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Capital Projects and Bond Oversight Committee

 

 

 

 

 

 

 

 

 

Updated November 4, 2009

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COMMITTEE OVERSIGHT FUNCTION

The Capital Projecs and Bond Oversight Committee (Committee) oversees 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 Finance and Administration Cabinet manages and reports proposed
    changes relating to the capital projects of Executive Branch agencies and
    several state postsecondary educational institutions.

  • The University of Kentucky, the University of Louisville, Murray State
    University, Northern Kentucky University, and Western Kentucky University  manage their own capital construction programs and report any related proposed changes to the Committee.

  • The Legislative and Judicial Branches 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 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 Committee for review.  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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