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154.30-010 Definitions for subchapter.
As used in this subchapter:
(1) "Activation date" means:
(a) For all projects except those described in paragraph (b) of this subsection, the
date established any time within a two (2) year period after the
commencement date. The Commonwealth may extend the two (2) year period
to no more than four (4) years upon written application by the agency
requesting the extension; and
(b) For signature projects approved under KRS 154.30-050(2)(a), the date
established any time within a ten (10) year period after the commencement
date.
The activation date is the date on which the time period for the pledge of
incremental revenues shall commence. To implement the activation date, the agency
that is a party to the tax incentive agreement shall notify the office;
(2) "Agency" means:
(a) An urban renewal and community development agency established under
KRS Chapter 99;
(b) A development authority established under KRS Chapter 99;
(c) A nonprofit corporation;
(d) A housing authority established under KRS Chapter 80;
(e) An air board established under KRS 183.132 to 183.160;
(f) A local industrial development authority established under KRS 154.50-301
to 154.50-346;
(g) A riverport authority established under KRS 65.510 to 65.650; or
(h) A designated department, division, or office of a city or county;
(3) "Approved public infrastructure costs" means costs associated with the acquisition,
installation, construction, or reconstruction of public works, public improvements,
and public buildings, including planning and design costs associated with the
development of such public amenities. "Approved public infrastructure costs"
includes but is not limited to costs incurred for the following:
(a) Land preparation, including demolition and clearance work;
(b) Buildings;
(c) Sewers and storm drainage;
(d) Curbs, sidewalks, promenades, and pedways;
(e) Roads;
(f) Street lighting;
(g) The provision of utilities;
(h) Environmental remediation;
(i) Floodwalls and floodgates;
(j) Public spaces or parks;
(4)
(5)
(6)
(7)
(8)
(k) Parking;
(l) Easements and rights-of-way;
(m) Transportation facilities;
(n) Public landings;
(o) Amenities, such as fountains, benches, and sculptures; and
(p) Riverbank modifications and improvements;
"Approved signature project costs" means:
(a) The acquisition of land for portions of the project that are for infrastructure;
and
(b) Costs associated with the acquisition, installation, development, construction,
improvement, or reconstruction of infrastructure, including planning and
design costs associated with the development of infrastructure, including but
not limited to parking structures, including portions of parking structures that
serve as platforms to support development above;
that have been determined by the commission to represent a unique challenge in the
financing of a project such that the project could not be developed without
incentives intended by this chapter to foster economic development;
"Authority" means the Kentucky Economic Development Finance Authority
established by KRS 154.20-010;
"Capital investment" means:
(a) Obligations incurred for labor and to contractors, subcontractors, builders, and
materialmen in connection with the acquisition, construction, installation,
equipping, and rehabilitation of a project;
(b) The cost of acquiring land or rights in land within the development area on the
footprint of the project, and any cost incident thereto, including recording
fees;
(c) The cost of contract bonds and of insurance of all kinds that may be required
or necessary during the course of acquisition, construction, installation,
equipping, and rehabilitation of a project which is not paid by the contractor
or contractors or otherwise provided;
(d) All costs of architectural and engineering services, including test borings,
surveys, estimates, plans, specifications, preliminary investigations,
supervision of construction, and the performance of all the duties required by
or consequent upon the acquisition, construction, installation, equipping, and
rehabilitation of a project;
(e) All costs that are required to be paid under the terms of any contract for the
acquisition, construction, installation, equipping, and rehabilitation of a
project; and
(f) All other costs of a nature comparable to those described in this subsection;
"City" means any city, consolidated local government, or urban-county government;
"Commencement date" means the date on which a tax incentive agreement is
(9)
(10)
(11)
(12)
(13)
(14)
(15)
(16)
(17)
(18)
(19)
(20)
(21)
(22)
executed;
"Commonwealth" means the Commonwealth of Kentucky;
"County" means any county, consolidated local government, charter county, unified
local government, or urban-county government;
"CPI" means the nonseasonally adjusted Consumer Price Index for all urban
consumers, all items, base year computed for 1982 to 1984 equals one hundred
(100), published by the United States Department of Labor, Bureau of Labor
Statistics;
"Department" means the Department of Revenue;
"Development area" means an area established under KRS 65.7049, 65.7051, and
65.7053;
"Economic development projects" means projects which are approved for tax
credits under Subchapter 20, 22, 23, 24, 25, 26, 27, 28, 34, or 48 of KRS Chapter
154;
"Financing costs" means principal, interest, costs of issuance, debt service reserve
requirements, underwriting discount, costs of credit enhancement or liquidity
instruments, and other costs directly related to the issuance of bonds or debt for
approved public infrastructure costs or approved signature project costs for projects
approved pursuant to KRS 154.30-050;
"Footprint" means the actual perimeter of a discrete, identified project within a
development area. The footprint shall not include any portion of a development area
outside the area for which actual capital investments are made;
"Governing body" means the body possessing legislative authority in a city or
county;
"Increment bonds" means bonds and notes issued for the purpose of paying the costs
of one (1) or more projects;
"Incremental revenues" means:
(a) The amount of revenues received by a taxing district, as determined by
subtracting old revenues from new revenues in a calendar year with respect to
a development area, or a project within a development area; or
(b) The amount of revenues received by the Commonwealth as determined by
subtracting old revenues from new revenues in a calendar year with respect to
the footprint;
"Local participation agreement" means the agreement entered into under KRS
65.7063;
"Local tax revenues" has the same meaning as in KRS 65.7045;
"New revenues" means:
(a) The amount of local tax revenues received by a taxing district with respect to
a development area in any calendar year beginning with the year in which the
activation date occurred; or
(b) The amount of state tax revenues received by the Commonwealth with respect
to the footprint in any calendar year beginning with the year in which the
activation date occurred;
(23) "Old revenues" means:
(a) The amount of local tax revenues received by a taxing district with respect to
a development area during the last calendar year prior to the commencement
date; or
(b) 1.
The amount of state tax revenues received by the Commonwealth within
the footprint during the last calendar year prior to the commencement
date. If the authority determines that the amount of state tax revenues
received during the last calendar year prior to the commencement date
does not represent a true and accurate depiction of revenues, the
authority may consider revenues for a period of no longer than three (3)
calendar years prior to the commencement date, so as to determine a fair
representation of state tax revenues. The amount determined by the
authority shall be specified in the tax incentive agreement. If state tax
revenues were derived from the footprint prior to the commencement
date, old revenues shall increase each calendar year by:
a.
The percentage increase, if any, of the CPI or a comparable index;
or
b.
An alternative percentage increase that is determined to be
appropriate by the authority.
The method for increasing old revenues shall be set forth in the tax
incentive agreement;
2.
If state revenues were derived from the footprint prior to the
commencement date, the calculation of incremental revenues shall be
based on the value of old revenues as increased using the method
prescribed in subparagraph 1. of this paragraph to reflect the same
calendar year as is used in the determination of new revenues.
(24) "Outstanding" means increment bonds that have been issued, delivered, and paid for
by the purchaser, except any of the following:
(a) Increment bonds canceled upon surrender, exchange, or transfer, or upon
payment or redemption;
(b) Increment bonds in replacement of which or in exchange for which other
increment bonds have been issued; or
(c) Increment bonds for the payment, redemption, or purchase for cancellation
prior to maturity, of which sufficient moneys or investments, in accordance
with the ordinance or other proceedings or any applicable law, by mandatory
sinking fund redemption requirements, or otherwise, have been deposited, and
credited in a sinking fund or with a trustee or paying or escrow agent, whether
at or prior to their maturity or redemption, and, in the case of increment bonds
to be redeemed prior to their stated maturity, notice of redemption has been
given or satisfactory arrangements have been made for giving notice of that
redemption, or waiver of that notice by or on behalf of the affected bond
(25)
(26)
(27)
(28)
(29)
(30)
holders has been filed with the issuer or its agent;
"Project" means any property, asset, or improvement located in a development area
and certified by the governing body as:
(a) Being for a public purpose; and
(b) Being for the development of facilities for residential, commercial, industrial,
public, recreational, or other uses, or for open space, including the
development, rehabilitation, renovation, installation, improvement,
enlargement, or extension of real estate and buildings; and
(c) Contributing to economic development or tourism; and
(d) Meeting the additional requirements established by KRS 154.30-040, 154.30050, or 154.30-060;
"Signature project" means a project approved under KRS 154.30-050;
"State real property ad valorem tax" means real property ad valorem taxes levied
under KRS 132.020(1)(a);
"State tax revenues" means revenues received by the Commonwealth from one (1)
or more of the following sources:
(a) State real property ad valorem taxes;
(b) Individual income taxes levied under KRS 141.020, other than individual
income taxes that have already been pledged to support an economic
development project within the development area;
(c) Corporation income taxes levied under KRS 141.040, other than corporation
income taxes that have already been pledged to support an economic
development project within the development area;
(d) Limited liability entity taxes levied under KRS 141.0401, other than limited
liability entity taxes that have already been pledged to support an economic
development project within the development area; and
(e) Sales taxes levied under KRS 139.200, excluding sales taxes already pledged
for:
1.
Approved tourism attraction projects, as defined in KRS 148.851, within
the development area; and
2.
Projects which are approved for sales tax refunds under Subchapter 20
of KRS Chapter 154 within the development area;
"Tax incentive agreement" means an agreement entered into in accordance with
KRS 154.30-070; and
"Termination date" means:
(a) For a tax incentive agreement satisfying the requirements of KRS 154.30-040
or 154.30-060, a date established by the tax incentive agreement that is no
more than twenty (20) years from the activation date. However, the
termination date for a tax incentive agreement shall in no event be more than
forty (40) years from the establishment date of the development area to which
the tax incentive agreement relates; and
(b)
For a project grant agreement satisfying the requirements of KRS 154.30-050,
a date established by the tax incentive agreement that is no more than thirty
(30) years from the activation date. However, the termination date for a tax
incentive agreement shall in no event be more than forty (40) years from the
establishment date of the development area to which the tax incentive
agreement relates.
Effective: June 8, 2011
History: Amended 2011 Ky. Acts ch. 62, sec. 7, effective June 8, 2011. -- Amended
2009 (1st Extra. Sess.) Ky. Acts ch. 1, sec. 102, effective June 26, 2009. -- Created
2008 Ky. Acts ch. 178, sec. 14, effective July 15, 2008.
Legislative Research Commission Note (6/8/2011). 2011 Ky. Acts. ch. 62, sec. 8,
provides that "the provisions of Section 7 of this Act (KRS 154.30-010) shall apply
retroactively and any agreements entered into prior to the effective date of this Act,
for projects approved under KRS 154.30-050(2)(a) that have not been activated as of
the effective date of this Act, shall be amended to reflect the revised activation date
provided for in Section 7 of this Act."
Legislative Research Commission Note (6/26/2009). 2009 (1st Extra. Sess.) Ky. Acts
ch. 1, sec. 103, provided that, notwithstanding KRS 65.7044(6), the amendments
made to this statute in 2009 (1st Extra. Sess.) Ky. Acts ch. 1, sec. 102, "shall apply
retroactively and any agreements entered into prior to the effective date of this Act
for projects approved under KRS 154.30-050(2)(a) that have not been activated as of
the effective date of this Act shall be amended to reflect the revised activation date
provided for in Section 102 of this Act."
Legislative Research Commission Note (7/15/2008). 2008 Ky. Acts ch. 178, sec. 14
established a new Subchapter 30 of KRS Chapter 154 concerning tax increment
financing projects and provided further that "KRS 65.7045 is repealed, reenacted,
and amended as a new section thereof to read as follows." Since KRS 65.7045 was
also amended in sec. 2 of that Act, inquiry was made of the drafter as to the intent of
sec. 14. The drafter explained that statutes dealing with both area development
projects and tax increment financing projects were blended together in KRS Chapter
65 with no easy distinguishing elements, and the intent of creating Subchapter 30 of
KRS Chapter 154 was to separate them appropriately. The intent of sec. 14 was to
create a definitions section for the new Subchapter 30 of KRS Chapter 154, using the
text of KRS 65.7045 as a base starting point, removing definitions specific to KRS
Chapter 65 area development projects, retaining definitions that were common to
both area development projects and tax increment financing projects, and adding
definitions specific to tax increment financing projects. As such, the Reviser of
Statutes has treated sec. 14 in codification as creating a new section of Subchapter 30
of KRS Chapter 154 (this statute) to effectuate that intent.
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