2021 Kentucky Revised Statutes Chapter 154 - Development Subchapter 154.32 - The Kentucky Business Investment Program 154.32-030 Application, approval, and review process -- Memorandum of agreement -- Preliminary and final approval -- Tax incentive agreement -- Standards for approval -- Partial satisfaction of eligibility requirements.
Download as PDF
154.32-030
Application, approval, and review process -- Memorandum of
agreement -- 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) 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;
(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.
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.
(2)
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.
2.
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.
3.
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.
4.
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
(g) 1.
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.
2.
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.
3.
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.
4.
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 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
(3)
(4)
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
(i) Any other information the authority may require.
(a) 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.
(b) 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
(c)
(d)
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 full-time 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:March 26, 2019
History: Amended 2019 Ky. Acts ch. 172, sec. 4, effective March 26, 2019. -Created 2009 (1st Extra. Sess.) Ky. Acts ch. 1, sec. 11, effective June 26, 2009.
Disclaimer: These codes may not be the most recent version. Kentucky may have more current or accurate information. We make no warranties or guarantees about the accuracy, completeness, or adequacy of the information contained on this site or the information linked to on the state site. Please check official sources.