154.27.020 Short title -- Legislative findings -- Purpose of subchapter-- Incentives.
Download pdf
Loading PDF...
<![CDATA[ Page 1 of 3 154.27-020 Short title -- Legislative findings -- Purpose of subchapter-- Incentives. (1) This subchapter shall be known as the "Incentives for Energy Independence Act." <br>(2) The General Assembly hereby finds and declares that it is in the best interest of the Commonwealth to induce the location of innovative energy-related businesses in <br>the Commonwealth in order to advance the public purposes of achieving energy <br>independence, creating new jobs and new investment, and creating new sources of <br>tax revenues that but for the inducements to be offered by the authority to approved <br>companies would not exist. (3) The purpose of this subchapter is to assist the Commonwealth in moving to the forefront of national efforts to achieve energy independence by reducing the <br>Commonwealth's reliance on imported energy resources. The provisions of this <br>subchapter seek to accomplish this purpose by providing incentives for companies <br>that, in a carbon capture ready manner, construct, retrofit, or upgrade facilities for <br>the purpose of: <br>(a) Increasing the production and sale of alternative transportation fuels; <br>(b) Increasing the production and sale of synthetic natural gas, chemicals, chemical feedstocks, or liquid fuels, from coal, biomass resources, or waste <br>coal through a gasification process; (c) Increasing the production and sale of energy-efficient alternative fuels; or <br>(d) Generating electricity for sale through alternative methods such as solar power, wind power, biomass resources, landfill methane gas, hydropower, or <br>other similar renewable resources. (4) To qualify for the incentives provided in this subchapter, the following requirements shall be met: <br>(a) For an alternative fuel facility or gasification facility that uses oil shale, tar sands, or coal as the primary feedstock, the minimum capital investment shall <br>be one hundred million dollars ($100,000,000); (b) For an alternative fuel facility or gasification facility that uses biomass resources as the primary feedstock, the minimum capital investment shall be <br>twenty-five million dollars ($25,000,000); (c) For an energy-efficient alternative fuel facility, the minimum capital investment shall be twenty-five million dollars ($25,000,000); (d) For an alternative fuel facility located in Kentucky that is newly constructed on or after August 1, 2010, or an existing facility located in Kentucky that is <br>retrofitted or upgraded on or after August 1, 2010, and that, after the new <br>construction, retrofit, or upgrade, primarily produces for sale alternative <br>transportation fuels using natural gas or natural gas liquids as the primary <br>feedstock, the minimum capital investment shall be one million dollars <br>($1,000,000); provided that the authority may approve a maximum of five (5) <br>projects that meet the requirements of this paragraph; and (e) For a renewable energy facility, the minimum capital investment shall be one million dollars ($1,000,000). Page 2 of 3 (5) The incentives under the Incentives for Energy Independence Act are as follows: (a) An advance disbursement of post-construction incentives for which an approved company has been approved, the maximum amount of which is <br>based upon the estimated labor component of the total capital investment of <br>the eligible project, and the utilization of Kentucky residents during the <br>construction period as set forth in KRS 154.27-090; (b) Sales and use tax incentives of up to one hundred percent (100%) of the taxes paid on purchases of tangible personal property made to construct, retrofit, or <br>upgrade an eligible project, as set forth in KRS 139.517 and 154.27-070; (c) Up to eighty percent (80%) of the severance taxes paid on the purchase or severance of: <br>1. Coal that is subject to the tax imposed under KRS 143.020 and that is <br>specifically used by an alternative fuel facility, energy-efficient <br>alternative fuel facility, or a gasification facility as feedstock for an <br>eligible project, as set forth in KRS 143.024 and 154.27-060; or 2. Natural gas or natural gas liquids that are subject to the tax imposed <br>under KRS 143A.020 and that are specifically used in an alternative fuel <br>facility described in subsection (4)(d) of this section as feedstock for an <br>eligible project, as set forth in KRS 143A.025 and 154.27-060; (d) Up to one hundred percent (100%) of the Kentucky income tax imposed under KRS 141.040 or 141.020, and the limited liability entity tax imposed under <br>KRS 141.0401 on the income, Kentucky gross profits, or Kentucky gross <br>receipts of the approved company generated by or arising from the eligible <br>project, as set forth in KRS 141.421 and 154.27-080; and (e) Authorization for the approved company to impose a wage assessment of up to four percent (4%) of the gross wages of each employee subject to the <br>Kentucky income tax: <br>1. Whose job was created as a result of the eligible project; 2. Who is employed by the approved company to work at the facility; and 3. Who is on the payroll of the approved company or an affiliate of the <br>approved company; as set forth in KRS 154.27-080. (6) The maximum recovery from all incentives approved under this subchapter for an eligible project shall not exceed fifty percent (50%) of the capital investment in the <br>eligible project. (7) The incentives available to an approved company shall be negotiated with and approved by the authority. (8) If a newly constructed facility that qualifies for incentives under this subchapter is later upgraded or retrofitted in a manner that would qualify for incentives under this <br>subchapter, the retrofit or upgrade shall be a separate eligible project, and the <br>minimum investment requirements and carbon capture readiness requirements, if Page 3 of 3 required, shall be met for the retrofit or upgrade to qualify for incentives under this <br>subchapter. (9) The General Assembly finds that the authorities granted by this subchapter are proper governmental and public purposes for which public moneys may be <br>expended. Effective: July 15, 2010 <br>History: Amended 2010 Ky. Acts ch. 60, sec. 2, effective July 15, 2010; and ch. 139, sec 3, effective July 15, 2010. -- Amended 2009 (1st Extra. Sess.) Ky. Acts ch. 1, <br>sec. 101, effective June 26, 2009. -- Created 2007 (2d Extra. Sess.) Ky. Acts ch. 1, <br>sec. 2, effective August 30, 2007. Legislative Research Commission Note (7/15/2010). 2010 Ky. Acts ch. 139, sec. 3, amended KRS 154.27-020 to add a new paragraph (d) to subsection (4) of the statute. <br>This statute was also amended in 2010 Ky. Acts ch. 60, sec. 2, and that amendment <br>added a new paragraph (c) to subsection (4). In codification, the lettering of the <br>former paragraph (4)(c) has been changed to (4)(e) by the Reviser of Statutes under <br>the authority of KRS 7.136 (1). Legislative Research Commission Note (7/15/2010). This section was amended by 2010 Ky. Acts chs. 60 and 139, which do not appear to be in conflict and have been <br>codified together. Legislative Research Commission Note (8/30/2007). A manifest clerical or typographical error in subsection (5)(a) of this section has been corrected by the <br>Reviser of Statutes during codification pursuant to the authority of KRS 7.136. ]]>