Utah Rural Jobs Act Modifications

24
31A-3-401
59-9-109
63N-4-301
63N-4-302
63N-4-303
63N-4-304
63N-4-305
63N-4-307
63N-4-309
0
Utah Rural Jobs Act Modifications
2026 GENERAL SESSION
STATE OF UTAH
Chief Sponsor: Nelson T. Abbott
Senate Sponsor: Derrin R. Owens
LONG TITLE
General Description:
This bill amends the Utah Rural Jobs Act tax credit requirements.
Highlighted Provisions:
This bill:
authorizes additional nonrefundable income and insurance tax credits related to
investments in eligible small businesses located in rural counties;
repeals a title provision; and
makes technical and conforming changes.
Money Appropriated in this Bill:
None
Other Special Clauses:
This bill provides a special effective date.
Utah Code Sections Affected:
AMENDS:
31A-3-401
Effective
05/06/26
, as last amended by Laws of Utah 2002, Chapter 308
63N-4-302
Effective
05/06/26
, as last amended by Laws of Utah 2022, Chapter 195
63N-4-303
Effective
05/06/26
, as last amended by Laws of Utah 2022, Chapter 195
63N-4-304
Effective
05/06/26
, as enacted by Laws of Utah 2017, Chapter 274
63N-4-305
Effective
05/06/26
, as last amended by Laws of Utah 2022, Chapter 195
63N-4-307
Effective
05/06/26
, as last amended by Laws of Utah 2022, Chapter 195
63N-4-309
Effective
05/06/26
, as last amended by Laws of Utah 2022, Chapter 195
ENACTS:
59-9-109
Effective
01/01/27
, Utah Code Annotated 1953
REPEALS:
63N-4-301
Effective
05/06/26
, as enacted by Laws of Utah 2017, Chapter 274
Be it enacted by the Legislature of the state of Utah:
Section 1. Section
31A-3-401
is amended to read:
31A-3-401
Effective
05/06/26
. Retaliation against insurers of foreign state or
country.
(1)
Except as provided in Section
31A-3-402
, when, under the laws of another state or
foreign country any taxes, licenses, other fees, deposit requirements, or other material
obligations, prohibitions, or restrictions are or would be imposed on Utah insurers, or on
the agents or representatives of Utah insurers, that are in excess of the taxes, licenses,
other fees, deposit requirements, or other obligations, prohibitions, or restrictions
directly imposed upon similar insurers, or upon the agents or representatives of those
insurers, of that other state or country under the statutes of this state, as long as the laws
of that other state or country continue in force or are so applied, the same taxes, licenses,
other fees, deposit requirements, or other material obligations, prohibitions, or
restrictions of any kind shall be imposed, collected, and enforced by the State Tax
Commission, with the assistance of the commissioner, upon the insurers, or upon the
agents or representatives of those insurers, of that other state or country doing business
or seeking to do business in this state.
(1)
Except as provided in Section
31A-3-402
, the State Tax Commission, with the
assistance of the commissioner, shall impose, collect, and enforce the same taxes,
licenses, other fees, deposit requirements, or other material obligations, prohibitions, or
restrictions against insurers, or the agents or representatives of the insurer, of another
state or country doing business or seeking to do business in this state if:
(a)
under the laws of the other state or foreign country, the taxes, licenses, other fees,
deposit requirements, or other material obligations, prohibitions, or restrictions
imposed upon Utah insurers, or on the agent or representatives of Utah insurers,
exceed the taxes, licenses, other fees, deposit requirements, or other material
obligations, prohibitions, or restrictions Utah imposes directly upon similar insurers,
or the agents or representatives of the similar insurers, of the other state or country;
and
(b)
the other state or foreign country enforces the collection of the higher taxes, licenses,
other fees, deposit requirements, or other material obligations, prohibitions, or
restrictions.
(2)
Any tax, license, or other obligation imposed by any city, county, or other political
subdivision or agency of another state or country on Utah insurers,
their
the Utah
insurers'
agents, or representatives is considered
as being
imposed by that state or
country within the meaning of this section.
(3)
The commissioner may
,
by rule
the commissioner makes in accordance with Title 63G,
Chapter 3, Utah Administrative Rulemaking Act,
waive the retaliatory requirements for
a person that is:
(a)
doing business in this state; or
(b)
seeking to do business in this state.
(4)
An insurer, or an affiliate as that term is defined in Section
63N-4-302
, may claim a tax
credit against a tax or assessment imposed under this section in accordance with Section
59-9-109
.
Section 2. Section
59-9-109
is enacted to read:
59-9-109
Effective
01/01/27
. Nonrefundable rural jobs premiums tax credit.
(1)
As used in this section:
(a)
"Affiliate" means the same as that term is defined in Section
63N-4-302
.
(b)
"Credit-eligible contribution" means the same as that term is defined in Section
63N-4-302
.
(c)
"Department" means the Insurance Department, described in Title 31A, Chapter 2,
Part 1, The Insurance Department.
(d)
"Office" means the Governor's Office of Economic Opportunity created in Section
63N-1a-301
.
(e)
"Phase three investment authority" means the same as that term is defined in Section
63N-4-302
.
(f)
"Qualified claimant" means an insurer or an affiliate that makes a credit-eligible
contribution under phase three investment authority and receives a tax credit
certificate from the office in accordance with Title 63N, Chapter 4, Part 3, Utah Rural
Jobs Act, for the taxable year.
(2)
A qualified claimant may claim a nonrefundable tax credit in an amount equal to the
amount listed as the tax credit amount on the tax credit certificate against:
(a)
the tax imposed under this chapter; or
(b)
a retaliatory tax or retaliatory assessment imposed under Title 31A, Chapter 3, Part
4, Retaliation.
(3)
A qualified claimant that claims the tax credit against tax under this chapter may carry
forward a tax credit under this section for a period that does not exceed the next four
taxable years if the amount of the tax credit exceeds the qualified claimant's tax liability
under this chapter for that taxable year.
(4)
The department may not charge an additional tax, fee, assessment, or penalty as a
condition for or result of claiming a tax credit in accordance with this section.
Section 3. Section
63N-4-302
is amended to read:
63N-4-302
Effective
05/06/26
. Definitions.
As used in this part:
(1)
(a)
"Affiliate" means a person that directly, or indirectly through one or more
intermediaries, controls, is controlled by, or is under common control with another
person.
(b)
For the purposes of this part, a person controls another person if the person holds,
directly or indirectly, the majority voting or ownership interest in the controlled
person or has control over the day-to-day operations of the controlled person by
contract or by law.
(2)
"Claimant" means a resident or nonresident person that has state taxable income.
(3)
"Closing date" means the date on which a rural investment company collects
:
the
investments described in Subsection
63N-4-303(7)
related to phase one investment
authority, phase two investment authority, or phase three investment authority.
(a)
all of the investments described in Subsection
63N-4-303(7)
related to phase one
investment authority; or
(b)
all of the investments described in Subsection
63N-4-303(7)
related to phase two
investment authority.
(4)
"Control" means another person holds, directly or indirectly, the majority voting or
ownership interest in the controlled person or has control over the day-to-day operations
of the controlled person by contract or by law.
(4)
(5)
(a)
"Credit-eligible contribution" means an investment of cash
by a claimant in
a rural investment company that is or will be eligible for a tax credit as evidenced by
notification issued by the office under Subsection
63N-4-303(5)(c)
.
:
(b)
The investment shall purchase an equity interest in the rural investment company or
purchase, at par value or premium, a debt instrument issued by the rural investment
company that has a maturity date at least five years after the closing date.
(a)
by a claimant in a rural investment company;
(b)
that is, or will be, eligible for a tax credit as evidenced by a notification the office
issues in accordance with Subsection
63N-4-303(5)(c)
; and
(c)
to purchase an equity interest in the rural investment company or to purchase, at par
value or premium, a debt instrument the rural investment company issues that has a
maturity date of at least five years after the closing date.
(5)
(6)
"Eligible small business" means a business that at the time of an initial growth
investment in the business by a rural investment company:
(a)
has fewer than 150 employees;
(b)
has less than $10,000,000 in net income for the preceding taxable year;
(c)
maintains the business's principal business operations in the state; and
(d)
is engaged in an industry related to:
(i)
aerospace;
(ii)
defense;
(iii)
energy and natural resources;
(iv)
financial services;
(v)
life sciences;
(vi)
outdoor products;
(vii)
software development;
(viii)
information technology;
(ix)
manufacturing; or
(x)
agribusiness.
(6)
(7)
(a)
"Excess return" means the difference between:
(i)
the present value of all growth investments made by a rural investment company
on the day the rural investment company applies to exit the program under Section
63N-4-309
, including the present value of all distributions and gains from the
growth investments; and
(ii)
the sum of the amount of the original growth investment and an amount equal to
any projected increase in the equity holder's federal or state tax liability, including
penalties and interest, related to the equity holder's ownership, management, or
operation of the rural investment company.
(b)
If
"Excess return" means zero if
the amount calculated in Subsection
(6)(a)
(7)(a)

is less than zero
, the excess return is equal to zero
.
(7)
(8)
"Federally licensed rural business investment company" means a person licensed as
a rural business investment company under 7 U.S.C. Sec. 2009cc.
(8)
(9)
"Federally licensed small business investment company" means a person licensed
as a small business investment company under 15 U.S.C. Sec. 681.
(9)
(10)
(a)
"Full-time employee" means an employee that throughout the year works at
least 30 hours per week or meets the customary practices accepted by that industry as
full time.
(b)
In accordance with
Title 63G, Chapter 3, Utah Administrative Rulemaking Act
, the
office may make rules that establish additional hour or other criteria to determine
what constitutes a full-time employee.
(10)
(11)
(a)
"Growth investment" means any capital or equity investment in an eligible
small business or any loan made from the investment authority to an eligible small
business with a stated maturity at least one year after the date of issuance.
(b)
"Growth investment" does not include, with respect to phase two investment
authority
or phase three investment authority
:
(i)
a secured loan or a revolving line of credit to an eligible small business, unless the
eligible small business sought and was denied similar financing from a
commercial bank, as established by an affidavit from the president or chief
executive officer of the eligible small business; or
(ii)
any portion of an investment, including any amount reinvested, in an eligible
small business that, when added to existing investments in the eligible small
business from all rural investment companies under
phase two
the same phase of
investment authority, exceeds $15,000,000.
(11)
(12)
(a)
"High wage" means a wage that
:

(a)
is at least 100% of the county average wage
.
; and
(b)
In accordance with
Title 63G, Chapter 3, Utah Administrative Rulemaking Act
, the
office may make rules that establish
meets
additional criteria to determine what
constitutes a high wage
the office establishes by rule made in accordance with Title
63G, Chapter 3, Utah Administrative Rulemaking Act
.
(12)
(13)
"Investment authority" means the minimum amount of investment a rural
investment company
must
shall
make in eligible small businesses
in order
for
credit-eligible contributions to the rural investment company to qualify for a
rural job
creation tax credit under Section
59-7-621
or
59-10-1038
tax credit
.
(13)
(14)
(a)
"New annual jobs" means the difference between:
(i)
(A)
the monthly average of full-time employees that are paid a high wage at an
eligible small business for the preceding calendar year; or
(B)
if the preceding calendar year contains the initial growth investment, the
monthly average of full-time employees that are paid a high wage at an eligible
small business for the months including and after the initial growth investment
and before the end of the preceding calendar year; and
(ii)
the number of full-time employees that are paid a high wage at the eligible small
business on the date of the initial growth investment.
(b)
If
"New annual jobs" means zero if
the amount calculated in Subsection
(13)(a)
(14)(a)
is less than zero
, the new annual jobs amount is equal to zero
.
(14)
(15)
"Phase one investment authority" means investment authority the office grants a
rural investment company based on an application submitted under Subsection
63N-4-303(1)(b)(i)
.
(15)
(16)
"Phase two investment authority" means investment authority the office grants a
rural investment company based on an application submitted under Subsection
63N-4-303(1)(b)(ii)
.
(17)
"Phase three investment authority" means investment authority the office grants a rural
investment company based on an application submitted under Subsection
63N-4-303(1)(b)(iii)
.
(16)
(18)
(a)
"Principal business operations" means the location where at least 60% of a
business's employees work or where employees that are paid at least 60% of a
business's payroll work.
(b)
For the purposes of this part, an out-of-state business that agrees to relocate
employees to this state to establish the business's principal business operations in this
state using the proceeds of a growth investment is considered to have the business's
principal business operations in this state if the business satisfies the requirements of
Subsection
(16)
(a)
(18)(a)
within 180 days after receiving the growth investment,
unless the office agrees to a later date.
(17)
(19)
"Program" means the provisions of this part applicable to a rural investment
company.
(18)
(20)
"Rural county" means:
(a)
with respect to phase one investment authority, any county in this state except Salt
Lake, Utah, Davis, Weber, Washington, Cache, Tooele, and Summit counties; or
(b)
with respect to phase two investment authority
or phase three investment authority
,
any county in this state except Salt Lake, Utah, Davis, and Weber counties.
(19)
(21)
"Rural investment company" means a person
approved by the office under
the
office approves in accordance with
Section
63N-4-303
.
(20)
(22)
(a)
"State reimbursement amount" means the difference between:
(i)
50% of the rural investment company's credit-eligible capital contributions; and
(ii)
the product of:
(A)
the total sum of new annual jobs reported to the office; and
(B)
$20,000 with respect to phase one investment authority, or $15,000 with
respect to phase two investment authority
or phase three investment authority
.
(b)
If
"State reimbursement amount" means zero if
the amount calculated in Subsection
(20)
(a)
(22)(a)
is less than zero
, the state reimbursement amount is equal to zero
.
(21)
(23)
"Tax credit" means a rural job creation tax credit created by Section
59-7-621
,

or
59-9-109
,

or
59-10-1038
.
(22)
(24)
"Tax credit certificate" means a certificate
issued by
the office
issues
that:
(a)
lists the name of the person to which the office authorizes a tax credit;
(b)
lists the person's taxpayer identification number;
(c)
lists the amount of tax credit that the office authorizes the person to claim for the
taxable year; and
(d)
may include other information as determined by the office.
Section 4. Section
63N-4-303
is amended to read:
63N-4-303
Effective
05/06/26
. Application, approval, and allocations.
(1)
(a)
A person seeking approval as a rural investment company shall submit an
application to the office.
(b)
(i)
For the investment authority described in Subsection
(6)(a)(i)
, the office shall
begin accepting applications on November 1, 2017.
(ii)
For the investment authority described in Subsection
(6)(a)(ii)
, the office shall
begin accepting applications on November 1, 2022.
(iii)
For the investment authority described in Subsection
(6)(a)(iii)
, the office shall
begin accepting applications on November 2, 2026.
(2)
An application submitted under Subsection
(1)
shall be in a form and in accordance with
procedures
prescribed by
the office
requires
, and shall include the following:
(a)
the total investment authority sought by the applicant, which may not exceed
$42,000,000;
(b)
a copy of the applicant's or
an affiliate of the applicant's
the applicant's affiliate's

license as a federally licensed rural business investment company or as a federally
licensed small business investment company;
(c)
evidence that before the date the application is submitted, the applicant or affiliates
of the applicant have invested at least $50,000,000 in nonpublic companies located in
counties in the United States with fewer than 50,000 inhabitants;
(d)
a signed affidavit from each claimant that commits to make a credit-eligible capital
contribution to the applicant, stating the amount of that commitment; and
(e)
the sum of all credit-eligible capital contribution commitments described in
Subsection
(2)(d)
, which must equal 58% of the total investment authority sought by
the applicant.
(3)
The office shall:
(a)
review and evaluate the applications submitted under this section within 30 days of
receipt in the order in which the applications are received; and
(b)
consider applications received on the same day to have been received simultaneously.
(4)
(a)
If, after review and evaluation of an application, the office determines that the
application does not meet the requirements of Subsection
(2)
, the office shall:
(i)
deny the application; or
(ii)
(A)
notify the applicant that the application was inadequate and allow the
applicant to provide additional information to the office to complete, clarify, or
cure defects
identified by
the office
identifies
in the application; and
(B)
inform the applicant that
the office shall receive
the additional information
described in Subsection
(4)(a)(ii)(A)

must be received by the office
within
five days of the notice in order to be considered.
(b)
If an applicant submits additional information to the office in accordance with
Subsection
(4)(a)(ii)
, the office shall:
(i)
consider the application to have been received on the date
it was originally
received by
the office
originally received the application
; and
(ii)
review and evaluate the additional information within 10 days of receiving the
additional information.
(5)
If, after review and evaluation of an application submitted under this section and any
additional information
submitted
the applicant submits
in accordance with Subsection
(4)(a)(ii)
, the office determines that the application meets the requirements of Subsection
(2)
, the office shall:
(a)
determine the amount of investment authority to award the applicant in accordance
with Subsection
(6)
;
(b)
provide to the applicant a written notice of approval as a rural investment company
specifying the amount of the applicant's investment authority; and
(c)
notify each claimant whose affidavit was included in the application under
Subsection
(2)
that the claimant qualifies for a tax credit that will be issued in
accordance with Section
63N-4-304
.
(6)
(a)
(i)
For the first application period described in Subsection
(1)(b)(i)
, the office
may not approve more than $42,000,000 in total investment authority and not
more than $24,360,000 in total credit-eligible contributions under this part.
(ii)
For the second application period described in Subsection
(1)(b)(ii)
, the office
may not approve more than $42,000,000 in total investment authority and not
more than $24,360,000 in total credit-eligible contributions under this part.
(iii)
For the third application period described in Subsection
(1)(b)(iii)
, the office may
not approve more than $42,000,000 in total investment authority and not more
than $24,360,000 in total credit-eligible contributions under this part.
(b)
Subject to Subsection
(6)(d)
, if
the office approves
an application
is approved
under Subsection
(5)
, the office shall approve the amount of investment authority
requested on the application.
(c)
(i)
During
the first
each
application period described in Subsection
(1)(b)(i)
(1)
,
the office may continue to accept applications under this section until the amount
of approved investment authority reaches $42,000,000.
(ii)
During the second application period described in Subsection
(1)(b)(ii)
, the
office may continue to accept applications under this section until the amount of
approved investment authority reaches $42,000,000.
(d)
If the office approves multiple applications received simultaneously under
Subsection
(3)
and the total amount of investment authority requested on
those
the

applications exceeds the amount of investment authority remaining, the office shall
proportionally reduce the investment authority and credit-eligible capital
contributions for each of
these
the
applications as necessary to avoid exceeding the
amount of investment authority and credit-eligible capital contributions remaining.
(7)
Within 65 days after the day on which a rural investment company receives approval
under Subsection
(5)(b)
, the rural investment company shall:
(a)
collect the total amount of committed credit-eligible capital contributions from each
claimant whose affidavit was included in the application under Subsection
(2)
;
(b)
collect one or more cash equity investments contributed by affiliates of the rural
investment company, including employees, officers, and directors of such affiliates,
that equal at least 10% of the rural investment company's investment authority;
(c)
collect one or more cash investments that, when added to the amounts collected
under Subsections
(7)(a)
and
(b)
, equal the rural investment company's investment
authority; and
(d)
send sufficient documentation to the office to prove that the amounts described in
this Subsection
(7)
have been collected.
(8)
If the rural investment company fails to fully comply with Subsection
(7)
:
(a)
the rural investment company's approval shall lapse and the corresponding
investment authority and credit-eligible capital contributions shall not count toward
the limits on the program size described in Subsection
(6)
;
(b)
if the office awards lapsed investment authority to a rural investment company, the
office shall first award lapsed investment authority pro rata to each rural investment
company that was awarded less than the requested investment authority under
Subsection
(6)(d)
, which a rural investment company may allocate to the rural
investment company's investors at the company's discretion; and
(c)
the office may award any remaining investment authority to new applicants.
Section 5. Section
63N-4-304
is amended to read:
63N-4-304
Effective
05/06/26
. Tax credit.
(1)
On the closing date, a claimant whose affidavit was included in an approved application
submitted under Section
63N-4-303
shall earn a vested tax credit equal to the amount of
the claimant's credit-eligible capital contribution to the rural investment company.
(2)
(a)
If the claimant is an insurer, the claimant may choose to assign the tax credit for
any taxable year to an affiliate by providing the office, in a form the office approves:
(i)
a written notice of intent to assign the tax credit to an affiliate; and
(ii)
the taxable years for which the claimant chooses to assign the tax credit.
(b)
Upon receipt of a notice of intent to assign the tax credit, if the office has not yet
issued a tax credit certificate for the taxable year for which the claimant is assigning
the tax credit, the office may issue a tax credit certificate only to the affiliate.
(2)
(3)
In each of the taxable years that includes the fourth through seventh anniversaries
of the closing date, the office shall:
(a)
issue a tax credit certificate to each approved claimant
or affiliate
, specifying a tax
credit amount for the taxable year equal to 25% of the claimant's total credit-eligible
capital contribution; and
(b)
provide a report to the State Tax Commission
and the Insurance Department
listing
:

(i)
the name and identifying information for:
(A)
each claimant
that received
to which the office issued
a tax credit certificate
under Subsection
(2)(a)
(3)(a);

and
(B)
each affiliate to which the office issued a tax credit certificate; and
(ii)
and
for each claimant,
the tax credit amount listed on the
tax credit
certificate
;
and
(iii)
for each affiliate:
(A)
if Subsection
(2)(b)
applies, a statement that the office did not issue a tax
credit certificate to the claimant for the taxable year; or
(B)
if a tax credit is assigned after the office issues a tax credit certificate to the
claimant, information necessary to identify the claimant to which the office
issued a tax credit certificate that was subsequently assigned to the affiliate
.
(3)
(4)
(a)
A claimant
or affiliate
may not claim a tax credit under this section unless the
claimant
or affiliate
has a tax credit certificate
issued by the office
.
(b)
A claimant
or affiliate
claiming a credit under this section shall retain a tax credit
certificate the claimant
or affiliate
receives from the office for the same time period a
person is required to keep books and records under Section
59-1-1406
.
(4)
(5)
In accordance with
Title 63G, Chapter 3, Utah Administrative Rulemaking Act
, the
office shall make rules describing:
(a)
the documentation requirements for a business entity to receive a tax credit certificate
under this section; and
(b)
administration of the program, including relevant timelines and deadlines.
Section 6. Section
63N-4-305
is amended to read:
63N-4-305
Effective
05/06/26
. Revocation of tax credit certificates and exit.
(1)
Except as provided in Subsection
(2)
, the office shall revoke a tax credit certificate
issued under Section
63N-4-304
if the rural investment company in which the
credit-eligible capital contribution was made does any of the following before the rural
investment company exits the program in accordance with Section
63N-4-309
:
(a)
fails to invest 100% of the rural investment company's investment authority in
growth investments in this state within three years
of
after
the closing date;
(b)
fails to maintain growth investments in this state equal to 100% of the rural
investment company's investment authority until the seventh anniversary
of
after
the
closing date in accordance with this section;
(c)
makes a distribution or payment that results in the rural investment company having
less than 100% of the rural investment company's investment authority invested in
growth investments in this state or available for investment in growth investments
and held in cash and other marketable securities;
(d)
(i)
with respect to phase one investment authority, fails to maintain growth
investments equal to 70% of the rural investment company's investment authority
in eligible small businesses that maintain
their
the eligible small businesses'

principal business operations in a rural county; or
(ii)
with respect to phase two investment authority
or phase three investment authority
,
fails to maintain growth investments equal to 100% of the rural investment
company's investment authority in eligible small businesses that maintain
their
the eligible small businesses'
principal business operations in a rural county;
(e)
invests more than $5,000,000 from the investment authority in the same eligible
small business, including amounts invested in affiliates of the eligible small business,
exclusive of growth investments made with repaid or redeemed growth investments
or interest or profits realized on the repaid or redeemed growth investments;
(f)
makes a growth investment in an eligible small business that directly, or indirectly
through an affiliate:
(i)
owns or has the right to acquire an ownership interest in the rural investment
company, an affiliate of the rural investment company, or an investor in the rural
investment company; or
(ii)
makes a loan to or an investment in the rural investment company, an affiliate of
the rural investment company, or an investor in the rural investment company; or
(g)
fails to timely provide a document described in Subsection
63N-4-307(1)(d)
63N-4-307(1)(b)(iv)
.
(2)
(a)
(i)
For the purposes of Subsection
(1)
, an investment is maintained even if the
investment is sold or repaid if the rural investment company reinvests an amount
equal to the capital returned or recovered by the fund from the original
investment, exclusive of any profits realized, in other growth investments in this
state within 12 months of the receipt of such capital.
(ii)
Amounts received periodically by a rural investment company are treated as
continually invested in growth investments if the amounts are reinvested in one or
more growth investments by the end of the following calendar year.
(iii)
A rural investment company is not required to reinvest capital returned from
growth investments after the sixth anniversary
of
after
the closing date and such
growth investments are considered as being held continuously by the rural
investment company through the seventh anniversary
of
after
the closing date.
(b)
(i)
Subsection
(1)(g)
does not apply to investments in publicly traded securities by
an eligible small business or an owner or affiliate of an eligible small business.
(ii)
Under Subsection
(1)(g)
, a rural investment company is not considered an
affiliate of a business concern solely as a result of the rural investment company's
growth investment.
(c)
A growth investment in an eligible small business that is not located in a rural county
may count toward the requirements of Subsection
(1)(d)
if the office determines that
the eligible small business is located in an economically disadvantaged rural area as
defined by rules made by the office in accordance with
Title 63G, Chapter 3, Utah
Administrative Rulemaking Act
.
(3)
(a)
Before revoking one or more tax credit certificates under this section, the office
shall notify the rural investment company of the reasons for the pending revocation.
(b)
If the rural investment company corrects any violation outlined in the notice to the
satisfaction of the office within 90 days after the day on which the
office sent the

notice
was sent
, the office may not revoke the tax credit certificate.
(c)
In accordance with
Title 63G, Chapter 3, Utah Administrative Rulemaking Act
, the
office may make rules that establish criteria to determine what constitutes a
correction under Subsection
(3)(b)
.
(4)
If
the office revoked a
tax credit
certificates are revoked
certificate
under this section:
(a)
(i)
the rural investment company shall make a cash distribution to the office in an
amount equal to the sum of all tax credits awarded to persons that have made
credit-eligible contributions to the rural investment company; and
(ii)
if the rural investment company is able to provide documentation to the office
that proves that a tax credit described in Subsection
(4)(a)(i)
has not been claimed,
the amount owed under Subsection
(4)(a)(i)
shall be reduced by the amount of the
unclaimed tax credit;
(b)
the rural investment company's investment authority and credit-eligible capital
contributions will not count toward the limits on the program size described in
Subsection
63N-4-303(6)
;
(c)
if the office awards lapsed investment authority to a rural investment company, the
office shall first award lapsed investment authority pro rata to each rural investment
company that was awarded less than the requested investment authority under
Subsection
63N-4-303(6)(d)
, which a rural investment company may allocate to the
rural investment company's investors at the rural investment company's discretion;
and
(d)
the office may award any remaining investment authority to new applicants.
(5)
The office may not revoke a tax credit certificate after a rural investment company has
exited the program in accordance with Section
63N-4-309
.
Section 7. Section
63N-4-307
is amended to read:
63N-4-307
Effective
05/06/26
. Reporting obligations -- Authorization to
disclose tax information -- Credit for new annual jobs.
(1)
(a)
A rural investment company shall submit an annual report to the office on or
before the last day of February for each preceding calendar year until the rural
investment company exits the program in accordance with Section
63N-4-309
.
(b)
The annual report shall provide documentation
as to
of
the rural investment
company's growth investments and include:
(a)
(i)
a bank statement evidencing each growth investment;
(b)
(ii)
the name, location, and industry of each business concern receiving a growth
investment, including either the determination letter set forth in Section
63N-4-306

or evidence that the business qualified as an eligible small business at the time the
investment was made;
(c)
(iii)
the number of new annual jobs at each eligible small business for the
preceding calendar year, accompanied by a report from a third-party accounting
firm attesting that the number of new annual jobs was calculated in accordance
with procedures approved by the office;
(d)
(iv)
unless provided in a previously submitted annual report, for each eligible
small business to which the rural investment company provided a growth
investment during the preceding calendar year, a document that expressly directs
and authorizes the State Tax Commission to disclose to the office the eligible
small business's returns and other information that would otherwise be subject to
confidentiality under Section
59-1-403
; and
(e)
(v)
any other information required by the office.
(2)
For the annual report due in 2022, each rural investment company shall submit the
documents described in Subsection
(1)(d)
on or before July 1, 2022.
(3)
(2)
(a)
Within 60 days of receipt of an annual report, the office shall provide written
confirmation to the rural investment company of the number of new annual jobs
the
office credited
the rural investment company
has been credited
with for the
preceding calendar year.
(b)
When granting credit for one or more new annual jobs at an eligible small business
that received or held a growth investment from more than one rural investment
company during the preceding calendar year, the office shall allocate credit for each
new annual job between the rural investment companies:
(i)
in proportion to each rural investment company's share of the total growth
investments the eligible small business received during the calendar year; or
(ii)
in accordance with any written agreement between the rural investment
companies.
(4)
(3)
By the fifth business day after the third anniversary of the closing date, a rural
investment company shall submit a report to the office providing evidence that the rural
investment company is in compliance with the investment requirements of Section
63N-4-305
.
(5)
(4)
In accordance with rules made by the office, a rural investment company that
receives phase one investment authority and phase two investment authority shall submit
an annual report under this section that provides separate information related to the
phase one investment authority and the phase two investment authority
.
(a)
In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Authority
Act, the office shall make rules to establish how a rural investment company that
receives investment authority from more than one phase shall submit an annual report
that provides separate information about each phase of investment authority.
(b)
A rural investment company that receives investment authority from more than one
phase shall submit an annual report in accordance with the office's rules described in
Subsection
(4)(a)
.
(6)
(5)
(a)
The office shall submit the document described in Subsection
(1)(d)
(1)(b)(iv)
to the State Tax Commission.
(b)
Upon receipt of a document described in Subsection
(1)(d)
(1)(b)(iv)
, the State Tax
Commission shall provide the office with the returns and other information the office
requests and that the State Tax Commission is directed and authorized to provide.
Section 8. Section
63N-4-309
is amended to read:
63N-4-309
Effective
05/06/26
. Exit.
(1)
(a)
On or after the seventh anniversary of the closing date, and on or before the
twelfth anniversary of the closing date, each rural investment company shall apply to
the office to exit the program and no longer be subject to this part.
(b)
A rural investment company that receives
phase one investment authority and phase
two investment authority
investment authority from more than one phase
shall
separately apply to exit the program
in relation to the phase one investment authority
and the phase two investment authority
.
(2)
An application submitted
A rural investment company shall submit an application

under Subsection
(1)
shall be
:
(a)
in a form and in accordance with procedures
prescribed by
the office
requires;
and

shall include

(b)
that includes
a calculation of the state reimbursement amount.
(3)
In evaluating the exit application, if no tax credit certificates have been revoked and the
rural investment company has not received a notice of revocation that has remained
uncorrected under Subsection
63N-4-305(3)(b)
, the rural investment company is eligible
for exit.
(4)
(a)
The office shall respond to the application within 30 days
of receipt
after the day
on which the office receives the application
and include confirmation of the state
reimbursement amount.
(b)
The office
shall
may
not unreasonably deny an application submitted under this
section.
(c)
If the office denies the application, the office shall provide the reasons for the
determination to the rural investment company.
(5)
If a rural investment company fails to submit an exit application in accordance with
Subsection
(1)
, the office shall:
(a)
calculate the state reimbursement amount using the best available information; and
(b)
provide the confirmation described in Subsection
(4)(a)
within 30 days
of
after
the
twelfth anniversary of the closing date.
(6)
Within 60 days after the day on which
the rural investment company receives
the
confirmation of the state reimbursement amount
is received by the rural investment
company
, the rural investment company shall make a cash distribution to the state in an
amount equal to the lesser of:
(a)
the state reimbursement amount; and
(b)
the excess return.
(7)
The office shall notify the rural investment company once
the office receives
payments
equal to the amount described in Subsection
(4)
have been received
.
(8)
Any
The office shall deposit
amounts collected under this section
shall be deposited
into the General Fund.
Section 9.
Repealer.
Title.
Section 10.
Effective Date.
(1)
Except as provided in Subsection (2), this bill takes effect May 6, 2026.
(2)
The actions affecting Section 59-9-109 (Effective 01/01/27) take effect for a taxable
year beginning on or after January 1, 2027.
2-11-26 2:00 PM