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154.27.040 Tax incentive agreement -- Required provisions.

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Page 1 of 2 154.27-040 Tax incentive agreement -- Required provisions. The terms and conditions of the tax incentive agreement shall be negotiated between the <br>authority and the approved company. The tax incentive agreement may include one (1) or <br>more of the incentives available under this subchapter or any combination of the <br>incentives as negotiated between the authority and the approved company. The tax <br>incentive agreement shall include but not be limited to the following provisions: <br>(1) The duties and responsibilities of the parties; <br>(2) The specific identification of incentives included in the tax incentive agreement, including the permissible percentage recovery under each included incentive; (3) A detailed description of the eligible project, including an estimate of the capital investment; (4) If the eligible project is an alternative fuel facility or a gasification facility, a requirement that the facility be carbon capture ready; (5) The minimum capital investment required and the maximum capital investment that may be recovered; (6) The time within which the minimum capital investment shall be made; <br>(7) The activation date and the termination date. The agreement shall commence on the activation date and shall terminate upon the earlier of full receipt of the maximum <br>amount of incentives by the approved company or twenty-five (25) years from the <br>activation date; (8) A target percentage of the workforce that is Kentucky residents during the construction, retrofit, or upgrade of the facility, and at the facility upon completion <br>of construction; (9) If the wage assessment permitted by KRS 154.27-080 is included, the percentage rate at which the assessment shall be imposed; (10) If the advance disbursement employment incentive permitted by KRS 154.27-090 is included: <br>(a) The estimated labor component and the estimated Kentucky resident factor as determined under KRS 154.27-090; (b) A schedule for the disbursement of funds during the construction period; <br>(c) A provision that requires a reduction or adjustment in the receipt of post-construction incentives for which the approved company is eligible under the <br>tax incentive agreement until the advance disbursement has been repaid by the <br>approved company; (d) A provision addressing an alternate payment method if the incentives are not sufficient to repay the advance disbursement; and (e) A repayment schedule that includes the amount of reduction, the incentives the reduction shall apply to, the amount of interest due, the time period over <br>which the advance disbursement amount shall be recouped, and the amount <br>that shall be recouped in each year. To the extent possible, the repayment <br>schedule shall include uniform incremental payments; Page 2 of 2 (11) That the approval of the company is not a guarantee of incentives and that actual receipt of the incentives shall be contingent on the approved company filing the <br>required requests for incentives and meeting the requirements established by the tax <br>incentive agreement and by KRS 139.517, 141.421, 143.024, 154.27-060, 154.27-<br>070, 154.27-080, and 154.27-090 that apply to the incentives included; (12) That the approved company shall provide the authority with documentation of capital expenditures in a manner acceptable to the authority; (13) Negotiated terms relating to repayment or similar remedies for incentives received prior to the completion of construction if the approved company fails to comply <br>with the terms of the tax incentive agreement; (14) That, if the authority determines that the approved company has failed to comply with any of its obligations under the tax incentive agreement: <br>(a) The authority shall have the right to suspend the incentives available to the approved company; (b) Both the authority and the department shall have the right to pursue any remedy provided under the tax incentive agreement; (c) The authority may terminate the tax incentive agreement; and <br>(d) Both the authority and the department may pursue any other remedy at law to which it may be entitled; (15) A requirement that the authority monitor the tax incentive agreement; <br>(16) A requirement that the approved company provide to the authority the information necessary to monitor the tax incentive agreement and authorization for the authority <br>to share that information with the Department of Revenue, the Department for <br>Energy Development and Independence, or any other entity the authority determines <br>is necessary for the purposes of monitoring and enforcing the terms of the tax <br>incentive agreement; and (17) Any other provisions not inconsistent with this subchapter and determined to be necessary or appropriate by the parties to the tax incentive agreement. Effective: July 15, 2010 <br>History: Amended 2010 Ky. Acts ch. 24, sec. 201, effective July 15, 2010. -- Created 2007 (2d Extra. Sess.) Ky. Acts ch. 1, sec. 4, effective August 30, 2007. Legislative Research Commission Note (8/30/2007). A manifest clerical or typographical error in subsection (10) of this section has been corrected by the <br>Reviser of Statutes during codification pursuant to the authority of KRS 7.136.