AN ACT relating to fiscal matters and declaring an emergency.

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AN ACT relating to fiscal matters and declaring an emergency. 1
Be it enacted by the General Assembly of the Commonwealth of Kentucky: 2
SECTION 1. A NEW SECTION OF KRS CHAPTER 141 IS CREATED TO 3
READ AS FOLLOWS: 4
(1) As used in this section: 5
(a) "Approved company" has the same meaning as in Section 13 of this Act; 6
(b) "Authority" has the same meaning as in Section 13 of this Act; and 7
(c) "Credit" means the economic development credit provided to an approved 8
company by the authority in accordance with Section 17 of this Act. 9
(2) (a) For taxable years beginning on or after January 1, 2026, there shall be 10
allowed an economic development credi t to an approved company. The 11
credit shall be refundable, nontransferable, and allowed against the tax 12
imposed under KRS 141.020 or 141.040 and 141.0401, with the ordering of 13
the credit as provided in Section 2 of this Act. 14
(b) In the case of a pass -through entity not subject to the tax imposed by KRS 15
141.040, the credit shall be taken against the tax imposed by KRS 141.0401 16
and shall be claimed by the partners, members, or shareholders in 17
accordance with their proportionate share of income. 18
(c) The amount of the credit that may be claimed in a taxable year by the 19
approved company shall be equal to the amount determined in accordance 20
with Section 17 of this Act, as applicable, except the total amount of credits 21
claimed by all approved companies under Section 17 of this Act shall not 22
exceed four million dollars ($4,000,000) per taxable year, of which no more 23
than one million dollars ($1,000,000) shall be allowed for wages paid to 24
full-time employees in counties other than heritage counties. 25
(3) (a) The department shall: 26
1. Promulgate administrative regulations in accordance with KRS 27
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Chapter 13A to administer the credit; 1
2. Work with the authority to determine the approved amount of credit or 2
apportionable share of credit available to be claimed in any taxable 3
year on a return as filed by an approved company or each partner, 4
member, or shareholder of an approved company; and 5
3. Report the following to the authority on the credits claimed under this 6
section: 7
a. The total amount of credit awarded for each taxable y ear, by 8
county; 9
b. Each taxpayer claiming a credit; and 10
c. The total amount of wages paid to a full -time employee by an 11
approved company and included in its credit computation. 12
(b) The information required to be reported under this subsection shall not be 13
considered confidential taxpayer information and shall not be subject to 14
KRS Chapter 131 or any other provisions of the Kentucky Revised Statutes 15
prohibiting disclosure or reporting of information. 16
Section 2. KRS 141.0205 is amended to read as follows: 17
If a taxpayer is entitled to more than one (1) of the tax credits allowed against the tax 18
imposed by KRS 141.020, 141.040, and 141.0401, the priority of application and use of 19
the credits shall be determined as follows: 20
(1) The nonrefundable business incentive credits against the tax imposed by KRS 21
141.020 shall be taken in the following order: 22
(a) The limited liability entity tax credit permitted by KRS 141.0401; 23
(b) The economic development credits computed under KRS 141.3 47, 141.381, 24
141.384, 141.3841, 141.400, 141.403, 141.407, 141.415, 154.12 -207, and 25
154.12-2088; 26
(c) The qualified farming operation credit permitted by KRS 141.412; 27
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(d) The certified rehabilitation credit permitted by KRS 171.397(1)(a); 1
(e) The health insurance credit permitted by KRS 141.062; 2
(f) The tax paid to other states credit permitted by KRS 141.070; 3
(g) The credit for hiring the unemployed permitted by KRS 141.065; 4
(h) The recycling or composting equipment credit permitted by KRS 141.390; 5
(i) The [tax ]credit for cash contributions in investment funds permitted by KRS 6
154.20-263 in effect prior to July 15, 2002, and the credit permitted by KRS 7
154.20-258; 8
(j) The research facilities credit permitted by KRS 141.395; 9
(k) The employer High School Equivalency Diploma program incentive credit 10
permitted under KRS 151B.402; 11
(l) The voluntary environmental remediation credit permitted by KRS 141.418; 12
(m) The biodiesel and renewable diesel credit permitted by KRS 141.423; 13
(n) The clean coal incentive credit permitted by KRS 141.428; 14
(o) The ethanol credit permitted by KRS 141.4242; 15
(p) The cellulosic ethanol credit permitted by KRS 141.4244; 16
(q) The energy efficiency credits permitted by KRS 141.436; 17
(r) The railroad maintenance and improvement credit permitted by KRS 141.385; 18
(s) The Endow Kentucky credit permitted by KRS 141.438; 19
(t) The New Markets Development Program credit permitted by KRS 141.434; 20
(u) The distilled spirits credit permitted by KRS 141.389; 21
(v) The angel investor credit permitted by KRS 141.396; 22
(w) The film industry credit permitted by KRS 141.383 for applications approved 23
on or after April 27, 2018, but before January 1, 2022; 24
(x) The inventory credit permitted by KRS 141.408; 25
(y) The renewable chemical production credit permitted by KRS 141.4231;[ and] 26
(z) The qualified broadband investment [tax ]credit permitted by KRS 141.391; 27
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and 1
(aa) The alternative jet fuel producer credit permitted by Section 42 of this Act; 2
(2) After the application of the nonrefundable credits in subsection (1 ) of this section, 3
the nonrefundable personal tax credits against the tax imposed by KRS 141.020 4
shall be taken in the following order: 5
(a) The individual credits permitted by KRS 141.020(3); 6
(b) The credit permitted by KRS 141.066; 7
(c) The tuition credit permitted by KRS 141.069; 8
(d) The household and dependent care credit permitted by KRS 141.067; 9
(e) The income gap credit permitted by KRS 141.066; and 10
(f) The Education Opportunity Account Program [tax ]credit permitted by KRS 11
141.522; 12
(3) After the application of the nonrefundable credits provided for in subsection (2) of 13
this section, the refundable credits against the tax imposed by KRS 141.020 shall be 14
taken in the following order: 15
(a) The individual withholding tax credit permitted by KRS 141.350; 16
(b) The individual estimated tax payment credit permitted by KRS 141.305; 17
(c) The certified rehabilitation credit permitted by KRS 171.3961, 171.3963, and 18
171.397(1)(b); 19
(d) The film industry [tax ] credit permitted by KRS 141.383 for applications 20
approved prior to April 27, 2018, or on or after January 1, 2022; 21
(e) The development area [tax ]credit permitted by KRS 141.398; 22
(f) The decontamination [tax ]credit permitted by KRS 141.419;[ and] 23
(g) The pass-through entity tax credit permitted by KRS 141.209; 24
(h) The economic development credit permitted by Section 1 of this Act; and 25
(i) The certified mixed -use development credit permitted by Section 31 of this 26
Act; 27
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(4) The nonrefundable credit permitted by KRS 141.0401 shall be applied against the 1
tax imposed by KRS 141.040; 2
(5) The following nonrefundable credits shall be applied against the sum of the tax 3
imposed by KRS 141.040 after subtracting the credit provided for in subsection (4) 4
of this section, and the tax imposed by KRS 141.0401 in the following order: 5
(a) The economic development credits computed under KRS 141.347, 141.381, 6
141.384, 141.3841, 141.400, 141.403, 141.407, 141.415, 154.12 -207, and 7
154.12-2088; 8
(b) The qualified farming operation credit permitted by KRS 141.412; 9
(c) The certified rehabilitation credit permitted by KRS 171.397(1)(a); 10
(d) The health insurance credit permitted by KRS 141.062; 11
(e) The unemployment credit permitted by KRS 141.065; 12
(f) The recycling or composting equipment credit permitted by KRS 141.390; 13
(g) The coal conversion credit permitted by KRS 141.041; 14
(h) The enterprise zone credit permitted by KRS 154.45 -090, for taxable periods 15
ending prior to January 1, 2008; 16
(i) The [tax ]credit for cash contributions to investment funds permitted by KRS 17
154.20-263 in effect prior t o July 15, 2002, and the credit permitted by KRS 18
154.20-258; 19
(j) The research facilities credit permitted by KRS 141.395; 20
(k) The employer High School Equivalency Diploma program incentive credit 21
permitted by KRS 151B.402; 22
(l) The voluntary environmental remediation credit permitted by KRS 141.418; 23
(m) The biodiesel and renewable diesel credit permitted by KRS 141.423; 24
(n) The clean coal incentive credit permitted by KRS 141.428; 25
(o) The ethanol credit permitted by KRS 141.4242; 26
(p) The cellulosic ethanol credit permitted by KRS 141.4244; 27
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(q) The energy efficiency credits permitted by KRS 141.436; 1
(r) The ENERGY STAR home or ENERGY STAR manufactured home credit 2
permitted by KRS 141.437; 3
(s) The railroad maintenance and improvement credit permitted by KRS 141.385; 4
(t) The railroad expansion credit permitted by KRS 141.386; 5
(u) The Endow Kentucky credit permitted by KRS 141.438; 6
(v) The New Markets Development Program credit permitted by KRS 141.434; 7
(w) The distilled spirits credit permitted by KRS 141.389; 8
(x) The film industry credit permitted by KRS 141.383 for applications approved 9
on or after April 27, 2018, but before January 1, 2022; 10
(y) The inventory credit permitted by KRS 141.408; 11
(z) The renewable chemical production [tax ]credit permitted by KRS 141.4231; 12
(aa) The Education Opportunity Account Program [tax ]credit permitted by KRS 13
141.522;[ and] 14
(ab) The qualified broadband investment [tax ]credit permitted by KRS 141.391; 15
and 16
(ac) The alternative jet fuel producer credit permitted by Section 42 of this Act; 17
and 18
(6) After the application of the nonrefundable credits in subsection (5) of this section, 19
the refundable credits shall be taken in the following order: 20
(a) The corporation estimated tax payment credit permitted by KRS 141.044; 21
(b) The certified rehabilitation credit permitted by KRS 171.3961, 171.3963, and 22
171.397(1)(b); 23
(c) The film industry [tax ] credit permitted by KRS 141.383 for applications 24
approved prior to April 27, 2018, or on or after January 1, 2022; 25
(d) The decontamination [tax ]credit permitted by KRS 141.419;[ and] 26
(e) The pass-through entity tax credit permitted by KRS 141.209; 27
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(f) The economic development credit permitted by Section 1 of this Act; and 1
(g) The certified mixed-use development credit permitted by Section 31 of this 2
Act. 3
Section 3. KRS 131.190 is amended to read as follows: 4
(1) No present or former commissioner or employee of the department, present or 5
former member of a county board of assessment appeals, present or former property 6
valuation administrator or employee, present or former secretary or employee of the 7
Finance and Administration Cabinet, former secretary or employee of the Revenue 8
Cabinet, or any other p erson, shall intentionally and without authorization inspect 9
or divulge any information acquired by him or her of the affairs of any person, or 10
information regarding the tax schedules, returns, or reports required to be filed with 11
the department or other proper officer, or any information produced by a hearing or 12
investigation, insofar as the information may have to do with the affairs of the 13
person's business. 14
(2) The prohibition established by subsection (1) of this section shall not extend to: 15
(a) Information required in prosecutions for making false reports or returns of 16
property for taxation, or any other infraction of the tax laws; 17
(b) Any matter properly entered upon any assessment record, or in any way made 18
a matter of public record; 19
(c) Furnishing a ny taxpayer or his or her properly authorized agent with 20
information respecting his or her own return; 21
(d) Testimony provided by the commissioner or any employee of the department 22
in any court, or the introduction as evidence of returns or reports filed with the 23
department, in an action for violation of state or federal tax laws or in any 24
action challenging state or federal tax laws; 25
(e) Providing an owner of unmined coal, oil or gas reserves, and other mineral or 26
energy resources assessed under KRS 132.820 , or owners of surface land 27
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under which the unmined minerals lie, factual information about the owner's 1
property derived from third-party returns filed for that owner's property, under 2
the provisions of KRS 132.820, that is used to determine the owner's 3
assessment. This information shall be provided to the owner on a confidential 4
basis, and the owner shall be subject to the penalties provided in KRS 5
131.990(2). The third -party filer shall be given prior notice of any disclosure 6
of information to the owner that was provided by the third-party filer; 7
(f) Providing to a third -party purchaser pursuant to an order entered in a 8
foreclosure action filed in a court of competent jurisdiction, factual 9
information related to the owner or lessee of coal, oil, gas reserv es, or any 10
other mineral resources assessed under KRS 132.820. The department may 11
promulgate an administrative regulation establishing a fee schedule for the 12
provision of the information described in this paragraph. Any fee imposed 13
shall not exceed the gre ater of the actual cost of providing the information or 14
ten dollars ($10); 15
(g) Providing information to a licensing agency, the Transportation Cabinet, or 16
the Kentucky Supreme Court under KRS 131.1817; 17
(h) Statistics of gasoline and special fuels gallonage reported to the department 18
under KRS 138.210 to 138.448; 19
(i) Providing any uti lity gross receipts license tax return information that is 20
necessary to administer the provisions of KRS 160.613 to 160.617 to 21
applicable school districts on a confidential basis; 22
(j) Providing documents, data, or other information to a third party pursuant to an 23
order issued by a court of competent jurisdiction; 24
(k) Publishing administrative writings on its official website in accordance with 25
KRS 131.020(1)(b); or 26
(l) Providing information to the Legislative Research Commission under: 27
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1. KRS 139.519 for pu rposes of the sales and use tax refund on building 1
materials used for disaster recovery; 2
2. KRS 141.436 for purposes of the energy efficiency products credits; 3
3. KRS 141.437 for purposes of the ENERGY STAR home and the 4
ENERGY STAR manufactured home credits; 5
4. KRS 141.383 for purposes of the film industry incentives; 6
5. KRS 154.26-095 for purposes of the Kentucky industrial revitalization 7
credit and the job assessment fees; 8
6. KRS 141.068 for purposes of the Kentucky investment fund; 9
7. KRS 141.396 for purposes of the angel investor credit; 10
8. KRS 141.389 for purposes of the distilled spirits credit; 11
9. KRS 141.408 for purposes of the inventory credit; 12
10. KRS 141.390 for purposes of the recycling and composting credits; 13
11. KRS 141.3841 for purposes of the selling farmer credit; 14
12. KRS 141.4231 for purposes of the renewable chemical production 15
credit; 16
13. KRS 141.524 for purposes of the Education Opportunity Account 17
Program credit; 18
14. KRS 141.398 for purposes of the development area credit; 19
15. KRS 139.516 for purposes of the sales and use tax exemptions for the 20
commercial mining of cryptocurrency; 21
16. KRS 141.419 for purposes of the decontamination credit; 22
17. KRS 141.391 for purposes of the qualified broadband investment credit; 23
18. KRS 139.499 for purpo ses of the sales and use tax exemptions for a 24
qualified data center project;[ and] 25
19. KRS 139.5325 for purposes of the sales and use tax incentive for a 26
qualifying attraction; 27
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20. Section 1 of this Act for purposes of the economic development credit; 1
21. Section 42 of this Act for purposes of the alternative jet fuel producer 2
credit; and 3
22. Section 31 of this Act for purposes of the certified -mixed use 4
development credit. 5
(3) The commissioner shall make available any information for official use only and on 6
a confidential basis to the proper officer, agency, board or commission of this state, 7
any Kentucky county, any Kentucky city, any other state, or the federal 8
government, un der reciprocal agreements whereby the department shall receive 9
similar or useful information in return. 10
(4) Access to and inspection of information received from the Internal Revenue Service 11
is for department use only, and is restricted to tax administrati on purposes. 12
Information received from the Internal Revenue Service shall not be made available 13
to any other agency of state government, or any county, city, or other state, and 14
shall not be inspected intentionally and without authorization by any present 15
secretary or employee of the Finance and Administration Cabinet, commissioner or 16
employee of the department, or any other person. 17
(5) Statistics of crude oil as reported to the department under the crude oil excise tax 18
requirements of KRS Chapter 137 and s tatistics of natural gas production as 19
reported to the department under the natural resources severance tax requirements 20
of KRS Chapter 143A may be made public by the department by release to the 21
Energy and Environment Cabinet, Department for Natural Resources. 22
(6) Notwithstanding any provision of law to the contrary, beginning with mine -map 23
submissions for the 1989 tax year, the department may make public or divulge only 24
those portions of mine maps submitted by taxpayers to the department pursuant to 25
KRS Chapter 132 for ad valorem tax purposes that depict the boundaries of mined -26
out parcel areas. These electronic maps shall not be relied upon to determine actual 27
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boundaries of mined-out parcel areas. Property boundaries contained in mine maps 1
required under KRS Chapters 350 and 352 shall not be construed to constitute land 2
surveying or boundary surveys as defined by KRS 322.010 and any administrative 3
regulations promulgated thereto. 4
Section 4. KRS 154.12-204 is amended to read as follows: 5
As used in KRS 154.12-205 to 154.12-208, unless the context requires otherwise: 6
(1) "Agribusiness" has the same meaning as in KRS 154.32-010; 7
(2) "Alternative fuel production" has the same meaning as in KRS 154.32-010; 8
(3) "Applicant" means a business or industry that has made application for a grant -in-9
aid or skills training investment credit as authorized by KRS 154.12 -205 to 154.12-10
208; 11
(4) "Approved company" means any qualified company seeking to sponsor an 12
occupational upgrade training program or skills upgrade training program for the 13
benefit of one (1) or more of its employees, which is approved by the corporation to 14
receive grant -in-aid or skills training investment credits as provided by KRS 15
154.12-205 to 154.12-208; 16
(5) "Approved costs" means costs confirmed as eligible by the corporation, including: 17
(a) Fees or salaries required to be paid to instructors who are employees of the 18
approved company, instructors who are full -time, part -time, or adjunct 19
instructors with an educational institution, and instructors who are consultants 20
on contract with an approved company in connection with an occupational 21
upgrade training program or skills upgrade training program sponsored by an 22
approved company; 23
(b) The c ost of supplies , equipment, and materials used exclusively in an 24
occupational upgrade training program or skills upgrade training program 25
sponsored by an approved company; 26
(c) Employee wages to be paid in connection with an occupational upgrade 27
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training program or skills upgrade training program sponsored by an approved 1
company; and 2
(d) All other costs of a nature comparable to those described in this subsection; 3
(6) "Board" means the board of directors of the Bluegrass State Skills Corporation; 4
(7) "Carbon dioxide or hydrogen transmission pipeline" has the same meaning as in 5
KRS 154.32-010; 6
(8) "Coal severing and processing" has the same meaning as in KRS 154.32-010; 7
(9) "Corporation" means the Bluegrass State Skills Corporation, or BSSC; 8
(10) "Educational institution" means a public or nonpublic secondary or postsecondary 9
institution or an independent provider within the Commonwealth authorized by law 10
to provide a program of skills training or education beyond the secondary school 11
level or to adult persons without a high school diploma or its equivalent; 12
(11) "Employee" means any person who is: 13
(a) [Who is ]Currently a permanent full-time employee of the qualified company; 14
(b) Subject to the tax imposed by KRS 141.020 [Who is a resident of Kentucky, 15
as that term is defined in KRS 141.010]; and 16
(c) [Who is ]Paid the minimum base hourly wage plus employee benefits equal to 17
or greater than fifteen percent (15%) of the minimum base hourly wage. If the 18
qualified company does not provide employee benefits equal to at least fifteen 19
percent (15%) of the minimum base hourly wage, the qualified company may 20
still qualify if it provides the full -time employee total hourly compensation 21
equal to or greater than one hundred fifteen percent (115%) of the minimum 22
base hourly wage through increased hourly wages combined with at least one 23
(1) company-paid employee benefit; 24
(12) "Energy-efficient alternative fuel production" has the same meaning as in KRS 25
154.32-010; 26
(13) "Gasification production" has the same meaning as in KRS 154.32-010; 27
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(14) "Grant-in-aid" means funding that is provided to qualified companies by the BSSC 1
for the development or expansion of a program as provided in this chapter; 2
(15) "Headquarters" has the same meaning as in KRS 154.32-010; 3
(16) "Heritage county" means a county where the coun ty population ranking 4
determined by the cabinet under Section 7 of this Act scores greater than or equal 5
to ninety-seven (97); 6
(17) "Hospital" has the same meaning as in KRS 154.32-010; 7
(18)[(17)] "Manufacturing" has the same meaning as in KRS 154.32-010; 8
(19)[(18)] "Minimum base hourly wage" means the minimum wage amount paid to an 9
employee by a qualified company, which shall not be less than: 10
(a) Two[One] hundred[ fifty] percent (200%)[(150%)] of the federal minimum 11
wage for a company located in a heritage county; or 12
(b) Three hundred percent (300%) of the federal minimum wage for a company 13
located in any other county; 14
(20)[(19)] "Nonretail service or technology" has[means] the same meaning as in KRS 15
154.32-010; 16
(21)[(20)] "Occupational upgrade training" m eans employee training sponsored by a 17
qualified company that is designed to qualify the employee for a promotional 18
opportunity with the qualified company; 19
(22)[(21)] "Program" or "program of skills training or education consistent with 20
employment needs" means a coordinated course of instruction which is designed to 21
prepare individuals for employment in a specific trade, occupation, or profession. 22
Such instruction may include: 23
(a) Classroom instruction; 24
(b) Classroom-related field, shop, factory, office, or laboratory work; and 25
(c) Basic skills, entry level training, job upgrading, retraining, and advance 26
training; 27
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(23)[(22)] (a) "Qualified company" means any corporation, limited liability company, 1
partnership, limited partnership, sole proprietorship, busine ss trust, or any 2
other legal entity through which business is conducted that is engaged in or is 3
planning to be engaged in one (1) or more of the following activities within 4
the Commonwealth: 5
1. Manufacturing; 6
2. Agribusiness; 7
3. Nonretail service or technology; 8
4. Headquarter operations, regardless of the underlying business activity of 9
the company; 10
5. Alternative fuel, gasification, energy -efficient alternative fuel, or 11
renewable energy production; 12
6. Carbon dioxide or hydrogen transmission pipeline; 13
7. Coal severing and processing; or 14
8. Hospital operations. 15
(b) "Qualified company" does not include companies where the primary activity 16
to be conducted within the Commonwealth is forestry, fishing, the provision 17
of utilities, construction, wholesale trade, r etail trade, real estate, rental and 18
leasing, accommodation and food services, or public administration services; 19
(24)[(23)] "Renewable energy production" means the same as in KRS 154.32-010; 20
(25)[(24)] "Skills upgrade training" means employee training sponsored by a qualified 21
company that is designed to provide the employee with new skills necessary to 22
enhance productivity, improve performance, or retain employment, including but 23
not limited to technical and interpersonal skills, and training that is designed to 24
enhance computer skills, communication skills, problem solving, reading, writing, 25
or math skills of employees who are unable to function effectively on the job due to 26
deficiencies in these areas, are unable to advance on the job, or who risk 27
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displacement because their skill deficiencies inhibit their training potential for new 1
technology; 2
(26)[(25)] "Skills training investment credit" means the credit against Kentucky income 3
tax imposed by KRS 141.020 or 141.040, and the limited liability entity tax 4
imposed by KRS 141.0401, as provided in this subchapter; and 5
(27)[(26)] "Technical assistance" means pr ofessional and any other assistance provided 6
by qualified companies to an educational institution, which is reasonably calculated 7
to support directly the development and expansion of a particular program as 8
defined herein. 9
Section 5. KRS 154.12-207 is amended to read as follows: 10
(1) The corporation may, subject to appropriation from the General Assembly or from 11
funds made available to the corporation from any other public or private source, 12
provide grants-in-aid to qualified companies, not in excess of five hundred thousand 13
dollars ($500,000) per grant-in-aid. Such grants-in-aid shall be used exclusively for 14
programs which are consistent with the provisions of this chapter. 15
(2) The corporation may, in accordance with KRS 1 54.12-204 to 154.12 -208, award a 16
skills training investment credit to an approved company. The amount of the skills 17
training investment credit awarded by the corporation shall be an amount not to 18
exceed fifty percent (50%) of the amount of approved costs i ncurred by the 19
approved company in connection with its program of occupational upgrade training 20
or skills upgrade training, the credit amount not to exceed four thousand five 21
hundred dollars ($4,500) [two thousand dollars ($2,000)] per trainee for an 22
approved company in a heritage county and three thousand five hundred dollars 23
($3,500) per trainee for an approved company located in any other county, and, in 24
the aggregate, not to exceed five hundred thousand dollars ($500,000) for each 25
approved company per fi scal year. The corporation shall only approve one (1) 26
application per fiscal year for each approved company. 27
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(3) To apply for a grant -in-aid or a skills training investment credit, a qualified 1
company shall submit an application to the Bluegrass State Ski lls Corporation 2
before commencing its program of skills upgrade or occupational upgrade training. 3
Each application shall contain information the corporation requires, including but 4
not limited to: 5
(a) A proposal for a program of skills upgrade training, oc cupational upgrade 6
training, and education; 7
(b) A description of each component of the proposed training program and the 8
number of employee training hours requested; and 9
(c) A statement of the total anticipated costs and expenses of the program, 10
including a breakdown of the costs associated with equipment, personnel, 11
facilities, and materials. 12
(4) Approval of the grant-in-aid and skills training investment credit application by the 13
board shall be based upon the following criteria: 14
(a) The program must be within the scope of KRS 154.12-204 to 154.12-208; 15
(b) Participants in the program must qualify as an employee as defined by KRS 16
154.12-204; 17
(c) The program must involve an area of skills upgrade training, occupational 18
upgrade training, and education which is needed by a qualified company and 19
for which a shortage of qualified individuals exists within the 20
Commonwealth; and 21
(d) The grant-in-aid and skills training investment credit must be essential to the 22
success of the program as the resources are inadequate to attract the technical 23
assistance and financial support necessary from a qualified company. 24
(5) After a review of applications for grant-in-aid and skills training investment credits, 25
the corporation may designate the qualified company as an approved com pany and 26
approve the maximum amount of grants and skills training investment credits the 27
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approved company is eligible to receive. The maximum amount of skills training 1
investment credits approved for all qualified companies by the corporation shall not 2
exceed two million five hundred thousand dollars ($2,500,000) for each fiscal year. 3
Skills training investment credits that remain unallocated by the corporation at the 4
end of its fiscal year shall lapse and shall not be carried forward to a new fiscal 5
year. 6
(6) The approved company shall complete all programs of skills upgrade training or 7
occupational upgrade training within three (3) years[one (1) year] from the date of 8
approval by the corporation and shall certify the completion of these programs to 9
the cor poration. Once they are completed and certified and all required 10
documentation is provided and received by the corporation, the corporation shall 11
disburse the grant funds or notify the approved company of the final authorized 12
skills training investment credit. 13
Section 6. KRS 154.21-015 is amended to read as follows: 14
As used in KRS 154.21-010 to 154.21-040: 15
(1) "Cabinet" means the Cabinet for Economic Development; 16
(2) "County population ranking" means the score of each cou nty determined by the 17
cabinet under KRS 154.21-017; 18
(3) "Eligible grant recipient" means a grant applicant that is a local government or an 19
economic development authority in an economic development district in this 20
Commonwealth that is engaged in an eligible project; 21
(4) "Eligible project": 22
(a) Means an economic development project initiated on a property that meets the 23
availability requirements in KRS 154.21-035(3); and 24
(b) Requires local matching funds based on the county population ranking; 25
(5) "Eligible use": 26
(a) Means the authorized purpose for which an awarded grant may be used 27
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depending on the source of funds from the Commonwealth; and 1
(b) May include expenditures in any of the following categories or some 2
combination thereof: 3
1. Due diligence study; 4
2. Property acquisition; 5
3. Infrastructure extension or improvement; 6
4. Site preparation work; 7
5. Building construction or renovation; or 8
6. Road improvement; 9
(6) "Heritage county" means a county where the county population ranking 10
determined by the cabinet under Section 7 of this Act scores greater than or equal 11
to ninety-seven (97); 12
(7) "Population density": 13
(a) Means the number of persons per square mile of a county; 14
(b) Is calculated by dividing the total county population by the square miles in the 15
county; 16
(c) Is determined by using the population estimate from the most recent available 17
five (5) year American Community Survey as published by the United States 18
Census Bureau; and 19
(d) Is used to rank each county in descending order, with the county having the 20
largest population density receiving a rank of one (1) and the county with the 21
smallest population density receiving a rank of one hundred twenty (120); 22
(8)[(7)] "Regional project" means an eligible project that is proposed by eligible grant 23
recipients residing in different counties in this Commonwealth who submit a single 24
grant application as co-applicants; and 25
(9)[(8)] "Ten (10) year percentage change in population": 26
(a) Means the percentage change in population within a county; 27
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(b) Is determined by c omparing the population estimate from the most recent 1
available five (5) year American Community Survey as published by the 2
United States Census Bureau to the same survey ten (10) years prior to the 3
most recent available survey; and 4
(c) Is used to rank eac h county in descending order, with the county having the 5
largest positive percentage change in population receiving a rank of one (1) 6
and the county with the largest negative percentage change receiving a rank of 7
one hundred twenty (120). 8
Section 7. KRS 154.21-017 is amended to read as follows: 9
(1) The Kentucky Product Development Initiative of 2024 is hereby established under 10
the cabinet. The cabinet shall partner with the Kentucky Association for Economic 11
Development to administer the program. The cabinet's administration of the 12
program includes: 13
(a) Creating and making available a standardized grant application and regional 14
grant application; 15
(b) Adopting a standardized scoring system pursuant to KRS 154.21-040; 16
(c) Reviewing the applications and proposals submitted by the proposed grant 17
recipients; 18
(d) Verifying the eligibility of the proposed grant recipients; 19
(e) Verifying that the proposed grant recipient seeks grant money for an eligible 20
project prior to prioritizing all eligible projects; 21
(f) Determining the county's population ranking under subsection (3) of this 22
section; 23
(g) Awarding grants to selected eligible grant recipients in multiple rounds of 24
funding; and 25
(h) Compiling and submitting the reports required by subsections (3) and (5) of 26
this section. 27
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(2) Upon receipt of eligible grant recipients and eligible project recommendations and 1
prioritization from the Kentucky Association for Economic Development and the 2
third-party independent site selection consultant, the cabinet shall verify and 3
process the eli gible grant recipients and eligible project recommendations with the 4
intent to approve and award grants under the economic development fund program 5
pursuant to KRS 154.12-100 and based on the following criteria: 6
(a) Consideration of whether the eligible gr ant recipient had received a grant 7
award from the Kentucky Product Development Initiative of 2022 under KRS 8
154.21-020; and 9
(b) The matching funds for the selected grant recipient's contribution to its 10
eligible project based on the county population rankin g determined under 11
subsection (3) of this section. 12
(3) (a) On or before June 1, 2024, and no later than June 1 every two (2) years 13
thereafter, the cabinet shall determine a county population ranking for each 14
county by adding the following two (2) factors: 15
1. The population density ranking; and 16
2. The ten (10) year percentage change in population ranking. 17
(b) The required local match for each county shall be as follows: 18
1. Eligible projects in counties where the county population ranking is 19
greater than or e qual to one hundred ninety -three (193) shall provide a 20
minimum amount of local matching funds equal to ten percent (10%) of 21
the project cost; 22
2. Eligible projects in counties where the county population ranking is less 23
than one hundred ninety -three (193) b ut greater than or equal to one 24
hundred forty -five (145) shall provide a minimum amount of local 25
matching funds equal to twelve and one -half percent (12.5%) of the 26
project cost; 27
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3. Eligible projects in counties where the county population ranking is less 1
than one hundred forty -five (145) but greater than or equal to ninety -2
seven (97) shall provide a minimum amount of local matching funds 3
equal to fifteen percent (15%) of the project cost; 4
4. Eligible projects in counties where the county population ranking is less 5
than ninety-seven (97) but greater than or equal to forty -nine (49) shall 6
provide a minimum amount of local matching funds equal to seventeen 7
and one-half percent (17.5%) of the project cost; 8
5. Eligible projects in counties where the county popula tion ranking is less 9
than forty-nine (49) shall provide a minimum amount of local matching 10
funds equal to twenty percent (20%) of the project cost; and 11
6. For eligible projects requesting due diligence as an eligible use, the due 12
diligence must be complete d prior to acquisition of the site. If the due 13
diligence result leads to the decision to not purchase the site, then the 14
cabinet may expend up to two hundred thousand dollars ($200,000) with 15
no local matching funds required. If the amount to be reimbursed by the 16
cabinet exceeds two hundred thousand dollars ($200,000), the cabinet 17
shall report to the Interim Joint Committee on Appropriations and 18
Revenue, or the Senate Standing Committee on Appropriations and 19
Revenue and the House Standing Committee on Approp riations and 20
Revenue, within five (5) days of the disbursement. The report shall 21
include the name and county location of the eligible project approved, 22
the amount of the grant awarded, the amount of the funding disbursed 23
for due diligence and the extenuati ng circumstances related to the due 24
diligence study. 25
(c) On or before July 1, 2024, and no later than July 1 every two (2) years 26
thereafter, the cabinet shall report to the Legislative Research Commission 27
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and the Interim Joint Committee on Appropriations a nd Revenue the 1
following information for each county: 2
1. The county name; 3
2. The population density ranking for that county; 4
3. The ten (10) year percentage change in population ranking for that 5
county; and 6
4. The county population ranking for that county. 7
(d) When awarding grants in this initiative, the cabinet shall not award grants to: 8
1. An eligible grant recipient or a group of eligible grant recipients in 9
excess of the amount allocated to the county in which the county is 10
located, except when pooled p ursuant to subsection (4) of this section; 11
or 12
2. An eligible grant recipient that received a grant award from the 13
Kentucky Product Development Initiative of 2022 prior to all other 14
eligible grant recipients receiving a grant award from the Kentucky 15
Product Development Initiative of 2024 if the eligible project scores are 16
equal to or above the score of an eligible project from an eligible grant 17
recipient who received a grant award from the Kentucky Product 18
Development Initiative of 2022 under KRS 154.21 -040, and in the case 19
where the scores are equal, discretion by the Kentucky Association for 20
Economic Development and the cabinet shall be used. 21
(e) The maximum funding available for an approved development project is two 22
million five hundred thousand dollars ($2,500,000) in a heritage county and 23
two million dollars ($2,000,000) in any other [per] county, except as 24
permitted by subsection (4) of this section. 25
(f) If there are funds available after the first round of grant awards of the 26
Kentucky Product Developmen t Initiative of 2024, the cabinet shall initiate 27
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additional rounds of grant awards. 1
(4) (a) For selected eligible grant recipients that are involved in a regional project, 2
the cabinet may pool the potential allocation of funds available for each 3
county rep resented by the eligible grant recipients for the grant amount 4
awarded. 5
(b) A county that is an eligible grant recipient involved in a regional project shall 6
provide that county's local matching funds based on the county population 7
ranking determined under subsection (3) of this section and each county's 8
local matching funds may be pooled as described in paragraph (a) of this 9
subsection. 10
(5) Beginning no later than November 1, 2024, and annually thereafter until the 11
authorized appropriation is spent or returned, the cabinet shall compile and submit a 12
report for each application approved by the Kentucky Economic Development 13
Finance Authority for the Kentucky Product Development Initiative of 2024. The 14
report shall be electronically delivered to the Legislativ e Research Commission and 15
the Interim Joint Committee on Appropriations and Revenue and contain the 16
following information: 17
(a) The name of the applicant, a description of the eligible project, and the 18
location of each proposed project for which an application was approved; 19
(b) The date the application was approved by the Kentucky Economic 20
Development Finance Authority; 21
(c) The amount of funding authorized for each project approved; 22
(d) The total amount of funding disbursed for each project approved; and 23
(e) The round of funding for which each project received approval. 24
(6) The Kentucky Product Development Initiative of 2024 shall begin July 1, 2024. 25
Section 8. KRS 154.21-035 is amended to read as follows: 26
(1) The Kentucky Association for Economic Development shall evaluate each 27
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applicant's eligible project according to the criteria described in th is section and 1
KRS 154.21-040 for the purposes of compiling a recommendation and score for the 2
eligible project and project site pursuant to KRS 154.21-040. 3
(2) The Kentucky Association for Economic Development and the third -party 4
independent site selectio n consultant shall consider the requirements in the 5
following five (5) categories in the evaluation of proposed projects: 6
(a) Property availability as described in subsection (3) of this section; 7
(b) Property development ability as described in subsection (4) of this section; 8
(c) Zoning availability as described in subsection (5) of this section; 9
(d) Transportation accessibility as described in subsection (6) of this section; and 10
(e) Utility adequacy as described in subsection (7) of this section. 11
(3) The p roperty that the eligible project occupies or is proposed to occupy shall be 12
available. Property shall be deemed available for the purposes of this program: 13
(a) If the property is publicly owned; or 14
(b) If the project's eligible use includes property acqui sition or a due diligence 15
study. In this situation the application shall include one (1) of the following: 16
1. A legally binding letter of intent or option for the sale to an eligible 17
grant recipient; or 18
2. An agreement for the sale to an eligible recipient. 19
(4) The property that the eligible project occupies or is proposed to occupy shall be 20
developable. Property shall be deemed developable if: 21
(a) The acreage intended for development is clearly defined by either: 22
1. The grant applicant; or 23
2. An engineerin g partner during or after a site visit, if the applicant is 24
unable to define the developable acreage; and 25
(b) The property is free of impediments to development, or a known impediment 26
can be mitigated by a grant applicant. A property is free of impediments if it: 27
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1. Is located outside of the one hundred (100) year and five hundred (500) 1
year flood zone; 2
2. Is free of recognized environmental conditions; 3
3. Is free of wetlands; 4
4. Is free of state and federally threatened and endangered species; 5
5. Is free of areas of archaeological or historical significance; and 6
6. Possesses soils compatible with the grant applicant's intended 7
development. 8
(5) The property that the eligible projec t occupies or is proposed to occupy shall be 9
appropriately zoned for the intended use or shall be able to be rezoned within ninety 10
(90) calendar days. The properties surrounding the grant applicant's project site 11
shall be zoned so they are compatible with the grant applicant's intended 12
development and use of the project site. 13
(6) The property that the eligible project occupies or is proposed to occupy shall be 14
directly served by a road or roads that are compatible with the intended use of the 15
property. Additionally, if the property is marketed as rail -served, the property shall 16
be deemed rail-served if: 17
(a) The grant applicant provides documentation from the rail provider that 18
evinces that rail infrastructure exists and the rail provider actually provides 19
rail service; or 20
(b) If the rail service does not exist at the time of the grant application, the grant 21
applicant provides documentation from the rail provider that evinces that the 22
project site will be able to be rail-served within twelve (12) months. 23
(7) The property that the eligible project occupies or is proposed to occupy shall have 24
access to adequate utilities and shall be served or able to be served by the 25
following: 26
(a) Electric infrastructure; 27
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(b) Natural gas or propane; 1
(c) Water infrastructure and a public water system; 2
(d) Wastewater infrastructure and a public wastewater treatment plant, excluding 3
a septic wastewater treatment system; and 4
(e) Fiber telecommunications infrastructure. 5
Section 9. KRS 154.25-010 is amended to read as follows: 6
As used in this subchapter: 7
(1) "Activation date" means a date selected by an approved company and set forth in 8
the jobs retention agreement at any time within a three (3) year period after the date 9
of final approval of the agr eement by the authority upon which the required 10
investment shall be made and the jobs retention project completed; 11
(2) "Agreement" means a jobs retention agreement entered into pursuant to KRS 12
154.25-030 on behalf of the authority and an approved company w ith respect to a 13
jobs retention project; 14
(3) "Agribusiness" has the same meaning as in KRS 154.32-010; 15
(4) "Approved company" means any eligible company approved by the authority 16
pursuant to KRS 154.25-030 for a jobs retention project; 17
(5) "Approved costs" means that portion of the eligible costs approved by the authority 18
that an approved company may recover through the inducements authorized by 19
KRS 154.25-030, being a percentage of eligible costs as approved by the authority; 20
(6) "Assessment" means the wage assessment fee authorized by KRS 154.25-040; 21
(7) "Authority" means the Kentucky Economic Development Finance Authority 22
created by KRS 154.20-010; 23
(8) "Commonwealth" means the Commonwealth of Kentucky; 24
(9) "Eligible company": 25
(a) Means any corporation, limited liability company, partnership, limited 26
partnership, sole proprietorship, business trust, or any other entity that has 27
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been operating within the Commonwealth on a continuous basis for at least 1
sixty (60) months preceding the request for approval by the authority of the 2
project which meets the standards set forth in KRS 154.25 -020, has been 3
previously approved for economic development incentives from the 4
Commonwealth related to one (1) or more of its facilities, and employs a 5
minimum of two hundred fifty (250) full -time persons for a project located 6
in a heritage county or one thousand (1,000) full -time persons for a project 7
located in any other county, engaged in one (1) or more of the following 8
activities: 9
1.[(a)] Manufacturing; 10
2.[(b)] Agribusiness; 11
3.[(c)] Nonretail service or technology; or 12
4.[(d)] Headquarters operations, regardless of the underlying business 13
activity of the company; and[.] 14
(b) ["Eligible company" ]Does not include companies where the primary ac tivity 15
to be conducted within the Commonwealth is forestry, fishing, mining, coal or 16
mineral processing, the provision of utilities, construction, wholesale trade, 17
retail trade, real estate, rental and leasing, educational services, 18
accommodation and food services, or public administration services; 19
(10) "Eligible costs" means: 20
(a) Obligations incurred for labor and to vendors, contractors, subcontractors, 21
builders, suppliers, deliverymen, and materialmen in connection with the 22
acquisition, construction, eq uipping, rehabilitation, and installation of a jobs 23
retention project; 24
(b) The cost of contract bonds and of insurance of all kinds that may be required 25
or necessary during the course of a jobs retention project which is not paid by 26
the vendor, supplier, deliveryman, contractor, or otherwise provided; 27
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(c) All costs of architectural and engineering services, including estimates, plans 1
and specifications, preliminary investigations, and supervision of 2
construction, rehabilitation, and installation, as well as for the performance of 3
all the duties required by or consequent upon the acquisition, construction, 4
equipping, rehabilitation, and installation of a jobs retention project; 5
(d) All costs required to be paid under the terms of any contract for the 6
acquisition, construction, equipping, rehabilitation, and installation of a jobs 7
retention project; 8
(e) All costs required for the installation of utilities, including but not limited to 9
water, sewer, sewer treatment, gas, electricity, communications, and railroad s, 10
and including off -site construction of the facilities paid for by the approved 11
company; and 12
(f) All other costs comparable with those described above; 13
(11) "Final approval" means the action taken by the authority authorizing the eligible 14
company to receive inducements under this subchapter; 15
(12) "Headquarters" has the same meaning as in KRS 154.32-010; 16
(13) "Heritage county" means a county where the county population ranking 17
determined by the cabinet under Section 7 of this Act scores greater than or equal 18
to ninety-seven (97); 19
(14) "Inducements" means the Kentucky tax credit and the wage assessment fee as 20
prescribed in KRS 154.25-030 and 154.25-040; 21
(15)[(14)] "Jobs retention project" or "project" means the acquisition, construction, and 22
installation of new equipment and, with respect thereto, the construction, 23
rehabilitation, and installation of improvements to facilities necessary to house the 24
acquisition, construction, and installation of new equipment, including surveys; 25
installation of utilities, inc luding water, sewer, sewage treatment, gas, electricity, 26
communications, and similar facilities; off -site construction of utility extensions to 27
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the boundaries of the real estate on which the facilities are located; and shall contain 1
eligible costs of not l ess than twenty-five million dollars ($25,000,000) for a 2
project located in a heritage county or one hundred million dollars ($100,000,000) 3
for a project located in any other county , all of which are utilized to improve the 4
economic and operational situati on of an approved company to allow the approved 5
company to reinvest in its operations and retain a significant number of existing 6
jobs within the Commonwealth; 7
(16)[(15)] "Kentucky gross profits" means Kentucky gross profits as defined in KRS 8
141.0401; 9
(17)[(16)] "Kentucky gross receipts" means Kentucky gross receipts as defined in KRS 10
141.0401; 11
(18)[(17)] "Manufacturing" has the same meaning as in KRS 154.32-010; 12
(19)[(18)] "Nonretail service or technology" has the same meaning as in KRS 154.32 -13
010; 14
(20)[(19)] "Preliminary approval" means the action taken by the authority conditioning 15
final approval by the authority upon satisfaction by the eligible company of the 16
requirements under this subchapter; 17
(21)[(20)] "Supplemental project" means an additional jobs retention project proposed 18
by the approved company or its affiliate during the term of a previously approved 19
jobs retention project, which may be included in the jobs retention agreement by 20
way of amendment and which may result in increased inducements an d an 21
extension of the original project term as set forth in KRS 154.25-050; and 22
(22)[(21)] "Transferred credits" means unused approved costs as determined by the 23
Department of Revenue from a previously approved, independent, active project 24
under a differen t incentive program governed by the Cabinet for Economic 25
Development that may be transferred to a jobs retention project and used by the 26
approved company pursuant to a jobs retention agreement. 27
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Section 10. KRS 154.25-030 is amended to read as follows: 1
(1) The authority, upon adoption of its final approval, may enter into, with any 2
approved company, an agreement with respect to the jobs retention project. The 3
terms and provisions of each agreement, includ ing the amount of approved costs, 4
the amount of the inducement, the job maintenance requirement, and any 5
limitations the authority may deem necessary, shall be determined by negotiations 6
between the authority and the approved company, except that each agre ement shall 7
include the following provisions: 8
(a) The amount the approved company may recover through inducements under 9
this subchapter for the initial project, which shall be a negotiated percentage 10
not to exceed fifty percent (50%) of eligible costs. However, the authority 11
may negotiate an increase in t he percentage such that both the initial project 12
and any supplemental projects are eligible for seventy -five percent (75%) of 13
eligible costs upon approval of a supplemental project. The adjustment to the 14
initial project shall be made on the total approved costs and any credits taken 15
prior to the addition of a supplemental project shall then be subtracted from 16
that increased amount of approved costs. Neither the initial project nor any 17
supplemental project shall ever be eligible for inducements greater than 18
seventy-five percent (75%) of the eligible costs. The authority shall negotiate 19
a maximum allowable inducement for each year of the agreement, and the 20
approved company may not recover inducements above that maximum in any 21
year during the term of the agreem ent, except that the annual maximum 22
allowable inducement may be exceeded if a carry -forward of unused 23
inducements from previous years exists. Any carry -forward of unused 24
inducements will lapse upon maturity or termination of the agreement; 25
(b) A provision that sets the activation date for the initial project within three (3) 26
years of the final approval. Prior to the activation date, the authority may 27
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extend the time for the completion of the jobs retention project and 1
compliance with the required investment upon request of the approved 2
company for good cause; however, the ten (10) year period for the term of the 3
agreement shall begin from the activation date. No inducements from the jobs 4
retention project shall be available, other than the transferred credit s provided 5
for under subsection (2) of this section, until activation. Upon activation, the 6
balance of transferred credits shall expire; 7
(c) A provision that states that within three (3) months of the completion of the 8
jobs retention project, the approved company shall document the actual cost 9
of the project in a manner acceptable to the authority. The authority may 10
employ an independent consultant or utilize technical resources to verify the 11
cost of the project. The approved company shall reimburse the aut hority for 12
the cost of the consultant; 13
(d) A provision that establishes a minimum required number of full-time jobs that 14
must be maintained at the site of the jobs retention project and filled with 15
residents of the Commonwealth subject to Kentucky income t ax and states 16
that the authorized inducements may be suspended at the discretion of the 17
authority from the date of noncompliance until the date compliance is 18
reestablished if the approved company's employment falls below the 19
established minimum employment requirement. If the company does not 20
increase the number of full-time employees at the site who are residents of the 21
Commonwealth and subject to Kentucky income tax sufficiently to meet the 22
minimum employment requirement within one (1) year from the date o f the 23
initial suspension, the remaining unused inducements may be terminated at 24
the discretion of the authority; 25
(e) A provision that gives the authority discretion to suspend or terminate the 26
authorized inducements for any failure to comply with the terms of the 27
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agreement; and 1
(f) 1. A provision that provides the term shall not be longer than the earlier of: 2
a.[1.] The date on which the approved company has received 3
inducements or withheld assessments equal to the amount that the 4
company may recover under paragraph (a) of this subsection; or 5
b.[2.] Ten (10) years from the activation date. 6
2. [However, ] The term in subparagraph 1. of this paragraph may be 7
extended to a period longer than ten (10) years upon: 8
a. The approved company demonstrating that less th an seventy-five 9
percent (75%) of the incentives awarded under the agreement 10
will be claimed during the term of the agreement; or 11
b. The addition of a supplemental project as negotiated and approved 12
by the authority. 13
3. An extension of the term shall not am end any provision of the 14
agreement impacting the scope of the project or the maximum amount 15
of incentives awarded under the agreement. 16
(2) In consideration of the execution of the agreement, during the time the agreement is 17
in effect, which time shall comm ence on the date of the agreement, the approved 18
company may be permitted the following inducements: 19
(a) Beginning on the effective date of the jobs retention agreement, which shall 20
also be the date of final approval, if the approved company has a balance o f 21
unused approved costs on a previously existing and active incentive 22
agreement approved by the authority pursuant to KRS Chapter 154, the 23
approved company may impose wage assessments on employees whose jobs 24
are at the facility where the project defined in the previously existing 25
incentive agreement was located. The wage assessments may be imposed as 26
provided in KRS 154.25 -040, and shall be available in an amount up to the 27
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balance of transferred credits from the previously existing project. 1
1. The transferred credits shall only be available to the approved company 2
until the activation date, the term from the original incentive agreement 3
expires, or the balance of transferred credits is exhausted, whichever 4
occurs first; and 5
2. Should the approved company exe rcise this option, the incentive 6
agreement from which the credits were transferred shall be terminated 7
upon transfer and all parties shall be released from their obligations 8
thereunder. 9
(b) After the activation date: 10
1. A one hundred percent (100%) credit against the taxes imposed by KRS 11
141.020, 141.040, and 141.0401 that would otherwise be owed by the 12
approved company, in the approved company's taxable year, as 13
determined under KRS 141.402, on the taxable income, Kentucky gross 14
receipts, or Kentucky gross profits of the approved company generated 15
by or arising from the jobs retention project. The ordering of credits 16
shall be as provided in KRS 141.0205; 17
2. The aggregate assessment withheld by the approved company as 18
provided in KRS 154.25-040 in each year after the activation date; 19
(c) The tax credits allowed to the approved company shall be equal to the lesser 20
of the total amount of the tax liability or the amount that the company may 21
recover under subsection (1)(a) of this section that has not yet been re covered, 22
reduced by any recovery through the collection of assessments subject to the 23
annual maximum inducements authorized pursuant to subsection (1)(a) of this 24
section. The credit shall be allowed for each taxable year of the approved 25
company during the term of the agreement and for which a tax return of the 26
approved company is filed until the amount that the company may recover 27
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under subsection (1)(a) of this section has been received through a 1
combination of credits and assessments, if the company elect s to impose 2
assessments. The approved company shall not be required to pay estimated 3
tax payments as prescribed under KRS 141.044 or 141.305 on income, 4
Kentucky gross profits, or Kentucky gross receipts from the jobs retention 5
project. One hundred eighty ( 180) days after the filing of the tax return of the 6
approved company, the Department of Revenue shall certify to the authority 7
the state tax liability for the preceding taxable year of the approved company 8
and the amount of any tax credits taken pursuant to this section; 9
(d) Prior to execution of the agreement, the eligible company shall secure from all 10
local governmental authorities responsible for collecting local occupational 11
license fees a resolution or order of the local governmental entities 12
acknowledging and consenting to the termination or partial termination of the 13
receipt of local occupational license fees on wages subject to the agreement 14
paid by the approved company on behalf of its employees to the local 15
government entities; 16
(e) If more than one (1) local occupational license fee is imposed upon the 17
employees of the approved company, the assessment imposed upon the 18
employees shall be credited against the local occupational license fee and 19
shall be apportioned to each local occupational license fe e according to each 20
local occupational license fee's proportion to the total of all local occupational 21
license fees for such employees. No credit or portion thereof shall be allowed 22
against any local occupational license fee imposed by or dedicated solely to a 23
local board of education; and 24
(f) If, in any taxable year of the approved company during which the agreement 25
is in effect, the assessment collected from the wages of the employees exceeds 26
the expended portion of the amount that the approved company ma y recover 27
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under paragraph (a) of this subsection, or exceeds the annual maximum 1
negotiated by the authority, the assessment collected from the wages of the 2
employees shall cease for the remainder of that taxable year of the approved 3
company. The approved c ompany shall resume normal personal income tax 4
and occupational license fee withholdings from the employees' wages for the 5
remainder of that taxable year, and the approved company shall remit to the 6
Commonwealth and applicable local jurisdictions their res pective shares of 7
the excess assessment collected on the withholding filing date for employees' 8
wages next succeeding the first date when the approved company collected 9
excess assessments. 10
(3) The jobs retention agreement and inducements available pursuant thereto shall not 11
be transferable or assignable by the approved company without the expressed 12
written consent of the authority. 13
Section 11. KRS 65.4931 is amended to read as follows: 14
(1) As used in this section: 15
(a) "Borrower" means the entity receiving the proceeds from a new bond issued 16
because of an extended tax increment financing agreement allowed under 17
KRS 65.490(12)[(10)]; 18
(b) "Excess revenues" means all moneys which exceed the cost s associated with 19
the borrower's operating expenses, capital expenditures, and the regularly 20
scheduled debt service on the bond; and 21
(c) "Term of the bond" shall begin on the date any current bonds are refinanced, 22
reissued, or restructured and shall end up on the earlier of the stated maturity 23
date of the bond or the payment in full of the bond. 24
(2) A pilot program may be extended for a period not to exceed an additional twenty -25
five (25) years in connection with the issuance of a new bond by the Kentucky 26
Economic Development Finance Authority if the pilot program agreement contains 27
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provisions requiring that: 1
(a) The borrower use all excess revenues to redeem the bond prior to the stated 2
maturity date; 3
(b) 1. Once the bond is callable, the borrower apply all excess revenues to the 4
redemption of the bond prior to the stated maturity date at least every 5
thirty-six (36) months; and 6
2. If it is the position of the borrower that the application of all excess 7
revenues to the redemption of the bond prior to the state d maturity date 8
jeopardizes the project, the borrower shall present an alternative 9
payment plan for that thirty-six (36) month period to the Capital Projects 10
and Bond Oversight Committee for approval; and 11
(c) No further revenues under the pilot program be remitted to the borrower 12
following the end of the term of the bond. 13
(3) The borrower shall submit a report to the Governor and the Capital Projects and 14
Bond Oversight Committee on or before November 1, 2018, and annually thereafter 15
regarding the operations and financial condition of the borrower. 16
Section 12. KRS 154.25-050 is amended to read as follows: 17
(1) If an approved company makes additional investments in the form of additional 18
jobs retention projects during the te rm of the initial jobs retention project, the 19
approved company may apply for, and the authority may approve, a supplemental 20
project. 21
(2) The authority, upon adoption of its final approval of a supplemental project, may 22
enter into, with any approved company, an amended agreement with respect to both 23
the initial jobs retention project and the supplemental project which shall jointly 24
make up its project. The terms and provisions of each amended agreement, 25
including the amount of approved costs, the amount of t he tax credit pursuant to 26
KRS 154.25 -030, the job maintenance requirement established by the agreement, 27
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and any limitations the authority may deem necessary, shall be determined by 1
negotiations between the authority and the approved company, except that ea ch 2
agreement shall include the following provisions: 3
(a) Upon approval of a supplemental project, the amount the approved company 4
may recover through inducements for the initial project and any supplemental 5
projects shall be a negotiated percentage not to exceed seventy-five percent 6
(75%) of the eligible costs from the initial project and all newly incurred 7
eligible costs from any supplemental projects, subject to the annual maximum 8
negotiated and approved by the authority. At the time a supplemental projec t 9
is approved, the recoverable amount and the annual maximum inducement for 10
the initial jobs retention project and any previous supplemental projects may 11
also be increased at the discretion of the authority pursuant to KRS 154.25 -12
030. 13
(b) The activation date for a supplemental project shall be no more than three (3) 14
years from final approval of the supplemental project. Prior to the activation 15
date, the authority may extend the time for the completion of the jobs 16
retention project and compliance with the required investment upon request of 17
the approved company for good cause; however, the ten (10) year period for 18
the term of the agreement shall begin from the activation date. Within three 19
(3) months of the completion date for a supplemental project, the appr oved 20
company shall document the actual cost of the project in a manner acceptable 21
to the authority. The authority may employ an independent consultant to 22
verify the cost of the supplemental project subject to reimbursement for the 23
cost of same from the approved company. 24
(c) In consideration of the execution of the amended agreement, on the date 25
stated in the agreement, the approved company may be permitted during the 26
term of the amended agreement to take the inducements set forth in KRS 27
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154.25-030(2)(b),[ and] (2)(c), and (3)(a) , subject to the remaining terms of 1
that section. 2
Section 13. KRS 154.32-010 is amended to read as follows: 3
As used in this subchapter: 4
(1) "Activation date" means the date established in the tax in centive agreement that is 5
within two (2) years of final approval; 6
(2) "Affiliate" means the following: 7
(a) Members of a family, including only brothers and sisters of the whole or half 8
blood, spouse, ancestors, and lineal descendants of an individual; 9
(b) An individual, and a corporation more than fifty percent (50%) in value of the 10
outstanding stock of which is owned, directly or indirectly, by or for that 11
individual; 12
(c) An individual, and a limited liability company of which more than fifty 13
percent (50%) of the capital interest or profits are owned or controlled, 14
directly or indirectly, by or for that individual; 15
(d) Two (2) corporations which are members of the same controlled group, which 16
includes and is limited to: 17
1. One (1) or more chains of corporat ions connected through stock 18
ownership with a common parent corporation if: 19
a. Stock possessing more than fifty percent (50%) of the total 20
combined voting power of all classes of stock entitled to vote or 21
more than fifty percent (50%) of the total value of shares of all 22
classes of stock of each of the corporations, except the common 23
parent corporation, is owned by one (1) or more of the other 24
corporations; and 25
b. The common parent corporation owns stock possessing more than 26
fifty percent (50%) of the total combined voting power of all 27
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classes of stock entitled to vote or more than fifty percent (50%) of 1
the total value of shares of all classes of stock of at least one (1) of 2
the other corporations, excluding, in computing the voting power 3
or value, stock owned directly by the other corporations; or 4
2. Two (2) or more corporations if fi ve (5) or fewer persons who are 5
individuals, estates, or trusts own stock possessing more than fifty 6
percent (50%) of the total combined voting power of all classes of stock 7
entitled to vote or more than fifty percent (50%) of the total value of 8
shares of all classes of stock of each corporation, taking into account the 9
stock ownership of each person only to the extent the stock ownership is 10
identical with respect to each corporation; 11
(e) A grantor and a fiduciary of any trust; 12
(f) A fiduciary of a trust an d a fiduciary of another trust, if the same person is a 13
grantor of both trusts; 14
(g) A fiduciary of a trust and a beneficiary of that trust; 15
(h) A fiduciary of a trust and a beneficiary of another trust, if the same person is a 16
grantor of both trusts; 17
(i) A fiduciary of a trust and a corporation more than fifty percent (50%) in value 18
of the outstanding stock of which is owned, directly or indirectly, by or for the 19
trust or by or for a person who is a grantor of the trust; 20
(j) A fiduciary of a trust and a lim ited liability company more than fifty percent 21
(50%) of the capital interest, or the interest in profits, of which is owned 22
directly or indirectly, by or for the trust or by or for a person who is a grantor 23
of the trust; 24
(k) A corporation, a partnership, or a limited partnership if the same persons own: 25
1. More than fifty percent (50%) in value of the outstanding stock of the 26
corporation; and 27
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2. More than fifty percent (50%) of the capital interest, or the profits 1
interest, in the partnership or limited partnership; 2
(l) A corporation and a limited liability company if the same persons own: 3
1. More than fifty percent (50%) in value of the outstanding stock of the 4
corporation; and 5
2. More than fifty percent (50%) of the capital interest or the profits in the 6
limited liability company; 7
(m) A partnership or limited partnership and a limited liability company if the 8
same persons own: 9
1. More than fifty percent (50%) of the capital interest or profits in the 10
partnership or limited partnership; and 11
2. More than fifty percent (50%) of the capital interest or the profits in the 12
limited liability company; 13
(n) An S corporation and another S corporation if the same persons own more 14
than fifty percent (50%) in value of the outstanding stock of each corporation; 15
S corporati on designation being the same as that designation under the 16
Internal Revenue Code of 1986, as amended; 17
(o) An S corporation and a C corporation, if the same persons own more than 18
fifty percent (50%) in value of the outstanding stock of each corporation; S 19
and C corporation designations being the same as those designations under the 20
Internal Revenue Code of 1986, as amended; or 21
(p) Two (2) or more limited liability companies, if the same persons own more 22
than fifty percent (50%) of the capital interest or are entitled to more than fifty 23
percent (50%) of the capital profits in the limited liability companies; 24
(3) "Agribusiness" means the processing of raw agricultural products, including but not 25
limited to timber and industrial hemp, or the performance of valu e-added functions 26
with regard to raw agricultural products; 27
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(4) "Alternative fuel production" means a Kentucky operation that primarily produces 1
alternative transportation fuels for sale. The alternative fuel production may 2
produce electricity as a by-product if the primary function of the operations remains 3
the production and sale of alternative transportation fuels; 4
(5) "Alternative transportation fuels" has the same meaning as in KRS 152.715; 5
(6) "Approved company" means an eligible company that has rece ived final approval 6
to receive incentives under this subchapter; 7
(7) "Approved costs" means the amount of eligible costs approved by the authority at 8
final approval; 9
(8) "Authority" means the Kentucky Economic Development Finance Authority 10
established by KRS 154.20-010; 11
(9) "Biomass resources" has the same meaning as in KRS 152.715; 12
(10) "Capital lease" means a lease classified as a capital lease by the Statement of 13
Financial Accounting Standards No. 13, Accounting for Leases, issued by the 14
Financial Accounting Standards Board, November 1976, as amended; 15
(11) "Carbon dioxide or hydrogen transmission pipeline" means the in -state portion of a 16
pipeline, including appurtenant f acilities, property rights, and easements, that is 17
used exclusively for the purpose of transporting carbon dioxide or hydrogen to the 18
point of sale, storage, or other carbon or hydrogen management applications; 19
(12) "Coal severing and processing" means act ivities resulting in the eligible company 20
being subject to the tax imposed by KRS Chapter 143; 21
(13) "Commonwealth" means the Commonwealth of Kentucky; 22
(14) "Confirmed approved costs" means: 23
(a) For owned economic development projects, the documented eligib le costs 24
incurred on or before the activation date; or 25
(b) For leased economic development projects: 26
1. The documented eligible costs incurred on or before the activation date; 27
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and 1
2. Estimated rent to be incurred by the approved company throughout the 2
term of the tax incentive agreement. 3
For both owned and leased economic development projects, "confirmed approved 4
costs" may be less than approved costs, but shall not be more than approved costs; 5
(15) "Department" means the Department of Revenue; 6
(16) "Economic development project" means: 7
(a) The acquisition, leasing, or construction of a new facility; 8
(b) The acquisition, leasing, rehabilitation, or expansion of an existing facility; or 9
(c) The installation and equipping of a facility; 10
by an eligible compa ny. "Economic development project" does not include any 11
economic development project that will result in the replacement of facilities 12
existing in the Commonwealth, except as provided in KRS 154.32-060; 13
(17) (a) "Eligible company" means any corporation, li mited liability company, 14
partnership, limited partnership, sole proprietorship, business trust, or any 15
other entity with a proposed economic development project that is engaged in 16
or is planning to be engaged in one (1) or more of the following activities 17
within the Commonwealth: 18
1. Manufacturing; 19
2. Agribusiness; 20
3. Nonretail service or technology; 21
4. Headquarters operations, regardless of the underlying business activity 22
of the company; 23
5. Alternative fuel, gasification, energy -efficient alternative fuel, or 24
renewable energy production; 25
6. Carbon dioxide or hydrogen transmission pipeline; 26
7. Coal severing and processing;[ or] 27
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8. Hospital operations; or 1
9. Research and development. 2
(b) "Eligible company" does not include companies where the primary activity to 3
be conducted within the Commonwealth is forestry, fishing, the provision of 4
utilities, construction, wholesale trade, retail trade, real estate, rental and 5
leasing, educational ser vices, accommodation and food services, or public 6
administration services; 7
(18) "Eligible costs" means: 8
(a) For owned economic development projects: 9
1. Start-up costs[; 10
] to furnish and equip a facility, including: 11
a. Office and manufacturing equipment; 12
b. Software; 13
c. Computers; 14
d. Fixtures; and 15
e. Fixed telecommunications equipment; 16
2. Nonrecurring obligations incurred for labor and nonrecurring payments 17
to contractors, subcontractors, builders, and materialmen in connection 18
with the economic development project; 19
3. The cost of acquiring land or rights in land and any cost incidental 20
thereto, including recording fees; 21
4. The cost of contract bonds and of insurance of all kinds that may be 22
required or necessary for completion of an economic development 23
project which is not paid by a contractor or otherwise provided for; 24
5. All costs of architectural and engineering services, including test 25
borings, surveys, estimated plans and specifications, preliminary 26
investigations, and supervision of construction, as we ll as for the 27
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performance of all the duties required for construction of the economic 1
development project; 2
6. All costs which are required to be paid under the terms of any contract 3
for the economic development project; 4
7. All costs incurred for constructi on activities, including site tests and 5
inspections; subsurface site work; excavation; removal of structures, 6
roadways, cemeteries, and other surface obstructions; filling, grading, 7
and providing drainage and storm water retention; installation of utilities 8
such as water, sewer, sewage treatment, gas, electric, communications, 9
and similar facilities; off -site construction of utility extensions to the 10
boundaries of the real estate; construction and installation of railroad 11
spurs as needed to connect the economic development project to existing 12
railways; or similar activities as the authority may determine necessary 13
for construction of the economic development project; and 14
8. All other costs of a nature comparable to those described above; and 15
(b) For leased economic development projects: 16
1. Start-up costs to furnish and equip a facility, including: 17
a. Office and manufacturing equipment; 18
b. Software; 19
c. Computers; 20
d. Fixtures; and 21
e. Fixed telecommunications equipment; 22
2. Building/leasehold improvements; and 23
3. Fifty percent (50%) of the estimated annual rent for each year of the tax 24
incentive agreement[. 25
Notwithstanding any other provision of this subsection, for economic development 26
projects that are not in enhanced ince ntive counties, the cost of equipment eligible 27
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for recovery as an eligible cost shall not exceed twenty thousand dollars ($20,000) 1
for each new full-time job created as of the activation date]; 2
(19) "Employee benefits" means payments by an approved company for its full -time 3
employees for health insurance, life insurance, dental insurance, vision insurance, 4
defined benefits, 401(k), or similar plans; 5
(20) "Energy-efficient alternative fuel production" means a Kentucky operation that 6
produces for sale energy-efficient alternative fuels; 7
(21) "Energy-efficient alternative fuels" means homogeneous fuels that: 8
(a) Are produced from processes designed to densify feedstock coal, waste coal, 9
or biomass resources; and 10
(b) Have an energy content that is greater than t he feedstock coal, waste coal, or 11
biomass resource; 12
(22) ["Enhanced incentive counties" means counties certified by the authority pursuant 13
to KRS 154.32-050; 14
(23) ]"Final approval" means the action taken by the authority authorizing the eligible 15
company to receive incentives under this subchapter; 16
(23)[(24)] (a) "Full-time job" means a job held by a person who: 17
1. Is required to work a minimum of thirty-five (35) hours per week; and 18
2. a. Is subject to the Kentucky individual income tax imposed by KRS 19
141.020; or 20
b. Works remotely away from the economic development project if 21
the job meets all of the following conditions: 22
i. Is held by a Kentucky resident; 23
ii. Was created as a result of the economic development project; 24
and 25
iii. The payroll of this job is expensed to the economic 26
development project. 27
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(b) "Full-time job" does not include a job held by a resident of any state with a 1
reciprocal agreement between the Commonwealth and the other s tate as 2
described in KRS 141.070; 3
(24)[(25)] "Gasification process" means a process that converts any carbon -containing 4
material into a synthesis gas composed primarily of carbon monoxide and 5
hydrogen; 6
(25)[(26)] "Gasification production" means a Kentucky operation that primarily 7
produces for sale: 8
(a) Alternative transportation fuels; 9
(b) Synthetic natural gas; 10
(c) Chemicals; 11
(d) Chemical feedstocks; or 12
(e) Liquid fuels; 13
from coal, waste coal, coal -processing waste, or biomass resources, through a 14
gasification process. The gasification production may produce electricity as a by -15
product if the primary function of the operations remains the production and sale of 16
alternative transportation fuels, synthetic natural gas, chemicals, chemical 17
feedstocks, or liquid fuels; 18
(26)[(27)] "Headquarters" means the principal office where the principal executives of 19
the entity are located and from which other personnel, branches, affiliate s, offices, 20
or entities are controlled; 21
(27)[(28)] "Heritage county" means a county where the county population ranking 22
determined by the cabinet under Section 7 of this Act scores greater than or equal 23
to ninety-seven (97); 24
(28) "Hospital" means a facilit y licensed by the Cabinet for Health and Family Services 25
under KRS Chapter 216B for the operation of a hospital and the basic services 26
provided by a hospital; 27
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(29) "Incentives" means the incentives available under this subchapter, as listed in KRS 1
154.32-020(3); 2
(30) "Job target" means the annual average number of new full -time jobs that the 3
approved company commits to create and maintain at the economic development 4
project, which shall not be less than ten (10) new full-time jobs; 5
(31) "Kentucky gross receipts" has the same meaning as in KRS 141.0401; 6
(32) "Kentucky gross profits" has the same meaning as in KRS 141.0401; 7
(33) "Lease agreement": 8
(a) Means an agreement between: 9
1. An approved company and an unrelated entity conveying the right to use 10
a facility, the terms of which reflect an arms' length transaction, or 11
2. An approved company and a related entity where the facility to be 12
occupied by the approved company was conveyed by an unrelated 13
entity after the approved company received preliminary approva l; 14
and[. "Lease agreement" ] 15
(b) Does not include a capital lease; 16
(34) "Leased project" means an economic development project site occupied by an 17
approved company pursuant to a lease agreement; 18
(35) "Manufacturing" means any activity involving: 19
(a) Processing, assembling, or production of any property, including the 20
processing resulting in a change in the conditions of the property and any 21
activity related to the processing, assembling, or production of property, 22
together with the storage, warehousing, dis tribution, and related office 23
facilities; or 24
(b) Production of vital medications, personal protective equipment, or equipment 25
necessary to produce personal protective equipment; 26
(36) (a) "Nonretail service or technology" means any activity where service or 27
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technology is provided predominantly outside the Commonwealth and 1
designed to serve a multistate, national, or international market. 2
(b) "Nonretail service or technology" includes but is not limited to call centers, 3
centralized administrative or processin g centers, telephone or Internet sales 4
order or processing centers, distribution or fulfillment centers, data processing 5
centers, research and development facilities, and other similar activities; 6
(37) "Owned project" means an economic development project owned in fee simple by 7
the approved company or an affiliate, or possessed by the approved company or an 8
affiliate pursuant to a capital lease; 9
(38) "Personal protective equipment" means protective clothing, helmets, gloves, face 10
shields, goggles, face mask s, respirators, and other equipment designed to protect 11
the user from injury or the spread of infection or illness; 12
(39) "Preliminary approval" means the action taken by the authority preliminarily 13
approving an eligible company for incentives under this subchapter; 14
(40) "Renewable energy production" means a Kentucky operation that utilizes wind 15
power, biomass resources, landfill methane gas, hydropower, solar power, or other 16
similar renewable resources to generate electricity for sale to unrelated entities; 17
(41) "Rent" means the actual annual rent or fee paid by an approved company under a 18
lease agreement; 19
(42) "Start-up costs" means nonrecurring costs , with the exception of paragraphs (d) 20
and (e) of this subsection, incurred to furnish and equip a facility for an economic 21
development project, including costs incurred for: 22
(a) Computers, furnishings, office equipment, manufacturing equipment, and 23
fixtures; 24
(b) The relocation of out-of-state equipment;[ and] 25
(c) Recurring software subscription or licensing fees covering a period not to 26
exceed one (1) year from activation of the project; 27
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(d) The initial software and licensing costs association with each ne w full-time 1
job created; and 2
(e) Cost of fixed telecommunications equipment; 3
as certified to the authority in accordance with KRS 154.32-030; 4
(43) "Synthetic natural gas" means the same thing as in KRS 152.715; 5
(44) "Tax incentive agreement" means the agr eement entered into pursuant to KRS 6
154.32-040 between the authority and an approved company; 7
(45) "Term," subject to Section 16 of this Act, means the period of time for which a tax 8
incentive agreement may be in effect, which shall not exceed fifteen (15) years for 9
an economic development project located in a heritage [an enhanced incentive] 10
county, or ten (10) years for an economic development project not located in any 11
other county; 12
(46) "Vital medications" means any drug or biologic used to prevent or tr eat a serious 13
life-threatening disease or medical condition for which there is no other available 14
source with sufficient supply of that drug or biologic or alternative drug or biologic; 15
(47) "Wage" means the per hour earnings of a full-time employee, including wages, tips, 16
overtime, bonuses, and commissions, as reflected on the employee's federal form 17
W-2 wage and tax statement, but excludes employee benefits; and 18
(48) "Wage target" means the average total hourly compensation amount, including the 19
minimum w age and employee benefits, that the approved company commits to 20
meet for all new full -time jobs created and maintained as a result of the economic 21
development project, which shall not be less than: 22
(a) Two hundred percent (200%) [One hundred twenty -five per cent (125%)] of 23
the federal minimum wage in heritage[enhanced incentive] counties; or 24
(b) Three hundred percent (300%) [One hundred fifty percent (150%)] of the 25
federal minimum wage in any[all] other counties. 26
Section 14. KRS 154.32-020 is amended to read as follows: 27
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(1) The purposes of this subchapter are: 1
(a) To provide incentives for eligible companies and to encourage the location or 2
expansion of manufacturing facilities, agribusiness operations, nonretail 3
service or t echnology facilities, headquarters operations, alternative fuel 4
production facilities, gasification production facilities, energy -efficient 5
alternative fuel production facilities, renewable energy production facilities, 6
carbon dioxide or hydrogen transmiss ion pipelines, coal severing and 7
processing, and hospital operations in the Commonwealth to advance the 8
public purposes of: 9
1. Creation of new jobs that, but for the incentives offered by the authority, 10
would not exist within the Commonwealth; 11
2. Creation of new sources of tax revenues for the support of public 12
services provided by the Commonwealth; 13
3. Improvement in the quality of life for Kentucky citizens through the 14
creation of sustainable jobs with higher salaries; and 15
4. Providing an economic stimulus to bolster in -state production of vital 16
medications and personal protective equipment; and 17
(b) To provide balanced[enhanced] incentives for companies that locate in 18
heritage[enhanced incentive] counties in recognition of the depressed 19
economic conditions in those counties and the increased need for the growth 20
and development caused by the depressed economic conditions. 21
(2) To qualify for the incentives provided by subsection (3) of this section, an approved 22
company shall: 23
(a) Incur eligible costs of at least one hundred thousand dollars ($100,000); 24
(b) Create at least ten (10) new full -time jobs and maintain an annual average 25
number of at least ten (10) new full-time jobs; and 26
(c) 1. Pay at least ninety percent (90%) of all new full -time employees whose 27
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jobs were created as a result of the economic devel opment project a 1
minimum wage of at least two hundred percent (200%) [one hundred 2
twenty-five percent (125%)] of the federal minimum wage in 3
heritage[enhanced incentive] counties, and three hundred percent 4
(300%)[one hundred fifty percent (150%)] of the federal minimum wage 5
in any other counties throughout the term of the economic development 6
project; and 7
2. Provide employee benefits for all new full -time jobs equal to at least 8
fifteen percent (15%) of the minimum wage requirement established by 9
subparagraph 1. of this paragraph. If the eligible company does not 10
provide employee benefits equal to at least fifteen percent (15%) of the 11
minimum wage requirement established by subparagraph 1. of this 12
paragraph, the eligible company may still qualify for incentive s if it 13
provides the full -time employees hired as a result of the economic 14
development project total hourly compensation equal to or greater than 15
one hundred fifteen percent (115%) of the minimum wage requirement 16
established in subparagraph 1. of this para graph through increased 17
hourly wages combined with employee benefits; or 18
(d) Produce vital medications, personal protective equipment, or equipment 19
necessary to produce personal protective equipment. 20
(3) (a) The incentives available under this subchapter are as follows: 21
1.[(a)] Tax credits of up to one hundred percent (100%) of the Kentucky 22
income tax imposed under KRS 141.020 or 141.040 and the limited 23
liability entity tax imposed under KRS 141.0401 on the income, 24
Kentucky gross profits, or Kentucky gross receipts of the approved 25
company generated by or arising from the economic development 26
project, as set forth in KRS 141.415 and 154.32-070; 27
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2.[(b)] Authorization for the approved company to impose a wage 1
assessment against the gross wages of each new emplo yee subject to the 2
Kentucky income tax as provided in KRS 154.32-090; and 3
3.[(c)] An approved company receiving preliminary approval after July 4
1, 2026, may receive, in addition to the inducements provided under 5
subparagraphs 1. and 2. of this paragraph, a n income tax credit as 6
provided under Section 17 of this Act. 7
(b) Notwithstanding any provision of law to the contrary, for any economic 8
development project with an eligible investment of more than two hundred 9
million dollars ($200,000,000), the authority may authorize approval to the 10
economic development project based upon terms and incentives applicable to 11
economic development project locating in a heritage[an enhanced incentive] 12
county. 13
(4) The General Assembly hereby finds and declares that the authorit y granted in this 14
subchapter and the purposes accomplished hereby are proper governmental and 15
public purposes for which public moneys may be expended, and that the 16
inducement of the location of economic development projects within the 17
Commonwealth is of pa ramount importance to the economic well -being of the 18
Commonwealth. 19
Section 15. KRS 154.32-030 is amended to read as follows: 20
(1) The application, approval, and review process under this subchapter shall be as 21
follows: 22
(a) An eligible company with a proposed economic development project may 23
submit an application to the authority. The application shall include the 24
information required by subsection (3) of this section; 25
(b) Upon review of the application and any additional i nformation submitted, the 26
authority may, by resolution, give preliminary approval to an eligible 27
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company and authorize the negotiation and execution of a memorandum of 1
agreement. The memorandum of agreement shall establish a preliminary job 2
target, minimum wage target, including employee benefits, and maximum 3
total approved cost for the economic development project, and shall only 4
allow the recovery of eligible costs incurred ninety (90) days prior to receipt 5
of[ after] preliminary approval. Upon preliminar y approval, the preliminarily 6
approved company may undertake the project in accordance with the 7
memorandum of agreement, and may begin to hire employees that may be 8
counted toward the minimum full -time job requirements established by the 9
memorandum of agreement; 10
(c) After preliminary approval but before final approval, the authority shall post 11
the preliminarily approved company's name, the location of the economic 12
development project, and the incentives that have been preliminarily approved 13
on the Cabinet for Economic Development's website[Web site]; 14
(d) The preliminarily approved company shall submit any documentation 15
required by the authority upon request of the authority; 16
(e) To obtain final approval, the preliminarily approved company shall submit: 17
1. Documentation required by the authority to confirm that the 18
requirements established by the memorandum of agreement have been 19
met; and 20
2. Documentation of official action taken by a local governmental entity 21
detailing the manner and level of local contribution, if applicable. 22
Upon review and confirmation of the documentation, the authority may, by 23
resolution, give final approval to the preliminarily approved company, and 24
authorize the execution of a tax incentive agreement between the authority 25
and the appro ved company pursuant to KRS 154.32 -040. The tax incentive 26
agreement shall establish an activation date, which shall be within two (2) 27
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years of final approval; 1
(f) 1. On or before the activation date, the approved company shall notify the 2
authority of its i ntention to activate the tax incentive agreement. The 3
approved company shall submit: 4
a. Documentation that it has met the minimum full -time job, 5
minimum investment, and minimum wage and employee benefits 6
requirements established by KRS 154.32 -020 as of the date of 7
activation; and 8
b. The confirmed approved costs incurred as of the date of activation, 9
which shall be the total eligible costs that may be recovered by the 10
approved company. 11
2. If the approved company fails to meet any of the minimum investment, 12
full-time job, or wage requirements, including employee benefits, 13
established by KRS 154.32 -020 on the activation date, the tax incentive 14
agreement shall be canceled and the approved company shall not be 15
eligible for incentives. 16
3. If an approved company meets the minimum investment, full -time job, 17
and wage requirements, including employee benefits, established by 18
KRS 154.32 -020, but fails to meet higher job targets and minimum 19
wage targets, including employee benefits, established i n the tax 20
incentive agreement, then the provisions of subsection (4) of this section 21
shall apply in determining the incentives for which the approved 22
company qualifies. 23
4. Upon activation of a tax incentive agreement, the authority shall notify 24
the department, and shall provide the department with the information 25
necessary to monitor and track the incentives taken by the approved 26
company; and 27
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(g) 1. The authority shall monitor the tax incentive agreement at least 1
annually, and the approved company shall sub mit all documentation 2
necessary for the authority to monitor the agreement. 3
2. The authority shall, based on the documentation provided, confirm that 4
the approved company is in continued compliance with the provisions of 5
the tax incentive agreement and, therefore, eligible for incentives. 6
3. Upon annual review, if the approved company meets the minimum job 7
and wage requirements, including employee benefits, established by 8
KRS 154.32 -020, but fails to meet the job target and minimum wage 9
target, including em ployee benefits, established in the tax incentive 10
agreement, then the provisions of subsection (4) of this section shall 11
apply in determining the incentives for which the approved company 12
qualifies in any year. 13
4. Upon final approval, the authority shall n otify the department that an 14
approved company is eligible for incentives and shall provide the 15
department with the information necessary to monitor the use of 16
incentives by the approved company. If, at any time during the term of 17
the tax incentive agreemen t, an approved company becomes ineligible 18
for incentives, the authority shall notify the department, and the 19
department shall discontinue the availability of incentives for the 20
approved company. 21
(2) (a) The authority may establish procedures and standards for the review and 22
approval of eligible companies and their economic development projects 23
through the promulgation of administrative regulations in accordance with 24
KRS Chapter 13A. 25
(b) Standards to be used by the authority in reviewing and approving an eli gible 26
company and its economic development project shall include but not be 27
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limited to: 1
1. The creditworthiness of the eligible company; 2
2. The proposed capital investment to be made; 3
3. The number of new full-time jobs to be provided for the residents of the 4
Commonwealth and the wages to be paid; 5
4. Support of the local community; and 6
5. The likelihood of the economic success of the economic development 7
project. 8
(3) The application shall include but not be limited to: 9
(a) The name of the applicant and iden tification of any affiliates of the applicant 10
who will have some relation to the economic development project; 11
(b) A description of the economic development project, including its location, the 12
total investment in the economic development project, and tota l proposed 13
eligible costs; 14
(c) The projected number of new full -time jobs to be created as a result of the 15
economic development project and identification of any affiliates who may 16
employ persons hired to fill those jobs; 17
(d) The number of existing full-time jobs at the site of the economic development 18
project on the date of the application and a description and breakdown of the 19
relevant affiliated employers; 20
(e) Proposed wage and employee benefit amounts for the new full-time jobs to be 21
created as a result of the proposed economic development project; 22
(f) For proposed economic development projects new to the Commonwealth, 23
certification by the eligible company that the economic development project 24
could reasonably and efficiently locate outside of the Common wealth and, 25
without the incentives offered by the authority, the eligible company would 26
likely locate outside the Commonwealth; 27
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(g) For eligible companies with an existing location in the Commonwealth 1
considering an expansion, certification that the tax in centives are necessary 2
for the expansion to occur; 3
(h) A letter of support from a local governmental entity in the city or county 4
where the economic development project will be located; and 5
(i) Any other information the authority may require. 6
(4) (a) An approved company that meets the minimum job and wage requirements, 7
including employee benefits established by KRS 154.32-020, but fails to meet 8
the job target and minimum wage target, including employee benefits 9
established by the tax incentive agreement, sh all be eligible to receive the 10
incentives authorized by the tax incentive agreement as provided in this 11
subsection. 12
(b) If, upon activation or annual review, an approved company achieves at least 13
ninety percent (90%) of both the job target and minimum wage target, 14
including employee benefits established by the tax incentive agreement, and 15
no other default has occurred, then the approved company shall be eligible to 16
receive full incentives as provided in the tax incentive agreement. 17
(c) If, upon activation or annual review, an approved company achieves less than 18
ninety percent (90%) of either the job target or minimum wage target, 19
including employee benefits established in the tax incentive agreement, and 20
no other default has occurred, th en the incentives available to the approved 21
company for the following year shall be reduced by a percentage equal to the 22
percentage representing the difference between the job target or minimum 23
wage target, including employee benefits established in the ta x incentive 24
agreement, and the actual average number of full -time jobs or average wage, 25
including employee benefits, paid. If both the number of actual average full -26
time jobs and average wages paid, including employee benefits, are below 27
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ninety percent (90 %) of the targets on the same measurement date, then the 1
greater percentage reduction of the two (2) shall be applied rather than 2
reducing the incentives available by the sum of the two (2). 3
(d) If, upon annual review, either the actual number of new full -time jobs or the 4
average wages paid for those jobs, including employee benefits, is less than 5
the minimum requirements established by KRS 154.32 -020, then the 6
economic development project may be suspended automatically or, with 7
approval of the authority, terminated. 8
Section 16. KRS 154.32-040 is amended to read as follows: 9
The authority, upon final approval of a company, may enter into a tax incentive 10
agreement with the approved company. The terms and conditions of the ta x incentive 11
agreement shall be negotiated between the authority and the approved company. The 12
terms of the tax incentive agreement shall include but not be limited to the following 13
provisions: 14
(1) The maximum approved costs that may be recovered over the t erm of the tax 15
incentive agreement and the annual maximum for approved costs; 16
(2) That the approved company shall provide the authority with all documentation 17
requested in a manner acceptable to the authority; 18
(3) Identification of the contribution of the local government to the economic 19
development project, if any; 20
(4) The activation date, which shall be within two (2) years of final approval; 21
(5) That the approved company shall implement the activation date by notifying the 22
authority; 23
(6) That the approve d company shall provide documentation satisfactory to the 24
authority within the timeframes required by the authority that it has met the 25
minimum employment, minimum investment, and minimum wage requirements, 26
including employee benefits, established by KRS 154.32-020; 27
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(7) That failure of the approved company to meet any of the minimum job, minimum 1
investment, or minimum wage requirements, including employee benefits, 2
established by KRS 154.32-020, on the activation date shall result in cancellation of 3
the tax incentive agreement; 4
(8) The term of the agreement, which shall not exceed fifteen (15) years for an 5
economic development project located in a heritage[an enhanced incentive] county, 6
or ten (10) years for an economic development project located in any 7
other[another] county; 8
(9) Notwithstanding subsection (8) of this section, an approved company that 9
received preliminary approval of an economic development project prior to 10
January 1, 2023, in which wage assessments were provided pursuant to Section 11
18 of this Act may request a one (1) time extension for up to five (5) years under 12
the following conditions: 13
(a) At the time the extension is granted, the approved company has received less 14
than seventy -five percent (75%) of the incentives awarded under the tax 15
incentive agreement; and 16
(b) The extension does not amend any provision of the tax incentive agreement 17
impacting the scope of the project or the maximum amount of incentives 18
awarded under the tax incentive agreement; 19
(10) That, if confirmed approved costs ar e less than the maximum approved costs 20
included in the tax incentive agreement, the confirmed approved costs shall become 21
the maximum amount that may be recovered by the approved company; 22
(11)[(10)] If the economic development project is a leased project, that future rent 23
payments that are included in eligible costs shall be included as confirmed approved 24
costs upon submission of a valid lease agreement executed after preliminary 25
approval; 26
(12)[(11)] Establishment of a job target and minimum wage target, in cluding employee 27
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benefits; 1
(13)[(12)] A requirement that the job target and minimum wage target, including 2
employee benefits, be measured: 3
(a) On the activation date, against the actual new full -time jobs created and the 4
average wages, including employee benefits, paid for those jobs; and 5
(b) Annually during each year of the agreement, against the annual average of the 6
new full -time jobs and the average wages paid for those jobs, including 7
employee benefits; 8
(14)[(13)] A provision requiring the approved company to notify the authority 9
immediately if the approved company sells or otherwise transfers or disposes of the 10
land on which an economic deve lopment project is located, if a lease relating to the 11
economic development project is terminated or lapses, or if the approved company 12
ceases or fundamentally alters operations at the economic development project; 13
(15)[(14)] A provision detailing the redu ctions in incentives that will occur pursuant to 14
KRS 154.32-030(4) if an approved company fails to meet its job target or minimum 15
wage target, including employee benefits; 16
(16)[(15)] That the agreement may be assigned by the approved company upon the 17
adoption of a resolution by the authority to that effect; 18
(17)[(16)] That the approved company shall make available to the authority all of its 19
records pertaining to the economic development project, including but not limited 20
to payroll records, records relatin g to eligible costs, and any other records 21
pertaining to the economic development project that the authority may require; 22
(18)[(17)] That the authority may share information with the department for the purposes 23
of monitoring and enforcing the terms of the tax incentive agreement; 24
(19)[(18)] That, if an approved company fails to comply with its obligations under the 25
tax incentive agreement other than the jobs target or minimum wage target, the 26
authority may take any or all of the following actions: 27
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(a) Suspend the incentives available to the approved company; 1
(b) Terminate the incentives available to the approved company; or 2
(c) Pursue any other remedy set forth in the tax incentive agreement or to which it 3
may be entitled by law; and 4
(20)[(19)] Any other provisions not inconsistent with this subchapter and determined to 5
be necessary or appropriate by the parties to the tax incentive agreement. 6
Section 17. KRS 154.32-070 is amended to read as follows: 7
(1) For taxable ye ars beginning after December 31, 2009, an approved company may 8
be eligible for a credit of up to one hundred percent (100%) of the Kentucky 9
income tax imposed under KRS 141.020 or 141.040, and the limited liability entity 10
tax imposed under KRS 141.0401, th at would otherwise be owed by the approved 11
company to the Commonwealth for the approved company's taxable year, on the 12
income, Kentucky gross profits, or Kentucky gross receipts of the approved 13
company generated by or arising from the economic development project. 14
(2) The credit allowed the approved company shall be applied against both the income 15
tax imposed by KRS 141.020 or 141.040, and the limited liability entity tax 16
imposed by KRS 141.0401, with credit ordering as provided in KRS 141.0205, for 17
the taxable year for which the tax return of the approved company is filed, subject 18
to the annual maximum set forth in the tax incentive agreement. Any credit not used 19
in the year in which it was first available may be carried forward to subsequent 20
years, provided that no credit may be carried forward beyond the term of the tax 21
incentive agreement. 22
(3) The approved company shall not be required to pay estimated tax payments under 23
KRS 141.044 on the Kentucky taxable income, Kentucky gross receipts, or 24
Kentucky gross profits generated by or arising from the eligible project. 25
(4) The credit provided by this section shall be determined as provided in KRS 26
141.415. 27
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(5) The amount of incentives allowed under subsections (1) to (4) of this section [in 1
any year] shall not ex ceed the lesser of the tax liability of the approved company 2
related to the economic development project for that year or the annual maximum 3
approved costs set forth in the tax incentive agreement in any year. The incentives 4
shall be allowed for each fisca l year of the approved company during the term of 5
the tax incentive agreement for which a tax return is filed by the approved 6
company. 7
(6) (a) An approved company receiving preliminary approval after July 1, 2026, 8
may receive, in addition to the inducement s provided under subsections (1) 9
to (4) of this section, a credit as provided under Section 1 of this Act in an 10
amount up to: 11
1. Two and one -quarter percent (2.25%) of the wages paid to full -time 12
employees who are subject to the tax imposed by KRS 141.020 and 13
maintained at an economic development project located in a heritage 14
county; and 15
2. One and one -quarter percent (1.25%) of the wages paid to full -time 16
employees who are subject to the tax imposed by KRS 141.020 and 17
maintained at an economic development project located in any other 18
county. 19
(b) The cumulative credits awarded: 20
1. To an approved company under this subsection for any year of the 21
agreement shall not exceed the annual maximum approved costs of 22
the economic development project as provided in the tax incentive 23
agreement; and 24
2. Shall not exceed four million dollars ($4,000,000) per taxable year, of 25
which no more than one million dollars ($1,000,000) shall be allowed 26
for wages paid to full -time employees in counties other than heritage 27
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counties. 1
Section 18. KRS 154.32-090 is amended to read as follows: 2
(1) An approved company or, with the authority's consent, an affiliate of an approved 3
company may impose wage assessments against employees as provided in this 4
section if a wage assessment is included in the incentives awarded to the approved 5
company in the tax incentive agreement. The level of wage assessment shall be 6
negotiated as part of the tax incentive agreement. 7
(2) If an economic development project is locate d in a heritage[an enhanced incentive] 8
county, the approved company or, with the authority's consent, an affiliate of the 9
approved company may require that each employee subject to the tax imposed by 10
KRS 141.020, whose job is determined by the authority to be created as a result of 11
the economic development project, as a condition of employment, agree to an 12
assessment of up to one hundred percent (100%) of the individual income tax rate 13
imposed by KRS 141.020, and that assessment shall operate as the 14
Commonwealth's wage assessment. Although not required for an economic 15
development project located in a heritage [an enhanced incentive] county, a local 16
jurisdiction may agree to forgo all or a portion of its local occupational license fee 17
as a local wage assessment. 18
(3) (a) If the economic development project is not located in a heritage[an enhanced 19
incentive] county, and is located in a local jurisdiction where: 20
1. No local occupational license fee is imposed; 21
2. a. A local occupational license fee greater than or equal to twenty 22
percent (20%) of the individual income tax rate in KRS 141.020 is 23
imposed; and 24
b. The local jurisdiction agrees to forgo, as the local wage 25
assessment, at least twenty percent (20%) of the individual income 26
tax rate imposed by KRS 141.020 via credits against the local 27
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occupational license fee for the affected employees; or 1
3. a. A local occupational license fee less than twenty percent (20%) of 2
the individual income tax rate in KRS 141.020 is imposed; and 3
b. The local jurisdiction agrees to forgo the total amount of the local 4
occupational license fee as the local wage assessment; then 5
(b) An approved company or, with the authority's consent, an affiliate of an 6
approved company may require that each employee su bject to tax imposed by 7
KRS 141.020, whose job is determined by the authority to be created as a 8
result of the economic development project, as a condition of employment, 9
agree to pay an assessment of up to sixty percent (60%) of the individual 10
income tax rate imposed by KRS 141.020 and that assessment shall operate as 11
the Commonwealth's wage assessment. 12
(4) (a) If the economic development project is not located in a heritage[an enhanced 13
incentive] county, and is located in a local jurisdiction where: 14
1. a. A local occupational license fee greater than or equal to twenty 15
percent (20%) of the individual income tax rate in KRS 141.020 is 16
imposed; and 17
b. The local jurisdiction agrees to forgo an amount of the local 18
occupational license fee that is less than twe nty percent (20%) of 19
the individual income tax rate in KRS 141.020 as the local wage 20
assessment; or 21
2. a. A local occupational license fee of lesser than twenty percent 22
(20%) of the individual income tax rate in KRS 141.020 is 23
imposed; and 24
b. The local jur isdiction agrees to forgo only a portion of the total 25
amount of the local occupational license fee as the local wage 26
assessment; then 27
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(b) An approved company or, with the authority's consent, an affiliate of an 1
approved company may require that each employ ee subject to tax imposed by 2
KRS 141.020, whose job is determined by the authority to be created as a 3
result of the economic development project, as a condition of employment, 4
agree to pay an assessment equal to three (3) times the forgone local wage 5
assessment rate and that assessment shall operate as the Commonwealth's 6
wage assessment. 7
(5) If the project is not located in a heritage[an enhanced incentive] county, and: 8
(a) Is located in a local jurisdiction that does not impose a local occupational 9
license fee, the local jurisdiction shall be required to provide some alternative 10
inducement satisfactory to the authority at the local level in order for a 11
preliminarily approved company to receive final approval. However, the 12
authority may waive this requiremen t if there are reasonable circumstances 13
that prevent the local jurisdiction from providing a reasonable inducement; or 14
(b) Is located in a local jurisdiction that does impose a local occupational license 15
fee, the jurisdiction may request that the authority waive the local 16
occupational license fee requirements established by subsection (3) or (4) of 17
this section if the local jurisdiction offers alternative inducements of similar 18
value satisfactory to the authority. The authority shall review all requests for a 19
waiver, and may waive the local occupational license fee requirements and 20
instead require the local jurisdiction to provide alternative inducements of 21
similar value if the authority determines that the circumstances warrant an 22
alternative contribution by the local jurisdiction. 23
(6) Each employee paying the assessment shall simultaneously be entitled to a credit 24
against the Kentucky individual income tax required to be withheld under KRS 25
141.310 equal to the state portion of the assessment and shall be en titled to a credit 26
against the local occupational license tax equal to the local portion of the 27
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assessment. 1
(7) If more than one (1) local jurisdiction imposes an occupational license fee, the local 2
jurisdiction portion of the assessment shall be prorated proportionately among the 3
taxes imposed by the local jurisdictions unless one (1) local jurisdiction agrees to 4
forgo the receipt of these taxes in an amount equal to the local jurisdiction portion 5
of the wage assessment, in which case no proration shall be made. 6
(8) If a full -time employee subject to state tax imposed by KRS 141.020 is already 7
employed by the approved company at a site other than the site of the economic 8
development project, that full -time employee's job shall be deemed to have been 9
created when the full -time employee is transferred to the site of the economic 10
development project if the full -time employee's existing job is filled with a new 11
full-time employee. 12
(9) If an approved company elects to impose the assessment as a condition of 13
employment, it shall be authorized to deduct the assessment from each payment of 14
wages to the employee. 15
(10) Notwithstanding any other provision of the Kentucky Revised Statutes, if an 16
approved company elects not to deduct the assessment from each payment of wages 17
to the employee, but rather requests a reimbursement of state tax imposed by KRS 18
141.020 or local occupational tax in the aggregate after they have been paid to the 19
state or local jurisdiction, no interest shall be paid by the state or by the local 20
jurisdiction on that reimbursement. 21
(11) No credit, or portion thereof, shall be allowed against any occupational license fee 22
imposed by or dedicated solely to the board of education in a local jurisdiction. 23
(12) An approved company imposing an assessment sha ll make its payroll, books, and 24
records available to the authority or the department upon request, and shall file with 25
the authority or department documentation pertaining to the assessment as the 26
authority or department may require. 27
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(13) Any assessment of the wages of employees of an approved company in connection 1
with their employment at an economic development project shall permanently cease 2
at the expiration of the tax incentive agreement. 3
Section 19. KRS 154.32-100 is amended to read as follows: 4
(1) (a) By October 1 of each year, th e department shall certify to the authority, in the 5
form of an annual report, aggregate tax credits claimed on tax returns filed 6
during the fiscal year ending June 30 of that year and aggregate assessments 7
taken during the prior calendar year by approved c ompanies with respect to 8
their economic development projects under this subchapter, and shall certify 9
to the authority, within ninety (90) days from the date an approved company 10
has filed its state income tax return, when an approved company has taken tax 11
credits or assessments equal to the total incentives available to the approved 12
company. 13
(b) For the economic development credit provided under Section 1 of this Act, 14
the department shall report to the authority the total amount of economic 15
development credit awarded for each taxable year, by county, including the 16
following: 17
1. Each approved company awarded a credit; and 18
2. The total amount of wages paid to a full -time employee by an 19
approved company and included in the credit computation. 20
(2) On a semiannual basis, by May 1 and November 1 of each year, the cabinet shall 21
prepare a report of the economic development credits provided under Section 17 22
of this Act to be submitted to the Governor and the Legislative Research 23
Commission for referral t o Interim Joint Committee on Appropriations and 24
Revenue and made available on the cabinet's website. The report shall include 25
but not be limited to the following: 26
(a) A summary of the economic development credits received and relevant 27
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statistics relating to actions taken by the cabinet, including: 1
1. The approved company; 2
2. The total amount of economic development credits awarded; 3
3. The number of full-time jobs created; and 4
4. The annual maximum approved costs of the economic development 5
project; 6
(b) The annual total of the economic development credits received; and 7
(c) Recommendations for legislation or policy actions needed to increase the 8
number of economic development projects. 9
SECTION 20. A NEW SECTION OF SUBCHAPTER 12 OF KRS CHAPTER 10
154 IS CREATED TO READ AS FOLLOWS: 11
(1) The cabinet shall work closely with the workforce liaison appointed by the 12
president of the Kentucky Community and Technical College System to: 13
(a) Promote jobs created in the Commonwealth as a resu lt of economic 14
development incentive programs; and 15
(b) Provide support with the goal of recruitment and placement of system 16
students and graduates into new job and workforce training opportunities 17
as they are made available within the Commonwealth. 18
(2) The cabinet shall work closely with the system and involve it in policy discussions 19
and planning that may have an effect on community members, system staff, and 20
students. 21
Section 21. KRS 141.383 is amended to read as follows: 22
(1) As used in this section: 23
(a) "Above-the-line production crew" has the same meaning as in KRS 154.61 -24
010; 25
(b) "Approved company" has the same meaning as in KRS 154.61-010; 26
(c) "Below-the-line production crew" has the same meaning as in KRS 154.61 -27
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010; 1
(d) "Continuous film production" has the same meaning as in KRS 154.61-010; 2
(e) "Council" means the Kentucky Film Leadership Council created in KRS 3
154.12-282; 4
(f) "Loan-out entity" has the same meaning as in KRS 154.61-010; 5
(g) "Qualifying expenditure" has the same meaning as in KRS 154.61-010; 6
(h) "Qualifying payroll expenditure" has the same meaning as in KRS 154.61 -7
010; 8
(i) "Secretary" has the same meaning as in KRS 154.61-010; and 9
(j) "Tax incentive agreement" has the same meaning as KRS 154.61-010. 10
(2) (a) There is hereby created a tax credit against the tax imposed under KRS 11
141.020 or 141.040 and 141.0401, with the ordering of credits as provided in 12
KRS 141.0205. 13
(b) The incentive available under paragraph (a) of this section is: 14
1. A refundable credit for applications approved prior to April 27, 2018; 15
2. A nonrefundable and nontransferable credit for applications approved on 16
or after April 27, 2018, but before January 1, 2022; and 17
3. A refundable credit for applications approved on or after January 1, 18
2022, if the provisions of paragraph (c) of this subsection are met. 19
(c) 1. The total tax incentive approved under KRS 154.61 -020 shall be limited 20
to: 21
a. One hundred mill ion dollars ($100,000,000) for calendar year 22
2018 and each calendar year through the calendar year 2021; 23
b. Seventy-five million dollars ($75,000,000) for the calendar year 24
2022 and each calendar year thereafter; and 25
c. Beginning with calendar year 2024, t he amount in subdivision b. 26
of this subparagraph shall be allocated accordingly: 27
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i. Twenty-five million dollars ($25,000,000) shall be allocated 1
for all approved companies with a continuous film 2
production; and 3
ii. On the first day of April 2025, and on Ap ril 1 of each 4
calendar year thereafter, any unused balance allocated under 5
subpart i. of this subdivision for continuous film productions 6
shall be made available for all approved companies with a 7
motion picture or entertainment production. 8
2. To qualify for the refundable credit, all applicants shall: 9
a. Begin filming or production in Kentucky within six (6) months of 10
approval by the council; and 11
b. Complete filming or production in Kentucky within two (2) years 12
of their production start date. 13
(3) An approved company may receive a refundable tax credit if: 14
(a) The department has received notification from the council that the approved 15
company has satisfied all requirements of KRS 154.61 -020 and 154.61 -030; 16
and 17
(b) The approved company has provided a detailed cost report and sufficient 18
documentation to the council, which has been forwarded by the council to the 19
department, that: 20
1. The purchases of qualifying expenditures were made after the execution 21
of the tax incentive agreement; and 22
2. The approved company or loan -out entity has withheld income tax as 23
required by KRS 141.310 on all qualified payroll expenditures, and 24
remitted and certified the withheld amount to the department. 25
(4) Interest shall not be allowed or paid on any refundable credits provided und er this 26
section. 27
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(5) The department may promulgate administrative regulations under KRS Chapter 1
13A to administer this section. 2
(6) On or before September 1, 2010, and on or before each September 1 thereafter, for 3
the immediately preceding fiscal year, the department shall report to the council and 4
the Interim Joint Committee on Appropriations and Revenue the names of the 5
approved companies and the amounts of refundable income tax credit claimed. 6
(7) No later than September 1, 2021, and by November 1 every four (4) years 7
thereafter, the department and the Cabinet for Economic Development shall 8
cooperatively provide historical data related to the tax credit allowed in this section 9
and KRS 154.61 -020 and 154.61 -030, including data items beginning with tax 10
credits claimed for taxable years beginning on or after January 1, 2018: 11
(a) The name of the taxpayer claiming the tax credit; 12
(b) The date that the application was approved and the date the filming or 13
production was completed; 14
(c) The taxable year in which the taxpayer claimed the tax credit; 15
(d) The total amount of the tax credit, including any amount denied, any amount 16
applied against a tax liability, any amount refunded, and any amount 17
remaining that may be claimed on a return filed in the future; 18
(e) Whether the taxpayer is a Kentucky -based company as defined in KRS 19
154.61-010; 20
(f) Whether the taxpayer films or produces a: 21
1. Feature-length film, television program, or industrial film; 22
2. National touring production of a Broadway show; or 23
3. Documentary; 24
(g) Whether the filming or production was performed: 25
1. Entirely in a heritage[an enhanced] county; or 26
2. In whole or in part in any Kentucky county other than in a heritage[an 27
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enhanced incentive] county; 1
(h) The amount of qualifying expenditures incurred by the taxpayer; 2
(i) The amount of qualifying payroll expenditures paid to: 3
1. Resident below-the-line crew; and 4
2. Nonresident below-the-line production crew; 5
including the number of crew members in each category; 6
(j) The amount of qualifying payroll expenditures paid to: 7
1. Resident above-the-line crew; and 8
2. Nonresident above-the-line crew; 9
including the number of crew members in each category; and 10
(k) A brief description of the type of motion picture or entertainment product ion 11
project. 12
(8) The information required to be reported under this section shall not be considered 13
confidential taxpayer information and shall not be subject to KRS Chapter 131 or 14
any other provisions of the Kentucky Revised Statutes prohibiting disclosur e or 15
reporting of information. 16
Section 22. KRS 154.61-010 is amended to read as follows: 17
As used in this subchapter: 18
(1) "Above-the-line production crew" means employees involved with the production 19
of a motion picture o r entertainment production whose salaries are negotiated prior 20
to commencement of production, such as actors, directors, producers, and writers; 21
(2) "Animated production" means a nationally distributed feature -length film created 22
with the rapid display of a sequence of images using 2 -D or 3 -D graphics of 23
artwork or model positions in order to create an illusion of movement; 24
(3) "Approved company" means an eligible company approved for incentives provided 25
under KRS 141.383 and 154.61-020; 26
(4) "Below-the-line production crew" means employees involved with the production 27
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of a motion picture or entertainment production except above -the-line production 1
crew. "Below-the-line production crew" includes but is not limited to: 2
(a) Casting assistants; 3
(b) Costume design; 4
(c) Extras; 5
(d) Gaffers; 6
(e) Grips; 7
(f) Location managers; 8
(g) Production assistants; 9
(h) Set construction staff; and 10
(i) Set design staff; 11
(5) "Cabinet" means the Cabinet for Economic Development; 12
(6) "Commonwealth" means the Commonwealth of Kentucky; 13
(7) "Compensation" means compensation included in adjusted gross income as defined 14
in KRS 141.010; 15
(8) "Continuous film production" means a motion picture or entertainment production 16
that: 17
(a) 1. Has a projected budget of a minimum of ten mi llion dollars 18
($10,000,000) per calendar year for qualifying expenditures and 19
qualifying payroll expenditures allocated to all qualifying motion picture 20
or entertainment productions to be filmed or produced in Kentucky, with 21
a minimum of one million five h undred thousand dollars ($1,500,000) 22
per production in Kentucky; and 23
2. Has a minimum of fifty percent (50%) of the funds available and the 24
ability to raise the remaining funds necessary to complete the filming 25
and production, which may be verified by: 26
a. Bank statements or other financial documents; or 27
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b. A fundraising plan at the request of the council; 1
(b) Demonstrates a distribution contract for each motion or entertainment 2
production; 3
(c) Films and produces a minimum of twelve (12) or more days per pro duction 4
within the Commonwealth; and 5
(d) Maintains: 6
1. An apprenticeship program or on -the-job training program as defined in 7
KRS 343.010; or 8
2. Partners with a film studies program with an accredited institution of 9
postsecondary education located in the Commonwealth; 10
(9) "Council" means the Kentucky Film Leadership Council created in KRS 154.12 -11
282; 12
(10) "Documentary" means a production based upon factual information and not 13
subjective interjections; 14
(11) "Eligible company" means any person that intends to film or produce a motion 15
picture or entertainment production in the Commonwealth; 16
(12) "Employee" has the same meaning as in KRS 141.010, and, for purposes of this 17
subchapter, also may include the employe es or independent contractors of an 18
approved company or the employees of a loan -out entity engaged by an approved 19
company if they meet the requirements of KRS 141.310; 20
(13) ["Enhanced incentive county" has the same meaning as in KRS 154.32-010; 21
(14) ]"Feature-length film" means a live-action or animated production that is: 22
(a) More than thirty (30) minutes in length; and 23
(b) Produced for distribution in theaters or via digital format, including but not 24
limited to DVD, Internet, or mobile electronic devices; 25
(14) "Heritage county" means a county where the county population ranking 26
determined by the cabinet under Section 7 of this Act scores greater than or equal 27
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to ninety-seven (97); 1
(15) "Industrial film" means a business -to-business film that may be viewed by the 2
public, including but not limited to videos used for training or for viewing at a trade 3
show; 4
(16) "Kentucky-based company" has the same meaning as in KRS 164.6011; 5
(17) "Loan-out entity" means a corporation, partnership, limited liability company, or 6
other entity through which an artist or other person is loaned out to perform services 7
for the approved company. A loan -out entity shall be registered and in good 8
standing with the Kentucky Secretary of State. Notwithstanding the business 9
organization, the loan-out entity and all employees of and other persons performing 10
services for the loan -out entity shall be subject to all applicable provisions of the 11
Kentucky personal income tax and any applicable payroll or other tax provisions; 12
(18) (a) "Motion picture or entertainment production" means: 13
1. The following if filmed in whole or in part, or produced in whole or in 14
part, in the Commonwealth: 15
a. A feature-length film; 16
b. A television program; 17
c. An industrial film; or 18
d. A documentary; or 19
2. A national touring production of a Broadway show produced in 20
Kentucky. 21
(b) "Motion picture or entertainment production" does not include the filming or 22
production of obscene material or television coverage of news or athletic 23
events; 24
(19) "Obscene" has the same meaning as in KRS 531.010; 25
(20) "Person" has the same meaning as in KRS 141.010; 26
(21) (a) "Qualifying expenditure" means expenditures made in the Commonwealth for 27
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the following if directly used in or for a motion picture or entertainment 1
production: 2
1. The production script and synopsis; 3
2. Set construction and operations, wardrobe, accessories, and related 4
services; 5
3. Lease or rental of real property in Kentucky as a set location; 6
4. Photography, sound synchronization, lighting, and related services; 7
5. Editing and related services; 8
6. Rental of facilities and equipment; 9
7. Vehicle leases; 10
8. Food; and 11
9. Accommodations. 12
(b) "Qualifying expenditure" does not include Kentucky sales and use tax paid by 13
the approved company on the qualifying expenditure; 14
(22) "Qualifying payroll expenditure" means compensation paid to above -the-line crew 15
and below -the line crew while working on a motion picture or entertainment 16
production in the Commonwealth if the compensation is for services performed in 17
the Commonwealth; 18
(23) "Resident" has the same meaning as in KRS 141.010; 19
(24) "Secretary" means the secretary of the Cabinet for Economic Development; 20
(25) "Tax incentive agreement" means the agreement entered into pursuant to KRS 21
154.61-030 between the council and the approved company; and 22
(26) "Television program" means any live -action or animated production or 23
documentary, including but not limited to: 24
(a) An episodic series; 25
(b) A miniseries; 26
(c) A television movie; or 27
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(d) A television pilot; 1
that is produced for distri bution on television via broadcast, cable, or any digital 2
format, including but not limited to cable, satellite, internet, or mobile electronic 3
devices. 4
Section 23. KRS 154.61-020 is amended to read as follows: 5
(1) The purposes of KRS 141.383 and this subchapter are to encourage: 6
(a) The film and entertainment industry to choose locations in the 7
Commonwealth for the filming and production of motion picture or 8
entertainment productions; 9
(b) The development of a film and entertainment industry in Kentucky; 10
(c) Increased employment opportunities for the citizens of the Commonwealth 11
within the film and entertainment industry; and 12
(d) The development of a production and postproduction infrastructure in the 13
Commonwealth for film production and touring Broadway show production 14
facilities containing state-of-the-art technologies. 15
(2) The council, together with the Department of Revenue, shall administer the tax 16
credit established by KRS 141.383, this section, and KRS 154.61-030. 17
(3) To qualify for the tax incentive provided in subsection (5) of this section, the 18
following requirements shall be met: 19
(a) For an approved company that is also a Kentucky-based company that: 20
1. Films or produces a feature-length film, television program, or industrial 21
film in whole or in part in the Commonwealth, the minimum combined 22
total of qualifying expenditures and qualifying payroll expenditures 23
shall be one hundred twenty-five thousand dollars ($125,000); 24
2. Produces a national touring production of a Broadway show in whole or 25
in part in the Commonwealth, the minimum combined total of 26
qualifying expenditures and qualifying payroll expenditures shall be 27
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twenty thousand dollars ($20,000); or 1
3. Films or produces a documentary in whole or in part in the 2
Commonwealth, the minimum combined total of qualifying 3
expenditures and qualifying payroll expenditures shall be ten thousand 4
dollars ($10,000); and 5
(b) For an approved company that is not a Kentucky-based company that: 6
1. Films or produces a feature-length film, television program, or industrial 7
film in whole or in part in the Commonwealth, the minimum combined 8
total of qualifying expenditures and qualifying payroll expenditures 9
shall be two hundred fifty thousand dollars ($250,000); or 10
2. Films or produces a documentary in whole or in part in the 11
Commonwealth or that produces a national touring production of a 12
Broadway show, the minimum combined total of qualifying 13
expenditures and qualifying payroll expenditures s hall be twenty 14
thousand dollars ($20,000). 15
(4) (a) Beginning on January 1, 2022, the total tax incentive approved under KRS 16
141.383 and this subchapter shall be limited to seventy -five million dollars 17
($75,000,000) for calendar year 2022 and each calendar year thereafter. 18
(b) Beginning with calendar year 2024: 19
1. Twenty-five million dollars ($25,000,000) shall be allocated for all 20
approved companies with a continuous film production; and 21
2. On the first day of July of each calendar year, any unused balance of the 22
amount allocated under subparagraph 1. of this paragraph for continuous 23
film productions shall be made available for all approved companies 24
with motion picture or entertainment productions. 25
(5) (a) To qualify for the tax incentive available under KR S 141.383 and this 26
subchapter all applicants shall: 27
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1. Begin filming or production in Kentucky within six (6) months of 1
approval by the council; and 2
2. Complete filming or production in Kentucky within two (2) years of the 3
filming or production start date. 4
(b) The tax credit shall be against the Kentucky income tax imposed under KRS 5
141.020 or 141.040, and the limited liability entity tax imposed under KRS 6
141.0401, and shall be refundable as provided in KRS 141.383. 7
(c) 1. For a motion picture or entertain ment production or continuous film 8
production filmed or produced in its entirety in a heritage[an enhanced 9
incentive] county, the amount of the incentive shall be equal to thirty -10
five percent (35%) of the approved company's: 11
a. Qualifying expenditures; 12
b. Qualifying payroll expenditures paid to resident and nonresident 13
below-the-line production crew; and 14
c. Qualifying payroll expenditures paid to resident and nonresident 15
above-the-line production crew not to exceed one million dollars 16
($1,000,000) in payroll expenditures per employee. 17
2. a. To the extent the approved company films or produces a motion 18
picture or entertainment production or continuous film production 19
in part in a heritage[an enhanced incentive] county and in part a 20
Kentucky county that is not a heritage [an enhanced incentive] 21
county, the approved company shall be eligible to receive the 22
incentives provided in this paragraph for those expenditures 23
incurred in the heritage[enhanced incentive] county and all other 24
expenditures shall be subject to the incentives provided in 25
paragraph (d) of this subsection. 26
b. The approved company shall track the requisite expenditures by 27
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county. If the approved company can demonstrate to the 1
satisfaction of the cabinet that it is not practical to use a separate 2
accounting method to determine the expenditures by county, the 3
approved company shall determine the correct expenditures by 4
county using an alternative method approved by the cabinet. 5
(d) For a motion picture or entertainment production or continuous film 6
production filmed or produced in whole or in part in any Kentucky county 7
other than in a heritage [an enhanced incentive] county, the amount of the 8
incentive shall be equal to: 9
1. Thirty percent (30%) of the approved company's: 10
a. Qualifying expenditures; 11
b. Qualifying payroll expenditures paid to below -the-line production 12
crew that are not residents; and 13
c. Qualifying payroll expenditures paid to above -the-line production 14
crew that are not residents, not to exceed one million dollars 15
($1,000,000) in payroll expenditures per employee; and 16
2. Thirty-five percent (35%) of the approved company's: 17
a. Qualifying payroll expenditures paid to resident below -the-line 18
production crew; and 19
b. Qualifying payroll expenditures paid to resident above -the-line 20
production crew not to exceed one million dollars ($1,000,000) in 21
payroll expenditures per employee. 22
Section 24. KRS 148.851 is amended to read as follows: 23
As used in 148.851 to 148.860, unless the context clearly indicates otherwise: 24
(1) "Agreement" means the tourism development agreement entered into between the 25
authority and an approved company; 26
(2) "Approved company" means any eligible company that has received final approval 27
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to receive incentives provided under KRS 148.853; 1
(3) "Approved costs" means the amount of eligible costs approved by the authority 2
upon completion of the project; 3
(4) "Authority" means the Kentucky Tourism Development Finance Authority as set 4
forth in KRS 148.850; 5
(5) "Cabinet" means the Tourism, Arts and Heritage Cabinet; 6
(6) "Crafts and products center" means a facility primarily devoted to the d isplay, 7
promotion, and sale of Kentucky products, and at which a minimum of eighty 8
percent (80%) of the sales occurring at the facility are of Kentucky arts, crafts, or 9
agricultural products; 10
(7) "Eligible company" means any corporation, limited liability company, partnership, 11
limited partnership, sole proprietorship, business trust, or any other entity operating 12
or intending to operate a tourism development project; 13
(8) "Eligible costs" means: 14
(a) Obligations incurred for labor and amounts paid to vendors, contractors, 15
subcontractors, builders, suppliers, deliverymen, and materialmen in 16
connection with the acquisition, construction, equipping, and installation of a 17
tourism development project; 18
(b) The costs of acquiring real property or rights include the a cquisition of real 19
property by a leasehold interest with a minimum term of ten (10) years, and 20
any costs incidental thereto; 21
(c) The cost of contract bonds and of insurance of all kinds that may be required 22
or necessary during the course of the acquisition , construction, equipping, and 23
installation of a tourism development project which is not paid by the vendor, 24
supplier, deliveryman, contractor, or otherwise provided; 25
(d) All costs of architectural and engineering services, including but not limited to 26
estimates, plans and specifications, preliminary investigations, and 27
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supervision of construction and installation, as well as for the performance of 1
all the duties required by or consequent to the acquisition, construction, 2
equipping, and installation of a tourism development project; 3
(e) All costs required to be paid under the terms of any contract for the 4
acquisition, construction, equipping, and installation of a tourism 5
development project; 6
(f) All costs required for the installation of utilities, includi ng but not limited to 7
water, sewer, sewer treatment, gas, electricity and communications, and 8
including off -site construction of the facilities paid for by the approved 9
company; and 10
(g) All other costs comparable with those described in this subsection, ex cluding 11
costs subject to refund under KRS 154.20 -202, 154.20 -204, 154.20 -206, 12
154.20-208, and 154.20-210 or Subchapter 31 of KRS Chapter 154; 13
(9)[ "Enhanced incentive county" has the same meaning as in KRS 154.32-010; 14
(10)] "Entertainment destination cente r project" means a facility that meets the 15
requirements of KRS 148.853(2)(b); 16
(10)[(11)] "Final approval" means the action taken by the authority authorizing the 17
eligible company to receive incentives under KRS 139.536 and 148.851 to 148.860; 18
(11)[(12)] "Full-service lodging facility" means a facility that provides overnight 19
sleeping accommodations, including private bathrooms and all of the following: 20
(a) On-site dining facilities; 21
(b) Room service; 22
(c) Catering: and 23
(d) Meeting space; 24
(12)[(13)] "Heritage county" means a county where the county population ranking 25
determined by the Cabinet for Economic Development under Section 7 of this Act 26
scores greater than or equal to ninety-seven (97); 27
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(13) "Incentives" means the Kentucky sales tax refund as prescribed in KRS 139.536; 1
(14) "Kentucky sales tax" means the sales tax imposed by KRS 139.200; 2
(15) "Lodging facility project" means a full-service lodging facility that: 3
(a) 1. Is located on recreational property owned or lease d by the 4
Commonwealth or the federal government; 5
2. Involves the restoration or rehabilitation of a structure that: 6
a. Is listed individually on the National Register of Historic Places; 7
or 8
b. Is located in the National Register Historic District; and 9
is certified by the Kentucky Heritage Council as contributing to the 10
historic significance of the district, and the rehabilitation or restoration 11
of the structure has been approved in advance by the Kentucky Heritage 12
Council; 13
3. Is an integral part of a major convention or sports facility; 14
4. Is located: 15
a. Within a fifty (50) mile radius of a property listed on the National 16
Register of Historic Places with a current function of recreation 17
and culture; and 18
b. In any of the one hundred (100) least -populated cou nties in the 19
Commonwealth, in terms of population density, according to the 20
most recent census; 21
5. Is located on property: 22
a. Owned by the Commonwealth, or leased by the Commonwealth 23
from the federal government; 24
b. Acquired for use in the state park system pursuant to KRS 25
148.028; and 26
c. Operated by the Kentucky Department of Parks pursuant to KRS 27
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148.021 or the Kentucky Horse Park Commission pursuant to 1
KRS 148.258 to 148.320; 2
6. Is located on property: 3
a. Owned or leased by the federal government and unde r the control 4
of the Department of the Interior; or 5
b. Owned by the Commonwealth and in the custody of the State Fair 6
Board as provided in KRS 247.140; 7
7. Is part of a tourism attraction project, entertainment destination center 8
project, or theme restauran t destination attraction project and the full -9
service lodging facility represents less than fifty percent (50%) of the 10
total eligible costs; or 11
8. Has not less than five hundred (500) guest rooms; or 12
(b) 1. Is located: 13
a. In any of the one hundred (100) least -populated counties in the 14
Commonwealth, in terms of population density, according to the 15
most recent decennial census; 16
b. In a county, the boundaries of which: 17
i. Include, in part, the boundaries of a designated nation al 18
forest; or 19
ii. Are adjacent to or include a portion of parallel reservoirs of 20
water surrounding a national recreation area; 21
c. Within a heritage[an enhanced incentive] county and will create at 22
least fifty (50) new full-time jobs within that county; and 23
d. Within one-half (1/2) mile of a state resort park; 24
2. Has a capital investment of at least one hundred million dollars 25
($100,000,000); and 26
3. Contains accommodations for: 27
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a. Lodging, with a minimum of one hundred (100) guest rooms, 1
cabins, or rental units; 2
b. Relaxation, including a spa; 3
c. More than one (1) on-site dining facility; and 4
d. More than one (1) meeting or event space; 5
(16) "Net positive fiscal impact" means the amount by which increased state tax 6
revenues will exceed the incentives given; 7
(17) "Preliminary approval" means the action taken by the authority conditionally 8
approving an eligible company for the incentives under KRS 139.536 and 148.851 9
to 148.860; 10
(18) "Recreational facility" means a structure or outdoor area that: 11
(a) Provides vi sitors recreational opportunities, including but not limited to 12
amusement parks, boating, hiking, horseback riding, hunting, fishing, 13
camping, wildlife viewing, live theater, rock climbing, and all -terrain vehicle 14
trails; and 15
(b) Serves as a likely destina tion where individuals who are not residents of the 16
Commonwealth would remain overnight in commercial lodging at or near the 17
recreational facility; 18
(19) "Theme restaurant destination attraction project" means a restaurant facility that 19
meets the requirements for incentives under KRS 148.853(2)(c); 20
(20) (a) "Tourism attraction project" means: 21
1. A cultural or historical site; 22
2. A recreational facility; 23
3. An entertainment facility; 24
4. An area of natural phenomenon or scenic beauty; or 25
5. A Kentucky crafts and products center; 26
(b) "Tourism attraction project" does not include facilities that are primarily 27
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devoted to the retail sale of goods, other than a Kentucky crafts and products 1
center, or a tourism attraction where the sale of goods is a secondary and 2
subordinate component of the attraction; and 3
(21) "Tourism development project" means: 4
(a) A tourism attraction project; 5
(b) A theme restaurant destination attraction project; 6
(c) An entertainment destination center project; or 7
(d) A lodging facility project. 8
Section 25. KRS 148.853 is amended to read as follows: 9
(1) The General Assembly finds and declares that: 10
(a) The general welfare and material well -being of the citizens of the 11
Commonwealth depend in large measure upon the development of tourism in 12
the Commonwealth; 13
(b) It is in the best interest of the Commonwealth to provide incentives for the 14
creation of new tourism attractions and the expansion of existing tourism 15
attractions within the Commonwealth in order to advance the public purposes 16
of relieving unemployment by preserving and creating jobs that would not 17
exist if not for the incentives offered by the authority to approved companies, 18
and by preserving and creating sources of tax revenues for th e support of 19
public services provided by the Commonwealth; 20
(c) The authorities granted by KRS 148.851 to 148.860 are proper governmental 21
and public purposes for which public moneys may be expended; and 22
(d) That the creation or expansion of tourism developm ent projects is of 23
paramount importance mandating that the provisions of KRS 139.536 and 24
KRS 148.851 to 148.860 be liberally construed and applied in order to 25
advance public purposes. 26
(2) To qualify for incentives provided in KRS 139.536 and 148.851 to 148 .860, the 27
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following requirements shall be met: 1
(a) For a tourism attraction project: 2
1. The total eligible costs shall exceed one million dollars ($1,000,000), 3
except for a tourism attraction project located in a county designated as 4
a heritage [an enhanced incentive] county at the time the eligible 5
company becomes an approved company as provided in KRS 6
148.857(6), the total eligible costs shall exceed five hundred thousand 7
dollars ($500,000); 8
2. In any year, including the first year of operation, the touris m attraction 9
project shall be open to the public at least one hundred (100) days; and 10
3. In any year following the third year of operation, the tourism attraction 11
project shall attract at least twenty -five percent (25%) of its visitors 12
from among persons who are not residents of the Commonwealth; 13
(b) For an entertainment destination center project: 14
1. The total eligible costs shall exceed five million dollars ($5,000,000); 15
2. The facility shall contain a minimum of two hundred thousand 16
(200,000) square feet of building space adjacent or complementary to an 17
existing tourism attraction project or a major convention facility; 18
3. The incentives shall be dedicated to a public infrastructure purpose that 19
shall relate to the entertainment destination center project; 20
4. In any year, including the first year of operation, the entertainment 21
destination center project shall: 22
a. Be open to the public at least one hundred (100) days per year; 23
b. Maintain at least one (1) major theme restaurant and at least three 24
(3) addit ional entertainment venues, including but not limited to 25
live entertainment, multiplex theaters, large-format theater, motion 26
simulators, family entertainment centers, concert halls, virtual 27
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reality or other interactive games, museums, exhibitions, or othe r 1
cultural and leisure-time activities; and 2
c. Maintain a minimum occupancy of sixty percent (60%) of the total 3
gross area available for lease with entertainment and food and 4
drink options not including the retail sale of tangible personal 5
property; and 6
5. In any year following the third year of operation, the entertainment 7
destination center project shall attract at least twenty -five percent (25%) 8
of its visitors from among persons who are not residents of the 9
Commonwealth; 10
(c) For a theme restaurant destination attraction project: 11
1. The total eligible costs shall exceed five million dollars ($5,000,000); 12
2. In any year, including the first year of operation, the attraction shall: 13
a. Be open to the public at least three hundred (300) days per year 14
and for at least eight (8) hours per day; and 15
b. Generate no more than fifty percent (50%) of its revenue through 16
the sale of alcoholic beverages; 17
3. In any year following the third year of operation, the theme restaurant 18
destination attraction project shall att ract a minimum of fifty percent 19
(50%) of its visitors from among persons who are not residents of the 20
Commonwealth; and 21
4. The theme restaurant destination attraction project shall: 22
a. At the time of final approval, offer a unique dining experience that 23
is not available in the Commonwealth within a one hundred (100) 24
mile radius of the attraction; 25
b. In any year, including the first year of operation, maintain seating 26
capacity of four hundred fifty (450) guests and offer live music or 27
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live musical and theatr ical entertainment during the peak business 1
hours that the facility is in operation and open to the public; or 2
c. Within three (3) years of the completion date, the attraction shall 3
obtain a top two (2) tier rating by a nationally accredited service 4
and shall maintain a top two (2) tier rating through the term of the 5
agreement; 6
(d) For a lodging facility project defined in KRS 148.851(15)(a): 7
1. a. The eligible costs shall exceed five million dollars ($5,000,000) 8
unless the provisions of subdivision b. of this subparagraph apply. 9
b. i. If the lodging facility is an integral part of a major 10
convention or sports facility, the eligible costs shall exceed 11
six million dollars ($6,000,000); and 12
ii. If the lodging facility includes five hundred (500) or more 13
guest rooms, the eligible costs shall exceed ten million 14
dollars ($10,000,000); and 15
2. In any year, including the first year of operation, the lodging facility 16
shall: 17
a. Be open to the public at least one hundred (100) days; and 18
b. Attract at least twenty -five p ercent (25%) of its visitors from 19
among persons who are not residents of the Commonwealth; 20
(e) For a lodging facility project defined in KRS 148.851(15)(b): 21
1. The eligible costs shall exceed one hundred million dollars 22
($100,000,000); and 23
2. The lodging facility shall: 24
a. Be open to the public at least one hundred (100) days each year, 25
including the first year of operation; and 26
b. In any year following the third year of operation, attract a 27
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minimum of twenty -five percent (25%) of its overnight visitors 1
from among persons who are not residents of the Commonwealth; 2
(f) Any tourism development project shall not be eligible for incentives if it 3
includes material determined to be lewd, offensive, or deemed to have a 4
negative impact on the tourism industry in the Commonwealth; and 5
(g) An expansion of any tourism development project shall in all cases be treated 6
as a new stand-alone project. 7
(3) (a) The incentives offered to an approved company under the Kentucky Tourism 8
Development Act may include a sales tax incentive based on the Kentucky 9
sales tax imposed on sales generated by or arising at the tourism development 10
project. 11
(b) 1. For a tourism dev elopment project other than a lodging facility project 12
described in subparagraph 4. or 5. of this paragraph: 13
a. A sales tax incentive shall be allowed to an approved company 14
over a period of ten (10) years, except as provided in 15
subparagraphs 7. and 8. of this paragraph; and 16
b. The sales tax incentive shall not exceed the lesser of the total 17
amount of the sales tax liability of the approved company and its 18
lessees or a percentage of the approved costs as specified by the 19
agreement, not to exceed twenty-five percent (25%). 20
2. For projects approved according to the application period established 21
under KRS 148.8531, a tourism attraction project located in a 22
heritage[an enhanced incentive] county at the time the eligible company 23
becomes an approved company as provided in KRS 148.857(6): 24
a. A sales tax incentive shall be allowed to the approved company 25
over a period of ten (10) years; and 26
b. The sales tax incentive shall not exceed the lesser of the total 27
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amount of the sales tax liability of the approved company a nd its 1
lessees or a percentage of the approved costs as specified by the 2
agreement, not to exceed thirty percent (30%). 3
3. For applications considered after June 27, 2025, including projects 4
related to property to which the title passed from a seller to a buyer on 5
or after March 1, 2025, a tourism attraction project located in a 6
heritage[an enhanced incentive] county with a population equal to or 7
less than twenty thousand (20,000) based on the most recent decennial 8
census at the time the eligible company be comes an approved company 9
as provided in KRS 148.857(6): 10
a. A sales tax incentive shall be allowed to the approved company 11
over a period of twenty (20) years; and 12
b. The sales tax incentive shall not exceed the lesser of the total 13
amount of the sales tax l iability of the approved company and its 14
lessees or a percentage of the approved costs as specified by the 15
agreement, not to exceed fifty percent (50%). 16
4. For a lodging facility project described in KRS 148.851(15)(a)5. or 6.: 17
a. A sales tax incentive sha ll be allowed to the approved company 18
over a period of twenty (20) years; and 19
b. The sales tax incentive shall not exceed the lesser of total amount 20
of the sales tax liability of the approved company and its lessees or 21
a percentage of the approved costs as specified by the agreement, 22
not to exceed fifty percent (50%). 23
5. For a lodging facility project described in KRS 148.851(15)(b), a sales 24
tax incentive that shall: 25
a. Be allowed to the approved company over a period of twenty (20) 26
years; and 27
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b. Not exceed the lesser of the total amount of sales tax liability of 1
the approved company and its lessees or a percentage of the 2
approved costs as specified by the agreement, not to exceed fifty 3
percent (50%). 4
6. Any unused incentives from a previous year may be carr ied forward to 5
any succeeding year during the term of the agreement until the entire 6
specified percentage of the approved costs has been received through 7
sales tax incentives. 8
7. If the approved company is an entertainment destination center that has 9
dedicated at least thirty million dollars ($30,000,000) of the incentives 10
provided under the agreement to a public infrastructure purpose, the 11
agreement may be amended to extend the term of the agreement up to 12
two (2) additional years if the approved company agrees to: 13
a. Reinvest in the original entertainment destination project one 14
hundred percent (100%) of any incentives received during the 15
extension that were outstanding at the end of the original term of 16
the agreement; and 17
b. Report to the authority at the end of each fiscal year the amount of 18
incentives received during the extension and how the incentives 19
were reinvested in the original entertainment destination project. 20
8. The term of a tourism development agreement entered into with a 21
tourism attraction project that was in effect on January 1, 2020, shall be 22
extended for one (1) year if the tourism attraction project: 23
a. Has historically been open to the public on a seasonal basis 24
consisting of less than six (6) months; 25
b. Has previously met the requiremen t of being open to the public at 26
least one hundred (100) days during the entire term of the tourism 27
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development agreement as required under subsection (2)(a)2. of 1
this section; 2
c. Failed to be open to the public at least one hundred (100) days 3
during the calendar year 2020 solely as a result of complying with 4
one (1) or more executive orders issued by the Governor under the 5
authority of KRS 39A.090 that prevented the tourism attraction 6
project from being open to the public for at least one hundred 7
(100) days during its normal operating season; and 8
d. Applied for a sales tax incentive related to the calendar year 2020 9
operating season and was denied the sales tax incentive solely on 10
the basis that the tourism attraction project was not open to the 11
public for at least one hundred (100) days in calendar year 2020. 12
Section 26. KRS 154.20-230 is amended to read as follows: 13
As used in KRS 154.20-230 to 154.20-240: 14
(1) "Application" means a document submitted by small businesses and investors, on a 15
form supplied by the autho rity, for the purpose of requesting certification to 16
participate in the program and to apply for a credit; 17
(2) "Authority" means the Kentucky Economic Development Finance Authority; 18
(3) "Commonwealth" means the Commonwealth of Kentucky; 19
(4) "Credit" means the nonrefundable angel investor tax credit established by KRS 20
141.396 and awarded by the authority pursuant to KRS 154.20-236; 21
(5) "Department" means the Department of Revenue; 22
(6)[ "Enhanced incentive counties" has the same meaning as in KRS 154.32-010; 23
(7)] "Entity" means any corporation, limited liability company, business development 24
corporation, partnership, limited partnership, sole proprietorship, association, joint 25
stock company, receivership, trust, professional service organization, or other lega l 26
entity through which business is conducted; 27
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(7)[(8)] "Fee" means a nonrefundable application fee in an amount set by the 1
authority, to be collected by the authority to offset the cost of administering KRS 2
154.20-230 to 154.20-240; 3
(8)[(9)] "Full-time employee" means a person that is required to work a minimum of 4
thirty-five (35) hours per week and is subject to the tax imposed by KRS 141.020; 5
(9) "Heritage county" means a county where the county population ranking 6
determined by the cabinet under Section 7 of this Act scores greater than or equal 7
to ninety-seven (97); 8
(10) "Knowledge-based" has the same meaning as in KRS 164.6011; 9
(11) (a) "Qualified activity" means any knowledge -based activity related to the new 10
economy focus areas of the Office of Entrepr eneurship and Innovation, 11
including but not limited to: 12
1. Bioscience; 13
2. Environmental and energy technology; 14
3. Health and human development; 15
4. Information technology and communications; and 16
5. Materials science and advanced manufacturing. 17
(b) A "qualified activity" does not include any activity principally engaged in by 18
financial institutions, commercial development companies, credit companies, 19
financial or investment advisors, brokerage or financial firms, other 20
investment funds or investment fund mana gers, charitable and religious 21
institutions, oil and gas exploration companies, insurance companies, 22
residential housing developers, retail establishments, or any activity that the 23
authority determines in its discretion to be against the public interest, a gainst 24
the purposes of KRS 154.20 -230 to 154.20 -240, or in violation of any law. 25
Notwithstanding this paragraph, an entity involved in other technological 26
advances may be deemed to be engaged in qualified activity, as determined by 27
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the executive director of the Office of Entrepreneurship and Innovation; 1
(12) "Qualified investment" means an investment meeting the requirements of KRS 2
154.20-234 for qualified investments, and certified pursuant to KRS 154.20-236; 3
(13) "Qualified investor" means an individual investor meeting the requirements of KRS 4
154.20-234 for qualified investors, and certified pursuant to KRS 154.20-236; and 5
(14) "Qualified small business" means an entity meeting the requirements of KRS 6
154.20-234 for qualified small businesses, and certifi ed pursuant to KRS 154.20 -7
236. 8
Section 27. KRS 154.20-236 is amended to read as follows: 9
(1) The total amount of credit that may be awarded by t he authority in each calendar 10
year, pursuant to KRS 154.20-230 to 154.20-240, to: 11
(a) All qualified investors shall be no more than three million dollars 12
($3,000,000); and 13
(b) Any individual qualified investor shall be no more than two hundred thousand 14
dollars ($200,000). 15
(2) (a) The total amount of credit that may be awarded by the authority to: 16
1. All qualified investors pursuant to KRS 154.20-230 to 154.20-240; and 17
2. All investors in all investment funds pursuant to KRS 154.20 -250 to 18
154.20-284; 19
shall be no more than forty million dollars ($40,000,000) in total for all years 20
prior to December 31, 2020. 21
(b) Beginning on or after January 1, 2021, the amount of credit that may be 22
awarded by the authority in each calendar year shall be equal to the amount 23
provided in subsection (1) of this section. 24
(c) The authority shall not grant preliminary or final approval for applications 25
received for the Kentucky Angel Investment Act on or after January 1, 2019, 26
but may resume approving applications received on or after January 1, 2021. 27
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(3) The authority shall, by promulgation of an administrative regulation, develop a 1
standard procedure for: 2
(a) Small businesses and investors to request certification for participation in the 3
program; 4
(b) Qualified investors to request certification of a planned investment as being a 5
qualified investment, and to apply for a credit; and 6
(c) The award of credits to qualified investors making qualified investments. 7
(4) At a minimum, the procedure shall: 8
(a) Require small businesses and inv estors to demonstrate to the authority that 9
they, and any planned investment, satisfy all requirements provided in KRS 10
154.20-234; 11
(b) Provide small businesses and investors with a standard written application 12
form to request certification and apply for a credit; 13
(c) Require the payment of a fee; and 14
(d) Mandate a time period for the duration of certifications granted to small 15
businesses and investors, and the procedures for recertification thereof. 16
(5) The amount of credit awarded shall not exceed: 17
(a) Twenty-five percent (25%) of the amount of the qualified investment, if the 18
principal place of business of the qualified small business is outside a 19
heritage[an enhanced incentive] county; or 20
(b) Forty percent (40%) of the amount of the qualified investment, if the principal 21
place of business of the qualified small business is in a heritage[an enhanced 22
incentive] county. 23
(6) Upon approval of a credit, the authority shall reduce the amount of available credit 24
by the amount of credit approved to the qualified investor. 25
(7) The authority may, in effectuating this section, contract with a science and 26
technology organization as defined in KRS 164.6011 to administer and manage the 27
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certification and application procedure established by the authority. However, the 1
final approval of all credits shall be made solely by the authority. 2
Section 28. KRS 154.34-010 is amended to read as follows: 3
As used in this subchapter: 4
(1) "Affiliate" has the same meaning as in KRS 154.32-010; 5
(2) "Agribusiness" has the same meaning as in KRS 154.32-010; 6
(3) "Alternative fuel production" has the same meaning as in KRS 154.32-010; 7
(4) "Approved company" means an eligible company approved unde r KRS 154.34-070 8
for a reinvestment project; 9
(5) "Approved costs" means the eligible equipment and related costs approved by the 10
authority that may be recovered by an approved company through the incentives 11
authorized by this subchapter; 12
(6) "Authority" me ans the Kentucky Economic Development Finance Authority 13
created by KRS 154.20-010; 14
(7) "Capital lease" has the same meaning as in KRS 154.32-010; 15
(8) "Carbon dioxide or hydrogen transmission pipeline" has the same meaning as in 16
KRS 154.32-010; 17
(9) "Coal se vering and processing" means activities resulting in an eligible company 18
being subject to the tax imposed by KRS Chapter 143; 19
(10) "Commonwealth" means the Commonwealth of Kentucky; 20
(11) "Department" means the Department of Revenue; 21
(12) (a) "Eligible comp any" means any corporation, limited liability company, 22
partnership, limited partnership, sole proprietorship, business trust, or any 23
other entity: 24
1. Employing or intending to employ a minimum of twenty -five (25) 25
persons on a full-time bases; and 26
2. Engaged in or planning to engage in one (1) or more of the following 27
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activities: 1
a. Headquarter operations; 2
b. Manufacturing; 3
c. Agribusiness; 4
d. Nonretail service or technology; 5
e. Coal severing and processing; 6
f. Alternative fuel, gasification, energy -efficient alternative fuel, or 7
renewable energy production; 8
g. Carbon dioxide or hydrogen transmission pipeline operations; or 9
h. Hospital operations; 10
at the same facility located and operating within the Commonwealth on 11
a permanent basis for a reasonable period of time preceding the request 12
for approval of a reinvestment project by the authority, including 13
facilities where operations have been temporarily suspended and which 14
meet the standards under KRS 154.34 -070 and related administrative 15
regulations promulgated by the authority. 16
(b) "Eligible company" does not include any company for which the primary 17
activity to be conducted within the Commonwealth is: 18
1. Forestry; 19
2. Fishing; 20
3. The provision of utilities; 21
4. Construction; 22
5. Wholesale trade; 23
6. Retail trade; 24
7. Real estate; 25
8. Rental and leasing; 26
9. Educational services; 27
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10. Accommodation and food services; or 1
11. Public administration services; 2
(13) (a) "Eligible equipment and related costs" means: 3
1. Obligations incurred for labor and to vendor s, contractors, 4
subcontractors, builders, suppliers, deliverymen, and materialmen in 5
connection with the acquisition, construction, equipping, rehabilitation, 6
and installation of a reinvestment project; 7
2. The cost of contract bonds and of insurance of all kinds that may be 8
required or necessary during the course of acquisition, construction, 9
equipping, rehabilitation, and installation of a reinvestment project 10
which is not paid by the vendor, supplier, deliveryman, contractor, or 11
otherwise provided; 12
3. All costs of architectural and engineering services, including estimates, 13
plans and specifications, preliminary investigations, and supervision of 14
construction, rehabilitation and installation, as well as for the 15
performance of all the duties required by or c onsequent upon the 16
acquisition, construction, equipping, rehabilitation, and installation of a 17
reinvestment project; 18
4. All costs required to be paid under the terms of any contract for the 19
acquisition, construction, equipping, rehabilitation, and installa tion of a 20
reinvestment project; 21
5. All costs required for the installation of utilities, including but not 22
limited to water, sewer, sewer treatment, gas, electricity, 23
communications, and access to transportation, and including off -site 24
construction of the facilities paid for by the approved company; and 25
6. All other costs of a nature comparable to those described in this 26
paragraph. 27
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(b) "Eligible equipment and related costs" does not include costs related to the 1
replacement or repair of existing machinery or equipment resulting from 2
normal wear and usage of the machinery or equipment; 3
(14) "Energy-efficient alternative fuel production" has the same meaning as in KRS 4
154.32-010; 5
(15)[ "Enhanced incentive counties" has the same meaning as in KRS 154.32-010; 6
(16)] "Equipment" means manufacturing machinery equipment, computers, furnishings, 7
fixtures, and other assets installed by the approved company as part of the 8
reinvestment project; 9
(16)[(17)] "Final approval" means the action taken by the authority designatin g a 10
preliminarily approved eligible company as an approved company to receive 11
incentives under this subchapter; 12
(17)[(18)] "Full-time employee" means a person who: 13
(a) Is required to work a minimum of thirty-five (35) hours per week; or 14
(b) Works remotely away from the reinvestment project if all the following 15
conditions are met: 16
1. Is a Kentucky resident; 17
2. Whose job was created or retained as a result of the reinvestment 18
project; and 19
3. Whose payroll is expensed to the reinvestment project; 20
(18)[(19)] "Gasification production" has the same meaning as in KRS 154.32-010; 21
(19)[(20)] "Headquarters" has the same meaning as in KRS 154.32-010; 22
(20) "Heritage county" means a county where the county population ranking 23
determined by the cabinet under Section 7 of this Act scores greater than or equal 24
to ninety-seven (97); 25
(21) "Hospital" has the same meaning as in KRS 154.32-010; 26
(22) "Incentives" means the Kentucky tax credit as prescribed in this subchapter; 27
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(23) "Kentucky gross profits" has the same meaning as in KRS 141.0401; 1
(24) "Kentucky gross receipts" has the same meaning as in KRS 141.0401; 2
(25) "Leased project" has the same meaning as in KRS 154.32-010; 3
(26) "Manufacturing" has the same meaning as in KRS 154.32-010; 4
(27) "Nonretail service or technology" has the same meaning as in KRS 154.32-010; 5
(28) "Personal protective equipment" has the same meaning as in KRS 154.32-010; 6
(29) "Preliminary approval" means the action taken by the authority designating an 7
eligible company as a preliminarily approved company; 8
(30) "Reinvestment agreement" means the agreement entered into pursuant to KRS 9
154.34-080 between the a uthority and an approved company with respect to a 10
reinvestment project; 11
(31) "Reinvestment project" means: 12
(a) A reinvestment in the facility of an eligible company and in the full -time 13
employees of an eligible company through the acquisition, constructio n, and 14
installation of new equipment and, with respect thereto, the construction, 15
rehabilitation, and installation of improvements to facilities necessary to 16
house the new equipment, including surveys; installation of utilities, including 17
water, sewer, sewage treatment, gas, electricity, communications, and similar 18
facilities; or off-site construction of utility extensions to the boundaries of the 19
real estate on which the facilities are located; 20
(b) The expenditure of at least one million dollars ($1,000,00 0) in eligible 21
equipment and related costs for leased projects and at least two million five 22
hundred thousand dollars ($2,500,000) in eligible equipment and related costs 23
for all other reinvestment projects; and 24
(c) A reinvestment in a facility in order to allow for the production of vital 25
medications, personal protective equipment, or equipment necessary to 26
produce personal protective equipment; 27
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(32) "Renewable energy production" has the same meaning as in KRS 154.32-010; and 1
(33) "Vital medications" has the same meaning as in KRS 154.32-010. 2
Section 29. KRS 164.6021 is amended to read as follows: 3
(1) The Cabinet for Economic Development shall manage the Kentucky enterprise fund 4
to provide capital to small and medium -size, Kentucky -based companies to 5
undertake feasibility, concept development, research and development, or 6
commercialization work. 7
(2) The purpose of the Kentucky enterprise fund is to: 8
(a) Accelerate knowledge transfer and technological innovation, improve 9
economic competitiveness, and spur economic growth in Kentucky -based 10
companies; 11
(b) Support feasibility, concept development, research and development, or 12
commercialization activities that have clear potential to lead to commercially 13
successful products, processes, or services within a reasonable period of time; 14
(c) Stimulate growth-oriented enterprises within the Commonwealth; 15
(d) Encourage partnerships and collaborative projects between private enterprises, 16
Kentucky's colleges and universities, and research organizations; 17
(e) Promote research and development and commercialization activit ies that are 18
market-oriented; and 19
(f) Support small and medium-sized companies. 20
(3) The Kentucky enterprise fund shall be used to fund qualified companies in 21
accordance with this section as follows: 22
(a) Grants of up to fifty thousand dollars ($50,000) for companies exploring the 23
feasibility of technology commercialization or projects related to feasibility 24
studies, such as incubator and accelerator programs; 25
(b) Funding of up to two hundred fifty thousand dollars ($250,000) for companies 26
in the concept development phase of technology commercialization; 27
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(c) Funding of up to five hundred thousand dollars ($500,000) for companies 1
advancing and promoting the program goals, as outlined in subsection (2) of 2
this section; and 3
(d) For new investments made on or after July 1, 2021, no qualified company can 4
receive a total investment from the fund in excess of up to five hundred 5
thousand dollars ($500,000). 6
(4) Beginning July 1, 2021, the cabinet shall allocate at least twenty percent (20%) of 7
the annual allotment of f unds for the Kentucky enterprise fund to qualified 8
companies located in rural or heritage[enhanced incentive] counties[, as certified 9
under KRS 154.32-050], and at least twenty percent (20%) of the annual allotment 10
of funds to qualified companies located i n Opportunity Zones, as designated by the 11
Commonwealth and certified by the Secretary of the United States Treasury. As 12
used in this subsection, "heritage county" means a county where the county 13
population ranking determined by the cabinet under Section 7 of this Act scores 14
greater than or equal to ninety-seven (97). 15
(5) For all funding totaling more than thirty thousand dollars ($30,000), the science and 16
technology organization or any entity designated by the executive director of the 17
Office of Entrepreneu rship and Innovation shall receive an equity interest in the 18
qualified company, such as a general or limited partnership interest, limited liability 19
company interest, common or preferred stock with or without voting rights and 20
without regard to seniority p osition, forms of subordinate or convertible unsecured 21
debt, or both, with warrants, rights, or other means of equity conversion attached, a 22
near equity interest such as a simple agreement for future equity or "SAFE 23
agreement", or other convertible debt in struments that are determined to qualify as 24
an adequate investment interest by the executive director of the Office of 25
Entrepreneurship and Innovation. 26
SECTION 30. A NEW SECTION OF SUBCHAPTER 20 OF KRS CHAPTER 27
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154 IS CREATED TO READ AS FOLLOWS: 1
(1) As used in this section: 2
(a) "Authority" means the Kentucky Economic Development Finance 3
Authority established by KRS 154.20-010; 4
(b) "Certified mixed-use rehabilitation" means the development, rehabilitation, 5
renovation, and i mprovement of a qualified abandoned building that will 6
serve at least two (2) of the following purposes, in its finished, rehabilitated 7
state: 8
1. Commercial; 9
2. Residential; or 10
3. Retail; 11
(c) "Department" means the Department of Revenue; 12
(d) "Eligible reha bilitation expenses" means all costs incurred in association 13
with the certified mixed -use rehabilitation of a qualified abandoned 14
building and includes: 15
1. Building and construction materials; 16
2. The costs of fixture installation; and 17
3. Labor and mechanics costs; 18
(e) "Qualified abandoned building" means a vacant structure that: 19
1. Contains a minimum of two hundred twenty -five thousand (225,000) 20
square feet of gross leasable area; 21
2. Is located within an urban core area; 22
3. Has a minimum vacancy rate by square footage of at least fifty percent 23
(50%) for a continuous period of at least six (6) months immediately 24
prior to the certified mixed-use rehabilitation; and 25
4. Is not a project t hat has been awarded the certified rehabilitation 26
credit under KRS 171.397; 27
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(f) "Taxpayer" means any person or entity who: 1
1. a. Incurs eligible rehabilitation expenses for a certified mixed -use 2
rehabilitation; or 3
b. Is the recipient of a certified mixed -use rehabilitation credit 4
which is transferred as provided in subsection (7)(b) of this 5
section; and 6
2. Is subject to the taxes imposed by KRS 136.320, 136.330, 136.340, 7
136.350, 136.370, 136.390, 141.020, 304.3 -270, or 141.040 and 8
141.0401; and 9
(g) "Urban core area" means a central, downtown part of this state that is 10
located within a metropolitan statistical area with a population of greater 11
than three hundred thousand (300,000) based on the most recent federal 12
decennial census. 13
(2) There is hereby created the certified mixed-use rehabilitation credit. 14
(3) For taxable years beginning on or after January 1, 2028, but before January 1, 15
2032, a taxpayer shall be allowed a refundable, transferrable certified mixed -use 16
rehabilitation credit against the taxes imposed by: 17
(a) KRS 141.020 or 141.040 and 141.0401, with the ordering of the credits as 18
provided in Section 2 of this Act; or 19
(b) KRS 136.320, 136.330, 136.340, 136.350, 136.370, 136.390, and 304.3 -270, 20
with the ordering of the credits as provided in Section 33 of this Act. 21
(4) The credit shall be: 22
(a) Equal to twenty percent (20%) of the eligible rehabilitation expenses 23
incurred during the taxable year; and 24
(b) Limited to: 25
1. Twenty-five million dollars ($25,000,000) per eligible taxpayer; and 26
2. A total of fifty million dollars ($50,000,000) for all tax credits 27
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preliminarily approved for each calendar year in which the credit is 1
available. 2
(5) (a) An eligible taxpayer seeking the credit provided under this section shall file 3
an application with the authority for preliminary approval by December 31, 4
2027, and by each December 31 thereafter of the calendar year immediately 5
preceding in the calendar year in which the certified mixed -use 6
rehabilitation will take place, and include the following: 7
1. Project location; 8
2. Proposed start and completion date of the project; 9
3. Anticipated costs to be incurred; 10
4. Verification that the building meets the requirements established in 11
subsection (1) of this section as a qualified abandoned building; 12
5. Detailed rehabilitat ion plans that outline the projected use of the 13
qualified abandoned building in its final, rehabilitated state; and 14
6. Any other information the authority may require to provide 15
preliminary project approval. 16
(b) The authority shall provide preliminary approval with the anticipated credit 17
amount to be awarded by January 15, 2028, and each January 15 thereafter 18
as long as the credit is available and shall: 19
1. Create the application by which a taxpayer may apply for prelimin ary 20
and final credit approval; 21
2. Provide notification to the taxpayer of preliminary and final credit 22
approval; and 23
3. Promulgate administrative regulations in accordance with KRS 24
Chapter 13A necessary to implement this section. 25
(6) (a) If the total amou nt of credits granted preliminary approval for a calendar 26
year under subsection (5) of this section: 27
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1. Exceeds fifty million dollars ($50,000,000), each taxpayer shall receive 1
no more than its applicable pro rata share as determined by the 2
authority; or 3
2. Is less than fifty million dollars ($50,000,000), the difference between 4
the amount of credits preliminarily approved and the maximum 5
amount available in accordance with subsection (4) of this section, 6
shall be added to the maximum amount of credit avail able for 7
preliminary approval in the next calendar year. 8
(b) In the event that credits are divided pro rata among all applicants, the 9
authority shall provide notification to the taxpayer with preliminary credit 10
approval. 11
(7) Within thirty (30) days of comp letion of the certified mixed -use rehabilitation 12
project, the taxpayer shall: 13
(a) Submit an application to the authority for final credit approval; 14
(b) Include an irrevocable election to: 15
1. Use the credit; or 16
2. Transfer the credit, in which case the following shall be included: 17
a. Transferee's taxpayer identification number; and 18
b. Amount of credit to be transferred; and 19
(c) Provide documentation of final project dates and actual costs incurred as 20
projected in subsection (5) of this section. 21
(8) Within si xty (60) days of the taxpayer's final application submission, the 22
authority shall: 23
(a) Review and verify all actual eligible rehabilitation expenses incurred; and 24
(b) Provide notification of final credit determination to the taxpayer and the 25
department, which may be claimed on the taxpayer's return for the taxable 26
year. 27
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(9) The authority shall notify the department following approval of a certified mixed -1
use rehabilitation project and include: 2
(a) The name and taxpayer identification number of each approved taxpayer; 3
(b) The location of each certified-mixed use rehabilitation project approved; 4
(c) The total amount of credit available for each taxpayer; and 5
(d) Any other information required by the department. 6
SECTION 31. A NEW SECTION OF KRS CHAPTER 141 IS CREATED TO 7
READ AS FOLLOWS: 8
(1) As used in this section: 9
(a) "Approved taxpayer" means any person or entity: 10
1. Subject to the taxes imposed in KRS 141.020 or 141.040 and 141.0401; 11
and 12
2. That is the recipient of a certified rehabilitation credit or transferred 13
credit as determined by the authority in accordance with Section 30 of 14
this Act; 15
(b) "Authority" has the same meaning as in Section 30 of this Act; 16
(c) "Certified mixed-use rehabilitation" has the same meaning as in Section 30 17
of this Act; and 18
(d) "Eligible rehabilitation expenses" has the same meaning as in Section 30 of 19
this Act. 20
(2) (a) For taxable years be ginning on or after January 1, 2028, but before 21
January 1, 2032, there shall be allowed a refundable, transferrable certified 22
rehabilitation credit against the taxes imposed by KRS 141.020 or 141.040 23
and 141.0401, with the ordering of the credit as provide d by in Section 2 of 24
this Act. 25
(b) In the case of a pass -through entity not subject to the tax imposed by KRS 26
141.040, the credit shall be taken against the tax imposed by KRS 141.0401 27
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and shall be claimed by the partners, members, or shareholders in 1
accordance with their proportionate share of income. 2
(c) The amount of the credit that may be claimed in a taxable year by the 3
approved taxpayer shall: 4
1. Be equal to the amount determined and approved by the authority in 5
accordance with Section 30 of this Act; and 6
2. Not exceed twenty-five million dollars ($25,000,000). 7
(3) A taxpayer receiving the credit may elect to transfer the credit to another taxpayer 8
or insurer as provided by subsection (7)(b) of Section 30 of this Act. 9
(4) The department may promulgate administrative regulations in accordance with 10
KRS Chapter 13A to establish policies and procedures to implement this section. 11
(5) (a) By November 1 of each year in which a certified mixed -use rehabilitation 12
credit is claimed, the department, working with t he authority, shall report to 13
the Legislative Research Commission for referral to the Interim Joint 14
Committee on Appropriations and Revenue, the following: 15
1. The location of each certified mixed-use rehabilitation project; 16
2. The total amount of credit cl aimed by project location for the taxable 17
year; 18
3. The total amount of credit claimed by each approved taxpayer; and 19
4. The total amount of all credit claimed by all taxpayers for the taxable 20
year. 21
(b) The information required to be reported under this sec tion shall not be 22
considered confidential taxpayer information and shall not be subject to 23
KRS Chapter 131 or any other provisions of the Kentucky Revised Statutes 24
prohibiting disclosure or reporting of information. 25
SECTION 32. A NEW SECTION OF KRS CHAPTER 136 IS CREATED TO 26
READ AS FOLLOWS: 27
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For calendar years beginning on or after January 1, 2028, but before January 1, 2032, 1
a taxpayer incurring eligible rehabilitation expenses shall be allowed a refundable, 2
transferable credit against the taxes imposed by KRS 136.320, 136.330, 136.340, 3
136.350, 136.370, 136.390, or 304.3 -270, with the ordering of the credit as provided by 4
in Section 33 of this Act. 5
SECTION 33. A NEW SECTION OF KRS CHAPT ER 136 IS CREATED TO 6
READ AS FOLLOWS: 7
(1) For purposes of the credit permitted by Section 30 of this Act, if a taxpayer is 8
entitled to more than one (1) of the tax credits allowed against the taxes imposed 9
by KRS 136.320, 136.320, 136.330, 136.340, 136.350 , 136.370, 136.390, and 10
304.3-270, the priority of application and use of the credit shall be determined as 11
follows: 12
(a) The nonrefundable credits shall be taken in the following order: 13
1. The Kentucky Investment Fund Act credit permitted by KRS 154.20 -14
258; and 15
2. The New Markets Development Program credit permitted by KRS 16
141.434; and 17
(b) After the application of the nonrefundable credits in paragraph (a) of this 18
subsection, the refundable certified mixed -use rehabilitation credit 19
permitted by Section 32 of this Act shall be taken. 20
(2) A taxpayer claiming a credit against any of the insurance premiums taxes 21
imposed by KRS 136.320, 136.330, 136.340, 136.350, 136.370, or 136.390 shall 22
not be required to pay additional retaliatory tax imposed by KRS 304.3-270. 23
(3) The Department of Revenue shall include information about this credit in the 24
report required under subsection (5) of Section 31 of this Act. 25
Section 34. KRS 148.853 is amended to read as follows: 26
(1) The General Assembly finds and declares that: 27
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(a) The general welfare and material well -being of the citizens of the 1
Commonwealth depend in large measure upon the development of tourism in 2
the Commonwealth; 3
(b) It is in the best interest of the Commonwealth to provide incentives for the 4
creation of new to urism attractions and the expansion of existing tourism 5
attractions within the Commonwealth in order to advance the public purposes 6
of relieving unemployment by preserving and creating jobs that would not 7
exist if not for the incentives offered by the auth ority to approved companies, 8
and by preserving and creating sources of tax revenues for the support of 9
public services provided by the Commonwealth; 10
(c) The authorities granted by KRS 148.851 to 148.860 are proper governmental 11
and public purposes for which public moneys may be expended; and 12
(d) That the creation or expansion of tourism development projects is of 13
paramount importance mandating that the provisions of KRS 139.536 and 14
KRS 148.851 to 148.860 be liberally construed and applied in order to 15
advance public purposes. 16
(2) To qualify for incentives provided in KRS 139.536 and 148.851 to 148.860, the 17
following requirements shall be met: 18
(a) For a tourism attraction project: 19
1. The total eligible costs shall exceed one million dollars ($1,000,000), 20
except for a tourism attraction project located in a county designated as 21
an enhanced incentive county at the time the eligible company becomes 22
an approved company as provided in KRS 148.857(6), the total eligible 23
costs shall exceed five hundred thousand dollars ($500,000); 24
2. In any year, including the first year of operation, the tourism attraction 25
project shall be open to the public at least one hundred (100) days; and 26
3. In any year following the third year of operation, the tourism attraction 27
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project shall a ttract at least twenty -five percent (25%) of its visitors 1
from among persons who are not residents of the Commonwealth; 2
(b) For an entertainment destination center project: 3
1. The total eligible costs shall exceed five million dollars ($5,000,000); 4
2. The facility shall contain a minimum of two hundred thousand 5
(200,000) square feet of building space adjacent or complementary to an 6
existing tourism attraction project or a major convention facility; 7
3. The incentives shall be dedicated to a public infrastruc ture purpose that 8
shall relate to the entertainment destination center project; 9
4. In any year, including the first year of operation, the entertainment 10
destination center project shall: 11
a. Be open to the public at least one hundred (100) days per year; 12
b. Maintain at least one (1) major theme restaurant and at least three 13
(3) additional entertainment venues, including but not limited to 14
live entertainment, multiplex theaters, large-format theater, motion 15
simulators, family entertainment centers, concert ha lls, virtual 16
reality or other interactive games, museums, exhibitions, or other 17
cultural and leisure-time activities; and 18
c. Maintain a minimum occupancy of sixty percent (60%) of the total 19
gross area available for lease with entertainment and food and 20
drink options not including the retail sale of tangible personal 21
property; and 22
5. In any year following the third year of operation, the entertainment 23
destination center project shall attract at least twenty -five percent (25%) 24
of its visitors from among perso ns who are not residents of the 25
Commonwealth; 26
(c) For a theme restaurant destination attraction project: 27
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1. The total eligible costs shall exceed five million dollars ($5,000,000); 1
2. In any year, including the first year of operation, the attraction shall: 2
a. Be open to the public at least three hundred (300) days per year 3
and for at least eight (8) hours per day; and 4
b. Generate no more than fifty percent (50%) of its revenue through 5
the sale of alcoholic beverages; 6
3. In any year following the third year of operation, the theme restaurant 7
destination attraction project shall attract a minimum of fifty percent 8
(50%) of its visitors from among persons who are not residents of the 9
Commonwealth; and 10
4. The theme restaurant destination attraction project shall: 11
a. At the time of final approval, offer a unique dining experience that 12
is not available in the Commonwealth within a one hundred (100) 13
mile radius of the attraction; 14
b. In any year, including the first year of operation, maintain seating 15
capacity of four hundred fifty (450) guests and offer live music or 16
live musical and theatrical entertainment during the peak business 17
hours that the facility is in operation and open to the public; or 18
c. Within three (3) years of the completion date, the attraction shall 19
obtain a top two (2) tier rating by a nationally accredited service 20
and shall maintain a top two (2) tier rating through the term of the 21
agreement; 22
(d) For a lodging facility project defined in KRS 148.851(15)(a): 23
1. a. The eligible costs shall exceed five million dollars ($5,000,000) 24
unless the provisions of subdivision b. of this subparagraph apply. 25
b. i. If the lodging facility is an integral part of a major 26
convention or sports fa cility, the eligible costs shall exceed 27
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six million dollars ($6,000,000); and 1
ii. If the lodging facility includes five hundred (500) or more 2
guest rooms, the eligible costs shall exceed ten million 3
dollars ($10,000,000); and 4
2. In any year, including the first year of operation, the lodging facility 5
shall: 6
a. Be open to the public at least one hundred (100) days; and 7
b. Attract at least twenty -five percent (25%) of its visitors from 8
among persons who are not residents of the Commonwealth; 9
(e) For a lodging facility project defined in KRS 148.851(15)(b): 10
1. The eligible costs shall exceed one hundred million dollars 11
($100,000,000); and 12
2. The lodging facility shall: 13
a. Be open to the public at least one hundred (100) days each year, 14
including the first year of operation; and 15
b. In any year following the third year of operation, attract a 16
minimum of twenty -five percent (25%) of its overnight visitors 17
from among persons who are not residents of the Commonwealth; 18
(f) Any tourism development project shall not be eligible for incentives if it 19
includes material determined to be lewd, offensive, or deemed to have a 20
negative impact on the tourism industry in the Commonwealth; and 21
(g) An expansion of any tourism development project shall in all cases be treated 22
as a new stand-alone project. 23
(3) (a) The incentives offered to an approved company under the Kentucky Tourism 24
Development Act may include a sales tax incentive based on the Kentucky 25
sales tax imposed on sales generated by or arising at the tourism development 26
project. 27
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(b) 1. For a tourism development project other than a lodging facility project 1
described in subparagraph 4. or 5. of this paragraph: 2
a. A sales tax incentive shall be allowed to an approved company 3
over a period of ten (10) years, except as provided in 4
subparagraphs 7. and 8. of this paragraph; and 5
b. The sales tax incentive shall not exceed the lesser of the total 6
amount of the sales tax liability of the approved company and its 7
lessees or a percentage of the approved costs as specified by the 8
agreement, not to exceed twenty-five percent (25%). 9
2. For projects approved according to the application period established 10
under KRS 148.8531, a tourism attraction project located in an enhanced 11
incentive county at the time the eligible company becomes an approved 12
company as provided in KRS 148.857(6): 13
a. A sales tax incentive shall be allowed to the approved company 14
over a period of ten (10) years; and 15
b. The sales tax incentive shall not exceed the lesser of the total 16
amount of the sales tax liability of the approved comp any and its 17
lessees or a percentage of the approved costs as specified by the 18
agreement, not to exceed thirty percent (30%). 19
3. For applications considered after June 27, 2025, including projects 20
related to property to which the title passed from a seller to a buyer on 21
or after March 1, 2025, a tourism attraction project located in an 22
enhanced incentive county with a population equal to or less than twenty 23
thousand (20,000) based on the most recent decennial census at the time 24
the eligible company becomes a n approved company as provided in 25
KRS 148.857(6): 26
a. A sales tax incentive shall be allowed to the approved company 27
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over a period of twenty (20) years; and 1
b. The sales tax incentive shall not exceed the lesser of the total 2
amount of the sales tax liabilit y of the approved company and its 3
lessees or a percentage of the approved costs as specified by the 4
agreement, not to exceed fifty percent (50%). 5
4. For a lodging facility project described in KRS 148.851(15)(a)5. or 6.: 6
a. A sales tax incentive shall be a llowed to the approved company 7
over a period of twenty (20) years; and 8
b. The sales tax incentive shall not exceed the lesser of total amount 9
of the sales tax liability of the approved company and its lessees or 10
a percentage of the approved costs as specif ied by the agreement, 11
not to exceed fifty percent (50%). 12
5. For a lodging facility project described in KRS 148.851(15)(b), a sales 13
tax incentive that shall: 14
a. Be allowed to the approved company over a period of twenty (20) 15
years; and 16
b. Not exceed the le sser of the total amount of sales tax liability of 17
the approved company and its lessees or a percentage of the 18
approved costs as specified by the agreement, not to exceed fifty 19
percent (50%). 20
6. Any unused incentives from a previous year may be carried for ward to 21
any succeeding year during the term of the agreement until the entire 22
specified percentage of the approved costs has been received through 23
sales tax incentives. 24
7. If the approved company is an entertainment destination center that has 25
dedicated at least thirty million dollars ($30,000,000) of the incentives 26
provided under the agreement to a public infrastructure purpose, the 27
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agreement may be amended to extend the term of the agreement up to 1
two (2) additional years if the approved company agrees to: 2
a. Reinvest in the original entertainment destination project one 3
hundred percent (100%) of any incentives received during the 4
extension that were outstanding at the end of the original term of 5
the agreement; and 6
b. Report to the authority at the end of each fiscal year the amount of 7
incentives received during the extension and how the incentives 8
were reinvested in the original entertainment destination project. 9
8. The term of a tourism development agreement entered into with a 10
tourism attraction project that was in effect on January 1, 2020, shall be 11
extended for one (1) year if the tourism attraction project: 12
a. Has historically been open to the public on a seasonal basis 13
consisting of less than six (6) months; 14
b. Has previously met the requirement of be ing open to the public at 15
least one hundred (100) days during the entire term of the tourism 16
development agreement as required under subsection (2)(a)2. of 17
this section; 18
c. Failed to be open to the public at least one hundred (100) days 19
during the calendar year 2020 solely as a result of complying with 20
one (1) or more executive orders issued by the Governor under the 21
authority of KRS 39A.090 that prevented the tourism attraction 22
project from being open to the public for at least one hundred 23
(100) days during its normal operating season; and 24
d. Applied for a sales tax incentive related to the calendar year 2020 25
operating season and was denied the sales tax incentive solely on 26
the basis that the tourism attraction project was not open to the 27
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public for at least one hundred (100) days in calendar year 2020. 1
9. a. If an approved company: 2
i. Qualified for an incentive under subsection (2)(b) of this 3
section; 4
ii. Had a tourism development agreement in place under 5
subsection (2)(b) of this section that expired; and 6
iii. Has not been a party to any tourism development 7
agreement relating to the entertainment destination center 8
in the most recently preceding five (5) years; 9
the approved company may enter into a new agreement under 10
subparagraph 1. of this paragraph. 11
b. The approved company shall agree to: 12
i. Reinvest in the original entertainment destination center 13
one hundred percent (100%) of any incentives received 14
under the new agreement into the project; and 15
ii. Report to the authority at the end of each fiscal year the 16
amount of incentives used and how the incentives were 17
reinvested in the original entertainment destination center. 18
Section 35. KRS 65.490 is amended to read as follows: 19
As used in KRS 65.490 to 65.499, unless the context otherwise requires: 20
(1) "Agency" means an urban renewal and community development agency of a taxing 21
district located within a county containing a consolidated local government or a city 22
of the first class, established under KRS Chapter 99; a development authority 23
located within a county containing a consolidated local government or a city of the 24
first class established under KRS Chapter 99; a nonprofit corporation located within 25
a county containing a consolidated local government or a city of the first class; or a 26
designated department, division, or office of a county containing a consolidated 27
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local government or of a city of the first class; 1
(2) "Development area" means an area no more than six (6) square miles, designated in 2
need of public improvements by a local or state government in a county containing 3
a consolidated local government or a city of the first class, a project area as defined 4
in KRS 99.615, or a public project as defined in KRS 58.010 in a county containing 5
a consolidated local government or a city of the first class. "Development area" 6
includes an existing economic development asset; 7
(3) "Existing development area" has the same meaning as in KRS 65.494; 8
(4) "Increment" means that amount of money received by any taxing district or the 9
state that is determined by subtracting the amount of old revenues from the amount 10
of new revenues in any year for which a taxing district or the state a nd an agency 11
have agreed upon under the terms of a contract of release or a grant contract; 12
(5)[(4)] "Local government" means a county containing a consolidated local 13
government or a city of the first class; 14
(6) "New development area" has the same meaning as in KRS 65.494; 15
(7)[(5)] "New revenues" means the revenues received by any taxing district or the 16
state from a development area in any year after the establishment of the 17
development area; 18
(8)[(6)] "Old revenues" means the amount of revenues received by any taxing district 19
or the state from a development area in the last year prior to the establishment of the 20
development area; 21
(9)[(7)] "Project" means any urban renewal, redevelopment, or public project 22
undertaken in accordance with the provisions of KRS 6 5.490 to 65.497, any project 23
undertaken in accordance with KRS 99.610 to 99.680, any project undertaken in 24
accordance with the provisions of KRS Chapter 58, or any "public project" as that 25
term is defined in KRS 58.010 undertaken by a nonprofit corporation located within 26
a county containing a consolidated local government or a city of the first class; 27
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(10)[(8)] "Release" or "contract of release" or "grant contract" means that agreement by 1
which a taxing district or the state permits the payment to an agency of a portion of 2
increments or an amount equal to a portion of increments received by it in return for 3
the benefits accrued to the taxing district or the state by reason of a project 4
undertaken by an agency in a development area; 5
(11)[(9)] "Taxing district" means a consolidated local government, a county containing 6
a city of the first class, a city of the first class that encompasses all or part of a 7
development area, or the state, but does not mean a school district; and 8
(12)[(10)] "Pilot program" means a tax increment financing program or a grant program 9
created by an agency within a consolidated local government or a county containing 10
a city of the first class which shall exist for a period of: 11
(a) Twenty (20) years for an existing development area;[,] and 12
(b) Thirty (30) years for a new development area; 13
and may be extended for a period not to exceed an additional twenty-five (25) years 14
as provided in KRS 65.4931. 15
Section 36. KRS 186.456 is amended to read as follows: 16
(1) As used in this section, "state police" means the Department of Kentucky State 17
Police. 18
(2) From September 1, 2024, until December 31, 2028[June 30, 2026], the state police 19
shall operate a pilot program to provide operator's license skills testing in up to ten 20
(10) counties in which the state police does not provide permanent, full -time, driver 21
licensing testing. 22
(3) In administering the pilot project under this section, the state police shall: 23
(a) Identify the counties participating in the pilot project based on both public 24
demand and available state police resources; 25
(b) Provide testing in each county at least one (1) time each month; 26
(c) Accept applications for testing slots through the state police's online 27
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application portal; 1
(d) Limit testing only to residents of the pilot project county where the test will be 2
administered; 3
(e) Limit testing only to applicants for an intermediate license under KRS 4
186.452; and 5
(f) Evaluate service levels, unsubscribed appointments, and no -shows during the 6
term of the pilot project and, if necessary, move the pilot project to another 7
county identified in subsection (2) of this section, while maintaining the pilot 8
project in up to ten (10) counties during the term of the project. 9
(4) The state police shall collect data on testing done under this section and, by October 10
31, 2025, submit a report to the Legislative Research Commission for referral to the 11
Interim Joint Committee on Transportation providing: 12
(a) Counts of the number of available testing appointments in each county, 13
applicants served, unclaimed testing slots, and no-show appointments; 14
(b) Information regarding how the pilot program affected testing associated with 15
regional licensing offices; and 16
(c) Recommendations on the continuation or expansion of the pilot project. 17
Section 37. KRS 154.30-050 is amended to read as follows: 18
(1) The Signature Project Program is hereby established. The purpose of this program 19
is to encourage private investment in the development of major proj ects that will 20
have a significant impact on the Commonwealth of Kentucky and are judged to be 21
of such a magnitude that the effect upon the location of the project warrants 22
extraordinary public support. 23
(2) (a) There shall be two (2) separate initiatives un der this program. The first 24
initiative, the criteria and details of which are set forth in subsection (3)(a) of 25
this section, shall apply to; 26
1. Qualifying projects that are not the subject of a contract under KRS 27
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65.495 in effect on or before the March 23 , 2007, but that have a project 1
grant agreement executed pursuant to KRS 154.30 -070 prior to January 2
1, 2008; or 3
2. Revised projects if the original project was not the subject of a contract 4
under KRS 65.495 on or before March 23, 2007, and had a project g rant 5
agreement executed pursuant to KRS 154.30 -070 prior to January 1, 6
2008, but the agreement was withdrawn voluntarily before the project 7
was completed. 8
(b) The second initiative, the criteria and details of which are set forth in 9
subsection (3)(b) of this section, shall apply to projects that meet the specified 10
requirements on or after January 1, 2008. 11
(3) (a) 1. The criteria for qualification shall be as follows: 12
a. The project shall represent new economic activity in the 13
Commonwealth; and 14
b. The projec t shall result in a minimum capital investment of two 15
hundred million dollars ($200,000,000). 16
2. The following provisions shall apply to projects that meet the criteria 17
established in subparagraph 1. of this paragraph: 18
a. KRS 65.7051 shall not apply to the establishment of a 19
development area; 20
b. The city or county in which the project is located shall adopt an 21
ordinance establishing the development area. The ordinance shall 22
be adopted in accordance with KRS 65.7053(1)(a), (b), (c), (d), 23
(e), (h), (i), (j), (k), (l), and (m); 24
c. KRS 65.7049, 65.7053(2) and (3), 65.7057, 65.70 59, 65.7061, 25
65.7063, 65.7065, and 65.7067, relating to local development 26
areas, shall apply; 27
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d. An application for state participation shall have been submitted as 1
provided in KRS 154.30 -030. The application shall include the 2
information required by KRS 154.30-030(2)(a)1.a. and b.; 3
e. The report provided for in KRS 154.30 -030(2)(a)3.b. shall not be 4
required, and the certification required by KRS 154.30 -030(6)(b) 5
shall not be required; 6
f. A project grant agreement shall be executed in accordance with 7
KRS 154.30-070; and 8
g. KRS 154.30-080 and 154.30-090 shall apply. 9
3. Projects that meet the criteria established in subparagraph 1. of this 10
paragraph shall be eligible for the following: 11
a. Up to one hundred percent (100%) of approved public 12
infrastructure costs, excluding any sales and use tax paid, may be 13
recovered; 14
b. Up to one hundred percent (100%) of the financing costs 15
associated with approved public infrastructure costs may be 16
recovered; 17
c. In a county containing a city of the first class, the local 18
participation agreement may provide for the release of up to eighty 19
percent (80%) of the increment from the tax levied under KRS 20
91A.390 derived by the governing body within the project 21
development area. The amount released shall not exceed a base 22
amount of fou r hundred thousand dollars ($400,000) in the first 23
year of the local participation agreement, which base amount shall 24
be increased in each subsequent year of the grant agreement by 25
four percent (4%); and 26
d. Up to one hundred percent (100%) of approved sign ature project 27
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costs, excluding any sales and use taxes paid, subject to the 1
following: 2
i. The authority shall review proposed expenditures for 3
inclusion in the tax incentive agreement. The authority may 4
approve the type of expenditures it determines are ne cessary 5
for completion of the private development; and 6
ii. Approved signature project costs shall be detailed in the tax 7
incentive agreement. 8
(b) Beginning on the effective date of this section of this Act[January 1, 2008]: 9
1. A project shall meet all of the following criteria to be considered for 10
state participation under this program: 11
a. The project shall represent new economic activity in the 12
Commonwealth; 13
b. The project shall result in a minimum capital investment of 14
five[two] hundred million dollars ($500,000,000)[($200,000,000)]; 15
c. The project shall be owned by a resident or nonresident, 16
nonprofit educational, charitable, or religious institution which 17
has qualified for an exemption from income tax under Section 18
501(c)(3) of the Internal Revenue Code; 19
d. The project shall result in a net positive economic impact to the 20
Commonwealth, taking into consideration any substantial adverse 21
impact on existing Commonwealth businesses. The net positive 22
impact shall be certified to the co mmission as required by KRS 23
154.30-030(6)(b); and 24
e.[d.] Not more than twenty percent (20%) of the capital investment or 25
twenty percent (20%) of the finished square footage shall be 26
devoted to the support or development of assets that will be 27
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utilized for the retail sale of tangible personal property; 1
2. Projects that meet the criteria established by subparagraph 1. of this 2
paragraph shall comply with all relevant provisions of this subchapter; 3
3. Projects that meet the criteria established by subparagraphs 1. and 2. of 4
this paragraph shall be eligible to recover: 5
a. Up to one hundred percent (100%) of approved public 6
infrastructure costs, excluding any sales and use taxes paid; 7
b. Up to one hundred percent (100%) of the financing costs 8
associated with approved public infrastructure costs; and 9
c. Up to one hundred percent (100%) of approved signature project 10
costs, excluding sales and use taxes paid subject to the following: 11
i. The authority shall review proposed expenditures for 12
inclusion in the tax incent ive agreement. The authority may 13
approve the type of expenditures it determines are necessary 14
for completion of the private development; and 15
ii. Approved signature project costs shall be detailed in the tax 16
incentive agreement; and 17
4. Notwithstanding any provision of this section to the contrary, if a project 18
has a residential use that comprises at least fifty percent (50%) of the 19
total finished square footage of the proposed project: 20
a. The report required in KRS 154.30 -030(2)(a)3.b. shall not be 21
required; and 22
b. The certification required in KRS 154.30 -030(6)(b) and 23
subparagraph 1.c. of this paragraph shall not be required. 24
(4) The authority sha ll review the application, the certification required by KRS 25
154.30-030, if applicable, and supporting information as provided in KRS 154.30 -26
030. 27
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(5) The authority shall specifically identify the state taxes from which incremental 1
revenues will be pledged. The authority may pledge up to eighty percent (80%) of 2
the incremental revenues from the identified state tax revenues from the footprint, 3
provided that the maximum amount of incremental revenues that may be pledged 4
for a project during the term of the ta x incentive agreement from all approved state 5
taxes shall not exceed one hundred percent (100%) of approved public 6
infrastructure costs, approved signature project costs, and financing costs. 7
(6) As part of the approval process, the authority shall determine the following: 8
(a) The footprint of the project; 9
(b) The maximum amount of approved public infrastructure costs, approved 10
signature project costs, and financing costs; 11
(c) That the local revenues pledged to support the public infrastructure of the 12
project, and local revenues pledged to support the overall project are of a 13
sufficient amount to warrant participation of the Commonwealth in the 14
project; 15
(d) The termination date of the tax incentive agreement, not to exceed thirty (30) 16
years from the activation date; 17
(e) Any adjustments to be made to old revenues, in determining incremental 18
revenues during each year of the term of the project grant agreement; and 19
(f) Any approved signature project costs; 20
(7) For the purpose of making the determination required by KRS 139.515(2), the 21
authority shall review the projected expenditures for tangible personal property 22
used in the construction of a signature project, as defined in KRS 139.515(1), and 23
shall establish an approximate percentage of the total anticipated e xpenditures that 24
are not included in the tax incentive agreement as approved public infrastructure 25
costs or approved signature project costs. This percentage shall be communicated 26
by the authority to the Department of Revenue, which shall use the informati on in 27
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administering the sales tax refund permitted by KRS 139.515. 1
(8) If state income taxes or local occupational license taxes are included for a project 2
that includes office space, the authority shall consider the impact of pledging theses 3
taxes on the ability to utilize other economic development projects at a later date. 4
(9) The pledge of state incremental tax revenues of the Commonwealth by the authority 5
shall be implemented through the execution of a tax incentive agreement between 6
the Commonwealth a nd the agency, city, or county in accordance with KRS 7
154.30-070. 8
[(10) Notwithstanding the minimum capital investment of two hundred million dollars 9
($200,000,000) required by subsection (3)(b)1.b. of this section, the authority may, 10
upon application of an agency that: 11
(a) Was approved to proceed with a project after January 1, 2008, but before 12
January 1, 2013, that, at the time of approval pledged to make the two 13
hundred million dollars ($200,000,000) investment requirement; and 14
(b) Had a consultant report prepared pursuant to KRS 154.30-030(6); 15
approve a reduction in the required minimum capital investment to an amount not 16
less than one hundred fifty million dollars ($150,000,000), subject to a 17
corresponding adjustment of the maximum incremental revenue available for 18
recovery as appropriate, based upon the recommendation of the consultant who 19
prepared the report pursuant to KRS 154.30-030(6). 20
(11) Notwithstanding any statute to the contrary, if a project had a project grant 21
agreement executed pursuant to KRS 154.30-070 prior to January 1, 2008, but the 22
agreement was withdrawn voluntarily before the project was completed, the project 23
may be revised and resubmitted under subsection (3)(a) of this section.] 24
Section 38. KRS 424.110 is amended to read as follows: 25
As used in KRS 424.110 to 424.370: 26
(1) "Publication area" means the city, county, district, or other local area for which an 27
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advertisement is required by law to be made. An advertisement shall be deemed to 1
be for a pa rticular city, county, district, or other local area if it concerns an official 2
activity of the city, county, district, or other area or of any governing body, board, 3
commission, officer, agency, or court thereof, or if the subject of the advertisement 4
concerns particularly the people of the city, county, district, or other area; 5
(2) "Advertisement" means any matter required by law to be published;[ and] 6
(3) "Zoned edition" means a newspaper edition published at least once a week, 7
distributed in a specific geographic region of the newspaper's circulation area, and 8
containing reporting and advertising of interest to subscribers in that geographic 9
region; and 10
(4) "Time" means the time of day, stated in both eastern standard time and central 11
standard time. 12
Section 39. KRS 61.805 is amended to read as follows: 13
As used in KRS 61.805 to 61.850, unless the context otherwise requires: 14
(1) "Meeting" means all gatherings of every kind, including video teleconferences, 15
regardless of where the meeting is held, and whether regular or special and 16
informational or casual gatherings held in anticipation of or in conjunction with a 17
regular or special meeting; 18
(2) "Public agency" means: 19
(a) Every state or local government board, commission, and authority; 20
(b) Every state or local legislative board, commission, and committee; 21
(c) Every county and city governing body, council, school district boa rd, special 22
district board, and municipal corporation; 23
(d) Every state or local government agency, including the policy-making board of 24
an institution of education, created by or pursuant to state or local statute, 25
executive order, ordinance, resolution, or other legislative act; 26
(e) Any body created by or pursuant to state or local statute, executive order, 27
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ordinance, resolution, or other legislative act in the legislative or executive 1
branch of government; 2
(f) Any entity when the majority of its governing body is appointed by a "public 3
agency" as defined in paragraph (a), (b), (c), (d), (e), (g), or (h) of this 4
subsection, a member or employee of a "public agency," a state or local 5
officer, or any combination thereof; 6
(g) Any board, commission, committee, subcommittee, ad hoc committee, 7
advisory committee, council, or agency, except for a committee of a hospital 8
medical staff or a committee formed for the purpose of evaluating the 9
qualifications of public agency employees, established, created, and 10
controlled by a "public agency" as defined in paragraph (a), (b), (c), (d), (e), 11
(f), or (h) of this subsection; and 12
(h) Any interagency body of two (2) or more public agencies where each "public 13
agency" is defined in paragraph (a), (b), (c), (d), (e), (f), or (g) of this 14
subsection; 15
(3) "Action taken" means a collective decision, a commitment or promise to make a 16
positive or negative decision, or an actual vote by a majority of the members of the 17
governmental body;[ and] 18
(4) "Member" means a member of the governin g body of the public agency and does 19
not include employees or licensees of the agency;[.] 20
(5) "Time" means the time of day, stated in both eastern standard time and central 21
standard time; and 22
(6) "Video teleconference" means one (1) meeting, occurring in t wo (2) or more 23
locations, where individuals can see and hear each other by means of video and 24
audio equipment. 25
Section 40. KRS 140.070 is amended to read as follows: 26
The tax upon transfers of property as defined in the p receding sections of this chapter 27
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shall be at the following rates: 1
(1) Class A. In case the transfer is to or for the benefit of a parent, surviving spouse, 2
child by blood, stepchild, child adopted during infancy, child adopted during 3
adulthood who was rea red by the decedent during infancy or a grandchild who is 4
the issue of a child by blood, the issue of a stepchild, the issue of a child adopted 5
during adulthood who was reared by the decedent during infancy, the issue of a 6
child adopted during infancy, nephew, niece, or a nephew or niece of the half 7
blood, brother, sister, or brother or sister of the half blood, the tax shall be[,] subject 8
to the provisions of KRS 140.080.[, shall be: 9
On its value not exceeding $20,000 .............................................................. 2% 10
On its value exceeding $20,000, but not exceeding $30,000 ....................... 3% 11
On its value exceeding $30,000, but not exceeding $45,000 ....................... 4% 12
On its value exceeding $45,000, but not exceeding $60,000 ....................... 5% 13
On its value exceeding $60,000, but not exceeding $100,000 ..................... 6% 14
On its value exceeding $100,000, but not exceeding $200,000 ................... 7% 15
On its value exceeding $200,000, but not exceeding $500,000 ................... 8% 16
On its value exceeding $500,000 ............................................................... 10%] 17
(2) Class B. In case the transfer is to or for the benefit of a[ nephew, niece, or a nephew 18
or niece of the half blood,] daughter-in-law, son-in-law, aunt or uncle, or a great -19
grandchild who is the grandchild of a child by blood, of a stepchild or of a child 20
adopted during infancy, the tax, subject to the provisions of KRS 140.080, shall be: 21
On its value not exceeding $10,000 .............................................................. 4% 22
On its value exceeding $10,000, but not exceeding $20,000 ....................... 5% 23
On its value exceeding $20,000, but not exceeding $30,000 ....................... 6% 24
On its value exceeding $30,000, but not exceeding $45,000 ....................... 8% 25
On its value exceeding $45,000, but not exceeding $60,000 ..................... 10% 26
On its value exceeding $60,000, but not exceeding $100,000 ................... 12% 27
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On its value exceeding $100,000, but not exceeding $200,000 ................. 14% 1
On its value exceeding $200,000 ................................................................ 16% 2
(3) Class C. In case the transfer is to or for the benefit of any educational, religious, or 3
other institutions, societies, or associations, or to any cities, towns, or public 4
institutions not exempted by KRS 140.060, or to any person not included in either 5
Class A or Class B, the tax, subject to the provisions of KRS 140.080, shall be: 6
On its value not exceeding $10,000 .............................................................. 6% 7
On its value exceeding $10,000, but not exceeding $20,000 ....................... 8% 8
On its value exceeding $20,000, but not exceeding $30,000 ..................... 10% 9
On its value exceeding $30,000, but not exceeding $45,000 ..................... 12% 10
On its value exceeding $45,000, but not exceeding $60,000 ................... . 14% 11
On its value exceeding $60,000 ........................................ ......................... 16% 12
Section 41. KRS 140.080 is amended to read as follows: 13
(1) The following exemptions chargeable against the lowest bracket or brackets of 14
inheritable interests shall be free from any tax under the preceding provisions of 15
this chapter: 16
(a) Surviving spouse, total inheritable interest. Effective as to decedents dying 17
after August 1, 1985, notwithstanding anything in this chapter to the contrary, 18
if the decedent's personal representative (or trustee or transferee, absent a 19
personal representative) shall so elect, the spouse's inheritable interest shall 20
include the entire value of any trust or life estate which is in a form that 21
qualifies for the federal estate tax marital deductions under 26 U.S.C. 22
sec.[section] 2056(b)(5) or [2056(b)](7)[ of the Internal Revenue Code of 23
1954], as amended through December 31, 1984, regardless of whether or not 24
the federal estate tax marital deduction is elected by the decedent's personal 25
representative. To be valid, the election referred to in the sentence 26
immediately preceding must be made in the form prescribed by the 27
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Department of Revenue and must be filed on or before the due date of the tax 1
return, including [ (plus] extensions,[)] or with the first tax return filed, 2
whichever last occurs; 3
(b)[ Class A beneficiaries as defined in KRS 140.070 , other than the surviving 4
spouse, of estates of decedents dying prior to July 1, 1995, as follows: 5
1. Infant child by blood or adoption, $20,000; 6
2. Child by blood who has been declared mentally disabled by a court of 7
competent jurisdiction, $20,000; 8
3. Child adopted during infancy who has been declared mentally disabled 9
by a court of competent jurisdiction, $20,000; or a 10
4. Child adopted during adulthood who was reared by the decedent during 11
infancy and who has been declared mentally disabled by a court of 12
competent jurisdiction, $20,000; 13
5. Parent, $5,000; 14
6. Child by blood, $5,000; 15
7. Stepchild, $5,000; 16
8. Child adopted during infancy, $5,000; 17
9. Child adopted during adulthood who was reared by the decedent during 18
infancy, $5,000; or a 19
10. Grandchild who is the issue of a child by blood, the issue of a stepchild, 20
the issue of a child adopted during infancy or the issue of a child 21
adopted during adulthood who was reared by the decedent during 22
infancy, $5,000; 23
(c)] Class A beneficiaries , as defined in KRS 140.070, [ other than the 24
surviving spouse, of estates of decedents dying on or after July 1, 1995, 25
shall be as follows: 26
1. For decedents dying between July 1, 199 5, and June 30, 1996, the 27
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greater of the exemption established pursuant to paragraph (1)(b) of this 1
section or one-fourth (1/4) of each beneficiary's inheritable interest; 2
2. For decedents dying between July 1, 1996, and June 30, 1997, the 3
greater of the exemption established pursuant to paragraph (1)(b) of this 4
section or one-half (1/2) of each beneficiary's inheritable interest; 5
3. For decedents dying between July 1, 1997, and June 30, 1998, the 6
greater of the exemption established pursuant to paragraph ( 1)(b) of this 7
section or three -fourths (3/4) of each beneficiary's inheritable interest; 8
and 9
4. For each decedent dying after June 30, 1998, each beneficiary's] total 10
inheritable interest; 11
(c)[(d)] All persons of Class B, under KRS 140.070, $1,000; and 12
(d)[(e)] All persons of Class C, under KRS 140.070, $500. 13
(2) If the decedent was not a resident of this state, the exemption shall be the same 14
proportion of the allowable exemption in the case of residents that the property 15
taxable by this state bears to the whole property transferred by the decedent. 16
SECTION 42. A NEW SECTION OF KRS CHAPTER 141 IS CREATED TO 17
READ AS FOLLOWS: 18
(1) As used in this section: 19
(a) "Agriculturally based alternative jet fuel" means an alternative j et fuel 20
produced from agricultural biomass, including crops and agricultural 21
byproducts derived from agricultural or livestock production, such as corn, 22
soybeans, wheat, canola, animal fats, and biomass residues from trees, 23
wood, and grasses; 24
(b) "Alternative jet fuel" means a liquid fuel that can be used in an aircraft 25
without the need to modify the aircraft engines or existing fuel distribution 26
infrastructure, and that: 27
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1. Consists of synthesized hydrocarbons and meets the requirements of: 1
a. The American Society for Testing and Materials International 2
Standard D7566; or 3
b. The American Society for Testing and Materials International 4
Standard D1655; 5
2. Is derived from eligible feedstocks; 6
3. Is not derived from palm fatty acid distillates; and 7
4. Achieves at least a fifty percent (50%) lifecycle greenhouse gas 8
emissions reduction in comparison with petroleum -based jet fuel, as 9
determined by a test that shows the fuel production pathway achieves 10
at least a fifty percent (50%) reduction of the aggregate attr ibutional 11
care lifecycle by measuring either: 12
a. Emissions under the lifecycle methodology for alternative jet 13
fuels adopted by the International Civil Aviation Organization 14
with the agreement of the United States; or 15
b. Greenhouse gas emissions values utilizing the most recent 16
version of Argonne National Laboratory's GREET model; 17
(c) "Alternative jet fuel producer" means an entity in this state that: 18
1. Produces alternative jet fuel; or 19
2. Blends SBC with conventional aviation gasoline or jet fuel; 20
(d) "Eligible feedstock" means any feedstock that qualifies as an eligible 21
feedstock for purposes of Section 45Z of the Internal Revenue Code; 22
(e) "Eligible taxpayer" means an alternative jet fuel producer or feedstock 23
provider that is located in the Commonwealth; 24
(f) "Feedstock provider" means an entity that manufactures an eligible 25
feedstock, including SBC, used in the process of making alternative jet fuel; 26
and 27
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(g) "Synthetic blending component" or "SBC" means synthesized 1
hydrocarbons that meet the requirements in any one (1) of the annexes of 2
the American Society for Testing and Materials International Standard 3
D7566, which may then be used as a component in the manufacture of 4
alternative jet fuel. 5
(2) (a) There shall be allowed a nonrefundable, nontransferable alternative jet fuel 6
credit allowed against the taxes imposed in KRS 141.020 or 141.040 and 7
141.0401 for alternative jet fuel producers in an amount certified by the 8
department under this section, with the ordering of th e credits as provided 9
in Section 2 of this Act. 10
(b) For taxable years beginning on or after January 1, 2029, but before 11
January 1, 2035, an eligible taxpayer may claim a credit at a rate of: 12
1. Fifty cents ($0.50) per gallon to a feedstock provider supplyi ng either 13
eligible feedstocks or SBC to an alternative jet fuel producer; 14
2. One dollar and fifty cents ($1.50) per gallon to an alternative jet fuel 15
producer that processes eligible feedstocks or blends SBC with 16
conventional jet fuel to produce alternative jet fuel; 17
3. Two dollars ($2) per gallon to an alternative jet fuel producer that 18
processes eligible feedstocks or blends SBC with conventional jet fuel 19
to produce agriculturally based alternative jet fuel; or 20
4. Two dollars and fifty cents ($2.50) per g allon to an alternative jet fuel 21
producer that processes eligible feedstocks or blends SBC with 22
conventional jet fuel to produce an agriculturally based alternative jet 23
fuel using an eligible feedstock that was produced in the 24
Commonwealth. 25
(3) (a) The cre dit allowed in subsection (2) of this section shall not be carried 26
forward to other taxable years. 27
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(b) The total credit allowed in subsection (2)(b)1. and 2. of this section shall not 1
exceed two million dollars ($2,000,000) per eligible taxpayer per taxabl e 2
year. 3
(c) The credits allowed in subsection (2) of this section may stack if the 4
alternative jet fuel producer is the same as the feedstock provider and shall 5
not exceed three dollars ($3) per gallon per entity. 6
(d) The aggregate total credit certified i n a calendar year shall not exceed 7
twenty million dollars ($20,000,000). If the aggregate total of credits 8
certified exceeds twenty million dollars ($20,000,000), the department shall 9
apportion credits pro rata among eligible taxpayers up to the twenty mil lion 10
dollar ($20,000,000) limit. 11
(4) The department, in conjunction with the Kentucky Department of Agriculture 12
and the Energy and Environment Cabinet, shall promulgate emergency and 13
ordinary administrative regulations in accordance with KRS Chapter 13A to 14
adopt: 15
(a) Forms and procedures necessary for implementation, calculation, 16
reporting, and certification of the credit no later than October 1, 2028; 17
(b) Verification standards and processes to ensure the fuel meets the 18
requirements to be alternative jet f uel or agriculturally based alternative jet 19
fuel; and 20
(c) Verification standards and processes to ensure each alternative jet fuel 21
producer and feedstock provider meets the criteria established in subsection 22
(1)(c) and (f) of this section. 23
(5) The departme nt, Kentucky Department of Agriculture, and Energy and 24
Environment Cabinet shall report to the Interim Joint Committee on 25
Appropriations and Revenue when administrative regulations have been 26
promulgated under subsection (4) of this section, and the credit provided in this 27
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section shall not be approved prior to the report. 1
(6) (a) An eligible taxpayer seeking approval for the credit under this section shall: 2
1. Submit an application to the department, on a form as prescribed by 3
the department, by January 15, 2030, following the close of the 4
calendar year, and each January 15 thereafter as long as the credit is 5
available; and 6
2. Provide the: 7
a. Taxpayer's identification number; and 8
b. Description and amount or volume of alternative jet fuel, eligible 9
feedstock, or SBC: 10
i. Produced, including anticipated production amounts, for 11
the calendar year; or 12
ii. Blended, including anticipated production amounts, for the 13
calendar year. 14
(b) The department shall: 15
1. Review all applications submitted by eligible taxpayers by February 16
15, 2030, and each February 15 thereafter as long as the credit is 17
available; 18
2. Determine the qualifying volumes of alternative jet fuel, eligible 19
feedstock, or SBC per eligible taxpayer; and 20
3. Issue a certification by March 1, 2030, and each March 1 thereafter as 21
long as the credit is available, of the credit amount approved for each 22
eligible taxpayer. 23
(7) (a) In order for the General Assembly to evaluate the alternativ e jet fuel 24
producer credit, by November 1, 2030, and each November 1 thereafter, as 25
long as the tax credit is claimed on any tax return filed, the department 26
shall report the following to the Legislative Research Commission for 27
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referral to the Interim Joint Committee on Appropriations and Revenue and 1
the Department of Agriculture: 2
1. The number of tax returns, by the tax type of return filed, claiming the 3
credit for each taxable year; 4
2. The total amount of credit claimed on returns filed for each taxable 5
year; 6
3. The total number of gallons claimed per return filed of: 7
a. Eligible feedstock or SBC provided; 8
b. Eligible feedstock processed or SBC blended with conventional 9
jet fuel to produce alternative jet fuel; 10
c. Agriculturally based alternative jet fuel produced; and 11
d. Agriculturally based alternative jet fuel produced using an 12
eligible feedstock that was produced in the Commonwealth; 13
4. The cumulative number of credits claimed by county, as identified by 14
the mailing address on the return filed for each taxable year; and 15
5. a. In the case of taxpayers other than corporations, based on 16
ranges of adjusted gross income of no larger than five thousand 17
dollars ($5,000), the total amount of credits claimed for each 18
adjusted gross income range for each taxable year. 19
b. In the case of corporations, based on ranges of net income of no 20
larger than fifty thousand dollars ($50,000), the total amount of 21
credit claimed for each net income range for each taxable year. 22
(b) The information required to be reported under thi s subsection shall not be 23
considered confidential taxpayer information and shall not be subject to 24
KRS Chapter 131 or any other provisions of the Kentucky Revised Statutes 25
prohibiting disclosure or reporting information. 26
SECTION 43. A NEW SECTION OF KRS CHAPTER 139 IS CREATED TO 27
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READ AS FOLLOWS: 1
(1) As used in this section: 2
(a) "Agriculturally based alternative jet fuel" has the same meaning as in 3
Section 42 of this Act; 4
(b) "Alternative jet fuel" has the same meaning as in Section 42 of this Act; 5
(c) "Commercial airport" has the same meaning as in KRS 183.011; 6
(d) "Effective date" means the first day of the month following the month in 7
which the department notifies the commercial airport that it is eligible to 8
receive a sales tax rebate; 9
(3) (a) Notwithstanding KRS 134.580 and 139.770, effective August 1, 2026, a 10
commercial airport may be granted a sales tax rebate of up to seventy -five 11
percent (75%) of the Kentucky sales tax generated by the sale of 12
agriculturally based alternative jet fuel and alternative jet fuel at a 13
commercial airport located in Kentucky. The tax rebate shal l be reduced by 14
the vendor compensation allowed under KRS 139.570 on or after August 1, 15
2026. 16
(b) The commercial airport shall have no obligation to refund or otherwise 17
return any amount of the sales tax rebate to the persons from whom the 18
sales tax was collected. 19
(c) The total tax rebate for each commercial airport shall be reinvested by the 20
commercial airport to maintain, improve, upgrade, and repair commercial 21
airport facilities and operations. 22
(4) (a) To be eligible for a sales tax rebate under this sec tion, the commercial 23
airport shall file an application with the department in the form prescribed 24
by the department through the promulgation of an administrative regulation 25
in accordance with KRS Chapter 13A. 26
(b) The department shall: 27
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1. Review the application; 1
2. Determine whether the applicant meets the requirements of this 2
section; and 3
3. Notify the applicant in writing whether the applicant qualifies for a 4
rebate and the effective date of qualification. 5
(5) A qualified applicant shall file a request for a sales tax rebate within sixty (60) 6
days following the end of each calendar quarter for sales made during the 7
quarter. The request shall be submitted in the form prescribed by the department 8
through the promulgation of an administrative regulation in acc ordance with 9
KRS Chapter 13A, and shall include supporting information and documentation 10
as determined necessary by the department to verify the requested tax rebate. 11
(6) The department shall review the request, verify the amount of sales tax rebate due 12
to the commercial airport, and pay the amount determined due within forty -five 13
(45) days of receipt of the request and all necessary supporting information. 14
(7) Interest shall not be allowed or paid on any sales tax rebate payment made under 15
this section. 16
Section 44. KRS 67C.147 is amended to read as follows: 17
(1) In order to maintain the tax structure, tax rates, or level of services in the area of the 18
consolidated local government formerly comprising the city of the first class, the 19
legislative council of a consolidated local government may provide in the manner 20
described in this chapter for taxes and services within the area comprising the 21
former city of the first class which are different from the taxes and services which 22
are applicable in the remainder of the county. These differences may include 23
differences in tax rates upon the class of property which includes the surface of the 24
land, differences in ad valorem tax rates upon personal property, and differences in 25
tax rates upon insurance premiums. 26
(2) Any difference in the ad valorem tax rate on the class of property which includes 27
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the surface of the land in the portion of the county formerly comprising the city of 1
the first class and in the portion of the county other th an that formerly comprising 2
the city of the first class may be imposed directly by the consolidated local 3
government council. Any change in these ad valorem tax rates shall comply with 4
KRS 68.245, 132.010, 132.017, and 132.027 and shall be used for service s as 5
provided by KRS 82.085. 6
(3) If the consolidated local government council determines to provide for tax rates 7
applicable to health insurance premiums and personal property which are different 8
in the area formerly comprising the city of the first class than the rates applicable in 9
the remainder of the county, it shall do so in the following manner. The 10
consolidated local government council shall by ordinance create a tax district to be 11
known as the "urban service tax district" bounded by the former bound aries of the 12
former city of the first class. The ordinance shall designate the number of members 13
of the board of this tax district and the manner in which they shall be appointed. 14
The ordinance shall provide that the board of the tax district shall receive the 15
income derived from the differential tax rate applicable in the area formerly 16
comprising the city of the first class with respect to personal property, health 17
insurance premiums, or both, and shall contract with the consolidated local 18
government to pa y all sums collected to the consolidated local government, in 19
return for the provision of services performed by the consolidated local government 20
within the area formerly comprising the city of the first class which services are in 21
addition to services per formed by the consolidated local government in the 22
remainder of the county. The consolidated local government shall provide at least 23
an annual reporting to the urban service tax district board and the legislative body 24
of the consolidated local government c ontaining but not limited to detailed 25
operating and capital expenditures of each service performed by the consolidated 26
local government. 27
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(4) After the initial formation of an urban service tax district in a consolidated local 1
government, the boundaries of the district may be modified in the following 2
manner. The proposal to alter the boundaries of the urban service tax district within 3
a consolidated local government may be initiated by: 4
(a) A resolution enacted by the consolidated local government describin g the 5
boundaries of the area to be added to or deleted from the tax district and duly 6
passed and signed by the mayor not less than one hundred twenty (120) days 7
before the next regularly scheduled election day within the county; or 8
(b) A petition signed by a number of qualified voters living within precincts 9
within the area to be added to or deleted from the tax district equal to ten 10
percent (10%) of the votes cast within each precinct in the last general 11
election for President of the United States and deli vered to the clerk of the 12
legislative council more than one hundred twenty (120) days next preceding 13
the next regularly scheduled election day within the county. 14
The boundaries so described in either case shall not cross precinct lines. The 15
question of wh ether the area bounded as described should be added to or deleted 16
from, as the case may be, the urban service tax district shall then be placed upon the 17
ballot in the precincts in the area to be added or deleted at the next regular election 18
and the questio n stated on the ballot shall be so phrased that a "Yes" vote shall be 19
cast in favor of making the proposed change and a "No" vote shall be cast to oppose 20
the proposed change. If a majority of those voting in those precincts support the 21
change, then the cha nge in the boundaries of the urban service tax district shall be 22
implemented. 23
(5) (a) Beginning with emergency medical responses made on or after [No later 24
than] July 1, 2025, the consolidated local government shall reimburse a fire 25
district operating under KRS Chapter 75 for expenses related to each 26
emergency medical response made by the fire district operating under KRS 27
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Chapter 75 into the area of the urban service tax district. A fire district so 1
responding shall receive from the consolidated local govern ment three 2
hundred dollars ($300) for transporting a person and one hundred fifty dollars 3
($150) for arriving at person's location when no person is transported. 4
(b) The payment established in paragraph (a) of this subsection shall be in 5
addition to any in surance moneys the fire district may be eligible to receive 6
resulting from the response. 7
(c) The payment established in paragraph (a) of this subsection shall be adjusted 8
on July 1 of each year by the percentage increase in the nonseasonally 9
adjusted annual average Consumer Price Index for All Urban Consumers 10
(CPI-U), U.S. City Average, All Items, between the two (2) most recent 11
calendar years available, as published by the United States Bureau of Labor 12
Statistics. 13
(d) The consolidated local government shall not charge a fire district operating 14
under KRS Chapter 75 for any expenses or services that the consolidated local 15
government was not charging the fire district prior to January 1, 2024. 16
(e) A fire district operating under KRS Chapter 75 that receives payment or 17
reimbursement in any form from the consolidated local government for an 18
emergency me dical response made by the fire district into the area of the 19
urban service tax district prior to July 1, 2025, shall not be eligible for 20
payments or reimbursement under this subsection beginning on July 1 of 21
the following fiscal year and continuing until the end of that fiscal year. 22
(6) Except for services provided within the central business district as defined by the 23
consolidated local government via ordinance as of April 1, 2024: 24
(a) From July 1, 2025, to June 30, 2028, the differential tax received by the urban 25
service tax district shall fund no less than eighty -five percent (85%) of all 26
costs related to the services provided, including capital expenditures related to 27
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the services, within the urban service tax district by the consolidated local 1
government as set out in this section that are in addition to the services 2
performed by the consolidated local government in the remainder of the 3
county; 4
(b) From July 1, 2028, to June 30, 2031, the differential tax received by the urban 5
service tax district shall fund no less than ninety percent (90%) of all costs 6
related to the services provided, including capital expenditures related to the 7
services, within the urban service tax district by the consolidated local 8
government as set out in this section that are in addition to the services 9
performed by the consolidated local government in the remainder of the 10
county; 11
(c) From July 1, 2031, to June 30, 2034, the differential tax received by the urban 12
service tax district shall fund no less than ninety -five percent (9 5%) of all 13
costs related to the services provided, including capital expenditures related to 14
the services, within the urban service tax district by the consolidated local 15
government as set out in this section that are in addition to the services 16
performed by the consolidated local government in the remainder of the 17
county; and 18
(d) After June 30, 2034, the differential tax received by the urban service tax 19
district shall fund no less than one hundred percent (100%) of all costs related 20
to the services provided, including capital expenditures related to the services, 21
within the urban service tax district by the consolidated local government as 22
set out in this section that are in addition to the services performed by the 23
consolidated local government in the remainder of the county. 24
Section 45. KRS 367.990 is amended to read as follows: 25
(1) Any person who violates the terms of a temporary or permanent injunction issued 26
under KRS 367.190 shall forfeit and pay to the Commonwealth a civil penalty of 27
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not more than twenty -five thousand dollars ($25,000) per violation. For the 1
purposes of this section, the Circuit Court issuing an injunction shall retain 2
jurisdiction, and the cause shall be continued, and in such cases the Attorney 3
General acting in the name of the Commonwealth may petition for recovery of civil 4
penalties. 5
(2)[ In any action brought under KRS 367.190, if the court finds that a person is 6
willfully using or has willfully used a method, act, or practice declared unlawful by 7
KRS 367.170, the Attorney General, upon petition to the court, may recover, on 8
behalf of the Commonwealth, a civil penalty of not more than two thousand dollars 9
($2,000) per violation, or where the defendant's conduct is directed at a person aged 10
sixty (60) or older, a civil penalty of not more than ten thousand dollars ($10,000) 11
per violation, if the trier of fact determines that the defendant knew or should have 12
known that the person aged sixty (60) or older is substantially more vulnerable than 13
other members of the public. 14
(3)] Any person with actual notice that an investigation has begun or is about to begin 15
pursuant to KRS 367.240 and 367.250 who intentionally conceals, alters, destroys, 16
or falsifies documentary material is guilty of a Class A misdemeanor. 17
(3)[(4)] Any person who, in response to a subpoena or demand as provided in KRS 18
367.240 or 367.250, intentionally falsifies or withholds documents, records, or 19
pertinent materials that are not privileged shall be subject to a fine as provided in 20
subsection (2)[(3)] of this section. 21
(4)[(5)] The Circuit Court of any county in which any plan described in KRS 367.350 22
is proposed, operated, or promoted may grant an injunction without bond, upon 23
complaint filed by the Attorney General to enjoin the further operation thereof, and 24
the Attorney General may ask for and t he court may assess civil penalties against 25
the defendant in an amount not to exceed the sum of five thousand dollars ($5,000) 26
which shall be for the benefit of the Commonwealth of Kentucky. 27
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(5)[(6)] Any person, business, or corporation who knowingly viola tes the provisions 1
of KRS 367.540 shall be guilty of a violation. It shall be considered a separate 2
offense each time a magazine is mailed into the state; but it shall be considered only 3
one (1) offense for any quantity of the same issue of a magazine mail ed into 4
Kentucky. 5
(6)[(7)] Any solicitor who violates the provisions of KRS 367.513 or 367.515 shall be 6
guilty of a Class A misdemeanor. 7
(7)[(8)] In addition to the penalties contained in this section, the Attorney General, 8
upon petition to the court, may recover, on behalf of the Commonwealth a civil 9
penalty of not more than the greater of five thousand dollars ($5,000) or two 10
hundred dollars ($200) per day for each and every violation of KRS 367.175. 11
(8)[(9)] Any person who [ shall] willfully and intention ally violates[violate] any 12
provision of KRS 367.976 to 367.985 shall be guilty of a Class B misdemeanor. 13
(9)[(10)] (a) Any person who violates the terms of a temporary or permanent 14
injunction issued under KRS 367.665 shall forfeit and pay to the 15
Commonwealth a penalty of not more than five thousand dollars ($5,000) per 16
violation. For the purposes of this section, the Circuit Court issuing an 17
injunction shall retain jurisdiction, and the cause shall be continued, and in 18
such cases the Attorney General acting in the name of the Commonwealth 19
may petition for recovery of civil penalties. 20
(b) 1. The Attorney General may, upon petition to a court having jurisdiction 21
under KRS 367.190, recover on behalf of the Commonwealth from any 22
person found to have willfully co mmitted an act declared unlawful by 23
KRS 367.667 a penalty of not more than five thousand dollars ($5,000) 24
per violation. 25
2. In addition to any other penalties provided for the commission of the 26
offense, any person found guilty of violating KRS 367.667(1)(c): 27
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a. Shall be punished by a fine of no less than five hundred dollars 1
($500) for the first offense and no less than five thousand dollars 2
($5,000) for any subsequent offense; and 3
b. Pay restitution of any financial benefit secured through conduct 4
proscribed by KRS 367.667(1)(c). 5
3. The Office of the Attorney General or the appropriate Commonwealth's 6
attorney shall have concurrent enforcement powers as to fines, felonies, 7
and misdemeanors under this paragraph. 8
(c) Any person who knowingly violates any provision of KRS 367.652, 367.653, 9
367.656, 367.657, 367.658, 367.666, or 367.668 or who knowingly gives false 10
or incorrect information to the Attorney General in filing statements or reports 11
required by KRS 367.650 to 367.670 shall be guilty of a Class D felony. 12
(10)[(11)] Any dealer who fails to provide a statement under KRS 367.760 or a notice 13
under KRS 367.765 shall be liable for a penalty of one hundred dollars ($100) per 14
violation to be collected in the name of th e Commonwealth upon action of the 15
Attorney General. 16
(11)[(12)] Any dealer or manufacturer who falsifies a statement under KRS 367.760 17
shall be liable for a penalty not exceeding one thousand dollars ($1,000) to be 18
collected in the name of the Commonwealth upon action by the Attorney General. 19
(12)[(13)] Any person who violates KRS 367.805, 367.809(2), 367.811, 367.813(1), or 20
367.816 shall be guilty of a Class C felony. 21
(13)[(14)] Either the Attorney General or the appropriate Commonwealth's attorney shall 22
have authority to prosecute violations of KRS 367.801 to 367.819. 23
(14)[(15)] A violation of KRS 367.474 to 367.478 and 367.482 is a Class C felony. 24
Either the Attorney General or the appropriate Commonwealth's attorney shall have 25
authority to prosecute violators of KRS 367.474 to 367.478 and 367.482. 26
(15)[(16)] Any person who violates KRS 367.310 shall be guilty of a violation. 27
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(16)[(17)] Any person, partnership, or corporation who violates the provisions of KRS 1
367.850 shall be guilty of a Class A misdemeanor. 2
(17)[(18)] Any dealer in motor vehicles or any other person who fraudulently changes, 3
sets back, disconnects, fails to connect, or causes to be changed, set back, or 4
disconnected, the speedometer or odometer of any motor vehicle, to effect the sale 5
of the motor vehicle shall be guilty of a Class D felony. 6
(18)[(19)] Any person who negotiates a contract of membership on behalf of a club 7
without having previously fulfilled the bonding requirement of KRS 367.403 shall 8
be guilty of a Class D felony. 9
(19)[(20)] Any person or corporation who operates or attempts to operate a health spa in 10
violation of KRS 367.905(1) shall be guilty of a Class A misdemeanor. 11
(20)[(21)] (a) Any person who violates KRS 367.832 shall be guilty of a Class C 12
felony; and 13
(b) The appro priate Commonwealth's attorney shall have authority to prosecute 14
felony violations of KRS 367.832. 15
(21)[(22)] (a) Any person who violates the provisions of KRS 367.855 or 367.857 16
shall be guilty of a violation. Either the Attorney General or the appropriat e 17
county health department may prosecute violators of KRS 367.855 or 18
367.857. 19
(b) The provisions of this subsection shall not apply to any retail establishment if 20
the wholesaler, distributor, or processor fails to comply with the provisions of 21
KRS 367.857. 22
(22)[(23)] Notwithstanding any other provision of law, any telemarketing company, 23
telemarketer, caller, or merchant shall be guilty of a Class D felony when that 24
telemarketing company, telemarketer, caller, or merchant three (3) times in one (1) 25
calendar year knowingly and willfully violates KRS 367.46955(15) by making or 26
causing to be made an unsolicited telephone solicitation call to a telephone number 27
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that appears in the current publication of the zero call list maintained by the Office 1
of the Attorney General's Office of Consumer Protection. 2
(23)[(24)] Notwithstanding any other provision of law, any telemarketing company, 3
telemarketer, caller, or merchant shall be guilty of a Class A misdemeanor when 4
that telemarketing company, telemarketer, caller, or merchant uses a zero call list 5
identified in KRS 367.46955(15) for any purpose other than complying with the 6
provisions of KRS 367.46951 to 367.46999. 7
(24)[(25)] (a) Notwithstanding any other provision of law, any telemarketing 8
company, telemarketer, calle r, or merchant that violates KRS 367.46951 to 9
367.46999 shall be assessed a civil penalty of not more than five thousand 10
dollars ($5,000) for each offense. 11
(b) The Attorney General, or any person authorized to act in his or her behalf, 12
shall initiate enfor cement of a civil penalty imposed under paragraph (a) of 13
this subsection. 14
(c) Any civil penalty imposed under paragraph (a) of this subsection may be 15
compromised by the Attorney General or his or her designated representative. 16
In determining the amount of the penalty or the amount agreed upon in 17
compromise, the Attorney General, or his or her designated representative, 18
shall consider the appropriateness of the penalty to the financial resources of 19
the telemarketing company, telemarketer, caller, or merchant charged, the 20
gravity of the violation, the number of times the telemarketing company, 21
telemarketer, caller, or merchant charged has been cited, and the good faith of 22
the telemarketing company, telemarketer, caller, or merchant charged in 23
attempting to achieve compliance, after notification of the violation. 24
(d) If a civil penalty is imposed under this subsection, a citation shall be issued 25
which describes the violation which has occurred and states the penalty for the 26
violation. If, within fifteen (15) wor king days from the receipt of the citation, 27
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the affected party fails to pay the penalty imposed, the Attorney General, or 1
any person authorized to act in his or her behalf, shall initiate a civil action to 2
collect the penalty. The civil action shall be tak en in the court which has 3
jurisdiction over the location in which the violation occurred. 4
(25)[(26)] Any person who violates KRS 367.500 shall be liable for a penalty of two 5
thousand five hundred dollars ($2,500) per violation. Either the Attorney General or 6
the appropriate Commonwealth's attorney may prosecute violations of KRS 7
367.500. 8
(26) (a) In any action brought under KRS 367.190, if the court finds that a person is 9
willfully using or has willfully used a method, act, or practice declared 10
unlawful by KRS 367.170, the Attorney General, upon petition to the court, 11
may recover on behalf of the Commonwealth a civil penalty of not more 12
than: 13
1. Two thousand dollars ($2,000) per violation; or 14
2. Ten thousand dollars ($10,000) per violation if the defendant's 15
conduct is directed at a person aged sixty (60) or older, and the trier of 16
fact determines that the defendant knew or should have known that 17
the person is aged sixty (60) or older and substantially more 18
vulnerable than other members of the public. 19
(b) For purposes of this subsection: 20
1. Any method, act, or practice declared unlawful by KRS 367.170 shall 21
constitute a separate violation as to each: 22
a. Consumer to whom a method, act, or practice declared unlawful 23
by KRS 367.170 was directed, communicated, or applied, 24
regardless of whether the consumer suffered actual pecuniary 25
loss; 26
b. Transaction in which a method, act, or practice declared 27
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unlawful by KRS 367.170 was employed, including but not 1
limited to each sale, offer, solicitation, advertisement or 2
advertisement placement, communication, other act connected 3
with the unlawful conduct; and 4
c. Separately identifiable method, act, or practice declared 5
unlawful by KRS 367.170, even if arising from the same 6
transaction or directed at the same consumer; and 7
2. Any method, act, or practice declared unlawful by KRS 367.170 that is 8
not identified as being in connection with a specific identifiable person 9
or t ransaction, but that is continuing in nature, shall constitute a 10
separate violation for each day that the unlawful method, act, or 11
practice exists or continues. 12
(c) Proof of actual injury to a consumer as a prerequisite to the assessment of 13
civil penalties under this subsection shall not be required, as the civil 14
penalty provisions in this subsection are intended to punish and deter the 15
violator and not intended solely to compensate injured parties. 16
(d) In determining the amount of the civil penalty establi shed in paragraph (a) 17
of this subsection to be assessed for each violation, the trier of fact may 18
consider, either alone or in combination, the following factors: 19
1. Whether the person charged with the violation was acting in good 20
faith or bad faith; 21
2. The nature, extent, and severity of the injury to consumers and the 22
public; 23
3. The person's ability to pay; 24
4. The amount of profit or gain obtained through the unlawful conduct; 25
5. The duration of the unlawful conduct; 26
6. The desire to eliminate any benefit derived from the violation and to 27
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deter future violations; and 1
7. Any prior violations of KRS 367.170 by the person. 2
(e) For purposes of this subsection, "person" has the same meaning as in KRS 3
367.110. 4
(f) This subsection shall: 5
1. Be liberally construed to effectuate its purpose of protecting 6
consumers and the public from unfair, false, misleading, or deceptive 7
acts or practices, and to provide the Attorney General the enforcement 8
tools necessary to deter unlawful conduct; and 9
2. Not be construed to limit the: 10
a. Methods by which the Attorney General or trier of fact may 11
determine the number of violations in any particular action; or 12
b. Right of the trier of fact to determine the number of violations 13
for which a person may properly be held responsible bas ed upon 14
the circumstances of the case. 15
Section 46. KRS 367.360 is amended to read as follows: 16
To accomplish the objectives and to carry out the duties prescribed by KRS 367.350 the 17
Attorney General, in addition to other powers conferred upon him by KRS 367.990 [(5)], 18
may issue subpoenas to any person, administer an oath or affirmation to any person, or 19
conduct hearings in aid of any investigation or inquiry, provided that information 20
obtained pursuant to the powers conferred by this section shall not be made public or 21
disclosed by the Attorney General or his employees beyond the extent necessary for law 22
enforcement purposes in the public interest. 23
Section 47. Whereas, musicians and music venues are vital to the economy of 24
the Commonwealth, the Kentucky Film Leadership Council is directed to study, examine, 25
and evalu ate the needs of Kentucky's musicians and music venues. The study shall be 26
conducted by the executive director of the Kentucky Film Office or his or her designee, 27
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the secretary of the Cabinet for Economic Development or his or her designee, and the 1
secretary of the Education and Labor Cabinet or his or her designee. The study shall 2
assess the needs of Kentucky musicians and music venues in this state and provide 3
strategies regarding how the Commonwealth may further facilitate industry growth and 4
the develop ment of partnerships between state agencies, universities, and this vital 5
industry. The study shall identify both opportunities and barriers this industry faces in 6
expanding within the state. The findings and results of this study shall be submitted to the 7
Legislative Research Commission by November 1, 2026, for referral to the Interim Joint 8
Committee on Economic Development and Workforce Investment. 9
Section 48. 2026 RS HB 757/VO, Section 7, is amended to read as follows: 10
In the case of taxpayers other than corporations: 11
(1) Adjusted gross income shall be calculated by subtracting from the gross income of 12
those taxpayers the deductions allowed individuals by Section 62 of the Internal 13
Revenue Code and adjusting as follows: 14
(a) Exclude income that is exempt from state taxation by the Kentucky 15
Constitution and the Constitution and statutory laws of the United States; 16
(b) Exclude income from supplemental annuities provided by the Railroad 17
Retirement Act of 1937 as amended and which are subject to federal income 18
tax by Pub. L. No. 89-699; 19
(c) Include interest income derived from obligations of sister states and political 20
subdivisions thereof; 21
(d) Exclude employee pension contributions picked up as provided for in KRS 22
6.505, 16.545, 21.360, 61.523, 61.560, 65.155, 67A.320, 67A.510, 78.610, 23
and 161.540 upon a ruling by the Internal Revenue Service or the federal 24
courts that these contributions shall not be included as gross income until such 25
time as the contributions are distributed or made available to the employee; 26
(e) Exclude Social Security and railroad retirement benefits subject to federal 27
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income tax; 1
(f) Exclude any money received because of a settlement or judgment in a lawsuit 2
brought against a manufacturer or distributor of "Agent Orange" for damages 3
resulting from exposure to Agent Orange by a member or veteran of the 4
Armed Forces of the United States or any dependent of such person who 5
served in Vietnam; 6
(g) 1. a. For taxable years beginning after December 31, 2005, but before 7
January 1, 2018, exclude up to forty-one thousand one hundred ten 8
dollars ($41,110) of total distributions from pension plans, annuity 9
contracts, profit -sharing plans, retirement plans, or employee 10
savings plans; and 11
b. For taxable years beginning on or after January 1, 2018, exclude 12
up to thirty -one thousand one hundred ten dollars ($31,110) of 13
total distributions from pension plans, annuity cont racts, profit -14
sharing plans, retirement plans, or employee savings plans. 15
2. As used in this paragraph: 16
a. "Annuity contract" has the same meaning as set forth in Section 17
1035 of the Internal Revenue Code; 18
b. "Distributions" includes but is not limited to any lump -sum 19
distribution from pension or profit -sharing plans qualifying for the 20
income tax averaging provisions of Section 402 of the Internal 21
Revenue Code; any distribution from an individual retirement 22
account as defined in Section 408 of the Internal Revenue Code; 23
and any disability pension distribution; and 24
c. "Pension plans, profit-sharing plans, retirement plans, or employee 25
savings plans" means any trust or other entity created or organized 26
under a written retirement plan and forming part of a stoc k bonus, 27
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pension, or profit-sharing plan of a public or private employer for 1
the exclusive benefit of employees or their beneficiaries and 2
includes plans qualified or unqualified under Section 401 of the 3
Internal Revenue Code and individual retirement acco unts as 4
defined in Section 408 of the Internal Revenue Code; 5
(h) 1. a. Exclude the portion of the distributive share of a shareholder's net 6
income from an S corporation subject to the franchise tax imposed 7
under KRS 136.505 or the capital stock tax imposed under KRS 8
136.300; and 9
b. Exclude the portion of the distributive share of a shareholder's net 10
income from an S corporation related to a qualified subchapter S 11
subsidiary subject to the franchise tax imposed under KRS 12
136.505 or the capital stock tax imposed under KRS 136.300. 13
2. The shareholder's basis of stock held in an S corporation where the S 14
corporation or its qualified subchapter S subsidiary is subject to the 15
franchise tax imposed under KRS 136.505 or the capital stock tax 16
imposed under KRS 136.30 0 shall be the same as the basis for federal 17
income tax purposes; 18
(i) Exclude income received for services performed as a precinct worker for 19
election training or for working at election booths in state, county, and local 20
primaries or regular or special elections; 21
(j) Exclude any capital gains income attributable to property taken by eminent 22
domain; 23
(k) 1. Exclude all income from all sources for members of the Armed Forces 24
who are on active duty and who are killed in the line of duty, for the 25
year during wh ich the death occurred and the year prior to the year 26
during which the death occurred. 27
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2. For the purposes of this paragraph, "all income from all sources" shall 1
include all federal and state death benefits payable to the estate or any 2
beneficiaries; 3
(l) Exclude all military pay received by members of the Armed Forces while on 4
active duty; 5
(m) 1. Include the amount deducted for depreciation under 26 U.S.C. sec. 167 6
or 168; and 7
2. Exclude the amounts allowed by KRS 141.0101 for depreciation; 8
(n) Include the amount deducted under 26 U.S.C. sec. 199A; 9
(o) Ignore any change in the cost basis of the surviving spouse's share of property 10
owned by a Kentucky community property trust occurring for federal income 11
tax purposes as a result of the death of the predeceasing spouse; 12
(p) Allow the same treatment allowed under Pub. L. No. 116 -260, secs. 276 and 13
278, related to the tax treatment of forgiven covered loans, deductions 14
attributable to those loans, and tax attributes associated with those loans for 15
taxable years ending on or after March 27, 2020, but before January 1, 2022; 16
(q) For taxable years beginning on or after January 1, 2020, but before March 11, 17
2023, allow the same treatment of restaurant revitalization grants in 18
accordance with Pub. L. No. 117 -2, sec. 9673 and 15 U.S.C. sec. 9009c, 19
related to the tax treatment of the g rants, deductions attributable to those 20
grants, and tax attributes associated with those grants; 21
(r) For taxable years beginning on or after January 1, 2026: 22
1. Include the amount deducted for domestic research or experimental 23
expenditures under 26 U.S.C. sec. 174A; and 24
2. Allow a subtraction equal to the amortization of [Exclude the amount 25
deducted for] domestic research or experimental expenditures computed 26
in accordance with[under] 26 U.S.C. sec. 174, as that section existed on 27
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December 31, 2024; 1
(s) Include the amount deducted for any qualified film or television production, 2
any qualified live theatrical production, and any qualified sound recording 3
production under 26 U.S.C. sec. 181; and 4
(t) Include interest deducted under 26 U.S.C. sec. 139L for amount s paid to a 5
qualified lender on any qualified real estate loan; and 6
(2) Net income shall be calculated by subtracting from adjusted gross income all the 7
deductions allowed individuals by Chapter 1 of the Internal Revenue Code, as 8
modified by KRS 141.0101, except: 9
(a) Any deduction allowed by 26 U.S.C. sec. 164 for taxes; 10
(b) Any deduction allowed by 26 U.S.C. sec. 165 for losses, except wagering 11
losses allowed under Section 165(d) of the Internal Revenue Code; 12
(c) Any deduction allowed by 26 U.S.C. sec. 213 for medical care expenses; 13
(d) Any deduction allowed by 26 U.S.C. sec. 217 for moving expenses; 14
(e) Any deduction allowed by 26 U.S.C. sec. 67 for any other miscellaneous 15
deduction; 16
(f) Any deduction allowed by the Internal Revenue Code for amounts allowa ble 17
under KRS 140.090(1)(h) in calculating the value of the distributive shares of 18
the estate of a decedent, unless there is filed with the income return a 19
statement that the deduction has not been claimed under KRS 140.090(1)(h); 20
(g) Any deduction allowed by 26 U.S.C. sec. 151 for personal exemptions and 21
any other deductions in lieu thereof; 22
(h) Any deduction allowed for amounts paid to any club, organization, or 23
establishment which has been determined by the courts or an agency 24
established by the General Assembly and charged with enforcing the civil 25
rights laws of the Commonwealth, not to afford full and equal membership 26
and full and equal enjoyment of its goods, services, facilities, privileges, 27
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advantages, or accommodations to any person because of race, color, religion, 1
national origin, or sex, except nothing shall be construed to deny a deduction 2
for amounts paid to any religious or denominational club, group, or 3
establishment or any organization operated solely for charitable or educational 4
purposes wh ich restricts membership to persons of the same religion or 5
denomination in order to promote the religious principles for which it is 6
established and maintained; 7
(i) A taxpayer may elect to claim the standard deduction allowed by KRS 8
141.081 instead of itemized deductions allowed pursuant to 26 U.S.C. sec. 63 9
and as modified by this section; 10
(j) For taxable years beginning on or after January 1, 2026, any deduction 11
allowed by 26 U.S.C. sec. 163(h)(3) as qualified residence interest shall be 12
limited to the amount of interest paid or accrued during the taxable year on the 13
acquisition and home equity indebtedness of the principal residence of the 14
taxpayer and shall not be claimed for more than one (1) qualified residence; 15
(k) Any deduction allowed by 26 U.S.C. sec. 224 for qualified tips; 16
(l) Any deduction allowed by 26 U.S.C. sec. 225 for qualified overtime 17
compensation; and 18
(m) Any deduction allowed by 26 U.S.C. sec. 163(h)(4) for qualified passenger 19
vehicle loan interest. 20
Section 49. 2026 RS HB 757/VO, Section 8, is amended to read as follows: 21
In the case of corporations: 22
(1) Gross income shall be calculated by adjusting federal gross income as defined in 23
Section 61 of the Internal Revenue Code as follows: 24
(a) Exclude income that is exempt from state taxation by the Kentucky 25
Constitution and the Constitution and statutory laws of the United States; 26
(b) Exclude all dividend income; 27
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(c) Include interest income derived from obligations of sister states and political 1
subdivisions thereof; 2
(d) Exclude fifty percent (50%) of gross income derived from any disposal of 3
coal covered by Section 631(c) of the Internal Revenue Code if the 4
corporation does not claim any deduction for percentage depletion, or for 5
expenditures attributable to the making an d administering of the contract 6
under which such disposition occurs or to the preservation of the economic 7
interests retained under such contract; 8
(e) Include the amount calculated under KRS 141.205; 9
(f) Ignore the provisions of Section 281 of the Internal Revenue Code in 10
computing gross income; 11
(g) Include the amount of deprecation deduction calculated under 26 U.S.C. sec. 12
167 or 168; 13
(h) Allow the same treatment allowed under Pub. L. No. 116 -260, secs. 276 and 14
278, related to the tax treatment of forgiven covered loans, deductions 15
attributable to those loans, and tax attributes associated with those loans for 16
taxable years ending on or after March 27, 2020, but before January 1, 2022; 17
(i) For taxable years beginning on or after January 1, 2020, but before March 11, 18
2023, allow the same treatment of restaurant revitalization grants in 19
accordance with Pub. L. No. 117 -2, sec. 9673 and 15 U.S.C. sec. 9009c, 20
related to the tax treatment of the grants, deductions attributable to those 21
grants, and tax attributes associated with those grants; 22
(j) For taxable years beginning on or after January 1, 2026: 23
1. Include the amount deducted for domestic research or experimental 24
expenditures under 26 U.S.C. sec. 174A; and 25
2. Allow a subtraction equal to the amortization of [Exclude the amount 26
deducted for] domestic research or experimental expenditures computed 27
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in accordance with[under] 26 U.S.C. sec. 174, as that section existed on 1
December 31, 2024; 2
(k) Include the amount deducted for any qualified film or television product ion, 3
any qualified live theatrical production, and any qualified sound recording 4
production under 26 U.S.C. sec. 181; 5
(l) Include interest deducted under 26 U.S.C. sec. 139L for amounts paid to a 6
qualified lender on any qualified real estate loan; and 7
(m) For purposes of determining the limitation on business interest under 26 8
U.S.C. sec. 163(j), the provisions of that section in effect on December 31, 9
2024, exclusive of any amendments made subsequent to that date, shall be 10
used; and 11
(2) Net income shall be calculated by subtracting from gross income: 12
(a) The deduction for depreciation allowed by KRS 141.0101; 13
(b) Any amount paid for vouchers or similar instruments that provide health 14
insurance coverage to employees or their families; 15
(c) All the deductions from gross income allowed corporations by Chapter 1 of 16
the Internal Revenue Code, as modified by KRS 141.0101, except: 17
1. Any deduction for a state tax which is computed, in whole or in part, by 18
reference to gross or net income and which is paid or accrued to any 19
state of the United States, the District of Columbia, the Commonwealth 20
of Puerto Rico, any territory or possession of the United States, or to any 21
foreign country or political subdivision thereof; 22
2. The deductions contained in Sections 243, 245, a nd 247 of the Internal 23
Revenue Code; 24
3. The provisions of Section 281 of the Internal Revenue Code shall be 25
ignored in computing net income; 26
4. Any deduction directly or indirectly allocable to income which is either 27
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exempt from taxation or otherwise not taxed under the provisions of this 1
chapter, except for deductions allowed under Pub. L. No. 116 -260, secs. 2
276 and 278, related to the tax treatment of forgiven covered loans and 3
deductions attributable to those loans for taxable years ending on or 4
after Ma rch 27, 2020, but before January 1, 2022; and deductions 5
allowed under Pub. L. No. 117 -2, sec. 9673 and 15 U.S.C. sec. 9009c, 6
related to the tax treatment of restaurant revitalization grants and 7
deductions attributable to those grants for taxable years beg inning on or 8
after January 1, 2020, but before March 11, 2023. Nothing in this 9
chapter shall be construed to permit the same item to be deducted more 10
than once; 11
5. Any deduction for amounts paid to any club, organization, or 12
establishment which has been de termined by the courts or an agency 13
established by the General Assembly and charged with enforcing the 14
civil rights laws of the Commonwealth, not to afford full and equal 15
membership and full and equal enjoyment of its goods, services, 16
facilities, privilege s, advantages, or accommodations to any person 17
because of race, color, religion, national origin, or sex, except nothing 18
shall be construed to deny a deduction for amounts paid to any religious 19
or denominational club, group, or establishment or any organiz ation 20
operated solely for charitable or educational purposes which restricts 21
membership to persons of the same religion or denomination in order to 22
promote the religious principles for which it is established and 23
maintained; 24
6. Any deduction prohibited by KRS 141.205; and 25
7. Any dividends -paid deduction of any captive real estate investment 26
trust; and 27
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(d) 1. A deferred tax deduction in an amount computed in accordance with this 1
paragraph. 2
2. For purposes of this paragraph: 3
a. "Net deferred tax asset" means that deferred tax assets exceed the 4
deferred tax liabilities of the combined group, as computed in 5
accordance with accounting principles generally accepted in the 6
United States of America; and 7
b. "Net deferred tax liability" means deferred tax liabilities that 8
exceed the deferred tax assets of a combined group as defined in 9
KRS 141.202, as computed in accordance with accounting 10
principles generally accepted in the United States of America. 11
3. Only publicly traded companies, including affiliated corporations 12
participating in the filing of a publicly traded company's financial 13
statements prepared in accordance with accounting principles generally 14
accepted in the United States of America, as of January 1, 2019, shall be 15
eligible for this deduction. 16
4. If the provisions of KRS 141.202 result in an aggregate increase to the 17
member's net deferred tax liability, an aggregate decrease to the 18
member's net deferred tax asset, or an aggregate change from a net 19
deferred tax asset to a net deferred tax liability, the combined group 20
shall be entitled to a deduction, as determined in this paragraph. 21
5. For ten (10) years beginning with the combined group's first taxable 22
year beginning on or after January 1, 2028, a combined group shall be 23
entitled to a deduction from the combined group's entire net income 24
equal to one -tenth (1/10) of the amount necessary to offset the increase 25
in the net deferred tax liability, decrease in the net deferred tax asset, or 26
aggregate cha nge from a net deferred tax asset to a net deferred tax 27
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liability. The increase in the net deferred tax liability, decrease in the net 1
deferred tax asset, or the aggregate change from a net deferred tax asset 2
to a net deferred tax liability shall be comput ed based on the change that 3
would result from the imposition of the combined reporting requirement 4
under KRS 141.202, but for the deduction provided under this paragraph 5
as of June 27, 2019. 6
6. The deferred tax impact determined in subparagraph 5. of this paragraph 7
shall be converted to the annual deferred tax deduction amount, as 8
follows: 9
a. The deferred tax impact determined in subparagraph 5. of this 10
paragraph shall be divided by the tax rate determined under KRS 11
141.040; 12
b. The resulting amount shall be further divided by the 13
apportionment factor determined by KRS 141.120 or 141.121 that 14
was used by the combined group in the calculation of the deferred 15
tax assets and deferred tax liabilities as described in subparagraph 16
5. of this paragraph; and 17
c. The r esulting amount represents the total net deferred tax 18
deduction available over the ten (10) year period as described in 19
subparagraph 5. of this paragraph. 20
7. The deduction calculated under this paragraph shall not be adjusted as a 21
result of any events happ ening subsequent to the calculation, including 22
but not limited to any disposition or abandonment of assets. The 23
deduction shall be calculated without regard to the federal tax effect and 24
shall not alter the tax basis of any asset. If the deduction under th is 25
section is greater than the combined group's entire Kentucky net income, 26
any excess deduction shall be carried forward and applied as a deduction 27
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to the combined group's entire net income in future taxable years until 1
fully utilized. 2
8. Any combined gro up intending to claim a deduction under this 3
paragraph shall file a statement with the department on or before July 1, 4
2019. The statement shall specify the total amount of the deduction 5
which the combined group claims on the form, including calculations 6
and other information supporting the total amounts of the deduction as 7
required by the department. No deduction shall be allowed under this 8
paragraph for any taxable year, except to the extent claimed on the 9
timely filed statement in accordance with this paragraph. 10
Section 50. 2026 RS HB 757/VO, Section 118, is amended to read as follows: 11
(1) As used in this section: 12
(a) "Existing development area" means a development area established by a 13
county containing a city of the f irst class or by a city of the first class prior to 14
March 23, 2007, that is subject to the provisions of a grant contract, Interlocal 15
Cooperation Agreement, or Master Agreement executed prior to March 23, 16
2007; and 17
(b) "New development area" means a development area that: 18
1. Is created within an existing development area; and 19
2. Exists independent of the existing development area[Exists for a period 20
of thirty (30) years, and may be extended for a period not to exceed an 21
additional twenty -five (25) years to accommodate the pilot program 22
term permitted pursuant to KRS 65.4931]. 23
(2) The provisions of KRS 65.490 to 65.499 shall apply only to: 24
(a) Existing development areas; and 25
(b) New development areas, provided that: 26
1. The project for the existing development area is amended to remove the 27
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new development area from the existing development area; 1
2. All contracts regarding the application of increment derived from the 2
new development area require not less than: 3
a. Ten perc ent (10%) of the increment be paid to the agency for 4
which the existing development area was established; 5
b. Eighty percent (80%) of the increment be paid to the developer of 6
the new development area; and 7
c. Ten percent (10%) shall be retained by the Commo nwealth or 8
local government, as applicable; 9
3. Notwithstanding KRS 65.495 to the contrary, the payment to the agency 10
under subparagraph 2. of this paragraph shall not be taken into account 11
in determining whether thresholds within the contract have been met; 12
4. The amendment of the project for an existing development area is 13
approved by: 14
a. i. The county containing a city of the first class; or 15
ii. The city of the first class; 16
in which the existing development area is located; 17
b. The Kentucky Economic Development Finance Authority; 18
c. The agency for which the existing development area was 19
established; and 20
d. If applicable, the insurer of any bonds issued for the benefit of the 21
agency for which the existing development area was established; 22
and 23
5. Any negotiation or agreement made related to an existing development 24
area or a new development area shall be approved by the Kentucky 25
Economic Development Finance Authority. 26
Section 51. 2026 RS SB 185/EN, Section 1, is amended to read as follows: 27
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(1) Kentucky State University, recognized as an 1890 land -grant university that is 1
Kentucky's only public Historically Black College or University (HBCU), shall be a 2
four (4) year residential polytechnic institution that focuses on highly technical, 3
industry-based applied learning and offers liberal studies and polytechnic programs 4
that are aligned with the workforce needs of the Commonwealth and consistent with 5
the historical mission of an HBCU. 6
(2) The General Assembly declares that a state of financial exigency exists at Kentucky 7
State University for five (5) years from the effective date of this Act or until such a 8
date that the General Assembly affirmatively declares, base d upon the 9
recommendation of the Council on Postsecondary Education, that the university's 10
finances are stable, whichever occurs first. 11
(3) (a) Kentucky State University shall not enter into any obligation or make any 12
expenditure costing twenty thousand d ollars ($20,000) or more without prior 13
approval of the Council on Postsecondary Education, including but not 14
limited to any purchase, contract, or increase due to a personnel action. 15
(b) Kentucky State University shall: 16
1. Provide a monthly report of unive rsity finances to the Council on 17
Postsecondary Education in the format requested by the council. The 18
council shall provide a quarterly update on the financial status of the 19
university to the Governor and the Legislative Research Commission; 20
2. Fully cooperate with the council in its exercise of the financial oversight 21
granted to the council under this subsection; 22
3. Timely provide all information and documentation deemed by the 23
council to be relevant to the financial oversight; and 24
4. Timely consult with the council on all major financial matters during the 25
state of financial exigency declared in subsection (2) of this section. 26
(c) The financial oversight granted to the council under this subsection shall 27
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continue for the entire duration of the financial e xigency declared in 1
subsection (2) of this section. 2
(4) Notwithstanding KRS 164A.560, beginning no later than July 1, 2027, all financial 3
transactions of Kentucky State University shall be reported and reconciled no less 4
than monthly in the Enhanced Manage ment Administrative Reporting System 5
(EMARS). 6
(5) Kentucky State University shall not incur a budget deficit for the remaining 7
duration of the financial exigency declared in subsection (2) of this section. 8
[(6) Any organization registered with the Kentucky Secretary of State or any member or 9
officer of any such organization having entered into a public -private lease 10
agreement with Kentucky State University shall not be eligible to transact any 11
business or enter into any contract with Kentucky State Universi ty or any other 12
agency or instrumentality of the Commonwealth or subdivision thereof after the 13
effective date of this Act. Any such contract purported to be executed or renewed 14
with any such organization or individual after the effective date of this Act s hall be 15
null and void.] 16
Section 52. 2026 RS HB 757/VO, Section 5, is amended to read as follows: 17
(1) (a) The Commonwealth shall offer three (3) tax increment financing participation 18
programs. The first program, the crite ria and details of which are set forth in 19
KRS 154.30-040, relates to a pledge of state real property ad valorem taxes 20
only. The second program, the criteria and details of which are set forth in 21
KRS 154.30 -050, is the Signature Projects Program. The third program, the 22
criteria and details of which are set forth in KRS 154.30 -060, relates to the 23
pledge of state tax revenues to support mixed -use development in blighted 24
urban areas. 25
(b) 1. The first and third programs identified in [programs under] paragraph 26
(a) of this subsection shall sunset on the effective date of this section of 27
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this Act, and new applications shall not be submitted or considered for 1
approval after the effective date of this section of this Act. 2
2. The Signature Projects Program shall sunset on December 31, 2028, 3
and new applications shall not be submitted or considered for 4
approval after December 31, 2028. 5
3. Projects approved for a program prior to the [effective ] date the 6
program shall sunset under subparagraph 1. or 2. of this paragraph[of 7
this section of this Act] shall continue to be governed in accordance with 8
the tax incentive agreement's terms and conditions as set forth in KRS 9
154.30-070. 10
4.[3.] Tax incentive agreements related to the programs under paragraph (a) of 11
this subsection and in effect on the effective date of this section of this 12
Act shall not be amended or have activation date extensions approved by 13
the Commonwealth after the effective date of this section of this Act. 14
(2) (a) Except as provided in subsection (1)(b)3. of this section, a city or county that 15
has established a development area pursuant to KRS 65.7049, 65.7051, and 16
65.7053, or an agency designated as the entity managing a development area 17
established pursuant to KRS 65 .7049, 65.7051, and 65.7053, may submit an 18
application to the authority requesting that the Commonwealth participate in a 19
project, before the effective date of this section of this Act. 20
1. The application shall identify the specific program under which sta te 21
participation is being requested and shall include the following 22
attachments, in addition to any requirements developed by the authority 23
pursuant to paragraph (b) of this subsection: 24
a. A copy of the ordinance adopted by the city or county establishing 25
the development area; 26
b. A copy of the local participation agreement; and 27
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c. Data and information supporting the determinations and findings 1
required by KRS 65.7049. 2
2. The staff of the authority shall review the application to determine if the 3
applicant h as met all of the statutory and regulatory requirements 4
established by this subchapter and shall notify the applicant in writing of 5
its determination. This review shall be preliminary in nature and shall 6
not constitute approval of the request. All applicat ions for participation 7
by the Commonwealth shall be reviewed by the authority for approval. 8
3. a. Applications meeting all statutory and regulatory requirements 9
requesting participation by the Commonwealth pursuant to KRS 10
154.30-040, along with any support ing materials, shall be referred 11
by the staff of the authority to the authority for consideration. 12
b. i. Applicants meeting all statutory and regulatory requirements 13
requesting participation by the Commonwealth pursuant to 14
KRS 154.30 -050(3)(b) or 154.30 -060 shall be required to 15
submit a report prepared by an independent consultant or 16
financial adviser as described in subsection (6) of this section 17
for the application to be complete. The staff of the authority 18
shall notify the applicants of the report requir ements and 19
shall provide information regarding the contents and 20
requirements for the report at the same time it notifies the 21
applicant of the results of its preliminary review. 22
ii. Upon receipt and review of the report, the staff of the 23
authority shall refer the application and supporting 24
information to the authority for consideration. 25
(b) Additional standards and requirements for the application process shall be 26
established by the authority through the promulgation of administrative 27
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regulations in accordance with KRS Chapter 13A. 1
(3) (a) The authority may request any materials and make any inquiries concerning 2
an application that the authority deems necessary. 3
(b) The authority shall, through the promulgation of administrative regulations in 4
accordance wit h KRS Chapter 13A, establish commercially reasonable 5
limitations on the financing costs that may be recovered under the provisions 6
of KRS 154.30-050. 7
(4) Upon review of an application and other information available, the authority may 8
pledge all or a portion of the state real property ad valorem tax incremental revenue 9
of the Commonwealth or state tax revenues attributable to the footprint of the 10
project, as limited by KRS 154.30 -040, 154.30 -050, or 154.30 -060, whichever is 11
applicable. 12
(a) If incremental re venues are pledged from less than one hundred percent 13
(100%) of the footprint of the project, a description of the included portion of 14
the development area shall be provided. 15
(b) State tax revenues from the development area that have not been pledged to 16
projects within the development area may be used to support other economic 17
development projects or tourism projects approved under KRS 139.536 and 18
148.851 to 148.860, provided that state tax revenues shall not be pledged 19
more than once during the existence o f the development area. Thus, state tax 20
revenues pledged to support increment bonds issued for the development area, 21
or a project in the development area shall not be pledged to support any other 22
development area, project, program, development, or undertak ing during the 23
life of the development area. If less than one hundred percent (100%) of 24
incremental revenues are pledged pursuant to the provisions of this 25
subchapter, the remaining incremental revenues shall not be used to support 26
other economic developme nt projects or tourism projects approved under 27
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KRS 139.536 and 148.851 to 148.860. 1
(5) The pledge of incremental state real property ad valorem tax revenues or state tax 2
revenues of the Commonwealth by the authority shall be implemented through the 3
execution of a tax incentive agreement between the Commonwealth and the agency, 4
city, or county, as the case may be, in accordance with KRS 154.30-070. 5
(6) (a) The authority shall engage the services of a qualified independent outside 6
consultant or financial advi ser to analyze the data related to the project and 7
the development area and prepare the report required by subsection (2) of this 8
section. The report shall include the following: 9
1. The estimated approved public infrastructure costs for the project and, if 10
relevant, approved signature project costs, financing costs, and costs 11
associated with land preparation, demolition, and clearance; 12
2. The feasibility of the project, taking into account the scope and location 13
of the project; 14
3. The estimated amount of local tax revenues and state tax revenues, as 15
applicable, that would be generated by the project over the period, 16
which may be up to twenty (20) years or thirty (30) years, as applicable, 17
from the activation date; 18
4. The estimated amount of local tax revenues and state tax revenues, as 19
applicable, that would be displaced within the Commonwealth, for the 20
purpose of quantifying economic activity which is being shifted over the 21
same period as that set forth in subparagraph 3. of this paragraph. The 22
projections for displaced activity shall include economic activity that is 23
lost to the Commonwealth as a result of the project, as well as economic 24
activity that is diverted to the project that formerly took place at existing 25
establishments within the Commonwealth prior to the commencement 26
date of the project; 27
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5. The estimated amount of local and state old revenues that would have 1
been generated in the footprint of the project in the absence of the 2
project, computed over the same time period as set forth in subparagraph 3
3. of this paragraph; 4
6. In the process of estimating the revenues and impacts prescribed in 5
subparagraphs 3. and 4. of this paragraph, the independent outside 6
consultant shall not consider any of the following: 7
a. Revenues or economic impacts associated with any projects within 8
the development area where the new project will be located; and 9
b. Revenues or economic impacts associated with economic 10
development projects and approved Kentucky Tourism 11
Development Act projects under KRS Chapter 148; 12
7. The relationship of the estimated incremental revenues to the financing 13
needs, including any increment bonds, of the project; 14
8. When estimating the fiscal impact of the project, the consultant shall 15
evaluate the amount of revenue estimated in subparagraph 3. of this 16
paragraph and shall deduct the amounts estimated in subparagraphs 4. 17
and 5. of this paragraph. The resulting difference shall be com pared to 18
the estimated incremental revenues to determine the presence or absence 19
of a positive fiscal impact; and 20
9. A determination that the project will not occur if not for the designation 21
of the development area, the granting of incremental revenues by the 22
taxing district or districts, other than the Commonwealth, and the 23
granting of the state tax incremental revenues. 24
(b) 1. The independent consultant or financial advisor shall consult with the 25
Office of State Budget Director, and the Finance and Admin istration 26
Cabinet in the development of the report. 27
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2. The Office of State Budget Director and the staff of the authority, in 1
collaboration with the independent consultant or financial advisor, shall 2
agree on a methodology to be used and assumptions to be made by the 3
independent consultant or financial consultant in preparing its report. 4
3. On the basis of the independent consultant's report and the other 5
materials provided, prior to any approval of a project by the authority, 6
the Office of State Budget Dir ector and the Finance and Administration 7
Cabinet shall certify to the authority whether there is a projected net 8
positive economic impact to the Commonwealth and the expected 9
amount of state tax incremental revenues from the project. 10
4. The city, county, o r agency making the application shall pay all costs 11
associated with the independent consultant's or financial advisor's report. 12
Section 53. 2026 RS HB 757/VO, Section 107, is amended to read as follows: 13
As used in this subchapter: 14
(1) "Activation date" means: 15
(a) For all projects except those described in paragraph (b) of this subsection, the 16
date established any time within a two (2) year period after the 17
commencement date. The Commonwealth may extend the two (2) year pe riod 18
to no more than four (4) years upon written application by the agency 19
requesting the extension; and 20
(b) For signature projects approved under KRS 154.30 -050(3)(a), the date 21
established any time within a ten (10) year period after the commencement 22
date. 23
For all projects established after July 14, 2018, the activation date is the date on 24
which the time period for the pledge of incremental revenues shall commence. To 25
implement the activation date, the minimum capital investment must be met and the 26
agency that is a party to the tax incentive agreement shall notify the office; 27
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(2) "Agency" means: 1
(a) An urban renewal and community development agency established under 2
KRS Chapter 99; 3
(b) A development authority established under KRS Chapter 99; 4
(c) A nonprofit corporation; 5
(d) A housing authority established under KRS Chapter 80; 6
(e) An air board established under KRS 183.132 to 183.160; 7
(f) A local industrial development authority established under KRS 154.50 -301 8
to 154.50-346; 9
(g) A riverport authority established under KRS 65.510 to 65.650; or 10
(h) A designated department, division, or office of a city or county; 11
(3) (a) "Approved public inf rastructure costs" means costs associated with the 12
acquisition, installation, construction, or reconstruction of public works, 13
public improvements, and public buildings, including planning and design 14
costs associated with the development of the public amenities. 15
(b) "Approved public infrastructure costs" includes but is not limited to costs 16
incurred for the following: 17
1. Land preparation, including demolition and clearance work; 18
2. Buildings; 19
3. Sewers and storm drainage; 20
4. Curbs, sidewalks, promenades, and pedways; 21
5. Roads; 22
6. Street lighting; 23
7. The provision of utilities; 24
8. Environmental remediation; 25
9. Floodwalls and floodgates; 26
10. Public spaces or parks; 27
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11. Parking; 1
12. Easements and rights-of-way; 2
13. Transportation facilities; 3
14. Public landings; 4
15. Amenities, including fountains, benches, and sculptures; and 5
16. Riverbank modifications and improvements; 6
(4) "Approved signature project costs" means: 7
(a) The acquisition of land for portions of the project that are for infrastructure; 8
and 9
(b) Costs associated with the acquisition, installation, development, construction, 10
improvement, or reconstruction of infrastructure, including planning and 11
design costs associated with the development of infrastructure, including but 12
not limited to parking struct ures, including portions of parking structures that 13
serve as platforms to support development above; 14
that have been determined by the commission to represent a unique challenge in the 15
financing of a project such that the project could not be developed without 16
incentives intended by this chapter to foster economic development; 17
(5) "Authority" means the Ken tucky Economic Development Finance Authority 18
established by KRS 154.20-010; 19
(6) "Capital investment" means: 20
(a) Obligations incurred for labor and to contractors, subcontractors, builders, and 21
materialmen in connection with the acquisition, construction, i nstallation, 22
equipping, and rehabilitation of a project; 23
(b) The cost of acquiring land or rights in land within the development area on the 24
footprint of the project, and any cost incident thereto, including recording 25
fees; 26
(c) The cost of contract bonds a nd of insurance of all kinds that may be required 27
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or necessary during the course of acquisition, construction, installation, 1
equipping, and rehabilitation of a project which is not paid by the contractor 2
or contractors or otherwise provided; 3
(d) All costs of architectural and engineering services, including test borings, 4
surveys, estimates, plans, specifications, preliminary investigations, 5
supervision of construction, and the performance of all the duties required by 6
or consequent upon the acquisition, con struction, installation, equipping, and 7
rehabilitation of a project; 8
(e) All costs that are required to be paid under the terms of any contract for the 9
acquisition, construction, installation, equipping, and rehabilitation of a 10
project; and 11
(f) All other c osts of a nature comparable to those described in this subsection 12
that occur after preliminary approval; 13
(7) "City" means any city, consolidated local government, or urban -county 14
government; 15
(8) "Commencement date" means the final approval date or the date on which a tax 16
incentive agreement is executed; 17
(9) "Commonwealth" means the Commonwealth of Kentucky; 18
(10) "County" means any county, consolidated local government, charter county, unified 19
local government, or urban-county government; 20
(11) "CPI" means th e nonseasonally adjusted Consumer Price Index for all urban 21
consumers, all items, base year computed for 1982 to 1984 equals one hundred 22
(100), published by the United States Department of Labor, Bureau of Labor 23
Statistics; 24
(12) "Department" means the Department of Revenue; 25
(13) "Development area" means an area established under KRS 65.7049, 65.7051, and 26
65.7053; 27
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(14) "Economic development projects" means projects which are approved for tax 1
credits under Subchapter 20, 22, 23, 24, 25, 26, 27, 28, 34, or 48 of KRS Chapter 2
154; 3
(15) "Financing costs" means principal, interest, costs of issuance, debt service reserve 4
requirements, underwriting discount, costs of credit enhancement or liquidity 5
instruments, and other costs directly related to the issuance of bon ds or debt for 6
approved public infrastructure costs or approved signature project costs for projects 7
approved pursuant to KRS 154.30-050; 8
(16) "Footprint" means the actual perimeter of a discrete, identified project within a 9
development area. The footprint shall not include any portion of a development area 10
outside the area for which actual capital investments are made and must be 11
contiguous; 12
(17) "Governing body" means the body possessing legislative authority in a city or 13
county; 14
(18) "Increment bonds" me ans bonds and notes issued for the purpose of paying the 15
costs of one (1) or more projects; 16
(19) "Incremental revenues" means: 17
(a) The amount of revenues received by a taxing district, as determined by 18
subtracting old revenues from new revenues in a calend ar year with respect to 19
a development area, or a project within a development area; or 20
(b) The amount of revenues received by the Commonwealth as determined by 21
subtracting old revenues from new revenues in a calendar year with respect to 22
the footprint; 23
(20) "Local participation agreement" means the agreement entered into under KRS 24
65.7063; 25
(21) "Local tax revenues" has the same meaning as in KRS 65.7045; 26
(22) "Modified new revenues for income tax" means the amount of individual income 27
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tax included in state tax revenues that is: 1
(a) The result of multiplying the portion of state tax revenues from individual 2
income taxes by the modifier; 3
(b) Used for calculating state tax revenues in calendar years 2023 to 2048; and 4
(c) For projects approved prior to January 1, 2023; 5
(23) "Modifier" means the result of: 6
(a) 1. Dividing the individual income tax rate of five percent (5%), in effect as 7
of December 31, 2022, by: 8
2. The individual income tax rate under KRS 141.020 for the calendar year 9
in which the new revenues for income tax are being computed; and 10
(b) Beginning in calendar year 2026, reducing the result of paragraph (a) of 11
this subsection by by t hree and three -tenths percent (3.3%) and in every 12
subsequent calendar year after 2026 to 2048, further reducing the result by 13
an additional one and one -tenth percent (1.1%) [Subtracting from the result 14
of paragraph (a) of this subsection the number one (1); 15
(c) Multiplying the result of paragraph (b) of this subsection by twenty -five 16
percent (25%); and 17
(d) Adding to the result of paragraph (c) of this subsection the number one (1)]; 18
(24) "New revenues" means: 19
(a) The amount of local tax revenues received by a taxing district with respect to 20
a development area in any calendar year beginning with the year in which the 21
activation date occurred; and 22
(b) The amount of state tax revenues received by the Commonwealth with respect 23
to the footprint in any calendar ye ar beginning with the year in which the 24
activation date occurred. 25
For projects approved prior to January 1, 2023, any state tax revenues received by 26
the Commonwealth from individual income tax shall be computed using modified 27
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new revenues for income tax; 1
(25) "Old revenues" means: 2
(a) The amount of local tax revenues received by a taxing district with respect to 3
a development area as of December 31 of the year of preliminary approval; or 4
(b) 1. The amount of state tax revenues received by the Commonwealth within 5
the footprint as of December 31 of the year of preliminary approval. If 6
the authority determines that the amount of state tax revenues received 7
as of December 31 of the last calendar year prior to the commencement 8
of preliminary approval does not re present a true and accurate depiction 9
of revenues, the authority may consider revenues for a period of no 10
longer than three (3) calendar years prior to the year of preliminary 11
approval, so as to determine a fair representation of state tax revenues. 12
The am ount determined by the authority shall be specified in the tax 13
incentive agreement. If state tax revenues were derived from the 14
footprint prior to the year of preliminary approval, old revenues shall 15
increase each calendar year by: 16
a. The percentage increase, if any, of the CPI or a comparable index; 17
or 18
b. An alternative percentage increase that is determined to be 19
appropriate by the authority. 20
The method for increasing old revenues shall be set forth in the tax 21
incentive agreement. 22
2. If state revenues we re derived from the footprint prior to the year of 23
preliminary approval, the calculation of incremental revenues shall be 24
based on the value of old revenues as increased using the method 25
prescribed in subparagraph 1. of this paragraph to reflect the same 26
calendar year as is used in the determination of new revenues; 27
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(26) "Outstanding" means increment bonds that have been issued, delivered, and paid 1
for by the purchaser, except any of the following: 2
(a) Increment bonds canceled upon surrender, exchange, or t ransfer, or upon 3
payment or redemption; 4
(b) Increment bonds in replacement of which or in exchange for which other 5
increment bonds have been issued; or 6
(c) Increment bonds for the payment, redemption, or purchase for cancellation 7
prior to maturity, of whic h sufficient moneys or investments, in accordance 8
with the ordinance or other proceedings or any applicable law, by mandatory 9
sinking fund redemption requirements, or otherwise, have been deposited, and 10
credited in a sinking fund or with a trustee or paying or escrow agent, whether 11
at or prior to their maturity or redemption, and, in the case of increment bonds 12
to be redeemed prior to their stated maturity, notice of redemption has been 13
given or satisfactory arrangements have been made for giving notice of that 14
redemption, or waiver of that notice by or on behalf of the affected bond 15
holders has been filed with the issuer or its agent; 16
(27) "Preliminary approval" means the action taken by the authority preliminarily 17
approving an eligible project for incentives under this subchapter; 18
(28) "Project" means any property, asset, or improvement located in a development area 19
and certified by the governing body as: 20
(a) Being for a public purpose; and 21
(b) Being for the development of facilities for residential, commercial, industrial, 22
public, recreational, or other uses, or for open space, including the 23
development, rehabilitation, renovation, installation, improvement, 24
enlargement, or extension of real estate and buildings; and 25
(c) Contributing to economic development or tourism; and 26
(d) Meeting the additional requirements established by KRS 154.30 -040, 154.30-27
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050, or 154.30-060; 1
(29) "Signature project" means a project approved under KRS 154.30-050; 2
(30) "State real property ad valorem tax" means real property ad valorem taxes levied 3
under KRS 132.020(1)(a); 4
(31) "State tax revenues" means revenues received by the Commonwealth from one (1) 5
or more of the following sources: 6
(a) State real property ad valorem taxes; 7
(b) Individual income taxes levied under KRS 141.020, other than individual 8
income taxes that have already been pledged to support an economic 9
development project within the development area; 10
(c) Corporation income taxes levied under KRS 141.040, o ther than corporation 11
income taxes that have already been pledged to support an economic 12
development project within the development area; 13
(d) Limited liability entity taxes levied under KRS 141.0401, other than limited 14
liability entity taxes that have alre ady been pledged to support an economic 15
development project within the development area; and 16
(e) Sales taxes levied under KRS 139.200, excluding sales taxes already pledged 17
for: 18
1. Approved tourism attraction projects, as defined in KRS 148.851, within 19
the development area; and 20
2. Projects which are approved for sales tax refunds under Subchapter 20 21
of KRS Chapter 154 within the development area; 22
(32) "Tax incentive agreement" means an agreement entered into in accordance with 23
KRS 154.30-070; and 24
(33) "Termination date" means: 25
(a) For a tax incentive agreement satisfying the requirements of KRS 154.30 -040 26
or 154.30 -060, a date established by the tax incentive agreement that is no 27
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more than twenty (20) years from the activation date. However, the 1
termination date for a tax incentive agreement shall in no event be more than 2
forty (40) years from the establishment date of the development area to which 3
the tax incentive agreement relates; and 4
(b) For a project grant agreement satisfying the requirements of KRS 15 4.30-050, 5
a date established by the tax incentive agreement that is no more than thirty 6
(30) years from the activation date. However, the termination date for a tax 7
incentive agreement shall in no event be more than forty (40) years from the 8
establishment date of the development area to which the tax incentive 9
agreement relates. 10
Section 54. 26 RS HB 757/VO, Section 128, is amended to read as follows: 11
(1) As used in this section: 12
(a) "Facility operator" means a person who owns or operates a venue; 13
(b) "Professional golf sporting event" [: 14
1. ]means an organized, competitive golf event, governed by rules and a 15
sporting body, where participants compete for compensation beyond 16
actual expenses; [and 17
2. Excludes minor league sporting events;] 18
(c) "Qualifying attraction" means a series of professional golf sporting events 19
which is: 20
1. Held at a venue over a duration of at least three (3) consecutive days; 21
2. Hosted by a sponsoring entity pursuant to an agreement with a facility 22
operator that authorizes the sponsoring entity to conduct one (1) or more 23
series of a professional golf sporting event; and 24
3. Open to the public upon purchase of tickets, with attendance totaling at 25
least o ne hundred thousand (100,000) admissions over the duration of 26
each series of professional golf sporting events;[ and] 27
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(d) "Sponsoring entity" means the person hosting a qualifying attraction; and 1
(e) "Venue" means: 2
1. Public property located in a consolida ted local government or in an 3
urban-county government that is owned, operated, or controlled by the 4
consolidated local government, urban-county government; 5
2. A park located in a consolidated local government that is: 6
a. Open to the general public; and 7
b. Owned, operated, or controlled by any nonprofit corporation 8
established under the provisions of KRS 273.161 to 273.390; 9
3. Property located in a consolidated local government or in an urban -10
county government that is owned, operated, or controlled by a publ ic 11
university; or 12
4. Privately owned property located in a consolidated local government or 13
in an urban -county government that is suitable for hosting professional 14
golf sporting events and qualifying attractions. 15
(2) Notwithstanding KRS 134.580 and 139.770: 16
(a) A sponsoring entity shall be granted a sales tax incentive equal to one hundred 17
percent (100%) of the Kentucky sales tax generated by the sale of admissions 18
to a qualifying attraction held at a venue, and the sales of tangible personal 19
property and s ervices related to the qualifying attraction, including but not 20
limited to the sale of: 21
1. Food and beverage concessions; 22
2. Souvenirs; 23
3. Parking; 24
4. Suites; 25
5. Sponsorships; and 26
6. Other hospitality services; 27
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sold at the qualifying attraction. 1
(b) One hundred percent (100%) of the sales tax incentive authorized in 2
paragraph (a) of this subsection shall be paid to the sponsoring entity of the 3
qualifying attraction from which the sales taxes were generated; 4
(c) Only one (1) incentive request shall be made for each qualifying attraction; 5
(d) The sponsoring entity shall have no obligation to refund or otherwise return 6
any amount of the sales tax incentive to the persons from whom the sales tax 7
was collected; 8
(e) The sales tax incentive shall be reduced by the vendor compensation allowed 9
under KRS 139.570; and 10
(f) Interest shall not be allowed or paid on any sales tax incentive payment made 11
under this section. 12
(3) The department shall accept initial applications for sales tax incentives under this 13
section for qualifying attractions held on or after July 1, 2026. 14
(4) To be eligible for a sales tax incentive under this section, the sponsoring entity shall 15
file an initial application with the department, which: 16
(a) Includes sufficient information regarding the qualifying attraction to 17
demonstrate whether it qualifies for the sales tax incentive; and 18
(b) Is filed at least sixty (60) days prior to the date of the first professional golf 19
sporting event constituting the qualifying attraction. 20
(5) Within thirty (30) days of receipt of the initial application, the department shall 21
notify the sponsoring entity of its preliminary approval or denial of the qualifying 22
attraction. 23
(6) If the initial application is denied, the d epartment shall provide the reason for the 24
denial. 25
(7) After approval of its initial application and the completion of the qualifying 26
attraction, a sponsoring entity shall apply for a sales tax incentive no earlier than 27
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thirty (30) days following the end o f the month during which sales taxes that were 1
generated from the qualifying attraction are collected. The application may 2
aggregate eligible sales taxes from previous months if the events comprising the 3
qualifying attraction were held in more than one (1) month. 4
(8) The department shall review each application for a sales tax incentive and 5
determine if it meets the requirements of this section, pending the verification of 6
required attendance. 7
(9) In determining eligibility for a sales tax incentive authori zed under this section, the 8
department shall waive the duration and attendance requirements listed in 9
subsection (1)(c)1. and 3. of this section if the person requesting an incentive 10
demonstrates that any delays, cancellations, or postponements were due to 11
inclement weather or other extraordinary events beyond the control of the parties 12
involved and that the weather or other extraordinary events rendered the satisfaction 13
of the requirement impossible. 14
(10) Both the initial application and the sales tax ince ntive application shall be in the 15
form prescribed by the department through the promulgation of an administrative 16
regulation in accordance with KRS Chapter 13A. 17
(11) The department shall verify the amount of sales tax incentive and pay the 18
allocations determined to be due in accordance with subsection (2)(b) of this section 19
within forty-five (45) days of receipt of the later of: 20
(a) The application submitted under subsection (7) of this section; or 21
(b) All necessary supporting information required by the d epartment to determine 22
that the sponsoring entity is eligible for the incentive. 23
(12) (a) Prior to November 1, 2027, and continuing each November 1 thereafter to 24
November 1, 2037, the department shall provide an annual report detailing 25
information related to each qualifying attraction receiving incentives during 26
the fiscal year concluding on June 30 of the reporting period. 27
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(b) The department shall include the following information in the report: 1
1. The name of the qualifying attraction; 2
2. The venue where the qualifying attraction was held; 3
3. The name of the facility operator; 4
4. The name of the sponsoring entity; 5
5. The duration of the qualifying attraction and the number of admissions 6
over that duration; 7
6. The amount of incentive paid to the facility operator; and 8
7. The amount of incentive paid to the sponsoring entity. 9
(c) The information required to be reported under this subsection shall not be 10
considered confidential taxpayer information and shall not be subject to KRS 11
Chapter 131 or any other provi sions of the Kentucky Revised Statutes 12
prohibiting disclosure or reporting of information. 13
(13) The provisions of this section shall expire on November 30, 2036, and a qualifying 14
attraction held after November 30, 2036, shall not be eligible for the incent ives 15
authorized in this section. 16
(14) The General Assembly is committed to the research and development of tourism 17
policies, including the aspiration to hold other professional sporting events across 18
the Commonwealth and especially in rural Kentucky. 19
Section 55. 26 RS HB 904/VO, Section 22, is amended to read as follows: 20
(1) The corporation shall institute a system of sports wagering in conformance with 21
federal law, this chapter, and by administrative regulations promulga ted under the 22
authority of KRS 230.215. 23
(2) Sports wagering shall not be offered in this state except as authorized by this 24
section and KRS 230.811. A track that holds a license to operate sports wagering 25
may contract with sports wagering service providers to conduct or manage sports 26
wagering operat ions as authorized by this chapter. Sports wagering may be 27
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provided at a licensed facility for sports wagering or online through a website or 1
mobile application. The licensed facility for sports wagering or a sports wagering 2
service provider may provide sports wagering through a website or mobile interface 3
as approved by the corporation. The corporation may provide temporary licenses to 4
licensed facilities for sports wagering or sports wagering service providers, if the 5
corporation deems that the information submitted by them is sufficient to determine 6
the applicant's suitability. The corporation may promulgate administrative 7
regulations to establish the suitability for temporary and ordinary license 8
applications for licensed facilities for sports wagering, sports wagering service 9
providers, and any related parties. 10
(3) Sports wagering licensees and service providers that accept wagers online via 11
websites and mobile applications shall impose the following requirements: 12
(a) Prior to placing a wager online via websites or mobile applications operated 13
by either a sports wagering licensee or a service provider, a patron shall 14
register the patron's sports wagering account with the operating sports 15
wagering licensee or service provider either in person at a licensed facility for 16
sports wagering or remotely through the service provider's website or mobile 17
application; 18
(b) 1. The registration process shall include attestation that the patron meets 19
the requirements to place a wager with a sports wagering licensee or 20
service provider in this state. 21
2. Prior to verification of a patron's identity, a sports wagering licensee or 22
service provider shall not allow the patron to engage in sports wagering, 23
make a deposit, or process a withdrawal via the patron's sports wagering 24
account. 25
3. A sports wagering licensee or service provider shall implement 26
commercially and technologically reasonable procedures to prevent 27
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access to sports wagering by any person under the age of twenty -one 1
(21): 2
a. At a licensed facility; and 3
b. Online via website or mobile application. 4
4. A sports wagering licensee or service provider may use information 5
obtained from third parties to verify that a person is authorized to open 6
an account, place wagers, and make deposits and withdrawals; 7
(c) A sports wage ring licensee or service provider shall adopt an account 8
registration policy to ensure that all patrons are authorized to place a wager 9
with a sports wagering licensee or service provider within the Commonwealth 10
of Kentucky. This policy shall include, with out limitation, a mechanism by 11
which to: 12
1. Verify the name and age of the patron; 13
2. Verify that the patron is not prohibited from placing a wager; and 14
3. Obtain the following information: 15
a. A physical address other than a post office box; 16
b. A phone number; 17
c. A unique user name; and 18
d. An email account; 19
(d) A sports wagering licensee or service provider shall use all commercially and 20
technologically reasonable means to ensure that each patron is limited to one 21
(1) account with that service provider in t he Commonwealth, but nothing in 22
this paragraph restricts a patron from holding other sports wagering accounts 23
in other jurisdictions; 24
(e) A sports wagering licensee or service provider, in addition to complying with 25
state and federal law pertaining to the protection of the private, personal 26
information of patrons, shall use all other commercially and technologically 27
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reasonable means to protect this information consistent with industry 1
standards; 2
(f) A sports wagering licensee or service provider shall use a ll commercially and 3
technologically reasonable means to verify the identity of the patron making a 4
deposit or withdrawal; 5
(g) A sports wagering licensee or service provider shall utilize geolocation or 6
geofencing technology to ensure that wagers are only a ccepted from patrons 7
who are physically located in the Commonwealth. A sports wagering licensee 8
or service provider shall maintain in this state its servers used to transmit 9
information for purposes of accepting or paying out wagers on a sporting 10
event placed by patrons in this state; 11
(h) A patron may fund the patron's account using any acceptable form of payment 12
or advance deposit method, which shall include the use of cash, cash 13
equivalents, credit cards, debit cards, automated clearing house, other 14
electronic methods, and any other form of payment authorized by the 15
corporation; and 16
(i) The corporation may enter into agreements with other jurisdictions or entities 17
to facilitate, administer, and regulate multijurisdictional sports betting by 18
sports betting operators to the extent that entering into the agreement is 19
consistent with state and federal laws and the sports betting agreement is 20
conducted only in the United States. 21
(4) A track may contract with no more than three (3) service providers at a time to 22
conduct and manage services and technology which support the operation of sports 23
betting both on the track and online via websites and mobile applications. The 24
website or mobile application used to offer sports betting shall be offered only 25
under the same brand as the track or that of the service provider contracted with the 26
track, or both. 27
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(5) (a) A track or service provider through an agreement with a licensed track shall 1
not offer sports wagering until the corporation has issued a sports wagering 2
license to the track, except for temporary licenses authorized under KRS 3
230.814. 4
(b) A track or association, or service provider through an agreement with a 5
licensed track, shall not offer fixed -odds wagering until the corporation has 6
issued a supplemental fixed-odds wagering license to the track. 7
(6) (a) A track licensed under KRS 230.811 may offer sports wagering at a facility 8
that meets the definition of "track" in KRS 230.210. 9
(b) A simulcast facility may offer sports wagering through an agreement with a 10
track by using any of that track's already established service providers. 11
(7) (a) As used in this subsection, "minimum bet limit": 12
1. Means the amount a bettor can win, not how much can be staked or 13
collected; and 14
2. Includes that the minimum bet limit must be accepted by bookmakers on 15
all fixed-odds wagers. 16
(b) A track or association li censed under this chapter may conduct fixed -odds 17
wagering on horse racing with or without a service provider. 18
(c) A track or association or service provider licensed under this chapter shall 19
have a mandatory minimum bet limit of at least one thousand dolla rs ($1,000) 20
per race. 21
(d) The betting menu shall be determined by the host track. 22
(8) (a) As used in this subsection, "proposition bet" means a wager on the 23
performance statistics of an individual athlete. 24
(b) A sports wagering licensee or service provider shall not offer or accept any 25
proposition bets on an individual performance statistic on athletes 26
participating in collegiate sporting events for a collegiate team located in 27
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Kentucky if the successful outcome of the wager is contingent upon the 1
athlete f ailing to meet a specified statistical threshold or experiencing a 2
negative performance outcome. 3
(9) (a) As used in this subsection: 4
1. "Affiliate" means an entity that is owned or controlled in whole or in 5
part by the licensee; and 6
2. "Beneficial interest " means participation in the proceeds of prediction 7
markets or events contracts either as a licensee or operator of the 8
proceeds or an entity that receives prediction market or events contracts 9
proceeds in any capacity. 10
(b) A track or association that hold s a license to conduct horse racing, sports 11
wagering, or a licensee offering fantasy contests under this chapter or its 12
affiliate shall not participate in or contract with platforms that offer events 13
contracts through a prediction market in the Commonwealt h of Kentucky or 14
have a beneficial interest in the proceeds of prediction markets in the 15
Commonwealth of Kentucky. 16
(c) A track or association licensed to conduct horse racing, sports wagering, or a 17
licensee offering fantasy contests under this chapter or i ts affiliate or an entity 18
in which it has a beneficial interest shall not contract with a licensed sports 19
wagering service provider that: 20
1. Offers sports events contracts through a prediction market in the 21
Commonwealth of Kentucky; or 22
2. Owns, rents, lice nses, advertises, operates, is partnered or affiliated 23
with, or has a beneficial interest in, an entity that makes available to its 24
users in any form a sports prediction market in the Commonwealth of 25
Kentucky. 26
(d) A track or association licensed to conduct horse racing, sports wagering, or 27
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a licensee offering fantasy contests under this chapter, its affiliate, or an 1
entity in which it has a beneficial interest shall not contract with an entity 2
offering sports event contracts or a sports prediction market in Kentucky. 3
(e) Notwithstanding paragraphs (b) to (d) of this subsection, a track or 4
association licensed to conduct horse racing, sports wagering, or a licensee 5
offering fantasy contests under this chapter found to have violated this 6
section shall have twe lve (12) months to cure the violation without any 7
additional penalty imposed by the corporation. If the violation is not cured 8
within twelve (12) months of the violation, the corporation may take 9
administrative action. 10
(10) Notwithstanding subsection (9) o f this section, this chapter shall not prohibit the 11
corporation or the Department of Revenue from promulgating administrative 12
regulations in accordance with KRS Chapter 13A to regulate the conduct or activity 13
of prediction markets in the Commonwealth in ac cordance with applicable federal 14
law. 15
(11) If a track or association holds two (2) or more licenses, only the specific license or 16
licensee for which the track or association has violated the terms shall be subject to 17
suspension or revocation or the applicable penalties. 18
(12) Nothing in this section shall [not ] be construed to prevent a licensed sports 19
wagering service provider or a track or association licensed to conduct horse racing 20
or sports wagering or a licensee offering fantasy contests under this cha pter from 21
offering advance[advanced] deposit account wagering as defined in Section 1 of 22
this Act. 23
Section 56. 2026 RS HB 677/EN, Section 25, is amended to read as follows: 24
(1) No person shall commence to construct a mer chant electric generating facility until 25
that person has applied for and obtained a construction certificate for the facility 26
from the board. The construction certificate shall be valid for a period of three (3) 27
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years after the issuance date of the last pe rmit required to be obtained from the 1
Energy and Environment Cabinet after which the certificate shall be void. The 2
certificate shall be conditioned upon the applicant obtaining necessary air, water, 3
and waste permits. If an applicant has not obtained all necessary permits and has 4
not commenced to construct prior to the expiration date of the certificate, the 5
applicant shall be required to obtain a new valid certificate from the board. 6
(2) (a) Except as provided in subsections (3), (4), and (5) of this section, no 7
construction certificate shall be issued to construct a merchant electric 8
generating facility unless: 9
1. The exhaust stack of the proposed facility and any wind turbine is at 10
least one thousand (1,000) feet from the property boundary of any 11
adjoining property owner; 12
2. All proposed structures or facilities used in connection with the 13
generation[ or storage] of electricity are two thousand (2,000) feet from 14
any residential neighborhood, school, hospital, or nursing home facility; 15
and 16
3. With regard to a wind power facility, the maximum height of the wind 17
turbine, as measured from the natural grade to the top of the hub where 18
the rotor attaches, does not exceed three hundred fifty (350) feet. 19
(b) For purposes of applications for site compatibility certificates pursuant to 20
KRS 278.216: 21
1. Only the exhaust stack of the proposed facility to be actually used for 22
coal or gas-fired generation shall be required to be at least one thousand 23
(1,000) feet from the property boundary of any adjoining property 24
owner and two thousand (2,000) feet from any residential neighborhood, 25
school, hospital, or nursing home facility; 26
2. Any proposed structure to be actually used for the generation of 27
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electricity fro m solar or wind power shall be at least one thousand 1
(1,000) feet from the property boundary of any adjoining property 2
owner; and 3
3. Any proposed structures or facilities used in connection with the 4
generation[ or storage] of electricity from solar or wind power shall be 5
at least two thousand (2,000) feet from any residential neighborhood, 6
school, hospital, or nursing home facility. 7
(3) If the merchant electric generating facility is proposed to be located in a county or a 8
municipality with planning and zon ing, then maximum height, decommissioning, 9
and setback requirements from a property boundary, residential neighborhood, 10
school, hospital, or nursing home facility may be established by the planning and 11
zoning commission. Any decommissioning requirement, ma ximum height 12
limitation, or setback established by a planning and zoning commission for a 13
facility in an area over which it has jurisdiction shall: 14
(a) Except with regard to the minimum decommission bonding amount required 15
in subsection (2)(m)5.a. of KRS 2 78.706, have primacy over the 16
decommissioning requirements in KRS 278.706(2)(m), the maximum height 17
limitation in subsection (2)(a)3. of this section, and the setback requirement in 18
subsections (2) and (5) of this section; and 19
(b) Not be subject to modific ation or waiver by the board through a request for 20
deviation by the applicant, as provided in subsection (4) of this section or 21
otherwise. 22
(4) The board may grant a deviation from the requirements of subsection (2) of this 23
section on a finding that the pro posed facility is designed to and, as located, would 24
meet the goals of KRS 224.10 -280, 278.010, 278.212, 278.214, 278.216, 278.218, 25
and 278.700 to 278.716 at a distance closer than those provided in subsection (2) of 26
this section. 27
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(5) If the merchant elect ric generating facility is proposed to be located on a site of a 1
former coal processing plant in the Commonwealth where the electric generating 2
facility will utilize on-site waste coal as a fuel source, then the one thousand (1,000) 3
foot property boundary requirement in subsection (2)(a)1. of this section shall not 4
be applicable; however, the applicant shall be required to meet any other setback 5
requirements contained in subsection (2)(a)2. of this section. 6
(6) If requested, a merchant electric generating e ntity considering construction of a 7
facility for the generation of electricity or a person acting on behalf of such an 8
entity shall hold a public meeting in any county where acquisition of real estate or 9
any interest in real estate is being considered for the facility. A request for such a 10
meeting may be made by the commission, or by any city or county governmental 11
entity, including a board of commissioners, planning and zoning, fiscal court, 12
mayor, or county judge/executive. The meeting shall be held not m ore than thirty 13
(30) days from the date of the request. 14
(7) The purpose of the meeting under subsection (6) of this section is to fully inform 15
landowners and other interested parties of the full extent of the project being 16
considered, including the project time line. One (1) or more representatives of the 17
entity with full knowledge of all aspects of the project shall be present and shall 18
answer questions from the public. 19
(8) Notice of the time, subject, and location of the meeting under subsection (6) of th is 20
section shall be posted in both a local newspaper, if any, and a newspaper of 21
general circulation in the county. Notice shall also be placed on the websites of the 22
unregulated entity, and any local governmental unit. Owners of real estate known to 23
be included in the project and any person whose property adjoins at any point any 24
property to be included in the project shall be notified personally by mail. All 25
notices must be mailed or posted at least two (2) weeks prior to the meeting. 26
(9) The merchant ele ctric generating entity or a person acting on behalf of a merchant 27
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electric generating entity shall, on or before the date of the public meeting held 1
under subsection (6) of this section, provide notice of all research, testing, or any 2
other activities being planned or considered to: 3
(a) The Energy and Environment Cabinet; 4
(b) The Public Service Commission; 5
(c) The Transportation Cabinet; 6
(d) The Attorney General; and 7
(e) The Office of the Governor. 8
(10) Subsections (6) to (9) of this section shall not appl y to any facility or project that 9
has already received a certificate of construction from the board. 10
Section 57. 2026 RS HB 677/EN, Section 26, is amended to read as follows: 11
(1) Any person seeking to obtain a construction certificate from the board to construct a 12
merchant electric generating facility shall file an application at the office of the 13
Public Service Commission. 14
(2) A completed application shall include the following: 15
(a) The name, address, and telephone number of the person proposing to 16
construct and own the merchant electric generating facility; 17
(b) A full description of the proposed site, including a map showing th e distance 18
of the proposed site from residential neighborhoods, the nearest residential 19
structures, schools, and public and private parks that are located within a two 20
(2) mile radius of the proposed facility; 21
(c) Evidence of public notice that shall inclu de the location of the proposed site 22
and a general description of the project, state that the proposed construction is 23
subject to approval by the board, and provide the telephone number and 24
address of the Public Service Commission. Public notice shall be g iven within 25
thirty (30) days immediately preceding the application filing to: 26
1. Landowners whose property borders the proposed site; and 27
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2. The general public in a newspaper of general circulation in the county or 1
municipality in which the facility is proposed to be located; 2
(d) A statement certifying that the proposed plant will be in compliance with all 3
local ordinances and regulations concerning noise control and with any local 4
planning and zoning ordinances. The statement shall also disclose setback 5
requirements established by the planning and zoning commission as provided 6
under KRS 278.704(3); 7
(e) If the facility is not proposed to be located on a site of a former coal 8
processing plant and the facility will use on -site waste coal as a fuel source or 9
in an area where a planning and zoning commission has established a setback 10
requirement pursuant to KRS 278.704(3), a statement that the exhaust stack of 11
the proposed facility and any wind turbine is at least one thousand (1,000) feet 12
from the property boundary of any adjoining property owner and all proposed 13
structures or facilities used in connection with the generation or storage of 14
electricity are two thousand (2,000) feet from any residential neighborhood, 15
school, hospital, or nursing home facility, unle ss coal or gas -fired generating 16
facilities capable of generating ten megawatts (10MW) or more currently exist 17
on the site. If the facility is proposed to be located on a site of a former coal 18
processing plant and the facility will use on -site waste coal as a fuel source, a 19
statement that the proposed site is compatible with the setback requirements 20
provided under KRS 278.704(5). If the facility is proposed to be located in a 21
jurisdiction that has established setback requirements pursuant to KRS 22
278.704(3), a statement that the proposed site is in compliance with those 23
established setback requirements; 24
(f) A complete report of the applicant's public involvement program activities 25
undertaken prior to the filing of the application, including: 26
1. The scheduling and conducting of a public meeting in the county or 27
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counties in which the proposed facility will be constructed at least 1
ninety (90) days prior to the filing of an application, for the purpose of 2
informing the public of the project being considered and rec eiving 3
comment on it; 4
2. Evidence that notice of the time, subject, and location of the meeting 5
was published in the newspaper of general circulation in the county, and 6
that individual notice was mailed to all owners of property adjoining the 7
proposed project at least two (2) weeks prior to the meeting; and 8
3. Any use of media coverage, direct mailing, fliers, newsletters, additional 9
public meetings, establishment of a community advisory group, and any 10
other efforts to obtain local involvement in the siting process; 11
(g) A summary of the efforts made by the applicant to locate the proposed facility 12
on a site where existing electric generating facilities are located; 13
(h) Proof of service of a copy of the application upon the chief executive officer 14
of each county and municipal corporation in which the proposed facility is to 15
be located, and upon the chief officer of each public agency charged with the 16
duty of planning land use in the jurisdiction in which the facility is proposed 17
to be located; 18
(i) An analysis of the proposed facility's projected effect on the electricity 19
transmission system in Kentucky; 20
(j) An analysis of the proposed facility's economic impact on the affected region 21
and the state; 22
(k) A detailed listing of all violations by it, or any person w ith an ownership 23
interest, of federal or state environmental laws, rules, or administrative 24
regulations, whether judicial or administrative, where violations have resulted 25
in criminal convictions or civil or administrative fines exceeding five 26
thousand dollars ($5,000). The status of any pending action, whether judicial 27
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or administrative, shall also be submitted; 1
(l) A site assessment report as specified in KRS 278.708. The applicant may 2
submit and the board may accept documentation of compliance with the 3
National Environmental Policy Act (NEPA) rather than a site assessment 4
report;[ and] 5
(m) A decommissioning plan that shall describe how the merchant electric 6
generating facility will be decommissioned and dismantled following the end 7
of its useful life. The decommissioning plan shall, at a minimum, include 8
plans to: 9
1. Unless otherwise request ed by the current landowner at the time of 10
decommissioning, remove all above-ground facilities; 11
2. Unless otherwise requested by the current landowner at the time of 12
decommissioning, remove any underground components and 13
foundations of above -ground facilit ies. Facilities removed under this 14
subparagraph shall be removed in their entirety, unless the current 15
landowner and the applicant otherwise agree at the time of 16
decommissioning to a different depth; 17
3. Return the land to a substantially similar state [ with the same or similar 18
soil quality] as it was prior to the commencement of construction; 19
4. Unless otherwise requested by the current landowner at the time of 20
decommissioning, leave any interconnection or other facilities in place 21
for future use at the completion of the decommissioning process; 22
5. Secure a bond or other similar security for the project to assure financial 23
performance of the decommissioning obligation, provided that: 24
a. The amount of the proposed bond or similar security shall be 25
determined by an independent, licensed engineer who is 26
experienced in the decommissioning [the type ] of solar electric 27
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generating facilities[facility to be decommissioned] and has no 1
financial interest in either the merchant electric generating facility 2
or any parcel of land upon which the merchant electric generating 3
facility is located. The proposed amount of the bond or similar 4
security shall be either[the greater of]: 5
i. The net present value of the total estimated cost of 6
completing the decommissioning plan; or 7
ii. The bond amount required by a county or municipal 8
government that has established a decommissioning bond 9
requirement or similar security obligation in the county or 10
municipality where the merchant electric generating facility 11
will be located. If the fa cility will be located in more than 12
one (1) county or municipality that has established a 13
decommissioning bond or similar security obligation, then 14
the higher amount shall be required for the facility; 15
b. The bond or other similar security names: 16
i. For property that is leased by the applicant, each landowner 17
from whom the applicant leases land and the Energy and 18
Environment Cabinet as the primary co-beneficiaries; or 19
ii. For property that is owned by the applicant, the Energy and 20
Environment Cabinet as the primary beneficiary; 21
c. If the merchant electric generating facility is to be located in a 22
county or municipality that has not established a decommissioning 23
bond or other similar security obligation, the bond or other similar 24
security shall name the count y or municipality as a secondary 25
beneficiary with the county's or municipality's consent; 26
d. The bond or other similar security shall be provided by an 27
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insurance company or surety that shall at all times maintain at least 1
an "Excellent" rating as measured by the AM Best rating agency 2
or an investment grade credit rating by any national credit rating 3
agency and, if available, shall be noncancelable by the provider or 4
the customer until completion of the decommissioning plan or 5
until a replacement bond is secured; and 6
e. The bond or other similar security shall provide that at least thirty 7
(30) days prior to its cancellation or lapse, the surety shall notify 8
the applicant, its successor or assign, each landowner, the Energy 9
and Environment Cabinet, and each co unty or city in which the 10
facility is located of the impending cancellation or lapse. The 11
notice shall specify the reason for the cancellation or lapse and 12
provide any of the parties, either jointly or separately, the 13
opportunity to cure the cancellation o r lapse prior to it becoming 14
effective. The applicant, its successor, or its assign, shall be 15
responsible for all costs incurred by all parties to cure the 16
cancellation or lapse of the bond. Each landowner, or the Energy 17
and Environment Cabinet with the pr ior approval of each 18
landowner, may make a demand on the bond and initiate and 19
complete the decommissioning plan; 20
6. Communicate with each affected landowner at the end of the merchant 21
electric generating facility's useful life so that any requests of the 22
landowner that are in addition to the minimum requirements set forth in 23
this paragraph and in addition to any other requirements specified in the 24
lease with the landowner may, in the sole discretion of the applicant or 25
its successor or assign, be accommodated; and 26
7. Incorporate the requirements of subparagraphs 1. to 6. of this paragraph 27
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into the applicant's leases with landowners; and 1
(n) For applications for the construction of wind power facilities, a statement 2
certifying that: 3
1. Any wind turbine will not be artificially lighted except as required by 4
law; 5
2. Wind power facilities will be sited in a manner that minimizes 6
shadowing or flicker impacts; and 7
3. Any shadowing or flicker impacts will not have a significant adverse 8
impact on neighboring or adja cent property uses through siting or 9
mitigation. 10
(3) (a) The entity causing the decommissioning plan required under subsection 11
(2)(m) of this section to be carried out shall be entitled to the proceeds from 12
the sale of any salvaged materials or components of the merchant electric 13
generating facility recovered during the decommissioning process. 14
(b) Any proceeds that the Energy and Environment Cabinet recovers from the 15
sale of salvaged materials or components in the course of carrying out a 16
decommissioning plan under subsection (2)(m) of this section that, taken with 17
the decommissioning bond amounts that have been drawn upon, exceed the 18
cost of completing the decommissioning plan shall be deposited in the 19
merchant electric generating facility monitoring and e nforcement fund 20
established in KRS 224.10-285. 21
(4) Application fees for a construction certificate shall be set by the board and 22
deposited into a trust and agency account to the credit of the commission. 23
(5) Replacement of a merchant electric generating fa cility with a like facility, or the 24
repair, modification, retrofitting, enhancement, or reconfiguration of a merchant 25
electric generating facility shall not, for the purposes of this section and KRS 26
224.10-280, 278.704, 278.708, 278.710, and 278.712, const itute construction of a 27
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merchant electric generating facility. 1
(6) The board shall promulgate administrative regulations prescribing fees to pay 2
expenses associated with its review of applications filed with it pursuant to KRS 3
278.700 to 278.716. All application fees collected by the board shall be deposited in 4
a trust and agency account to the credit of the Public Service Commission. If a 5
majority of the members of the board find that an applicant's initial fees are 6
insufficient to pay the board's expenses associated with the application, including 7
the board's expenses associated with legal review thereof, the board shall assess a 8
supplemental application fee to cover the additional expenses. An applicant's failure 9
to pay a fee assessed pursuant to this sub section shall be grounds for denial of the 10
application. 11
Section 58. 2026 RS HB 757/VO, Section 9, is amended to read as follows: 12
(1) As used in this section: 13
(a) "Adjusted gross fantasy contest receipts" means the total sum of entry fees 14
collected by a fantasy contest service provider from all fantasy contest 15
participants entering a fantasy contest, less winnings paid to fantasy contest 16
participants in the contest; 17
(b) "Athlete": 18
1. Means a professional or amateur competi tor in a real -world lawful 19
sporting event or an organized video game competition that is: 20
a. Regulated by a sports governing body; and 21
b. Held between players who play individually or as a team; and 22
2. Includes equine competitors; 23
(c) "Department" means the Department of Revenue; 24
(d) "Fantasy contest": 25
1. Means any online fantasy or simulated game or contest that meets the 26
following conditions: 27
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a. There are no fewer than two (2) fantasy contest participants; 1
i. All fantasy contest participants are natural persons; and 2
ii. A fantasy contest service provider shall not be construed to 3
be a participant; 4
b. i. The values of all prizes offered to w inning fantasy contest 5
participants are established and made known to fantasy 6
contest participants in advance of the contest; 7
ii. Multiple winning participants may share a prize; and 8
iii. Prizes may consist of fixed amounts, tiered payouts, or other 9
conditional bonus payouts, provided that all prize structures 10
are disclosed in advance by the fantasy contest service 11
provider; 12
c. All winning outcomes reflect the relative knowledge and skill of 13
the fantasy contest participant and are determined predominantly 14
by the accumulated statistical performance or finishing position of 15
multiple athletes across one (1) or more real -world sporting 16
events; 17
d. Fantasy contest participants assemble a fictional entry or roster of 18
actual athletes and exercise management or selec tion control over 19
the roster; 20
e. Fantasy contest participants compete for prizes awarded by a 21
fantasy contest service provider based on terms and conditions 22
published by the fantasy contest service provider and made known 23
to the fantasy contest participant in advance of the contest; 24
f. Winning outcomes are determined by clearly established scoring 25
criteria based on one (1) or more statistical results of the 26
performance of an individual athlete, including but not limited to a 27
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fantasy score; 1
g. A winning outcome is not based: 2
i. On the score, point spread, or outcome of a single real -world 3
team or combination of teams; or 4
ii. Solely on any single performance of an individual athlete or 5
participant in any single actual event; and 6
h. The game or contest does not violate any provision of federal law; 7
2. Includes contests in which fantasy contest participants compete against 8
each other; and 9
3. Does not include any fantasy contest: 10
a. Without a fantasy contest entry fee; or 11
b. Betting against the fantasy contest service provider; 12
(e) "Fantasy contest entry fee" means the cash or cash equivalent that is required 13
to be paid by a fantasy contest participant in advance to a fantasy contest 14
service provider in order to participate in a fantasy contest; 15
(f) "Fantasy contest participant" means a person who is twenty -one (21) years of 16
age or older who is: 17
1. Kentucky resident who participates in a fantasy contest offered by a 18
fantasy contest service provider; and 19
2. Not a Kentucky resident who participates in a fantasy contest offered by 20
a fantasy contest service provider while in Kentucky; and 21
(g) "Fantasy contest service provider": 22
1. Means a person or entity that offers fantasy contests to the general 23
public; and 24
2. Does not include an internet service provider or a provider of mobile 25
data services merely as a result of that provider's transporting of genera l 26
traffic that may include a fantasy contest. 27
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(2) Beginning on January 1, 2027, the Commonwealth shall impose and collect a tax at 1
a rate of twelve percent (12%) of the fantasy contest service provider's adjusted 2
gross fantasy contest receipts. The accrual method of accounting shall be used for 3
purposes of calculating the amount of tax owed by the licensee. 4
(3) The tax imposed by subsection (2) of this section is due and payable monthly and 5
shall be remitted to the department on or before the twentieth day of the next 6
succeeding calendar month. 7
(4) The fantasy contest service provider's payment shall be accompanied by a return 8
prescribed by the department indicating the amount of tax due for the previous 9
calendar month as well as any other information the de partment shall require 10
through an administrative regulation promulgated in accordance with KRS Chapter 11
13A. 12
(5) Any fantasy contest service provider who violates any provision of this section shall 13
be subject to the uniform civil penalties imposed under KRS 131.180. 14
(6) In every case, any tax not paid on or before the due date shall bear interest at the tax 15
interest rate as defined in KRS 131.010 from the due date until the date of payment. 16
[(7) It is the purpose and intent of the General Assembly to levy t axes on persons 17
engaged in the operations of fantasy contests. It is not the intent of the General 18
Assembly to legalize these activities.] 19
Section 59. 2026 RS HB 757/VO, Section 71, is amended to read as follows: 20
(1) As used in this section: 21
(a) "Consumer" means a: 22
1. Kentucky resident who purchases an event contract through a prediction 23
market; or 24
2. Person who is not a Kentucky resident who purchases an event contract 25
through a prediction market while in Kentucky; 26
(b) "Department" means the Department of Revenue; 27
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(c) "Event contract": 1
1. Means an agreement, contract, transaction, or swap in an excluded 2
commodity based on the occurrence, extent of an occurrence, or 3
contingency other than a change in the price, rate, valu e, or levels of a 4
commodity described in 7 U.S.C. sec. 1a(19)(i), as amended; and 5
2. Does not include: 6
a. Any contract of sale of a commodity for future delivery, or any 7
option on such a contract, executed on or subject to the rules of a 8
designated contract market; or 9
b. Any swap or derivative based on: 10
i. An agricultural commodity; 11
ii. An exempt commodity; or 12
iii. Any excluded commodity not subject to subparagraph 1. of 13
this paragraph, as the terms are defined in the Commodity 14
Exchange Act; 15
(d) "Person" has the same meaning as in KRS 139.010; 16
(e) "Prediction market": 17
1. Means: 18
a. Any physical or electronic platform through which a consumer 19
may buy, sell, or exchange event contracts, whether the market is 20
located in or out of the state; or 21
b. Any platform or system that provides consumers with the ability to 22
open speculative positions on the outcomes of future events; and 23
2. May be a board of trade designated as a contract market by the 24
Commodity Futures Trading Commission; 25
(f) "Prediction market operator": 26
1. Means a board of trade or other person, including any affiliate of the 27
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person, that operates a prediction market; and 1
2. Includes but is not limited to a person that satisfies the requirements of 2
this subsection through the ownership, operati on, or control of a digital 3
distribution service, digital distribution platform, online portal, or 4
application store where a prediction market may be accessed; 5
(g) "Speculative position" means a financial commitment made by a consumer in 6
a prediction market; and 7
(h) "Transaction fee" means: 8
1. The fee charged by the prediction market operator to complete a sale, 9
purchase, or trade of an event contract to a consumer; and 10
2. The amount paid by a consumer to purchase an event contract from a 11
prediction market operator. 12
(2) On and after January 1, 2027, an excise tax is hereby imposed on a prediction 13
market operator at the rate of fourteen and one -quarter percent (14.25%) of the 14
prediction market operator's transaction fees. The accrual method of accounting 15
shall be used for purposes of calculating the amount of tax owed by the prediction 16
market operator under this subsection. 17
(3) The tax imposed by subsection (2) of this section is due and payable monthly and 18
shall be remitted to the department on or before th e twentieth day of the next 19
succeeding calendar month. 20
(4) The prediction market operator's payment shall be accompanied by a return 21
prescribed by the department indicating the amount of tax due for the previous 22
calendar month as well as any other informat ion the department shall require 23
through an administrative regulation promulgated in accordance with KRS Chapter 24
13A. 25
(5) Any prediction market operator who violates any provision of this section shall be 26
subject to the uniform civil penalties imposed under KRS 131.180. 27
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(6) In every case, any tax not paid on or before the due date shall bear interest at the tax 1
interest rate as defined in KRS 131.010 from the due date until the date of payment. 2
[(7) It is the purpose and intent of the General Assembly to le vy taxes on persons 3
engaged in the operations of a prediction market. It is not the intent of the General 4
Assembly to legalize these activities.] 5
Section 60. 2026 RS HB 757/VO, Section 97, is amended to read as follows: 6
As used in KRS 138.210 to 138.448, unless the context requires otherwise: 7
(1) "Accountable loss" means loss or destruction of "received" gasoline or special fuel 8
through wrecking of transportation conveyance, explosion, fire, flood or other 9
casualty loss, or contaminated and returned to storage. The loss shall be reported 10
within thirty (30) days after discovery of the loss to the department in a manner and 11
form prescribed by the department, supported by proper evidence which in the sole 12
judgment of the depa rtment substantiates the alleged loss or contamination and 13
which is confirmed in writing to the reporting dealer by the department. The 14
department may make any investigation deemed necessary to establish the bona 15
fide claim of the loss; 16
(2) "Agricultural p urposes" means purposes directly related to the production of 17
agricultural commodities and the conducting of ordinary activities on the farm; 18
(3) "Annual survey value" means the average of the quarterly survey values for a fiscal 19
year, as determined by the department, based upon surveys taken during the first 20
month of each quarter of the fiscal year; 21
(4) "Average wholesale price" means the weighted average per gallon wholesale price 22
of gasoline, based on the quarterly survey value as determined by the depar tment, 23
and as adjusted by KRS 138.228; 24
(5) "Bulk storage facility" means gasoline or special fuels storage facilities of not less 25
than twenty thousand (20,000) gallons owned or operated at one (1) location by a 26
single owner or operator for the purpose of storing gasoline or special fuels for 27
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resale or delivery to retail outlets or consumers; 1
(6) "Cellulosic ethanol" has the same meaning as in KRS 141.422; 2
(7) "Dealer" means any person who is: 3
(a) Regularly engaged in the business of refining, producing, distilling, 4
manufacturing, blending, or compou nding gasoline or special fuels in this 5
state; 6
(b) Regularly importing gasoline or special fuel, upon which no tax has been 7
paid, into this state for distribution in bulk to others; 8
(c) Distributing gasoline from bulk storage in this state; 9
(d) Regularly e ngaged in the business of distributing gasoline or special fuels 10
from bulk storage facilities primarily to others in arm's-length transactions; 11
(e) In the case of gasoline, receiving or accepting delivery within this state of 12
gasoline for resale within thi s state in amounts of not less than an average of 13
one hundred thousand (100,000) gallons per month during any prior 14
consecutive twelve (12) months' period, when in the opinion of the 15
department, the person has sufficient financial rating and reputation to justify 16
the conclusion that he or she will pay all taxes and comply with all other 17
obligations imposed upon a dealer; or 18
(f) Regularly exporting gasoline or special fuels; 19
(8) "Department" means the Department of Revenue; 20
(9) "Diesel fuel": 21
(a) Means any l iquid other than gasoline that, without further processing or 22
blending, is suitable for use as a fuel in a diesel powered highway vehicle; and 23
(b) Does not include unblended kerosene, No. 5 and No. 6 fuel oils as described 24
in ASTM specification D 396, or F-76 Fuel Naval Distillate MILL-F-166884; 25
(10) "Dyed diesel fuel" means diesel fuel that is required to be dyed under United States 26
Environmental Protection Agency rules for high sulfur diesel fuel, or is dyed under 27
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the Internal Revenue Service rules for lo w sulfur fuel, or pursuant to any other 1
requirements subsequently set by the United States Environmental Protection 2
Agency or the Internal Revenue Service; 3
(11) "Ethanol" has the same meaning as in KRS 141.422; 4
(12) "Ethanol flex fuel" means an ethanol fue l blend of ethanol and gasoline that meets 5
the current ASTM specification D5798; 6
(13) "Financial instrument" means a bond issued by a corporation authorized to do 7
business in Kentucky, a line of credit, or an account with a financial institution 8
maintaining a compensating balance; 9
(14) "Fuel grade ethanol" includes ethanol, cellulosic ethanol, and ethanol flex fuel; 10
(15) "Gasoline": 11
(a) Means all liquid fuels, including liquids ordinarily, practically, and 12
commercially usable in internal combustion engines for the generation of 13
power, and all distillates of and condensates from petroleum, natural gas, coal, 14
coal tar, vegetable ferments, and all other products so usable which are 15
produced, blended, or compounded for the purpose of operating motor 16
vehicles, showing a flash point of one hundred ten (110) degrees Fahrenheit 17
or below, using the Eliott Closed Cup Test, or when tested in a manner 18
approved by the United States Bureau of Mines, are prima facie commercially 19
usable in internal combustion engines; 20
(b) Includes: 21
1. Casing head, absorption, natural gasoline, [fuel grade ethanol, ] and 22
condensates when used without blending as a motor fuel, sold for use in 23
motors direct, or sold to those who blend for their own use; and[, ] 24
2. Fuel grade ethanol; and 25
(c) Does not include propane, butane, or other liquefied petroleum gases; 26
kerosene; cleaner solvent; fuel oil; diesel fuel; crude oil; or casing head, 27
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absorption, natural gasoline, [fuel grade ethanol, ] and condensates when sold 1
to be blended or compounded with ot her less volatile liquids in the 2
manufacture of commercial gasoline for motor fuel; industrial naphthas; 3
rubber solvents; Stoddard solvent; mineral spirits; VM and P naphthas; 4
turpentine substitutes; pentane; hexane; heptane; octane; benzene; benzine; 5
xylol; toluol; aromatic petroleum solvents; alcohol; and liquefied gases which 6
would not exist as liquids at a temperature of sixty (60) degrees Fahrenheit 7
and a pressure of fourteen and seven tenths (14.7) pounds per square inch 8
absolute, unless the products are used wholly or in combination with gasoline 9
as a motor fuel; 10
(16) "Motor vehicle" means any vehicle, machine, or mechanical contrivance propelled 11
by an internal combustion engine and licensed for operation and operated upon the 12
public highways and any trailer or semitrailer attached to or having its front end 13
supported by the motor vehicles; 14
(17) "Public highways" means every way or place generally open to the use of the public 15
as a matter or right for the purpose of vehicular travel, notwithstanding th at they 16
may be temporarily closed or travel thereon restricted for the purpose of 17
construction, maintenance, repair, or reconstruction; 18
(18) "Quarterly survey value": 19
(a) Means a value determined by the department for each calendar quarter of the 20
weighted average per gallon wholesale price of gasoline, determined from 21
information available through independent statistical surveys of gasoline 22
prices or, if requested, from inf ormation furnished by licensed gasoline 23
dealers. The department shall determine, within twenty (20) days following 24
the end of the first month of each calendar quarter, the weighted average of 25
per gallon wholesale selling prices of gasoline for the previous month. That 26
value shall be the quarterly survey value for the beginning of the following 27
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calendar quarter; and 1
(b) Shall be determined exclusive of any federal gasoline tax and any fee on 2
imported oil imposed by the Congress of the United States; 3
(19) "Received," "received gasoline," or "received special fuels" means: 4
(a) 1. Gasoline and special fuels produced, manufactured, or compounded at 5
any refinery in this state or acquired by any dealer and delivered into or 6
stored in refinery, marine, or pipeline t erminal storage facilities in this 7
state shall be deemed to be received when it has been loaded for bulk 8
delivery into tank cars or tank trucks consigned to destinations within 9
this state. 10
2. For the purpose of the proper administration of this chapter an d to 11
prevent the evasion of the tax and to enforce the duty of the dealer to 12
collect the tax, it shall be presumed that all gasoline and special fuel 13
loaded by any licensed dealer within this state into tank cars or tank 14
trucks is consigned to destinations within this state, unless the contrary 15
is established by the dealer, pursuant to administrative regulations 16
prescribed by the department; and 17
(b) 1. Gasoline and special fuels acquired by any dealer in this state, and not 18
delivered into refinery, marine, or pipeline terminal storage facilities, 19
shall be deemed to be received when it has been placed into storage 20
tanks or other containers for use or subject to withdrawal for use, 21
delivery, sale, or other distribution. 22
2. Dealers may sell gasoline or special fuels to licensed bonded dealers in 23
this state in transport truckload, carload, or cargo lots, withdrawing it 24
from refinery, marine, pipeline terminal, or bulk storage tanks, without 25
paying the tax. In these instances, the licensed bonded dealer purchasin g 26
the gasoline or special fuels shall be deemed to have received that fuel at 27
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the time of withdrawal from the seller's storage facility and shall be 1
responsible to the state for the payment of the tax thereon; 2
(20) "Refinery" means any place where gasoline or special fuel is refined, manufactured, 3
compounded, or otherwise prepared for use; 4
(21) "Retail filling station" means any place accessible to general public vehicular traffic 5
where gasoline or special fuel is or may be placed into the fuel supply tank of a 6
licensed motor vehicle; 7
(22) "Special fuels" means and includes all combustible gases and liquids capable of 8
being used for the generation of power in an internal combustion engine to propel 9
vehicles of any kind upon the public highways, including die sel fuel, and dyed 10
diesel fuel used exclusively for nonhighway purposes in off -highway equipment 11
and in nonlicensed motor vehicles, except that it does not include gasoline, aviation 12
jet fuel, kerosene unless used wholly or in combination with special fuel as a motor 13
fuel, or liquefied petroleum gas as defined in KRS 234.100; 14
(23) "Storage" means all gasoline and special fuels produced, refined, distilled, 15
manufactured, blended, or compounded and stored at a refinery storage or delivered 16
by boat at a marine terminal for storage, or delivered by pipeline at a pipeline 17
terminal, delivery station, or tank farm for storage; 18
(24) "Transporter" means any person who transports gasoline or special fuels on which 19
the tax has not been paid or assumed; and 20
(25) "Wholesale floor price" means two dollars and seventeen and seven -tenths cents 21
($2.177) per gallon. 22
Section 61. The Kentucky Cabinet for Economic Development is directed to: 23
(1) Report on the current tax credits and incentives eligible in Kentucky to 24
hyperscale data centers, and data centers. The report shall also include tax credits and 25
incentives in Kentucky's surrounding states relating to hyperscale data centers, and data 26
centers; and 27
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(2) Present the report required in subsection (1) of this section, including any 1
recommendations, to the Legislative Research Commission for referral to the Interim 2
Joint Commit tee on Appropriations and Revenue and the Interim Joint Committee on 3
Economic Development and Workforce Investment by August 1, 2027. 4
Section 62. 26 RS SB 343/GA, Section 1, is amended to read as follows: 5
(1) There is he reby created the Department of Workers' Claims administratively 6
attached to the Office of the Governor, which shall be headed by a commissioner 7
appointed by the Governor and confirmed by the Senate in accordance with Section 8
6 of this Act. 9
(2) The department shall be divided for administrative purposes into the: 10
(a) Office of the Commissioner; 11
(b) Office of General Counsel: 12
(c) Office of Administrative Law Judges; 13
(d) Division of Claims Processing; 14
(e) Division of Security and Compliance; 15
(f) Division of Workers' Compensation Funds; and 16
(g) Division of Specialist and Medical Services. 17
(3) The Office of Administrative Law Judges shall be headed by a chief administrative 18
law judge appointed in accordance with Section 7 of this Act. 19
(4) Each division in the department shall be headed by a director [ appointed by the 20
commissioner with the approval of the Governor in accordance with KRS 12.050]. 21
(5) The Workers' Compensation Board shall be attached to the Depar tment of Workers' 22
Claims for administrative purposes only. 23
Section 63. Notwithstanding any other provision of law to the contrary: 24
(1) The Department of Workers’ Claims shall retain all classified and unclassified 25
positions and employees that the Department of Workers’ Claims had 14 days prior to the 26
transfer from the Education and Labor Cabinet to the Office of the Governor in 27
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accordance with 26 RS SB 343/GA, and each employee shall retain his or her position 1
until the D epartment of Workers’ Claims creates any new positions or abolishes any 2
existing position; and 3
(2) No employee shall suffer any penalty in the transfer from the Education and 4
Labor Cabinet to the Office of the Governor in accordance with 26 RS SB 343/GA. 5
Section 64. 2026 RS HB 757/VO, Section 136, is amended to read as follows: 6
Sections 9, 10, 71, 72, 107, [to 115] and 117 of this Act take effect January 1, 2027. 7
Section 65. 2026 RS HB 757/VO, Section 139, is amended to read as follows: 8
Sections 114 and 115 [Section 128] of this Act shall take effect on July 1, 9
2027[2026]. 10
Section 66. 2026 RS HB 757/VO, Section 140, is amended to read as follows: 11
Whereas funding the operations of state government is an essential part of the 12
Commonwealth's budget, an emergency is declared to exist, and Section 128 of this Act 13
takes effect July 1, 2026, and Sections 18 to 21, 33 to 35, 57 to 70, 73 to 91, 108 to 113, 14
119, 127, and 130 to 133 of this Act take effect upon passage and approval by the 15
Governor or upon its otherwise becoming a law. 16
Section 67. The Cabinet for Economic Development's various incentive 17
programs play a vital role in supporting economic development and job growth 18
throughout the Commonwealth. To ensure companies operating within the 19
Commonwealth's border counties are not negatively impacted by employees residing in 20
adjacent states and to encourage companies operating in adjacent states to hire Kentucky 21
residents, the cabinet is encouraged to conduct a feasibility and impact study on interstate 22
reciprocity between state economic development programming. The study shall at a 23
minimum identify any existing models, identif y the potential economic impacts of such 24
an arrangement between Kentucky and adjacent states, assess the feasibility and cost 25
implications of implementing those models, and provide recommendations. The Cabinet 26
shall collaborate with the Center for Economic and Entrepreneurial Development at 27
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Murray State University to establish the scope of the study. If the cabinet completes such 1
a study, it shall be submitted to the Interim Joint Committee on Economic Development 2
and Workforce Investment by December 1, 2028. 3
Section 68. Sections 40 and 41 of this Act shall apply to estates of decedents 4
who died on or after January 1, 2026. 5
Section 69. Section 60 of this Act takes effect on August 1, 2026. 6
Section 70. Section 53 of this Act takes effect on January 1, 2027. 7
Section 71. Sections 30 to 34 of this Act take effect on July 1, 2027. 8
Section 72. Subsection (5) of Section 44 of this Act shall apply retroactively to 9
require a consolidated local government to only reimburse a fire district for emergency 10
medical responses made on or after July 1, 2025. Subsection (5) of Section 44 of this Act 11
shall also apply retroactively to any matters or litigation that have not been fully and 12
finally adjudicated, or are in the appellate process, or for which time to file an appeal has 13
not lapsed, as of the effective date of Section 44 of this Act. 14
Section 73. Whereas it is critical to ensure a consolidated local government is 15
not required to unnecessarily expend taxpayer funds, an emergency is declared to exist, 16
and Section 54 of this Act takes effect on July 1, 2026, and Sections 36, 44, 51, 64, 65, 17
66, and 71 of this Act take effect upon its passage and approval by the Governor or upon 18
its otherwise becoming a law. 19
Section 74. The following KRS section is repealed: 20
154.32-050 Enhanced incentive counties -- Annual identification and certification 21
or decertification -- Criteria -- Multicounty industrial park projects. 22
Section 75. Whereas areas of Kentucky have been impacted by high 23
unemployment an emergency is declared to exist, and this Act takes effect upon its 24
passage and approval by the Governor or upon its otherwise becoming a law. 25