Kentucky Gov Requests Changes to Economic Incentives in Special Session

On Monday, legislation was introduced in a special session of the Kentucky Legislature to amend several of Kentucky's economic development incentive programs. Additionally, HB 3 contains language to secure funding and land for a proposed lithium-ion battery manufacturing complex (see the April 22, 2009 issue of the Digest) in Hardin County.

Proposed changes to the economic development incentive programs include:

• Consolidating existing tax credits under the Kentucky Economic Opportunity Zone, Kentucky Jobs Development Act, Kentucky Industrial Development Act, and Kentucky Rural Economic Development Act into a single, flexible tax incentive;
• Providing a sales and use tax refund for firms utilizing computer and telecommunications equipment that invest a minimum of $100 million;
• Expanding sales tax reimbursement for electronic processing equipment costing at least $50,000; and,
• Creating an income tax credit for new hires at companies with less than 50 employees that also invest $5,000 in qualified equipment and technology;

While many of the proposed changes were approved by both the Kentucky House and Senate during the recently completed session of the legislature, final passage of the measures did not take place, thus their consideration during the special session.

Additional information on HB 3 in the 2009 special legislative session is available at: http://www.lrc.ky.gov/record/09SS/HB3.htm.