purchaser's prepaid tuition contract if the contract is terminated and a request for refund is made before July 1 of the qualified beneficiary's projected college entrance year. The board may determine a rate of interest to accrue for payment on the amount otherwise payable under this paragraph; (c) For a prepaid tuition account terminated after June 30 of the qualified beneficiary's projected college entrance year and prior to June 27, 2019: 1. The value of the prepaid tuition account for the 2014-2015 academic year for accounts with a utilization period end date prior to 2012; or 2. The value of the prepaid tuition account at the end of the account's utilization period plus three percent (3%) per annum for a maximum of two (2) years thereafter, or the applicable tuition plan value increase, whichever is less, for accounts with a utilization period end date of 2012 or later; or (d) For a prepaid tuition account terminated after June 30 of the qualified beneficiary's projected college entrance year and on or after June 27, 2019, the value of the prepaid tuition account at the time of termination. (3) All refunds paid shall be less any benefits previously paid from the plan and any administrative fees as determined by the board. The office may impose a fee upon termination of the account for administrative costs and deduct the fee from the amount otherwise payable under this section. (4) If a qualified beneficiary is awarded a scholarship that covers tuition costs included in a prepaid tuition contract, the purchaser may request a refund consisting of the amount of the value of the prepaid tuition account, not to exceed the amount of the scholarship. (5) If the purchaser wishes to transfer funds from the prepaid tuition account to the Kentucky Educational Savings Plan Trust, the purchaser may do so under administrative regulations promulgated by the board and the board of directors of the Kentucky Educational Savings Plan Trust under KRS 164A.325. The transfer amount shall be calculated in the same way a refund is determined in accordance with this section. (6) If the purchaser wishes to transfer funds from the prepaid tuition account to another qualified tuition program as defined in 26 U.S.C. sec. 529(b)(1), the purchaser may do so under administrative regulations promulgated by the board. The transfer amount shall be calculated in the same way a refund is determined in accordance with this section. (7) The board may terminate a prepaid tuition contract at any time due to the fraud or misrepresentation of a purchaser or qualified beneficiary with respect to the prepaid tuition contract. (8) All operations of the Commonwealth postsecondary education prepaid tuition trust fund and the Tuition Account Program Office shall end on June 30, 2030. On or before that date, any remaining prepaid tuition account funds that have not been utilized, transferred to another qualified tuition program, or refunded upon the request of the purchaser shall be refunded to the purchaser in accordance with subsection (2) of this section. Effective: June 27, 2019 History: Amended 2019 Ky. Acts ch. 9, sec. 3, effective June 27, 2019. -- Amended 2014 Ky. Acts ch. 34, sec. 4, effective July 15, 2014. -- Amended 2006 Ky. Acts ch. 252, Pt. XXXI, sec. 7, effective April 25, 2006. -- Amended 2005 Ky. Acts ch. 162, sec. 8, effective July 1, 2005. -- Amended 2002 Ky. Acts ch. 25, sec. 7, effective July 15, 2002. -- Created 2000 Ky. Acts ch. 163, sec. 7, effective July 14, 2000.

KRS 164A.800 Creation of fund

164A.800. Creation of fund There is hereby created a mining and minerals trust fund, hereinafter referred to as the "fund." Effective: July 15, 1982 History: Created 1982 Ky. Acts ch. 260, sec. 1, effective July 15, 1982.

KRS 164A.805 Board of trustees -- Appointment -- Terms -- General powers

164A.805. Board of trustees -- Appointment -- Terms -- General powers (1) There is established a mining and minerals trust fund at the University of Kentucky under the control and direction of a board of trustees. The board of trustees shall consist of three (3) members of the university board of trustees appointed by the chairman of that board; two (2) members appointed by the Speaker of the House of Representatives of the Kentucky General Assembly; and two (2) members appointed by the President of the Senate of the Kentucky General Assembly. For the first term, one (1) appointment each shall be for one (1) year. All other appointments and all subsequent appointments shall be for two (2) years. (2) The members shall select from themselves one (1) member to serve as chairman. The members shall serve without pay but shall be entitled to reasonable expense reimbursement from the fund. (3) The board may receive and accept for deposit in the fund bequests, gifts, grants, and any appropriations by the General Assembly and may make decisions regarding disbursal of those funds consistent with the provisions of KRS 164A.800 to 164A.840. Effective: July 15, 1994 History: Amended 1994 Ky. Acts ch. 486, sec. 28, effective July 15, 1994. -- Created 1982 Ky. Acts ch. 260, sec. 4, effective July 15, 1982.

KRS 164A.810 Funds -- Deposit -- Investment -- Purpose

164A.810. Funds -- Deposit -- Investment -- Purpose (1) All moneys received by the mining and minerals trust fund shall be deposited in the State Treasury in a separate account entitled "mining and minerals research." The Treasurer of the Commonwealth shall, by the 10th day of each month, issue a check to the trustee of the mining and minerals trust fund in an amount equal to the balance of funds in the account at the close of business on the last business day of the preceding month. Idle funds in the account shall be invested, consistent with disbursement requirements, by the Treasurer and investment earnings shall accrue to the state general fund. (2) Moneys deposited in the mining and minerals trust fund in fiscal years 1982-83 and 1983-84 are appropriated for the purposes contained in subsection (1) of KRS 164A.820. Effective: July 15, 1982 History: Created 1982 Ky. Acts ch. 260, secs. 2 and 3, effective July 15, 1982.

KRS 164A.815 Records -- Reports

164A.815. Records -- Reports Records shall be maintained for all receipts and disbursements from the fund and an annual audit of the transactions shall be conducted as part of the University of Kentucky annual audit at the end of each fiscal year. A quarterly financial report shall be prepared by the trustees and a copy of this report shall be submitted to the executive director of the Legislative Research Commission and to the Governor. Effective: July 15, 1982 History: Created 1982 Ky. Acts ch. 260, sec. 5, effective July 15, 1982.

KRS 164A.820 Use of fund -- Separate budget required

164A.820. Use of fund -- Separate budget required (1) The fund shall be used to defray the costs of debt service to retire revenue bonds issued to defray the costs of constructing and equipping any mining and minerals building authorized by the General Assembly for construction on the University of Kentucky campus. Idle funds shall be invested as provided by law for funds of the University of Kentucky. Investment earnings shall be deposited in the fund. (2) A separate budget for required debt service on a mining and minerals building shall be submitted in accordance with KRS Chapter 45. Effective: July 15, 1986 History: Amended 1986 Ky. Acts ch. 232, sec. 1, effective July 15, 1986. -- Created 1982 Ky. Acts ch. 260, secs. 6 and 7, effective July 15, 1982.

KRS 164A.830 Revenue bonds -- University of Kentucky may issue

164A.830. Revenue bonds -- University of Kentucky may issue The University of Kentucky may issue revenue bonds to provide for the construction of a building to house the School of Mines and Minerals. Effective: July 15, 1982 History: Created 1982 Ky. Acts ch. 260, sec. 8, effective July 15, 1982.

KRS 164A.840 Source of funds

164A.840. Source of funds Each fiscal year all license, permit, and acreage fees, collected by the Energy and Environment Cabinet and which are related to mining or minerals, shall be deposited to the credit of the mining and minerals trust fund in an amount not to exceed the annual debt service required for a mining and minerals building. Effective: July 15, 2010 History: Amended 2010 Ky. Acts ch. 24, sec. 226, effective July 15, 2010. -- Amended 1986 Ky. Acts ch. 232, sec. 2, effective July 15, 1986. -- Created 1982 Ky. Acts ch. 260, sec. 9, effective July 15, 1982.

Source: Kentucky Legislative Research Commission (legislature.ky.gov)URL: https://apps.legislature.ky.gov/law/statutes/chapter.aspx?id=37930Fetched: 10/20/2026