AN ACT relating to economic development.

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AN ACT relating to economic development. 1
Be it enacted by the General Assembly of the Commonwealth of Kentucky: 2
Section 1. KRS 148.853 is amended to read as follows: 3
(1) The General Assembly finds and declares that: 4
(a) The general welfare and material well -being of the citizens of the 5
Commonwealth depend in large measure upon the development of tourism in 6
the Commonwealth; 7
(b) It is in the best interest of the Commonwealth to provide incentives for the 8
creation of new tourism attractions and the expansion of existing tourism 9
attractions within the Commonwealth in order to advance the public purposes 10
of rel ieving unemployment by preserving and creating jobs that would not 11
exist if not for the incentives offered by the authority to approved companies, 12
and by preserving and creating sources of tax revenues for the support of 13
public services provided by the Commonwealth; 14
(c) The authorities granted by KRS 148.851 to 148.860 are proper governmental 15
and public purposes for which public moneys may be expended; and 16
(d) That the creation or expansion of tourism development projects is of 17
paramount importance mandating that the provisions of KRS 139.536 and 18
KRS 148.851 to 148.860 be liberally construed and applied in order to 19
advance public purposes. 20
(2) To qualify for inc entives provided in KRS 139.536 and 148.851 to 148.860, the 21
following requirements shall be met: 22
(a) For a tourism attraction project: 23
1. The total eligible costs shall exceed one million dollars ($1,000,000), 24
except for a tourism attraction project locate d in a county designated as 25
an enhanced incentive county at the time the eligible company becomes 26
an approved company as provided in KRS 148.857(6), the total eligible 27
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costs shall exceed five hundred thousand dollars ($500,000); 1
2. In any year, including t he first year of operation, the tourism attraction 2
project shall be open to the public at least one hundred (100) days; and 3
3. In any year following the third year of operation, the tourism attraction 4
project shall attract at least twenty -five percent (25% ) of its visitors 5
from among persons who are not residents of the Commonwealth; 6
(b) For an entertainment destination center project: 7
1. The total eligible costs shall exceed five million dollars ($5,000,000); 8
2. The facility shall contain a minimum of two hundred thousand 9
(200,000) square feet of building space adjacent or complementary to an 10
existing tourism attraction project or a major convention facility; 11
3. The incentives shall be dedicated to a public infrastructure purpose that 12
shall relate to the entertainment destination center project; 13
4. In any year, including the first year of operation, the entertainment 14
destination center project shall: 15
a. Be open to the public at least one hundred (100) days per year; 16
b. Maintain at least one (1) major theme r estaurant and at least three 17
(3) additional entertainment venues, including but not limited to 18
live entertainment, multiplex theaters, large-format theater, motion 19
simulators, family entertainment centers, concert halls, virtual 20
reality or other interactiv e games, museums, exhibitions, or other 21
cultural and leisure-time activities; and 22
c. Maintain a minimum occupancy of sixty percent (60%) of the total 23
gross area available for lease with entertainment and food and 24
drink options not including the retail sale of tangible personal 25
property; and 26
5. In any year following the third year of operation, the entertainment 27
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destination center project shall attract at least twenty -five percent (25%) 1
of its visitors from among persons who are not residents of the 2
Commonwealth; 3
(c) For a theme restaurant destination attraction project: 4
1. The total eligible costs shall exceed five million dollars ($5,000,000); 5
2. In any year, including the first year of operation, the attraction shall: 6
a. Be open to the public at least thre e hundred (300) days per year 7
and for at least eight (8) hours per day; and 8
b. Generate no more than fifty percent (50%) of its revenue through 9
the sale of alcoholic beverages; 10
3. In any year following the third year of operation, the theme restaurant 11
destination attraction project shall attract a minimum of fifty percent 12
(50%) of its visitors from among persons who are not residents of the 13
Commonwealth; and 14
4. The theme restaurant destination attraction project shall: 15
a. At the time of final approval, offer a unique dining experience that 16
is not available in the Commonwealth within a one hundred (100) 17
mile radius of the attraction; 18
b. In any year, including the first year of operation, maintain seating 19
capacity of four hundred fifty (450) guests and offer l ive music or 20
live musical and theatrical entertainment during the peak business 21
hours that the facility is in operation and open to the public; or 22
c. Within three (3) years of the completion date, the attraction shall 23
obtain a top two (2) tier rating by a nationally accredited service 24
and shall maintain a top two (2) tier rating through the term of the 25
agreement; 26
(d) For a lodging facility project defined in KRS 148.851(15)(a): 27
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1. a. The eligible costs shall exceed five million dollars ($5,000,000) 1
unless the provisions of subdivision b. of this subparagraph apply. 2
b. i. If the lodging facility is an integral part of a major 3
convention or sports facility , the eligible costs shall exceed 4
six million dollars ($6,000,000); and 5
ii. If the lodging facility includes five hundred (500) or more 6
guest rooms, the eligible costs shall exceed ten million 7
dollars ($10,000,000); and 8
2. In any year, including the first year of operation, the lodging facility 9
shall: 10
a. Be open to the public at least one hundred (100) days; and 11
b. Attract at least twenty -five percent (25%) of its visitors from 12
among persons who are not residents of the Commonwealth; 13
(e) For a lodging facility project defined in KRS 148.851(15)(b): 14
1. The eligible costs shall exceed one hundred million dollars 15
($100,000,000); and 16
2. The lodging facility shall: 17
a. Be open to the public at least one hundred (100) days each year, 18
including the first year of operation; and 19
b. In any year following the third year of operation, attract a 20
minimum of twenty -five percent (25%) of its overnight visitors 21
from among persons who are not residents of the Commonwealth; 22
(f) Any tourism development project shall not be eligib le for incentives if it 23
includes material determined to be lewd, offensive, or deemed to have a 24
negative impact on the tourism industry in the Commonwealth; and 25
(g) An expansion of any tourism development project shall in all cases be treated 26
as a new stand-alone project. 27
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(3) (a) The incentives offered to an approved company under the Kentucky Tourism 1
Development Act may include a sales tax incentive based on the Kentucky 2
sales tax imposed on sales generated by or arising at the tourism development 3
project. 4
(b) 1. For a tourism development project other than a lodging facility project 5
described in subparagraph 4. or 5. of this paragraph: 6
a. A sales tax incentive shall be allowed to an approved company 7
over a period of ten (10) years, except as provided in 8
subparagraphs 7. and 8. of this paragraph; and 9
b. The sales tax incentive shall not exceed the lesser of the total 10
amount of the sales tax liability of the approved company and its 11
lessees or a percentage of the approved costs as specified by the 12
agreement, not to exceed twenty-five percent (25%). 13
2. For projects approved according to the application period established 14
under KRS 148.8531, a tourism attraction project located in an enhanced 15
incentive county at the time the eligible company becomes an approved 16
company as provided in KRS 148.857(6): 17
a. A sales tax incentive shall be allowed to the approved company 18
over a period of ten (10) years; and 19
b. The sales tax incentive shall not exceed the lesser of the total 20
amount of the sales tax liability of the appro ved company and its 21
lessees or a percentage of the approved costs as specified by the 22
agreement, not to exceed thirty percent (30%). 23
3. For applications considered after June 27, 2025, including projects 24
related to property to which the title passed from a seller to a buyer on 25
or after March 1, 2025, a tourism attraction project located in an 26
enhanced incentive county with a population equal to or less than twenty 27
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thousand (20,000) based on the most recent decennial census at the time 1
the eligible company becomes an approved company as provided in 2
KRS 148.857(6): 3
a. A sales tax incentive shall be allowed to the approved company 4
over a period of twenty (20) years; 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 fifty percent (50%). 9
4. For a lodging facility project described in KRS 148.851(15)(a)5. or 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 total amount 13
of the sales tax liability of the approved company and its lessees or 14
a percentage of the approved costs as specified by the agreement, 15
not to exceed fifty percent (50%). 16
5. For a lodging facility project described in KRS 148.851(15)(b), a sa les 17
tax incentive that shall: 18
a. Be allowed to the approved company over a period of twenty (20) 19
years; and 20
b. Not exceed the lesser of the total amount of sales tax liability of 21
the approved company and its lessees or a percentage of the 22
approved costs as specified by the agreement, not to exceed fifty 23
percent (50%). 24
6. Any unused incentives from a previous year may be carried forward to 25
any succeeding year during the term of the agreement until the entire 26
specified percentage of the approved costs has bee n received through 27
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sales tax incentives. 1
7. If the approved company is an entertainment destination center that has 2
dedicated at least thirty million dollars ($30,000,000) of the incentives 3
provided under the agreement to a public infrastructure purpose, t he 4
agreement may be amended to extend the term of the agreement up to 5
two (2) additional years if the approved company agrees to: 6
a. Reinvest in the original entertainment destination project one 7
hundred percent (100%) of any incentives received during the 8
extension that were outstanding at the end of the original term of 9
the agreement; and 10
b. Report to the authority at the end of each fiscal year the amount of 11
incentives received during the extension and how the incentives 12
were reinvested in the original entertainment destination project. 13
8. The term of a tourism development agreement entered into with a 14
tourism attraction project that was in effect on January 1, 2020, shall be 15
extended for one (1) year if the tourism attraction project: 16
a. Has historically been open to the public on a seasonal basis 17
consisting of less than nine (9)[six (6)] months; 18
b. Has previously met the requirement of being open to the public at 19
least one hundred (100) days during the entire term of the tourism 20
development agreement as required under subsection (2)(a)2. of 21
this section; 22
c. Failed to be open to the public at least one hundred (100) days 23
during the calendar year 2020 solely as a result of complying with 24
one (1) or more executive orders issued by the Governor under the 25
authority of KRS 39A.090 that prevented the tourism attraction 26
project from being open to the public for at least one hundred 27
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(100) days during its normal operating season; and 1
d. Applied for a sales tax incentive related to the calendar year 2020 2
operating season and was denied the sales tax incentive solely on 3
the basis that the tourism attraction project was not open to the 4
public for at least one hundred (100) days in calendar year 2020. 5