{"data":{"id":"us-ky/krs-154.20-254","jurisdiction":"us-ky","citation":"KRS 154.20-254","heading":"Definitions for KRS 154.20-250 to 154.20-284.","body":"As used in KRS 154.20-250 to 154.20-284, unless the context clearly requires otherwise:\n(1) \"Affiliate\" means any person or entity who directly or indirectly, through one (1) or\nmore intermediaries, controls or is controlled by or is under common control w ith\nanother person or entity;\n(2) \"Agreement\" means an investment fund agreement entered into pursuant to KRS\n154.20-255(5) by the authority and an investment fund manager on behalf of the\ninvestment fund, the investment fund manager, and any investor in t he investment\nfund;\n(3) \"Amended application\" means a document submitted by an investment fund\nmanager, in a form acceptable to the authority and on behalf of an investment fund,\nfor the purpose of increasing the aggregate amount of available tax credits;\n(4) \"Applicant\" means any person or entity who has not received approval from the\nauthority as an investment fund manager, but who has submitted or will submit an\napplication to the authority for approval as an investment fund manager;\n(5) \"Authority\" means the Kentucky Economic Development Finance Authority or its\ndesignee;\n(6) \"Cash contribution\" means an investment of money by an investor in an investment\nfund under the terms of KRS 154.20-250 to 154.20-284;\n(7) \"Committed cash contribution\" means a legally binding agreement by an investor to\nmake a cash contribution in an amount set forth in a written agreement between an\ninvestor and an investment fund;\n(8) \"Commonwealth\" means the Commonwealth of Kentucky;\n(9) \"Credit\" means a nonrefundable credit for investors against state tax liability\nallocated and granted by the authority pursuant to KRS 154.20 -258 for qualified\ninvestments made by approved investment funds;\n(10) \"Entity\" means any corporation, limited liability company, business development\ncorporation, partnership, limited partnership, sole proprietorship, association, joint\nstock company, receivership, trust, professional service organization, or other legal\nentity through which business is conducted;\n(11) \"Financial institution\" means \"financial institution\" as defined in KRS 136.500(10)\nand includes savings and loan associations, savings banks, and similar institutions\nsubject to the taxes imposed by KRS 136.290, 136.300, or 136.310;\n(12) \"Insurance company\" means any insurance company subject to the taxes imposed\nby KRS 136.320, 136.330, or 304.3-270;\n(13) \"Investment fund\" means any entity that is organized by an investment fund\nmanager in compliance with appl icable state and federal securities laws and\nregulations, and is approved by the authority to make qualified investments\npursuant to KRS 154.20-256;\n(14) \"Investment fund manager\" means any person or entity that has been approved by\nthe authority to manage  one (1) or more investment funds authorized under the\nprovisions of KRS 154.20 -250 to 154.20 -284 and is in compliance with all\napplicable federal and state regulations;\n(15) \"Investor\" means any person or entity, including financial institutions and insurance\ncompanies, that is subject to state tax liability and that makes a cash contribution or\na committed cash contribution to an investment fund in accordance with the\nprovisions of KRS 154.20 -250 to 154.20 -284 and has not been convicted of\nviolating any of Kentucky's tax laws within the past ten (10) years;\n(16) \"Knowledge-based\" has the same meaning as in KRS 164.6011;\n(17) \"Nonprofit entity\" means an investor that is exempt from federal income tax under\nSection 501(c) of the Internal Revenue Code of 1986, as amended;\n(18) \"Qualified activity\" has the same meaning as in KRS 154.20-230;\n(19) \"Qualified investment\" means an investment of at least ten thousand dollars\n($10,000) in a small business by an investment fund, in compliance with applicable\nstate and  federal securities laws and regulations, seeking a financial return based\nupon that consideration. In consideration for the qualified investment, the\ninvestment fund shall receive an equity interest in the small business, such as a\ngeneral or limited part nership interest, common or preferred stock with or without\nvoting rights and without regard to seniority position, forms of subordinate or\nconvertible unsecured debt, or both, with warrants, rights, or other means of equity\nconversion attached; and\n(20) \"Small business\" means any entity which at the time a qualified investment is made\nby an investment fund:\n(a) 1. Has a net worth of five million dollars ($5,000,000) or less or net\nincome after federal income taxes for each of the two (2) preceding\nfiscal years of three million dollars ($3,000,000) or less; or\n2. Is a knowledge -based business, as shall be prescribed by the executive\ndirector of the Office of Entrepreneurship and Innovation, and has a net\nworth of ten million dollars ($10,000,000) or less;\n(b) Is actively and principally engaged in a qualified activity within the\nCommonwealth, or will be actively and principally engaged in a qualified\nactivity within the Commonwealth after the receipt of a qualified investment\nby an investment fund;\n(c) Has no more than one hundred (100) employees; and\n(d) Has more than fifty percent (50%) of its assets, operations, and employees\nlocated in Kentucky.","path":[],"source_url":"https://apps.legislature.ky.gov/law/statutes/statute.aspx?id=57636","current_through":"Includes enactments through the 2026 Regular Session","vintage":"09/05/2026","retrieved_at":"2026-09-05T20:50:53Z","sha256":"99dd50cb57e5b3a7169cf5ac157ceb110926d1591315ad9ee0f0f68b190fc9f6","source_id":"us-ky","stale":false,"prev":"us-ky/krs-154.20-253","next":"us-ky/krs-154.20-255"},"notice":"GroundRules: Original legal text. Not legal advice."}