Kentucky Revised Statutes Title VI. Financial Administration § Appendix A, Pt. III Appendix A, Pt. III. State/Executive Branch Budget

1. Funds Designations: Restricted Funds designated in the biennial budget bills are classified in the state financial records and reports as the Agency Revenue Fund, State Enterprise Funds (State Parks, State Fair Board, Insurance Administration, and Kentucky Horse Park), Internal Services Funds (Fleet Management, Computer Services, Correctional Industries, Central Printing, Risk Management, and Property Management), and selected Fiduciary Funds (Other Expendable Trust Funds). Separate fund records and reports shall be maintained in a manner consistent with the branch budget bills.

The sources of Restricted Funds appropriations in this Act shall include all fees (which includes fees for room and board, athletics, and student activities) and rentals, admittances, sales, bond proceeds, licenses collected by law, gifts, subventions, contributions, income from investments, and other miscellaneous receipts produced or received by a budget unit, except as otherwise specifically provided, for the purposes, use, and benefit of the budget unit as authorized by law. Restricted Funds receipts shall be credited and allotted to the respective fund or account out of which a specified appropriation is made in this Act. All receipts of Restricted Funds shall be deposited in the State Treasury and credited to the proper account as provided in KRS Chapters 12, 42, 45, and 48.

The sources of Federal Funds appropriations in this Act shall include federal subventions, grants, contracts, or other Federal Funds received, income from investments, other miscellaneous federal receipts received by a budget unit, and the Unemployment Compensation Fund, except as otherwise provided, for the purposes, use, and benefit of the budget unit as authorized by law. Federal Funds receipts shall be credited and allotted to the respective fund account out of which a specified appropriation is made in this Act. All Federal Funds receipts shall be deposited in the State Treasury and credited to the proper account as provided in KRS Chapters 12, 42, 45, and 48.

2. Expenditure of Excess Restricted Funds or Federal Funds Receipts: If receipts received or credited to the Restricted Funds accounts or Federal Funds accounts of a budget unit during fiscal year 2024-2025 or fiscal year 2025-2026, and any balance forwarded to the credit of these same accounts from the previous fiscal year, exceed the appropriation made by a specific sum for these accounts of the budget unit as provided in Part I, Operating Budget, of this Act, for the fiscal year in which the excess occurs, the excess funds in the accounts of the budget unit shall become available for expenditure for the purpose of the account during the fiscal year only upon compliance with the conditions and procedures specified in KRS 48.400, 48.500, 48.600, 48.605, 48.620, 48.630, 48.730, and 48.800, and with the authorization of the State Budget Director and approval of the Secretary of the Finance and Administration Cabinet.

Prior to authorizing the appropriation of any excess, unbudgeted Restricted Funds pursuant to this section, the State Budget Director and the Secretary of the Finance and Administration Cabinet shall review the adequacy of the General Fund Surplus Account with respect to its availability to support authorized expenditures from the General Fund Surplus Account, known as Necessary Government Expenses. If General Fund Surplus Account moneys are determined by this review to be adequate to meet known or anticipated Necessary Government Expenses during fiscal year 2024-2025 or fiscal year 2025-2026, respectively, then the appropriation increase may be approved. If the review indicates that there are insufficient funds available or reasonably estimated to become available to the General Fund Surplus Account to meet known or projected Necessary Government Expenses for the fiscal years enumerated above, the State Budget Director and the Secretary of the Finance and Administration Cabinet may disapprove the request for additional Restricted Funds expenditure authority and may direct the excess Restricted Funds identified to the General Fund Surplus Account in order to meet Necessary Government Expense obligations. The results of any review shall be reported to the Interim Joint Committee on Appropriations and Revenue in accordance with KRS 48.400, 48.500, 48.600, 48.605, 48.610, 48.620, 48.630, 48.730, and 48.800.

Any request made by a budget unit pursuant to KRS 48.630 that relates to Restricted Funds or Federal Funds shall include documentation showing a comparative statement of revised estimated receipts by fund source and the proposed expenditures by proposed use, with the appropriated sums specified in the Budget of the Commonwealth, and statements which explain the cause, source, and use for any variances which may exist.

Notwithstanding KRS 48.630(2), any request for allotment of unbudgeted appropriations from any fund source shall be made in writing 14 days in advance of any allotment revision by the head of the budget unit and transmitted simultaneously to the State Budget Director and the Interim Joint Committee on Appropriations and Revenue. The State Budget Director shall report all approved revisions of unbudgeted appropriations to the Interim Joint Committee on Appropriations and Revenue within 14 days of the revision. This report shall include analysis, including but not limited to the amount, necessity, remaining unbudgeted funds, and anticipated future needs for unbudgeted funds.

Each budget unit shall submit its reports in print and electronic format consistent with the Restricted Funds and Federal Funds records contained in the fiscal biennium 2024-2026 Branch Budget Request Manual and according to the following schedule in each fiscal year: (a) on or before the beginning of each fiscal year; (b) on or before October 1; (c) on or before January 1; and (d) on or before April 1.

3. Interim Appropriation Increases: No appropriation from any fund source shall exceed the sum specified in this Act until the agency has documented the necessity, purpose, use, and source, and the documentation has been submitted to the Interim Joint Committee on Appropriations and Revenue for its review and action in accordance with KRS 48.630 and Section 2. of this Part. Proposed revisions to an appropriation contained in the enacted State/Executive Branch Budget or allotment of an unbudgeted appropriation shall conform to the conditions and procedures of KRS 48.630 and this Act.

4. Revision of Appropriation Allotments: Allotments within appropriated sums for the activities and purposes contained in the enacted State/Executive Branch Budget shall conform to KRS 48.610 and may be revised pursuant to KRS 48.605 and this Act.

5. Permitted Appropriation Obligations: No state agency, cabinet, department, office, or program shall incur any obligation against the General Fund or Road Fund appropriations contained in this Act unless the obligation may be reasonably determined to have been contemplated in the enacted State/Executive Branch Budget and is based upon supporting documentation considered by the General Assembly and legislative and executive records.

6. Lapse of General Fund or Road Fund Appropriations Supplanted by Federal Funds: Notwithstanding KRS 45.229, any General Fund appropriation made in anticipation of a lack, loss, or reduction of Federal Funds shall lapse to the Budget Reserve Trust Fund Account (KRS 48.705) to the extent the Federal Funds otherwise become available. Any Road Fund appropriation made in anticipation of a lack, loss, or reduction of Federal Funds shall lapse to the Road Fund Surplus Account to the extent the Federal Funds otherwise become available.

7. Federally Funded Agencies: A state agency entitled to Federal Funds, which would represent 100 percent of the cost of a program, shall conform to KRS 48.730.

8. Lapse of General Fund or Road Fund Excess Debt Service Appropriations: Notwithstanding KRS 48.720, any excess General Fund debt service shall lapse to the Budget Reserve Trust Fund Account (KRS 48.705) unless otherwise directed in this Act. Pursuant to KRS 48.720, any excess Road Fund debt service shall lapse to the Road Fund Surplus Account unless otherwise directed in this Act.

9. Statutes in Conflict: All statutes and portions of statutes in conflict with any of the provisions of this Act, to the extent of the conflict, are suspended unless otherwise provided by this Act.

10. Interpretation of Appropriations: Notwithstanding KRS 48.500, all questions that arise in interpreting this Act and the Transportation Cabinet budget shall be decided by the Attorney General, and the decision of the Attorney General shall be final and conclusive.

11. Publication of the Budget of the Commonwealth: The State Budget Director shall cause the Governor's Office for Policy and Management, within 60 days of adjournment of the 2024 Regular Session of the General Assembly, to publish a final enacted budget document, styled the Budget of the Commonwealth, based upon the Legislative Branch Budget, State/Executive Branch Budget, Transportation Cabinet Budget, and Judicial Branch Budget as enacted by the 2024 Regular Session, as well as other Acts which contain appropriation provisions for the 2024-2026 fiscal biennium, and based upon supporting documentation and legislative records as considered by the 2024 Regular Session. This document shall include, for each agency and budget unit, a consolidated budget summary statement of available regular and continuing appropriated revenue by fund source, corresponding appropriation allocations by program or subprogram as appropriate, budget expenditures by principal budget class, and any other fiscal data and commentary considered necessary for budget execution by the Governor's Office for Policy and Management and oversight by the Interim Joint Committee on Appropriations and Revenue. The enacted State/Executive Branch Budget and Transportation Cabinet Budget shall be revised or adjusted only upon approval by the Governor's Office for Policy and Management as provided in each Part of this Act and by KRS 48.400 to 48.810, and upon review and approval by the Interim Joint Committee on Appropriations and Revenue.

12. State Financial Condition: Pursuant to KRS 48.400, the State Budget Director shall monitor and report on the financial condition of the Commonwealth.

13. Prorating Administrative Costs: The Secretary of the Finance and Administration Cabinet is authorized to establish a system or formula or a combination of both for prorating the administrative costs of the Finance and Administration Cabinet, the Department of the Treasury, and the Office of the Attorney General relative to the administration of programs in which there is joint participation by the state and federal governments for the purpose of receiving the maximum amount of participation permitted under the appropriate federal laws and regulations governing the programs. The receipts and allotments under this section shall be reported to the Interim Joint Committee on Appropriations and Revenue prior to any transfer of funds.

14. Construction of Budget Provisions Regarding Executive Reorganization Orders: Nothing in this Act shall be construed to confirm or ratify, under KRS 12.028, any executive reorganization order unless the executive order was confirmed or ratified by appropriate amendment to the Kentucky Revised Statutes in another Act of the 2024 Regular Session of the General Assembly.

15. Executive Orders: For the purpose of ensuring transparent government, the Governor shall provide a comprehensive report to the Legislative Research Commission simultaneously with each and every executive order issued pertaining to:

16. Tax Expenditure Revenue Loss Estimates: By September 1 of each fiscal year, the Office of State Budget Director shall provide to each branch of government detailed estimates for the General Fund and Road Fund for the current and next two fiscal years of the revenue loss resulting from tax expenditures. The Department of Revenue shall provide assistance and furnish data, which is not restricted by KRS 131.190. “Tax expenditure” as used in this section means an exemption, exclusion, or deduction from the base of a tax, a credit against the tax, a deferral of a tax, or a preferential tax rate. The estimates shall include for each tax expenditure the amount of revenue loss, a citation of the legal authority for the tax expenditure, the year in which it was enacted, and the tax year in which it became effective.

17. Duplicate Appropriations: Any appropriation item and sum in Parts I to X of this Act and in an appropriation provision in any Act of the 2024 Regular Session which constitutes a duplicate appropriation shall be governed by KRS 48.312.

18. Priority of Individual Appropriations:KRS 48.313 shall control when a total or subtotal figure in this Act conflicts with the sum of the appropriations of which it consists.

19. Severability of Budget Provisions: Appropriation items and sums in Parts I to X of this Act shall conform to KRS 48.311. If any section, any subsection, or any provision is found by a court of competent jurisdiction in a final, unappealable order to be invalid or unconstitutional, the decision of the courts shall not affect or impair any of the remaining sections, subsections, or provisions.

20. Unclaimed Lottery Prize Money: For fiscal year 2024-2025 and fiscal year 2025-2026, all unclaimed lottery prize money under KRS 154A.110(3) shall be credited to the Kentucky Educational Excellence Scholarship Reserve Account to be held as a subsidiary account within the Finance and Administration Cabinet for the purpose of funding the KEES Program as appropriated in this Act. If the Kentucky Higher Education Assistance Authority certifies to the State Budget Director that the appropriations in this Act for the KEES Program under the existing award schedule are insufficient to meet funds required for eligible applicants, then the State Budget Director shall provide the necessary allotment of funds in the balance of the KEES Reserve Account to fund the KEES Program. Actions taken under this section shall be reported to the Interim Joint Committee on Appropriations and Revenue on a timely basis.

21. Workers' Compensation: Notwithstanding KRS 342.340(1) and 803 KAR 25:021, Section 4, the Personnel Cabinet shall be exempt from procuring excess risk insurance in fiscal year 2024-2025 and fiscal year 2025-2026 for the Workers' Compensation Benefits and Reserve Program administered by the Cabinet.

22. Carry Forward and Undesignated General Fund and Road Fund Carry Forward: Notwithstanding KRS 48.700 and 48.705, and other Parts of this Act, the Secretary of the Finance and Administration Cabinet shall determine and certify, within 30 days of the close of fiscal year 2023-2024 and fiscal year 2024-2025, the actual amount of undesignated balance of the General Fund and the Road Fund for the year just ended. The amounts from the undesignated fiscal year 2023-2024 and fiscal year 2024-2025 General Fund and Road Fund balances that are designated and carried forward for budgeted purposes in the 2024-2026 fiscal biennium shall be determined by the State Budget Director during the close of the respective fiscal year and shall be reported to the Interim Joint Committee on Appropriations and Revenue within 30 days of the close of the fiscal year. Any General Fund undesignated balance in excess of the amount designated for budgeted purposes under this section shall be made available for the General Fund Surplus Expenditure Plan contained in Part VII of this Act unless otherwise provided in this Act. The Road Fund undesignated balance in excess of the amount designated for budgeted purposes under this section shall be made available for the Road Fund Surplus Expenditure Plan contained in Part IX of this Act unless otherwise provided in this Act.

23. Reallocation of Appropriations Among Budget Units: Notwithstanding any statute to the contrary, or provisions of this Act, the Secretary of a Cabinet, the Commissioner of the Department of Education, and other agency heads may request a reallocation among budget units under his or her administrative authority up to five percent of General Fund appropriations contained in Part I, Operating Budget, of this Act for fiscal years 2023-2024, 2024-2025, and 2025-2026 for approval by the State Budget Director. A request shall explain the need and use for the transfer authority under this section. The amount of transfer of General Fund appropriations shall be separately recorded and reported in the system of financial accounts and reports provided in KRS Chapter 45. The State Budget Director shall report a transfer made under this section, in writing, to the Interim Joint Committee on Appropriations and Revenue.

24. Budget Implementation: The General Assembly directs that the Executive Branch shall carry out all appropriations and budgetary language provisions as contained in the State/Executive Branch Budget. The Legislative Research Commission shall review quarterly expenditure data to determine if an agency is out of compliance with this directive. If the Legislative Research Commission suspects that any entity has acted in non-conformity with this section, the Legislative Research Commission may order an audit or review at the agency's expense. Such audit findings, reviews, and reports shall be subject to the Kentucky Open Records Law. The Secretary of each Cabinet, the Commissioner of Education, or agency head shall provide a comprehensive semiannual report, beginning February 1, 2025, to the standing Appropriations and Revenue Committees of the General Assembly or the Interim Joint Committee on Appropriations and Revenue, as appropriate, detailing expenditures related to the appropriations contained within the budgetary language provisions for each budget unit within their cabinet. If an agency does not expend the full General Fund appropriation contained within a budgetary language provision, the unexpended funds shall be transferred to the Budget Reserve Trust Fund Account (KRS 48.705).

25. Appropriations Expenditure Purpose and Transfer Restrictions: Funds appropriated in this Act shall be expended only for the purposes specified and authorized by the General Assembly in this Act. No funds appropriated in this Act shall be transferred to or between any cabinet, department, board, commission, institution, agency, or budget unit of state government unless specifically authorized by the General Assembly in this Act and KRS 48.400 to 48.810. Semiannually, beginning February 1, 2025, the State Budget Director shall submit a letter to the Legislative Research Commission certifying any known violations of any provision of this section for that six-month period or any prior six-month period. Compliance with the provisions of this section shall be reviewed and determined by the Interim Joint Committee on Appropriations and Revenue.

26. Information Technology: All authorized computer information technology projects shall submit a semiannual progress report to the Capital Projects and Bond Oversight Committee. The reporting process shall begin six months after the project is authorized and shall continue through completion of the project. The initial report shall establish a timeline for completion and cash disbursement schedule. Each subsequent report shall update the timeline and budgetary status of the project and explain in detail any issues with completion date and funding.

27. Equipment Service Contracts and Energy Efficiency Measures: The General Assembly mandates that the Finance and Administration Cabinet review all equipment service contracts to maximize savings to the Commonwealth to strictly adhere to the provisions of KRS 56.772, 56.782, and 56.784 in maximizing the use of energy efficiency measures.

28. Debt Restructuring: Notwithstanding any other provision of the Kentucky Revised Statutes, no General Fund or Road Fund debt restructuring transactions shall be undertaken during the 2024-2026 fiscal biennium.

29. Effects of Subsequent Legislation: If any measure enacted during the 2024 Regular Session of the General Assembly subsequent to this Act contains an appropriation or is projected to increase or decrease General Fund revenues, the amount in the Budget Reserve Trust Fund shall be revised to accommodate the appropriation or the reduction or increase in projected revenues. Notwithstanding any provision of KRS 48.120(3) and (4) to the contrary, the official enacted revenue estimates of the Commonwealth described in KRS 48.120(4) shall be adjusted at the conclusion of the 2024 Regular Session of the General Assembly, respectively, to incorporate any projected revenue increases or decreases that will occur as a result of actions taken by the General Assembly subsequent to the passage of this Act by both chambers.

30. Permitted Use of Water and Sewer Bond Funds: Notwithstanding Part II, (3) of this Act and any statute to the contrary, any balances remaining for either closed or open project grant agreements authorized pursuant to bond pools set forth in 2003 Ky. Acts ch. 156, Part II, A., 3., d. Water and Sewer Resources Development Fund for Tobacco Counties and e. Water and Sewer Resources Development Fund For Coal Producing Counties; 2005 Ky. Acts ch. 173, Part II, A., 3., 003. Infrastructure for Economic Development Fund for Coal-Producing Counties and 004. Infrastructure for Economic Development Fund for Tobacco Counties; 2006 Ky. Acts ch. 252, Part II, A., 2., 003. Infrastructure for Economic Development Fund for Non-Coal Producing Counties and 004. Infrastructure for Economic Development Fund for Coal-Producing Counties; 2008 Ky. Acts ch. 123, Section 3., 004. Infrastructure for Economic Development Fund for Coal-Producing Counties and 005. Infrastructure for Economic Development Fund for Non-Coal Producing Counties; 2008 Ky. Acts ch. 174, Section 2.; and 2009 Ky. Acts ch. 87, Section 2. shall not lapse and shall remain to the credit of projects previously authorized by the General Assembly unless expressly reauthorized and reallocated by action of the General Assembly.

31. COVID-19 Federal Funds: No Federal Funds received from the Coronavirus Aid, Relief, and Economic Security (CARES) Act or any other Federal Funds related to the COVID-19 emergency response shall be used to establish any new programs unless those new programs can be fully supported from existing appropriation amounts once all of the Federal Funds have been expended. No new positions shall be established unless those new positions are established as federally funded time-limited positions. The Office of State Budget Director shall submit a report to the Interim Joint Committee on Appropriations and Revenue by December 1 of each fiscal year on the expenditure of all Federal Funds and associated matching funds related to the COVID-19 emergency response. Any unexpended Federal Funds that require an interim reallocation must be approved by both the Governor and the State Treasurer.

32. Approval of State Aircraft Travel: Notwithstanding KRS 45.101, 174.508, and any other statute or administrative regulation to the contrary, the use of state aircraft by any secretary or other state official of any Executive Branch cabinet for out-of-state travel shall be approved by the State Treasurer. The State Treasurer shall only approve requests which document that the use of state aircraft is the lowest cost option as measured by both travel costs and travel time. The State Treasurer shall not designate approval authority for out-of-state travel on state aircraft by Executive Branch cabinet secretaries or other state officials to any other person. Any requests and documentation regarding the use of state aircraft collected by the State Treasurer shall be subject to the Kentucky Open Records Act, KRS 61.870 to 61.884.

33. Lapse of General Fund or Road Fund Appropriations Supplanted by Pandemic Relief Funds: Notwithstanding KRS 45.229, any General Fund appropriations that become available due to supplantation of Federal Funds related to COVID-19 emergency response or pandemic relief shall lapse to the Budget Reserve Trust Fund Account (KRS 48.705). Any Road Fund appropriations that become available due to supplantation of Federal Funds related to the COVID-19 emergency response or pandemic relief shall lapse to the Emergency Disaster Relief Account.

34. Federal Acts: Notwithstanding KRS 48.630, Section 2. of this Part, and any statute to the contrary, the state portion of the Coronavirus State and Local Fiscal Recovery Fund and the Coronavirus Capital Projects Fund of the American Rescue Plan Act of 2021 shall not be expended or appropriated without the express authority of the General Assembly.

35. Pandemic Relief Funds: No Federal Funds received related to COVID-19 emergency response or pandemic relief shall be used to establish any new programs unless those new programs can be fully supported from existing appropriation amounts once all of the Federal Funds have been expended. No new positions shall be established unless those new positions are established as federally funded time-limited positions. The Office of State Budget Director shall prepare a monthly report for all federal pandemic relief funds. The report shall include, at a minimum, the federal grant program name, the recipient, the purpose of the funding, the total award amount, monthly detail of actual expenditures by object code, and the fund source and amounts of any state funds that have been supplanted. The report shall be submitted to the Legislative Research Commission, Office of Budget Review, by the 15th of each month during the 2024-2026 fiscal biennium.

36. Electronic Access to Budget Information: In accordance with KRS 48.950, the State Budget Director shall continue to work cooperatively with the Legislative Research Commission to provide relevant budgetary information in a timely manner. To ensure that this information is transmitted in its most useful format, the State Budget Director shall provide electronic versions of all documents requested by the Legislative Research Commission in an editable format in order for documents to be manipulated without the use of specialized software. Electronic access shall also include the ability to access and view, but not edit, documents contained in KBUD and all related or successor budgetary systems of record.

37. Motor Vehicles: Notwithstanding any statute to the contrary, no agency, department, air pollution control district, or political subdivision of the Commonwealth, including the Transportation Cabinet, shall mandate the purchase of electric vehicles, and no Request for Proposal shall limit purchasing of vehicles to solely electric vehicles.