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AN ACT relating to the commercial mining of cryptocurrency. 1
Be it enacted by the General Assembly of the Commonwealth of Kentucky: 2
Section 1. KRS 154.27-010 is amended to read as follows: 3
As used in this subchapter: 4
(1) "Activation date" means the date on which an approved company begins incurring 5
recoverable costs or engaging in recoverable activity pursuant to the tax incentive 6
agreement, except as set forth in Section 4 of this Act. The activation date shall be 7
set forth in the tax incentive agreement and shall be a date within five (5) years of 8
the date of final approval of the tax incentive agreement. The authority may extend 9
the five (5) year period to no more than seven (7) years upon written application for 10
an extension by the approved company. To implement the activation date, the 11
approved company shall notify the authority of its intent to activate the tax 12
incentives authorized in the tax incentive agreement. The activation date shall apply 13
to all incentives included in the tax incentive agreement regardless of whether the 14
approved company has met the requirements to receive all incentives at that time. If 15
the approved company does not implement the activation date before the date 16
established in the tax incentive agreement, the activation date shall be the date 17
established in the tax incentive agreement; 18
(2) "Affiliate" has the same meaning as in KRS 154.22-010; 19
(3) (a) "Alternative fuel facility" means a facility located in Kentucky that is newly 20
constructed on or after August 30, 2007, or an existing facility located in 21
Kentucky that is retrofitted or upgraded on or after August 30, 2007, and that, 22
after the new construction, retrofit, or upgrade, primarily produces for sale 23
alternative transportation fuels. For a retrofit of an existing facility, the new 24
modification or addition within the facility shall primarily produce alternative 25
transportation fuel for sale. 26
(b) The alternative fuel facility may produce electricity as a by-product if the 27 UNOFFICIAL COPY 22 RS BR 2058
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primary purpose for which the facility is constructed, retrofitted, or upgraded, 1
and the primary function of the facility remains the production and sale of 2
alternative transportation fuels; 3
(4) "Alternative transportation fuels" has the same meaning as in KRS 152.715; 4
(5) "Approved company" means a corporation, limited liability company, partnership, 5
registered limited liability partnership, sole proprietorship, business trust, or any 6
other entity approved for incentives for an eligible project; 7
(6) "Authority" means the Kentucky Economic Development Finance Authority 8
established by KRS 154.20-010; 9
(7) "Base amount" means the tons of coal, thousand (1000) cubic foot units (Mcf) of 10
natural gas, or gallons of natural gas liquids purchased and used or severed and used 11
by the approved company as feedstock for an eligible project during the twelve (12) 12
months prior to the month in which the approved company first begins receiving 13
incentives under KRS 143.024 or 143A.025, and 154.27-060, that were subject to 14
the tax imposed by KRS 143.020 or 143A.020; 15
(8) "Blockchain technology" or "blockchain" means shared or distributed data 16
structures or digital ledgers governed by consensus protocols and maintained by 17
peer-to-peer networks that: 18
(a) Store digital transactions; and 19
(b) Verify and secure transactions cryptographically; 20
(9) "Biomass resources" has the same meaning as in KRS 152.715; 21
(10) (a) "Capital investment" means: 22
1. Obligations incurred for labor and to contractors, subcontractors, 23
builders, and materialmen in connection with the acquisition, 24
construction, installation, equipping, upgrading, or retrofitting of an 25
eligible project; 26
2. The cost of acquiring land or rights in land and any cost incident thereto, 27 UNOFFICIAL COPY 22 RS BR 2058
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including recording fees; 1
3. The cost of contract bonds and of insurance of all kinds that may be 2
required or necessary during the course of acquisition, construction, 3
installation, equipping, upgrading, or retrofitting of an eligible project 4
which is not paid by the contractor or otherwise provided; 5
4. All costs of architectural and engineering services, including test 6
borings, surveys, estimates, plans, specifications, preliminary 7
investigations, supervision of construction, and the performance of all 8
the duties required by or consequent upon the acquisition, construction, 9
installation, equipping, upgrading, or retrofitting of an eligible project; 10
5. All costs required to be paid under the terms of any contract for the 11
acquisition, construction, installation, equipping, upgrading, or 12
retrofitting of an eligible project; and 13
6. All other costs of a nature comparable to those described in this 14
subsection. 15
(b) "Capital investment" does not include costs described in paragraph (a) of this 16
subsection that are paid for with funds received from the federal government 17
or that are reimbursed by the federal government; 18
(11) "Carbon capture ready" means planning for or anticipating capture of carbon 19
dioxide in a manner to facilitate continued operation of the facility in compliance 20
with applicable federal requirements; 21
(12) "Carbon dioxide transmission pipeline" means the in-state portion of a pipeline, 22
including appurtenant facilities, property rights, and easements, that is used 23
exclusively for the purpose of transporting carbon dioxide to a point of sale, storage, 24
or other carbon management applications; 25
(13) "Center for Applied Energy Research" means the University of Kentucky Center for 26
Applied Energy Research; 27 UNOFFICIAL COPY 22 RS BR 2058
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(14) "Colocation facility" means a facility that houses tangible personal property that 1
functions as a computing system node or nodes, or hosts such node or nodes, in 2
the commercial mining of cryptocurrency; 3
(15)[(14)] "Commercial mining of cryptocurrency" means the process through which 4
blockchain technology is used to mine cryptocurrency at a 5
[cryptocurrency]colocation facility, and includes the process through which 6
blockchain transactions are verified and accepted by adding the transactions to a 7
blockchain ledger, which involves solving complex mathematical cryptographic 8
problems associated with a block containing transaction data; 9
(16)[(15)] "Commonwealth" means the Commonwealth of Kentucky; 10
(17) "Computing system node" means equipment purchased or leased: 11
(a) For operational use in this state; 12
(b) That consists of specialized computers used in the commercial mining of 13
cryptocurrency; and 14
(c) That includes all power-related equipment required to operate the 15
specialized computers used in the commercial mining of cryptocurrency, to 16
the extent that any power produced is used to operate the equipment and is 17
not sold or fed back to the electric grid; 18
(18)[(16)] "Construction period" means the period beginning with the activation date of 19
the eligible project and ending on a date set forth in the tax incentive agreement, 20
which shall be no later than five (5) years from the activation date; 21
(19)[(17)] "Consensus protocol" means a set of rules and procedures that control how 22
and when blockchain transactions are verified, validated, recorded, and recognized; 23
(20)[(18)] "Cryptocurrency" means a type of virtual currency that utilizes blockchain 24
technology and that: 25
(a) Can be digitally traded between users; or 26
(b) Can be converted or exchanged for legal tender; 27 UNOFFICIAL COPY 22 RS BR 2058
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[(19) "Cryptocurrency facility" means a facility located in the Commonwealth that is 1
utilized in the commercial mining of cryptocurrency or in hosting persons engaged 2
in the commercial mining of cryptocurrency through utilization of the facility's 3
infrastructure, including servers and network hardware powered by Internet 4
bandwidth, electricity, and other services generally required for such mining 5
operations;] 6
(21)[(20)] "Department" means the Department of Revenue; 7
(22)[(21)] "Eligible project" means: 8
(a) An alternative fuel facility or a gasification facility meeting the investment 9
requirements of KRS 154.27-020; 10
(b) An energy-efficient alternative fuel facility meeting the investment 11
requirements of KRS 154.27-020; 12
(c) A renewable energy facility meeting the investment requirements of KRS 13
154.27-020; 14
(d) A carbon dioxide transmission pipeline meeting the investment requirements 15
of KRS 154.27-020; or 16
(e) A colocation[cryptocurrency] facility meeting the investment requirements of 17
KRS 154.27-020[20]; 18
(23)[(22)] "Energy-efficient alternative fuel facility" means a facility located in Kentucky 19
that is newly constructed on or after August 30, 2010, or an existing facility located 20
in Kentucky that is retrofitted or upgraded on or after August 30, 2010, and that, 21
after the new construction, retrofit, or upgrade, will produce for sale energy-22
efficient alternative fuels. For a retrofit of an existing facility, the new modification 23
or addition within the facility shall produce for sale energy-efficient alternative 24
fuels; 25
(24)[(23)] "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 2058
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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
(25)[(24)] "Estimated labor component" means the projected percentage of the total 4
capital investment attributable to labor; 5
(26)[(25)] (a) "Facility" means a single location within the Commonwealth at which 6
machinery and equipment are used: 7
1. In a manufacturing process that transforms raw materials into a product 8
with commercial value; or 9
2. In the commercial mining of cryptocurrency or in hosting persons 10
engaged in the commercial mining of cryptocurrency. 11
(b) The facility shall include the physical plant structure where the manufacturing 12
process occurs or where the commercial mining of cryptocurrency occurs and 13
machinery and equipment within the physical plant structure. 14
(c) The facility may include: 15
1. On-site machinery and equipment used exclusively for processing coal 16
or other raw materials for use in the manufacturing process at the 17
facility; 18
2. For an alternative fuel facility or gasification facility, on-site power 19
station operations, if those operations are primarily used to produce 20
electricity for the facility; 21
3. On-site refining operations, if those operations are used exclusively to 22
refine and blend fuels produced by the facility; and 23
4. The in-state portion of a pipeline, including appurtenant facilities, 24
property rights, and easements, if the exclusive purpose of the pipeline is 25
to transport carbon dioxide from the facility to a point of sale, storage, or 26
other carbon management applications. 27 UNOFFICIAL COPY 22 RS BR 2058
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(d) "Facility" shall not include any mining operations, or drilling and production 1
operations for natural gas, unless such coal, natural resource, or natural gas 2
operations are being used for purposes of, or are hosting, the commercial 3
mining of cryptocurrency, in which case such operations shall be a facility; 4
(27)[(26)] "Gasification process" means a process that converts any carbon-containing 5
material into a synthesis gas composed primarily of carbon monoxide and hydrogen; 6
(28)[(27)] (a) "Gasification facility" means a facility located in Kentucky that is newly 7
constructed on or after August 30, 2007, or an existing facility located in 8
Kentucky that is retrofitted or upgraded on or after August 30, 2007, and that, 9
after the new construction, retrofit, or upgrade, primarily produces for sale: 10
1. Alternative transportation fuels; 11
2. Synthetic natural gas; 12
3. Chemicals; 13
4. Chemical feedstocks; or 14
5. Liquid fuels; 15
from coal, waste coal, coal-processing waste, or biomass resources, through a 16
gasification process. For a retrofit of an existing facility, the new modification 17
or addition within the facility shall primarily produce one (1) or more of the 18
products set forth in this paragraph. 19
(b) The gasification facility may produce electricity as a by-product if the primary 20
purpose for which the facility is constructed, retrofitted, or upgraded, and the 21
primary function of the facility remains the production and sale of alternative 22
transportation fuels, synthetic natural gas, chemicals, chemical feedstocks, or 23
liquid fuels; 24
(29)[(28)] "Kentucky gross profits" has the same meaning as in KRS 141.0401; 25
(30)[(29)] "Kentucky gross receipts" has the same meaning as in KRS 141.0401; 26
(31)[(30)] "Post-construction incentives" means the incentives available under KRS 27 UNOFFICIAL COPY 22 RS BR 2058
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154.27-060 and 154.27-080; 1
(32)[(31)] "Renewable energy facility" means a facility located in Kentucky that is newly 2
constructed on or after August 30, 2007, or an existing facility located in Kentucky 3
that is retrofitted or upgraded after August 30, 2007, and that, after the new 4
construction, retrofit, or upgrade, utilizes: 5
(a) Wind power, biomass resources, landfill methane gas, hydropower, or other 6
similar renewable resources to generate electricity in excess of one (1) 7
megawatt for sale to unrelated entities; or 8
(b) Solar power to generate electricity in excess of fifty (50) kilowatts for sale to 9
unrelated entities. 10
For a retrofit of an existing facility, the modification or addition shall primarily 11
result in the production of electricity as described in paragraph (a) or (b) of this 12
subsection; 13
(33)[(32)] "Resident" has the same meaning as in KRS 141.010; 14
(34)[(33)] (a) "Retrofit" means a modification or addition to an existing facility that 15
results in the production of a new and different product or services or uses a 16
new or different process to produce the same product or services at the 17
facility. 18
(b) Modifications or additions to a facility that maintain, restore, mend, or repair a 19
facility shall not be considered a retrofit of the facility, and shall not be 20
considered part of the capital investment if undertaken at the same time as a 21
retrofit; 22
(35)[(34)] "Synthetic natural gas" has the same meaning as in KRS 152.715; 23
(36)[(35)] "Tax incentive agreement" means an agreement entered into in accordance 24
with KRS 154.27-040; 25
(37)[(36)] "Termination date" means a date established by the tax incentive agreement 26
that is no more than twenty-five (25) years from the activation date; and 27 UNOFFICIAL COPY 22 RS BR 2058
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(38)[(37)] "Upgrade" means an investment in an existing facility that results in an 1
increase in the productivity of the facility. Increased productivity shall be measured 2
in relation to the type of products or services that are required to be produced or 3
performed by that facility to be an eligible project. 4
Section 2. KRS 154.27-020 is amended to read as follows: 5
(1) This subchapter shall be known as the "Incentives for Energy-related Business Act." 6
(2) The General Assembly hereby finds and declares that it is in the best interest of the 7
Commonwealth to induce the location of innovative energy-related businesses in 8
the Commonwealth in order to advance the public purposes of achieving energy 9
independence, creating new and advanced technologies, creating new jobs and new 10
investment, and creating new sources of tax revenues that but for the inducements 11
to be offered by the authority to approved companies would not exist. 12
(3) The purpose of this subchapter is to assist the Commonwealth in moving to the 13
forefront of national efforts to achieve energy independence by reducing the 14
Commonwealth's reliance on imported energy resources, and to become a national 15
leader in emerging industries which use substantial amounts of energy. The 16
provisions of this subchapter seek to accomplish this purpose by providing 17
incentives for companies that, in a carbon capture ready manner, construct, retrofit, 18
or upgrade facilities for the purpose of: 19
(a) Increasing the production and sale of alternative transportation fuels; 20
(b) Increasing the production and sale of synthetic natural gas, chemicals, 21
chemical feedstocks, or liquid fuels, from coal, biomass resources, or waste 22
coal through a gasification process; 23
(c) Increasing the production and sale of energy-efficient alternative fuels; 24
(d) Generating electricity for sale through alternative methods such as solar 25
power, wind power, biomass resources, landfill methane gas, hydropower, or 26
other similar renewable resources; or 27 UNOFFICIAL COPY 22 RS BR 2058
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(e) Increasing the usage of electricity in areas which have an abundant supply due 1
to the loss of manufacturing businesses across the state. 2
(4) To qualify for the incentives provided in this subchapter, the following 3
requirements shall be met: 4
(a) For an alternative fuel facility or gasification facility that uses oil shale, tar 5
sands, or coal as the primary feedstock, the minimum capital investment shall 6
be one hundred million dollars ($100,000,000); 7
(b) For an alternative fuel facility or gasification facility that uses biomass 8
resources as the primary feedstock, the minimum capital investment shall be 9
twenty-five million dollars ($25,000,000); 10
(c) For an energy-efficient alternative fuel facility, the minimum capital 11
investment shall be twenty-five million dollars ($25,000,000); 12
(d) For an alternative fuel facility located in Kentucky that is newly constructed 13
on or after August 1, 2010, or an existing facility located in Kentucky that is 14
retrofitted or upgraded on or after August 1, 2010, and that, after the new 15
construction, retrofit, or upgrade, primarily produces for sale alternative 16
transportation fuels using natural gas or natural gas liquids as the primary 17
feedstock, the minimum capital investment shall be one million dollars 18
($1,000,000); provided that the authority may approve a maximum of five (5) 19
projects that meet the requirements of this paragraph; 20
(e) For a renewable energy facility, the minimum capital investment shall be one 21
million dollars ($1,000,000); 22
(f) For a carbon dioxide transmission pipeline, the minimum capital investment 23
shall be fifty million dollars ($50,000,000); and 24
(g) For a colocation[ cryptocurrency] facility, the minimum capital investment 25
shall be one million dollars ($1,000,000). 26
(5) The incentives under the Incentives for Energy-related Business Act are as follows: 27 UNOFFICIAL COPY 22 RS BR 2058
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(a) An advance disbursement of post-construction incentives for which an 1
approved company has been approved, the maximum amount of which is 2
based upon the estimated labor component of the total capital investment of 3
the eligible project, and the utilization of Kentucky residents during the 4
construction period as set forth in KRS 154.27-090; 5
(b) 1. Sales and use tax incentives of up to one hundred percent (100%) of the 6
taxes paid on purchases of tangible personal property made to construct, 7
retrofit, or upgrade an eligible project[, including commercial 8
cryptocurrency mining equipment at a facility,] as set forth in KRS 9
139.517 and 154.27-070; and 10
2. Sales and use tax incentives of up to one hundred percent (100%) of 11
the taxes paid on purchase of computing system nodes used at a 12
colocation facility as set forth in KRS 139.517 and Section 4 of this 13
Act. 14
(c) Up to eighty percent (80%) of the severance taxes paid on the purchase or 15
severance of: 16
1. Coal that is subject to the tax imposed under KRS 143.020 and that is 17
specifically used by an alternative fuel facility, energy-efficient 18
alternative fuel facility, or a gasification facility as feedstock for an 19
eligible project, as set forth in KRS 143.024 and 154.27-060; or 20
2. Natural gas or natural gas liquids that are subject to the tax imposed 21
under KRS 143A.020 and that are specifically used in an alternative fuel 22
facility described in subsection (4)(d) of this section as feedstock for an 23
eligible project, as set forth in KRS 143A.025 and 154.27-060; 24
(d) Up to one hundred percent (100%) of the Kentucky income tax imposed under 25
KRS 141.040 or 141.020, and the limited liability entity tax imposed under 26
KRS 141.0401 on the income, Kentucky gross profits, or Kentucky gross 27 UNOFFICIAL COPY 22 RS BR 2058
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receipts of the approved company generated by or arising from the eligible 1
project, as set forth in KRS 141.421 and 154.27-080; and 2
(e) Authorization for the approved company to impose a wage assessment of up 3
to four percent (4%) of the gross wages of each employee subject to the 4
Kentucky income tax: 5
1. Whose job was created as a result of the eligible project; 6
2. Who is employed by the approved company to work at the facility; and 7
3. Who is on the payroll of the approved company or an affiliate of the 8
approved company; 9
as set forth in KRS 154.27-080. 10
(6) The maximum recovery from all incentives approved under this subchapter for an 11
eligible project shall not exceed fifty percent (50%) of the capital investment in the 12
eligible project. 13
(7) The incentives available to an approved company shall be negotiated with and 14
approved by the authority. 15
(8) If a newly constructed facility that qualifies for incentives under this subchapter is 16
later upgraded or retrofitted in a manner that would qualify for incentives under this 17
subchapter, the retrofit or upgrade shall be a separate eligible project, and the 18
minimum investment requirements and carbon capture readiness requirements, if 19
required, shall be met for the retrofit or upgrade to qualify for incentives under this 20
subchapter. 21
(9) The General Assembly finds that the authorities granted by this subchapter are 22
proper governmental and public purposes for which public moneys may be 23
expended. 24
Section 3. KRS 154.27-030 is amended to read as follows: 25
(1) A company with an eligible project may submit an application for incentives to the 26
authority prior to making any capital investment it will seek to recover. 27 UNOFFICIAL COPY 22 RS BR 2058
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(2) The application shall include: 1
(a) The name of the applicant and identification of any affiliates of the applicant; 2
(b) The type of eligible project; 3
(c) A description of the location; 4
(d) A full description of the eligible project scope, which may include[including] 5
but is not limited to: 6
1. A list and the status of permits, certificates, or approvals required by the 7
federal government, the Commonwealth, or any jurisdiction within the 8
Commonwealth; 9
2. A description of the carbon capture readiness of the facility, if the 10
proposed eligible project is an alternative fuel facility or a gasification 11
facility; 12
3. Any feasibility studies, including supporting documents; 13
4. Anticipated sources of eligible project funding; 14
5. The total anticipated capital investment and the time period over which 15
the capital investment will occur; 16
6. The proposed feedstock and the estimated volume of feedstock use per 17
year; 18
7. A description of the proposed products or services to be produced by the 19
facility and the process that will be used to produce the products; 20
8. The planned capacity of the facility after construction, retrofit, or 21
upgrade; 22
9. The estimated output of the facility upon completion; and 23
10. A plan for and description of how the company will employ Kentucky 24
residents at the facility and how the company will ensure, to the extent 25
possible, that workers employed during construction, retrofit, or upgrade 26
of the facility are Kentucky residents. The plan shall include projected 27 UNOFFICIAL COPY 22 RS BR 2058
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numbers; 1
(e) Identification of the specific incentives sought; 2
(f) Payment of any applicable application fees required by the authority to offset 3
reasonable costs of reviewing and processing the application; and 4
(g) Other information as required by the authority. 5
(3) (a) The authority shall forward the application to the Department of Revenue and 6
the Office of Energy Policy, if applicable, for review and comment with a date 7
by which comments shall be provided back to the authority. 8
(b) The authority may forward the application to the Center for Applied Energy 9
Research for review and comment as well. 10
(c) The forwarding of the application to these agencies or other parties for 11
review or comment shall not prevent or delay the authority from: 12
1. Granting preliminary approval; or 13
2. Processing or approving an application for sales or use tax 14
reimbursements. 15
(4) (a) The authority shall review the application and shall verify that: 16
1. The applicant has met all of the statutory and regulatory requirements 17
established by this subchapter and regulations promulgated thereunder; 18
2. The applicant has secured or is in the process of securing all necessary 19
permits, certificates, or approvals required by the federal government, 20
the Commonwealth, or any jurisdiction within the Commonwealth; 21
3. The proposed facility is carbon capture ready, if the proposed facility is 22
an alternative fuel facility or gasification facility; 23
4. The company has a plan that includes a projected number of Kentucky 24
residents that will be employed during the construction, retrofit, or 25
upgrade of the facility and at the facility upon completion; and 26
5. Any other requirements established by the authority. 27 UNOFFICIAL COPY 22 RS BR 2058
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(b) The Department of Revenue and the Office of Energy Policy, if applicable, 1
shall review the application and shall verify that the company seeking 2
approval and all affiliate companies are in good standing with the department. 3
(c) The authority may engage the services of outside consultants to assist in the 4
review of the application. Costs associated with the engagement of outside 5
consultants shall be borne by the applicant. 6
(5) (a) Upon the earlier of: 7
1. The receipt of comments and recommendations from the Office of 8
Energy Policy, the Department of Revenue, and the Center for Applied 9
Energy Research, if applicable; or 10
2. The expiration of the time period established by the authority for 11
receiving comments pursuant to subsection (3) of this section; 12
the authority may, through the adoption of a resolution, preliminarily approve 13
an applicant for incentives under this subchapter. 14
(b) Preliminary approval shall be based upon representations of the applicant in 15
the application and attachments as well as other information submitted with 16
the application. The authority shall make a finding that, based upon the 17
applicant's representations, the project appears to be eligible for incentives 18
pursuant to this subchapter. 19
(c) Prior to final approval: 20
1. The applicant shall: 21
a. Provide all supportive data requested by the authority; 22
b. Secure all required permits or take appropriate steps to do so; and 23
c. Cooperate with the authority to obtain opinions or 24
recommendations from any outside consultants; and 25
2. The authority shall, in consultation with the Office of Energy Policy or 26
any other entity, verify the representations of the applicant. 27 UNOFFICIAL COPY 22 RS BR 2058
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(d) 1. A preliminarily approved company seeking an advance disbursement 1
employment incentive under KRS 154.27-090 shall, prior to receiving 2
final approval from the authority, provide to the authority a labor market 3
analysis prepared by a public postsecondary education institution in the 4
Commonwealth with knowledge of the labor market in the region in 5
which the eligible project will be located. 6
2. The labor market analysis shall evaluate the construction market in the 7
region where the proposed project is to be located and the estimated 8
labor component of the proposed project. The public postsecondary 9
education institution may consult with the Center for Applied Energy 10
Research or the Office of Energy Policy in determining the types of 11
laborers required for the construction, retrofit, or upgrade of the eligible 12
facility. 13
3. The labor market analysis shall include an estimate of the percentage of 14
the estimated labor component that constitutes wages to be paid to 15
Kentucky residents. 16
(e) Based upon all of the information available, the authority may, through 17
adoption of a resolution, give its final approval and authorize the execution of 18
a tax incentive agreement to be negotiated pursuant to KRS 154.27-040. 19
(f) The authority may issue preliminary and final approval for a project during 20
the same meeting in order to execute efficiently the purpose and intent of 21
this subchapter. 22
(6) The authority may request any materials and make any inquiries concerning an 23
application that the authority deems necessary. 24
(7) The actual capital investment that may be recovered and percentages of each 25
incentive that an approved company may receive shall be negotiated between the 26
approved company and the authority and shall not exceed the limitations established 27 UNOFFICIAL COPY 22 RS BR 2058
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by KRS 154.27-020. 1
(8) The General Assembly recognizes that the incentives offered under this subchapter 2
include the possibility of the release of incentives to approved companies prior to 3
construction completion, and that the release of these incentives may present more 4
risk for the Commonwealth. The authority is directed to consider the possible 5
increased risk to the Commonwealth when negotiating tax incentive agreements that 6
include incentives prior to construction completion, and to incorporate repayment or 7
similar remedy provisions in the tax incentive agreement to the extent the authority 8
determines such provisions are necessary to protect the investment made by the 9
Commonwealth if the approved company fails to comply with the terms of the tax 10
incentive agreement. 11
(9) The authority and the approved company shall enter into a tax incentive agreement 12
in accordance with KRS 154.27-040. 13
(10) The authority, with input from the Office of Energy Policy, if applicable, and the 14
Department of Revenue, shall establish additional standards and requirements for 15
the application process through the promulgation of administrative regulations in 16
accordance with KRS Chapter 13A. The standards shall include but not be limited 17
to the creditworthiness of eligible companies and the likelihood of economic 18
success of the economic development project. 19
(11) Notwithstanding any other provision of this subchapter, the authority may approve a 20
maximum of five (5) projects under this subchapter that involve an alternative fuel 21
facility located in Kentucky that: 22
(a) Is newly constructed on or after August 1, 2010, or an existing facility located 23
in Kentucky that is retrofitted or upgraded on or after August 1, 2010; 24
(b) After the new construction, retrofit, or upgrade, primarily produces for sale 25
alternative transportation fuels using natural gas or natural gas liquids as the 26
primary feedstock; and 27 UNOFFICIAL COPY 22 RS BR 2058
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(c) Has a minimum capital investment of one million dollars ($1,000,000). 1
Section 4. KRS 154.27-070 is amended to read as follows: 2
(1) Notwithstanding KRS 134.580(3) and 139.770:[,] 3
(a) 1. [On or after January 1, 2008, ]An approved company is eligible for an 4
incentive in an amount up to one hundred percent (100%) of the 5
Kentucky sales and use tax paid, reduced by the vendor compensation 6
provided under KRS 139.570, on the purchase of tangible personal 7
property, including but not limited to materials, machinery, and 8
equipment used to construct, retrofit, or upgrade an eligible project. 9
2.[(2)] The incentive shall not include tangible personal property 10
purchased before the activation date or purchases of operating supplies, 11
or repair, replacement, or spare parts as defined in KRS 139.010. 12
(b) 1. In addition, a colocation facility which has received final approval 13
may be eligible for an incentive in an amount up to one hundred 14
percent (100%) of the Kentucky sales and use tax paid, reduced by the 15
vendor compensation provided under KRS 139.570, on computing 16
system nodes used in the commercial mining of cryptocurrency as of 17
the date of original application. 18
2. Sales and use taxes paid on or after the application date may qualify 19
for reimbursement by the authority. 20
(2)[(3)] Upon the activation date, an approved company may be eligible for the 21
incentive offered under this section. The approved company shall file a request for 22
the incentive payment with the department as provided in KRS 139.517. 23
(3)[(4)] The incentive provided in this section shall expire upon the completion of the 24
construction, retrofit, or upgrade of the eligible project, or five (5) years from the 25
activation date, whichever is earlier. 26
Section 5. This Act takes effect August 1, 2022. 27