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Kentucky General Assembly· HB 392signed by Governor (Acts Ch. 39)

An act relating to local public agency transactions., the official text

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UNOFFICIAL COPY                                                  26 RS HB 392/GA

1   AN ACT relating to local public agency transactions.

2 Be it enacted by the General Assembly of the Commonwealth of Kentucky:

3   Section 1. KRS 45A.385 is amended to read as follows:

4 (1) The local public agency may use small purchase procedures for any contract for

5   which a determination is made that the aggregate amount of the contract does not

6   exceed fifty thousand dollars ($50,000)[forty thousand dollars ($40,000)] if small

7   purchase procedures are in writing and available to the public.

8 (2) Beginning in calendar year 2030, the small purchase maximum amount set out in

9   subsection (1) of this section shall be increased by ten thousand dollars ($10,000)

10  every five (5) years effective on January 1 of each year. The Finance and

11  Administration Cabinet shall, through a technical advice memorandum or other

12  official means of communication, announce the small purchase maximum

13  amount in effect for the current year, and shall also prominently post that

14  information on its website.

15  Section 2. KRS 45A.420 is amended to read as follows:

16 (1) Any local public agency may enter into an agreement for cooperative purchasing

17  with any other local public agency. When the contracting local public agency

18  contracts for supplies, services or construction pursuant to KRS 45A.365, 45A.370,

19  45A.375, or 45A.380, all other parties to the agreement shall be deemed to have

20  complied with the provisions of those sections.

21 (2) Nothing in KRS 45A.345 to 45A.990 shall deprive a local public agency from

22  negotiating with vendors for supplies where such supplies are the subject of a price

23  agreement with the Commonwealth of Kentucky provided, however, that no

24  contract executed under this section would authorize a price higher than is

25  contained in the price agreement with the Commonwealth of Kentucky for such

26  specific supplies.

27 (3) For agreements that do not establish a fixed unit price, a local public agency may

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1   make purchases using an established discount, quote, formula, or other pricing

2   method as established by the Commonwealth in the agreement. A local public

3   agency shall retain records documenting its compliance with the procedures

4   required in the applicable agreement.

5 (4)[(3)] Nothing in KRS 45A.345 to 45A.990 shall deprive a local school district from

6   acquiring supplies outside of price agreements with the Commonwealth of

7   Kentucky if the supplies meet the same specifications as the contract items and the

8   supplies are purchased at a lower price than is contained in the price agreement with

9   the Commonwealth of Kentucky for such specific supplies and the purchase does

10  not exceed two thousand five hundred dollars ($2,500).

11  Section 3. KRS 82.083 is amended to read as follows:

12 (1) As used in this section, "independent appraisal" means an appraisal made by:

13  (a) An individual or organization not affiliated with the city or its officers or

14  employees, using a generally accepted national or professional standard; or

15  (b) A city's officers or employees using:

16  1. A nationally published valuation of property based on the most recent

17  edition of the publication; or

18  2. For personal property with no applicable nationally published

19  valuation standard, a generally accepted method to determine a good-

20  faith estimate of the value of the personal property.

21 (2) A city may sell or otherwise dispose of any of its real or personal property.

22 (3) Before selling or otherwise disposing of any real or personal property that has any

23  value, the city shall make a written determination setting forth and fully describing:

24  (a) The real or personal property;

25  (b) Its intended use at the time of acquisition;

26  (c) The reasons why it is in the public interest to dispose of it;[ and]

27  (d) The method used to estimate value when the property is personal property

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1   appraised under subsection (1)(b)2. of this section; and

2   (e) The method of disposition to be used.

3 (4) Real or personal property may be:

4   (a) Transferred, with or without compensation, to another governmental agency;

5   (b) Transferred, with or without compensation, for economic development

6   purposes, which shall include but not be limited to real property transfers for

7   the elimination of blight;

8   (c) Sold at public auction following publication of the auction in accordance with

9   KRS 424.130(1)(b);

10  (d) Sold by electronic auction following publication of the auction, including the

11  uniform resource link (URL) for the site of the electronic auction, in

12  accordance with KRS 424.130(1)(b);

13  (e) Sold by sealed bids in accordance with the procedure for sealed bids under

14  KRS 45A.365(3) and (4);

15  (f) Traded towards the purchase of the same or similar type of property, if the

16  trade-in value received equals or exceeds the actual fair market value of the

17  property as determined using an independent appraisal as defined in

18  subsection (1) of this section;

19  (g) Sold for its appraised fair market value or a greater amount if the property is

20  valued at ten thousand dollars ($10,000) or less in an independent appraisal.

21  Property sold under this paragraph may not be sold to a city officer or

22  employee or family member of a city officer or employee as defined in the

23  city's ethics ordinance adopted under KRS 65.003;

24  (h) Notwithstanding subsection (3) of this section, sold for scrap or disposed of as

25  garbage in a manner consistent with the public interest if the property has no

26  value, or is of negligible value as determined by an independent appraisal;

27  (i) Sold by the Finance and Administration Cabinet under an agreement with the

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    UNOFFICIAL COPY                                             26 RS HB 392/GA

1   city; or

2   (j) Notwithstanding subsection (3) of this section, when the property is an animal

3   used in service by the city, given to the animal's primary handler or trainer,

4   without the payment of compensation, when the animal is retired or is no

5   longer capable of performing service to the city.

6 (5) If a city receives no bids for the real or personal property, either at public or

7   electronic auction or by sealed bid, the property may be disposed of, consistent with

8   the public interest, in any manner deemed appropriate by the city. In those

9   instances, a written description of the property, the method of disposal, and the

10  amount of compensation, if any, shall be made.

11 (6) Any compensation resulting from the disposal of this real or personal property shall

12  be transferred to the general fund of the city.

13  Section 4. KRS 82.084 is amended to read as follows:

14 KRS 45A.345 to 45A.460 and 424.260 shall not apply to city governments, urban-county

15 governments, consolidated local governments, or air boards identified in and operating

16 under the provisions of KRS 183.142(1) for the purchase of:

17 (1) Products or services when there is a single source of the product or service to be

18  procured within a reasonable geographic area;

19 (2) Products needed as replacement parts for personal property or equipment where the

20  need cannot be reasonably anticipated and maintaining an inventory of replacement

21  parts is not feasible;[ and]

22 (3) Vehicles and equipment installed on vehicles that are used exclusively for law

23  enforcement purposes, if the purchaser obtains at least three (3) quotes prior to

24  making the purchase and retains records documenting the quotes; and

25 (4) Products or services that are provided by:

26  (a) Entities recognized by the Office of Vocational Rehabilitation under KRS

27  Chapter 163 that operate programs for the rehabilitation of individuals who

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    UNOFFICIAL COPY                                            26 RS HB 392/GA

1   are blind or visually impaired;

2   (b) Agencies for individuals with severe disabilities as described in KRS

3   45A.465;

4   (c) A qualified veterans' workshop providing job and employment-skill training

5   to veterans where such a workshop is operated by the United States

6   Department of Veterans Affairs;

7   (d) Nonprofit organizations, employment services organizations, or other private

8   business organizations with established operations within the jurisdiction of

9   the city, urban-county government, or consolidated local government with the

10  main mission or business purpose of serving individuals with disabilities by

11  offering transitional or supported employment services or other rehabilitative

12  programs and services, including but not limited to serving individuals with

13  severe mental or physical disabilities or those recovering from substance

14  abuse disorders; or

15  (e) Nonprofit community service organizations operating within the jurisdiction

16  of the city, urban-county government, or consolidated local government when

17  there is a determination in the official record of the legislative body that the

18  purchase of the products or services would serve a mutual benefit to the

19  government and the organization by:

20  1. Furthering the purposes of the organization;

21  2. Providing a service or product needed by the government;

22  3. Advancing a specific public purpose; and

23  4. Serving the best interest of the public.

24  If two (2) or more organizations meet the qualifications set out in this

25  paragraph, then the government shall award the contract to one (1) of the

26  qualifying organizations using the selection criteria of its adopted competitive

27  bidding process.

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1   Section 5. KRS 424.260 is amended to read as follows:

2 (1) Except where a statute specifically fixes a larger sum as the minimum for a

3   requirement of advertisement for bids, no city, county, or district, or board or

4   commission of a city or county, or sheriff or county clerk, may make a contract,

5   lease, or other agreement for:

6   (a) Materials;

7   (b) Supplies, except perishable foods such as meat, poultry, fish, egg products,

8   fresh vegetables, and fresh fruits;

9   (c) Equipment; or

10  (d) Contractual services other than professional;

11  involving an expenditure of more than fifty thousand dollars ($50,000)[forty

12  thousand dollars ($40,000)] without first making newspaper advertisement for bids.

13  This subsection shall not apply to the transfer of property between governmental

14  agencies as authorized in KRS 82.083(4)(a).

15 (2) If the fiscal court requires that the sheriff or county clerk advertise for bids on

16  expenditures of less than fifty thousand dollars ($50,000)[forty thousand dollars

17  ($40,000)], the fiscal court requirement shall prevail.

18 (3) (a) Nothing in this statute shall limit or restrict the ability of a local school district

19  to acquire supplies and equipment outside of the bidding procedure if those

20  supplies and equipment meet the specifications of the contracts awarded by

21  the Office of Material and Procurement Services in the Office of the

22  Controller within the Finance and Administration Cabinet or a federal, local,

23  or cooperative agency and are available for purchase elsewhere at a lower

24  price. A board of education may purchase those supplies and equipment

25  without advertising for bids if, prior to making the purchases, the board of

26  education obtains certification from the district's finance or purchasing officer

27  that the items to be purchased meet the standards and specifications fixed by

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    UNOFFICIAL COPY                                                26 RS HB 392/GA

1   state price contract, federal (GSA) price contract, or the bid of another school

2   district whose bid specifications allow other districts to utilize their bids, and

3   that the sales price is lower than that established by the various price contract

4   agreements or available through the bid of another school district whose bid

5   specifications would allow the district to utilize their bid.

6   (b) The procedures set forth in paragraph (a) of this subsection shall not be

7   available to the district for any specific item once the bidding procedure has

8   been initiated by an invitation to bid and a publication of specifications for

9   that specific item has been published. In the event that all bids are rejected,

10  the district may again avail itself of the provisions of paragraph (a) of this

11  subsection.

12 (4) This requirement shall not apply in an emergency if the chief executive officer of

13  the city, county, or district has duly certified that an emergency exists, and has filed

14  a copy of the certificate with the chief financial officer of the city, county, or

15  district, or if the sheriff or the county clerk has certified that an emergency exists,

16  and has filed a copy of the certificate with the clerk of the court where his necessary

17  office expenses are fixed pursuant to KRS 64.345 or 64.530, or if the

18  superintendent of the board of education has duly certified that an emergency

19  exists, and has filed a copy of the certificate with the chief state school officer.

20 (5) The provisions of subsection (1) of this section shall not apply for the purchase of

21  wholesale electric power for resale to the ultimate customers of a municipal utility

22  organized under KRS 96.550 to 96.900.

23 (6) Subsection (1) of this section shall not apply to purchases for products or services

24  made pursuant to KRS 82.084.

25 (7) Beginning in calendar year 2030, the small purchase maximum amount set out in

26  subsections (1) and (2) of this section shall be increased by ten thousand dollars

27  ($10,000) every five (5) years effective on January 1 of each year. The Finance

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   UNOFFICIAL COPY                                            26 RS HB 392/GA

1  and Administration Cabinet shall, through a technical advice memorandum or

2  other official means of communication, announce the small purchase maximum

3  amount in effect for the current year, and shall also prominently post that

4  information on its website.

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