307 KAR 2:010. Kentucky Jobs Development Act Program

Link to law: http://www.lrc.ky.gov/kar/307/002/010.htm
Published: 2015

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      307

KAR 2:010. Kentucky Jobs Development Act Program.

 

      RELATES

TO: KRS 154.24-010-154.24-150

      STATUTORY

AUTHORITY: KRS 154.20-033, 154.24-090

      NECESSITY,

FUNCTION, AND CONFORMITY: KRS 154.24-090 authorizes the authority to promulgate

administrative regulations regarding the approval of eligible companies and

economic development projects conducted by those companies. This administrative

regulation establishes necessary to set out the application process, hearing

procedure and project selection criteria for the Kentucky Jobs Development Act

Program established pursuant to KRS 154.24-010 through 154.24-150.

 

      Section

1. Definitions. (1) "Act" means KRS 154.24-010 through KRS

154.24-150.

      (2)

"Activation date" means a date that:

      (a)

Shall be designated by the company and set forth in the service and technology

agreement, within two (2) years from the date of the authority’s final approval

resolution; and

      (b)

Commences the company’s ten (10) year period of eligibility for wage

assessments and income tax credits.

      (3)

"Approved company" is defined in KRS 154.24-010(3).

      (4)

"Assessment" is defined in KRS 154.24-010(5).

      (5)

"Authority" is defined in KRS 154.24-010(6).

      (6)

"Commonwealth" is defined in KRS 154.24-010(8).

      (7)

"Economic development project" is defined in KRS 154.24-010(9).

      (8)

"Eligible company" is defined by KRS 154.24-010(10).

      (9)

"Full-time employee" is defined in KRS 154.24-010(13).

      (10)

"Inducements" is defined in KRS 154.24-010(15).

      (11)

"KRS" means the Kentucky Revised Statutes, as they may be amended

from time to time.

      (12)

"Rent" is defined in KRS 154.24-010(19).

      (13)

"Service or technology" is defined in KRS 154.24-010(20).

      (14)

"Start-up costs" is defined in KRS 154.24-010(21).

 

      Section

2. Service or Technology; Excluded Classifications. (1) "Service or

technology" defined in KRS 154.24-010 shall not include the following

classifications listed by division in the index of the "North American

Industry Classification System" (2002 ed.) published by the United States

Office of Management and Budget and incorporated by reference in Section 7 of

this administrative regulation:

      (a)

Section 11. Agriculture, forestry, fishing, and hunting;

      (b)

Section 21. Mining;

      (c)

Section 23. Construction; and

      (d)

Section 31-33. Manufacturing.

      (2)

Any company principally engaged in an ineligible activity, including those

listed in subsection (1) of this section, may be approved for the Kentucky Jobs

Development Act Program if the company's service and technology activity:

      (a)

Complies with the requirements of this administrative regulation;

      (b)

Is operated by the company in a separate division; and

      (c)

Is approved by the authority.

 

      Section

3. Kentucky Jobs Development Act Program. (1) A company wishing to participate

in the Kentucky Jobs Development Act Program shall file an application with the

authority which shall contain:

      (a)

Documentation and certification required pursuant to KRS 154.24-090(1).

Documentation of services provided for persons located outside the Commonwealth

shall include the annual gross revenues directly generated from the economic

development project. In the case of those economic development projects which

for purposes of the approved company and in accordance with generally accepted

accounting principles do not generate revenues, the required documentation

shall include the annual gross revenues generated by the entity for which the

services from the economic development project are provided;

      (b)

Information required pursuant to KRS 154.24-090(2), (3) and (4);

      (c)

A list of the competitors of the applicant in the Commonwealth;

      (d)

Notice that a $500 nonrefundable application fee payable to the authority shall

be submitted with the application;

      (e)

A brief history of the business and description of the project, including

description of service or technology activities;

      (f)

A letter of support from the appropriate local elected officials, including an

acknowledgment that the local community is supportive of the job assessment

incentive;

      (g)

Notice that an administrative fee of one-tenth (.1) of one (1) percent of the

estimated approved costs for the entire period, with a minimum administrative

fee of $1,000 in addition to the $500 application fee, is payable upon

execution of the service and technology agreement. If the approved costs, as

finally determined, are adjusted upward, the administrative fee shall be

increased commensurately;

      (h)

Notice that a completed Economic Development Incentive Disclosure Statement as

incorporated by reference, shall be submitted as a part of the application;

      (i)

Projected costs and a breakdown of those costs, including:

      1.

Annual rent for the building or the fair rental value if the building is being

purchased;

      2.

Start-up costs as defined in KRS 154.24-010(21); and

      3.

Relocation costs as defined in KRS 154.24-010(18);

      (j)

For the ten (10) year period of the financial assistance:

      1.

The annual estimated wages to be paid;

      2.

The annual wage assessment; and

      3.

The annual income tax credit;

      (k)

The current number of jobs at the project location, both full time and part

time;

      (l)

The number of new full-time and part-time jobs to be created at the project

location by the activation date;

      (m)

The total projected number of full-time and part-time jobs that will exist at

the project at the activation date; and

      (n)

The number of skilled, semiskilled, unskilled, managerial and technical jobs

created by the projects.

      (2)

Pursuant to KRS 154.24-100 the authority may preliminarily approve eligible

companies after consideration of the application for the Kentucky Jobs

Development Act Program if it determines the company meets all the requirements

of the Act and this administrative regulation.

 

      Section

4. Hearing Procedure. (1) The authority shall appoint a hearing agent and hold

at least one (1) public hearing to solicit public comments. At the hearing the

company shall address the criteria in KRS 154.24-090.

      (2)

The hearing shall be held in Frankfort and notice of the hearing shall include

the date, time and precise location, including street address, where the

hearing shall be held.

      (3)

The public shall be afforded the opportunity to present evidence and comment on

the application at the public hearing.

      (4)

Public hearings shall be conducted informally to allow reasonable commentary on

the application.

      (5)

Public hearings shall be tape recorded by the authority and copies made

available to the public. Any person requesting a copy of the tape shall provide

a blank audio cassette upon which the copy will be provided.

      (6)

The hearing agent shall summarize the comments offered at the public hearing

and shall submit the summary to the authority for its consideration of whether

to designate the eligible company as an approved company.

      (a)

The hearing agent shall not express an opinion about whether the eligible

company should be designated by the authority as an approved company.

      (b)

Two (2) copies of the report of the hearing agent shall be completed and

provided to the authority at least ten (10) days prior to its meeting to

consider designating the eligible company as an approved company.

 

      Section

5. Service and Technology Agreement Contents. The authority may require the

following additional information as a part of the negotiated terms of a service

and technology agreement pursuant to KRS 154.24-120:

      (1)

Annual, quarterly or monthly progress reports to the authority;

      (2)

Annual, quarterly or monthly certifications to assure compliance with KRS

154.24-090(1), 154.24-120(2)(b) and 154.24-140(4);

      (3)

Annual certifications of rental payments referred to in KRS 154.24-130(2);

      (4)

Annual, quarterly or monthly financial reports to the authority;

      (5)

Access to the approved company's records; and

      (6)

Access to the approved company’s facilities.

 

      Section

6. Activation. If an approved company has not met the job creation requirements

as set forth in KRS 154.24-090 and the service and technology agreement by its

activation date, the company shall lose its approved company status and shall

not be eligible for the authorized inducements under the service and technology

agreement, unless it requests and receives an extension pursuant to KRS

154.24-090(2). The extension established by KRS 154.24-090(2) may only be

granted to permit the company to create the number of jobs required by statute.

No inducements may be taken during the extension period until the job creation

requirement is met.

 

      Section

7. Incorporation by Reference. (1) The following material is incorporated by

reference:

      (a)

The "Application for Kentucky Jobs Development Act Program" (Application)

which also includes the "Economic Development Incentive Disclosure

Statement"; and

      (b)

The "North American Industry Classification System" (2002 ed.) (NAIC)

from the United States Office of Management and Budget.

      (2)

This material may be inspected, copied or obtained, subject to applicable

copyright law, at the offices of the Cabinet for Economic Development, 24th

Floor, Capital Plaza Tower, Frankfort, Kentucky, Monday through Friday, 8 a.m.

to 4:30 p.m. (19 Ky.R. 2533; Am. 20 Ky.R. 69; eff. 6-25-93; 21 Ky.R. 2737; 22

Ky.R. 39; eff. 7-6-95; 29 Ky.R. 2968; 30 Ky.R. 279; eff. 8-13-2003.)