2006 Utah Code - 63-38f-1206 — Board duties and powers.

     63-38f-1206.   Board duties and powers.
     (1) The board shall:
     (a) establish criteria and procedures for the allocation and issuance of contingent tax credits to designated investors by means of certificates issued by the board, provided that a contingent tax credit may not be issued unless the Utah fund of funds:
     (i) first agrees to treat the amount of the tax credit redeemed by the state as a loan from the state to the Utah fund of funds; and
     (ii) agrees to repay the loan upon terms and conditions established by the board;
     (b) establish criteria and procedures for assessing the likelihood of future certificate redemptions by designated investors, including:
     (i) criteria and procedures for evaluating the value of investments made by the Utah fund of funds; and
     (ii) the returns from the Utah fund of funds;
     (c) establish criteria and procedures for registering and redeeming contingent tax credits by designated investors holding certificates issued by the board;
     (d) establish a target rate of return or range of returns on venture capital investments of the Utah fund of funds;
     (e) establish criteria and procedures governing commitments obtained by the board from designated purchasers including:
     (i) entering into commitments with designated purchasers; and
     (ii) drawing on commitments to redeem certificates from designated investors;
     (f) have power to:
     (i) expend funds;
     (ii) invest funds;
     (iii) enter into contracts;
     (iv) insure against loss; and
     (v) perform any other act necessary to carry out its purpose; and
     (g) make, amend, and repeal rules for the conduct of its affairs, consistent with this part and in accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act.
     (2) (a) All rules made by the board under Subsection (1)(g) are subject to review by the Legislative Management Committee:
     (i) whenever made, modified, or repealed; and
     (ii) in each even-numbered year.
     (b) Subsection (2)(a) does not preclude the legislative Administrative Rules Review Committee from reviewing and taking appropriate action on any rule made, amended, or repealed by the board.
     (3) (a) The criteria and procedures established by the board for the allocation and issuance of contingent tax credits shall:
     (i) include the contingencies that must be met for a certificate and its related tax credits to be:
     (A) issued by the board;
     (B) transferred by a designated investor; and
     (C) redeemed by a designated investor in order to receive a contingent tax credit; and
     (ii) tie the contingencies for redemption of certificates to the targeted rates of return and scheduled redemptions of equity interests purchased by designated investors in the Utah fund of

funds.
     (b) The board may not issue contingent tax credits under this part prior to July 1, 2004.
     (4) (a) The board may charge a placement fee to the Utah fund of funds for the issuance of a certificate and related contingent tax credit to a designated investor.
     (b) The fee shall:
     (i) be charged only to pay for reasonable and necessary costs of the board; and
     (ii) not exceed .5% of the equity investment of the designated investor.
     (5) The board's criteria and procedures for redeeming certificates:
     (a) shall give priority to the redemption amount from the available funds in the redemption reserve; and
     (b) to the extent there are insufficient funds in the redemption reserve to redeem certificates, shall grant the board the option to redeem certificates:
     (i) by certifying a contingent tax credit to the designated investor; or
     (ii) by making demand on designated purchasers consistent with the requirements of Section 63-38f-1221.
     (6) (a) The board shall, in consultation with the corporation, publish an annual report of the activities conducted by the Utah fund of funds, and present the report to the governor and the Executive Appropriations Committee of the Legislature.
     (b) The annual report shall:
     (i) include a copy of the audit of the Utah fund of funds and a valuation of the assets of the Utah fund of funds;
     (ii) review the progress of the investment fund allocation manager in implementing its investment plan; and
     (iii) describe any redemption or transfer of a certificate issued under this part.
     (c) The annual report may not identify any specific designated investor who has redeemed or transferred a certificate.
     (d) (i) Beginning July 1, 2006, and thereafter every two years, the board shall publish a progress report which shall evaluate the progress of the state in accomplishing the purposes stated in Section 63-38f-1202.
     (ii) The board shall give a copy of the report to the Legislature.

Amended by Chapter 52, 2006 General Session