Current through Bulletin 2024-06, March 15, 2024
This R357-7-4 applies to the Debt-based Refinancing of
existing loans to a Utah Fund of Funds that were entered into prior to July 1,
2014 even if the refinancing occurs after July 1, 2015.
(1) No later than 20 Business Days prior to
each Closing of a Debt-based Refinancing, the Corporation shall provide the
following information to the Board:
(a) A
summary of the terms of the loan instrument(s) and other contractual agreements
to be entered into by the Utah Fund of Funds or the Corporation in connection
with the Debt-based Refinancing; and
(b) The anticipated Closing
date.
(2) No later than
two Business Days prior to each Closing of a Debt-based Refinancing, the
Corporation shall provide the following information to the Board for each
Person expected to become a Designated Investor at Closing:
(a) Name of the Designated Investor;
(b) Evidence that the Designated
Investor is an Accredited Investor;
(c) The Designated Investor's address and
taxpayer identification number;
(d)
The aggregate principal amount of loans expected to be made at such Closing by
such Designated Investor;
(e) The
method of determining the scheduled principal and interest payments applicable
to such Debt-based Refinancing;
(f) The Scheduled Return for the Designated
Investor applicable to such Debt-based Refinancing.
(g) The maximum amount of contingent tax
credits to be certified for each Certificate to be issued at Closing;
(h) The Maturity Date or Maturity
Dates for each Certificate to be issued at Closing; and
(i) All of the requested contingencies to be
applicable to the contingent tax credits to which such Certificate relates.
(3) Upon receipt of the
information identified in sections 1 and 2 of this R357-7-4, the Board shall
issue a Certificate for contingent tax credits in accordance with U.C.A.
Section
63N-6-406,
to each Designated Investor identified at Closing with respect to such
Designated Investor's Private Investment to be made at Closing. The following
provisions shall apply to such Certificates:
(a) Certificates may only be issued by the
Board;
(b) Certificates shall be
based on the principal amount invested in the applicable Utah Fund of Funds
plus scheduled interest.
(c) The
maximum amount of contingent tax credits represented by each Certificate shall
be calculated in accordance with the limitations set forth in U.C.A. Section
63N-6-406(2)(a);
(d) The maximum amount of
outstanding Certificates that may be redeemed in a Fiscal Year will be
calculated on a proportional basis in the proportions set forth in U.C.A.
Section
63N-6-406(2)(c).
(e) The maximum amount of tax
credits to be certified for a Private Investment may not exceed the difference
between (i) the Scheduled Return for such Private Investment and (ii) the
Actual Return received with respect to such Private Investment, determined as
of the applicable Maturity Date.
(4) Each Certificate issued to a Designated
Investor in connection with a Debt-based Refinancing shall contain, or
incorporate by reference to another document, each of the following:
(a) The name, address and taxpayer
identification number of the Designated Investor to which such Certificate
relates;
(b) The amount of the
Designated Investor's maximum principal loan amount and interest rate;
(c) All contingencies applicable
to the tax credits to which such Certificate relates;
(d) The date of issuance of such Certificate;
(e) The Maturity Date or Maturity
Dates of such Certificate;
(f) The
maximum amount of contingent tax credits represented by such Certificate;
(g) The process for presenting the
Certificate for Certification and Redemption; and
(h) Such other provisions the Board
determines to be include that are consistent with the Act and these rules.
(5) Certification of
Contingent Tax Credits:
(a) To redeem a
Certificate for tax credits, a Designated Investor shall present the Board with
its Certificate for Certification no later than June 30 of the Calendar Year in
which the earliest Maturity Date stated on the Certificate occurs.
(b) Prior to Certification, the Board will
determine the amount of funds available in the Redemption Reserve.
(i) If funds are available in the Redemption
Reserve, the Board shall direct the Corporation to make a cash payment with
respect to such Certificate in accordance with U.C.A. Section
63N-6-408
to the extent funds are available therefor and tax credits are eligible for
Certification under such Certificate, such payment to be allocated among
Designated Investors in proportion to the outstanding balances of all
Certificates, Certificates of Eligibility and Tax Credit Balance Certificates
timely presented to the Board pending Certification.
(ii) Any such payments referenced in
paragraph (i) shall reduce, dollar for dollar, the amount of tax credits that
may be certified by the Board with respect to such
Certificates.
(c) Prior
to Certification, the Board, at its election, may make a demand upon a
Designated Purchaser to purchase the tax credits represented by the Certificate
in accordance with U.C.A. Section
63N-6-409.
(d) The Corporation shall provide all
information and documents reasonably available to it that the Board requests
and determines are necessary for the Board to be able to certify the amount of
tax credits to be claimed by the Designated Investor. Such information and
documents shall include but are not limited to the following:
(i) Contractual agreements to which either
any of the Corporation, the Designated Investor or any applicable Utah Fund of
Funds is a party that were entered into in connection with the Debt-based
Refinancing.
(ii) All documents and
financial information necessary to calculate the actual amounts paid by the
Utah Fund of Funds to the Designated Investor with respect to its Private
Investment in the Utah Fund of Funds.
(iii) Any other documents the Board deems
necessary to assess compliance with this chapter or to verify the amount of
certifiable tax credits related to a Certificate.
(e) No later than the date that is the later
of (i) September 1 of the Calendar Year in which the earliest Maturity Date
stated on the Certificate occurs or (ii) the date that is 20 Business Days
after receipt of all information and documents pursuant to section 5(d) of this
R357-7-4 the Board shall establish and certify to the Designated Investor the
amount of tax credits related to the Certificate, if any.
(f) The Board shall provide the Designated
Investor a Tax Credit Redemption Certificate setting forth the amount of
certified tax credits represented by such Certificate (if any) that may be
claimed by the Designated Investor, in accordance with U.C.A. Section
63N-6-408
and
R357-7-11.
(g) If the certified Certificate has more
than one Maturity Date, the Board shall issue to the Designated Investor a Tax
Credit Redemption Certificate for the certified tax credits for the applicable
Maturity Date in accordance with section 5(f) of this R357-7-4 and shall issue
to the Designated Investor one or more Certificates for the balance of any
contingent tax credits applicable to future Maturity Dates for which the tax
credits are not then being certified.
(h) Certificates being certified for a
Maturity Date shall be certified pro rata with all other Certificates being
certified for the same Maturity Date.
(i) If a Certificate for contingent tax
credits has more than one Maturity Date, the Maturity Date or Maturity Dates
occurring in the same Calendar Year on which the Certificate was presented to
the Board for certification shall be the Maturity Date or Maturity Dates used
for purposes of Certification under this R357-7-4.
(j) Once a Tax Credit Redemption Certificate
has been issued, the Board shall notify the Commission of such issuance within
five Business Days.
(k) Upon
Certification of a Certificate, the Board shall cancel such Certificate, unless
such Certificate has a Maturity Date that has not expired, in which case the
Board shall issue a balance Certificate in accordance with section 5(g) of this
R357-7-4.
(6) Expiration
or Cancellation of Tax Credits Represented by Certificates. Tax credits
represented by a Certificate shall expire or be cancelled as provided in the
Certificate.
(7) The agreements
between a Utah Fund of Funds and a Designated Investor regarding a Private
Investment shall provide that upon timely presentation of the Certificate
applicable to such Private Investment to the Board for Certification in
accordance with this R357-7-4 by such Designated Investor or its Transferee,
such Designated Investor shall be deemed to have assigned to the Corporation
effective as of the Maturity Date all of the indebtedness owed to such
Designated Investor by the applicable Utah Fund of Funds. Any payments made by
such Utah Fund of Funds to such Designated Investor after the Maturity Date
with respect to such assigned indebtedness shall reduce the amount of tax
credits represented by the Tax Redemption Certificate to be issued to such
Designated Investor. Any amounts received by the Corporation with respect to
such assigned indebtedness shall be paid first to the state of Utah in an
amount up to the amount of tax credits granted by the state of Utah to such
Designated Investor and the balance shall be retained by the Corporation to be
included in the Redemption Reserve.