KRS 154.27-040: Tax incentive agreement -- Required provisions.

The terms and conditions of the tax incentive agreement shall be negotiated between the

authority and the approved company. The tax incentive agreement may include one (1) or

more of the incentives available under this subchapter or any combination of the

incentives as negotiated between the authority and the approved company. The tax

incentive agreement shall include but not be limited to the following provisions:

(1) The duties and responsibilities of the parties;

(2) The specific identification of incent ives included in the tax incentive agreement,

including the permissible percentage recovery under each included incentive;

(3) A detailed description of the eligible project, including an estimate of the capital

investment;

(4) If the eligible project is a n alternative fuel facility or a gasification facility, a

requirement that the facility be carbon capture ready;

(5) The minimum capital investment required and the maximum capital investment that

may be recovered;

(6) The time within which the minimum capital investment shall be made;

(7) The activation date and the termination date. The agreement shall commence on the

activation date and shall terminate upon the earlier of full receipt of the maximum

amount of incentives by the approved company or twenty -five (25) years from the

activation date;

(8) A target percentage of the workforce that is Kentucky residents during the

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

of construction;

(9) If the wage assessment per mitted by KRS 154.27 -080 is included, the percentage

rate at which the assessment shall be imposed;

(10) If the advance disbursement employment incentive permitted by KRS 154.27-090 is

included:

(a) The estimated labor component and the estimated Kentucky resident factor as

determined under KRS 154.27-090;

(b) A schedule for the disbursement of funds during the construction period;

(c) A provision that requires a reduction or adjustment in the receipt of post -

construction incentives for which the approved company is eligible under the

tax incentive agreement until the advance disbursement has been repaid by the

approved company;

(d) A provision addressing an alternate payment method if the incentives are not

sufficient to repay the advance disbursement; and

(e) A repayment schedule that includes the amount of reduction, the incentives

the reduction shall apply to, the amount of interest d ue, the time period over

which the advance disbursement amount shall be recouped, and the amount

that shall be recouped in each year. To the extent possible, the repayment

schedule shall include uniform incremental payments;

(11) That the approval of the c ompany is not a guarantee of incentives and that actual

receipt of the incentives shall be contingent on the approved company filing the

required requests for incentives and meeting the requirements established by the tax

incentive agreement and by KRS 139 .517, 141.421, 143.024, 154.27 -060, 154.27-

070, 154.27-080, and 154.27-090 that apply to the incentives included;

(12) That the approved company shall provide the authority with documentation of

capital expenditures in a manner acceptable to the authority;

(13) Negotiated terms relating to repayment or similar remedies for incentives received

prior to the completion of construction if the approved company fails to comply

with the terms of the tax incentive agreement;

(14) That, if the authority determines t hat the approved company has failed to comply

with any of its obligations under the tax incentive agreement:

(a) The authority shall have the right to suspend the incentives available to the

approved company;

(b) Both the authority and the department shall have the right to pursue any

remedy provided under the tax incentive agreement;

(c) The authority may terminate the tax incentive agreement; and

(d) Both the authority and the department may pursue any other remedy at law to

which it may be entitled;

(15) A requirement that the authority monitor the tax incentive agreement;

(16) A requirement that the approved company provide to the authority the information

necessary to monitor the tax incentive agreement and authorization for the authority

to share that information with the Department of Revenue, the Office of Energy

Policy, or any other entity the authority determines is necessary for the purposes of

monitoring and enforcing the terms of the tax incentive agreement; and

(17) Any other provisions not inco nsistent with this subchapter and determined to be

necessary or appropriate by the parties to the tax incentive agreement.