House committee OKs incentives bill

Kentucky would revamp its system of economic development incentives, including expanding incentives to cover existing industries and making the state more attractive to filmmakers, under a bill approved by a House committee Thursday. 

The plan already has the general support of Gov. Steve Beshear, who mentioned the issue during his State of the Commonwealth address last week, and the broad backing of state officials and the business community. 

“Businesses have a new model,” Rep. Tommy Thompson, the bill’s sponsor, told the House Economic Development Committee. “They’re operating differently. State’s have to operate differently to compete.”

The 126-page bill covers broad ground and would provide tax credits to Kentucky manufacturing businesses that invest in facilities and work-force education, the reimbursement of film and television productions for certain expenses and  the consolidation of the state’s multiple incentive programs into one.

In his address to the state last week, Beshear said one of the initiatives he hoped to push this year was to better tailor the state’s economic development incentives program to better attract new jobs and protect the ones already here.

“It’s time we modernized and restructured our incentive programs to make them more responsive to today’s economic needs and to give us flexibility to compete for new jobs,” Beshear told lawmakers on Feb. 4.

Under the portions of the plan for existing industries, manufacturers could recoup 50 percent of the cost of investments topping $10 million through tax credits and be reimbursed through credits for 100 percent of costs to train employees. 

Companies that depend heavily on computer and technological equipment could see sales tax exemptions on investments of more than $200 million. 

The incentive programs already in place would be consolidated into a single program, which would help those outside the state and outside the country better navigate the process, according to Donna Duncan, commissioner of the Office of Financial Incentives. 

“I think we’ll have something to sell to folks,” Duncan told the committee. “I think there will be an exciting and refreshing look at Kentucky.”

Changes to those existing programs include higher rates of return to the company on wages created and longer terms for the incentive programs in counties suffering from higher rates of unemployment. 

The bill also contains provisions to attract investment by the film and television industry in the state, an effort Thompson has made during past session.

Read more about the bill in Friday’s Messenger-Inquirer.


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