{"data":{"id":"us-ky/krs-154.20-256","jurisdiction":"us-ky","citation":"KRS 154.20-256","heading":"Approval of investment funds and managers -- Application --","body":"Documents -- Powers of authority -- Purpose of investment fund -- Criteria for\napproval -- Disclosure form -- Operation of multiple funds -- Loss of unused\ncredits -- Confidentiality -- Standards.\n(1) The approval of investment funds and investment fund managers shall be made\npursuant to an application to the authority submitted by a proposed fund manager on\nbehalf of a proposed investment fund and shall include:\n(a) The name, addr ess, and Social Security number or employer identification\nnumber, as applicable, of the investment fund manager and the investment\nfund;\n(b) The applicant's business plan, including the minimum and maximum amount\nof cash contributions to be solicited for the investment fund, and strategy for\noperation of the proposed investment fund;\n(c) The amount of credits the investment fund seeks for making qualified\ninvestments;\n(d) The applicant fund manager's relevant experience and demonstrated ability to\nmanage the proposed investment fund;\n(e) The location and account number of a bank account that has been established\nfor use by the investment fund;\n(f) The exemption or registration provision that is being relied upon or intended\nto be relied upon by both the inv estment fund and the investment fund\nmanager to permit this offering of securities and the activity of the investment\nfund manager in relation to the offering, in compliance with applicable state\nand federal securities laws and regulations;\n(g) A represent ation that the investment fund and the investment fund manager\nare and shall remain in compliance with applicable state and federal securities\nregulations; and\n(h) Any additional information the authority deems necessary.\n(2) The applicant shall include copies of the following documents as attachments to the\napplication:\n(a) The disclosure documents used in connection with the offering and\ninvestment in the investment fund;\n(b) The disclosure documents provided to each investor which state that:\n1. The investor has certain rights, responsibilities, and liabilities pursuant\nto KRS 154.20-250 to 154.20-284;\n2. The Commonwealth shall be immune from liability for any losses or\ndamages investors, investment funds, or investment fund managers may\nincur pursuant to KRS 154.20-279;\n3. No tax credit shall be available under the provisions of KRS 154.20 -250\nto 154.20 -284 until the investment fund and the investment fund\nmanager have complied with applicable state and federal securities laws\nand regulations and have been approved by the authority, and an\nagreement has been executed, and the terms of that agreement have been\ndisclosed in writing to each investor; and\n4. Investors shall lose all rights to any unused credits allocated to an\ninvestment fund that does not make a qualified investment within one\n(1) year of the date of the agreement with the authority or within any one\n(1) year period thereafter through the end of the term of the agreement.\nAn applicant soliciting cash contributions for the initial capitalization of an\ninvestment fund, or an investment fund manager soliciting additional cash\ncontributions for an approved investment fund, shall disclose in advance and in\nwriting to each potential investor those items described in this subsection in\naddition to any other items required by law or by agreement.\n(3) The authority shall have, in addition to its other powers provided in this chapter and\nas otherwise provided by law, all powers and authority, not explicitly prohibited by\nstatute, that are necessary or convenient to carry out and effectuate the purposes,\nobjectives, and provisions of KRS 154.20 -250 to 154.2 0-284, including but not\nlimited to power to:\n(a) Require consultation, advisory, and legal fees and other expenses the authority\ndeems necessary or incident to the preparation, adoption, implementation,\nmodification, or enforcement of the terms of any agr eement or other\ndocument, or otherwise necessary or incident to any transaction;\n(b) Require the investment fund manager to pay these fees and expenses directly\nto the person providing such consultation, advisory, legal, or other services on\nbehalf of the authority; and\n(c) Impose and collect fees and charges in connection with any transaction and\nprovide for reasonable penalties for delinquent payment of fees or charges.\nAny payments made by an investment fund manager pursuant to this subsection\nmay be passed on to the investment fund manager's investment fund.\n(4) An investment fund's stated purpose shall be primarily to encourage and assist in\nthe creation, development, or expansion of small businesses located in Kentucky.\n(5) The criteria considered by the authority for the approval of investment fund\nmanagers and the maximum amount of credits allocated to the investors of an\ninvestment fund shall include but not be limited to:\n(a) Compliance by those persons with applicable state and federal securities laws\nand regulations;\n(b) A review of the application;\n(c) The investment strategy for the investment fund;\n(d) The relevant experience of the applicant fund manager or, if the applicant fund\nmanager is an entity, the applicant's management;\n(e) The applicant's demonstrated ability to manage the investment fund; and\n(f) The amount of credits requested by the investment fund and the total amount\nof credits which may be granted to investors under KRS 154.20-258.\n(6) Following the making of a qualified investm ent, the investment fund manager shall\nwithin eighty (80) days file a disclosure form with the authority detailing the\nfollowing information:\n(a) The name and address of the small business in which the qualified investment\nwas made;\n(b) The amount of the qualified investment; and\n(c) The name, address, and Social Security number or employer identification\nnumber, as may be applicable, of each investor and the amount of credit\nallocated to each investor by virtue of the investor's proportional ownership\ninterest in the qualified investment.\n(7) An investment fund manager and its affiliates may operate no more than three (3)\nseparate investment funds pursuant to separate applications submitted to and\napproved by the authority, provided the investment fund mana ger is in compliance\nwith any applicable state and federal securities laws and regulations as evidenced by\na written statement to the authority by an investment fund manager to that effect.\n(8) An investment fund manager seeking to expand a previously appr oved investment\nfund shall submit to the authority an amended application in a form acceptable to\nthe authority.\n(9) An investment fund shall lose all unused credits that are available to its investors if\nthe investment fund does not make a qualified inves tment within one (1) year of the\ndate of the agreement or within any one (1) year period thereafter through the end of\nthe term of the agreement.\n(10) The contents of the information form required under subsections (1), (2), and (6) of\nthis section shall b e treated by the authority and by the Department of Revenue as\nconfidential and shall not be considered public records under KRS 61.870 to\n61.884.\n(11) The authority, in consultation with the Department of Revenue, may establish\nadditional procedures and s tandards, as it deems necessary for the approval of\ninvestment funds and investment fund managers, and for the allocation and granting\nof investment tax credits by the promulgation of administrative regulations in\naccordance with the provisions of KRS Chapter 13A.","path":[],"source_url":"https://apps.legislature.ky.gov/law/statutes/statute.aspx?id=51549","current_through":"Includes enactments through the 2026 Regular Session","vintage":"09/05/2026","retrieved_at":"2026-09-05T20:50:53Z","sha256":"59d97883654365b74580c08537f3a444093a49a16aa39f03a8563d50f9c64d85","source_id":"us-ky","stale":false,"prev":"us-ky/krs-154.20-255","next":"us-ky/krs-154.20-257"},"notice":"GroundRules: Original legal text. Not legal advice."}