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Invest in Kentucky

Invest in Kentucky. December 2008. Welcome to Kentucky. HOFBRAUHAUS NEWPORT. Where is Kentucky?. Kentucky is located within 600 miles / 1,000 kilometers of two-thirds of the U. S. population. New Leadership. Steve Beshear Governor Commonwealth of Kentucky Larry Hayes

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Invest in Kentucky

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  1. Invest in Kentucky December 2008

  2. Welcome to Kentucky .. HOFBRAUHAUS NEWPORT 2

  3. Where is Kentucky? Kentucky is located within 600 miles / 1,000 kilometers of two-thirds of the U. S. population. 3

  4. New Leadership Steve Beshear Governor Commonwealth of Kentucky Larry Hayes Interim Secretary Cabinet for Economic Development 4

  5. Business Costs • The overall cost of doing business in Kentucky is 7% lower than the national average. • This measurement takes into account: • Labor • Energy • State & Local Taxation • Kentucky enjoys the 2nd lowest industrial electric costs in the eastern United States. (Source: North American Business Cost Review, 2008) 5

  6. Business Costs • Tax Modernization: • In 2005, Kentucky’s tax system was reformed to improve the tax climate for business investment: • The corporation license tax was eliminated. • The corporate income tax rate was reduced from 8.25% to 6%. • Tax credit incentives are maintained. • Kentucky manufacturers enjoy favorable tax provisions: • Exemption of sales and use tax on manufacturing machinery for new and expanded industry. • Exemption of manufacturing machinery from local property taxes, • with state rate at 15 cents per $100 in assessed value. 6

  7. Automotive Industry A significant presence in Kentucky: • In 2007, Kentucky ranked 3rd in car and light truck production • Kentucky has 470+ motor vehicle related suppliers employing nearly 90,000, which includes the 15,500 employees at the 4 Kentucky assembly plants. • 9.9% of all cars and light trucks produced in the U.S. are made in Kentucky. 7

  8. Motor Vehicle Related Plants and Suppliers Automotive Assembly Plants: 4 Automotive Suppliers: 470+ 8

  9. Automobile and Truck Assembly Plants 9

  10. Motor Vehicle Related Manufacturers 250 Miles\800 Kilometers 500 Miles\400 Kilometers 10

  11. Automotive – European Presence 11

  12. Recent Accomplishments Kentucky competes for business growth: • Kentucky ranked 4thin the Site Selection 2007 Competitiveness Award based on 10 criteria for measuring business expansion activity. • Kentucky ranked 10thin the 2007 Site Selection Governor’s Cup awarded for most new and expanded facilities. • Kentucky's Workforce Training Programs, which includes the Bluegrass State Skills Corporation, ranked 5thin the U.S. for 2007. (Source: Site Selection & Expansion Management Magazines, 2008) 12

  13. Global Kentucky Kentucky Ranks 10th overall in “Globalization” • 10th in Foreign Direct Investment, by percentage of workforce employed by foreign firms (3.77%). • Kentucky ranks 6th nationally in exports per capita for 2007. • In 2007 Louisville International Airport ranked as the 9th busiest cargo airport in the world and 3rd in North America. • The Louisville International Airport handled 4.5 billion pounds of cargo, freight, and mail in 2007. 13

  14. Foreign Direct Investment There are 404 foreign-owned facilities employing 76,323 in Kentucky: • 182 Western European-owned facilities with 26,686 employees. • 69 German-owned facilities with 9,347 employees. • 156 Japanese-owned facilities with 38,952 employees. • 66 other foreign-owned facilities. 14

  15. Kentucky Cabinet for Economic Development Primary state agency responsible for business development in Kentucky. • Attraction of new business investment. • Retention and expansion of existing business. Acting as single point of contact for Kentucky. • Liaison with local development organizations. • Liaison with other state agencies. • Liaison with utility companies. 15

  16. Kentucky Cabinet for Economic Development Your single point of contact in Kentucky will: • Identify appropriate sites and buildings for your business. • Provide detailed community and site-specific data on workforce, business costs, utilities, etc... • Accompany officials to Kentucky communities for confidential community and site/building evaluations and meetings. • Prepare a package of financial, training, and tax incentives as well as other project inducements. • Assist in obtaining required state permits. 16

  17. www.thinkkentucky.com 17

  18. Site & Building Database 18

  19. Site Information 19

  20. Building Information 20

  21. Community Information 21

  22. Financial Assistance To Lower the Cost of Doing Business in Kentucky: Programs are available to address both front-end costs and long-term recovery of a portion of the investment in land, building, and equipment. • Front End Grant and Tax Refunds • Typically recovered within the first 3-5 years of project implementation • Employee Recruitment and Training • Available when workforce recruiting and training is implemented • Long Term Cost Recovery Programs • Allows a 10 or 15 year recovery period upon activation of incentives 22

  23. Front End Cost Reductions • Kentucky Enterprise Initiative Act (KEIA) is a program to refund sales and use taxes for construction materials, building fixtures and research and development equipment. • Economic Development Access Road Fund is a pool of money Kentucky uses to ensure an industrial location has good, functional and safe highway access. • Kentucky Office for Employment & Training provides a free service to businesses by recruiting, screening and referring potential employees based on criteria provided by the company. • Bluegrass State Skills Corporation (BSSC) & Kentucky Workforce Investment Network System (KY WINS) are two programs to provide funding for training employees. • Economic Development Bond (EDB) Grant funds are available for Kentucky to inject cash into a project in a creative and flexible manner for infrastructure, equipment, research and development, or other special needs. 23

  24. Long Term Cost Recovery • Manufacturing Operations in Kentucky may be Eligible for One of the Following: • Kentucky Industrial Development Act (KIDA) • KIDA is a manufacturing incentive program available in every county in Kentucky that is not eligible for KREDA. • Kentucky Rural Economic Development Act (KREDA) • KREDA is a more aggressive program available in higher unemployment areas of Kentucky. It offers a longer term for recovery and higher eligible costs. • Service Oriented Operations in Kentucky may be Eligible for: • Kentucky Jobs Development Act (KJDA) • KJDA is a service oriented incentive program available in every county in Kentucky 24

  25. Long Term Cost Recovery 25

  26. Long Term Cost Recovery Kentucky Industrial Development Act (KIDA): Eligible Operations: Manufacturing companies locating or expanding in Kentucky. Eligible Costs KIDA allows companies to recover land, building, and equipment costs, with equipment costs limited to $20,000 per Kentucky job created, over the ten-year term of the program. Inducements For up to 10 years the company can receive either a 100% credit against their state corporate income tax or the company can assess Kentucky resident employees up to 3% of their gross payroll. Employees offset this with personal state income credits equal to the assessment. 26

  27. Long Term Cost Recovery Kentucky Rural Economic Development Act (KREDA): Eligible Operations: Manufacturing companies that locate or expand in qualifying KREDA counties. Eligible Costs KREDA allows companies to recover land, building, and equipment costs over the fifteen-year term of the program. Inducements For up to 15 years the company can receive a 100% credit against their state corporate income tax and the company can assess Kentucky resident employees up to 4% of their gross payroll. Employees offset this with personal state income credits equal to the assessment. 27

  28. Long Term Cost Recovery Kentucky Jobs Development Act (KJDA) Eligible Operations: Service or technology (non-manufacturing) related companies locating or expanding in Kentucky Eligible Costs Allows approved companies to recover up to 50% of their annual lease cost over the ten-year term of the program and up to 50% of their start-up costs (up to $10,000 per new full time Kentucky resident employee) including the cost of furnishing and equipping the facility. Inducements For up to 10 years the company can receive a 100% credit against their state corporate income tax and the company can assess Kentucky resident employees up to 5% of their gross payroll. Employees offset this with personal state income credits equal to the assessment. 28

  29. Summary • Single Point of Contact for Site, Community, and Workforce Evaluations • Help in the Establishment of Workforce Training Programs • Assistance with the Office for Employment and Training on Recruiting and Screening of New Employees • Ability to Expedite Permitting Processes Relating to Air, Water, and • Construction • Coordination in Arranging Meetings with Additional Entities Interested in the • Project • Provide Access to Financial Assistance Programs Available to Support Future • Expansion of Existing Operations 29

  30. Contact Information Larry Hayes, Interim Secretary Jim Navolio, Commissioner Cabinet for Economic Development Business Development larry.hayes@ky.govjim.navolio@ky.gov Kentucky Cabinet for Economic Development Old Capitol Annex Building 300 West Broadway Frankfort, Kentucky 40601 Phone: 502-564-7140 Fax: 502-564-3256 www.thinkkentucky.com 30

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