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AN ACT relating to an economic development taxpayer transplant program. 1
Be it enacted by the General Assembly of the Commonwealth of Kentucky: 2
SECTION 1. A NEW SECTION OF SUBCHAPTER 20 OF KRS CHAPTER 3
154 IS CREATED TO READ AS FOLLOWS: 4
(1) As used in this section: 5
(a) "Annual disbursement" means the amount paid to the contracted company 6
under the Taxpayer Transplant Program and shall be equal to: 7
1. Four percent (4%); or 8
2. Five and one-half percent (5.5%) 9
of the qualified employee's gross wages earned under the program during 10
the annual period in accordance with Section 2 of this Act; 11
(b) "Authority" means the Kentucky Economic Development Finance 12
Authority established in KRS 154.20-010; 13
(c) "Bidding company" means any corporation, limited liability company, 14
partnership, limited partnership, sole proprietorship, business trust, or any 15
other entity that responds to a request for proposal issued by the authority 16
under subsection (3)(a) of this section for a proposed Taxpayer Transplant 17
Program; 18
(d) "Contracted company" means a bidding company that: 19
1. Invests at least ten million dollars ($10,000,000) in the Taxpayer 20
Transplant Program for: 21
a. Marketing and advertising; 22
b. Recruiting, vetting, or attracting qualified employees; 23
c. Offering incentive grants to retain or relocate qualified 24
employees; or 25
d. Paying up-front costs related to the program; 26
with program costs to average a minimum of seven thousand five 27 UNOFFICIAL COPY 23 RS BR 214
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hundred dollars ($7,500) for each qualified employee; and 1
2. Successfully enters into an agreement with the authority under this 2
section; 3
(e) "Department" means the Department of Revenue; 4
(f) "Employer" has the same meaning as in KRS 141.010 and which is 5
required by KRS 141.310 to withhold a tax determined under KRS 141.315 6
or by the tables authorized by KRS 141.370; 7
(g) "Qualified employee" means any individual who: 8
1. Permanently relocates to this state as a result of the contracted 9
company's Taxpayer Transplant Program; 10
2. Maintains his or her current position or acquires new employment 11
upon relocation; 12
3. Works at a physical location within this state, at a remote site separate 13
from the employer's physical location; and 14
4. Earns gross income as defined in KRS 141.010(19) from an employer 15
of at least seventy-five thousand dollars ($75,000) annually; and 16
(h) "Taxpayer Transplant Program" means the program established in 17
subsection (2) of this section and administered by the authority, which: 18
1. Is the result of an agreement entered into by the authority and the 19
contracted company in response to the request for proposal process; 20
2. Recruits individuals located outside this state to relocate within this 21
state as a qualified employee; 22
3. Does not extend for more than twenty-five (25) years under the terms 23
of the agreement; and 24
4. Is not open to new recruits after a period of five (5) years from the 25
start of the Taxpayer Transplant Program. 26
(2) (a) There hereby is established the Taxpayer Transplant Program to promote 27 UNOFFICIAL COPY 23 RS BR 214
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relocation of qualified employees to the state. 1
(b) The authority shall issue a request for proposal to solicit information from 2
bidding companies for program evaluation and the establishment of a 3
contract. 4
(c) Upon completion of the evaluation process, the authority and the bidding 5
company shall enter into an agreement, after which the contracted company 6
may implement the Taxpayer Transplant Program and begin receiving 7
annual disbursements under Section 2 of this Act. 8
(3) The bid evaluation and monitoring process under this section for the Taxpayer 9
Transplant Program shall include: 10
(a) A bidding company shall submit information to the authority that includes 11
but not is limited to: 12
1. The name and identification number of the bidding company; 13
2. The projected number of new qualified employees that the bidding 14
company will relocate to Kentucky; 15
3. A timeline describing when the qualified employees will be relocated 16
in Kentucky; 17
4. A description of the projected costs that will be incurred by the bidding 18
company in the recruitment and retention of a qualified employee; 19
5. Documentation, including bank or financial statements, of at least ten 20
million dollars ($10,000,000) pledged to the Taxpayer Transplant 21
Program; and 22
6. Any other information requested by the authority; and 23
(b) For each bidding company, the authority shall: 24
1. Review the information submitted; 25
2. Request any materials and make any inquiries concerning a bidding 26
company's submission as the authority deems necessary; 27 UNOFFICIAL COPY 23 RS BR 214
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3. Evaluate: 1
a. The likelihood that the program will be an economic success for 2
the Commonwealth; and 3
b. The projections related to qualified employee recruits. 4
4. Determine, by resolution, if the proposal is approved; and 5
5. Notify the bidding company of the proposal's approval or denial. 6
(4) Upon acceptance of the proposal and establishment of a contract: 7
(a) The contracted company may implement the Taxpayer Transplant Program 8
and begin receiving annual disbursements from the department under 9
Section 2 of this Act; and 10
(b) The authority shall monitor: 11
1. The contracted company annually to determine if the contracted 12
company is successfully able to recruit qualified employees as 13
projected in subsection (3)(a)2. and 3. of this section; 14
2. The costs of the contracted company annually; and 15
3. Each qualified employee to ensure that he or she remains qualified 16
and, if no longer qualified, notify the department. 17
(5) A contracted company receiving an annual disbursement under Section 2 of this 18
Act shall: 19
(a) Make its books and records available to the authority or the department 20
upon request; 21
(b) File with the authority or the department documentation pertaining to the 22
Taxpayer Transplant Program as required by the authority or the 23
department; and 24
(c) Provide income verification of the qualified employees in the event the 25
department should no longer be in receipt of income statements. 26
(6) (a) If at any time the contracted company is unable to successfully recruit 27 UNOFFICIAL COPY 23 RS BR 214
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qualified employees as projected, the agreement may be terminated by the 1
authority. 2
(b) The authority shall immediately notify the contracted company and the 3
department if it deems contract termination necessary. 4
(c) Upon contract termination, the annual disbursements shall continue for the 5
previously qualified employees that continue to be employed as a result of 6
the Taxpayer Transplant Program. 7
(7) Annual disbursements from the department shall not exceed a total of eight 8
million dollars ($8,000,000) annually for all contracted companies. 9
(8) A qualified employee under this section shall not be considered as an employee 10
who qualified for any other tax incentives under KRS Chapter 139, 141, or 154, 11
including wage assessment. 12
(9) The authority may promulgate administrative regulations under KRS Chapter 13
13A to establish policies and procedures to implement this section. 14
SECTION 2. A NEW SECTION OF KRS CHAPTER 131 IS CREATED TO 15
READ AS FOLLOWS: 16
(1) As used in this section: 17
(a) "Annual disbursement"; 18
(b) "Authority"; 19
(c) "Contracted company"; 20
(d) "Qualified employee"; and 21
(e) "Taxpayer Transplant Program" or "program"; 22
have the same meaning as in Section 1 of this Act. 23
(2) (a) The department shall jointly work with the authority to provide an annual 24
disbursement to a contracted company under the Taxpayer Transplant 25
Program established in Section 1 of this Act. 26
(b) The annual disbursement shall be paid to the contracted company annually, 27 UNOFFICIAL COPY 23 RS BR 214
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based upon the county in which the qualified employee relocates, and shall 1
be: 2
1. a. Four percent (4%) of the qualified employee's gross wages if the 3
relocation is to a county with a population of one hundred 4
thousand (100,000) or more based on the most recent federal 5
decennial census; or 6
b. Five and one-half percent (5.5%) of the qualified employee's 7
gross wages if the relocation is to a county with a population of 8
less than one hundred thousand (100,000) based on the most 9
recent federal decennial census; 10
2. Paid by the department to the contracted company within sixty (60) 11
days upon commencement of the calendar year; and 12
3. a. Prorated based on the number of days during the calendar year 13
that the qualified employee is in this state as a result of the 14
program established in Section 1 of this Act; or 15
b. Terminated for any qualified employee who relocates outside of 16
this state. 17
(3) (a) The department may promulgate administrative regulations under KRS 18
Chapter 13A to establish policies and procedures to implement this section. 19
(b) The contracted company shall provide the following information to the 20
department: 21
1. Contact information related to the contracted company; 22
2. The name and taxpayer identification of each qualified employee; 23
3. The address, including county of location, of the qualified employee; 24
4. The date each qualified employee: 25
a. Begins employment under the Taxpayer Transplant Program; 26
and 27 UNOFFICIAL COPY 23 RS BR 214
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b. Ends employment, if applicable; 1
5. The federal employer identification number of the employer for which 2
the qualified employee is employed; and 3
6. Any other information required by the department to process the 4
annual disbursement. 5
(5) (a) In order for the General Assembly to evaluate the Taxpayer Transplant 6
Program, the department shall provide the following information on a 7
cumulative basis for each fiscal year to provide a historical impact to the 8
Commonwealth: 9
1. The name and address of the contracted company which received the 10
annual disbursement; 11
2. The total amount of annual disbursement issued during the fiscal year 12
to the contracted company; 13
3. The name and address of each qualified employee employed during 14
the fiscal year; 15
4. The name and address of the employer which hired the qualified 16
employee; 17
5. The date the qualified employee: 18
a. Began employment under the program; and 19
b. Ended employment, if applicable; and 20
6. The salary of the qualified employee. 21
(b) The report required under paragraph (a) of this subsection shall be 22
submitted to the Interim Joint Committee on Appropriations and Revenue 23
no later than October 1, 2024, and no later than October 1 for each fiscal 24
year thereafter, and staff for Appropriations and Revenue may share 25
aggregated statistics from the report with the Interim Joint Committee on 26
Economic Development and Workforce Investment as long as there is a 27 UNOFFICIAL COPY 23 RS BR 214
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Taxpayer Transplant Program in the Commonwealth. 1
Section 3. KRS 131.190 is amended to read as follows: 2
(1) No present or former commissioner or employee of the department, present or 3
former member of a county board of assessment appeals, present or former property 4
valuation administrator or employee, present or former secretary or employee of the 5
Finance and Administration Cabinet, former secretary or employee of the Revenue 6
Cabinet, or any other person, shall intentionally and without authorization inspect 7
or divulge any information acquired by him or her of the affairs of any person, or 8
information regarding the tax schedules, returns, or reports required to be filed with 9
the department or other proper officer, or any information produced by a hearing or 10
investigation, insofar as the information may have to do with the affairs of the 11
person's business. 12
(2) The prohibition established by subsection (1) of this section shall not extend to: 13
(a) Information required in prosecutions for making false reports or returns of 14
property for taxation, or any other infraction of the tax laws; 15
(b) Any matter properly entered upon any assessment record, or in any way made 16
a matter of public record; 17
(c) Furnishing any taxpayer or his or her properly authorized agent with 18
information respecting his or her own return; 19
(d) Testimony provided by the commissioner or any employee of the department 20
in any court, or the introduction as evidence of returns or reports filed with the 21
department, in an action for violation of state or federal tax laws or in any 22
action challenging state or federal tax laws; 23
(e) Providing an owner of unmined coal, oil or gas reserves, and other mineral or 24
energy resources assessed under KRS 132.820, or owners of surface land 25
under which the unmined minerals lie, factual information about the owner's 26
property derived from third-party returns filed for that owner's property, under 27 UNOFFICIAL COPY 23 RS BR 214
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the provisions of KRS 132.820, that is used to determine the owner's 1
assessment. This information shall be provided to the owner on a confidential 2
basis, and the owner shall be subject to the penalties provided in KRS 3
131.990(2). The third-party filer shall be given prior notice of any disclosure 4
of information to the owner that was provided by the third-party filer; 5
(f) Providing to a third-party purchaser pursuant to an order entered in a 6
foreclosure action filed in a court of competent jurisdiction, factual 7
information related to the owner or lessee of coal, oil, gas reserves, or any 8
other mineral resources assessed under KRS 132.820. The department may 9
promulgate an administrative regulation establishing a fee schedule for the 10
provision of the information described in this paragraph. Any fee imposed 11
shall not exceed the greater of the actual cost of providing the information or 12
ten dollars ($10); 13
(g) Providing information to a licensing agency, the Transportation Cabinet, or 14
the Kentucky Supreme Court under KRS 131.1817; 15
(h) Statistics of gasoline and special fuels gallonage reported to the department 16
under KRS 138.210 to 138.448; 17
(i) Providing any utility gross receipts license tax return information that is 18
necessary to administer the provisions of KRS 160.613 to 160.617 to 19
applicable school districts on a confidential basis; 20
(j) Providing documents, data, or other information to a third party pursuant to an 21
order issued by a court of competent jurisdiction; or 22
(k) Providing information to the Legislative Research Commission under: 23
1. KRS 139.519 for purposes of the sales and use tax refund on building 24
materials used for disaster recovery; 25
2. KRS 141.436 for purposes of the energy efficiency products credits; 26
3. KRS 141.437 for purposes of the ENERGY STAR home and the 27 UNOFFICIAL COPY 23 RS BR 214
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ENERGY STAR manufactured home credits; 1
4. KRS 141.383 for purposes of the film industry incentives; 2
5. KRS 154.26-095 for purposes of the Kentucky industrial revitalization 3
tax credits and the job assessment fees; 4
6. KRS 141.068 for purposes of the Kentucky investment fund; 5
7. KRS 141.396 for purposes of the angel investor tax credit; 6
8. KRS 141.389 for purposes of the distilled spirits credit; 7
9. KRS 141.408 for purposes of the inventory credit; 8
10. KRS 141.390 for purposes of the recycling and composting credit; 9
11. KRS 141.3841 for purposes of the selling farmer tax credit; 10
12. KRS 141.4231 for purposes of the renewable chemical production tax 11
credit; 12
13. KRS 141.524 for purposes of the Education Opportunity Account 13
Program tax credit; 14
14. KRS 141.398 for purposes of the development area tax credit; 15
15. KRS 139.516 for the purposes of the sales and use tax exemption on the 16
commercial mining of cryptocurrency;[ and] 17
16. KRS 141.419 for purposes of the decontamination tax credit; and 18
17. Section 2 of this Act for purposes of the Taxpayer Transplant 19
Program. 20
(3) The commissioner shall make available any information for official use only and on 21
a confidential basis to the proper officer, agency, board or commission of this state, 22
any Kentucky county, any Kentucky city, any other state, or the federal 23
government, under reciprocal agreements whereby the department shall receive 24
similar or useful information in return. 25
(4) Access to and inspection of information received from the Internal Revenue Service 26
is for department use only, and is restricted to tax administration purposes. 27 UNOFFICIAL COPY 23 RS BR 214
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Information received from the Internal Revenue Service shall not be made available 1
to any other agency of state government, or any county, city, or other state, and 2
shall not be inspected intentionally and without authorization by any present 3
secretary or employee of the Finance and Administration Cabinet, commissioner or 4
employee of the department, or any other person. 5
(5) Statistics of crude oil as reported to the department under the crude oil excise tax 6
requirements of KRS Chapter 137 and statistics of natural gas production as 7
reported to the department under the natural resources severance tax requirements 8
of KRS Chapter 143A may be made public by the department by release to the 9
Energy and Environment Cabinet, Department for Natural Resources. 10
(6) Notwithstanding any provision of law to the contrary, beginning with 11
mine-map submissions for the 1989 tax year, the department may make 12
public or divulge only those portions of mine maps submitted by 13
taxpayers to the department pursuant to KRS Chapter 132 for ad 14
valorem tax purposes that depict the boundaries of mined-out parcel 15
areas. These electronic maps shall not be relied upon to determine actual 16
boundaries of mined-out parcel areas. Property boundaries contained in 17
mine maps required under KRS Chapters 350 and 352 shall not be 18
construed to constitute land surveying or boundary surveys as defined 19
by KRS 322.010 and any administrative regulations promulgated 20
thereto. 21
Section 4. KRS 154.12-2035 is amended to read as follows: 22
(1) The cabinet shall maintain a searchable electronic database on its Web site 23
containing information on the cost and status of the programs listed in subsection 24
(3)(a) of this section. The database shall include all projects approved at any time in 25
the last five (5) years and shall include for each, where applicable, the following 26
information: 27 UNOFFICIAL COPY 23 RS BR 214
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(a) The name of the program, the recipient or participant, the type of project, and 1
its location by county; 2
(b) Total and approved costs of the project or investment, and the amount of 3
incentives or other benefits authorized; 4
(c) For the Kentucky Business Investment Program and the Kentucky Enterprise 5
Initiative Act, the amount of incentives or other benefits actually recovered as 6
self-reported by the recipient; 7
(d) The number of new jobs estimated and, for the Kentucky Business Investment 8
Program, actually created, along with wage information for those jobs; 9
(e) Project status and the date and nature of the most recent activity; and 10
(f) Any other comparable data or information necessary to achieve transparency 11
and accountability for the specified programs. 12
(2) In addition to the electronic database required in subsection (1) of this section, the 13
cabinet shall prepare an annual report on the programs listed in subsection (3) of 14
this section and make it available on the Cabinet for Economic Development Web 15
site by November 1 of each year. The report shall include all projects approved in 16
the preceding fiscal year and shall provide for these projects the information 17
specified in subsection (1) of this section plus aggregate data for each program, 18
summary evaluations of program activity and effectiveness, and anything required 19
by statute to be reported for any particular program. The report shall also list all 20
projects that were approved in prior years but active at any time in the preceding 21
fiscal year, although for these projects the report need not provide further data. 22
(3) The following programs shall be subject to the reporting requirements of this 23
section: 24
(a) The electronic database required in subsection (1) of this section shall include 25
the Bluegrass State Skills Corporation, grants-in-aid and skills training 26
investment credit; Kentucky Business Investment Program; Kentucky 27 UNOFFICIAL COPY 23 RS BR 214
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Enterprise Initiative Act; Office of Entrepreneurship and Small Business 1
Innovation programs; Incentives for Energy-related Business Act; Kentucky 2
Economic Development Finance Authority small business and direct loan 3
programs; Kentucky Industrial Revitalization Act; Kentucky Reinvestment 4
Act; Kentucky Small Business Tax Credit; economic development bonds; 5
Kentucky Industrial Development Act; Kentucky Jobs Development Act; 6
Kentucky Jobs Retention Act; the Kentucky Rural Economic Development 7
Act; and the Taxpayer Transplant Program; and 8
(b) The annual report required by subsection (2) of this section shall include all 9
programs listed in paragraph (a) of this subsection plus the Kentucky 10
Investment Fund Act, and tax increment financing, state participation projects. 11
(4) The cabinet shall coordinate with any other agency necessary to supply the 12
information required by this section. 13
Section 5. (1) The Kentucky Economic Development Finance Authority 14
shall issue the request for proposal required in subsection (2)(b) of Section 1 of this Act 15
no later than 90 days after the effective date of this Act. 16
(2) There shall be a ten percent reduction in the Economic Development budget 17
unit during the next biennium if the request for proposal is not issued by 90 days after the 18
effective date of this Act. 19