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Incentives bill may be tightened

FRANKFORT — The House might revamp Gov. Steve Beshear's proposal to overhaul the state's economic incentive programs as early as Tuesday, adding more transparency and creating more stringent requirements for companies that receive some tax breaks.

On Monday the House budget committee approved the changes to the proposal, which is supposed to streamline the state's programs to lure businesses and beef up employment in Kentucky.

Rep. Tommy Thompson, D-Owensboro, said after Monday's budget committee hearing that he expected the House to vote on the bill Tuesday. He is a co-sponsor of House Bill 229.

The changes came after some legislators raised questions about key aspects of the new program, dubbed INK, or Incentives for a New Kentucky.

The changes approved by the budget committee would require less upfront investment by companies but would increase the minimum wages they would have to pay.

The revamped bill also eliminated a controversial provision that would give companies tax credits for paying the tuition bills of employees.

That provision drew fire from some legislators because it had no restrictions on whether the employee lived in or went to school in Kentucky. That meant a company that created five new jobs could have received tax credits for paying the tuition of an employee in an out-of-state office.

Thompson said Monday that state economic development officials had agreed to eliminate that provision from the bill for now.

"We are going to be looking at that during the interim," he said.

Thompson said House and Senate leaders spent more than six hours Friday hammering out the changes. He thinks both chambers will approve the measure by the end of this week, before lawmakers recess until March 26.

The changes to the bill also include more public disclosure about which companies receive tax credits or other help from the state.

Rep. Harry Moberly, D-Richmond, who had filed an amendment to the bill asking for more restrictions on the incentives, said Wednesday that the changes have satisfied his reservations about the bill.

"I think the governor ought to have the tools he needs," Moberly said. "I think it will pass."

Other notable changes include expanding a tax credit for movie, documentary and commercial production companies to film in Kentucky. The provision now allows national touring companies of Broadway productions that spend a minimum of $500,000 in Kentucky to receive tax credits.

The film industry and first lady Jane Beshear have been pushing for tax credits to lure the industry to Kentucky.