Current through Bulletin 2024-06, March 15, 2024
This R357-7-6 applies to Private Investments structured as
equity investments in any Utah Fund of Funds initiated on or after July 1,
2015, excluding any Equity-based Refinancing.
(1) No later than 20 Business Days prior to
each Closing to which this R357-7-6 applies, 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 applicable Utah Fund of Funds and any other contractual
agreements to be entered into by the applicable Utah Fund of Funds, the
Corporation and any Designated Investor in connection with its Private
Investment in a Utah Fund of Funds; and
(b) The anticipated Closing date.
(2) No later than two Business
Days prior to each Closing, the Corporation shall provide the Board with the
following information with respect to each Person expected to become a
Designated Investor at such 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 the Designated Investor; and
(e) The Term of the applicable Utah Fund of
Funds.
(3) Within 20
Business Days after each Closing, the Board shall issue to each Designated
Investor that has invested in the applicable Utah Fund of Funds at such Closing
a Certificate of Eligibility.
(a) The maximum
aggregate amount of tax credits for which a Designated Investor may apply as
represented by its Certificate of Eligibility shall be calculated in accordance
with the limitations set forth in U.C.A. Section
63N-6-406(2)(a).
(b) A Certificate of Eligibility
shall entitle a Designated Investor to apply for a Tax Credit Redemption
Certificate in accordance with this R357-7-6 as in effect at the time such
Certificate of Eligibility was certified by the Board and may not be modified,
terminated or rescinded without the consent of such Designated
Investor.
(4) Each
Certificate of Eligibility 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 whom the Certificate of Eligibility is issued;
(b) The maximum amount of tax credits
represented by such Certificate of Eligibility for which such Designated
Investor is eligible to apply (which shall be equal to such Designated
Investor's capital commitment to the applicable Utah Fund of Funds);
(c) The date of issuance of the Certificate
of Eligibility; and
(d) A statement
that such Designated Investor is eligible to apply for tax credits represented
by a Tax Credit Redemption Certificate, subject to the limitations set forth in
this R357-7-6.
(5)
Application for Tax Credits or other Payments.
(a) A Designated Investor who has received a
Certificate of Eligibility may apply to the Board for tax credits represented
by a Tax Credit Redemption Certificate if the following conditions are
satisfied:
(i) Subject to section 5(c) of
this R357-7-6, such Designated Investor has contributed capital to the
applicable Utah Fund of Funds in the amount required under the agreement
between such Utah Fund of Funds and the Designated Investor;
(ii) The Term of the applicable Utah Fund of
Funds has expired.
(iii) As of the
Determination Date, there is a Shortfall attributable to such Designated
Investor's Private Investment.
(iv) There is Economic Development Impact
attributable to the applicable Utah Fund of Funds as most recently certified by
the Board in accordance with
R357-7-9
and section 12 of this R357-7-6 prior to the Determination Date.
(v) As of the Determination Date, there are
insufficient funds in the Redemption Reserve available to make a cash payment
equal to the amount of the lesser of (i) the Shortfall described in section
5(a)(iii) of this R357-7-6 for all Designated Investors of the applicable Utah
Fund of Funds, and (ii) the amount of Economic Development Impact described in
section 5(a)(iv) of this R357-7-6 attributable to such Designated
Investors.
(b) Any
Designated Investor not eligible to apply for tax credits as a result of the
condition set forth in section 5(a)(v) of this R357-7-6, may present its
Certificate of Eligibility to the Board no later than the June 30 following the
Determination Date, and to the extent such Certificate of Eligibility would
otherwise be certified in accordance with this R357-7-6 absent such condition,
the Board shall direct the Corporation to make a cash payment from the
Redemption Reserve or other sources with respect to such Designated Investors
in accordance with U.C.A. Section
63N-6-408
to the extent funds are available therefor by no later than September 1 of the
Calendar Year immediately following the Determination Date, 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.
(c) If a Feeder Fund fails to contribute
capital to a Utah Fund of Funds with respect to which such Feeder Fund is a
Designated Investor in the amount required under the agreement between such
Utah Fund of Funds and such Feeder Fund, and such failure is a direct result of
the failure of any member, partner or other equity investor of such Feeder Fund
(a "Feeder Fund Investor") to make a contribution of capital required to be
made to such Feeder Fund, then the restriction on applying for tax credits set
forth in section 5(a)(i) of this R357-7-6 shall apply only to (i) that portion
of the tax credits represented by the Certificate of Eligibility issued to such
Feeder Fund that bears the same proportion to the aggregate tax credits
represented by such Certificate of Eligibility, as the obligation to contribute
capital to such Feeder Fund of such Feeder Fund Investor bears to the aggregate
obligations to contribute capital to such Feeder Fund of all its Feeder Fund
Investors or (ii) any Certificate of Eligibility Transferred to such Feeder
Fund Investor by such Feeder Fund.
(6) Upon the satisfaction of the conditions
set forth in section 5(a) of this R357-7-6, a Designated Investor may apply for
a Tax Credit Redemption Certificate, in a form prescribed by the Board in
accordance with this R357-7-6. The Tax Credit Redemption Certificate shall be
issued in an amount equal to the lesser of (i) the Economic Development Impact
attributable to such Designated Investor determined in accordance with
R357-7-9
and section 12 of this R357-7-6 and (ii) the Shortfall attributable to such
Designated Investor's Private Investment, in each case calculated as of the
Determination Date.
(7) To apply
for tax credits, a Designated Investor shall present the Board with its
Certificate of Eligibility no later than the first June 30 following the
Determination Date. If for any reason a Designated Investor fails to present
its Certificate of Eligibility to the Board on time, such Certificate of
Eligibility shall automatically expire without further action of the Board and
any eligibility to apply for tax credits represented thereby shall be
forfeited.
(a) The amount of tax credits
represented by a Certificate of Eligibility that the Board is permitted to
certify in a Fiscal Year upon application by a Designated Investor will be
calculated and allocated in accordance with section 13 of this
R357-7-6.
(b) 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 either
the Corporation or any applicable Utah Fund of Funds is a party that were
entered into in connection with the Designated Investor's Private Investment in
the applicable Utah Fund of Funds.
(ii) All financial information and related
documents necessary to calculate the Shortfall attributable to such Designated
Investor's Private Investment.
(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 such Certificate of Eligibility.
(c) 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 of Eligibility 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 of Eligibility, 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 of Eligibility
and Tax Credit Balance Certificates.
(d) 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 of Eligibility in accordance with U.C.A.
Section
63N-6-409.
(e) No later than the date that is the later
of (i) September 1 of the Calendar Year immediately following the Determination
Date or (ii) the date that is 20 Business Days after receipt of all information
and documents pursuant to section 7(b) of this R357-7-6, the Board shall
establish and certify to the Designated Investor the amount of tax credits
related to the Certificate of Eligibility, if any.
(f) The Board shall Issue each 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 such Designated Investor, in accordance with U.C.A. Section
63N-6-408
and
R357-7-11.
(g) Once a Tax Credit Redemption Certificate
has been issued, the Board will notify the Commission of such issuance within
five Business Days.
(h) Upon
issuance of a Tax Credit Redemption Certificate, the Board shall cancel the
related Certificate of Eligibility.
(8) To the extent that, in accordance with
section 7(a) of this R357-7-6, the Board is not permitted to certify all of the
tax credits represented by a Designated Investor's Certificate of Eligibility,
upon cancellation of the Certificate of Eligibility in accordance with section
7(h) of this R357-7-6, the Board shall issue to such Designated Investor a Tax
Credit Balance Certificate for the amount of remaining tax credits that were
limited by section 7(a) of this R357-7-6. The amount of tax credits for which a
Designated Investor is eligible to apply represented by its Tax Credit Balance
Certificate shall not be adjusted for any Economic Development Impact
measurements made in accordance with
R357-7-9
for any period after the applicable Determination Date.
(9) A Tax Credit Redemption Certificate
issued to a Designated Investor shall contain each of the following:
(a) The name, address and taxpayer
identification number of such Designated Investor;
(b) The date of issuance of the Tax Credit
Redemption Certificate; and
(c) The
amount of tax credits to be claimed.
(10) A Tax Credit Balance Certificate issued
to a Designated Investor shall contain each of the following:
(a) The name, address and taxpayer
identification number of such Designated Investor;
(b) The date of issuance of the Tax Credit
Balance Certificate;
(c) The
certificate number of the cancelled Certificate of Eligibility to which the Tax
Credit Balance Certificate relates;
(d) The amount tax credits represented by
such Tax Credit Balance Certificate; and
(e) The Fiscal Year or Fiscal Years in which
such Designated Investor shall be eligible to apply for tax credits represented
by such Tax Credit Balance Certificate.
(11) During each the Fiscal Year set forth on
a Tax Credit Balance Certificate, a Designated Investor may apply for
Certification of the tax credits represented by such Tax Credit Balance
Certificate by presenting it to the Board no later than June 30 of such Fiscal
Year. If for any reason a Designated Investor fails to present its Tax Credit
Balance Certificate to the Board in a timely fashion, such Tax Credit Balance
Certificate shall automatically expire without further action of the Board and
any amount of tax credits represented thereby shall be forfeited.
(a) The amount of tax credits represented by
a Tax Credit Balance Certificate that the Board is permitted to certify in a
Fiscal Year upon application by a Designated Investor will be calculated and
allocated in accordance with section 13 of this R357-7-6.
(b) Prior to Certification, the Board will
determine the amount of funds available in the Redemption Reserve and payments
shall be made in a manner consistent with that specified in section 7(c) of
this R357-7-6.
(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 Tax Credit Balance
Certificate in accordance with U.C.A. Section
63N-6-409.
(d) No later than September 1 of the
applicable Fiscal Year set forth in applying Designated Investor's Tax Balance
Certificate, the Board shall determine and certify to such Designated Investor
the amount of tax credits related to such Tax Credit Balance Certificate (if
any) that may be redeemed in such Fiscal Year.
(e) The Board shall issue to 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.
(f) Once a tax credit has been certified for
redemption, the Board will notify the Commission of such certification within
five Business Days.
(g) Upon
Certification for redemption of a Tax Credit Balance Certificate, the Board
shall cancel such Tax Credit Balance Certificate.
(h) To the extent that, in accordance with
section 11(a) of this R357-7-6, the Board was not permitted to certify all of
the tax credits represented by a Designated Investor's Tax Credit Balance
Certificate in the Fiscal Year applied for, upon cancellation of the Tax Credit
Balance Certificate in accordance with section 11(g) of this R357-7-6, the
Board shall issue to such Designated Investor a new Tax Credit Balance
Certificate for the amount of remaining tax credits that were limited by
section 11(a) of this R357-7-6, and the Designated Investor may apply for
Certification of such certificate in the following Fiscal Year or Fiscal Years
in accordance with this section 11.
(12) The amount of Economic Development
Impact certified by the Board in accordance with
R357-7-9
shall be allocated to each Designated Investor in accordance with this section
12.
(a) The amount of Economic Development
Impact measured in accordance with sections 2 and 3 of
R357-7-9
shall be allocated to each Designated Investor of the applicable Utah Fund of
Funds on a pro rata basis, based on its aggregate capital commitment to such
applicable Utah Fund of Funds compared to the aggregate capital commitments of
all other Designated Investors in such applicable Utah Fund of Funds.
(b) The amount of Economic Development Impact
measured in accordance with section 4 of
R357-7-9
shall be allocated to the Designated Investors of the various Utah Funds of
Funds as determined by the contractual agreements between such Designated
Investors and such Utah Funds of Funds with respect to such Designated
Investors' respective Private Investments in such Utah Funds of
Funds.
(c) The amount of Economic
Development Impact determined in accordance with section 5 of
R357-7-9
shall be allocated:
(i) to each Designated
Investor of the applicable Utah Fund of Funds on a pro rata basis based on its
aggregate capital commitment to such applicable Utah Fund of Funds compared to
the aggregate capital commitments of all other Designated Investors in such
applicable Utah Fund of Funds, if such Economic Development Impact is in
respect of an applicable Utah Fund of Funds; or
(ii) to the Designated Investors of the
various Utah Funds of Funds as determined by the contractual agreements between
such Designated Investors and such Utah Funds of Funds with respect to such
Designated Investors' respective Private Investments in such Utah Funds of
Funds, if such Economic Development Impact is in respect of the activities of
the Corporation.
(13) The maximum amount of tax credits the
Board is permitted to certify in accordance with this R357-7-6 with respect to
Certificates of Eligibility and Tax Credit Balance Certificates presented to
the Board by Designated Investors of a Utah Fund of Funds in any Fiscal Year
shall be calculated on a proportional basis in the proportions set forth in
U.C.A. Section
63N-6-406(2)(c).
For the purposes of such calculation:
(a) The
$100,000,000 increment set forth in U.C.A. Section
63N-6-406(2)(c)
shall be determined by reference to the aggregate capital commitments made by
each of the Designated Investors that is eligible to apply for such credits in
such Fiscal Year, as set forth on the applicable Certificate of Eligibility of
such Designated Investor; and
(b)
Available tax credits shall be allocated among such Designated Investors on a
pro rata basis in accordance with on their respective capital commitments to
the applicable Utah Fund of Funds.
(14) A tax credit represented by a
Certificate of Eligibility or Tax Credit Balance Certificate may only be
redeemed by a Designated Investor in accordance with the terms of the
Certificate of Eligibility or Tax Credit Balance Certificate, as applicable,
this R357-7-6 and U.C.A. Section
63N-6-408.
(15) 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 of Eligibility applicable to
such Private Investment to the Board for Certification of tax credits
represented by such certificate in accordance with this R357-7-6 by such
Designated Investor or its Transferee, such Designated Investor shall be deemed
to have assigned to the Corporation effective as of the Determination Date a
portion of such Designated Investor's Private Investment in the applicable Utah
Fund of Funds equal to a fraction, calculated as of the Determination Date, the
numerator of which is the amount of such Designated Investor's Tax Credit
Eligibility and the denominator of which is the Shortfall attributable to such
Designated Investor's Private Investment. Such assignment shall include,
without limitation, any and all rights to distributions, dividends, redemption
proceeds or other payments from such Utah Fund of Funds attributable to such
Private Investment that are made after the Determination Date. Any
distributions, dividends, redemption proceeds or other payments made by such
Utah Fund of Funds after the Determination Date with respect to such assigned
interest to such Designated Investor shall reduce the amount of tax credits
that may be issued with respect to the applicable Certificate of Eligibility.
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 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.
