Utah Admin. Code R357-10-12 - Decertification

(1) Qualified equity investments shall be decertified upon proof of compliance with all provisions of Utah Code Section 63M-1-3507(2).

(2) A qualified community development entity shall file a "Request to Decertify a Qualified Equity Investment"

(3) For the purposes of this section, the requirement that reinvestments exceed 150 % of a qualified equity investment shall be considered provided:

(a) Investments made with the profits on returned or redeemed qualified low-income community investments shall count towards the 150% requirement; and

(b) Investments made with returned or redeemed qualified low-income community investments shall count towards the 150% requirement provided such qualified low-income community investment is made in a different qualified active low-income community business than the qualified active low-income community business that returned or redeemed the qualified low-income community investment and the qualified active low-income community business receiving the, to be counted toward the 150% requirement, is located in Utah.

(c) CDE shall provide documentation, such as bank statements and tax returns to demonstrate compliance with the 150% investment requirement.

(d)

(i) Example 1: CDE invests $1,000,000 in QALICB A. QALICB A repays $1,000,000 plus $200,000 in interest. If CDE reinvested another $1,200,000 in QALICB A, only $1,200,000 would count towards 150% requirement ($1,000,000 initially invested plus $200,000 in profits).

(ii) Example 2: Same facts as Example 1 but CDE, instead, reinvests the $1,200,000 repaid by QALICB A into QALICB B. Then $2,200,000 would count towards 150% requirement. ($1,000,000 initial investment in QALICB A, plus $1,000,000 return of capital invested in QALICB B, plus $200,000 profit in QALICB B). Alternatively, CDE could also count $2,200,000 towards 150% requirement if $200,000 profit was reinvested in QALICB A and $1,000,000 was invested in QALICB B.

(4) Upon receipt of a Request to Decertify a Qualified Equity Investment, the Office shall issue a Decertification Certificate if all of the conditions for decertification are met.

(5) If the Office determines that the conditions for decertification have not been met, the Office shall issue a Notice of Agency Action, Failure to Decertify.

(a) Each Notice of Agency Action, Failure to Decertify shall identify which provision of Section 63M-1-3504 has not been met.

(b) Upon receipt of the Notice of Agency Action, the qualified community development entity may submit a request for reconsideration to the Executive Director of the Office within 10 days.

(i) The request for reconsideration shall contain all exhibits or evidence that the qualified community development entity wishes the Director to consider regarding compliance.

(c) The Executive Director of the Office shall have 30 days to consider and issue a decision on reconsideration.

(6) Further proceedings: If the issue of certification is not resolved by reconsideration, as set forth in Section 5, either party may request an informal administrative hearing, as set forth in the Utah Administrative Procedures Act.

(7) The costs of hiring an Administrative Law Judge to rule on the informal administrative hearing shall be borne by the losing party.

Notes

Utah Admin. Code R357-10-12

Adopted by Utah State Bulletin Number 2015-15, effective 7/8/2015