{"data":{"id":"us-ky/krs-154.32-010","jurisdiction":"us-ky","citation":"KRS 154.32-010","heading":"Definitions for subchapter.","body":"As used in this subchapter:\n(1) \"Activation date\" means the date established in the tax incentive agreement that is\nwithin two (2) years of final approval;\n(2) \"Affiliate\" means the following:\n(a) Members of a family, including only brothers and sisters of the whole or half\nblood, spouse, ancestors, and lineal descendants of an individual;\n(b) An individual, and a corporation more than fifty percent (50%) in value of the\noutstanding stock of which is owned, directly or indirectly, by or for that\nindividual;\n(c) An individual, and a limite d liability company of which more than fifty\npercent (50%) of the capital interest or profits are owned or controlled,\ndirectly or indirectly, by or for that individual;\n(d) Two (2) corporations which are members of the same controlled group, which\nincludes and is limited to:\n1. One (1) or more chains of corporations connected through stock\nownership with a common parent corporation if:\na. Stock possessing more than fifty percent (50%) of the total\ncombined voting power of all classes of stock entitled to vote or\nmore than fifty percent (50%) of the total value of shares of all\nclasses of stock of each of the corporations, except the common\nparent corporation, is owned by one (1) or more of the other\ncorporations; and\nb. The common parent corporation owns stock possessing more than\nfifty percent (50%) of the total combined voting power of all\nclasses of stock entitled to vote or more than fifty percent (50%) of\nthe total value of shares of all classes of stock of at least one (1) of\nthe other corporations, excluding, in computing the voting power\nor value, stock owned directly by the other corporations; or\n2. Two (2) or more corporations if fi ve (5) or fewer persons who are\nindividuals, estates, or trusts own stock possessing more than fifty\npercent (50%) of the total combined voting power of all classes of stock\nentitled to vote or more than fifty percent (50%) of the total value of\nshares of all classes of stock of each corporation, taking into account the\nstock ownership of each person only to the extent the stock ownership is\nidentical with respect to each corporation;\n(e) A grantor and a fiduciary of any trust;\n(f) A fiduciary of a trust an d a fiduciary of another trust, if the same person is a\ngrantor of both trusts;\n(g) A fiduciary of a trust and a beneficiary of that trust;\n(h) A fiduciary of a trust and a beneficiary of another trust, if the same person is a\ngrantor of both trusts;\n(i) A fiduciary of a trust and a corporation more than fifty percent (50%) in value\nof the outstanding stock of which is owned, directly or indirectly, by or for the\ntrust or by or for a person who is a grantor of the trust;\n(j) A fiduciary of a trust and a lim ited liability company more than fifty percent\n(50%) of the capital interest, or the interest in profits, of which is owned\ndirectly or indirectly, by or for the trust or by or for a person who is a grantor\nof the trust;\n(k) A corporation, a partnership, or a limited partnership if the same persons own:\n1. More than fifty percent (50%) in value of the outstanding stock of the\ncorporation; and\n2. More than fifty percent (50%) of the capital interest, or the profits\ninterest, in the partnership or limited partnership;\n(l) A corporation and a limited liability company if the same persons own:\n1. More than fifty percent (50%) in value of the outstanding stock of the\ncorporation; and\n2. More than fifty percent (50%) of the capital interest or the profits in the\nlimited liability company;\n(m) A partnership or limited partnership and a limited liability company if the\nsame persons own:\n1. More than fifty percent (50%) of the capital interest or profits in the\npartnership or limited partnership; and\n2. More than fifty percent (50%) of the capital interest or the profits in the\nlimited liability company;\n(n) An S corporation and another S corporation if the same persons own more\nthan fifty percent (50%) in value of the outstanding stock of each corporation;\nS corporati on designation being the same as that designation under the\nInternal Revenue Code of 1986, as amended;\n(o) An S corporation and a C corporation, if the same persons own more than\nfifty percent (50%) in value of the outstanding stock of each corporation; S\nand C corporation designations being the same as those designations under the\nInternal Revenue Code of 1986, as amended; or\n(p) Two (2) or more limited liability companies, if the same persons own more\nthan fifty percent (50%) of the capital interest or are entitled to more than fifty\npercent (50%) of the capital profits in the limited liability companies;\n(3) \"Agribusiness\" means the processing of raw agricultural products, including but not\nlimited to timber and industrial hemp, or the performance of valu e-added functions\nwith regard to raw agricultural products;\n(4) \"Alternative fuel production\" means a Kentucky operation that primarily produces\nalternative transportation fuels for sale. The alternative fuel production may\nproduce electricity as a by-product if the primary function of the operations remains\nthe production and sale of alternative transportation fuels;\n(5) \"Alternative transportation fuels\" has the same meaning as in KRS 152.715;\n(6) \"Approved company\" means an eligible company that has rece ived final approval\nto receive incentives under this subchapter;\n(7) \"Approved costs\" means the amount of eligible costs approved by the authority at\nfinal approval;\n(8) \"Authority\" means the Kentucky Economic Development Finance Authority\nestablished by KRS 154.20-010;\n(9) \"Biomass resources\" has the same meaning as in KRS 152.715;\n(10) \"Capital lease\" means a lease classified as a capital lease by the Statement of\nFinancial Accounting Standards No. 13, Accounting for Leases, issued by the\nFinancial Accounting Standards Board, November 1976, as amended;\n(11) \"Carbon dioxide or hydrogen transmission pipeline\" means the in -state portion of a\npipeline, including appurtenant f acilities, property rights, and easements, that is\nused exclusively for the purpose of transporting carbon dioxide or hydrogen to the\npoint of sale, storage, or other carbon or hydrogen management applications;\n(12) \"Coal severing and processing\" means act ivities resulting in the eligible company\nbeing subject to the tax imposed by KRS Chapter 143;\n(13) \"Commonwealth\" means the Commonwealth of Kentucky;\n(14) \"Confirmed approved costs\" means:\n(a) For owned economic development projects, the documented eligib le costs\nincurred on or before the activation date; or\n(b) For leased economic development projects:\n1. The documented eligible costs incurred on or before the activation date;\nand\n2. Estimated rent to be incurred by the approved company throughout the\nterm of the tax incentive agreement.\nFor both owned and leased economic development projects, \"confirmed approved\ncosts\" may be less than approved costs, but shall not be more than approved costs;\n(15) \"Department\" means the Department of Revenue;\n(16) \"Economic development project\" means:\n(a) The acquisition, leasing, or construction of a new facility;\n(b) The acquisition, leasing, rehabilitation, or expansion of an existing facility; or\n(c) The installation and equipping of a facility;\nby an eligible compa ny. \"Economic development project\" does not include any\neconomic development project that will result in the replacement of facilities\nexisting in the Commonwealth, except as provided in KRS 154.32-060;\n(17) (a) \"Eligible company\" means any corporation, li mited liability company,\npartnership, limited partnership, sole proprietorship, business trust, or any\nother entity with a proposed economic development project that is engaged in\nor is planning to be engaged in one (1) or more of the following activities\nwithin the Commonwealth:\n1. Manufacturing;\n2. Agribusiness;\n3. Nonretail service or technology;\n4. Headquarters operations, regardless of the underlying business activity\nof the company;\n5. Alternative fuel, gasification, energy -efficient alternative fuel, or\nrenewable energy production;\n6. Carbon dioxide or hydrogen transmission pipeline;\n7. Coal severing and processing;\n8. Hospital operations;\n9. Development of the nuclear energy ecosystem, including but not limited\nto nuclear energy generating facility siting and development; or\n10. Research and development.\n(b) \"Eligible company\" does not include companies where the primary activity to\nbe conducted within the Commonwealth is forestry, fish ing, the provision of\nutilities, except as provided in paragraph (a)9. of this subsection, construction,\nwholesale trade, retail trade, real estate, rental and leasing, educational\nservices, accommodation and food services, or public administration services;\n(18) \"Eligible costs\" means:\n(a) For owned economic development projects:\n1. Start-up costs to furnish and equip a facility, including:\na. Office and manufacturing equipment;\nb. Software;\nc. Computers;\nd. Fixtures; and\ne. Fixed telecommunications equipment;\n2. Nonrecurring obligations incurred for labor and nonrecurring payments\nto contractors, subcontractors, builders, and materialmen in connection\nwith the economic development project;\n3. The cost of acquiring land or rights in land and any cost incide ntal\nthereto, including recording fees;\n4. The cost of contract bonds and of insurance of all kinds that may be\nrequired or necessary for completion of an economic development\nproject which is not paid by a contractor or otherwise provided for;\n5. All cost s of architectural and engineering services, including test\nborings, surveys, estimated plans and specifications, preliminary\ninvestigations, and supervision of construction, as well as for the\nperformance of all the duties required for construction of the  economic\ndevelopment project;\n6. All costs which are required to be paid under the terms of any contract\nfor the economic development project;\n7. All costs incurred for construction activities, including site tests and\ninspections; subsurface site work; e xcavation; removal of structures,\nroadways, cemeteries, and other surface obstructions; filling, grading,\nand providing drainage and storm water retention; installation of utilities\nsuch as water, sewer, sewage treatment, gas, electric, communications,\nand similar facilities; off -site construction of utility extensions to the\nboundaries of the real estate; construction and installation of railroad\nspurs as needed to connect the economic development project to existing\nrailways; or similar activities as the authority may determine necessary\nfor construction of the economic development project; and\n8. All other costs of a nature comparable to those described in this\nparagraph, including but not limited to investments in:\na. Laboratory equipment;\nb. Computer servers;\nc. Software;\nd. Capitalized leases; and\ne. Leasehold improvements;\nwhen the costs are integral to the operation of research and\ndevelopment, headquarters, high -technology operations, or service\nsector facilities; and\n(b) For leased economic development projects:\n1. Start-up costs to furnish and equip a facility, including:\na. Office and manufacturing equipment;\nb. Software;\nc. Computers;\nd. Fixtures; and\ne. Fixed telecommunications equipment;\n2. Building/leasehold improvements;\n3. Fifty percent (50%) of the estimated annual rent for each year of the tax\nincentive agreement; and\n4. Investments in:\na. Laboratory equipment;\nb. Computer servers;\nc. Software; and\nd. Capitalized leases;\nwhen the costs are directly related to the establishment or expansion of\nresearch and development, headquarters, high -technology operations, or\nservice sector facilities;\n(19) \"Employee benefits\" means payments by an approved company for its full -time\nemployees for health insurance, life insurance, dental insurance, vision insurance,\ndefined benefits, 401(k), or similar plans;\n(20) \"Energy-efficient alternative fuel production\" means a Kentucky operation that\nproduces for sale energy-efficient alternative fuels;\n(21) \"Energy-efficient alternative fuels\" means homogeneous fuels that:\n(a) Are produced from processes designed to densify feedstock coal , waste coal,\nor biomass resources; and\n(b) Have an energy content that is greater than the feedstock coal, waste coal, or\nbiomass resource;\n(22) \"Final approval\" means the action taken by the authority authorizing the eligible\ncompany to receive incentives under this subchapter;\n(23) (a) \"Full-time job\" means a job held by a person who:\n1. Is required to work a minimum of thirty-five (35) hours per week; and\n2. a. Is subject to the Kentucky individual income tax imposed by KRS\n141.020; or\nb. Works remotely away from the economic development project if\nthe job meets all of the following conditions:\ni. Is held by a Kentucky resident;\nii. Was created as a result of the economic development project;\nand\niii. The payroll of this job is expensed to the economic\ndevelopment project.\n(b) \"Full-time job\" does not include a job held by a resident of any state with a\nreciprocal agreement between the Commonwealth and the other s tate as\ndescribed in KRS 141.070;\n(24) \"Gasification process\" means a process that converts any carbon -containing\nmaterial into a synthesis gas composed primarily of carbon monoxide and\nhydrogen;\n(25) \"Gasification production\" means a Kentucky operation th at primarily produces for\nsale:\n(a) Alternative transportation fuels;\n(b) Synthetic natural gas;\n(c) Chemicals;\n(d) Chemical feedstocks; or\n(e) Liquid fuels;\nfrom coal, waste coal, coal -processing waste, or biomass resources, through a\ngasification process. The gasification production may produce electricity as a by -\nproduct if the primary function of the operations remains the production and sale of\nalternative transportation fuels, synthetic natural gas, chemicals, chemical\nfeedstocks, or liquid fuels;\n(26) \"Headquarters\" means the principal office where the principal executives of the\nentity are located and from which other personnel, branches, affiliates, offices, or\nentities are controlled;\n(27) \"Heritage county\" means a county where the county populati on ranking determined\nby the cabinet under KRS 154.21 -017 scores greater than or equal to ninety -seven\n(97);\n(28) \"Hospital\" means a facility licensed by the Cabinet for Health and Family Services\nunder KRS Chapter 216B for the operation of a hospital and the basic services\nprovided by a hospital;\n(29) \"Incentives\" means the incentives available under this subchapter, as listed in KRS\n154.32-020(3);\n(30) \"Job target\" means the annual average number of new full -time jobs that the\napproved company commits to create and maintain at the economic development\nproject, which shall not be less than ten (10) new full-time jobs;\n(31) \"Kentucky gross profits\" has the same meaning as in KRS 141.0401;\n(32) \"Kentucky gross receipts\" has the same meaning as in KRS 141.0401;\n(33) \"Lease agreement\":\n(a) Means an agreement between:\n1. An approved company and an unrelated entity conveying the right to use\na facility, the terms of which reflect an arms' length transaction; or\n2. An approved company and a related entity where the facility to be\noccupied by the approved company was conveyed  by unrelated entity\nafter the approved company received preliminary approval; and\n(b) Does not include a capital lease;\n(34) \"Leased project\" means an economic development project site occupied by an\napproved company pursuant to a lease agreement;\n(35) \"Manufacturing\" means any activity involving:\n(a) Processing, assembling, or production of any property, including the\nprocessing resulting in a change in the conditions of the property and any\nactivity related to the processing, assembling, or production of  property,\ntogether with the storage, warehousing, distribution, and related office\nfacilities; or\n(b) Production of vital medications, personal protective equipment, or equipment\nnecessary to produce personal protective equipment;\n(36) (a) \"Nonretail serv ice or technology\" means any activity where service or\ntechnology is provided predominantly outside the Commonwealth and\ndesigned to serve a multistate, national, or international market.\n(b) \"Nonretail service or technology\" includes but is not limited to  call centers,\ncentralized administrative or processing centers, telephone or internet sales\norder or processing centers, distribution or fulfillment centers, data processing\ncenters, research and development facilities, and other similar activities;\n(37) \"Owned project\" means an economic development project owned in fee simple by\nthe approved company or an affiliate, or possessed by the approved company or an\naffiliate pursuant to a capital lease;\n(38) \"Personal protective equipment\" means protective cloth ing, helmets, gloves, face\nshields, goggles, face masks, respirators, and other equipment designed to protect\nthe user from injury or the spread of infection or illness;\n(39) \"Preliminary approval\" means the action taken by the authority preliminarily\napproving an eligible company for incentives under this subchapter;\n(40) \"Renewable energy production\" means a Kentucky operation that utilizes wind\npower, biomass resources, landfill methane gas, hydropower, solar power, or other\nsimilar renewable resources to generate electricity for sale to unrelated entities;\n(41) \"Rent\" means the actual annual rent or fee paid by an approved company under a\nlease agreement;\n(42) \"Start-up costs\" means nonrecurring costs, with the exception of paragraphs (d) and\n(e) of this  subsection, incurred to furnish and equip a facility for an economic\ndevelopment project, including costs incurred for:\n(a) Computers, furnishings, office equipment, manufacturing equipment, and\nfixtures;\n(b) The relocation of out-of-state equipment;\n(c) Recurring software subscription or licensing fees covering a period not to\nexceed one (1) year form activation of the project;\n(d) The initial software and licensing costs association with each new full -time\njob created;\n(e) Cost of fixed telecommunications equipment; and\n(f) Investments in:\n1. Laboratory equipment;\n2. Computer servers;\n3. Software;\n4. Capitalized leases; and\n5. Leasehold improvements;\nwhen the costs are necessary to accommodate research and development,\nheadquarters, high-technology operations, or service sector facilities;\nas certified to the authority in accordance with KRS 154.32-030;\n(43) \"Synthetic natural gas\" means the same thing as in KRS 152.715;\n(44) \"Tax incentive agreement\" means the agreement entered into pursuant to KRS\n154.32-040 between the authority and an approved company;\n(45) \"Term,\" subject to KRS 154.32 -040, means the period of time for which a tax\nincentive agreement may be in effect, which shall not exceed fifteen (15) years for\nan economic development project located in a heritage county, or ten (10) years for\nan economic development project not located in any other county;\n(46) \"Vital medications\" means any drug  or biologic used to prevent or treat a serious\nlife-threatening disease or medical condition for which there is no other available\nsource with sufficient supply of that drug or biologic or alternative drug or biologic;\n(47) \"Wage\" means the per hour earnings of a full-time employee, including wages, tips,\novertime, bonuses, and commissions, as reflected on the employee's federal form\nW-2 wage and tax statement, but excludes employee benefits; and\n(48) \"Wage target\" means the average total hourly compensati on amount, including the\nminimum wage and employee benefits, that the approved company commits to\nmeet for all new full -time jobs created and maintained as a result of the economic\ndevelopment project, which shall not be less than:\n(a) Two hundred percent (200%) of the federal minimum wage in heritage\ncounties; or\n(b) Three hundred percent (300%) of the federal minimum wage in any other\ncounties.","path":[],"source_url":"https://apps.legislature.ky.gov/law/statutes/statute.aspx?id=57966","current_through":"Includes enactments through the 2026 Regular Session","vintage":"09/05/2026","retrieved_at":"2026-09-05T20:50:56Z","sha256":"233bb3d56420e50b2b7513ba2a180eb9fafdc91937217f2648513e652c25b5d4","source_id":"us-ky","stale":false,"prev":"us-ky/krs-154.315","next":"us-ky/krs-154.32-020"},"notice":"GroundRules: Original legal text. Not legal advice."}