KRS 154.20-255: Tax credits available to investment fund -- Application for approval as

manager -- Requirements for investment fund -- Agreement -- Total qualified

investments made by fund.

(1) (a) The total amount of credits available to any single inv estment fund awarded

credits under KRS 154.20-250 to 154.20-284 shall not exceed, in aggregate:

1. For any calendar year begining prior to January 1, 2022, eight million

dollars ($8,000,000) for all investors and all taxable years; and

2. In any calendar year beginning on or after January 1, 2022, one million

dollars ($1,000,000).

(b) The total credit available for all investors in all investment funds awarded

under KRS 154.20-250 to 154.20-284 shall not exceed a total of three million

dollars ($3,000,000) in any calendar year beginning on or after January 1,

2021.

(2) A person or entity seeking to be approved as an investment fund manager for the

operation of one (1) or more investment funds shall make written application to the

authority pursuant to KRS 15 4.20-256, in addition to complying with applicable

state and federal securities laws and regulations.

(3) Prior to the granting of any tax credits to investors of an investment fund, the

committed cash contributions to an investment fund shall be not less than five

hundred thousand dollars ($500,000).

(4) (a) An investment fund shall have no less than four (4) investors, and no investor

or investment fund manager, including their closely related family members,

and affiliates may own or have a capital inter est in more than forty percent

(40%) of the investment fund's capitalization.

(b) As used in this subsection, "closely related" means any of the following in

relation to the investor, the investor's spouse, the fund manager, or the fund

manager's spouse:

1. Parents or grandparents;

2. Children or their spouses; or

3. Siblings or their spouses.

(5) Subsequent to approval of the investment fund and the investment fund manager,

the authority and the investment fund manager, on behalf of itself and any investors

in the investment fund, shall enter into an agreement with respect to the investment

fund. T he terms and provisions of each agreement shall be determined by

negotiations between the authority and the investment fund manager. The effective

date of the agreement shall be the date of approval of the investment fund and the

investment fund manager by the authority. If an investment fund manager fails to

comply with any of the obligations of the agreement, the authority may, at its

option, do any one (1) or more of the following:

(a) Suspend the availability of the credits;

(b) Pursue any remedy provid ed under the agreement, including termination of

the agreement; or

(c) Pursue any other remedy at law to which it may be entitled.

(6) Any investor shall be entitled to a tax credit as a result of its investment in an

investment fund as provided in KRS 154.20-258.

(7) Total qualified investments made by an investment fund, including initial and

subsequent investments made by an investment fund, in any single small business

using approved qualified investments, shall not exceed thirty percent (30%) of the

committed cash contributions to the investment fund. This restriction shall not

apply to investments of money by the investment fund that are not qualified

investments.

(8) The provisions of this section shall not prohibit an investment fund from investing

in a business that is not a small business, including a business that is located outside

of the Commonwealth; however, such investments shall not be eligible for the tax

credit set forth in KRS 154.20-258.