KRS 154.30-010: Definitions for subchapter. (Effective until January 1, 2027)

As used in this subchapter:

(1) "Activation date" means:

(a) For all projects except those described in paragraph (b) of this subsection, the

date established any time with in a two (2) year period after the

commencement date. The Commonwealth may extend the two (2) year period

to no more than four (4) years upon written application by the agency

requesting the extension; and

(b) For signature projects approved under KRS 154. 30-050(3)(a), the date

established any time within a ten (10) year period after the commencement

date.

For all projects established after July 14, 2018, the activation date is the date on

which the time period for the pledge of incremental revenues shall commence. To

implement the activation date, the minimum capital investment must be met and the

agency that is a party to the tax incentive agreement shall notify the office;

(2) "Agency" means:

(a) An urban renewal and community development agency establis hed under

KRS Chapter 99;

(b) A development authority established under KRS Chapter 99;

(c) A nonprofit corporation;

(d) A housing authority established under KRS Chapter 80;

(e) An air board established under KRS 183.132 to 183.160;

(f) A local industrial development authority established under KRS 154.50 -301

to 154.50-346;

(g) A riverport authority established under KRS 65.510 to 65.650; or

(h) A designated department, division, or office of a city or county;

(3) (a) "Approved public infrastructure costs" means costs associated with the

acquisition, installation, construction, or reconstruction of public works,

public improvements, and public buildings, including planning and desi gn

costs associated with the development of the public amenities.

(b) "Approved public infrastructure costs" includes but is not limited to costs

incurred for the following:

1. Land preparation, including demolition and clearance work;

2. Buildings;

3. Sewers and storm drainage;

4. Curbs, sidewalks, promenades, and pedways;

5. Roads;

6. Street lighting;

7. The provision of utilities;

8. Environmental remediation;

9. Floodwalls and floodgates;

10. Public spaces or parks;

11. Parking;

12. Easements and rights-of-way;

13. Transportation facilities;

14. Public landings;

15. Amenities, including fountains, benches, and sculptures; and

16. Riverbank modifications and improvements;

(4) "Approved signature project costs" means:

(a) The acquisition of land for portio ns of the project that are for infrastructure;

and

(b) Costs associated with the acquisition, installation, development, construction,

improvement, or rec onstruction of infrastructure, including planning and

design costs associated with the development of infrastructure, including but

not limited to parking structures, including portions of parking structures that

serve as platforms to support development above;

that have been determined by the commission to represent a unique challenge in the

financing of a project such that the project could not be developed without

incentives intended by this chapter to foster economic development;

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

established by KRS 154.20-010;

(6) "Capital investment" means:

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

materialmen in connection with the acquisition, construc tion, installation,

equipping, and rehabilitation of a project;

(b) The cost of acquiring land or rights in land within the development area on the

footprint of the project, and any cost incident 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 a project which is not paid by the contractor

or contractors or otherwise provided;

(d) 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 acquisiti on, construction, installation, equipping, and

rehabilitation of a project;

(e) All costs that are required to be paid under the terms of any contract for the

acquisition, construction, installation, equipping, and rehabilitation of a

project; and

(f) All other costs of a nature comparable to those described in this subsection

that occur after preliminary approval;

(7) "City" means any city, consolidated local government, or urban -county

government;

(8) "Commencement date" means the final approval date or t he date on which a tax

incentive agreement is executed;

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

(10) "County" means any county, consolidated local government, charter county, unified

local government, or urban-county government;

(11) "CPI" m eans the nonseasonally adjusted Consumer Price Index for all urban

consumers, all items, base year computed for 1982 to 1984 equals one hundred

(100), published by the United States Department of Labor, Bureau of Labor

Statistics;

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

(13) "Development area" means an area established under KRS 65.7049, 65.7051, and

65.7053;

(14) "Economic development projects" means projects which are approved for tax

credits under Subchapter 20, 22, 23, 24, 25, 26, 27, 28, 34, or 48 of KRS Chapter

154;

(15) "Financing costs" means principal, interest, costs of issuance, debt service reserve

requirements, underwriting discount, costs of credit enhancement or liquidity

instruments, and other costs directly related to the issuance of bonds or debt for

approved public infrastructure costs or approved signature project costs for projects

approved pursuant to KRS 154.30-050;

(16) "Footprint" means the actual perimeter of a discrete, identified project within a

development area. The footprint shall not include any portion of a development area

outside the area for which actual capital investments are made and must be

contiguous;

(17) "Governing body" means the body possessing legislative authority in a city or

county;

(18) "Increment bo nds" means bonds and notes issued for the purpose of paying the

costs of one (1) or more projects;

(19) "Incremental revenues" means:

(a) The amount of revenues received by a taxing district, as determined by

subtracting old revenues from new revenues in a calendar year with respect to

a development area, or a project within a development area; or

(b) The amount of revenues received by the Commonwealth as determined by

subtracting old revenues from new revenues in a calendar year with respect to

the footprint;

(20) "Local participation agreement" means the agreement entered into under KRS

65.7063;

(21) "Local tax revenues" has the same meaning as in KRS 65.7045;

(22) "Modified new revenues for income tax" means the amount of individual income

tax included in state tax revenues that is:

(a) The result of multiplying the portion of state tax revenues from individual

income taxes by the modifier;

(b) Used for calculating state tax revenues in calendar years 2023 to 2026; and

(c) For projects approved prior to January 1, 2023;

(23) "Modifier" means the result of dividing the individual income tax rate of five

percent (5%), in effect as of December 31, 2 022, by the individual income tax rate

under KRS 141.020 for the calendar year in which the new revenues for income tax

are being computed;

(24) "New revenues" means:

(a) The amount of local tax revenues received by a taxing district with respect to

a development area in any calendar year beginning with the year in which the

activation date occurred; and

(b) The amount of state tax revenues received by the Commonwealth with respect

to the footprint in any calendar year beginning with the year in which the

activation date occurred.

For projects approved prior to January 1, 2023, any state tax revenues received by

the Commonwealth from individual income tax shall be computed using modified

new revenues for income tax;

(25) "Old revenues" means:

(a) The amount of local tax revenues received by a taxing district with respect to

a development area as of December 31 of the year of preliminary approval; or

(b) 1. The amount of state tax revenues received by the Commonwealth within

the footprint as of December 31 of the year of preliminary approval. If

the authority determines that the amount of state tax revenues received

as of December 31 of the last calendar year prior to the commencement

of preliminary approval does not represent a true and accurate depiction

of revenues, the authority may consider revenues for a period of no

longer than three (3) calendar years prior to the year of preliminary

approval, so as to determine a fair representation of state tax revenues.

The amount determined by the authority shall be specified in the tax

incentive agreement. If state tax revenues were derived from the

footprint prior to the year of preliminary approval, old revenues shall

increase each calendar year by:

a. The percentage increase, if any, of the CPI or a comparable in dex;

or

b. An alternative percentage increase that is determined to be

appropriate by the authority.

The method for increasing old revenues shall be set forth in the tax

incentive agreement.

2. If state revenues were derived from the footprint prior to th e year of

preliminary approval, the calculation of incremental revenues shall be

based on the value of old revenues as increased using the method

prescribed in subparagraph 1. of this paragraph to reflect the same

calendar year as is used in the determination of new revenues;

(26) "Outstanding" means increment bonds that have been issued, delivered, and paid

for by the purchaser, except any of the following:

(a) Increment bonds canceled upon surrender, exchange, or transfer, or upon

payment or redemption;

(b) Increment bonds in replacement of which or in exchange for which other

increment bonds have been issued; or

(c) Increment bonds for the payment, redemption, or purchase for cancellation

prior to maturity, of which sufficient moneys or investments, in ac cordance

with the ordinance or other proceedings or any applicable law, by mandatory

sinking fund redemption requirements, or otherwise, have been deposited, and

credited in a sinking fund or with a trustee or paying or escrow agent, whether

at or prior to their maturity or redemption, and, in the case of increment bonds

to be redeemed prior to their stated maturity, notice of redemption has been

given or satisfactory arrangements have been made for giving notice of that

redemption, or waiver of that notice by or on behalf of the affected bond

holders has been filed with the issuer or its agent;

(27) "Preliminary approval" means the action taken by the authority preliminarily

approving an eligible project for incentives under this subchapter;

(28) "Project" means any property, asset, or improvement located in a development area

and certified by the governing body as:

(a) Being for a public purpose; and

(b) Being for the development of facilities for residential, commercial, industrial,

public, recreational, o r other uses, or for open space, including the

development, rehabilitation, renovation, installation, improvement,

enlargement, or extension of real estate and buildings; and

(c) Contributing to economic development or tourism; and

(d) Meeting the additional requirements established by KRS 154.30 -040, 154.30-

050, or 154.30-060;

(29) "Signature project" means a project approved under KRS 154.30-050;

(30) "State real property ad valorem tax" means real property ad valorem taxes levied

under KRS 132.020(1)(a);

(31) "State tax revenues" means revenues received by the Commonwealth from one (1)

or more of the following sources:

(a) State real property ad valorem taxes;

(b) Individual income taxes levied under KRS 141.020, other than individual

income taxes that have already been pledged to support an economic

development project within the development area;

(c) Corporation income taxes levied under KRS 141.040, other than corporation

income taxes that have already been pledged to support an economic

development project within the development area;

(d) Limited liability entity taxes levied under KRS 141.0401, other than limited

liability entity taxes that have alr eady been pledged to support an economic

development project within the development area; and

(e) Sales taxes levied under KRS 139.200, excluding sales taxes already pledged

for:

1. Approved tourism attraction projects, as defined in KRS 148.851, within

the development area; and

2. Projects which are approved for sales tax refunds under Subchapter 20

of KRS Chapter 154 within the development area;

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

KRS 154.30-070; and

(33) "Termination date" means:

(a) For a tax incentive agreement satisfying the requirements of KRS 154.30 -040

or 154.30 -060, a date established by the tax incentive agreement that is no

more than twenty (20) years from the activation date. However, the

termination date for a tax incentive agreement shall in no event be more than

forty (40) years from the establishment date of the development area to which

the tax incentive agreement relates; and

(b) For a project grant agreement satisfying the requirements of KRS 1 54.30-050,

a date established by the tax incentive agreement that is no more than thirty

(30) years from the activation date. However, the termination date for a tax

incentive agreement shall in no event be more than forty (40) years from the

establishment date of the development area to which the tax incentive

agreement relates.

Effective: June 27, 2025