The legislation, also known as H.B. 1 passed in a special session in 2007, provides tax incentives available for up to 25 years, for up to a maximum of 50 percent of the capital investment, via: Sales and Use Tax refunds up to 100 percent of tax paid on tangible personal property made to construct, retrofit or upgrade a facility. Severance Tax incentives up to 80 percent of taxes paid on the purchase or severance of coal. Tax Credits up to 100 percent of tax paid on corporate income or Limited Liability Entity Tax arising from the project. Reduction wage assessments incentives, up to 4 percent of gross wages of each employee.Additionally, advanced disbursement of post construction incentives using a formula based on percentage of labor component in construction and the utilization of Kentucky residents in the construction phase may be available. Advance disbursements repayments may be based upon incentives earned in the future.
Requirements to qualify for the incentives:
Alternative fuel facility or gasification facility that is carbon capture ready and uses coal as the primary feedstock: the minimum capital investment is $100,000,000. Alternative fuel facility or gasification facility that is carbon capture ready and uses biomass resources as the primary feedstock: the minimum capital investment is $25,000,000.
EXPERIENCE:
In December 2008, a joint venture of Peabody Energy and ConocoPhillips filed an application for an air permit with the Commonwealth of Kentucky to site a coal-to-natural-gas facility near Central City in Muhlenberg County. The facility is to be known as Kentucky NewGas.
