2021 Kentucky Revised Statutes Chapter 65 - General provisions applicable to counties, cities, and other local units 65.7047 Establishment of local development areas -- Conditions for establishment -- Steps for establishment or modification -- Funding -- Execution of agreement -- Pledge of revenues.
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65.7047 Establishment of local development areas -- Conditions for establishment - Steps for establishment or modification -- Funding -- Execution of agreement
-- Pledge of revenues.
(1)
(2)
Any city or county may establish a local development area pursuant to this section,
subject to the following conditions:
(a) A local development area shall be on previously undeveloped land;
(b) No more than one thousand (1,000) acres shall be approved for a local
development area in any twelve (12) month period in any county;
(c) The establishment or expansion of the local development area shall not cause
the assessed value of taxable real property within all local development areas
and development areas of the city or county establishing the local
development area to exceed twenty percent (20%) of the assessed value of all
taxable real property within its jurisdiction. For the purpose of determining
whether the twenty percent (20%) threshold has been met, the assessed value
of taxable real property within all of the local development areas and
development areas shall be valued as of the establishment date; and
(d) Unless the ordinance establishing a local development area requires an earlier
termination date, a local development area shall cease to exist on the
termination date.
A city or county shall take the following steps to establish or modify a local
development area:
(a) The city or county shall engage the services of a qualified independent outside
consultant or financial adviser to analyze the data related to the project and the
development area and prepare a report. The report shall include the following:
1.
The estimated approved public infrastructure costs for the project and, if
relevant, project costs, financing costs, and costs associated with land
preparation, demolition, and clearance;
2.
The feasibility of the project, taking into account the scope and location
of the project;
3.
The estimated amount of local tax revenues, as applicable, that would be
generated by the project over the period, which may be up to forty (40)
years, as applicable, from the development area's established date;
4.
The estimated amount of local tax revenues, as applicable, that would be
displaced within the city or county, for the purpose of quantifying
economic activity which is being shifted over the same period as that set
forth in subparagraph 3. of this paragraph. The projections for displaced
activity shall include economic activity that is lost to the local
jurisdiction as a result of the project, as well as economic activity that is
diverted to the project that formerly took place at existing establishments
within the local jurisdiction prior to the commencement date of the
project;
5.
The estimated amount of old revenues that would have been generated
in the development area of the project in the absence of the project,
(b)
(c)
computed over the same time period as set forth in subparagraph 3. of
this paragraph;
6.
In the process of estimating the revenues and impacts prescribed in
subparagraphs 3. and 4. of this paragraph, the independent outside
consultant shall not consider any of the following:
a.
Revenues or economic impacts associated with any projects within
the development area where the new project will be located; or
b.
Revenues or economic impacts associated with economic
development projects and approved Kentucky Tourism
Development Act projects under KRS Chapter 148;
7.
The relationship of the estimated incremental revenues to the financing
needs, including any increment bonds, of the project;
8.
When estimating the fiscal impact of the project, the consultant shall
evaluate the amount of revenue estimated in subparagraph 3. of this
paragraph and shall deduct the amounts estimated in subparagraphs 4.
and 5. of this paragraph. The resulting difference shall be compared to
the estimated incremental revenues to determine the presence or absence
of a positive fiscal impact; and
9.
A determination that the project will not occur if not for the designation
of the development area, the granting of incremental revenues by the
taxing district or districts, and the granting of the local tax incremental
revenues.
The city or county shall hold a public hearing to solicit input from the public
regarding the local development area. The city or county shall advertise the
hearing by causing to be published, in accordance with KRS 424.130, notice
of the time, place, and purpose of the hearing and a general description of the
boundaries of the proposed local development area. The notice shall include a
summary of the projects proposed for the local development area;
After the public hearing, the city or county shall adopt an ordinance which
shall include the following provisions:
1.
A description of the boundaries of the local development area;
2.
The establishment date and the termination date;
3.
A name for the local development area for identification purposes;
4.
Approval of any agreements relating to the local development area;
5.
A provision establishing a special fund for the local development area or
any project within the local development area;
6.
A requirement that any entity other than the governing body that
receives financial assistance under the local development area ordinance,
whether in the form of a grant, loan, or loan guarantee, shall make
periodic accounting to the governing body;
7.
A provision for periodic analysis and review by the governing body of
the development activity in the local development area;
8.
(3)
(4)
Designation of the agency or agencies responsible for oversight,
administration, and implementation of the local development ordinance;
9.
The estimated net positive fiscal impact as calculated in paragraph (a)8.
of this subsection in the required independent consultant report; and
10. Any other provisions, findings, limitations, rules, or procedures
regarding the proposed local development area or a project within the
local development area and its establishment or maintenance deemed
necessary by the city or county; and
(d) If incremental revenues or other resources are to be pledged from taxing
districts other than the city or county establishing the local development area,
a local development area agreement shall be executed in accordance with the
provisions of subsection (4) of this section.
Funding for projects in a local development area shall be provided in accordance
with KRS 65.7057.
A local development area agreement shall be executed among the agencies and
taxing districts involved in administering, providing financing, or pledging
incremental revenues within the local development area. The local development
area agreement shall be adopted by a city or county by ordinance and by any other
taxing district or agency by resolution, and shall include but not be limited to the
following provisions:
(a) Identification of the parties to the local development area agreement and the
duties and responsibilities of each entity under the agreement;
(b) Specific identification of the tax increments released or pledged by type of tax
by each taxing district;
(c) The anticipated benefit to be received by each taxing district for the release or
pledge, including:
1.
A detailed summary of old revenues collected and projected new
revenues for each taxing district on an annual basis for the term of the
local development area agreement; and
2.
The maximum amount of incremental revenue to be paid by each taxing
district and the maximum number of years the payment will be effective;
(d) A detailed description of the local development area;
(e) A description of each proposed project, including an estimate of the costs of
construction, acquisition, and development;
(f) A requirement that pledged incremental revenues will be deposited in a
special fund pursuant to KRS 65.7061, including the timing and procedure for
depositing incremental revenues and other pledged amounts into the special
fund;
(g) Terms of default and remedies, provided that no remedy shall permit the
withholding by any party to the local development area agreement of any
incremental revenues pledged to the special fund if increment bonds are
outstanding that are secured by a pledge of those incremental revenues;
(h)
(i)
(5)
The commencement date, activation date, and termination date; and
Any other provisions not inconsistent with KRS 65.7041 to 65.7083 deemed
necessary or appropriate by the parties to the agreement.
Any pledge of incremental revenues in a local development area agreement shall be
superior to any other pledge of revenues for any other purpose and shall, from the
activation date to the termination date set forth in the local area development
agreement, supersede any statute, ordinance, or resolution regarding the application
or use of incremental revenues. No ordinance in conflict with a local development
area agreement shall be adopted while any increment bonds secured by that pledge
remain outstanding. Ordinances or resolutions pledging incremental revenues on a
subordinate basis to any existing pledges may be adopted.
Effective: June 29, 2021
History: Amended 2021 Ky. Acts ch. 185, sec. 100, effective June 29, 2021. -Amended 2008 Ky. Acts ch. 178, sec. 3, effective July 15, 2008. -- Created 2007 Ky.
Acts ch. 95, sec. 4, effective March 23, 2007.
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