246.605 Agricultural Economic Development Board -- Definitions -- Establishment
2,112 words·~10 min read·
/ky/246-605A research copy — for the controlling text, always check the official state or federal source. Not legal advice.
-- Membership -- Duties -- Incentive program -- Agricultural economic
development fund -- Procedures -- Applications.
(1)As used in this section:
(a)"Agribusiness" has the same meaning as in KRS 154.32-010;
(b)"Alternative fuels" has the same meaning as in KRS 154.20-400, and also
includes alternative fuels generated by an agricultural production facility for
the purpose of generating sustainable aviation fuel;
(c)"Application" means the documentation submitted for an eligible project that
is required for preliminary approval under subsection (6)(b) of this section;
(d)"Board" means the Agricultural Economic Development Board established in
subsection
(3)of this section;
(e)"Eligible project" means any agricultural economic development project or
proposal, including an agribusiness or alternative fuels project, that:
1. Develops necessary supply chain infrastructure within the
Commonwealth;
2. Has a significant level of capital investment; and
3. Demonstrates a positive economic impact to the selected site location,
which may be:
a. Quantified by the:
i. Number of farming operations impacted for each one
thousand dollars ($1,000) of incentives awarded; or
ii. Increase in the volume of product or production for each one
thousand dollars ($1,000) of incentives awarded; or
b. Based on econometric analysis provided by a state-funded
university within the Commonwealth;
(f)"Farming operation" has the same meaning as in KRS 154.60-040;
(g)"Fund" means the agricultural economic development fund created in
subsection
(4)of this section; and
(h)"Incentives" means either a:
1. Direct grant of moneys;
2. Forgivable loan;
3. Low-interest revolving loan, of which no more than fifty percent (50%)
of the principal of the loan is forgiven within the memorandum of
agreement required under subsection (6)(c) of this section; or
4. Any combination of the incentives in subparagraphs 1. to 3. of this
paragraph in conjunction with another lawfully authorized incentive
award scheme;
based upon the eligible project meeting certain economic conditions.
(2)The purposes of this section are to:
(a)Provide incentives for eligible projects;
(b)Encourage the location or expansion of agricultural development in the
Commonwealth; and
(c)Advance the public purposes of:
1. Improvement in the quality of life for Kentucky citizens;
2. Providing an economic stimulus to bolster in-state production of vital
sustainable agricultural products and services; and
3. Creation of new sources of tax revenues for the support of public
services provided by the Commonwealth.
(a)The Agricultural Economic Development Board is hereby established and
shall be composed of six
(6)members to include:
1. The Commissioner of Agriculture or his or her designee, who shall serve
as chair; and
2. Five
(5)members appointed by the Commissioner, with at least one
person representing each of the following four
(4)agricultural sectors:
a. Livestock or poultry;
b. Row crops;
c. Specialty crops; and
d. Local economic development.
(b)The members appointed under paragraph (a)2. of this subsection shall:
1. Be chosen from a list of three
(3)nominees submitted to the
Commissioner, with:
a. One
(1)member chosen from a list provided by the Kentucky
Association for Economic Development;
b. Two
(2)members chosen from a list provided by the Kentucky
Agricultural Finance Corporation; and
c. Two
(2)members chosen from a list provided by the Agricultural
Development Board;
2. Be reimbursed for expenses incurred in the performance of their duties;
3. Serve for a term of two
(2)years and until a successor is appointed
unless removed in accordance with subparagraph 5. of this paragraph;
4. Serve for no more than two
(2)consecutive terms; and
5. Be removed by the Commissioner for good cause or if a member misses
two
(2)consecutive meetings without good cause.
(c)Upon the death, resignation, or removal of any member, the vacancy for the
unexpired term shall be filled by the Commissioner in the same manner as the
original appointment.
(d)The board shall:
1. Be attached to the Kentucky Office of Agricultural Policy for
administrative purposes;
2. Meet:
a. Quarterly;
b. At the call of the chair; or
c. Upon a call of the majority of the members; and
3. Not be subject to reorganization under KRS Chapter 12.
(e)A quorum of the board:
1. Shall consist of at least three
(3)members; and
2. Is required for any action to be taken by the board.
(f)The duties of the board shall include:
1. Administering the fund created in subsection
(4)of this section;
2. Working with the department to develop procedures, guidelines, and
criteria for:
a. Prioritizing eligible projects;
b. Determining project awards; and
c. Terminating incentives to eligible projects;
3. Preparing full meeting reports and maintaining all records and official
actions of the board;
4. Receiving and reviewing applications from eligible projects;
5. Prioritizing eligible projects resulting in the maximum agricultural
impact;
6. Entering into a memorandum of agreement with an eligible project;
7. Approving distributions to eligible projects and monitoring progress of
those projects through the distribution process;
8. Terminating incentives and recovering previous distributions if the
terms of the memorandum of agreement are not met; and
9. Preparing and submitting an annual report to the Interim Joint
Committee on Appropriations and Revenue beginning no later than
November 1, 2025, and no later than each November 1 thereafter until
all moneys have been fully distributed and all memoranda of agreement
have been completed. The report shall contain cumulative and historical
information for each application received, including:
a. Information to identify the eligible project, including the:
i. Name submitted on the application;
ii. County within which the eligible project is or will be
located; and
iii. Agricultural economic development activity for which the
eligible project will develop;
b. Dates, including the date the:
i. Application was received;
ii. Application was denied, if appropriate;
iii. Memorandum of agreement was executed;
iv. Memorandum of agreement is estimated to be completed;
and
v. Memorandum of agreement was completed;
c. The amount of capital investment that has or will be made by the
recipient for the eligible project;
d. The estimated economic impact to be achieved from the eligible
project;
e. Whether the incentive is or will be a:
i. Direct grant of moneys and the total amount of the grant;
ii. Forgivable loan and the total amount of the forgivable loan;
iii. Low-interest revolving loan, the total amount of the loan,
and the low-interest rate of the loan; or
iv. Combination of the incentives in subparts i. to iii. of this
subdivision;
f. If the incentive is a low-interest loan, the amount of:
i. Principal collected from the inception of the loan to the
report date; and
ii. Interest collected from the inception of the loan to the report
date;
g. A list of all funding sources to be utilized by the eligible project;
and
h. The amount of incentive disbursements that have been made to the
eligible project under this section.
(a)The agricultural economic development fund is hereby created as a revolving
account within the State Treasury to be administered by the department.
(b)The fund shall consist of moneys received from repayment of low-interest
loans awarded as an incentive under this section, state appropriations, gifts,
grants, federal funds, and any returned moneys required under subsection
(6)(j) of this section.
(c)Amounts deposited in the fund shall be used as provided in this section.
(d)Notwithstanding KRS 45.229, fund amounts not expended at the close of a
fiscal year shall not lapse but shall be carried forward into the next fiscal year.
(e)All interest earnings of the fund shall become a part of the fund and shall not
lapse.
(f)Up to twenty percent (20%) of moneys appropriated to the fund during a
fiscal year may be used for eligible projects to retain or create innovative or
high-technology jobs in the agriculture industry that are directly associated
with developing more diverse energy sources within the Commonwealth.
(a)By working in conjunction and coordination with the Cabinet for Economic
Development, the department shall create a program to encourage projects
promoting economic development related to agriculture, including:
1. Agricultural economic development projects across the Commonwealth;
2. Agribusiness projects; and
3. Alternative fuels projects.
(b)The Cabinet for Economic Development shall coordinate with and seek
guidance from the Commissioner of Agriculture in considering any projects
for economic incentives related to agricultural economic development,
agribusiness, or production facilities for alternative fuels, including
sustainable aviation fuels.
(a)An eligible project may submit an application to the board in accordance with
subsection
(8)of this section.
(b)Upon review of the application and any additional information submitted, the
board may give preliminary approval to an eligible project and authorize the
negotiation and execution of a memorandum of agreement.
(c)The memorandum of agreement shall:
1. Establish the:
a. Minimum amount of capital investment to be made;
b. Whether the incentive is a:
i. Direct grant of moneys and the total amount of the grant;
ii. Forgivable loan and the total amount of the forgivable loan;
iii. Low-interest revolving loan, the total amount of the loan,
and the low-interest rate of the loan; or
iv. Combination of the incentives in subparts i. to iii. of this
subdivision; and
c. Target dates for distribution of the incentives during the time
between preliminary approval and final approval of the eligible
project; and
2. Only allow the incentives to be applied to costs incurred after
preliminary approval.
(d)Upon preliminary approval, the business may undertake and begin the project
according to the memorandum of agreement.
(e)The eligible project shall submit any documentation required by the board
upon request.
(f)Upon preliminary approval, the board shall:
1. Post the company's name, location of the agricultural economic
development project, and incentives that have been preliminarily
approved on the department's website; and
2. Monitor each eligible project to ensure that incentives are distributed
incrementally as the capital investment targets are incrementally
achieved according to the memorandum of agreement.
(g)Records relating to applications for incentives from the fund or under KRS
Chapter 154, including exchanges of information and offers, that are denied,
or are not otherwise awarded an incentive, shall remain confidential, shall not
be subject to public inspection, and shall not be considered public records
under KRS 61.870 to 61.884.
(h)1. To obtain final approval, the eligible project shall submit documentation
required by the board to confirm that the requirements established by the
memorandum of agreement have been met. Documentation shall include
information demonstrating that the eligible project has met the minimum
capital investment.
2. Upon review and confirmation of the documentation, the board may
authorize the final distribution of incentives and the memorandum of
agreement shall be completed.
(i)The board shall monitor the activities of the eligible project and, based on the
documentation provided, confirm that the eligible project is in compliance
with the provisions of the memorandum of agreement and therefore eligible
for the continued distribution of incentives.
(j)If, at any time during the term of the memorandum of agreement, an eligible
project becomes ineligible for incentives, the board shall immediately
terminate the distribution of incentives and determine whether previously
distributed incentives may be recaptured based on a pro rata basis of the
partially completed terms and the actual terms within the memorandum of
agreement by the benchmarks established in the memorandum of agreement.
(a)The board shall operate in the same manner as the operation of the
Agricultural Development Board in accordance with KRS 248.701 to
248.727.
(b)Standards to be used in reviewing and approving an eligible project shall
include but not be limited to the:
1. Creditworthiness of the eligible company;
2. Proposed capital investment to be made;
3. Projected tax receipts;
4. Support of the local community; and
5. Likelihood of the economic success of the agricultural economic
development project.
(8)The application shall include:
(a)The name of the applicant who will have some relation to the eligible project;
(b)A description of the eligible project, including its location and the total capital
investment in the eligible project;
(c)For eligible projects new to the Commonwealth:
1. Certification by the applicant that the eligible project could reasonably
and efficiently locate outside of the Commonwealth and that, without
the incentives offered by the board, the eligible project would likely
locate outside the Commonwealth; and
2. The identification of at least one
(1)viable out-of-state location for the
eligible project;
(d)For eligible projects with an existing location in the Commonwealth
considering an expansion, certification that the incentives are necessary for
the expansion to occur;
(e)A letter of support from a local governmental entity in the city or county
where the eligible project will be located; and
(f)Any other information the board may require.