148.853 Legislative findings -- Qualifications for incentives -- Incentives available.
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(1)The General Assembly finds and declares that:
(a)The general welfare and material well-being of the citizens of the
Commonwealth depend in large measure upon the development of tourism in
the Commonwealth;
(b)It is in the best interest of the Commonwealth to provide incentives for the
creation of new tourism attractions and the expansion of existing tourism
attractions within the Commonwealth in order to advance the public purposes
of relieving unemployment by preserving and creating jobs that would not
exist if not for the incentives offered by the authority to approved companies,
and by preserving and creating sources of tax revenues for the support of
public services provided by the Commonwealth;
(c)The authorities granted by KRS 148.851 to 148.860 are proper governmental
and public purposes for which public moneys may be expended; and
(d)That the creation or expansion of tourism development projects is of
paramount importance mandating that the provisions of KRS 139.536 and
KRS 148.851 to 148.860 be liberally construed and applied in order to
advance public purposes.
(2)To qualify for incentives provided in KRS 139.536 and 148.851 to 148.860, the
following requirements shall be met:
(a)For a tourism attraction project:
1. The total eligible costs shall exceed one million dollars ($1,000,000),
except for a tourism attraction project located in a county designated as
an enhanced incentive county at the time the eligible company becomes
an approved company as provided in KRS 148.857(6), the total eligible
costs shall exceed five hundred thousand dollars ($500,000);
2. In any year, including the first year of operation, the tourism attraction
project shall be open to the public at least one hundred
(100)days; and
3. In any year following the third year of operation, the tourism attraction
project shall attract at least twenty-five percent (25%) of its visitors
from among persons who are not residents of the Commonwealth;
(b)For an entertainment destination center project:
1. The total eligible costs shall exceed five million dollars ($5,000,000);
2. The facility shall contain a minimum of two hundred thousand
(200,000) square feet of building space adjacent or complementary to an
existing tourism attraction project or a major convention facility;
3. The incentives shall be dedicated to a public infrastructure purpose that
shall relate to the entertainment destination center project;
4. In any year, including the first year of operation, the entertainment
destination center project shall:
a. Be open to the public at least one hundred
(100)days per year;
b. Maintain at least one
(1)major theme restaurant and at least three
(3)additional entertainment venues, including but not limited to
live entertainment, multiplex theaters, large-format theater, motion
simulators, family entertainment centers, concert halls, virtual
reality or other interactive games, museums, exhibitions, or other
cultural and leisure-time activities; and
c. Maintain a minimum occupancy of sixty percent (60%) of the total
gross area available for lease with entertainment and food and
drink options not including the retail sale of tangible personal
property; and
5. In any year following the third year of operation, the entertainment
destination center project shall attract at least twenty-five percent (25%)
of its visitors from among persons who are not residents of the
Commonwealth;
(c)For a theme restaurant destination attraction project:
1. The total eligible costs shall exceed five million dollars ($5,000,000);
2. In any year, including the first year of operation, the attraction shall:
a. Be open to the public at least three hundred
(300)days per year
and for at least eight
(8)hours per day; and
b. Generate no more than fifty percent (50%) of its revenue through
the sale of alcoholic beverages;
3. In any year following the third year of operation, the theme restaurant
destination attraction project shall attract a minimum of fifty percent
(50%) of its visitors from among persons who are not residents of the
Commonwealth; and
4. The theme restaurant destination attraction project shall:
a. At the time of final approval, offer a unique dining experience that
is not available in the Commonwealth within a one hundred
mile radius of the attraction;
b. In any year, including the first year of operation, maintain seating
capacity of four hundred fifty
(450)guests and offer live music or
live musical and theatrical entertainment during the peak business
hours that the facility is in operation and open to the public; or
c. Within three
(3)years of the completion date, the attraction shall
obtain a top two
(2)tier rating by a nationally accredited service
and shall maintain a top two
(2)tier rating through the term of the
agreement;
(d)For a lodging facility project defined in KRS 148.851(15)(a):
1. a. The eligible costs shall exceed five million dollars ($5,000,000)
unless the provisions of subdivision b. of this subparagraph apply.
b. i. If the lodging facility is an integral part of a major
convention or sports facility, the eligible costs shall exceed
six million dollars ($6,000,000); and
ii. If the lodging facility includes five hundred
(500)or more
guest rooms, the eligible costs shall exceed ten million
dollars ($10,000,000); and
2. In any year, including the first year of operation, the lodging facility
shall:
a. Be open to the public at least one hundred
(100)days; and
b. Attract at least twenty-five percent (25%) of its visitors from
among persons who are not residents of the Commonwealth;
(e)For a lodging facility project defined in KRS 148.851(15)(b):
1. The eligible costs shall exceed one hundred million dollars
($100,000,000); and
2. The lodging facility shall:
a. Be open to the public at least one hundred
(100)days each year,
including the first year of operation; and
b. In any year following the third year of operation, attract a
minimum of twenty-five percent (25%) of its overnight visitors
from among persons who are not residents of the Commonwealth;
(f)Any tourism development project shall not be eligible for incentives if it
includes material determined to be lewd, offensive, or deemed to have a
negative impact on the tourism industry in the Commonwealth; and
(g)An expansion of any tourism development project shall in all cases be treated
as a new stand-alone project.
(a)The incentives offered to an approved company under the Kentucky Tourism
Development Act may include a sales tax incentive based on the Kentucky
sales tax imposed on sales generated by or arising at the tourism development
project.
(b)1. For a tourism development project other than a lodging facility project
described in subparagraph 4. or 5. of this paragraph:
a. A sales tax incentive shall be allowed to an approved company
over a period of ten
(10)years, except as provided in
subparagraphs 7. and 8. of this paragraph; and
b. The sales tax incentive shall not exceed the lesser of the total
amount of the sales tax liability of the approved company and its
lessees or a percentage of the approved costs as specified by the
agreement, not to exceed twenty-five percent (25%).
2. For projects approved according to the application period established
under KRS 148.8531, a tourism attraction project located in an enhanced
incentive county at the time the eligible company becomes an approved
company as provided in KRS 148.857(6):
a. A sales tax incentive shall be allowed to the approved company
over a period of ten
(10)years; and
b. The sales tax incentive shall not exceed the lesser of the total
amount of the sales tax liability of the approved company and its
lessees or a percentage of the approved costs as specified by the
agreement, not to exceed thirty percent (30%). 3. For applications considered after June 27, 2025, including projects
related to property to which the title passed from a seller to a buyer on
or after March 1, 2025, a tourism attraction project located in an
enhanced incentive county with a population equal to or less than twenty
thousand (20,000) based on the most recent decennial census at the time
the eligible company becomes an approved company as provided in
KRS 148.857(6):
a. A sales tax incentive shall be allowed to the approved company
over a period of twenty
(20)years; and
b. The sales tax incentive shall not exceed the lesser of the total
amount of the sales tax liability of the approved company and its
lessees or a percentage of the approved costs as specified by the
agreement, not to exceed fifty percent (50%). 4. For a lodging facility project described in KRS 148.851(15)(a)5. or 6.:
a. A sales tax incentive shall be allowed to the approved company
over a period of twenty
(20)years; and
b. The sales tax incentive shall not exceed the lesser of total amount
of the sales tax liability of the approved company and its lessees or
a percentage of the approved costs as specified by the agreement,
not to exceed fifty percent (50%). 5. For a lodging facility project described in KRS 148.851(15)(b), a sales
tax incentive that shall:
a. Be allowed to the approved company over a period of twenty
years; and
b. Not exceed the lesser of the total amount of sales tax liability of
the approved company and its lessees or a percentage of the
approved costs as specified by the agreement, not to exceed fifty
percent (50%). 6. Any unused incentives from a previous year may be carried forward to
any succeeding year during the term of the agreement until the entire
specified percentage of the approved costs has been received through
sales tax incentives. 7. If the approved company is an entertainment destination center that has
dedicated at least thirty million dollars ($30,000,000) of the incentives
provided under the agreement to a public infrastructure purpose, the
agreement may be amended to extend the term of the agreement up to
two
(2)additional years if the approved company agrees to:
a. Reinvest in the original entertainment destination project one
hundred percent (100%) of any incentives received during the
extension that were outstanding at the end of the original term of
the agreement; and
b. Report to the authority at the end of each fiscal year the amount of
incentives received during the extension and how the incentives
were reinvested in the original entertainment destination project. 8. The term of a tourism development agreement entered into with a
tourism attraction project that was in effect on January 1, 2020, shall be
extended for one
(1)year if the tourism attraction project:
a. Has historically been open to the public on a seasonal basis
consisting of less than six
(6)months;
b. Has previously met the requirement of being open to the public at
least one hundred
(100)days during the entire term of the tourism
development agreement as required under subsection (2)(a)2. of
this section;
c. Failed to be open to the public at least one hundred
(100)days
during the calendar year 2020 solely as a result of complying with
one
(1)or more executive orders issued by the Governor under the
authority of KRS 39A.090 that prevented the tourism attraction
project from being open to the public for at least one hundred
(100)days during its normal operating season; and
d. Applied for a sales tax incentive related to the calendar year 2020
operating season and was denied the sales tax incentive solely on
the basis that the tourism attraction project was not open to the
public for at least one hundred
(100)days in calendar year 2020.