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AN ACT relating to economic development incentive projects. 1
Be it enacted by the General Assembly of the Commonwealth of Kentucky: 2
Section 1. KRS 154.22-040 is amended to read as follows: 3
(1) Each year, the authority shall, under its Rural Economic Development Assistance 4
Program, on the basis of the final unemployment figures calculated by the 5
Department of Workforce Investment in the Education and Workforce Development 6
Cabinet, determine which counties have had a countywide rate of unemployment 7
exceeding the statewide unemployment rate of the Commonwealth in the most 8
recent five (5) consecutive calendar years, or which have had an average 9
countywide rate of unemployment exceeding the statewide unemployment rate of 10
the Commonwealth by two hundred percent (200%) in the most recent calendar 11
year, and shall certify those counties as qualified counties. A county not certified on 12
the basis of final unemployment figures may also be certified as a qualified county 13
if the authority determines the county is one (1) of the sixty (60) most distressed 14
counties in the Commonwealth based on the following criteria with equal weight 15
given to each criterion: 16
(a) The average countywide rate of unemployment in the most recent three (3) 17
consecutive calendar years, on the basis of final unemployment figures 18
calculated by the Department of Workforce Investment in the Education and 19
Workforce Development Cabinet; 20
(b) In each county the percentage of adults twenty-five (25) years of age and older 21
who have attained at least a high school education or equivalent, on the basis 22
of the most recent data available from the United States Department of 23
Commerce, Bureau of the Census; and 24
(c) Road quality, as quantified by the access within a county to roads ranked in 25
descending order from best quality to worst quality as follows: two (2) or 26
more interstate highways, one (1) interstate highway, a state four (4) lane 27 UNOFFICIAL COPY 22 RS BR 494
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parkway, four (4) lane principal arterial access to an interstate highway, state 1
two (2) lane parkway and none of the preceding road types, as certified by the 2
Kentucky Transportation Cabinet to the authority. 3
If the authority determines that a county which has previously been certified as a 4
qualified county no longer meets the criteria of this subsection, the authority shall 5
decertify that county. The authority shall not provide inducements for any facilities 6
in that county and an approved company shall not be eligible for the inducements 7
offered by KRS 154.22-010 to 154.22-070 unless the tax incentive agreements 8
required herein are entered into by all parties prior to July 1 of the year following 9
the calendar year in which the authority decertified that county. In addition, the 10
authority shall certify coal-producing counties, not otherwise certified as qualified 11
counties in this subsection, for economic development projects involving the new 12
construction of electric generation facilities. A coal-producing county shall mean a 13
county in the Commonwealth of Kentucky that has produced coal upon which the 14
tax imposed under KRS 143.020 was paid at any time. For economic development 15
projects undertaken in a regional industrial park, as defined in KRS 42.4588, or in 16
an industrial park created pursuant to an interlocal agreement in which revenues are 17
shared as provided in KRS 65.210 to 65.300, where the physical boundaries of the 18
industrial park lie within two (2) or more counties of which at least one (1) of the 19
counties is a qualified county under this section, an eligible company undertaking 20
an economic development project within the physical boundaries of the industrial 21
park may be approved for the inducements under KRS 154.22-010 to 154.22-080. 22
(2) The authority shall establish the procedures and standards for the determination and 23
approval of eligible companies and their economic development projects by the 24
promulgation of administrative regulations in accordance with KRS Chapter 13A. 25
The criteria for approval of eligible companies and economic development projects 26
shall include but not be limited to the creditworthiness of eligible companies; the 27 UNOFFICIAL COPY 22 RS BR 494
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number of new jobs to be provided by an economic development project to 1
residents of the Commonwealth; and the likelihood of the economic success of the 2
economic development project. 3
(3) The economic development project shall involve a minimum investment of one 4
hundred thousand dollars ($100,000) by the eligible company and shall result in the 5
creation by the eligible company, within two (2) years from the date of the final 6
approval authorizing the economic development project, of a minimum of fifteen 7
(15) new full-time jobs at the site of the economic development project for 8
Kentucky residents to be employed by the eligible company and to be held by 9
persons subject to the personal income tax of the Commonwealth. The authority 10
may extend this two (2) year period upon the written application of an eligible 11
company requesting an extension. 12
(4) (a) Within six (6) months after the activation date, the approved company shall 13
compensate a minimum of ninety percent (90%) of its full-time employees 14
whose jobs were created with base hourly [wages ]wage that is the greater of 15
[equal to either]: 16
1. Eighty-five percent (85%)[Seventy-five percent (75%)] of the average 17
hourly wage for the Commonwealth;[ or] 18
2. Eighty-five percent (85%)[Seventy-five percent (75%)] of the average 19
hourly wage for the county in which the project is to be undertaken; 20
or[.] 21
3. [(b) If the base hourly wage calculated in paragraph (a)1. or 2. of this 22
subsection is less than one hundred fifty percent (150%) of the federal 23
minimum wage, then the base hourly wage shall be ]One hundred fifty 24
percent (150%) of the federal minimum wage;[. ] 25
throughout the term of the economic development project[However, for 26
projects receiving preliminary approval of the authority prior to July 1, 2008, 27 UNOFFICIAL COPY 22 RS BR 494
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the base hourly wage shall be one hundred fifty percent (150%) of the federal 1
minimum wage existing on January 1, 2007]. 2
(b) In addition to the applicable base hourly wage calculated[ above], the eligible 3
company shall provide employee benefits equal to at least fifteen percent 4
(15%) of the applicable base hourly wage[; however, if the eligible company 5
does not provide employee benefits equal to at least fifteen percent (15%) of 6
the applicable base hourly wage, the eligible company may qualify under this 7
section if it provides the employees hired by the eligible company as a result 8
of the economic development project total hourly compensation equal to or 9
greater than one hundred fifteen percent (115%) of the applicable base hourly 10
wage through increased hourly wages combined with employee benefits]. 11
(c) The requirements of this subsection shall not apply to eligible companies 12
which are nonprofit corporations established under KRS 273.163 to 273.387 13
and whose employees are handicapped and sheltered workshop workers 14
employed at less than the established minimum wage as authorized by KRS 15
337.295. 16
For an eligible company, within a regional industrial park which lies within two (2) 17
or more counties, the calculation of the wage and benefit requirement shall be 18
determined by averaging the average county hourly wage for all counties within the 19
regional industrial park. 20
(5) No economic development project which will result in the replacement of 21
agribusiness, manufacturing, or electric generation facilities existing in the state 22
shall be approved by the authority; however, the authority may approve an 23
economic development project that: 24
(a) Rehabilitates an agribusiness, manufacturing, or electric generation facility: 25
1. Which has not been in operation for a period of ninety (90) or more 26
consecutive days; 27 UNOFFICIAL COPY 22 RS BR 494
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2. For which the current occupant of the facility has published a notice of 1
closure so long as the eligible company intending to acquire the facility 2
is not an affiliate of the current occupant; or 3
3. The title to which is vested in other than the eligible company or an 4
affiliate of the eligible company and that is sold or transferred pursuant 5
to a foreclosure ordered by a court of competent jurisdiction or an order 6
of a bankruptcy court of competent jurisdiction; 7
(b) Replaces an agribusiness, manufacturing, or electric generation facility 8
existing in the Commonwealth: 9
1. The title to which shall have been taken under the exercise of the power 10
of eminent domain, or the title to which shall be the subject of a 11
nonappealable judgment granting the authority to exercise the power of 12
eminent domain, in either event to the extent that normal operations 13
cannot be resumed at the facility within twelve (12) months; or 14
2. Which has been damaged or destroyed by fire or other casualty to the 15
extent that normal operations cannot be resumed at the facility within 16
twelve (12) months; or 17
(c) Replaces an existing agribusiness, manufacturing, or electric generation 18
facility located in the same qualified county, and the existing agribusiness, 19
manufacturing, or electric generation facility to be replaced cannot be 20
expanded due to the unavailability of real estate at or adjacent to the 21
agribusiness, manufacturing, or electric generation facility to be replaced. Any 22
economic development project satisfying the requirements of this subsection 23
shall only be eligible for inducements to the extent of the expansion, and no 24
inducements shall be available for the equivalent of the agribusiness, 25
manufacturing, or electric generation facility to be replaced. No economic 26
development project otherwise satisfying the requirements of this subsection 27 UNOFFICIAL COPY 22 RS BR 494
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shall be approved by the authority which results in a lease abandonment or 1
lease termination by the approved company without the consent of the lessor. 2
(6) With respect to each eligible company making an application to the authority for 3
inducements, and with respect to the economic development project described in the 4
application, the authority shall request materials and make inquiries of the applicant 5
as necessary or appropriate. Upon review of the application and completion of 6
initial inquiries, the authority may, by resolution, give its preliminary approval by 7
designating an eligible company as a preliminarily approved company and 8
authorizing the undertaking of the economic development project. After preliminary 9
approval, the authority may by final approval designate an eligible company to be 10
an approved company. 11
Section 2. KRS 154.32-020 is amended to read as follows: 12
(1) The purposes of this subchapter are: 13
(a) To provide incentives for eligible companies and to encourage the location or 14
expansion of manufacturing facilities, agribusiness operations, nonretail 15
service or technology facilities, headquarters operations, alternative fuel 16
production facilities, gasification production facilities, energy-efficient 17
alternative fuel production facilities, renewable energy production facilities, 18
carbon dioxide transmission pipelines, coal severing and processing, and 19
hospital operations in the Commonwealth to advance the public purposes of: 20
1. Creation of new jobs that, but for the incentives offered by the authority, 21
would not exist within the Commonwealth; 22
2. Creation of new sources of tax revenues for the support of public 23
services provided by the Commonwealth; 24
3. Improvement in the quality of life for Kentucky citizens through the 25
creation of sustainable jobs with higher salaries; and 26
4. Providing an economic stimulus to bolster in-state production of vital 27 UNOFFICIAL COPY 22 RS BR 494
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medications and personal protective equipment; and 1
(b) To provide enhanced incentives for companies that locate in enhanced 2
incentive counties in recognition of the depressed economic conditions in 3
those counties and the increased need for the growth and development caused 4
by the depressed economic conditions. 5
(2) To qualify for the incentives provided by subsection (3) of this section, an approved 6
company shall: 7
(a) Incur eligible costs of at least one hundred thousand dollars ($100,000); 8
(b) Create at least ten (10) new full-time jobs and maintain an annual average 9
number of at least ten (10) new full-time jobs;[ and] 10
(c)[ 1.] Within six (6) months after the activation date, compensate at least 11
ninety (90%) of all of its full-time employees whose jobs were created as a 12
result of the economic development project, a minimum wage that is the 13
greater of: 14
1. Eighty-five percent (85%) of the average hourly wage for the 15
Commonwealth; 16
2. Eighty-five percent (85%) of the average hourly wage for the county in 17
which the project is to be undertaken; or 18
3. [Pay at least ninety percent (90%) of all new full-time employees whose 19
jobs were created as a result of the economic development project a 20
minimum wage of at least ]One hundred twenty-five percent (125%) of 21
the federal minimum wage in enhanced incentive counties, and one 22
hundred fifty percent (150%) of the federal minimum wage in other 23
counties; 24
throughout the term of the economic development project; and 25
(d)[2.] Provide employee benefits for all new full-time jobs equal to at least 26
fifteen percent (15%) of the minimum wage requirement established by 27 UNOFFICIAL COPY 22 RS BR 494
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paragraph (c) of this subsection[subparagraph 1. of this paragraph. If the 1
eligible company does not provide employee benefits equal to at least fifteen 2
percent (15%) of the minimum wage requirement established by subparagraph 3
1. of this paragraph, the eligible company may still qualify for incentives if it 4
provides the full-time employees hired as a result of the economic 5
development project total hourly compensation equal to or greater than one 6
hundred fifteen percent (115%) of the minimum wage requirement established 7
in subparagraph 1. of this paragraph through increased hourly wages 8
combined with employee benefits]; or 9
(e)[(d)] Produce vital medications, personal protective equipment, or equipment 10
necessary to produce personal protective equipment. 11
(3) The incentives available under this subchapter are as follows: 12
(a) Tax credits of up to one hundred percent (100%) of the Kentucky income tax 13
imposed under KRS 141.020 or 141.040 and the limited liability entity tax 14
imposed under KRS 141.0401 on the income, Kentucky gross profits, or 15
Kentucky gross receipts of the approved company generated by or arising 16
from the economic development project, as set forth in KRS 141.415 and 17
154.32-070; 18
(b) Authorization for the approved company to impose a wage assessment against 19
the gross wages of each new employee subject to the Kentucky income tax as 20
provided in KRS 154.32-090; and 21
(c) Notwithstanding any provision of law to the contrary, for any economic 22
development project with an eligible investment of more than two hundred 23
million dollars ($200,000,000), the authority may authorize approval to the 24
economic development project based upon terms and incentives applicable to 25
economic development project locating in an enhanced incentive county. 26
(4) The General Assembly hereby finds and declares that the authority granted in this 27 UNOFFICIAL COPY 22 RS BR 494
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subchapter and the purposes accomplished hereby are proper governmental and 1
public purposes for which public moneys may be expended, and that the 2
inducement of the location of economic development projects within the 3
Commonwealth is of paramount importance to the economic well-being of the 4
Commonwealth. 5
Section 3. KRS 154.32-010 is amended to read as follows: 6
(1) "Activation date" means the date established in the tax incentive agreement that is 7
within two (2) years of final approval; 8
(2) "Affiliate" means the following: 9
(a) Members of a family, including only brothers and sisters of the whole or half 10
blood, spouse, ancestors, and lineal descendants of an individual; 11
(b) An individual, and a corporation more than fifty percent (50%) in value of the 12
outstanding stock of which is owned, directly or indirectly, by or for that 13
individual; 14
(c) An individual, and a limited liability company of which more than fifty 15
percent (50%) of the capital interest or profits are owned or controlled, 16
directly or indirectly, by or for that individual; 17
(d) Two (2) corporations which are members of the same controlled group, which 18
includes and is limited to: 19
1. One (1) or more chains of corporations connected through stock 20
ownership with a common parent corporation if: 21
a. Stock possessing more than fifty percent (50%) of the total 22
combined voting power of all classes of stock entitled to vote or 23
more than fifty percent (50%) of the total value of shares of all 24
classes of stock of each of the corporations, except the common 25
parent corporation, is owned by one (1) or more of the other 26
corporations; and 27 UNOFFICIAL COPY 22 RS BR 494
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b. The common parent corporation owns stock possessing more than 1
fifty percent (50%) of the total combined voting power of all 2
classes of stock entitled to vote or more than fifty percent (50%) of 3
the total value of shares of all classes of stock of at least one (1) of 4
the other corporations, excluding, in computing the voting power 5
or value, stock owned directly by the other corporations; or 6
2. Two (2) or more corporations if five (5) or fewer persons who are 7
individuals, estates, or trusts own stock possessing more than fifty 8
percent (50%) of the total combined voting power of all classes of stock 9
entitled to vote or more than fifty percent (50%) of the total value of 10
shares of all classes of stock of each corporation, taking into account the 11
stock ownership of each person only to the extent the stock ownership is 12
identical with respect to each corporation; 13
(e) A grantor and a fiduciary of any trust; 14
(f) A fiduciary of a trust and a fiduciary of another trust, if the same person is a 15
grantor of both trusts; 16
(g) A fiduciary of a trust and a beneficiary of that trust; 17
(h) A fiduciary of a trust and a beneficiary of another trust, if the same person is a 18
grantor of both trusts; 19
(i) A fiduciary of a trust and a corporation more than fifty percent (50%) in value 20
of the outstanding stock of which is owned, directly or indirectly, by or for the 21
trust or by or for a person who is a grantor of the trust; 22
(j) A fiduciary of a trust and a limited liability company more than fifty percent 23
(50%) of the capital interest, or the interest in profits, of which is owned 24
directly or indirectly, by or for the trust or by or for a person who is a grantor 25
of the trust; 26
(k) A corporation, a partnership, or a limited partnership if the same persons own: 27 UNOFFICIAL COPY 22 RS BR 494
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1. More than fifty percent (50%) in value of the outstanding stock of the 1
corporation; and 2
2. More than fifty percent (50%) of the capital interest, or the profits 3
interest, in the partnership or limited partnership; 4
(l) A corporation and a limited liability company if the same persons own: 5
1. More than fifty percent (50%) in value of the outstanding stock of the 6
corporation; and 7
2. More than fifty percent (50%) of the capital interest or the profits in the 8
limited liability company; 9
(m) A partnership or limited partnership and a limited liability company if the 10
same persons own: 11
1. More than fifty percent (50%) of the capital interest or profits in the 12
partnership or limited partnership; and 13
2. More than fifty percent (50%) of the capital interest or the profits in the 14
limited liability company; 15
(n) An S corporation and another S corporation if the same persons own more 16
than fifty percent (50%) in value of the outstanding stock of each corporation; 17
S corporation designation being the same as that designation under the 18
Internal Revenue Code of 1986, as amended; 19
(o) An S corporation and a C corporation, if the same persons own more than fifty 20
percent (50%) in value of the outstanding stock of each corporation; S and C 21
corporation designations being the same as those designations under the 22
Internal Revenue Code of 1986, as amended; or 23
(p) Two (2) or more limited liability companies, if the same persons own more 24
than fifty percent (50%) of the capital interest or are entitled to more than fifty 25
percent (50%) of the capital profits in the limited liability companies; 26
(3) "Agribusiness" means the processing of raw agricultural products, including but not 27 UNOFFICIAL COPY 22 RS BR 494
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limited to timber and industrial hemp, or the performance of value-added functions 1
with regard to raw agricultural products; 2
(4) "Alternative fuel production" means a Kentucky operation that primarily produces 3
alternative transportation fuels for sale. The alternative fuel production may produce 4
electricity as a by-product if the primary function of the operations remains the 5
production and sale of alternative transportation fuels; 6
(5) "Alternative transportation fuels" has the same meaning as in KRS 152.715; 7
(6) "Approved company" means an eligible company that has received final approval to 8
receive incentives under this subchapter; 9
(7) "Approved costs" means the amount of eligible costs approved by the authority at 10
final approval; 11
(8) "Authority" means the Kentucky Economic Development Finance Authority 12
established by KRS 154.20-010; 13
(9) "Biomass resources" has the same meaning as in KRS 152.715; 14
(10) "Capital lease" means a lease classified as a capital lease by the Statement of 15
Financial Accounting Standards No. 13, Accounting for Leases, issued by the 16
Financial Accounting Standards Board, November 1976, as amended; 17
(11) "Carbon dioxide transmission pipeline" means the in-state portion of a pipeline, 18
including appurtenant facilities, property rights, and easements, that is used 19
exclusively for the purpose of transporting carbon dioxide to the point of sale, 20
storage, or other carbon management applications; 21
(12) "Coal severing and processing" means activities resulting in the eligible company 22
being subject to the tax imposed by KRS Chapter 143; 23
(13) "Commonwealth" means the Commonwealth of Kentucky; 24
(14) "Confirmed approved costs" means: 25
(a) For owned economic development projects, the documented eligible costs 26
incurred on or before the activation date; or 27 UNOFFICIAL COPY 22 RS BR 494
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(b) For leased economic development projects: 1
1. The documented eligible costs incurred on or before the activation date; 2
and 3
2. Estimated rent to be incurred by the approved company throughout the 4
term of the tax incentive agreement. 5
For both owned and leased economic development projects, "confirmed approved 6
costs" may be less than approved costs, but shall not be more than approved costs; 7
(15) "Department" means the Department of Revenue; 8
(16) "Economic development project" means: 9
(a) The acquisition, leasing, or construction of a new facility; 10
(b) The acquisition, leasing, rehabilitation, or expansion of an existing facility; or 11
(c) The installation and equipping of a facility; 12
by an eligible company. "Economic development project" does not include any 13
economic development project that will result in the replacement of facilities 14
existing in the Commonwealth, except as provided in KRS 154.32-060; 15
(17) (a) "Eligible company" means any corporation, limited liability company, 16
partnership, limited partnership, sole proprietorship, business trust, or any 17
other entity with a proposed economic development project that is engaged in 18
or is planning to be engaged in one (1) or more of the following activities 19
within the Commonwealth: 20
1. Manufacturing; 21
2. Agribusiness; 22
3. Nonretail service or technology; 23
4. Headquarters operations, regardless of the underlying business activity 24
of the company; 25
5. Alternative fuel, gasification, energy-efficient alternative fuel, or 26
renewable energy production; 27 UNOFFICIAL COPY 22 RS BR 494
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6. Carbon dioxide transmission pipeline; 1
7. Coal severing and processing; or 2
8. Hospital operations. 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
2. Nonrecurring obligations incurred for labor and nonrecurring payments 12
to contractors, subcontractors, builders, and materialmen in connection 13
with the economic development project; 14
3. The cost of acquiring land or rights in land and any cost incidental 15
thereto, including recording fees; 16
4. The cost of contract bonds and of insurance of all kinds that may be 17
required or necessary for completion of an economic development 18
project which is not paid by a contractor or otherwise provided for; 19
5. All costs of architectural and engineering services, including test 20
borings, surveys, estimated plans and specifications, preliminary 21
investigations, and supervision of construction, as well as for the 22
performance of all the duties required for construction of the economic 23
development project; 24
6. All costs which are required to be paid under the terms of any contract 25
for the economic development project; 26
7. All costs incurred for construction activities, including site tests and 27 UNOFFICIAL COPY 22 RS BR 494
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inspections; subsurface site work; excavation; removal of structures, 1
roadways, cemeteries, and other surface obstructions; filling, grading, 2
and providing drainage and storm water retention; installation of utilities 3
such as water, sewer, sewage treatment, gas, electric, communications, 4
and similar facilities; off-site construction of utility extensions to the 5
boundaries of the real estate; construction and installation of railroad 6
spurs as needed to connect the economic development project to existing 7
railways; or similar activities as the authority may determine necessary 8
for construction of the economic development project; and 9
8. All other costs of a nature comparable to those described above; and 10
(b) For leased economic development projects: 11
1. Start-up costs; 12
2. Building/leasehold improvements; and 13
3. Fifty percent (50%) of the estimated annual rent for each year of the tax 14
incentive agreement. 15
Notwithstanding any other provision of this subsection, for economic development 16
projects that are not in enhanced incentive counties, the cost of equipment eligible 17
for recovery as an eligible cost shall not exceed twenty thousand dollars ($20,000) 18
for each new full-time job created as of the activation date; 19
(19) "Employee benefits" means payments by an approved company for its full-time 20
employees for health insurance, life insurance, dental insurance, vision insurance, 21
defined benefits, 401(k), or similar plans, which shall be equal to at least fifteen 22
percent (15%) of the applicable wage target; 23
(20) "Energy-efficient alternative fuel production" means a Kentucky operation that 24
produces for sale energy-efficient alternative fuels; 25
(21) "Energy-efficient alternative fuels" means homogeneous fuels that: 26
(a) Are produced from processes designed to densify feedstock coal, waste coal, 27 UNOFFICIAL COPY 22 RS BR 494
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or biomass resources; and 1
(b) Have an energy content that is greater than the feedstock coal, waste coal, or 2
biomass resource; 3
(22) "Enhanced incentive counties" means counties certified by the authority pursuant to 4
KRS 154.32-050; 5
(23) "Final approval" means the action taken by the authority authorizing the eligible 6
company to receive incentives under this subchapter; 7
(24) (a) "Full-time job" means a job held by a person who: 8
1. Is required to work a minimum of thirty-five (35) hours per week; and 9
2. a. Is subject to the Kentucky individual income tax imposed by KRS 10
141.020; or 11
b. Works remotely away from the economic development project if 12
the job meets all of the following conditions: 13
i. Is held by a Kentucky resident; 14
ii. Was created as a result of the economic development project; 15
and 16
iii. The payroll of this job is expensed to the economic 17
development project. 18
(b) "Full-time job" does not include a job held by a resident of any state with a 19
reciprocal agreement between the Commonwealth and the other state as 20
described in KRS 141.070; 21
(25) "Gasification process" means a process that converts any carbon-containing material 22
into a synthesis gas composed primarily of carbon monoxide and hydrogen; 23
(26) "Gasification production" means a Kentucky operation that primarily produces for 24
sale: 25
(a) Alternative transportation fuels; 26
(b) Synthetic natural gas; 27 UNOFFICIAL COPY 22 RS BR 494
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(c) Chemicals; 1
(d) Chemical feedstocks; or 2
(e) Liquid fuels; 3
from coal, waste coal, coal-processing waste, or biomass resources, through a 4
gasification process. The gasification production may produce electricity as a by-5
product if the primary function of the operations remains the production and sale of 6
alternative transportation fuels, synthetic natural gas, chemicals, chemical 7
feedstocks, or liquid fuels; 8
(27) "Headquarters" means the principal office where the principal executives of the 9
entity are located and from which other personnel, branches, affiliates, offices, or 10
entities are controlled; 11
(28) "Hospital" means a facility licensed by the Cabinet for Health and Family Services 12
under KRS Chapter 216B for the operation of a hospital and the basic services 13
provided by a hospital; 14
(29) "Incentives" means the incentives available under this subchapter, as listed in KRS 15
154.32-020(3); 16
(30) "Job target" means the annual average number of new full-time jobs that the 17
approved company commits to create and maintain at the economic development 18
project, which shall not be less than ten (10) new full-time jobs; 19
(31) "Kentucky gross receipts" has the same meaning as in KRS 141.0401; 20
(32) "Kentucky gross profits" has the same meaning as in KRS 141.0401; 21
(33) "Lease agreement" means an agreement between an approved company and an 22
unrelated entity conveying the right to use a facility, the terms of which reflect an 23
arms' length transaction. "Lease agreement" does not include a capital lease; 24
(34) "Leased project" means an economic development project site occupied by an 25
approved company pursuant to a lease agreement; 26
(35) "Manufacturing" means any activity involving: 27 UNOFFICIAL COPY 22 RS BR 494
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(a) Processing, assembling, or production of any property, including the 1
processing resulting in a change in the conditions of the property and any 2
activity related to the processing, assembling, or production of property, 3
together with the storage, warehousing, distribution, and related office 4
facilities; or 5
(b) Production of vital medications, personal protective equipment, or equipment 6
necessary to produce personal protective equipment; 7
(36) (a) "Nonretail service or technology" means any activity where service or 8
technology is provided predominantly outside the Commonwealth and 9
designed to serve a multistate, national, or international market. 10
(b) "Nonretail service or technology" includes but is not limited to call centers, 11
centralized administrative or processing centers, telephone or Internet sales 12
order or processing centers, distribution or fulfillment centers, data processing 13
centers, research and development facilities, and other similar activities; 14
(37) "Owned project" means an economic development project owned in fee simple by 15
the approved company or an affiliate, or possessed by the approved company or an 16
affiliate pursuant to a capital lease; 17
(38) "Personal protective equipment" means protective clothing, helmets, gloves, face 18
shields, goggles, face masks, respirators, and other equipment designed to protect 19
the user from injury or the spread of infection or illness; 20
(39) "Preliminary approval" means the action taken by the authority preliminarily 21
approving an eligible company for incentives under this subchapter; 22
(40) "Renewable energy production" means a Kentucky operation that utilizes wind 23
power, biomass resources, landfill methane gas, hydropower, solar power, or other 24
similar renewable resources to generate electricity for sale to unrelated entities; 25
(41) "Rent" means the actual annual rent or fee paid by an approved company under a 26
lease agreement; 27 UNOFFICIAL COPY 22 RS BR 494
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(42) "Start-up costs" means nonrecurring costs incurred to furnish and equip a facility for 1
an economic development project, including costs incurred for: 2
(a) Computers, furnishings, office equipment, manufacturing equipment, and 3
fixtures; 4
(b) The relocation of out-of-state equipment; and 5
(c) Cost of fixed telecommunications equipment; 6
as certified to the authority in accordance with KRS 154.32-030; 7
(43) "Synthetic natural gas" means the same thing as in KRS 152.715; 8
(44) "Tax incentive agreement" means the agreement entered into pursuant to KRS 9
154.32-040 between the authority and an approved company; 10
(45) "Term" means the period of time for which a tax incentive agreement may be in 11
effect, which shall not exceed fifteen (15) years for an economic development 12
project located in an enhanced incentive county, or ten (10) years for an economic 13
development project not located in any other county; 14
(46) "Vital medications" means any drug or biologic used to prevent or treat a serious 15
life-threatening disease or medical condition for which there is no other available 16
source with sufficient supply of that drug or biologic or alternative drug or biologic; 17
(47) "Wage" means the per hour earnings of a full-time employee, including wages, tips, 18
overtime, bonuses, and commissions, as reflected on the employee's federal form 19
W-2 wage and tax statement, but excludes employee benefits; and 20
(48) "Wage target" means the average total hourly compensation amount, including the 21
minimum wage and employee benefits, that the approved company commits to meet 22
for all new full-time jobs created and maintained as a result of the economic 23
development project, which shall be the greater of[not be less than]: 24
(a) Eighty-five percent (85%) of the average hourly wage for the 25
Commonwealth; 26
(b) Eighty-five percent (85%) of the average hourly wage for the county in 27 UNOFFICIAL COPY 22 RS BR 494
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which the project is to be undertaken; 1
(c) One hundred twenty-five percent (125%) of the federal minimum wage in 2
enhanced incentive counties; or 3
(d)[(b)] One hundred fifty percent (150%) of the federal minimum wage in all 4
other counties. 5
Section 4. KRS 154.34-110 is amended to read as follows: 6
(1) The purpose of this subchapter is to provide a means for the Commonwealth to 7
promote job retention by providing incentives for existing businesses to reinvest in 8
existing operations in Kentucky for eligible companies. 9
(2) (a) To qualify for the incentives provided in this subchapter, an approved 10
company shall: 11
1. Incur eligible equipment and related costs of at least one million dollars 12
($1,000,000) for leased projects and at least two million five hundred 13
thousand dollars ($2,500,000) for all other reinvestment projects; 14
2. Agree to maintain a full-time employment base of at least eighty-five 15
percent (85%) at the facility on the date of preliminary approval; and 16
3. Not have been awarded incentives under Subchapter 26 of this chapter 17
for a period of at least five (5) years prior to applying for incentives 18
under this subchapter. 19
(b) An approved company meeting the expenditure and employment retention 20
requirements established by this subsection shall be eligible to recover up to 21
fifty percent (50%) of the amount expended for eligible equipment and related 22
costs. The actual amount that an approved company may recover shall be 23
negotiated with the authority, and may be less than the maximum amount for 24
which the approved company is eligible. 25
(c) The approved company shall compensate a minimum of ninety percent 26
(90%) of its full-time employees whose jobs were created as a result of the 27 UNOFFICIAL COPY 22 RS BR 494
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economic development project, a minimum wage that is the greater of: 1
1. Eighty-five percent (85%) of the average hourly wage for the 2
Commonwealth; 3
2. Eighty-five percent (85%) of the average hourly wage for the county in 4
which the project is to be undertaken; or 5
3. One hundred fifty percent (150%) of the federal minimum wage; 6
throughout the term of the economic development project. 7
(d) In addition to the applicable base hourly wage calculated, the eligible 8
company shall provide employee benefits equal to at least fifteen percent 9
(15%) of the applicable base hourly wage. 10
(3) An approved company shall be eligible for incentives under this subchapter as 11
follows: tax incentives of up to one hundred percent (100%) of the Kentucky 12
income tax imposed under KRS 141.020 or 141.040 and the limited liability entity 13
tax imposed under KRS 141.0401 on the income, Kentucky gross profits, or 14
Kentucky gross receipts of the approved company generated by or arising from the 15
eligible project, as set forth in KRS 154.34-120. 16
(4) The General Assembly finds and declares that: 17
(a) The general welfare and material well-being of the citizens of the 18
Commonwealth depend in large measure upon the reinvestment and 19
development of existing industry in the Commonwealth; 20
(b) It is in the best interest of the Commonwealth to induce reinvestment in 21
existing facilities of eligible companies within the Commonwealth in order to 22
advance the public purposes of relieving unemployment by preserving jobs 23
that may be lost if not for the incentives to be offered by the authority to 24
approved companies, and by preserving and creating sources of tax revenues 25
for the support of public services provided by the Commonwealth; and 26
(c) The authority prescribed by this subchapter and the purposes to be 27 UNOFFICIAL COPY 22 RS BR 494
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accomplished under this subchapter are proper governmental and public 1
purposes for which public moneys may be expended. 2
(5) On or before November 1, 2021, and each November 1 thereafter, the authority 3
shall submit an overview report to the Interim Joint Committee on Appropriations 4
and Revenue and the Governor on the success or failure of each completed project 5
in order to determine the effectiveness of the program. The report shall include but 6
not be limited to the following information: 7
(a) The number of applications receiving preliminary approval during the fiscal 8
year; 9
(b) The number of final approvals issued during the fiscal year; 10
(c) The total amount of eligible equipment and other costs projected by the 11
approved company at preliminary approval; 12
(d) The total amount of eligible equipment and other costs actually incurred by 13
the approved company at final approval; 14
(e) The total number of full time jobs required to be preserved or retained as a 15
result of the reinvestment project; 16
(f) The total actual number of full-time jobs reported by the reinvestment project 17
as being preserved or retained on an annual basis; 18
(g) The maximum approved costs that may be recovered by the approved 19
companies for the reinvestment projects; and 20
(h) The location of the reinvestment projects receiving preliminary and final 21
approval during the fiscal year. 22
Section 5. KRS 154.12-204 is amended to read as follows: 23
As used in KRS 154.12-205 to 154.12-208, unless the context requires otherwise: 24
(1) "Agribusiness" has the same meaning as in KRS 154.32-010; 25
(2) "Alternative fuel production" has the same meaning as in KRS 154.32-010; 26
(3) "Applicant" means a business or industry that has made application for a grant-in-27 UNOFFICIAL COPY 22 RS BR 494
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aid or skills training investment credit as authorized by KRS 154.12-205 to 154.12-1
208; 2
(4) "Approved company" means any qualified company seeking to sponsor an 3
occupational upgrade training program or skills upgrade training program for the 4
benefit of one (1) or more of its employees, which is approved by the corporation to 5
receive grant-in-aid or skills training investment credits as provided by KRS 6
154.12-205 to 154.12-208; 7
(5) "Approved costs" means costs confirmed as eligible by the corporation, including: 8
(a) Fees or salaries required to be paid to instructors who are employees of the 9
approved company, instructors who are full-time, part-time, or adjunct 10
instructors with an educational institution, and instructors who are consultants 11
on contract with an approved company in connection with an occupational 12
upgrade training program or skills upgrade training program sponsored by an 13
approved company; 14
(b) The cost of supplies and materials used exclusively in an occupational 15
upgrade training program or skills upgrade training program sponsored by an 16
approved company; 17
(c) Employee wages to be paid in connection with an occupational upgrade 18
training program or skills upgrade training program sponsored by an approved 19
company; and 20
(d) All other costs of a nature comparable to those described in this subsection; 21
(6) "Board" means the board of directors of the Bluegrass State Skills Corporation; 22
(7) "Carbon dioxide transmission pipeline" has the same meaning as in KRS 154.32-23
010; 24
(8) "Coal severing and processing" has the same meaning as in KRS 154.32-010; 25
(9) "Corporation" means the Bluegrass State Skills Corporation, or BSSC; 26
(10) "Educational institution" means a public or nonpublic secondary or postsecondary 27 UNOFFICIAL COPY 22 RS BR 494
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institution or an independent provider within the Commonwealth authorized by law 1
to provide a program of skills training or education beyond the secondary school 2
level or to adult persons without a high school diploma or its equivalent; 3
(11) "Employee" means any person: 4
(a) Who is currently a permanent full-time employee of the qualified company; 5
(b) Who is a resident of Kentucky, as that term is defined in KRS 141.010; and 6
(c) Who is [paid]compensated with the minimum base hourly wage plus 7
employee benefits equal to or greater than fifteen percent (15%) of the 8
minimum base hourly wage[. If the qualified company does not provide 9
employee benefits equal to at least fifteen percent (15%) of the minimum base 10
hourly wage, the qualified company may still qualify if it provides the full-11
time employee total hourly compensation equal to or greater than one hundred 12
fifteen percent (115%) of the minimum base hourly wage through increased 13
hourly wages combined with at least one (1) company-paid employee benefit]; 14
(12) "Energy-efficient alternative fuel production" has the same meaning as in KRS 15
154.32-010; 16
(13) "Gasification production" has the same meaning as in KRS 154.32-010; 17
(14) "Grant-in-aid" means funding that is provided to qualified companies by the BSSC 18
for the development or expansion of a program as provided in this chapter; 19
(15) "Headquarters" has the same meaning as in KRS 154.32-010; 20
(16) "Hospital" has the same meaning as in KRS 154.32-010; 21
(17) "Manufacturing" has the same meaning as in KRS 154.32-010; 22
(18) "Minimum base hourly wage" means the minimum wage amount paid to an 23
employee by a qualified company, which shall be the greater of: 24
(a) Eighty-five percent (85%) of the average hourly wage for the 25
Commonwealth; 26
(b) Eighty-five percent (85%) of the average hourly wage for the county in 27 UNOFFICIAL COPY 22 RS BR 494
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which the project is to be undertaken; or 1
(c) [not be less than ]One hundred fifty percent (150%) of the federal minimum 2
wage; 3
throughout the term of the economic development project; 4
(19) "Nonretail service or technology" means the same as in KRS 154.32-010; 5
(20) "Occupational upgrade training" means employee training sponsored by a qualified 6
company that is designed to qualify the employee for a promotional opportunity 7
with the qualified company; 8
(21) "Program" or "program of skills training or education consistent with employment 9
needs" means a coordinated course of instruction which is designed to prepare 10
individuals for employment in a specific trade, occupation, or profession. Such 11
instruction may include: 12
(a) Classroom instruction; 13
(b) Classroom-related field, shop, factory, office, or laboratory work; and 14
(c) Basic skills, entry level training, job upgrading, retraining, and advance 15
training; 16
(22) (a) "Qualified company" means any corporation, limited liability company, 17
partnership, limited partnership, sole proprietorship, business trust, or any 18
other legal entity through which business is conducted that is engaged in or is 19
planning to be engaged in one (1) or more of the following activities within 20
the Commonwealth: 21
1. Manufacturing; 22
2. Agribusiness; 23
3. Nonretail service or technology; 24
4. Headquarter operations, regardless of the underlying business activity of 25
the company; 26
5. Alternative fuel, gasification, energy-efficient alternative fuel, or 27 UNOFFICIAL COPY 22 RS BR 494
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renewable energy production; 1
6. Carbon dioxide transmission pipeline; 2
7. Coal severing and processing; or 3
8. Hospital operations. 4
(b) "Qualified company" does not include companies where the primary activity 5
to be conducted within the Commonwealth is forestry, fishing, the provision 6
of utilities, construction, wholesale trade, retail trade, real estate, rental and 7
leasing, accommodation and food services, or public administration services; 8
(23) "Renewable energy production" means the same as in KRS 154.32-010; 9
(24) "Skills upgrade training" means employee training sponsored by a qualified 10
company that is designed to provide the employee with new skills necessary to 11
enhance productivity, improve performance, or retain employment, including but 12
not limited to technical and interpersonal skills, and training that is designed to 13
enhance computer skills, communication skills, problem solving, reading, writing, 14
or math skills of employees who are unable to function effectively on the job due to 15
deficiencies in these areas, are unable to advance on the job, or who risk 16
displacement because their skill deficiencies inhibit their training potential for new 17
technology; 18
(25) "Skills training investment credit" means the credit against Kentucky income tax 19
imposed by KRS 141.020 or 141.040, and the limited liability entity tax imposed by 20
KRS 141.0401, as provided in this subchapter; and 21
(26) "Technical assistance" means professional and any other assistance provided by 22
qualified companies to an educational institution, which is reasonably calculated to 23
support directly the development and expansion of a particular program as defined 24
herein. 25
Section 6. KRS 154.60-020 is amended to read as follows: 26
(1) The authority shall develop a Small Business Development Credit Program in 27 UNOFFICIAL COPY 22 RS BR 494
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consultation with the Office of Entrepreneurship and Small Business Innovation to 1
assist new or existing small businesses operating in the Commonwealth. The 2
nonrefundable credit shall be allowed against the taxes imposed by KRS 141.020 or 3
141.040, and 141.0401. The ordering of credits shall be as provided in KRS 4
141.0205. 5
(2) The authority shall determine the terms, conditions, and requirements for 6
application for the credit, in consultation with the Office of Entrepreneurship and 7
Small Business Innovation, subject to the provisions of subsection (3) of this 8
section. The application shall contain identification information about the number 9
of eligible positions created and filled, a calculation of the base employment of the 10
small business, verification of investment of five thousand dollars ($5,000) or more 11
in qualifying equipment or technology, and other information the authority may 12
specify to determine eligibility for the credit. 13
(3) (a) The maximum amount of credits that may be committed in each fiscal year by 14
the authority and shared between the small business tax credit program and 15
the Selling Farmer Tax Credit Program shall be capped at three million dollars 16
($3,000,000). 17
(b) In order to be eligible to receive final approval for a credit, a small business 18
shall, within the twenty-four (24) month period immediately preceding the 19
application submission date: 20
1. Create and fill one (1) or more eligible positions over the base 21
employment; and 22
2. Invest five thousand dollars ($5,000) or more in qualifying equipment or 23
technology. 24
(c) Each eligible position that is created and filled shall be maintained for twelve 25
(12) months. If a full-time employee filling a newly created eligible position 26
ceases to be employed by the small business for any reason, that employee 27 UNOFFICIAL COPY 22 RS BR 494
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shall be replaced within forty-five (45) days in order for the eligible position 1
to maintain its eligible status, in addition to meeting all other applicable 2
requirements. 3
(d) Within six (6) months after the activation date, the approved company shall 4
pay at least ninety percent (90%) of all new full-time employees whose jobs 5
were created as a result of the economic development project a minimum 6
wage that is the greater of: 7
1. Eighty-five percent (85%) of the average hourly wage for the 8
Commonwealth; 9
2. Eighty-five percent (85%) of the average hourly wage for the county in 10
which the project is to be undertaken; or 11
3. One hundred fifty percent (150%) of the federal minimum wage; 12
throughout the term of the economic development project. 13
(e) In addition to the applicable base hourly wage calculated, the eligible 14
company shall provide employee benefits equal to at least fifteen percent 15
(15%) of the applicable base hourly wage. 16
(f) The small business shall submit all information necessary for the authority to 17
determine credit eligibility for each year, and the amount of credit for which 18
the small business is eligible. 19
(g)[(e)] The maximum amount of credit for each small business for each year 20
shall not exceed twenty-five thousand dollars ($25,000). 21
(h)[(f)] The credit shall be claimed on the tax return for the year during which 22
the credit was approved. Unused credits may be carried forward for up to five 23
(5) years. 24
Section 7. KRS 154.28-080 is amended to read as follows: 25
(1) The authority shall promulgate standards for the determination and approval of 26
eligible companies and their economic development projects in accordance with 27 UNOFFICIAL COPY 22 RS BR 494
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KRS Chapter 13A. 1
(2) The standards for approval of eligible companies and economic development 2
projects shall include but not be limited to: the creditworthiness of eligible 3
companies; the number of new jobs to be provided by an economic development 4
project to the residents of the Commonwealth; and the likelihood of the economic 5
success of the economic development project. 6
(3) The economic development project shall involve a minimum investment of one 7
hundred thousand dollars ($100,000) by the eligible company and shall result in the 8
creation by the eligible company, within two (2) years from the date of the final 9
resolution authorizing the economic development project, of a minimum of fifteen 10
(15) new full-time jobs at the site of the economic development projects for 11
Kentucky residents to be employed by the eligible company and to be held by 12
persons subject to the personal income tax of the Commonwealth. The authority 13
may extend this two (2) year period upon the written application of an eligible 14
company requesting an extension. 15
(4) (a) Within six (6) months after the activation date, the approved company shall 16
compensate a minimum of ninety percent (90%) of its full-time employees 17
whose jobs were created as a result of the economic development project a 18
minimum wage that is the greater of[with base hourly wages equal to either]: 19
1. Eighty-five percent (85%)[Seventy-five percent (75%)] of the average 20
hourly wage for the Commonwealth;[ or] 21
2. Eighty-five percent (85%)[Seventy-five percent (75%)] of the average 22
hourly wage for the county in which the project is to be undertaken; or 23
3. One hundred fifty percent (150%) of the federal minimum wage; 24
throughout the term of the economic development project. 25
(b) [If the base hourly wage calculated in paragraph (a)1. or 2. of this subsection 26
is less than one hundred fifty percent (150%) of the federal minimum wage, 27 UNOFFICIAL COPY 22 RS BR 494
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then the base hourly wage shall be one hundred fifty percent (150%) of the 1
federal minimum wage. However, for projects receiving preliminary approval 2
of the authority prior to July 1, 2008, the base hourly wage shall be one 3
hundred fifty percent (150%) of the federal minimum wage existing on 4
January 1, 2007. ]In addition to the applicable base hourly wage calculated 5
above, the eligible company shall provide employee benefits equal to at least 6
fifteen percent (15%) of the applicable base hourly wage[; however, if the 7
eligible company does not provide employee benefits equal to at least fifteen 8
percent (15%) of the applicable base hourly wage, the eligible company may 9
qualify under this section if it provides the employees hired by the eligible 10
company as a result of the economic development project total hourly 11
compensation equal to or greater than one hundred fifteen percent (115%) of 12
the applicable base hourly wage through increased hourly wages combined 13
with employee benefits]. 14
(5) No economic development project which will result in the replacement of a 15
manufacturing or agribusiness facility existing within the Commonwealth shall be 16
approved by the authority; however, the authority may approve an economic 17
development project that: 18
(a) Rehabilitates a manufacturing or agribusiness facility: 19
1. Which has not been in operation for a period of ninety (90) or more 20
consecutive days; 21
2. For which the current occupant of the facility has published a notice of 22
closure so long as the eligible company intending to acquire the facility 23
is not an affiliate of the current occupant; or 24
3. To which the title is vested in other than the eligible company or an 25
affiliate of the eligible company and that is sold or transferred pursuant 26
to a foreclosure ordered by a court of competent jurisdiction or an order 27 UNOFFICIAL COPY 22 RS BR 494
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of a bankruptcy court of competent jurisdiction; 1
(b) Replaces a manufacturing or agribusiness facility existing in the 2
Commonwealth: 3
1. To which the title shall have been taken under the exercise of the power 4
of eminent domain, or to which the title shall be the subject of a 5
nonappealable judgment granting the authority to exercise the power of 6
eminent domain, in either event to the extent that normal operations 7
cannot be resumed at the facility within twelve (12) months; or 8
2. Which has been damaged or destroyed by fire or other casualty to the 9
extent that normal operations cannot be resumed at the facility within 10
twelve (12) months; or 11
(c) Replaces an existing manufacturing or agribusiness facility located in the 12
same county that cannot be expanded due to the unavailability of real estate at 13
or adjacent to the manufacturing or agribusiness facility to be replaced. Any 14
economic development project satisfying the requirements of this subsection 15
shall be eligible only for inducements to the extent of the expansion, and no 16
inducements shall be available for the equivalent of the manufacturing or 17
agribusiness facility to be replaced. No economic development project 18
otherwise satisfying the requirements of this subsection shall be approved by 19
the authority that results in a lease abandonment or lease termination by the 20
eligible company without the consent of the lessor. 21
(6) With respect to each eligible company making an application to the authority for 22
inducements, and with respect to these economic development projects described in 23
the application which do not involve an expansion, the authority shall make 24
inquiries and request materials of the applicant, including but not limited to written 25
evidence that except for the receipt of inducements authorized by KRS 154.28-015 26
to 154.28-090 and KRS 141.400, the eligible company will not locate its economic 27 UNOFFICIAL COPY 22 RS BR 494
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development project within the Commonwealth. Upon the review of the application 1
and completion of initial inquiries, the authority may, by resolution, give its 2
preliminary approval by designating an eligible company as a preliminarily 3
approved company and authorizing the undertaking of the economic development 4
project. 5
(7) After a diligent review of the relevant materials and completion of its inquiries, the 6
authority, by resolution of its board of directors, may designate an eligible company 7
to be an approved company. 8
(8) All meetings of the board of directors of the authority shall be held in accordance 9
with KRS 61.805 to 61.850. The board of directors of the authority may, pursuant to 10
KRS 61.815, hold closed sessions of its meetings to discuss matters exempt from 11
the open meetings law and pertaining to an eligible company. 12
Section 8. KRS 154.23-025 is amended to read as follows: 13
(1) Relevant standards for approval of eligible companies and economic development 14
projects shall include but are not limited to creditworthiness of the eligible 15
company, the number of new jobs to be provided by a project to Kentucky residents, 16
and the likelihood that the project will be an economic success. 17
(2) An eligible company shall certify to the authority by written application that it 18
makes the following commitments in an economic development project: 19
(a) A minimum investment of one hundred thousand dollars ($100,000) in the 20
project; 21
(b) Creation of a minimum of ten (10) new full-time jobs at the project site for 22
qualified employees by the activation date, as set forth in KRS 154.23-035 or 23
154.23-040; 24
(c) A statement that no significant number of existing jobs in the Commonwealth 25
will be lost or adversely affected due to approval of the eligible company and 26
its economic development project; and 27 UNOFFICIAL COPY 22 RS BR 494
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(d) A statement that the economic development project could reasonably and 1
efficiently locate outside the qualified zone and, without the inducements 2
offered by the authority, the eligible company would likely locate outside the 3
zone. 4
(3) (a) No project that will result in the replacement of an existing manufacturing or 5
service or technology facility existing in the Commonwealth shall be 6
approved by the authority; however, the authority may approve a project if the 7
project is one: 8
1. a. That rehabilitates a manufacturing or service or technology facility 9
that has not been in operation; 10
b. For which the current occupant of the facility has published a 11
notice of closure so long as the eligible company intending to 12
acquire the facility is not an affiliate of the current occupant; or 13
c. To which the title is vested in one other than the eligible company 14
and that is sold or transferred under a foreclosure ordered by a 15
court of competent jurisdiction or by order of bankruptcy court; 16
2. Replaces a manufacturing or service or technology facility existing in 17
the Commonwealth that been damaged or destroyed by fire, or the title 18
to which shall have been taken under the exercise of the power of 19
eminent domain or is the subject of a nonappealable judgment that 20
grants the power of eminent domain to the authority, in any of these 21
events to the extent that normal operations cannot be resumed at the 22
facility within twelve (12) months; or 23
3. Replaces an existing manufacturing or service or technology facility 24
located in the same qualified zone that cannot be expanded due to the 25
lack of available real estate at or adjacent to the manufacturing or 26
service or technology facility to be replaced. Any economic 27 UNOFFICIAL COPY 22 RS BR 494
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development project satisfying the requirements of this paragraph shall 1
only be eligible for inducements to the extent of the expansion, and no 2
inducements shall be available for the equivalent of the manufacturing 3
or service or technology facility to be replaced. 4
(b) No economic development project otherwise satisfying the requirements of 5
paragraph (a) of this subsection shall be approved by the authority that results 6
in a lease abandonment or lease termination by the approved company without 7
the consent of the lessor. 8
(4) (a) Within six (6) months after the activation date, the approved company shall 9
compensate a minimum of ninety percent (90%) of its full-time employees 10
whose jobs were created with base hourly [wages]wage that is the greater of 11
[equal to either]: 12
1. Eighty-five percent (85%)[Seventy-five percent (75%)] of the average 13
hourly wage for the Commonwealth;[ or] 14
2. Eighty-five percent (85%)[Seventy-five percent (75%)] of the average 15
hourly wage for the county in which the project is to be undertaken; or 16
3. One hundred fifty percent (150%) of the federal minimum wage; 17
throughout the term of the economic development project. 18
(b) [If the base hourly wage calculated in paragraph (a)1. or 2. of this subsection 19
is less than one hundred fifty percent (150%) of the federal minimum wage, 20
then the base hourly wage shall be one hundred fifty percent (150%) of the 21
federal minimum wage. However, for projects receiving preliminary approval 22
of the authority prior to July 1, 2008, the base hourly wage shall be one 23
hundred fifty percent (150%) of the federal minimum wage existing on 24
January 1, 2007. ]In addition to the applicable base hourly wage calculated 25
above, the eligible company shall provide employee benefits equal to at least 26
fifteen percent (15%) of the applicable base hourly wage[; however, if the 27 UNOFFICIAL COPY 22 RS BR 494
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eligible company does not provide employee benefits equal to at least fifteen 1
percent (15%) of the applicable base hourly wage, the eligible company may 2
qualify under this section if it provides the employees hired by the eligible 3
company as a result of the economic development project total hourly 4
compensation equal to or greater than one hundred fifteen percent (115%) of 5
the applicable base hourly wage through increased hourly wages combined 6
with employee benefits]. 7
Section 9. KRS 154.24-090 is amended to read as follows: 8
The authority shall promulgate administrative regulations in accordance with KRS 9
Chapter 13A, regarding the approval of eligible companies and economic development 10
projects conducted by those companies. The criteria for approval of eligible companies 11
and economic development projects shall include but not be limited to the following 12
criteria: 13
(1) A determination by the authority that more than seventy-five percent (75%) of 14
services provided by the eligible company from the proposed project shall be 15
provided for persons located outside the Commonwealth during each year of the 16
period during which it receives inducements as authorized in KRS 154.24-110; 17
(2) The economic development project shall result in the creation by the eligible 18
company of a minimum of fifteen (15) new full-time jobs for Kentucky residents to 19
be employed by the eligible company and to be held by persons subject to the 20
personal income tax of the Commonwealth at the activation date set forth in the 21
company's service and technology agreement as described in KRS 154.24-120. The 22
activation date shall occur within two (2) years after the date of the final resolution 23
authorizing the economic development project. The authority may extend the period 24
for compliance with this subsection up to one (1) year from the activation date upon 25
the written application of an eligible company requesting an extension; 26
(3) (a) Within six (6) months after the activation date, the approved company shall 27 UNOFFICIAL COPY 22 RS BR 494
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compensate a minimum of ninety percent (90%) of its full-time employees 1
whose jobs were created with base hourly [wages ]wage that is the greater 2
of[equal to either]: 3
1. Eighty-five percent (85%)[Seventy-five percent (75%)] of the average 4
hourly wage for the Commonwealth;[ or] 5
2. Eighty-five percent (85%)[Seventy-five percent (75%)] of the average 6
hourly wage for the county in which the project is to be undertaken; or 7
3. One hundred fifty percent (150%) of the federal minimum wage; 8
throughout the term of the economic development project. 9
[(b) If the base hourly wage calculated in paragraph (a)1. or 2. of this subsection is 10
less than one hundred fifty percent (150%) of the federal minimum wage, then 11
the base hourly wage shall be one hundred fifty percent (150%) of the federal 12
minimum wage. However, for projects receiving preliminary approval of the 13
authority prior to July 1, 2008, the base hourly wage shall be one hundred fifty 14
percent (150%) of the federal minimum wage existing on January 1, 2007.] 15
(b)[(c)] In addition to the base hourly wages, the eligible company shall provide 16
employee benefits equal to at least fifteen percent (15%) of the applicable base 17
hourly wages;[ however, if the eligible company does not provide employee 18
benefits equal to at least fifteen percent (15%) of the applicable base hourly 19
wages, the eligible company may qualify under this section if it provides the 20
employees hired by the eligible company as a result of the economic 21
development project total hourly compensation equal to or greater than one 22
hundred fifteen percent (115%) of the applicable base hourly wages through 23
increased hourly wages combined with employee benefits;] 24
(4) If an eligible company receives approval from the authority before July 1, 2008, and 25
locates an economic development project on property that adjoins one (1) of the five 26
(5) regional postsecondary education centers operated and occupied in cooperation 27 UNOFFICIAL COPY 22 RS BR 494
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with the Kentucky Community and Technical College System, or operated and 1
occupied under the combined efforts of the Kentucky Community and Technical 2
College System and a public four (4) year comprehensive university, the eligible 3
company may alternatively satisfy the requirements of subsection (3) of this section 4
in the following manner: 5
[(a) Within six (6) months after the activation date, the approved company shall 6
compensate a minimum of ninety percent (90%) of its full-time employees 7
whose jobs were created as a result of the project with total of base hourly 8
wages plus employee benefits equal to or greater than two hundred percent 9
(200%) of the federal minimum wage, providing that base hourly wages shall 10
be greater than or equal to one hundred fifty percent (150%) of the federal 11
minimum wage;] 12
(a)[(b)] The eligible company shall provide to the authority a statement 13
certifying that the eligible company will seek to provide full-time or part-time 14
employment opportunities for nontraditional students who are enrolled or seek 15
to be enrolled at a regional postsecondary education center; and 16
(b)[(c)] The director of the regional postsecondary education center shall provide 17
to the authority a statement asserting that the eligible company is likely to 18
provide appropriate employment opportunities for students and that the 19
economic development project may be reasonably expected to provide 20
meaningful opportunities for technological and infrastructural enhancements; 21
(5) Written evidence that: 22
(a) Approval of the economic development project and the resulting inducements 23
to be offered are essential to the creation of new jobs in the Commonwealth 24
by an eligible company in connection with its economic development project; 25
and 26
(b) No significant number of existing jobs in the Commonwealth will be lost, or 27 UNOFFICIAL COPY 22 RS BR 494
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adversely affected, due to the designation of an eligible company as an 1
approved company, and to the approval of the eligible company's economic 2
development project; and 3
(6) That the economic development project could reasonably and efficiently locate 4
outside of the Commonwealth and, without the inducements offered by the 5
authority, the eligible company would likely locate outside the state. 6
Section 10. Sections 1 through 9 of this Act shall apply to any economic 7
development incentives that have not received final approval prior to the effective date of 8
this Act. 9