{"data":{"id":"us-ky/krs-141.432","jurisdiction":"us-ky","citation":"KRS 141.432","heading":"Definitions for KRS 141.432 to 141.434.","body":"As used in KRS 141.432 to 141.434, unless the context requires otherwise:\n(1) \"Applicable percentage\" means zero percent (0%) for each of the first two (2) credit\nallowance dates, seven percent (7%) for the third credit allowance date, and eight\npercent (8%) for the next four (4) credit allowance dates;\n(2) \"Credit allowance date\" means, with respect to any qualified equity investment:\n(a) The date on which the investment is initially made; and\n(b) Each of the six (6) anniversary dates of that date thereafter;\n(3) \"Long-term debt security\" means any debt instrument issued by a qualified\ncommunity development entity, at par value or a premium, with an original maturity\ndate of at least seven (7) years from the date of its issuance, with no acceleration of\nrepayment, amortization, or prepayment features prior to its original maturity date.\nThe qualified community development entity that issues the debt instrument may\nnot make cash interest payments on the debt instrument during the period\ncommencing with its is suance and ending on its final credit allowance date in\nexcess of the cumulative operating income, as defined in the regulations\npromulgated under 26 U.S.C. sec. 45D, of the qualified community development\nentity for that same period, which shall be calcul ated prior to giving effect to the\nexpense of the cash interest payments. The foregoing shall in no way limit the\nholder's ability to accelerate payments on the debt instrument in situations where the\nqualified community development entity has defaulted on  covenants designed to\nensure compliance with KRS 141.432 to 141.434 or 26 U.S.C. sec. 45D;\n(4) \"Purchase price\" means the amount paid to a qualified community development\nentity that issues a qualified equity investment for the qualified equity investment;\n(5) \"Qualified active low -income community business\" has the same meaning given\nthat term in 26 U.S.C. sec. 45D. A business shall be considered a qualified active\nlow-income community business for the duration of the qualified community\ndevelopment entity's investment in, or loan to, the business if the entity reasonably\nexpects, at the time it makes the investment or loan, that the business will continue\nto satisfy the requirements for being a qualified active low -income community\nbusiness throughout the  entire period of the investment or loan. The term excludes\nany business that derives or projects to derive fifteen percent (15%) or more of its\nannual revenue from the rental or sale of real estate. This exclusion does not apply\nto a business that is cont rolled by, or under common control with, another business\nif the second business:\n(a) Does not derive or project to derive fifteen percent (15%) or more of its\nannual revenue from the rental or sale of real estate; and\n(b) Is the primary tenant of the real estate leased from the first business;\n(6) \"Qualified community development entity\" has the same meaning given that term in\n26 U.S.C. sec. 45D; provided that the entity has entered into, or is controlled by an\nentity that has entered into, an allocation a greement with the Community\nDevelopment Financial Institutions Fund of the United States Treasury Department\nwith respect to credits authorized by 26 U.S.C. sec. 45D, which includes the\nCommonwealth of Kentucky within the service area set forth in such all ocation\nagreement;\n(7) \"Qualified equity investment\" means any equity investment in, or long -term debt\nsecurity issued by, a qualified community development entity that:\n(a) Is acquired after June 4, 2010, at its original issuance solely in exchange for\ncash;\n(b) 1. In the case of a qualified equity investment issued prior to Jan uary 1,\n2014, has at least eighty -five percent (85%) of its cash purchase price\nused by the issuer to make qualified low -income community\ninvestments in qualified active low -income community businesses\nlocated in the Commonwealth by the second anniversary of the initial\ncredit allowance date; and\n2. In the case of a qualified equity investment issued on or after January 1,\n2014, has at least one hundred percent (100%) of its cash purchase price\nused by the issuer to make qualified low -income community\ninvestments in qualified active low -income community businesses\nlocated in the Commonwealth by the first anniversary of the initial credit\nallowance date; and\n(c) Is designated by the issuer as a qualified equity investment under this\nsubsection and is certifie d by the department as not exceeding the limitation\ncontained in KRS 141.434. This term shall include any qualified equity\ninvestment that does not meet the provisions of paragraph (a) of this\nsubsection if the investment was a qualified equity investment in the hands of\na prior holder. The qualified community development entity shall keep\nsufficiently detailed books and records with respect to the investments made\nwith the proceeds of the qualified equity investments to allow the direct\ntracing of the proc eeds into qualified low -income community investments in\nqualified active low-income community businesses in the Commonwealth;\n(8) \"Qualified low -income community investment\" means any capital or equity\ninvestment in, or loan to, any qualified active low -income community business\nmade after June 4, 2010. With respect to any one (1) qualified active low -income\ncommunity business, the maximum amount of qualified low -income community\ninvestments that may be made in the business, on a collective basis with all o f its\naffiliates, with the proceeds of qualified equity investments that have been certified\nunder KRS 141.433 shall be ten million dollars ($10,000,000) whether made by one\n(1) or several qualified community development entities;\n(9) \"Tax credit\" means a nonrefundable credit against the taxes imposed by KRS\n141.020, 141.040, 141.0401, 136.320, 136.330, 136.340, 136.350, 136.370,\n136.390, or 304.3 -270. For the credit against the taxes imposed by KRS 141.020,\n141.040, or 141.0401, the ordering of the credits  shall be as provided in KRS\n141.0205. An insurance company claiming a tax credit against the insurance\npremium tax is not required to pay additional retaliatory tax levied pursuant to KRS\n304.3-270; and\n(10) \"Taxpayer\" means any individual or entity subje ct to the tax imposed by KRS\n141.020, 141.040, 141.0401, 136.320, 136.330, 136.340, 136.350, 136.370,\n136.390, or 304.3-270.","path":["KRS Chapter 141"],"source_url":"https://apps.legislature.ky.gov/law/statutes/statute.aspx?id=43422","current_through":"Includes enactments through the 2026 Regular Session","vintage":"09/05/2026","retrieved_at":"2026-09-05T20:50:35Z","sha256":"aacff0f6bc72ab22e0fd204a29a218e7d1158a2854015ac43cac762f49adb31f","source_id":"us-ky","stale":false,"prev":"us-ky/krs-141.430","next":"us-ky/krs-141.433"},"notice":"GroundRules: Original legal text. Not legal advice."}