Current through Bulletin 2024-06, March 15, 2024
This R357-7-5 applies to the Equity-based Refinancing of
existing loans to 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 an Equity-based Refinancing, the Corporation shall provide the
following information to the Board:
(a) A
summary of the terms of the limited partnership agreement or the operating
agreement of the issuing Utah Fund of Funds and other contractual agreements to
be entered into by the Utah Fund of Funds or the Corporation in connection with
the Equity-based Refinancing; and
(b) The anticipated Closing date.
(2) No later than two
Business Days prior to each Closing of an Equity-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 amount of the capital commitment expected to be made at such
Closing by such Designated Investor;
(e) The maximum amount of contingent tax
credits to be certified for each Certificate to be issued at Closing;
(f) The Maturity Date or Maturity Dates for
each Certificate to be issued at Closing; and
(g) 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 R357-7-5, 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 Capital Invested in the applicable Utah Fund of Funds.
(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 can 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 Designated Investor may not exceed any Shortfall
attributable to such Designated Investor's Private Investment, determined as of
the applicable Maturity Date.
(4) Each Certificate issued to a Designated
Investor in connection with an Equity-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 investment commitment;
(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 the 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 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 include but are not limited to the following:
(i) Contractual agreements to which 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 Equity-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
R357-7-5 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 R357-7-5 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 R357-7-5.
(j) Once a Tax Credit Redemption Certificate
has been issued, the Board will 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
R357-7-5.
(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 R357-7-5 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 such Designated Investor's Private
Investment in the applicable Utah Fund of Funds. Such assignment shall include,
without limitation, any and all rights to future distributions, dividends,
redemption proceeds or other payments from such Utah Fund of Funds attributable
to such Private Investment. Any payments made by such Utah Fund of Funds to
such Designated Investor after the Maturity Date with respect to such assigned
interest 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 interest shall be
paid first to the state of Utah in an amount up to the amount of certified 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.
