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Statutes > Kentucky > 154-30 > 010

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Page 1 of 6 154.30-010 Definitions for subchapter. As used in this subchapter: <br>(1) &quot;Activation date&quot; means: (a) For all projects except those described in paragraph (b) of this subsection, the date established any time within a two (2) year period after the <br>commencement date. The Commonwealth may extend the two (2) year period <br>to no more than four (4) years upon written application by the agency <br>requesting the extension; and (b) For signature projects approved under KRS 154.30-050(2)(a), the date established any time within a five (5) year period after the commencement <br>date. The activation date is the date on which the time period for the pledge of <br>incremental revenues shall commence. To implement the activation date, the agency <br>that is a party to the tax incentive agreement shall notify the office; (2) &quot;Agency&quot; means: (a) An urban renewal and community development agency established under KRS Chapter 99; (b) A development authority established under KRS Chapter 99; <br>(c) A nonprofit corporation; <br>(d) A housing authority established under KRS Chapter 80; <br>(e) An air board established under KRS 183.132 to 183.160; <br>(f) A local industrial development authority established under KRS 154.50-301 to 154.50-346; (g) A riverport authority established under KRS 65.510 to 65.650; or <br>(h) A designated department, division, or office of a city or county; (3) &quot;Approved public infrastructure costs&quot; means costs associated with the acquisition, installation, construction, or reconstruction of public works, public improvements, <br>and public buildings, including planning and design costs associated with the <br>development of such public amenities. &quot;Approved public infrastructure costs&quot; <br>includes but is not limited to costs incurred for the following: <br>(a) Land preparation, including demolition and clearance work; <br>(b) Buildings; <br>(c) Sewers and storm drainage; <br>(d) Curbs, sidewalks, promenades, and pedways; <br>(e) Roads; <br>(f) Street lighting; <br>(g) The provision of utilities; <br>(h) Environmental remediation; <br>(i) Floodwalls and floodgates; <br>(j) Public spaces or parks; Page 2 of 6 (k) Parking; <br>(l) Easements and rights-of-way; <br>(m) Transportation facilities; <br>(n) Public landings; <br>(o) Amenities, such as fountains, benches, and sculptures; and <br>(p) Riverbank modifications and improvements; (4) &quot;Approved signature project costs&quot; means: (a) The acquisition of land for portions of the project that are for infrastructure; and (b) Costs associated with the acquisition, installation, development, construction, improvement, or reconstruction of infrastructure, including planning and <br>design costs associated with the development of infrastructure, including but <br>not limited to parking structures, including portions of parking structures that <br>serve as platforms to support development above; that have been determined by the commission to represent a unique challenge in the <br>financing of a project such that the project could not be developed without <br>incentives intended by this chapter to foster economic development; (5) &quot;Authority&quot; means the Kentucky Economic Development Finance Authority established by KRS 154.20-010; (6) &quot;Capital investment&quot; means: (a) Obligations incurred for labor and to contractors, subcontractors, builders, and materialmen in connection with the acquisition, construction, installation, <br>equipping, and rehabilitation of a project; (b) The cost of acquiring land or rights in land within the development area on the footprint of the project, and any cost incident thereto, including recording <br>fees; (c) The cost of contract bonds and of insurance of all kinds that may be required or necessary during the course of acquisition, construction, installation, <br>equipping, and rehabilitation of a project which is not paid by the contractor <br>or contractors or otherwise provided; (d) All costs of architectural and engineering services, including test borings, surveys, estimates, plans, specifications, preliminary investigations, <br>supervision of construction, and the performance of all the duties required by <br>or consequent upon the acquisition, construction, installation, equipping, and <br>rehabilitation of a project; (e) All costs that are required to be paid under the terms of any contract for the acquisition, construction, installation, equipping, and rehabilitation of a <br>project; and (f) All other costs of a nature comparable to those described in this subsection; (7) &quot;City&quot; means any city, consolidated local government, or urban-county government; Page 3 of 6 (8) &quot;Commencement date&quot; means the date on which a tax incentive agreement is executed; (9) &quot;Commonwealth&quot; means the Commonwealth of Kentucky; <br>(10) &quot;County&quot; means any county, consolidated local government, charter county, unified local government, or urban-county government; (11) &quot;CPI&quot; means the nonseasonally adjusted Consumer Price Index for all urban consumers, all items, base year computed for 1982 to 1984 equals one hundred <br>(100), published by the United States Department of Labor, Bureau of Labor <br>Statistics; (12) &quot;Department&quot; means the Department of Revenue; <br>(13) &quot;Development area&quot; means an area established under KRS 65.7049, 65.7051, and 65.7053; (14) &quot;Economic development projects&quot; means projects which are approved for tax credits under Subchapter 20, 22, 23, 24, 25, 26, 27, 28, 34, or 48 of KRS Chapter <br>154; (15) &quot;Financing costs&quot; means principal, interest, costs of issuance, debt service reserve requirements, underwriting discount, costs of credit enhancement or liquidity <br>instruments, and other costs directly related to the issuance of bonds or debt for <br>approved public infrastructure costs or approved signature project costs for projects <br>approved pursuant to KRS 154.30-050; (16) &quot;Footprint&quot; means the actual perimeter of a discrete, identified project within a development area. The footprint shall not include any portion of a development area <br>outside the area for which actual capital investments are made; (17) &quot;Governing body&quot; means the body possessing legislative authority in a city or county; (18) &quot;Increment bonds&quot; means bonds and notes issued for the purpose of paying the costs of one (1) or more projects; (19) &quot;Incremental revenues&quot; means: (a) The amount of revenues received by a taxing district, as determined by subtracting old revenues from new revenues in a calendar year with respect to <br>a development area, or a project within a development area; or (b) The amount of revenues received by the Commonwealth as determined by subtracting old revenues from new revenues in a calendar year with respect to <br>the footprint; (20) &quot;Local participation agreement&quot; means the agreement entered into under KRS 65.7063; (21) &quot;Local tax revenues&quot; has the same meaning as in KRS 65.7045; <br>(22) &quot;New revenues&quot; means: (a) The amount of local tax revenues received by a taxing district with respect to a development area in any calendar year beginning with the year in which the <br>activation date occurred; or Page 4 of 6 (b) The amount of state tax revenues received by the Commonwealth with respect to the footprint in any calendar year beginning with the year in which the <br>activation date occurred; (23) &quot;Old revenues&quot; means: (a) The amount of local tax revenues received by a taxing district with respect to a development area during the last calendar year prior to the commencement <br>date; or (b) 1. The amount of state tax revenues received by the Commonwealth within <br>the footprint during the last calendar year prior to the commencement <br>date. If the authority determines that the amount of state tax revenues <br>received during the last calendar year prior to the commencement date <br>does not represent a true and accurate depiction of revenues, the <br>authority may consider revenues for a period of no longer than three (3) <br>calendar years prior to the commencement date, so as to determine a fair <br>representation of state tax revenues. The amount determined by the <br>authority shall be specified in the tax incentive agreement. If state tax <br>revenues were derived from the footprint prior to the commencement <br>date, old revenues shall increase each calendar year by: <br>a. The percentage increase, if any, of the CPI or a comparable index; <br>or b. An alternative percentage increase that is determined to be <br>appropriate by the authority. The method for increasing old revenues shall be set forth in the tax <br>incentive agreement; 2. If state revenues were derived from the footprint prior to the <br>commencement date, the calculation of incremental revenues shall be <br>based on the value of old revenues as increased using the method <br>prescribed in subparagraph 1. of this paragraph to reflect the same <br>calendar year as is used in the determination of new revenues. (24) &quot;Outstanding&quot; means increment bonds that have been issued, delivered, and paid for by the purchaser, except any of the following: <br>(a) Increment bonds canceled upon surrender, exchange, or transfer, or upon payment or redemption; (b) Increment bonds in replacement of which or in exchange for which other increment bonds have been issued; or (c) Increment bonds for the payment, redemption, or purchase for cancellation prior to maturity, of which sufficient moneys or investments, in accordance <br>with the ordinance or other proceedings or any applicable law, by mandatory <br>sinking fund redemption requirements, or otherwise, have been deposited, and <br>credited in a sinking fund or with a trustee or paying or escrow agent, whether <br>at or prior to their maturity or redemption, and, in the case of increment bonds <br>to be redeemed prior to their stated maturity, notice of redemption has been <br>given or satisfactory arrangements have been made for giving notice of that Page 5 of 6 redemption, or waiver of that notice by or on behalf of the affected bond <br>holders has been filed with the issuer or its agent; (25) &quot;Project&quot; means any property, asset, or improvement located in a development area and certified by the governing body as: <br>(a) Being for a public purpose; and <br>(b) Being for the development of facilities for residential, commercial, industrial, public, recreational, or other uses, or for open space, including the <br>development, rehabilitation, renovation, installation, improvement, enlargement, or extension of real estate and buildings; and (c) Contributing to economic development or tourism; and <br>(d) Meeting the additional requirements established by KRS 154.30-040, 154.30-050, or 154.30-060; (26) &quot;Signature project&quot; means a project approved under KRS 154.30-050; <br>(27) &quot;State real property ad valorem tax&quot; means real property ad valorem taxes levied under KRS 132.020(1)(a); (28) &quot;State tax revenues&quot; means revenues received by the Commonwealth from one (1) or more of the following sources: <br>(a) State real property ad valorem taxes; <br>(b) Individual income taxes levied under KRS 141.020, other than individual income taxes that have already been pledged to support an economic <br>development project within the development area; (c) Corporation income taxes levied under KRS 141.040, other than corporation income taxes that have already been pledged to support an economic <br>development project within the development area; (d) Limited liability entity taxes levied under KRS 141.0401, other than limited liability entity taxes that have already been pledged to support an economic <br>development project within the development area; and (e) Sales taxes levied under KRS 139.200, excluding sales taxes already pledged for: <br>1. Approved tourism attraction projects, as defined in KRS 148.851, within <br>the development area; and 2. Projects which are approved for sales tax refunds under Subchapter 20 <br>of KRS Chapter 154 within the development area; (29) &quot;Tax incentive agreement&quot; means an agreement entered into in accordance with KRS 154.30-070; and (30) &quot;Termination date&quot; means: (a) For a tax incentive agreement satisfying the requirements of KRS 154.30-040 or 154.30-060, a date established by the tax incentive agreement that is no <br>more than twenty (20) years from the activation date. However, the <br>termination date for a tax incentive agreement shall in no event be more than Page 6 of 6 forty (40) years from the establishment date of the development area to which <br>the tax incentive agreement relates; and (b) For a project grant agreement satisfying the requirements of KRS 154.30-050, a date established by the tax incentive agreement that is no more than thirty <br>(30) years from the activation date. However, the termination date for a tax <br>incentive agreement shall in no event be more than forty (40) years from the <br>establishment date of the development area to which the tax incentive <br>agreement relates. Effective: June 26, 2009 <br>History: Amended 2009 (1st Extra. Sess.) Ky. Acts ch. 1, sec. 102, effective June 26, 2009. -- Created 2008 Ky. Acts ch. 178, sec. 14, effective July 15, 2008. Legislative Research Commission Note (6/26/2009). 2009 (1st Extra. Sess.) Ky. Acts ch. 1, sec. 103, provided that, notwithstanding KRS 65.7044(6), the amendments <br>made to this statute in 2009 (1st Extra. Sess.) Ky. Acts ch. 1, sec. 102, &quot;shall apply <br>retroactively and any agreements entered into prior to the effective date of this Act <br>for projects approved under KRS 154.30-050(2)(a) that have not been activated as of <br>the effective date of this Act shall be amended to reflect the revised activation date <br>provided for in Section 102 of this Act.&quot; Legislative Research Commission Note (7/15/2008). 2008 Ky. Acts ch. 178, sec. 14 established a new Subchapter 30 of KRS Chapter 154 concerning tax increment <br>financing projects and provided further that &quot;KRS 65.7045 is repealed, reenacted, <br>and amended as a new section thereof to read as follows.&quot; Since KRS 65.7045 was <br>also amended in sec. 2 of that Act, inquiry was made of the drafter as to the intent of <br>sec. 14. The drafter explained that statutes dealing with both area development <br>projects and tax increment financing projects were blended together in KRS Chapter <br>65 with no easy distinguishing elements, and the intent of creating Subchapter 30 of <br>KRS Chapter 154 was to separate them appropriately. The intent of sec. 14 was to <br>create a definitions section for the new Subchapter 30 of KRS Chapter 154, using the <br>text of KRS 65.7045 as a base starting point, removing definitions specific to KRS <br>Chapter 65 area development projects, retaining definitions that were common to <br>both area development projects and tax increment financing projects, and adding <br>definitions specific to tax increment financing projects. As such, the Reviser of <br>Statutes has treated sec. 14 in codification as creating a new section of Subchapter 30 <br>of KRS Chapter 154 (this statute) to effectuate that intent.

State Codes and Statutes

Statutes > Kentucky > 154-30 > 010

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Page 1 of 6 154.30-010 Definitions for subchapter. As used in this subchapter: <br>(1) &quot;Activation date&quot; means: (a) For all projects except those described in paragraph (b) of this subsection, the date established any time within a two (2) year period after the <br>commencement date. The Commonwealth may extend the two (2) year period <br>to no more than four (4) years upon written application by the agency <br>requesting the extension; and (b) For signature projects approved under KRS 154.30-050(2)(a), the date established any time within a five (5) year period after the commencement <br>date. The activation date is the date on which the time period for the pledge of <br>incremental revenues shall commence. To implement the activation date, the agency <br>that is a party to the tax incentive agreement shall notify the office; (2) &quot;Agency&quot; means: (a) An urban renewal and community development agency established under KRS Chapter 99; (b) A development authority established under KRS Chapter 99; <br>(c) A nonprofit corporation; <br>(d) A housing authority established under KRS Chapter 80; <br>(e) An air board established under KRS 183.132 to 183.160; <br>(f) A local industrial development authority established under KRS 154.50-301 to 154.50-346; (g) A riverport authority established under KRS 65.510 to 65.650; or <br>(h) A designated department, division, or office of a city or county; (3) &quot;Approved public infrastructure costs&quot; means costs associated with the acquisition, installation, construction, or reconstruction of public works, public improvements, <br>and public buildings, including planning and design costs associated with the <br>development of such public amenities. &quot;Approved public infrastructure costs&quot; <br>includes but is not limited to costs incurred for the following: <br>(a) Land preparation, including demolition and clearance work; <br>(b) Buildings; <br>(c) Sewers and storm drainage; <br>(d) Curbs, sidewalks, promenades, and pedways; <br>(e) Roads; <br>(f) Street lighting; <br>(g) The provision of utilities; <br>(h) Environmental remediation; <br>(i) Floodwalls and floodgates; <br>(j) Public spaces or parks; Page 2 of 6 (k) Parking; <br>(l) Easements and rights-of-way; <br>(m) Transportation facilities; <br>(n) Public landings; <br>(o) Amenities, such as fountains, benches, and sculptures; and <br>(p) Riverbank modifications and improvements; (4) &quot;Approved signature project costs&quot; means: (a) The acquisition of land for portions of the project that are for infrastructure; and (b) Costs associated with the acquisition, installation, development, construction, improvement, or reconstruction of infrastructure, including planning and <br>design costs associated with the development of infrastructure, including but <br>not limited to parking structures, including portions of parking structures that <br>serve as platforms to support development above; that have been determined by the commission to represent a unique challenge in the <br>financing of a project such that the project could not be developed without <br>incentives intended by this chapter to foster economic development; (5) &quot;Authority&quot; means the Kentucky Economic Development Finance Authority established by KRS 154.20-010; (6) &quot;Capital investment&quot; means: (a) Obligations incurred for labor and to contractors, subcontractors, builders, and materialmen in connection with the acquisition, construction, installation, <br>equipping, and rehabilitation of a project; (b) The cost of acquiring land or rights in land within the development area on the footprint of the project, and any cost incident thereto, including recording <br>fees; (c) The cost of contract bonds and of insurance of all kinds that may be required or necessary during the course of acquisition, construction, installation, <br>equipping, and rehabilitation of a project which is not paid by the contractor <br>or contractors or otherwise provided; (d) All costs of architectural and engineering services, including test borings, surveys, estimates, plans, specifications, preliminary investigations, <br>supervision of construction, and the performance of all the duties required by <br>or consequent upon the acquisition, construction, installation, equipping, and <br>rehabilitation of a project; (e) All costs that are required to be paid under the terms of any contract for the acquisition, construction, installation, equipping, and rehabilitation of a <br>project; and (f) All other costs of a nature comparable to those described in this subsection; (7) &quot;City&quot; means any city, consolidated local government, or urban-county government; Page 3 of 6 (8) &quot;Commencement date&quot; means the date on which a tax incentive agreement is executed; (9) &quot;Commonwealth&quot; means the Commonwealth of Kentucky; <br>(10) &quot;County&quot; means any county, consolidated local government, charter county, unified local government, or urban-county government; (11) &quot;CPI&quot; means the nonseasonally adjusted Consumer Price Index for all urban consumers, all items, base year computed for 1982 to 1984 equals one hundred <br>(100), published by the United States Department of Labor, Bureau of Labor <br>Statistics; (12) &quot;Department&quot; means the Department of Revenue; <br>(13) &quot;Development area&quot; means an area established under KRS 65.7049, 65.7051, and 65.7053; (14) &quot;Economic development projects&quot; means projects which are approved for tax credits under Subchapter 20, 22, 23, 24, 25, 26, 27, 28, 34, or 48 of KRS Chapter <br>154; (15) &quot;Financing costs&quot; means principal, interest, costs of issuance, debt service reserve requirements, underwriting discount, costs of credit enhancement or liquidity <br>instruments, and other costs directly related to the issuance of bonds or debt for <br>approved public infrastructure costs or approved signature project costs for projects <br>approved pursuant to KRS 154.30-050; (16) &quot;Footprint&quot; means the actual perimeter of a discrete, identified project within a development area. The footprint shall not include any portion of a development area <br>outside the area for which actual capital investments are made; (17) &quot;Governing body&quot; means the body possessing legislative authority in a city or county; (18) &quot;Increment bonds&quot; means bonds and notes issued for the purpose of paying the costs of one (1) or more projects; (19) &quot;Incremental revenues&quot; means: (a) The amount of revenues received by a taxing district, as determined by subtracting old revenues from new revenues in a calendar year with respect to <br>a development area, or a project within a development area; or (b) The amount of revenues received by the Commonwealth as determined by subtracting old revenues from new revenues in a calendar year with respect to <br>the footprint; (20) &quot;Local participation agreement&quot; means the agreement entered into under KRS 65.7063; (21) &quot;Local tax revenues&quot; has the same meaning as in KRS 65.7045; <br>(22) &quot;New revenues&quot; means: (a) The amount of local tax revenues received by a taxing district with respect to a development area in any calendar year beginning with the year in which the <br>activation date occurred; or Page 4 of 6 (b) The amount of state tax revenues received by the Commonwealth with respect to the footprint in any calendar year beginning with the year in which the <br>activation date occurred; (23) &quot;Old revenues&quot; means: (a) The amount of local tax revenues received by a taxing district with respect to a development area during the last calendar year prior to the commencement <br>date; or (b) 1. The amount of state tax revenues received by the Commonwealth within <br>the footprint during the last calendar year prior to the commencement <br>date. If the authority determines that the amount of state tax revenues <br>received during the last calendar year prior to the commencement date <br>does not represent a true and accurate depiction of revenues, the <br>authority may consider revenues for a period of no longer than three (3) <br>calendar years prior to the commencement date, so as to determine a fair <br>representation of state tax revenues. The amount determined by the <br>authority shall be specified in the tax incentive agreement. If state tax <br>revenues were derived from the footprint prior to the commencement <br>date, old revenues shall increase each calendar year by: <br>a. The percentage increase, if any, of the CPI or a comparable index; <br>or b. An alternative percentage increase that is determined to be <br>appropriate by the authority. The method for increasing old revenues shall be set forth in the tax <br>incentive agreement; 2. If state revenues were derived from the footprint prior to the <br>commencement date, the calculation of incremental revenues shall be <br>based on the value of old revenues as increased using the method <br>prescribed in subparagraph 1. of this paragraph to reflect the same <br>calendar year as is used in the determination of new revenues. (24) &quot;Outstanding&quot; means increment bonds that have been issued, delivered, and paid for by the purchaser, except any of the following: <br>(a) Increment bonds canceled upon surrender, exchange, or transfer, or upon payment or redemption; (b) Increment bonds in replacement of which or in exchange for which other increment bonds have been issued; or (c) Increment bonds for the payment, redemption, or purchase for cancellation prior to maturity, of which sufficient moneys or investments, in accordance <br>with the ordinance or other proceedings or any applicable law, by mandatory <br>sinking fund redemption requirements, or otherwise, have been deposited, and <br>credited in a sinking fund or with a trustee or paying or escrow agent, whether <br>at or prior to their maturity or redemption, and, in the case of increment bonds <br>to be redeemed prior to their stated maturity, notice of redemption has been <br>given or satisfactory arrangements have been made for giving notice of that Page 5 of 6 redemption, or waiver of that notice by or on behalf of the affected bond <br>holders has been filed with the issuer or its agent; (25) &quot;Project&quot; means any property, asset, or improvement located in a development area and certified by the governing body as: <br>(a) Being for a public purpose; and <br>(b) Being for the development of facilities for residential, commercial, industrial, public, recreational, or other uses, or for open space, including the <br>development, rehabilitation, renovation, installation, improvement, enlargement, or extension of real estate and buildings; and (c) Contributing to economic development or tourism; and <br>(d) Meeting the additional requirements established by KRS 154.30-040, 154.30-050, or 154.30-060; (26) &quot;Signature project&quot; means a project approved under KRS 154.30-050; <br>(27) &quot;State real property ad valorem tax&quot; means real property ad valorem taxes levied under KRS 132.020(1)(a); (28) &quot;State tax revenues&quot; means revenues received by the Commonwealth from one (1) or more of the following sources: <br>(a) State real property ad valorem taxes; <br>(b) Individual income taxes levied under KRS 141.020, other than individual income taxes that have already been pledged to support an economic <br>development project within the development area; (c) Corporation income taxes levied under KRS 141.040, other than corporation income taxes that have already been pledged to support an economic <br>development project within the development area; (d) Limited liability entity taxes levied under KRS 141.0401, other than limited liability entity taxes that have already been pledged to support an economic <br>development project within the development area; and (e) Sales taxes levied under KRS 139.200, excluding sales taxes already pledged for: <br>1. Approved tourism attraction projects, as defined in KRS 148.851, within <br>the development area; and 2. Projects which are approved for sales tax refunds under Subchapter 20 <br>of KRS Chapter 154 within the development area; (29) &quot;Tax incentive agreement&quot; means an agreement entered into in accordance with KRS 154.30-070; and (30) &quot;Termination date&quot; means: (a) For a tax incentive agreement satisfying the requirements of KRS 154.30-040 or 154.30-060, a date established by the tax incentive agreement that is no <br>more than twenty (20) years from the activation date. However, the <br>termination date for a tax incentive agreement shall in no event be more than Page 6 of 6 forty (40) years from the establishment date of the development area to which <br>the tax incentive agreement relates; and (b) For a project grant agreement satisfying the requirements of KRS 154.30-050, a date established by the tax incentive agreement that is no more than thirty <br>(30) years from the activation date. However, the termination date for a tax <br>incentive agreement shall in no event be more than forty (40) years from the <br>establishment date of the development area to which the tax incentive <br>agreement relates. Effective: June 26, 2009 <br>History: Amended 2009 (1st Extra. Sess.) Ky. Acts ch. 1, sec. 102, effective June 26, 2009. -- Created 2008 Ky. Acts ch. 178, sec. 14, effective July 15, 2008. Legislative Research Commission Note (6/26/2009). 2009 (1st Extra. Sess.) Ky. Acts ch. 1, sec. 103, provided that, notwithstanding KRS 65.7044(6), the amendments <br>made to this statute in 2009 (1st Extra. Sess.) Ky. Acts ch. 1, sec. 102, &quot;shall apply <br>retroactively and any agreements entered into prior to the effective date of this Act <br>for projects approved under KRS 154.30-050(2)(a) that have not been activated as of <br>the effective date of this Act shall be amended to reflect the revised activation date <br>provided for in Section 102 of this Act.&quot; Legislative Research Commission Note (7/15/2008). 2008 Ky. Acts ch. 178, sec. 14 established a new Subchapter 30 of KRS Chapter 154 concerning tax increment <br>financing projects and provided further that &quot;KRS 65.7045 is repealed, reenacted, <br>and amended as a new section thereof to read as follows.&quot; Since KRS 65.7045 was <br>also amended in sec. 2 of that Act, inquiry was made of the drafter as to the intent of <br>sec. 14. The drafter explained that statutes dealing with both area development <br>projects and tax increment financing projects were blended together in KRS Chapter <br>65 with no easy distinguishing elements, and the intent of creating Subchapter 30 of <br>KRS Chapter 154 was to separate them appropriately. The intent of sec. 14 was to <br>create a definitions section for the new Subchapter 30 of KRS Chapter 154, using the <br>text of KRS 65.7045 as a base starting point, removing definitions specific to KRS <br>Chapter 65 area development projects, retaining definitions that were common to <br>both area development projects and tax increment financing projects, and adding <br>definitions specific to tax increment financing projects. As such, the Reviser of <br>Statutes has treated sec. 14 in codification as creating a new section of Subchapter 30 <br>of KRS Chapter 154 (this statute) to effectuate that intent.

State Codes and Statutes

State Codes and Statutes

Statutes > Kentucky > 154-30 > 010

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Page 1 of 6 154.30-010 Definitions for subchapter. As used in this subchapter: <br>(1) &quot;Activation date&quot; means: (a) For all projects except those described in paragraph (b) of this subsection, the date established any time within a two (2) year period after the <br>commencement date. The Commonwealth may extend the two (2) year period <br>to no more than four (4) years upon written application by the agency <br>requesting the extension; and (b) For signature projects approved under KRS 154.30-050(2)(a), the date established any time within a five (5) year period after the commencement <br>date. The activation date is the date on which the time period for the pledge of <br>incremental revenues shall commence. To implement the activation date, the agency <br>that is a party to the tax incentive agreement shall notify the office; (2) &quot;Agency&quot; means: (a) An urban renewal and community development agency established under KRS Chapter 99; (b) A development authority established under KRS Chapter 99; <br>(c) A nonprofit corporation; <br>(d) A housing authority established under KRS Chapter 80; <br>(e) An air board established under KRS 183.132 to 183.160; <br>(f) A local industrial development authority established under KRS 154.50-301 to 154.50-346; (g) A riverport authority established under KRS 65.510 to 65.650; or <br>(h) A designated department, division, or office of a city or county; (3) &quot;Approved public infrastructure costs&quot; means costs associated with the acquisition, installation, construction, or reconstruction of public works, public improvements, <br>and public buildings, including planning and design costs associated with the <br>development of such public amenities. &quot;Approved public infrastructure costs&quot; <br>includes but is not limited to costs incurred for the following: <br>(a) Land preparation, including demolition and clearance work; <br>(b) Buildings; <br>(c) Sewers and storm drainage; <br>(d) Curbs, sidewalks, promenades, and pedways; <br>(e) Roads; <br>(f) Street lighting; <br>(g) The provision of utilities; <br>(h) Environmental remediation; <br>(i) Floodwalls and floodgates; <br>(j) Public spaces or parks; Page 2 of 6 (k) Parking; <br>(l) Easements and rights-of-way; <br>(m) Transportation facilities; <br>(n) Public landings; <br>(o) Amenities, such as fountains, benches, and sculptures; and <br>(p) Riverbank modifications and improvements; (4) &quot;Approved signature project costs&quot; means: (a) The acquisition of land for portions of the project that are for infrastructure; and (b) Costs associated with the acquisition, installation, development, construction, improvement, or reconstruction of infrastructure, including planning and <br>design costs associated with the development of infrastructure, including but <br>not limited to parking structures, including portions of parking structures that <br>serve as platforms to support development above; that have been determined by the commission to represent a unique challenge in the <br>financing of a project such that the project could not be developed without <br>incentives intended by this chapter to foster economic development; (5) &quot;Authority&quot; means the Kentucky Economic Development Finance Authority established by KRS 154.20-010; (6) &quot;Capital investment&quot; means: (a) Obligations incurred for labor and to contractors, subcontractors, builders, and materialmen in connection with the acquisition, construction, installation, <br>equipping, and rehabilitation of a project; (b) The cost of acquiring land or rights in land within the development area on the footprint of the project, and any cost incident thereto, including recording <br>fees; (c) The cost of contract bonds and of insurance of all kinds that may be required or necessary during the course of acquisition, construction, installation, <br>equipping, and rehabilitation of a project which is not paid by the contractor <br>or contractors or otherwise provided; (d) All costs of architectural and engineering services, including test borings, surveys, estimates, plans, specifications, preliminary investigations, <br>supervision of construction, and the performance of all the duties required by <br>or consequent upon the acquisition, construction, installation, equipping, and <br>rehabilitation of a project; (e) All costs that are required to be paid under the terms of any contract for the acquisition, construction, installation, equipping, and rehabilitation of a <br>project; and (f) All other costs of a nature comparable to those described in this subsection; (7) &quot;City&quot; means any city, consolidated local government, or urban-county government; Page 3 of 6 (8) &quot;Commencement date&quot; means the date on which a tax incentive agreement is executed; (9) &quot;Commonwealth&quot; means the Commonwealth of Kentucky; <br>(10) &quot;County&quot; means any county, consolidated local government, charter county, unified local government, or urban-county government; (11) &quot;CPI&quot; means the nonseasonally adjusted Consumer Price Index for all urban consumers, all items, base year computed for 1982 to 1984 equals one hundred <br>(100), published by the United States Department of Labor, Bureau of Labor <br>Statistics; (12) &quot;Department&quot; means the Department of Revenue; <br>(13) &quot;Development area&quot; means an area established under KRS 65.7049, 65.7051, and 65.7053; (14) &quot;Economic development projects&quot; means projects which are approved for tax credits under Subchapter 20, 22, 23, 24, 25, 26, 27, 28, 34, or 48 of KRS Chapter <br>154; (15) &quot;Financing costs&quot; means principal, interest, costs of issuance, debt service reserve requirements, underwriting discount, costs of credit enhancement or liquidity <br>instruments, and other costs directly related to the issuance of bonds or debt for <br>approved public infrastructure costs or approved signature project costs for projects <br>approved pursuant to KRS 154.30-050; (16) &quot;Footprint&quot; means the actual perimeter of a discrete, identified project within a development area. The footprint shall not include any portion of a development area <br>outside the area for which actual capital investments are made; (17) &quot;Governing body&quot; means the body possessing legislative authority in a city or county; (18) &quot;Increment bonds&quot; means bonds and notes issued for the purpose of paying the costs of one (1) or more projects; (19) &quot;Incremental revenues&quot; means: (a) The amount of revenues received by a taxing district, as determined by subtracting old revenues from new revenues in a calendar year with respect to <br>a development area, or a project within a development area; or (b) The amount of revenues received by the Commonwealth as determined by subtracting old revenues from new revenues in a calendar year with respect to <br>the footprint; (20) &quot;Local participation agreement&quot; means the agreement entered into under KRS 65.7063; (21) &quot;Local tax revenues&quot; has the same meaning as in KRS 65.7045; <br>(22) &quot;New revenues&quot; means: (a) The amount of local tax revenues received by a taxing district with respect to a development area in any calendar year beginning with the year in which the <br>activation date occurred; or Page 4 of 6 (b) The amount of state tax revenues received by the Commonwealth with respect to the footprint in any calendar year beginning with the year in which the <br>activation date occurred; (23) &quot;Old revenues&quot; means: (a) The amount of local tax revenues received by a taxing district with respect to a development area during the last calendar year prior to the commencement <br>date; or (b) 1. The amount of state tax revenues received by the Commonwealth within <br>the footprint during the last calendar year prior to the commencement <br>date. If the authority determines that the amount of state tax revenues <br>received during the last calendar year prior to the commencement date <br>does not represent a true and accurate depiction of revenues, the <br>authority may consider revenues for a period of no longer than three (3) <br>calendar years prior to the commencement date, so as to determine a fair <br>representation of state tax revenues. The amount determined by the <br>authority shall be specified in the tax incentive agreement. If state tax <br>revenues were derived from the footprint prior to the commencement <br>date, old revenues shall increase each calendar year by: <br>a. The percentage increase, if any, of the CPI or a comparable index; <br>or b. An alternative percentage increase that is determined to be <br>appropriate by the authority. The method for increasing old revenues shall be set forth in the tax <br>incentive agreement; 2. If state revenues were derived from the footprint prior to the <br>commencement date, the calculation of incremental revenues shall be <br>based on the value of old revenues as increased using the method <br>prescribed in subparagraph 1. of this paragraph to reflect the same <br>calendar year as is used in the determination of new revenues. (24) &quot;Outstanding&quot; means increment bonds that have been issued, delivered, and paid for by the purchaser, except any of the following: <br>(a) Increment bonds canceled upon surrender, exchange, or transfer, or upon payment or redemption; (b) Increment bonds in replacement of which or in exchange for which other increment bonds have been issued; or (c) Increment bonds for the payment, redemption, or purchase for cancellation prior to maturity, of which sufficient moneys or investments, in accordance <br>with the ordinance or other proceedings or any applicable law, by mandatory <br>sinking fund redemption requirements, or otherwise, have been deposited, and <br>credited in a sinking fund or with a trustee or paying or escrow agent, whether <br>at or prior to their maturity or redemption, and, in the case of increment bonds <br>to be redeemed prior to their stated maturity, notice of redemption has been <br>given or satisfactory arrangements have been made for giving notice of that Page 5 of 6 redemption, or waiver of that notice by or on behalf of the affected bond <br>holders has been filed with the issuer or its agent; (25) &quot;Project&quot; means any property, asset, or improvement located in a development area and certified by the governing body as: <br>(a) Being for a public purpose; and <br>(b) Being for the development of facilities for residential, commercial, industrial, public, recreational, or other uses, or for open space, including the <br>development, rehabilitation, renovation, installation, improvement, enlargement, or extension of real estate and buildings; and (c) Contributing to economic development or tourism; and <br>(d) Meeting the additional requirements established by KRS 154.30-040, 154.30-050, or 154.30-060; (26) &quot;Signature project&quot; means a project approved under KRS 154.30-050; <br>(27) &quot;State real property ad valorem tax&quot; means real property ad valorem taxes levied under KRS 132.020(1)(a); (28) &quot;State tax revenues&quot; means revenues received by the Commonwealth from one (1) or more of the following sources: <br>(a) State real property ad valorem taxes; <br>(b) Individual income taxes levied under KRS 141.020, other than individual income taxes that have already been pledged to support an economic <br>development project within the development area; (c) Corporation income taxes levied under KRS 141.040, other than corporation income taxes that have already been pledged to support an economic <br>development project within the development area; (d) Limited liability entity taxes levied under KRS 141.0401, other than limited liability entity taxes that have already been pledged to support an economic <br>development project within the development area; and (e) Sales taxes levied under KRS 139.200, excluding sales taxes already pledged for: <br>1. Approved tourism attraction projects, as defined in KRS 148.851, within <br>the development area; and 2. Projects which are approved for sales tax refunds under Subchapter 20 <br>of KRS Chapter 154 within the development area; (29) &quot;Tax incentive agreement&quot; means an agreement entered into in accordance with KRS 154.30-070; and (30) &quot;Termination date&quot; means: (a) For a tax incentive agreement satisfying the requirements of KRS 154.30-040 or 154.30-060, a date established by the tax incentive agreement that is no <br>more than twenty (20) years from the activation date. However, the <br>termination date for a tax incentive agreement shall in no event be more than Page 6 of 6 forty (40) years from the establishment date of the development area to which <br>the tax incentive agreement relates; and (b) For a project grant agreement satisfying the requirements of KRS 154.30-050, a date established by the tax incentive agreement that is no more than thirty <br>(30) years from the activation date. However, the termination date for a tax <br>incentive agreement shall in no event be more than forty (40) years from the <br>establishment date of the development area to which the tax incentive <br>agreement relates. Effective: June 26, 2009 <br>History: Amended 2009 (1st Extra. Sess.) Ky. Acts ch. 1, sec. 102, effective June 26, 2009. -- Created 2008 Ky. Acts ch. 178, sec. 14, effective July 15, 2008. Legislative Research Commission Note (6/26/2009). 2009 (1st Extra. Sess.) Ky. Acts ch. 1, sec. 103, provided that, notwithstanding KRS 65.7044(6), the amendments <br>made to this statute in 2009 (1st Extra. Sess.) Ky. Acts ch. 1, sec. 102, &quot;shall apply <br>retroactively and any agreements entered into prior to the effective date of this Act <br>for projects approved under KRS 154.30-050(2)(a) that have not been activated as of <br>the effective date of this Act shall be amended to reflect the revised activation date <br>provided for in Section 102 of this Act.&quot; Legislative Research Commission Note (7/15/2008). 2008 Ky. Acts ch. 178, sec. 14 established a new Subchapter 30 of KRS Chapter 154 concerning tax increment <br>financing projects and provided further that &quot;KRS 65.7045 is repealed, reenacted, <br>and amended as a new section thereof to read as follows.&quot; Since KRS 65.7045 was <br>also amended in sec. 2 of that Act, inquiry was made of the drafter as to the intent of <br>sec. 14. The drafter explained that statutes dealing with both area development <br>projects and tax increment financing projects were blended together in KRS Chapter <br>65 with no easy distinguishing elements, and the intent of creating Subchapter 30 of <br>KRS Chapter 154 was to separate them appropriately. The intent of sec. 14 was to <br>create a definitions section for the new Subchapter 30 of KRS Chapter 154, using the <br>text of KRS 65.7045 as a base starting point, removing definitions specific to KRS <br>Chapter 65 area development projects, retaining definitions that were common to <br>both area development projects and tax increment financing projects, and adding <br>definitions specific to tax increment financing projects. As such, the Reviser of <br>Statutes has treated sec. 14 in codification as creating a new section of Subchapter 30 <br>of KRS Chapter 154 (this statute) to effectuate that intent.