KRS 154.27-010: Definitions for subchapter. (Effective July 1, 2021)

As used in this subchapter:

(1) "Activation date" means the date on which an approved company begins

incurring recoverable costs or engaging in recoverable activity pursuant to the

tax incentive agreement. The activation date shall be set forth in the tax

incentive agreement and shall be a date within five (5) years of the date of final

approval of the tax incentive agreement. The authority may extend the five (5)

year period to no more than seven (7) years upon written application for an

extension by the approved company. To implement the activation date, the

approved company shall notify the authority of its intent to activate the tax

incentives authorized in the tax incentive agreement. The activation date shall

apply to all incentives included in the tax incentive agreement regardless of

whether the approved company has met the requirements to receive all

incentives at that time. If the approved company does not implement the

activation date before the date established in the tax incentive agreement, the

activation date shall be the date established in the tax incentive agreement;

(2) "Affiliate" has the same meaning as in KRS 154.22-010;

(3) (a) "Alternative fuel facility" means a facility located in Kentucky that is newly

constructed on or after August 30, 2007, or an existing facility located in

Kentucky that is retrofitted or upgraded on or after August 30, 2007, and

that, after the new construction, retrofit, or upgrade, primarily produces for

sale alternative transportation fuels. For a retrofit of an existing facility, the

new modification or addition within the facility shall primarily produce

alternative transportation fuel for sale.

(b) The alternative fuel facility may produce electricity as a by-product if the

primary purpose for which the facility is constructed, retrofitted, or

upgraded, and the primary function of the facility remains the production

and sale of alternative transportation fuels;

(4) "Alternative transportation fuels" has the same meaning as in KRS 152.715;

(5) "Approved company" means a corporation, limited liability company,

partnership, registered limited liability partnership, sole proprietorship, business

trust, or any other entity approved for incentives for an eligible project;

(6) "Authority" means the Kentucky Economic Development Finance Authority

established by KRS 154.20-010;

(7) "Base amount" means the tons of coal, thousand (1000) cubic foot units (Mcf)

of natural gas, or gallons of natural gas liquids purchased and used or severed

and used by the approved company as feedstock for an eligible project during

the twelve (12) months prior to the month in which the approved company first

begins receiving incentives under KRS 143.024 or 143A.025, and 154.27-060,

that were subject to the tax imposed by KRS 143.020 or 143A.020;

(8) "Blockchain technology" or "blockchain" means shared or distributed data

structures or digital ledgers governed by consensus protocols and maintained

by peer-to-peer networks that:

(a) Store digital transactions; and

(b) Verify and secure transactions cryptographically;

(9) "Biomass resources" has the same meaning as in KRS 152.715;

(10)(a) "Capital investment" means:

1. Obligations incurred for labor and to contractors, subcontractors,

builders, and materialmen in connection with the acquisition,

construction, installation, equipping, upgrading, or retrofitting of an

eligible project;

2. The cost of acquiring land or rights in land and any cost incident

thereto, including recording fees;

3. 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, upgrading, or retrofitting of an eligible project

which is not paid by the contractor or otherwise provided;

4. All costs of architectural and engineering services, including test

borings, surveys, estimates, plans, specifications, preliminary

investigations, supervision of construction, and the performance of

all the duties required by or consequent upon the acquisition,

construction, installation, equipping, upgrading, or retrofitting of an

eligible project;

5. All costs required to be paid under the terms of any contract for the

acquisition, construction, installation, equipping, upgrading, or

retrofitting of an eligible project; and

6. All other costs of a nature comparable to those described in this

subsection.

(b) "Capital investment" does not include costs described in paragraph (a) of

this subsection that are paid for with funds received from the federal

government or that are reimbursed by the federal government;

(11) "Carbon capture ready" means planning for or anticipating capture of carbon

dioxide in a manner to facilitate continued operation of the facility in compliance

with applicable federal requirements;

(12) "Carbon dioxide transmission pipeline" means the in-state portion of a pipeline,

including appurtenant facilities, property rights, and easements, that is used

exclusively for the purpose of transporting carbon dioxide to a point of sale,

storage, or other carbon management applications;

(13) "Center for Applied Energy Research" means the University of Kentucky

Center for Applied Energy Research;

(14) "Commercial mining of cryptocurrency" means the process through which

blockchain technology is used to mine cryptocurrency at a cryptocurrency

facility, and includes the process through which blockchain transactions are

verified and accepted by adding the transactions to a blockchain ledger, which

involves solving complex mathematical cryptographic problems associated with

a block containing transaction data;

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

(16) "Construction period" means the period beginning with the activation date of

the eligible project and ending on a date set forth in the tax incentive

agreement, which shall be no later than five (5) years from the activation date;

(17) "Consensus protocol" means a set of rules and procedures that control how

and when blockchain transactions are verified, validated, recorded, and

recognized;

(18) "Cryptocurrency" means a type of virtual currency that utilizes blockchain

technology and that:

(a) Can be digitally traded between users; or

(b) Can be converted or exchanged for legal tender;

(19) "Cryptocurrency facility" means a facility located in the Commonwealth that is

utilized in the commercial mining of cryptocurrency or in hosting persons

engaged in the commercial mining of cryptocurrency through utilization of the

facility's infrastructure, including servers and network hardware powered by

Internet bandwidth, electricity, and other services generally required for such

mining operations;

(20) "Department" means the Department of Revenue;

(21) "Eligible project" means:

(a) An alternative fuel facility or a gasification facility meeting the investment

requirements of KRS 154.27-020;

(b) An energy-efficient alternative fuel facility meeting the investment

requirements of KRS 154.27-020;

(c) A renewable energy facility meeting the investment requirements of KRS

154.27-020;

(d) A carbon dioxide transmission pipeline meeting the investment

requirements of KRS 154.27-020; or

(e) A cryptocurrency facility meeting the investment requirements of KRS

154.27-20;

(22) "Energy-efficient alternative fuel facility" means a facility located in Kentucky

that is newly constructed on or after August 30, 2010, or an existing facility

located in Kentucky that is retrofitted or upgraded on or after August 30, 2010,

and that, after the new construction, retrofit, or upgrade, will produce for sale

energy-efficient alternative fuels. For a retrofit of an existing facility, the new

modification or addition within the facility shall produce for sale energy-efficient

alternative fuels;

(23) "Energy-efficient alternative fuels" means homogeneous fuels that:

(a) Are produced from processes designed to densify feedstock coal, waste

coal, or biomass resources; and

(b) Have an energy content that is greater than the feedstock coal, waste

coal, or biomass resource;

(24) "Estimated labor component" means the projected percentage of the total

capital investment attributable to labor;

(25)(a) "Facility" means a single location within the Commonwealth at which

machinery and equipment are used:

1. In a manufacturing process that transforms raw materials into a

product with commercial value; or

2. In the commercial mining of cryptocurrency or in hosting persons

engaged in the commercial mining of cryptocurrency.

(b) The facility shall include the physical plant structure where the

manufacturing process occurs or where the commercial mining of

cryptocurrency occurs and machinery and equipment within the physical

plant structure.

(c) The facility may include:

1. On-site machinery and equipment used exclusively for processing

coal or other raw materials for use in the manufacturing process at

the facility;

2. For an alternative fuel facility or gasification facility, on-site power

station operations, if those operations are primarily used to produce

electricity for the facility;

3. On-site refining operations, if those operations are used exclusively

to refine and blend fuels produced by the facility; and

4. The in-state portion of a pipeline, including appurtenant facilities,

property rights, and easements, if the exclusive purpose of the

pipeline is to transport carbon dioxide from the facility to a point of

sale, storage, or other carbon management applications.

(d) "Facility" shall not include any mining operations, or drilling and

production operations for natural gas, unless such coal, natural resource,

or natural gas operations are being used for purposes of, or are hosting,

the commercial mining of cryptocurrency, in which case such operations

shall be a facility;

(26) "Gasification process" means a process that converts any carbon-containing

material into a synthesis gas composed primarily of carbon monoxide and

hydrogen;

(27)(a) "Gasification facility" means a facility located in Kentucky that is newly

constructed on or after August 30, 2007, or an existing facility located in

Kentucky that is retrofitted or upgraded on or after August 30, 2007, and

that, after the new construction, retrofit, or upgrade, primarily produces for

sale:

1. Alternative transportation fuels;

2. Synthetic natural gas;

3. Chemicals;

4. Chemical feedstocks; or

5. Liquid fuels;

from coal, waste coal, coal-processing waste, or biomass resources,

through a gasification process. For a retrofit of an existing facility, the new

modification or addition within the facility shall primarily produce one (1) or

more of the products set forth in this paragraph.

(b) The gasification facility may produce electricity as a by-product if the

primary purpose for which the facility is constructed, retrofitted, or

upgraded, and the primary function of the facility remains the production

and sale of alternative transportation fuels, synthetic natural gas,

chemicals, chemical feedstocks, or liquid fuels;

(28) "Kentucky gross profits" has the same meaning as in KRS 141.0401;

(29) "Kentucky gross receipts" has the same meaning as in KRS 141.0401;

(30) "Post-construction incentives" means the incentives available under KRS

154.27-060 and 154.27-080;

(31) "Renewable energy facility" means a facility located in Kentucky that is newly

constructed on or after August 30, 2007, or an existing facility located in

Kentucky that is retrofitted or upgraded after August 30, 2007, and that, after

the new construction, retrofit, or upgrade, utilizes:

(a) Wind power, biomass resources, landfill methane gas, hydropower, or

other similar renewable resources to generate electricity in excess of one

(1) megawatt for sale to unrelated entities; or

(b) Solar power to generate electricity in excess of fifty (50) kilowatts for sale

to unrelated entities.

For a retrofit of an existing facility, the modification or addition shall primarily

result in the production of electricity as described in paragraph (a) or (b) of this

subsection;

(32) "Resident" has the same meaning as in KRS 141.010;

(33)(a) "Retrofit" means a modification or addition to an existing facility that

results in the production of a new and different product or services or

uses a new or different process to produce the same product or services

at the facility.

(b) Modifications or additions to a facility that maintain, restore, mend, or

repair a facility shall not be considered a retrofit of the facility, and shall

not be considered part of the capital investment if undertaken at the same

time as a retrofit;

(34) "Synthetic natural gas" has the same meaning as in KRS 152.715;

(35) "Tax incentive agreement" means an agreement entered into in accordance

with KRS 154.27-040;

(36) "Termination date" means a date established by the tax incentive agreement

that is no more than twenty-five (25) years from the activation date; and

(37) "Upgrade" means an investment in an existing facility that results in an

increase in the productivity of the facility. Increased productivity shall be

measured in relation to the type of products or services that are required to be

produced or performed by that facility to be an eligible project.