Page 1 of 5 154.32-010 Definitions for subchapter. As used in this subchapter: <br>(1) "Activation date" means the date established in the tax incentive agreement that is within two (2) years of final approval; (2) "Advance disbursement" means the disbursement of incentives prior to the activation date; (3) "Affiliate" has the same meaning as in KRS 154.48-010 and, in addition, shall include two (2) or more limited liability companies if the same persons own more <br>than fifty percent (50%) of the capital interest or are entitled to more than fifty <br>percent (50%) of the capital profits in the limited liability companies; (4) "Agribusiness" means the processing of raw agricultural products, including timber, or the performance of value-added functions with regard to raw agricultural <br>products; (5) "Approved company" means an eligible company that has received final approval to receive incentives under this subchapter; (6) "Approved costs" means the amount of eligible costs approved by the authority at final approval; (7) "Authority" means the Kentucky Economic Development Finance Authority established by KRS 154.20-010; (8) "Capital lease" means a lease classified as a capital lease by the Statement of Financial Accounting Standards No. 13, Accounting for Leases, issued by the <br>Financial Accounting Standards Board, November 1976, as amended; (9) "Commonwealth" means the Commonwealth of Kentucky; <br>(10) "Confirmed approved costs" means: (a) For owned economic development projects, the documented eligible costs incurred on or before the activation date; or (b) For leased economic development projects: 1. The documented eligible costs incurred on or before the activation date; <br>and 2. Estimated rent to be incurred by the approved company throughout the <br>term of the tax incentive agreement. For both owned and leased economic development projects, "confirmed approved <br>costs" may be less than approved costs, but shall not be more than approved costs; (11) "Department" means the Department of Revenue; <br>(12) "Economic development project" means: (a) 1. The acquisition, leasing, or construction of a new facility; or 2. The acquisition, leasing, rehabilitation, or expansion of an existing <br>facility; and (b) The installation and equipping of the facility; Page 2 of 5 by an eligible company. "Economic development project" does not include any <br>economic development project that will result in the replacement of facilities <br>existing in the Commonwealth, except as provided in KRS 154.32-060; (13) (a) "Eligible company" means any corporation, limited liability company, partnership, limited partnership, sole proprietorship, business trust, or any <br>other entity with a proposed economic development project that is engaged in <br>or is planning to be engaged in one (1) or more of the following activities <br>within the Commonwealth: <br>1. Manufacturing; 2. Agribusiness; 3. Nonretail service or technology; or 4. National or regional headquarters operations, regardless of the <br>underlying business activity of the company. (b) "Eligible company" does not include companies where the primary activity to be conducted within the Commonwealth is forestry, fishing, mining, coal or <br>mineral processing, the provision of utilities, construction, wholesale trade, <br>retail trade, real estate, rental and leasing, educational services, <br>accommodation and food services, or public administration services; (14) "Eligible costs" means: (a) For owned economic development projects: 1. Start-up costs; 2. Obligations incurred for labor and amounts paid to contractors, <br>subcontractors, builders, and materialmen in connection with the <br>economic development project; 3. The cost of acquiring land or rights in land and any cost incidental <br>thereto, including recording fees; 4. The cost of contract bonds and of insurance of all kinds that may be <br>required or necessary for completion of an economic development <br>project which is not paid by a contractor or otherwise provided for; 5. All costs of architectural and engineering services, including test <br>borings, surveys, estimated plans and specifications, preliminary <br>investigations, and supervision of construction, as well as for the <br>performance of all the duties required for construction of the economic <br>development project; 6. All costs which are required to be paid under the terms of any contract <br>for the economic development project; 7. All costs incurred for construction activities, including site tests and <br>inspections; subsurface site work; excavation; removal of structures, <br>roadways, cemeteries, and other surface obstructions; filling, grading, <br>and providing drainage and storm water retention; installation of utilities <br>such as water, sewer, sewage treatment, gas, electric, communications, <br>and similar facilities; off-site construction of utility extensions to the Page 3 of 5 boundaries of the real estate; construction and installation of railroad <br>spurs as needed to connect the economic development project to existing <br>railways; or similar activities as the authority may determine necessary <br>for construction of the economic development project; and 8. All other costs of a nature comparable to those described above; and (b) For leased economic development projects: 1. Start-up costs; and 2. Fifty percent (50%) of the estimated annual rent for each year of the tax <br>incentive agreement. Notwithstanding any other provision of this subsection, for economic development <br>projects that are not in enhanced incentive counties, the cost of equipment eligible <br>for recovery as an eligible cost shall not exceed twenty thousand dollars ($20,000) <br>for each new full-time job created as of the activation date; (15) "Employee benefits" means nonmandated payments by an approved company for its full-time employees for health insurance, life insurance, dental insurance, vision <br>insurance, defined benefits, 401(k), or similar plans; (16) "Enhanced incentive counties" means counties certified by the authority pursuant to KRS 154.32-050; (17) "Final approval" means the action taken by the authority authorizing the eligible company to receive incentives under this subchapter; (18) "Full-time job" means a job held by a person who: (a) Is a Kentucky resident subject to the Kentucky individual income tax imposed by KRS 141.020; and (b) Is required to work a minimum of thirty-five (35) hours per week; (19) "Incentives" means the incentives available under this subchapter, as listed in KRS 154.32-020(3); (20) "Job target" means the annual average number of new full-time jobs that the approved company commits to create and maintain at the economic development <br>project, which shall not be less than ten (10) new full-time jobs; (21) "Kentucky gross receipts" has the same meaning as in KRS 141.0401; <br>(22) "Kentucky gross profits" has the same meaning as in KRS 141.0401; <br>(23) "Lease agreement" means an agreement between an approved company and an unrelated entity conveying the right to use property, plant, or equipment, the terms <br>of which reflect an arms' length transaction. "Lease agreement" does not include a <br>capital lease; (24) "Leased project" means an economic development project site occupied by an approved company pursuant to a lease agreement; (25) "Loan agreement" means the agreement between the authority and a preliminarily approved company establishing the terms and conditions of an advance <br>disbursement; Page 4 of 5 (26) "Manufacturing" means any activity involving the processing, assembling, or production of any property, including the processing resulting in a change in the <br>conditions of the property and any activity related to the processing, assembling, or <br>production of property. "Manufacturing" also includes storage, warehousing, <br>distribution, and office activities related to the manufacturing activity; (27) "Minimum wage target" means the average minimum wage amount that the approved company commits to meet for all new full-time jobs created and <br>maintained as a result of the economic development project, which shall not be less <br>than: <br>(a) One hundred twenty-five percent (125%) of the federal minimum wage in enhanced incentive counties; or (b) One hundred fifty percent (150%) of the federal minimum wage in all other counties; (28) (a) "Nonretail service or technology" means any activity where: 1. Service or technology is: <br>a. Provided predominantly outside the Commonwealth; and b. Designed to serve a multistate, national, or international market; or 2. Service or technology is provided by a national or regional headquarters <br>as a support to other business activities conducted by the eligible <br>company. (b) "Nonretail service or technology" includes but is not limited to call centers, centralized administrative or processing centers, telephone or Internet sales <br>order or processing centers, distribution or fulfillment centers, data processing <br>centers, research and development facilities, and other similar activities; (29) "Owned project" means an economic development project owned in fee simple by the approved company or an affiliate, or possessed by the approved company or an <br>affiliate pursuant to a capital lease; (30) "Preliminary approval" means the action taken by the authority preliminarily approving an eligible company for incentives under this subchapter; (31) "Rent" means the actual annual rent or fee paid by an approved company under a lease agreement; (32) "Start-up costs" means costs incurred to furnish and equip a facility for an economic development project, including costs incurred for: <br>(a) Computers, furnishings, office equipment, manufacturing equipment, and fixtures; (b) The relocation of out-of-state equipment; and <br>(c) Nonrecurring costs of fixed telecommunications equipment; as certified to the authority in accordance with KRS 154.32-030; (33) "Tax incentive agreement" means the agreement entered into pursuant to KRS 154.32-040 between the authority and an approved company; and Page 5 of 5 (34) "Term" means the period of time for which a tax incentive agreement may be in effect, which shall not exceed fifteen (15) years for an economic development <br>project located in an enhanced incentive county, or ten (10) years for an economic <br>development project not located in any other county. Effective: June 26, 2009 <br>History: Created 2009 (1st Extra. Sess.) Ky. Acts ch. 1, sec. 9, effective June 26, 2009.
Page 1 of 5 154.32-010 Definitions for subchapter. As used in this subchapter: <br>(1) "Activation date" means the date established in the tax incentive agreement that is within two (2) years of final approval; (2) "Advance disbursement" means the disbursement of incentives prior to the activation date; (3) "Affiliate" has the same meaning as in KRS 154.48-010 and, in addition, shall include two (2) or more limited liability companies if the same persons own more <br>than fifty percent (50%) of the capital interest or are entitled to more than fifty <br>percent (50%) of the capital profits in the limited liability companies; (4) "Agribusiness" means the processing of raw agricultural products, including timber, or the performance of value-added functions with regard to raw agricultural <br>products; (5) "Approved company" means an eligible company that has received final approval to receive incentives under this subchapter; (6) "Approved costs" means the amount of eligible costs approved by the authority at final approval; (7) "Authority" means the Kentucky Economic Development Finance Authority established by KRS 154.20-010; (8) "Capital lease" means a lease classified as a capital lease by the Statement of Financial Accounting Standards No. 13, Accounting for Leases, issued by the <br>Financial Accounting Standards Board, November 1976, as amended; (9) "Commonwealth" means the Commonwealth of Kentucky; <br>(10) "Confirmed approved costs" means: (a) For owned economic development projects, the documented eligible costs incurred on or before the activation date; or (b) For leased economic development projects: 1. The documented eligible costs incurred on or before the activation date; <br>and 2. Estimated rent to be incurred by the approved company throughout the <br>term of the tax incentive agreement. For both owned and leased economic development projects, "confirmed approved <br>costs" may be less than approved costs, but shall not be more than approved costs; (11) "Department" means the Department of Revenue; <br>(12) "Economic development project" means: (a) 1. The acquisition, leasing, or construction of a new facility; or 2. The acquisition, leasing, rehabilitation, or expansion of an existing <br>facility; and (b) The installation and equipping of the facility; Page 2 of 5 by an eligible company. "Economic development project" does not include any <br>economic development project that will result in the replacement of facilities <br>existing in the Commonwealth, except as provided in KRS 154.32-060; (13) (a) "Eligible company" means any corporation, limited liability company, partnership, limited partnership, sole proprietorship, business trust, or any <br>other entity with a proposed economic development project that is engaged in <br>or is planning to be engaged in one (1) or more of the following activities <br>within the Commonwealth: <br>1. Manufacturing; 2. Agribusiness; 3. Nonretail service or technology; or 4. National or regional headquarters operations, regardless of the <br>underlying business activity of the company. (b) "Eligible company" does not include companies where the primary activity to be conducted within the Commonwealth is forestry, fishing, mining, coal or <br>mineral processing, the provision of utilities, construction, wholesale trade, <br>retail trade, real estate, rental and leasing, educational services, <br>accommodation and food services, or public administration services; (14) "Eligible costs" means: (a) For owned economic development projects: 1. Start-up costs; 2. Obligations incurred for labor and amounts paid to contractors, <br>subcontractors, builders, and materialmen in connection with the <br>economic development project; 3. The cost of acquiring land or rights in land and any cost incidental <br>thereto, including recording fees; 4. The cost of contract bonds and of insurance of all kinds that may be <br>required or necessary for completion of an economic development <br>project which is not paid by a contractor or otherwise provided for; 5. All costs of architectural and engineering services, including test <br>borings, surveys, estimated plans and specifications, preliminary <br>investigations, and supervision of construction, as well as for the <br>performance of all the duties required for construction of the economic <br>development project; 6. All costs which are required to be paid under the terms of any contract <br>for the economic development project; 7. All costs incurred for construction activities, including site tests and <br>inspections; subsurface site work; excavation; removal of structures, <br>roadways, cemeteries, and other surface obstructions; filling, grading, <br>and providing drainage and storm water retention; installation of utilities <br>such as water, sewer, sewage treatment, gas, electric, communications, <br>and similar facilities; off-site construction of utility extensions to the Page 3 of 5 boundaries of the real estate; construction and installation of railroad <br>spurs as needed to connect the economic development project to existing <br>railways; or similar activities as the authority may determine necessary <br>for construction of the economic development project; and 8. All other costs of a nature comparable to those described above; and (b) For leased economic development projects: 1. Start-up costs; and 2. Fifty percent (50%) of the estimated annual rent for each year of the tax <br>incentive agreement. Notwithstanding any other provision of this subsection, for economic development <br>projects that are not in enhanced incentive counties, the cost of equipment eligible <br>for recovery as an eligible cost shall not exceed twenty thousand dollars ($20,000) <br>for each new full-time job created as of the activation date; (15) "Employee benefits" means nonmandated payments by an approved company for its full-time employees for health insurance, life insurance, dental insurance, vision <br>insurance, defined benefits, 401(k), or similar plans; (16) "Enhanced incentive counties" means counties certified by the authority pursuant to KRS 154.32-050; (17) "Final approval" means the action taken by the authority authorizing the eligible company to receive incentives under this subchapter; (18) "Full-time job" means a job held by a person who: (a) Is a Kentucky resident subject to the Kentucky individual income tax imposed by KRS 141.020; and (b) Is required to work a minimum of thirty-five (35) hours per week; (19) "Incentives" means the incentives available under this subchapter, as listed in KRS 154.32-020(3); (20) "Job target" means the annual average number of new full-time jobs that the approved company commits to create and maintain at the economic development <br>project, which shall not be less than ten (10) new full-time jobs; (21) "Kentucky gross receipts" has the same meaning as in KRS 141.0401; <br>(22) "Kentucky gross profits" has the same meaning as in KRS 141.0401; <br>(23) "Lease agreement" means an agreement between an approved company and an unrelated entity conveying the right to use property, plant, or equipment, the terms <br>of which reflect an arms' length transaction. "Lease agreement" does not include a <br>capital lease; (24) "Leased project" means an economic development project site occupied by an approved company pursuant to a lease agreement; (25) "Loan agreement" means the agreement between the authority and a preliminarily approved company establishing the terms and conditions of an advance <br>disbursement; Page 4 of 5 (26) "Manufacturing" means any activity involving the processing, assembling, or production of any property, including the processing resulting in a change in the <br>conditions of the property and any activity related to the processing, assembling, or <br>production of property. "Manufacturing" also includes storage, warehousing, <br>distribution, and office activities related to the manufacturing activity; (27) "Minimum wage target" means the average minimum wage amount that the approved company commits to meet for all new full-time jobs created and <br>maintained as a result of the economic development project, which shall not be less <br>than: <br>(a) One hundred twenty-five percent (125%) of the federal minimum wage in enhanced incentive counties; or (b) One hundred fifty percent (150%) of the federal minimum wage in all other counties; (28) (a) "Nonretail service or technology" means any activity where: 1. Service or technology is: <br>a. Provided predominantly outside the Commonwealth; and b. Designed to serve a multistate, national, or international market; or 2. Service or technology is provided by a national or regional headquarters <br>as a support to other business activities conducted by the eligible <br>company. (b) "Nonretail service or technology" includes but is not limited to call centers, centralized administrative or processing centers, telephone or Internet sales <br>order or processing centers, distribution or fulfillment centers, data processing <br>centers, research and development facilities, and other similar activities; (29) "Owned project" means an economic development project owned in fee simple by the approved company or an affiliate, or possessed by the approved company or an <br>affiliate pursuant to a capital lease; (30) "Preliminary approval" means the action taken by the authority preliminarily approving an eligible company for incentives under this subchapter; (31) "Rent" means the actual annual rent or fee paid by an approved company under a lease agreement; (32) "Start-up costs" means costs incurred to furnish and equip a facility for an economic development project, including costs incurred for: <br>(a) Computers, furnishings, office equipment, manufacturing equipment, and fixtures; (b) The relocation of out-of-state equipment; and <br>(c) Nonrecurring costs of fixed telecommunications equipment; as certified to the authority in accordance with KRS 154.32-030; (33) "Tax incentive agreement" means the agreement entered into pursuant to KRS 154.32-040 between the authority and an approved company; and Page 5 of 5 (34) "Term" means the period of time for which a tax incentive agreement may be in effect, which shall not exceed fifteen (15) years for an economic development <br>project located in an enhanced incentive county, or ten (10) years for an economic <br>development project not located in any other county. Effective: June 26, 2009 <br>History: Created 2009 (1st Extra. Sess.) Ky. Acts ch. 1, sec. 9, effective June 26, 2009.
Page 1 of 5 154.32-010 Definitions for subchapter. As used in this subchapter: <br>(1) "Activation date" means the date established in the tax incentive agreement that is within two (2) years of final approval; (2) "Advance disbursement" means the disbursement of incentives prior to the activation date; (3) "Affiliate" has the same meaning as in KRS 154.48-010 and, in addition, shall include two (2) or more limited liability companies if the same persons own more <br>than fifty percent (50%) of the capital interest or are entitled to more than fifty <br>percent (50%) of the capital profits in the limited liability companies; (4) "Agribusiness" means the processing of raw agricultural products, including timber, or the performance of value-added functions with regard to raw agricultural <br>products; (5) "Approved company" means an eligible company that has received final approval to receive incentives under this subchapter; (6) "Approved costs" means the amount of eligible costs approved by the authority at final approval; (7) "Authority" means the Kentucky Economic Development Finance Authority established by KRS 154.20-010; (8) "Capital lease" means a lease classified as a capital lease by the Statement of Financial Accounting Standards No. 13, Accounting for Leases, issued by the <br>Financial Accounting Standards Board, November 1976, as amended; (9) "Commonwealth" means the Commonwealth of Kentucky; <br>(10) "Confirmed approved costs" means: (a) For owned economic development projects, the documented eligible costs incurred on or before the activation date; or (b) For leased economic development projects: 1. The documented eligible costs incurred on or before the activation date; <br>and 2. Estimated rent to be incurred by the approved company throughout the <br>term of the tax incentive agreement. For both owned and leased economic development projects, "confirmed approved <br>costs" may be less than approved costs, but shall not be more than approved costs; (11) "Department" means the Department of Revenue; <br>(12) "Economic development project" means: (a) 1. The acquisition, leasing, or construction of a new facility; or 2. The acquisition, leasing, rehabilitation, or expansion of an existing <br>facility; and (b) The installation and equipping of the facility; Page 2 of 5 by an eligible company. "Economic development project" does not include any <br>economic development project that will result in the replacement of facilities <br>existing in the Commonwealth, except as provided in KRS 154.32-060; (13) (a) "Eligible company" means any corporation, limited liability company, partnership, limited partnership, sole proprietorship, business trust, or any <br>other entity with a proposed economic development project that is engaged in <br>or is planning to be engaged in one (1) or more of the following activities <br>within the Commonwealth: <br>1. Manufacturing; 2. Agribusiness; 3. Nonretail service or technology; or 4. National or regional headquarters operations, regardless of the <br>underlying business activity of the company. (b) "Eligible company" does not include companies where the primary activity to be conducted within the Commonwealth is forestry, fishing, mining, coal or <br>mineral processing, the provision of utilities, construction, wholesale trade, <br>retail trade, real estate, rental and leasing, educational services, <br>accommodation and food services, or public administration services; (14) "Eligible costs" means: (a) For owned economic development projects: 1. Start-up costs; 2. Obligations incurred for labor and amounts paid to contractors, <br>subcontractors, builders, and materialmen in connection with the <br>economic development project; 3. The cost of acquiring land or rights in land and any cost incidental <br>thereto, including recording fees; 4. The cost of contract bonds and of insurance of all kinds that may be <br>required or necessary for completion of an economic development <br>project which is not paid by a contractor or otherwise provided for; 5. All costs of architectural and engineering services, including test <br>borings, surveys, estimated plans and specifications, preliminary <br>investigations, and supervision of construction, as well as for the <br>performance of all the duties required for construction of the economic <br>development project; 6. All costs which are required to be paid under the terms of any contract <br>for the economic development project; 7. All costs incurred for construction activities, including site tests and <br>inspections; subsurface site work; excavation; removal of structures, <br>roadways, cemeteries, and other surface obstructions; filling, grading, <br>and providing drainage and storm water retention; installation of utilities <br>such as water, sewer, sewage treatment, gas, electric, communications, <br>and similar facilities; off-site construction of utility extensions to the Page 3 of 5 boundaries of the real estate; construction and installation of railroad <br>spurs as needed to connect the economic development project to existing <br>railways; or similar activities as the authority may determine necessary <br>for construction of the economic development project; and 8. All other costs of a nature comparable to those described above; and (b) For leased economic development projects: 1. Start-up costs; and 2. Fifty percent (50%) of the estimated annual rent for each year of the tax <br>incentive agreement. Notwithstanding any other provision of this subsection, for economic development <br>projects that are not in enhanced incentive counties, the cost of equipment eligible <br>for recovery as an eligible cost shall not exceed twenty thousand dollars ($20,000) <br>for each new full-time job created as of the activation date; (15) "Employee benefits" means nonmandated payments by an approved company for its full-time employees for health insurance, life insurance, dental insurance, vision <br>insurance, defined benefits, 401(k), or similar plans; (16) "Enhanced incentive counties" means counties certified by the authority pursuant to KRS 154.32-050; (17) "Final approval" means the action taken by the authority authorizing the eligible company to receive incentives under this subchapter; (18) "Full-time job" means a job held by a person who: (a) Is a Kentucky resident subject to the Kentucky individual income tax imposed by KRS 141.020; and (b) Is required to work a minimum of thirty-five (35) hours per week; (19) "Incentives" means the incentives available under this subchapter, as listed in KRS 154.32-020(3); (20) "Job target" means the annual average number of new full-time jobs that the approved company commits to create and maintain at the economic development <br>project, which shall not be less than ten (10) new full-time jobs; (21) "Kentucky gross receipts" has the same meaning as in KRS 141.0401; <br>(22) "Kentucky gross profits" has the same meaning as in KRS 141.0401; <br>(23) "Lease agreement" means an agreement between an approved company and an unrelated entity conveying the right to use property, plant, or equipment, the terms <br>of which reflect an arms' length transaction. "Lease agreement" does not include a <br>capital lease; (24) "Leased project" means an economic development project site occupied by an approved company pursuant to a lease agreement; (25) "Loan agreement" means the agreement between the authority and a preliminarily approved company establishing the terms and conditions of an advance <br>disbursement; Page 4 of 5 (26) "Manufacturing" means any activity involving the processing, assembling, or production of any property, including the processing resulting in a change in the <br>conditions of the property and any activity related to the processing, assembling, or <br>production of property. "Manufacturing" also includes storage, warehousing, <br>distribution, and office activities related to the manufacturing activity; (27) "Minimum wage target" means the average minimum wage amount that the approved company commits to meet for all new full-time jobs created and <br>maintained as a result of the economic development project, which shall not be less <br>than: <br>(a) One hundred twenty-five percent (125%) of the federal minimum wage in enhanced incentive counties; or (b) One hundred fifty percent (150%) of the federal minimum wage in all other counties; (28) (a) "Nonretail service or technology" means any activity where: 1. Service or technology is: <br>a. Provided predominantly outside the Commonwealth; and b. Designed to serve a multistate, national, or international market; or 2. Service or technology is provided by a national or regional headquarters <br>as a support to other business activities conducted by the eligible <br>company. (b) "Nonretail service or technology" includes but is not limited to call centers, centralized administrative or processing centers, telephone or Internet sales <br>order or processing centers, distribution or fulfillment centers, data processing <br>centers, research and development facilities, and other similar activities; (29) "Owned project" means an economic development project owned in fee simple by the approved company or an affiliate, or possessed by the approved company or an <br>affiliate pursuant to a capital lease; (30) "Preliminary approval" means the action taken by the authority preliminarily approving an eligible company for incentives under this subchapter; (31) "Rent" means the actual annual rent or fee paid by an approved company under a lease agreement; (32) "Start-up costs" means costs incurred to furnish and equip a facility for an economic development project, including costs incurred for: <br>(a) Computers, furnishings, office equipment, manufacturing equipment, and fixtures; (b) The relocation of out-of-state equipment; and <br>(c) Nonrecurring costs of fixed telecommunications equipment; as certified to the authority in accordance with KRS 154.32-030; (33) "Tax incentive agreement" means the agreement entered into pursuant to KRS 154.32-040 between the authority and an approved company; and Page 5 of 5 (34) "Term" means the period of time for which a tax incentive agreement may be in effect, which shall not exceed fifteen (15) years for an economic development <br>project located in an enhanced incentive county, or ten (10) years for an economic <br>development project not located in any other county. Effective: June 26, 2009 <br>History: Created 2009 (1st Extra. Sess.) Ky. Acts ch. 1, sec. 9, effective June 26, 2009.
