KRS 65.6971: Development area for infrastructure development -- Application --

Approval -- Ordinance creating area -- Increment amounts -- Grant contracts -

- Portion of increment due from each taxing district -- Financing account --

Reports -- Operating procedures -- Obligation of Department of Revenue and

agency.

(1) A city, county, or agency shall submit an application to the Cabinet for Economic

Development for approval of a development area for infrastructure development

which includes revenues from the Commonw ealth, the standards for which the

Cabinet for Economic Development and the Tourism, Arts and Heritage Cabinet

shall establish through their operating procedures or by the promulgation of

administrative regulations in accordance with KRS Chapter 13A. The C abinet for

Economic Development shall determine whether the development area described in

the application constitutes a project of the type described in this section. The

Cabinet for Economic Development, upon its determination, shall assign the

application to the economic development authority or the tourism development

authority, as appropriate, for further consideration and approval.

(2) A development area for purposes of infrastructure development shall:

(a) 1. Consist of at least fifty (50) acres of un developed land, unless approved

otherwise by the economic development authority or the tourism

development authority in consideration of the geography of the area; or

2. Consist of at least one (1) acre constituting a brownfield site; and

(b) 1. In the case of an economic development project, be under the control of,

owned by, and operated by an agency at the commencement date; or

2. In the case of a tourism attraction project, be under the control of, leased

by, owned by, or operated by an agency at the commencement date.

(3) With respect to each city, county, or agency that applies to the economic

development authority or the tourism development authority for approval of a

development area for infrastructure development, the economic development

authority or the tourism development authority shall request materials and make all

inquiries concerning the application the economic development authority or the

tourism development authority deems necessary. Upon review of the application

and requested materials, and completion of inquiries, the economic development

authority or the tourism development authority may grant approval for:

(a) The development area for infrastructure development;

(b) Each project for which an application has been submitted to be located in the

development area for infrastructure development, provided that each project

approved for location in the development area for infrastructure development

meets the criteria necessary in order to qualify for inducements under

subchapters 22, 24, or 28 of KRS Chapter 154, or satisfies the requirements of

a tourism development attraction defined under KRS 148.851;

(c) The percentage of the Commonwealth's portion of the increment that the

Commonwealth agrees to distribute to the agency each year during the term of

the grant contract;

(d) The maximum amount of costs for infrastructure development for which the

increment may be distributed to the agency; and

(e) The master agreement constituting a grant contract and any addendum for

each project approved for location in the development area for infrastructure

development.

(4) Prior to any approval by the economic development authority or the tourism

development au thority, the economic development authority or the tourism

development authority shall have received an ordinance adopted by the city or

county creating the development area and establishing the percentage of increment

that the city and county are distribu ting each year to the agency for use in the

infrastructure development of the development area for which economic

development authority or the tourism development authority approval is sought. The

economic development authority or the tourism development a uthority shall not

approve a percentage of the Commonwealth's portion of the increment to be

distributed to the agency each calendar year with respect to a development area for

infrastructure development greater than the percentage approved by the city or

county creating the development area.

(5) The maximum amount of increment available for development areas for

infrastructure development is one hundred percent (100%).

(6) The terms and conditions of each grant contract, including the master agreement

constituting a grant contract and any addenda, are subject to negotiations between

the economic development authority or the tourism development authority and the

other parties to the grant contract. The grant contract shall include but not be limited

to the f ollowing provisions: the activation date, the taxes to be included in the

calculation of the increment, the percentage increment to be contributed by each

taxing district, the maximum amount of infrastructure development costs, a

description of the develop ment area, the termination date, subject to extension

through each addendum, and the requirement of the agency to annually certify to the

economic development authority or the tourism development authority as to the use

of the increment for payment of infrastructure development costs.

(7) (a) Any agency that enters into a grant contract for the release of any increments

that may arise during the period of a grant contract shall, after each calendar

year a grant contract is in effect, notify each taxing district obligated under the

grant contract that an increment is due, and, in consultation with each taxing

district, determine the respective portion of the total increment due from each

taxing district. The agency shall then present the total increment due f rom the

Commonwealth under the grant contract to the Department of Revenue for

certification.

1. Upon notice from the agency, each taxing district obligated under the

grant contract, other than the Commonwealth, shall release to the agency

the respective portion of the total increment due under the grant contract.

The agency shall certify to the Department of Revenue on a calendar

year basis the amount of the increment collected.

2. Upon certification of the total increment due from the Commonwealth

by the Department of Revenue, the department is authorized and

directed to transfer the increment to a tax increment financing account

established and administered by the Finance and Administration Cabinet

for payment of the Commonwealth's portion of the incremen t. Prior to

disbursement by the Finance and Administration Cabinet of the funds

from the tax increment financing account, the economic development

authority or the tourism development authority shall notify the Finance

and Administration Cabinet that the a gency is in compliance with the

terms of the grant contract. Upon notification, the Finance and

Administration Cabinet is authorized and directed to release to the

agency the Commonwealth's portion of the total increment due under the

grant contract.

(b) The Department of Revenue shall report to the economic development

authority or the tourism development authority on a calendar year basis the

amount of the total increment released to an agency.

(8) The Department of Revenue shall have the authority to est ablish operating

procedures for the administration and determination of the Commonwealth's

increment.

(9) The Department of Revenue or agency shall have no obligation to refund or

otherwise return any of the increment to the taxpayer from whom the incremen t

arose or is attributable. Further, no additional increment resulting from audit,

amended returns or other activity for any period shall be transferred to the tax

increment financing account after the initial release to the agency of the

Commonwealth's increment for that period.