Kentucky Statutes 154.20-277 – Annual examination of investment funds by authority and Department of Revenue — Other audits — Department’s powers of enforcement — Notice of noncompliance — Examination, investigative, and enforcement powers of se…
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(1) Each year the annual financial statements and annual reports of the investment fund shall be delivered to the authority within ninety (90) days after the end of the investment fund’s fiscal year.
(2) The authority and the Department of Revenue, individually or collectively, may examine, under oath, any of the officers, trustees, partners, members, managers, directors, agents, employees, or investors of an investment fund regarding the affairs and business of the investment fund. The authority and the Department of Revenue, individually or collectively, may issue subpoenas and subpoenas duces tecum and administer oaths. Refusal to obey such a subpoena or subpoena duces tecum may be reported to the Franklin Circuit Court, which shall enforce the subpoena or subpoena duces tecum according to the rules of civil or criminal procedure, as applicable.
(3) In addition to the audits required by this section, the authority or the Department of Revenue may audit one (1) or more investment funds or investment fund managers in any year on a random basis or for cause. The authority or the Department of Revenue may also audit, for cause, any small business in which an investment fund has made a qualified investment. Nothing in this section shall be construed to prohibit the Department of Revenue from conducting any audit relating to the administration or enforcement of the tax laws of the Commonwealth which the Department of Revenue determines to be appropriate.
(4) If any audit conducted pursuant to this section discloses that an investment fund or investment fund manager is not in compliance with the provisions of KRS § 141.068 and KRS § 154.20-250 to KRS § 154.20-284, the authority and the Department of Revenue may consult with one another with respect to this noncompliance and the Department of Revenue may exercise any of its powers to protect the Commonwealth’s interest and to enforce the provisions of KRS § 141.068 and KRS
154.20-250 to 154.20-284.
(5) The authority may give an investment fund manager written notice of any noncompliance with the provisions of KRS § 154.20-250 to KRS § 154.20-284 and specify a period of time the investment fund manager shall have to cure any noncompliance. Failure to cure any such noncompliance within the period of time specified by the authority may result in further action by the authority pursuant to this section.
(6) Nothing in this section shall be construed to prohibit the Department of Financial Institutions, Division of Securities, or any other securities regulatory organization or body with jurisdiction over the activity of an investment fund or the investment fund manager from conducting any examination or investigation relating to the securities activities of the investment fund or investment fund manager. If any examination or investigation conducted pursuant to any securities laws or regulations discloses that an investment fund or investment fund manager is not in compliance with any provision of any applicable securities laws or regulations, the
appropriate securities regulator may take whatever action it deems appropriate in accordance with such securities laws and regulations to respond to the noncompliance, notwithstanding any action the authority or the Department of Revenue may or may not take with respect to the noncompliance.
Effective: June 29, 2021
History: Amended 2021 Ky. Acts ch. 185, sec. 116, effective June 29, 2021. — Amended 2010 Ky. Acts ch. 24, sec. 197, effective July 15, 2010. — Amended 2005
Ky. Acts ch. 85, sec. 575, effective June 20, 2005. — Amended 2002 Ky. Acts ch.
230, sec. 25, effective July 15, 2002. — Created 1998 Ky. Acts ch. 414, sec. 11, effective July 15, 1998.
(2) The authority and the Department of Revenue, individually or collectively, may examine, under oath, any of the officers, trustees, partners, members, managers, directors, agents, employees, or investors of an investment fund regarding the affairs and business of the investment fund. The authority and the Department of Revenue, individually or collectively, may issue subpoenas and subpoenas duces tecum and administer oaths. Refusal to obey such a subpoena or subpoena duces tecum may be reported to the Franklin Circuit Court, which shall enforce the subpoena or subpoena duces tecum according to the rules of civil or criminal procedure, as applicable.
Terms Used In Kentucky Statutes 154.20-277
- Action: includes all proceedings in any court of this state. See Kentucky Statutes 446.010
- Authority: means the Kentucky Economic Development Finance Authority, consisting of a committee as set forth in KRS §. See Kentucky Statutes 154.1-010
- Commonwealth: means the Commonwealth of Kentucky. See Kentucky Statutes 154.1-010
- Directors: when applied to corporations, includes managers or trustees. See Kentucky Statutes 446.010
- Fiscal year: The fiscal year is the accounting period for the government. For the federal government, this begins on October 1 and ends on September 30. The fiscal year is designated by the calendar year in which it ends; for example, fiscal year 2006 begins on October 1, 2005 and ends on September 30, 2006.
- Jurisdiction: (1) The legal authority of a court to hear and decide a case. Concurrent jurisdiction exists when two courts have simultaneous responsibility for the same case. (2) The geographic area over which the court has authority to decide cases.
- Oath: A promise to tell the truth.
- Subpoena: A command to a witness to appear and give testimony.
- Subpoena duces tecum: A command to a witness to produce documents.
- Year: means calendar year. See Kentucky Statutes 446.010
(3) In addition to the audits required by this section, the authority or the Department of Revenue may audit one (1) or more investment funds or investment fund managers in any year on a random basis or for cause. The authority or the Department of Revenue may also audit, for cause, any small business in which an investment fund has made a qualified investment. Nothing in this section shall be construed to prohibit the Department of Revenue from conducting any audit relating to the administration or enforcement of the tax laws of the Commonwealth which the Department of Revenue determines to be appropriate.
(4) If any audit conducted pursuant to this section discloses that an investment fund or investment fund manager is not in compliance with the provisions of KRS § 141.068 and KRS § 154.20-250 to KRS § 154.20-284, the authority and the Department of Revenue may consult with one another with respect to this noncompliance and the Department of Revenue may exercise any of its powers to protect the Commonwealth’s interest and to enforce the provisions of KRS § 141.068 and KRS
154.20-250 to 154.20-284.
(5) The authority may give an investment fund manager written notice of any noncompliance with the provisions of KRS § 154.20-250 to KRS § 154.20-284 and specify a period of time the investment fund manager shall have to cure any noncompliance. Failure to cure any such noncompliance within the period of time specified by the authority may result in further action by the authority pursuant to this section.
(6) Nothing in this section shall be construed to prohibit the Department of Financial Institutions, Division of Securities, or any other securities regulatory organization or body with jurisdiction over the activity of an investment fund or the investment fund manager from conducting any examination or investigation relating to the securities activities of the investment fund or investment fund manager. If any examination or investigation conducted pursuant to any securities laws or regulations discloses that an investment fund or investment fund manager is not in compliance with any provision of any applicable securities laws or regulations, the
appropriate securities regulator may take whatever action it deems appropriate in accordance with such securities laws and regulations to respond to the noncompliance, notwithstanding any action the authority or the Department of Revenue may or may not take with respect to the noncompliance.
Effective: June 29, 2021
History: Amended 2021 Ky. Acts ch. 185, sec. 116, effective June 29, 2021. — Amended 2010 Ky. Acts ch. 24, sec. 197, effective July 15, 2010. — Amended 2005
Ky. Acts ch. 85, sec. 575, effective June 20, 2005. — Amended 2002 Ky. Acts ch.
230, sec. 25, effective July 15, 2002. — Created 1998 Ky. Acts ch. 414, sec. 11, effective July 15, 1998.