Court Challenge Promised for New Venture Capital Bill

Court Challenge Promised for New Venture Capital Bill

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(Salt Lake City-AP) -- A bill passed by the Legislature to create a 100 (M)million dollars fund to lure out-of-state venture capital to Utah appears headed for a court challenge.

If Governor Mike Leavitt signs the bill into law, State Auditor Auston Johnson says he will file a lawsuit, challenging the law on the grounds that it violates the Utah Constitution.

Johnson says the state should not be in the business of creating a private, for-profit, entity.

But supporters of the law say amendments make it clear that the entity is not truly a private operation.

Sponsoring Representative Peggy Wallace says the bill creates a fund to be financed by banks, insurance companies and other businesses -- not taxpayers. The money would go to venture capital firms that agree to set up shop inside the state and incubate Utah-based companies.

(Copyright 2003 by The Associated Press. All Rights Reserved.)

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