2011 Kentucky Revised Statutes Subchapter 32 The Kentucky Business Investment Program 154.32.030 Application, approval, and review process -- Memorandum of agreement -- Loan agreement for advance disbursement -- Preliminary and final approval -- Tax incentive agreement -- Standards for approval -- Partial satisfaction of eligibility requirements.
KY Rev Stat § 154.32.030 (1996 through Reg Sess) What's This?
154.32-030 Application, approval, and review process -- Memorandum of
agreement -- Loan agreement for advance disbursement -- Preliminary and
final approval -- Tax incentive agreement -- Standards for approval -- Partial
satisfaction of eligibility requirements.
(1)
The application, approval, and review process under this subchapter shall be as
follows:
(a) An eligible company with a proposed economic development project may
submit an application to the authority. The application shall include the
information required by subsection (3) of this section;
(b) 1.
Upon review of the application and any additional information
submitted, the authority may, by resolution, give preliminary approval to
an eligible company and authorize the negotiation and execution of a
memorandum of agreement. The memorandum of agreement shall
establish a preliminary job target, minimum wage target, including
employee benefits, and maximum total approved cost for the economic
development project, and shall only allow the recovery of eligible costs
incurred after preliminary approval. Upon preliminary approval, the
preliminarily approved company may undertake the project in
accordance with the memorandum of agreement, and may begin to hire
employees that may be counted toward the minimum full-time job
requirements established by the memorandum of agreement.
2.
If the preliminary approval includes an advance disbursement, a separate
loan agreement shall also be negotiated establishing the terms for the
advance disbursement in accordance with KRS 154.32-080;
(c) After preliminary approval but before final approval, the authority shall post
the preliminarily approved company's name, the location of the economic
development project, and the incentives that have been preliminarily approved
on the Cabinet for Economic Development's Web site;
(d) The preliminarily approved company shall submit any documentation required
by the authority upon request of the authority;
(e) To obtain final approval, the preliminarily approved company shall submit:
1.
Documentation required by the authority to confirm that the
requirements established by the memorandum of agreement have been
met; and
2.
Documentation of official action taken by a local governmental entity
detailing the manner and level of local contribution, if applicable.
Upon review and confirmation of the documentation, the authority may, by
resolution, give final approval to the preliminarily approved company, and
authorize the execution of a tax incentive agreement between the authority and
the approved company pursuant to KRS 154.32-040. The tax incentive
agreement shall establish an activation date, which shall be within two (2)
years of final approval;
(f)
1.
2.
3.
4.
(g)
1.
2.
3.
4.
On or before the activation date, the approved company shall notify the
authority of its intention to activate the tax incentive agreement. The
approved company shall submit:
a.
Documentation that it has met the minimum full-time job,
minimum investment, and minimum wage and employee benefits
requirements established by KRS 154.32-020 as of the date of
activation; and
b.
The confirmed approved costs incurred as of the date of activation,
which shall be the total eligible costs that may be recovered by the
approved company.
If the approved company fails to meet any of the minimum investment,
full-time job, or wage requirements, including employee benefits,
established by KRS 154.32-020 on the activation date, the tax incentive
agreement shall be canceled and the approved company shall not be
eligible for incentives.
If an approved company meets the minimum investment, full-time job,
and wage requirements, including employee benefits, established by
KRS 154.32-020, but fails to meet higher job targets and minimum wage
targets, including employee benefits, established in the tax incentive
agreement, then the provisions of subsection (4) of this section shall
apply in determining the incentives for which the approved company
qualifies.
Upon activation of a tax incentive agreement, the authority shall notify
the department, and shall provide the department with the information
necessary to monitor and track the incentives taken by the approved
company; and
The authority shall monitor the tax incentive agreement at least annually,
and the approved company shall submit all documentation necessary for
the authority to monitor the agreement.
The authority shall, based on the documentation provided, confirm that
the approved company is in continued compliance with the provisions of
the tax incentive agreement and, therefore, eligible for incentives.
Upon annual review, if the approved company meets the minimum job
and wage requirements, including employee benefits, established by
KRS 154.32-020, but fails to meet the job target and minimum wage
target, including employee benefits, established in the tax incentive
agreement, then the provisions of subsection (4) of this section shall
apply in determining the incentives for which the approved company
qualifies in any year.
Upon final approval, the authority shall notify the department that an
approved company is eligible for incentives and shall provide the
department with the information necessary to monitor the use of
incentives by the approved company. If, at any time during the term of
(2)
(3)
the tax incentive agreement, an approved company becomes ineligible
for incentives, the authority shall notify the department, and the
department shall discontinue the availability of incentives for the
approved company.
(a) The authority may establish procedures and standards for the review and
approval of eligible companies and their economic development projects
through the promulgation of administrative regulations in accordance with
KRS Chapter 13A.
(b) Standards to be used by the authority in reviewing and approving an eligible
company and its economic development project shall include but not be
limited to:
1.
The creditworthiness of the eligible company;
2.
The proposed capital investment to be made;
3.
The number of new full-time jobs to be provided for the residents of the
Commonwealth and the wages to be paid;
4.
Support of the local community; and
5.
The likelihood of the economic success of the economic development
project.
The application shall include but not be limited to:
(a) The name of the applicant and identification of any affiliates of the applicant
who will have some relation to the economic development project;
(b) A description of the economic development project, including its location, the
total investment in the economic development project, and total proposed
eligible costs;
(c) The projected number of new full-time jobs to be created as a result of the
economic development project and identification of any affiliates who may
employ persons hired to fill those jobs;
(d) The number of existing full-time jobs at the site of the economic development
project on the date of the application and a description and breakdown of the
relevant affiliated employers;
(e) Proposed wage and employee benefit amounts for the new full-time jobs to be
created as a result of the proposed economic development project;
(f) For proposed economic development projects new to the Commonwealth,
certification by the eligible company that the economic development project
could reasonably and efficiently locate outside of the Commonwealth and,
without the incentives offered by the authority, the eligible company would
likely locate outside the Commonwealth;
(g) For eligible companies with an existing location in the Commonwealth
considering an expansion, certification that the tax incentives are necessary for
the expansion to occur;
(h) A letter of support from a local governmental entity in the city or county
where the economic development project will be located; and
(4)
(i)
(a)
(b)
(c)
(d)
Any other information the authority may require.
An approved company that meets the minimum job and wage requirements,
including employee benefits established by KRS 154.32-020, but fails to meet
the job target and minimum wage target, including employee benefits
established by the tax incentive agreement, shall be eligible to receive the
incentives authorized by the tax incentive agreement as provided in this
subsection.
If, upon activation or annual review, an approved company achieves at least
ninety percent (90%) of both the job target and minimum wage target,
including employee benefits established by the tax incentive agreement, and
no other default has occurred, then the approved company shall be eligible to
receive full incentives as provided in the tax incentive agreement.
If, upon activation or annual review, an approved company achieves less than
ninety percent (90%) of either the job target or minimum wage target,
including employee benefits established in the tax incentive agreement, and no
other default has occurred, then the incentives available to the approved
company for the following year shall be reduced by a percentage equal to the
percentage representing the difference between the job target or minimum
wage target, including employee benefits established in the tax incentive
agreement, and the actual average number of full-time jobs or average wage,
including employee benefits, paid. If both the number of actual average fulltime jobs and average wages paid, including employee benefits, are below
ninety percent (90%) of the targets on the same measurement date, then the
greater percentage reduction of the two (2) shall be applied rather than
reducing the incentives available by the sum of the two (2).
If, upon annual review, either the actual number of new full-time jobs or the
average wages paid for those jobs, including employee benefits, is less than
the minimum requirements established by KRS 154.32-020, then the
economic development project may be suspended automatically or, with
approval of the authority, terminated.
Effective: June 26, 2009
History: Created 2009 (1st Extra. Sess.) Ky. Acts ch. 1, sec. 11, effective June 26,
2009.
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