KRS 154.22-010: Definitions for KRS 154.22-010 to 154.22-080.

The following words and terms as used in KRS 154.22-010 to 154.22-080, unless

the context clearly indicates a different meaning, shall have the following meanings:

(1) "Activation date" means a date selected by an approved company in the tax

incentive agreement at any time within a two (2) year period after the date of

final approval of the tax incentive agreement by the authority;

(2) "Affiliate" means the following:

(a) Members of a family, including only brothers and sisters of the whole or

half blood, spouse, ancestors, and lineal descendants of an individual;

(b) An individual, and a corporation more than fifty percent (50%) in value of

the outstanding stock of which is owned, directly or indirectly, by or for

that individual;

(c) An individual, and a limited liability company of which more than fifty

percent (50%) of the capital interest or profits are owned or controlled,

directly or indirectly, by or for that individual;

(d) Two (2) corporations which are members of the same controlled group,

which includes and is limited to:

1. One (1) or more chains of corporations connected through stock

ownership with a common parent corporation, if:

a. Stock possessing more than fifty percent (50%) of the total

combined voting power of all classes of stock entitled to vote or

more than fifty percent (50%) of the total value of shares of all

classes of stock of each of the corporations, except the

common parent corporation, is owned by one (1) or more of

the other corporations; and

b. The common parent corporation owns stock possessing more

than fifty percent (50%) of the total combined voting power of

all classes of stock entitled to vote or more than fifty percent

(50%) of the total value of shares of all classes of stock of at

least one (1) of the other corporations, excluding, in computing

the voting power or value, stock owned directly by the other

corporations; or

2. Two (2) or more corporations, if five (5) or fewer persons who are

individuals, estates, or trusts own stock possessing more than fifty

percent (50%) of the total combined voting power of all classes of

stock entitled to vote or more than fifty percent (50%) of the total

value of shares of all classes of stock of each corporation, taking

into account the stock ownership of each person only to the extent

the stock ownership is identical with respect to each corporation;

(e) A grantor and a fiduciary of any trust;

(f) A fiduciary of a trust and a fiduciary of another trust, if the same person is

a grantor of both trusts;

(g) A fiduciary of a trust and a beneficiary of that trust;

(h) A fiduciary of a trust and a beneficiary of another trust, if the same person

is a grantor of both trusts;

(i) A fiduciary of a trust and a corporation more than fifty percent (50%) in

value of the outstanding stock of which is owned, directly or indirectly, by

or for the trust or by or for a person who is a grantor of the trust;

(j) A fiduciary of a trust and a limited liability company more than fifty percent

(50%) of the capital interest, or the interest in profits, of which is owned

directly or indirectly, by or for the trust or by or for a person who is a

grantor of the trust;

(k) A corporation, a partnership, and a limited partnership, if the same

persons own:

1. More than fifty percent (50%) in value of the outstanding stock of the

corporation; and

2. More than fifty percent (50%) of the capital interest, or the profits

interest, in the partnership or limited partnership;

(l) A corporation and a limited liability company, if the same persons own:

1. More than fifty percent (50%) in value of the outstanding stock of the

corporation; and

2. More than fifty percent (50%) of the capital interest or the profits in

the limited liability company;

(m) A partnership, limited partnership, and a limited liability company, if the

same persons own:

1. More than fifty percent (50%) of the capital interest or profits in the

partnership or limited partnership; and

2. More than fifty percent (50%) of the capital interest or the profits in

the limited liability company;

(n) An S corporation and another S corporation, if the same persons own

more than fifty percent (50%) in value of the outstanding stock of each

corporation, S corporation designation being the same as that designation

under the Internal Revenue Code of 1986, as amended; or

(o) An S corporation and a C corporation, if the same persons own more

than fifty percent (50%) in value of the outstanding stock of each

corporation; S and C corporation designations being the same as those

designations under the Internal Revenue Code of 1986, as amended;

(3) "Agribusiness" means any activity involving the processing of raw agricultural

products, including timber, or the providing of value-added functions with

regard to raw agricultural products;

(4) "Approved company" means any eligible company seeking to locate an

economic development project in a qualified county, which eligible company is

approved by the authority pursuant to KRS 154.22-010 to 154.22-080;

(5) "Approved costs" means:

(a) Obligations incurred for labor and to contractors, subcontractors, builders,

and materialmen in connection with the acquisition, construction,

installation, equipping, and rehabilitation of an economic development

project;

(b) The cost of acquiring land or rights in land and any cost incidental

thereto, including recording fees;

(c) The cost of contract bonds and of insurance of all kinds that may be

required or necessary during the course of acquisition, construction,

installation, equipping, and rehabilitation of an economic development

project which is not paid by the contractor or contractors or otherwise

provided for;

(d) All costs of architectural and engineering services, including test borings,

surveys, estimates, plans and specifications, preliminary investigations,

and supervision of construction, as well as for the performance of all the

duties required by or consequent upon the acquisition, construction,

installation, equipping, and rehabilitation of an economic development

project;

(e) All costs which shall be required to be paid under the terms of any

contract or contracts for the acquisition, construction, installation,

equipping, and rehabilitation of an economic development project; and

(f) All other costs of a nature comparable to those described above;

(6) "Assessment" means the job development assessment fee authorized by KRS

154.22-010 to 154.22-080;

(7) "Authority" means the Kentucky Economic Development Finance Authority as

created in KRS 154.20-010;

(8) "Average hourly wage" means the wage and employment data published by

the Department of Workforce Development in the Education and Labor Cabinet

collectively translated into wages per hour based on a two thousand eighty

(2,080) hour work year for the following sectors:

(a) Manufacturing;

(b) Transportation, communications, and public utilities;

(c) Wholesale and retail trade;

(d) Finance, insurance, and real estate; and

(e) Services;

(9) "Commonwealth" means the Commonwealth of Kentucky;

(10)(a) "Economic development project" means and includes:

1. The acquisition of ownership in any real estate in a qualified county

by the authority, the approved manufacturing or agribusiness

company, or its affiliate;

2. The present ownership of real estate in a qualified county by the

approved manufacturing or agribusiness company or its affiliate;

3. The acquisition or present ownership of improvements or facilities,

as described in paragraph (b) of this subsection, on land which is

possessed or is to be possessed by the approved manufacturing or

agribusiness company pursuant to a ground lease having a term of

sixty (60) years or more;

4. The new construction of an electric generation facility; and

5. The legal possession of facilities by an approved company or its

affiliate pursuant to a lease having a term equal to or greater than

fifteen (15) years with a third-party entity, negotiated at arm's length,

if the facility will be used by the approved company to conduct the

approved activity for which the inducement has been granted. An

economic development project qualifying under this subparagraph

shall only be eligible for credits against equipment and costs related

to installation of equipment and for purposes of the tax credits

provided under the provisions of KRS 154.22-010 to 154.22-080

only to the extent of twenty thousand dollars ($20,000) per job

created by and maintained at the economic development project.

Notwithstanding KRS 154.22-050(8) and 154.22-060, an economic

development project qualifying under this subparagraph shall be

eligible only for the aggregate assessments pursuant to KRS

154.22-070 withheld by the approved company each year and shall

not be eligible for credit against Kentucky income tax and limited

liability entity tax.

(b) For purposes of paragraph (a)1. and 2. of this subsection, ownership of

real estate shall only include fee ownership of real estate and possession

of real estate pursuant to a capital lease as determined in accordance

with Statement of Financial Accounting Standards No. 13, Accounting for

Leases, issued by the Financial Accounting Standards Board, November

1976. With respect to paragraph (a)1., 2., and 3. of this subsection or this

paragraph, the construction, installation, equipping, and rehabilitation of

improvements, including fixtures and equipment, and facilities necessary

or desirable for improvement of the real estate, including surveys; site

tests and inspections; subsurface site work; excavation; removal of

structures, roadways, cemeteries, and other surface obstructions; filling,

grading, and provision of drainage, storm water retention, installation of

utilities such as water, sewer, sewage treatment, gas, electricity,

communications, and similar facilities; off-site construction of utility

extensions to the boundaries of the real estate; and the acquisition,

installation, equipping, and rehabilitation of manufacturing facilities on the

real estate, for use and occupancy by the approved company or its

affiliates for manufacturing purposes, electric generation, or for

agribusiness purposes. Pursuant to paragraph (a)3. and 5. of this

subsection, an economic development project shall not include lease

payments made pursuant to a ground lease for purposes of the tax credits

provided under the provisions of KRS 154.22-010 to 154.22-080;

(11) "Electric generation" means the generation of electricity for resale by means of

combusting at least fifty percent (50%) of the total fuel used to generate

electricity from coal or from gas derived from coal;

(12) "Eligible company" means any corporation, limited liability company,

partnership, limited partnership, sole proprietorship, business trust, or any other

entity engaged in manufacturing, electric generation, or in agribusiness;

(13) "Employee benefits" means nonmandated costs paid by an eligible company

for its full-time employees for health insurance, life insurance, dental insurance,

vision insurance, defined benefits, 401(k), or similar plans;

(14) "Final approval" means the action taken by the authority authorizing the eligible

company to receive inducements under this subchapter;

(15) "Full-time employee" means a person employed by an approved company for a

minimum of thirty-five (35) hours per week and subject to the state income tax

imposed by KRS 141.020;

(16) "Inducements" means the assessment and the tax credits allowed by KRS

154.22-060;

(17) "Manufacturing" means any activity involving the manufacturing, processing,

assembling, or production of any property, including the processing resulting in

a change in the conditions of the property and any activity related to it, together

with the storage, warehousing, distribution, and related office facilities;

however, "manufacturing" shall not include mining, coal or mineral processing,

or extraction of minerals;

(18) "Preliminary approval" means the action taken by the authority conditioning

final approval by the authority upon satisfaction by the eligible company of the

requirements under this subchapter;

(19) "Qualified county" means any county certified as such by the authority

pursuant to KRS 154.22-010 to 154.22-080;

(20) "Revenues" shall not be considered state funds;

(21) "State agency" shall have the meaning assigned to the term in KRS 56.440(8);

(22) "Tax incentive agreement" means the agreement entered into, pursuant to

KRS 154.22-050, between the authority and an approved company with

respect to an economic development project;

(23) "Kentucky gross receipts" means "Kentucky gross receipts" as defined in KRS

141.0401; and

(24) "Kentucky gross profits" means "Kentucky gross profits" as defined in KRS

141.0401.