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UNOFFICIAL COPY 26 RS HB 577/GA AN ACT relating to economic development.
CHAPTER 114 1 CHAPTER 114 ( HB 577 ) AN ACT relating to economic development.
(7) "Program" means the Kentucky Entrepreneurship and Innovation Hub Program["Affiliate" means an ICC identified as the headquarters for program Page 1 of 17 HB057710.100 - 1044 - XXXX 2/18/2026 2:46 PM GA UNOFFICIAL COPY 26 RS HB 577/GA activity in a region or subregion;
(7) "Program" means the Kentucky Entrepreneurship and Innovation Hub Program["Affiliate" means an ICC identified as the headquarters for program activity in a region or subregion;
and (e) Attracting workforce talent, investors, and start-up companies to Kentucky.
and Legislative Research Commission PDF Version ACTS OF THE GENERAL ASSEMBLY (e) Attracting workforce talent, investors, and start-up companies to Kentucky.
(a) Identifying and linking entrepreneurs, faculty, subject-matter experts, scientists, venture capitalists, and other key individuals from the business sector, universities, community and technical colleges, local leaders, and government for the creation and expansion of knowledge-based, technology- Page 2 of 17 HB057710.100 - 1044 - XXXX 2/18/2026 2:46 PM GA UNOFFICIAL COPY 26 RS HB 577/GA intensive companies;
(a) Identifying and linking entrepreneurs, faculty, subject-matter experts, scientists, venture capitalists, and other key individuals from the business sector, universities, community and technical colleges, local leaders, and government for the creation and expansion of knowledge-based, technology-intensive companies;
Identifying those issues, opportunities, and challenges that have Page 3 of 17 HB057710.100 - 1044 - XXXX 2/18/2026 2:46 PM GA UNOFFICIAL COPY 26 RS HB 577/GA statewide implications;[.] (b) The hubs[regional affiliates] are responsible for fulfilling the duties as set forth in KRS 154.12-305 relating to the implementation of the region's innovation strategic plan and supporting the implementation of the Kentucky Innovation Act initiatives in the region or subregion;
Identifying those issues, opportunities, and challenges that have statewide implications;[.] (b) The hubs[regional affiliates] are responsible for fulfilling the duties as set forth in KRS 154.12-305 relating to the implementation of the region's innovation strategic plan and supporting the implementation of the Kentucky Innovation Act initiatives in the region or subregion;
(3) The executive director[ of the Office of Entrepreneurship and Innovation] shall have all the powers and authority, not explicitly prohibited by statute, necessary and convenient to carry out and effectuate the purposes of KRS 154.12-300 to 154.12- 310.
(3) The executive director[ of the Office of Entrepreneurship and Innovation] shall have all the powers and authority, not explicitly prohibited by statute, necessary and convenient to carry out and effectuate the purposes of KRS 154.12-300 to 154.12-310.
(3) "Closely related family members" means any of the following in relation to an Page 4 of 17 HB057710.100 - 1044 - XXXX 2/18/2026 2:46 PM GA UNOFFICIAL COPY 26 RS HB 577/GA employee or their spouse:
CHAPTER 114 3 (3) "Closely related family members" means any of the following in relation to an employee or their spouse:
(10)[(8)] "Knowledge-based" means technology-intensive or driven by knowledge, Page 5 of 17 HB057710.100 - 1044 - XXXX 2/18/2026 2:46 PM GA UNOFFICIAL COPY 26 RS HB 577/GA innovation, and speed;
(10)[(8)] "Knowledge-based" means technology-intensive or driven by knowledge, innovation, and speed;
Moneys received by the fund from a public or private source may be subject to use restrictions, sector or cluster limitations, investment criteria, or other conditions imposed by the contributing entity and are Page 6 of 17 HB057710.100 - 1044 - XXXX 2/18/2026 2:46 PM GA UNOFFICIAL COPY 26 RS HB 577/GA subject to approval by the cabinet, provided such conditions are consistent with the purposes of the fund.
Moneys received by the fund from a public or private source may be subject to use restrictions, sector or cluster limitations, investment criteria, or other conditions imposed by the contributing entity and are subject to approval by the cabinet, provided such conditions are consistent with the purposes of the fund.
(3) The Kentucky enterprise fund shall also receive moneys transferred from the Kentucky rural innovation fund under KRS 164.6027, the Kentucky commercialization fund under KRS 164.6035, and the Kentucky alternative fuel and renewable energy fund under KRS 154.20-410.
Legislative Research Commission PDF Version ACTS OF THE GENERAL ASSEMBLY (3) The Kentucky enterprise fund shall also receive moneys transferred from the Kentucky rural innovation fund under KRS 164.6027, the Kentucky commercialization fund under KRS 164.6035, and the Kentucky alternative fuel and renewable energy fund under KRS 154.20-410.
Page 7 of 17 HB057710.100 - 1044 - XXXX 2/18/2026 2:46 PM GA UNOFFICIAL COPY 26 RS HB 577/GA (e) Promote research and development and commercialization activities that are market-oriented;[ and] (f) Support early-stage and high-growth[small and medium-sized] companies;
(e) Promote research and development and commercialization activities that are market-oriented;[ and] (f) Support early-stage and high-growth[small and medium-sized] companies;
(5) For all funding totaling more than thirty thousand dollars ($30,000), the science and technology organization or any entity designated by the executive director of the Page 8 of 17 HB057710.100 - 1044 - XXXX 2/18/2026 2:46 PM GA UNOFFICIAL COPY 26 RS HB 577/GA Office of Entrepreneurship and Innovation shall receive an equity interest in the qualified company, such as a general or limited partnership interest, limited liability company interest, common or preferred stock with or without voting rights and without regard to seniority position, forms of subordinate or convertible unsecured debt, or both, with warrants, rights, or other means of equity conversion attached, a near equity interest such as a simple agreement for future equity or "SAFE agreement", or other convertible debt instruments that are determined to qualify as an adequate investment interest by the executive director of the Office of Entrepreneurship and Innovation.
(5) For all funding totaling more than thirty thousand dollars ($30,000), the science and technology organization or any entity designated by the executive director of the Office of Entrepreneurship and Innovation shall receive an equity interest in the qualified company, such as a general or limited partnership interest, limited liability company interest, common or preferred stock with or without voting rights and without regard to seniority position, forms of subordinate or convertible unsecured debt, or both, with warrants, rights, or other means of equity conversion attached, a near equity interest such as a simple agreement for future equity or "SAFE agreement", or other convertible debt instruments that are determined to qualify as an adequate investment interest by the executive director of the Office of Entrepreneurship and Innovation.
(1) The science and technology organization shall have the authority, upon approval by the cabinet, to review applications, qualify companies, and certify qualified companies to receive funding from the Kentucky enterprise fund.
CHAPTER 114 5 (1) The science and technology organization shall have the authority, upon approval by the cabinet, to review applications, qualify companies, and certify qualified companies to receive funding from the Kentucky enterprise fund.
Meets the definition of a Kentucky-based company, or has demonstrated potential to become a Kentucky-based company within Page 9 of 17 HB057710.100 - 1044 - XXXX 2/18/2026 2:46 PM GA UNOFFICIAL COPY 26 RS HB 577/GA one hundred eighty (180) days after certification authorizing funding under subsection (5) of this section, or within a timeframe determined by the executive director of the Office of Entrepreneurship and Innovation;
Meets the definition of a Kentucky-based company, or has demonstrated potential to become a Kentucky-based company within one hundred eighty (180) days after certification authorizing funding under subsection (5) of this section, or within a timeframe determined by the executive director of the Office of Entrepreneurship and Innovation;
(a) Negotiate an agreement and funding contract with a college or university in Page 10 of 17 HB057710.100 - 1044 - XXXX 2/18/2026 2:46 PM GA UNOFFICIAL COPY 26 RS HB 577/GA the Commonwealth, if any, and with a project partner, if any, that is satisfactory to the science and technology organization, to undertake the commercialization work;
(a) Negotiate an agreement and funding contract with a college or university in the Commonwealth, if any, and with a project partner, if any, that is satisfactory to the science and technology organization, to undertake the commercialization work;
(7) Prior to certifying a qualified company, the science and technology organization may negotiate with the qualified company the ownership and disposition of patents, royalties, all other intellectual property rights, and an equity, near equity such as a simple agreement for future equity or "SAFE agreement", convertible debt, or similar investment format that is approved by the executive director of the Office of Entrepreneurship and Innovation on behalf of the Kentucky enterprise fund for the sole purpose of reinvesting and sustaining a revolving fund to carry out the provisions of KRS 164.6021 and 164.6023.
(7) Prior to certifying a qualified company, the science and technology organization may negotiate with the qualified company the ownership and disposition of patents, royalties, all other intellectual property rights, and an equity, near equity such as a simple agreement for future equity or "SAFE agreement", convertible debt, or similar investment format that is approved by the executive director of the Office of Entrepreneurship and Legislative Research Commission PDF Version ACTS OF THE GENERAL ASSEMBLY Innovation on behalf of the Kentucky enterprise fund for the sole purpose of reinvesting and sustaining a revolving fund to carry out the provisions of KRS 164.6021 and 164.6023.
and (b) A deadline, from the date an applicant is determined to be a qualified Page 11 of 17 HB057710.100 - 1044 - XXXX 2/18/2026 2:46 PM GA UNOFFICIAL COPY 26 RS HB 577/GA company, by which certification shall be made.
and (b) A deadline, from the date an applicant is determined to be a qualified company, by which certification shall be made.
2 Is actively and principally engaged in a qualified activity within the Commonwealth, or will be actively and principally engaged in a qualified activity within the Commonwealth after the receipt of a qualified investment by a qualified investor;
Is actively and principally engaged in a qualified activity within the Commonwealth, or will be actively and principally engaged in a qualified activity within the Commonwealth after the receipt of a qualified investment by a qualified investor;
Page 12 of 17 HB057710.100 - 1044 - XXXX 2/18/2026 2:46 PM GA UNOFFICIAL COPY 26 RS HB 577/GA 2.
2.
1.
CHAPTER 114 7 1.
If made through a pass-through entity, the amount eligible for the tax Page 13 of 17 HB057710.100 - 1044 - XXXX 2/18/2026 2:46 PM GA UNOFFICIAL COPY 26 RS HB 577/GA credit shall be limited to that individual's pro rata share of the capital contributed to the entity that is ultimately invested in the qualified small business;
If made through a pass-through entity, the amount eligible for the tax credit shall be limited to that individual's pro rata share of the capital contributed to the entity that is ultimately invested in the qualified small business;
and 3.[2.]Be offered and executed in compliance with applicable state and federal securities laws and regulations;
and 3.[2.] Be offered and executed in compliance with applicable state and federal securities laws and regulations;
(4) "Applicant" means any person or entity who has not received approval from the Page 14 of 17 HB057710.100 - 1044 - XXXX 2/18/2026 2:46 PM GA UNOFFICIAL COPY 26 RS HB 577/GA authority as an investment fund manager, but who has submitted or will submit an application to the authority for approval as an investment fund manager;
(4) "Applicant" means any person or entity who has not received approval from the authority as an investment fund manager, but who has submitted or will submit an application to the authority for approval as an investment fund manager;
(13) "Investment fund" means any entity that is organized by an investment fund manager in compliance with applicable state and federal securities laws and regulations, and is approved by the authority to make qualified investments pursuant to KRS 154.20-256;
Legislative Research Commission PDF Version ACTS OF THE GENERAL ASSEMBLY (13) "Investment fund" means any entity that is organized by an investment fund manager in compliance with applicable state and federal securities laws and regulations, and is approved by the authority to make qualified investments pursuant to KRS 154.20-256;
(14) "Investment fund manager" means any person or entity that has been approved by Page 15 of 17 HB057710.100 - 1044 - XXXX 2/18/2026 2:46 PM GA UNOFFICIAL COPY 26 RS HB 577/GA the authority to manage one (1) or more investment funds authorized under the provisions of KRS 154.20-250 to 154.20-284 and is in compliance with all applicable federal and state regulations;
(14) "Investment fund manager" means any person or entity that has been approved by the authority to manage one (1) or more investment funds authorized under the provisions of KRS 154.20-250 to 154.20-284 and is in compliance with all applicable federal and state regulations;
Is a knowledge-based business, as shall be prescribed by the executive Page 16 of 17 HB057710.100 - 1044 - XXXX 2/18/2026 2:46 PM GA UNOFFICIAL COPY 26 RS HB 577/GA director of the Office of Entrepreneurship and Innovation[commissioner of the Department of Commercialization and Innovation], and has a net worth of ten million dollars ($10,000,000) or less;
Is a knowledge-based business, as shall be prescribed by the executive director of the Office of Entrepreneurship and Innovation[commissioner of the Department of Commercialization and Innovation], and has a net worth of ten million dollars ($10,000,000) or less;
Page 17 of 17 HB057710.100 - 1044 - XXXX 2/18/2026 2:46 PM GA
Signed by Governor April 13, 2026.
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