Kentucky Statutes 141.428 – Kentucky Clean Coal Incentive Act — Definitions — Tax credit — Administrative regulations
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(1) As used in this section:
(a) “Clean coal facility” means an electric generation facility beginning commercial operation on or after January 1, 2005, at a cost greater than one hundred fifty million dollars ($150,000,000) that is located in the Commonwealth of Kentucky and is certified by the Energy and Environment Cabinet as reducing emissions of pollutants released during generation of electricity through the use of clean coal equipment and technologies;
(b) “Clean coal equipment” means equipment purchased and installed for commercial use in a clean coal facility to aid in reducing the level of pollutants released during the generation of electricity from eligible coal;
(c) “Clean coal technologies” means technologies incorporated for use within a clean coal facility to lower emissions of pollutants released during the generation of electricity from eligible coal;
(d) “Eligible coal” means coal that is subject to the tax imposed under KRS
143.020;
(e) “Ton” means a unit of weight equivalent to two thousand (2,000) pounds; and
(f) “Taxpayer” means taxpayer as defined in KRS § 131.010(4).
(2) Effective for tax years ending on or after December 31, 2006, a nonrefundable, nontransferable credit shall be allowed for:
(a) Any electric power company subject to tax under KRS § 136.120 and certified as a clean coal facility or any taxpayer that owns or operates a clean coal facility and purchases eligible coal that is used by the taxpayer in a certified clean coal facility; or
(b) A parent company of an entity identified in paragraph (a) of this subsection if the subsidiary is wholly owned.
(3) (a) The credit may be taken against the taxes imposed by:
1. KRS § 136.120; or
2. KRS § 141.020 or 141.040, and 141.0401.
(b) The credit shall not be carried forward and must be used on the tax return filed for the period during which the eligible coal was purchased. The Energy and Environment Cabinet must approve and certify use of the clean coal equipment and technologies within a clean coal facility before any taxpayer may claim the credit.
(c) The credit allowed under paragraph (a) of this subsection shall be applied both to the income tax imposed under KRS § 141.020 or 141.040 and to the limited liability entity tax imposed under KRS § 141.0401, with the ordering of credits as provided in KRS § 141.0205.
(4) The amount of the allowable credit shall be two dollars ($2) per ton of eligible coal purchased that is used to generate electric power at a certified clean coal facility.
(5) Each taxpayer eligible for the credit provided under subsection (2) of this section shall file a clean coal incentive credit claim on forms prescribed by the department. At the time of filing for the credit, the taxpayer shall submit an electronic report verifying the tons of coal subject to the tax imposed by KRS § 143.020 purchased for each year in which the credit is claimed. The department shall determine the amount of the approved credit and issue a credit certificate to the taxpayer.
(6) Corporations and pass-through entities subject to the tax imposed under KRS
141.040 or 141.0401 shall be eligible to apply, subject to the conditions imposed under this section, the approved credit against its liability for the taxes, in consecutive order as follows:
(a) The credit shall first be applied against both the tax imposed by KRS
141.0401 and the tax imposed by KRS § 141.020 or 141.040, with the ordering of credits as provided in KRS § 141.0205;
(b) The credit shall then be applied to the tax imposed by KRS § 136.120.
The credit shall meet the entirety of the taxpayer’s liability under the first tax listed in consecutive order before applying any remaining credit to the next tax listed. The taxpayer’s total liability under each preceding tax must be fully met before the remaining credit can be applied to the subsequent tax listed in consecutive order.
(7) If the taxpayer is a pass-through entity not subject to tax under KRS § 141.040, the amount of approved credit shall be applied against the tax imposed by KRS
141.0401 at the entity level, and shall also be distributed to each partner, member, or shareholder based on the partner’s, member’s, or shareholder’s distributive share of the income of the pass-through entity. The credit shall be claimed in the same manner as specified in subsection (6) of this section. Each pass-through entity shall notify the department electronically of all partners, members, or shareholders who may claim any amount of the approved credit. Failure to provide information to the department in a manner prescribed by regulation may constitute the forfeiture of available credits to all partners, members, or shareholders associated with the pass- through entity.
(8) The taxpayer shall maintain all records associated with the credit for a period of five (5) years. Acceptable verification of eligible coal purchased shall include invoices that indicate the tons of eligible coal purchased from a Kentucky supplier of coal and proof of remittance for that purchase.
(9) The department shall develop the forms required under this section, specifying the procedure for claiming the credit, and applying the credit against the taxpayer’s liability in the order provided under subsections (6) and (7) of this section.
(10) The Office of Energy Policy within the Energy and Environment Cabinet and the department shall promulgate administrative regulations necessary to administer this section.
(11) This section shall be known as the Kentucky Clean Coal Incentive Act.
Effective: June 27, 2019
History: Amended 2019 Ky. Acts ch. 151, sec. 57, effective June 27, 2019. — Amended
2018 Ky. Acts ch. 29, sec. 6, effective July 14, 2018. — Amended 2010 Ky. Acts ch.
24, sec. 113, effective July 15, 2010. — Amended 2007 (2d Extra. Sess.) Ky. Acts ch.
1, sec. 28, effective August 30, 2007. — Amended 2006 (1st Extra. Sess.) Ky. Acts ch. 2, sec. 35, effective June 28, 2006. — Created 2005 Ky. Acts ch. 168, sec. 142, effective March 18, 2005.
Legislative Research Commission Note (4/27/2018). KRS § 136.070 was repealed in
2018 Ky. Acts chs. 171 and 207, but a conforming amendment was not made to this statute to address the reference it contains to KRS § 136.070. The Reviser of Statutes has determined that making such a conforming change during the 2018 codification exceeds the permissible correction of manifest clerical or typographical errors under KRS § 7.136(1)(h). Therefore, the reference to KRS § 136.070 remains unchanged and would have to be changed pursuant to future legislative action.
Legislative Research Commission Note (4/27/2018). KRS § 141.0405 was repealed in
2018 Ky. Acts chs. 171 and 207, but a conforming amendment was not made to this statute to address the reference it contains to KRS § 141.0405. The Reviser of Statutes has determined that making such a conforming change during the 2018 codification exceeds the permissible correction of manifest clerical or typographical errors under KRS § 7.136(1)(h). Therefore, the reference to KRS § 141.0405 remains unchanged and would have to be changed pursuant to future legislative action.
Legislative Research Commission Note (6/28/2006). 2006 (1st Extra Sess.) Ky. Acts ch. 2, sec. 73, provides that “unless a provision of this Act specifically applies to an earlier tax year, the provisions of this Act shall apply to taxable years beginning on or after January 1, 2007.”
Legislative Research Commission Note (3/18/2005). 2005 Ky. Acts ch. 168, sec. 165, provides that this section shall apply to tax years beginning on or after January 1,
2005.
(a) “Clean coal facility” means an electric generation facility beginning commercial operation on or after January 1, 2005, at a cost greater than one hundred fifty million dollars ($150,000,000) that is located in the Commonwealth of Kentucky and is certified by the Energy and Environment Cabinet as reducing emissions of pollutants released during generation of electricity through the use of clean coal equipment and technologies;
Terms Used In Kentucky Statutes 141.428
- Action: includes all proceedings in any court of this state. See Kentucky Statutes 446.010
- Amendment: A proposal to alter the text of a pending bill or other measure by striking out some of it, by inserting new language, or both. Before an amendment becomes part of the measure, thelegislature must agree to it.
- Company: may extend and be applied to any corporation, company, person, partnership, joint stock company, or association. See Kentucky Statutes 446.010
- corporations: means :
1. See Kentucky Statutes 141.900 - Department: means the Department of Revenue. See Kentucky Statutes 141.010
- Pass-through entity: means any partnership, S corporation, limited liability company, limited liability partnership, limited partnership, or similar entity recognized by the laws of this state that is not taxed for federal purposes at the entity level, but instead passes to each partner, member, shareholder, or owner their proportionate share of income, deductions, gains, losses, credits, and any other similar attributes. See Kentucky Statutes 141.010
- Statute: A law passed by a legislature.
- Year: means calendar year. See Kentucky Statutes 446.010
(b) “Clean coal equipment” means equipment purchased and installed for commercial use in a clean coal facility to aid in reducing the level of pollutants released during the generation of electricity from eligible coal;
(c) “Clean coal technologies” means technologies incorporated for use within a clean coal facility to lower emissions of pollutants released during the generation of electricity from eligible coal;
(d) “Eligible coal” means coal that is subject to the tax imposed under KRS
143.020;
(e) “Ton” means a unit of weight equivalent to two thousand (2,000) pounds; and
(f) “Taxpayer” means taxpayer as defined in KRS § 131.010(4).
(2) Effective for tax years ending on or after December 31, 2006, a nonrefundable, nontransferable credit shall be allowed for:
(a) Any electric power company subject to tax under KRS § 136.120 and certified as a clean coal facility or any taxpayer that owns or operates a clean coal facility and purchases eligible coal that is used by the taxpayer in a certified clean coal facility; or
(b) A parent company of an entity identified in paragraph (a) of this subsection if the subsidiary is wholly owned.
(3) (a) The credit may be taken against the taxes imposed by:
1. KRS § 136.120; or
2. KRS § 141.020 or 141.040, and 141.0401.
(b) The credit shall not be carried forward and must be used on the tax return filed for the period during which the eligible coal was purchased. The Energy and Environment Cabinet must approve and certify use of the clean coal equipment and technologies within a clean coal facility before any taxpayer may claim the credit.
(c) The credit allowed under paragraph (a) of this subsection shall be applied both to the income tax imposed under KRS § 141.020 or 141.040 and to the limited liability entity tax imposed under KRS § 141.0401, with the ordering of credits as provided in KRS § 141.0205.
(4) The amount of the allowable credit shall be two dollars ($2) per ton of eligible coal purchased that is used to generate electric power at a certified clean coal facility.
(5) Each taxpayer eligible for the credit provided under subsection (2) of this section shall file a clean coal incentive credit claim on forms prescribed by the department. At the time of filing for the credit, the taxpayer shall submit an electronic report verifying the tons of coal subject to the tax imposed by KRS § 143.020 purchased for each year in which the credit is claimed. The department shall determine the amount of the approved credit and issue a credit certificate to the taxpayer.
(6) Corporations and pass-through entities subject to the tax imposed under KRS
141.040 or 141.0401 shall be eligible to apply, subject to the conditions imposed under this section, the approved credit against its liability for the taxes, in consecutive order as follows:
(a) The credit shall first be applied against both the tax imposed by KRS
141.0401 and the tax imposed by KRS § 141.020 or 141.040, with the ordering of credits as provided in KRS § 141.0205;
(b) The credit shall then be applied to the tax imposed by KRS § 136.120.
The credit shall meet the entirety of the taxpayer’s liability under the first tax listed in consecutive order before applying any remaining credit to the next tax listed. The taxpayer’s total liability under each preceding tax must be fully met before the remaining credit can be applied to the subsequent tax listed in consecutive order.
(7) If the taxpayer is a pass-through entity not subject to tax under KRS § 141.040, the amount of approved credit shall be applied against the tax imposed by KRS
141.0401 at the entity level, and shall also be distributed to each partner, member, or shareholder based on the partner’s, member’s, or shareholder’s distributive share of the income of the pass-through entity. The credit shall be claimed in the same manner as specified in subsection (6) of this section. Each pass-through entity shall notify the department electronically of all partners, members, or shareholders who may claim any amount of the approved credit. Failure to provide information to the department in a manner prescribed by regulation may constitute the forfeiture of available credits to all partners, members, or shareholders associated with the pass- through entity.
(8) The taxpayer shall maintain all records associated with the credit for a period of five (5) years. Acceptable verification of eligible coal purchased shall include invoices that indicate the tons of eligible coal purchased from a Kentucky supplier of coal and proof of remittance for that purchase.
(9) The department shall develop the forms required under this section, specifying the procedure for claiming the credit, and applying the credit against the taxpayer’s liability in the order provided under subsections (6) and (7) of this section.
(10) The Office of Energy Policy within the Energy and Environment Cabinet and the department shall promulgate administrative regulations necessary to administer this section.
(11) This section shall be known as the Kentucky Clean Coal Incentive Act.
Effective: June 27, 2019
History: Amended 2019 Ky. Acts ch. 151, sec. 57, effective June 27, 2019. — Amended
2018 Ky. Acts ch. 29, sec. 6, effective July 14, 2018. — Amended 2010 Ky. Acts ch.
24, sec. 113, effective July 15, 2010. — Amended 2007 (2d Extra. Sess.) Ky. Acts ch.
1, sec. 28, effective August 30, 2007. — Amended 2006 (1st Extra. Sess.) Ky. Acts ch. 2, sec. 35, effective June 28, 2006. — Created 2005 Ky. Acts ch. 168, sec. 142, effective March 18, 2005.
Legislative Research Commission Note (4/27/2018). KRS § 136.070 was repealed in
2018 Ky. Acts chs. 171 and 207, but a conforming amendment was not made to this statute to address the reference it contains to KRS § 136.070. The Reviser of Statutes has determined that making such a conforming change during the 2018 codification exceeds the permissible correction of manifest clerical or typographical errors under KRS § 7.136(1)(h). Therefore, the reference to KRS § 136.070 remains unchanged and would have to be changed pursuant to future legislative action.
Legislative Research Commission Note (4/27/2018). KRS § 141.0405 was repealed in
2018 Ky. Acts chs. 171 and 207, but a conforming amendment was not made to this statute to address the reference it contains to KRS § 141.0405. The Reviser of Statutes has determined that making such a conforming change during the 2018 codification exceeds the permissible correction of manifest clerical or typographical errors under KRS § 7.136(1)(h). Therefore, the reference to KRS § 141.0405 remains unchanged and would have to be changed pursuant to future legislative action.
Legislative Research Commission Note (6/28/2006). 2006 (1st Extra Sess.) Ky. Acts ch. 2, sec. 73, provides that “unless a provision of this Act specifically applies to an earlier tax year, the provisions of this Act shall apply to taxable years beginning on or after January 1, 2007.”
Legislative Research Commission Note (3/18/2005). 2005 Ky. Acts ch. 168, sec. 165, provides that this section shall apply to tax years beginning on or after January 1,
2005.