AN ACT relating to housing development districts.

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AN ACT relating to housing development districts. 1
Be it enacted by the General Assembly of the Commonwealth of Kentucky: 2
SECTION 1. A NEW SECTION OF KRS CHAPTER 65 IS CREATED TO 3
READ AS FOLLOWS: 4
(1) As used in this section: 5
(a) "Approved project" means a project for which the developer has: 6
1. Filed an application under subsection (6) of this section; 7
2. Negotiated the terms of housing incentive payments with a local 8
government; and 9
3. Commenced a housing development within a district; 10
(b) "Cabinet" means the Cabinet for Economic Development; 11
(c) "Department" means the Department for Local Government; 12
(d) "Housing development district" or "district" means a contiguous 13
geographic area of not more than one thousand (1,000) acres, which may 14
be within one (1) or more cities or counties, defined and created for 15
development or revitalization purposes by an ordina nce of a local 16
government in which one (1) or more projects are proposed to be located; 17
(e) "Local government" means a city, county, charter county government, 18
consolidated local government, urban -county government, or unified local 19
government; 20
(f) "New co nstruction" means the planning, design, building, or any 21
combination of these, to erect a completely new structure never before 22
occupied within a district; 23
(g) "Program" means the Housing Incentive Payment Program provided for in 24
this section; 25
(h) "Project" means a housing development within a district that: 26
1. Contains at least fifteen (15) housing units, including multifamily and 27
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mixed-use housing; and 1
2. Meets the requirements set out in this section and any additional 2
requirements adopted by an ordinance of a local government; 3
(i) "Revitalization" means the planning or replanning, design or redesign, 4
acquisition, clearance, development, disposal, rehabilitation, historic 5
preservation, or any combination of these, of a structure within a district 6
and the preparation and use of the structure for residential purposes; and 7
(j) "Taxing authority" means a school district or a special purpose 8
governmental entity having ad valorem taxing authority and operating 9
within the jurisdiction of a local government that has established a district. 10
(2) (a) A local government may establish a housing development district by: 11
1. Adopting an ordinance containing: 12
a. A map and description of the area to be included within the 13
district; 14
b. A description of the process by which a developer may apply to 15
construct housing within the district; 16
c. A statement regarding whether development within the district 17
is: 18
i. Exempt from permitting or review by the planning unit; or 19
ii. Subject to an alternative process for permitting or review 20
except in no instance shall an alternative process be more 21
stringent than the procedure utilized outside of the district 22
for similar developments; and 23
d. Any additional requirements or qualifications that developers 24
must meet to be eligible for participation in the program; and 25
2. Notifying the cabinet and the department that a district has been 26
created and transmitting information as required in subsection (10) of 27
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this section. 1
(b) A developer may petition a local government to establish a district. 2
(c) A local government shall: 3
1. Exclude a parcel of property from a proposed district if the local 4
government receives a written request from a property owner seeking 5
exclusion within thirty (30) days of the adoption of an ordinance 6
under paragraph (a) of this subsection; and 7
2. Amend the map and description of the district accordingly. 8
(3) (a) If a local government chooses to utilize the exemption to planning and 9
zoning or alternative process under subsection (2)(a)1.c. of this section, the 10
local government shall conduct a public hearing regarding the exemption 11
or alternative process, and a separate vote of the legislative body of the local 12
government shall be required to adopt the exemption or alternative process. 13
(b) The meeting shall be held solely for this purpose, and no other business 14
shall be conducted at the meeting. 15
(4) (a) Local governm ents may act jointly, via an interlocal agreement in 16
accordance with KRS 65.210 to 65.300, to establish a district. 17
(b) The interlocal agreement shall contain the information set out in subsection 18
(2) of this section, and each participating local governme nt shall be 19
required to adopt an ordinance as set out in subsection (2) of this section. 20
(5) (a) In addition to a local government, any taxing authority may elect to 21
participate in the program by its board enacting a resolution declaring its 22
election to participate. 23
(b) If a taxing authority elects to participate under paragraph (a) of this 24
subsection, the taxing authority shall proceed to negotiate with the 25
developer as described in subsection (6)(c) of this section. 26
(6) (a) Following the creation of a dis trict, a local government may accept 27
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applications from developers for a project. 1
(b) A local government shall have the sole discretion to approve or deny an 2
application, but a local government shall not approve a project unless it 3
determines that the proje ct will not commence unless the developer receives 4
the housing incentive payment set out in subsection (7) of this section. 5
(c) If a local government approves an application, it shall: 6
1. Negotiate with the developer to: 7
a. Determine a percentage of the pr operty tax actually paid in any 8
year that will be used to calculate the housing incentive payment 9
described in subsection (7) of this section; 10
b. Set the duration of the housing incentive payments, not to exceed 11
the maximum terms set out in subsection (7) of this section; 12
c. Define when the project shall be considered to have commenced 13
for the purposes set out in subsection (7) of this section; and 14
d. Establish the timing for the housing incentive payments; and 15
2. After agreeing to the terms set out in subp aragraph 1. of this 16
paragraph, transmit the application along with a document setting out 17
those terms to the cabinet and the department. 18
(d) An application under this subsection shall not be required for a developer 19
seeking to develop housing within a dist rict if that developer is not seeking 20
to participate in the program. An application shall only be required if a 21
developer is seeking to participate in the program. This section shall not be 22
construed to permit a local government to prohibit a developer fro m 23
developing housing within the district that would otherwise be permissible 24
outside of the district or in the absence of the existence of a district. 25
(7) A Housing Incentive Payment Program shall be administered as follows: 26
(a) Participating local governm ents and participating taxing authorities shall 27
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each award a housing incentive payment to a developer of an approved 1
project on an annual basis for a period of up to: 2
1. Seven (7) years for a project involving new construction; or 3
2. Fifteen (15) years f or a project solely involving revitalization of 4
structures; 5
beginning six (6) months from the commencement of the project as 6
determined under subsection (6)(c)1.c. of this section; 7
(b) The annual housing incentive payment from each participating local 8
government and taxing authority shall be calculated by first determining the 9
total property tax that was actually paid in the preceding year to each 10
participating local government and taxing authority for each parcel of 11
property included in an approved project which has been issued a certificate 12
of occupancy, and applying the percentage agreed to by the participating 13
local governments, other taxing authorities if applicable, and the developer 14
as set out in subparagraph (6)(c)1. of this section; and 15
(c) Any private or nonprofit entity may contribute money to a local government 16
to award as additional housing incentive payment amounts for a project 17
within a district. 18
(8) A local area development district shall, upon the request of a local government, 19
assist with t he establishment of a district under this section and with the 20
administration of a program under subsection (7) of this section. 21
(9) (a) The cabinet shall develop and implement strategies and programs to 22
promote awareness of a program operating under this section among 23
businesses and employers it provides services to or conducts business with. 24
(b) When the cabinet engages with a company re garding participation in any 25
incentive or funding program administered by the cabinet, including when 26
it initially communicates with, receives an application from, and approves 27
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funding to, any company, it shall provide to the company information 1
regarding: 2
1. The program set out in this section, including a list of local 3
governments that have established districts and implemented programs 4
under this section; and 5
2. The Certified Child Care Community Designation Program under 6
KRS 199.891, including a list of communities that have obtained that 7
designation. 8
(c) The cabinet shall prepare and post a report to the website required in KRS 9
154.12-2035, on November 1 of each year, that contains a list of the local 10
governments that have established districts and impl emented programs 11
under this section and a list of communities that have obtained the certified 12
child care community designation under KRS 199.891, and information 13
regarding the cabinet's engagement with companies including the total 14
number of contacts made under paragraph (b) of this subsection. 15
(10) (a) When a local government establishes a district, and no later than each 16
September 1 thereafter, the local government shall transmit information to 17
the cabinet and the department including: 18
1. Whether the dis trict has been established jointly with any other local 19
government, and if so which other local governments; 20
2. A map and description of the area included in the district; 21
3. The density of housing units per acre in the district; 22
4. The total number of dev elopers that have applied for participation in 23
the program including the number approved and denied; 24
5. The total number of projects in the program; 25
6. For each approved project: 26
a. The name of the developer of the approved project; 27
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b. The total assessed value of property that is a part of the approved 1
project; 2
c. The total number of housing units that have been constructed in 3
connection with the approved project; 4
d. The total amount of housing incentive payments that have been 5
made in connection with the approved project; 6
e. The duration of the housing incentive payments that the local 7
government has agreed to make to the developer; 8
f. The identity of any other taxing authority that has participated in 9
the approved project and the total amount of housing i ncentive 10
payments issued from each taxing authority; and 11
g. The identity of any private or nonprofit entities that have 12
participated in the approved project and the total amount of 13
housing incentive payments from each entity; 14
7. A running total of the amou nt of funds all participating local 15
governments have expended on all approved projects within the 16
district; 17
8. A running total of the number of housing units constructed in the 18
district by a developer that has received housing incentive payments; 19
and 20
9. Whether the local government has obtained a certified child care 21
community designation. 22
(b) Beginning November 1, 2027, the department shall submit an annual report 23
to the Legislative Research Commission for referral to the Interim Joint 24
Committee on Appropriations and Revenue summarizing the information it 25
has received from local governments under paragraph (a) of this 26
subsection. 27
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(c) The department may promulgate administrative regulations in accordance 1
with KRS Chapter 13A to carry out this subsection, inc luding the creation 2
of a standardized form to be used by local governments to submit 3
information. 4
(d) A local government shall not be required to submit any further information 5
on an approved project following the disbursement of the final housing 6
incentive payment associated with that project. 7
(11) This section shall not be construed t o prohibit or preempt a local government 8
from adopting any other ordinance or regulation or establishing any other 9
program, including an incentive program, concerning housing development. 10