Kentucky Statutes 154.27-040 – Tax incentive agreement — Required provisions
Current as of: 2024 | Check for updates
|
Other versions
The terms and conditions of the tax incentive agreement shall be negotiated between the authority and the approved company. The tax incentive agreement may include one (1) or more of the incentives available under this subchapter or any combination of the incentives as negotiated between the authority and the approved company. The tax incentive agreement shall include but not be limited to the following provisions:
(1) The duties and responsibilities of the parties;
(2) The specific identification of incentives included in the tax incentive agreement, including the permissible percentage recovery under each included incentive;
(3) A detailed description of the eligible project, including an estimate of the capital investment;
(4) If the eligible project is an alternative fuel facility or a gasification facility, a requirement that the facility be carbon capture ready;
(5) The minimum capital investment required and the maximum capital investment that may be recovered;
(6) The time within which the minimum capital investment shall be made;
(7) The activation date and the termination date. The agreement shall commence on the activation date and shall terminate upon the earlier of full receipt of the maximum amount of incentives by the approved company or twenty-five (25) years from the activation date;
(8) A target percentage of the workforce that is Kentucky residents during the construction, retrofit, or upgrade of the facility, and at the facility upon completion of construction;
(9) If the wage assessment permitted by KRS § 154.27-080 is included, the percentage rate at which the assessment shall be imposed;
(10) If the advance disbursement employment incentive permitted by KRS § 154.27-090 is included:
(a) The estimated labor component and the estimated Kentucky resident factor as determined under KRS § 154.27-090;
(b) A schedule for the disbursement of funds during the construction period;
(c) A provision that requires a reduction or adjustment in the receipt of post- construction incentives for which the approved company is eligible under the tax incentive agreement until the advance disbursement has been repaid by the approved company;
(d) A provision addressing an alternate payment method if the incentives are not sufficient to repay the advance disbursement; and
(e) A repayment schedule that includes the amount of reduction, the incentives the reduction shall apply to, the amount of interest due, the time period over which the advance disbursement amount shall be recouped, and the amount that shall be recouped in each year. To the extent possible, the repayment schedule shall include uniform incremental payments;
(11) That the approval of the company is not a guarantee of incentives and that actual receipt of the incentives shall be contingent on the approved company filing the required requests for incentives and meeting the requirements established by the tax incentive agreement and by KRS § 139.517, 141.421, 143.024, 154.27-060, 154.27-
070, 154.27-080, and 154.27-090 that apply to the incentives included;
(12) That the approved company shall provide the authority with documentation of capital expenditures in a manner acceptable to the authority;
(13) Negotiated terms relating to repayment or similar remedies for incentives received prior to the completion of construction if the approved company fails to comply with the terms of the tax incentive agreement;
(14) That, if the authority determines that the approved company has failed to comply with any of its obligations under the tax incentive agreement:
(a) The authority shall have the right to suspend the incentives available to the approved company;
(b) Both the authority and the department shall have the right to pursue any remedy provided under the tax incentive agreement;
(c) The authority may terminate the tax incentive agreement; and
(d) Both the authority and the department may pursue any other remedy at law to which it may be entitled;
(15) A requirement that the authority monitor the tax incentive agreement;
(16) A requirement that the approved company provide to the authority the information necessary to monitor the tax incentive agreement and authorization for the authority to share that information with the Department of Revenue, the Office of Energy Policy, or any other entity the authority determines is necessary for the purposes of monitoring and enforcing the terms of the tax incentive agreement; and
(17) Any other provisions not inconsistent with this subchapter and determined to be necessary or appropriate by the parties to the tax incentive agreement.
Effective: July 14, 2018
History: Amended 2018 Ky. Acts ch. 29, sec. 56, effective July 14, 2018. — Amended
2010 Ky. Acts ch. 24, sec. 201, effective July 15, 2010. — Created 2007 (2d Extra. Sess.) Ky. Acts ch. 1, sec. 4, effective August 30, 2007.
Legislative Research Commission Note (7/14/2018). 2018 Ky. Acts ch. 171, sec. 140 directed that this statute be repealed. However, 2018 Ky. Acts ch. 207, sec. 149 subsequently directed that the repeal of this statute in 2018 Ky. Acts ch. 171 itself be repealed. Therefore, no repeal was given effect.
Legislative Research Commission Note (8/30/2007). A manifest clerical or typographical error in subsection (10) of this section has been corrected by the Reviser of Statutes during codification pursuant to the authority of KRS § 7.136.
(1) The duties and responsibilities of the parties;
Terms Used In Kentucky Statutes 154.27-040
- Activation date: means the date on which an approved company begins incurring recoverable costs or engaging in recoverable activity pursuant to the tax incentive agreement. See Kentucky Statutes 154.27-010
- Approved company: means a corporation, limited liability company, partnership, registered limited liability partnership, sole proprietorship, business trust, or any other entity approved for incentives for an eligible project. See Kentucky Statutes 154.27-010
- Authority: means the Kentucky Economic Development Finance Authority established by KRS §. See Kentucky Statutes 154.27-010
- Capital investment: means :
1. See Kentucky Statutes 154.27-010 - Carbon capture ready: means planning for or anticipating capture of carbon dioxide in a manner to facilitate continued operation of the facility in compliance with applicable federal requirements. See Kentucky Statutes 154.27-010
- Company: may extend and be applied to any corporation, company, person, partnership, joint stock company, or association. See Kentucky Statutes 446.010
- Construction period: means the period beginning with the activation date of the eligible project and ending on a date set forth in the tax incentive agreement, which shall be no later than five (5) years from the activation date. See Kentucky Statutes 154.27-010
- Department: means the Department of Revenue. See Kentucky Statutes 154.27-010
- Eligible project: means :
(a) An alternative fuel facility or a gasification facility meeting the investment requirements of KRS §. See Kentucky Statutes 154.27-010 - Estimated labor component: means the projected percentage of the total capital investment attributable to labor. See Kentucky Statutes 154.27-010
- Facility: means a single location within the Commonwealth at which machinery and equipment are used:
1. See Kentucky Statutes 154.27-010 - Project: includes but is not limited to agribusiness, agricultural or forestry production, harvesting, storage, or processing facilities or equipment. See Kentucky Statutes 154.1-010
- Retrofit: means a modification or addition to an existing facility that results in the production of a new and different product or services or uses a new or different process to produce the same product or services at the facility. See Kentucky Statutes 154.27-010
- Statute: A law passed by a legislature.
- Tax incentive agreement: means an agreement entered into in accordance with KRS §. See Kentucky Statutes 154.27-010
- Termination date: means a date established by the tax incentive agreement that is no more than twenty-five (25) years from the activation date. See Kentucky Statutes 154.27-010
- Upgrade: means an investment in an existing facility that results in an increase in the productivity of the facility. See Kentucky Statutes 154.27-010
- Year: means calendar year. See Kentucky Statutes 446.010
(2) The specific identification of incentives included in the tax incentive agreement, including the permissible percentage recovery under each included incentive;
(3) A detailed description of the eligible project, including an estimate of the capital investment;
(4) If the eligible project is an alternative fuel facility or a gasification facility, a requirement that the facility be carbon capture ready;
(5) The minimum capital investment required and the maximum capital investment that may be recovered;
(6) The time within which the minimum capital investment shall be made;
(7) The activation date and the termination date. The agreement shall commence on the activation date and shall terminate upon the earlier of full receipt of the maximum amount of incentives by the approved company or twenty-five (25) years from the activation date;
(8) A target percentage of the workforce that is Kentucky residents during the construction, retrofit, or upgrade of the facility, and at the facility upon completion of construction;
(9) If the wage assessment permitted by KRS § 154.27-080 is included, the percentage rate at which the assessment shall be imposed;
(10) If the advance disbursement employment incentive permitted by KRS § 154.27-090 is included:
(a) The estimated labor component and the estimated Kentucky resident factor as determined under KRS § 154.27-090;
(b) A schedule for the disbursement of funds during the construction period;
(c) A provision that requires a reduction or adjustment in the receipt of post- construction incentives for which the approved company is eligible under the tax incentive agreement until the advance disbursement has been repaid by the approved company;
(d) A provision addressing an alternate payment method if the incentives are not sufficient to repay the advance disbursement; and
(e) A repayment schedule that includes the amount of reduction, the incentives the reduction shall apply to, the amount of interest due, the time period over which the advance disbursement amount shall be recouped, and the amount that shall be recouped in each year. To the extent possible, the repayment schedule shall include uniform incremental payments;
(11) That the approval of the company is not a guarantee of incentives and that actual receipt of the incentives shall be contingent on the approved company filing the required requests for incentives and meeting the requirements established by the tax incentive agreement and by KRS § 139.517, 141.421, 143.024, 154.27-060, 154.27-
070, 154.27-080, and 154.27-090 that apply to the incentives included;
(12) That the approved company shall provide the authority with documentation of capital expenditures in a manner acceptable to the authority;
(13) Negotiated terms relating to repayment or similar remedies for incentives received prior to the completion of construction if the approved company fails to comply with the terms of the tax incentive agreement;
(14) That, if the authority determines that the approved company has failed to comply with any of its obligations under the tax incentive agreement:
(a) The authority shall have the right to suspend the incentives available to the approved company;
(b) Both the authority and the department shall have the right to pursue any remedy provided under the tax incentive agreement;
(c) The authority may terminate the tax incentive agreement; and
(d) Both the authority and the department may pursue any other remedy at law to which it may be entitled;
(15) A requirement that the authority monitor the tax incentive agreement;
(16) A requirement that the approved company provide to the authority the information necessary to monitor the tax incentive agreement and authorization for the authority to share that information with the Department of Revenue, the Office of Energy Policy, or any other entity the authority determines is necessary for the purposes of monitoring and enforcing the terms of the tax incentive agreement; and
(17) Any other provisions not inconsistent with this subchapter and determined to be necessary or appropriate by the parties to the tax incentive agreement.
Effective: July 14, 2018
History: Amended 2018 Ky. Acts ch. 29, sec. 56, effective July 14, 2018. — Amended
2010 Ky. Acts ch. 24, sec. 201, effective July 15, 2010. — Created 2007 (2d Extra. Sess.) Ky. Acts ch. 1, sec. 4, effective August 30, 2007.
Legislative Research Commission Note (7/14/2018). 2018 Ky. Acts ch. 171, sec. 140 directed that this statute be repealed. However, 2018 Ky. Acts ch. 207, sec. 149 subsequently directed that the repeal of this statute in 2018 Ky. Acts ch. 171 itself be repealed. Therefore, no repeal was given effect.
Legislative Research Commission Note (8/30/2007). A manifest clerical or typographical error in subsection (10) of this section has been corrected by the Reviser of Statutes during codification pursuant to the authority of KRS § 7.136.