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154.30.070 Terms and conditions of tax incentive agreements to be negotiated between authority and agency -- Provisions of agreement -- Pledge of incremental revenues superior to other pledges of reve

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Page 1 of 2 154.30-070 Terms and conditions of tax incentive agreements to be negotiated between authority and agency -- Provisions of agreement -- Pledge of <br>incremental revenues superior to other pledges of revenues -- Renewal and <br>discontinuance of agreement. (1) The terms and conditions of the tax incentive agreement shall be negotiated between the authority and the agency. The tax incentive agreement shall include but <br>not be limited to the following provisions: <br>(a) Identification of the parties to the tax incentive agreement and the duties and responsibilities of each party to the tax incentive agreement; (b) The specific identification of the state tax revenues, by type of tax, to be released or pledged by the Commonwealth for the project; (c) 1. A detailed summary of old revenues collected and projected new <br>revenues for the Commonwealth on an annual basis for the term of the <br>tax incentive agreement; and 2. The maximum amount of incremental revenue to be released by the <br>Commonwealth and the maximum number of years the pledge of <br>incremental revenues will be effective; (d) A detailed description of each project that is the subject of the tax incentive agreement, including an estimate of the costs of construction or acquisition <br>and development; (e) Identification of the project footprint from which the state incremental revenues pledged by the Commonwealth are to be derived; (f) The approved public infrastructure costs and, when applicable, approved signature project costs, approved financing costs, and approved costs relating <br>to land preparation, demolition, and clearance that may be recovered; (g) The minimum capital investment required, and the date by which the minimum capital investment is expected to occur; (h) Terms of default and remedies, provided that no remedy shall permit the withholding by any party to the tax incentive agreement of any incremental <br>revenues if increment bonds are outstanding that are secured by a pledge of <br>those incremental revenues; (i) The termination date; <br>(j) A requirement that the agency, city, or county annually certify to the authority the use of incremental revenues for the payment of approved project costs <br>within the development area; (k) A requirement that the agency shall utilize the portion of incremental revenues pledged pursuant to a tax incentive agreement that exceeds, in a given year, <br>the amounts needed to: <br>1. Pay the current financing costs; and 2. Maintain a fully funded reserve; Page 2 of 2 to provide for the retirement or defeasance of all or a portion of the remaining <br>financing costs related to approved public infrastructure costs, and approved <br>signature project costs secured by the incremental revenues; (l) A requirement that the agency, city, or county make periodic accountings to the authority; (m) A requirement that the authority monitor and verify approved public infrastructure costs, financing costs and approved signature project costs and <br>minimum capital investment; and (n) For a signature project, the eligible refund percentage for the sales tax as permitted under KRS 139.515, and as determined by the authority pursuant to <br>KRS 65.7075(6); and (o) Any other provisions not inconsistent with this subchapter deemed necessary or appropriate by the parties to the tax incentive agreement. (2) Any pledge of incremental revenues in a tax incentive agreement shall be superior to any other pledge of revenues for any other purpose and shall, from the activation <br>date to the termination date, supersede any statute or ordinance regarding the <br>application or use of incremental revenues. An ordinance in conflict with a tax <br>incentive agreement shall not be adopted while any increment bonds secured by that <br>pledge remain outstanding. Ordinances pledging increments on a subordinate basis <br>to any existing pledges may be adopted. (3) Any tax incentive agreement shall be made on the basis of automatic year-to-year renewals, with the option to discontinue upon sixty (60) days' notice before the end <br>of any annual termination date of the tax incentive agreement. Effective: July 15, 2008 <br>History: Repealed, reenacted, and amended 2008 Ky. Acts ch. 178, sec. 20, effective July 15, 2008. -- Created 2007 Ky. Acts ch. 95, sec. 20, effective March 23, 2007. Legislative Research Commission Note (7/15/2008). 2008 Ky. Acts ch. 178, sec. 14 established a new Subchapter 30 of Chapter 154 concerning tax increment financing <br>projects and secs. 16 through 19 and 21 of that Act repealed, reenacted, and amended <br>existing sections of KRS Chapter 65 as new sections of the new Subchapter 30 of <br>KRS Chapter 154. Inquiry was made of the drafter as to the intent of those actions. <br>The drafter explained that statutes dealing with both area development projects and <br>tax increment financing projects were blended together in KRS Chapter 65 with no <br>easy distinguishing elements, and the intent of creating Subchapter 30 of KRS <br>Chapter 154 was to separate them appropriately. Therefore, the intent of secs. 16 <br>through 19 and 21 was to move those sections contained in KRS Chapter 65 that <br>relate to only tax increment financing projects into the new Subchapter 30 of KRS <br>Chapter 154, with necessary conforming amendments to the language. The Reviser of <br>Statutes inquired about the treatment of sec. 20 of that Act purporting to amend KRS <br>65.7079, which appeared to the Reviser to require the same treatment as other <br>statutes in that range moved into new Subchapter 30 of KRS Chapter 154 in secs. 16 <br>through 19 and 21. The drafter confirmed that the intent was to treat that statute in <br>the same manner as those statutes addressed in secs. 16 through 19 and 21. As such, <br>the Reviser of Statutes has treated sec. 20 in codification as repealing and reenacting <br>this statute as a new section of Subchapter 30 of KRS Chapter 154 to effectuate that <br>intent. Formerly codified as KRS 65.7079.