Definitions for KRS 141.432 to 141.434

As used in KRS 141.432 to 141.434, unless the context requires otherwise:
(1) "Applicable percentage" means zero percent (0%) for each of the first two (2) credit
allowance dates, seven percent (7%) for the third credit allowance date, and eight
percent (8%) for the next four (4) credit allowance dates;
(2) "Credit allowance date" means, with respect to any qualified equity investment:
(a) The date on which the investment is initially made; and
(b) Each of the six (6) anniversary dates of that date thereafter;
(3) "Long-term debt security" means any debt instrument issued by a qualified
community development entity, at par value or a premium, with an original maturity
date of at least seven (7) years from the date of its issuance, with no acceleration of
repayment, amortization, or prepayment features prior to its original maturity date.
The qualified community development entity that issues the debt instrument may
not make cash interest payments on the debt instrument during the period
commencing with its is suance and ending on its final credit allowance date in
excess of the cumulative operating income, as defined in the regulations
promulgated under 26 U.S.C. sec. 45D, of the qualified community development
entity for that same period, which shall be calcul ated prior to giving effect to the
expense of the cash interest payments. The foregoing shall in no way limit the
holder's ability to accelerate payments on the debt instrument in situations where the
qualified community development entity has defaulted on covenants designed to
ensure compliance with KRS 141.432 to 141.434 or 26 U.S.C. sec. 45D;
(4) "Purchase price" means the amount paid to a qualified community development
entity that issues a qualified equity investment for the qualified equity investment;
(5) "Qualified active low -income community business" has the same meaning given
that term in 26 U.S.C. sec. 45D. A business shall be considered a qualified active
low-income community business for the duration of the qualified community
development entity's investment in, or loan to, the business if the entity reasonably
expects, at the time it makes the investment or loan, that the business will continue
to satisfy the requirements for being a qualified active low -income community
business throughout the entire period of the investment or loan. The term excludes
any business that derives or projects to derive fifteen percent (15%) or more of its
annual revenue from the rental or sale of real estate. This exclusion does not apply
to a business that is cont rolled by, or under common control with, another business
if the second business:
(a) Does not derive or project to derive fifteen percent (15%) or more of its
annual revenue from the rental or sale of real estate; and
(b) Is the primary tenant of the real estate leased from the first business;
(6) "Qualified community development entity" has the same meaning given that term in
26 U.S.C. sec. 45D; provided that the entity has entered into, or is controlled by an
entity that has entered into, an allocation a greement with the Community
Development Financial Institutions Fund of the United States Treasury Department
with respect to credits authorized by 26 U.S.C. sec. 45D, which includes the
Commonwealth of Kentucky within the service area set forth in such all ocation
agreement;
(7) "Qualified equity investment" means any equity investment in, or long -term debt
security issued by, a qualified community development entity that:
(a) Is acquired after June 4, 2010, at its original issuance solely in exchange for
cash;
(b) 1. In the case of a qualified equity investment issued prior to Jan uary 1,
2014, has at least eighty -five percent (85%) of its cash purchase price
used by the issuer to make qualified low -income community
investments in qualified active low -income community businesses
located in the Commonwealth by the second anniversary of the initial
credit allowance date; and
2. In the case of a qualified equity investment issued on or after January 1,
2014, has at least one hundred percent (100%) of its cash purchase price
used by the issuer to make qualified low -income community
investments in qualified active low -income community businesses
located in the Commonwealth by the first anniversary of the initial credit
allowance date; and
(c) Is designated by the issuer as a qualified equity investment under this
subsection and is certifie d by the department as not exceeding the limitation
contained in KRS 141.434. This term shall include any qualified equity
investment that does not meet the provisions of paragraph (a) of this
subsection if the investment was a qualified equity investment in the hands of
a prior holder. The qualified community development entity shall keep
sufficiently detailed books and records with respect to the investments made
with the proceeds of the qualified equity investments to allow the direct
tracing of the proc eeds into qualified low -income community investments in
qualified active low-income community businesses in the Commonwealth;
(8) "Qualified low -income community investment" means any capital or equity
investment in, or loan to, any qualified active low -income community business
made after June 4, 2010. With respect to any one (1) qualified active low -income
community business, the maximum amount of qualified low -income community
investments that may be made in the business, on a collective basis with all o f its
affiliates, with the proceeds of qualified equity investments that have been certified
under KRS 141.433 shall be ten million dollars ($10,000,000) whether made by one
(1) or several qualified community development entities;
(9) "Tax credit" means a nonrefundable credit against the taxes imposed by KRS
141.020, 141.040, 141.0401, 136.320, 136.330, 136.340, 136.350, 136.370,
136.390, or 304.3 -270. For the credit against the taxes imposed by KRS 141.020,
141.040, or 141.0401, the ordering of the credits shall be as provided in KRS
141.0205. An insurance company claiming a tax credit against the insurance
premium tax is not required to pay additional retaliatory tax levied pursuant to KRS
304.3-270; and
(10) "Taxpayer" means any individual or entity subje ct to the tax imposed by KRS
141.020, 141.040, 141.0401, 136.320, 136.330, 136.340, 136.350, 136.370,
136.390, or 304.3-270.