307 KAR 1:060. Kentucky Small Business Investment Credit Program.
RELATES TO: KRS 154.20-33, 154.60-010-154.60-030.
STATUTORY AUTHORITY: KRS 154.20-33, 154.60-030.
NECESSITY, FUNCTION AND CONFORMITY: KRS 154.60-030 requires the Kentucky Economic Development Finance Authority to promulgate administrative regulations establishing the procedures and standards for the Kentucky Small Business Investment Credit Program. KRS 154.20-033 authorizes the Kentucky Economic Development Finance Authority to impose fees in conjunction with the application process. This administrative regulation establishes the application and fee structure for the Kentucky Small Business Investment Credit Program.
Section 1. Definitions. (1) "Application" means the form "Kentucky Small Business Investment Credit (KSBIC) Application", dated June 30, 2010.
(2) "Base employment" is defined by KRS 154.60-010(2).
(3) "Base hourly wage" means the average per hour wage earned by a full-time employee, including wages, tips and commissions, but excluding benefits, reimbursements, and bonuses.
(4) "Base year" is defined by KRS 154.60-010(3).
(5) "Creates and fills" is defined by KRS 154.60-010(4).
(6) "Company start date" means the first day the business applicant begins its operations as verified by one of the methods set out in Section 3(2) of this administrative regulation.
(7) "Eligible position" is defined by KRS 154.60-010(5).
(8) "Full-time employee" is defined by KRS 154.60-010(6).
(9) "KEDFA" means the Kentucky Economic Development Finance Authority.
(10) "Kentucky Small Business Investment Program" means the small business development credit program established in KRS 154.60-010 through 154.60-030 and this administrative regulation.
(11) "Qualifying equipment or technology" means tangible property:
(a)1. With a per-unit cost of $300 or more;
2. With an expected useful life of more than one (1) year; and
3. Approved by the Division of Small Business Services; and
(b) Not including real property, buildings, and supplies.
(12) "Small business" is defined in KRS 154.60-010.
Section 2. Ineligible Business Applicants. The following businesses shall not be eligible to apply:
(1) Businesses engaged in any type of illegal activity;
(2) Businesses that present live performances of a prurient sexual nature;
(3) Businesses that derive more than (5) percent of annual gross revenue through:
(a) The sale or rental of products or services of a prurient sexual nature; or
(b) The presentation of any depictions or displays of a prurient sexual nature;
(4) Businesses principally engaged in teaching, instructing, counseling, or indoctrinating religion or religious beliefs, whether in a religious or secular setting;
(5) Businesses deriving more than fifty (50) percent of annual gross revenues from lobbying activities;
(6) Businesses that are in default on any federal, state, or local taxes;
(7) Businesses that are not in good standing with the Kentucky Secretary of State’s Office (if applicable);
(8) Businesses that do not hold all current licenses, permits, and registrations necessary to legally operate a business in Kentucky; or
(9) Businesses that have received Kentucky Economic Development Finance Authority approved loans, grants, or tax incentives that were based on job creation or equipment purchases if the eligible position or positions or qualifying equipment in their applications was used as the basis for a tax credit under a previously approved Kentucky Economic Development Finance Authority incentive program.
Section 3. Eligibility Date. Businesses shall not be eligible to apply until the latter of the following dates:
(1) One (1) year after the purchase of qualifying equipment or technology; or
(2) One (1) year after the eligible position or positions have been created and filled.
Section 4. Application Supplements. (1) In addition to the information required by KRS 154.60-020, the applicant shall provide:
(a) All information required by the application which is incorporated herein by reference; and
(b) Verification of its company start date by providing one (1) of the following:
1. If the business is registered with the Kentucky Secretary of State, the organization number and organization date as listed in the Secretary of State’s Organization Search database at http://sos.ky.gov/online.htm;
2. The initial occupational license issued to a business that clearly identifies the company start date;
3. Documentation from the Kentucky Department of Revenue that shows the company start date; or
4. Affidavit from the business attesting to the company start date including the factual basis for citing the date.
(2) The applicant shall pay an administration fee, which is one (1) percent of the qualifying tax credit amount, in order to be eligible for the credits established in KRS 154.60-020. The fee shall be refunded if not approved by the Kentucky Economic Development Finance Authority.
(3) In addition to the administration fee, the applicant shall certify its current level of employment prior to approval by the Kentucky Economic Development Finance Authority.
Section 5. Incorporation by Reference. (1) The "Kentucky Small Business Investment Credit (KSBIC) Application", June 30, 2010, is incorporated by reference.
(2) This material may be inspected, copied, or obtained, subject to applicable copyright law, at the Cabinet for Economic Development, Department of Financial Incentives, Old Capitol Annex, 300 West Broadway, Frankfort, Kentucky, Monday through Friday, 8 a.m. to 4:30 p.m. (37 Ky.R. 956; eff. 11-5-2010.)