KRS 148.853: Legislative findings -- Qualifications for incentives -- Incentives available.

(Effective until July 1, 2027)

(1) The General Assembly finds and declares that:

(a) The general welfare and material well -being of the citizens of the

Commonwealth depend in large measure upon the development of tourism in

the Commonwealth;

(b) It is in the best interest of the Commonwealth to provide incentives for the

creation of new tourism attractions and the expansion of existing tourism

attractions within the Commonwealth in order to advance the public purposes

of relieving unemployment by preserving and creating jobs that would not

exist if not for the incentives offered by the authority to approved companies,

and by preserving and creating sources of tax re venues for the support of

public services provided by the Commonwealth;

(c) The authorities granted by KRS 148.851 to 148.860 are proper governmental

and public purposes for which public moneys may be expended; and

(d) That the creation or expansion of tou rism development projects is of

paramount importance mandating that the provisions of KRS 139.536 and

KRS 148.851 to 148.860 be liberally construed and applied in order to

advance public purposes.

(2) To qualify for incentives provided in KRS 139.536 and 1 48.851 to 148.860, the

following requirements shall be met:

(a) For a tourism attraction project:

1. The total eligible costs shall exceed one million dollars ($1,000,000),

except for a tourism attraction project located in a county designated as

a heritage county at the time the eligible company becomes an approved

company as provided in KRS 148.857(6), the total eligible costs shall

exceed five hundred thousand dollars ($500,000);

2. In any year, including the first year of operation, the tourism attraction

project shall be open to the public at least one hundred (100) days; and

3. In any year following the third year of operation, the tourism attraction

project shall attract at least twenty-five percent (25%) of its visitors

from among persons who are not residents of the Commonwealth;

(b) For an entertainment destination center project:

1. The total eligible costs shall exceed five million dollars ($5,000,000);

2. The facility shall c ontain a minimum of two hundred thousand

(200,000) square feet of building space adjacent or complementary to an

existing tourism attraction project or a major convention facility;

3. The incentives shall be dedicated to a public infrastructure purpose tha t

shall relate to the entertainment destination center project;

4. In any year, including the first year of operation, the entertainment

destination center project shall:

a. Be open to the public at least one hundred (100) days per year;

b. Maintain at least one (1) major theme restaurant and at least three

(3) additional entertainment venues, including but not limited to

live entertainment, multiplex theaters, large-format theater, motion

simulators, family entertainment centers, concert halls, virtual

reality or other interactive games, museums, exhibitions, or other

cultural and leisure-time activities; and

c. Maintain a minimum occupancy of sixty percent (60%) of the total

gross area available for lease with entertainment and food and

drink options not i ncluding the retail sale of tangible personal

property; and

5. In any year following the third year of operation, the entertainment

destination center project shall attract at least twenty -five percent (25%)

of its visitors from among persons who are not r esidents of the

Commonwealth;

(c) For a theme restaurant destination attraction project:

1. The total eligible costs shall exceed five million dollars ($5,000,000);

2. In any year, including the first year of operation, the attraction shall:

a. Be open to the public at least three hundred (300) days per year

and for at least eight (8) hours per day; and

b. Generate no more than fifty percent (50%) of its revenue through

the sale of alcoholic beverages;

3. In any year following the third year of operation, t he theme restaurant

destination attraction project shall attract a minimum of fifty percent

(50%) of its visitors from among persons who are not residents of the

Commonwealth; and

4. The theme restaurant destination attraction project shall:

a. At the time of final approval, offer a unique dining experience that

is not available in the Commonwealth within a one hundred (100)

mile radius of the attraction;

b. In any year, including the first year of operation, maintain seating

capacity of four hundred fifty (450) guests and offer live music or

live musical and theatrical entertainment during the peak business

hours that the facility is in operation and open to the public; or

c. Within three (3) years of the completion date, the attraction shall

obtain a top t wo (2) tier rating by a nationally accredited service

and shall maintain a top two (2) tier rating through the term of the

agreement;

(d) For a lodging facility project defined in KRS 148.851(15)(a):

1. a. The eligible costs shall exceed five million dolla rs ($5,000,000)

unless the provisions of subdivision b. of this subparagraph apply.

b. i. If the lodging facility is an integral part of a major

convention or sports facility, the eligible costs shall exceed

six million dollars ($6,000,000); and

ii. If the lodging facility includes five hundred (500) or more

guest rooms, the eligible costs shall exceed ten million

dollars ($10,000,000); and

2. In any year, including the first year of operation, the lodging facility

shall:

a. Be open to the public at least one hundred (100) days; and

b. Attract at least twenty -five percent (25%) of its visitors from

among persons who are not residents of the Commonwealth;

(e) For a lodging facility project defined in KRS 148.851(15)(b):

1. The eligible costs shall excee d one hundred million dollars

($100,000,000); and

2. The lodging facility shall:

a. Be open to the public at least one hundred (100) days each year,

including the first year of operation; and

b. In any year following the third year of operation, attract a

minimum of twenty -five percent (25%) of its overnight visitors

from among persons who are not residents of the Commonwealth;

(f) Any tourism development project shall not be eligible for incentives if it

includes material determined to be lewd, offensive, or deemed to have a

negative impact on the tourism industry in the Commonwealth; and

(g) An expansion of any tourism development project shall in all cases be treated

as a new stand-alone project.

(3) (a) The incentives offered to an approved company under the Kentucky Tourism

Development Act may include a sales tax incentive based on the Kentucky

sales tax imposed on sales generated by or arising at the tourism development

project.

(b) 1. For a tourism development project other than a lodging facility proj ect

described in subparagraph 4. or 5. of this paragraph:

a. A sales tax incentive shall be allowed to an approved company

over a period of ten (10) years, except as provided in

subparagraphs 7. and 8. of this paragraph; and

b. The sales tax incentive shal l not exceed the lesser of the total

amount of the sales tax liability of the approved company and its

lessees or a percentage of the approved costs as specified by the

agreement, not to exceed twenty-five percent (25%).

2. For projects approved according to the application period established

under KRS 148.8531, a tourism attraction project located in a heritage

county at the time the eligible company becomes an approved company

as provided in KRS 148.857(6):

a. A sales tax incentive shall be allowed to the approved company

over a period of ten (10) years; and

b. The sales tax incentive shall not exceed the lesser of the total

amount of the sales tax liability of the approved company and its

lessees or a percentage of the approved costs as specified by the

agreement, not to exceed thirty percent (30%).

3. For applications considered after June 27, 2025, including projects

related to property to which the title passed from a seller to a buyer on

or after March 1, 2025, a tourism attraction project located in a heritage

county with a population equal to or less than twenty thousand (20,000)

based on the most recent decennial census at the time the eligible

company becomes an approved company as provided in KRS

148.857(6):

a. A sales tax incentive shall be allowe d to the approved company

over a period of twenty (20) years; and

b. The sales tax incentive shall not exceed the lesser of the total

amount of the sales tax liability of the approved company and its

lessees or a percentage of the approved costs as specifi ed by the

agreement, not to exceed fifty percent (50%).

4. For a lodging facility project described in KRS 148.851(15)(a)5. or 6.:

a. A sales tax incentive shall be allowed to the approved company

over a period of twenty (20) years; and

b. The sales tax incentive shall not exceed the lesser of total amount

of the sales tax liability of the approved company and its lessees or

a percentage of the approved costs as specified by the agreement,

not to exceed fifty percent (50%).

5. For a lodging facility project described in KRS 148.851(15)(b), a sales

tax incentive that shall:

a. Be allowed to the approved company over a period of twenty (20)

years; and

b. Not exceed the lesser of the total amount of sales tax liability of

the approved company and its lessees or a percentage of the

approved costs as specified by the agreement, not to exceed fifty

percent (50%).

6. Any unused incentives from a previous year may be carried forward to

any succeeding year during the term of the agreement until the entire

specified percentage of the approved costs has been received through

sales tax incentives.

7. If the approved company is an entertainment destinat ion center that has

dedicated at least thirty million dollars ($30,000,000) of the incentives

provided under the agreement to a public infrastructure purpose, the

agreement may be amended to extend the term of the agreement up to

two (2) additional years if the approved company agrees to:

a. Reinvest in the original entertainment destination project one

hundred percent (100%) of any incentives received during the

extension that were outstanding at the end of the original term of

the agreement; and

b. Report to the authority at the end of each fiscal year the amount of

incentives received during the extension and how the incentives

were reinvested in the original entertainment destination project.

8. The term of a tourism development agreement entered into wi th a

tourism attraction project that was in effect on January 1, 2020, shall be

extended for one (1) year if the tourism attraction project:

a. Has historically been open to the public on a seasonal basis

consisting of less than six (6) months;

b. Has previously met the requirement of being open to the public at

least one hundred (100) days during the entire term of the tourism

development agreement as required under subsection (2)(a)2. of

this section;

c. Failed to be open to the public at least one hundre d (100) days

during the calendar year 2020 solely as a result of complying with

one (1) or more executive orders issued by the Governor under the

authority of KRS 39A.090 that prevented the tourism attraction

project from being open to the public for at le ast one hundred

(100) days during its normal operating season; and

d. Applied for a sales tax incentive related to the calendar year 2020

operating season and was denied the sales tax incentive solely on

the basis that the tourism attraction project was no t open to the

public for at least one hundred (100) days in calendar year 2020.

Effective: April 27, 2026