154.23.010 Definitions for KRS 154.23-005 to 154.23-079.

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154.23-010 Definitions for KRS 154.23-005 to 154.23-079. As used in KRS 154.23-005 to 154.23-079, unless the context clearly indicates otherwise: <br>(1) &quot;Affiliate&quot; has the same meaning as in KRS 154.22-010; <br>(2) &quot;Approved company&quot; means an eligible company that locates an economic development project in a qualified zone, as provided for in KRS 154.23-030; (3) &quot;Approved costs&quot; means: (a) For an approved company that establishes a new manufacturing facility or expands an existing manufacturing facility, the following obligations incurred <br>in its economic development project, including rent under leases subject to <br>subsection (8)(b)4. of this section: <br>1. The cost of labor, contractors, subcontractors, builders, and material <br>workers in connection with the acquisition, construction, installation, <br>equipping, and rehabilitation of an economic development project; 2. The cost of acquiring real estate or rights in land and any cost incidental <br>thereto, including recording fees; 3. The cost of contract bonds and insurance of all kinds that may be <br>required or necessary during the course of acquisition, construction, <br>installation, equipping, and rehabilitation of an economic development <br>project that is not paid by the contractor or contractors or otherwise <br>provided for; 4. The cost of architectural and engineering services, including test <br>borings, surveys, estimates, plans and specifications, preliminary <br>investigations, and supervision of construction, as well as for the <br>performance of all duties required by or consequent to the acquisition, <br>construction, installation, equipping, and rehabilitation of an economic <br>development project; 5. All costs required to be paid under the terms of any contract for the <br>acquisition, construction, installation, equipping, and rehabilitation of an <br>economic development project; and 6. All other costs of a nature comparable to those described above; or (b) For an approved company that establishes a new service or technology business or expands existing service or technology operations, up to a <br>maximum of fifty percent (50%) of the total start-up costs during the term of <br>the service and technology agreement, plus up to a maximum of fifty percent <br>(50%) of the annual rent for each elapsed year of the service and technology <br>agreement; (4) &quot;Assessment&quot; means the job development assessment fee authorized by KRS 154.23-055; (5) &quot;Authority&quot; means the Kentucky Economic Development Finance Authority, as created in KRS 154.20-010; (6) &quot;Average hourly wage&quot; means the wage and employment data published by the Office of Employment and Training within the Department of Workforce Investment within the Education and Workforce Development Cabinet collectively <br>translated into wages per hour based on a two thousand eighty (2,080) hour work <br>year for the following sectors: <br>(a) Manufacturing; <br>(b) Transportation, communications, and public utilities; <br>(c) Wholesale and retail trade; <br>(d) Finance, insurance, and real estate; and <br>(e) Services; (7) &quot;Commonwealth&quot; means the Commonwealth of Kentucky; <br>(8) &quot;Economic development project&quot; or &quot;project&quot; means: (a) A new or expanded service or technology activity conducted at a new or expanded site by: <br>1. An approved company; or 2. An approved company and its affiliate or affiliates; or (b) Any of the following activities of an approved company engaged in manufacturing: <br>1. The acquisition of or present ownership in any real estate in a qualified <br>zone for the purposes described in KRS 154.23-005 to 154.23-079, <br>which ownership shall include only fee simple ownership of real estate <br>and possession of real estate according to a capital lease as determined <br>in accordance with Statement of Financial Accounting Standards No. 13, <br>Accounting for Leases, issued by the Financial Accounting Standards <br>Board, November 1976; 2. The acquisition or present ownership of improvements or facilities on <br>land that is possessed or is to be possessed by the approved company in <br>a ground lease having a term of sixty (60) years or more; provided, <br>however, that this project shall not include lease payments made under a <br>ground lease for purposes of calculating the tax credits offered under <br>KRS 154.23-005 to 154.23-079; 3. The construction, installation, equipping, and rehabilitation of <br>improvements, fixtures, equipment, and facilities necessary or desirable <br>for improvement of the real estate owned, used, or occupied by the <br>approved company for manufacturing purposes. Construction activities <br>include surveys; site tests and inspections; subsurface site work; <br>excavation; removal of structures, roadways, cemeteries, and other <br>surface obstructions; filling, grading, and providing drainage and storm <br>water retention; installation of utilities such as water, sewer, sewage <br>treatment, gas, electric, communications, and similar facilities; off-site <br>construction of utility extensions to the boundaries of the real estate; or <br>similar activities as the authority may determine necessary for <br>construction; and 4. The leasing of real estate and the buildings and fixtures thereon <br>acquired, constructed, and installed with funds from grants under KRS <br>154.23-060; (9) &quot;Eligible company&quot; means any corporation, limited liability company, partnership, limited partnership, sole proprietorship, business trust, or any other legal entity <br>engaged in manufacturing, or service or technology; however, any company whose <br>primary purpose is retail sales shall not be an eligible company; (10) &quot;Employee benefits&quot; means nonmandated costs paid by an eligible company for its full-time employees for health insurance, life insurance, dental insurance, vision <br>insurance, defined benefits, 401(k), or similar plans; (11) &quot;Final approval&quot; means action taken by the authority that authorizes the eligible company to receive inducements in connection with a project under KRS 154.23-<br>005 to 154.23-079; (12) &quot;Full-time employee&quot; means a person employed by an approved company for a minimum of thirty-five (35) hours per week and subject to the state income tax <br>imposed by KRS 141.020; (13) &quot;Inducements&quot; means the assessment and the income tax credits allowed to an approved company under KRS 154.23-050 and 154.23-055; (14) &quot;Local government&quot; means a city, county, or urban-county government; <br>(15) &quot;Manufacturing&quot; means to make, assemble, process, produce, or perform any other activity that changes the form or conditions of raw materials and other property, and <br>shall include any ancillary activity to the manufacturing process, such as storage, <br>warehousing, distribution, and related office facilities; however, &quot;manufacturing&quot; <br>shall not include mining, the extraction of minerals or coal, or processing of these <br>resources; (16) &quot;Person&quot; means an individual, sole proprietorship, partnership, limited partnership, joint venture, trust, unincorporated organization, association, corporation, limited <br>liability company, institution, entity or government, whether federal, state, county, <br>city, or otherwise, including without limitation any instrumentality, division, <br>political subdivision, district, court, agency, or department thereof; (17) &quot;Preliminary approval&quot; means action taken by the authority that conditions final approval of an eligible company and its economic development project upon <br>satisfaction by the eligible company of the applicable requirements under KRS <br>154.23-005 to 154.23-079; (18) &quot;Qualified employee&quot; means an individual subject to Kentucky income tax who has resided in the qualified zone where the project exists for at least twelve (12) <br>consecutive months preceding full-time employment by an approved company; (19) &quot;Qualified statewide employee&quot; means an individual subject to Kentucky income tax who has resided in any census tract or county in the Commonwealth that meets <br>the criteria in KRS 154.23-015, regardless of whether the tract or county is in a <br>qualified zone, for at least twelve (12) consecutive months preceding full-time <br>employment by an approved company; (20) &quot;Qualified zone&quot; means any census tract or county certified as such by the authority in KRS 154.23-015 and 154.23-020; (21) &quot;Rent&quot; means: (a) The actual annual rent or leasing fee paid by an approved company to a bona fide entity negotiated at arm's length for the use of a building by the approved <br>company to conduct the approved project for which the inducement has been <br>granted; or (b) The fair rental value on an annual basis in a building owned by the approved company of the space used by the approved company to conduct the approved <br>project for which the inducement has been granted as determined by the <br>authority using criteria that are customary in the real estate industry for the <br>type of building being used. The fair rental value shall include an analysis of <br>the cost of amortizing the cost of land and building over the period of time <br>customary in the real estate industry for the type of building and for the land <br>being utilized; and (c) Rent shall include the customary cost of occupancy, including but not limited to property taxes, heating and air conditioning, electricity, water, sewer, and <br>insurance; (22) &quot;Service and technology agreement&quot; means any agreement entered into under KRS 154.23-040 on behalf of the authority, an approved company engaged in service or <br>technology, and third-party lessors, if applicable, with respect to an economic <br>development project; (23) (a) &quot;Service or technology&quot; means either: 1. Any activity involving the performance of work, except work classified <br>by the divisions, including successor divisions, of agriculture, forestry <br>and fishing, mining, utilities, construction, manufacturing, wholesale <br>trade, retail trade, real estate rental and leasing, educational services, <br>accommodation and food services, and public administration in <br>accordance with the &quot;North American Industry Classification System,&quot; <br>as revised by the United States Office of Management and Budget from <br>time to time, or any successor publication; or 2. Regional or headquarters operations of an entity engaged in an activity <br>listed in subparagraph 1. of this paragraph. (b) Notwithstanding paragraph (a) of this subsection, &quot;service or technology&quot; shall not include any activity involving the performance of work by an <br>individual who is providing direct service to the public pursuant to a license <br>issued by the state or an association that licenses in lieu of the state; (24) &quot;Start-up costs&quot; means the acquisition cost associated with the project and related to furnishing and equipping a building for ordinary business functions, including <br>computers, nonrecurring costs of fixed telecommunication equipment, furnishings, <br>office equipment, and the relocation of out-of-state equipment, as verified and <br>approved by the authority in accordance with KRS 154.23-040; (25) &quot;Tax incentive agreement&quot; means that agreement entered into pursuant to KRS 154.23-035 between the authority and an approved company with respect to an <br>economic development project; (26) &quot;Kentucky gross receipts&quot; means Kentucky gross receipts as defined in KRS 141.0401; and (27) &quot;Kentucky gross profits&quot; means Kentucky gross profits as defined in KRS 141.0401. Effective: July 15, 2010 <br>History: Repealed and reenacted 2010 Ky. Acts ch. 51, sec. 44, effective July 15, 2010. -- Amended 2009 Ky. Acts ch. 11, sec. 39, effective June 25, 2009. -- Amended 2007 <br>Ky. Acts ch. 137, sec. 44, effective June 26, 2007. -- Amended 2006 (1st Extra. <br>Sess.) Ky. Acts ch. 2, sec. 46, effective June 28, 2006. -- Amended 2006 Ky. Acts <br>ch. 149, sec. 217, effective July 12, 2006; and ch. 211, sec. 71, effective July 12, <br>2006. -- Amended 2004 Ky. Acts ch. 105, sec. 4, effective July 13, 2004. -- Amended <br>2002 Ky. Acts ch. 338, sec. 25, effective July 15, 2002. -- Created 2000 Ky. Acts <br>ch. 528, sec. 2, effective July 14, 2000. Legislative Research Commission Note (7/15/2010). 2010 Ky. Acts ch. 51, sec. 183, provides, &quot;The specific textual provisions of Sections 1 to 178 of this Act which <br>reflect amendments made to those sections by 2007 Ky. Acts ch. 137 shall be deemed <br>effective as of June 26, 2007, and those provisions are hereby made expressly <br>retroactive to that date, with the remainder of the text of those sections being <br>unaffected by the provisions of this section.&quot; Legislative Research Commission Note (6/28/2006). 2006 (1st Extra Sess.) Ky. Acts ch. 2, sec. 73, provides that &quot;unless a provision of this Act specifically applies to an <br>earlier tax year, the provisions of this Act shall apply to taxable years beginning on or <br>after January 1, 2007.&quot; Legislative Research Commission Note (7/12/2006). In 2006 Ky. Acts ch. 149, almost all references in the Kentucky Revised Statutes to &quot;registered limited liability <br>partnerships&quot; were removed by amendments to various sections of the KRS. <br>However, in this section and in sec. 216 of the bill, KRS 154.22-010, this phrase was <br>not changed or deleted. It appears that leaving this phrase in these two sections was <br>an oversight. Legislative Research Commission Note (7/12/2006). A reference in subsection (3)(a) of this section has been corrected in codification to read &quot;subsection (8)(b)4.&quot; <br>because the necessary adjustments to this internal reference were not made in either <br>2002 Ky. Acts ch. 338, sec. 25, or 2006 Ky. Acts ch. 149, sec 217, each of which <br>inserted a new subsection into this statute. The Reviser of Statutes has corrected these <br>oversights under the authority of KRS 7.136(1)(e) and (h).