Page 1 of 3 154.20-254 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: <br>(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 <br>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 <br>investment fund, the investment fund manager, and any investor in the investment <br>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, <br>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 <br>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 <br>investor and an investment fund; (8) "Commonwealth" means the Commonwealth of Kentucky; <br>(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 <br>investments made by approved investment funds; (10) "Entity" means any corporation, limited liability company, business development corporation, partnership, limited partnership, sole proprietorship, association, joint <br>stock company, receivership, trust, professional service organization, or other legal <br>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 <br>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 <br>regulations, and is approved by the authority to make qualified investments <br>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 Page 2 of 3 provisions of KRS 154.20-250 to 154.20-284 and is in compliance with all <br>applicable federal and state regulations; (15) "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 <br>a committed cash contribution to an investment fund in accordance with the <br>provisions of KRS 154.20-250 to 154.20-284 and has not been convicted of <br>violating any of Kentucky's tax laws within the past ten (10) years; (16) "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; (17) "Qualified activity" means any industrial, manufacturing, mining, mining reclamation for economic development, commercial, health care, agricultural <br>enterprise, or agribusiness activity. A "qualified activity" does not include any <br>activity principally engaged in by financial institutions, commercial development <br>companies, credit companies, financial or investment advisors, brokerage or <br>financial firms, other investment funds or investment fund managers, charitable and <br>religious institutions, oil and gas exploration companies, insurance companies, <br>residential housing developers, retail establishments, or any activity that the <br>authority determines in its discretion to be against the public interest, against the <br>purposes of KRS 154.20-250 to 154.20-284, or in violation of any law; (18) "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 <br>regulations, seeking a financial return based upon that consideration. In <br>consideration for the qualified investment, the investment fund shall receive an <br>equity interest in the small business, such as a general or limited partnership <br>interest, common or preferred stock with or without voting rights and without <br>regard to seniority position, forms of subordinate or convertible unsecured debt, or <br>both, with warrants, rights, or other means of equity conversion attached; and (19) "Small business" means any entity which at the time a qualified investment is made by an investment fund: <br>(a) 1. Has a net worth of five million dollars ($5,000,000) or less or net <br>income after federal income taxes for each of the two (2) preceding <br>fiscal years of three million dollars ($3,000,000) or less; or 2. Is a knowledge-based business, as shall be prescribed by the <br>commissioner of the Department of Commercialization and Innovation, <br>and has a net worth of ten million dollars ($10,000,000) 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 <br>activity within the Commonwealth after the receipt of a qualified investment <br>by an investment fund; (c) Has no more than one hundred (100) employees; and <br>(d) Has more than fifty percent (50%) of its assets, operations, and employees located in Kentucky. Effective: July 12, 2006 Page 3 of 3 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, <br>effective June 20, 2005. -- Created 2002 Ky. Acts ch. 230, sec. 17, effective July 15, <br>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 <br>codified together.
Page 1 of 3 154.20-254 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: <br>(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 <br>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 <br>investment fund, the investment fund manager, and any investor in the investment <br>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, <br>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 <br>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 <br>investor and an investment fund; (8) "Commonwealth" means the Commonwealth of Kentucky; <br>(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 <br>investments made by approved investment funds; (10) "Entity" means any corporation, limited liability company, business development corporation, partnership, limited partnership, sole proprietorship, association, joint <br>stock company, receivership, trust, professional service organization, or other legal <br>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 <br>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 <br>regulations, and is approved by the authority to make qualified investments <br>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 Page 2 of 3 provisions of KRS 154.20-250 to 154.20-284 and is in compliance with all <br>applicable federal and state regulations; (15) "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 <br>a committed cash contribution to an investment fund in accordance with the <br>provisions of KRS 154.20-250 to 154.20-284 and has not been convicted of <br>violating any of Kentucky's tax laws within the past ten (10) years; (16) "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; (17) "Qualified activity" means any industrial, manufacturing, mining, mining reclamation for economic development, commercial, health care, agricultural <br>enterprise, or agribusiness activity. A "qualified activity" does not include any <br>activity principally engaged in by financial institutions, commercial development <br>companies, credit companies, financial or investment advisors, brokerage or <br>financial firms, other investment funds or investment fund managers, charitable and <br>religious institutions, oil and gas exploration companies, insurance companies, <br>residential housing developers, retail establishments, or any activity that the <br>authority determines in its discretion to be against the public interest, against the <br>purposes of KRS 154.20-250 to 154.20-284, or in violation of any law; (18) "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 <br>regulations, seeking a financial return based upon that consideration. In <br>consideration for the qualified investment, the investment fund shall receive an <br>equity interest in the small business, such as a general or limited partnership <br>interest, common or preferred stock with or without voting rights and without <br>regard to seniority position, forms of subordinate or convertible unsecured debt, or <br>both, with warrants, rights, or other means of equity conversion attached; and (19) "Small business" means any entity which at the time a qualified investment is made by an investment fund: <br>(a) 1. Has a net worth of five million dollars ($5,000,000) or less or net <br>income after federal income taxes for each of the two (2) preceding <br>fiscal years of three million dollars ($3,000,000) or less; or 2. Is a knowledge-based business, as shall be prescribed by the <br>commissioner of the Department of Commercialization and Innovation, <br>and has a net worth of ten million dollars ($10,000,000) 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 <br>activity within the Commonwealth after the receipt of a qualified investment <br>by an investment fund; (c) Has no more than one hundred (100) employees; and <br>(d) Has more than fifty percent (50%) of its assets, operations, and employees located in Kentucky. Effective: July 12, 2006 Page 3 of 3 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, <br>effective June 20, 2005. -- Created 2002 Ky. Acts ch. 230, sec. 17, effective July 15, <br>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 <br>codified together.
Page 1 of 3 154.20-254 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: <br>(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 <br>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 <br>investment fund, the investment fund manager, and any investor in the investment <br>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, <br>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 <br>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 <br>investor and an investment fund; (8) "Commonwealth" means the Commonwealth of Kentucky; <br>(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 <br>investments made by approved investment funds; (10) "Entity" means any corporation, limited liability company, business development corporation, partnership, limited partnership, sole proprietorship, association, joint <br>stock company, receivership, trust, professional service organization, or other legal <br>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 <br>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 <br>regulations, and is approved by the authority to make qualified investments <br>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 Page 2 of 3 provisions of KRS 154.20-250 to 154.20-284 and is in compliance with all <br>applicable federal and state regulations; (15) "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 <br>a committed cash contribution to an investment fund in accordance with the <br>provisions of KRS 154.20-250 to 154.20-284 and has not been convicted of <br>violating any of Kentucky's tax laws within the past ten (10) years; (16) "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; (17) "Qualified activity" means any industrial, manufacturing, mining, mining reclamation for economic development, commercial, health care, agricultural <br>enterprise, or agribusiness activity. A "qualified activity" does not include any <br>activity principally engaged in by financial institutions, commercial development <br>companies, credit companies, financial or investment advisors, brokerage or <br>financial firms, other investment funds or investment fund managers, charitable and <br>religious institutions, oil and gas exploration companies, insurance companies, <br>residential housing developers, retail establishments, or any activity that the <br>authority determines in its discretion to be against the public interest, against the <br>purposes of KRS 154.20-250 to 154.20-284, or in violation of any law; (18) "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 <br>regulations, seeking a financial return based upon that consideration. In <br>consideration for the qualified investment, the investment fund shall receive an <br>equity interest in the small business, such as a general or limited partnership <br>interest, common or preferred stock with or without voting rights and without <br>regard to seniority position, forms of subordinate or convertible unsecured debt, or <br>both, with warrants, rights, or other means of equity conversion attached; and (19) "Small business" means any entity which at the time a qualified investment is made by an investment fund: <br>(a) 1. Has a net worth of five million dollars ($5,000,000) or less or net <br>income after federal income taxes for each of the two (2) preceding <br>fiscal years of three million dollars ($3,000,000) or less; or 2. Is a knowledge-based business, as shall be prescribed by the <br>commissioner of the Department of Commercialization and Innovation, <br>and has a net worth of ten million dollars ($10,000,000) 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 <br>activity within the Commonwealth after the receipt of a qualified investment <br>by an investment fund; (c) Has no more than one hundred (100) employees; and <br>(d) Has more than fifty percent (50%) of its assets, operations, and employees located in Kentucky. Effective: July 12, 2006 Page 3 of 3 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, <br>effective June 20, 2005. -- Created 2002 Ky. Acts ch. 230, sec. 17, effective July 15, <br>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 <br>codified together.
