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AN ACT relating to economic development. 1
Be it enacted by the General Assembly of the Commonwealth of Kentucky: 2
SECTION 1. SUBCHAPTER 21 OF KRS CHAPTER 154 IS ESTABLISHED, 3
AND A NEW SECTION THEREOF IS CREATED TO READ AS FOLLOWS: 4
The General Assembly finds and declares that the purpose of Sections 1 to 7 of this Act 5
is to support economic development and job growth across this Commonwealth. In 6
enacting this legislation, it is the intention of the General Assembly to enable the 7
Cabinet for Economic Development to enter into a partnership with the Kentucky 8
Association for Economic Development for the purposes of this program, herein 9
known as the Kentucky Product Development Initiative, and to administer program 10
funds to achieve this purpose. 11
SECTION 2. A NEW SECTION OF SUBCHAPTER 21 OF KRS CHAPTER 12
154 IS CREATED TO READ AS FOLLOWS: 13
As used in Sections 1 to 7 of this Act: 14
(1) "Cabinet" means the Cabinet for Economic Development; 15
(2) "Eligible grant recipient" means a grant applicant that is a local government or 16
an economic development authority in an economic development district in this 17
Commonwealth that is engaged in an eligible project; 18
(3) "Eligible project" means an economic development project that is initiated on 19
publicly owned property or on property with a letter of intent or sale agreement 20
for the sale to an eligible grant recipient with available matching funds for the 21
project on a dollar-for-dollar basis, and that satisfies the evaluation criteria in 22
Section 6 of this Act; 23
(4) "Eligible use" means the authorized purpose for which an awarded grant may be 24
used depending on the source of funds from the Commonwealth. "Eligible use" 25
may include but is not limited to expenditure in any of the following categories or 26
some combination thereof: 27 UNOFFICIAL COPY 22 RS HB 745/EN
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(a) Due diligence study; 1
(b) Property acquisition; 2
(c) Infrastructure extension or improvement; 3
(d) Site preparation work; or 4
(e) Road improvement; and 5
(5) "Regional project" means an eligible project that is proposed by eligible grant 6
recipients residing in different counties in this Commonwealth who submit a 7
single grant application as co-applicants. 8
SECTION 3. A NEW SECTION OF SUBCHAPTER 21 OF KRS CHAPTER 9
154 IS CREATED TO READ AS FOLLOWS: 10
(1) The Kentucky Product Development Initiative is hereby established under the 11
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 but is not limited to the following: 14
(a) Creating and making available a standardized grant application and 15
regional grant application; 16
(b) Developing a standardized scoring system pursuant to Section 7 of this Act; 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 21
eligible project prior to prioritizing and recommending the eligible grant 22
recipient and eligible project to the cabinet; and 23
(f) Awarding grants to selected eligible grant recipients in two (2) rounds of 24
funding. 25
(2) Upon receipt of eligible grant recipients and eligible project recommendations 26
and prioritization from the Kentucky Association for Economic Development and 27 UNOFFICIAL COPY 22 RS HB 745/EN
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the third-party independent site selection consultant, the cabinet shall verify and 1
process the eligible grant recipients and eligible project recommendations with 2
the intent to approve and award grants matching the selected grant recipient's 3
contribution to its eligible project on a dollar-for-dollar basis, under the 4
economic development fund program pursuant to KRS 154.12-100, up to ten 5
percent (10%) of the total funds appropriated to the Kentucky Product 6
Development Initiative by the General Assembly. 7
(3) (a) Prior to the first round of grant awards, the cabinet shall allocate a 8
percentage of the total funds appropriated to this program by the General 9
Assembly to each county in the Commonwealth. When awarding grants in 10
the first round of funding, the cabinet shall not award grants to an eligible 11
grant recipient or a group of eligible grant recipients in excess of the 12
amount allocated to the county in which it or they are located, except when 13
pooled pursuant to subsection (4) of this section. The allocation shall be 14
made according to the following calculations: 15
1. For all counties except Jefferson County, the percentage of the fund 16
each county is eligible to receive shall be the percentage of the state 17
population that the county's total population makes up, then 18
multiplied by two (2); and 19
2. For Jefferson County, the percentage of the fund it shall be eligible to 20
receive is the percentage of the state population that Jefferson 21
County's total population makes up. 22
(b) If there are funds available after the first round of grant awards, the cabinet 23
shall initiate a second round of grant awards through the Kentucky Product 24
Development Initiative. Any remaining funds available for program use 25
shall be pooled and available to eligible grant recipients from all counties 26
on a first-come, first-served basis, but each county's eligible allocation shall 27 UNOFFICIAL COPY 22 RS HB 745/EN
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not exceed two million dollars ($2,000,000) except as permitted by 1
subsection (4) of this section. 2
(4) For selected eligible grant recipients that are involved in a regional project, the 3
cabinet may pool the potential allocation of funds available for each county 4
represented by the eligible grant recipients for the grant amount awarded. For 5
example, if a county that is eligible for up to ten percent (10%) of the program 6
funds based on the calculations in subsection (3) of this section partners with a 7
county that is eligible for five percent (5%) of the program funds based on the 8
calculations in subsection (3) of this section, then the total allocation for the 9
regional project that the cabinet may award is fifteen percent (15%). 10
(5) Grant applicants located in a county that participates in the Rural Project 11
Development Initiative shall be disqualified from participation in the Kentucky 12
Product Development Initiative. 13
SECTION 4. A NEW SECTION OF SUBCHAPTER 21 OF KRS CHAPTER 14
154 IS CREATED TO READ AS FOLLOWS: 15
(1) (a) To participate in the Kentucky Product Development Initiative, grant 16
applicants shall submit an application to the Kentucky Association for 17
Economic Development that will be received by or shared with the third-18
party independent site selection consultant for review; and 19
(b) Grant applicants wishing to engage in a regional project shall submit a 20
single application to the Kentucky Association for Economic Development 21
that will be received by or shared with the third-party independent site 22
selection consultant for review. 23
(2) If a grant applicant is selected as an eligible grant recipient approved under the 24
economic development fund program, it shall comply with any incentive 25
agreements and reporting requirements deemed necessary by the cabinet to verify 26
that the awarded grant goes toward an eligible use. 27 UNOFFICIAL COPY 22 RS HB 745/EN
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(3) If the selected grant recipient fails to comply with subsection (2) of this section or 1
uses the awarded grant money for any purpose other than an eligible use, the 2
selected eligible grant recipient shall forfeit and be liable to the cabinet for the 3
full award amount. 4
SECTION 5. A NEW SECTION OF SUBCHAPTER 21 OF KRS CHAPTER 5
154 IS CREATED TO READ AS FOLLOWS: 6
(1) In the implementation of the Kentucky Product Development Initiative, the 7
Kentucky Association for Economic Development shall: 8
(a) Process the grant applications; 9
(b) Determine whether a grant applicant is an eligible grant recipient and 10
seeking a grant for an eligible project; 11
(c) Evaluate the project site cited or proposed by each grant applicant in 12
accordance with the program's evaluation model described in Section 7 of 13
this Act and based on the criteria recommended by the third-party 14
independent site selection consultant; 15
(d) Score each grant applicant's project pursuant to the scoring system 16
described in Section 7 of this Act; 17
(e) Rank the grant applicants: 18
1. In a manner that prioritizes the greatest return on investment, 19
workforce creation, and relative positive impact on the community; 20
and 21
2. Based on the project site evaluation and subsequent project score 22
described in Sections 6 and 7 of this Act; 23
(f) Compile a list of proposed grant recipients whose eligible project 24
demonstrates a high level of investment potential if a grant is made, as 25
revealed by the evaluation, scoring, and ranking process described in this 26
section and Sections 6 and 7 of this Act; 27 UNOFFICIAL COPY 22 RS HB 745/EN
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(g) Submit the proposed grant recipients and their prioritization to the cabinet 1
for final selection of the grant recipients; 2
(h) Provide detailed feedback to all grant applicants after the project site 3
evaluation and project score are completed; and 4
(i) Compile an annual report for the cabinet conveying the following 5
information about the program: 6
1. A list of all program applicants; 7
2. The identity of applicants who were not selected for recommendation; 8
3. Trends found in feedback given to applicants who were not selected 9
for recommendation; 10
4. Eligible uses of the properties cited in the grant applications; and 11
5. Any other information requested by the cabinet. 12
(2) The Kentucky Association for Economic Development shall contract with a third-13
party independent site selection consultant to assist with the grant applicant site 14
evaluations, scoring, prioritization, and recommendations described in this 15
section and Sections 6 and 7 of this Act. 16
SECTION 6. A NEW SECTION OF SUBCHAPTER 21 OF KRS CHAPTER 17
154 IS CREATED TO READ AS FOLLOWS: 18
(1) The Kentucky Association for Economic Development shall evaluate each 19
applicant's eligible project according to the criteria described in this section and 20
Section 7 of this Act for the purposes of compiling a recommendation and score 21
for the eligible project and project site pursuant to Section 7 of this Act. 22
(2) The Kentucky Association for Economic Development and the third-party 23
independent site selection consultant shall consider the requirements in the 24
following five (5) categories in the evaluation of proposed projects: 25
(a) Property availability as described in subsection (3) of this section; 26
(b) Property development ability as described in subsection (4) of this section; 27 UNOFFICIAL COPY 22 RS HB 745/EN
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(c) Zoning availability as described in subsection (5) of this section; 1
(d) Transportation accessibility as described in subsection (6) of this section; 2
and 3
(e) Utility adequacy as described in subsection (7) of this section. 4
(3) The property that the eligible project occupies or is proposed to occupy shall be 5
available. Property shall be deemed available for the purposes of this program if 6
the property is: 7
(a) Publicly owned; or 8
(b) Property with a letter of intent or sale agreement for the sale to an eligible 9
grant recipient. 10
(4) The property that the eligible project occupies or is proposed to occupy shall be 11
developable. Property shall be deemed developable if: 12
(a) The acreage intended for development is clearly defined by either: 13
1. The grant applicant; or 14
2. An engineering partner during or after a site visit, if the applicant is 15
unable to define the developable acreage; and 16
(b) The property is free of impediments to development, or a known impediment 17
can be mitigated by a grant applicant. A property is free of impediments if 18
it: 19
1. Is located outside of the one hundred (100) year and five hundred 20
(500) year flood zone; 21
2. Is free of recognized environmental conditions; 22
3. Is free of wetlands; 23
4. Is free of state and federally threatened and endangered species; 24
5. Is free of areas of archaeological or historical significance; and 25
6. Possesses soils compatible with the grant applicant's intended 26
development. 27 UNOFFICIAL COPY 22 RS HB 745/EN
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(5) The property that the eligible project occupies or is proposed to occupy shall be 1
appropriately zoned for the intended use or shall be able to be rezoned within 2
ninety (90) calendar days. The properties surrounding the grant applicant's 3
project site shall be zoned so they are compatible with the grant applicant's 4
intended development and use of the project site. 5
(6) The property that the eligible project occupies or is proposed to occupy shall be 6
directly served by a road or roads that are compatible with the intended use of the 7
property. Additionally, if the property is marketed as rail-served, the property 8
shall be deemed rail-served if: 9
(a) The grant applicant provides documentation from the rail provider that 10
evinces that rail infrastructure exists and the rail provider actually provides 11
rail service; or 12
(b) If the rail service does not exist at the time of the grant application, the 13
grant applicant provides documentation from the rail provider that evinces 14
that the project site will be able to be rail-served within twelve (12) months. 15
(7) The property that the eligible project occupies or is proposed to occupy shall have 16
access to adequate utilities and shall be served or able to be served by the 17
following: 18
(a) Electric infrastructure; 19
(b) Natural gas; 20
(c) Water infrastructure and a public water system; 21
(d) Wastewater infrastructure and a public wastewater treatment plant, 22
excluding a septic wastewater treatment system; and 23
(e) Fiber telecommunications infrastructure. 24
SECTION 7. A NEW SECTION OF SUBCHAPTER 21 OF KRS CHAPTER 25
154 IS CREATED TO READ AS FOLLOWS: 26
(1) In the administration of the Kentucky Product Development Initiative, the 27 UNOFFICIAL COPY 22 RS HB 745/EN
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Kentucky Association for Economic Development, via a third-party independent 1
site selection consultant, shall develop a scoring system for the project and the 2
project site proposed by each grant applicant based on the total projected return 3
on investment, key workforce characteristics, and the relative positive impact in 4
the community. 5
(2) The scoring system shall include: 6
(a) A score in each category as specified in subsection (3) of this section; and 7
(b) A total weighted score, which is the average of the scores in each category. 8
(3) The scoring categories shall include but are not limited to: 9
(a) Projected return on investment the project will yield, which includes an 10
assessment of the: 11
1. Likelihood of project completion at the applicant's proposed site, both 12
with the cabinet's funding and without; 13
2. Projected gross economic impact of the proposed project on the 14
community; 15
3. Projected number of jobs created by the proposed project and 16
subsequent impact on the community; and 17
4. A determination of the cost of the job based on the cost expended by 18
the cabinet if it awards the requested grant amount to the applicant; 19
(b) Key workforce characteristics, including an assessment of objective 20
workforce data for the community in which the project is located; and 21
(c) Relative positive impact the project will have on the surrounding 22
community. 23
Section 8. This Act may be cited as the Kentucky Product Development 24
Initiative Act. 25