154.20-254 Definitions for KRS 154.20-250 to 154.20-284.
As used in KRS 154.20-250 to 154.20-284, unless the context clearly requires otherwise:
(1) "Affiliate" means any person or entity who directly or indirectly, through one (1) or
more intermediaries, controls or is controlled by or is under common control with
another person or entity;
(2) "Agreement" means an investment fund agreement entered into pursuant to KRS
154.20-255(5) by the authority and an investment fund manager on behalf of the
investment fund, the investment fund manager, and any investor in the investment
fund;
(3) "Amended application" means a document submitted by an investment fund
manager, in a form acceptable to the authority and on behalf of an investment fund,
for the purpose of increasing the aggregate amount of available tax credits;
(4) "Applicant" means any person or entity who has not received approval from the
authority as an investment fund manager, but who has submitted or will submit an
application to the authority for approval as an investment fund manager;
(5) "Authority" means the Kentucky Economic Development Finance Authority or its
designee;
(6) "Cash contribution" means an investment of money by an investor in an investment
fund under the terms of KRS 154.20-250 to 154.20-284;
(7) "Committed cash contribution" means a legally binding agreement by an investor to
make a cash contribution in an amount set forth in a written agreement between an
investor and an investment fund;
(8) "Commonwealth" means the Commonwealth of Kentucky;
(9) "Credit" means a nonrefundable credit for investors against state tax liability
allocated and granted by the authority pursuant to KRS 154.20-258 for qualified
investments made by approved investment funds;
(10) "Entity" means any corporation, limited liability company, business development
corporation, partnership, limited partnership, sole proprietorship, association, joint
stock company, receivership, trust, professional service organization, or other legal
entity through which business is conducted;
(11) "Financial institution" means "financial institution" as defined in KRS 136.500(10)
and includes savings and loan associations, savings banks, and similar institutions
subject to the taxes imposed by KRS 136.290, 136.300, or 136.310;
(12) "Insurance company" means any insurance company subject to the taxes imposed by
KRS 136.320, 136.330, or 304.3-270;
(13) "Investment fund" means any entity that is organized by an investment fund
manager in compliance with applicable state and federal securities laws and
regulations, and is approved by the authority to make qualified investments
pursuant to KRS 154.20-256;
(14) "Investment fund manager" means any person or entity that has been approved by
the authority to manage one (1) or more investment funds authorized under the
(15)
(16)
(17)
(18)
(19)
provisions of KRS 154.20-250 to 154.20-284 and is in compliance with all
applicable federal and state regulations;
"Investor" means any person or entity, including financial institutions and insurance
companies, that is subject to state tax liability and that makes a cash contribution or
a committed cash contribution to an investment fund in accordance with the
provisions of KRS 154.20-250 to 154.20-284 and has not been convicted of
violating any of Kentucky's tax laws within the past ten (10) years;
"Nonprofit entity" means an investor that is exempt from federal income tax under
Section 501(c) of the Internal Revenue Code of 1986, as amended;
"Qualified activity" means any industrial, manufacturing, mining, mining
reclamation for economic development, commercial, health care, agricultural
enterprise, or agribusiness activity. A "qualified activity" does not include any
activity principally engaged in by financial institutions, commercial development
companies, credit companies, financial or investment advisors, brokerage or
financial firms, other investment funds or investment fund managers, charitable and
religious institutions, oil and gas exploration companies, insurance companies,
residential housing developers, retail establishments, or any activity that the
authority determines in its discretion to be against the public interest, against the
purposes of KRS 154.20-250 to 154.20-284, or in violation of any law;
"Qualified investment" means an investment of money in a small business by an
investment fund, in compliance with applicable state and federal securities laws and
regulations, seeking a financial return based upon that consideration. In
consideration for the qualified investment, the investment fund shall receive an
equity interest in the small business, such as a general or limited partnership
interest, common or preferred stock with or without voting rights and without
regard to seniority position, forms of subordinate or convertible unsecured debt, or
both, with warrants, rights, or other means of equity conversion attached; and
"Small business" means any entity which at the time a qualified investment is made
by an investment fund:
(a) 1.
Has a net worth of five million dollars (,000,000) or less or net
income after federal income taxes for each of the two (2) preceding
fiscal years of three million dollars (,000,000) or less; or
2.
Is a knowledge-based business, as shall be prescribed by the
commissioner of the Department of Commercialization and Innovation,
and has a net worth of ten million dollars (,000,000) or less;
(b) Is actively and principally engaged in a qualified activity within the
Commonwealth, or will be actively and principally engaged in a qualified
activity within the Commonwealth after the receipt of a qualified investment
by an investment fund;
(c) Has no more than one hundred (100) employees; and
(d) Has more than fifty percent (50%) of its assets, operations, and employees
located in Kentucky.
Effective: July 12, 2006
History: Amended 2006 Ky. Acts ch. 149, sec. 215, effective July 12, 2006; and
ch. 210, sec. 9, effective July 12, 2006. -- Amended 2005 Ky. Acts ch. 181, sec. 13,
effective June 20, 2005. -- Created 2002 Ky. Acts ch. 230, sec. 17, effective July 15,
2002.
Legislative Research Commission Note (7/12/2006). This section was amended by
2006 Ky. Acts chs. 149 and 210, which do not appear to be in conflict and have been
codified together.
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