Current through Register Vol. 50, No. 9, March 1, 2024
RELATES TO:
KRS
148.850,
148.851,
148.853,
148.855,
148.857,
148.859,
148.860
NECESSITY, FUNCTION, AND CONFORMITY:
KRS
148.850(4) requires the
Secretary of Tourism to establish criteria for the disbursement and collection
of funds appropriated to the Tourism Development Loan Program. This
administrative regulation establishes those criteria.
Section 1. Definitions. As used in this
administrative regulation, the following terms have the following meanings:
(1) "Authority" means the Tourism Development
Finance Authority.
(2) "Cash match
basis" means the amount of investment by the borrower from equity or other loan
sources, which is equal to or greater than the amount borrowed through the
program.
(3) "Fixed costs" are
costs incurred in acquiring, constructing, reconstructing, rehabilitating,
renovating, enlarging, improving, equipping, maintaining, or furnishing the
tourism project, including site clearance and preparation.
(4) "Fund" means the loan fund authorized for
the Tourism Development Loan Program by
KRS
148.850(4).
Section 2. Criteria. The following criteria
shall be utilized by the authority in evaluating and making loans under the
Tourism Development Loan Program:
(1) Fixed
asset lending shall be made to qualified businesses, on a cash match
basis;
(2) A first, co-first, or
second secured position on fixed asset collateral in favor of the authority is
required of all loans;
(3) Prior to
final approval of any loan to be provided, and as a condition precedent
thereto, the authority shall determine that the benefits to be derived by the
Commonwealth and the local economic area from the establishment and operation
of the eligible project shall exceed the cost of providing such assistance;
and
(4) The project proposed to be
financed shall be economically feasible, as determined by the
authority.
Section 3.
Considerations. The authority shall consider and take into consideration, inter
alia, the following:
(1) Payrolls, and the
taxes generated, at both state and local levels, by the eligible project and
taxes generated by the employment and economic activity created or preserved by
the eligible project;
(2) The size,
nature, and cost of the eligible project, including the prospect of the
eligible project for attracting and retaining visitors to the
Commonwealth;
(3) The needs (and
degree of needs) of the area in which the eligible project is to be
located;
(4) The financial needs of
the applicant;
(5) The amount of
any kind of assistance, if any, to be provided to any applicant by other
government agencies through tax exemption or abatement, financing assistance
with industrial development bonds, and otherwise, with respect to the eligible
project;
(6) The amount of capital
made available to the eligible project by other lenders and by the owners of
the eligible project; and
(7) The
number of projected new visitors, in the context of the size of the loan being
made, attributable to the tourism project.
Section 4. Eligibility Standards. The
authority, subject to the other applicable provisions of this administrative
regulation, shall make loans only from monies in the fund. Program loans shall
be made if the authority determines that:
(1)
The project is an eligible project and is economically sound;
(2) The amount to be loaned from the fund
shall not exceed fifty (50) percent of the total fixed costs of the eligible
project;
(3) The amount of the loan
from the fund to be repaid shall be adequately secured by a mortgage, lien,
assignment, or pledge, at such level of priority as the authority may
require;
(4) The determinations of
the authority shall be conclusive for purposes of the validity of a loan
commitment evidenced by an agreement of the authority;
(5) Rates of interest, times of payment of
interest and principal, and other terms, conditions and provisions of, and
security for, program loans made from the fund pursuant to this section shall
be such as the authority determines to be appropriate and in furtherance of the
purpose for which the loans are made. Repayments of loans shall conform to the
requirements of the loan contract; and
(6) The authority is authorized to take
action established in the loan contract as may be necessary to collect on the
loan.
STATUTORY AUTHORITY:
KRS
148.850(4)
