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Updated
August 9, 2006
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COMMITTEE
OVERSIGHT FUNCTION
The
Committee is the General Assembly's "watch dog" during the interim for the
state's capital construction projects, bond issuance and the related projects, and real
property leases. There are a number of proposed actions state agencies are required to
submit to the Committee for its review and/or approval.
The
University of Kentucky, the University of Louisville, Murray State
University, and Western Kentucky University manage their own capital
construction programs and report any related proposed changes to the
Committee.
The
Office of Financial Management reports the proposed issuance of all
state bonds, as well as the projects to be funded by the bonds. In addition,
the Office reports on school district bonds with participation by the School
Facilities Construction Commission.
When
the Committee fails to approve or disapproves a proposed action, the head of the
requesting entity (in most instances, the Secretary of the Finance and Administration
Cabinet) must advise the Committee in writing within 30 days whether the agency will
revise the action to address the Committee's objections, cancel the action, or proceed
with the proposed action despite the Committee's objections. If, in review of a capital
project, a lease procurement, or bond issue, the Committee determines statutory
requirements are not being met, the Committee is directed, pursuant to KRS 45.795, to request the Legislative
Research Commission to seek an injunction to prohibit further action on the capital
project or bond issue.
Background: The
Capital Construction and Equipment Purchase Oversight Committee was established by the
General Assembly in an Extraordinary Session in 1979 to oversee the state's capital
construction program. In 1988, the General Assembly broadened the scope of the Committee's
jurisdiction to include oversight of state bond issues and the name was changed to the
Capital Projects and Bond Oversight Committee. Pursuant to KRS 45.790, the Capital Projects and
Bond Oversight Committee is composed of eight legislative members, appointed for two-year
terms which are not staggered. Members from each chamber elect a co-chair to serve for
two-year terms. Any action taken by the Committee requires a vote of a majority of its
entire membership. The regular monthly meeting date, currently, is the third
Tuesday of the month.
Authorization
of Capital Projects
With
few exceptions, capital projects with a value greater than $600,000 (capital construction
item and information technology systems) or $200,000 (equipment) must be included as a
line-item in an enacted budget of the General Assembly. new unbudgeted projects that use
at least 50% private or federal funding are permitted if first submitted to the Capital
Projects and Bond Oversight Committee for review. Similarly, energy efficiency projects
are permitted if first submitted to the Committee for review and if energy cost savings
are projected to produce a payback in five years or less. Purchases of unbudgeted
equipment for medical, scientific, or research purposes are permitted as unbudgeted
projects but are required to be reported to the Committee. Projects addressing emergency
situations do not need to be authorized by the General Assembly.
Project authorization may be carried over from one biennium to another without specific
authorization in the new budget, depending on the project's stage of development. The
2006-08 enacted state Executive Budget terminated any existing line-item capital
construction project on June 30, 2006 unless: (1) a construction contract had been
obtained; (2) a purchase order executed; (3) in the case of bond-authorized projects,
permanent financing or short-term line of credit for the authorized scope had been
obtained; or (4) grant or loan agreements had been finalized. Projects are to be
constructed consistent with the purpose, location, and configuration set forth in the
budget bill, the statutory budget memorandum, and other supporting documentation.
Capital
Projects Home Page
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