KRS 154.30-060: Commonwealth Participation Program for Mixed -Use Redevelopment

in Blighted Urban Areas -- Definitions -- Criteria for state participation --

Qualifying expenditures -- Authority review -- Required determinations by the

authority -- Pledge limitations -- Tax incentive agreement required.

(1) The Commonwealth Participation Program for Mixed -Use Redevelopment in

Blighted Urban Areas is hereby established.

(2) State participation under this program shall be limited to the support of approved

public infrastructure costs and costs associated with land preparation, demolition,

and clearance determined to be necessary to support private investment or private

development projects that benefit the public, where project economics are unable to

support or secure necessary financing to undertake the public improvements, land

preparation, demolition, and clearance.

(3) As used in this section:

(a) "Mixed-use" means a project:

1. That includes at least two (2) qualified uses, each of which comprises at

least twenty percent (20%) of the total finished square footage of the

proposed project or represents at least twenty percent (20%) of the total

capital investment; or

2. That includes at least three (3) qualified uses:

a. One (1) of which comprises at least t wenty percent (20%) of the

total finished square footage of the proposed project or represents

at least twenty percent (20%) of the total capital investment; and

b. The remainder of which, when combined, jointly comprise at least

twenty percent (20%) of th e total finished square footage of the

proposed project or represent at least twenty percent (20%) of the

total capital investment;

(b) "Qualified use" means:

1. Retail;

2. Residential;

3. Office;

4. Restaurant; or

5. Hospitality; and

(c) "Retail" means an establishment predominantly engaged in the sale of

tangible personal property subject to the tax imposed by KRS Chapter 139,

but shall not include restaurants.

(4) To be considered for state participation under this program, a project shall:

(a) Be located in an area that has three (3) or more of the conditions listed in KRS

65.7049(3)(a), or be a project described in KRS 65.7049(3)(b);

(b) Be a mixed-use project;

(c) Represent new economic activity in the Commonwealth;

(d) Result in a cap ital investment between twenty million dollars ($20,000,000)

and two hundred million dollars ($200,000,000);

(e) Not include any retail establishment that exceeds twenty thousand (20,000)

square feet of finished square footage;

(f) Include pedestrian amenities and public space;

(g) Result 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 authority as

required by KRS 154.30-030(6)(b); and

(h) 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:

1. The report requir ed in KRS 154.30 -030(2)(a)3.b. shall not be required;

and

2. The certification required in KRS 154.30-030(6)(b) and paragraph (g) of

this subsection shall not be required.

(5) The following costs may be recovered pursuant to this section:

(a) Up to one hun dred percent (100%) of approved public infrastructure costs;

and

(b) Up to one hundred percent (100%) of expenses for land preparation,

demolition, and clearance necessary for the development to occur.

(6) The commission shall review the application, the c ertification required by KRS

154.30-030, and supporting information as provided in KRS 154.30-030.

(7) 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 of

the project, 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 the costs and expenses determined under

subsection (5) of this section.

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

(a) The footprint of the project;

(b) That the proposed project m eets the requirements established by subsection

(4) of this section;

(c) The maximum amount of approved public infrastructure costs and expenses

for land preparation, demolition, and clearance;

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

project and local revenues pledged to support the overa ll project are of a

sufficient amount to warrant participation of the Commonwealth in the

project;

(e) The termination date of the tax incentive agreement; and

(f) Any adjustments to be made to old revenues, in determining incremental

revenues during each year of the term of the tax incentive agreement.

(9) If state income taxes or local occupational licenses taxes are included for a project

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

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

(10) 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, ci ty, or county in accordance with KRS

154.30-070.