HB243: Restricting and Reporting for the Controversial Fund of Funds
This bill (as a third substitute) passed the House 72-2, and passed the Senate 24-0. Visit our Legislative Index to see the final vote rankings for the 2014 general session.
Libertas Institute supports this bill.
The Fund of Funds is a taxpayer-guaranteed loan whereby state funds are committed as backing for a fund to be used as venture capital money to invest in businesses around the state. The Fund has faced criticism lately for its lack of transparency and resistance to legislative oversight.
At an interim committee meeting last June, the Fund’s Vice President resisted probing questions from legislators looking to better understand the Fund’s activities, arguing that such information should be public since taxpayers are involved and because the Fund is a creation of government. Several legislators voiced concern about the Fund, its practices, and its performance—including legislators who supported the original bill that led the state to become involved in venture capital.
Simply put, the government should not be in the business of business. Venture capital is great, and we want to see investors coming to Utah and helping grow the economy. This, however, should be done voluntarily, and the commitment of taxpayer dollars to bail out bad business investments is a direct violation of basic market principles. The Fund of Funds violates the proper role of government.
We prefer to see the taxpayer commitment repealed completely, extricating the state from venture capital agreements. Short of that more preferable and proper goal, we support a bill HB243 by Representative Jim Bird that seeks to impose restrictions and reporting requirements on the Fund to minimize the risk to taxpayers and add more oversight.