Representative Steve Waldrip proposes the following substitute bill:


1     
FUND OF FUNDS MODIFICATIONS

2     
2022 GENERAL SESSION

3     
STATE OF UTAH

4     
Chief Sponsor: Scott D. Sandall

5     
House Sponsor: Steve Waldrip

6     

7     LONG TITLE
8     General Description:
9          This bill relates to the Utah Capital Investment Corporation and the Utah fund of funds.
10     Highlighted Provisions:
11          This bill:
12          ▸     repeals the Utah Capital Investment Board;
13          ▸     modifies and repeals certain provisions relating to the Utah Capital Investment
14     Corporation and the Utah fund of funds to begin the process of winding up the
15     affairs of those entities;
16          ▸     modifies the Utah Capital Investment Restricted Account to accept funds disbursed
17     to the state by the Utah Capital Investment Corporation or the Utah fund of funds;
18          ▸     exempts the Utah fund of funds from the Utah Money Management Act; and
19          ▸     makes technical and conforming changes.
20     Money Appropriated in this Bill:
21          None
22     Other Special Clauses:
23          This bill provides a special effective date.
24     Utah Code Sections Affected:
25     AMENDS:
26          51-7-2, as last amended by Laws of Utah 2021, Chapter 33
27          63N-6-103, as last amended by Laws of Utah 2021, Chapter 438
28          63N-6-204, as enacted by Laws of Utah 2021, Chapter 438
29          63N-6-301, as last amended by Laws of Utah 2021, Chapter 438
30          63N-6-303, as last amended by Laws of Utah 2021, Chapter 438
31          63N-6-305, as renumbered and amended by Laws of Utah 2015, Chapter 283
32          63N-6-401, as last amended by Laws of Utah 2015, Chapter 420 and renumbered and
33     amended by Laws of Utah 2015, Chapter 283
34          63N-6-402, as last amended by Laws of Utah 2021, Chapter 438
35          63N-6-404, as renumbered and amended by Laws of Utah 2015, Chapter 283
36          63N-6-405, as last amended by Laws of Utah 2015, Chapter 420 and renumbered and
37     amended by Laws of Utah 2015, Chapter 283
38          63N-6-410, as last amended by Laws of Utah 2015, Chapter 420 and renumbered and
39     amended by Laws of Utah 2015, Chapter 283
40     REPEALS:
41          63N-6-101, as renumbered and amended by Laws of Utah 2015, Chapter 283
42          63N-6-102, as last amended by Laws of Utah 2015, Chapter 420 and renumbered and
43     amended by Laws of Utah 2015, Chapter 283
44          63N-6-201, as renumbered and amended by Laws of Utah 2015, Chapter 283
45          63N-6-202, as last amended by Laws of Utah 2019, Chapter 136
46          63N-6-203, as last amended by Laws of Utah 2019, Chapter 214
47          63N-6-302, as renumbered and amended by Laws of Utah 2015, Chapter 283
48          63N-6-304, as renumbered and amended by Laws of Utah 2015, Chapter 283
49          63N-6-306, as renumbered and amended by Laws of Utah 2015, Chapter 283
50          63N-6-403, as renumbered and amended by Laws of Utah 2015, Chapter 283
51          63N-6-406, as last amended by Laws of Utah 2021, Chapter 438
52          63N-6-407, as renumbered and amended by Laws of Utah 2015, Chapter 283
53          63N-6-408, as renumbered and amended by Laws of Utah 2015, Chapter 283
54          63N-6-409, as renumbered and amended by Laws of Utah 2015, Chapter 283
55          63N-6-411, as renumbered and amended by Laws of Utah 2015, Chapter 283
56     

57     Be it enacted by the Legislature of the state of Utah:
58          Section 1. Section 51-7-2 is amended to read:
59          51-7-2. Exemptions from chapter.
60          The following funds are exempt from this chapter:
61          (1) funds invested in accordance with the participating employees' designation or
62     direction pursuant to a public employees' deferred compensation plan established and operated
63     in compliance with Section 457 of the Internal Revenue Code of 1986, as amended;
64          (2) funds of the Utah State Retirement Board;
65          (3) funds of the Utah Housing Corporation;
66          (4) endowment funds of higher education institutions;
67          (5) permanent and other land grant trust funds established pursuant to the Utah
68     Enabling Act and the Utah Constitution;
69          (6) the State Post-Retirement Benefits Trust Fund;
70          (7) the funds of the Utah Educational Savings Plan;
71          (8) funds of the permanent state trust fund created by and operated under Utah
72     Constitution, Article XXII, Section 4;
73          (9) the funds in the Navajo Trust Fund;
74          (10) the funds in the Radioactive Waste Perpetual Care and Maintenance Account;
75          (11) the funds in the Employers' Reinsurance Fund;
76          (12) the funds in the Uninsured Employers' Fund;
77          (13) the Utah State Developmental Center Long-Term Sustainability Fund, created in
78     Section 62A-5-206.7; [and]
79          (14) the funds in the Risk Management Fund created in Section 63A-4-201[.]; and
80          (15) the Utah fund of funds created in Section 63N-6-401.
81          Section 2. Section 63N-6-103 is amended to read:
82          63N-6-103. Definitions.
83          As used in this part:
84          (1) "Board" means the [Utah Capital Investment Board] board of directors of the
85     corporation.
86          [(2) "Certificate" means a contract between the board and a designated investor under
87     which a contingent tax credit is available and issued to the designated investor.]
88          [(3) (a) Except as provided in Subsection (3)(b), "claimant" means a resident or
89     nonresident person.]
90          [(b) "Claimant" does not include an estate or trust.]
91          [(4) "Commitment" means a written commitment by a designated purchaser to
92     purchase from the board certificates presented to the board for redemption by a designated
93     investor. Each commitment shall state the dollar amount of contingent tax credits that the
94     designated purchaser has committed to purchase from the board.]
95          [(5) "Contingent tax credit" means a contingent tax credit issued under this part that is
96     available against tax liabilities imposed by Title 59, Chapter 7, Corporate Franchise and
97     Income Taxes, or Title 59, Chapter 10, Individual Income Tax Act, if there are insufficient
98     funds in the redemption reserve and the board has not exercised other options for redemption
99     under Subsection 63N-6-408(3)(b).]
100          [(6)] (2) "Corporation" means the Utah Capital Investment Corporation created under
101     Section 63N-6-301.
102          [(7) "Designated investor" means:]
103          [(a) a person who makes a private investment; or]
104          [(b) a transferee of a certificate or contingent tax credit.]
105          [(8) "Designated purchaser" means:]
106          [(a) a person who enters into a written undertaking with the board to purchase a
107     commitment; or]
108          [(b) a transferee who assumes the obligations to make the purchase described in the
109     commitment.]
110          [(9) "Estate" means a nonresident estate or a resident estate.]
111          [(10) "Person" means an individual, partnership, limited liability company, corporation,
112     association, organization, business trust, estate, trust, or any other legal or commercial entity.]
113          [(11) "Private investment" means:]
114          [(a) an equity interest in the Utah fund of funds; or]
115          [(b) a loan to the Utah fund of funds initiated before July 1, 2014, including a loan that
116     was originated before July 1, 2014, and that is refinanced one or more times on or after July 1,
117     2014.]
118          [(12) "Redemption reserve" means the reserve established by the corporation to:]
119          [(a) facilitate the cash redemption of certificates; and]
120          [(b) provide money for the state as directed by statute.]
121          [(13)] (3) "Restricted account" means the Utah Capital Investment Restricted Account
122     created in Section 63N-6-204.
123          [(14) "Taxpayer" means a taxpayer:]
124          [(a) of an investor; and]
125          [(b) if that taxpayer is a:]
126          [(i) claimant;]
127          [(ii) estate; or]
128          [(iii) trust.]
129          [(15) "Trust" means a nonresident trust or a resident trust.]
130          [(16)] (4) "Utah fund of funds" means a [limited partnership or] limited liability
131     company established under Section 63N-6-401 [in which a designated investor purchases an
132     equity interest].
133          Section 3. Section 63N-6-204 is amended to read:
134          63N-6-204. Utah Capital Investment Restricted Account.
135          (1) There is created a restricted account within the General Fund known as the Utah
136     Capital Investment Restricted Account.
137          (2) The restricted account shall be funded by[:] disbursements from the Utah fund of
138     funds or the corporation.
139          [(a) redemption reserve money and other money from the corporation as directed by
140     statute; and]
141          [(b) appropriations made to the account by the Legislature.]
142          (3) The state treasurer shall:
143          (a) administer the account;
144          [(a)] (b) invest money in the restricted account in accordance with Title 51, Chapter 7,
145     State Money Management Act; and
146          [(b)] (c) deposit interest or other earnings derived from investment of restricted
147     account money into the restricted account.
148          (4) The Legislature may appropriate funds from the restricted account to the General
149     Fund or for any other lawful purpose.
150          [(4) Subject to appropriations by the Legislature, the restricted account shall be
151     administered by the Governor's Office of Economic Opportunity for economic development,
152     infrastructure, state parks, recreation, education innovation, or other purposes as directed by the
153     Legislature.]
154          [(5) An appropriation from the restricted account is nonlapsing.]
155          Section 4. Section 63N-6-301 is amended to read:
156          63N-6-301. Utah Capital Investment Corporation -- Powers and purposes --
157     Reporting requirements.
158          (1) (a) There is created an independent quasi-public nonprofit corporation known as the
159     Utah Capital Investment Corporation.
160          (b) The corporation:
161          (i) may exercise all powers conferred on independent corporations under Section
162     63E-2-106;
163          (ii) is subject to the prohibited participation provisions of Section 63E-2-107; and
164          (iii) is subject to the other provisions of Title 63E, Chapter 2, Independent
165     Corporations Act, except as otherwise provided in this part.
166          (c) The corporation shall file with the Division of Corporations and Commercial Code:
167          (i) articles of incorporation; and
168          (ii) any amendment to its articles of incorporation.
169          (d) In addition to the articles of incorporation, the corporation may adopt bylaws and
170     operational policies that are consistent with this chapter.
171          (e) Except as otherwise provided in this part, this part does not exempt the corporation
172     from the requirements under state law which apply to other corporations organized under Title
173     63E, Chapter 2, Independent Corporations Act.
174          (2) The purposes of the corporation are to:
175          (a) [organize] administer the Utah fund of funds;
176          (b) select an investment fund allocation manager to [make venture capital and private
177     equity fund] manage investments by the Utah fund of funds;
178          (c) negotiate the terms of a contract with the investment fund allocation manager;
179          (d) execute the contract with the selected investment fund manager on behalf of the
180     Utah fund of funds; and
181          [(e) receive funds paid by designated investors for the issuance of certificates by the
182     board for private investment in the Utah fund of funds;]
183          [(f)] (e) receive investment returns from the Utah fund of funds[; and].
184          [(g) establish the redemption reserve to be used by the corporation to:]
185          [(i) redeem certificates; and]
186          [(ii) provide money for the state as directed by statute.]
187          (3) The corporation may not:
188          (a) exercise governmental functions;
189          (b) have members;
190          (c) pledge the credit or taxing power of the state or any political subdivision of the
191     state; or
192          (d) make its debts payable out of any money except money of the corporation.
193          (4) The obligations of the corporation are not obligations of the state or any political
194     subdivision of the state within the meaning of any constitutional or statutory debt limitations,
195     but are obligations of the corporation payable solely and only from the corporation's funds.
196          (5) The corporation may:
197          (a) engage consultants and legal counsel;
198          (b) expend funds;
199          (c) invest funds;
200          (d) issue debt and equity, and borrow funds;
201          (e) enter into contracts;
202          (f) insure against loss;
203          (g) hire employees; and
204          (h) perform any other act necessary to carry out its purposes.
205          (6) (a) The corporation shall[, in consultation with the board,] publish on or before
206     September 1 an annual report of the activities conducted by the Utah fund of funds and submit,
207     in accordance with Section 68-3-14, the written report to:
208          (i) the governor;
209          (ii) the Business, Economic Development, and Labor Appropriations Subcommittee;
210          (iii) the Business and Labor Interim Committee; and
211          (iv) the Retirement and Independent Entities Interim Committee.
212          (b) The annual report shall:
213          (i) be designed to provide clear, accurate, and accessible information to the public, the
214     governor, and the Legislature;
215          (ii) include a copy of the audit of the Utah fund of funds described in Section
216     63N-6-405;
217          (iii) include a detailed balance sheet, revenue and expenses statement, and cash flow
218     statement;
219          [(iv) include detailed information regarding new fund commitments made during the
220     year, including the amount of money committed;]
221          [(v) include the net rate of return of the Utah fund of funds from the inception of the
222     Utah fund of funds, after accounting for all expenses, including administrative and financing
223     costs;]
224          [(vi)] (iv) include detailed information regarding:
225          (A) realized gains from investments and any realized losses; and
226          (B) unrealized gains and any unrealized losses based on the net present value of
227     ongoing investments;
228          [(vii)] (v) include detailed information regarding all yearly expenditures, including:
229          (A) administrative, operating, and financing costs;
230          (B) aggregate compensation information for full- and part-time employees, including
231     benefit and travel expenses; and
232          (C) expenses related to the allocation manager;
233          [(viii)] (vi) include detailed information regarding all funding sources for
234     administrative, operations, and financing expenses, including expenses charged by or to the
235     Utah fund of funds, including management and placement fees;
236          [(ix) review the progress of the investment fund allocation manager in implementing
237     its investment plan and provide a general description of the investment plan;]
238          [(x)] (vii) for each individual fund that the Utah fund of funds is invested in that
239     represents at least 5% of the net assets of the Utah fund of funds, include the name of the fund,
240     the total value of the fund, the fair market value of the Utah fund of funds' investment in the
241     fund, and the percentage of the total value of the fund held by the Utah fund of funds; and
242          [(xi) include the number of companies in Utah where an investment was made from a
243     fund that the Utah fund of funds is invested in, and provide an aggregate count of new full-time
244     employees in the state added by all companies where investments were made by funds that the
245     Utah fund of funds is invested in;]
246          [(xii)] (viii) include an aggregate total value for all funds the Utah fund of funds is
247     invested in[, and an aggregate total amount of money invested in the state by the funds the Utah
248     fund of funds is invested in;].
249          [(xiii) describe any redemption or transfer of a certificate issued under this part;]
250          [(xiv) include actual and estimated potential appropriations the Legislature will be
251     required to provide as a result of redeemed certificates or tax credits during the following five
252     years;]
253          [(xv) include an evaluation of the state's progress in accomplishing the purposes stated
254     in Section 63N-6-102; and]
255          [(xvi) be directly accessible to the public via a link from the main page of the Utah
256     fund of fund's website.]
257          [(c) The annual report may not identify a specific designated investor who has
258     redeemed or transferred a certificate.]
259          [(7) (a) On or before December 1, 2021, the corporation shall provide a written report
260     to the president of the Senate and the speaker of the House of Representatives that includes a
261     detailed plan, time line, and recommendations for the future of the corporation.]
262          [(b) The plan shall include recommendations describing:]
263          [(i) the divestment of the state from any future liability of the corporation and a time
264     line for realizing gains and winding down all investments from the current Utah fund of funds;]
265          [(ii) any plans that the corporation has to raise capital for a fund similar to the current
266     Utah fund of funds that does not require certificates, contingent tax credits, or other guarantees
267     from the state to be provided to equity investors;]
268          [(iii) whether the corporation should continue as an independent quasi-public nonprofit
269     corporation under Title 63E, Chapter 2, Independent Corporations Act;]
270          [(iv) if the corporation recommends continuing as an independent quasi-public
271     nonprofit corporation, why the corporation should continue, and what benefits the corporation
272     will provide to the state in terms of economic development, job growth, or other benefits;]
273          [(v) whether the corporation should be liquidated or dissolved under Section
274     63N-3-306;]
275          [(vi) if the corporation recommends that the corporation be liquidated or dissolved, a
276     detailed plan and time line for dissolution that includes recommendations regarding how assets
277     and realized gains of the corporation should be distributed;]
278          [(vii) whether the corporation should be privatized in accordance with Title 63E,
279     Chapter 1, Part 4, Privatization of Independent Entities; and]
280          [(viii) if the corporation recommends that the corporation be privatized, a detailed plan
281     and time line for privatization that includes recommendations regarding the distribution of
282     assets and realized gains of the corporation.]
283          [(8) In relation to the written report described in Subsection (7), the corporation:]
284          [(a) may seek potential commitments through letters of intent or other means to
285     demonstrate the viability of raising capital for a new fund as described in Subsection (7)(b)(ii);
286     and]
287          [(b) may not enter into any binding commitments related to a new fund as described in
288     Subsection (7)(b)(ii), unless the corporation receives specific authorization through legislation
289     passed by the Legislature after the report described in Subsection (7) is provided.]
290          Section 5. Section 63N-6-303 is amended to read:
291          63N-6-303. Board of directors.
292          [(1) The initial board of directors of the corporation shall consist of five members.]
293          [(2) The persons elected to the initial board of directors by the appointment committee
294     shall include persons who have an expertise, as considered appropriate by the appointment
295     committee, in the areas of:]
296          [(a) the selection and supervision of investment managers;]
297          [(b) fiduciary management of investment funds; and]
298          [(c) other areas of expertise as considered appropriate by the appointment committee.]
299          [(3) After the election of the initial board of directors, vacancies in the board of
300     directors of the corporation shall be filled by election by the remaining directors of the
301     corporation.]
302          [(4) (a) Board members shall serve four-year terms, except that of the five initial
303     members:]
304          [(i) two shall serve four-year terms;]
305          [(ii) two shall serve three-year terms; and]
306          [(iii) one shall serve a two-year term.]
307          [(b) Board members shall serve until their successors are elected and qualified and may
308     serve up to a maximum of two successive terms.]
309          [(c) A majority of the board members may remove a board member for cause.]
310          [(d) (i) The board shall select a chair by majority vote.]
311          [(ii) The chair's term is for one year, which may be extended annually by a majority
312     vote of the members of the board of directors.]
313          (1) The corporation's board of directors comprises the state treasurer and two
314     individuals designated by the state treasurer.
315          [(5)] (2) [Three] Two members of the board are a quorum for the transaction of
316     business.
317          [(6)] (3) Members of the board of directors:
318          (a) are subject to any restrictions on conflicts of interest specified in the organizational
319     documents of the corporation; and
320          [(b) shall annually disclose any venture capital and private equity interests to the
321     corporation; and]
322          [(c)] (b) may not participate in a vote by the board of directors related to an investment
323     by the Utah fund of funds, if the member has an interest in the investment.
324          [(7)] (4) Directors of the corporation:
325          (a) shall be compensated for direct expenses and mileage; and
326          (b) may not receive a director's fee or salary for service as directors.
327          Section 6. Section 63N-6-305 is amended to read:
328          63N-6-305. Management fee -- Additional financial assistance.
329          (1) The corporation may charge a management fee on assets under management in the
330     Utah fund of funds.
331          [(2) The fee shall:]
332          [(a) be in addition to any fee charged to the Utah fund of funds by the venture capital
333     investment fund allocation manager selected by the corporation; and]
334          [(b) be charged only to pay for reasonable and necessary costs of the corporation.]
335          [(3) The corporation may apply for and, when qualified, receive financial assistance
336     from the Industrial Assistance Account under Chapter 3, Part 1, Industrial Assistance Account,
337     and under rules made by the Board of Business and Economic Development in accordance with
338     Title 63G, Chapter 3, Utah Administrative Rulemaking Act, to help establish the program
339     authorized under this part.]
340          (2) The management fee described in Subsection (1) may not, in a calendar year,
341     exceed 1% of the asset value of the Utah fund of funds on the immediately preceding
342     December 31.
343          (3) In addition to the management fee, the Utah fund of funds will pay directly or
344     reimburse the corporation for out-of-pocket expenses, including fund administration, tax and
345     audit fees and costs, investment and monitoring costs, and similar expenses incurred in
346     connection with the operation of the corporation or the Utah fund of funds.
347          Section 7. Section 63N-6-401 is amended to read:
348          63N-6-401. Organization of Utah fund of funds.
349          (1) The corporation shall organize, and be the sole member and manager of, the Utah
350     fund of funds.
351          (2) The Utah fund of funds shall [make investments in venture capital and private
352     equity partnerships or entities in a manner and for the following purposes:] hold and manage
353     investments made by the Utah fund of funds and proceeds from those investments until
354     disbursed to the restricted account or used to pay the fees and expenses described in this
355     chapter.
356          [(a) to encourage the availability of a wide variety of venture capital in the state;]
357          [(b) to strengthen the economy of the state;]
358          [(c) to help business in the state gain access to sources of capital;]
359          [(d) to help build a significant, permanent source of capital available to serve the needs
360     of businesses in the state; and]
361          [(e) to accomplish all these benefits in a way that minimizes the use of contingent tax
362     credits.]
363          (3) The Utah fund of funds shall be organized[: (a)] as a [limited partnership or]
364     limited liability company [under Utah law having the corporation and qualified investment
365     professionals as the general partner or manager;], with the corporation as the sole member and
366     manager.
367          [(b) to provide for equity interests for designated investors, which provide for a
368     designated scheduled return and a scheduled redemption in accordance with rules made by the
369     board pursuant to Title 63G, Chapter 3, Utah Administrative Rulemaking Act; and]
370          [(c) to provide for loans by or the issuance of debt obligations to designated investors
371     that provide for designated payments of principal, interest, or interest equivalent in accordance
372     with rules made by the board pursuant to Title 63G, Chapter 3, Utah Administrative
373     Rulemaking Act.]
374          [(4) Public money may not be invested in the Utah fund of funds.]
375          (4) The Utah fund of funds may not invest money after May 4, 2022, unless the Utah
376     fund of funds committed to the investment before May 4, 2022.
377          (5) The corporation may disburse proceeds of investments from the Utah fund of funds
378     into the restricted account at any time the corporation determines is in the best interest of the
379     state, leaving sufficient funds to pay expenses and fees owed by, or needed to wind up the
380     affairs of, the corporation or the Utah fund of funds.
381          (6) The state treasurer shall notify the Executive Appropriations Committee when all
382     investments held by the Utah fund of funds mature and the state treasurer determines it is
383     advisable to complete winding up the affairs of the corporation.
384          Section 8. Section 63N-6-402 is amended to read:
385          63N-6-402. Compensation from the Utah fund of funds to the corporation --
386     Transfer to restricted account.
387          (1) The corporation shall be compensated for its involvement in the Utah fund of funds
388     through the payment of the management fee described in Section 63N-6-305.
389          [(2) Before any returns may be reinvested in the Utah fund of funds:]
390          [(a) any returns shall be paid to designated investors, including the repayment by the
391     Utah fund of funds of any outstanding loans;]
392          [(b) any returns in excess of those payable to designated investors shall be deposited in
393     the redemption reserve and shall be:]
394          [(i) held by the corporation as a first priority reserve for the redemption of certificates;
395     and]
396          [(ii) used by the corporation to provide money for the state as directed by statute;]
397          [(c) any returns received by the corporation from investment of amounts held in the
398     redemption reserve that are not used to provide money for the state as directed by statute shall
399     be added to the redemption reserve until the redemption reserve has reached a total of
400     $250,000,000; and]
401          [(d) if at the end of a calendar year the redemption reserve exceeds the $250,000,000
402     limitation referred to in Subsection (2)(c), the corporation may reinvest the excess in the Utah
403     fund of funds.]
404          [(3) Funds held by the corporation in the redemption reserve shall be invested in
405     accordance with Title 51, Chapter 7, State Money Management Act.]
406          [(4)] (2) (a) [By June 30, 2021] On or before June 30, 2022, the [corporation] Utah
407     fund or funds shall transfer [$20,000,000 from the redemption reserve or other assets of the
408     corporation] $15,000,000 to the state treasurer.
409          (b) The state treasurer shall deposit the money described in Subsection [(4)] (2)(a) into
410     the restricted account.
411          Section 9. Section 63N-6-404 is amended to read:
412          63N-6-404. Powers of Utah fund of funds.
413          [(1)] The Utah fund of funds may:
414          [(a)] (1) engage consultants and legal counsel;
415          [(b)] (2) expend funds;
416          [(c) invest funds;]
417          [(d) issue debt and borrow funds;]
418          [(e)] (3) enter into contracts; and
419          [(f) insure against loss;]
420          [(g) hire employees;]
421          [(h) issue equity interests to designated investors that have purchased equity interest
422     certificates from the board; and]
423          [(i)] (4) perform any other act necessary to carry out its purposes.
424          [(2) (a) The Utah fund of funds shall engage a venture capital investment fund
425     allocation manager.]
426          [(b) The compensation paid to the fund manager shall be in addition to the
427     management fee paid to the corporation under Section 63N-6-305.]
428          [(3) The Utah fund of funds may:]
429          [(a) open and manage bank and short-term investment accounts as considered
430     necessary by the venture capital investment fund allocation manager; and]
431          [(b) expend money to secure investment ratings for investments by designated
432     investors in the Utah fund of funds.]
433          Section 10. Section 63N-6-405 is amended to read:
434          63N-6-405. Annual audits.
435          (1) Each calendar year, an audit of the activities of the Utah fund of funds shall be
436     made as described in this section.
437          (2) (a) The audit shall be conducted by:
438          (i) the state auditor; or
439          (ii) an independent auditor engaged by the state auditor.
440          (b) An independent auditor used under Subsection (2)(a)(ii) must have no business,
441     contractual, or other connection to:
442          (i) the corporation; or
443          (ii) the Utah fund of funds.
444          (3) The corporation shall pay the costs associated with the annual audit.
445          (4) The annual audit report shall:
446          (a) be delivered to:
447          (i) the corporation; and
448          (ii) the [board] state treasurer;
449          (b) include a valuation of the assets owned by the Utah fund of funds as of the end of
450     the reporting year;
451          (c) include an opinion regarding the accuracy of the information provided in the annual
452     report described in Subsection 63N-6-301(6); and
453          [(d) include an opinion regarding the accuracy of the information that supports the
454     economic development impact in the state of the Utah fund of funds as described in
455     Subsections 63N-6-203(3)(b)(ii) and 63N-6-406(3); and]
456          [(e)] (d) be completed on or before September 1 for the previous calendar year so that
457     it may be included in the annual report described in Subsection 63N-6-301(6).
458          Section 11. Section 63N-6-410 is amended to read:
459          63N-6-410. Powers and effectiveness.
460          (1) This chapter may not be construed as a restriction or limitation upon any power
461     which the board might otherwise have under any other law of this state and the provisions of
462     this chapter are cumulative to those powers.
463          (2) This chapter shall be construed to provide a complete, additional, and alternative
464     method for performing the duties authorized and shall be regarded as supplemental and
465     additional powers to those conferred by any other laws.
466          [(3) With respect to a debt-based private investment only, the provisions of any
467     contract entered into by the board or the Utah fund of funds may not be compromised,
468     diminished, invalidated, or affected by the:]
469          [(a) level, timing, or degree of success of the Utah fund of funds or the investment
470     funds in which the Utah fund of funds invests; or]
471          [(b) extent to which the investment funds are:]
472          [(i) invested in Utah venture capital projects; or]
473          [(ii) successful in accomplishing any economic development objectives.]
474          Section 12. Repealer.
475          This bill repeals:
476          Section 63N-6-101, Title.
477          Section 63N-6-102, Findings -- Purpose.
478          Section 63N-6-201, Utah Capital Investment Board.
479          Section 63N-6-202, Board members -- Meetings -- Expenses.
480          Section 63N-6-203, Board duties and powers.
481          Section 63N-6-302, Incorporator -- Appointment committee.
482          Section 63N-6-304, Investment manager.
483          Section 63N-6-306, Dissolution.
484          Section 63N-6-403, Investments by Utah fund of funds.
485          Section 63N-6-406, Certificates and contingent tax credits.
486          Section 63N-6-407, Transfer and registration of certificates.
487          Section 63N-6-408, Redemption of certificates.
488          Section 63N-6-409, Use of commitments to redeem certificates.
489          Section 63N-6-411, Permissible investments.
490          Section 13. Effective date.
491          This bill takes effect on July 1, 2022, except that the changes to Sections 63N-6-401
492     and 63N-6-402 take effect on May 4, 2022.