Accompanied by community and business leaders in Owensboro, KY, Gov. Steve Beshear has signed authorizing includes new and expanded business incentive programs to encourage job growth and capital investment in Kentucky.
”This landmark legislation demonstrates Kentucky’s willingness to adapt to current economic conditions by updating the state’s economic incentive toolbox to reflect the needs of both new and existing businesses,” said Gov. Beshear. ”We are committed to keeping our economic incentive programs on the cutting edge.”
The Incentives for a New Kentucky bill, sponsored by Rep. Tommy Thompson of Owensboro, streamlines and modernizes Kentucky’s business incentive programs including the consolidation of four long-standing programs, Kentucky Rural Economic Development Act, Kentucky Industrial Development Act, Kentucky Jobs Development Act, and Kentucky Economic Opportunity Zone Act, into a single, more flexible tax incentive program called the Kentucky Business Investment (KBI) Program.
KBI provides income tax credits and wage assessments to new and existing agribusinesses, regional and national headquarters, manufacturing companies, and non-retail service or technology related companies that locate or expand operations in Kentucky. Increased incentives are available to projects occurring in enhanced incentive counties.
”This vital legislation will allow Kentucky to grow its economic and employment base while focusing on the retention and expansion of our existing businesses,” said Rep. Thompson.
The new legislation also expands the Kentucky Enterprise Initiative Act (KEIA) to include a sales tax refund for the purchase of electronic processing equipment costing $50,000 or more in addition to the minimum $500,000 project investment. The term of the agreement for KEIA projects has been extended for up to seven years.
Additionally, approved companies that are heavy users of computer and telecommunication equipment now have the ability to receive a sales tax refund on the purchase of qualifying equipment costing at least $100 million or more installed at a single location in Kentucky.
With a focus on helping Kentucky’s existing business, the Kentucky Reinvestment Act was also expanded to benefit existing manufacturers who need to make a significant capital investment in Kentucky facilities in order to remain competitive.
Companies investing at least $2.5 million in an existing Kentucky manufacturing facility and maintaining at least 85 percent of the full-time employment base may take advantage of the program and may also recover up to 100 percent of eligible skills upgrade training costs.
A Small Business Development Credit Program was also established and is being developed by the Cabinet for Economic Development. These tax credits will be available in 2012.
”By developing new programs to address identified gaps in our economic development toolbox, as well as streamlining and modernizing our existing programs, Kentucky will gain a competitive advantage in attracting new investment and job creation,” said Gov. Beshear.
House Bill 3 was passed during the recent special legislative session and became effective on June 26, 2009.