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AN ACT relating to the community restoration tax credit. 1
Be it enacted by the General Assembly of the Commonwealth of Kentucky: 2
SECTION 1. A NEW SECTION OF KRS CHAPTER 141 IS CREATED TO 3
READ AS FOLLOWS: 4
(1) As used in this section: 5
(a) "Community development financial institution" means a financial 6
institution that is certified by the United States Department of the 7
Treasury's community development financial institutions fund; 8
(b) "Qualified loan" means a loan that is at least two percent (2%) below the 9
prime rate, as published by the Wall Street Journal at the time the loan is 10
approved, and that does not meet the definition of a qualified low-rate loan; 11
(c) "Qualified long-term investment" means an equity investment made for a 12
period of more than five (5) years; and 13
(d) "Qualified low-rate loan" means a loan that is at least four percent (4%) 14
below the prime rate, as published by the Wall Street Journal at the time the 15
loan is approved. 16
(2) (a) For taxable years beginning on or after January 1, 2024, but before 17
January 1, 2028, the department may award a nonrefundable, 18
nontransferrable community restoration tax credit to a financial institution. 19
(b) The credit may be applied to the taxes imposed in KRS 141.020 or 141.040 20
and 141.0401, with the ordering of the credits under Section 2 of this Act. 21
(c) The department shall not award an aggregate amount of tax credits which 22
would exceed twenty million dollars ($20,000,000) in any year, if all 23
taxpayers claimed the allowable amount each year. 24
(d) The amount of credit awarded to a financial institution shall be in an 25
amount equal to: 26
1. a. Five percent (5%) of a qualified loan or qualified long-term 27 UNOFFICIAL COPY 23 RS BR 967
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investment made to a community development financial 1
institution; or 2
b. Three percent (3%) annually of the unpaid principal balance of 3
a qualified loan made to a community development financial 4
institution as of December 31 of each year; and 5
2. a. Ten percent (10%) of a grant, contribution, or qualified low-rate 6
loan made to a community development financial institution; or 7
b. Five percent (5%) annually of the unpaid principal balance of a 8
qualified low-rate loan made to a community development 9
financial institution as of December 31 of each year. 10
(e) The credit may be claimed by the financial institution for a period not to 11
exceed the earlier of: 12
1. Fifteen (15) years; or 13
2. The life of the loan. 14
(f) Any unused credit allowed under paragraph (d)1.a. or 2.a. of this subsection 15
during a taxable year may be carried forward, except that no unused credit 16
shall be carried forward beyond fifteen (15) years after the tax year in 17
which the credit originated. 18
(3) Notwithstanding KRS 360.010, a community development financial institution 19
shall be allowed to charge a rate of interest not to exceed twenty-four percent 20
(24%) per annum. 21
(4) (a) In order for the General Assembly to evaluate the effectiveness of the 22
community restoration credit, the department shall provide the following 23
information on a cumulative basis for each taxable year to provide a 24
historical impact of the tax credit to the Commonwealth: 25
1. The name and location, by county, of each financial institution 26
claiming a credit; 27 UNOFFICIAL COPY 23 RS BR 967
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2. The amount of credit claimed by the financial institution, whether the 1
credit was a result of paragraph (d)1.a. or b. of subsection (2) of this 2
section, paragraph (d)2.a. or b. of subsection (2) of this section, or 3
both, and if multiple results apply, the amount of credit for each 4
result; 5
3. The amount of credit carried forward by the financial institution; 6
4. A list of the community development financial institutions that were 7
issued a loan and the location, by county, of the community 8
development financial institutions; and 9
5. Based on ranges of net income no larger than fifty thousand dollars 10
($50,000) for the taxable year, the total amount of tax credit claimed 11
and the number of returns claiming a tax credit for each net income 12
range. 13
(b) The report required by paragraph (a) of this subsection shall be submitted 14
to the Interim Joint Committee on Appropriations and Revenue beginning 15
no later than November 1, 2025, and no later than each November 1 16
thereafter, as long as the credit is claimed on any return processed by the 17
department. 18
Section 2. KRS 141.0205 is amended to read as follows: 19
If a taxpayer is entitled to more than one (1) of the tax credits allowed against the tax 20
imposed by KRS 141.020, 141.040, and 141.0401, the priority of application and use of 21
the credits shall be determined as follows: 22
(1) The nonrefundable business incentive credits against the tax imposed by KRS 23
141.020 shall be taken in the following order: 24
(a) The limited liability entity tax credit permitted by KRS 141.0401; 25
(b) The economic development credits computed under KRS 141.347, 141.381, 26
141.384, 141.3841, 141.400, 141.401, 141.403, 141.407, 141.415, 154.12-27 UNOFFICIAL COPY 23 RS BR 967
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207, and 154.12-2088; 1
(c) The qualified farming operation credit permitted by KRS 141.412; 2
(d) The certified rehabilitation credit permitted by KRS 171.397(1)(a); 3
(e) The health insurance credit permitted by KRS 141.062; 4
(f) The tax paid to other states credit permitted by KRS 141.070; 5
(g) The credit for hiring the unemployed permitted by KRS 141.065; 6
(h) The recycling or composting equipment credit permitted by KRS 141.390; 7
(i) The tax credit for cash contributions in investment funds permitted by KRS 8
154.20-263 in effect prior to July 15, 2002, and the credit permitted by KRS 9
154.20-258; 10
(j) The research facilities credit permitted by KRS 141.395; 11
(k) The employer High School Equivalency Diploma program incentive credit 12
permitted under KRS 151B.402; 13
(l) The voluntary environmental remediation credit permitted by KRS 141.418; 14
(m) The biodiesel and renewable diesel credit permitted by KRS 141.423; 15
(n) The clean coal incentive credit permitted by KRS 141.428; 16
(o) The ethanol credit permitted by KRS 141.4242; 17
(p) The cellulosic ethanol credit permitted by KRS 141.4244; 18
(q) The energy efficiency credits permitted by KRS 141.436; 19
(r) The railroad maintenance and improvement credit permitted by KRS 141.385; 20
(s) The Endow Kentucky credit permitted by KRS 141.438; 21
(t) The New Markets Development Program credit permitted by KRS 141.434; 22
(u) The distilled spirits credit permitted by KRS 141.389; 23
(v) The angel investor credit permitted by KRS 141.396; 24
(w) The film industry credit permitted by KRS 141.383 for applications approved 25
on or after April 27, 2018, but before January 1, 2022; 26
(x) The inventory credit permitted by KRS 141.408;[ and] 27 UNOFFICIAL COPY 23 RS BR 967
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(y) The renewable chemical production credit permitted by KRS 141.4231; and 1
(z) The community restoration credit permitted by Section 1 of this Act. 2
(2) After the application of the nonrefundable credits in subsection (1) of this section, 3
the nonrefundable personal tax credits against the tax imposed by KRS 141.020 4
shall be taken in the following order: 5
(a) The individual credits permitted by KRS 141.020(3); 6
(b) The credit permitted by KRS 141.066; 7
(c) The tuition credit permitted by KRS 141.069; 8
(d) The household and dependent care credit permitted by KRS 141.067; 9
(e) The income gap credit permitted by KRS 141.066; and 10
(f) The Education Opportunity Account Program tax credit permitted by KRS 11
141.522. 12
(3) After the application of the nonrefundable credits provided for in subsection (2) of 13
this section, the refundable credits against the tax imposed by KRS 141.020 shall be 14
taken in the following order: 15
(a) The individual withholding tax credit permitted by KRS 141.350; 16
(b) The individual estimated tax payment credit permitted by KRS 141.305; 17
(c) The certified rehabilitation credit permitted by KRS 171.3961, 171.3963, and 18
171.397(1)(b); 19
(d) The film industry tax credit permitted by KRS 141.383 for applications 20
approved prior to April 27, 2018, or on or after January 1, 2022; 21
(e) The development area tax credit permitted by KRS 141.398; and 22
(f) The decontamination tax credit permitted by KRS 141.419. 23
(4) The nonrefundable credit permitted by KRS 141.0401 shall be applied against the 24
tax imposed by KRS 141.040. 25
(5) The following nonrefundable credits shall be applied against the sum of the tax 26
imposed by KRS 141.040 after subtracting the credit provided for in subsection (4) 27 UNOFFICIAL COPY 23 RS BR 967
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of this section, and the tax imposed by KRS 141.0401 in the following order: 1
(a) The economic development credits computed under KRS 141.347, 141.381, 2
141.384, 141.3841, 141.400, 141.401, 141.403, 141.407, 141.415, 154.12-3
207, and 154.12-2088; 4
(b) The qualified farming operation credit permitted by KRS 141.412; 5
(c) The certified rehabilitation credit permitted by KRS 171.397(1)(a); 6
(d) The health insurance credit permitted by KRS 141.062; 7
(e) The unemployment credit permitted by KRS 141.065; 8
(f) The recycling or composting equipment credit permitted by KRS 141.390; 9
(g) The coal conversion credit permitted by KRS 141.041; 10
(h) The enterprise zone credit permitted by KRS 154.45-090, for taxable periods 11
ending prior to January 1, 2008; 12
(i) The tax credit for cash contributions to investment funds permitted by KRS 13
154.20-263 in effect prior to July 15, 2002, and the credit permitted by KRS 14
154.20-258; 15
(j) The research facilities credit permitted by KRS 141.395; 16
(k) The employer High School Equivalency Diploma program incentive credit 17
permitted by KRS 151B.402; 18
(l) The voluntary environmental remediation credit permitted by KRS 141.418; 19
(m) The biodiesel and renewable diesel credit permitted by KRS 141.423; 20
(n) The clean coal incentive credit permitted by KRS 141.428; 21
(o) The ethanol credit permitted by KRS 141.4242; 22
(p) The cellulosic ethanol credit permitted by KRS 141.4244; 23
(q) The energy efficiency credits permitted by KRS 141.436; 24
(r) The ENERGY STAR home or ENERGY STAR manufactured home credit 25
permitted by KRS 141.437; 26
(s) The railroad maintenance and improvement credit permitted by KRS 141.385; 27 UNOFFICIAL COPY 23 RS BR 967
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(t) The railroad expansion credit permitted by KRS 141.386; 1
(u) The Endow Kentucky credit permitted by KRS 141.438; 2
(v) The New Markets Development Program credit permitted by KRS 141.434; 3
(w) The distilled spirits credit permitted by KRS 141.389; 4
(x) The film industry credit permitted by KRS 141.383 for applications approved 5
on or after April 27, 2018, but before January 1, 2022; 6
(y) The inventory credit permitted by KRS 141.408; 7
(z) The renewable chemical production tax credit permitted by KRS 141.4231;[ 8
and] 9
(aa) The Education Opportunity Account Program tax credit permitted by KRS 10
141.522; and 11
(ab) The community restoration credit permitted by Section 1 of this Act. 12
(6) After the application of the nonrefundable credits in subsection (5) of this section, 13
the refundable credits shall be taken in the following order: 14
(a) The corporation estimated tax payment credit permitted by KRS 141.044; 15
(b) The certified rehabilitation credit permitted by KRS 171.3961, 171.3963, and 16
171.397(1)(b); 17
(c) The film industry tax credit permitted by KRS 141.383 for applications 18
approved prior to April 27, 2018, or on or after January 1, 2022; and 19
(d) The decontamination tax credit permitted by KRS 141.419. 20
Section 3. KRS 131.190 is amended to read as follows: 21
(1) No present or former commissioner or employee of the department, present or 22
former member of a county board of assessment appeals, present or former property 23
valuation administrator or employee, present or former secretary or employee of the 24
Finance and Administration Cabinet, former secretary or employee of the Revenue 25
Cabinet, or any other person, shall intentionally and without authorization inspect 26
or divulge any information acquired by him or her of the affairs of any person, or 27 UNOFFICIAL COPY 23 RS BR 967
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information regarding the tax schedules, returns, or reports required to be filed with 1
the department or other proper officer, or any information produced by a hearing or 2
investigation, insofar as the information may have to do with the affairs of the 3
person's business. 4
(2) The prohibition established by subsection (1) of this section shall not extend to: 5
(a) Information required in prosecutions for making false reports or returns of 6
property for taxation, or any other infraction of the tax laws; 7
(b) Any matter properly entered upon any assessment record, or in any way made 8
a matter of public record; 9
(c) Furnishing any taxpayer or his or her properly authorized agent with 10
information respecting his or her own return; 11
(d) Testimony provided by the commissioner or any employee of the department 12
in any court, or the introduction as evidence of returns or reports filed with the 13
department, in an action for violation of state or federal tax laws or in any 14
action challenging state or federal tax laws; 15
(e) Providing an owner of unmined coal, oil or gas reserves, and other mineral or 16
energy resources assessed under KRS 132.820, or owners of surface land 17
under which the unmined minerals lie, factual information about the owner's 18
property derived from third-party returns filed for that owner's property, under 19
the provisions of KRS 132.820, that is used to determine the owner's 20
assessment. This information shall be provided to the owner on a confidential 21
basis, and the owner shall be subject to the penalties provided in KRS 22
131.990(2). The third-party filer shall be given prior notice of any disclosure 23
of information to the owner that was provided by the third-party filer; 24
(f) Providing to a third-party purchaser pursuant to an order entered in a 25
foreclosure action filed in a court of competent jurisdiction, factual 26
information related to the owner or lessee of coal, oil, gas reserves, or any 27 UNOFFICIAL COPY 23 RS BR 967
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other mineral resources assessed under KRS 132.820. The department may 1
promulgate an administrative regulation establishing a fee schedule for the 2
provision of the information described in this paragraph. Any fee imposed 3
shall not exceed the greater of the actual cost of providing the information or 4
ten dollars ($10); 5
(g) Providing information to a licensing agency, the Transportation Cabinet, or 6
the Kentucky Supreme Court under KRS 131.1817; 7
(h) Statistics of gasoline and special fuels gallonage reported to the department 8
under KRS 138.210 to 138.448; 9
(i) Providing any utility gross receipts license tax return information that is 10
necessary to administer the provisions of KRS 160.613 to 160.617 to 11
applicable school districts on a confidential basis; 12
(j) Providing documents, data, or other information to a third party pursuant to an 13
order issued by a court of competent jurisdiction; or 14
(k) Providing information to the Legislative Research Commission under: 15
1. KRS 139.519 for purposes of the sales and use tax refund on building 16
materials used for disaster recovery; 17
2. KRS 141.436 for purposes of the energy efficiency products credits; 18
3. KRS 141.437 for purposes of the ENERGY STAR home and the 19
ENERGY STAR manufactured home credits; 20
4. KRS 141.383 for purposes of the film industry incentives; 21
5. KRS 154.26-095 for purposes of the Kentucky industrial revitalization 22
tax credits and the job assessment fees; 23
6. KRS 141.068 for purposes of the Kentucky investment fund; 24
7. KRS 141.396 for purposes of the angel investor tax credit; 25
8. KRS 141.389 for purposes of the distilled spirits credit; 26
9. KRS 141.408 for purposes of the inventory credit; 27 UNOFFICIAL COPY 23 RS BR 967
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10. KRS 141.390 for purposes of the recycling and composting credit; 1
11. KRS 141.3841 for purposes of the selling farmer tax credit; 2
12. KRS 141.4231 for purposes of the renewable chemical production tax 3
credit; 4
13. KRS 141.524 for purposes of the Education Opportunity Account 5
Program tax credit; 6
14. KRS 141.398 for purposes of the development area tax credit; 7
15. KRS 139.516 for the purposes of the sales and use tax exemption on the 8
commercial mining of cryptocurrency;[ and] 9
16. KRS 141.419 for purposes of the decontamination tax credit; and 10
17. Section 1 of this Act for purposes of the community restoration credit. 11
(3) The commissioner shall make available any information for official use only and on 12
a confidential basis to the proper officer, agency, board or commission of this state, 13
any Kentucky county, any Kentucky city, any other state, or the federal 14
government, under reciprocal agreements whereby the department shall receive 15
similar or useful information in return. 16
(4) Access to and inspection of information received from the Internal Revenue Service 17
is for department use only, and is restricted to tax administration purposes. 18
Information received from the Internal Revenue Service shall not be made available 19
to any other agency of state government, or any county, city, or other state, and 20
shall not be inspected intentionally and without authorization by any present 21
secretary or employee of the Finance and Administration Cabinet, commissioner or 22
employee of the department, or any other person. 23
(5) Statistics of crude oil as reported to the department under the crude oil excise tax 24
requirements of KRS Chapter 137 and statistics of natural gas production as 25
reported to the department under the natural resources severance tax requirements 26
of KRS Chapter 143A may be made public by the department by release to the 27 UNOFFICIAL COPY 23 RS BR 967
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Energy and Environment Cabinet, Department for Natural Resources. 1
(6) Notwithstanding any provision of law to the contrary, beginning with mine-map 2
submissions for the 1989 tax year, the department may make public or divulge only 3
those portions of mine maps submitted by taxpayers to the department pursuant to 4
KRS Chapter 132 for ad valorem tax purposes that depict the boundaries of mined-5
out parcel areas. These electronic maps shall not be relied upon to determine actual 6
boundaries of mined-out parcel areas. Property boundaries contained in mine maps 7
required under KRS Chapters 350 and 352 shall not be construed to constitute land 8
surveying or boundary surveys as defined by KRS 322.010 and any administrative 9
regulations promulgated thereto. 10