Daviess County Fiscal Court took the first step toward approving a tax rebate ordinance to support Southern Star Central Gas Pipeline, Inc., as part of an economic development incentive package tied to the company’s $3 million facility improvements.
Fiscal Court members heard the first reading of the ordinance Thursday evening. Daviess County Treasurer Jordan Johnson provided a detailed overview of the project. He said that on December 12, 2019, the Kentucky Economic Development Finance Authority (KEDFA) preliminarily approved incentives for improvements Southern Star planned to make to its building in Daviess County.
“Through this project, Southern Star was required to maintain a base employment of 214 employees and add 13 new jobs. At that time, the state committed 3% of its income tax per KRS 154, and the County committed 0.35% of its occupational tax for the eligible new positions,” he said.
The improvements, totaling approximately $3 million, have been completed. The next step involves Southern Star submitting its incentive package to the Cabinet for Economic Development for final approval next month.
“In order for Southern Star to receive the incentives, this ordinance must accompany their submission,” Johnson said. “In other words, the state will not commit to income tax credits unless the local government rebates the statute-required percentage of its occupational tax for the new positions.”
The ordinance provides a 0.35% occupational license fee rebate for wages, salaries, and compensation paid to 13 new employees hired in connection with the expansion. The rebate will be offered over a 10-year period or until the maximum allowable amount is reached.
“This tax rebate is a standard function of the Kentucky Business Investment Program that Daviess County Fiscal Court has historically participated in and supported for eligible applications,” Johnson said.
The incentives, originally approved in 2019, aim to encourage job growth and economic development in the county. Under the terms of the ordinance, only employees hired specifically for the expanded business operations in Daviess County will qualify for the rebate.
Fiscal Court can vote on the ordinance following a second reading, which is expected to take place in early January.
