State Codes and Statutes
Statutes > Utah > Title-63m > Chapter-01 > 63m-1-121863M-1-1218. Certificates and contingent tax credits.
(1) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, theboard, in consultation with the State Tax Commission, shall make rules governing the form,issuance, transfer, and redemption of certificates.
(2) The board's issuance of certificates and related contingent tax credits to designatedinvestors is subject to the following:
(a) the aggregate outstanding certificates may not exceed a total of $300,000,000 ofcontingent tax credits;
(b) the board shall issue a certificate contemporaneously with an investment in the Utahfund of funds by a designated investor;
(c) the board shall issue contingent tax credits in a manner that not more than$20,000,000 of contingent tax credits for each $100,000,000 increment of contingent tax creditsmay be redeemable in any fiscal year; and
(d) the credits are certifiable if there are insufficient funds in the redemption reserve tomake a cash redemption and the board does not exercise its other options under Subsection63M-1-1220(3)(b).
(3) In determining the $300,000,000 maximum limit in Subsection (2)(a) and the$20,000,000 limitation for each $100,000,000 increment of contingent tax credits in Subsection(2)(c):
(a) the board shall use the cumulative amount of scheduled aggregate returns oncertificates issued by the board to designated investors;
(b) certificates and related contingent tax credits which have expired may not beincluded; and
(c) certificates and related contingent tax credits which have been redeemed shall beincluded only to the extent of tax credits actually allowed.
(4) Contingent tax credits are subject to the following:
(a) a contingent tax credit may not be redeemed except by a designated investor inaccordance with the terms of a certificate from the board;
(b) a contingent tax credit may not be redeemed prior to the time the Utah fund of fundsreceives full payment from the designated investor for the certificate;
(c) a contingent tax credit shall be claimed for a tax year that begins during the calendaryear maturity date stated on the certificate;
(d) an investor who redeems a certificate and the related contingent tax credit shallallocate the amount of the contingent tax credit to the taxpayers of the investor based on thetaxpayer's pro rata share of the investor's earnings; and
(e) a contingent tax credit shall be claimed as a refundable credit.
(5) In calculating the amount of a contingent tax credit:
(a) the board shall certify a contingent tax credit only if the actual return or payment ofprincipal and interest to the designated investor is less than that targeted at the issuance of thecertificate;
(b) the amount of the contingent tax credit for a designated investor with an equityinterest may not exceed the difference between:
(i) the sum of:
(A) the initial private investment of the designated investor in the Utah fund of funds;and
(B) the scheduled aggregate return to the designated investor at rates of return authorizedby the board at the issuance of the certificate; and
(ii) the aggregate actual return received by the designated investor and any predecessor ininterest of the initial equity investment and interest on the initial equity investment;
(c) the rates, whether fixed rates or variable rates, shall be determined by a formulastipulated in the certificate; and
(d) the amount of the contingent tax credit for a designated investor with a loan or otherdebt obligation from the Utah fund of funds shall be equal to the amount of any principal,interest, or interest equivalent unpaid at the redemption of the loan or other obligation, asstipulated in the certificate.
(6) The board shall clearly indicate on the certificate:
(a) the targeted return on the invested capital, if the private investment is an equityinterest;
(b) the payment schedule of principal, interest, or interest equivalent, if the privateinvestment is a loan or other debt obligation;
(c) the amount of the initial private investment;
(d) the calculation formula for determining the scheduled aggregate return on the initialequity investment, if applicable; and
(e) the calculation formula for determining the amount of the contingent tax credit thatmay be claimed.
(7) Once moneys are invested by a designated investor, the certificate:
(a) is binding on the board; and
(b) may not be modified, terminated, or rescinded.
(8) Funds invested by a designated investor for a certificate shall be paid to thecorporation for placement in the Utah fund of funds.
(9) The State Tax Commission may, in accordance with Title 63G, Chapter 3, UtahAdministrative Rulemaking Act, and in consultation with the board, make rules to helpimplement this section.
Amended by Chapter 143, 2009 General Session
