KRS § 42.4588 — KY Code / Title VI / Chapter 42 / Section 42.4588
42.4588 Local Government Economic Development Program -- Use of grants -- Procedures
Status: in_force

42.4588 Local Government Economic Development Program -- Use of grants --

Procedures.

(1) (a) A Local Government Economic Development Program is established to

consist of a system of grants to counties to attract new industry. Grants from

funds provided for in KRS 42.4592(1)(a) and (b) shall be administered by the

Department for Local Government. Grants from funds provided for in KRS

42.4592(1)(c) shall be administered by the Kentucky Economic Development

Finance Authority.

(b) All references in this section to the commissioner of the Department for Local

Government relate only to the grants or industrial development projects

funded through KRS 42.4592(1)(a) and (b). All references in this section to

the secretary of the Cabinet for Economic Development or the Kentucky

Economic Development Finance Authority relate only to grants or industrial

development projects funded through KRS 42.4592(1)(c).

(2) Grants obtained under this program shall be used for:

(a) Industrial development projects if an industrial firm has agreed with the local

government, to the satisfaction of the Kentucky Economic Development

Finance Authority or the Department for Local Government, to develop, in

conjunction with the industrial development project, manufacturing,

processing, assembling, or other facilities approved by the secretary of the

Cabinet for Economic Development or the commissioner of the Department

for Local Government;

(b) Industrial development projects if the secretary of the Cabinet for Economic

Development or the commissioner of the Department for Local Government

finds that the project is necessary for the creation of an environment for new

industry in order to obtain an agreement from an industrial firm to develop

manufacturing, processing, assembling, or other facilities approved by the

secretary of the Cabinet for Economic Development or the commissioner of

the Department for Local Government; and

(c) Debt service for industrial development projects, as defined in subsection

(2)(a) and (b) of this section, or for facilities approved by the secretary of the

Cabinet for Economic Development or the commissioner of the Department

for Local Government under the provisions of subsection (3) of this section.

(3) The secretary of the Cabinet for Economic Development or the commissioner of the

Department for Local Government may approve facilities, other than

manufacturing, processing, or assembling facilities, for industrial development

projects when the secretary or the commissioner finds that the facility will add

value to a product. Value-added facilities shall include data processing,

telecommunication, and distribution facilities but shall not include retail facilities or

coal mining, coal processing, or coal transportation facilities. The secretary or the

commissioner may also approve privately owned facilities for transient lodging and

recreation where the secretary or commissioner finds that the cost of the recreation

component of the facility is equal to, or greater than, the cost of the lodging

component of the facility. The criteria for approval of applications for grants

provided for in subsection (10)(a), (b), and (c) of this section shall be paramount in

the case of lodging and recreational facilities.

(4) Applications for grants from funds provided for in KRS 42.4592(1)(a) and (b) shall

be made by the legislative bodies of one (1) or more counties with accounts in the

local government economic development fund. Applications for grants from funds

provided for in KRS 42.4592(1)(c) shall be made by the legislative bodies of two

(2) or more counties with accounts in the local government economic development

fund. No grant shall be awarded without application for a grant.

(5) A grant may be awarded for an industrial development project located in a county

that does not have an account in the local government economic development fund,

if the secretary of the Cabinet for Economic Development or the commissioner of

the Department for Local Government finds that the industrial development project

may be reasonably expected to create jobs for residents of the local unit or units of

government applying for the grant. Application for the grant shall be made by the

legislative bodies of one (1) or more counties with accounts in the local government

economic development fund.

(6) An industrial development project may include legal, accounting, engineering, and

marketing expenses for a regional industrial park, in addition to the activities set

forth in subsection (11)(a) of this section.

(7) Grants awarded from funds provided for in KRS 42.4592(1)(a) and (b) shall not

exceed the total balance of the accounts of the applicant counties at the time of the

award of the grant.

(8) Grants awarded under the provisions of subsection (2)(c) of this section may be for

a period not to exceed the current biennium of the Commonwealth and shall be

limited to an amount not to exceed the amount estimated to be allocated to the

applicant county or counties for the current biennium under the provisions of KRS

42.4592(1)(a) and (b).

(9) Approval of grant applications shall be by the secretary of the Cabinet for

Economic Development or the commissioner of the Department for Local

Government. Award of grants from funds provided for in KRS 42.4592(1)(c) shall

be by the Kentucky Economic Development Finance Authority. Award of grants

from funds provided for in KRS 42.4592(1)(a) and (b) shall be by the commissioner

of the Department for Local Government.

(10) Criteria for approval of applications and the award of grants to be considered, if

applicable, shall include:

(a) The number of jobs to be created or preserved, directly or indirectly, by the

industrial development project;

(b) Payrolls, and the taxes generated, both at the state and local levels, by the

industrial development project and taxes generated by the employment

created or preserved by the industrial development project;

(c) The size, nature, and cost of the industrial development project, including the

prospect of the industrial development project providing long-term jobs in

enterprises consistent with the changing economies of the affected local units

of government;

(d) The needs, and degree of needs, of the local units of government which will

be affected by the industrial development project;

(e) The needs of any industrial firm benefiting from the industrial development

project;

(f) The amount and kind of assistance, if any, available to an industrial firm from

other government agencies through tax exemption or abatement, financing

assistance through industrial development bonds, and otherwise, with respect

to the industrial development project;

(g) The amount of capital made available to the facility by lenders and by the

industrial firm; and

(h) The economic feasibility of the facility.

(11) For purposes of this section:

(a) "Industrial development project" includes the acquisition of any real estate

and the construction, acquisition, and installation thereon and with respect

thereto of improvements and facilities necessary and useful for the

improvement of the real estate for conveyance to or lease to industrial firms to

be used for manufacturing, processing, or assembling purposes, including

surveys; site tests and inspections; subsurface site work; excavation, removal

of structures, roadways, cemeteries, and other surface obstructions; filling,

grading, and provision of drainage; storm water retention; installation of

utilities, such as water, sewer, sewage treatment, gas, electricity,

communication, and other similar facilities; off-site construction of utility

extensions to the boundaries of the real estate; construction and installation on

the real estate of the industrial firm of buildings, including buildings to be

used for worker training and education; rail facilities; roads; sidewalks; curbs;

other improvements to the real estate necessary to its manufacturing,

processing, assembling, or other approved use by industrial entities;

workforce training; and job development incentive grants;

(b) "Industrial firm" means any corporation, limited liability company, limited

liability partnership, partnership, person, or other legal entity, whether

domestic or foreign, which will itself or through its subsidiaries and affiliates

construct and develop a manufacturing, processing, assembling, or other

approved facility on the site of an industrial development project financed

pursuant to this section;

(c) "Job development incentive grant" means an award to a county of funds from

its account administered by the Department for Local Government pursuant to

KRS 42.4592(1)(a) and (b) for the use by the county to encourage job

development for those industrial development projects located in that county

which create at least twenty-five (25) new full-time jobs held by Kentucky

residents who receive a minimum wage of at least one hundred thirty percent

(130%) of the federal minimum wage. Each job development incentive grant

shall be limited to five thousand dollars ($5,000) for each job created which

fulfills the requirements of this subsection. The industrial firm receiving the

job development incentive grant shall pay its employees at the project site an

average wage equal to or greater than one hundred fifty percent (150%) of the

federal minimum wage and shall invest at least ten thousand dollars ($10,000)

per new job created. After a fiscal court has received authorization for the job

development grant by the Department for Local Government, the county, the

industrial firm, and the Department for Local Government shall enter into an

agreement committing the grant funds to be disbursed at such time as the

industrial firm certifies the authenticity of the following information to be

delivered to the county:

1. The industrial firm has made at least the minimum investment required;

2. At least twenty-five (25) new full-time Kentucky jobs have been created

at the project site by the industrial firm;

3. No employee at the project site is paid a salary by the industrial firm

which is less than one hundred thirty percent (130%) of the federal

minimum wage;

4. The employees at the project site are paid an average wage by the

industrial firm at least equal to one hundred fifty percent (150%) of the

federal minimum wage;

5. Each employee hired for the project by the industrial firm shall have

worked on a full-time basis at the minimum wages described in this

section at least twelve (12) full consecutive months at the site prior to

any grant funds disbursement; and

6. No job created by the industrial firm after twenty-four (24) months from

the date of the first eligible hire at the project site shall be considered for

the grant.

If the county is satisfied the information provided is accurate and qualifies the

industrial firm for the job development incentive grant as described in the

agreement, it shall forward the certified information to the Department for

Local Government, which shall make the job development grant disbursement

upon sufficient evidence that all terms of the agreement have been met; and

(d) "Regional industrial park" means an industrial development project authorized

for a grant award by the Kentucky Economic Development Finance Authority

for a minimum of three (3) counties eligible for grant funds provided for in

KRS 42.4592(1)(c), which coalition may include a county as approved under

subsection (5) of this section.

(12) Findings by the secretary of the Cabinet for Economic Development or the

commissioner of the Department for Local Government, provided for in subsections

(2)(b), (3), and (5) of this section, shall be made in writing to the affected counties,

the Governor, and the Legislative Research Commission.

(13) By October 1 of each odd-numbered year, the secretary of the Cabinet for

Economic Development and the commissioner of the Department for Local

Government shall each provide, in writing, to the Governor and the Legislative

Research Commission a listing of all applications for grants received pursuant to

this section subsequent to the last report, indicating which applications were

approved or disapproved, with the reason for disapproval when the decision was to

disapprove, and a listing of all grants awarded, with the amount of the award, the

recipient county, and the related industrial development project.

(14) (a) Projects specifically authorized by appropriations made by the General

Assembly in an enacted budget bill, with the funding source identified as

funds allocated to individual counties under KRS 42.4592(1)(a) or (b), shall

be deemed approved and shall not be subject to the application process

established in this section.

(b) Projects described in paragraph (a) of this subsection shall be subject to a

memorandum of agreement between the entity identified in the appropriation

and the Department for Local Government. The memorandum of agreement

shall address the legal requirements for the disbursement and accounting of

funds.

(c) Within thirty (30) days of the receipt of a written request from an entity

designated in the appropriation for funding related to a project described in

paragraph (a) of this subsection, the Department for Local Government shall

prepare and send a memorandum of agreement to the designated entity for

review and signature. Upon receipt of the signed memorandum of agreement

from the designated entity, the Department for Local Government shall

release the funds for the project for use by the designated entity.

(d) Funds appropriated for specific projects as described in paragraph (a) of this

subsection shall not be expended for any other purpose, provided that the

commissioner of the Department for Local Government may, upon written

request by a designated entity identifying an extraordinary circumstance or

emergency situation, approve the reallocation of funds appropriated for a

specific project as described in paragraph (a) of this subsection to the extent

necessary to address the extraordinary circumstance or emergency situation.

Any approval under this paragraph shall be made in writing, and shall be

reported to the State Budget Director and the Interim Joint Committee on

Appropriations and Revenue within thirty (30) days of the approval being

made.