{"data":{"id":"us-ky/krs-65.7047","jurisdiction":"us-ky","citation":"KRS 65.7047","heading":"Establishment  of local development  areas  -- Conditions  for","body":"establishment -- Steps for establishment or modification -- Funding  --\nExecution of agreement -- Pledge of revenues -- Reporting requirements\n-- Administrative regulations.\n(1) Any  city or county may  establish a local development area pursuant to this\nsection, subject to the following conditions:\n(a) A local development area shall be on previously undeveloped land;\n(b) No  more than one thousand (1,000) acres shall be approved for a local\ndevelopment area in any twelve (12) month period in any county;\n(c) The  establishment or expansion of the local development area shall not\ncause  the assessed value of taxable real property within all local\ndevelopment  areas and  development  areas of the city or county\nestablishing the local development area to exceed twenty percent (20%)\nof the assessed value of all taxable real property within its jurisdiction. For\nthe purpose of determining whether the twenty percent (20%) threshold\nhas been met, the assessed value of taxable real property within all of the\nlocal development areas and development areas shall be valued as of the\nestablishment date; and\n(d) Unless the ordinance establishing a local development area requires an\nearlier termination date, a local development area shall cease to exist on\nthe termination date.\n(2) A  city or county shall take the following steps to establish or modify a local\ndevelopment area:\n(a) If the city or county pledges occupational license taxes or the\noccupational license fee authorized by KRS  65.7056 as a part of the local\ntax revenues to support the local development area, the city or county\nmay  engage the services of a qualified independent outside consultant or\nfinancial adviser to analyze the data related to the project and the\ndevelopment area and prepare a report. If the city or county elects to\nhave  the report prepared pursuant to this paragraph, the report may\ninclude the following:\n1. The estimated approved public infrastructure costs for the project;\n2. The  feasibility of the project, taking into account the scope and\nlocation of the project;\n3. The  estimated amount of local tax revenues, as applicable, that\nwould be generated by the project over the period, which may be up\nto forty (40) years, as applicable, from the development area's\nestablished date;\n4. The  estimated amount of local tax revenues, as applicable, that\nwould  be displaced within the city or county, for the purpose of\nquantifying economic activity which is being shifted over the same\nperiod as that set forth in subparagraph 3. of this paragraph. The\nprojections for displaced activity shall include economic activity that\nis lost to the local jurisdiction as a result of the project, as well as\neconomic  activity that is diverted to the project that formerly took\nplace at existing establishments within the local jurisdiction prior to\nthe commencement  date of the project;\n5. The  estimated amount  of old revenues that would have been\ngenerated in the development area of the project in the absence of\nthe project, computed over the same  time period as set forth in\nsubparagraph 3. of this paragraph;\n6. In the process of estimating the revenues and impacts prescribed in\nsubparagraphs 3. and 4. of this paragraph, the independent outside\nconsultant shall not consider any of the following:\na. Local tax revenues or economic impacts associated with any\nprojects within the development area where the new project\nwill be located; or\nb. Local tax revenues or economic  impacts associated with\neconomic  development  projects and  approved  Kentucky\nTourism Development Act projects under KRS Chapter 148;\n7. The  relationship of the estimated incremental revenues to the\nfinancing needs, including any increment bonds, of the project;\n8. When  estimating the fiscal impact of the project, the consultant shall\nevaluate the amount of revenue estimated in subparagraph 3. of this\nparagraph  and  shall deduct  the  amounts  estimated  in\nsubparagraphs 4. and 5. of this paragraph. The resulting difference\nshall be  compared  to the estimated incremental revenues to\ndetermine the presence or absence of a positive fiscal impact; and\n9. A  determination that the project will not occur if not for the\ndesignation of the development area, the granting of incremental\nrevenues by the taxing district or districts, and the granting of the\nlocal tax incremental revenues;\n(b) The  city or county shall hold a public hearing to solicit input from the\npublic regarding the local development area. The city or county shall\nadvertise the hearing by causing to be published, in accordance with KRS\n424.130, notice of the time, place, and purpose of the hearing and a\ngeneral description of the boundaries of the proposed local development\narea. The notice shall include a summary of the projects proposed for the\nlocal development area;\n(c) After the public hearing, the city or county shall adopt an ordinance which\nshall include the following provisions:\n1. A description of the boundaries of the local development area;\n2. The establishment date and the termination date;\n3. A name for the local development area for identification purposes;\n4. Approval of any agreements relating to the local development area;\n5. A  provision establishing a special fund for the local development\narea or any project within the local development area;\n6. A  requirement that any entity other than the governing body that\nreceives financial assistance under the local development area\nordinance, whether in the form of a grant, loan, or loan guarantee,\nshall make periodic accounting to the governing body;\n7. A provision for periodic analysis and review by the governing body\nof the development activity in the local development area;\n8. Designation of the agency or agencies responsible for oversight,\nadministration, and  implementation of the local development\nordinance;\n9. The estimated net positive fiscal impact as calculated in paragraph\n(a)8. of this subsection if the city or county elects to have an\nindependent consultant report prepared; and\n10. Any  other provisions, findings, limitations, rules, or procedures\nregarding the proposed local development area or a project within\nthe local development area and its establishment or maintenance\ndeemed  necessary by the city or county;\n(d) If incremental revenues or other resources are to be pledged from taxing\ndistricts other than the city or county establishing the local development\narea, a  local development  area agreement  shall be  executed in\naccordance with the provisions of subsection (4) of this section; and\n(e) If the city or county elects to use an independent consultant or financial\nadviser as provided in paragraph (a) of this subsection, the independent\nconsultant or financial adviser shall:\n1. Consult with the city's or county's budget office in the development\nof the report; and\n2. With the approval of the city's or county's budget office, create a\nmethodology  to be used and assumptions to be made  by the\nindependent consultant or financial adviser in preparing the report.\nThe  developer requesting the city or county to establish the local\ndevelopment area shall pay all costs associated with the independent\nconsultant or financial adviser preparation of the independent consultant\nor financial adviser report, unless the city or county agrees to pay the\ncosts of preparation.\n(3) Funding  for projects in a local development area shall be  provided in\naccordance with KRS 65.7057.\n(4) A  local development area agreement shall be executed among  the agencies\nand taxing districts involved in administering, providing financing, or pledging\nincremental revenues  within the  local development  area. The  local\ndevelopment area agreement shall be adopted by a city or county by ordinance\nand by any other taxing district or agency by resolution, and shall include but\nnot be limited to the following provisions:\n(a) Identification of the parties to the local development area agreement and\nthe duties and responsibilities of each entity under the agreement;\n(b) Specific identification of the tax increments released or pledged by type of\ntax by each taxing district;\n(c) The  anticipated benefit to be received by each taxing district for the\nrelease or pledge, including:\n1. A  detailed summary  of old revenues collected and projected new\nrevenues for each taxing district on an annual basis for the term of\nthe local development area agreement; and\n2. The  maximum  amount of incremental revenue to be paid by each\ntaxing district and the maximum  number of years the payment will\nbe effective;\n(d) A detailed description of the local development area;\n(e) A description of each proposed project, including an estimate of the costs\nof construction, acquisition, and development;\n(f) A  requirement that pledged incremental revenues will be deposited in a\nspecial fund pursuant to KRS 65.7061, including the timing and procedure\nfor depositing incremental revenues and other pledged amounts into the\nspecial fund;\n(g) Terms  of default and remedies, provided that no remedy shall permit the\nwithholding by any party to the local development area agreement of any\nincremental revenues pledged to the special fund if increment bonds are\noutstanding that are secured by a pledge of those incremental revenues;\n(h) The commencement  date, activation date, and termination date; and\n(i) Any  other provisions not inconsistent with KRS  65.7041 to 65.7083\ndeemed  necessary or appropriate by the parties to the agreement.\n(5) Any  pledge of incremental revenues in a local development area agreement\nshall be superior to any other pledge of revenues for any other purpose and\nshall, from the activation date to the termination date set forth in the local area\ndevelopment  agreement, supersede any statute, ordinance, or resolution\nregarding the application or use of incremental revenues. No ordinance in\nconflict with a local development area agreement shall be adopted while any\nincrement bonds secured by that pledge remain outstanding. Ordinances or\nresolutions pledging incremental revenues on a subordinate basis to any\nexisting pledges may be adopted.\n(6) A city or county government acting pursuant to this section on or after March\n25, 2022, shall file information regarding its local development area agreement\nwith the Cabinet for Economic  Development on a form prescribed by the\ncabinet. The Cabinet for Economic Development is authorized to promulgate\nadministrative regulations pursuant to KRS  Chapter 13A  to create any\nnecessary forms to meet the requirements of this subsection.","path":["KRS Chapter 65"],"source_url":"https://apps.legislature.ky.gov/law/statutes/statute.aspx?id=52058","current_through":"Includes enactments through the 2026 Regular Session","vintage":"09/05/2026","retrieved_at":"2026-09-05T20:49:22Z","sha256":"058fd7e6a09c395057e370ba1b9f1fa53b409be74993a0047b571e980c0e54c7","source_id":"us-ky","stale":false,"prev":"us-ky/krs-65.7045","next":"us-ky/krs-65.7049"},"notice":"GroundRules: Original legal text. Not legal advice."}