KRS 164.6023: Authority of the science and technology organization to review

applications, qualify companies, and certify qualified companies.

(1) The science and technology organization shall have the authority, upon approval by

the cabinet, to revie w applications, qualify companies, and certify qualified

companies to receive funding from the Kentucky enterprise fund.

(2) The science and technology organization shall develop application criteria and an

application process subject to the following limi tations. The proposed project shall

be likely to:

(a) Produce a measurable result and be technically sound;

(b) Lead to innovative technology or new knowledge;

(c) Lead to commercially successful products, processes, or services within a

reasonable period of time; or

(d) Show significant potential for stimulating economic growth and a reasonable

probability to enhance employment opportunities within the Commonwealth.

(3) The applicant shall provide to the science and technology organization an

application that shall include but not be limited to the following information:

(a) Verification that the applicant is an eligible company that:

1. Meets the definition of a Kentucky-based company, or has demonstrated

potential to become a Kentucky -based company within one hundred

eighty (180) days after certification authorizing funding under

subsection (5) of this section, or within a timeframe determined by the

executive director of the Office of Entrepreneurship and Innovation; and

2. Is an early-stage or high-growth company;

(b) A technology description and plan that is sufficient for outside expert review;

(c) A detailed financial analysis that includes the commitment of resources by the

applicant and others;

(d) Sufficient detail con cerning proposed project partners, type and amount of

work to be performed and financing to be contributed by each partner, and

expected product or service with estimated costs to be reflected in the

negotiated contract or agreement; and

(e) A statement of the economic development potential of the project.

(4) The science and technology organization shall conduct an independent review with

the use of outside experts to evaluate each application. Following the application

review, the science and technology o rganization shall make a determination of the

application and may determine that the applicant is a qualified company as defined

in KRS 164.6011.

(5) Upon a qualified company's presentation of a legal agreement or contract meeting

the conditions under subs ection (6) of this section, the science and technology

organization shall present the qualified company, the project partners, if any, and

the college or university in the Commonwealth, if any, with a certification

authorizing funding.

(6) Prior to receiving certification authorizing funding from the science and technology

organization, the qualified company shall:

(a) Negotiate an agreement and funding contract with a college or university in

the Commonwealth, if any, and with a project partner, if any, th at is

satisfactory to the science and technology organization, to undertake the

commercialization work; and

(b) Provide assurance to the science and technology organization that the college

or university and the qualified company have negotiated the owners hip and

disposition of patents, royalties, all other intellectual property rights, and

equity or related position relating to the contract between the qualifying

company and the college or university;

unless the requirement to partner with a college or un iversity is recommended to be

waived by the science and technology organization.

(7) Prior to certifying a qualified company, the science and technology organization

may negotiate with the qualified company the ownership and disposition of patents,

royalties, all other intellectual property rights, and an equity, near equity such as a

simple agreement for future equity or "SAFE agreement," convertible debt, or

similar investment format that is approved by the executive director of the Office of

Entrepreneurship and Innovation on behalf of the Kentucky enterprise fund for the

sole purpose of reinvesting and sustaining a revolving fund to carry out the

provisions of KRS 164.6021 and 164.6023.

(8) The science and technology organization, upon approval by the ca binet, shall set

forth guidelines as to when and how all areas of the state will be notified about the

program's availability and a program schedule, including but not limited to the

following:

(a) A review cycle including:

1. A deadline for submission of applications at least biannually; and

2. A deadline for reviewing applications of no more than one hundred

twenty (120) days after the application submission deadline; and

(b) A deadline, from the date an applicant is determined to be a qualified

company, by which certification shall be made. If certification is not made by

that deadline the funding voucher award is made void.