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UNOFFICIAL COPY 26 RS HB 869/EN
1 AN ACT relating to fiscal matters and declaring an emergency.
2 Be it enacted by the General Assembly of the Commonwealth of Kentucky:
3 SECTION 1. A NEW SECTION OF KRS CHAPTER 141 IS CREATED TO
4 READ AS FOLLOWS:
5 (1) As used in this section:
6 (a) "Approved company" has the same meaning as in Section 13 of this Act;
7 (b) "Authority" has the same meaning as in Section 13 of this Act; and
8 (c) "Credit" means the economic development credit provided to an approved
9 company by the authority in accordance with Section 17 of this Act.
10 (2) (a) For taxable years beginning on or after January 1, 2026, there shall be
11 allowed an economic development credit to an approved company. The
12 credit shall be refundable, nontransferable, and allowed against the tax
13 imposed under KRS 141.020 or 141.040 and 141.0401, with the ordering of
14 the credit as provided in Section 2 of this Act.
15 (b) In the case of a pass-through entity not subject to the tax imposed by KRS
16 141.040, the credit shall be taken against the tax imposed by KRS 141.0401
17 and shall be claimed by the partners, members, or shareholders in
18 accordance with their proportionate share of income.
19 (c) The amount of the credit that may be claimed in a taxable year by the
20 approved company shall be equal to the amount determined in accordance
21 with Section 17 of this Act, as applicable, except the total amount of credits
22 claimed by all approved companies under Section 17 of this Act shall not
23 exceed four million dollars ($4,000,000) per taxable year, of which no more
24 than one million dollars ($1,000,000) shall be allowed for wages paid to
25 full-time employees in counties other than heritage counties.
26 (3) (a) The department shall:
27 1. Promulgate administrative regulations in accordance with KRS
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1 Chapter 13A to administer the credit;
2 2. Work with the authority to determine the approved amount of credit or
3 apportionable share of credit available to be claimed in any taxable
4 year on a return as filed by an approved company or each partner,
5 member, or shareholder of an approved company; and
6 3. Report the following to the authority on the credits claimed under this
7 section:
8 a. The total amount of credit awarded for each taxable year, by
9 county;
10 b. Each taxpayer claiming a credit; and
11 c. The total amount of wages paid to a full-time employee by an
12 approved company and included in its credit computation.
13 (b) The information required to be reported under this subsection shall not be
14 considered confidential taxpayer information and shall not be subject to
15 KRS Chapter 131 or any other provisions of the Kentucky Revised Statutes
16 prohibiting disclosure or reporting of information.
17 Section 2. KRS 141.0205 is amended to read as follows:
18 If a taxpayer is entitled to more than one (1) of the tax credits allowed against the tax
19 imposed by KRS 141.020, 141.040, and 141.0401, the priority of application and use of
20 the credits shall be determined as follows:
21 (1) The nonrefundable business incentive credits against the tax imposed by KRS
22 141.020 shall be taken in the following order:
23 (a) The limited liability entity tax credit permitted by KRS 141.0401;
24 (b) The economic development credits computed under KRS 141.347, 141.381,
25 141.384, 141.3841, 141.400, 141.403, 141.407, 141.415, 154.12-207, and
26 154.12-2088;
27 (c) The qualified farming operation credit permitted by KRS 141.412;
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1 (d) The certified rehabilitation credit permitted by KRS 171.397(1)(a);
2 (e) The health insurance credit permitted by KRS 141.062;
3 (f) The tax paid to other states credit permitted by KRS 141.070;
4 (g) The credit for hiring the unemployed permitted by KRS 141.065;
5 (h) The recycling or composting equipment credit permitted by KRS 141.390;
6 (i) The [tax ]credit for cash contributions in investment funds permitted by KRS
7 154.20-263 in effect prior to July 15, 2002, and the credit permitted by KRS
8 154.20-258;
9 (j) The research facilities credit permitted by KRS 141.395;
10 (k) The employer High School Equivalency Diploma program incentive credit
11 permitted under KRS 151B.402;
12 (l) The voluntary environmental remediation credit permitted by KRS 141.418;
13 (m) The biodiesel and renewable diesel credit permitted by KRS 141.423;
14 (n) The clean coal incentive credit permitted by KRS 141.428;
15 (o) The ethanol credit permitted by KRS 141.4242;
16 (p) The cellulosic ethanol credit permitted by KRS 141.4244;
17 (q) The energy efficiency credits permitted by KRS 141.436;
18 (r) The railroad maintenance and improvement credit permitted by KRS 141.385;
19 (s) The Endow Kentucky credit permitted by KRS 141.438;
20 (t) The New Markets Development Program credit permitted by KRS 141.434;
21 (u) The distilled spirits credit permitted by KRS 141.389;
22 (v) The angel investor credit permitted by KRS 141.396;
23 (w) The film industry credit permitted by KRS 141.383 for applications approved
24 on or after April 27, 2018, but before January 1, 2022;
25 (x) The inventory credit permitted by KRS 141.408;
26 (y) The renewable chemical production credit permitted by KRS 141.4231;[ and]
27 (z) The qualified broadband investment [tax ]credit permitted by KRS 141.391;
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1 and
2 (aa) The alternative jet fuel producer credit permitted by Section 42 of this Act;
3 (2) After the application of the nonrefundable credits in subsection (1) of this section,
4 the nonrefundable personal tax credits against the tax imposed by KRS 141.020
5 shall be taken in the following order:
6 (a) The individual credits permitted by KRS 141.020(3);
7 (b) The credit permitted by KRS 141.066;
8 (c) The tuition credit permitted by KRS 141.069;
9 (d) The household and dependent care credit permitted by KRS 141.067;
10 (e) The income gap credit permitted by KRS 141.066; and
11 (f) The Education Opportunity Account Program [tax ]credit permitted by KRS
12 141.522;
13 (3) After the application of the nonrefundable credits provided for in subsection (2) of
14 this section, the refundable credits against the tax imposed by KRS 141.020 shall be
15 taken in the following order:
16 (a) The individual withholding tax credit permitted by KRS 141.350;
17 (b) The individual estimated tax payment credit permitted by KRS 141.305;
18 (c) The certified rehabilitation credit permitted by KRS 171.3961, 171.3963, and
19 171.397(1)(b);
20 (d) The film industry [tax ]credit permitted by KRS 141.383 for applications
21 approved prior to April 27, 2018, or on or after January 1, 2022;
22 (e) The development area [tax ]credit permitted by KRS 141.398;
23 (f) The decontamination [tax ]credit permitted by KRS 141.419;[ and]
24 (g) The pass-through entity tax credit permitted by KRS 141.209;
25 (h) The economic development credit permitted by Section 1 of this Act; and
26 (i) The certified mixed-use development credit permitted by Section 31 of this
27 Act;
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1 (4) The nonrefundable credit permitted by KRS 141.0401 shall be applied against the
2 tax imposed by KRS 141.040;
3 (5) The following nonrefundable credits shall be applied against the sum of the tax
4 imposed by KRS 141.040 after subtracting the credit provided for in subsection (4)
5 of this section, and the tax imposed by KRS 141.0401 in the following order:
6 (a) The economic development credits computed under KRS 141.347, 141.381,
7 141.384, 141.3841, 141.400, 141.403, 141.407, 141.415, 154.12-207, and
8 154.12-2088;
9 (b) The qualified farming operation credit permitted by KRS 141.412;
10 (c) The certified rehabilitation credit permitted by KRS 171.397(1)(a);
11 (d) The health insurance credit permitted by KRS 141.062;
12 (e) The unemployment credit permitted by KRS 141.065;
13 (f) The recycling or composting equipment credit permitted by KRS 141.390;
14 (g) The coal conversion credit permitted by KRS 141.041;
15 (h) The enterprise zone credit permitted by KRS 154.45-090, for taxable periods
16 ending prior to January 1, 2008;
17 (i) The [tax ]credit for cash contributions to investment funds permitted by KRS
18 154.20-263 in effect prior to July 15, 2002, and the credit permitted by KRS
19 154.20-258;
20 (j) The research facilities credit permitted by KRS 141.395;
21 (k) The employer High School Equivalency Diploma program incentive credit
22 permitted by KRS 151B.402;
23 (l) The voluntary environmental remediation credit permitted by KRS 141.418;
24 (m) The biodiesel and renewable diesel credit permitted by KRS 141.423;
25 (n) The clean coal incentive credit permitted by KRS 141.428;
26 (o) The ethanol credit permitted by KRS 141.4242;
27 (p) The cellulosic ethanol credit permitted by KRS 141.4244;
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1 (q) The energy efficiency credits permitted by KRS 141.436;
2 (r) The ENERGY STAR home or ENERGY STAR manufactured home credit
3 permitted by KRS 141.437;
4 (s) The railroad maintenance and improvement credit permitted by KRS 141.385;
5 (t) The railroad expansion credit permitted by KRS 141.386;
6 (u) The Endow Kentucky credit permitted by KRS 141.438;
7 (v) The New Markets Development Program credit permitted by KRS 141.434;
8 (w) The distilled spirits credit permitted by KRS 141.389;
9 (x) The film industry credit permitted by KRS 141.383 for applications approved
10 on or after April 27, 2018, but before January 1, 2022;
11 (y) The inventory credit permitted by KRS 141.408;
12 (z) The renewable chemical production [tax ]credit permitted by KRS 141.4231;
13 (aa) The Education Opportunity Account Program [tax ]credit permitted by KRS
14 141.522;[ and]
15 (ab) The qualified broadband investment [tax ]credit permitted by KRS 141.391;
16 and
17 (ac) The alternative jet fuel producer credit permitted by Section 42 of this Act;
18 and
19 (6) After the application of the nonrefundable credits in subsection (5) of this section,
20 the refundable credits shall be taken in the following order:
21 (a) The corporation estimated tax payment credit permitted by KRS 141.044;
22 (b) The certified rehabilitation credit permitted by KRS 171.3961, 171.3963, and
23 171.397(1)(b);
24 (c) The film industry [tax ]credit permitted by KRS 141.383 for applications
25 approved prior to April 27, 2018, or on or after January 1, 2022;
26 (d) The decontamination [tax ]credit permitted by KRS 141.419;[ and]
27 (e) The pass-through entity tax credit permitted by KRS 141.209;
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1 (f) The economic development credit permitted by Section 1 of this Act; and
2 (g) The certified mixed-use development credit permitted by Section 31 of this
3 Act.
4 Section 3. KRS 131.190 is amended to read as follows:
5 (1) No present or former commissioner or employee of the department, present or
6 former member of a county board of assessment appeals, present or former property
7 valuation administrator or employee, present or former secretary or employee of the
8 Finance and Administration Cabinet, former secretary or employee of the Revenue
9 Cabinet, or any other person, shall intentionally and without authorization inspect
10 or divulge any information acquired by him or her of the affairs of any person, or
11 information regarding the tax schedules, returns, or reports required to be filed with
12 the department or other proper officer, or any information produced by a hearing or
13 investigation, insofar as the information may have to do with the affairs of the
14 person's business.
15 (2) The prohibition established by subsection (1) of this section shall not extend to:
16 (a) Information required in prosecutions for making false reports or returns of
17 property for taxation, or any other infraction of the tax laws;
18 (b) Any matter properly entered upon any assessment record, or in any way made
19 a matter of public record;
20 (c) Furnishing any taxpayer or his or her properly authorized agent with
21 information respecting his or her own return;
22 (d) Testimony provided by the commissioner or any employee of the department
23 in any court, or the introduction as evidence of returns or reports filed with the
24 department, in an action for violation of state or federal tax laws or in any
25 action challenging state or federal tax laws;
26 (e) Providing an owner of unmined coal, oil or gas reserves, and other mineral or
27 energy resources assessed under KRS 132.820, or owners of surface land
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1 under which the unmined minerals lie, factual information about the owner's
2 property derived from third-party returns filed for that owner's property, under
3 the provisions of KRS 132.820, that is used to determine the owner's
4 assessment. This information shall be provided to the owner on a confidential
5 basis, and the owner shall be subject to the penalties provided in KRS
6 131.990(2). The third-party filer shall be given prior notice of any disclosure
7 of information to the owner that was provided by the third-party filer;
8 (f) Providing to a third-party purchaser pursuant to an order entered in a
9 foreclosure action filed in a court of competent jurisdiction, factual
10 information related to the owner or lessee of coal, oil, gas reserves, or any
11 other mineral resources assessed under KRS 132.820. The department may
12 promulgate an administrative regulation establishing a fee schedule for the
13 provision of the information described in this paragraph. Any fee imposed
14 shall not exceed the greater of the actual cost of providing the information or
15 ten dollars ($10);
16 (g) Providing information to a licensing agency, the Transportation Cabinet, or
17 the Kentucky Supreme Court under KRS 131.1817;
18 (h) Statistics of gasoline and special fuels gallonage reported to the department
19 under KRS 138.210 to 138.448;
20 (i) Providing any utility gross receipts license tax return information that is
21 necessary to administer the provisions of KRS 160.613 to 160.617 to
22 applicable school districts on a confidential basis;
23 (j) Providing documents, data, or other information to a third party pursuant to an
24 order issued by a court of competent jurisdiction;
25 (k) Publishing administrative writings on its official website in accordance with
26 KRS 131.020(1)(b); or
27 (l) Providing information to the Legislative Research Commission under:
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1 1. KRS 139.519 for purposes of the sales and use tax refund on building
2 materials used for disaster recovery;
3 2. KRS 141.436 for purposes of the energy efficiency products credits;
4 3. KRS 141.437 for purposes of the ENERGY STAR home and the
5 ENERGY STAR manufactured home credits;
6 4. KRS 141.383 for purposes of the film industry incentives;
7 5. KRS 154.26-095 for purposes of the Kentucky industrial revitalization
8 credit and the job assessment fees;
9 6. KRS 141.068 for purposes of the Kentucky investment fund;
10 7. KRS 141.396 for purposes of the angel investor credit;
11 8. KRS 141.389 for purposes of the distilled spirits credit;
12 9. KRS 141.408 for purposes of the inventory credit;
13 10. KRS 141.390 for purposes of the recycling and composting credits;
14 11. KRS 141.3841 for purposes of the selling farmer credit;
15 12. KRS 141.4231 for purposes of the renewable chemical production
16 credit;
17 13. KRS 141.524 for purposes of the Education Opportunity Account
18 Program credit;
19 14. KRS 141.398 for purposes of the development area credit;
20 15. KRS 139.516 for purposes of the sales and use tax exemptions for the
21 commercial mining of cryptocurrency;
22 16. KRS 141.419 for purposes of the decontamination credit;
23 17. KRS 141.391 for purposes of the qualified broadband investment credit;
24 18. KRS 139.499 for purposes of the sales and use tax exemptions for a
25 qualified data center project;[ and]
26 19. KRS 139.5325 for purposes of the sales and use tax incentive for a
27 qualifying attraction;
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1 20. Section 1 of this Act for purposes of the economic development credit;
2 21. Section 42 of this Act for purposes of the alternative jet fuel producer
3 credit; and
4 22. Section 31 of this Act for purposes of the certified-mixed use
5 development credit.
6 (3) The commissioner shall make available any information for official use only and on
7 a confidential basis to the proper officer, agency, board or commission of this state,
8 any Kentucky county, any Kentucky city, any other state, or the federal
9 government, under reciprocal agreements whereby the department shall receive
10 similar or useful information in return.
11 (4) Access to and inspection of information received from the Internal Revenue Service
12 is for department use only, and is restricted to tax administration purposes.
13 Information received from the Internal Revenue Service shall not be made available
14 to any other agency of state government, or any county, city, or other state, and
15 shall not be inspected intentionally and without authorization by any present
16 secretary or employee of the Finance and Administration Cabinet, commissioner or
17 employee of the department, or any other person.
18 (5) Statistics of crude oil as reported to the department under the crude oil excise tax
19 requirements of KRS Chapter 137 and statistics of natural gas production as
20 reported to the department under the natural resources severance tax requirements
21 of KRS Chapter 143A may be made public by the department by release to the
22 Energy and Environment Cabinet, Department for Natural Resources.
23 (6) Notwithstanding any provision of law to the contrary, beginning with mine-map
24 submissions for the 1989 tax year, the department may make public or divulge only
25 those portions of mine maps submitted by taxpayers to the department pursuant to
26 KRS Chapter 132 for ad valorem tax purposes that depict the boundaries of mined-
27 out parcel areas. These electronic maps shall not be relied upon to determine actual
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1 boundaries of mined-out parcel areas. Property boundaries contained in mine maps
2 required under KRS Chapters 350 and 352 shall not be construed to constitute land
3 surveying or boundary surveys as defined by KRS 322.010 and any administrative
4 regulations promulgated thereto.
5 Section 4. KRS 154.12-204 is amended to read as follows:
6 As used in KRS 154.12-205 to 154.12-208, unless the context requires otherwise:
7 (1) "Agribusiness" has the same meaning as in KRS 154.32-010;
8 (2) "Alternative fuel production" has the same meaning as in KRS 154.32-010;
9 (3) "Applicant" means a business or industry that has made application for a grant-in-
10 aid or skills training investment credit as authorized by KRS 154.12-205 to 154.12-
11 208;
12 (4) "Approved company" means any qualified company seeking to sponsor an
13 occupational upgrade training program or skills upgrade training program for the
14 benefit of one (1) or more of its employees, which is approved by the corporation to
15 receive grant-in-aid or skills training investment credits as provided by KRS
16 154.12-205 to 154.12-208;
17 (5) "Approved costs" means costs confirmed as eligible by the corporation, including:
18 (a) Fees or salaries required to be paid to instructors who are employees of the
19 approved company, instructors who are full-time, part-time, or adjunct
20 instructors with an educational institution, and instructors who are consultants
21 on contract with an approved company in connection with an occupational
22 upgrade training program or skills upgrade training program sponsored by an
23 approved company;
24 (b) The cost of supplies, equipment, and materials used exclusively in an
25 occupational upgrade training program or skills upgrade training program
26 sponsored by an approved company;
27 (c) Employee wages to be paid in connection with an occupational upgrade
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1 training program or skills upgrade training program sponsored by an approved
2 company; and
3 (d) All other costs of a nature comparable to those described in this subsection;
4 (6) "Board" means the board of directors of the Bluegrass State Skills Corporation;
5 (7) "Carbon dioxide or hydrogen transmission pipeline" has the same meaning as in
6 KRS 154.32-010;
7 (8) "Coal severing and processing" has the same meaning as in KRS 154.32-010;
8 (9) "Corporation" means the Bluegrass State Skills Corporation, or BSSC;
9 (10) "Educational institution" means a public or nonpublic secondary or postsecondary
10 institution or an independent provider within the Commonwealth authorized by law
11 to provide a program of skills training or education beyond the secondary school
12 level or to adult persons without a high school diploma or its equivalent;
13 (11) "Employee" means any person who is:
14 (a) [Who is ]Currently a permanent full-time employee of the qualified company;
15 (b) Subject to the tax imposed by KRS 141.020[Who is a resident of Kentucky,
16 as that term is defined in KRS 141.010]; and
17 (c) [Who is ]Paid the minimum base hourly wage plus employee benefits equal to
18 or greater than fifteen percent (15%) of the minimum base hourly wage. If the
19 qualified company does not provide employee benefits equal to at least fifteen
20 percent (15%) of the minimum base hourly wage, the qualified company may
21 still qualify if it provides the full-time employee total hourly compensation
22 equal to or greater than one hundred fifteen percent (115%) of the minimum
23 base hourly wage through increased hourly wages combined with at least one
24 (1) company-paid employee benefit;
25 (12) "Energy-efficient alternative fuel production" has the same meaning as in KRS
26 154.32-010;
27 (13) "Gasification production" has the same meaning as in KRS 154.32-010;
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1 (14) "Grant-in-aid" means funding that is provided to qualified companies by the BSSC
2 for the development or expansion of a program as provided in this chapter;
3 (15) "Headquarters" has the same meaning as in KRS 154.32-010;
4 (16) "Heritage county" means a county where the county population ranking
5 determined by the cabinet under Section 7 of this Act scores greater than or equal
6 to ninety-seven (97);
7 (17) "Hospital" has the same meaning as in KRS 154.32-010;
8 (18)[(17)] "Manufacturing" has the same meaning as in KRS 154.32-010;
9 (19)[(18)] "Minimum base hourly wage" means the minimum wage amount paid to an
10 employee by a qualified company, which shall not be less than:
11 (a) Two[One] hundred[ fifty] percent (200%)[(150%)] of the federal minimum
12 wage for a company located in a heritage county; or
13 (b) Three hundred percent (300%) of the federal minimum wage for a company
14 located in any other county;
15 (20)[(19)] "Nonretail service or technology" has[means] the same meaning as in KRS
16 154.32-010;
17 (21)[(20)] "Occupational upgrade training" means employee training sponsored by a
18 qualified company that is designed to qualify the employee for a promotional
19 opportunity with the qualified company;
20 (22)[(21)] "Program" or "program of skills training or education consistent with
21 employment needs" means a coordinated course of instruction which is designed to
22 prepare individuals for employment in a specific trade, occupation, or profession.
23 Such instruction may include:
24 (a) Classroom instruction;
25 (b) Classroom-related field, shop, factory, office, or laboratory work; and
26 (c) Basic skills, entry level training, job upgrading, retraining, and advance
27 training;
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1 (23)[(22)] (a) "Qualified company" means any corporation, limited liability company,
2 partnership, limited partnership, sole proprietorship, business trust, or any
3 other legal entity through which business is conducted that is engaged in or is
4 planning to be engaged in one (1) or more of the following activities within
5 the Commonwealth:
6 1. Manufacturing;
7 2. Agribusiness;
8 3. Nonretail service or technology;
9 4. Headquarter operations, regardless of the underlying business activity of
10 the company;
11 5. Alternative fuel, gasification, energy-efficient alternative fuel, or
12 renewable energy production;
13 6. Carbon dioxide or hydrogen transmission pipeline;
14 7. Coal severing and processing; or
15 8. Hospital operations.
16 (b) "Qualified company" does not include companies where the primary activity
17 to be conducted within the Commonwealth is forestry, fishing, the provision
18 of utilities, construction, wholesale trade, retail trade, real estate, rental and
19 leasing, accommodation and food services, or public administration services;
20 (24)[(23)] "Renewable energy production" means the same as in KRS 154.32-010;
21 (25)[(24)] "Skills upgrade training" means employee training sponsored by a qualified
22 company that is designed to provide the employee with new skills necessary to
23 enhance productivity, improve performance, or retain employment, including but
24 not limited to technical and interpersonal skills, and training that is designed to
25 enhance computer skills, communication skills, problem solving, reading, writing,
26 or math skills of employees who are unable to function effectively on the job due to
27 deficiencies in these areas, are unable to advance on the job, or who risk
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1 displacement because their skill deficiencies inhibit their training potential for new
2 technology;
3 (26)[(25)] "Skills training investment credit" means the credit against Kentucky income
4 tax imposed by KRS 141.020 or 141.040, and the limited liability entity tax
5 imposed by KRS 141.0401, as provided in this subchapter; and
6 (27)[(26)] "Technical assistance" means professional and any other assistance provided
7 by qualified companies to an educational institution, which is reasonably calculated
8 to support directly the development and expansion of a particular program as
9 defined herein.
10 Section 5. KRS 154.12-207 is amended to read as follows:
11 (1) The corporation may, subject to appropriation from the General Assembly or from
12 funds made available to the corporation from any other public or private source,
13 provide grants-in-aid to qualified companies, not in excess of five hundred thousand
14 dollars ($500,000) per grant-in-aid. Such grants-in-aid shall be used exclusively for
15 programs which are consistent with the provisions of this chapter.
16 (2) The corporation may, in accordance with KRS 154.12-204 to 154.12-208, award a
17 skills training investment credit to an approved company. The amount of the skills
18 training investment credit awarded by the corporation shall be an amount not to
19 exceed fifty percent (50%) of the amount of approved costs incurred by the
20 approved company in connection with its program of occupational upgrade training
21 or skills upgrade training, the credit amount not to exceed four thousand five
22 hundred dollars ($4,500)[two thousand dollars ($2,000)] per trainee for an
23 approved company in a heritage county and three thousand five hundred dollars
24 ($3,500) per trainee for an approved company located in any other county, and, in
25 the aggregate, not to exceed five hundred thousand dollars ($500,000) for each
26 approved company per fiscal year. The corporation shall only approve one (1)
27 application per fiscal year for each approved company.
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1 (3) To apply for a grant-in-aid or a skills training investment credit, a qualified
2 company shall submit an application to the Bluegrass State Skills Corporation
3 before commencing its program of skills upgrade or occupational upgrade training.
4 Each application shall contain information the corporation requires, including but
5 not limited to:
6 (a) A proposal for a program of skills upgrade training, occupational upgrade
7 training, and education;
8 (b) A description of each component of the proposed training program and the
9 number of employee training hours requested; and
10 (c) A statement of the total anticipated costs and expenses of the program,
11 including a breakdown of the costs associated with equipment, personnel,
12 facilities, and materials.
13 (4) Approval of the grant-in-aid and skills training investment credit application by the
14 board shall be based upon the following criteria:
15 (a) The program must be within the scope of KRS 154.12-204 to 154.12-208;
16 (b) Participants in the program must qualify as an employee as defined by KRS
17 154.12-204;
18 (c) The program must involve an area of skills upgrade training, occupational
19 upgrade training, and education which is needed by a qualified company and
20 for which a shortage of qualified individuals exists within the
21 Commonwealth; and
22 (d) The grant-in-aid and skills training investment credit must be essential to the
23 success of the program as the resources are inadequate to attract the technical
24 assistance and financial support necessary from a qualified company.
25 (5) After a review of applications for grant-in-aid and skills training investment credits,
26 the corporation may designate the qualified company as an approved company and
27 approve the maximum amount of grants and skills training investment credits the
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1 approved company is eligible to receive. The maximum amount of skills training
2 investment credits approved for all qualified companies by the corporation shall not
3 exceed two million five hundred thousand dollars ($2,500,000) for each fiscal year.
4 Skills training investment credits that remain unallocated by the corporation at the
5 end of its fiscal year shall lapse and shall not be carried forward to a new fiscal
6 year.
7 (6) The approved company shall complete all programs of skills upgrade training or
8 occupational upgrade training within three (3) years[one (1) year] from the date of
9 approval by the corporation and shall certify the completion of these programs to
10 the corporation. Once they are completed and certified and all required
11 documentation is provided and received by the corporation, the corporation shall
12 disburse the grant funds or notify the approved company of the final authorized
13 skills training investment credit.
14 Section 6. KRS 154.21-015 is amended to read as follows:
15 As used in KRS 154.21-010 to 154.21-040:
16 (1) "Cabinet" means the Cabinet for Economic Development;
17 (2) "County population ranking" means the score of each county determined by the
18 cabinet under KRS 154.21-017;
19 (3) "Eligible grant recipient" means a grant applicant that is a local government or an
20 economic development authority in an economic development district in this
21 Commonwealth that is engaged in an eligible project;
22 (4) "Eligible project":
23 (a) Means an economic development project initiated on a property that meets the
24 availability requirements in KRS 154.21-035(3); and
25 (b) Requires local matching funds based on the county population ranking;
26 (5) "Eligible use":
27 (a) Means the authorized purpose for which an awarded grant may be used
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1 depending on the source of funds from the Commonwealth; and
2 (b) May include expenditures in any of the following categories or some
3 combination thereof:
4 1. Due diligence study;
5 2. Property acquisition;
6 3. Infrastructure extension or improvement;
7 4. Site preparation work;
8 5. Building construction or renovation; or
9 6. Road improvement;
10 (6) "Heritage county" means a county where the county population ranking
11 determined by the cabinet under Section 7 of this Act scores greater than or equal
12 to ninety-seven (97);
13 (7) "Population density":
14 (a) Means the number of persons per square mile of a county;
15 (b) Is calculated by dividing the total county population by the square miles in the
16 county;
17 (c) Is determined by using the population estimate from the most recent available
18 five (5) year American Community Survey as published by the United States
19 Census Bureau; and
20 (d) Is used to rank each county in descending order, with the county having the
21 largest population density receiving a rank of one (1) and the county with the
22 smallest population density receiving a rank of one hundred twenty (120);
23 (8)[(7)] "Regional project" means an eligible project that is proposed by eligible grant
24 recipients residing in different counties in this Commonwealth who submit a single
25 grant application as co-applicants; and
26 (9)[(8)] "Ten (10) year percentage change in population":
27 (a) Means the percentage change in population within a county;
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1 (b) Is determined by comparing the population estimate from the most recent
2 available five (5) year American Community Survey as published by the
3 United States Census Bureau to the same survey ten (10) years prior to the
4 most recent available survey; and
5 (c) Is used to rank each county in descending order, with the county having the
6 largest positive percentage change in population receiving a rank of one (1)
7 and the county with the largest negative percentage change receiving a rank of
8 one hundred twenty (120).
9 Section 7. KRS 154.21-017 is amended to read as follows:
10 (1) The Kentucky Product Development Initiative of 2024 is hereby established under
11 the cabinet. The cabinet shall partner with the Kentucky Association for Economic
12 Development to administer the program. The cabinet's administration of the
13 program includes:
14 (a) Creating and making available a standardized grant application and regional
15 grant application;
16 (b) Adopting a standardized scoring system pursuant to KRS 154.21-040;
17 (c) Reviewing the applications and proposals submitted by the proposed grant
18 recipients;
19 (d) Verifying the eligibility of the proposed grant recipients;
20 (e) Verifying that the proposed grant recipient seeks grant money for an eligible
21 project prior to prioritizing all eligible projects;
22 (f) Determining the county's population ranking under subsection (3) of this
23 section;
24 (g) Awarding grants to selected eligible grant recipients in multiple rounds of
25 funding; and
26 (h) Compiling and submitting the reports required by subsections (3) and (5) of
27 this section.
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1 (2) Upon receipt of eligible grant recipients and eligible project recommendations and
2 prioritization from the Kentucky Association for Economic Development and the
3 third-party independent site selection consultant, the cabinet shall verify and
4 process the eligible grant recipients and eligible project recommendations with the
5 intent to approve and award grants under the economic development fund program
6 pursuant to KRS 154.12-100 and based on the following criteria:
7 (a) Consideration of whether the eligible grant recipient had received a grant
8 award from the Kentucky Product Development Initiative of 2022 under KRS
9 154.21-020; and
10 (b) The matching funds for the selected grant recipient's contribution to its
11 eligible project based on the county population ranking determined under
12 subsection (3) of this section.
13 (3) (a) On or before June 1, 2024, and no later than June 1 every two (2) years
14 thereafter, the cabinet shall determine a county population ranking for each
15 county by adding the following two (2) factors:
16 1. The population density ranking; and
17 2. The ten (10) year percentage change in population ranking.
18 (b) The required local match for each county shall be as follows:
19 1. Eligible projects in counties where the county population ranking is
20 greater than or equal to one hundred ninety-three (193) shall provide a
21 minimum amount of local matching funds equal to ten percent (10%) of
22 the project cost;
23 2. Eligible projects in counties where the county population ranking is less
24 than one hundred ninety-three (193) but greater than or equal to one
25 hundred forty-five (145) shall provide a minimum amount of local
26 matching funds equal to twelve and one-half percent (12.5%) of the
27 project cost;
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1 3. Eligible projects in counties where the county population ranking is less
2 than one hundred forty-five (145) but greater than or equal to ninety-
3 seven (97) shall provide a minimum amount of local matching funds
4 equal to fifteen percent (15%) of the project cost;
5 4. Eligible projects in counties where the county population ranking is less
6 than ninety-seven (97) but greater than or equal to forty-nine (49) shall
7 provide a minimum amount of local matching funds equal to seventeen
8 and one-half percent (17.5%) of the project cost;
9 5. Eligible projects in counties where the county population ranking is less
10 than forty-nine (49) shall provide a minimum amount of local matching
11 funds equal to twenty percent (20%) of the project cost; and
12 6. For eligible projects requesting due diligence as an eligible use, the due
13 diligence must be completed prior to acquisition of the site. If the due
14 diligence result leads to the decision to not purchase the site, then the
15 cabinet may expend up to two hundred thousand dollars ($200,000) with
16 no local matching funds required. If the amount to be reimbursed by the
17 cabinet exceeds two hundred thousand dollars ($200,000), the cabinet
18 shall report to the Interim Joint Committee on Appropriations and
19 Revenue, or the Senate Standing Committee on Appropriations and
20 Revenue and the House Standing Committee on Appropriations and
21 Revenue, within five (5) days of the disbursement. The report shall
22 include the name and county location of the eligible project approved,
23 the amount of the grant awarded, the amount of the funding disbursed
24 for due diligence and the extenuating circumstances related to the due
25 diligence study.
26 (c) On or before July 1, 2024, and no later than July 1 every two (2) years
27 thereafter, the cabinet shall report to the Legislative Research Commission
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1 and the Interim Joint Committee on Appropriations and Revenue the
2 following information for each county:
3 1. The county name;
4 2. The population density ranking for that county;
5 3. The ten (10) year percentage change in population ranking for that
6 county; and
7 4. The county population ranking for that county.
8 (d) When awarding grants in this initiative, the cabinet shall not award grants to:
9 1. An eligible grant recipient or a group of eligible grant recipients in
10 excess of the amount allocated to the county in which the county is
11 located, except when pooled pursuant to subsection (4) of this section;
12 or
13 2. An eligible grant recipient that received a grant award from the
14 Kentucky Product Development Initiative of 2022 prior to all other
15 eligible grant recipients receiving a grant award from the Kentucky
16 Product Development Initiative of 2024 if the eligible project scores are
17 equal to or above the score of an eligible project from an eligible grant
18 recipient who received a grant award from the Kentucky Product
19 Development Initiative of 2022 under KRS 154.21-040, and in the case
20 where the scores are equal, discretion by the Kentucky Association for
21 Economic Development and the cabinet shall be used.
22 (e) The maximum funding available for an approved development project is two
23 million five hundred thousand dollars ($2,500,000) in a heritage county and
24 two million dollars ($2,000,000) in any other[per] county, except as
25 permitted by subsection (4) of this section.
26 (f) If there are funds available after the first round of grant awards of the
27 Kentucky Product Development Initiative of 2024, the cabinet shall initiate
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1 additional rounds of grant awards.
2 (4) (a) For selected eligible grant recipients that are involved in a regional project,
3 the cabinet may pool the potential allocation of funds available for each
4 county represented by the eligible grant recipients for the grant amount
5 awarded.
6 (b) A county that is an eligible grant recipient involved in a regional project shall
7 provide that county's local matching funds based on the county population
8 ranking determined under subsection (3) of this section and each county's
9 local matching funds may be pooled as described in paragraph (a) of this
10 subsection.
11 (5) Beginning no later than November 1, 2024, and annually thereafter until the
12 authorized appropriation is spent or returned, the cabinet shall compile and submit a
13 report for each application approved by the Kentucky Economic Development
14 Finance Authority for the Kentucky Product Development Initiative of 2024. The
15 report shall be electronically delivered to the Legislative Research Commission and
16 the Interim Joint Committee on Appropriations and Revenue and contain the
17 following information:
18 (a) The name of the applicant, a description of the eligible project, and the
19 location of each proposed project for which an application was approved;
20 (b) The date the application was approved by the Kentucky Economic
21 Development Finance Authority;
22 (c) The amount of funding authorized for each project approved;
23 (d) The total amount of funding disbursed for each project approved; and
24 (e) The round of funding for which each project received approval.
25 (6) The Kentucky Product Development Initiative of 2024 shall begin July 1, 2024.
26 Section 8. KRS 154.21-035 is amended to read as follows:
27 (1) The Kentucky Association for Economic Development shall evaluate each
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1 applicant's eligible project according to the criteria described in this section and
2 KRS 154.21-040 for the purposes of compiling a recommendation and score for the
3 eligible project and project site pursuant to KRS 154.21-040.
4 (2) The Kentucky Association for Economic Development and the third-party
5 independent site selection consultant shall consider the requirements in the
6 following five (5) categories in the evaluation of proposed projects:
7 (a) Property availability as described in subsection (3) of this section;
8 (b) Property development ability as described in subsection (4) of this section;
9 (c) Zoning availability as described in subsection (5) of this section;
10 (d) Transportation accessibility as described in subsection (6) of this section; and
11 (e) Utility adequacy as described in subsection (7) of this section.
12 (3) The property that the eligible project occupies or is proposed to occupy shall be
13 available. Property shall be deemed available for the purposes of this program:
14 (a) If the property is publicly owned; or
15 (b) If the project's eligible use includes property acquisition or a due diligence
16 study. In this situation the application shall include one (1) of the following:
17 1. A legally binding letter of intent or option for the sale to an eligible
18 grant recipient; or
19 2. An agreement for the sale to an eligible recipient.
20 (4) The property that the eligible project occupies or is proposed to occupy shall be
21 developable. Property shall be deemed developable if:
22 (a) The acreage intended for development is clearly defined by either:
23 1. The grant applicant; or
24 2. An engineering partner during or after a site visit, if the applicant is
25 unable to define the developable acreage; and
26 (b) The property is free of impediments to development, or a known impediment
27 can be mitigated by a grant applicant. A property is free of impediments if it:
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1 1. Is located outside of the one hundred (100) year and five hundred (500)
2 year flood zone;
3 2. Is free of recognized environmental conditions;
4 3. Is free of wetlands;
5 4. Is free of state and federally threatened and endangered species;
6 5. Is free of areas of archaeological or historical significance; and
7 6. Possesses soils compatible with the grant applicant's intended
8 development.
9 (5) The property that the eligible project occupies or is proposed to occupy shall be
10 appropriately zoned for the intended use or shall be able to be rezoned within ninety
11 (90) calendar days. The properties surrounding the grant applicant's project site
12 shall be zoned so they are compatible with the grant applicant's intended
13 development and use of the project site.
14 (6) The property that the eligible project occupies or is proposed to occupy shall be
15 directly served by a road or roads that are compatible with the intended use of the
16 property. Additionally, if the property is marketed as rail-served, the property shall
17 be deemed rail-served if:
18 (a) The grant applicant provides documentation from the rail provider that
19 evinces that rail infrastructure exists and the rail provider actually provides
20 rail service; or
21 (b) If the rail service does not exist at the time of the grant application, the grant
22 applicant provides documentation from the rail provider that evinces that the
23 project site will be able to be rail-served within twelve (12) months.
24 (7) The property that the eligible project occupies or is proposed to occupy shall have
25 access to adequate utilities and shall be served or able to be served by the
26 following:
27 (a) Electric infrastructure;
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1 (b) Natural gas or propane;
2 (c) Water infrastructure and a public water system;
3 (d) Wastewater infrastructure and a public wastewater treatment plant, excluding
4 a septic wastewater treatment system; and
5 (e) Fiber telecommunications infrastructure.
6 Section 9. KRS 154.25-010 is amended to read as follows:
7 As used in this subchapter:
8 (1) "Activation date" means a date selected by an approved company and set forth in
9 the jobs retention agreement at any time within a three (3) year period after the date
10 of final approval of the agreement by the authority upon which the required
11 investment shall be made and the jobs retention project completed;
12 (2) "Agreement" means a jobs retention agreement entered into pursuant to KRS
13 154.25-030 on behalf of the authority and an approved company with respect to a
14 jobs retention project;
15 (3) "Agribusiness" has the same meaning as in KRS 154.32-010;
16 (4) "Approved company" means any eligible company approved by the authority
17 pursuant to KRS 154.25-030 for a jobs retention project;
18 (5) "Approved costs" means that portion of the eligible costs approved by the authority
19 that an approved company may recover through the inducements authorized by
20 KRS 154.25-030, being a percentage of eligible costs as approved by the authority;
21 (6) "Assessment" means the wage assessment fee authorized by KRS 154.25-040;
22 (7) "Authority" means the Kentucky Economic Development Finance Authority
23 created by KRS 154.20-010;
24 (8) "Commonwealth" means the Commonwealth of Kentucky;
25 (9) "Eligible company":
26 (a) Means any corporation, limited liability company, partnership, limited
27 partnership, sole proprietorship, business trust, or any other entity that has
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1 been operating within the Commonwealth on a continuous basis for at least
2 sixty (60) months preceding the request for approval by the authority of the
3 project which meets the standards set forth in KRS 154.25-020, has been
4 previously approved for economic development incentives from the
5 Commonwealth related to one (1) or more of its facilities, and employs a
6 minimum of two hundred fifty (250) full-time persons for a project located
7 in a heritage county or one thousand (1,000) full-time persons for a project
8 located in any other county, engaged in one (1) or more of the following
9 activities:
10 1.[(a)] Manufacturing;
11 2.[(b)] Agribusiness;
12 3.[(c)] Nonretail service or technology; or
13 4.[(d)] Headquarters operations, regardless of the underlying business
14 activity of the company; and[.]
15 (b) ["Eligible company" ]Does not include companies where the primary activity
16 to be conducted within the Commonwealth is forestry, fishing, mining, coal or
17 mineral processing, the provision of utilities, construction, wholesale trade,
18 retail trade, real estate, rental and leasing, educational services,
19 accommodation and food services, or public administration services;
20 (10) "Eligible costs" means:
21 (a) Obligations incurred for labor and to vendors, contractors, subcontractors,
22 builders, suppliers, deliverymen, and materialmen in connection with the
23 acquisition, construction, equipping, rehabilitation, and installation of a jobs
24 retention project;
25 (b) The cost of contract bonds and of insurance of all kinds that may be required
26 or necessary during the course of a jobs retention project which is not paid by
27 the vendor, supplier, deliveryman, contractor, or otherwise provided;
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1 (c) All costs of architectural and engineering services, including estimates, plans
2 and specifications, preliminary investigations, and supervision of
3 construction, rehabilitation, and installation, as well as for the performance of
4 all the duties required by or consequent upon the acquisition, construction,
5 equipping, rehabilitation, and installation of a jobs retention project;
6 (d) All costs required to be paid under the terms of any contract for the
7 acquisition, construction, equipping, rehabilitation, and installation of a jobs
8 retention project;
9 (e) All costs required for the installation of utilities, including but not limited to
10 water, sewer, sewer treatment, gas, electricity, communications, and railroads,
11 and including off-site construction of the facilities paid for by the approved
12 company; and
13 (f) All other costs comparable with those described above;
14 (11) "Final approval" means the action taken by the authority authorizing the eligible
15 company to receive inducements under this subchapter;
16 (12) "Headquarters" has the same meaning as in KRS 154.32-010;
17 (13) "Heritage county" means a county where the county population ranking
18 determined by the cabinet under Section 7 of this Act scores greater than or equal
19 to ninety-seven (97);
20 (14) "Inducements" means the Kentucky tax credit and the wage assessment fee as
21 prescribed in KRS 154.25-030 and 154.25-040;
22 (15)[(14)] "Jobs retention project" or "project" means the acquisition, construction, and
23 installation of new equipment and, with respect thereto, the construction,
24 rehabilitation, and installation of improvements to facilities necessary to house the
25 acquisition, construction, and installation of new equipment, including surveys;
26 installation of utilities, including water, sewer, sewage treatment, gas, electricity,
27 communications, and similar facilities; off-site construction of utility extensions to
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1 the boundaries of the real estate on which the facilities are located; and shall contain
2 eligible costs of not less than twenty-five million dollars ($25,000,000) for a
3 project located in a heritage county or one hundred million dollars ($100,000,000)
4 for a project located in any other county, all of which are utilized to improve the
5 economic and operational situation of an approved company to allow the approved
6 company to reinvest in its operations and retain a significant number of existing
7 jobs within the Commonwealth;
8 (16)[(15)] "Kentucky gross profits" means Kentucky gross profits as defined in KRS
9 141.0401;
10 (17)[(16)] "Kentucky gross receipts" means Kentucky gross receipts as defined in KRS
11 141.0401;
12 (18)[(17)] "Manufacturing" has the same meaning as in KRS 154.32-010;
13 (19)[(18)] "Nonretail service or technology" has the same meaning as in KRS 154.32-
14 010;
15 (20)[(19)] "Preliminary approval" means the action taken by the authority conditioning
16 final approval by the authority upon satisfaction by the eligible company of the
17 requirements under this subchapter;
18 (21)[(20)] "Supplemental project" means an additional jobs retention project proposed
19 by the approved company or its affiliate during the term of a previously approved
20 jobs retention project, which may be included in the jobs retention agreement by
21 way of amendment and which may result in increased inducements and an
22 extension of the original project term as set forth in KRS 154.25-050; and
23 (22)[(21)] "Transferred credits" means unused approved costs as determined by the
24 Department of Revenue from a previously approved, independent, active project
25 under a different incentive program governed by the Cabinet for Economic
26 Development that may be transferred to a jobs retention project and used by the
27 approved company pursuant to a jobs retention agreement.
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1 Section 10. KRS 154.25-030 is amended to read as follows:
2 (1) The authority, upon adoption of its final approval, may enter into, with any
3 approved company, an agreement with respect to the jobs retention project. The
4 terms and provisions of each agreement, including the amount of approved costs,
5 the amount of the inducement, the job maintenance requirement, and any
6 limitations the authority may deem necessary, shall be determined by negotiations
7 between the authority and the approved company, except that each agreement shall
8 include the following provisions:
9 (a) The amount the approved company may recover through inducements under
10 this subchapter for the initial project, which shall be a negotiated percentage
11 not to exceed fifty percent (50%) of eligible costs. However, the authority
12 may negotiate an increase in the percentage such that both the initial project
13 and any supplemental projects are eligible for seventy-five percent (75%) of
14 eligible costs upon approval of a supplemental project. The adjustment to the
15 initial project shall be made on the total approved costs and any credits taken
16 prior to the addition of a supplemental project shall then be subtracted from
17 that increased amount of approved costs. Neither the initial project nor any
18 supplemental project shall ever be eligible for inducements greater than
19 seventy-five percent (75%) of the eligible costs. The authority shall negotiate
20 a maximum allowable inducement for each year of the agreement, and the
21 approved company may not recover inducements above that maximum in any
22 year during the term of the agreement, except that the annual maximum
23 allowable inducement may be exceeded if a carry-forward of unused
24 inducements from previous years exists. Any carry-forward of unused
25 inducements will lapse upon maturity or termination of the agreement;
26 (b) A provision that sets the activation date for the initial project within three (3)
27 years of the final approval. Prior to the activation date, the authority may
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1 extend the time for the completion of the jobs retention project and
2 compliance with the required investment upon request of the approved
3 company for good cause; however, the ten (10) year period for the term of the
4 agreement shall begin from the activation date. No inducements from the jobs
5 retention project shall be available, other than the transferred credits provided
6 for under subsection (2) of this section, until activation. Upon activation, the
7 balance of transferred credits shall expire;
8 (c) A provision that states that within three (3) months of the completion of the
9 jobs retention project, the approved company shall document the actual cost
10 of the project in a manner acceptable to the authority. The authority may
11 employ an independent consultant or utilize technical resources to verify the
12 cost of the project. The approved company shall reimburse the authority for
13 the cost of the consultant;
14 (d) A provision that establishes a minimum required number of full-time jobs that
15 must be maintained at the site of the jobs retention project and filled with
16 residents of the Commonwealth subject to Kentucky income tax and states
17 that the authorized inducements may be suspended at the discretion of the
18 authority from the date of noncompliance until the date compliance is
19 reestablished if the approved company's employment falls below the
20 established minimum employment requirement. If the company does not
21 increase the number of full-time employees at the site who are residents of the
22 Commonwealth and subject to Kentucky income tax sufficiently to meet the
23 minimum employment requirement within one (1) year from the date of the
24 initial suspension, the remaining unused inducements may be terminated at
25 the discretion of the authority;
26 (e) A provision that gives the authority discretion to suspend or terminate the
27 authorized inducements for any failure to comply with the terms of the
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1 agreement; and
2 (f) 1. A provision that provides the term shall not be longer than the earlier of:
3 a.[1.] The date on which the approved company has received
4 inducements or withheld assessments equal to the amount that the
5 company may recover under paragraph (a) of this subsection; or
6 b.[2.] Ten (10) years from the activation date.
7 2. [However, ]The term in subparagraph 1. of this paragraph may be
8 extended to a period longer than ten (10) years upon:
9 a. The approved company demonstrating that less than seventy-five
10 percent (75%) of the incentives awarded under the agreement
11 will be claimed during the term of the agreement; or
12 b. The addition of a supplemental project as negotiated and approved
13 by the authority.
14 3. An extension of the term shall not amend any provision of the
15 agreement impacting the scope of the project or the maximum amount
16 of incentives awarded under the agreement.
17 (2) In consideration of the execution of the agreement, during the time the agreement is
18 in effect, which time shall commence on the date of the agreement, the approved
19 company may be permitted the following inducements:
20 (a) Beginning on the effective date of the jobs retention agreement, which shall
21 also be the date of final approval, if the approved company has a balance of
22 unused approved costs on a previously existing and active incentive
23 agreement approved by the authority pursuant to KRS Chapter 154, the
24 approved company may impose wage assessments on employees whose jobs
25 are at the facility where the project defined in the previously existing
26 incentive agreement was located. The wage assessments may be imposed as
27 provided in KRS 154.25-040, and shall be available in an amount up to the
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1 balance of transferred credits from the previously existing project.
2 1. The transferred credits shall only be available to the approved company
3 until the activation date, the term from the original incentive agreement
4 expires, or the balance of transferred credits is exhausted, whichever
5 occurs first; and
6 2. Should the approved company exercise this option, the incentive
7 agreement from which the credits were transferred shall be terminated
8 upon transfer and all parties shall be released from their obligations
9 thereunder.
10 (b) After the activation date:
11 1. A one hundred percent (100%) credit against the taxes imposed by KRS
12 141.020, 141.040, and 141.0401 that would otherwise be owed by the
13 approved company, in the approved company's taxable year, as
14 determined under KRS 141.402, on the taxable income, Kentucky gross
15 receipts, or Kentucky gross profits of the approved company generated
16 by or arising from the jobs retention project. The ordering of credits
17 shall be as provided in KRS 141.0205;
18 2. The aggregate assessment withheld by the approved company as
19 provided in KRS 154.25-040 in each year after the activation date;
20 (c) The tax credits allowed to the approved company shall be equal to the lesser
21 of the total amount of the tax liability or the amount that the company may
22 recover under subsection (1)(a) of this section that has not yet been recovered,
23 reduced by any recovery through the collection of assessments subject to the
24 annual maximum inducements authorized pursuant to subsection (1)(a) of this
25 section. The credit shall be allowed for each taxable year of the approved
26 company during the term of the agreement and for which a tax return of the
27 approved company is filed until the amount that the company may recover
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1 under subsection (1)(a) of this section has been received through a
2 combination of credits and assessments, if the company elects to impose
3 assessments. The approved company shall not be required to pay estimated
4 tax payments as prescribed under KRS 141.044 or 141.305 on income,
5 Kentucky gross profits, or Kentucky gross receipts from the jobs retention
6 project. One hundred eighty (180) days after the filing of the tax return of the
7 approved company, the Department of Revenue shall certify to the authority
8 the state tax liability for the preceding taxable year of the approved company
9 and the amount of any tax credits taken pursuant to this section;
10 (d) Prior to execution of the agreement, the eligible company shall secure from all
11 local governmental authorities responsible for collecting local occupational
12 license fees a resolution or order of the local governmental entities
13 acknowledging and consenting to the termination or partial termination of the
14 receipt of local occupational license fees on wages subject to the agreement
15 paid by the approved company on behalf of its employees to the local
16 government entities;
17 (e) If more than one (1) local occupational license fee is imposed upon the
18 employees of the approved company, the assessment imposed upon the
19 employees shall be credited against the local occupational license fee and
20 shall be apportioned to each local occupational license fee according to each
21 local occupational license fee's proportion to the total of all local occupational
22 license fees for such employees. No credit or portion thereof shall be allowed
23 against any local occupational license fee imposed by or dedicated solely to a
24 local board of education; and
25 (f) If, in any taxable year of the approved company during which the agreement
26 is in effect, the assessment collected from the wages of the employees exceeds
27 the expended portion of the amount that the approved company may recover
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1 under paragraph (a) of this subsection, or exceeds the annual maximum
2 negotiated by the authority, the assessment collected from the wages of the
3 employees shall cease for the remainder of that taxable year of the approved
4 company. The approved company shall resume normal personal income tax
5 and occupational license fee withholdings from the employees' wages for the
6 remainder of that taxable year, and the approved company shall remit to the
7 Commonwealth and applicable local jurisdictions their respective shares of
8 the excess assessment collected on the withholding filing date for employees'
9 wages next succeeding the first date when the approved company collected
10 excess assessments.
11 (3) The jobs retention agreement and inducements available pursuant thereto shall not
12 be transferable or assignable by the approved company without the expressed
13 written consent of the authority.
14 Section 11. KRS 65.4931 is amended to read as follows:
15 (1) As used in this section:
16 (a) "Borrower" means the entity receiving the proceeds from a new bond issued
17 because of an extended tax increment financing agreement allowed under
18 KRS 65.490(12)[(10)];
19 (b) "Excess revenues" means all moneys which exceed the costs associated with
20 the borrower's operating expenses, capital expenditures, and the regularly
21 scheduled debt service on the bond; and
22 (c) "Term of the bond" shall begin on the date any current bonds are refinanced,
23 reissued, or restructured and shall end upon the earlier of the stated maturity
24 date of the bond or the payment in full of the bond.
25 (2) A pilot program may be extended for a period not to exceed an additional twenty-
26 five (25) years in connection with the issuance of a new bond by the Kentucky
27 Economic Development Finance Authority if the pilot program agreement contains
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1 provisions requiring that:
2 (a) The borrower use all excess revenues to redeem the bond prior to the stated
3 maturity date;
4 (b) 1. Once the bond is callable, the borrower apply all excess revenues to the
5 redemption of the bond prior to the stated maturity date at least every
6 thirty-six (36) months; and
7 2. If it is the position of the borrower that the application of all excess
8 revenues to the redemption of the bond prior to the stated maturity date
9 jeopardizes the project, the borrower shall present an alternative
10 payment plan for that thirty-six (36) month period to the Capital Projects
11 and Bond Oversight Committee for approval; and
12 (c) No further revenues under the pilot program be remitted to the borrower
13 following the end of the term of the bond.
14 (3) The borrower shall submit a report to the Governor and the Capital Projects and
15 Bond Oversight Committee on or before November 1, 2018, and annually thereafter
16 regarding the operations and financial condition of the borrower.
17 Section 12. KRS 154.25-050 is amended to read as follows:
18 (1) If an approved company makes additional investments in the form of additional
19 jobs retention projects during the term of the initial jobs retention project, the
20 approved company may apply for, and the authority may approve, a supplemental
21 project.
22 (2) The authority, upon adoption of its final approval of a supplemental project, may
23 enter into, with any approved company, an amended agreement with respect to both
24 the initial jobs retention project and the supplemental project which shall jointly
25 make up its project. The terms and provisions of each amended agreement,
26 including the amount of approved costs, the amount of the tax credit pursuant to
27 KRS 154.25-030, the job maintenance requirement established by the agreement,
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1 and any limitations the authority may deem necessary, shall be determined by
2 negotiations between the authority and the approved company, except that each
3 agreement shall include the following provisions:
4 (a) Upon approval of a supplemental project, the amount the approved company
5 may recover through inducements for the initial project and any supplemental
6 projects shall be a negotiated percentage not to exceed seventy-five percent
7 (75%) of the eligible costs from the initial project and all newly incurred
8 eligible costs from any supplemental projects, subject to the annual maximum
9 negotiated and approved by the authority. At the time a supplemental project
10 is approved, the recoverable amount and the annual maximum inducement for
11 the initial jobs retention project and any previous supplemental projects may
12 also be increased at the discretion of the authority pursuant to KRS 154.25-
13 030.
14 (b) The activation date for a supplemental project shall be no more than three (3)
15 years from final approval of the supplemental project. Prior to the activation
16 date, the authority may extend the time for the completion of the jobs
17 retention project and compliance with the required investment upon request of
18 the approved company for good cause; however, the ten (10) year period for
19 the term of the agreement shall begin from the activation date. Within three
20 (3) months of the completion date for a supplemental project, the approved
21 company shall document the actual cost of the project in a manner acceptable
22 to the authority. The authority may employ an independent consultant to
23 verify the cost of the supplemental project subject to reimbursement for the
24 cost of same from the approved company.
25 (c) In consideration of the execution of the amended agreement, on the date
26 stated in the agreement, the approved company may be permitted during the
27 term of the amended agreement to take the inducements set forth in KRS
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1 154.25-030(2)(b),[ and] (2)(c), and (3)(a), subject to the remaining terms of
2 that section.
3 Section 13. KRS 154.32-010 is amended to read as follows:
4 As used in this subchapter:
5 (1) "Activation date" means the date established in the tax incentive agreement that is
6 within two (2) years of final approval;
7 (2) "Affiliate" means the following:
8 (a) Members of a family, including only brothers and sisters of the whole or half
9 blood, spouse, ancestors, and lineal descendants of an individual;
10 (b) An individual, and a corporation more than fifty percent (50%) in value of the
11 outstanding stock of which is owned, directly or indirectly, by or for that
12 individual;
13 (c) An individual, and a limited liability company of which more than fifty
14 percent (50%) of the capital interest or profits are owned or controlled,
15 directly or indirectly, by or for that individual;
16 (d) Two (2) corporations which are members of the same controlled group, which
17 includes and is limited to:
18 1. One (1) or more chains of corporations connected through stock
19 ownership with a common parent corporation if:
20 a. Stock possessing more than fifty percent (50%) of the total
21 combined voting power of all classes of stock entitled to vote or
22 more than fifty percent (50%) of the total value of shares of all
23 classes of stock of each of the corporations, except the common
24 parent corporation, is owned by one (1) or more of the other
25 corporations; and
26 b. The common parent corporation owns stock possessing more than
27 fifty percent (50%) of the total combined voting power of all
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1 classes of stock entitled to vote or more than fifty percent (50%) of
2 the total value of shares of all classes of stock of at least one (1) of
3 the other corporations, excluding, in computing the voting power
4 or value, stock owned directly by the other corporations; or
5 2. Two (2) or more corporations if five (5) or fewer persons who are
6 individuals, estates, or trusts own stock possessing more than fifty
7 percent (50%) of the total combined voting power of all classes of stock
8 entitled to vote or more than fifty percent (50%) of the total value of
9 shares of all classes of stock of each corporation, taking into account the
10 stock ownership of each person only to the extent the stock ownership is
11 identical with respect to each corporation;
12 (e) A grantor and a fiduciary of any trust;
13 (f) A fiduciary of a trust and a fiduciary of another trust, if the same person is a
14 grantor of both trusts;
15 (g) A fiduciary of a trust and a beneficiary of that trust;
16 (h) A fiduciary of a trust and a beneficiary of another trust, if the same person is a
17 grantor of both trusts;
18 (i) A fiduciary of a trust and a corporation more than fifty percent (50%) in value
19 of the outstanding stock of which is owned, directly or indirectly, by or for the
20 trust or by or for a person who is a grantor of the trust;
21 (j) A fiduciary of a trust and a limited liability company more than fifty percent
22 (50%) of the capital interest, or the interest in profits, of which is owned
23 directly or indirectly, by or for the trust or by or for a person who is a grantor
24 of the trust;
25 (k) A corporation, a partnership, or a limited partnership if the same persons own:
26 1. More than fifty percent (50%) in value of the outstanding stock of the
27 corporation; and
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1 2. More than fifty percent (50%) of the capital interest, or the profits
2 interest, in the partnership or limited partnership;
3 (l) A corporation and a limited liability company if the same persons own:
4 1. More than fifty percent (50%) in value of the outstanding stock of the
5 corporation; and
6 2. More than fifty percent (50%) of the capital interest or the profits in the
7 limited liability company;
8 (m) A partnership or limited partnership and a limited liability company if the
9 same persons own:
10 1. More than fifty percent (50%) of the capital interest or profits in the
11 partnership or limited partnership; and
12 2. More than fifty percent (50%) of the capital interest or the profits in the
13 limited liability company;
14 (n) An S corporation and another S corporation if the same persons own more
15 than fifty percent (50%) in value of the outstanding stock of each corporation;
16 S corporation designation being the same as that designation under the
17 Internal Revenue Code of 1986, as amended;
18 (o) An S corporation and a C corporation, if the same persons own more than
19 fifty percent (50%) in value of the outstanding stock of each corporation; S
20 and C corporation designations being the same as those designations under the
21 Internal Revenue Code of 1986, as amended; or
22 (p) Two (2) or more limited liability companies, if the same persons own more
23 than fifty percent (50%) of the capital interest or are entitled to more than fifty
24 percent (50%) of the capital profits in the limited liability companies;
25 (3) "Agribusiness" means the processing of raw agricultural products, including but not
26 limited to timber and industrial hemp, or the performance of value-added functions
27 with regard to raw agricultural products;
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1 (4) "Alternative fuel production" means a Kentucky operation that primarily produces
2 alternative transportation fuels for sale. The alternative fuel production may
3 produce electricity as a by-product if the primary function of the operations remains
4 the production and sale of alternative transportation fuels;
5 (5) "Alternative transportation fuels" has the same meaning as in KRS 152.715;
6 (6) "Approved company" means an eligible company that has received final approval
7 to receive incentives under this subchapter;
8 (7) "Approved costs" means the amount of eligible costs approved by the authority at
9 final approval;
10 (8) "Authority" means the Kentucky Economic Development Finance Authority
11 established by KRS 154.20-010;
12 (9) "Biomass resources" has the same meaning as in KRS 152.715;
13 (10) "Capital lease" means a lease classified as a capital lease by the Statement of
14 Financial Accounting Standards No. 13, Accounting for Leases, issued by the
15 Financial Accounting Standards Board, November 1976, as amended;
16 (11) "Carbon dioxide or hydrogen transmission pipeline" means the in-state portion of a
17 pipeline, including appurtenant facilities, property rights, and easements, that is
18 used exclusively for the purpose of transporting carbon dioxide or hydrogen to the
19 point of sale, storage, or other carbon or hydrogen management applications;
20 (12) "Coal severing and processing" means activities resulting in the eligible company
21 being subject to the tax imposed by KRS Chapter 143;
22 (13) "Commonwealth" means the Commonwealth of Kentucky;
23 (14) "Confirmed approved costs" means:
24 (a) For owned economic development projects, the documented eligible costs
25 incurred on or before the activation date; or
26 (b) For leased economic development projects:
27 1. The documented eligible costs incurred on or before the activation date;
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1 and
2 2. Estimated rent to be incurred by the approved company throughout the
3 term of the tax incentive agreement.
4 For both owned and leased economic development projects, "confirmed approved
5 costs" may be less than approved costs, but shall not be more than approved costs;
6 (15) "Department" means the Department of Revenue;
7 (16) "Economic development project" means:
8 (a) The acquisition, leasing, or construction of a new facility;
9 (b) The acquisition, leasing, rehabilitation, or expansion of an existing facility; or
10 (c) The installation and equipping of a facility;
11 by an eligible company. "Economic development project" does not include any
12 economic development project that will result in the replacement of facilities
13 existing in the Commonwealth, except as provided in KRS 154.32-060;
14 (17) (a) "Eligible company" means any corporation, limited liability company,
15 partnership, limited partnership, sole proprietorship, business trust, or any
16 other entity with a proposed economic development project that is engaged in
17 or is planning to be engaged in one (1) or more of the following activities
18 within the Commonwealth:
19 1. Manufacturing;
20 2. Agribusiness;
21 3. Nonretail service or technology;
22 4. Headquarters operations, regardless of the underlying business activity
23 of the company;
24 5. Alternative fuel, gasification, energy-efficient alternative fuel, or
25 renewable energy production;
26 6. Carbon dioxide or hydrogen transmission pipeline;
27 7. Coal severing and processing;[ or]
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1 8. Hospital operations; or
2 9. Research and development.
3 (b) "Eligible company" does not include companies where the primary activity to
4 be conducted within the Commonwealth is forestry, fishing, the provision of
5 utilities, construction, wholesale trade, retail trade, real estate, rental and
6 leasing, educational services, accommodation and food services, or public
7 administration services;
8 (18) "Eligible costs" means:
9 (a) For owned economic development projects:
10 1. Start-up costs[;
11 ] to furnish and equip a facility, including:
12 a. Office and manufacturing equipment;
13 b. Software;
14 c. Computers;
15 d. Fixtures; and
16 e. Fixed telecommunications equipment;
17 2. Nonrecurring obligations incurred for labor and nonrecurring payments
18 to contractors, subcontractors, builders, and materialmen in connection
19 with the economic development project;
20 3. The cost of acquiring land or rights in land and any cost incidental
21 thereto, including recording fees;
22 4. The cost of contract bonds and of insurance of all kinds that may be
23 required or necessary for completion of an economic development
24 project which is not paid by a contractor or otherwise provided for;
25 5. All costs of architectural and engineering services, including test
26 borings, surveys, estimated plans and specifications, preliminary
27 investigations, and supervision of construction, as well as for the
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1 performance of all the duties required for construction of the economic
2 development project;
3 6. All costs which are required to be paid under the terms of any contract
4 for the economic development project;
5 7. All costs incurred for construction activities, including site tests and
6 inspections; subsurface site work; excavation; removal of structures,
7 roadways, cemeteries, and other surface obstructions; filling, grading,
8 and providing drainage and storm water retention; installation of utilities
9 such as water, sewer, sewage treatment, gas, electric, communications,
10 and similar facilities; off-site construction of utility extensions to the
11 boundaries of the real estate; construction and installation of railroad
12 spurs as needed to connect the economic development project to existing
13 railways; or similar activities as the authority may determine necessary
14 for construction of the economic development project; and
15 8. All other costs of a nature comparable to those described above; and
16 (b) For leased economic development projects:
17 1. Start-up costs to furnish and equip a facility, including:
18 a. Office and manufacturing equipment;
19 b. Software;
20 c. Computers;
21 d. Fixtures; and
22 e. Fixed telecommunications equipment;
23 2. Building/leasehold improvements; and
24 3. Fifty percent (50%) of the estimated annual rent for each year of the tax
25 incentive agreement[.
26 Notwithstanding any other provision of this subsection, for economic development
27 projects that are not in enhanced incentive counties, the cost of equipment eligible
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1 for recovery as an eligible cost shall not exceed twenty thousand dollars ($20,000)
2 for each new full-time job created as of the activation date];
3 (19) "Employee benefits" means payments by an approved company for its full-time
4 employees for health insurance, life insurance, dental insurance, vision insurance,
5 defined benefits, 401(k), or similar plans;
6 (20) "Energy-efficient alternative fuel production" means a Kentucky operation that
7 produces for sale energy-efficient alternative fuels;
8 (21) "Energy-efficient alternative fuels" means homogeneous fuels that:
9 (a) Are produced from processes designed to densify feedstock coal, waste coal,
10 or biomass resources; and
11 (b) Have an energy content that is greater than the feedstock coal, waste coal, or
12 biomass resource;
13 (22) ["Enhanced incentive counties" means counties certified by the authority pursuant
14 to KRS 154.32-050;
15 (23) ]"Final approval" means the action taken by the authority authorizing the eligible
16 company to receive incentives under this subchapter;
17 (23)[(24)] (a) "Full-time job" means a job held by a person who:
18 1. Is required to work a minimum of thirty-five (35) hours per week; and
19 2. a. Is subject to the Kentucky individual income tax imposed by KRS
20 141.020; or
21 b. Works remotely away from the economic development project if
22 the job meets all of the following conditions:
23 i. Is held by a Kentucky resident;
24 ii. Was created as a result of the economic development project;
25 and
26 iii. The payroll of this job is expensed to the economic
27 development project.
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1 (b) "Full-time job" does not include a job held by a resident of any state with a
2 reciprocal agreement between the Commonwealth and the other state as
3 described in KRS 141.070;
4 (24)[(25)] "Gasification process" means a process that converts any carbon-containing
5 material into a synthesis gas composed primarily of carbon monoxide and
6 hydrogen;
7 (25)[(26)] "Gasification production" means a Kentucky operation that primarily
8 produces for sale:
9 (a) Alternative transportation fuels;
10 (b) Synthetic natural gas;
11 (c) Chemicals;
12 (d) Chemical feedstocks; or
13 (e) Liquid fuels;
14 from coal, waste coal, coal-processing waste, or biomass resources, through a
15 gasification process. The gasification production may produce electricity as a by-
16 product if the primary function of the operations remains the production and sale of
17 alternative transportation fuels, synthetic natural gas, chemicals, chemical
18 feedstocks, or liquid fuels;
19 (26)[(27)] "Headquarters" means the principal office where the principal executives of
20 the entity are located and from which other personnel, branches, affiliates, offices,
21 or entities are controlled;
22 (27)[(28)] "Heritage county" means a county where the county population ranking
23 determined by the cabinet under Section 7 of this Act scores greater than or equal
24 to ninety-seven (97);
25 (28) "Hospital" means a facility licensed by the Cabinet for Health and Family Services
26 under KRS Chapter 216B for the operation of a hospital and the basic services
27 provided by a hospital;
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1 (29) "Incentives" means the incentives available under this subchapter, as listed in KRS
2 154.32-020(3);
3 (30) "Job target" means the annual average number of new full-time jobs that the
4 approved company commits to create and maintain at the economic development
5 project, which shall not be less than ten (10) new full-time jobs;
6 (31) "Kentucky gross receipts" has the same meaning as in KRS 141.0401;
7 (32) "Kentucky gross profits" has the same meaning as in KRS 141.0401;
8 (33) "Lease agreement":
9 (a) Means an agreement between:
10 1. An approved company and an unrelated entity conveying the right to use
11 a facility, the terms of which reflect an arms' length transaction, or
12 2. An approved company and a related entity where the facility to be
13 occupied by the approved company was conveyed by an unrelated
14 entity after the approved company received preliminary approval;
15 and[. "Lease agreement" ]
16 (b) Does not include a capital lease;
17 (34) "Leased project" means an economic development project site occupied by an
18 approved company pursuant to a lease agreement;
19 (35) "Manufacturing" means any activity involving:
20 (a) Processing, assembling, or production of any property, including the
21 processing resulting in a change in the conditions of the property and any
22 activity related to the processing, assembling, or production of property,
23 together with the storage, warehousing, distribution, and related office
24 facilities; or
25 (b) Production of vital medications, personal protective equipment, or equipment
26 necessary to produce personal protective equipment;
27 (36) (a) "Nonretail service or technology" means any activity where service or
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1 technology is provided predominantly outside the Commonwealth and
2 designed to serve a multistate, national, or international market.
3 (b) "Nonretail service or technology" includes but is not limited to call centers,
4 centralized administrative or processing centers, telephone or Internet sales
5 order or processing centers, distribution or fulfillment centers, data processing
6 centers, research and development facilities, and other similar activities;
7 (37) "Owned project" means an economic development project owned in fee simple by
8 the approved company or an affiliate, or possessed by the approved company or an
9 affiliate pursuant to a capital lease;
10 (38) "Personal protective equipment" means protective clothing, helmets, gloves, face
11 shields, goggles, face masks, respirators, and other equipment designed to protect
12 the user from injury or the spread of infection or illness;
13 (39) "Preliminary approval" means the action taken by the authority preliminarily
14 approving an eligible company for incentives under this subchapter;
15 (40) "Renewable energy production" means a Kentucky operation that utilizes wind
16 power, biomass resources, landfill methane gas, hydropower, solar power, or other
17 similar renewable resources to generate electricity for sale to unrelated entities;
18 (41) "Rent" means the actual annual rent or fee paid by an approved company under a
19 lease agreement;
20 (42) "Start-up costs" means nonrecurring costs, with the exception of paragraphs (d)
21 and (e) of this subsection, incurred to furnish and equip a facility for an economic
22 development project, including costs incurred for:
23 (a) Computers, furnishings, office equipment, manufacturing equipment, and
24 fixtures;
25 (b) The relocation of out-of-state equipment;[ and]
26 (c) Recurring software subscription or licensing fees covering a period not to
27 exceed one (1) year from activation of the project;
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1 (d) The initial software and licensing costs association with each new full-time
2 job created; and
3 (e) Cost of fixed telecommunications equipment;
4 as certified to the authority in accordance with KRS 154.32-030;
5 (43) "Synthetic natural gas" means the same thing as in KRS 152.715;
6 (44) "Tax incentive agreement" means the agreement entered into pursuant to KRS
7 154.32-040 between the authority and an approved company;
8 (45) "Term," subject to Section 16 of this Act, means the period of time for which a tax
9 incentive agreement may be in effect, which shall not exceed fifteen (15) years for
10 an economic development project located in a heritage[an enhanced incentive]
11 county, or ten (10) years for an economic development project not located in any
12 other county;
13 (46) "Vital medications" means any drug or biologic used to prevent or treat a serious
14 life-threatening disease or medical condition for which there is no other available
15 source with sufficient supply of that drug or biologic or alternative drug or biologic;
16 (47) "Wage" means the per hour earnings of a full-time employee, including wages, tips,
17 overtime, bonuses, and commissions, as reflected on the employee's federal form
18 W-2 wage and tax statement, but excludes employee benefits; and
19 (48) "Wage target" means the average total hourly compensation amount, including the
20 minimum wage and employee benefits, that the approved company commits to
21 meet for all new full-time jobs created and maintained as a result of the economic
22 development project, which shall not be less than:
23 (a) Two hundred percent (200%)[One hundred twenty-five percent (125%)] of
24 the federal minimum wage in heritage[enhanced incentive] counties; or
25 (b) Three hundred percent (300%)[One hundred fifty percent (150%)] of the
26 federal minimum wage in any[all] other counties.
27 Section 14. KRS 154.32-020 is amended to read as follows:
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1 (1) The purposes of this subchapter are:
2 (a) To provide incentives for eligible companies and to encourage the location or
3 expansion of manufacturing facilities, agribusiness operations, nonretail
4 service or technology facilities, headquarters operations, alternative fuel
5 production facilities, gasification production facilities, energy-efficient
6 alternative fuel production facilities, renewable energy production facilities,
7 carbon dioxide or hydrogen transmission pipelines, coal severing and
8 processing, and hospital operations in the Commonwealth to advance the
9 public purposes of:
10 1. Creation of new jobs that, but for the incentives offered by the authority,
11 would not exist within the Commonwealth;
12 2. Creation of new sources of tax revenues for the support of public
13 services provided by the Commonwealth;
14 3. Improvement in the quality of life for Kentucky citizens through the
15 creation of sustainable jobs with higher salaries; and
16 4. Providing an economic stimulus to bolster in-state production of vital
17 medications and personal protective equipment; and
18 (b) To provide balanced[enhanced] incentives for companies that locate in
19 heritage[enhanced incentive] counties in recognition of the depressed
20 economic conditions in those counties and the increased need for the growth
21 and development caused by the depressed economic conditions.
22 (2) To qualify for the incentives provided by subsection (3) of this section, an approved
23 company shall:
24 (a) Incur eligible costs of at least one hundred thousand dollars ($100,000);
25 (b) Create at least ten (10) new full-time jobs and maintain an annual average
26 number of at least ten (10) new full-time jobs; and
27 (c) 1. Pay at least ninety percent (90%) of all new full-time employees whose
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1 jobs were created as a result of the economic development project a
2 minimum wage of at least two hundred percent (200%)[one hundred
3 twenty-five percent (125%)] of the federal minimum wage in
4 heritage[enhanced incentive] counties, and three hundred percent
5 (300%)[one hundred fifty percent (150%)] of the federal minimum wage
6 in any other counties throughout the term of the economic development
7 project; and
8 2. Provide employee benefits for all new full-time jobs equal to at least
9 fifteen percent (15%) of the minimum wage requirement established by
10 subparagraph 1. of this paragraph. If the eligible company does not
11 provide employee benefits equal to at least fifteen percent (15%) of the
12 minimum wage requirement established by subparagraph 1. of this
13 paragraph, the eligible company may still qualify for incentives if it
14 provides the full-time employees hired as a result of the economic
15 development project total hourly compensation equal to or greater than
16 one hundred fifteen percent (115%) of the minimum wage requirement
17 established in subparagraph 1. of this paragraph through increased
18 hourly wages combined with employee benefits; or
19 (d) Produce vital medications, personal protective equipment, or equipment
20 necessary to produce personal protective equipment.
21 (3) (a) The incentives available under this subchapter are as follows:
22 1.[(a)] Tax credits of up to one hundred percent (100%) of the Kentucky
23 income tax imposed under KRS 141.020 or 141.040 and the limited
24 liability entity tax imposed under KRS 141.0401 on the income,
25 Kentucky gross profits, or Kentucky gross receipts of the approved
26 company generated by or arising from the economic development
27 project, as set forth in KRS 141.415 and 154.32-070;
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1 2.[(b)] Authorization for the approved company to impose a wage
2 assessment against the gross wages of each new employee subject to the
3 Kentucky income tax as provided in KRS 154.32-090; and
4 3.[(c)] An approved company receiving preliminary approval after July
5 1, 2026, may receive, in addition to the inducements provided under
6 subparagraphs 1. and 2. of this paragraph, an income tax credit as
7 provided under Section 17 of this Act.
8 (b) Notwithstanding any provision of law to the contrary, for any economic
9 development project with an eligible investment of more than two hundred
10 million dollars ($200,000,000), the authority may authorize approval to the
11 economic development project based upon terms and incentives applicable to
12 economic development project locating in a heritage[an enhanced incentive]
13 county.
14 (4) The General Assembly hereby finds and declares that the authority granted in this
15 subchapter and the purposes accomplished hereby are proper governmental and
16 public purposes for which public moneys may be expended, and that the
17 inducement of the location of economic development projects within the
18 Commonwealth is of paramount importance to the economic well-being of the
19 Commonwealth.
20 Section 15. KRS 154.32-030 is amended to read as follows:
21 (1) The application, approval, and review process under this subchapter shall be as
22 follows:
23 (a) An eligible company with a proposed economic development project may
24 submit an application to the authority. The application shall include the
25 information required by subsection (3) of this section;
26 (b) Upon review of the application and any additional information submitted, the
27 authority may, by resolution, give preliminary approval to an eligible
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1 company and authorize the negotiation and execution of a memorandum of
2 agreement. The memorandum of agreement shall establish a preliminary job
3 target, minimum wage target, including employee benefits, and maximum
4 total approved cost for the economic development project, and shall only
5 allow the recovery of eligible costs incurred ninety (90) days prior to receipt
6 of[ after] preliminary approval. Upon preliminary approval, the preliminarily
7 approved company may undertake the project in accordance with the
8 memorandum of agreement, and may begin to hire employees that may be
9 counted toward the minimum full-time job requirements established by the
10 memorandum of agreement;
11 (c) After preliminary approval but before final approval, the authority shall post
12 the preliminarily approved company's name, the location of the economic
13 development project, and the incentives that have been preliminarily approved
14 on the Cabinet for Economic Development's website[Web site];
15 (d) The preliminarily approved company shall submit any documentation
16 required by the authority upon request of the authority;
17 (e) To obtain final approval, the preliminarily approved company shall submit:
18 1. Documentation required by the authority to confirm that the
19 requirements established by the memorandum of agreement have been
20 met; and
21 2. Documentation of official action taken by a local governmental entity
22 detailing the manner and level of local contribution, if applicable.
23 Upon review and confirmation of the documentation, the authority may, by
24 resolution, give final approval to the preliminarily approved company, and
25 authorize the execution of a tax incentive agreement between the authority
26 and the approved company pursuant to KRS 154.32-040. The tax incentive
27 agreement shall establish an activation date, which shall be within two (2)
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1 years of final approval;
2 (f) 1. On or before the activation date, the approved company shall notify the
3 authority of its intention to activate the tax incentive agreement. The
4 approved company shall submit:
5 a. Documentation that it has met the minimum full-time job,
6 minimum investment, and minimum wage and employee benefits
7 requirements established by KRS 154.32-020 as of the date of
8 activation; and
9 b. The confirmed approved costs incurred as of the date of activation,
10 which shall be the total eligible costs that may be recovered by the
11 approved company.
12 2. If the approved company fails to meet any of the minimum investment,
13 full-time job, or wage requirements, including employee benefits,
14 established by KRS 154.32-020 on the activation date, the tax incentive
15 agreement shall be canceled and the approved company shall not be
16 eligible for incentives.
17 3. If an approved company meets the minimum investment, full-time job,
18 and wage requirements, including employee benefits, established by
19 KRS 154.32-020, but fails to meet higher job targets and minimum
20 wage targets, including employee benefits, established in the tax
21 incentive agreement, then the provisions of subsection (4) of this section
22 shall apply in determining the incentives for which the approved
23 company qualifies.
24 4. Upon activation of a tax incentive agreement, the authority shall notify
25 the department, and shall provide the department with the information
26 necessary to monitor and track the incentives taken by the approved
27 company; and
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1 (g) 1. The authority shall monitor the tax incentive agreement at least
2 annually, and the approved company shall submit all documentation
3 necessary for the authority to monitor the agreement.
4 2. The authority shall, based on the documentation provided, confirm that
5 the approved company is in continued compliance with the provisions of
6 the tax incentive agreement and, therefore, eligible for incentives.
7 3. Upon annual review, if the approved company meets the minimum job
8 and wage requirements, including employee benefits, established by
9 KRS 154.32-020, but fails to meet the job target and minimum wage
10 target, including employee benefits, established in the tax incentive
11 agreement, then the provisions of subsection (4) of this section shall
12 apply in determining the incentives for which the approved company
13 qualifies in any year.
14 4. Upon final approval, the authority shall notify the department that an
15 approved company is eligible for incentives and shall provide the
16 department with the information necessary to monitor the use of
17 incentives by the approved company. If, at any time during the term of
18 the tax incentive agreement, an approved company becomes ineligible
19 for incentives, the authority shall notify the department, and the
20 department shall discontinue the availability of incentives for the
21 approved company.
22 (2) (a) The authority may establish procedures and standards for the review and
23 approval of eligible companies and their economic development projects
24 through the promulgation of administrative regulations in accordance with
25 KRS Chapter 13A.
26 (b) Standards to be used by the authority in reviewing and approving an eligible
27 company and its economic development project shall include but not be
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1 limited to:
2 1. The creditworthiness of the eligible company;
3 2. The proposed capital investment to be made;
4 3. The number of new full-time jobs to be provided for the residents of the
5 Commonwealth and the wages to be paid;
6 4. Support of the local community; and
7 5. The likelihood of the economic success of the economic development
8 project.
9 (3) The application shall include but not be limited to:
10 (a) The name of the applicant and identification of any affiliates of the applicant
11 who will have some relation to the economic development project;
12 (b) A description of the economic development project, including its location, the
13 total investment in the economic development project, and total proposed
14 eligible costs;
15 (c) The projected number of new full-time jobs to be created as a result of the
16 economic development project and identification of any affiliates who may
17 employ persons hired to fill those jobs;
18 (d) The number of existing full-time jobs at the site of the economic development
19 project on the date of the application and a description and breakdown of the
20 relevant affiliated employers;
21 (e) Proposed wage and employee benefit amounts for the new full-time jobs to be
22 created as a result of the proposed economic development project;
23 (f) For proposed economic development projects new to the Commonwealth,
24 certification by the eligible company that the economic development project
25 could reasonably and efficiently locate outside of the Commonwealth and,
26 without the incentives offered by the authority, the eligible company would
27 likely locate outside the Commonwealth;
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1 (g) For eligible companies with an existing location in the Commonwealth
2 considering an expansion, certification that the tax incentives are necessary
3 for the expansion to occur;
4 (h) A letter of support from a local governmental entity in the city or county
5 where the economic development project will be located; and
6 (i) Any other information the authority may require.
7 (4) (a) An approved company that meets the minimum job and wage requirements,
8 including employee benefits established by KRS 154.32-020, but fails to meet
9 the job target and minimum wage target, including employee benefits
10 established by the tax incentive agreement, shall be eligible to receive the
11 incentives authorized by the tax incentive agreement as provided in this
12 subsection.
13 (b) If, upon activation or annual review, an approved company achieves at least
14 ninety percent (90%) of both the job target and minimum wage target,
15 including employee benefits established by the tax incentive agreement, and
16 no other default has occurred, then the approved company shall be eligible to
17 receive full incentives as provided in the tax incentive agreement.
18 (c) If, upon activation or annual review, an approved company achieves less than
19 ninety percent (90%) of either the job target or minimum wage target,
20 including employee benefits established in the tax incentive agreement, and
21 no other default has occurred, then the incentives available to the approved
22 company for the following year shall be reduced by a percentage equal to the
23 percentage representing the difference between the job target or minimum
24 wage target, including employee benefits established in the tax incentive
25 agreement, and the actual average number of full-time jobs or average wage,
26 including employee benefits, paid. If both the number of actual average full-
27 time jobs and average wages paid, including employee benefits, are below
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1 ninety percent (90%) of the targets on the same measurement date, then the
2 greater percentage reduction of the two (2) shall be applied rather than
3 reducing the incentives available by the sum of the two (2).
4 (d) If, upon annual review, either the actual number of new full-time jobs or the
5 average wages paid for those jobs, including employee benefits, is less than
6 the minimum requirements established by KRS 154.32-020, then the
7 economic development project may be suspended automatically or, with
8 approval of the authority, terminated.
9 Section 16. KRS 154.32-040 is amended to read as follows:
10 The authority, upon final approval of a company, may enter into a tax incentive
11 agreement with the approved company. The terms and conditions of the tax incentive
12 agreement shall be negotiated between the authority and the approved company. The
13 terms of the tax incentive agreement shall include but not be limited to the following
14 provisions:
15 (1) The maximum approved costs that may be recovered over the term of the tax
16 incentive agreement and the annual maximum for approved costs;
17 (2) That the approved company shall provide the authority with all documentation
18 requested in a manner acceptable to the authority;
19 (3) Identification of the contribution of the local government to the economic
20 development project, if any;
21 (4) The activation date, which shall be within two (2) years of final approval;
22 (5) That the approved company shall implement the activation date by notifying the
23 authority;
24 (6) That the approved company shall provide documentation satisfactory to the
25 authority within the timeframes required by the authority that it has met the
26 minimum employment, minimum investment, and minimum wage requirements,
27 including employee benefits, established by KRS 154.32-020;
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1 (7) That failure of the approved company to meet any of the minimum job, minimum
2 investment, or minimum wage requirements, including employee benefits,
3 established by KRS 154.32-020, on the activation date shall result in cancellation of
4 the tax incentive agreement;
5 (8) The term of the agreement, which shall not exceed fifteen (15) years for an
6 economic development project located in a heritage[an enhanced incentive] county,
7 or ten (10) years for an economic development project located in any
8 other[another] county;
9 (9) Notwithstanding subsection (8) of this section, an approved company that
10 received preliminary approval of an economic development project prior to
11 January 1, 2023, in which wage assessments were provided pursuant to Section
12 18 of this Act may request a one (1) time extension for up to five (5) years under
13 the following conditions:
14 (a) At the time the extension is granted, the approved company has received less
15 than seventy-five percent (75%) of the incentives awarded under the tax
16 incentive agreement; and
17 (b) The extension does not amend any provision of the tax incentive agreement
18 impacting the scope of the project or the maximum amount of incentives
19 awarded under the tax incentive agreement;
20 (10) That, if confirmed approved costs are less than the maximum approved costs
21 included in the tax incentive agreement, the confirmed approved costs shall become
22 the maximum amount that may be recovered by the approved company;
23 (11)[(10)] If the economic development project is a leased project, that future rent
24 payments that are included in eligible costs shall be included as confirmed approved
25 costs upon submission of a valid lease agreement executed after preliminary
26 approval;
27 (12)[(11)] Establishment of a job target and minimum wage target, including employee
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1 benefits;
2 (13)[(12)] A requirement that the job target and minimum wage target, including
3 employee benefits, be measured:
4 (a) On the activation date, against the actual new full-time jobs created and the
5 average wages, including employee benefits, paid for those jobs; and
6 (b) Annually during each year of the agreement, against the annual average of the
7 new full-time jobs and the average wages paid for those jobs, including
8 employee benefits;
9 (14)[(13)] A provision requiring the approved company to notify the authority
10 immediately if the approved company sells or otherwise transfers or disposes of the
11 land on which an economic development project is located, if a lease relating to the
12 economic development project is terminated or lapses, or if the approved company
13 ceases or fundamentally alters operations at the economic development project;
14 (15)[(14)] A provision detailing the reductions in incentives that will occur pursuant to
15 KRS 154.32-030(4) if an approved company fails to meet its job target or minimum
16 wage target, including employee benefits;
17 (16)[(15)] That the agreement may be assigned by the approved company upon the
18 adoption of a resolution by the authority to that effect;
19 (17)[(16)] That the approved company shall make available to the authority all of its
20 records pertaining to the economic development project, including but not limited
21 to payroll records, records relating to eligible costs, and any other records
22 pertaining to the economic development project that the authority may require;
23 (18)[(17)] That the authority may share information with the department for the purposes
24 of monitoring and enforcing the terms of the tax incentive agreement;
25 (19)[(18)] That, if an approved company fails to comply with its obligations under the
26 tax incentive agreement other than the jobs target or minimum wage target, the
27 authority may take any or all of the following actions:
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1 (a) Suspend the incentives available to the approved company;
2 (b) Terminate the incentives available to the approved company; or
3 (c) Pursue any other remedy set forth in the tax incentive agreement or to which it
4 may be entitled by law; and
5 (20)[(19)] Any other provisions not inconsistent with this subchapter and determined to
6 be necessary or appropriate by the parties to the tax incentive agreement.
7 Section 17. KRS 154.32-070 is amended to read as follows:
8 (1) For taxable years beginning after December 31, 2009, an approved company may
9 be eligible for a credit of up to one hundred percent (100%) of the Kentucky
10 income tax imposed under KRS 141.020 or 141.040, and the limited liability entity
11 tax imposed under KRS 141.0401, that would otherwise be owed by the approved
12 company to the Commonwealth for the approved company's taxable year, on the
13 income, Kentucky gross profits, or Kentucky gross receipts of the approved
14 company generated by or arising from the economic development project.
15 (2) The credit allowed the approved company shall be applied against both the income
16 tax imposed by KRS 141.020 or 141.040, and the limited liability entity tax
17 imposed by KRS 141.0401, with credit ordering as provided in KRS 141.0205, for
18 the taxable year for which the tax return of the approved company is filed, subject
19 to the annual maximum set forth in the tax incentive agreement. Any credit not used
20 in the year in which it was first available may be carried forward to subsequent
21 years, provided that no credit may be carried forward beyond the term of the tax
22 incentive agreement.
23 (3) The approved company shall not be required to pay estimated tax payments under
24 KRS 141.044 on the Kentucky taxable income, Kentucky gross receipts, or
25 Kentucky gross profits generated by or arising from the eligible project.
26 (4) The credit provided by this section shall be determined as provided in KRS
27 141.415.
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1 (5) The amount of incentives allowed under subsections (1) to (4) of this section[in
2 any year] shall not exceed the lesser of the tax liability of the approved company
3 related to the economic development project for that year or the annual maximum
4 approved costs set forth in the tax incentive agreement in any year. The incentives
5 shall be allowed for each fiscal year of the approved company during the term of
6 the tax incentive agreement for which a tax return is filed by the approved
7 company.
8 (6) (a) An approved company receiving preliminary approval after July 1, 2026,
9 may receive, in addition to the inducements provided under subsections (1)
10 to (4) of this section, a credit as provided under Section 1 of this Act in an
11 amount up to:
12 1. Two and one-quarter percent (2.25%) of the wages paid to full-time
13 employees who are subject to the tax imposed by KRS 141.020 and
14 maintained at an economic development project located in a heritage
15 county; and
16 2. One and one-quarter percent (1.25%) of the wages paid to full-time
17 employees who are subject to the tax imposed by KRS 141.020 and
18 maintained at an economic development project located in any other
19 county.
20 (b) The cumulative credits awarded:
21 1. To an approved company under this subsection for any year of the
22 agreement shall not exceed the annual maximum approved costs of
23 the economic development project as provided in the tax incentive
24 agreement; and
25 2. Shall not exceed four million dollars ($4,000,000) per taxable year, of
26 which no more than one million dollars ($1,000,000) shall be allowed
27 for wages paid to full-time employees in counties other than heritage
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1 counties.
2 Section 18. KRS 154.32-090 is amended to read as follows:
3 (1) An approved company or, with the authority's consent, an affiliate of an approved
4 company may impose wage assessments against employees as provided in this
5 section if a wage assessment is included in the incentives awarded to the approved
6 company in the tax incentive agreement. The level of wage assessment shall be
7 negotiated as part of the tax incentive agreement.
8 (2) If an economic development project is located in a heritage[an enhanced incentive]
9 county, the approved company or, with the authority's consent, an affiliate of the
10 approved company may require that each employee subject to the tax imposed by
11 KRS 141.020, whose job is determined by the authority to be created as a result of
12 the economic development project, as a condition of employment, agree to an
13 assessment of up to one hundred percent (100%) of the individual income tax rate
14 imposed by KRS 141.020, and that assessment shall operate as the
15 Commonwealth's wage assessment. Although not required for an economic
16 development project located in a heritage[an enhanced incentive] county, a local
17 jurisdiction may agree to forgo all or a portion of its local occupational license fee
18 as a local wage assessment.
19 (3) (a) If the economic development project is not located in a heritage[an enhanced
20 incentive] county, and is located in a local jurisdiction where:
21 1. No local occupational license fee is imposed;
22 2. a. A local occupational license fee greater than or equal to twenty
23 percent (20%) of the individual income tax rate in KRS 141.020 is
24 imposed; and
25 b. The local jurisdiction agrees to forgo, as the local wage
26 assessment, at least twenty percent (20%) of the individual income
27 tax rate imposed by KRS 141.020 via credits against the local
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1 occupational license fee for the affected employees; or
2 3. a. A local occupational license fee less than twenty percent (20%) of
3 the individual income tax rate in KRS 141.020 is imposed; and
4 b. The local jurisdiction agrees to forgo the total amount of the local
5 occupational license fee as the local wage assessment; then
6 (b) An approved company or, with the authority's consent, an affiliate of an
7 approved company may require that each employee subject to tax imposed by
8 KRS 141.020, whose job is determined by the authority to be created as a
9 result of the economic development project, as a condition of employment,
10 agree to pay an assessment of up to sixty percent (60%) of the individual
11 income tax rate imposed by KRS 141.020 and that assessment shall operate as
12 the Commonwealth's wage assessment.
13 (4) (a) If the economic development project is not located in a heritage[an enhanced
14 incentive] county, and is located in a local jurisdiction where:
15 1. a. A local occupational license fee greater than or equal to twenty
16 percent (20%) of the individual income tax rate in KRS 141.020 is
17 imposed; and
18 b. The local jurisdiction agrees to forgo an amount of the local
19 occupational license fee that is less than twenty percent (20%) of
20 the individual income tax rate in KRS 141.020 as the local wage
21 assessment; or
22 2. a. A local occupational license fee of lesser than twenty percent
23 (20%) of the individual income tax rate in KRS 141.020 is
24 imposed; and
25 b. The local jurisdiction agrees to forgo only a portion of the total
26 amount of the local occupational license fee as the local wage
27 assessment; then
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1 (b) An approved company or, with the authority's consent, an affiliate of an
2 approved company may require that each employee subject to tax imposed by
3 KRS 141.020, whose job is determined by the authority to be created as a
4 result of the economic development project, as a condition of employment,
5 agree to pay an assessment equal to three (3) times the forgone local wage
6 assessment rate and that assessment shall operate as the Commonwealth's
7 wage assessment.
8 (5) If the project is not located in a heritage[an enhanced incentive] county, and:
9 (a) Is located in a local jurisdiction that does not impose a local occupational
10 license fee, the local jurisdiction shall be required to provide some alternative
11 inducement satisfactory to the authority at the local level in order for a
12 preliminarily approved company to receive final approval. However, the
13 authority may waive this requirement if there are reasonable circumstances
14 that prevent the local jurisdiction from providing a reasonable inducement; or
15 (b) Is located in a local jurisdiction that does impose a local occupational license
16 fee, the jurisdiction may request that the authority waive the local
17 occupational license fee requirements established by subsection (3) or (4) of
18 this section if the local jurisdiction offers alternative inducements of similar
19 value satisfactory to the authority. The authority shall review all requests for a
20 waiver, and may waive the local occupational license fee requirements and
21 instead require the local jurisdiction to provide alternative inducements of
22 similar value if the authority determines that the circumstances warrant an
23 alternative contribution by the local jurisdiction.
24 (6) Each employee paying the assessment shall simultaneously be entitled to a credit
25 against the Kentucky individual income tax required to be withheld under KRS
26 141.310 equal to the state portion of the assessment and shall be entitled to a credit
27 against the local occupational license tax equal to the local portion of the
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1 assessment.
2 (7) If more than one (1) local jurisdiction imposes an occupational license fee, the local
3 jurisdiction portion of the assessment shall be prorated proportionately among the
4 taxes imposed by the local jurisdictions unless one (1) local jurisdiction agrees to
5 forgo the receipt of these taxes in an amount equal to the local jurisdiction portion
6 of the wage assessment, in which case no proration shall be made.
7 (8) If a full-time employee subject to state tax imposed by KRS 141.020 is already
8 employed by the approved company at a site other than the site of the economic
9 development project, that full-time employee's job shall be deemed to have been
10 created when the full-time employee is transferred to the site of the economic
11 development project if the full-time employee's existing job is filled with a new
12 full-time employee.
13 (9) If an approved company elects to impose the assessment as a condition of
14 employment, it shall be authorized to deduct the assessment from each payment of
15 wages to the employee.
16 (10) Notwithstanding any other provision of the Kentucky Revised Statutes, if an
17 approved company elects not to deduct the assessment from each payment of wages
18 to the employee, but rather requests a reimbursement of state tax imposed by KRS
19 141.020 or local occupational tax in the aggregate after they have been paid to the
20 state or local jurisdiction, no interest shall be paid by the state or by the local
21 jurisdiction on that reimbursement.
22 (11) No credit, or portion thereof, shall be allowed against any occupational license fee
23 imposed by or dedicated solely to the board of education in a local jurisdiction.
24 (12) An approved company imposing an assessment shall make its payroll, books, and
25 records available to the authority or the department upon request, and shall file with
26 the authority or department documentation pertaining to the assessment as the
27 authority or department may require.
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1 (13) Any assessment of the wages of employees of an approved company in connection
2 with their employment at an economic development project shall permanently cease
3 at the expiration of the tax incentive agreement.
4 Section 19. KRS 154.32-100 is amended to read as follows:
5 (1) (a) By October 1 of each year, the department shall certify to the authority, in the
6 form of an annual report, aggregate tax credits claimed on tax returns filed
7 during the fiscal year ending June 30 of that year and aggregate assessments
8 taken during the prior calendar year by approved companies with respect to
9 their economic development projects under this subchapter, and shall certify
10 to the authority, within ninety (90) days from the date an approved company
11 has filed its state income tax return, when an approved company has taken tax
12 credits or assessments equal to the total incentives available to the approved
13 company.
14 (b) For the economic development credit provided under Section 1 of this Act,
15 the department shall report to the authority the total amount of economic
16 development credit awarded for each taxable year, by county, including the
17 following:
18 1. Each approved company awarded a credit; and
19 2. The total amount of wages paid to a full-time employee by an
20 approved company and included in the credit computation.
21 (2) On a semiannual basis, by May 1 and November 1 of each year, the cabinet shall
22 prepare a report of the economic development credits provided under Section 17
23 of this Act to be submitted to the Governor and the Legislative Research
24 Commission for referral to Interim Joint Committee on Appropriations and
25 Revenue and made available on the cabinet's website. The report shall include
26 but not be limited to the following:
27 (a) A summary of the economic development credits received and relevant
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1 statistics relating to actions taken by the cabinet, including:
2 1. The approved company;
3 2. The total amount of economic development credits awarded;
4 3. The number of full-time jobs created; and
5 4. The annual maximum approved costs of the economic development
6 project;
7 (b) The annual total of the economic development credits received; and
8 (c) Recommendations for legislation or policy actions needed to increase the
9 number of economic development projects.
10 SECTION 20. A NEW SECTION OF SUBCHAPTER 12 OF KRS CHAPTER
11 154 IS CREATED TO READ AS FOLLOWS:
12 (1) The cabinet shall work closely with the workforce liaison appointed by the
13 president of the Kentucky Community and Technical College System to:
14 (a) Promote jobs created in the Commonwealth as a result of economic
15 development incentive programs; and
16 (b) Provide support with the goal of recruitment and placement of system
17 students and graduates into new job and workforce training opportunities
18 as they are made available within the Commonwealth.
19 (2) The cabinet shall work closely with the system and involve it in policy discussions
20 and planning that may have an effect on community members, system staff, and
21 students.
22 Section 21. KRS 141.383 is amended to read as follows:
23 (1) As used in this section:
24 (a) "Above-the-line production crew" has the same meaning as in KRS 154.61-
25 010;
26 (b) "Approved company" has the same meaning as in KRS 154.61-010;
27 (c) "Below-the-line production crew" has the same meaning as in KRS 154.61-
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1 010;
2 (d) "Continuous film production" has the same meaning as in KRS 154.61-010;
3 (e) "Council" means the Kentucky Film Leadership Council created in KRS
4 154.12-282;
5 (f) "Loan-out entity" has the same meaning as in KRS 154.61-010;
6 (g) "Qualifying expenditure" has the same meaning as in KRS 154.61-010;
7 (h) "Qualifying payroll expenditure" has the same meaning as in KRS 154.61-
8 010;
9 (i) "Secretary" has the same meaning as in KRS 154.61-010; and
10 (j) "Tax incentive agreement" has the same meaning as KRS 154.61-010.
11 (2) (a) There is hereby created a tax credit against the tax imposed under KRS
12 141.020 or 141.040 and 141.0401, with the ordering of credits as provided in
13 KRS 141.0205.
14 (b) The incentive available under paragraph (a) of this section is:
15 1. A refundable credit for applications approved prior to April 27, 2018;
16 2. A nonrefundable and nontransferable credit for applications approved on
17 or after April 27, 2018, but before January 1, 2022; and
18 3. A refundable credit for applications approved on or after January 1,
19 2022, if the provisions of paragraph (c) of this subsection are met.
20 (c) 1. The total tax incentive approved under KRS 154.61-020 shall be limited
21 to:
22 a. One hundred million dollars ($100,000,000) for calendar year
23 2018 and each calendar year through the calendar year 2021;
24 b. Seventy-five million dollars ($75,000,000) for the calendar year
25 2022 and each calendar year thereafter; and
26 c. Beginning with calendar year 2024, the amount in subdivision b.
27 of this subparagraph shall be allocated accordingly:
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1 i. Twenty-five million dollars ($25,000,000) shall be allocated
2 for all approved companies with a continuous film
3 production; and
4 ii. On the first day of April 2025, and on April 1 of each
5 calendar year thereafter, any unused balance allocated under
6 subpart i. of this subdivision for continuous film productions
7 shall be made available for all approved companies with a
8 motion picture or entertainment production.
9 2. To qualify for the refundable credit, all applicants shall:
10 a. Begin filming or production in Kentucky within six (6) months of
11 approval by the council; and
12 b. Complete filming or production in Kentucky within two (2) years
13 of their production start date.
14 (3) An approved company may receive a refundable tax credit if:
15 (a) The department has received notification from the council that the approved
16 company has satisfied all requirements of KRS 154.61-020 and 154.61-030;
17 and
18 (b) The approved company has provided a detailed cost report and sufficient
19 documentation to the council, which has been forwarded by the council to the
20 department, that:
21 1. The purchases of qualifying expenditures were made after the execution
22 of the tax incentive agreement; and
23 2. The approved company or loan-out entity has withheld income tax as
24 required by KRS 141.310 on all qualified payroll expenditures, and
25 remitted and certified the withheld amount to the department.
26 (4) Interest shall not be allowed or paid on any refundable credits provided under this
27 section.
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1 (5) The department may promulgate administrative regulations under KRS Chapter
2 13A to administer this section.
3 (6) On or before September 1, 2010, and on or before each September 1 thereafter, for
4 the immediately preceding fiscal year, the department shall report to the council and
5 the Interim Joint Committee on Appropriations and Revenue the names of the
6 approved companies and the amounts of refundable income tax credit claimed.
7 (7) No later than September 1, 2021, and by November 1 every four (4) years
8 thereafter, the department and the Cabinet for Economic Development shall
9 cooperatively provide historical data related to the tax credit allowed in this section
10 and KRS 154.61-020 and 154.61-030, including data items beginning with tax
11 credits claimed for taxable years beginning on or after January 1, 2018:
12 (a) The name of the taxpayer claiming the tax credit;
13 (b) The date that the application was approved and the date the filming or
14 production was completed;
15 (c) The taxable year in which the taxpayer claimed the tax credit;
16 (d) The total amount of the tax credit, including any amount denied, any amount
17 applied against a tax liability, any amount refunded, and any amount
18 remaining that may be claimed on a return filed in the future;
19 (e) Whether the taxpayer is a Kentucky-based company as defined in KRS
20 154.61-010;
21 (f) Whether the taxpayer films or produces a:
22 1. Feature-length film, television program, or industrial film;
23 2. National touring production of a Broadway show; or
24 3. Documentary;
25 (g) Whether the filming or production was performed:
26 1. Entirely in a heritage[an enhanced] county; or
27 2. In whole or in part in any Kentucky county other than in a heritage[an
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1 enhanced incentive] county;
2 (h) The amount of qualifying expenditures incurred by the taxpayer;
3 (i) The amount of qualifying payroll expenditures paid to:
4 1. Resident below-the-line crew; and
5 2. Nonresident below-the-line production crew;
6 including the number of crew members in each category;
7 (j) The amount of qualifying payroll expenditures paid to:
8 1. Resident above-the-line crew; and
9 2. Nonresident above-the-line crew;
10 including the number of crew members in each category; and
11 (k) A brief description of the type of motion picture or entertainment production
12 project.
13 (8) The information required to be reported under this section shall not be considered
14 confidential taxpayer information and shall not be subject to KRS Chapter 131 or
15 any other provisions of the Kentucky Revised Statutes prohibiting disclosure or
16 reporting of information.
17 Section 22. KRS 154.61-010 is amended to read as follows:
18 As used in this subchapter:
19 (1) "Above-the-line production crew" means employees involved with the production
20 of a motion picture or entertainment production whose salaries are negotiated prior
21 to commencement of production, such as actors, directors, producers, and writers;
22 (2) "Animated production" means a nationally distributed feature-length film created
23 with the rapid display of a sequence of images using 2-D or 3-D graphics of
24 artwork or model positions in order to create an illusion of movement;
25 (3) "Approved company" means an eligible company approved for incentives provided
26 under KRS 141.383 and 154.61-020;
27 (4) "Below-the-line production crew" means employees involved with the production
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1 of a motion picture or entertainment production except above-the-line production
2 crew. "Below-the-line production crew" includes but is not limited to:
3 (a) Casting assistants;
4 (b) Costume design;
5 (c) Extras;
6 (d) Gaffers;
7 (e) Grips;
8 (f) Location managers;
9 (g) Production assistants;
10 (h) Set construction staff; and
11 (i) Set design staff;
12 (5) "Cabinet" means the Cabinet for Economic Development;
13 (6) "Commonwealth" means the Commonwealth of Kentucky;
14 (7) "Compensation" means compensation included in adjusted gross income as defined
15 in KRS 141.010;
16 (8) "Continuous film production" means a motion picture or entertainment production
17 that:
18 (a) 1. Has a projected budget of a minimum of ten million dollars
19 ($10,000,000) per calendar year for qualifying expenditures and
20 qualifying payroll expenditures allocated to all qualifying motion picture
21 or entertainment productions to be filmed or produced in Kentucky, with
22 a minimum of one million five hundred thousand dollars ($1,500,000)
23 per production in Kentucky; and
24 2. Has a minimum of fifty percent (50%) of the funds available and the
25 ability to raise the remaining funds necessary to complete the filming
26 and production, which may be verified by:
27 a. Bank statements or other financial documents; or
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1 b. A fundraising plan at the request of the council;
2 (b) Demonstrates a distribution contract for each motion or entertainment
3 production;
4 (c) Films and produces a minimum of twelve (12) or more days per production
5 within the Commonwealth; and
6 (d) Maintains:
7 1. An apprenticeship program or on-the-job training program as defined in
8 KRS 343.010; or
9 2. Partners with a film studies program with an accredited institution of
10 postsecondary education located in the Commonwealth;
11 (9) "Council" means the Kentucky Film Leadership Council created in KRS 154.12-
12 282;
13 (10) "Documentary" means a production based upon factual information and not
14 subjective interjections;
15 (11) "Eligible company" means any person that intends to film or produce a motion
16 picture or entertainment production in the Commonwealth;
17 (12) "Employee" has the same meaning as in KRS 141.010, and, for purposes of this
18 subchapter, also may include the employees or independent contractors of an
19 approved company or the employees of a loan-out entity engaged by an approved
20 company if they meet the requirements of KRS 141.310;
21 (13) ["Enhanced incentive county" has the same meaning as in KRS 154.32-010;
22 (14) ]"Feature-length film" means a live-action or animated production that is:
23 (a) More than thirty (30) minutes in length; and
24 (b) Produced for distribution in theaters or via digital format, including but not
25 limited to DVD, Internet, or mobile electronic devices;
26 (14) "Heritage county" means a county where the county population ranking
27 determined by the cabinet under Section 7 of this Act scores greater than or equal
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1 to ninety-seven (97);
2 (15) "Industrial film" means a business-to-business film that may be viewed by the
3 public, including but not limited to videos used for training or for viewing at a trade
4 show;
5 (16) "Kentucky-based company" has the same meaning as in KRS 164.6011;
6 (17) "Loan-out entity" means a corporation, partnership, limited liability company, or
7 other entity through which an artist or other person is loaned out to perform services
8 for the approved company. A loan-out entity shall be registered and in good
9 standing with the Kentucky Secretary of State. Notwithstanding the business
10 organization, the loan-out entity and all employees of and other persons performing
11 services for the loan-out entity shall be subject to all applicable provisions of the
12 Kentucky personal income tax and any applicable payroll or other tax provisions;
13 (18) (a) "Motion picture or entertainment production" means:
14 1. The following if filmed in whole or in part, or produced in whole or in
15 part, in the Commonwealth:
16 a. A feature-length film;
17 b. A television program;
18 c. An industrial film; or
19 d. A documentary; or
20 2. A national touring production of a Broadway show produced in
21 Kentucky.
22 (b) "Motion picture or entertainment production" does not include the filming or
23 production of obscene material or television coverage of news or athletic
24 events;
25 (19) "Obscene" has the same meaning as in KRS 531.010;
26 (20) "Person" has the same meaning as in KRS 141.010;
27 (21) (a) "Qualifying expenditure" means expenditures made in the Commonwealth for
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1 the following if directly used in or for a motion picture or entertainment
2 production:
3 1. The production script and synopsis;
4 2. Set construction and operations, wardrobe, accessories, and related
5 services;
6 3. Lease or rental of real property in Kentucky as a set location;
7 4. Photography, sound synchronization, lighting, and related services;
8 5. Editing and related services;
9 6. Rental of facilities and equipment;
10 7. Vehicle leases;
11 8. Food; and
12 9. Accommodations.
13 (b) "Qualifying expenditure" does not include Kentucky sales and use tax paid by
14 the approved company on the qualifying expenditure;
15 (22) "Qualifying payroll expenditure" means compensation paid to above-the-line crew
16 and below-the line crew while working on a motion picture or entertainment
17 production in the Commonwealth if the compensation is for services performed in
18 the Commonwealth;
19 (23) "Resident" has the same meaning as in KRS 141.010;
20 (24) "Secretary" means the secretary of the Cabinet for Economic Development;
21 (25) "Tax incentive agreement" means the agreement entered into pursuant to KRS
22 154.61-030 between the council and the approved company; and
23 (26) "Television program" means any live-action or animated production or
24 documentary, including but not limited to:
25 (a) An episodic series;
26 (b) A miniseries;
27 (c) A television movie; or
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1 (d) A television pilot;
2 that is produced for distribution on television via broadcast, cable, or any digital
3 format, including but not limited to cable, satellite, internet, or mobile electronic
4 devices.
5 Section 23. KRS 154.61-020 is amended to read as follows:
6 (1) The purposes of KRS 141.383 and this subchapter are to encourage:
7 (a) The film and entertainment industry to choose locations in the
8 Commonwealth for the filming and production of motion picture or
9 entertainment productions;
10 (b) The development of a film and entertainment industry in Kentucky;
11 (c) Increased employment opportunities for the citizens of the Commonwealth
12 within the film and entertainment industry; and
13 (d) The development of a production and postproduction infrastructure in the
14 Commonwealth for film production and touring Broadway show production
15 facilities containing state-of-the-art technologies.
16 (2) The council, together with the Department of Revenue, shall administer the tax
17 credit established by KRS 141.383, this section, and KRS 154.61-030.
18 (3) To qualify for the tax incentive provided in subsection (5) of this section, the
19 following requirements shall be met:
20 (a) For an approved company that is also a Kentucky-based company that:
21 1. Films or produces a feature-length film, television program, or industrial
22 film in whole or in part in the Commonwealth, the minimum combined
23 total of qualifying expenditures and qualifying payroll expenditures
24 shall be one hundred twenty-five thousand dollars ($125,000);
25 2. Produces a national touring production of a Broadway show in whole or
26 in part in the Commonwealth, the minimum combined total of
27 qualifying expenditures and qualifying payroll expenditures shall be
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1 twenty thousand dollars ($20,000); or
2 3. Films or produces a documentary in whole or in part in the
3 Commonwealth, the minimum combined total of qualifying
4 expenditures and qualifying payroll expenditures shall be ten thousand
5 dollars ($10,000); and
6 (b) For an approved company that is not a Kentucky-based company that:
7 1. Films or produces a feature-length film, television program, or industrial
8 film in whole or in part in the Commonwealth, the minimum combined
9 total of qualifying expenditures and qualifying payroll expenditures
10 shall be two hundred fifty thousand dollars ($250,000); or
11 2. Films or produces a documentary in whole or in part in the
12 Commonwealth or that produces a national touring production of a
13 Broadway show, the minimum combined total of qualifying
14 expenditures and qualifying payroll expenditures shall be twenty
15 thousand dollars ($20,000).
16 (4) (a) Beginning on January 1, 2022, the total tax incentive approved under KRS
17 141.383 and this subchapter shall be limited to seventy-five million dollars
18 ($75,000,000) for calendar year 2022 and each calendar year thereafter.
19 (b) Beginning with calendar year 2024:
20 1. Twenty-five million dollars ($25,000,000) shall be allocated for all
21 approved companies with a continuous film production; and
22 2. On the first day of July of each calendar year, any unused balance of the
23 amount allocated under subparagraph 1. of this paragraph for continuous
24 film productions shall be made available for all approved companies
25 with motion picture or entertainment productions.
26 (5) (a) To qualify for the tax incentive available under KRS 141.383 and this
27 subchapter all applicants shall:
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1 1. Begin filming or production in Kentucky within six (6) months of
2 approval by the council; and
3 2. Complete filming or production in Kentucky within two (2) years of the
4 filming or production start date.
5 (b) The tax credit shall be against the Kentucky income tax imposed under KRS
6 141.020 or 141.040, and the limited liability entity tax imposed under KRS
7 141.0401, and shall be refundable as provided in KRS 141.383.
8 (c) 1. For a motion picture or entertainment production or continuous film
9 production filmed or produced in its entirety in a heritage[an enhanced
10 incentive] county, the amount of the incentive shall be equal to thirty-
11 five percent (35%) of the approved company's:
12 a. Qualifying expenditures;
13 b. Qualifying payroll expenditures paid to resident and nonresident
14 below-the-line production crew; and
15 c. Qualifying payroll expenditures paid to resident and nonresident
16 above-the-line production crew not to exceed one million dollars
17 ($1,000,000) in payroll expenditures per employee.
18 2. a. To the extent the approved company films or produces a motion
19 picture or entertainment production or continuous film production
20 in part in a heritage[an enhanced incentive] county and in part a
21 Kentucky county that is not a heritage[an enhanced incentive]
22 county, the approved company shall be eligible to receive the
23 incentives provided in this paragraph for those expenditures
24 incurred in the heritage[enhanced incentive] county and all other
25 expenditures shall be subject to the incentives provided in
26 paragraph (d) of this subsection.
27 b. The approved company shall track the requisite expenditures by
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1 county. If the approved company can demonstrate to the
2 satisfaction of the cabinet that it is not practical to use a separate
3 accounting method to determine the expenditures by county, the
4 approved company shall determine the correct expenditures by
5 county using an alternative method approved by the cabinet.
6 (d) For a motion picture or entertainment production or continuous film
7 production filmed or produced in whole or in part in any Kentucky county
8 other than in a heritage[an enhanced incentive] county, the amount of the
9 incentive shall be equal to:
10 1. Thirty percent (30%) of the approved company's:
11 a. Qualifying expenditures;
12 b. Qualifying payroll expenditures paid to below-the-line production
13 crew that are not residents; and
14 c. Qualifying payroll expenditures paid to above-the-line production
15 crew that are not residents, not to exceed one million dollars
16 ($1,000,000) in payroll expenditures per employee; and
17 2. Thirty-five percent (35%) of the approved company's:
18 a. Qualifying payroll expenditures paid to resident below-the-line
19 production crew; and
20 b. Qualifying payroll expenditures paid to resident above-the-line
21 production crew not to exceed one million dollars ($1,000,000) in
22 payroll expenditures per employee.
23 Section 24. KRS 148.851 is amended to read as follows:
24 As used in 148.851 to 148.860, unless the context clearly indicates otherwise:
25 (1) "Agreement" means the tourism development agreement entered into between the
26 authority and an approved company;
27 (2) "Approved company" means any eligible company that has received final approval
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1 to receive incentives provided under KRS 148.853;
2 (3) "Approved costs" means the amount of eligible costs approved by the authority
3 upon completion of the project;
4 (4) "Authority" means the Kentucky Tourism Development Finance Authority as set
5 forth in KRS 148.850;
6 (5) "Cabinet" means the Tourism, Arts and Heritage Cabinet;
7 (6) "Crafts and products center" means a facility primarily devoted to the display,
8 promotion, and sale of Kentucky products, and at which a minimum of eighty
9 percent (80%) of the sales occurring at the facility are of Kentucky arts, crafts, or
10 agricultural products;
11 (7) "Eligible company" means any corporation, limited liability company, partnership,
12 limited partnership, sole proprietorship, business trust, or any other entity operating
13 or intending to operate a tourism development project;
14 (8) "Eligible costs" means:
15 (a) Obligations incurred for labor and amounts paid to vendors, contractors,
16 subcontractors, builders, suppliers, deliverymen, and materialmen in
17 connection with the acquisition, construction, equipping, and installation of a
18 tourism development project;
19 (b) The costs of acquiring real property or rights include the acquisition of real
20 property by a leasehold interest with a minimum term of ten (10) years, and
21 any costs incidental thereto;
22 (c) The cost of contract bonds and of insurance of all kinds that may be required
23 or necessary during the course of the acquisition, construction, equipping, and
24 installation of a tourism development project which is not paid by the vendor,
25 supplier, deliveryman, contractor, or otherwise provided;
26 (d) All costs of architectural and engineering services, including but not limited to
27 estimates, plans and specifications, preliminary investigations, and
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1 supervision of construction and installation, as well as for the performance of
2 all the duties required by or consequent to the acquisition, construction,
3 equipping, and installation of a tourism development project;
4 (e) All costs required to be paid under the terms of any contract for the
5 acquisition, construction, equipping, and installation of a tourism
6 development project;
7 (f) All costs required for the installation of utilities, including but not limited to
8 water, sewer, sewer treatment, gas, electricity and communications, and
9 including off-site construction of the facilities paid for by the approved
10 company; and
11 (g) All other costs comparable with those described in this subsection, excluding
12 costs subject to refund under KRS 154.20-202, 154.20-204, 154.20-206,
13 154.20-208, and 154.20-210 or Subchapter 31 of KRS Chapter 154;
14 (9)[ "Enhanced incentive county" has the same meaning as in KRS 154.32-010;
15 (10)] "Entertainment destination center project" means a facility that meets the
16 requirements of KRS 148.853(2)(b);
17 (10)[(11)] "Final approval" means the action taken by the authority authorizing the
18 eligible company to receive incentives under KRS 139.536 and 148.851 to 148.860;
19 (11)[(12)] "Full-service lodging facility" means a facility that provides overnight
20 sleeping accommodations, including private bathrooms and all of the following:
21 (a) On-site dining facilities;
22 (b) Room service;
23 (c) Catering: and
24 (d) Meeting space;
25 (12)[(13)] "Heritage county" means a county where the county population ranking
26 determined by the Cabinet for Economic Development under Section 7 of this Act
27 scores greater than or equal to ninety-seven (97);
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1 (13) "Incentives" means the Kentucky sales tax refund as prescribed in KRS 139.536;
2 (14) "Kentucky sales tax" means the sales tax imposed by KRS 139.200;
3 (15) "Lodging facility project" means a full-service lodging facility that:
4 (a) 1. Is located on recreational property owned or leased by the
5 Commonwealth or the federal government;
6 2. Involves the restoration or rehabilitation of a structure that:
7 a. Is listed individually on the National Register of Historic Places;
8 or
9 b. Is located in the National Register Historic District; and
10 is certified by the Kentucky Heritage Council as contributing to the
11 historic significance of the district, and the rehabilitation or restoration
12 of the structure has been approved in advance by the Kentucky Heritage
13 Council;
14 3. Is an integral part of a major convention or sports facility;
15 4. Is located:
16 a. Within a fifty (50) mile radius of a property listed on the National
17 Register of Historic Places with a current function of recreation
18 and culture; and
19 b. In any of the one hundred (100) least-populated counties in the
20 Commonwealth, in terms of population density, according to the
21 most recent census;
22 5. Is located on property:
23 a. Owned by the Commonwealth, or leased by the Commonwealth
24 from the federal government;
25 b. Acquired for use in the state park system pursuant to KRS
26 148.028; and
27 c. Operated by the Kentucky Department of Parks pursuant to KRS
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1 148.021 or the Kentucky Horse Park Commission pursuant to
2 KRS 148.258 to 148.320;
3 6. Is located on property:
4 a. Owned or leased by the federal government and under the control
5 of the Department of the Interior; or
6 b. Owned by the Commonwealth and in the custody of the State Fair
7 Board as provided in KRS 247.140;
8 7. Is part of a tourism attraction project, entertainment destination center
9 project, or theme restaurant destination attraction project and the full-
10 service lodging facility represents less than fifty percent (50%) of the
11 total eligible costs; or
12 8. Has not less than five hundred (500) guest rooms; or
13 (b) 1. Is located:
14 a. In any of the one hundred (100) least-populated counties in the
15 Commonwealth, in terms of population density, according to the
16 most recent decennial census;
17 b. In a county, the boundaries of which:
18 i. Include, in part, the boundaries of a designated national
19 forest; or
20 ii. Are adjacent to or include a portion of parallel reservoirs of
21 water surrounding a national recreation area;
22 c. Within a heritage[an enhanced incentive] county and will create at
23 least fifty (50) new full-time jobs within that county; and
24 d. Within one-half (1/2) mile of a state resort park;
25 2. Has a capital investment of at least one hundred million dollars
26 ($100,000,000); and
27 3. Contains accommodations for:
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1 a. Lodging, with a minimum of one hundred (100) guest rooms,
2 cabins, or rental units;
3 b. Relaxation, including a spa;
4 c. More than one (1) on-site dining facility; and
5 d. More than one (1) meeting or event space;
6 (16) "Net positive fiscal impact" means the amount by which increased state tax
7 revenues will exceed the incentives given;
8 (17) "Preliminary approval" means the action taken by the authority conditionally
9 approving an eligible company for the incentives under KRS 139.536 and 148.851
10 to 148.860;
11 (18) "Recreational facility" means a structure or outdoor area that:
12 (a) Provides visitors recreational opportunities, including but not limited to
13 amusement parks, boating, hiking, horseback riding, hunting, fishing,
14 camping, wildlife viewing, live theater, rock climbing, and all-terrain vehicle
15 trails; and
16 (b) Serves as a likely destination where individuals who are not residents of the
17 Commonwealth would remain overnight in commercial lodging at or near the
18 recreational facility;
19 (19) "Theme restaurant destination attraction project" means a restaurant facility that
20 meets the requirements for incentives under KRS 148.853(2)(c);
21 (20) (a) "Tourism attraction project" means:
22 1. A cultural or historical site;
23 2. A recreational facility;
24 3. An entertainment facility;
25 4. An area of natural phenomenon or scenic beauty; or
26 5. A Kentucky crafts and products center;
27 (b) "Tourism attraction project" does not include facilities that are primarily
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1 devoted to the retail sale of goods, other than a Kentucky crafts and products
2 center, or a tourism attraction where the sale of goods is a secondary and
3 subordinate component of the attraction; and
4 (21) "Tourism development project" means:
5 (a) A tourism attraction project;
6 (b) A theme restaurant destination attraction project;
7 (c) An entertainment destination center project; or
8 (d) A lodging facility project.
9 Section 25. KRS 148.853 is amended to read as follows:
10 (1) The General Assembly finds and declares that:
11 (a) The general welfare and material well-being of the citizens of the
12 Commonwealth depend in large measure upon the development of tourism in
13 the Commonwealth;
14 (b) It is in the best interest of the Commonwealth to provide incentives for the
15 creation of new tourism attractions and the expansion of existing tourism
16 attractions within the Commonwealth in order to advance the public purposes
17 of relieving unemployment by preserving and creating jobs that would not
18 exist if not for the incentives offered by the authority to approved companies,
19 and by preserving and creating sources of tax revenues for the support of
20 public services provided by the Commonwealth;
21 (c) The authorities granted by KRS 148.851 to 148.860 are proper governmental
22 and public purposes for which public moneys may be expended; and
23 (d) That the creation or expansion of tourism development projects is of
24 paramount importance mandating that the provisions of KRS 139.536 and
25 KRS 148.851 to 148.860 be liberally construed and applied in order to
26 advance public purposes.
27 (2) To qualify for incentives provided in KRS 139.536 and 148.851 to 148.860, the
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1 following requirements shall be met:
2 (a) For a tourism attraction project:
3 1. The total eligible costs shall exceed one million dollars ($1,000,000),
4 except for a tourism attraction project located in a county designated as
5 a heritage[an enhanced incentive] county at the time the eligible
6 company becomes an approved company as provided in KRS
7 148.857(6), the total eligible costs shall exceed five hundred thousand
8 dollars ($500,000);
9 2. In any year, including the first year of operation, the tourism attraction
10 project shall be open to the public at least one hundred (100) days; and
11 3. In any year following the third year of operation, the tourism attraction
12 project shall attract at least twenty-five percent (25%) of its visitors
13 from among persons who are not residents of the Commonwealth;
14 (b) For an entertainment destination center project:
15 1. The total eligible costs shall exceed five million dollars ($5,000,000);
16 2. The facility shall contain a minimum of two hundred thousand
17 (200,000) square feet of building space adjacent or complementary to an
18 existing tourism attraction project or a major convention facility;
19 3. The incentives shall be dedicated to a public infrastructure purpose that
20 shall relate to the entertainment destination center project;
21 4. In any year, including the first year of operation, the entertainment
22 destination center project shall:
23 a. Be open to the public at least one hundred (100) days per year;
24 b. Maintain at least one (1) major theme restaurant and at least three
25 (3) additional entertainment venues, including but not limited to
26 live entertainment, multiplex theaters, large-format theater, motion
27 simulators, family entertainment centers, concert halls, virtual
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1 reality or other interactive games, museums, exhibitions, or other
2 cultural and leisure-time activities; and
3 c. Maintain a minimum occupancy of sixty percent (60%) of the total
4 gross area available for lease with entertainment and food and
5 drink options not including the retail sale of tangible personal
6 property; and
7 5. In any year following the third year of operation, the entertainment
8 destination center project shall attract at least twenty-five percent (25%)
9 of its visitors from among persons who are not residents of the
10 Commonwealth;
11 (c) For a theme restaurant destination attraction project:
12 1. The total eligible costs shall exceed five million dollars ($5,000,000);
13 2. In any year, including the first year of operation, the attraction shall:
14 a. Be open to the public at least three hundred (300) days per year
15 and for at least eight (8) hours per day; and
16 b. Generate no more than fifty percent (50%) of its revenue through
17 the sale of alcoholic beverages;
18 3. In any year following the third year of operation, the theme restaurant
19 destination attraction project shall attract a minimum of fifty percent
20 (50%) of its visitors from among persons who are not residents of the
21 Commonwealth; and
22 4. The theme restaurant destination attraction project shall:
23 a. At the time of final approval, offer a unique dining experience that
24 is not available in the Commonwealth within a one hundred (100)
25 mile radius of the attraction;
26 b. In any year, including the first year of operation, maintain seating
27 capacity of four hundred fifty (450) guests and offer live music or
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1 live musical and theatrical entertainment during the peak business
2 hours that the facility is in operation and open to the public; or
3 c. Within three (3) years of the completion date, the attraction shall
4 obtain a top two (2) tier rating by a nationally accredited service
5 and shall maintain a top two (2) tier rating through the term of the
6 agreement;
7 (d) For a lodging facility project defined in KRS 148.851(15)(a):
8 1. a. The eligible costs shall exceed five million dollars ($5,000,000)
9 unless the provisions of subdivision b. of this subparagraph apply.
10 b. i. If the lodging facility is an integral part of a major
11 convention or sports facility, the eligible costs shall exceed
12 six million dollars ($6,000,000); and
13 ii. If the lodging facility includes five hundred (500) or more
14 guest rooms, the eligible costs shall exceed ten million
15 dollars ($10,000,000); and
16 2. In any year, including the first year of operation, the lodging facility
17 shall:
18 a. Be open to the public at least one hundred (100) days; and
19 b. Attract at least twenty-five percent (25%) of its visitors from
20 among persons who are not residents of the Commonwealth;
21 (e) For a lodging facility project defined in KRS 148.851(15)(b):
22 1. The eligible costs shall exceed one hundred million dollars
23 ($100,000,000); and
24 2. The lodging facility shall:
25 a. Be open to the public at least one hundred (100) days each year,
26 including the first year of operation; and
27 b. In any year following the third year of operation, attract a
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1 minimum of twenty-five percent (25%) of its overnight visitors
2 from among persons who are not residents of the Commonwealth;
3 (f) Any tourism development project shall not be eligible for incentives if it
4 includes material determined to be lewd, offensive, or deemed to have a
5 negative impact on the tourism industry in the Commonwealth; and
6 (g) An expansion of any tourism development project shall in all cases be treated
7 as a new stand-alone project.
8 (3) (a) The incentives offered to an approved company under the Kentucky Tourism
9 Development Act may include a sales tax incentive based on the Kentucky
10 sales tax imposed on sales generated by or arising at the tourism development
11 project.
12 (b) 1. For a tourism development project other than a lodging facility project
13 described in subparagraph 4. or 5. of this paragraph:
14 a. A sales tax incentive shall be allowed to an approved company
15 over a period of ten (10) years, except as provided in
16 subparagraphs 7. and 8. of this paragraph; and
17 b. The sales tax incentive shall not exceed the lesser of the total
18 amount of the sales tax liability of the approved company and its
19 lessees or a percentage of the approved costs as specified by the
20 agreement, not to exceed twenty-five percent (25%).
21 2. For projects approved according to the application period established
22 under KRS 148.8531, a tourism attraction project located in a
23 heritage[an enhanced incentive] county at the time the eligible company
24 becomes an approved company as provided in KRS 148.857(6):
25 a. A sales tax incentive shall be allowed to the approved company
26 over a period of ten (10) years; and
27 b. The sales tax incentive shall not exceed the lesser of the total
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1 amount of the sales tax liability of the approved company and its
2 lessees or a percentage of the approved costs as specified by the
3 agreement, not to exceed thirty percent (30%).
4 3. For applications considered after June 27, 2025, including projects
5 related to property to which the title passed from a seller to a buyer on
6 or after March 1, 2025, a tourism attraction project located in a
7 heritage[an enhanced incentive] county with a population equal to or
8 less than twenty thousand (20,000) based on the most recent decennial
9 census at the time the eligible company becomes an approved company
10 as provided in KRS 148.857(6):
11 a. A sales tax incentive shall be allowed to the approved company
12 over a period of twenty (20) years; and
13 b. The sales tax incentive shall not exceed the lesser of the total
14 amount of the sales tax liability of the approved company and its
15 lessees or a percentage of the approved costs as specified by the
16 agreement, not to exceed fifty percent (50%).
17 4. For a lodging facility project described in KRS 148.851(15)(a)5. or 6.:
18 a. A sales tax incentive shall be allowed to the approved company
19 over a period of twenty (20) years; and
20 b. The sales tax incentive shall not exceed the lesser of total amount
21 of the sales tax liability of the approved company and its lessees or
22 a percentage of the approved costs as specified by the agreement,
23 not to exceed fifty percent (50%).
24 5. For a lodging facility project described in KRS 148.851(15)(b), a sales
25 tax incentive that shall:
26 a. Be allowed to the approved company over a period of twenty (20)
27 years; and
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1 b. Not exceed the lesser of the total amount of sales tax liability of
2 the approved company and its lessees or a percentage of the
3 approved costs as specified by the agreement, not to exceed fifty
4 percent (50%).
5 6. Any unused incentives from a previous year may be carried forward to
6 any succeeding year during the term of the agreement until the entire
7 specified percentage of the approved costs has been received through
8 sales tax incentives.
9 7. If the approved company is an entertainment destination center that has
10 dedicated at least thirty million dollars ($30,000,000) of the incentives
11 provided under the agreement to a public infrastructure purpose, the
12 agreement may be amended to extend the term of the agreement up to
13 two (2) additional years if the approved company agrees to:
14 a. Reinvest in the original entertainment destination project one
15 hundred percent (100%) of any incentives received during the
16 extension that were outstanding at the end of the original term of
17 the agreement; and
18 b. Report to the authority at the end of each fiscal year the amount of
19 incentives received during the extension and how the incentives
20 were reinvested in the original entertainment destination project.
21 8. The term of a tourism development agreement entered into with a
22 tourism attraction project that was in effect on January 1, 2020, shall be
23 extended for one (1) year if the tourism attraction project:
24 a. Has historically been open to the public on a seasonal basis
25 consisting of less than six (6) months;
26 b. Has previously met the requirement of being open to the public at
27 least one hundred (100) days during the entire term of the tourism
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1 development agreement as required under subsection (2)(a)2. of
2 this section;
3 c. Failed to be open to the public at least one hundred (100) days
4 during the calendar year 2020 solely as a result of complying with
5 one (1) or more executive orders issued by the Governor under the
6 authority of KRS 39A.090 that prevented the tourism attraction
7 project from being open to the public for at least one hundred
8 (100) days during its normal operating season; and
9 d. Applied for a sales tax incentive related to the calendar year 2020
10 operating season and was denied the sales tax incentive solely on
11 the basis that the tourism attraction project was not open to the
12 public for at least one hundred (100) days in calendar year 2020.
13 Section 26. KRS 154.20-230 is amended to read as follows:
14 As used in KRS 154.20-230 to 154.20-240:
15 (1) "Application" means a document submitted by small businesses and investors, on a
16 form supplied by the authority, for the purpose of requesting certification to
17 participate in the program and to apply for a credit;
18 (2) "Authority" means the Kentucky Economic Development Finance Authority;
19 (3) "Commonwealth" means the Commonwealth of Kentucky;
20 (4) "Credit" means the nonrefundable angel investor tax credit established by KRS
21 141.396 and awarded by the authority pursuant to KRS 154.20-236;
22 (5) "Department" means the Department of Revenue;
23 (6)[ "Enhanced incentive counties" has the same meaning as in KRS 154.32-010;
24 (7)] "Entity" means any corporation, limited liability company, business development
25 corporation, partnership, limited partnership, sole proprietorship, association, joint
26 stock company, receivership, trust, professional service organization, or other legal
27 entity through which business is conducted;
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1 (7)[(8)] "Fee" means a nonrefundable application fee in an amount set by the
2 authority, to be collected by the authority to offset the cost of administering KRS
3 154.20-230 to 154.20-240;
4 (8)[(9)] "Full-time employee" means a person that is required to work a minimum of
5 thirty-five (35) hours per week and is subject to the tax imposed by KRS 141.020;
6 (9) "Heritage county" means a county where the county population ranking
7 determined by the cabinet under Section 7 of this Act scores greater than or equal
8 to ninety-seven (97);
9 (10) "Knowledge-based" has the same meaning as in KRS 164.6011;
10 (11) (a) "Qualified activity" means any knowledge-based activity related to the new
11 economy focus areas of the Office of Entrepreneurship and Innovation,
12 including but not limited to:
13 1. Bioscience;
14 2. Environmental and energy technology;
15 3. Health and human development;
16 4. Information technology and communications; and
17 5. Materials science and advanced manufacturing.
18 (b) A "qualified activity" does not include any activity principally engaged in by
19 financial institutions, commercial development companies, credit companies,
20 financial or investment advisors, brokerage or financial firms, other
21 investment funds or investment fund managers, charitable and religious
22 institutions, oil and gas exploration companies, insurance companies,
23 residential housing developers, retail establishments, or any activity that the
24 authority determines in its discretion to be against the public interest, against
25 the purposes of KRS 154.20-230 to 154.20-240, or in violation of any law.
26 Notwithstanding this paragraph, an entity involved in other technological
27 advances may be deemed to be engaged in qualified activity, as determined by
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1 the executive director of the Office of Entrepreneurship and Innovation;
2 (12) "Qualified investment" means an investment meeting the requirements of KRS
3 154.20-234 for qualified investments, and certified pursuant to KRS 154.20-236;
4 (13) "Qualified investor" means an individual investor meeting the requirements of KRS
5 154.20-234 for qualified investors, and certified pursuant to KRS 154.20-236; and
6 (14) "Qualified small business" means an entity meeting the requirements of KRS
7 154.20-234 for qualified small businesses, and certified pursuant to KRS 154.20-
8 236.
9 Section 27. KRS 154.20-236 is amended to read as follows:
10 (1) The total amount of credit that may be awarded by the authority in each calendar
11 year, pursuant to KRS 154.20-230 to 154.20-240, to:
12 (a) All qualified investors shall be no more than three million dollars
13 ($3,000,000); and
14 (b) Any individual qualified investor shall be no more than two hundred thousand
15 dollars ($200,000).
16 (2) (a) The total amount of credit that may be awarded by the authority to:
17 1. All qualified investors pursuant to KRS 154.20-230 to 154.20-240; and
18 2. All investors in all investment funds pursuant to KRS 154.20-250 to
19 154.20-284;
20 shall be no more than forty million dollars ($40,000,000) in total for all years
21 prior to December 31, 2020.
22 (b) Beginning on or after January 1, 2021, the amount of credit that may be
23 awarded by the authority in each calendar year shall be equal to the amount
24 provided in subsection (1) of this section.
25 (c) The authority shall not grant preliminary or final approval for applications
26 received for the Kentucky Angel Investment Act on or after January 1, 2019,
27 but may resume approving applications received on or after January 1, 2021.
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1 (3) The authority shall, by promulgation of an administrative regulation, develop a
2 standard procedure for:
3 (a) Small businesses and investors to request certification for participation in the
4 program;
5 (b) Qualified investors to request certification of a planned investment as being a
6 qualified investment, and to apply for a credit; and
7 (c) The award of credits to qualified investors making qualified investments.
8 (4) At a minimum, the procedure shall:
9 (a) Require small businesses and investors to demonstrate to the authority that
10 they, and any planned investment, satisfy all requirements provided in KRS
11 154.20-234;
12 (b) Provide small businesses and investors with a standard written application
13 form to request certification and apply for a credit;
14 (c) Require the payment of a fee; and
15 (d) Mandate a time period for the duration of certifications granted to small
16 businesses and investors, and the procedures for recertification thereof.
17 (5) The amount of credit awarded shall not exceed:
18 (a) Twenty-five percent (25%) of the amount of the qualified investment, if the
19 principal place of business of the qualified small business is outside a
20 heritage[an enhanced incentive] county; or
21 (b) Forty percent (40%) of the amount of the qualified investment, if the principal
22 place of business of the qualified small business is in a heritage[an enhanced
23 incentive] county.
24 (6) Upon approval of a credit, the authority shall reduce the amount of available credit
25 by the amount of credit approved to the qualified investor.
26 (7) The authority may, in effectuating this section, contract with a science and
27 technology organization as defined in KRS 164.6011 to administer and manage the
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1 certification and application procedure established by the authority. However, the
2 final approval of all credits shall be made solely by the authority.
3 Section 28. KRS 154.34-010 is amended to read as follows:
4 As used in this subchapter:
5 (1) "Affiliate" has the same meaning as in KRS 154.32-010;
6 (2) "Agribusiness" has the same meaning as in KRS 154.32-010;
7 (3) "Alternative fuel production" has the same meaning as in KRS 154.32-010;
8 (4) "Approved company" means an eligible company approved under KRS 154.34-070
9 for a reinvestment project;
10 (5) "Approved costs" means the eligible equipment and related costs approved by the
11 authority that may be recovered by an approved company through the incentives
12 authorized by this subchapter;
13 (6) "Authority" means the Kentucky Economic Development Finance Authority
14 created by KRS 154.20-010;
15 (7) "Capital lease" has the same meaning as in KRS 154.32-010;
16 (8) "Carbon dioxide or hydrogen transmission pipeline" has the same meaning as in
17 KRS 154.32-010;
18 (9) "Coal severing and processing" means activities resulting in an eligible company
19 being subject to the tax imposed by KRS Chapter 143;
20 (10) "Commonwealth" means the Commonwealth of Kentucky;
21 (11) "Department" means the Department of Revenue;
22 (12) (a) "Eligible company" means any corporation, limited liability company,
23 partnership, limited partnership, sole proprietorship, business trust, or any
24 other entity:
25 1. Employing or intending to employ a minimum of twenty-five (25)
26 persons on a full-time bases; and
27 2. Engaged in or planning to engage in one (1) or more of the following
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1 activities:
2 a. Headquarter operations;
3 b. Manufacturing;
4 c. Agribusiness;
5 d. Nonretail service or technology;
6 e. Coal severing and processing;
7 f. Alternative fuel, gasification, energy-efficient alternative fuel, or
8 renewable energy production;
9 g. Carbon dioxide or hydrogen transmission pipeline operations; or
10 h. Hospital operations;
11 at the same facility located and operating within the Commonwealth on
12 a permanent basis for a reasonable period of time preceding the request
13 for approval of a reinvestment project by the authority, including
14 facilities where operations have been temporarily suspended and which
15 meet the standards under KRS 154.34-070 and related administrative
16 regulations promulgated by the authority.
17 (b) "Eligible company" does not include any company for which the primary
18 activity to be conducted within the Commonwealth is:
19 1. Forestry;
20 2. Fishing;
21 3. The provision of utilities;
22 4. Construction;
23 5. Wholesale trade;
24 6. Retail trade;
25 7. Real estate;
26 8. Rental and leasing;
27 9. Educational services;
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1 10. Accommodation and food services; or
2 11. Public administration services;
3 (13) (a) "Eligible equipment and related costs" means:
4 1. Obligations incurred for labor and to vendors, contractors,
5 subcontractors, builders, suppliers, deliverymen, and materialmen in
6 connection with the acquisition, construction, equipping, rehabilitation,
7 and installation of a reinvestment project;
8 2. The cost of contract bonds and of insurance of all kinds that may be
9 required or necessary during the course of acquisition, construction,
10 equipping, rehabilitation, and installation of a reinvestment project
11 which is not paid by the vendor, supplier, deliveryman, contractor, or
12 otherwise provided;
13 3. All costs of architectural and engineering services, including estimates,
14 plans and specifications, preliminary investigations, and supervision of
15 construction, rehabilitation and installation, as well as for the
16 performance of all the duties required by or consequent upon the
17 acquisition, construction, equipping, rehabilitation, and installation of a
18 reinvestment project;
19 4. All costs required to be paid under the terms of any contract for the
20 acquisition, construction, equipping, rehabilitation, and installation of a
21 reinvestment project;
22 5. All costs required for the installation of utilities, including but not
23 limited to water, sewer, sewer treatment, gas, electricity,
24 communications, and access to transportation, and including off-site
25 construction of the facilities paid for by the approved company; and
26 6. All other costs of a nature comparable to those described in this
27 paragraph.
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1 (b) "Eligible equipment and related costs" does not include costs related to the
2 replacement or repair of existing machinery or equipment resulting from
3 normal wear and usage of the machinery or equipment;
4 (14) "Energy-efficient alternative fuel production" has the same meaning as in KRS
5 154.32-010;
6 (15)[ "Enhanced incentive counties" has the same meaning as in KRS 154.32-010;
7 (16)] "Equipment" means manufacturing machinery equipment, computers, furnishings,
8 fixtures, and other assets installed by the approved company as part of the
9 reinvestment project;
10 (16)[(17)] "Final approval" means the action taken by the authority designating a
11 preliminarily approved eligible company as an approved company to receive
12 incentives under this subchapter;
13 (17)[(18)] "Full-time employee" means a person who:
14 (a) Is required to work a minimum of thirty-five (35) hours per week; or
15 (b) Works remotely away from the reinvestment project if all the following
16 conditions are met:
17 1. Is a Kentucky resident;
18 2. Whose job was created or retained as a result of the reinvestment
19 project; and
20 3. Whose payroll is expensed to the reinvestment project;
21 (18)[(19)] "Gasification production" has the same meaning as in KRS 154.32-010;
22 (19)[(20)] "Headquarters" has the same meaning as in KRS 154.32-010;
23 (20) "Heritage county" means a county where the county population ranking
24 determined by the cabinet under Section 7 of this Act scores greater than or equal
25 to ninety-seven (97);
26 (21) "Hospital" has the same meaning as in KRS 154.32-010;
27 (22) "Incentives" means the Kentucky tax credit as prescribed in this subchapter;
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1 (23) "Kentucky gross profits" has the same meaning as in KRS 141.0401;
2 (24) "Kentucky gross receipts" has the same meaning as in KRS 141.0401;
3 (25) "Leased project" has the same meaning as in KRS 154.32-010;
4 (26) "Manufacturing" has the same meaning as in KRS 154.32-010;
5 (27) "Nonretail service or technology" has the same meaning as in KRS 154.32-010;
6 (28) "Personal protective equipment" has the same meaning as in KRS 154.32-010;
7 (29) "Preliminary approval" means the action taken by the authority designating an
8 eligible company as a preliminarily approved company;
9 (30) "Reinvestment agreement" means the agreement entered into pursuant to KRS
10 154.34-080 between the authority and an approved company with respect to a
11 reinvestment project;
12 (31) "Reinvestment project" means:
13 (a) A reinvestment in the facility of an eligible company and in the full-time
14 employees of an eligible company through the acquisition, construction, and
15 installation of new equipment and, with respect thereto, the construction,
16 rehabilitation, and installation of improvements to facilities necessary to
17 house the new equipment, including surveys; installation of utilities, including
18 water, sewer, sewage treatment, gas, electricity, communications, and similar
19 facilities; or off-site construction of utility extensions to the boundaries of the
20 real estate on which the facilities are located;
21 (b) The expenditure of at least one million dollars ($1,000,000) in eligible
22 equipment and related costs for leased projects and at least two million five
23 hundred thousand dollars ($2,500,000) in eligible equipment and related costs
24 for all other reinvestment projects; and
25 (c) A reinvestment in a facility in order to allow for the production of vital
26 medications, personal protective equipment, or equipment necessary to
27 produce personal protective equipment;
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1 (32) "Renewable energy production" has the same meaning as in KRS 154.32-010; and
2 (33) "Vital medications" has the same meaning as in KRS 154.32-010.
3 Section 29. KRS 164.6021 is amended to read as follows:
4 (1) The Cabinet for Economic Development shall manage the Kentucky enterprise fund
5 to provide capital to small and medium-size, Kentucky-based companies to
6 undertake feasibility, concept development, research and development, or
7 commercialization work.
8 (2) The purpose of the Kentucky enterprise fund is to:
9 (a) Accelerate knowledge transfer and technological innovation, improve
10 economic competitiveness, and spur economic growth in Kentucky-based
11 companies;
12 (b) Support feasibility, concept development, research and development, or
13 commercialization activities that have clear potential to lead to commercially
14 successful products, processes, or services within a reasonable period of time;
15 (c) Stimulate growth-oriented enterprises within the Commonwealth;
16 (d) Encourage partnerships and collaborative projects between private enterprises,
17 Kentucky's colleges and universities, and research organizations;
18 (e) Promote research and development and commercialization activities that are
19 market-oriented; and
20 (f) Support small and medium-sized companies.
21 (3) The Kentucky enterprise fund shall be used to fund qualified companies in
22 accordance with this section as follows:
23 (a) Grants of up to fifty thousand dollars ($50,000) for companies exploring the
24 feasibility of technology commercialization or projects related to feasibility
25 studies, such as incubator and accelerator programs;
26 (b) Funding of up to two hundred fifty thousand dollars ($250,000) for companies
27 in the concept development phase of technology commercialization;
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1 (c) Funding of up to five hundred thousand dollars ($500,000) for companies
2 advancing and promoting the program goals, as outlined in subsection (2) of
3 this section; and
4 (d) For new investments made on or after July 1, 2021, no qualified company can
5 receive a total investment from the fund in excess of up to five hundred
6 thousand dollars ($500,000).
7 (4) Beginning July 1, 2021, the cabinet shall allocate at least twenty percent (20%) of
8 the annual allotment of funds for the Kentucky enterprise fund to qualified
9 companies located in rural or heritage[enhanced incentive] counties[, as certified
10 under KRS 154.32-050], and at least twenty percent (20%) of the annual allotment
11 of funds to qualified companies located in Opportunity Zones, as designated by the
12 Commonwealth and certified by the Secretary of the United States Treasury. As
13 used in this subsection, "heritage county" means a county where the county
14 population ranking determined by the cabinet under Section 7 of this Act scores
15 greater than or equal to ninety-seven (97).
16 (5) For all funding totaling more than thirty thousand dollars ($30,000), the science and
17 technology organization or any entity designated by the executive director of the
18 Office of Entrepreneurship and Innovation shall receive an equity interest in the
19 qualified company, such as a general or limited partnership interest, limited liability
20 company interest, common or preferred stock with or without voting rights and
21 without regard to seniority position, forms of subordinate or convertible unsecured
22 debt, or both, with warrants, rights, or other means of equity conversion attached, a
23 near equity interest such as a simple agreement for future equity or "SAFE
24 agreement", or other convertible debt instruments that are determined to qualify as
25 an adequate investment interest by the executive director of the Office of
26 Entrepreneurship and Innovation.
27 SECTION 30. A NEW SECTION OF SUBCHAPTER 20 OF KRS CHAPTER
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1 154 IS CREATED TO READ AS FOLLOWS:
2 (1) As used in this section:
3 (a) "Authority" means the Kentucky Economic Development Finance
4 Authority established by KRS 154.20-010;
5 (b) "Certified mixed-use rehabilitation" means the development, rehabilitation,
6 renovation, and improvement of a qualified abandoned building that will
7 serve at least two (2) of the following purposes, in its finished, rehabilitated
8 state:
9 1. Commercial;
10 2. Residential; or
11 3. Retail;
12 (c) "Department" means the Department of Revenue;
13 (d) "Eligible rehabilitation expenses" means all costs incurred in association
14 with the certified mixed-use rehabilitation of a qualified abandoned
15 building and includes:
16 1. Building and construction materials;
17 2. The costs of fixture installation; and
18 3. Labor and mechanics costs;
19 (e) "Qualified abandoned building" means a vacant structure that:
20 1. Contains a minimum of two hundred twenty-five thousand (225,000)
21 square feet of gross leasable area;
22 2. Is located within an urban core area;
23 3. Has a minimum vacancy rate by square footage of at least fifty percent
24 (50%) for a continuous period of at least six (6) months immediately
25 prior to the certified mixed-use rehabilitation; and
26 4. Is not a project that has been awarded the certified rehabilitation
27 credit under KRS 171.397;
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1 (f) "Taxpayer" means any person or entity who:
2 1. a. Incurs eligible rehabilitation expenses for a certified mixed-use
3 rehabilitation; or
4 b. Is the recipient of a certified mixed-use rehabilitation credit
5 which is transferred as provided in subsection (7)(b) of this
6 section; and
7 2. Is subject to the taxes imposed by KRS 136.320, 136.330, 136.340,
8 136.350, 136.370, 136.390, 141.020, 304.3-270, or 141.040 and
9 141.0401; and
10 (g) "Urban core area" means a central, downtown part of this state that is
11 located within a metropolitan statistical area with a population of greater
12 than three hundred thousand (300,000) based on the most recent federal
13 decennial census.
14 (2) There is hereby created the certified mixed-use rehabilitation credit.
15 (3) For taxable years beginning on or after January 1, 2028, but before January 1,
16 2032, a taxpayer shall be allowed a refundable, transferrable certified mixed-use
17 rehabilitation credit against the taxes imposed by:
18 (a) KRS 141.020 or 141.040 and 141.0401, with the ordering of the credits as
19 provided in Section 2 of this Act; or
20 (b) KRS 136.320, 136.330, 136.340, 136.350, 136.370, 136.390, and 304.3-270,
21 with the ordering of the credits as provided in Section 33 of this Act.
22 (4) The credit shall be:
23 (a) Equal to twenty percent (20%) of the eligible rehabilitation expenses
24 incurred during the taxable year; and
25 (b) Limited to:
26 1. Twenty-five million dollars ($25,000,000) per eligible taxpayer; and
27 2. A total of fifty million dollars ($50,000,000) for all tax credits
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1 preliminarily approved for each calendar year in which the credit is
2 available.
3 (5) (a) An eligible taxpayer seeking the credit provided under this section shall file
4 an application with the authority for preliminary approval by December 31,
5 2027, and by each December 31 thereafter of the calendar year immediately
6 preceding in the calendar year in which the certified mixed-use
7 rehabilitation will take place, and include the following:
8 1. Project location;
9 2. Proposed start and completion date of the project;
10 3. Anticipated costs to be incurred;
11 4. Verification that the building meets the requirements established in
12 subsection (1) of this section as a qualified abandoned building;
13 5. Detailed rehabilitation plans that outline the projected use of the
14 qualified abandoned building in its final, rehabilitated state; and
15 6. Any other information the authority may require to provide
16 preliminary project approval.
17 (b) The authority shall provide preliminary approval with the anticipated credit
18 amount to be awarded by January 15, 2028, and each January 15 thereafter
19 as long as the credit is available and shall:
20 1. Create the application by which a taxpayer may apply for preliminary
21 and final credit approval;
22 2. Provide notification to the taxpayer of preliminary and final credit
23 approval; and
24 3. Promulgate administrative regulations in accordance with KRS
25 Chapter 13A necessary to implement this section.
26 (6) (a) If the total amount of credits granted preliminary approval for a calendar
27 year under subsection (5) of this section:
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1 1. Exceeds fifty million dollars ($50,000,000), each taxpayer shall receive
2 no more than its applicable pro rata share as determined by the
3 authority; or
4 2. Is less than fifty million dollars ($50,000,000), the difference between
5 the amount of credits preliminarily approved and the maximum
6 amount available in accordance with subsection (4) of this section,
7 shall be added to the maximum amount of credit available for
8 preliminary approval in the next calendar year.
9 (b) In the event that credits are divided pro rata among all applicants, the
10 authority shall provide notification to the taxpayer with preliminary credit
11 approval.
12 (7) Within thirty (30) days of completion of the certified mixed-use rehabilitation
13 project, the taxpayer shall:
14 (a) Submit an application to the authority for final credit approval;
15 (b) Include an irrevocable election to:
16 1. Use the credit; or
17 2. Transfer the credit, in which case the following shall be included:
18 a. Transferee's taxpayer identification number; and
19 b. Amount of credit to be transferred; and
20 (c) Provide documentation of final project dates and actual costs incurred as
21 projected in subsection (5) of this section.
22 (8) Within sixty (60) days of the taxpayer's final application submission, the
23 authority shall:
24 (a) Review and verify all actual eligible rehabilitation expenses incurred; and
25 (b) Provide notification of final credit determination to the taxpayer and the
26 department, which may be claimed on the taxpayer's return for the taxable
27 year.
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1 (9) The authority shall notify the department following approval of a certified mixed-
2 use rehabilitation project and include:
3 (a) The name and taxpayer identification number of each approved taxpayer;
4 (b) The location of each certified-mixed use rehabilitation project approved;
5 (c) The total amount of credit available for each taxpayer; and
6 (d) Any other information required by the department.
7 SECTION 31. A NEW SECTION OF KRS CHAPTER 141 IS CREATED TO
8 READ AS FOLLOWS:
9 (1) As used in this section:
10 (a) "Approved taxpayer" means any person or entity:
11 1. Subject to the taxes imposed in KRS 141.020 or 141.040 and 141.0401;
12 and
13 2. That is the recipient of a certified rehabilitation credit or transferred
14 credit as determined by the authority in accordance with Section 30 of
15 this Act;
16 (b) "Authority" has the same meaning as in Section 30 of this Act;
17 (c) "Certified mixed-use rehabilitation" has the same meaning as in Section 30
18 of this Act; and
19 (d) "Eligible rehabilitation expenses" has the same meaning as in Section 30 of
20 this Act.
21 (2) (a) For taxable years beginning on or after January 1, 2028, but before
22 January 1, 2032, there shall be allowed a refundable, transferrable certified
23 rehabilitation credit against the taxes imposed by KRS 141.020 or 141.040
24 and 141.0401, with the ordering of the credit as provided by in Section 2 of
25 this Act.
26 (b) In the case of a pass-through entity not subject to the tax imposed by KRS
27 141.040, the credit shall be taken against the tax imposed by KRS 141.0401
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1 and shall be claimed by the partners, members, or shareholders in
2 accordance with their proportionate share of income.
3 (c) The amount of the credit that may be claimed in a taxable year by the
4 approved taxpayer shall:
5 1. Be equal to the amount determined and approved by the authority in
6 accordance with Section 30 of this Act; and
7 2. Not exceed twenty-five million dollars ($25,000,000).
8 (3) A taxpayer receiving the credit may elect to transfer the credit to another taxpayer
9 or insurer as provided by subsection (7)(b) of Section 30 of this Act.
10 (4) The department may promulgate administrative regulations in accordance with
11 KRS Chapter 13A to establish policies and procedures to implement this section.
12 (5) (a) By November 1 of each year in which a certified mixed-use rehabilitation
13 credit is claimed, the department, working with the authority, shall report to
14 the Legislative Research Commission for referral to the Interim Joint
15 Committee on Appropriations and Revenue, the following:
16 1. The location of each certified mixed-use rehabilitation project;
17 2. The total amount of credit claimed by project location for the taxable
18 year;
19 3. The total amount of credit claimed by each approved taxpayer; and
20 4. The total amount of all credit claimed by all taxpayers for the taxable
21 year.
22 (b) The information required to be reported under this section shall not be
23 considered confidential taxpayer information and shall not be subject to
24 KRS Chapter 131 or any other provisions of the Kentucky Revised Statutes
25 prohibiting disclosure or reporting of information.
26 SECTION 32. A NEW SECTION OF KRS CHAPTER 136 IS CREATED TO
27 READ AS FOLLOWS:
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1 For calendar years beginning on or after January 1, 2028, but before January 1, 2032,
2 a taxpayer incurring eligible rehabilitation expenses shall be allowed a refundable,
3 transferable credit against the taxes imposed by KRS 136.320, 136.330, 136.340,
4 136.350, 136.370, 136.390, or 304.3-270, with the ordering of the credit as provided by
5 in Section 33 of this Act.
6 SECTION 33. A NEW SECTION OF KRS CHAPTER 136 IS CREATED TO
7 READ AS FOLLOWS:
8 (1) For purposes of the credit permitted by Section 30 of this Act, if a taxpayer is
9 entitled to more than one (1) of the tax credits allowed against the taxes imposed
10 by KRS 136.320, 136.320, 136.330, 136.340, 136.350, 136.370, 136.390, and
11 304.3-270, the priority of application and use of the credit shall be determined as
12 follows:
13 (a) The nonrefundable credits shall be taken in the following order:
14 1. The Kentucky Investment Fund Act credit permitted by KRS 154.20-
15 258; and
16 2. The New Markets Development Program credit permitted by KRS
17 141.434; and
18 (b) After the application of the nonrefundable credits in paragraph (a) of this
19 subsection, the refundable certified mixed-use rehabilitation credit
20 permitted by Section 32 of this Act shall be taken.
21 (2) A taxpayer claiming a credit against any of the insurance premiums taxes
22 imposed by KRS 136.320, 136.330, 136.340, 136.350, 136.370, or 136.390 shall
23 not be required to pay additional retaliatory tax imposed by KRS 304.3-270.
24 (3) The Department of Revenue shall include information about this credit in the
25 report required under subsection (5) of Section 31 of this Act.
26 Section 34. KRS 148.853 is amended to read as follows:
27 (1) The General Assembly finds and declares that:
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1 (a) The general welfare and material well-being of the citizens of the
2 Commonwealth depend in large measure upon the development of tourism in
3 the Commonwealth;
4 (b) It is in the best interest of the Commonwealth to provide incentives for the
5 creation of new tourism attractions and the expansion of existing tourism
6 attractions within the Commonwealth in order to advance the public purposes
7 of relieving unemployment by preserving and creating jobs that would not
8 exist if not for the incentives offered by the authority to approved companies,
9 and by preserving and creating sources of tax revenues for the support of
10 public services provided by the Commonwealth;
11 (c) The authorities granted by KRS 148.851 to 148.860 are proper governmental
12 and public purposes for which public moneys may be expended; and
13 (d) That the creation or expansion of tourism development projects is of
14 paramount importance mandating that the provisions of KRS 139.536 and
15 KRS 148.851 to 148.860 be liberally construed and applied in order to
16 advance public purposes.
17 (2) To qualify for incentives provided in KRS 139.536 and 148.851 to 148.860, the
18 following requirements shall be met:
19 (a) For a tourism attraction project:
20 1. The total eligible costs shall exceed one million dollars ($1,000,000),
21 except for a tourism attraction project located in a county designated as
22 an enhanced incentive county at the time the eligible company becomes
23 an approved company as provided in KRS 148.857(6), the total eligible
24 costs shall exceed five hundred thousand dollars ($500,000);
25 2. In any year, including the first year of operation, the tourism attraction
26 project shall be open to the public at least one hundred (100) days; and
27 3. In any year following the third year of operation, the tourism attraction
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1 project shall attract at least twenty-five percent (25%) of its visitors
2 from among persons who are not residents of the Commonwealth;
3 (b) For an entertainment destination center project:
4 1. The total eligible costs shall exceed five million dollars ($5,000,000);
5 2. The facility shall contain a minimum of two hundred thousand
6 (200,000) square feet of building space adjacent or complementary to an
7 existing tourism attraction project or a major convention facility;
8 3. The incentives shall be dedicated to a public infrastructure purpose that
9 shall relate to the entertainment destination center project;
10 4. In any year, including the first year of operation, the entertainment
11 destination center project shall:
12 a. Be open to the public at least one hundred (100) days per year;
13 b. Maintain at least one (1) major theme restaurant and at least three
14 (3) additional entertainment venues, including but not limited to
15 live entertainment, multiplex theaters, large-format theater, motion
16 simulators, family entertainment centers, concert halls, virtual
17 reality or other interactive games, museums, exhibitions, or other
18 cultural and leisure-time activities; and
19 c. Maintain a minimum occupancy of sixty percent (60%) of the total
20 gross area available for lease with entertainment and food and
21 drink options not including the retail sale of tangible personal
22 property; and
23 5. In any year following the third year of operation, the entertainment
24 destination center project shall attract at least twenty-five percent (25%)
25 of its visitors from among persons who are not residents of the
26 Commonwealth;
27 (c) For a theme restaurant destination attraction project:
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1 1. The total eligible costs shall exceed five million dollars ($5,000,000);
2 2. In any year, including the first year of operation, the attraction shall:
3 a. Be open to the public at least three hundred (300) days per year
4 and for at least eight (8) hours per day; and
5 b. Generate no more than fifty percent (50%) of its revenue through
6 the sale of alcoholic beverages;
7 3. In any year following the third year of operation, the theme restaurant
8 destination attraction project shall attract a minimum of fifty percent
9 (50%) of its visitors from among persons who are not residents of the
10 Commonwealth; and
11 4. The theme restaurant destination attraction project shall:
12 a. At the time of final approval, offer a unique dining experience that
13 is not available in the Commonwealth within a one hundred (100)
14 mile radius of the attraction;
15 b. In any year, including the first year of operation, maintain seating
16 capacity of four hundred fifty (450) guests and offer live music or
17 live musical and theatrical entertainment during the peak business
18 hours that the facility is in operation and open to the public; or
19 c. Within three (3) years of the completion date, the attraction shall
20 obtain a top two (2) tier rating by a nationally accredited service
21 and shall maintain a top two (2) tier rating through the term of the
22 agreement;
23 (d) For a lodging facility project defined in KRS 148.851(15)(a):
24 1. a. The eligible costs shall exceed five million dollars ($5,000,000)
25 unless the provisions of subdivision b. of this subparagraph apply.
26 b. i. If the lodging facility is an integral part of a major
27 convention or sports facility, the eligible costs shall exceed
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1 six million dollars ($6,000,000); and
2 ii. If the lodging facility includes five hundred (500) or more
3 guest rooms, the eligible costs shall exceed ten million
4 dollars ($10,000,000); and
5 2. In any year, including the first year of operation, the lodging facility
6 shall:
7 a. Be open to the public at least one hundred (100) days; and
8 b. Attract at least twenty-five percent (25%) of its visitors from
9 among persons who are not residents of the Commonwealth;
10 (e) For a lodging facility project defined in KRS 148.851(15)(b):
11 1. The eligible costs shall exceed one hundred million dollars
12 ($100,000,000); and
13 2. The lodging facility shall:
14 a. Be open to the public at least one hundred (100) days each year,
15 including the first year of operation; and
16 b. In any year following the third year of operation, attract a
17 minimum of twenty-five percent (25%) of its overnight visitors
18 from among persons who are not residents of the Commonwealth;
19 (f) Any tourism development project shall not be eligible for incentives if it
20 includes material determined to be lewd, offensive, or deemed to have a
21 negative impact on the tourism industry in the Commonwealth; and
22 (g) An expansion of any tourism development project shall in all cases be treated
23 as a new stand-alone project.
24 (3) (a) The incentives offered to an approved company under the Kentucky Tourism
25 Development Act may include a sales tax incentive based on the Kentucky
26 sales tax imposed on sales generated by or arising at the tourism development
27 project.
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1 (b) 1. For a tourism development project other than a lodging facility project
2 described in subparagraph 4. or 5. of this paragraph:
3 a. A sales tax incentive shall be allowed to an approved company
4 over a period of ten (10) years, except as provided in
5 subparagraphs 7. and 8. of this paragraph; and
6 b. The sales tax incentive shall not exceed the lesser of the total
7 amount of the sales tax liability of the approved company and its
8 lessees or a percentage of the approved costs as specified by the
9 agreement, not to exceed twenty-five percent (25%).
10 2. For projects approved according to the application period established
11 under KRS 148.8531, a tourism attraction project located in an enhanced
12 incentive county at the time the eligible company becomes an approved
13 company as provided in KRS 148.857(6):
14 a. A sales tax incentive shall be allowed to the approved company
15 over a period of ten (10) years; and
16 b. The sales tax incentive shall not exceed the lesser of the total
17 amount of the sales tax liability of the approved company and its
18 lessees or a percentage of the approved costs as specified by the
19 agreement, not to exceed thirty percent (30%).
20 3. For applications considered after June 27, 2025, including projects
21 related to property to which the title passed from a seller to a buyer on
22 or after March 1, 2025, a tourism attraction project located in an
23 enhanced incentive county with a population equal to or less than twenty
24 thousand (20,000) based on the most recent decennial census at the time
25 the eligible company becomes an approved company as provided in
26 KRS 148.857(6):
27 a. A sales tax incentive shall be allowed to the approved company
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1 over a period of twenty (20) years; and
2 b. The sales tax incentive shall not exceed the lesser of the total
3 amount of the sales tax liability of the approved company and its
4 lessees or a percentage of the approved costs as specified by the
5 agreement, not to exceed fifty percent (50%).
6 4. For a lodging facility project described in KRS 148.851(15)(a)5. or 6.:
7 a. A sales tax incentive shall be allowed to the approved company
8 over a period of twenty (20) years; and
9 b. The sales tax incentive shall not exceed the lesser of total amount
10 of the sales tax liability of the approved company and its lessees or
11 a percentage of the approved costs as specified by the agreement,
12 not to exceed fifty percent (50%).
13 5. For a lodging facility project described in KRS 148.851(15)(b), a sales
14 tax incentive that shall:
15 a. Be allowed to the approved company over a period of twenty (20)
16 years; and
17 b. Not exceed the lesser of the total amount of sales tax liability of
18 the approved company and its lessees or a percentage of the
19 approved costs as specified by the agreement, not to exceed fifty
20 percent (50%).
21 6. Any unused incentives from a previous year may be carried forward to
22 any succeeding year during the term of the agreement until the entire
23 specified percentage of the approved costs has been received through
24 sales tax incentives.
25 7. If the approved company is an entertainment destination center that has
26 dedicated at least thirty million dollars ($30,000,000) of the incentives
27 provided under the agreement to a public infrastructure purpose, the
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1 agreement may be amended to extend the term of the agreement up to
2 two (2) additional years if the approved company agrees to:
3 a. Reinvest in the original entertainment destination project one
4 hundred percent (100%) of any incentives received during the
5 extension that were outstanding at the end of the original term of
6 the agreement; and
7 b. Report to the authority at the end of each fiscal year the amount of
8 incentives received during the extension and how the incentives
9 were reinvested in the original entertainment destination project.
10 8. The term of a tourism development agreement entered into with a
11 tourism attraction project that was in effect on January 1, 2020, shall be
12 extended for one (1) year if the tourism attraction project:
13 a. Has historically been open to the public on a seasonal basis
14 consisting of less than six (6) months;
15 b. Has previously met the requirement of being open to the public at
16 least one hundred (100) days during the entire term of the tourism
17 development agreement as required under subsection (2)(a)2. of
18 this section;
19 c. Failed to be open to the public at least one hundred (100) days
20 during the calendar year 2020 solely as a result of complying with
21 one (1) or more executive orders issued by the Governor under the
22 authority of KRS 39A.090 that prevented the tourism attraction
23 project from being open to the public for at least one hundred
24 (100) days during its normal operating season; and
25 d. Applied for a sales tax incentive related to the calendar year 2020
26 operating season and was denied the sales tax incentive solely on
27 the basis that the tourism attraction project was not open to the
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1 public for at least one hundred (100) days in calendar year 2020.
2 9. a. If an approved company:
3 i. Qualified for an incentive under subsection (2)(b) of this
4 section;
5 ii. Had a tourism development agreement in place under
6 subsection (2)(b) of this section that expired; and
7 iii. Has not been a party to any tourism development
8 agreement relating to the entertainment destination center
9 in the most recently preceding five (5) years;
10 the approved company may enter into a new agreement under
11 subparagraph 1. of this paragraph.
12 b. The approved company shall agree to:
13 i. Reinvest in the original entertainment destination center
14 one hundred percent (100%) of any incentives received
15 under the new agreement into the project; and
16 ii. Report to the authority at the end of each fiscal year the
17 amount of incentives used and how the incentives were
18 reinvested in the original entertainment destination center.
19 Section 35. KRS 65.490 is amended to read as follows:
20 As used in KRS 65.490 to 65.499, unless the context otherwise requires:
21 (1) "Agency" means an urban renewal and community development agency of a taxing
22 district located within a county containing a consolidated local government or a city
23 of the first class, established under KRS Chapter 99; a development authority
24 located within a county containing a consolidated local government or a city of the
25 first class established under KRS Chapter 99; a nonprofit corporation located within
26 a county containing a consolidated local government or a city of the first class; or a
27 designated department, division, or office of a county containing a consolidated
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1 local government or of a city of the first class;
2 (2) "Development area" means an area no more than six (6) square miles, designated in
3 need of public improvements by a local or state government in a county containing
4 a consolidated local government or a city of the first class, a project area as defined
5 in KRS 99.615, or a public project as defined in KRS 58.010 in a county containing
6 a consolidated local government or a city of the first class. "Development area"
7 includes an existing economic development asset;
8 (3) "Existing development area" has the same meaning as in KRS 65.494;
9 (4) "Increment" means that amount of money received by any taxing district or the
10 state that is determined by subtracting the amount of old revenues from the amount
11 of new revenues in any year for which a taxing district or the state and an agency
12 have agreed upon under the terms of a contract of release or a grant contract;
13 (5)[(4)] "Local government" means a county containing a consolidated local
14 government or a city of the first class;
15 (6) "New development area" has the same meaning as in KRS 65.494;
16 (7)[(5)] "New revenues" means the revenues received by any taxing district or the
17 state from a development area in any year after the establishment of the
18 development area;
19 (8)[(6)] "Old revenues" means the amount of revenues received by any taxing district
20 or the state from a development area in the last year prior to the establishment of the
21 development area;
22 (9)[(7)] "Project" means any urban renewal, redevelopment, or public project
23 undertaken in accordance with the provisions of KRS 65.490 to 65.497, any project
24 undertaken in accordance with KRS 99.610 to 99.680, any project undertaken in
25 accordance with the provisions of KRS Chapter 58, or any "public project" as that
26 term is defined in KRS 58.010 undertaken by a nonprofit corporation located within
27 a county containing a consolidated local government or a city of the first class;
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1 (10)[(8)] "Release" or "contract of release" or "grant contract" means that agreement by
2 which a taxing district or the state permits the payment to an agency of a portion of
3 increments or an amount equal to a portion of increments received by it in return for
4 the benefits accrued to the taxing district or the state by reason of a project
5 undertaken by an agency in a development area;
6 (11)[(9)] "Taxing district" means a consolidated local government, a county containing
7 a city of the first class, a city of the first class that encompasses all or part of a
8 development area, or the state, but does not mean a school district; and
9 (12)[(10)] "Pilot program" means a tax increment financing program or a grant program
10 created by an agency within a consolidated local government or a county containing
11 a city of the first class which shall exist for a period of:
12 (a) Twenty (20) years for an existing development area;[,] and
13 (b) Thirty (30) years for a new development area;
14 and may be extended for a period not to exceed an additional twenty-five (25) years
15 as provided in KRS 65.4931.
16 Section 36. KRS 186.456 is amended to read as follows:
17 (1) As used in this section, "state police" means the Department of Kentucky State
18 Police.
19 (2) From September 1, 2024, until December 31, 2028[June 30, 2026], the state police
20 shall operate a pilot program to provide operator's license skills testing in up to ten
21 (10) counties in which the state police does not provide permanent, full-time, driver
22 licensing testing.
23 (3) In administering the pilot project under this section, the state police shall:
24 (a) Identify the counties participating in the pilot project based on both public
25 demand and available state police resources;
26 (b) Provide testing in each county at least one (1) time each month;
27 (c) Accept applications for testing slots through the state police's online
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1 application portal;
2 (d) Limit testing only to residents of the pilot project county where the test will be
3 administered;
4 (e) Limit testing only to applicants for an intermediate license under KRS
5 186.452; and
6 (f) Evaluate service levels, unsubscribed appointments, and no-shows during the
7 term of the pilot project and, if necessary, move the pilot project to another
8 county identified in subsection (2) of this section, while maintaining the pilot
9 project in up to ten (10) counties during the term of the project.
10 (4) The state police shall collect data on testing done under this section and, by October
11 31, 2025, submit a report to the Legislative Research Commission for referral to the
12 Interim Joint Committee on Transportation providing:
13 (a) Counts of the number of available testing appointments in each county,
14 applicants served, unclaimed testing slots, and no-show appointments;
15 (b) Information regarding how the pilot program affected testing associated with
16 regional licensing offices; and
17 (c) Recommendations on the continuation or expansion of the pilot project.
18 Section 37. KRS 154.30-050 is amended to read as follows:
19 (1) The Signature Project Program is hereby established. The purpose of this program
20 is to encourage private investment in the development of major projects that will
21 have a significant impact on the Commonwealth of Kentucky and are judged to be
22 of such a magnitude that the effect upon the location of the project warrants
23 extraordinary public support.
24 (2) (a) There shall be two (2) separate initiatives under this program. The first
25 initiative, the criteria and details of which are set forth in subsection (3)(a) of
26 this section, shall apply to;
27 1. Qualifying projects that are not the subject of a contract under KRS
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1 65.495 in effect on or before the March 23, 2007, but that have a project
2 grant agreement executed pursuant to KRS 154.30-070 prior to January
3 1, 2008; or
4 2. Revised projects if the original project was not the subject of a contract
5 under KRS 65.495 on or before March 23, 2007, and had a project grant
6 agreement executed pursuant to KRS 154.30-070 prior to January 1,
7 2008, but the agreement was withdrawn voluntarily before the project
8 was completed.
9 (b) The second initiative, the criteria and details of which are set forth in
10 subsection (3)(b) of this section, shall apply to projects that meet the specified
11 requirements on or after January 1, 2008.
12 (3) (a) 1. The criteria for qualification shall be as follows:
13 a. The project shall represent new economic activity in the
14 Commonwealth; and
15 b. The project shall result in a minimum capital investment of two
16 hundred million dollars ($200,000,000).
17 2. The following provisions shall apply to projects that meet the criteria
18 established in subparagraph 1. of this paragraph:
19 a. KRS 65.7051 shall not apply to the establishment of a
20 development area;
21 b. The city or county in which the project is located shall adopt an
22 ordinance establishing the development area. The ordinance shall
23 be adopted in accordance with KRS 65.7053(1)(a), (b), (c), (d),
24 (e), (h), (i), (j), (k), (l), and (m);
25 c. KRS 65.7049, 65.7053(2) and (3), 65.7057, 65.7059, 65.7061,
26 65.7063, 65.7065, and 65.7067, relating to local development
27 areas, shall apply;
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1 d. An application for state participation shall have been submitted as
2 provided in KRS 154.30-030. The application shall include the
3 information required by KRS 154.30-030(2)(a)1.a. and b.;
4 e. The report provided for in KRS 154.30-030(2)(a)3.b. shall not be
5 required, and the certification required by KRS 154.30-030(6)(b)
6 shall not be required;
7 f. A project grant agreement shall be executed in accordance with
8 KRS 154.30-070; and
9 g. KRS 154.30-080 and 154.30-090 shall apply.
10 3. Projects that meet the criteria established in subparagraph 1. of this
11 paragraph shall be eligible for the following:
12 a. Up to one hundred percent (100%) of approved public
13 infrastructure costs, excluding any sales and use tax paid, may be
14 recovered;
15 b. Up to one hundred percent (100%) of the financing costs
16 associated with approved public infrastructure costs may be
17 recovered;
18 c. In a county containing a city of the first class, the local
19 participation agreement may provide for the release of up to eighty
20 percent (80%) of the increment from the tax levied under KRS
21 91A.390 derived by the governing body within the project
22 development area. The amount released shall not exceed a base
23 amount of four hundred thousand dollars ($400,000) in the first
24 year of the local participation agreement, which base amount shall
25 be increased in each subsequent year of the grant agreement by
26 four percent (4%); and
27 d. Up to one hundred percent (100%) of approved signature project
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1 costs, excluding any sales and use taxes paid, subject to the
2 following:
3 i. The authority shall review proposed expenditures for
4 inclusion in the tax incentive agreement. The authority may
5 approve the type of expenditures it determines are necessary
6 for completion of the private development; and
7 ii. Approved signature project costs shall be detailed in the tax
8 incentive agreement.
9 (b) Beginning on the effective date of this section of this Act[January 1, 2008]:
10 1. A project shall meet all of the following criteria to be considered for
11 state participation under this program:
12 a. The project shall represent new economic activity in the
13 Commonwealth;
14 b. The project shall result in a minimum capital investment of
15 five[two] hundred million dollars ($500,000,000)[($200,000,000)];
16 c. The project shall be owned by a resident or nonresident,
17 nonprofit educational, charitable, or religious institution which
18 has qualified for an exemption from income tax under Section
19 501(c)(3) of the Internal Revenue Code;
20 d. The project shall result in a net positive economic impact to the
21 Commonwealth, taking into consideration any substantial adverse
22 impact on existing Commonwealth businesses. The net positive
23 impact shall be certified to the commission as required by KRS
24 154.30-030(6)(b); and
25 e.[d.] Not more than twenty percent (20%) of the capital investment or
26 twenty percent (20%) of the finished square footage shall be
27 devoted to the support or development of assets that will be
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1 utilized for the retail sale of tangible personal property;
2 2. Projects that meet the criteria established by subparagraph 1. of this
3 paragraph shall comply with all relevant provisions of this subchapter;
4 3. Projects that meet the criteria established by subparagraphs 1. and 2. of
5 this paragraph shall be eligible to recover:
6 a. Up to one hundred percent (100%) of approved public
7 infrastructure costs, excluding any sales and use taxes paid;
8 b. Up to one hundred percent (100%) of the financing costs
9 associated with approved public infrastructure costs; and
10 c. Up to one hundred percent (100%) of approved signature project
11 costs, excluding sales and use taxes paid subject to the following:
12 i. The authority shall review proposed expenditures for
13 inclusion in the tax incentive agreement. The authority may
14 approve the type of expenditures it determines are necessary
15 for completion of the private development; and
16 ii. Approved signature project costs shall be detailed in the tax
17 incentive agreement; and
18 4. Notwithstanding any provision of this section to the contrary, if a project
19 has a residential use that comprises at least fifty percent (50%) of the
20 total finished square footage of the proposed project:
21 a. The report required in KRS 154.30-030(2)(a)3.b. shall not be
22 required; and
23 b. The certification required in KRS 154.30-030(6)(b) and
24 subparagraph 1.c. of this paragraph shall not be required.
25 (4) The authority shall review the application, the certification required by KRS
26 154.30-030, if applicable, and supporting information as provided in KRS 154.30-
27 030.
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1 (5) The authority shall specifically identify the state taxes from which incremental
2 revenues will be pledged. The authority may pledge up to eighty percent (80%) of
3 the incremental revenues from the identified state tax revenues from the footprint,
4 provided that the maximum amount of incremental revenues that may be pledged
5 for a project during the term of the tax incentive agreement from all approved state
6 taxes shall not exceed one hundred percent (100%) of approved public
7 infrastructure costs, approved signature project costs, and financing costs.
8 (6) As part of the approval process, the authority shall determine the following:
9 (a) The footprint of the project;
10 (b) The maximum amount of approved public infrastructure costs, approved
11 signature project costs, and financing costs;
12 (c) That the local revenues pledged to support the public infrastructure of the
13 project, and local revenues pledged to support the overall project are of a
14 sufficient amount to warrant participation of the Commonwealth in the
15 project;
16 (d) The termination date of the tax incentive agreement, not to exceed thirty (30)
17 years from the activation date;
18 (e) Any adjustments to be made to old revenues, in determining incremental
19 revenues during each year of the term of the project grant agreement; and
20 (f) Any approved signature project costs;
21 (7) For the purpose of making the determination required by KRS 139.515(2), the
22 authority shall review the projected expenditures for tangible personal property
23 used in the construction of a signature project, as defined in KRS 139.515(1), and
24 shall establish an approximate percentage of the total anticipated expenditures that
25 are not included in the tax incentive agreement as approved public infrastructure
26 costs or approved signature project costs. This percentage shall be communicated
27 by the authority to the Department of Revenue, which shall use the information in
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1 administering the sales tax refund permitted by KRS 139.515.
2 (8) If state income taxes or local occupational license taxes are included for a project
3 that includes office space, the authority shall consider the impact of pledging theses
4 taxes on the ability to utilize other economic development projects at a later date.
5 (9) The pledge of state incremental tax revenues of the Commonwealth by the authority
6 shall be implemented through the execution of a tax incentive agreement between
7 the Commonwealth and the agency, city, or county in accordance with KRS
8 154.30-070.
9 [(10) Notwithstanding the minimum capital investment of two hundred million dollars
10 ($200,000,000) required by subsection (3)(b)1.b. of this section, the authority may,
11 upon application of an agency that:
12 (a) Was approved to proceed with a project after January 1, 2008, but before
13 January 1, 2013, that, at the time of approval pledged to make the two
14 hundred million dollars ($200,000,000) investment requirement; and
15 (b) Had a consultant report prepared pursuant to KRS 154.30-030(6);
16 approve a reduction in the required minimum capital investment to an amount not
17 less than one hundred fifty million dollars ($150,000,000), subject to a
18 corresponding adjustment of the maximum incremental revenue available for
19 recovery as appropriate, based upon the recommendation of the consultant who
20 prepared the report pursuant to KRS 154.30-030(6).
21 (11) Notwithstanding any statute to the contrary, if a project had a project grant
22 agreement executed pursuant to KRS 154.30-070 prior to January 1, 2008, but the
23 agreement was withdrawn voluntarily before the project was completed, the project
24 may be revised and resubmitted under subsection (3)(a) of this section.]
25 Section 38. KRS 424.110 is amended to read as follows:
26 As used in KRS 424.110 to 424.370:
27 (1) "Publication area" means the city, county, district, or other local area for which an
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1 advertisement is required by law to be made. An advertisement shall be deemed to
2 be for a particular city, county, district, or other local area if it concerns an official
3 activity of the city, county, district, or other area or of any governing body, board,
4 commission, officer, agency, or court thereof, or if the subject of the advertisement
5 concerns particularly the people of the city, county, district, or other area;
6 (2) "Advertisement" means any matter required by law to be published;[ and]
7 (3) "Zoned edition" means a newspaper edition published at least once a week,
8 distributed in a specific geographic region of the newspaper's circulation area, and
9 containing reporting and advertising of interest to subscribers in that geographic
10 region; and
11 (4) "Time" means the time of day, stated in both eastern standard time and central
12 standard time.
13 Section 39. KRS 61.805 is amended to read as follows:
14 As used in KRS 61.805 to 61.850, unless the context otherwise requires:
15 (1) "Meeting" means all gatherings of every kind, including video teleconferences,
16 regardless of where the meeting is held, and whether regular or special and
17 informational or casual gatherings held in anticipation of or in conjunction with a
18 regular or special meeting;
19 (2) "Public agency" means:
20 (a) Every state or local government board, commission, and authority;
21 (b) Every state or local legislative board, commission, and committee;
22 (c) Every county and city governing body, council, school district board, special
23 district board, and municipal corporation;
24 (d) Every state or local government agency, including the policy-making board of
25 an institution of education, created by or pursuant to state or local statute,
26 executive order, ordinance, resolution, or other legislative act;
27 (e) Any body created by or pursuant to state or local statute, executive order,
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1 ordinance, resolution, or other legislative act in the legislative or executive
2 branch of government;
3 (f) Any entity when the majority of its governing body is appointed by a "public
4 agency" as defined in paragraph (a), (b), (c), (d), (e), (g), or (h) of this
5 subsection, a member or employee of a "public agency," a state or local
6 officer, or any combination thereof;
7 (g) Any board, commission, committee, subcommittee, ad hoc committee,
8 advisory committee, council, or agency, except for a committee of a hospital
9 medical staff or a committee formed for the purpose of evaluating the
10 qualifications of public agency employees, established, created, and
11 controlled by a "public agency" as defined in paragraph (a), (b), (c), (d), (e),
12 (f), or (h) of this subsection; and
13 (h) Any interagency body of two (2) or more public agencies where each "public
14 agency" is defined in paragraph (a), (b), (c), (d), (e), (f), or (g) of this
15 subsection;
16 (3) "Action taken" means a collective decision, a commitment or promise to make a
17 positive or negative decision, or an actual vote by a majority of the members of the
18 governmental body;[ and]
19 (4) "Member" means a member of the governing body of the public agency and does
20 not include employees or licensees of the agency;[.]
21 (5) "Time" means the time of day, stated in both eastern standard time and central
22 standard time; and
23 (6) "Video teleconference" means one (1) meeting, occurring in two (2) or more
24 locations, where individuals can see and hear each other by means of video and
25 audio equipment.
26 Section 40. KRS 140.070 is amended to read as follows:
27 The tax upon transfers of property as defined in the preceding sections of this chapter
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1 shall be at the following rates:
2 (1) Class A. In case the transfer is to or for the benefit of a parent, surviving spouse,
3 child by blood, stepchild, child adopted during infancy, child adopted during
4 adulthood who was reared by the decedent during infancy or a grandchild who is
5 the issue of a child by blood, the issue of a stepchild, the issue of a child adopted
6 during adulthood who was reared by the decedent during infancy, the issue of a
7 child adopted during infancy, nephew, niece, or a nephew or niece of the half
8 blood, brother, sister, or brother or sister of the half blood, the tax shall be[,] subject
9 to the provisions of KRS 140.080.[, shall be:
10 On its value not exceeding $20,000 .............................................................. 2%
11 On its value exceeding $20,000, but not exceeding $30,000 ....................... 3%
12 On its value exceeding $30,000, but not exceeding $45,000 ....................... 4%
13 On its value exceeding $45,000, but not exceeding $60,000 ....................... 5%
14 On its value exceeding $60,000, but not exceeding $100,000 ..................... 6%
15 On its value exceeding $100,000, but not exceeding $200,000 ................... 7%
16 On its value exceeding $200,000, but not exceeding $500,000 ................... 8%
17 On its value exceeding $500,000 ............................................................... 10%]
18 (2) Class B. In case the transfer is to or for the benefit of a[ nephew, niece, or a nephew
19 or niece of the half blood,] daughter-in-law, son-in-law, aunt or uncle, or a great-
20 grandchild who is the grandchild of a child by blood, of a stepchild or of a child
21 adopted during infancy, the tax, subject to the provisions of KRS 140.080, shall be:
22 On its value not exceeding $10,000 .............................................................. 4%
23 On its value exceeding $10,000, but not exceeding $20,000 ....................... 5%
24 On its value exceeding $20,000, but not exceeding $30,000 ....................... 6%
25 On its value exceeding $30,000, but not exceeding $45,000 ....................... 8%
26 On its value exceeding $45,000, but not exceeding $60,000 ..................... 10%
27 On its value exceeding $60,000, but not exceeding $100,000 ................... 12%
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1 On its value exceeding $100,000, but not exceeding $200,000 ................. 14%
2 On its value exceeding $200,000 ................................................................ 16%
3 (3) Class C. In case the transfer is to or for the benefit of any educational, religious, or
4 other institutions, societies, or associations, or to any cities, towns, or public
5 institutions not exempted by KRS 140.060, or to any person not included in either
6 Class A or Class B, the tax, subject to the provisions of KRS 140.080, shall be:
7 On its value not exceeding $10,000 .............................................................. 6%
8 On its value exceeding $10,000, but not exceeding $20,000 ....................... 8%
9 On its value exceeding $20,000, but not exceeding $30,000 ..................... 10%
10 On its value exceeding $30,000, but not exceeding $45,000 ..................... 12%
11 On its value exceeding $45,000, but not exceeding $60,000 ................... . 14%
12 On its value exceeding $60,000 ........................................ ......................... 16%
13 Section 41. KRS 140.080 is amended to read as follows:
14 (1) The following exemptions chargeable against the lowest bracket or brackets of
15 inheritable interests shall be free from any tax under the preceding provisions of
16 this chapter:
17 (a) Surviving spouse, total inheritable interest. Effective as to decedents dying
18 after August 1, 1985, notwithstanding anything in this chapter to the contrary,
19 if the decedent's personal representative (or trustee or transferee, absent a
20 personal representative) shall so elect, the spouse's inheritable interest shall
21 include the entire value of any trust or life estate which is in a form that
22 qualifies for the federal estate tax marital deductions under 26 U.S.C.
23 sec.[section] 2056(b)(5) or [2056(b)](7)[ of the Internal Revenue Code of
24 1954], as amended through December 31, 1984, regardless of whether or not
25 the federal estate tax marital deduction is elected by the decedent's personal
26 representative. To be valid, the election referred to in the sentence
27 immediately preceding must be made in the form prescribed by the
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1 Department of Revenue and must be filed on or before the due date of the tax
2 return, including[ (plus] extensions,[)] or with the first tax return filed,
3 whichever last occurs;
4 (b)[ Class A beneficiaries as defined in KRS 140.070, other than the surviving
5 spouse, of estates of decedents dying prior to July 1, 1995, as follows:
6 1. Infant child by blood or adoption, $20,000;
7 2. Child by blood who has been declared mentally disabled by a court of
8 competent jurisdiction, $20,000;
9 3. Child adopted during infancy who has been declared mentally disabled
10 by a court of competent jurisdiction, $20,000; or a
11 4. Child adopted during adulthood who was reared by the decedent during
12 infancy and who has been declared mentally disabled by a court of
13 competent jurisdiction, $20,000;
14 5. Parent, $5,000;
15 6. Child by blood, $5,000;
16 7. Stepchild, $5,000;
17 8. Child adopted during infancy, $5,000;
18 9. Child adopted during adulthood who was reared by the decedent during
19 infancy, $5,000; or a
20 10. Grandchild who is the issue of a child by blood, the issue of a stepchild,
21 the issue of a child adopted during infancy or the issue of a child
22 adopted during adulthood who was reared by the decedent during
23 infancy, $5,000;
24 (c)] Class A beneficiaries, as defined in KRS 140.070,[ other than the
25 surviving spouse, of estates of decedents dying on or after July 1, 1995,
26 shall be as follows:
27 1. For decedents dying between July 1, 1995, and June 30, 1996, the
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1 greater of the exemption established pursuant to paragraph (1)(b) of this
2 section or one-fourth (1/4) of each beneficiary's inheritable interest;
3 2. For decedents dying between July 1, 1996, and June 30, 1997, the
4 greater of the exemption established pursuant to paragraph (1)(b) of this
5 section or one-half (1/2) of each beneficiary's inheritable interest;
6 3. For decedents dying between July 1, 1997, and June 30, 1998, the
7 greater of the exemption established pursuant to paragraph (1)(b) of this
8 section or three-fourths (3/4) of each beneficiary's inheritable interest;
9 and
10 4. For each decedent dying after June 30, 1998, each beneficiary's] total
11 inheritable interest;
12 (c)[(d)] All persons of Class B, under KRS 140.070, $1,000; and
13 (d)[(e)] All persons of Class C, under KRS 140.070, $500.
14 (2) If the decedent was not a resident of this state, the exemption shall be the same
15 proportion of the allowable exemption in the case of residents that the property
16 taxable by this state bears to the whole property transferred by the decedent.
17 SECTION 42. A NEW SECTION OF KRS CHAPTER 141 IS CREATED TO
18 READ AS FOLLOWS:
19 (1) As used in this section:
20 (a) "Agriculturally based alternative jet fuel" means an alternative jet fuel
21 produced from agricultural biomass, including crops and agricultural
22 byproducts derived from agricultural or livestock production, such as corn,
23 soybeans, wheat, canola, animal fats, and biomass residues from trees,
24 wood, and grasses;
25 (b) "Alternative jet fuel" means a liquid fuel that can be used in an aircraft
26 without the need to modify the aircraft engines or existing fuel distribution
27 infrastructure, and that:
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1 1. Consists of synthesized hydrocarbons and meets the requirements of:
2 a. The American Society for Testing and Materials International
3 Standard D7566; or
4 b. The American Society for Testing and Materials International
5 Standard D1655;
6 2. Is derived from eligible feedstocks;
7 3. Is not derived from palm fatty acid distillates; and
8 4. Achieves at least a fifty percent (50%) lifecycle greenhouse gas
9 emissions reduction in comparison with petroleum-based jet fuel, as
10 determined by a test that shows the fuel production pathway achieves
11 at least a fifty percent (50%) reduction of the aggregate attributional
12 care lifecycle by measuring either:
13 a. Emissions under the lifecycle methodology for alternative jet
14 fuels adopted by the International Civil Aviation Organization
15 with the agreement of the United States; or
16 b. Greenhouse gas emissions values utilizing the most recent
17 version of Argonne National Laboratory's GREET model;
18 (c) "Alternative jet fuel producer" means an entity in this state that:
19 1. Produces alternative jet fuel; or
20 2. Blends SBC with conventional aviation gasoline or jet fuel;
21 (d) "Eligible feedstock" means any feedstock that qualifies as an eligible
22 feedstock for purposes of Section 45Z of the Internal Revenue Code;
23 (e) "Eligible taxpayer" means an alternative jet fuel producer or feedstock
24 provider that is located in the Commonwealth;
25 (f) "Feedstock provider" means an entity that manufactures an eligible
26 feedstock, including SBC, used in the process of making alternative jet fuel;
27 and
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1 (g) "Synthetic blending component" or "SBC" means synthesized
2 hydrocarbons that meet the requirements in any one (1) of the annexes of
3 the American Society for Testing and Materials International Standard
4 D7566, which may then be used as a component in the manufacture of
5 alternative jet fuel.
6 (2) (a) There shall be allowed a nonrefundable, nontransferable alternative jet fuel
7 credit allowed against the taxes imposed in KRS 141.020 or 141.040 and
8 141.0401 for alternative jet fuel producers in an amount certified by the
9 department under this section, with the ordering of the credits as provided
10 in Section 2 of this Act.
11 (b) For taxable years beginning on or after January 1, 2029, but before
12 January 1, 2035, an eligible taxpayer may claim a credit at a rate of:
13 1. Fifty cents ($0.50) per gallon to a feedstock provider supplying either
14 eligible feedstocks or SBC to an alternative jet fuel producer;
15 2. One dollar and fifty cents ($1.50) per gallon to an alternative jet fuel
16 producer that processes eligible feedstocks or blends SBC with
17 conventional jet fuel to produce alternative jet fuel;
18 3. Two dollars ($2) per gallon to an alternative jet fuel producer that
19 processes eligible feedstocks or blends SBC with conventional jet fuel
20 to produce agriculturally based alternative jet fuel; or
21 4. Two dollars and fifty cents ($2.50) per gallon to an alternative jet fuel
22 producer that processes eligible feedstocks or blends SBC with
23 conventional jet fuel to produce an agriculturally based alternative jet
24 fuel using an eligible feedstock that was produced in the
25 Commonwealth.
26 (3) (a) The credit allowed in subsection (2) of this section shall not be carried
27 forward to other taxable years.
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1 (b) The total credit allowed in subsection (2)(b)1. and 2. of this section shall not
2 exceed two million dollars ($2,000,000) per eligible taxpayer per taxable
3 year.
4 (c) The credits allowed in subsection (2) of this section may stack if the
5 alternative jet fuel producer is the same as the feedstock provider and shall
6 not exceed three dollars ($3) per gallon per entity.
7 (d) The aggregate total credit certified in a calendar year shall not exceed
8 twenty million dollars ($20,000,000). If the aggregate total of credits
9 certified exceeds twenty million dollars ($20,000,000), the department shall
10 apportion credits pro rata among eligible taxpayers up to the twenty million
11 dollar ($20,000,000) limit.
12 (4) The department, in conjunction with the Kentucky Department of Agriculture
13 and the Energy and Environment Cabinet, shall promulgate emergency and
14 ordinary administrative regulations in accordance with KRS Chapter 13A to
15 adopt:
16 (a) Forms and procedures necessary for implementation, calculation,
17 reporting, and certification of the credit no later than October 1, 2028;
18 (b) Verification standards and processes to ensure the fuel meets the
19 requirements to be alternative jet fuel or agriculturally based alternative jet
20 fuel; and
21 (c) Verification standards and processes to ensure each alternative jet fuel
22 producer and feedstock provider meets the criteria established in subsection
23 (1)(c) and (f) of this section.
24 (5) The department, Kentucky Department of Agriculture, and Energy and
25 Environment Cabinet shall report to the Interim Joint Committee on
26 Appropriations and Revenue when administrative regulations have been
27 promulgated under subsection (4) of this section, and the credit provided in this
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1 section shall not be approved prior to the report.
2 (6) (a) An eligible taxpayer seeking approval for the credit under this section shall:
3 1. Submit an application to the department, on a form as prescribed by
4 the department, by January 15, 2030, following the close of the
5 calendar year, and each January 15 thereafter as long as the credit is
6 available; and
7 2. Provide the:
8 a. Taxpayer's identification number; and
9 b. Description and amount or volume of alternative jet fuel, eligible
10 feedstock, or SBC:
11 i. Produced, including anticipated production amounts, for
12 the calendar year; or
13 ii. Blended, including anticipated production amounts, for the
14 calendar year.
15 (b) The department shall:
16 1. Review all applications submitted by eligible taxpayers by February
17 15, 2030, and each February 15 thereafter as long as the credit is
18 available;
19 2. Determine the qualifying volumes of alternative jet fuel, eligible
20 feedstock, or SBC per eligible taxpayer; and
21 3. Issue a certification by March 1, 2030, and each March 1 thereafter as
22 long as the credit is available, of the credit amount approved for each
23 eligible taxpayer.
24 (7) (a) In order for the General Assembly to evaluate the alternative jet fuel
25 producer credit, by November 1, 2030, and each November 1 thereafter, as
26 long as the tax credit is claimed on any tax return filed, the department
27 shall report the following to the Legislative Research Commission for
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1 referral to the Interim Joint Committee on Appropriations and Revenue and
2 the Department of Agriculture:
3 1. The number of tax returns, by the tax type of return filed, claiming the
4 credit for each taxable year;
5 2. The total amount of credit claimed on returns filed for each taxable
6 year;
7 3. The total number of gallons claimed per return filed of:
8 a. Eligible feedstock or SBC provided;
9 b. Eligible feedstock processed or SBC blended with conventional
10 jet fuel to produce alternative jet fuel;
11 c. Agriculturally based alternative jet fuel produced; and
12 d. Agriculturally based alternative jet fuel produced using an
13 eligible feedstock that was produced in the Commonwealth;
14 4. The cumulative number of credits claimed by county, as identified by
15 the mailing address on the return filed for each taxable year; and
16 5. a. In the case of taxpayers other than corporations, based on
17 ranges of adjusted gross income of no larger than five thousand
18 dollars ($5,000), the total amount of credits claimed for each
19 adjusted gross income range for each taxable year.
20 b. In the case of corporations, based on ranges of net income of no
21 larger than fifty thousand dollars ($50,000), the total amount of
22 credit claimed for each net income range for each taxable year.
23 (b) The information required to be reported under this subsection shall not be
24 considered confidential taxpayer information and shall not be subject to
25 KRS Chapter 131 or any other provisions of the Kentucky Revised Statutes
26 prohibiting disclosure or reporting information.
27 SECTION 43. A NEW SECTION OF KRS CHAPTER 139 IS CREATED TO
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1 READ AS FOLLOWS:
2 (1) As used in this section:
3 (a) "Agriculturally based alternative jet fuel" has the same meaning as in
4 Section 42 of this Act;
5 (b) "Alternative jet fuel" has the same meaning as in Section 42 of this Act;
6 (c) "Commercial airport" has the same meaning as in KRS 183.011;
7 (d) "Effective date" means the first day of the month following the month in
8 which the department notifies the commercial airport that it is eligible to
9 receive a sales tax rebate;
10 (3) (a) Notwithstanding KRS 134.580 and 139.770, effective August 1, 2026, a
11 commercial airport may be granted a sales tax rebate of up to seventy-five
12 percent (75%) of the Kentucky sales tax generated by the sale of
13 agriculturally based alternative jet fuel and alternative jet fuel at a
14 commercial airport located in Kentucky. The tax rebate shall be reduced by
15 the vendor compensation allowed under KRS 139.570 on or after August 1,
16 2026.
17 (b) The commercial airport shall have no obligation to refund or otherwise
18 return any amount of the sales tax rebate to the persons from whom the
19 sales tax was collected.
20 (c) The total tax rebate for each commercial airport shall be reinvested by the
21 commercial airport to maintain, improve, upgrade, and repair commercial
22 airport facilities and operations.
23 (4) (a) To be eligible for a sales tax rebate under this section, the commercial
24 airport shall file an application with the department in the form prescribed
25 by the department through the promulgation of an administrative regulation
26 in accordance with KRS Chapter 13A.
27 (b) The department shall:
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1 1. Review the application;
2 2. Determine whether the applicant meets the requirements of this
3 section; and
4 3. Notify the applicant in writing whether the applicant qualifies for a
5 rebate and the effective date of qualification.
6 (5) A qualified applicant shall file a request for a sales tax rebate within sixty (60)
7 days following the end of each calendar quarter for sales made during the
8 quarter. The request shall be submitted in the form prescribed by the department
9 through the promulgation of an administrative regulation in accordance with
10 KRS Chapter 13A, and shall include supporting information and documentation
11 as determined necessary by the department to verify the requested tax rebate.
12 (6) The department shall review the request, verify the amount of sales tax rebate due
13 to the commercial airport, and pay the amount determined due within forty-five
14 (45) days of receipt of the request and all necessary supporting information.
15 (7) Interest shall not be allowed or paid on any sales tax rebate payment made under
16 this section.
17 Section 44. KRS 67C.147 is amended to read as follows:
18 (1) In order to maintain the tax structure, tax rates, or level of services in the area of the
19 consolidated local government formerly comprising the city of the first class, the
20 legislative council of a consolidated local government may provide in the manner
21 described in this chapter for taxes and services within the area comprising the
22 former city of the first class which are different from the taxes and services which
23 are applicable in the remainder of the county. These differences may include
24 differences in tax rates upon the class of property which includes the surface of the
25 land, differences in ad valorem tax rates upon personal property, and differences in
26 tax rates upon insurance premiums.
27 (2) Any difference in the ad valorem tax rate on the class of property which includes
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1 the surface of the land in the portion of the county formerly comprising the city of
2 the first class and in the portion of the county other than that formerly comprising
3 the city of the first class may be imposed directly by the consolidated local
4 government council. Any change in these ad valorem tax rates shall comply with
5 KRS 68.245, 132.010, 132.017, and 132.027 and shall be used for services as
6 provided by KRS 82.085.
7 (3) If the consolidated local government council determines to provide for tax rates
8 applicable to health insurance premiums and personal property which are different
9 in the area formerly comprising the city of the first class than the rates applicable in
10 the remainder of the county, it shall do so in the following manner. The
11 consolidated local government council shall by ordinance create a tax district to be
12 known as the "urban service tax district" bounded by the former boundaries of the
13 former city of the first class. The ordinance shall designate the number of members
14 of the board of this tax district and the manner in which they shall be appointed.
15 The ordinance shall provide that the board of the tax district shall receive the
16 income derived from the differential tax rate applicable in the area formerly
17 comprising the city of the first class with respect to personal property, health
18 insurance premiums, or both, and shall contract with the consolidated local
19 government to pay all sums collected to the consolidated local government, in
20 return for the provision of services performed by the consolidated local government
21 within the area formerly comprising the city of the first class which services are in
22 addition to services performed by the consolidated local government in the
23 remainder of the county. The consolidated local government shall provide at least
24 an annual reporting to the urban service tax district board and the legislative body
25 of the consolidated local government containing but not limited to detailed
26 operating and capital expenditures of each service performed by the consolidated
27 local government.
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1 (4) After the initial formation of an urban service tax district in a consolidated local
2 government, the boundaries of the district may be modified in the following
3 manner. The proposal to alter the boundaries of the urban service tax district within
4 a consolidated local government may be initiated by:
5 (a) A resolution enacted by the consolidated local government describing the
6 boundaries of the area to be added to or deleted from the tax district and duly
7 passed and signed by the mayor not less than one hundred twenty (120) days
8 before the next regularly scheduled election day within the county; or
9 (b) A petition signed by a number of qualified voters living within precincts
10 within the area to be added to or deleted from the tax district equal to ten
11 percent (10%) of the votes cast within each precinct in the last general
12 election for President of the United States and delivered to the clerk of the
13 legislative council more than one hundred twenty (120) days next preceding
14 the next regularly scheduled election day within the county.
15 The boundaries so described in either case shall not cross precinct lines. The
16 question of whether the area bounded as described should be added to or deleted
17 from, as the case may be, the urban service tax district shall then be placed upon the
18 ballot in the precincts in the area to be added or deleted at the next regular election
19 and the question stated on the ballot shall be so phrased that a "Yes" vote shall be
20 cast in favor of making the proposed change and a "No" vote shall be cast to oppose
21 the proposed change. If a majority of those voting in those precincts support the
22 change, then the change in the boundaries of the urban service tax district shall be
23 implemented.
24 (5) (a) Beginning with emergency medical responses made on or after[No later
25 than] July 1, 2025, the consolidated local government shall reimburse a fire
26 district operating under KRS Chapter 75 for expenses related to each
27 emergency medical response made by the fire district operating under KRS
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1 Chapter 75 into the area of the urban service tax district. A fire district so
2 responding shall receive from the consolidated local government three
3 hundred dollars ($300) for transporting a person and one hundred fifty dollars
4 ($150) for arriving at person's location when no person is transported.
5 (b) The payment established in paragraph (a) of this subsection shall be in
6 addition to any insurance moneys the fire district may be eligible to receive
7 resulting from the response.
8 (c) The payment established in paragraph (a) of this subsection shall be adjusted
9 on July 1 of each year by the percentage increase in the nonseasonally
10 adjusted annual average Consumer Price Index for All Urban Consumers
11 (CPI-U), U.S. City Average, All Items, between the two (2) most recent
12 calendar years available, as published by the United States Bureau of Labor
13 Statistics.
14 (d) The consolidated local government shall not charge a fire district operating
15 under KRS Chapter 75 for any expenses or services that the consolidated local
16 government was not charging the fire district prior to January 1, 2024.
17 (e) A fire district operating under KRS Chapter 75 that receives payment or
18 reimbursement in any form from the consolidated local government for an
19 emergency medical response made by the fire district into the area of the
20 urban service tax district prior to July 1, 2025, shall not be eligible for
21 payments or reimbursement under this subsection beginning on July 1 of
22 the following fiscal year and continuing until the end of that fiscal year.
23 (6) Except for services provided within the central business district as defined by the
24 consolidated local government via ordinance as of April 1, 2024:
25 (a) From July 1, 2025, to June 30, 2028, the differential tax received by the urban
26 service tax district shall fund no less than eighty-five percent (85%) of all
27 costs related to the services provided, including capital expenditures related to
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1 the services, within the urban service tax district by the consolidated local
2 government as set out in this section that are in addition to the services
3 performed by the consolidated local government in the remainder of the
4 county;
5 (b) From July 1, 2028, to June 30, 2031, the differential tax received by the urban
6 service tax district shall fund no less than ninety percent (90%) of all costs
7 related to the services provided, including capital expenditures related to the
8 services, within the urban service tax district by the consolidated local
9 government as set out in this section that are in addition to the services
10 performed by the consolidated local government in the remainder of the
11 county;
12 (c) From July 1, 2031, to June 30, 2034, the differential tax received by the urban
13 service tax district shall fund no less than ninety-five percent (95%) of all
14 costs related to the services provided, including capital expenditures related to
15 the services, within the urban service tax district by the consolidated local
16 government as set out in this section that are in addition to the services
17 performed by the consolidated local government in the remainder of the
18 county; and
19 (d) After June 30, 2034, the differential tax received by the urban service tax
20 district shall fund no less than one hundred percent (100%) of all costs related
21 to the services provided, including capital expenditures related to the services,
22 within the urban service tax district by the consolidated local government as
23 set out in this section that are in addition to the services performed by the
24 consolidated local government in the remainder of the county.
25 Section 45. KRS 367.990 is amended to read as follows:
26 (1) Any person who violates the terms of a temporary or permanent injunction issued
27 under KRS 367.190 shall forfeit and pay to the Commonwealth a civil penalty of
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1 not more than twenty-five thousand dollars ($25,000) per violation. For the
2 purposes of this section, the Circuit Court issuing an injunction shall retain
3 jurisdiction, and the cause shall be continued, and in such cases the Attorney
4 General acting in the name of the Commonwealth may petition for recovery of civil
5 penalties.
6 (2)[ In any action brought under KRS 367.190, if the court finds that a person is
7 willfully using or has willfully used a method, act, or practice declared unlawful by
8 KRS 367.170, the Attorney General, upon petition to the court, may recover, on
9 behalf of the Commonwealth, a civil penalty of not more than two thousand dollars
10 ($2,000) per violation, or where the defendant's conduct is directed at a person aged
11 sixty (60) or older, a civil penalty of not more than ten thousand dollars ($10,000)
12 per violation, if the trier of fact determines that the defendant knew or should have
13 known that the person aged sixty (60) or older is substantially more vulnerable than
14 other members of the public.
15 (3)] Any person with actual notice that an investigation has begun or is about to begin
16 pursuant to KRS 367.240 and 367.250 who intentionally conceals, alters, destroys,
17 or falsifies documentary material is guilty of a Class A misdemeanor.
18 (3)[(4)] Any person who, in response to a subpoena or demand as provided in KRS
19 367.240 or 367.250, intentionally falsifies or withholds documents, records, or
20 pertinent materials that are not privileged shall be subject to a fine as provided in
21 subsection (2)[(3)] of this section.
22 (4)[(5)] The Circuit Court of any county in which any plan described in KRS 367.350
23 is proposed, operated, or promoted may grant an injunction without bond, upon
24 complaint filed by the Attorney General to enjoin the further operation thereof, and
25 the Attorney General may ask for and the court may assess civil penalties against
26 the defendant in an amount not to exceed the sum of five thousand dollars ($5,000)
27 which shall be for the benefit of the Commonwealth of Kentucky.
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1 (5)[(6)] Any person, business, or corporation who knowingly violates the provisions
2 of KRS 367.540 shall be guilty of a violation. It shall be considered a separate
3 offense each time a magazine is mailed into the state; but it shall be considered only
4 one (1) offense for any quantity of the same issue of a magazine mailed into
5 Kentucky.
6 (6)[(7)] Any solicitor who violates the provisions of KRS 367.513 or 367.515 shall be
7 guilty of a Class A misdemeanor.
8 (7)[(8)] In addition to the penalties contained in this section, the Attorney General,
9 upon petition to the court, may recover, on behalf of the Commonwealth a civil
10 penalty of not more than the greater of five thousand dollars ($5,000) or two
11 hundred dollars ($200) per day for each and every violation of KRS 367.175.
12 (8)[(9)] Any person who[ shall] willfully and intentionally violates[violate] any
13 provision of KRS 367.976 to 367.985 shall be guilty of a Class B misdemeanor.
14 (9)[(10)] (a) Any person who violates the terms of a temporary or permanent
15 injunction issued under KRS 367.665 shall forfeit and pay to the
16 Commonwealth a penalty of not more than five thousand dollars ($5,000) per
17 violation. For the purposes of this section, the Circuit Court issuing an
18 injunction shall retain jurisdiction, and the cause shall be continued, and in
19 such cases the Attorney General acting in the name of the Commonwealth
20 may petition for recovery of civil penalties.
21 (b) 1. The Attorney General may, upon petition to a court having jurisdiction
22 under KRS 367.190, recover on behalf of the Commonwealth from any
23 person found to have willfully committed an act declared unlawful by
24 KRS 367.667 a penalty of not more than five thousand dollars ($5,000)
25 per violation.
26 2. In addition to any other penalties provided for the commission of the
27 offense, any person found guilty of violating KRS 367.667(1)(c):
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1 a. Shall be punished by a fine of no less than five hundred dollars
2 ($500) for the first offense and no less than five thousand dollars
3 ($5,000) for any subsequent offense; and
4 b. Pay restitution of any financial benefit secured through conduct
5 proscribed by KRS 367.667(1)(c).
6 3. The Office of the Attorney General or the appropriate Commonwealth's
7 attorney shall have concurrent enforcement powers as to fines, felonies,
8 and misdemeanors under this paragraph.
9 (c) Any person who knowingly violates any provision of KRS 367.652, 367.653,
10 367.656, 367.657, 367.658, 367.666, or 367.668 or who knowingly gives false
11 or incorrect information to the Attorney General in filing statements or reports
12 required by KRS 367.650 to 367.670 shall be guilty of a Class D felony.
13 (10)[(11)] Any dealer who fails to provide a statement under KRS 367.760 or a notice
14 under KRS 367.765 shall be liable for a penalty of one hundred dollars ($100) per
15 violation to be collected in the name of the Commonwealth upon action of the
16 Attorney General.
17 (11)[(12)] Any dealer or manufacturer who falsifies a statement under KRS 367.760
18 shall be liable for a penalty not exceeding one thousand dollars ($1,000) to be
19 collected in the name of the Commonwealth upon action by the Attorney General.
20 (12)[(13)] Any person who violates KRS 367.805, 367.809(2), 367.811, 367.813(1), or
21 367.816 shall be guilty of a Class C felony.
22 (13)[(14)] Either the Attorney General or the appropriate Commonwealth's attorney shall
23 have authority to prosecute violations of KRS 367.801 to 367.819.
24 (14)[(15)] A violation of KRS 367.474 to 367.478 and 367.482 is a Class C felony.
25 Either the Attorney General or the appropriate Commonwealth's attorney shall have
26 authority to prosecute violators of KRS 367.474 to 367.478 and 367.482.
27 (15)[(16)] Any person who violates KRS 367.310 shall be guilty of a violation.
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1 (16)[(17)] Any person, partnership, or corporation who violates the provisions of KRS
2 367.850 shall be guilty of a Class A misdemeanor.
3 (17)[(18)] Any dealer in motor vehicles or any other person who fraudulently changes,
4 sets back, disconnects, fails to connect, or causes to be changed, set back, or
5 disconnected, the speedometer or odometer of any motor vehicle, to effect the sale
6 of the motor vehicle shall be guilty of a Class D felony.
7 (18)[(19)] Any person who negotiates a contract of membership on behalf of a club
8 without having previously fulfilled the bonding requirement of KRS 367.403 shall
9 be guilty of a Class D felony.
10 (19)[(20)] Any person or corporation who operates or attempts to operate a health spa in
11 violation of KRS 367.905(1) shall be guilty of a Class A misdemeanor.
12 (20)[(21)] (a) Any person who violates KRS 367.832 shall be guilty of a Class C
13 felony; and
14 (b) The appropriate Commonwealth's attorney shall have authority to prosecute
15 felony violations of KRS 367.832.
16 (21)[(22)] (a) Any person who violates the provisions of KRS 367.855 or 367.857
17 shall be guilty of a violation. Either the Attorney General or the appropriate
18 county health department may prosecute violators of KRS 367.855 or
19 367.857.
20 (b) The provisions of this subsection shall not apply to any retail establishment if
21 the wholesaler, distributor, or processor fails to comply with the provisions of
22 KRS 367.857.
23 (22)[(23)] Notwithstanding any other provision of law, any telemarketing company,
24 telemarketer, caller, or merchant shall be guilty of a Class D felony when that
25 telemarketing company, telemarketer, caller, or merchant three (3) times in one (1)
26 calendar year knowingly and willfully violates KRS 367.46955(15) by making or
27 causing to be made an unsolicited telephone solicitation call to a telephone number
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1 that appears in the current publication of the zero call list maintained by the Office
2 of the Attorney General's Office of Consumer Protection.
3 (23)[(24)] Notwithstanding any other provision of law, any telemarketing company,
4 telemarketer, caller, or merchant shall be guilty of a Class A misdemeanor when
5 that telemarketing company, telemarketer, caller, or merchant uses a zero call list
6 identified in KRS 367.46955(15) for any purpose other than complying with the
7 provisions of KRS 367.46951 to 367.46999.
8 (24)[(25)] (a) Notwithstanding any other provision of law, any telemarketing
9 company, telemarketer, caller, or merchant that violates KRS 367.46951 to
10 367.46999 shall be assessed a civil penalty of not more than five thousand
11 dollars ($5,000) for each offense.
12 (b) The Attorney General, or any person authorized to act in his or her behalf,
13 shall initiate enforcement of a civil penalty imposed under paragraph (a) of
14 this subsection.
15 (c) Any civil penalty imposed under paragraph (a) of this subsection may be
16 compromised by the Attorney General or his or her designated representative.
17 In determining the amount of the penalty or the amount agreed upon in
18 compromise, the Attorney General, or his or her designated representative,
19 shall consider the appropriateness of the penalty to the financial resources of
20 the telemarketing company, telemarketer, caller, or merchant charged, the
21 gravity of the violation, the number of times the telemarketing company,
22 telemarketer, caller, or merchant charged has been cited, and the good faith of
23 the telemarketing company, telemarketer, caller, or merchant charged in
24 attempting to achieve compliance, after notification of the violation.
25 (d) If a civil penalty is imposed under this subsection, a citation shall be issued
26 which describes the violation which has occurred and states the penalty for the
27 violation. If, within fifteen (15) working days from the receipt of the citation,
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1 the affected party fails to pay the penalty imposed, the Attorney General, or
2 any person authorized to act in his or her behalf, shall initiate a civil action to
3 collect the penalty. The civil action shall be taken in the court which has
4 jurisdiction over the location in which the violation occurred.
5 (25)[(26)] Any person who violates KRS 367.500 shall be liable for a penalty of two
6 thousand five hundred dollars ($2,500) per violation. Either the Attorney General or
7 the appropriate Commonwealth's attorney may prosecute violations of KRS
8 367.500.
9 (26) (a) In any action brought under KRS 367.190, if the court finds that a person is
10 willfully using or has willfully used a method, act, or practice declared
11 unlawful by KRS 367.170, the Attorney General, upon petition to the court,
12 may recover on behalf of the Commonwealth a civil penalty of not more
13 than:
14 1. Two thousand dollars ($2,000) per violation; or
15 2. Ten thousand dollars ($10,000) per violation if the defendant's
16 conduct is directed at a person aged sixty (60) or older, and the trier of
17 fact determines that the defendant knew or should have known that
18 the person is aged sixty (60) or older and substantially more
19 vulnerable than other members of the public.
20 (b) For purposes of this subsection:
21 1. Any method, act, or practice declared unlawful by KRS 367.170 shall
22 constitute a separate violation as to each:
23 a. Consumer to whom a method, act, or practice declared unlawful
24 by KRS 367.170 was directed, communicated, or applied,
25 regardless of whether the consumer suffered actual pecuniary
26 loss;
27 b. Transaction in which a method, act, or practice declared
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1 unlawful by KRS 367.170 was employed, including but not
2 limited to each sale, offer, solicitation, advertisement or
3 advertisement placement, communication, other act connected
4 with the unlawful conduct; and
5 c. Separately identifiable method, act, or practice declared
6 unlawful by KRS 367.170, even if arising from the same
7 transaction or directed at the same consumer; and
8 2. Any method, act, or practice declared unlawful by KRS 367.170 that is
9 not identified as being in connection with a specific identifiable person
10 or transaction, but that is continuing in nature, shall constitute a
11 separate violation for each day that the unlawful method, act, or
12 practice exists or continues.
13 (c) Proof of actual injury to a consumer as a prerequisite to the assessment of
14 civil penalties under this subsection shall not be required, as the civil
15 penalty provisions in this subsection are intended to punish and deter the
16 violator and not intended solely to compensate injured parties.
17 (d) In determining the amount of the civil penalty established in paragraph (a)
18 of this subsection to be assessed for each violation, the trier of fact may
19 consider, either alone or in combination, the following factors:
20 1. Whether the person charged with the violation was acting in good
21 faith or bad faith;
22 2. The nature, extent, and severity of the injury to consumers and the
23 public;
24 3. The person's ability to pay;
25 4. The amount of profit or gain obtained through the unlawful conduct;
26 5. The duration of the unlawful conduct;
27 6. The desire to eliminate any benefit derived from the violation and to
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1 deter future violations; and
2 7. Any prior violations of KRS 367.170 by the person.
3 (e) For purposes of this subsection, "person" has the same meaning as in KRS
4 367.110.
5 (f) This subsection shall:
6 1. Be liberally construed to effectuate its purpose of protecting
7 consumers and the public from unfair, false, misleading, or deceptive
8 acts or practices, and to provide the Attorney General the enforcement
9 tools necessary to deter unlawful conduct; and
10 2. Not be construed to limit the:
11 a. Methods by which the Attorney General or trier of fact may
12 determine the number of violations in any particular action; or
13 b. Right of the trier of fact to determine the number of violations
14 for which a person may properly be held responsible based upon
15 the circumstances of the case.
16 Section 46. KRS 367.360 is amended to read as follows:
17 To accomplish the objectives and to carry out the duties prescribed by KRS 367.350 the
18 Attorney General, in addition to other powers conferred upon him by KRS 367.990[(5)],
19 may issue subpoenas to any person, administer an oath or affirmation to any person, or
20 conduct hearings in aid of any investigation or inquiry, provided that information
21 obtained pursuant to the powers conferred by this section shall not be made public or
22 disclosed by the Attorney General or his employees beyond the extent necessary for law
23 enforcement purposes in the public interest.
24 Section 47. Whereas, musicians and music venues are vital to the economy of
25 the Commonwealth, the Kentucky Film Leadership Council is directed to study, examine,
26 and evaluate the needs of Kentucky's musicians and music venues. The study shall be
27 conducted by the executive director of the Kentucky Film Office or his or her designee,
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1 the secretary of the Cabinet for Economic Development or his or her designee, and the
2 secretary of the Education and Labor Cabinet or his or her designee. The study shall
3 assess the needs of Kentucky musicians and music venues in this state and provide
4 strategies regarding how the Commonwealth may further facilitate industry growth and
5 the development of partnerships between state agencies, universities, and this vital
6 industry. The study shall identify both opportunities and barriers this industry faces in
7 expanding within the state. The findings and results of this study shall be submitted to the
8 Legislative Research Commission by November 1, 2026, for referral to the Interim Joint
9 Committee on Economic Development and Workforce Investment.
10 Section 48. 2026 RS HB 757/VO, Section 7, is amended to read as follows:
11 In the case of taxpayers other than corporations:
12 (1) Adjusted gross income shall be calculated by subtracting from the gross income of
13 those taxpayers the deductions allowed individuals by Section 62 of the Internal
14 Revenue Code and adjusting as follows:
15 (a) Exclude income that is exempt from state taxation by the Kentucky
16 Constitution and the Constitution and statutory laws of the United States;
17 (b) Exclude income from supplemental annuities provided by the Railroad
18 Retirement Act of 1937 as amended and which are subject to federal income
19 tax by Pub. L. No. 89-699;
20 (c) Include interest income derived from obligations of sister states and political
21 subdivisions thereof;
22 (d) Exclude employee pension contributions picked up as provided for in KRS
23 6.505, 16.545, 21.360, 61.523, 61.560, 65.155, 67A.320, 67A.510, 78.610,
24 and 161.540 upon a ruling by the Internal Revenue Service or the federal
25 courts that these contributions shall not be included as gross income until such
26 time as the contributions are distributed or made available to the employee;
27 (e) Exclude Social Security and railroad retirement benefits subject to federal
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1 income tax;
2 (f) Exclude any money received because of a settlement or judgment in a lawsuit
3 brought against a manufacturer or distributor of "Agent Orange" for damages
4 resulting from exposure to Agent Orange by a member or veteran of the
5 Armed Forces of the United States or any dependent of such person who
6 served in Vietnam;
7 (g) 1. a. For taxable years beginning after December 31, 2005, but before
8 January 1, 2018, exclude up to forty-one thousand one hundred ten
9 dollars ($41,110) of total distributions from pension plans, annuity
10 contracts, profit-sharing plans, retirement plans, or employee
11 savings plans; and
12 b. For taxable years beginning on or after January 1, 2018, exclude
13 up to thirty-one thousand one hundred ten dollars ($31,110) of
14 total distributions from pension plans, annuity contracts, profit-
15 sharing plans, retirement plans, or employee savings plans.
16 2. As used in this paragraph:
17 a. "Annuity contract" has the same meaning as set forth in Section
18 1035 of the Internal Revenue Code;
19 b. "Distributions" includes but is not limited to any lump-sum
20 distribution from pension or profit-sharing plans qualifying for the
21 income tax averaging provisions of Section 402 of the Internal
22 Revenue Code; any distribution from an individual retirement
23 account as defined in Section 408 of the Internal Revenue Code;
24 and any disability pension distribution; and
25 c. "Pension plans, profit-sharing plans, retirement plans, or employee
26 savings plans" means any trust or other entity created or organized
27 under a written retirement plan and forming part of a stock bonus,
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1 pension, or profit-sharing plan of a public or private employer for
2 the exclusive benefit of employees or their beneficiaries and
3 includes plans qualified or unqualified under Section 401 of the
4 Internal Revenue Code and individual retirement accounts as
5 defined in Section 408 of the Internal Revenue Code;
6 (h) 1. a. Exclude the portion of the distributive share of a shareholder's net
7 income from an S corporation subject to the franchise tax imposed
8 under KRS 136.505 or the capital stock tax imposed under KRS
9 136.300; and
10 b. Exclude the portion of the distributive share of a shareholder's net
11 income from an S corporation related to a qualified subchapter S
12 subsidiary subject to the franchise tax imposed under KRS
13 136.505 or the capital stock tax imposed under KRS 136.300.
14 2. The shareholder's basis of stock held in an S corporation where the S
15 corporation or its qualified subchapter S subsidiary is subject to the
16 franchise tax imposed under KRS 136.505 or the capital stock tax
17 imposed under KRS 136.300 shall be the same as the basis for federal
18 income tax purposes;
19 (i) Exclude income received for services performed as a precinct worker for
20 election training or for working at election booths in state, county, and local
21 primaries or regular or special elections;
22 (j) Exclude any capital gains income attributable to property taken by eminent
23 domain;
24 (k) 1. Exclude all income from all sources for members of the Armed Forces
25 who are on active duty and who are killed in the line of duty, for the
26 year during which the death occurred and the year prior to the year
27 during which the death occurred.
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1 2. For the purposes of this paragraph, "all income from all sources" shall
2 include all federal and state death benefits payable to the estate or any
3 beneficiaries;
4 (l) Exclude all military pay received by members of the Armed Forces while on
5 active duty;
6 (m) 1. Include the amount deducted for depreciation under 26 U.S.C. sec. 167
7 or 168; and
8 2. Exclude the amounts allowed by KRS 141.0101 for depreciation;
9 (n) Include the amount deducted under 26 U.S.C. sec. 199A;
10 (o) Ignore any change in the cost basis of the surviving spouse's share of property
11 owned by a Kentucky community property trust occurring for federal income
12 tax purposes as a result of the death of the predeceasing spouse;
13 (p) Allow the same treatment allowed under Pub. L. No. 116-260, secs. 276 and
14 278, related to the tax treatment of forgiven covered loans, deductions
15 attributable to those loans, and tax attributes associated with those loans for
16 taxable years ending on or after March 27, 2020, but before January 1, 2022;
17 (q) For taxable years beginning on or after January 1, 2020, but before March 11,
18 2023, allow the same treatment of restaurant revitalization grants in
19 accordance with Pub. L. No. 117-2, sec. 9673 and 15 U.S.C. sec. 9009c,
20 related to the tax treatment of the grants, deductions attributable to those
21 grants, and tax attributes associated with those grants;
22 (r) For taxable years beginning on or after January 1, 2026:
23 1. Include the amount deducted for domestic research or experimental
24 expenditures under 26 U.S.C. sec. 174A; and
25 2. Allow a subtraction equal to the amortization of[Exclude the amount
26 deducted for] domestic research or experimental expenditures computed
27 in accordance with[under] 26 U.S.C. sec. 174, as that section existed on
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1 December 31, 2024;
2 (s) Include the amount deducted for any qualified film or television production,
3 any qualified live theatrical production, and any qualified sound recording
4 production under 26 U.S.C. sec. 181; and
5 (t) Include interest deducted under 26 U.S.C. sec. 139L for amounts paid to a
6 qualified lender on any qualified real estate loan; and
7 (2) Net income shall be calculated by subtracting from adjusted gross income all the
8 deductions allowed individuals by Chapter 1 of the Internal Revenue Code, as
9 modified by KRS 141.0101, except:
10 (a) Any deduction allowed by 26 U.S.C. sec. 164 for taxes;
11 (b) Any deduction allowed by 26 U.S.C. sec. 165 for losses, except wagering
12 losses allowed under Section 165(d) of the Internal Revenue Code;
13 (c) Any deduction allowed by 26 U.S.C. sec. 213 for medical care expenses;
14 (d) Any deduction allowed by 26 U.S.C. sec. 217 for moving expenses;
15 (e) Any deduction allowed by 26 U.S.C. sec. 67 for any other miscellaneous
16 deduction;
17 (f) Any deduction allowed by the Internal Revenue Code for amounts allowable
18 under KRS 140.090(1)(h) in calculating the value of the distributive shares of
19 the estate of a decedent, unless there is filed with the income return a
20 statement that the deduction has not been claimed under KRS 140.090(1)(h);
21 (g) Any deduction allowed by 26 U.S.C. sec. 151 for personal exemptions and
22 any other deductions in lieu thereof;
23 (h) Any deduction allowed for amounts paid to any club, organization, or
24 establishment which has been determined by the courts or an agency
25 established by the General Assembly and charged with enforcing the civil
26 rights laws of the Commonwealth, not to afford full and equal membership
27 and full and equal enjoyment of its goods, services, facilities, privileges,
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1 advantages, or accommodations to any person because of race, color, religion,
2 national origin, or sex, except nothing shall be construed to deny a deduction
3 for amounts paid to any religious or denominational club, group, or
4 establishment or any organization operated solely for charitable or educational
5 purposes which restricts membership to persons of the same religion or
6 denomination in order to promote the religious principles for which it is
7 established and maintained;
8 (i) A taxpayer may elect to claim the standard deduction allowed by KRS
9 141.081 instead of itemized deductions allowed pursuant to 26 U.S.C. sec. 63
10 and as modified by this section;
11 (j) For taxable years beginning on or after January 1, 2026, any deduction
12 allowed by 26 U.S.C. sec. 163(h)(3) as qualified residence interest shall be
13 limited to the amount of interest paid or accrued during the taxable year on the
14 acquisition and home equity indebtedness of the principal residence of the
15 taxpayer and shall not be claimed for more than one (1) qualified residence;
16 (k) Any deduction allowed by 26 U.S.C. sec. 224 for qualified tips;
17 (l) Any deduction allowed by 26 U.S.C. sec. 225 for qualified overtime
18 compensation; and
19 (m) Any deduction allowed by 26 U.S.C. sec. 163(h)(4) for qualified passenger
20 vehicle loan interest.
21 Section 49. 2026 RS HB 757/VO, Section 8, is amended to read as follows:
22 In the case of corporations:
23 (1) Gross income shall be calculated by adjusting federal gross income as defined in
24 Section 61 of the Internal Revenue Code as follows:
25 (a) Exclude income that is exempt from state taxation by the Kentucky
26 Constitution and the Constitution and statutory laws of the United States;
27 (b) Exclude all dividend income;
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1 (c) Include interest income derived from obligations of sister states and political
2 subdivisions thereof;
3 (d) Exclude fifty percent (50%) of gross income derived from any disposal of
4 coal covered by Section 631(c) of the Internal Revenue Code if the
5 corporation does not claim any deduction for percentage depletion, or for
6 expenditures attributable to the making and administering of the contract
7 under which such disposition occurs or to the preservation of the economic
8 interests retained under such contract;
9 (e) Include the amount calculated under KRS 141.205;
10 (f) Ignore the provisions of Section 281 of the Internal Revenue Code in
11 computing gross income;
12 (g) Include the amount of deprecation deduction calculated under 26 U.S.C. sec.
13 167 or 168;
14 (h) Allow the same treatment allowed under Pub. L. No. 116-260, secs. 276 and
15 278, related to the tax treatment of forgiven covered loans, deductions
16 attributable to those loans, and tax attributes associated with those loans for
17 taxable years ending on or after March 27, 2020, but before January 1, 2022;
18 (i) For taxable years beginning on or after January 1, 2020, but before March 11,
19 2023, allow the same treatment of restaurant revitalization grants in
20 accordance with Pub. L. No. 117-2, sec. 9673 and 15 U.S.C. sec. 9009c,
21 related to the tax treatment of the grants, deductions attributable to those
22 grants, and tax attributes associated with those grants;
23 (j) For taxable years beginning on or after January 1, 2026:
24 1. Include the amount deducted for domestic research or experimental
25 expenditures under 26 U.S.C. sec. 174A; and
26 2. Allow a subtraction equal to the amortization of[Exclude the amount
27 deducted for] domestic research or experimental expenditures computed
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1 in accordance with[under] 26 U.S.C. sec. 174, as that section existed on
2 December 31, 2024;
3 (k) Include the amount deducted for any qualified film or television production,
4 any qualified live theatrical production, and any qualified sound recording
5 production under 26 U.S.C. sec. 181;
6 (l) Include interest deducted under 26 U.S.C. sec. 139L for amounts paid to a
7 qualified lender on any qualified real estate loan; and
8 (m) For purposes of determining the limitation on business interest under 26
9 U.S.C. sec. 163(j), the provisions of that section in effect on December 31,
10 2024, exclusive of any amendments made subsequent to that date, shall be
11 used; and
12 (2) Net income shall be calculated by subtracting from gross income:
13 (a) The deduction for depreciation allowed by KRS 141.0101;
14 (b) Any amount paid for vouchers or similar instruments that provide health
15 insurance coverage to employees or their families;
16 (c) All the deductions from gross income allowed corporations by Chapter 1 of
17 the Internal Revenue Code, as modified by KRS 141.0101, except:
18 1. Any deduction for a state tax which is computed, in whole or in part, by
19 reference to gross or net income and which is paid or accrued to any
20 state of the United States, the District of Columbia, the Commonwealth
21 of Puerto Rico, any territory or possession of the United States, or to any
22 foreign country or political subdivision thereof;
23 2. The deductions contained in Sections 243, 245, and 247 of the Internal
24 Revenue Code;
25 3. The provisions of Section 281 of the Internal Revenue Code shall be
26 ignored in computing net income;
27 4. Any deduction directly or indirectly allocable to income which is either
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1 exempt from taxation or otherwise not taxed under the provisions of this
2 chapter, except for deductions allowed under Pub. L. No. 116-260, secs.
3 276 and 278, related to the tax treatment of forgiven covered loans and
4 deductions attributable to those loans for taxable years ending on or
5 after March 27, 2020, but before January 1, 2022; and deductions
6 allowed under Pub. L. No. 117-2, sec. 9673 and 15 U.S.C. sec. 9009c,
7 related to the tax treatment of restaurant revitalization grants and
8 deductions attributable to those grants for taxable years beginning on or
9 after January 1, 2020, but before March 11, 2023. Nothing in this
10 chapter shall be construed to permit the same item to be deducted more
11 than once;
12 5. Any deduction for amounts paid to any club, organization, or
13 establishment which has been determined by the courts or an agency
14 established by the General Assembly and charged with enforcing the
15 civil rights laws of the Commonwealth, not to afford full and equal
16 membership and full and equal enjoyment of its goods, services,
17 facilities, privileges, advantages, or accommodations to any person
18 because of race, color, religion, national origin, or sex, except nothing
19 shall be construed to deny a deduction for amounts paid to any religious
20 or denominational club, group, or establishment or any organization
21 operated solely for charitable or educational purposes which restricts
22 membership to persons of the same religion or denomination in order to
23 promote the religious principles for which it is established and
24 maintained;
25 6. Any deduction prohibited by KRS 141.205; and
26 7. Any dividends-paid deduction of any captive real estate investment
27 trust; and
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1 (d) 1. A deferred tax deduction in an amount computed in accordance with this
2 paragraph.
3 2. For purposes of this paragraph:
4 a. "Net deferred tax asset" means that deferred tax assets exceed the
5 deferred tax liabilities of the combined group, as computed in
6 accordance with accounting principles generally accepted in the
7 United States of America; and
8 b. "Net deferred tax liability" means deferred tax liabilities that
9 exceed the deferred tax assets of a combined group as defined in
10 KRS 141.202, as computed in accordance with accounting
11 principles generally accepted in the United States of America.
12 3. Only publicly traded companies, including affiliated corporations
13 participating in the filing of a publicly traded company's financial
14 statements prepared in accordance with accounting principles generally
15 accepted in the United States of America, as of January 1, 2019, shall be
16 eligible for this deduction.
17 4. If the provisions of KRS 141.202 result in an aggregate increase to the
18 member's net deferred tax liability, an aggregate decrease to the
19 member's net deferred tax asset, or an aggregate change from a net
20 deferred tax asset to a net deferred tax liability, the combined group
21 shall be entitled to a deduction, as determined in this paragraph.
22 5. For ten (10) years beginning with the combined group's first taxable
23 year beginning on or after January 1, 2028, a combined group shall be
24 entitled to a deduction from the combined group's entire net income
25 equal to one-tenth (1/10) of the amount necessary to offset the increase
26 in the net deferred tax liability, decrease in the net deferred tax asset, or
27 aggregate change from a net deferred tax asset to a net deferred tax
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1 liability. The increase in the net deferred tax liability, decrease in the net
2 deferred tax asset, or the aggregate change from a net deferred tax asset
3 to a net deferred tax liability shall be computed based on the change that
4 would result from the imposition of the combined reporting requirement
5 under KRS 141.202, but for the deduction provided under this paragraph
6 as of June 27, 2019.
7 6. The deferred tax impact determined in subparagraph 5. of this paragraph
8 shall be converted to the annual deferred tax deduction amount, as
9 follows:
10 a. The deferred tax impact determined in subparagraph 5. of this
11 paragraph shall be divided by the tax rate determined under KRS
12 141.040;
13 b. The resulting amount shall be further divided by the
14 apportionment factor determined by KRS 141.120 or 141.121 that
15 was used by the combined group in the calculation of the deferred
16 tax assets and deferred tax liabilities as described in subparagraph
17 5. of this paragraph; and
18 c. The resulting amount represents the total net deferred tax
19 deduction available over the ten (10) year period as described in
20 subparagraph 5. of this paragraph.
21 7. The deduction calculated under this paragraph shall not be adjusted as a
22 result of any events happening subsequent to the calculation, including
23 but not limited to any disposition or abandonment of assets. The
24 deduction shall be calculated without regard to the federal tax effect and
25 shall not alter the tax basis of any asset. If the deduction under this
26 section is greater than the combined group's entire Kentucky net income,
27 any excess deduction shall be carried forward and applied as a deduction
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1 to the combined group's entire net income in future taxable years until
2 fully utilized.
3 8. Any combined group intending to claim a deduction under this
4 paragraph shall file a statement with the department on or before July 1,
5 2019. The statement shall specify the total amount of the deduction
6 which the combined group claims on the form, including calculations
7 and other information supporting the total amounts of the deduction as
8 required by the department. No deduction shall be allowed under this
9 paragraph for any taxable year, except to the extent claimed on the
10 timely filed statement in accordance with this paragraph.
11 Section 50. 2026 RS HB 757/VO, Section 118, is amended to read as follows:
12 (1) As used in this section:
13 (a) "Existing development area" means a development area established by a
14 county containing a city of the first class or by a city of the first class prior to
15 March 23, 2007, that is subject to the provisions of a grant contract, Interlocal
16 Cooperation Agreement, or Master Agreement executed prior to March 23,
17 2007; and
18 (b) "New development area" means a development area that:
19 1. Is created within an existing development area; and
20 2. Exists independent of the existing development area[Exists for a period
21 of thirty (30) years, and may be extended for a period not to exceed an
22 additional twenty-five (25) years to accommodate the pilot program
23 term permitted pursuant to KRS 65.4931].
24 (2) The provisions of KRS 65.490 to 65.499 shall apply only to:
25 (a) Existing development areas; and
26 (b) New development areas, provided that:
27 1. The project for the existing development area is amended to remove the
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1 new development area from the existing development area;
2 2. All contracts regarding the application of increment derived from the
3 new development area require not less than:
4 a. Ten percent (10%) of the increment be paid to the agency for
5 which the existing development area was established;
6 b. Eighty percent (80%) of the increment be paid to the developer of
7 the new development area; and
8 c. Ten percent (10%) shall be retained by the Commonwealth or
9 local government, as applicable;
10 3. Notwithstanding KRS 65.495 to the contrary, the payment to the agency
11 under subparagraph 2. of this paragraph shall not be taken into account
12 in determining whether thresholds within the contract have been met;
13 4. The amendment of the project for an existing development area is
14 approved by:
15 a. i. The county containing a city of the first class; or
16 ii. The city of the first class;
17 in which the existing development area is located;
18 b. The Kentucky Economic Development Finance Authority;
19 c. The agency for which the existing development area was
20 established; and
21 d. If applicable, the insurer of any bonds issued for the benefit of the
22 agency for which the existing development area was established;
23 and
24 5. Any negotiation or agreement made related to an existing development
25 area or a new development area shall be approved by the Kentucky
26 Economic Development Finance Authority.
27 Section 51. 2026 RS SB 185/EN, Section 1, is amended to read as follows:
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1 (1) Kentucky State University, recognized as an 1890 land-grant university that is
2 Kentucky's only public Historically Black College or University (HBCU), shall be a
3 four (4) year residential polytechnic institution that focuses on highly technical,
4 industry-based applied learning and offers liberal studies and polytechnic programs
5 that are aligned with the workforce needs of the Commonwealth and consistent with
6 the historical mission of an HBCU.
7 (2) The General Assembly declares that a state of financial exigency exists at Kentucky
8 State University for five (5) years from the effective date of this Act or until such a
9 date that the General Assembly affirmatively declares, based upon the
10 recommendation of the Council on Postsecondary Education, that the university's
11 finances are stable, whichever occurs first.
12 (3) (a) Kentucky State University shall not enter into any obligation or make any
13 expenditure costing twenty thousand dollars ($20,000) or more without prior
14 approval of the Council on Postsecondary Education, including but not
15 limited to any purchase, contract, or increase due to a personnel action.
16 (b) Kentucky State University shall:
17 1. Provide a monthly report of university finances to the Council on
18 Postsecondary Education in the format requested by the council. The
19 council shall provide a quarterly update on the financial status of the
20 university to the Governor and the Legislative Research Commission;
21 2. Fully cooperate with the council in its exercise of the financial oversight
22 granted to the council under this subsection;
23 3. Timely provide all information and documentation deemed by the
24 council to be relevant to the financial oversight; and
25 4. Timely consult with the council on all major financial matters during the
26 state of financial exigency declared in subsection (2) of this section.
27 (c) The financial oversight granted to the council under this subsection shall
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1 continue for the entire duration of the financial exigency declared in
2 subsection (2) of this section.
3 (4) Notwithstanding KRS 164A.560, beginning no later than July 1, 2027, all financial
4 transactions of Kentucky State University shall be reported and reconciled no less
5 than monthly in the Enhanced Management Administrative Reporting System
6 (EMARS).
7 (5) Kentucky State University shall not incur a budget deficit for the remaining
8 duration of the financial exigency declared in subsection (2) of this section.
9 [(6) Any organization registered with the Kentucky Secretary of State or any member or
10 officer of any such organization having entered into a public-private lease
11 agreement with Kentucky State University shall not be eligible to transact any
12 business or enter into any contract with Kentucky State University or any other
13 agency or instrumentality of the Commonwealth or subdivision thereof after the
14 effective date of this Act. Any such contract purported to be executed or renewed
15 with any such organization or individual after the effective date of this Act shall be
16 null and void.]
17 Section 52. 2026 RS HB 757/VO, Section 5, is amended to read as follows:
18 (1) (a) The Commonwealth shall offer three (3) tax increment financing participation
19 programs. The first program, the criteria and details of which are set forth in
20 KRS 154.30-040, relates to a pledge of state real property ad valorem taxes
21 only. The second program, the criteria and details of which are set forth in
22 KRS 154.30-050, is the Signature Projects Program. The third program, the
23 criteria and details of which are set forth in KRS 154.30-060, relates to the
24 pledge of state tax revenues to support mixed-use development in blighted
25 urban areas.
26 (b) 1. The first and third programs identified in[programs under] paragraph
27 (a) of this subsection shall sunset on the effective date of this section of
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1 this Act, and new applications shall not be submitted or considered for
2 approval after the effective date of this section of this Act.
3 2. The Signature Projects Program shall sunset on December 31, 2028,
4 and new applications shall not be submitted or considered for
5 approval after December 31, 2028.
6 3. Projects approved for a program prior to the [effective ]date the
7 program shall sunset under subparagraph 1. or 2. of this paragraph[of
8 this section of this Act] shall continue to be governed in accordance with
9 the tax incentive agreement's terms and conditions as set forth in KRS
10 154.30-070.
11 4.[3.] Tax incentive agreements related to the programs under paragraph (a) of
12 this subsection and in effect on the effective date of this section of this
13 Act shall not be amended or have activation date extensions approved by
14 the Commonwealth after the effective date of this section of this Act.
15 (2) (a) Except as provided in subsection (1)(b)3. of this section, a city or county that
16 has established a development area pursuant to KRS 65.7049, 65.7051, and
17 65.7053, or an agency designated as the entity managing a development area
18 established pursuant to KRS 65.7049, 65.7051, and 65.7053, may submit an
19 application to the authority requesting that the Commonwealth participate in a
20 project, before the effective date of this section of this Act.
21 1. The application shall identify the specific program under which state
22 participation is being requested and shall include the following
23 attachments, in addition to any requirements developed by the authority
24 pursuant to paragraph (b) of this subsection:
25 a. A copy of the ordinance adopted by the city or county establishing
26 the development area;
27 b. A copy of the local participation agreement; and
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1 c. Data and information supporting the determinations and findings
2 required by KRS 65.7049.
3 2. The staff of the authority shall review the application to determine if the
4 applicant has met all of the statutory and regulatory requirements
5 established by this subchapter and shall notify the applicant in writing of
6 its determination. This review shall be preliminary in nature and shall
7 not constitute approval of the request. All applications for participation
8 by the Commonwealth shall be reviewed by the authority for approval.
9 3. a. Applications meeting all statutory and regulatory requirements
10 requesting participation by the Commonwealth pursuant to KRS
11 154.30-040, along with any supporting materials, shall be referred
12 by the staff of the authority to the authority for consideration.
13 b. i. Applicants meeting all statutory and regulatory requirements
14 requesting participation by the Commonwealth pursuant to
15 KRS 154.30-050(3)(b) or 154.30-060 shall be required to
16 submit a report prepared by an independent consultant or
17 financial adviser as described in subsection (6) of this section
18 for the application to be complete. The staff of the authority
19 shall notify the applicants of the report requirements and
20 shall provide information regarding the contents and
21 requirements for the report at the same time it notifies the
22 applicant of the results of its preliminary review.
23 ii. Upon receipt and review of the report, the staff of the
24 authority shall refer the application and supporting
25 information to the authority for consideration.
26 (b) Additional standards and requirements for the application process shall be
27 established by the authority through the promulgation of administrative
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1 regulations in accordance with KRS Chapter 13A.
2 (3) (a) The authority may request any materials and make any inquiries concerning
3 an application that the authority deems necessary.
4 (b) The authority shall, through the promulgation of administrative regulations in
5 accordance with KRS Chapter 13A, establish commercially reasonable
6 limitations on the financing costs that may be recovered under the provisions
7 of KRS 154.30-050.
8 (4) Upon review of an application and other information available, the authority may
9 pledge all or a portion of the state real property ad valorem tax incremental revenue
10 of the Commonwealth or state tax revenues attributable to the footprint of the
11 project, as limited by KRS 154.30-040, 154.30-050, or 154.30-060, whichever is
12 applicable.
13 (a) If incremental revenues are pledged from less than one hundred percent
14 (100%) of the footprint of the project, a description of the included portion of
15 the development area shall be provided.
16 (b) State tax revenues from the development area that have not been pledged to
17 projects within the development area may be used to support other economic
18 development projects or tourism projects approved under KRS 139.536 and
19 148.851 to 148.860, provided that state tax revenues shall not be pledged
20 more than once during the existence of the development area. Thus, state tax
21 revenues pledged to support increment bonds issued for the development area,
22 or a project in the development area shall not be pledged to support any other
23 development area, project, program, development, or undertaking during the
24 life of the development area. If less than one hundred percent (100%) of
25 incremental revenues are pledged pursuant to the provisions of this
26 subchapter, the remaining incremental revenues shall not be used to support
27 other economic development projects or tourism projects approved under
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1 KRS 139.536 and 148.851 to 148.860.
2 (5) The pledge of incremental state real property ad valorem tax revenues or state tax
3 revenues of the Commonwealth by the authority shall be implemented through the
4 execution of a tax incentive agreement between the Commonwealth and the agency,
5 city, or county, as the case may be, in accordance with KRS 154.30-070.
6 (6) (a) The authority shall engage the services of a qualified independent outside
7 consultant or financial adviser to analyze the data related to the project and
8 the development area and prepare the report required by subsection (2) of this
9 section. The report shall include the following:
10 1. The estimated approved public infrastructure costs for the project and, if
11 relevant, approved signature project costs, financing costs, and costs
12 associated with land preparation, demolition, and clearance;
13 2. The feasibility of the project, taking into account the scope and location
14 of the project;
15 3. The estimated amount of local tax revenues and state tax revenues, as
16 applicable, that would be generated by the project over the period,
17 which may be up to twenty (20) years or thirty (30) years, as applicable,
18 from the activation date;
19 4. The estimated amount of local tax revenues and state tax revenues, as
20 applicable, that would be displaced within the Commonwealth, for the
21 purpose of quantifying economic activity which is being shifted over the
22 same period as that set forth in subparagraph 3. of this paragraph. The
23 projections for displaced activity shall include economic activity that is
24 lost to the Commonwealth as a result of the project, as well as economic
25 activity that is diverted to the project that formerly took place at existing
26 establishments within the Commonwealth prior to the commencement
27 date of the project;
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1 5. The estimated amount of local and state old revenues that would have
2 been generated in the footprint of the project in the absence of the
3 project, computed over the same time period as set forth in subparagraph
4 3. of this paragraph;
5 6. In the process of estimating the revenues and impacts prescribed in
6 subparagraphs 3. and 4. of this paragraph, the independent outside
7 consultant shall not consider any of the following:
8 a. Revenues or economic impacts associated with any projects within
9 the development area where the new project will be located; and
10 b. Revenues or economic impacts associated with economic
11 development projects and approved Kentucky Tourism
12 Development Act projects under KRS Chapter 148;
13 7. The relationship of the estimated incremental revenues to the financing
14 needs, including any increment bonds, of the project;
15 8. When estimating the fiscal impact of the project, the consultant shall
16 evaluate the amount of revenue estimated in subparagraph 3. of this
17 paragraph and shall deduct the amounts estimated in subparagraphs 4.
18 and 5. of this paragraph. The resulting difference shall be compared to
19 the estimated incremental revenues to determine the presence or absence
20 of a positive fiscal impact; and
21 9. A determination that the project will not occur if not for the designation
22 of the development area, the granting of incremental revenues by the
23 taxing district or districts, other than the Commonwealth, and the
24 granting of the state tax incremental revenues.
25 (b) 1. The independent consultant or financial advisor shall consult with the
26 Office of State Budget Director, and the Finance and Administration
27 Cabinet in the development of the report.
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1 2. The Office of State Budget Director and the staff of the authority, in
2 collaboration with the independent consultant or financial advisor, shall
3 agree on a methodology to be used and assumptions to be made by the
4 independent consultant or financial consultant in preparing its report.
5 3. On the basis of the independent consultant's report and the other
6 materials provided, prior to any approval of a project by the authority,
7 the Office of State Budget Director and the Finance and Administration
8 Cabinet shall certify to the authority whether there is a projected net
9 positive economic impact to the Commonwealth and the expected
10 amount of state tax incremental revenues from the project.
11 4. The city, county, or agency making the application shall pay all costs
12 associated with the independent consultant's or financial advisor's report.
13 Section 53. 2026 RS HB 757/VO, Section 107, is amended to read as follows:
14 As used in this subchapter:
15 (1) "Activation date" means:
16 (a) For all projects except those described in paragraph (b) of this subsection, the
17 date established any time within a two (2) year period after the
18 commencement date. The Commonwealth may extend the two (2) year period
19 to no more than four (4) years upon written application by the agency
20 requesting the extension; and
21 (b) For signature projects approved under KRS 154.30-050(3)(a), the date
22 established any time within a ten (10) year period after the commencement
23 date.
24 For all projects established after July 14, 2018, the activation date is the date on
25 which the time period for the pledge of incremental revenues shall commence. To
26 implement the activation date, the minimum capital investment must be met and the
27 agency that is a party to the tax incentive agreement shall notify the office;
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1 (2) "Agency" means:
2 (a) An urban renewal and community development agency established under
3 KRS Chapter 99;
4 (b) A development authority established under KRS Chapter 99;
5 (c) A nonprofit corporation;
6 (d) A housing authority established under KRS Chapter 80;
7 (e) An air board established under KRS 183.132 to 183.160;
8 (f) A local industrial development authority established under KRS 154.50-301
9 to 154.50-346;
10 (g) A riverport authority established under KRS 65.510 to 65.650; or
11 (h) A designated department, division, or office of a city or county;
12 (3) (a) "Approved public infrastructure costs" means costs associated with the
13 acquisition, installation, construction, or reconstruction of public works,
14 public improvements, and public buildings, including planning and design
15 costs associated with the development of the public amenities.
16 (b) "Approved public infrastructure costs" includes but is not limited to costs
17 incurred for the following:
18 1. Land preparation, including demolition and clearance work;
19 2. Buildings;
20 3. Sewers and storm drainage;
21 4. Curbs, sidewalks, promenades, and pedways;
22 5. Roads;
23 6. Street lighting;
24 7. The provision of utilities;
25 8. Environmental remediation;
26 9. Floodwalls and floodgates;
27 10. Public spaces or parks;
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1 11. Parking;
2 12. Easements and rights-of-way;
3 13. Transportation facilities;
4 14. Public landings;
5 15. Amenities, including fountains, benches, and sculptures; and
6 16. Riverbank modifications and improvements;
7 (4) "Approved signature project costs" means:
8 (a) The acquisition of land for portions of the project that are for infrastructure;
9 and
10 (b) Costs associated with the acquisition, installation, development, construction,
11 improvement, or reconstruction of infrastructure, including planning and
12 design costs associated with the development of infrastructure, including but
13 not limited to parking structures, including portions of parking structures that
14 serve as platforms to support development above;
15 that have been determined by the commission to represent a unique challenge in the
16 financing of a project such that the project could not be developed without
17 incentives intended by this chapter to foster economic development;
18 (5) "Authority" means the Kentucky Economic Development Finance Authority
19 established by KRS 154.20-010;
20 (6) "Capital investment" means:
21 (a) Obligations incurred for labor and to contractors, subcontractors, builders, and
22 materialmen in connection with the acquisition, construction, installation,
23 equipping, and rehabilitation of a project;
24 (b) The cost of acquiring land or rights in land within the development area on the
25 footprint of the project, and any cost incident thereto, including recording
26 fees;
27 (c) The cost of contract bonds and of insurance of all kinds that may be required
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1 or necessary during the course of acquisition, construction, installation,
2 equipping, and rehabilitation of a project which is not paid by the contractor
3 or contractors or otherwise provided;
4 (d) All costs of architectural and engineering services, including test borings,
5 surveys, estimates, plans, specifications, preliminary investigations,
6 supervision of construction, and the performance of all the duties required by
7 or consequent upon the acquisition, construction, installation, equipping, and
8 rehabilitation of a project;
9 (e) All costs that are required to be paid under the terms of any contract for the
10 acquisition, construction, installation, equipping, and rehabilitation of a
11 project; and
12 (f) All other costs of a nature comparable to those described in this subsection
13 that occur after preliminary approval;
14 (7) "City" means any city, consolidated local government, or urban-county
15 government;
16 (8) "Commencement date" means the final approval date or the date on which a tax
17 incentive agreement is executed;
18 (9) "Commonwealth" means the Commonwealth of Kentucky;
19 (10) "County" means any county, consolidated local government, charter county, unified
20 local government, or urban-county government;
21 (11) "CPI" means the nonseasonally adjusted Consumer Price Index for all urban
22 consumers, all items, base year computed for 1982 to 1984 equals one hundred
23 (100), published by the United States Department of Labor, Bureau of Labor
24 Statistics;
25 (12) "Department" means the Department of Revenue;
26 (13) "Development area" means an area established under KRS 65.7049, 65.7051, and
27 65.7053;
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1 (14) "Economic development projects" means projects which are approved for tax
2 credits under Subchapter 20, 22, 23, 24, 25, 26, 27, 28, 34, or 48 of KRS Chapter
3 154;
4 (15) "Financing costs" means principal, interest, costs of issuance, debt service reserve
5 requirements, underwriting discount, costs of credit enhancement or liquidity
6 instruments, and other costs directly related to the issuance of bonds or debt for
7 approved public infrastructure costs or approved signature project costs for projects
8 approved pursuant to KRS 154.30-050;
9 (16) "Footprint" means the actual perimeter of a discrete, identified project within a
10 development area. The footprint shall not include any portion of a development area
11 outside the area for which actual capital investments are made and must be
12 contiguous;
13 (17) "Governing body" means the body possessing legislative authority in a city or
14 county;
15 (18) "Increment bonds" means bonds and notes issued for the purpose of paying the
16 costs of one (1) or more projects;
17 (19) "Incremental revenues" means:
18 (a) The amount of revenues received by a taxing district, as determined by
19 subtracting old revenues from new revenues in a calendar year with respect to
20 a development area, or a project within a development area; or
21 (b) The amount of revenues received by the Commonwealth as determined by
22 subtracting old revenues from new revenues in a calendar year with respect to
23 the footprint;
24 (20) "Local participation agreement" means the agreement entered into under KRS
25 65.7063;
26 (21) "Local tax revenues" has the same meaning as in KRS 65.7045;
27 (22) "Modified new revenues for income tax" means the amount of individual income
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1 tax included in state tax revenues that is:
2 (a) The result of multiplying the portion of state tax revenues from individual
3 income taxes by the modifier;
4 (b) Used for calculating state tax revenues in calendar years 2023 to 2048; and
5 (c) For projects approved prior to January 1, 2023;
6 (23) "Modifier" means the result of:
7 (a) 1. Dividing the individual income tax rate of five percent (5%), in effect as
8 of December 31, 2022, by:
9 2. The individual income tax rate under KRS 141.020 for the calendar year
10 in which the new revenues for income tax are being computed; and
11 (b) Beginning in calendar year 2026, reducing the result of paragraph (a) of
12 this subsection by by three and three-tenths percent (3.3%) and in every
13 subsequent calendar year after 2026 to 2048, further reducing the result by
14 an additional one and one-tenth percent (1.1%)[Subtracting from the result
15 of paragraph (a) of this subsection the number one (1);
16 (c) Multiplying the result of paragraph (b) of this subsection by twenty-five
17 percent (25%); and
18 (d) Adding to the result of paragraph (c) of this subsection the number one (1)];
19 (24) "New revenues" means:
20 (a) The amount of local tax revenues received by a taxing district with respect to
21 a development area in any calendar year beginning with the year in which the
22 activation date occurred; and
23 (b) The amount of state tax revenues received by the Commonwealth with respect
24 to the footprint in any calendar year beginning with the year in which the
25 activation date occurred.
26 For projects approved prior to January 1, 2023, any state tax revenues received by
27 the Commonwealth from individual income tax shall be computed using modified
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1 new revenues for income tax;
2 (25) "Old revenues" means:
3 (a) The amount of local tax revenues received by a taxing district with respect to
4 a development area as of December 31 of the year of preliminary approval; or
5 (b) 1. The amount of state tax revenues received by the Commonwealth within
6 the footprint as of December 31 of the year of preliminary approval. If
7 the authority determines that the amount of state tax revenues received
8 as of December 31 of the last calendar year prior to the commencement
9 of preliminary approval does not represent a true and accurate depiction
10 of revenues, the authority may consider revenues for a period of no
11 longer than three (3) calendar years prior to the year of preliminary
12 approval, so as to determine a fair representation of state tax revenues.
13 The amount determined by the authority shall be specified in the tax
14 incentive agreement. If state tax revenues were derived from the
15 footprint prior to the year of preliminary approval, old revenues shall
16 increase each calendar year by:
17 a. The percentage increase, if any, of the CPI or a comparable index;
18 or
19 b. An alternative percentage increase that is determined to be
20 appropriate by the authority.
21 The method for increasing old revenues shall be set forth in the tax
22 incentive agreement.
23 2. If state revenues were derived from the footprint prior to the year of
24 preliminary approval, the calculation of incremental revenues shall be
25 based on the value of old revenues as increased using the method
26 prescribed in subparagraph 1. of this paragraph to reflect the same
27 calendar year as is used in the determination of new revenues;
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1 (26) "Outstanding" means increment bonds that have been issued, delivered, and paid
2 for by the purchaser, except any of the following:
3 (a) Increment bonds canceled upon surrender, exchange, or transfer, or upon
4 payment or redemption;
5 (b) Increment bonds in replacement of which or in exchange for which other
6 increment bonds have been issued; or
7 (c) Increment bonds for the payment, redemption, or purchase for cancellation
8 prior to maturity, of which sufficient moneys or investments, in accordance
9 with the ordinance or other proceedings or any applicable law, by mandatory
10 sinking fund redemption requirements, or otherwise, have been deposited, and
11 credited in a sinking fund or with a trustee or paying or escrow agent, whether
12 at or prior to their maturity or redemption, and, in the case of increment bonds
13 to be redeemed prior to their stated maturity, notice of redemption has been
14 given or satisfactory arrangements have been made for giving notice of that
15 redemption, or waiver of that notice by or on behalf of the affected bond
16 holders has been filed with the issuer or its agent;
17 (27) "Preliminary approval" means the action taken by the authority preliminarily
18 approving an eligible project for incentives under this subchapter;
19 (28) "Project" means any property, asset, or improvement located in a development area
20 and certified by the governing body as:
21 (a) Being for a public purpose; and
22 (b) Being for the development of facilities for residential, commercial, industrial,
23 public, recreational, or other uses, or for open space, including the
24 development, rehabilitation, renovation, installation, improvement,
25 enlargement, or extension of real estate and buildings; and
26 (c) Contributing to economic development or tourism; and
27 (d) Meeting the additional requirements established by KRS 154.30-040, 154.30-
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1 050, or 154.30-060;
2 (29) "Signature project" means a project approved under KRS 154.30-050;
3 (30) "State real property ad valorem tax" means real property ad valorem taxes levied
4 under KRS 132.020(1)(a);
5 (31) "State tax revenues" means revenues received by the Commonwealth from one (1)
6 or more of the following sources:
7 (a) State real property ad valorem taxes;
8 (b) Individual income taxes levied under KRS 141.020, other than individual
9 income taxes that have already been pledged to support an economic
10 development project within the development area;
11 (c) Corporation income taxes levied under KRS 141.040, other than corporation
12 income taxes that have already been pledged to support an economic
13 development project within the development area;
14 (d) Limited liability entity taxes levied under KRS 141.0401, other than limited
15 liability entity taxes that have already been pledged to support an economic
16 development project within the development area; and
17 (e) Sales taxes levied under KRS 139.200, excluding sales taxes already pledged
18 for:
19 1. Approved tourism attraction projects, as defined in KRS 148.851, within
20 the development area; and
21 2. Projects which are approved for sales tax refunds under Subchapter 20
22 of KRS Chapter 154 within the development area;
23 (32) "Tax incentive agreement" means an agreement entered into in accordance with
24 KRS 154.30-070; and
25 (33) "Termination date" means:
26 (a) For a tax incentive agreement satisfying the requirements of KRS 154.30-040
27 or 154.30-060, a date established by the tax incentive agreement that is no
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1 more than twenty (20) years from the activation date. However, the
2 termination date for a tax incentive agreement shall in no event be more than
3 forty (40) years from the establishment date of the development area to which
4 the tax incentive agreement relates; and
5 (b) For a project grant agreement satisfying the requirements of KRS 154.30-050,
6 a date established by the tax incentive agreement that is no more than thirty
7 (30) years from the activation date. However, the termination date for a tax
8 incentive agreement shall in no event be more than forty (40) years from the
9 establishment date of the development area to which the tax incentive
10 agreement relates.
11 Section 54. 26 RS HB 757/VO, Section 128, is amended to read as follows:
12 (1) As used in this section:
13 (a) "Facility operator" means a person who owns or operates a venue;
14 (b) "Professional golf sporting event" [:
15 1. ]means an organized, competitive golf event, governed by rules and a
16 sporting body, where participants compete for compensation beyond
17 actual expenses; [and
18 2. Excludes minor league sporting events;]
19 (c) "Qualifying attraction" means a series of professional golf sporting events
20 which is:
21 1. Held at a venue over a duration of at least three (3) consecutive days;
22 2. Hosted by a sponsoring entity pursuant to an agreement with a facility
23 operator that authorizes the sponsoring entity to conduct one (1) or more
24 series of a professional golf sporting event; and
25 3. Open to the public upon purchase of tickets, with attendance totaling at
26 least one hundred thousand (100,000) admissions over the duration of
27 each series of professional golf sporting events;[ and]
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1 (d) "Sponsoring entity" means the person hosting a qualifying attraction; and
2 (e) "Venue" means:
3 1. Public property located in a consolidated local government or in an
4 urban-county government that is owned, operated, or controlled by the
5 consolidated local government, urban-county government;
6 2. A park located in a consolidated local government that is:
7 a. Open to the general public; and
8 b. Owned, operated, or controlled by any nonprofit corporation
9 established under the provisions of KRS 273.161 to 273.390;
10 3. Property located in a consolidated local government or in an urban-
11 county government that is owned, operated, or controlled by a public
12 university; or
13 4. Privately owned property located in a consolidated local government or
14 in an urban-county government that is suitable for hosting professional
15 golf sporting events and qualifying attractions.
16 (2) Notwithstanding KRS 134.580 and 139.770:
17 (a) A sponsoring entity shall be granted a sales tax incentive equal to one hundred
18 percent (100%) of the Kentucky sales tax generated by the sale of admissions
19 to a qualifying attraction held at a venue, and the sales of tangible personal
20 property and services related to the qualifying attraction, including but not
21 limited to the sale of:
22 1. Food and beverage concessions;
23 2. Souvenirs;
24 3. Parking;
25 4. Suites;
26 5. Sponsorships; and
27 6. Other hospitality services;
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1 sold at the qualifying attraction.
2 (b) One hundred percent (100%) of the sales tax incentive authorized in
3 paragraph (a) of this subsection shall be paid to the sponsoring entity of the
4 qualifying attraction from which the sales taxes were generated;
5 (c) Only one (1) incentive request shall be made for each qualifying attraction;
6 (d) The sponsoring entity shall have no obligation to refund or otherwise return
7 any amount of the sales tax incentive to the persons from whom the sales tax
8 was collected;
9 (e) The sales tax incentive shall be reduced by the vendor compensation allowed
10 under KRS 139.570; and
11 (f) Interest shall not be allowed or paid on any sales tax incentive payment made
12 under this section.
13 (3) The department shall accept initial applications for sales tax incentives under this
14 section for qualifying attractions held on or after July 1, 2026.
15 (4) To be eligible for a sales tax incentive under this section, the sponsoring entity shall
16 file an initial application with the department, which:
17 (a) Includes sufficient information regarding the qualifying attraction to
18 demonstrate whether it qualifies for the sales tax incentive; and
19 (b) Is filed at least sixty (60) days prior to the date of the first professional golf
20 sporting event constituting the qualifying attraction.
21 (5) Within thirty (30) days of receipt of the initial application, the department shall
22 notify the sponsoring entity of its preliminary approval or denial of the qualifying
23 attraction.
24 (6) If the initial application is denied, the department shall provide the reason for the
25 denial.
26 (7) After approval of its initial application and the completion of the qualifying
27 attraction, a sponsoring entity shall apply for a sales tax incentive no earlier than
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1 thirty (30) days following the end of the month during which sales taxes that were
2 generated from the qualifying attraction are collected. The application may
3 aggregate eligible sales taxes from previous months if the events comprising the
4 qualifying attraction were held in more than one (1) month.
5 (8) The department shall review each application for a sales tax incentive and
6 determine if it meets the requirements of this section, pending the verification of
7 required attendance.
8 (9) In determining eligibility for a sales tax incentive authorized under this section, the
9 department shall waive the duration and attendance requirements listed in
10 subsection (1)(c)1. and 3. of this section if the person requesting an incentive
11 demonstrates that any delays, cancellations, or postponements were due to
12 inclement weather or other extraordinary events beyond the control of the parties
13 involved and that the weather or other extraordinary events rendered the satisfaction
14 of the requirement impossible.
15 (10) Both the initial application and the sales tax incentive application shall be in the
16 form prescribed by the department through the promulgation of an administrative
17 regulation in accordance with KRS Chapter 13A.
18 (11) The department shall verify the amount of sales tax incentive and pay the
19 allocations determined to be due in accordance with subsection (2)(b) of this section
20 within forty-five (45) days of receipt of the later of:
21 (a) The application submitted under subsection (7) of this section; or
22 (b) All necessary supporting information required by the department to determine
23 that the sponsoring entity is eligible for the incentive.
24 (12) (a) Prior to November 1, 2027, and continuing each November 1 thereafter to
25 November 1, 2037, the department shall provide an annual report detailing
26 information related to each qualifying attraction receiving incentives during
27 the fiscal year concluding on June 30 of the reporting period.
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1 (b) The department shall include the following information in the report:
2 1. The name of the qualifying attraction;
3 2. The venue where the qualifying attraction was held;
4 3. The name of the facility operator;
5 4. The name of the sponsoring entity;
6 5. The duration of the qualifying attraction and the number of admissions
7 over that duration;
8 6. The amount of incentive paid to the facility operator; and
9 7. The amount of incentive paid to the sponsoring entity.
10 (c) The information required to be reported under this subsection shall not be
11 considered confidential taxpayer information and shall not be subject to KRS
12 Chapter 131 or any other provisions of the Kentucky Revised Statutes
13 prohibiting disclosure or reporting of information.
14 (13) The provisions of this section shall expire on November 30, 2036, and a qualifying
15 attraction held after November 30, 2036, shall not be eligible for the incentives
16 authorized in this section.
17 (14) The General Assembly is committed to the research and development of tourism
18 policies, including the aspiration to hold other professional sporting events across
19 the Commonwealth and especially in rural Kentucky.
20 Section 55. 26 RS HB 904/VO, Section 22, is amended to read as follows:
21 (1) The corporation shall institute a system of sports wagering in conformance with
22 federal law, this chapter, and by administrative regulations promulgated under the
23 authority of KRS 230.215.
24 (2) Sports wagering shall not be offered in this state except as authorized by this
25 section and KRS 230.811. A track that holds a license to operate sports wagering
26 may contract with sports wagering service providers to conduct or manage sports
27 wagering operations as authorized by this chapter. Sports wagering may be
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1 provided at a licensed facility for sports wagering or online through a website or
2 mobile application. The licensed facility for sports wagering or a sports wagering
3 service provider may provide sports wagering through a website or mobile interface
4 as approved by the corporation. The corporation may provide temporary licenses to
5 licensed facilities for sports wagering or sports wagering service providers, if the
6 corporation deems that the information submitted by them is sufficient to determine
7 the applicant's suitability. The corporation may promulgate administrative
8 regulations to establish the suitability for temporary and ordinary license
9 applications for licensed facilities for sports wagering, sports wagering service
10 providers, and any related parties.
11 (3) Sports wagering licensees and service providers that accept wagers online via
12 websites and mobile applications shall impose the following requirements:
13 (a) Prior to placing a wager online via websites or mobile applications operated
14 by either a sports wagering licensee or a service provider, a patron shall
15 register the patron's sports wagering account with the operating sports
16 wagering licensee or service provider either in person at a licensed facility for
17 sports wagering or remotely through the service provider's website or mobile
18 application;
19 (b) 1. The registration process shall include attestation that the patron meets
20 the requirements to place a wager with a sports wagering licensee or
21 service provider in this state.
22 2. Prior to verification of a patron's identity, a sports wagering licensee or
23 service provider shall not allow the patron to engage in sports wagering,
24 make a deposit, or process a withdrawal via the patron's sports wagering
25 account.
26 3. A sports wagering licensee or service provider shall implement
27 commercially and technologically reasonable procedures to prevent
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1 access to sports wagering by any person under the age of twenty-one
2 (21):
3 a. At a licensed facility; and
4 b. Online via website or mobile application.
5 4. A sports wagering licensee or service provider may use information
6 obtained from third parties to verify that a person is authorized to open
7 an account, place wagers, and make deposits and withdrawals;
8 (c) A sports wagering licensee or service provider shall adopt an account
9 registration policy to ensure that all patrons are authorized to place a wager
10 with a sports wagering licensee or service provider within the Commonwealth
11 of Kentucky. This policy shall include, without limitation, a mechanism by
12 which to:
13 1. Verify the name and age of the patron;
14 2. Verify that the patron is not prohibited from placing a wager; and
15 3. Obtain the following information:
16 a. A physical address other than a post office box;
17 b. A phone number;
18 c. A unique user name; and
19 d. An email account;
20 (d) A sports wagering licensee or service provider shall use all commercially and
21 technologically reasonable means to ensure that each patron is limited to one
22 (1) account with that service provider in the Commonwealth, but nothing in
23 this paragraph restricts a patron from holding other sports wagering accounts
24 in other jurisdictions;
25 (e) A sports wagering licensee or service provider, in addition to complying with
26 state and federal law pertaining to the protection of the private, personal
27 information of patrons, shall use all other commercially and technologically
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1 reasonable means to protect this information consistent with industry
2 standards;
3 (f) A sports wagering licensee or service provider shall use all commercially and
4 technologically reasonable means to verify the identity of the patron making a
5 deposit or withdrawal;
6 (g) A sports wagering licensee or service provider shall utilize geolocation or
7 geofencing technology to ensure that wagers are only accepted from patrons
8 who are physically located in the Commonwealth. A sports wagering licensee
9 or service provider shall maintain in this state its servers used to transmit
10 information for purposes of accepting or paying out wagers on a sporting
11 event placed by patrons in this state;
12 (h) A patron may fund the patron's account using any acceptable form of payment
13 or advance deposit method, which shall include the use of cash, cash
14 equivalents, credit cards, debit cards, automated clearing house, other
15 electronic methods, and any other form of payment authorized by the
16 corporation; and
17 (i) The corporation may enter into agreements with other jurisdictions or entities
18 to facilitate, administer, and regulate multijurisdictional sports betting by
19 sports betting operators to the extent that entering into the agreement is
20 consistent with state and federal laws and the sports betting agreement is
21 conducted only in the United States.
22 (4) A track may contract with no more than three (3) service providers at a time to
23 conduct and manage services and technology which support the operation of sports
24 betting both on the track and online via websites and mobile applications. The
25 website or mobile application used to offer sports betting shall be offered only
26 under the same brand as the track or that of the service provider contracted with the
27 track, or both.
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1 (5) (a) A track or service provider through an agreement with a licensed track shall
2 not offer sports wagering until the corporation has issued a sports wagering
3 license to the track, except for temporary licenses authorized under KRS
4 230.814.
5 (b) A track or association, or service provider through an agreement with a
6 licensed track, shall not offer fixed-odds wagering until the corporation has
7 issued a supplemental fixed-odds wagering license to the track.
8 (6) (a) A track licensed under KRS 230.811 may offer sports wagering at a facility
9 that meets the definition of "track" in KRS 230.210.
10 (b) A simulcast facility may offer sports wagering through an agreement with a
11 track by using any of that track's already established service providers.
12 (7) (a) As used in this subsection, "minimum bet limit":
13 1. Means the amount a bettor can win, not how much can be staked or
14 collected; and
15 2. Includes that the minimum bet limit must be accepted by bookmakers on
16 all fixed-odds wagers.
17 (b) A track or association licensed under this chapter may conduct fixed-odds
18 wagering on horse racing with or without a service provider.
19 (c) A track or association or service provider licensed under this chapter shall
20 have a mandatory minimum bet limit of at least one thousand dollars ($1,000)
21 per race.
22 (d) The betting menu shall be determined by the host track.
23 (8) (a) As used in this subsection, "proposition bet" means a wager on the
24 performance statistics of an individual athlete.
25 (b) A sports wagering licensee or service provider shall not offer or accept any
26 proposition bets on an individual performance statistic on athletes
27 participating in collegiate sporting events for a collegiate team located in
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1 Kentucky if the successful outcome of the wager is contingent upon the
2 athlete failing to meet a specified statistical threshold or experiencing a
3 negative performance outcome.
4 (9) (a) As used in this subsection:
5 1. "Affiliate" means an entity that is owned or controlled in whole or in
6 part by the licensee; and
7 2. "Beneficial interest" means participation in the proceeds of prediction
8 markets or events contracts either as a licensee or operator of the
9 proceeds or an entity that receives prediction market or events contracts
10 proceeds in any capacity.
11 (b) A track or association that holds a license to conduct horse racing, sports
12 wagering, or a licensee offering fantasy contests under this chapter or its
13 affiliate shall not participate in or contract with platforms that offer events
14 contracts through a prediction market in the Commonwealth of Kentucky or
15 have a beneficial interest in the proceeds of prediction markets in the
16 Commonwealth of Kentucky.
17 (c) A track or association licensed to conduct horse racing, sports wagering, or a
18 licensee offering fantasy contests under this chapter or its affiliate or an entity
19 in which it has a beneficial interest shall not contract with a licensed sports
20 wagering service provider that:
21 1. Offers sports events contracts through a prediction market in the
22 Commonwealth of Kentucky; or
23 2. Owns, rents, licenses, advertises, operates, is partnered or affiliated
24 with, or has a beneficial interest in, an entity that makes available to its
25 users in any form a sports prediction market in the Commonwealth of
26 Kentucky.
27 (d) A track or association licensed to conduct horse racing, sports wagering, or
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1 a licensee offering fantasy contests under this chapter, its affiliate, or an
2 entity in which it has a beneficial interest shall not contract with an entity
3 offering sports event contracts or a sports prediction market in Kentucky.
4 (e) Notwithstanding paragraphs (b) to (d) of this subsection, a track or
5 association licensed to conduct horse racing, sports wagering, or a licensee
6 offering fantasy contests under this chapter found to have violated this
7 section shall have twelve (12) months to cure the violation without any
8 additional penalty imposed by the corporation. If the violation is not cured
9 within twelve (12) months of the violation, the corporation may take
10 administrative action.
11 (10) Notwithstanding subsection (9) of this section, this chapter shall not prohibit the
12 corporation or the Department of Revenue from promulgating administrative
13 regulations in accordance with KRS Chapter 13A to regulate the conduct or activity
14 of prediction markets in the Commonwealth in accordance with applicable federal
15 law.
16 (11) If a track or association holds two (2) or more licenses, only the specific license or
17 licensee for which the track or association has violated the terms shall be subject to
18 suspension or revocation or the applicable penalties.
19 (12) Nothing in this section shall [not ]be construed to prevent a licensed sports
20 wagering service provider or a track or association licensed to conduct horse racing
21 or sports wagering or a licensee offering fantasy contests under this chapter from
22 offering advance[advanced] deposit account wagering as defined in Section 1 of
23 this Act.
24 Section 56. 2026 RS HB 677/EN, Section 25, is amended to read as follows:
25 (1) No person shall commence to construct a merchant electric generating facility until
26 that person has applied for and obtained a construction certificate for the facility
27 from the board. The construction certificate shall be valid for a period of three (3)
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1 years after the issuance date of the last permit required to be obtained from the
2 Energy and Environment Cabinet after which the certificate shall be void. The
3 certificate shall be conditioned upon the applicant obtaining necessary air, water,
4 and waste permits. If an applicant has not obtained all necessary permits and has
5 not commenced to construct prior to the expiration date of the certificate, the
6 applicant shall be required to obtain a new valid certificate from the board.
7 (2) (a) Except as provided in subsections (3), (4), and (5) of this section, no
8 construction certificate shall be issued to construct a merchant electric
9 generating facility unless:
10 1. The exhaust stack of the proposed facility and any wind turbine is at
11 least one thousand (1,000) feet from the property boundary of any
12 adjoining property owner;
13 2. All proposed structures or facilities used in connection with the
14 generation[ or storage] of electricity are two thousand (2,000) feet from
15 any residential neighborhood, school, hospital, or nursing home facility;
16 and
17 3. With regard to a wind power facility, the maximum height of the wind
18 turbine, as measured from the natural grade to the top of the hub where
19 the rotor attaches, does not exceed three hundred fifty (350) feet.
20 (b) For purposes of applications for site compatibility certificates pursuant to
21 KRS 278.216:
22 1. Only the exhaust stack of the proposed facility to be actually used for
23 coal or gas-fired generation shall be required to be at least one thousand
24 (1,000) feet from the property boundary of any adjoining property
25 owner and two thousand (2,000) feet from any residential neighborhood,
26 school, hospital, or nursing home facility;
27 2. Any proposed structure to be actually used for the generation of
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1 electricity from solar or wind power shall be at least one thousand
2 (1,000) feet from the property boundary of any adjoining property
3 owner; and
4 3. Any proposed structures or facilities used in connection with the
5 generation[ or storage] of electricity from solar or wind power shall be
6 at least two thousand (2,000) feet from any residential neighborhood,
7 school, hospital, or nursing home facility.
8 (3) If the merchant electric generating facility is proposed to be located in a county or a
9 municipality with planning and zoning, then maximum height, decommissioning,
10 and setback requirements from a property boundary, residential neighborhood,
11 school, hospital, or nursing home facility may be established by the planning and
12 zoning commission. Any decommissioning requirement, maximum height
13 limitation, or setback established by a planning and zoning commission for a
14 facility in an area over which it has jurisdiction shall:
15 (a) Except with regard to the minimum decommission bonding amount required
16 in subsection (2)(m)5.a. of KRS 278.706, have primacy over the
17 decommissioning requirements in KRS 278.706(2)(m), the maximum height
18 limitation in subsection (2)(a)3. of this section, and the setback requirement in
19 subsections (2) and (5) of this section; and
20 (b) Not be subject to modification or waiver by the board through a request for
21 deviation by the applicant, as provided in subsection (4) of this section or
22 otherwise.
23 (4) The board may grant a deviation from the requirements of subsection (2) of this
24 section on a finding that the proposed facility is designed to and, as located, would
25 meet the goals of KRS 224.10-280, 278.010, 278.212, 278.214, 278.216, 278.218,
26 and 278.700 to 278.716 at a distance closer than those provided in subsection (2) of
27 this section.
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1 (5) If the merchant electric generating facility is proposed to be located on a site of a
2 former coal processing plant in the Commonwealth where the electric generating
3 facility will utilize on-site waste coal as a fuel source, then the one thousand (1,000)
4 foot property boundary requirement in subsection (2)(a)1. of this section shall not
5 be applicable; however, the applicant shall be required to meet any other setback
6 requirements contained in subsection (2)(a)2. of this section.
7 (6) If requested, a merchant electric generating entity considering construction of a
8 facility for the generation of electricity or a person acting on behalf of such an
9 entity shall hold a public meeting in any county where acquisition of real estate or
10 any interest in real estate is being considered for the facility. A request for such a
11 meeting may be made by the commission, or by any city or county governmental
12 entity, including a board of commissioners, planning and zoning, fiscal court,
13 mayor, or county judge/executive. The meeting shall be held not more than thirty
14 (30) days from the date of the request.
15 (7) The purpose of the meeting under subsection (6) of this section is to fully inform
16 landowners and other interested parties of the full extent of the project being
17 considered, including the project time line. One (1) or more representatives of the
18 entity with full knowledge of all aspects of the project shall be present and shall
19 answer questions from the public.
20 (8) Notice of the time, subject, and location of the meeting under subsection (6) of this
21 section shall be posted in both a local newspaper, if any, and a newspaper of
22 general circulation in the county. Notice shall also be placed on the websites of the
23 unregulated entity, and any local governmental unit. Owners of real estate known to
24 be included in the project and any person whose property adjoins at any point any
25 property to be included in the project shall be notified personally by mail. All
26 notices must be mailed or posted at least two (2) weeks prior to the meeting.
27 (9) The merchant electric generating entity or a person acting on behalf of a merchant
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1 electric generating entity shall, on or before the date of the public meeting held
2 under subsection (6) of this section, provide notice of all research, testing, or any
3 other activities being planned or considered to:
4 (a) The Energy and Environment Cabinet;
5 (b) The Public Service Commission;
6 (c) The Transportation Cabinet;
7 (d) The Attorney General; and
8 (e) The Office of the Governor.
9 (10) Subsections (6) to (9) of this section shall not apply to any facility or project that
10 has already received a certificate of construction from the board.
11 Section 57. 2026 RS HB 677/EN, Section 26, is amended to read as follows:
12 (1) Any person seeking to obtain a construction certificate from the board to construct a
13 merchant electric generating facility shall file an application at the office of the
14 Public Service Commission.
15 (2) A completed application shall include the following:
16 (a) The name, address, and telephone number of the person proposing to
17 construct and own the merchant electric generating facility;
18 (b) A full description of the proposed site, including a map showing the distance
19 of the proposed site from residential neighborhoods, the nearest residential
20 structures, schools, and public and private parks that are located within a two
21 (2) mile radius of the proposed facility;
22 (c) Evidence of public notice that shall include the location of the proposed site
23 and a general description of the project, state that the proposed construction is
24 subject to approval by the board, and provide the telephone number and
25 address of the Public Service Commission. Public notice shall be given within
26 thirty (30) days immediately preceding the application filing to:
27 1. Landowners whose property borders the proposed site; and
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1 2. The general public in a newspaper of general circulation in the county or
2 municipality in which the facility is proposed to be located;
3 (d) A statement certifying that the proposed plant will be in compliance with all
4 local ordinances and regulations concerning noise control and with any local
5 planning and zoning ordinances. The statement shall also disclose setback
6 requirements established by the planning and zoning commission as provided
7 under KRS 278.704(3);
8 (e) If the facility is not proposed to be located on a site of a former coal
9 processing plant and the facility will use on-site waste coal as a fuel source or
10 in an area where a planning and zoning commission has established a setback
11 requirement pursuant to KRS 278.704(3), a statement that the exhaust stack of
12 the proposed facility and any wind turbine is at least one thousand (1,000) feet
13 from the property boundary of any adjoining property owner and all proposed
14 structures or facilities used in connection with the generation or storage of
15 electricity are two thousand (2,000) feet from any residential neighborhood,
16 school, hospital, or nursing home facility, unless coal or gas-fired generating
17 facilities capable of generating ten megawatts (10MW) or more currently exist
18 on the site. If the facility is proposed to be located on a site of a former coal
19 processing plant and the facility will use on-site waste coal as a fuel source, a
20 statement that the proposed site is compatible with the setback requirements
21 provided under KRS 278.704(5). If the facility is proposed to be located in a
22 jurisdiction that has established setback requirements pursuant to KRS
23 278.704(3), a statement that the proposed site is in compliance with those
24 established setback requirements;
25 (f) A complete report of the applicant's public involvement program activities
26 undertaken prior to the filing of the application, including:
27 1. The scheduling and conducting of a public meeting in the county or
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1 counties in which the proposed facility will be constructed at least
2 ninety (90) days prior to the filing of an application, for the purpose of
3 informing the public of the project being considered and receiving
4 comment on it;
5 2. Evidence that notice of the time, subject, and location of the meeting
6 was published in the newspaper of general circulation in the county, and
7 that individual notice was mailed to all owners of property adjoining the
8 proposed project at least two (2) weeks prior to the meeting; and
9 3. Any use of media coverage, direct mailing, fliers, newsletters, additional
10 public meetings, establishment of a community advisory group, and any
11 other efforts to obtain local involvement in the siting process;
12 (g) A summary of the efforts made by the applicant to locate the proposed facility
13 on a site where existing electric generating facilities are located;
14 (h) Proof of service of a copy of the application upon the chief executive officer
15 of each county and municipal corporation in which the proposed facility is to
16 be located, and upon the chief officer of each public agency charged with the
17 duty of planning land use in the jurisdiction in which the facility is proposed
18 to be located;
19 (i) An analysis of the proposed facility's projected effect on the electricity
20 transmission system in Kentucky;
21 (j) An analysis of the proposed facility's economic impact on the affected region
22 and the state;
23 (k) A detailed listing of all violations by it, or any person with an ownership
24 interest, of federal or state environmental laws, rules, or administrative
25 regulations, whether judicial or administrative, where violations have resulted
26 in criminal convictions or civil or administrative fines exceeding five
27 thousand dollars ($5,000). The status of any pending action, whether judicial
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1 or administrative, shall also be submitted;
2 (l) A site assessment report as specified in KRS 278.708. The applicant may
3 submit and the board may accept documentation of compliance with the
4 National Environmental Policy Act (NEPA) rather than a site assessment
5 report;[ and]
6 (m) A decommissioning plan that shall describe how the merchant electric
7 generating facility will be decommissioned and dismantled following the end
8 of its useful life. The decommissioning plan shall, at a minimum, include
9 plans to:
10 1. Unless otherwise requested by the current landowner at the time of
11 decommissioning, remove all above-ground facilities;
12 2. Unless otherwise requested by the current landowner at the time of
13 decommissioning, remove any underground components and
14 foundations of above-ground facilities. Facilities removed under this
15 subparagraph shall be removed in their entirety, unless the current
16 landowner and the applicant otherwise agree at the time of
17 decommissioning to a different depth;
18 3. Return the land to a substantially similar state[ with the same or similar
19 soil quality] as it was prior to the commencement of construction;
20 4. Unless otherwise requested by the current landowner at the time of
21 decommissioning, leave any interconnection or other facilities in place
22 for future use at the completion of the decommissioning process;
23 5. Secure a bond or other similar security for the project to assure financial
24 performance of the decommissioning obligation, provided that:
25 a. The amount of the proposed bond or similar security shall be
26 determined by an independent, licensed engineer who is
27 experienced in the decommissioning [the type ]of solar electric
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1 generating facilities[facility to be decommissioned] and has no
2 financial interest in either the merchant electric generating facility
3 or any parcel of land upon which the merchant electric generating
4 facility is located. The proposed amount of the bond or similar
5 security shall be either[the greater of]:
6 i. The net present value of the total estimated cost of
7 completing the decommissioning plan; or
8 ii. The bond amount required by a county or municipal
9 government that has established a decommissioning bond
10 requirement or similar security obligation in the county or
11 municipality where the merchant electric generating facility
12 will be located. If the facility will be located in more than
13 one (1) county or municipality that has established a
14 decommissioning bond or similar security obligation, then
15 the higher amount shall be required for the facility;
16 b. The bond or other similar security names:
17 i. For property that is leased by the applicant, each landowner
18 from whom the applicant leases land and the Energy and
19 Environment Cabinet as the primary co-beneficiaries; or
20 ii. For property that is owned by the applicant, the Energy and
21 Environment Cabinet as the primary beneficiary;
22 c. If the merchant electric generating facility is to be located in a
23 county or municipality that has not established a decommissioning
24 bond or other similar security obligation, the bond or other similar
25 security shall name the county or municipality as a secondary
26 beneficiary with the county's or municipality's consent;
27 d. The bond or other similar security shall be provided by an
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1 insurance company or surety that shall at all times maintain at least
2 an "Excellent" rating as measured by the AM Best rating agency
3 or an investment grade credit rating by any national credit rating
4 agency and, if available, shall be noncancelable by the provider or
5 the customer until completion of the decommissioning plan or
6 until a replacement bond is secured; and
7 e. The bond or other similar security shall provide that at least thirty
8 (30) days prior to its cancellation or lapse, the surety shall notify
9 the applicant, its successor or assign, each landowner, the Energy
10 and Environment Cabinet, and each county or city in which the
11 facility is located of the impending cancellation or lapse. The
12 notice shall specify the reason for the cancellation or lapse and
13 provide any of the parties, either jointly or separately, the
14 opportunity to cure the cancellation or lapse prior to it becoming
15 effective. The applicant, its successor, or its assign, shall be
16 responsible for all costs incurred by all parties to cure the
17 cancellation or lapse of the bond. Each landowner, or the Energy
18 and Environment Cabinet with the prior approval of each
19 landowner, may make a demand on the bond and initiate and
20 complete the decommissioning plan;
21 6. Communicate with each affected landowner at the end of the merchant
22 electric generating facility's useful life so that any requests of the
23 landowner that are in addition to the minimum requirements set forth in
24 this paragraph and in addition to any other requirements specified in the
25 lease with the landowner may, in the sole discretion of the applicant or
26 its successor or assign, be accommodated; and
27 7. Incorporate the requirements of subparagraphs 1. to 6. of this paragraph
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1 into the applicant's leases with landowners; and
2 (n) For applications for the construction of wind power facilities, a statement
3 certifying that:
4 1. Any wind turbine will not be artificially lighted except as required by
5 law;
6 2. Wind power facilities will be sited in a manner that minimizes
7 shadowing or flicker impacts; and
8 3. Any shadowing or flicker impacts will not have a significant adverse
9 impact on neighboring or adjacent property uses through siting or
10 mitigation.
11 (3) (a) The entity causing the decommissioning plan required under subsection
12 (2)(m) of this section to be carried out shall be entitled to the proceeds from
13 the sale of any salvaged materials or components of the merchant electric
14 generating facility recovered during the decommissioning process.
15 (b) Any proceeds that the Energy and Environment Cabinet recovers from the
16 sale of salvaged materials or components in the course of carrying out a
17 decommissioning plan under subsection (2)(m) of this section that, taken with
18 the decommissioning bond amounts that have been drawn upon, exceed the
19 cost of completing the decommissioning plan shall be deposited in the
20 merchant electric generating facility monitoring and enforcement fund
21 established in KRS 224.10-285.
22 (4) Application fees for a construction certificate shall be set by the board and
23 deposited into a trust and agency account to the credit of the commission.
24 (5) Replacement of a merchant electric generating facility with a like facility, or the
25 repair, modification, retrofitting, enhancement, or reconfiguration of a merchant
26 electric generating facility shall not, for the purposes of this section and KRS
27 224.10-280, 278.704, 278.708, 278.710, and 278.712, constitute construction of a
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1 merchant electric generating facility.
2 (6) The board shall promulgate administrative regulations prescribing fees to pay
3 expenses associated with its review of applications filed with it pursuant to KRS
4 278.700 to 278.716. All application fees collected by the board shall be deposited in
5 a trust and agency account to the credit of the Public Service Commission. If a
6 majority of the members of the board find that an applicant's initial fees are
7 insufficient to pay the board's expenses associated with the application, including
8 the board's expenses associated with legal review thereof, the board shall assess a
9 supplemental application fee to cover the additional expenses. An applicant's failure
10 to pay a fee assessed pursuant to this subsection shall be grounds for denial of the
11 application.
12 Section 58. 2026 RS HB 757/VO, Section 9, is amended to read as follows:
13 (1) As used in this section:
14 (a) "Adjusted gross fantasy contest receipts" means the total sum of entry fees
15 collected by a fantasy contest service provider from all fantasy contest
16 participants entering a fantasy contest, less winnings paid to fantasy contest
17 participants in the contest;
18 (b) "Athlete":
19 1. Means a professional or amateur competitor in a real-world lawful
20 sporting event or an organized video game competition that is:
21 a. Regulated by a sports governing body; and
22 b. Held between players who play individually or as a team; and
23 2. Includes equine competitors;
24 (c) "Department" means the Department of Revenue;
25 (d) "Fantasy contest":
26 1. Means any online fantasy or simulated game or contest that meets the
27 following conditions:
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1 a. There are no fewer than two (2) fantasy contest participants;
2 i. All fantasy contest participants are natural persons; and
3 ii. A fantasy contest service provider shall not be construed to
4 be a participant;
5 b. i. The values of all prizes offered to winning fantasy contest
6 participants are established and made known to fantasy
7 contest participants in advance of the contest;
8 ii. Multiple winning participants may share a prize; and
9 iii. Prizes may consist of fixed amounts, tiered payouts, or other
10 conditional bonus payouts, provided that all prize structures
11 are disclosed in advance by the fantasy contest service
12 provider;
13 c. All winning outcomes reflect the relative knowledge and skill of
14 the fantasy contest participant and are determined predominantly
15 by the accumulated statistical performance or finishing position of
16 multiple athletes across one (1) or more real-world sporting
17 events;
18 d. Fantasy contest participants assemble a fictional entry or roster of
19 actual athletes and exercise management or selection control over
20 the roster;
21 e. Fantasy contest participants compete for prizes awarded by a
22 fantasy contest service provider based on terms and conditions
23 published by the fantasy contest service provider and made known
24 to the fantasy contest participant in advance of the contest;
25 f. Winning outcomes are determined by clearly established scoring
26 criteria based on one (1) or more statistical results of the
27 performance of an individual athlete, including but not limited to a
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1 fantasy score;
2 g. A winning outcome is not based:
3 i. On the score, point spread, or outcome of a single real-world
4 team or combination of teams; or
5 ii. Solely on any single performance of an individual athlete or
6 participant in any single actual event; and
7 h. The game or contest does not violate any provision of federal law;
8 2. Includes contests in which fantasy contest participants compete against
9 each other; and
10 3. Does not include any fantasy contest:
11 a. Without a fantasy contest entry fee; or
12 b. Betting against the fantasy contest service provider;
13 (e) "Fantasy contest entry fee" means the cash or cash equivalent that is required
14 to be paid by a fantasy contest participant in advance to a fantasy contest
15 service provider in order to participate in a fantasy contest;
16 (f) "Fantasy contest participant" means a person who is twenty-one (21) years of
17 age or older who is:
18 1. Kentucky resident who participates in a fantasy contest offered by a
19 fantasy contest service provider; and
20 2. Not a Kentucky resident who participates in a fantasy contest offered by
21 a fantasy contest service provider while in Kentucky; and
22 (g) "Fantasy contest service provider":
23 1. Means a person or entity that offers fantasy contests to the general
24 public; and
25 2. Does not include an internet service provider or a provider of mobile
26 data services merely as a result of that provider's transporting of general
27 traffic that may include a fantasy contest.
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1 (2) Beginning on January 1, 2027, the Commonwealth shall impose and collect a tax at
2 a rate of twelve percent (12%) of the fantasy contest service provider's adjusted
3 gross fantasy contest receipts. The accrual method of accounting shall be used for
4 purposes of calculating the amount of tax owed by the licensee.
5 (3) The tax imposed by subsection (2) of this section is due and payable monthly and
6 shall be remitted to the department on or before the twentieth day of the next
7 succeeding calendar month.
8 (4) The fantasy contest service provider's payment shall be accompanied by a return
9 prescribed by the department indicating the amount of tax due for the previous
10 calendar month as well as any other information the department shall require
11 through an administrative regulation promulgated in accordance with KRS Chapter
12 13A.
13 (5) Any fantasy contest service provider who violates any provision of this section shall
14 be subject to the uniform civil penalties imposed under KRS 131.180.
15 (6) In every case, any tax not paid on or before the due date shall bear interest at the tax
16 interest rate as defined in KRS 131.010 from the due date until the date of payment.
17 [(7) It is the purpose and intent of the General Assembly to levy taxes on persons
18 engaged in the operations of fantasy contests. It is not the intent of the General
19 Assembly to legalize these activities.]
20 Section 59. 2026 RS HB 757/VO, Section 71, is amended to read as follows:
21 (1) As used in this section:
22 (a) "Consumer" means a:
23 1. Kentucky resident who purchases an event contract through a prediction
24 market; or
25 2. Person who is not a Kentucky resident who purchases an event contract
26 through a prediction market while in Kentucky;
27 (b) "Department" means the Department of Revenue;
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1 (c) "Event contract":
2 1. Means an agreement, contract, transaction, or swap in an excluded
3 commodity based on the occurrence, extent of an occurrence, or
4 contingency other than a change in the price, rate, value, or levels of a
5 commodity described in 7 U.S.C. sec. 1a(19)(i), as amended; and
6 2. Does not include:
7 a. Any contract of sale of a commodity for future delivery, or any
8 option on such a contract, executed on or subject to the rules of a
9 designated contract market; or
10 b. Any swap or derivative based on:
11 i. An agricultural commodity;
12 ii. An exempt commodity; or
13 iii. Any excluded commodity not subject to subparagraph 1. of
14 this paragraph, as the terms are defined in the Commodity
15 Exchange Act;
16 (d) "Person" has the same meaning as in KRS 139.010;
17 (e) "Prediction market":
18 1. Means:
19 a. Any physical or electronic platform through which a consumer
20 may buy, sell, or exchange event contracts, whether the market is
21 located in or out of the state; or
22 b. Any platform or system that provides consumers with the ability to
23 open speculative positions on the outcomes of future events; and
24 2. May be a board of trade designated as a contract market by the
25 Commodity Futures Trading Commission;
26 (f) "Prediction market operator":
27 1. Means a board of trade or other person, including any affiliate of the
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1 person, that operates a prediction market; and
2 2. Includes but is not limited to a person that satisfies the requirements of
3 this subsection through the ownership, operation, or control of a digital
4 distribution service, digital distribution platform, online portal, or
5 application store where a prediction market may be accessed;
6 (g) "Speculative position" means a financial commitment made by a consumer in
7 a prediction market; and
8 (h) "Transaction fee" means:
9 1. The fee charged by the prediction market operator to complete a sale,
10 purchase, or trade of an event contract to a consumer; and
11 2. The amount paid by a consumer to purchase an event contract from a
12 prediction market operator.
13 (2) On and after January 1, 2027, an excise tax is hereby imposed on a prediction
14 market operator at the rate of fourteen and one-quarter percent (14.25%) of the
15 prediction market operator's transaction fees. The accrual method of accounting
16 shall be used for purposes of calculating the amount of tax owed by the prediction
17 market operator under this subsection.
18 (3) The tax imposed by subsection (2) of this section is due and payable monthly and
19 shall be remitted to the department on or before the twentieth day of the next
20 succeeding calendar month.
21 (4) The prediction market operator's payment shall be accompanied by a return
22 prescribed by the department indicating the amount of tax due for the previous
23 calendar month as well as any other information the department shall require
24 through an administrative regulation promulgated in accordance with KRS Chapter
25 13A.
26 (5) Any prediction market operator who violates any provision of this section shall be
27 subject to the uniform civil penalties imposed under KRS 131.180.
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1 (6) In every case, any tax not paid on or before the due date shall bear interest at the tax
2 interest rate as defined in KRS 131.010 from the due date until the date of payment.
3 [(7) It is the purpose and intent of the General Assembly to levy taxes on persons
4 engaged in the operations of a prediction market. It is not the intent of the General
5 Assembly to legalize these activities.]
6 Section 60. 2026 RS HB 757/VO, Section 97, is amended to read as follows:
7 As used in KRS 138.210 to 138.448, unless the context requires otherwise:
8 (1) "Accountable loss" means loss or destruction of "received" gasoline or special fuel
9 through wrecking of transportation conveyance, explosion, fire, flood or other
10 casualty loss, or contaminated and returned to storage. The loss shall be reported
11 within thirty (30) days after discovery of the loss to the department in a manner and
12 form prescribed by the department, supported by proper evidence which in the sole
13 judgment of the department substantiates the alleged loss or contamination and
14 which is confirmed in writing to the reporting dealer by the department. The
15 department may make any investigation deemed necessary to establish the bona
16 fide claim of the loss;
17 (2) "Agricultural purposes" means purposes directly related to the production of
18 agricultural commodities and the conducting of ordinary activities on the farm;
19 (3) "Annual survey value" means the average of the quarterly survey values for a fiscal
20 year, as determined by the department, based upon surveys taken during the first
21 month of each quarter of the fiscal year;
22 (4) "Average wholesale price" means the weighted average per gallon wholesale price
23 of gasoline, based on the quarterly survey value as determined by the department,
24 and as adjusted by KRS 138.228;
25 (5) "Bulk storage facility" means gasoline or special fuels storage facilities of not less
26 than twenty thousand (20,000) gallons owned or operated at one (1) location by a
27 single owner or operator for the purpose of storing gasoline or special fuels for
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1 resale or delivery to retail outlets or consumers;
2 (6) "Cellulosic ethanol" has the same meaning as in KRS 141.422;
3 (7) "Dealer" means any person who is:
4 (a) Regularly engaged in the business of refining, producing, distilling,
5 manufacturing, blending, or compounding gasoline or special fuels in this
6 state;
7 (b) Regularly importing gasoline or special fuel, upon which no tax has been
8 paid, into this state for distribution in bulk to others;
9 (c) Distributing gasoline from bulk storage in this state;
10 (d) Regularly engaged in the business of distributing gasoline or special fuels
11 from bulk storage facilities primarily to others in arm's-length transactions;
12 (e) In the case of gasoline, receiving or accepting delivery within this state of
13 gasoline for resale within this state in amounts of not less than an average of
14 one hundred thousand (100,000) gallons per month during any prior
15 consecutive twelve (12) months' period, when in the opinion of the
16 department, the person has sufficient financial rating and reputation to justify
17 the conclusion that he or she will pay all taxes and comply with all other
18 obligations imposed upon a dealer; or
19 (f) Regularly exporting gasoline or special fuels;
20 (8) "Department" means the Department of Revenue;
21 (9) "Diesel fuel":
22 (a) Means any liquid other than gasoline that, without further processing or
23 blending, is suitable for use as a fuel in a diesel powered highway vehicle; and
24 (b) Does not include unblended kerosene, No. 5 and No. 6 fuel oils as described
25 in ASTM specification D 396, or F-76 Fuel Naval Distillate MILL-F-166884;
26 (10) "Dyed diesel fuel" means diesel fuel that is required to be dyed under United States
27 Environmental Protection Agency rules for high sulfur diesel fuel, or is dyed under
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1 the Internal Revenue Service rules for low sulfur fuel, or pursuant to any other
2 requirements subsequently set by the United States Environmental Protection
3 Agency or the Internal Revenue Service;
4 (11) "Ethanol" has the same meaning as in KRS 141.422;
5 (12) "Ethanol flex fuel" means an ethanol fuel blend of ethanol and gasoline that meets
6 the current ASTM specification D5798;
7 (13) "Financial instrument" means a bond issued by a corporation authorized to do
8 business in Kentucky, a line of credit, or an account with a financial institution
9 maintaining a compensating balance;
10 (14) "Fuel grade ethanol" includes ethanol, cellulosic ethanol, and ethanol flex fuel;
11 (15) "Gasoline":
12 (a) Means all liquid fuels, including liquids ordinarily, practically, and
13 commercially usable in internal combustion engines for the generation of
14 power, and all distillates of and condensates from petroleum, natural gas, coal,
15 coal tar, vegetable ferments, and all other products so usable which are
16 produced, blended, or compounded for the purpose of operating motor
17 vehicles, showing a flash point of one hundred ten (110) degrees Fahrenheit
18 or below, using the Eliott Closed Cup Test, or when tested in a manner
19 approved by the United States Bureau of Mines, are prima facie commercially
20 usable in internal combustion engines;
21 (b) Includes:
22 1. Casing head, absorption, natural gasoline, [fuel grade ethanol, ]and
23 condensates when used without blending as a motor fuel, sold for use in
24 motors direct, or sold to those who blend for their own use; and[, ]
25 2. Fuel grade ethanol; and
26 (c) Does not include propane, butane, or other liquefied petroleum gases;
27 kerosene; cleaner solvent; fuel oil; diesel fuel; crude oil; or casing head,
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1 absorption, natural gasoline, [fuel grade ethanol, ]and condensates when sold
2 to be blended or compounded with other less volatile liquids in the
3 manufacture of commercial gasoline for motor fuel; industrial naphthas;
4 rubber solvents; Stoddard solvent; mineral spirits; VM and P naphthas;
5 turpentine substitutes; pentane; hexane; heptane; octane; benzene; benzine;
6 xylol; toluol; aromatic petroleum solvents; alcohol; and liquefied gases which
7 would not exist as liquids at a temperature of sixty (60) degrees Fahrenheit
8 and a pressure of fourteen and seven tenths (14.7) pounds per square inch
9 absolute, unless the products are used wholly or in combination with gasoline
10 as a motor fuel;
11 (16) "Motor vehicle" means any vehicle, machine, or mechanical contrivance propelled
12 by an internal combustion engine and licensed for operation and operated upon the
13 public highways and any trailer or semitrailer attached to or having its front end
14 supported by the motor vehicles;
15 (17) "Public highways" means every way or place generally open to the use of the public
16 as a matter or right for the purpose of vehicular travel, notwithstanding that they
17 may be temporarily closed or travel thereon restricted for the purpose of
18 construction, maintenance, repair, or reconstruction;
19 (18) "Quarterly survey value":
20 (a) Means a value determined by the department for each calendar quarter of the
21 weighted average per gallon wholesale price of gasoline, determined from
22 information available through independent statistical surveys of gasoline
23 prices or, if requested, from information furnished by licensed gasoline
24 dealers. The department shall determine, within twenty (20) days following
25 the end of the first month of each calendar quarter, the weighted average of
26 per gallon wholesale selling prices of gasoline for the previous month. That
27 value shall be the quarterly survey value for the beginning of the following
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1 calendar quarter; and
2 (b) Shall be determined exclusive of any federal gasoline tax and any fee on
3 imported oil imposed by the Congress of the United States;
4 (19) "Received," "received gasoline," or "received special fuels" means:
5 (a) 1. Gasoline and special fuels produced, manufactured, or compounded at
6 any refinery in this state or acquired by any dealer and delivered into or
7 stored in refinery, marine, or pipeline terminal storage facilities in this
8 state shall be deemed to be received when it has been loaded for bulk
9 delivery into tank cars or tank trucks consigned to destinations within
10 this state.
11 2. For the purpose of the proper administration of this chapter and to
12 prevent the evasion of the tax and to enforce the duty of the dealer to
13 collect the tax, it shall be presumed that all gasoline and special fuel
14 loaded by any licensed dealer within this state into tank cars or tank
15 trucks is consigned to destinations within this state, unless the contrary
16 is established by the dealer, pursuant to administrative regulations
17 prescribed by the department; and
18 (b) 1. Gasoline and special fuels acquired by any dealer in this state, and not
19 delivered into refinery, marine, or pipeline terminal storage facilities,
20 shall be deemed to be received when it has been placed into storage
21 tanks or other containers for use or subject to withdrawal for use,
22 delivery, sale, or other distribution.
23 2. Dealers may sell gasoline or special fuels to licensed bonded dealers in
24 this state in transport truckload, carload, or cargo lots, withdrawing it
25 from refinery, marine, pipeline terminal, or bulk storage tanks, without
26 paying the tax. In these instances, the licensed bonded dealer purchasing
27 the gasoline or special fuels shall be deemed to have received that fuel at
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1 the time of withdrawal from the seller's storage facility and shall be
2 responsible to the state for the payment of the tax thereon;
3 (20) "Refinery" means any place where gasoline or special fuel is refined, manufactured,
4 compounded, or otherwise prepared for use;
5 (21) "Retail filling station" means any place accessible to general public vehicular traffic
6 where gasoline or special fuel is or may be placed into the fuel supply tank of a
7 licensed motor vehicle;
8 (22) "Special fuels" means and includes all combustible gases and liquids capable of
9 being used for the generation of power in an internal combustion engine to propel
10 vehicles of any kind upon the public highways, including diesel fuel, and dyed
11 diesel fuel used exclusively for nonhighway purposes in off-highway equipment
12 and in nonlicensed motor vehicles, except that it does not include gasoline, aviation
13 jet fuel, kerosene unless used wholly or in combination with special fuel as a motor
14 fuel, or liquefied petroleum gas as defined in KRS 234.100;
15 (23) "Storage" means all gasoline and special fuels produced, refined, distilled,
16 manufactured, blended, or compounded and stored at a refinery storage or delivered
17 by boat at a marine terminal for storage, or delivered by pipeline at a pipeline
18 terminal, delivery station, or tank farm for storage;
19 (24) "Transporter" means any person who transports gasoline or special fuels on which
20 the tax has not been paid or assumed; and
21 (25) "Wholesale floor price" means two dollars and seventeen and seven-tenths cents
22 ($2.177) per gallon.
23 Section 61. The Kentucky Cabinet for Economic Development is directed to:
24 (1) Report on the current tax credits and incentives eligible in Kentucky to
25 hyperscale data centers, and data centers. The report shall also include tax credits and
26 incentives in Kentucky's surrounding states relating to hyperscale data centers, and data
27 centers; and
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1 (2) Present the report required in subsection (1) of this section, including any
2 recommendations, to the Legislative Research Commission for referral to the Interim
3 Joint Committee on Appropriations and Revenue and the Interim Joint Committee on
4 Economic Development and Workforce Investment by August 1, 2027.
5 Section 62. 26 RS SB 343/GA, Section 1, is amended to read as follows:
6 (1) There is hereby created the Department of Workers' Claims administratively
7 attached to the Office of the Governor, which shall be headed by a commissioner
8 appointed by the Governor and confirmed by the Senate in accordance with Section
9 6 of this Act.
10 (2) The department shall be divided for administrative purposes into the:
11 (a) Office of the Commissioner;
12 (b) Office of General Counsel:
13 (c) Office of Administrative Law Judges;
14 (d) Division of Claims Processing;
15 (e) Division of Security and Compliance;
16 (f) Division of Workers' Compensation Funds; and
17 (g) Division of Specialist and Medical Services.
18 (3) The Office of Administrative Law Judges shall be headed by a chief administrative
19 law judge appointed in accordance with Section 7 of this Act.
20 (4) Each division in the department shall be headed by a director[ appointed by the
21 commissioner with the approval of the Governor in accordance with KRS 12.050].
22 (5) The Workers' Compensation Board shall be attached to the Department of Workers'
23 Claims for administrative purposes only.
24 Section 63. Notwithstanding any other provision of law to the contrary:
25 (1) The Department of Workers’ Claims shall retain all classified and unclassified
26 positions and employees that the Department of Workers’ Claims had 14 days prior to the
27 transfer from the Education and Labor Cabinet to the Office of the Governor in
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1 accordance with 26 RS SB 343/GA, and each employee shall retain his or her position
2 until the Department of Workers’ Claims creates any new positions or abolishes any
3 existing position; and
4 (2) No employee shall suffer any penalty in the transfer from the Education and
5 Labor Cabinet to the Office of the Governor in accordance with 26 RS SB 343/GA.
6 Section 64. 2026 RS HB 757/VO, Section 136, is amended to read as follows:
7 Sections 9, 10, 71, 72, 107, [to 115] and 117 of this Act take effect January 1, 2027.
8 Section 65. 2026 RS HB 757/VO, Section 139, is amended to read as follows:
9 Sections 114 and 115[Section 128] of this Act shall take effect on July 1,
10 2027[2026].
11 Section 66. 2026 RS HB 757/VO, Section 140, is amended to read as follows:
12 Whereas funding the operations of state government is an essential part of the
13 Commonwealth's budget, an emergency is declared to exist, and Section 128 of this Act
14 takes effect July 1, 2026, and Sections 18 to 21, 33 to 35, 57 to 70, 73 to 91, 108 to 113,
15 119, 127, and 130 to 133 of this Act take effect upon passage and approval by the
16 Governor or upon its otherwise becoming a law.
17 Section 67. The Cabinet for Economic Development's various incentive
18 programs play a vital role in supporting economic development and job growth
19 throughout the Commonwealth. To ensure companies operating within the
20 Commonwealth's border counties are not negatively impacted by employees residing in
21 adjacent states and to encourage companies operating in adjacent states to hire Kentucky
22 residents, the cabinet is encouraged to conduct a feasibility and impact study on interstate
23 reciprocity between state economic development programming. The study shall at a
24 minimum identify any existing models, identify the potential economic impacts of such
25 an arrangement between Kentucky and adjacent states, assess the feasibility and cost
26 implications of implementing those models, and provide recommendations. The Cabinet
27 shall collaborate with the Center for Economic and Entrepreneurial Development at
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1 Murray State University to establish the scope of the study. If the cabinet completes such
2 a study, it shall be submitted to the Interim Joint Committee on Economic Development
3 and Workforce Investment by December 1, 2028.
4 Section 68. Sections 40 and 41 of this Act shall apply to estates of decedents
5 who died on or after January 1, 2026.
6 Section 69. Section 60 of this Act takes effect on August 1, 2026.
7 Section 70. Section 53 of this Act takes effect on January 1, 2027.
8 Section 71. Sections 30 to 34 of this Act take effect on July 1, 2027.
9 Section 72. Subsection (5) of Section 44 of this Act shall apply retroactively to
10 require a consolidated local government to only reimburse a fire district for emergency
11 medical responses made on or after July 1, 2025. Subsection (5) of Section 44 of this Act
12 shall also apply retroactively to any matters or litigation that have not been fully and
13 finally adjudicated, or are in the appellate process, or for which time to file an appeal has
14 not lapsed, as of the effective date of Section 44 of this Act.
15 Section 73. Whereas it is critical to ensure a consolidated local government is
16 not required to unnecessarily expend taxpayer funds, an emergency is declared to exist,
17 and Section 54 of this Act takes effect on July 1, 2026, and Sections 36, 44, 51, 64, 65,
18 66, and 71 of this Act take effect upon its passage and approval by the Governor or upon
19 its otherwise becoming a law.
20 Section 74. The following KRS section is repealed:
21 154.32-050 Enhanced incentive counties -- Annual identification and certification
22 or decertification -- Criteria -- Multicounty industrial park projects.
23 Section 75. Whereas areas of Kentucky have been impacted by high
24 unemployment an emergency is declared to exist, and this Act takes effect upon its
25 passage and approval by the Governor or upon its otherwise becoming a law.
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