KRS 154.30-050: Signature Project Program -- Purpose -- Two initiatives -- Criteria for

state participation -- Qualifying expenditures -- Authority review -- Required

determinations by the authority -- Pledge limitations -- Tax incentive

agreement required.

(1) The Signature Project Program is hereby established. The purpose of this program

is to encourage private investment in the development of major projects that will

have a significant impact on the Commonwealth of Kentucky and are judged to be

of su ch a magnitude that the effect upon the location of the project warrants

extraordinary public support.

(2) (a) There shall be two (2) separate initiatives under this program. The first

initiative, the criteria and details of which are set forth in subsecti on (3)(a) of

this section, shall apply to:

1. Qualifying projects that are not the subject of a contract under KRS

65.495 in effect on or before the March 23, 2007, but that have a project

grant agreement executed pursuant to KRS 154.30 -070 prior to Januar y

1, 2008; or

2. Revised projects if the original project was not the subject of a contract

under KRS 65.495 on or before March 23, 2007, and had a project grant

agreement executed pursuant to KRS 154.30 -070 prior to January 1,

2008, but the agreement was withdrawn voluntarily before the project

was completed.

(b) The second initiative, the criteria and details of which are set forth in

subsection (3)(b) of this section, shall apply to projects that meet the specified

requirements on or after January 1, 2008.

(3) (a) 1. The criteria for qualification shall be as follows:

a. The project shall represent new economic activity in the

Commonwealth; and

b. The project shall result in a minimu m capital investment of two

hundred million dollars ($200,000,000).

2. The following provisions shall apply to projects that meet the criteria

established in subparagraph 1. of this paragraph:

a. KRS 65.7051 shall not apply to the establishment of a

development area;

b. The city or county in which the project is located shall adopt an

ordinance establishing the development area. The ordinance shall

be adopted in accordance with KRS 65.7053(1)(a), (b), (c), (d),

(e), (h), (i), (j), (k), (l), and (m);

c. KRS 65.7049, 65.7053(2) and (3), 65.7057, 65.7059, 65.7061,

65.7063, 65.7065, and 65.7067, relating to local development

areas, shall apply;

d. An application for state participation shall have been submitted as

provided in KRS 154.30 -030. The application shal l include the

information required by KRS 154.30-030(2)(a)1.a. and b.;

e. The report provided for in KRS 154.30 -030(2)(a)3.b. shall not be

required, and the certification required by KRS 154.30 -030(6)(b)

shall not be required;

f. A project grant agreement shall be executed in accordance with

KRS 154.30-070; and

g. KRS 154.30-080 and 154.30-090 shall apply.

3. Projects that meet the criteria established in subparagraph 1. of this

paragraph shall be eligible for the following:

a. Up to one hundred percent (10 0%) of approved public

infrastructure costs, excluding any sales and use tax paid, may be

recovered;

b. Up to one hundred percent (100%) of the financing costs

associated with approved public infrastructure costs may be

recovered;

c. In a county containing a city of the first class, the local

participation agreement may provide for the release of up to eighty

percent (80%) of the increment from the tax levied under KRS

91A.390 derived by the governing body within the project

development area. The amount rel eased shall not exceed a base

amount of four hundred thousand dollars ($400,000) in the first

year of the local participation agreement, which base amount shall

be increased in each subsequent year of the grant agreement by

four percent (4%); and

d. Up to one hundred percent (100%) of approved signature project

costs, excluding any sales and use taxes paid, subject to the

following:

i. The authority shall review proposed expenditures for

inclusion in the tax incentive agreement. The authority may

approve the type of expenditures it determines are necessary

for completion of the private development; and

ii. Approved signature project costs shall be detailed in the tax

incentive agreement.

(b) Beginning on April 27, 2026:

1. A project shall meet all of the fo llowing criteria to be considered for

state participation under this program:

a. The project shall represent new economic activity in the

Commonwealth;

b. The project shall result in a minimum capital investment of five

hundred million dollars ($500,000,000);

c. The project shall be owned by a resident or nonresident, nonprofit

educational, charitable, or religious institution which has qualified

for an exemption from income tax under Section 501(c)(3) of the

Internal Revenue Code;

d. The project shall resu lt in a net positive economic impact to the

Commonwealth, taking into consideration any substantial adverse

impact on existing Commonwealth businesses. The net positive

impact shall be certified to the commission as required by KRS

154.30-030(6)(b); and

e. Not more than twenty percent (20%) of the capital investment or

twenty percent (20%) of the finished square footage shall be

devoted to the support or development of assets that will be

utilized for the retail sale of tangible personal property;

2. Projects that meet the criteria established by subparagraph 1. of this

paragraph shall comply with all relevant provisions of this subchapter;

3. Projects that meet the criteria established by subparagraphs 1. and 2. of

this paragraph shall be eligible to recover:

a. Up to one hundred percent (100%) of approved public

infrastructure costs, excluding any sales and use taxes paid;

b. Up to one hundred percent (100%) of the financing costs

associated with approved public infrastructure costs; and

c. Up to one hundred percent (100%) of approved signature project

costs, excluding sales and use taxes paid subject to the following:

i. The authority shall r eview proposed expenditures for

inclusion in the tax incentive agreement. The authority may

approve the type of expenditures it determines are necessary

for completion of the private development; and

ii. Approved signature project costs shall be detail ed in the tax

incentive agreement; and

4. Notwithstanding any provision of this section to the contrary, if a project

has a residential use that comprises at least fifty percent (50%) of the

total finished square footage of the proposed project:

a. The re port required in KRS 154.30 -030(2)(a)3.b. shall not be

required; and

b. The certification required in KRS 154.30 -030(6)(b) and

subparagraph 1.c. of this paragraph shall not be required.

(4) The authority shall review the application, the certification req uired by KRS

154.30-030, if applicable, and supporting information as provided in KRS 154.30 -

030.

(5) The authority shall specifically identify the state taxes from which incremental

revenues will be pledged. The authority may pledge up to eighty percent ( 80%) of

the incremental revenues from the identified state tax revenues from the footprint,

provided that the maximum amount of incremental revenues that may be pledged

for a project during the term of the tax incentive agreement from all approved state

taxes shall not exceed one hundred percent (100%) of approved public

infrastructure costs, approved signature project costs, and financing costs.

(6) As part of the approval process, the authority shall determine the following:

(a) The footprint of the project;

(b) The maximum amount of approved public infrastructure costs, approved

signature project costs, and financing costs;

(c) That the local revenues pledged to support the public infrastructure of the

project, and local revenues pledged to support the ov erall project are of a

sufficient amount to warrant participation of the Commonwealth in the

project;

(d) The termination date of the tax incentive agreement, not to exceed thirty (30)

years from the activation date;

(e) Any adjustments to be made to old r evenues, in determining incremental

revenues during each year of the term of the project grant agreement; and

(f) Any approved signature project costs.

(7) For the purpose of making the determination required by KRS 139.515(2), the

authority shall review t he projected expenditures for tangible personal property

used in the construction of a signature project, as defined in KRS 139.515(1), and

shall establish an approximate percentage of the total anticipated expenditures that

are not included in the tax inc entive agreement as approved public infrastructure

costs or approved signature project costs. This percentage shall be communicated

by the authority to the Department of Revenue, which shall use the information in

administering the sales tax refund permitted by KRS 139.515.

(8) If state income taxes or local occupational license taxes are included for a project

that includes office space, the authority shall consider the impact of pledging theses

taxes on the ability to utilize other economic development projects at a later date.

(9) The pledge of state incremental tax revenues of the Commonwealth by the authority

shall be implemented through the execution of a tax incentive agreement between

the Commonwealth and the agency, city, or county in accordance wit h KRS

154.30-070.