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141.432 Definitions for KRS 141.432 to 141.434.
As used in KRS 141.432 to 141.434, unless the context requires otherwise:
(1) "Applicable percentage" means zero percent (0%) for each of the first two (2)
credit allowance dates, seven percent (7%) for the third credit allowance date,
and eight percent (8%) for the next four (4) credit allowance dates;
(2) "Credit allowance date" means, with respect to any qualified equity investment:
(a) The date on which the investment is initially made; and
(b) Each of the six (6) anniversary dates of that date thereafter;
(3) "Long-term debt security" means any debt instrument issued by a qualified
community development entity, at par value or a premium, with an original
maturity date of at least seven (7) years from the date of its issuance, with no
acceleration of repayment, amortization, or prepayment features prior to its
original maturity date. The qualified community development entity that issues
the debt instrument may not make cash interest payments on the debt
instrument during the period commencing with its issuance and ending on its
final credit allowance date in excess of the cumulative operating income, as
defined in the regulations promulgated under 26 U.S.C. sec. 45D, of the
qualified community development entity for that same period, which shall be
calculated prior to giving effect to the expense of the cash interest payments.
The foregoing shall in no way limit the holder's ability to accelerate payments
on the debt instrument in situations where the qualified community
development entity has defaulted on covenants designed to ensure compliance
with KRS 141.432 to 141.434 or 26 U.S.C. sec. 45D;
(4) "Purchase price" means the amount paid to a qualified community
development entity that issues a qualified equity investment for the qualified
equity investment;
(5) "Qualified active low-income community business" has the same meaning
given that term in 26 U.S.C. sec. 45D. A business shall be considered a
qualified active low-income community business for the duration of the qualified
community development entity's investment in, or loan to, the business if the
entity reasonably expects, at the time it makes the investment or loan, that the
business will continue to satisfy the requirements for being a qualified active
low-income community business throughout the entire period of the investment
or loan. The term excludes any business that derives or projects to derive
fifteen percent (15%) or more of its annual revenue from the rental or sale of
real estate. This exclusion does not apply to a business that is controlled by, or
under common control with, another business if the second business:
(a) Does not derive or project to derive fifteen percent (15%) or more of its
annual revenue from the rental or sale of real estate; and
(b) Is the primary tenant of the real estate leased from the first business;
(6) "Qualified community development entity" has the same meaning given that
term in 26 U.S.C. sec. 45D; provided that the entity has entered into, or is
controlled by an entity that has entered into, an allocation agreement with the
Community Development Financial Institutions Fund of the United States
Treasury Department with respect to credits authorized by 26 U.S.C. sec. 45D,
which includes the Commonwealth of Kentucky within the service area set forth
in such allocation agreement;
(7) "Qualified equity investment" means any equity investment in, or long-term
debt security issued by, a qualified community development entity that:
(a) Is acquired after June 4, 2010, at its original issuance solely in exchange
for cash;
(b) 1.
In the case of a qualified equity investment issued prior to January
1, 2014, has at least eighty-five percent (85%) of its cash purchase
price used by the issuer to make qualified low-income community
investments in qualified active low-income community businesses
located in the Commonwealth by the second anniversary of the
initial credit allowance date; and
2.
In the case of a qualified equity investment issued on or after
January 1, 2014, has at least one hundred percent (100%) of its
cash purchase price used by the issuer to make qualified
low-income community investments in qualified active low-income
community businesses located in the Commonwealth by the first
anniversary of the initial credit allowance date; and
(c) Is designated by the issuer as a qualified equity investment under this
subsection and is certified by the department as not exceeding the
limitation contained in KRS 141.434. This term shall include any qualified
equity investment that does not meet the provisions of paragraph (a) of
this subsection if the investment was a qualified equity investment in the
hands of a prior holder. The qualified community development entity shall
keep sufficiently detailed books and records with respect to the
investments made with the proceeds of the qualified equity investments to
allow the direct tracing of the proceeds into qualified low-income
community investments in qualified active low-income community
businesses in the Commonwealth;
(8) "Qualified low-income community investment" means any capital or equity
investment in, or loan to, any qualified active low-income community business
made after June 4, 2010. With respect to any one (1) qualified active
low-income community business, the maximum amount of qualified low-income
community investments that may be made in the business, on a collective
basis with all of its affiliates, with the proceeds of qualified equity investments
that have been certified under KRS 141.433 shall be ten million dollars
($10,000,000) whether made by one (1) or several qualified community
development entities;
(9) "Tax credit" means a nonrefundable credit against the taxes imposed by KRS
141.020, 141.040, 141.0401, 136.320, 136.330, 136.340, 136.350, 136.370,
136.390, or 304.3-270. For the credit against the taxes imposed by KRS
141.020, 141.040, or 141.0401, the ordering of the credits shall be as provided
in KRS 141.0205. An insurance company claiming a tax credit against the
insurance premium tax is not required to pay additional retaliatory tax levied
pursuant to KRS 304.3-270; and
(10) "Taxpayer" means any individual or entity subject to the tax imposed by KRS
141.020, 141.040, 141.0401, 136.320, 136.330, 136.340, 136.350, 136.370,
136.390, or 304.3-270.
Effective:July 15, 2014
History: Amended 2014 Ky. Acts ch. 102, sec. 29, effective July 15, 2014. -Created 2010 (1st Extra. Sess.) Ky. Acts ch. 2, sec. 16, effective June 4, 2010.
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