Page 1 of 4 154.32-030 Application, approval, and review process -- Memorandum of agreement -- Loan agreement for advance disbursement -- Preliminary and <br>final approval -- Tax incentive agreement -- Standards for approval -- Partial <br>satisfaction of eligibility requirements. (1) The application, approval, and review process under this subchapter shall be as follows: <br>(a) An eligible company with a proposed economic development project may submit an application to the authority. The application shall include the <br>information required by subsection (3) of this section; (b) 1. Upon review of the application and any additional information <br>submitted, the authority may, by resolution, give preliminary approval to <br>an eligible company and authorize the negotiation and execution of a <br>memorandum of agreement. The memorandum of agreement shall <br>establish a preliminary job target, minimum wage target, including <br>employee benefits, and maximum total approved cost for the economic <br>development project, and shall only allow the recovery of eligible costs <br>incurred after preliminary approval. Upon preliminary approval, the <br>preliminarily approved company may undertake the project in <br>accordance with the memorandum of agreement, and may begin to hire <br>employees that may be counted toward the minimum full-time job <br>requirements established by the memorandum of agreement. 2. If the preliminary approval includes an advance disbursement, a separate <br>loan agreement shall also be negotiated establishing the terms for the <br>advance disbursement in accordance with KRS 154.32-080; (c) After preliminary approval but before final approval, the authority shall post the preliminarily approved company's name, the location of the economic <br>development project, and the incentives that have been preliminarily approved <br>on the Cabinet for Economic Development's Web site; (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 <br>requirements established by the memorandum of agreement have been <br>met; and 2. Documentation of official action taken by a local governmental entity <br>detailing the manner and level of local contribution, if applicable. Upon review and confirmation of the documentation, the authority may, by <br>resolution, give final approval to the preliminarily approved company, and <br>authorize the execution of a tax incentive agreement between the authority and <br>the approved company pursuant to KRS 154.32-040. The tax incentive <br>agreement shall establish an activation date, which shall be within two (2) <br>years of final approval; Page 2 of 4 (f) 1. On or before the activation date, the approved company shall notify the <br>authority of its intention to activate the tax incentive agreement. The <br>approved company shall submit: <br>a. Documentation that it has met the minimum full-time job, <br>minimum investment, and minimum wage and employee benefits <br>requirements established by KRS 154.32-020 as of the date of <br>activation; and b. The confirmed approved costs incurred as of the date of activation, <br>which shall be the total eligible costs that may be recovered by the <br>approved company. 2. If the approved company fails to meet any of the minimum investment, <br>full-time job, or wage requirements, including employee benefits, <br>established by KRS 154.32-020 on the activation date, the tax incentive <br>agreement shall be canceled and the approved company shall not be <br>eligible for incentives. 3. If an approved company meets the minimum investment, full-time job, <br>and wage requirements, including employee benefits, established by <br>KRS 154.32-020, but fails to meet higher job targets and minimum wage <br>targets, including employee benefits, established in the tax incentive <br>agreement, then the provisions of subsection (4) of this section shall <br>apply in determining the incentives for which the approved company <br>qualifies. 4. Upon activation of a tax incentive agreement, the authority shall notify <br>the department, and shall provide the department with the information <br>necessary to monitor and track the incentives taken by the approved <br>company; and (g) 1. The authority shall monitor the tax incentive agreement at least annually, <br>and the approved company shall submit all documentation necessary for <br>the authority to monitor the agreement. 2. The authority shall, based on the documentation provided, confirm that <br>the approved company is in continued compliance with the provisions of <br>the tax incentive agreement and, therefore, eligible for incentives. 3. Upon annual review, if the approved company meets the minimum job <br>and wage requirements, including employee benefits, established by <br>KRS 154.32-020, but fails to meet the job target and minimum wage <br>target, including employee benefits, established in the tax incentive <br>agreement, then the provisions of subsection (4) of this section shall <br>apply in determining the incentives for which the approved company <br>qualifies in any year. 4. Upon final approval, the authority shall notify the department that an <br>approved company is eligible for incentives and shall provide the <br>department with the information necessary to monitor the use of <br>incentives by the approved company. If, at any time during the term of Page 3 of 4 the tax incentive agreement, an approved company becomes ineligible <br>for incentives, the authority shall notify the department, and the <br>department shall discontinue the availability of incentives for the <br>approved company. (2) (a) The authority may establish procedures and standards for the review and approval of eligible companies and their economic development projects <br>through the promulgation of administrative regulations in accordance with <br>KRS Chapter 13A. (b) Standards to be used by the authority in reviewing and approving an eligible company and its economic development project shall include but not be <br>limited to: <br>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 <br>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 <br>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 <br>eligible costs; (c) The projected number of new full-time jobs to be created as a result of the economic development project and identification of any affiliates who may <br>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 <br>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 <br>could reasonably and efficiently locate outside of the Commonwealth and, <br>without the incentives offered by the authority, the eligible company would <br>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 <br>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 Page 4 of 4 (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 <br>the job target and minimum wage target, including employee benefits <br>established by the tax incentive agreement, shall be eligible to receive the <br>incentives authorized by the tax incentive agreement as provided in this <br>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, <br>including employee benefits established by the tax incentive agreement, and <br>no other default has occurred, then the approved company shall be eligible to <br>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, <br>including employee benefits established in the tax incentive agreement, and no <br>other default has occurred, then the incentives available to the approved <br>company for the following year shall be reduced by a percentage equal to the <br>percentage representing the difference between the job target or minimum <br>wage target, including employee benefits established in the tax incentive <br>agreement, and the actual average number of full-time jobs or average wage, <br>including employee benefits, paid. If both the number of actual average full-<br>time jobs and average wages paid, including employee benefits, are below <br>ninety percent (90%) of the targets on the same measurement date, then the <br>greater percentage reduction of the two (2) shall be applied rather than <br>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 benefits, is less than <br>the minimum requirements established by KRS 154.32-020, then the <br>economic development project may be suspended automatically or, with <br>approval of the authority, terminated. Effective: June 26, 2009 <br>History: Created 2009 (1st Extra. Sess.) Ky. Acts ch. 1, sec. 11, effective June 26, 2009.
Page 1 of 4 154.32-030 Application, approval, and review process -- Memorandum of agreement -- Loan agreement for advance disbursement -- Preliminary and <br>final approval -- Tax incentive agreement -- Standards for approval -- Partial <br>satisfaction of eligibility requirements. (1) The application, approval, and review process under this subchapter shall be as follows: <br>(a) An eligible company with a proposed economic development project may submit an application to the authority. The application shall include the <br>information required by subsection (3) of this section; (b) 1. Upon review of the application and any additional information <br>submitted, the authority may, by resolution, give preliminary approval to <br>an eligible company and authorize the negotiation and execution of a <br>memorandum of agreement. The memorandum of agreement shall <br>establish a preliminary job target, minimum wage target, including <br>employee benefits, and maximum total approved cost for the economic <br>development project, and shall only allow the recovery of eligible costs <br>incurred after preliminary approval. Upon preliminary approval, the <br>preliminarily approved company may undertake the project in <br>accordance with the memorandum of agreement, and may begin to hire <br>employees that may be counted toward the minimum full-time job <br>requirements established by the memorandum of agreement. 2. If the preliminary approval includes an advance disbursement, a separate <br>loan agreement shall also be negotiated establishing the terms for the <br>advance disbursement in accordance with KRS 154.32-080; (c) After preliminary approval but before final approval, the authority shall post the preliminarily approved company's name, the location of the economic <br>development project, and the incentives that have been preliminarily approved <br>on the Cabinet for Economic Development's Web site; (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 <br>requirements established by the memorandum of agreement have been <br>met; and 2. Documentation of official action taken by a local governmental entity <br>detailing the manner and level of local contribution, if applicable. Upon review and confirmation of the documentation, the authority may, by <br>resolution, give final approval to the preliminarily approved company, and <br>authorize the execution of a tax incentive agreement between the authority and <br>the approved company pursuant to KRS 154.32-040. The tax incentive <br>agreement shall establish an activation date, which shall be within two (2) <br>years of final approval; Page 2 of 4 (f) 1. On or before the activation date, the approved company shall notify the <br>authority of its intention to activate the tax incentive agreement. The <br>approved company shall submit: <br>a. Documentation that it has met the minimum full-time job, <br>minimum investment, and minimum wage and employee benefits <br>requirements established by KRS 154.32-020 as of the date of <br>activation; and b. The confirmed approved costs incurred as of the date of activation, <br>which shall be the total eligible costs that may be recovered by the <br>approved company. 2. If the approved company fails to meet any of the minimum investment, <br>full-time job, or wage requirements, including employee benefits, <br>established by KRS 154.32-020 on the activation date, the tax incentive <br>agreement shall be canceled and the approved company shall not be <br>eligible for incentives. 3. If an approved company meets the minimum investment, full-time job, <br>and wage requirements, including employee benefits, established by <br>KRS 154.32-020, but fails to meet higher job targets and minimum wage <br>targets, including employee benefits, established in the tax incentive <br>agreement, then the provisions of subsection (4) of this section shall <br>apply in determining the incentives for which the approved company <br>qualifies. 4. Upon activation of a tax incentive agreement, the authority shall notify <br>the department, and shall provide the department with the information <br>necessary to monitor and track the incentives taken by the approved <br>company; and (g) 1. The authority shall monitor the tax incentive agreement at least annually, <br>and the approved company shall submit all documentation necessary for <br>the authority to monitor the agreement. 2. The authority shall, based on the documentation provided, confirm that <br>the approved company is in continued compliance with the provisions of <br>the tax incentive agreement and, therefore, eligible for incentives. 3. Upon annual review, if the approved company meets the minimum job <br>and wage requirements, including employee benefits, established by <br>KRS 154.32-020, but fails to meet the job target and minimum wage <br>target, including employee benefits, established in the tax incentive <br>agreement, then the provisions of subsection (4) of this section shall <br>apply in determining the incentives for which the approved company <br>qualifies in any year. 4. Upon final approval, the authority shall notify the department that an <br>approved company is eligible for incentives and shall provide the <br>department with the information necessary to monitor the use of <br>incentives by the approved company. If, at any time during the term of Page 3 of 4 the tax incentive agreement, an approved company becomes ineligible <br>for incentives, the authority shall notify the department, and the <br>department shall discontinue the availability of incentives for the <br>approved company. (2) (a) The authority may establish procedures and standards for the review and approval of eligible companies and their economic development projects <br>through the promulgation of administrative regulations in accordance with <br>KRS Chapter 13A. (b) Standards to be used by the authority in reviewing and approving an eligible company and its economic development project shall include but not be <br>limited to: <br>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 <br>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 <br>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 <br>eligible costs; (c) The projected number of new full-time jobs to be created as a result of the economic development project and identification of any affiliates who may <br>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 <br>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 <br>could reasonably and efficiently locate outside of the Commonwealth and, <br>without the incentives offered by the authority, the eligible company would <br>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 <br>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 Page 4 of 4 (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 <br>the job target and minimum wage target, including employee benefits <br>established by the tax incentive agreement, shall be eligible to receive the <br>incentives authorized by the tax incentive agreement as provided in this <br>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, <br>including employee benefits established by the tax incentive agreement, and <br>no other default has occurred, then the approved company shall be eligible to <br>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, <br>including employee benefits established in the tax incentive agreement, and no <br>other default has occurred, then the incentives available to the approved <br>company for the following year shall be reduced by a percentage equal to the <br>percentage representing the difference between the job target or minimum <br>wage target, including employee benefits established in the tax incentive <br>agreement, and the actual average number of full-time jobs or average wage, <br>including employee benefits, paid. If both the number of actual average full-<br>time jobs and average wages paid, including employee benefits, are below <br>ninety percent (90%) of the targets on the same measurement date, then the <br>greater percentage reduction of the two (2) shall be applied rather than <br>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 benefits, is less than <br>the minimum requirements established by KRS 154.32-020, then the <br>economic development project may be suspended automatically or, with <br>approval of the authority, terminated. Effective: June 26, 2009 <br>History: Created 2009 (1st Extra. Sess.) Ky. Acts ch. 1, sec. 11, effective June 26, 2009.
Page 1 of 4 154.32-030 Application, approval, and review process -- Memorandum of agreement -- Loan agreement for advance disbursement -- Preliminary and <br>final approval -- Tax incentive agreement -- Standards for approval -- Partial <br>satisfaction of eligibility requirements. (1) The application, approval, and review process under this subchapter shall be as follows: <br>(a) An eligible company with a proposed economic development project may submit an application to the authority. The application shall include the <br>information required by subsection (3) of this section; (b) 1. Upon review of the application and any additional information <br>submitted, the authority may, by resolution, give preliminary approval to <br>an eligible company and authorize the negotiation and execution of a <br>memorandum of agreement. The memorandum of agreement shall <br>establish a preliminary job target, minimum wage target, including <br>employee benefits, and maximum total approved cost for the economic <br>development project, and shall only allow the recovery of eligible costs <br>incurred after preliminary approval. Upon preliminary approval, the <br>preliminarily approved company may undertake the project in <br>accordance with the memorandum of agreement, and may begin to hire <br>employees that may be counted toward the minimum full-time job <br>requirements established by the memorandum of agreement. 2. If the preliminary approval includes an advance disbursement, a separate <br>loan agreement shall also be negotiated establishing the terms for the <br>advance disbursement in accordance with KRS 154.32-080; (c) After preliminary approval but before final approval, the authority shall post the preliminarily approved company's name, the location of the economic <br>development project, and the incentives that have been preliminarily approved <br>on the Cabinet for Economic Development's Web site; (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 <br>requirements established by the memorandum of agreement have been <br>met; and 2. Documentation of official action taken by a local governmental entity <br>detailing the manner and level of local contribution, if applicable. Upon review and confirmation of the documentation, the authority may, by <br>resolution, give final approval to the preliminarily approved company, and <br>authorize the execution of a tax incentive agreement between the authority and <br>the approved company pursuant to KRS 154.32-040. The tax incentive <br>agreement shall establish an activation date, which shall be within two (2) <br>years of final approval; Page 2 of 4 (f) 1. On or before the activation date, the approved company shall notify the <br>authority of its intention to activate the tax incentive agreement. The <br>approved company shall submit: <br>a. Documentation that it has met the minimum full-time job, <br>minimum investment, and minimum wage and employee benefits <br>requirements established by KRS 154.32-020 as of the date of <br>activation; and b. The confirmed approved costs incurred as of the date of activation, <br>which shall be the total eligible costs that may be recovered by the <br>approved company. 2. If the approved company fails to meet any of the minimum investment, <br>full-time job, or wage requirements, including employee benefits, <br>established by KRS 154.32-020 on the activation date, the tax incentive <br>agreement shall be canceled and the approved company shall not be <br>eligible for incentives. 3. If an approved company meets the minimum investment, full-time job, <br>and wage requirements, including employee benefits, established by <br>KRS 154.32-020, but fails to meet higher job targets and minimum wage <br>targets, including employee benefits, established in the tax incentive <br>agreement, then the provisions of subsection (4) of this section shall <br>apply in determining the incentives for which the approved company <br>qualifies. 4. Upon activation of a tax incentive agreement, the authority shall notify <br>the department, and shall provide the department with the information <br>necessary to monitor and track the incentives taken by the approved <br>company; and (g) 1. The authority shall monitor the tax incentive agreement at least annually, <br>and the approved company shall submit all documentation necessary for <br>the authority to monitor the agreement. 2. The authority shall, based on the documentation provided, confirm that <br>the approved company is in continued compliance with the provisions of <br>the tax incentive agreement and, therefore, eligible for incentives. 3. Upon annual review, if the approved company meets the minimum job <br>and wage requirements, including employee benefits, established by <br>KRS 154.32-020, but fails to meet the job target and minimum wage <br>target, including employee benefits, established in the tax incentive <br>agreement, then the provisions of subsection (4) of this section shall <br>apply in determining the incentives for which the approved company <br>qualifies in any year. 4. Upon final approval, the authority shall notify the department that an <br>approved company is eligible for incentives and shall provide the <br>department with the information necessary to monitor the use of <br>incentives by the approved company. If, at any time during the term of Page 3 of 4 the tax incentive agreement, an approved company becomes ineligible <br>for incentives, the authority shall notify the department, and the <br>department shall discontinue the availability of incentives for the <br>approved company. (2) (a) The authority may establish procedures and standards for the review and approval of eligible companies and their economic development projects <br>through the promulgation of administrative regulations in accordance with <br>KRS Chapter 13A. (b) Standards to be used by the authority in reviewing and approving an eligible company and its economic development project shall include but not be <br>limited to: <br>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 <br>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 <br>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 <br>eligible costs; (c) The projected number of new full-time jobs to be created as a result of the economic development project and identification of any affiliates who may <br>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 <br>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 <br>could reasonably and efficiently locate outside of the Commonwealth and, <br>without the incentives offered by the authority, the eligible company would <br>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 <br>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 Page 4 of 4 (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 <br>the job target and minimum wage target, including employee benefits <br>established by the tax incentive agreement, shall be eligible to receive the <br>incentives authorized by the tax incentive agreement as provided in this <br>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, <br>including employee benefits established by the tax incentive agreement, and <br>no other default has occurred, then the approved company shall be eligible to <br>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, <br>including employee benefits established in the tax incentive agreement, and no <br>other default has occurred, then the incentives available to the approved <br>company for the following year shall be reduced by a percentage equal to the <br>percentage representing the difference between the job target or minimum <br>wage target, including employee benefits established in the tax incentive <br>agreement, and the actual average number of full-time jobs or average wage, <br>including employee benefits, paid. If both the number of actual average full-<br>time jobs and average wages paid, including employee benefits, are below <br>ninety percent (90%) of the targets on the same measurement date, then the <br>greater percentage reduction of the two (2) shall be applied rather than <br>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 benefits, is less than <br>the minimum requirements established by KRS 154.32-020, then the <br>economic development project may be suspended automatically or, with <br>approval of the authority, terminated. Effective: June 26, 2009 <br>History: Created 2009 (1st Extra. Sess.) Ky. Acts ch. 1, sec. 11, effective June 26, 2009.
