KRS 154.27-030: Application for incentives -- Review -- Approval -- Approval of

projects involving new, retrofitted, or upgraded alternative fuel facilities.

(Effective July 1, 2021)

(1) A company with an eligible project may submit an application for incentives to

the authority prior to making any capital investment it will seek to recover.

(2) The application shall include:

(a) The name of the applicant and identification of any affiliates of the

applicant;

(b) The type of eligible project;

(c) A description of the location;

(d) A full description of the eligible project scope, including but not limited to:

1. A list and the status of permits, certificates, or approvals required by

the federal government, the Commonwealth, or any jurisdiction

within the Commonwealth;

2. A description of the carbon capture readiness of the facility, if the

proposed eligible project is an alternative fuel facility or a gasification

facility;

3. Any feasibility studies, including supporting documents;

4. Anticipated sources of eligible project funding;

5. The total anticipated capital investment and the time period over

which the capital investment will occur;

6. The proposed feedstock and the estimated volume of feedstock use

per year;

7. A description of the proposed products or services to be produced

by the facility and the process that will be used to produce the

products;

8. The planned capacity of the facility after construction, retrofit, or

upgrade;

9. The estimated output of the facility upon completion; and

10. A plan for and description of how the company will employ Kentucky

residents at the facility and how the company will ensure, to the

extent possible, that workers employed during construction, retrofit,

or upgrade of the facility are Kentucky residents. The plan shall

include projected numbers;

(e) Identification of the specific incentives sought;

(f) Payment of any applicable application fees required by the authority to

offset reasonable costs of reviewing and processing the application; and

(g) Other information as required by the authority.

(3) The authority shall forward the application to the Department of Revenue and

the Office of Energy Policy, if applicable, for review and comment with a date

by which comments shall be provided back to the authority. The authority may

forward the application to the Center for Applied Energy Research for review

and comment as well.

(4) (a) The authority shall review the application and shall verify that:

1. The applicant has met all of the statutory and regulatory

requirements established by this subchapter and regulations

promulgated thereunder;

2. The applicant has secured or is in the process of securing all

necessary permits, certificates, or approvals required by the federal

government, the Commonwealth, or any jurisdiction within the

Commonwealth;

3. The proposed facility is carbon capture ready, if the proposed facility

is an alternative fuel facility or gasification facility;

4. The company has a plan that includes a projected number of

Kentucky residents that will be employed during the construction,

retrofit, or upgrade of the facility and at the facility upon completion;

and

5. Any other requirements established by the authority.

(b) The Department of Revenue and the Office of Energy Policy, if

applicable, shall review the application and shall verify that the company

seeking approval and all affiliate companies are in good standing with the

department.

(c) The authority may engage the services of outside consultants to assist in

the review of the application. Costs associated with the engagement of

outside consultants shall be borne by the applicant.

(5) (a) Upon the earlier of:

1. The receipt of comments and recommendations from the Office of

Energy Policy, the Department of Revenue, and the Center for

Applied Energy Research, if applicable; or

2. The expiration of the time period established by the authority for

receiving comments pursuant to subsection (3) of this section;

the authority may, through the adoption of a resolution, preliminarily

approve an applicant for incentives under this subchapter.

(b) Preliminary approval shall be based upon representations of the applicant

in the application and attachments as well as other information submitted

with the application. The authority shall make a finding that, based upon

the applicant's representations, the project appears to be eligible for

incentives pursuant to this subchapter.

(c) Prior to final approval:

1. The applicant shall:

a. Provide all supportive data requested by the authority;

b. Secure all required permits or take appropriate steps to do so;

and

c. Cooperate with the authority to obtain opinions or

recommendations from any outside consultants; and

2. The authority shall, in consultation with the Office of Energy Policy

or any other entity, verify the representations of the applicant.

(d) 1. A preliminarily approved company seeking an advance

disbursement employment incentive under KRS 154.27-090 shall,

prior to receiving final approval from the authority, provide to the

authority a labor market analysis prepared by a public

postsecondary education institution in the Commonwealth with

knowledge of the labor market in the region in which the eligible

project will be located.

2. The labor market analysis shall evaluate the construction market in

the region where the proposed project is to be located and the

estimated labor component of the proposed project. The public

postsecondary education institution may consult with the Center for

Applied Energy Research or the Office of Energy Policy in

determining the types of laborers required for the construction,

retrofit, or upgrade of the eligible facility.

3. The labor market analysis shall include an estimate of the

percentage of the estimated labor component that constitutes wages

to be paid to Kentucky residents.

(e) Based upon all of the information available, the authority may, through

adoption of a resolution, give its final approval and authorize the

execution of a tax incentive agreement to be negotiated pursuant to KRS

154.27-040.

(6) The authority may request any materials and make any inquiries concerning an

application that the authority deems necessary.

(7) The actual capital investment that may be recovered and percentages of each

incentive that an approved company may receive shall be negotiated between

the approved company and the authority and shall not exceed the limitations

established by KRS 154.27-020.

(8) The General Assembly recognizes that the incentives offered under this

subchapter include the possibility of the release of incentives to approved

companies prior to construction completion, and that the release of these

incentives may present more risk for the Commonwealth. The authority is

directed to consider the possible increased risk to the Commonwealth when

negotiating tax incentive agreements that include incentives prior to

construction completion, and to incorporate repayment or similar remedy

provisions in the tax incentive agreement to the extent the authority determines

such provisions are necessary to protect the investment made by the

Commonwealth if the approved company fails to comply with the terms of the

tax incentive agreement.

(9) The authority and the approved company shall enter into a tax incentive

agreement in accordance with KRS 154.27-040.

(10) The authority, with input from the Office of Energy Policy, if applicable, and the

Department of Revenue, shall establish additional standards and requirements

for the application process through the promulgation of administrative

regulations in accordance with KRS Chapter 13A. The standards shall include

but not be limited to the creditworthiness of eligible companies and the

likelihood of economic success of the economic development project.

(11) Notwithstanding any other provision of this subchapter, the authority may

approve a maximum of five (5) projects under this subchapter that involve an

alternative fuel facility located in Kentucky that:

(a) Is newly constructed on or after August 1, 2010, or an existing facility

located in Kentucky that is retrofitted or upgraded on or after August 1,

2010;

(b) After the new construction, retrofit, or upgrade, primarily produces for sale

alternative transportation fuels using natural gas or natural gas liquids as

the primary feedstock; and

(c) Has a minimum capital investment of one million dollars ($1,000,000).