House backs venture-capital bill aimed at keeping investment in Utah

The Utah House voted to approve House Bill 240 (the Venture Capital Enhancement Act), a measure to create a Utah Capital Investment Corporation and a fund-of-funds designed to attract private venture capital and retain growing companies in-state. The bill passed the House after floor debate; the final recorded vote was 68 yes and 1 no.

Sponsor Representative Peggy Wallace described the bill as a mechanism to mobilize private investment and ‘‘create new jobs in the state and help to diversify the state’s economic base.’’ She said the structure includes a nonprofit corporation, a professional fund manager and contingency mechanisms intended to protect investors and the state. Wallace told members the plan had been reviewed with the state auditors, the attorney general’s office and the Department of Community and Economic Development.

Representative Wallace outlined how contingent tax-credit certificates and a reserve account could limit state exposure while offering guaranteed, lower-rate returns to certain investors; she said the entity would be set up gradually and would operate with oversight and safeguards. Members questioned constitutionality and comparisons to past entities; Wallace said the bill had been vetted with legal and auditing offices and that the structure was intentionally different from previous models.

Floor supporters stressed the potential economic benefit. Representative Alexander and other members argued the measure would help keep capital and jobs in Utah. Opponents raised questions about oversight and long-term fiscal risk; however, sponsors argued the design contains protections and that the state’s involvement would be managed carefully.

The House adopted amendments and the first substitute on the floor; House Bill 240 as amended passed by a roll-call tally of 68 yes and 1 no and will be transmitted to the Senate for consideration.