(b) The corporation shall be governed by a board of 20 directors who shall be residents of this state. The board shall consist of (1) the governor or, at the discretion of the governor, the secretary of the department of commerce, (2) the secretary of agriculture, (3) four directors who are members of the legislature appointed as provided in subsection (d)(1), (4) four directors who are appointed by legislative officers as provided in subsection (d)(2), and (5) ten directors appointed by the governor subject to senate confirmation as provided in K.S.A. 75-4315b, and amendments thereto. Except as provided by K.S.A. 46-2601, and amendments thereto, no person whose appointment is subject to confirmation by the senate, shall exercise any power, duty or function as a member of the board until confirmed by the senate.
(c) (1) All 10 of the directors appointed by the governor shall be persons recognized for outstanding knowledge and leadership in their fields. Six of the directors shall be persons from the private sector and four shall be persons from the public sector. The four appointees from the public sector shall consist of one or more of the following: Senior administrators at Kansas educational institutions governed by the board of regents or engineers or scientists who have extensive experience in managing basic or applied scientific and technological research. Of the six directors appointed from the private sector:
(A) Four directors shall be persons who represent industries of the Kansas economy including small enterprises which include, but are not limited to:
(i) Resource-based industries of agriculture, oil and gas;
(ii) advanced technology industries of aviation, manufacturing, information and design; and
(iii) emerging industries of telecommunications, computer software, information services and research services; and
(B) two directors shall be persons who represent the private financial sector of whom one shall have experience in the area of high-risk venture investments, and the other shall have commercial banking experience in an industry of special technological importance to the Kansas economy.
(2) In making appointments to the board, the governor shall give consideration to the qualifications of the persons who served as commissioners of the Kansas advanced technology commission and shall give consideration to appropriate geographical representation.
(3) Of the members first appointed to the board, two directors shall be appointed for a term of one year, two directors shall be appointed for terms of two years, three directors shall be appointed for terms of three years and three directors shall be appointed for terms of four years. Except as provided by paragraph (4), successors to such directors shall be appointed for terms of four years. Each director shall hold office for the term of appointment and until the successor has been appointed and confirmed. In the event of a vacancy, the vacancy shall be filled by the governor in the manner provided for original appointments for the remainder of the unexpired portion of the term.
(4) The terms of directors appointed pursuant to this subsection who are serving on the board on the effective date of this act shall expire on January 15, of the year in which such member's term would have expired under the provisions of this section prior to amendment by this act. Thereafter, directors shall be appointed for terms of four years and until their successors are appointed and confirmed.
(d) (1) Four directors shall be members of the legislature as follows: The speaker of the house, the house minority leader, the president of the senate, and the senate minority leader, or legislators who are appointed to represent them and who will provide continuity by virtue of their membership on the standing committee on commerce of the senate, the standing committee on economic development of the house of representatives or the joint committee on economic development. Legislative officers designated in this subsection shall serve by virtue of office. Legislators appointed under this subsection shall serve from the dates of their appointment until the first day of the regular legislative session in odd-numbered years and are eligible for reappointment.
(2) (A) Four directors shall be appointed by legislative officers as follows: (1) One shall be appointed by the speaker of the house, (2) one shall be appointed by the house minority leader, (3) one shall be appointed by the president of the senate, and (4) one shall be appointed by the senate minority leader. The members so appointed shall be persons who are recognized for outstanding knowledge and leadership in their fields, who are from the private sector and who represent industries of the Kansas economy including small enterprises which include, but are not limited to:
(i) Resource-based industries of agriculture, oil and gas;
(ii) advanced technology industries of aviation, manufacturing, information and design; and
(iii) emerging industries of telecommunications, computer software, information services and research services.
(B) Of the directors first appointed by legislative officers under this subsection (d)(2), the directors appointed by the speaker of the house and the president of the senate shall be appointed to a term of four years and the directors appointed by the house minority leader and the senate minority leader shall be appointed to a term of two years. Successors to such directors shall be appointed for terms of four years. Each director shall hold office for the term of appointment and until the successor has been appointed. In the event of a vacancy, the vacancy shall be filled by the legislative officer who appointed the director who created the vacancy in the manner provided for the original appointment for the remainder of the unexpired portion of the term.
(e) Members of the board of directors, in their dealings with enterprises that may receive financing through the corporation, shall declare any potential conflict of interest and abstain from voting prior to taking any actions relating to that transaction.
(f) The board of directors shall conduct a national search and select a corporate president who meets a national standard of experience, ability and initiative for similar positions. The corporate president shall not be a member of the board.
(g) The board of directors shall hold all board meetings within the state of Kansas.
(h) Members of the board of directors are entitled to compensation and expenses as provided in K.S.A. 75-3223, and amendments thereto.
(i) The board shall annually elect from the private sector membership one member as chairperson and one member as vice-chairperson.
(j) The board of directors shall meet at least once during each calendar quarter, and at such other times as may be provided in the rules of the corporation, upon call by the president, the chairperson or upon written request of a majority of the directors.
(k) A majority of the board of directors shall be necessary to transact corporation business, and all actions of the directors shall be by a majority vote of the full number of corporate directors.
(l) The directors shall establish an executive committee composed of the chairperson, vice-chairperson and three additional members chosen by the chairperson from among the remaining directors. The executive committee, in intervals between board meetings, may transact any board business that has been delegated to the executive committee. A majority of the executive committee shall be necessary to transact business and all actions of the executive committee shall be by a majority vote of the committee.
(m) No member of the board of directors is eligible to serve more than two terms of office.
(n) A member appointed to the board of directors by the governor may be removed by the governor for cause, stated in writing, after a hearing thereon.
History: L. 1986, ch. 284, § 4; L. 1991, ch. 245, § 1; L. 1992, ch. 221, § 1; L. 1993, ch. 136, § 13; L. 1995, ch. 241, § 17; L. 2000, ch. 157, § 1; L. 2003, ch. 154, § 75; L. 2004, ch. 101, § 130; July 1.
(1) Existing resource-based industries of agriculture, oil, gas, coal and helium;
(2) existing advanced technology industries of aviation, pharmaceuticals, computers and electronics; and
(3) emerging industries of telecommunications, computer software, information services and research services.
(b) The corporation shall achieve the purpose stated in subsection (a) of this section by:
(1) Financing basic research, applied research and development, and technology transfer at Kansas educational institutions which meet competitive standards of excellence as measured by national and international peers, and which create innovative collaboration between Kansas educational institutions and Kansas enterprises;
(2) awarding applied research matching grants to Kansas educational institutions and Kansas private enterprises in order to move innovation and applied research toward commercial application;
(3) engaging in seed-capital financing for the development and implementation of innovations or new technologies for existing resource, technology-based and emerging Kansas businesses; and
(4) providing technical referral services to such small, new, emerging or mature businesses and encouraging Kansas educational institutions to establish technical information data bases and industrial liaison offices which are easily accessible by both private and public sector Kansas organizations.
(c) The department of commerce, Kansas, Inc. and all other interested state agencies shall cooperate with the Kansas technology enterprise corporation in providing information and other assistance as may be requested for the performance of its duties with respect to the state's economic development strategy.
History: L. 1986, ch. 284, § 1; L. 1992, ch. 221, § 2; May 14.
(a) "Applied research" means those research activities occurring at educational institutions and in private enterprises, which have potential commercial application;
(b) "basic research" means research that has long range generic value to an industry classification or group of companies. Basic research is distinguished from applied research which has more short range present value to a single company or project;
(c) "corporation" means the Kansas technology enterprise corporation;
(d) "educational institutions" means public and private community colleges, colleges and universities in the state;
(e) "enterprise" means a firm with its principal place of business in Kansas which is engaged or proposes to be engaged in this state in agricultural, natural resource-based or other manufacturing, research and development, or the provision of technology-based services;
(f) "new technology" means the development through science or research of methods, processes and procedures, including but not limited to those involving the utilization of agricultural products and by-products and oil and gas and other mineral resources for practical application in industrial and service situations;
(g) "person" means any individual, partnership, corporation or joint venture carrying on business or proposing to carry on business within the state;
(h) "product" means any product, device, technique or process, which is or may be developed or marketed commercially; however, "product" does not refer to basic research but shall apply to such products, devices, techniques or processes which have advanced beyond the theoretical stage and are in a prototype or practice stage;
(i) "qualified security" means any public or private financial arrangement, involving any note, security, debenture, evidence of indebtedness, certificate of interest or participation in any profit-sharing agreement, preorganization certificate or subscription, transferable security, investment contract, certificate of deposit for a security, certificate of interest or participation in a patent or application therefor, or in royalty or other payments under such a patent or application, or, in general, any interest or instrument commonly known as a "security" or any certificate for, receipt for, guarantee of, or option, warrant or right to subscribe to or purchase any of the foregoing to the extent allowed by law;
(j) "seed capital" means financing that is provided for the development, refinement and commercialization of a product, process or innovation, whether for the startup of a new firm, the expansion or the restructuring of a small firm.
History: L. 1986, ch. 284, § 2; L. 1988, ch. 297, § 15; L. 1991, ch. 272, § 14; L. 1992, ch. 221, § 3; May 14.
(1) Make, amend and repeal bylaws, rules and regulations for the management of its affairs;
(2) sue and be sued;
(3) make contracts and execute all instruments necessary or convenient for carrying out its business;
(4) acquire, own, hold, dispose of and encumber real or personal property of any nature, both tangible and intangible, or any interest therein;
(5) enter into agreements or other transactions with any federal, state, county or municipal agency and with any individual, corporation, enterprise, association or any other entity involving applied research and technology;
(6) acquire real property or an interest therein, by purchase or foreclosure, where such acquisition is necessary or appropriate to protect or secure any investment or loan in which the corporation has an interest;
(7) sell, transfer and convey any such property to a buyer, and in the event such sale, transfer or conveyance cannot be effected with reasonable promptness or at a reasonable price, to lease such property to a tenant;
(8) invest any funds appropriated by the state and held in reserve in funds not required for immediate disbursement, in such investments that may be lawful for fiduciaries in this state, and invest funds received from gifts, grants, donations and other operations of the corporation in such investments as would be lawful for a private corporation having purposes similar to the corporation;
(9) borrow money and give guaranties, provided that the indebtedness and other obligations of the corporation shall be payable solely out of its own resources, and shall not constitute a pledge of the full faith and credit of the state or any of its revenues;
(10) appoint officers, consultants, agents and advisors, and prescribe their duties and compensation;
(11) appear in its own behalf before boards, commissions, departments or other agencies of municipal, county or state government or federal government;
(12) procure insurance against any losses in connection with its properties in such amounts from such insurers as may be necessary or desirable;
(13) consent, subject to the provisions of any contract with note-holders, whenever it considers it necessary or desirable in the fulfillment of the purposes of this act, to the modifications, with respect to the rate of interest, time payment or of any installment, of principal and interest or any terms of any contract or agreement of any kind to which the corporation is a party;
(14) accept any and all donations, grants, bequests and devises, conditional and otherwise, of money, property, services or other things of value which may be received from the United States or any agency thereof, any governmental agency, or any institution, person, firm or corporation, public or private, to be held, used or applied for any or all of the purposes specified in this act, in accordance with the terms and conditions of any such grant;
(15) trade, buy or sell qualified securities, including without limitation, the powers to guarantee, purchase, take, receive, subscribe for or otherwise acquire, to own, hold, use or otherwise employ; to sell, lease, exchange, transfer or otherwise dispose of; to mortgage, lend, pledge or otherwise deal in and with, qualified securities issued by any other domestic or foreign corporation, partnership, association, limited liability company, or business trust, whether or not such issuer was organized or caused to be organized by the corporation. The corporation, while owner of any such qualified securities, may exercise all of the rights, powers and privileges of ownership, including without limitation the right to vote;
(16) finance, conduct or cooperate in the financing or conducting of scientific, technological, business, financial or other investigations which are related to or likely to lead to business and economic development, involving natural resources, innovation, applied research and new technology, by making and entering into contracts or other appropriate arrangements, including the provisions of grants, loans and other forms of assistance;
(17) solicit, study and assist in the preparation of business plans and proposals of new or established resource and technologically oriented enterprises of special importance to the Kansas economy;
(18) prepare, publish and distribute such technological studies, reports, bulletins and other materials as it considers appropriate, subject only to the maintenance and responsibility for confidentiality of the client proprietary information, and encourage educational institutions to develop and disseminate similar materials;
(19) organize, conduct, sponsor or cooperate with, and assist both the private sector and educational institutions in the conduct of, special institutes, conferences, demonstrations and studies relating to the stimulation and formulation of innovation, applied science and technologically oriented enterprises and studies relating to the formulation of resource and technologically oriented enterprises and industry endeavors;
(20) provide and pay for such advisory services and technical assistance that may be necessary or desirable to carry out the purposes of this act;
(21) own, possess and take license in, patents, copyrights and proprietary processes and negotiate and enter into contracts and establish charges for the use of such patents, copyrights and proprietary processes when such patents and licenses for innovation or inventions result from research sponsored by the corporation in a private enterprise or when the corporation finances a product developed by a private enterprise;
(22) negotiate royalty payments to the corporation on patents and licenses for innovations or inventions arising in the course of research sponsored by the corporation at educational institutions under the jurisdiction of the Kansas board of regents; such negotiated royalty arrangements should reflect an appropriate sharing of legal risk as well as financial return between the corporation and educational institution; such patents and licenses shall be in keeping with the patent policies of the Kansas board of regents;
(23) exercise any other powers necessary for the operation and functioning of the corporation within the purposes authorized in this act;
(24) participate with any state agency or educational institution in developing specific programs and goals to assist in the development of industrial innovation, applied research and new technology of special importance to the Kansas economy, and monitor performance;
(25) cooperate with the department of commerce regarding financial assistance programs targeted to small enterprises of special importance to the Kansas economy;
(26) provide resource-based, scientific and technological data and information required by the governor, the legislature, or its committees, and to state agencies, educational institutions and cities, counties and school districts and to private citizens and groups, within the limitations of the resources available to the corporation. This service shall be in addition to any services currently provided by any educational institution, committee or other organization in the state.
(b) The corporation shall be exempt from all franchise, corporate business and income taxes levied by the state. However, this act is not intended to exempt from any such taxes, or from any taxes levied in connection with the manufacture or sale of any products or processes which are the subject of any agreement made by the corporation, or any person entering into any agreement with the corporation.
(c) Documents and other materials submitted to the corporation by Kansas businesses shall not be public records if such records are trade secrets under the uniform trade secrets act (K.S.A. 60-3320 et seq. and amendments thereto) or are determined by the corporation to be business secrets, and shall be maintained in a secured environment by the president.
(d) The corporation shall not be subject to state purchasing laws.
History: L. 1986, ch. 284, § 3; L. 1992, ch. 221, § 4; L. 2005, ch. 67, § 11; July 1.
(b) The president:
(1) May employ and terminate such other officers and employees as designated by the board of directors. Any officer or employee of the corporation who receives a salary allocated from state funds shall receive no other compensation including, but not limited to, salaries, bonuses, fees or incentives for performance of any duties on behalf of any entity which is a subsidiary of or is otherwise related to the corporation or is a business in which the corporation or any entity related to the corporation has invested state funds. The president's employment contract, including any renewal of an existing contract, shall be made available to the senate commerce committee and the house economic development committee, or if the legislature is not in session, the joint committee on economic development, prior to execution of the contract. Such officers and employees shall be in the unclassified service under the Kansas civil service act;
(2) shall attend board meetings;
(3) shall appoint a secretary to keep a record of all proceedings and maintain and be custodian of all financial and operational records, documents and papers filed with the corporation and of the minute book of the corporation; and
(4) before accepting any applications as provided for under this act, shall prepare a business plan which shall include the corporate analysis of funding levels of programs in other states that are shown in the report required in subsection (b) of K.S.A. 74-8111 and amendments thereto and the threshold funding levels specified in subsection (c) of K.S.A. 74-8111 and amendments thereto. Upon approval of the business plan by the corporation board, the plan shall be presented to the standing committee on commerce of the senate and the standing committee on economic development of the house of representatives or the joint legislative committee on economic development for review and evaluation.
History: L. 1986, ch. 284, § 5; L. 1987, ch. 317, § 8; L. 1993, ch. 136, § 14; L. 1995, ch. 255, § 5; L. 1996, ch. 236, § 1; July 1.
(b) Centers of excellence for basic research will primarily undertake ongoing basic research with a particular focus that will have long-run potential for commercial development. The centers should build on institutional strengths and be in areas of research where the educational institution has achieved or has true promise of attaining a standard of excellence as recognized by national and international peers.
(1) The Kansas technology enterprise basic research fund is hereby created to which shall be credited any state funds specifically so designated. The fund is not to be used for applied research, technology transfer, technical assistance or training except as it is incidental to the basic research intended to be benefited by this section.
(2) The corporation may use the Kansas technology enterprise basic research fund to carry out the purposes of this act by awarding funds to establish new centers of excellence for basic research or to increase funding to such already established centers of excellence so long as those centers are determined to be primarily carrying out basic research and to meet the standards of excellence required by this act. Awards of funds shall be made on a competitive basis, and all proposals for new centers of excellence shall be subject to external peer review on the basis of scientific merit which meet national standards of excellence and subsequent potential for commercial application.
(c) Centers of excellence for applied research and development will primarily undertake applied research and development with a particular focus that will have long-run potential for commercial development. The centers should build on institutional strengths and be in areas of research where the educational institution has achieved or has true promise of attaining a standard of excellence in applied research and development.
(1) The Kansas technology enterprise applied research and development fund is hereby created to which shall be credited any state funds specifically so designated. The fund is not to be used for basic research, technology transfer, technical assistance or training except as it is incidental to the applied research and development intended to be benefited by this section.
(2) The corporation may use the Kansas technology enterprise applied research and development fund to carry out the purposes of this act by awarding funds to establish new centers of excellence for applied research and development or to increase funding to such already established centers of excellence so long as those centers are determined to be carrying out primarily applied research and development, and to be meeting the standards of excellence required by this act. Awards of funds shall be made on a competitive basis, and all proposals for new centers of excellence shall be subject to external peer review on the basis of scientific merit which meets national standards of excellence and subsequent potential for commercial application.
(d) Centers of excellence for technology transfer will primarily undertake ongoing transfer of technology from educational institutions to Kansas business.
(1) The Kansas technology enterprise technology transfer fund is hereby created to which shall be credited any state funds specifically so designated. The fund is not to be used for basic research, applied research and development, technical assistance or training except as it is incidental to the technology transfer intended to be benefited by this section.
(2) The corporation may use the Kansas technology enterprise technology transfer fund to carry out the purposes of this act by awarding funds to establish new centers of technology transfer or to increase funding to such already established centers of excellence so long as those centers are determined to be carrying out primarily technology transfer.
(3) Awards of funds shall be made on a competitive basis and all proposals for new centers of excellence shall be subject to external peer review on the basis of merit which meets national standards of excellence and potential for increasing the competitiveness of Kansas business.
(e) The corporation shall award funding to centers of excellence transfer in accordance with subsections (g) and (h).
(f) In carrying out its functions under this section, the corporation is directed to create a centers of excellence committee to assist in evaluating the establishment of new centers of excellence and in evaluating increases in funding for already established centers of excellence. The membership of the centers of excellence committee may include both directors and staff members of the corporation, and other persons drawn from sources other than the corporation who meet standards similar to those applying to the board of directors and who are recognized by their peers for outstanding knowledge and leadership in their fields.
(g) The corporation shall award funding for new centers and increased funding for established centers only after:
(1) Developing, adopting and publishing the criteria it shall use when evaluating centers of excellence;
(2) developing a level of core funding for each center of excellence; and
(3) receiving the recommendation of the centers of excellence committee which will review proposals for new or established centers of excellence containing:
(A) Documentation that not less than 50% of the center's funding above the established level of core funding will be matched by sources other than the corporation; machinery or equipment may be considered as part of the matching funds, but must be accompanied by a statement that the center of excellence has received the machinery or equipment, it is state of the art; and either
(i) verifying that the machinery or equipment is donated and has only been used in testing to insure quality control, or used by a wholesaler or retailer for demonstration purposes only; or
(ii) detailing the price paid by the center of excellence, with an invoice showing the amount paid for the equipment;
(B) a description of a potential for future benefit to industry;
(C) an itemized operations budget; and
(D) other information that may be required by the board.
(h) The board shall approve proposals to establish new centers of excellence after the board finds, based upon the proposal submitted, external peer reviews, and such additional investigation as the staff of the corporation shall make and incorporate in its minutes that:
(1) The proposed center of excellence has the potential to stimulate economic growth by bringing together educational institutions and businesses in partnerships to focus on basic research, applied research and development, and technology transfer;
(2) the center has the long-run potential for benefit to existing and new businesses through innovation and development of new technology; and
(3) approval of the proposal will not create or foster unnecessary duplication of programs, particularly at the graduate level of instruction.
(i) Each existing Kansas center of excellence is eligible for annual support from the corporation according to the same terms and conditions as provided in this act for new centers except that an external peer review to determine under what provision of this statute and by what terms continuing funding is appropriate shall be conducted annually during the first three years after the center of excellence is established and shall be conducted biennially thereafter. In the years between external peer reviews conducted on a biennial basis, the corporation shall conduct internal reviews to determine under what provision of this statute and under what terms continuing funding is appropriate.
(j) Any commercialized research that results from the funding of a center of excellence shall be subject to negotiations under provisions of (21) and (22) of subsection (a) of K.S.A. 74-8104 and amendments thereto.
History: L. 1986, ch. 284, § 6; L. 1987, ch. 318, § 1; L. 1990, ch. 290, § 1; July 1.
(b) The corporation may use the Kansas technology enterprise applied research fund to carry out the purposes of this act by awarding competitive applied research grants to educational institutions and private enterprises of special importance to the Kansas economy. The fund is not to be used for pure research technology transfer technical assistance or training but only for actual applied research.
(c) The board shall award grants only after:
(1) Developing, adopting and publishing the criteria it shall use when evaluating research proposals; and
(2) reviewing applied research proposals which present:
(A) Documentation, if the proposal is from an educational institution, that not less than 60% of the total direct cost of the proposed project will be provided by sources other than the corporation; machinery or equipment may be considered as part of the matching funds for the research, but must be accompanied by a statement:
(i) That the educational institution has received the machinery or equipment and it is state of the art; and either
(ii) verifying that the equipment or machinery is donated and has only been used in testing to insure quality control, or used by a wholesaler or retailer for demonstration purposes only; or
(iii) detailing the price paid by the educational institution, with an invoice showing the amount paid for the machinery or equipment;
(B) documentation, if the proposal is from a private enterprise, that not less than 60% of the total direct cost of the proposed project will be provided by sources other than the corporation or through in-kind services provided through the private enterprise as evaluated by the board or review committee;
(C) a description of the future commercial application and the industrial sectors that will likely benefit by the applied research project and the potential for job creation;
(D) an itemized research budget, time line and research methodology;
(E) a recommendation from the sponsoring educational institution or business enterprise; and
(F) other information that may be required by the board.
(d) The board shall approve such applied research proposals after the board finds, based upon the proposal submitted and such additional investigation as the staff of the corporation shall make and incorporate in its minutes, that:
(1) The proposed project is research that leads to innovation, new knowledge or technology and is not training or technical assistance for business firms;
(2) the proposed applied research project will expand that field's technological base within the state;
(3) the project will enhance employment opportunities within Kansas; and
(4) the project is technically sound and will produce a measurable result.
(e) The board of directors shall create an applied research committee to assist in evaluating potential applied research projects. The membership of this applied research committee may include both directors and staff members of the corporation, and other persons drawn from sources other than the corporation who meet standards similar to those applying to the board of directors and who are recognized by their peers for outstanding knowledge and leadership in their fields.
(f) Any commercialized research that results from a corporation applied research grant shall be subject to provisions (21) and (22) of subsection (a) of K.S.A. 74-8104.
History: L. 1986, ch. 284, § 7; Jan. 12, 1987.
(b) The corporation is hereby directed to establish a small business innovation research bridge financing fund. Such fund shall provide grants, loans, royalty or equity investment to firms that have previously received federal phase I SBIR moneys and that have applied for a phase II SBIR grant.
History: L. 1986, ch. 284, § 8; L. 1995, ch. 126, § 1; July 1.
(a) Increased the number of phase II SBIR grant proposals;
(b) increased the percentage of phase II SBIR grants awarded to researchers in the state;
(c) stimulated subsequent investments by industry venture capital and other federal sources;
(d) encouraged development of industry partners with researchers; and
(e) encouraged development of business or commercialization plans for new technology.
History: L. 1995, ch. 126, § 2; July 1.
(b) The corporation may use the Kansas technology enterprise seed-capital fund as follows:
(1) To carry out the purposes of this act through investments in qualified securities and through the forms of financial assistance authorized by this act, including:
(A) Loans, loans convertible to equity, and equity;
(B) leaseholds;
(C) management or consultant service agreements;
(D) loans with warrants attached that are beneficially owned by the corporation;
(E) loans with warrants attached that are beneficially owned by a party other than the corporation; and
(F) any other contractual arrangement in which the corporation is providing scientific and technological services to any federal, state, county or municipal agency, or to any individual, corporation, enterprise, association or any other entity involving science and technology. The corporation, in connection with the provision of any form of financial assistance, may enter into royalty agreements with an enterprise.
(2) To pay all or a portion of the corporation's operating expenses from revenues generated by seed-capital fund investments, which shall be an amount sufficient to allow the corporation to undertake and efficiently manage its responsibilities.
(3) To invest in such other investments as are lawful for Kansas fiduciaries.
(c) The corporation may use the Kansas technology enterprise seed-capital fund to purchase qualified securities issued by enterprises as a part of a resource and technology project for the purpose of raising the initial capital for such projects subject to the conditions set forth in this section.
(d) The corporation may use the fund to make low-interest or zero-interest loans to business incubator facilities in exchange for royalties from future gross sales generated by enterprises created in the incubator.
(e) The corporation shall purchase qualified securities issued by an enterprise as a part of a resource and technology project only after:
(1) Receipt of an application from the enterprise which contains:
(A) A business plan including a description of the enterprise and its management, product and market;
(B) a statement of the amount, timing and projected use of the capital required;
(C) a statement of the potential economic impact of the enterprise, including the number, location and types of jobs expected to be created; and
(D) such other information as the corporation board of directors shall request.
(2) Approval of the investment by the corporation may be made after the board of directors finds, based upon the application submitted by the enterprise and such additional investigation as the staff of the corporation shall make and incorporate in its minutes, that:
(A) The proceeds of the investment will be used only to cover the seed-capital needs of the enterprise except as authorized by this section;
(B) the enterprise has a reasonable chance of success;
(C) the corporation's participation is instrumental to the success of the enterprise and its retention within the state because funding otherwise available for the enterprise is not available on commercially reasonable terms;
(D) the enterprise has the reasonable potential to create a substantial amount of employment within the state;
(E) the entrepreneur and other founders of the enterprise have already made or are contractually committed to make a substantial financial and time commitment to the enterprise;
(F) the securities to be purchased are qualified securities;
(G) there is a reasonable possibility that the corporation will recoup at least its initial investment; and
(H) binding commitments have been made to the corporation by the enterprise for adequate reporting of financial data to the corporation, which shall include a requirement for an annual report, or if required by the board, an annual audit of the financial and operational records of the enterprise, and for such control on the part of the corporation as the board of directors shall consider prudent over the management of the enterprise, so as to protect the investment of the corporation, including in the discretion of the board and without limitation, right of access to financial and other records of the enterprise.
(f) The board of directors shall create an investment committee to assist in evaluating potential investments in qualified securities. The membership of this investment committee may include both directors and staff members of the corporation, and other persons drawn from sources other than the corporation who meet standards similar to those applying to the board of directors and who are recognized by their peers for outstanding knowledge and leadership in their fields, all of whom shall serve at the pleasure of the board.
(g) The corporation shall not make investments in qualified securities issued by enterprises in excess of the amount necessary to own more than 49% of qualified securities in any one enterprise at the time of the purchase by the corporation, after giving effect to the conversion of all outstanding convertible qualified securities of the enterprise except that in the event of severe financial difficulty of the enterprise, threatening, in the judgment of the board of directors, the investment of the corporation therein, a greater percentage of such securities may be owned by the corporation.
History: L. 1986, ch. 284, § 9; Jan. 12, 1987.
(b) The corporation shall provide to private enterprises and individuals, services which include, but are not limited to:
(1) Disseminating such research and technical information as is available to the corporation;
(2) referring clients to researchers or laboratories for the purpose of testing and evaluating new products, processes or innovations;
(3) assisting persons developing innovations or new technology in locating enterprises or entrepreneurs that may be interested in applying such innovations or new technologies; and
(4) providing managerial assistance to enterprises requesting such assistance, but particularly to those small enterprises of special importance to the Kansas economy.
(c) The corporation shall encourage business enterprises to use such technology transfer and technical support services as provided by educational institutions and especially the state's small business development centers.
History: L. 1986, ch. 284, § 10; Jan. 12, 1987.
(b) The corporation shall annually review and prepare a report showing how and and at what level other states fund the programs provided for under this act. The corporation shall recommend an appropriate funding level for Kansas which will make these programs nationally competitive with those of other states. The corporation's findings and recommendations shall be submitted to the governor and the legislature.
(c) The corporation shall adopt a threshold funding level for each of the programs provided for under this act. The threshold amount shall provide for funding that is great enough to have a significant impact and carry out the intent of this act. If the appropriation to fund these programs falls below the threshold, then no funding shall be provided by the corporation to the program funded below threshold level.
(d) The corporation shall be subject to an audit by the legislative division of post audit.
History: L. 1986, ch. 284, § 11; Jan. 12, 1987.
History: L. 1986, ch. 284, § 12; Jan. 12, 1987.
(b) Nothing in this act or the act of which it is amendatory shall be construed as placing any officer or employee of the Kansas technology enterprise corporation in the classified service under the Kansas civil service act.
History: L. 1987, ch. 317, § 5; L. 1995, ch. 255, § 6; Dec. 17.
(b) Except as provided in subsection (a), any matching funds or other moneys received by the corporation from any source outside the state treasury may be placed in the state treasury or may be maintained in interest-bearing accounts in Kansas banks or Kansas savings and loan associations, or invested pursuant to subsection (b)(3) of K.S.A. 74-8109 and amendments thereto. Any accounts so maintained shall bear a designation of one of the fund titles established in the Kansas technology enterprise corporation act.
History: L. 1987, ch. 317, § 6; April 30.
History: L. 1987, ch. 317, § 4; April 30.
(b) "Patent depository library" means a library which has:
(1) Acquired or is in the process of acquiring a collection of United States patents; and
(2) established certain understandings with the patent and trademark office of the United States department of commerce regarding the library's obligations concerning maintenance of the collection, public accessibility to the collection and services offered by the library which afford its effective use.
(c) The board of directors of the Kansas technology enterprise corporation shall solicit proposals from state agencies for establishment of a patent depository library. After consideration of the proposals submitted, the board of directors shall designate the state agency and location for the patent depository library. The patent depository library shall be established with a grant of funds by Kansas technology enterprise corporation, composed of moneys of the corporation or moneys granted to the corporation from private sources, or both such moneys, for acquiring the initial patent collection and related equipment. The state agency designated for the patent depository library shall be responsible for the operating expenditures of the library.
History: L. 1990, ch. 299, § 1; July 1.
History: L. 1993, ch. 168, §§ 1 to 5; Repealed, L. 1996, ch. 209, § 29; July 1.
(b) The division of markets within the Kansas department of agriculture created by K.S.A. 74-530 and the director of marketing created by K.S.A. 74-533 are hereby abolished.
History: L. 1996, ch. 209, § 1; July 1.
(b) This act shall be known and may be cited as the Kansas angel investor tax credit act.
History: L. 2004, ch. 112, § 74; L. 2005, ch. 134, § 1; July 1.
(a) "Angel investor" and "investor" mean an accredited investor who is a natural person or an owner of a permitted entity investor, who is of high net worth, as defined in 17 C.F.R. 230.501(a) as in effect on the effective date of this act, and who seeks high returns through private investments in start-up companies and may seek active involvement in business, such as consulting and mentoring the entrepreneur. For the purposes of this act, a person who serves as an executive, officer, employee, vendor or independent contractor of the business in which an otherwise qualified cash investment is made is not an angel investor and such person shall not qualify for the issuance of tax credits for such investment;
(b) "Bioscience business" means what is reflected in K.S.A. 2007 Supp. 74-99b83, and amendments thereto;
(c) "cash investment" means money or money equivalent in consideration for qualified securities;
(d) "KTEC" means the Kansas technology enterprise corporation, a public instrumentality created pursuant to K.S.A. 74-8101, and amendments thereto;
(e) "Kansas business" means any business owned by an individual, any partnership, association or corporation domiciled in Kansas, or any corporation, even if a wholly owned subsidiary of a foreign corporation, that does business primarily in Kansas or does substantially all of such businesses' production in Kansas;
(f) "owner" means any natural person who is, directly or indirectly, a partner, stockholder or member in a permitted entity investor;
(g) "permitted entity investor" means (A) any general partnership, limited partnership, corporation that has in effect a valid election to be taxed as an S corporation under the United States internal revenue code, or a limited liability company that has elected to be taxed as a partnership under the United States internal revenue code and (B) that was established and is operated for the sole purpose of making investments in other entities;
(h) "qualified Kansas business" means the Kansas businesses that are approved and certified as qualified Kansas businesses as provided in K.S.A. 2007 Supp. 74-8134, and amendments thereto; and
(i) "qualified securities" means a cash investment through any one or more forms of financial assistance as provided in this subsection that have been approved in form and substance by KTEC. Such forms of financial assistance are: (1) Any form of equity, such as: (A) A general or limited, partnership interest; (B) common stock; (C) preferred stock, with or without voting rights, without regard to seniority position, and whether or not convertible into common stock; or (D) any form of subordinate or convertible debt, or both, with warrants or other means of equity conversion attached; or
(2) a debt instrument, such as a note or debenture that is secured or unsecured, subordinated to the general creditors of the debtor and requires no payments of principal, other than principal payments required to be made out of any future profits of the debtor, for at least a seven-year period after commencement of such debt instrument's term.
History: L. 2004, ch. 112, § 75; L. 2005, ch. 134, § 2; L. 2007, ch. 184, § 7; July 1.
(b) The secretary of revenue shall not allow tax credits of more than $50,000 for a single Kansas business or a total of $250,000 in tax credits for a single year per investor who is a natural person or owner of a permitted entity investor. No tax credits authorized by this act shall be allowed for any cash investments in qualified securities for any year after the year 2016. The total amount of tax credits which may be allowed under this section shall not exceed $4,000,000 during the tax year 2007 and $6,000,000 for tax year 2008 and each tax year thereafter. The balance of unissued tax credits may be carried over for issuance in future years until 2016.
(c) A cash investment in a qualified security shall be deemed to have been made on the date of acquisition of the qualified security, as such date is determined in accordance with the provisions of the internal revenue code.
(d) No investor shall claim a credit under this section for cash investments in Kansas venture capital, inc. No Kansas venture capital company shall qualify for the tax credit for an investment in a fund created by articles 81, 82, 83 or 84 of chapter 74 of the Kansas Statutes Annotated.
(e) Any investor who has not owed any Kansas income tax under the provisions of article 32, chapter 79 of the Kansas Statutes Annotated for the immediate past three taxable years, who does not reasonably believe that it will owe any such tax for the current taxable year and who makes a cash investment in a qualified security of a qualified Kansas business shall be deemed to acquire an interest in the nature of a transferable credit limited to an amount equal to 50% of this cash investment. This interest may be transferred to any natural person of net worth, as defined in 17 C.F.R. 230.501(a) as in effect on the effective date of this act whether or not such person is then an investor and be claimed by the transferee as a credit against the transferee's Kansas income tax liability beginning in the year provided in subsection (a). No person shall be entitled to a refund for the interest created under this section. Only the full credit for any one investment may be transferred and this interest may only be transferred one time. A credit acquired by transfer shall be subject to the limitations prescribed in this section. Documentation of any credit acquired by transfer shall be provided by the investor in the manner required by the director of taxation.
(f) The reasonable costs of the administration of this act, the review of applications for certification as qualified Kansas businesses and the issuance of tax credits authorized by this act shall be reimbursed through fees paid by the qualified Kansas businesses and the investors or the transferees of investors, according to a reasonable fee schedule adopted by the corporation.
History: L. 2004, ch. 112, § 76; L. 2005, ch. 134, § 3; L. 2007, ch. 184, § 8; July 1.
(b) Such application to KTEC shall be in form and substance as required by KTEC, but shall include at least the following:
(1) The name of the business and certified copies of the organizational documents of the business;
(2) a business plan, including a description of the business and the management, product, market and financial plan of business;
(3) a statement of the business innovative and proprietary technology, product or service;
(4) a statement of the potential economic impact of the enterprise, including the number, location and types of jobs expected to be created;
(5) a description of the qualified securities to be issued, the consideration to be paid for the qualified securities, the amount of any tax credits requested and the earliest year in which the tax credits may be redeemed;
(6) a statement of the amount, timing and projected use of the proceeds to be raised from the proposed sale of qualified securities; and
(7) such other information as KTEC may request, such as the names, addresses and taxpayer identification numbers of all investors who may qualify for the tax credit. Such list of investors who may qualify for the tax credits shall be amended as new qualified securities are sold or as any information on the list shall change.
(c) No business shall be designated as a qualified Kansas business unless such business meets all of the following criteria:
(1) The business must not have had annual gross revenues of more than $5,000,000 in the most recent tax year of the business;
(2) businesses that are not bioscience businesses must have been in operation for less than five years; bioscience businesses must have been in operation for less than 10 years;
(3) all else equal, first consideration will be given to animal health companies;
(4) the business must not have ownership interests including, but not limited to, common or preferred shares of stock that can be traded by the public via a stock exchange, electronic exchange, bulletin board or other public market place on or before the date that a qualifying investment is made;
(5) the business must not be engaged primarily in any one or more of the following enterprises: (A) Any service provider set forth in K.S.A. 17-2707, and amendments thereto; (B) the business of banking, savings and loan or lending institutions, credit or finance, or financial brokerage or investments; (C) the provision of professional services, such as legal, accounting or engineering services; (D) governmental, charitable, religious or trade organizations; (E) the ownership, development, brokerage, sales or leasing of real estate; (F) insurance; (G) construction or construction management or contracting; (H) business consulting or brokerage; (I) any business engaged primarily as a passive business, having irregular or noncontinuous operations, or deriving substantially all of the income of the business from passive investments that generate interest, dividends, royalties, or capital gains, or any business arrangements the effect of which is to immunize an investor from risk of loss; (J) any Kansas certified capital formation company; (K) any activity that is in violation of the law; and (L) any business raising money primarily to purchase real estate, land or fixtures; and
(6) the business must satisfy all other requirements of this act.
(d) Notwithstanding the requirements of subsection (c), a business may be considered as a qualified Kansas business under the provisions of this act if such business falls within a standard industrial classification code.
(e) The portions of documents and other materials submitted to KTEC that contain trade secrets shall be kept confidential and shall be maintained in a secured environment by the president of KTEC. For the purposes of this act, such portions of documents and other materials means any customer lists, any formula, compound, production data or compilation of information certain individuals within a commercial concern using such portions of documents and other material means to fabricate, produce or compound an article of trade, or, any service having commercial value, which gives the user an opportunity to obtain a business advantage over competitors who do not know or use such service.
(f) A qualified Kansas business shall have the burden of proof to demonstrate to KTEC the qualifications of the business under this section and shall have the obligation to notify KTEC in a timely manner of any changes in the qualifications of the business or in the eligibility of investors to claim a tax credit for cash investment in a qualified security.
History: L. 2004, ch. 112, § 77; L. 2005, ch. 134, § 4; L. 2007, ch. 184, § 9; July 1.
(1) The business has a reasonable chance of success;
(2) the business has the reasonable potential to create measurable employment within the state;
(3) the business has an innovative and proprietary technology, product and service;
(4) the existing owners of the business and other founders have made or are committed to make a substantial financial and time commitment to the business;
(5) the securities to be issued and purchased are qualified securities; and
(6) binding commitments have been made by the business to KTEC for adequate reporting of financial data, including a requirement for an annual report, or, if required by the board of directors of KTEC, an annual audit of the financial and operational records of the business, the right of access to the financial records of the business and the right of KTEC to record and publish normal and customary data and information related to the issuance of tax credits that are not otherwise determined to be trade or business secrets.
(b) In addition to reports by the businesses to KTEC and its board of directors, KTEC will also provide an annual report, on or before February 1, to the governor, to the senate committee on commerce, the house committee on economic development and tourism and the joint committee on economic development and any successor committees thereto, on the marketing and use of the angel investor tax credits. This report will include the following: The amount of tax credits used in the previous fiscal year including what percentage was claimed by individuals and what percentage was claimed by investment firms; the types of businesses that benefited from the tax credits; and any aggregate job creation or capital investment in Kansas that resulted from the use of the tax credits for a period of five years beginning from the date on which the tax credits were awarded. In addition, the annual report will provide information regarding what businesses which derived benefit from the tax credits remained in Kansas and what businesses ceased business, what businesses were purchased and what businesses may have moved out-of-state and why.
History: L. 2004, ch. 112, § 78; L. 2005, ch. 134, § 5; L. 2007, ch. 184, § 10; July 1.
(b) Each qualified Kansas business for which tax credits have been issued pursuant to this act shall report to KTEC on an annual basis, the following: (1) The name, address and taxpayer identification number of each angel investor who has made cash investment in the qualified securities of a qualified Kansas business and has received tax credits for this investment during the preceding year and all other preceding years; (2) the amounts of these cash investments by each angel investor and a description of the qualified securities issued in consideration of such cash investments; (3) the name, address and taxpayer identification number of each investor to which tax credits issued pursuant to this act have been transferred by the original angel investor; and (4) any additional information as KTEC may require pursuant to this act.
(c) KTEC shall transmit annually to the governor, the secretary of commerce, the standing committee on commerce of the senate, the standing committee on economic development of the house of representatives, the joint committee on economic development, and Kansas, Inc. a report, based upon information received from each qualified Kansas business for which tax credits have been issued during the preceding year, describing the following: (1) The manner in which the purpose, as described in this act, has been carried out; (2) the total cash investments made for the purchase of qualified securities of qualified Kansas businesses during the preceding year and cumulatively since the inception of this act; (3) an estimate of jobs created and jobs preserved by cash investments made in qualified securities of qualified Kansas businesses; and (4) an estimate of the multiplier effect on the Kansas economy of the cash investments made pursuant to this act.
(d) The secretary of commerce shall provide the information specified in subsection (c) to the department of revenue on an annual basis. The secretary of commerce shall conduct an annual review of the activities undertaken pursuant to this act to ensure that tax credits issued pursuant to this act are issued in compliance with the provisions of this act or rules and regulations promulgated by the department of commerce or KTEC with respect to this act. The reasonable costs of the annual review shall be paid by KTEC according to a reasonable fee schedule adopted by the secretary of commerce.
(e) Any violation of the reporting requirements set forth in this section shall be grounds for undesignation of a qualified Kansas business under this section.
(f) If the secretary of commerce determines that a business is not in substantial compliance with the requirements of this act to maintain its designation, the secretary, by written notice, shall inform the officers of the qualified Kansas business and the business that such business will lose designation as a qualified Kansas business in 120 days from the date of mailing of the notice unless such business corrects the deficiencies and is once again in compliance with the requirements for designation.
(g) At the end of the 120-day period, if the qualified Kansas business is still not in substantial compliance, the secretary of commerce shall send a notice of loss of designation to the business, KTEC, the secretary of the department of revenue and to all known investors in the business. Loss of designation of a qualified Kansas business shall preclude the issuance of any additional tax credits with respect to this business and KTEC shall not approve the application of such business as a qualified Kansas business. Upon loss of the designation as a qualified Kansas business or if a business loses its designation as a qualified Kansas business under this act by moving its operations outside Kansas within 10 years after receiving financial assistance under this act, such business shall repay such financial assistance to KTEC, in an amount determined by KTEC. Each qualified Kansas business that loses such designation shall enter into a repayment agreement with KTEC specifying the terms of such repayment obligation.
(h) Angel investors in a qualified Kansas business shall be entitled to keep all of the tax credits claimed under this act.
(i) The department of commerce and KTEC may prepare and adopt procedures concerning the performance of the duties placed upon each respective entity by this act.
History: L. 2004, ch. 112, § 79; L. 2005, ch. 134, § 6; July 1.
History: L. 2004, ch. 112, § 80; July 1.