KRS 154.32-030: Application, approval, and review process -- Memorandum of

agreement -- Preliminary and final approval -- Tax incentive agreement --

Standards for approval -- Partial satisfaction of eligibility requirements.

(1) The application, approval, and review process under this subchapter shall be as

follows:

(a) An eligible company with a proposed economic development project may

submit an application to the authority. The application shall include the

information required by subsection (3) of this section;

(b) Upon review of the application and any additional information submitted, the

authority may, by resolution, give preliminary approval to an eligible

company and authorize the negotiation and execution of a memorandum of

agreement. The memorandum o f agreement shall establish a preliminary job

target, minimum wage target, including employee benefits, and maximum

total approved cost for the economic development project, and shall only

allow the recovery of eligible costs incurred ninety (90) days prio r to receipt

of preliminary approval. Upon preliminary approval, the preliminarily

approved company may undertake the project in accordance with the

memorandum of agreement, and may begin to hire employees that may be

counted toward the minimum full -time j ob requirements established by the

memorandum of agreement;

(c) After preliminary approval but before final approval, the authority shall post

the preliminarily approved company's name, the location of the economic

development project, and the incentives that have been preliminarily approved

on the Cabinet for Economic Development's website;

(d) The preliminarily approved company shall submit any documentation

required by the authority upon request of the authority;

(e) To obtain final approval, the preliminarily approved company shall submit:

1. Documentation required by the authority to confirm that the

requirements established by the memorandum of agreement have been

met; and

2. Documentation of official action taken by a local governmental entity

detailing the manner and level of local contribution, if applicable.

Upon review and c onfirmation of the documentation, the authority may, by

resolution, give final approval to the preliminarily approved company, and

authorize the execution of a tax incentive agreement between the authority

and the approved company pursuant to KRS 154.32 -040. The tax incentive

agreement shall establish an activation date, which shall be within two (2)

years of final approval;

(f) 1. On or before the activation date, the approved company shall notify the

authority of its intention to activate the tax incentiv e agreement. The

approved company shall submit:

a. Documentation that it has met the minimum full -time job,

minimum investment, and minimum wage and employee benefits

requirements established by KRS 154.32 -020 as of the date of

activation; and

b. The confirmed approved costs incurred as of the date of activation,

which shall be the total eligible costs that may be recovered by the

approved company.

2. If the approved company fails to meet any of the minimum investment,

full-time job, or wage requirements, i ncluding employee benefits,

established by KRS 154.32 -020 on the activation date, the tax incentive

agreement shall be canceled and the approved company shall not be

eligible for incentives.

3. If an approved company meets the minimum investment, full -time job,

and wage requirements, including employee benefits, established by

KRS 154.32 -020, but fails to meet higher job targets and minimum

wage targets, including employee benefits, established in the tax

incentive agreement, then the provisions of subsection (4) of this section

shall apply in determining the incentives for which the approved

company qualifies.

4. Upon activation of a tax incentive agreement, the authority shall notify

the department, and shall provide the department with the information

necessary to monitor and track the incentives taken by the approved

company; and

(g) 1. The authority shall monitor the tax incentive agreement at least

annually, and the approved company shall submit all documentation

necessary for the authority to monitor the agreement.

2. The authority shall, based on the documentation provided, confirm that

the approved company is in continued compliance with the provisions of

the tax incentive agreement and, therefore, eligible for incentives.

3. Upon annual review, if th e approved company meets the minimum job

and wage requirements, including employee benefits, established by

KRS 154.32 -020, but fails to meet the job target and minimum wage

target, including employee benefits, established in the tax incentive

agreement, t hen the provisions of subsection (4) of this section shall

apply in determining the incentives for which the approved company

qualifies in any year.

4. Upon final approval, the authority shall notify the department that an

approved company is eligible for incentives and shall provide the

department with the information necessary to monitor the use of

incentives by the approved company. If, at any time during the term of

the tax incentive agreement, an approved company becomes ineligible

for incentives, the authority shall notify the department, and the

department shall discontinue the availability of incentives for the

approved company.

(2) (a) The authority may establish procedures and standards for the review and

approval of eligible companies and their ec onomic development projects

through the promulgation of administrative regulations in accordance with

KRS Chapter 13A.

(b) Standards to be used by the authority in reviewing and approving an eligible

company and its economic development project shall inclu de but not be

limited to:

1. The creditworthiness of the eligible company;

2. The proposed capital investment to be made;

3. The number of new full-time jobs to be provided for the residents of the

Commonwealth and the wages to be paid;

4. Support of the local community; and

5. The likelihood of the economic success of the economic development

project.

(3) The application shall include but not be limited to:

(a) The name of the applicant and identification of any affiliates of the applicant

who will have some relation to the economic development project;

(b) A description of the economic development project, including its location, the

total investment in the economic development project, and total proposed

eligible costs;

(c) The projected number of new ful l-time jobs to be created as a result of the

economic development project and identification of any affiliates who may

employ persons hired to fill those jobs;

(d) The number of existing full-time jobs at the site of the economic development

project on the date of the application and a description and breakdown of the

relevant affiliated employers;

(e) Proposed wage and employee benefit amounts for the new full-time jobs to be

created as a result of the proposed economic development project;

(f) For proposed economic development projects new to the Commonwealth,

certification by the eligible company that the economic development project

could reasonably and efficiently locate outside of the Commonwealth and,

without the incentives offered by the a uthority, the eligible company would

likely locate outside the Commonwealth;

(g) For eligible companies with an existing location in the Commonwealth

considering an expansion, certification that the tax incentives are necessary

for the expansion to occur;

(h) A letter of support from a local governmental entity in the city or county

where the economic development project will be located; and

(i) Any other information the authority may require.

(4) (a) An approved company that meets the minimum job and wage requirements,

including employee benefits established by KRS 154.32-020, but fails to meet

the job target and minimum wage target, including employee benefits

established by the tax incentive agreement, shall be eligible to receive the

incentives authorize d by the tax incentive agreement as provided in this

subsection.

(b) If, upon activation or annual review, an approved company achieves at least

ninety percent (90%) of both the job target and minimum wage target,

including employee benefits established by the tax incentive agreement, and

no other default has occurred, then the approved company shall be eligible to

receive full incentives as provided in the tax incentive agreement.

(c) If, upon activation or annual review, an approved company achieves less than

ninety percent (90%) of either the job target or minimum wage target,

including employee benefits established in the tax incentive agreement, and

no other default has occurred, then the incentives available to the approved

company for the following ye ar shall be reduced by a percentage equal to the

percentage representing the difference between the job target or minimum

wage target, including employee benefits established in the tax incentive

agreement, and the actual average number of full -time jobs o r average wage,

including employee benefits, paid. If both the number of actual average full -

time jobs and average wages paid, including employee benefits, are below

ninety percent (90%) of the targets on the same measurement date, then the

greater percent age reduction of the two (2) shall be applied rather than

reducing the incentives available by the sum of the two (2).

(d) If, upon annual review, either the actual number of new full -time jobs or the

average wages paid for those jobs, including employee b enefits, is less than

the minimum requirements established by KRS 154.32 -020, then the

economic development project may be suspended automatically or, with

approval of the authority, terminated.