(Frankfort, Kentucky) – Gov. Steve Beshear unveiled details of his economic incentives legislation, intended to modernize the state's economic development capabilities.
According to a news release, the bill is designed to update the state's antiquated economic incentives with a focus on helping Kentucky's existing businesses. The measure is also meant to lure major tourism development projects to the state and secure necessary funding for a proposed advanced battery manufacturing complex in Hardin County, all of which would create jobs and hundreds of millions of dollars in investment for Kentucky, officials say.
Key provisions geared toward manufacturing and tech companies include:
•Amending the Kentucky Reinvestment Act to assist existing manufacturers making significant capital investments in retooling facilities in order to remain competitive, preventing loss of jobs to competitor states;
•Consolidating the existing “K-credits” administered by the Cabinet for Economic Development into a single, more flexible tax incentive program for new and expanding businesses, while retaining the unique features that allow distressed counties to compete;
•Expanding the Kentucky Enterprise Initiative Act to allow electronic processing equipment purchases of at least $50,000 to become eligible for sales tax reimbursement. Currently, the funds are only available for construction and research and development equipment;
•Providing a sales and use tax refund for companies that are heavy users of computer and telecommunications equipment - investing a minimum of $100 million - similar to current sales tax exemption for new machinery and equipment used in manufacturing;
•Creating a small business income tax credit program for companies with 50 or fewer employees creating at least one new job and investing $5,000. The program would have an annual cap of $3 million.
“My goal is to ensure that Kentucky's economic and tourism development programs are on the cutting edge,” Beshear said in a statement. “This legislative package will give Kentucky options for retaining our existing companies at a time when their options are limited. Additionally, it will demonstrate to site selectors Kentucky's willingness to adapt to current economic conditions.”
The legislation was developed as a result of months of intensive consultations with legislators, local economic development organizations, site selection consultants and existing Kentucky businesses. Most of the issues contained in the legislation were approved by both chambers during the recently completed legislative session, but failed to move forward for final passage due to timing constraints.
The proposed legislation will be sponsored by Rep. Tommy Thompson of Owensboro.
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