KRS 154.30-070: Terms and conditions of tax incentive agreements to be negotiated

between authority and agency -- Provisions of agreement -- Pledge of

incremental revenues superior to other pledges of revenues -- Renewal and

discontinuance of agreement.

(1) The terms and conditions of the tax incentive agreement shall be negotiated

between the authority and the agency. The tax incentive agreement shall include but

not be limited to the following provisions:

(a) Identification of the parties to the tax incent ive agreement and the duties and

responsibilities of each party to the tax incentive agreement;

(b) The specific identification of the state tax revenues, by type of tax, to be

released or pledged by the Commonwealth for the project;

(c) 1. A detailed summ ary of old revenues collected and projected new

revenues for the Commonwealth on an annual basis for the term of the

tax incentive agreement; and

2. The maximum amount of incremental revenue to be released by the

Commonwealth and the maximum number of year s the pledge of

incremental revenues will be effective;

(d) A detailed description of each project that is the subject of the tax incentive

agreement, including an estimate of the costs of construction or acquisition

and development;

(e) Identification of the project footprint from which the state incremental

revenues pledged by the Commonwealth are to be derived;

(f) The approved public infrastructure costs and, when applicable, approved

signature project costs, approved financing costs, and approved costs relating

to land preparation, demolition, and clearance that may be recovered;

(g) The minimum capital investment required, the date by which the minimum

capital investment is expected to occur, and a provision stating that failure of

the approved company to meet the minimum capital investment established by

KRS 154.30-040, 154.30-050, or 154.30 -060 on or before the activation date

shall result in cancellation of the tax incentive agreement;

(h) Terms of default and remedies, provided that no remedy shall permit the

withholding by any party to the tax incentive agreement of any incremental

revenues if increment bonds are outstanding that are secured by a pledge of

those incremental revenues;

(i) The termination date;

(j) A requirement that the agency, city, or county annually certify to the authority

the use of incremental revenues for the payment of approved project costs

within the development area;

(k) A requirement that the agency shall utilize the portion of incremental revenues

pledged pursuant to a tax incentive agreement that exceeds, in a given year,

the amounts needed to:

1. Pay the current financing costs; and

2. Maintain a fully funded reserve;

to provide for the retirement or defeasance of all or a portion of the remaining

financing costs related to approved public infrastructure costs, and approved

signature project costs secured by the incremental revenues;

(l) A requirement that the agency, city, or county make periodic accountings to

the authority;

(m) A re quirement that the authority monitor and verify approved public

infrastructure costs, financing costs and approved signature project costs and

minimum capital investment; and

(n) For a signature project, the eligible refund amount or percentage for the sal es

tax as permitted under KRS 139.515, and as determined by the authority

pursuant to KRS 65.7075(6); and

(o) Any other provisions not inconsistent with this subchapter deemed necessary

or appropriate by the parties to the tax incentive agreement.

(2) Any pledge of incremental revenues in a tax incentive agreement shall be superior

to any other pledge of revenues for any other purpose and shall, from the activation

date to the termination date, supersede any statute or ordinance regarding the

application or use of incremental revenues. An ordinance in conflict with a tax

incentive agreement shall not be adopted while any increment bonds secured by that

pledge remain outstanding. Ordinances pledging increments on a subordinate basis

to any existing pledges may be adopted.

(3) Any tax incentive agreement shall be made on the basis of automatic year -to-year

renewals, with the option to discontinue upon sixty (60) days' notice before the end

of any annual termination date of the tax incentive agreement.