RELATES TO:
KRS
161.430
NECESSITY, FUNCTION, AND CONFORMITY:
KRS
161.430(1) provides that the
board of trustees shall give priority to the investment of funds in obligations
calculated to improve the industrial development and enforce the economic
welfare of the Commonwealth. This administrative regulation sets out guidelines
to be followed in investing in obligations of the Kentucky Industrial
Development Finance Authority.
Section
1.
(1) The board of trustees
will consider requests by the Kentucky Industrial Development Finance Authority
for loans when loan requests are submitted. Requests shall be made in writing
thirty (30) days in advance of the time funds are needed and shall be signed by
the chairman of the authority. Each request shall contain a reference to the
action of the authority authorizing the request for the loan. Any loan made
pursuant to the request of the authority shall be evidenced by an instrument or
instruments of indebtedness executed by the authority and signed by the
chairman. All instruments shall be approved by the Attorney General. Any
transfer of funds shall be by interaccount bill as provided in
KRS 154.170.
(2) The investment committee shall review
each request and approve or disapprove the request subject to the action of the
board of trustees.
(3) Loans made
to the authority shall bear interest, payable semiannually, on July 1 and
January 1, at a rate of return equal to that available on corporate bonds,
rated AA or the equivalent by one (1) or more nationally recognized rating
services, of the most recent issue. In the event more than one (1) issue has
been offered on the same date, the rate available on the largest issue shall be
used.
(4) Loans made to the
authority shall be for a period of not more than twenty-five (25) years. During
the first five (5) years of these loans, interest shall be paid as set forth in
subsection (3) of this section, and the authority shall have the right to pay
all or any part of the principal during this period. Beginning with the sixth
year, the authority shall pay interest and at least that percentage of the
remaining principal balance necessary to retire the loan within the remaining
life of the loan.
(5) The authority
shall furnish to the board of trustees an annual financial statement of its
accounts.
(6) During any fiscal
year, the amount of funds loaned to the authority by the Teachers' Retirement
System shall be in the same proportion to the total amount loaned as the assets
of the Teachers' Retirement System are to the total assets of all the
retirement systems.
