Page 1 of 2 LRC 2022-BR1350-HB308
COMMONWEALTH OF KENTUCKY FISCAL NOTE STATEMENT
LEGISLATIVE RESEARCH COMMISSION
2022 R EGULAR SESSION
MEASURE
2022 BR NUMBER 1350 HOUSE BILL NUMBER 308
TITLE AN ACT relating to the establishment of a tax credit to promote investments in Kentucky
businesses.
SPONSOR Representative Richard Heath
FISCAL SUMMARY
STATE FISCAL IMPACT: YES NO UNCERTAIN
OTHER FISCAL STATEMENT (S) THAT MAY APPLY: ACTUARIAL ANALYSIS
LOCAL MANDATE CORRECTIONS IMPACT HEALTH BENEFIT MANDATE
APPROPRIATION UNIT(S) IMPACTED:
FUND(S) IMPACTED: GENERAL ROAD FEDERAL RESTRICTED
FISCAL ESTIMATES 2021-2022 2022-2023 2023-2024 ANNUAL IMPACT AT FULL
IMPLEMENTATION
REVENUES ($15,000,000)
EXPENDITURES
NET EFFECT ($15,000,000)
( ) indicates a decrease/negative
PURPOSE OF MEASURE: The purpose of HB 308 is to encourage investment in a growth
zone, which means (1) a rural county having a population of less than 50,000; (2) an
underemployment zone having a labor force participation rate below the national average; or (3)
an opportunity zone as defined for federal purposes. Insurance companies that make an
investment contribution to a growth fund are issued a tax credit certificate and may claim a tax
credit against the insurance premiums taxes imposed under KRS Chapter 136.
FISCAL EXPLANATION : Beginning October 1, 2022, a growth fund shall make application
to the Department of Revenue for approval of the investment authority and business plan for
investment in a growth zone. The department shall not approve initial investment authority that
would allow more than $15 million in tax credits to be taken in any one year. Additionally, the
department shall not issue approval for any amount of investment authority, on or after October
1, 2023.
Upon approval of the application, the department shall issue a written approval to the growth
fund and tax credit certificate to each investor. The growth fund will have two years to invest
100% of its investment authority, with at least 75% of its investment authority in growth
businesses located in rural counties. Page 2 of 2 LRC 2022-BR1350-HB308
The investor may claim no more than 20% of the credit in each of the years that include the
second, third, fourth, fifth, and sixth anniversaries of the growth fund collecting all investment
amounts.
Because of this delayed time for claiming the tax credit, there would be no fiscal impact in the
current or upcoming biennium. At full implementation, the tax credit for any year cannot exceed
$15 million. This maximum tax credit would be allowed for six years, totaling $75 million over
the life of the growth fund.
DATA SOURCE(S): LRC staff
PREPARER: Jennifer Hays NOTE NUMBER: 39 REVIEW: JAB DATE: 2/9/2022