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154.30.052 Signature project loan support program -- Program requirements.

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Page 1 of 2 154.30-052 Signature project loan support program -- Program requirements. (1) An agency with a signature project approved under KRS 154.30-050(2)(a) with a tax incentive agreement executed prior to January 1, 2008, may apply to the <br>authority to participate in a loan support program. (2) The authority shall establish a loan support program for agencies meeting the requirements of subsection (1) of this section. The program shall, at a minimum, <br>include the following requirements: <br>(a) An agency seeking to participate in the loan support program shall file an application with the authority, in the form and format determined by the <br>authority. The authority shall review the application and may request any <br>additional information necessary to evaluate the application; (b) If the authority approves an agency for participation in the loan support program, the authority shall enter into an agreement with the agency detailing <br>the terms and conditions of the agency's participation in the program. The <br>terms of the agreement shall include but not be limited to: <br>1. Identification of the collateral or other forms of repayment assurance <br>that will be available from the agency if the Cabinet for Economic <br>Development makes a loan to the agency; 2. A requirement that the agency obtain from the developer or developers <br>an agreement to indemnify the Commonwealth or the agency, as the case <br>may be, if the Cabinet for Economic Development makes a loan to the <br>agency that the agency is not able to repay; 3. Identification of any other alternative methods for repayment of any <br>loans if incremental revenues are insufficient; 4. A statement that the authority has verified that the agency requesting <br>participation in the program has the resources available to maintain an <br>acceptable balance in the account as required by paragraph (g) of this <br>subsection; 5. A requirement that any balance remaining in the account of an agency at <br>the expiration of the agreement, and after all required amounts have <br>been repaid shall be repaid to the agency; and 6. The agreement term, which shall not be longer than the term of the tax <br>incentive agreement between the agency and the authority; (c) The agency requesting participation in the loan support program shall provide to the authority a lump-sum payment in an amount equal to at least seventy-<br>five percent (75%) of the annual average projected incremental revenues to be <br>generated within the agency's development area over the term of the tax <br>incentive agreement; (d) The authority shall hold the funds transferred by an agency on behalf of the agency making the deposit in a separate account; (e) To the extent funds are available in the agency's account, the authority shall, upon request of the agency, make a distribution from the agency's account to Page 2 of 2 the agency in any year that the incremental revenues generated from the <br>agency's development area are insufficient to make any debt payments the <br>agency is obligated to make; (f) 1. If the balance in an agency's account at the close of any fiscal year is less <br>than the amount initially provided by the agency to the authority, the <br>agency shall provide to the authority from incremental revenues, an <br>amount necessary to bring the level of the account back to the amount of <br>the lump-sum payment required by paragraph (c) of this subsection. 2. a. If the agency does not have sufficient incremental revenues to <br>bring its account back to the initial level, the Cabinet for Economic <br>Development shall, subject to the availability of funds, deposit in <br>the account of the agency the amount necessary to bring the <br>balance in the fund back to the initial level. b. If the Cabinet for Economic Development does not have sufficient <br>funds to restore the account to the initial level, the Cabinet for <br>Economic Development shall seek funding from the General <br>Assembly in an amount sufficient to restore the account balance to <br>the initial amount. c. Any amount deposited in the account of an agency by the Cabinet <br>for Economic Development shall be a loan from the Cabinet for <br>Economic Development to the agency, and shall be repaid by the <br>agency according to the terms and conditions agreed to by the <br>agency and the authority; (g) Prior to entering into an agreement with an agency pursuant to this section, the authority shall verify that the agency requesting the loan has the resources <br>available to maintain an acceptable balance in its account; and (h) Any balance remaining in the account of an agency at the expiration of the agreement and after all required amounts have been repaid shall be returned to <br>the agency. Effective: June 26, 2009 <br>History: Created 2009 (1st Extra. Sess.) Ky. Acts ch. 1, sec. 64, effective June 26, 2009.