Create new sections of KRS Chapter 224A to define terms; establish the Kentucky Water and Wastewater Assistance for Troubled or Economically Restrained Systems Program under the Kentucky Infrastructure Authority (KIA) to provide for a loan application and evaluation process for eligible public water and wastewater systems to seek loan funds from the General Assembly; require the KIA to make available applications under the program, verify eligibility of proposed recipients, award loans as directed by the General Assembly, enforce compliance with loan conditions, and report quarterly to the General Assembly on the status of all loans under the program; allow the Kentucky Rural Water Association (KRWA) to contract or consult with third-party consultants, state agencies, or special purpose governmental entities in discharging its duties; require finalized loan applications to be made available to the public; allow eligible public water and wastewater systems to submit applications for regional projects; provide for forfeiture and repayment of loans; require the KRWA to evaluate applications according to specified criteria and to submit an annual report to the Legislative Research Commission containing the evaluations and scores of the proposed loan recipients; establish the Kentucky water and wastewater assistance for troubled or economically restrained systems fund; provide that all moneys in the fund shall be allocated by the General Assembly for providing loans for eligible projects; require that interest rates for loans be set in the same manner as the interest rates for loans from the federally-assisted wastewater and water supply resolving funds, except that the interest rates shall be one-half of a percent lower; establish the emergency Kentucky water and wastewater assistance for troubled or economically restrained systems fund; provide that moneys from the fund be dedicated to providing loans for capital and non-capital expenses relating solely to restoring or avoiding imminent interruption of utility service provided by a public water or wastewater system after a statewide or local emergency has been declared; allow the authority to require a corrective action plan to be submitted with a loan application; require that interest rates for loans be set in the same manner as the interest rates for loans form the federally-assisted wastewater and water supply resolving funds; create a new section of KRS Chapter 96 to define terms; create a forbearance period of three years for a utility acquiring a public water or wastewater system with existing violations; require the acquiring utility to correct past violations during the forbearance period; defer fines and penalties during the forbearance period; prioritize funding from the KIA for projects where the acquiring utility is making improvements to the acquired system; allow for a waiver of accrued fines and penalties if all deficiencies have been corrected and the public water or wastewater system has been sold to the acquiring utility or if the utility adopts a management and operations agreement handled by a well-operated utility; require the acquiring utility to make records available to ensure compliance; after the expiration of the forbearance period, allow the Energy and Environment Cabinet and the Public Service Commission to either waive fines and penalties, collect fines and penalties, or grant a discretionary extension of the forbearance period; allow priority in funding from the KIA to be predicated on timely payment of deferred fines and penalties; prohibit an acquired water or wastewater systems to which a forbearance period applied from being eligible for any additional forbearance periods; amend KRS 224A.316 to remove repetitive language and to require the KIA to prioritize funding for a utility acquiring a public water or wastewater system for the correction of deficiencies in the system identified in state and federal violations; APPROPRIATION.