Committee Report REGULAR CALENDAR
May 2, 2018
HOUSE OF REPRESENTATIVES
REPORT OF COMMITTEE
The Majority of the Committee on Commerce and
Consumer Affairs to which was referred SB 537,
AN ACT (New Title) conferring extraterritorial financing powers on the New Hampshire business finance authority. Having considered the same, report the same with the following amendment, and the recommendation that the bill OUGHT TO PASS WITH AMENDMENT.
Rep. Kermit Williams
FOR THE MAJORITY OF THE COMMITTEE
Original: House Clerk Cc: Committee Bill File MAJORITY COMMITTEE REPORT
Committee: Commerce and Consumer Affairs Bill Number: SB 537 Title: (New Title) conferring extraterritorial financing powers on the New Hampshire business finance authority. Date: May 2, 2018 Consent Calendar: REGULAR Recommendation; OUGHT TO PASS WITH AMENDMENT 2018-1.601h
STATEMENT OF INTENT
This bill would allow the three state finance authorities — the Business Finance Authority, the New Hampshire Housing Authority, and the Health and Education Facilities Authority — to use their existing expertise in processing tax-exempt conduit bond requests to better serve today's New Hampshire companies and non-profits, and provide that same service to entities outside of New Hampshire that are considering expanding their operations. This bill encourages the viewpoint that New Hampshire is the best place to locate your business or non-profit, and does so in a way that uses the expertise and capacity already in place today. This type of activity will help the three finance authorities to further their collective mission of encouraging growth and attracting new companies to New Hampshire.
Vote 14-4.
Rep. Kermit Williams FOR THE MAJORITY
Original: House Clerk Cc: Committee Bill File REGULAR CALENDAR
Commerce and Consumer Affairs SE 537, (New Title) conferring extraterritorial financing powers on the New Hampshire business finance authority. MAJORITY: OUGHT TO PASS WITH AMENDMENT. MINORITY: REFER FOR INTERIM STUDY. Rep. Kermit Williams for the Majority of Commerce and Consumer Affairs, This bill would allow the three state finance authorities — the Business Finance Authority, the New Hampshire Housing Authority, and the Health and Education Facilities Authority — to use their existing expertise in processing tax-exempt conduit bond requests to better serve today's New Hampshire companies and non-profits, and provide that same service to entities outside of New Hampshire that are considering expanding their operations. This bill encourages the viewpoint that New Hampshire is the best place to locate your business or non-profit, and does so in a way that uses the expertise and. capacity already in place today. This type of activity will help the three finance authorities to further their collective mission of encouraging growth and attracting new companies to New Hampshire. Vote 14-4.
Original: House Clerk Cc: Committee Bill File
Rep. Williams, Hills. 4 April 17, 2018 2018-1601h 05/03
Amendment to SB 537
1 Amend RSA 162-5:2, VII as inserted by section 1 of the bill by replacing it with the following: 2 3 VII. "Project" means any capital improvement, purchase of receivables, property, assets, 4 commodities, bonds, or other revenue streams or related assets, working capital program or liability 5 or other insurance program, located outside of the state. The term "project" shall include any 6 housing facility located outside the state for students, faculty, or staff affiliated with an educational 7 institution and any housing facility, including without limitation any senior living, assisted living, 8 or nursing home facility, used or operated by or for the benefit of any hospital or health care, senior 9 care, or senior living institution in connection with the carrying out of hospital, health care, senior 10 care, or senior living services and shall include any housing, housing project, or any other facility 11 that may be financed by the New Hampshire housing finance authority under RSA 204-C with the 12 written consent of the New Hampshire housing finance authority's executive director or his or her 13 designee; provided that written consent shall not be required with respect to the financing of any 14 facility that, were such facility located within the state, could have been financed pursuant to the 15 provisions of RSA 162-I as of the effective date of this chapter. 16 17 Amend RSA 162-S:5, V as inserted by section 1 of the bill by replacing it with the following: 18 19 V. The proceeds of a bond issued under this chapter may be used to finance or refinance one 20 or more projects located outside of the state, but shall not be used to finance or refinance any project 21 located within the state of New Hampshire. 22 23 Amend RSA 162-S:12 as inserted by section 1 of the bill by replacing it with the following: 24 25 162-S:12 Selection of Authority Bond Program Administrator. After the initial designated 26 members have been appointed pursuant to RSA 162-S:3, II, the business finance authority may 27 select a qualified firm to assist in the carrying out of the powers of the authority and the 28 administration of the business of the authority conferred by this chapter. The selection of such firm 29 shall be pursuant to a process approved by the board of directors of the business finance authority 30 and such firm shall serve on such financial terms as shall be approved by board of directors of the 31 business finance authority. At the conclusion of the initial term of service of such firm, the business 32 finance authority shall determine whether, and on what terms, to engage any firm to provide any SB 537 — This bill would allow the three state finance authorities the Business Finance Authority, New Hampshire Housing, and the Health and Education Facilities Authority—to use their existing expertise in processing tax-exempt conduit bond requests to better serve today's New Hampshire companies and non-profits, and provide that same service to entities outside of New Hampshire that are considering expanding their operations. This bill encourages the viewpoint that New Hampshire is the best place to locate your business or non-profit, and does so in a way that uses the expertise and capacity already in place today. This type of activity will help the three finance authorities to further their collective mission of encouraging growth and attracting new companies to New Hampshire. Stapler, Carol
From: Stapler, Carol Sent: Wednesday, April 25, 2018 3:22 PM To: Smarling, Pam; Hunt, John Subject: FW: SB 537 blurb Attachments: SB 537 blurb.docx
Kermit's majority blurb...
From: Kermit Williams fmailto:kermit.williamsgmail.coml Sent: Wednesday, April 25, 2018 2:37 PM To: Stapler, Carol Subject: SB 537 blurb
attached...
1
Stapler, Carol
From: John B Hunt
lank you for being there.
On Apr 25, 2018, at 3;22 PM, Stapler, Carol
Kermit's majority blurb...
From: Kermit Williams [mailto:kermit.williamsPgmail.com Sent: Wednesday, April 25, 2018 2:37 PM To: Stapler, Carol Subject: SB 537 blurb
attached...
May 2, 2018
HOUSE OF REPRESENTATIVES
REPORT OF COMMITTEE
The Minority of the Committee on Commerce and
Consumer Affairs to which was referred SB 537,
AN ACT (New Title) conferring extraterritorial financing powers on the New Hampshire business finance authority. Having considered the same, and being unable to agree with the Majority, report with the recommendation that the bill be REFERRED FOR
INTERIM STUDY.
Rep. Michael Costable
FOR THE MINORITY OF THE COMMITTEE
Original: House Clerk Cc: Committee Bill File MINORITY COMMITTEE REPORT
Committee: Commerce and Consumer Affairs Bill Number: SE 537 Title: (New Title) conferring extraterritorial financing powers on the New Hampshire business finance authority. Date: May 2, 2018 Consent Calendar: REGULAR Recommendation: REFER FOR INTERIM STUDY
STATEMENT OF INTENT
The minority of the committee believes the proper motion is Refer for interim Study. This bill originally established a new stand-alone agency with broad new powers (it is safe to assume that a new agency would face more scrutiny). It very quickly moved under the Business Finance Authority's (BFA) control We were told the BFA was the perfect place for the new agency and new powers because they have the knowledge and expertise to handle these transactions, but then were told that they don't have the necessary skills, tools or time so they will contract out the new authority to a private firm (very likely the one that wrote this bill). There is nothing in the bill regarding their compensation package or marketing budget or where initial startup costs will come from. The original charter requiring the BFA to fund projects in New Hampshire for the sole benefit of New Hampshire inhabitants has not been amended It is the genesis for which the TWA can issue tax exempt bonds in the first place. This bill takes the position that the fees generated from foreign transactions with zero connection to New Hampshire are not only a direct benefit to New Hampshire, but "shall be regarded as performing an essential governmental function" (page 1 line 11). This argument may hold more water if the fees were guaranteed to the General Fund or earmarked for projects here in New Hampshire, but sadly they are not. We were told that the previous quote is just a throw away line to satisfy the IRS admitting that this shouldn't be considered essential and thus opening up a fault line. They technically do not have legitimate authority to issue these bonds (this could have been addressed by requiring some nexus to NH, but that was opposed). Abusing the powers of tax exemption in exchange for a fee is "crony capitalism" and has no place in a free society. It further opens up the BFA (and this state) to possible litigation from the federal government, other state agencies or from investors. It also undercuts legitimate corporate and "backed" municipal bond activity. All of this grants questionable new power with limited oversight. The bill states that "Bonds may be issued under this chapter without obtaining the consent of the Governor or Council or any department" (page 5 line 34) unless they arc compelled to under Internal Revenue Code 147(f). Other concerns/questions that deserve further study include but are not limited to: the BFA can apply subsidies on behalf of a company, can receive gifts, can invest proceeds in any security and they can acquire, operate, buy, own or lease property outside of the state and a quorum of only three members can result in two board members controlling tens of millions of dollars or more of financing. The minority feels this open ended broad new power needs more time and scrutiny before we enact this legislation.
Original: House Clerk Cc: Committee Bill File REGULAR CALENDAR
Commerce and Consumer Affairs SB 537, (New Title) conferring extraterritorial financing powers on the New Hampshire business finance authority. REFER FOR INTERIM STUDY. Rep. Michael Costable for the Minority of Commerce and Consumer Affairs. The minority of the committee believes the proper motion is Refer for Interim Study. This bill originally established a new stand-alone agency with broad new powers (it is safe to assume that a new agency would face more scrutiny). It very quickly moved under the Business Finance Authority's (BFA) control We were told the BFA was the perfect place for the new agency and new powers because they have the knowledge and expertise to handle these transactions, but then were told that they don't have the necessary skills, tools or time so they will contract out the new authority to a private firm (very likely the one that wrote this bill). There is nothing in the bill regarding their compensation package or marketing budget or where initial startup costs will come from. The original charter requiring the BFA to fund projects in New Hampshire for the sole benefit of New Hampshire inhabitants has not been amended It is the genesis for which the BFA can issue tax exempt bonds in the first place. This bill takes the position that the fees generated from foreign transactions with zero connection to New Hampshire are not only a direct benefit to New .14ampshire, but "shall be regarded as performing an essential governmental function" (page 1 line 11). This argument may hold more water if the fees were guaranteed to the General Fund or earmarked for projects here in New Hampshire, but sadly they are not. We were told that the previous quote is just a throw away line to satisfy the IRS admitting that this shouldn't be considered essential and thus opening up a fault line. They technically do not have legitimate authority to issue these bonds (this could have been addressed by requiring some nexus to NH, but that was opposed). Abusing the powers of tax exemption in exchange for a fee is "crony capitalism" and has no place in a free society. It further opens up the BFA (and this state) to possible litigation from the federal, government, other state agencies or from investors. It also undercuts legitimate corporate and "backed" municipal bond activity. All of this grants questionable new power with limited oversight. The bill states that "Bonds may be issued under this chapter without obtaining the consent of the Governor or Council or any department" (page 5 line 34) unless they are compelled to under internal Revenue Code 147(f). Other concerns/questions that deserve further study include but, are not limited to: the BFA can apply subsidies on behalf of a company, can receive gifts, can invest proceeds in any security and they can acquire, operate, buy, own or lease property outside of the state and a quorum of only three members can result in two board members controlling tens of millions of dollars or more of financing. The minority feels this open ended broad new power needs more time and scrutiny before we enact this legislation.
Original: House Clerk Cc: Committee Bill File Stapler, Carol
From: John B Hunt
OK, JBH
Begin forwarded message:
From: "Costable, Michael"
he minority on the committee believe the proper motion is Interim Study. This bill originally started as a new stand alone agency with broad new powers (it is safe to assume that a new agency would face more scrutiny). It very quickly moved under the Business Finance Authority's control We were told the BFA was the perfect place for the new agency and new powers because they have the knowledge and expertise to handle these transactions, but then stated that they don't have the necessary skills, tools or time so they will contract out the new authority to a private firm (very likely the one that wrote this bill). There is nothing in the bill regarding their compensation package or marketing budget or where initial startup costs will come from. The original charter requiring the BFA tolund projects in New Hampshire for the sole benefit of New Hampshire inhabitants has not been amended It is the genesis for which the BFA can issue tax exempt bonds in the first place. This bill takes the position that the fees generated from foreign transactions with zero connection to New Hampshire are not only a direct benefit to New Hampshire, but "shall be regarded as performing an essential governmental function" (pg1 line 11). This argument may hold more water if the fees were guaranteed to the general fund or earmarked for projects here in New Hampshire, but sadly they are not. We were told that the previous quote is just a throw away line to satisfy the IRS admitting that this shouldn't be considered essential and thus opening up a fault line. They technically do not have legitimate authority to issue these bonds (this could have been addressed by requiring some nexus to NH, but that was opposed). Abusing the powers of tax exemption in exchange for a fee is "crony capitalism" and has no place in a free society. It further opens up the BFA (and this state) to possible litigation from the federal government, other state agencies or from investors. It also undercuts legitimate corporate and "backed" municipal bond activity. All of this questionable new power with limited oversight, stating "Bonds may be issued under this chapter without obtaining the consent of the Governor or Council or any department" (pg5 line 34) unless they are compelled to under Internal Revenue Code 147(f). Other concerns/questions that deserve further study include but are not limited to: the BFA can apply subsidies on behalf of a company, can receive gifts, can invest proceeds in any security and they can acquire, operate, buy, own or lease property outside of the state and a quorum of only three members can result in two board members controlling tens of millions of dollars or more of financing. The minority feels this open ended broad new power needs more time and scrutiny before we enact this legislation.
Respectfully, Michael Costable
2 HOUSE COMMITTEE ON COMMERCE AND CONSUMER AFFAIRS
EXECUTIVE SESSION on SB 537
BILL TITLE: (New Title) conferring extraterritorial financing powers on the New Hampshire business finance authority.
DATE: April 24, 2018
LOB ROOM: 302
MOTIONS: OUGHT TO PASS WITH AMENDMENT Moved by Rep. Williams Seconded by Rep. Panasiti AM Vote: 18-0
Amendment # 2018-1601h Moved by Rep. Williams Seconded by Rep. Panasiti Vote: 14-4
CONSENT CALENDAR: NO
Statement of Intent: Refer to Committee Report
Respectfully submitted,
Rep Valerie Fraser, Clerk HOUSE COMMITTEE ON COMMERCE AND CONSUMER AFFAIRS
EXECUTIVE SESSION on SB 537
BILL TITLE: (New Title) conferring extraterritorial financing powers on the New Hampshire business finance authority.
DATE: 4/7,7 4/1
LOB ROOM: 302
MOTION: (Please check one box)
OTP 0 ITL 0 Retain (Pt year) El Adoption of Amendment # 66 O Interim Study (2nd year) (if offered) 1 ;) ii , f 1 1 Moved by Rep. 1-4- i ( i i a/i/Y1Z9 Seconded by Rep. dikid:)/i): Vote: i ••/
MOTION: (Please check one box)
O OTP [5/0TP/A 0 ITL 0 Retain (l year) 0 Adoption of Amendment # O Interim Studyiynd year) (if offered)
Moved by Rep. [10 r l U a/WA Seconded by Rep. e4./111-41/ Vote: 1
MOTION: (Please check one box)
O OTP 0 OTP/A 0 ITL 0 Retain (P' year) El Adoption of Amendment # O Interim Study (2nd year) (if offered)
Moved by Rep. Seconded by Rep. Vote:
MOTION: (Please check one box)
❑ OTP 0 OTP/A 0 ITL 0 Retain (Pt year) 0 Adoption of Amendment # O Interim Study (2nd year) (if offered)
Moved by Rep. Seconded by Rep. Vote:
CONSENT CALENDAR: YES NO
Minority Report? k../Yes No If yes, author, Rep: Motion
Respectfully submitted: .7611Z/U--(— /t,a,44 Rep Valerie Iraser, Clerk STATE OF NEW HAMPSHIRE 1/5/2018 10:27:29AM ' OFFICE OF THE HOUSE CLERK . Roll Call Committee Registers Report 2018 SESSION
COMMERCE
Bill #:513 5-37 Title: Pm/ 4r, , /v • „Ay" '"'" PH Date: / 1 1 - xec ession Date: 4t iv/ &iv n Motion: Amendment
MEMBER YEAS,/ NAYS
Hunt, John B. Chariman N./ Biggie, Barbara Vice Chairman -7/ Fraser, Valerie Clerk Fromuth, Bart _ Sanborn, Laurie J. Ferreira, Elizabeth . v/7 • Osborne, Jason M. V/ • . Costable, Michael V./ . . Plumer, John R. 17 • 1 Schwaegler, Vicki 1 . Panasiti, Reed A. . . ' ' ____ Butler, Edward A. , • V Gidge, Kenneth N. ._._ . Williams, Kermit R. I Abel, Richard M. • V/ Luneau, David 1/ McBeath, Rebecca Bartlett, Christy D. Fontneau, Timothy _ — Van Houten, Connie - TOTAL VOTE:
Lc(i,oaAc15
Page: 1 of 1 STATE OF NEW HAMPSHIRE 1/5/2018 10:27:29AM OFFICE OF THE HOUSE CLERK Roll Call Committee Registers Report 2018 SESSION
COMMERCE
Bill #: 5/3 5-3 Title: 4 1 PH Date: / /0 / Exec Session Date:
Motion: Q TP- f Amendment
MEMBER YEAS NAYS
Hunt, John B. Chariman 1.4
Biggie, Barbara Vice Chairman ki Fraser, Valerie Clerk V
..,=..... Fromuth, Bart 1 Sanborn, Laurie J. V/ Ferreira, Elizabeth V Osborne, Jason M. Costable, Michael • ‘)/* Plumer, John R. • . Schwaegler, Vicki 17/ Panasiti, Reed A. V / ,. Butler, Edward A. \I . Gidge, Kenneth N. -- • Williams, Kermit R. •k.//
Abel, Richard M. . • Luneau, David V/
McBeath, Rebecca V/ Bartlett, Christy D. Fontneau, Timothy ,_..-. Van Houten, Connie • TOTAL VOTE:
Page: 1 of 1
Rep. Williams, Hills. 4 April 17, 2018 2018-1601h 05/03
Amendment to SB 537
1 Amend RSA 162-S:2, VII as inserted by section 1 of the bill by replacing it with the following: 2 3 VII. "Project" means any capital improvement, purchase of receivables, property, assets, 4 commodities, bonds, or other revenue streams or related assets, working capital program or liability 5 or other insurance program, located outside of the state. The term "project" shall include any 6 housing facility located outside the state for students, faculty, or staff affiliated with an educational 7 institution and any housing facility, including without limitation any senior living, assisted living, 8 or nursing home facility, used or operated by or for the benefit of any hospital or health care, senior 9 care, or senior living institution in connection with the carrying out of hospital, health care, senior 10 care, or senior living services and shall include any housing, housing project, or any other facility 11 that may be financed by the New Hampshire housing finance authority under RSA 204-C with the 12 written consent of the New Hampshire housing finance authority's executive director or his or her 13 designee; provided that written consent shall not be required with respect to the financing of any 14 facility that, were such facility located within the state, could have been financed pursuant to the 15 provisions of RSA 162-I as of the effective date of this chapter. 16 17 Amend RSA 162-S:5, V as inserted by section 1 of the bill by replacing it with the following: 18 19 V. The proceeds of a bond issued under this chapter may be used to finance or refinance one 20 or more projects located outside of the state, but shall not be used. to finance or refinance any project 21 located within the state of New Hampshire. 22 23 Amend RSA 162-S:12 as inserted by section 1 of the bill by replacing it with the following: 24 25 162-S:12 Selection of Authority Bond Program Administrator. After the initial designated 26 members have been appointed pursuant to RSA 162-S:3, II, the business finance authority may 27 select a qualified firm to assist in the carrying out of the powers of the authority and the 28 administration of the business of the authority conferred by this chapter. The selection of such firm 29 shall be pursuant to a process approved by the board of directors of the business finance authority 30 and such firm shall serve on such financial terms as shall be approved by board of directors of the 31 business finance authority. At the conclusion of the initial term of service of such firm, the business 32 finance authority shall determine whether, and on what terms, to engage any firm to provide any HOUSE COMMITTEE ON COMMERCE AND CONSUMER AFFAIRS
EXECUTIVE SESSION on SB 537
BILL TITLE: (New Title) conferring extraterritorial financing powers on the New I lampsh ire business finance authority.
DATE: April 18, 2018
LOB ROOM: 302
MOTIONS: REFER FOR INTERIM STUDY
Moved by Rep. Costable Seconded by Rep. Plumer Vote: 6-13 Motion failed; will take up amendment next Tuesday, April 24.
Respectfully submitted,
Rep Valerie Fraser, Clerk
HOUSE COMMITTEE ON COMMERCE AND CONSUMER AFFAIRS
EXECUTIVE SESSION on SB 537
BILL TITLE: (New Title) conferring extraterritorial financing powers on the New Hampshire business finance authority. DATE: GJI II 1-44_e ; row/ LOB ROOM: 302
MOTION: (Please(Please check one box) ❑ OTP 0 ITL O Retain (1st year) 0 Adoption of Amendment # nterim Study (2nd. year) (if offered) Moved by Rep. ( 7) pie Seconded by Rep. Li dte.--r Vote: 6 -13
MOTION: (Please check one box)
O OTP 0 OTP/A 0 ITL 0 Retain (Pt year) 0 Adoption of Amendment # O Interim Study (2nd year) (if offered)
Moved by Rep. Seconded by Rep. Vote:
MOTION: (Please check one box)
O OTP 0 OTP/A ❑ ITL 0 Retain (Pt year) 0 Adoption of Amendment # O Interim Study (2nd year) (if offered)
Moved by Rep. Seconded by Rep. Vote:
MOTION: (Please check one box)
❑ OTP 0 OTP/A 0 ITL 0 Retain (1st year) 0 Adoption of Amendment # O Interim Study (2nd year) (if offered)
Moved by Rep. Seconded by Rep. Vote:
CONSENT CALENDAR: YES NO
Minority Report? Yes No If yes, author, Rep: Motion
Respectfully submitted: ithuL CY'L aAeA Rep Valerie Fraser, Clerk STATE OF NEW HAMPSHIRE 1/5/2018 10:27:29AM ' OFFICE OF THE HOUSE CLERK- Roll Call Committee Registers Report 2018 SESSION
COMMERCE Bill #: •6j 537 Title: PH Date: Lt 1 l6 de Exec Session Da
. Motion: Amendment
MEMBER YEAS
Hunt, John B. Chariman ' V Biggie, Barbara Vice Chairman Fraser., Valerie Clerk 1/7 • Fromuth, Bart
Sanborn, Laurie J. . Ferreira, Elizabeth 1/./ • . . Osborne Jason M. Costable, Michael , .. Plumer, John R, . Vi Schwaegler, Vicki ._..--- Panasiti, Reed A, -- i Butler, Edward A. _____- .,-,— . Gidge, Kenneth N. . —_, Williams, Kermit R. . i. Abel, Richard M. • ! . Luneau, David V McBeath, Rebecca , — 7 Bartlett, Christy D. Fontneau, Timothy ' — Van Houten, Connie TOTAL VOTE:
of 1 Sub-Committee Minutes HOUSE COMMITTEE ON COMMERCE AND CONSUMER AFFAIRS
SUBCOMMITTEE WORK SESSION an SI3 537
BILL TITLE: (New Title) conferring extraterritorial financing powers on the New Hampshire business finance authority,
DATE: April 24, 2018
Subcommittee Members: Reps. Fraser, Costable, Plumer, Williams, Abel and Panasiti
Comments and Recommendations: BFA, NH Housing, HEFA Subset 13FA, National Finance Authority. Some foreign owned companies own in NH.
MOTIONS: OUGHT TO PASS WITH AMENDMENT
Moved by Rep. Williams Seconded by Rep. Panasiti AM Vote: 8-0
Amendment # 2018-1601h
Moved by Rep. Williams Seconded by Rep. Plumes• Vote: 6-2
Respectfully submitted,
Rep. Valerie Fraser Subcommittee Clerk HOUSE COMMITTEE ON COMMERCE AND CONSUMER AFFAIRS
SUBCOMMITTEE WORK SESSION on SB 537
BILL TITLE: (New Title) conferring extraterritorial financing powers on the New Hampshire business finance authority.
DATE: Li
Subcommittee Members: Reps. Hunt, Biggie, Fraser Fromuth, Sanborn, Ferreira, Osborne, Costable, Plumer, Schwaegler, Panasiti, Butler, Gidge, Williams, Abel, Luneau, McBeath, Bartlett, Fontneau and Van Houten
Comments and Recommendations: oril) 51,/h5p'f5FA Fkkika4462_
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MOTIONS: ()TP,)TP/A,---- ITL, Retained (1st Yr), Interim Study (2nd ).Tr) (Please circle one)
Moved by Rep. 1111)1a,Kt Seconded by Rep. Pa_f); 6;#I AM Vote: Adoption of Amendment # 1‘0]
Moved by Rep. Seconded by Rep. Vote:
Amendment Adopted Amendment Failed
MOTIONS: OTP TL, Retained (1st Yr), Interim Study (2nd Yr) (Please circle one)
Moved by Rep. Oil /)A )4 -S Seconded by Rep. Pluetrvg,r AM Vote:
Adoption of Amendment #
Moved by Rep. Seconded by Rep. Vote:
Amendment Adopted Amendment Failed
Respectfully submitted,
Rep. liahLG(..( Subcommittee Chairman/Clerk
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Rep. Williams, Hills. 4 April 17, 2018 2018-160Ih 05/03
Amendment to SB 537
1 Amend RSA 162-S:2, VII as inserted by section 1 of the bill by replacing it with the following: 2 3 VII. "Project" means any capital improvement, purchase of receivables, property, assets, 4 commodities, bonds, or other revenue streams or related assets, working capital program or liability 5 or other insurance program, located outside of the state. The term "project" shall include any 6 housing facility located outside the state for students, faculty, or staff affiliated with an educational 7 institution and any housing facility, including without limitation any senior living, assisted living, 8 or nursing home facility, used or operated by or for the benefit of any hospital or health care, senior 9 care, or senior living institution in connection with the carrying out of hospital, health care, senior 10 care, 'or senior living services and shall include any housing, housing project, or any other facility 11 that may be financed by the New Hampshire housing finance authority under RSA 204-C with the 12 written consent of the New Hampshire housing finance authority's executive director or his or her 13 designee; provided that written consent shall not be required with respect to the financing of any 14 facility that, were such facility located within the state, could have been financed pursuant to the 15 provisions of RSA 162-I as of the effective date of this chapter. 16 17 Amend RSA I62-S:5, Vas inserted by section 1 of the bill by replacing it with the following: 18 19 V. The proceeds of a bond issued under this chapter may be used to finance or refinance one 20 or more projects located outside of the state, but shall not be used to finance or refinance any project 21 located within the state of New Hampshire. 22 23 Amend RSA 162-S:12 as inserted by section 1 of the bill by replacing it with the following: 24 25 162-S:12 Selection of Authority Bond Program Administrator. After the initial designated 26 members have been appointed pursuant to RSA 162-S:3, II, the business finance authority may 27 select a qualified firm to assist in the carrying out of the powers of the authority and the 28 administration of the business of the authority conferred by this chapter. The selection of such firm 29 shall be pursuant to a process approved by the board of directors of the business finance authority 30 and such firm shall serve on such financial terms as shall be approved by board of directors of the 31 business finance authority. At the conclusion of the initial term of service of such firm, the business 32 finance authority shall determine whether, and on what terms, to engage any firm to provide any HOUSE COMMITTEE ON COMMERCE AND CONSUMER AFFAIRS
SUBCOMMITTEE WORK SESSION on SI3 537
BILL TITLE: (New Title) conferring extraterritorial financing powers on the New Hampshire business finance authority.
DATE: April 17, 2018
Subcommittee Members: Reps. Sanborn, Costable, Plumes, Williams and Abel
Comments and Recommendations:
MOTIONS: REFER FOR INTERIM STUDY
Moved by Rep. Reps. Hunt, Biggie, Fraser, Fromuth, Sanborn, Ferreira, Osborne, Costable, Flumes, Schwaegler, Panasiti, Butler, Gidge, Williams, Abel, Luneau, McBeath, Bartlett, .Fontneau and Van Houten Moved by Rep. Elber Seconded by Rep. Rep. Plumcr Vote: 5-I
Respectfully submitted,
Rep. Michael Costable Subcommittee Clerk HOUSE COMMITTEE ON COMMERCE AND CONSUMER AFFAIRS
SUBCOMMITTEE WORK SESSION.. SB 537
BILL TITLE: (New Title) conferring extraterritorial financing powers on the New Hampshire business finance authority.
DATE:
Subcommittee Members: Reps. Hunt, Biggie, Fraser, Fromuth, Sanborn, Ferreira, Osborne, Costable, Plumer, Schwaegler, Panasiti, Butler, Gidge, Williams, Abel, Luneau, McBeath, Bartlett, Fontneau and Van Houten CL t
Comments and Recommendations:
MOTIONS: OTP, OTP/A, ITL, Retained (1st Yr) 2nd Yr) (Please circle one
Moved by Rep. Seconded by Rep. q,n/i ( AM Vote:
Adoption of Amendment #
Moved by Rep. Seconded by Rep. Vote:
Amendment Adopted Amendment Failed
MOTIONS: OTP, OTP/A, ITL, Retained (1st Yr), Interim Study (2nd Yr) (Please circle one)
Moved by Rep. Seconded by Rep. AM Vote:
Adoption of Amendment #
Moved by Rep. Seconded by Rep. Vote:
Amendment Adopted Amendment Failed
Respectfully submitted,
Rep. Subcommittee Chairman/Clerk - ' Hething. mutes HOUSE COMMITTEE ON COMMERCE AND CONSUMER AFFAIRS
PUBLIC HEARING ON SB 537
BILL TITLE: (New Title) conferring extraterritorial financing powers on the New Hampshire business finance authority.
DATE: April 10, 2018
LOB ROOM: 302 Time Public Hearing Called to Order: 11:15 am
Time Adjourned: 12:55 pm
Co "ttee Members: Rep sborneTD MeBeath, ett in neau an
Bill Sponsors: Sen. Innis Sen. Carson Sen. Fuller Clark Sen. Gannon Sen. Giuda Sen. Reagan Sen. Soucy Sen. Watters Rep. Williams Rep. Hunt
TESTIMONY
* Use asterisk if written testimony and/or amendments are submitted.
James Key-Wallace, BFA- Supports. This bill is an enabling bill to enable 3 different authorities to expand their tax exempt bonding to transactions that are not inside NH. BFA, NHHA, Higher Education.Tax exempt bonding is a category for a borrower. If you under take expansion; a private loan from a private bank; does that loan meet the federal definition. If it does, we can go through the process and make the loan tax exempt which helps the borrower get a better rate. The bank doesn't have to pay taxes on the money they make on that loan. It is a great incentive. State by state basis usually is how it is done. But the changes see multiple state companies expanding into NH but then have to do it in all 3 different states. This bill allows the tax exempt bonds to be given to all 3 states they might be located in. We like it. 9 other states are doing it. We don't want to lose this business If a company can issue through a NH entity, we can serve that customer every time. It puts us at an advantage. Takes our existing powers out to other companies in other states.
Q:Rep. Ed Butler - Can you talk about how NH business might not be part of a potential deal? A: Company A is expanding somewhere. We have a bank willing to lend but it looks like we are eligible for a better rate. Co A CFO come to us and we either approve it or not. We can derive benefits in NH from other companies expanding in other states. We charge a fee for this service. It funds the BFA economics.
Q: Rep. David Luneau - When I read the bill, talk about the new authority. A: It is a subcommittee of the BFA and the National Finance Authority. We and they can bond other states under their own dba's. 'BFA is very supportive.
Senator Dan Innis, prime sponsor - It establishes the Granite State Finance Authority. And allows projects undertaken outside the state. It is a good thing for us to do and generate income for housing authorities. It helps others to do business in NH easier. We need more workers.
Q:. Rep. Richard Abel - On the surface seems to change the mission of these finance authorities. Do we risk losing the mission of this activity in the state of NH? Is NH at risk? A: It is not really changing the way they do business, but just removing the borders. The funds generated through this activity covers the costs. The generated revenue could help NH.
Q: Rep. Laurie Sanborn - I am a member of the BFA board as legislative appointee. How was this amended? A: It changed at my house. The finance authorities got together and resisted against a 4th authority. That is gone. We focused on the 3 remaining. The BFA will be the largest partner. Higher education and housing will do well.
Q: Chairman John Hunt - We are removing a sentence on page 2 VII line 15. Withstanding.... Why should it be removed? A: I don't have a problem with it.
Q: Rep. Ken Gidge - There is not enough business in NH? A: NH is a small market. This is an opportunity to leverage our expertise to other companies. Will we make money? Yes. Q: Are you moving out of NH for larger sums of money? A: Likely the same interest rates. Can't vary too much from that. Our objective is to bring in some money to better perform our mission here.
Q: Rep. Butler - How did this bill originate? A: I will defer to those behind me.
Q: Rep. David Luneau - Is there an out of state project; is it multistate? A: We don't know that yet.
John Stoecker, Sierra Management Group - Supports. There is a big opportunity in 11 states to authorize multi-jurisdictional bonding. At the Nat'l Assoc. of Bond Lawyers- found NH to be a good state to approach. We reached out to the BFA and found we can serve NH and the nationwide market. We have given back over 15M to authorities. We are happy to compete.
Q: Rep. Luneau - Sierra Mgt. Group does what? A: We suggest what has been done in other states, is we provide the marketing approach nationwide and locally. Peter Imse, Health Education Finance Authority - Supports. Defer to executive director
*Bonnie Payette, Exec. Dir for NH HEFA- Supports in part. We are a public body corporate and mission to lower costs. 1969 to help non-profits get low cost financing through bonds. Our fees charged are used in our day to day operation. We allow low cost financing for many projects of the non-profits. AS of 2017, we have issued over 11.5Billion in financing. WE have 3 Billion outstanding. The NH H BFA, and NH HEFA got together to help a certain economically needy areas. We wish to provide smooth financing to our institutions. We can be audited by the IRS at any time. IF we are not in compliance with IRS rules it could become very costly It makes sense to allow our 3 agencies to be given different financing authority. WE are in favor of Section 2-13 and 14 We oppose Section 1.. We object to BFA not requiring bonds that have a nexus to NH. If the bill is revised we would have no objections.
Q: Rep. Luneau - The 3 year mgt. contract, why is it in there? A: We don't have mandatory contracts. Any additional financing requires an extra hearing. We would manage the additional financing. We don't need a contract. Q: Currently, you don't use third party mgt. Companies. A: The manging company would be hired within 3 months of the passage of legislation.
Q: Rep. Richard Abel - Would HEFA with 2.5 employees have the capacity to do financing outside of NH? A: I believe we would be able to. We must have a nexxus to NH.
*Peter Imse, Chair of the NH HEFA authority - Support in part 2-13, 1/Iand oppose in part section 1. We are charged with certain segments of NH to provide needed financing. We work in parallel lanes with the other agencies. NH bonds have an excellent reputation. It helps sell the bond. We have to be careful to keep up our quality of bonds. Most agencies are state, county oriented. But times are changing with more affiliations across state lines. Health care and housing. Last fall the Sierra Group decided that NH might be a good place to set up an out of state agency, creating a new agency. The existing agencies met about our concerns that we didn't want a 4th agency issuing these bonds. We considered the extraterritorial bonds in NH. We amended our enabling statutes to allow going out of state. The bill includes our language. We didn't see the final form of the BM language until the last minute. The BFA proposal is the original Sierra authority with their name on it. We object to a few specific provisions: It puts state agencies in competition with each other and removes some key safeguards that are in place and would permit BFA to issue bonds in an are that they don't have expertise at this time. Section 1 creates a new BFA chapter. The definition of project is extremely broad contrary to the agreement we made regarding expansion. It encompasses any type of project, anywhere with no limitations. It should be matched up to what it is now. BFA has argued that the definitions are the same, but that is not true. BFA lanes would go out of state, directly competing with us. We run a lean shop with the best deals for our clients. We don't want to confuse the market place. We feel strongly that the definition of project has to be in line with BFA current authorities. Bonds proceeds can be only issued for out of state. Section 5.1 and 10.1 provide for approval of bonds by the governor and not gov and council. We think that is a significant oversight. Both Housing Finance and HEFA include language to require a state nexus to benefit the state. In the language there is no tie in. We have never heard of having an agency to be required to sign a contract for 3 years with a mgt. company. We would be happy to draft appropriate language.
Q: Rep. Luneau - Could a similar structure be extended to 13FA? A: Absolutely. The very last section of the BFA statute requires to enter into a 3 year mgt contract to manage the company.
Q: Chairman Hunt - Change to may OK? A: The have the authority already, but by including it you give it as a requirement. Is it good state policy to require a term of contract and that it be the 3 year term?
Q: Rep. Butler - In the sections you support would it require significant changes in your mgt. methods now? A: I would be foolish to claim we wouldn't need to hire anyone else. But as an initial matter, we have the nexus requirement we would be dealing with an entity that already touches NH somehow. Our staff is lean and mean, but we function well. Our Ex Dir holds the office of secretary. It is mandated. We are self supporting and our fees pay for staff.
Q: Rep. Costable - How are you connected to rating agencies and your activity? A: Yes, we have a lot of experience with rating agencies and many of our bonds are rated. Some bonds are not rated if small group of purchasers. In the public domain would have to be rated. At a minimum should have some quality of rating anyway, but tough to consider. If NH name is on the deal it must be connected to NH and have some oversight. Q: Rep. Ferreira - 11 states have this multi-jurisdictional authority? A: Wisconsin, CO, AZ we are active in.
Mary McLaughlin, NH HEFA - Supports. Iam familiar with bond financing. 'I'D bond bank. All board members have first hand knowledge. We offer a bond financing workshop yearly to help them understand tax exempt bonding. The staff is committed to hand holding so the borrowers receive the lowest cost financing for their project. We receive current ratings and economic impacts on those institutions.
John Ruth, CTBH Partners, LLC - Supports. I am a registered municipal advisor. I am in favor for 2 reasons: Increase choice of conduit borrowers for my clients. NH competes against Wisconsin and CO. I would like to see the fees return to NH. My concerns that they wouldn't be able to finance NH when they have a choice to finance anything BUT NH. A minimum rate for borrowers should not be included in legislation. Certain investors want high yield and should not be restricted. It would impact some companies located in NH. Extraterritorial would expand fees and agency activities. It would build expertise through working the transactions. More transactions will build that depth to created more experienced team. The elimination of volume cap for borrowers would be a game changer. The conduit borrowers that require volume cap is a state level restriction. If that falls away, they could consolidate their issuance under on bond.
Q: Rep. Luneau - All 3 should stay in their lane? A: The borrower should have a choice. I am still comparing to other state issuers. If they have to stay in their lane it is still good and an expansion. It should not be required.
Q: Butler - Why should it not be required? A: I am only concerned with my clients- the organizations that borrow money. The company with only out of state operations is good. A multi-jurisdictional operations should not be penalized for having a NH operation.
*Dean Christon, NHHA- Ex Dir — Supports. We are concerned with the definition of project. We have worked with BFA on this. There was a sentence added that is confusing and want it removed. Otherwise we are OK with it.
Q: REp.Butler - The definition of project includes housing outside the state, etc. Why doesn't that worry you relative to negative impact on NEI FIFA vs. BFA? A: I would not be threatened. WE discussed their goals BFA, and there are some gray area activity, and in state we have overlapping projects, but we want to keep BFA from moving outside their lanes into an area not within their expertice. Any fee income by NHHA, via bonds, is by statute to the trust fund. This is an opportunity to generate income for the trust fund. Q: Why is NHHA not as threatened. A: There is language between BFA and NHHA who must give written consent to work together.
Brian McMillin, President New Gate Housing and Alliant Capital - Supports. Creating customer choice will allow the choice of bond issuer and financing structure to promote an improved affordable housing. Competition improves the market place. The programs can be complimentary. BFA to issue bonds nationwide would offer New Gate and other Mass. Developers choices close to home. A single issuer in several states is a handy one stop shop. We support the BFA model.
Q: Butler - Does Mass offer this kind of out of state financing? A: Not to my knowledge.
Gary Piontknowski, Consultant - Supports. I looked at 60 properties in NH. My clients business employs 130 people. I was referred to BFA, bought a building in Derry, NH and the company moved to NH. They have now hired 75 people in NH. 95% of renovations done by local contractors. I am so impressed with how NH was willing to bring this company to NH. We are looking to build a rehab center here. We support what BFA is doing here. We rebuilt the San Amena building in Derry.
*Kris Moussette of Hinckley, Allen and Snyder - Supports. Antonio Martene, NHBFA - Supports. We believe BFA can write bonds for out of state and non profits projects.
James Key-Wallace- BFA- Additional comment. The types of projects are the same we have been doing now.
Pro, 5; Con, 0 Blue Sheet
Respectfully Submitted:
Valerie Fraser, Clerk
HOUSE COMMITTEE ON COMMERCE AND CONSUMER AFFAIRS
PUBLIC HEARING ON SB 537
BILL TITLE: (New Title) conferring extraterritorial financing powers on the New Hampshire business finance authority.
DATE: I
ROOM: 302 Time Public Hearing Called to Order: . I
Time Adjourned:
(please circle if present)
Committee Members: Reps. Hunt.,-Biggie, Fraser, Fromuth, Sanborn, Ferreira, Osborne, Costable, Plumer, Schwaegler, Panasiti, Butler, Gidge, Williams, Abel, Luneau, McBeath, Bartlett, Fontneau and Van Houlga...
Bill Sponsors: Sen. Innis Sen. Carson Sen. Fuller Clark Sen. Gannon Sen. Giuda Sen. Reagan Sen. Soucy Sen. Watters Rep. Williams Rep. Hunt
TESTIMONY
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James Key-Wallace- BFA- Supports
This bill is an enabling bill to enable 3 different authorities to expand their tax exempt bonding to transactions that are not inside NH. BFA, NHHA, Higher Education.Tax exempt bonding is a category for a borrower. If you undertate expansion; a private loan from a private bank; does that loan meet the federal definition. If it does, we can go through the process and make the loan tax exempt which helps the borrower get a better rate. The bank doesn't have to pay taxes on the money they make on that loan. It is a great incentive. State by state basis usually is how it is done. But the changes see multiple state companies expanding into NH but then have to do it in all 3 different states. This bill allows the tax exempt bonds to be given to all 3 states they might be located in. We like it. 9 other states are doing it. We don't want to lose this business If a company can issue through a NH entity, we can serve that customer every time. It puts us at an advantage. Takes our existing powers out to other companies in other states. Q: Butler: Can you talk about how NH business might not be part of a potential deal? A: Company A is expanding somewhere. We have a bank willing to lend but it looks like we are eligible for a better rate. Co A CFO come to us and we either approve it or not. We can derive benefits in NH from other companies expanding in other states. We charge a fee for this service. It funds the BFA economics. Q: Luneau: When I read the bill, talk about the new authority. A: It is a subcommittee of the BFA and the National Finance Authority. We and they can bond other states under their own dba's. BFA is very supportive.
Senator Dan Innis: SD#
It establishes the Granite State Finance Authority. And allows projects undertaken outside the state. It is a good thing for us to do and generate income for housing authorities. It helps others to do business in NH easier. We need more workers. Q: Abel: On the surface seems to change the mission of these finance authorities. Do we risk losing the mission of this activity in the state of NH? Is NH at risk? A: It is not really changing the way they do business, but just removing the borders. The funds generated through this activity covers the costs. The generated revenue could help NH. Q: Sanborn: I am a member of the BFA board as legislative appointee. How was this amended? A: It changed at my house. The finance authorities got together and resisted against a 41h authority. That is gone. We focused on the 3 remaining. The BFA will be the largest partner. Higher education and housing will do well. Q: Hunt: We are removing a sentence on page 2 VII line 15. Withstanding.... Why should it be removed? A: I don't have a problem with it. Q: Gidge: There is not enough business in NH? A: NH is a small market. This is an opportunity to leverage our expertise to other companies. Will we make money? Yes. Q: Gidge: Are you moving out of NH for larger sums of money? A: Likely the same interest rates. Can't vary too much from that. Our objective is to bring in some money to better perform our mission here. Page 2 SB 537 Commerce
Q: Butler: How did this bill originate? A: I will defer to those behind me. Q: Luneau: Is there an out of state project; is it multistate? A: We don't know that yet.
John Stoecker- Sierra Management Group- Supports
There is a big opportunity in 11 states to authorize multi jurisdictional bonding. At the Nat'l Assoc. of Bond Lawyers- found NH to be a good state to approach. We reached out to the BFA and found we can serve NH and the nationwide market. We have given back over 15M to authorities. We are happy to compete. Q: Luneau: Sierra Mgt Group does what? A: We suggest what has been done in other states, is we provide the marketing approach nationwide and locally.
Peter Imse- Health Education Finance Authority- Supports Defer to executive director
**Bonnie Payette- Exec. Dir for NH HEFA- Supports in part
We are a public body corporate and mission to lower costs. 1969 to help non-profits get low cost financing through bonds. Our fees charged are used in our day to day operation. We allow low cost financing for many projects of the non-profits. AS of 2017, we have issued over 11.5BiIlion in financing. WE have 3 Billion outstanding. The NH HFA, BFA, and NH HEFA got together to help a certain economically needy areas. We wish to provide smooth financing to our institutions. We can be audited by the IRS at any time. IF we are not in compliance with IRS rules it could become very costly It makes sense to allow our 3 agencies to be given different financing authority. WE are in favor of Section 2-13 and 14 We oppose Section 1. We object to BFA not requiring bonds that have a nexxus to NH. If the bill is revised we would have no objections. Q: Luneau: The 3 year mgt contract,.why is it in there? A: We don't have mandatory contracts. Any additional financing requires an extra hearing. We would manage the additional financing. We don't need a contract. Q: Luneau: Currently, you don't use third party mgt. Companies. A: The manging company would be hired within 3 months of the passage of legislation. Q: Abel: Would HEFA with 2.5 employees have the capacity to do financing outside of NH? A: I believe we would be able to. We must have a nexxus to NI-I.
* *Peter Imse- Chair of the NH HEFA authority- Support in part 2-13, 14and oppose in part section 1.
We are charged with certain segments of NH to provide needed financing. We work in parallel lanes with the other agencies. NH bonds have an excellent reputation. It helps sell the bond. We have to be careful to keep up our quality of bonds. Most agencies are state, county oriented. But times are changing with more affiliations across state lines. Health care and housing. Last fall the Sierra Group decided that NH might be a good place to set up an out of state agency, creating a new agency. The existing agencies met about our concerns that we didn't want a 4th agency issuing these bonds. We considered the extraterritorial bonds in NH. We amended our enabling statutes to allow going out of state. The bill includes our language. We didn't see the final form of the BFA language until the last Page 3 SB 537 Commerce minute. The BFA proposal is the original Sierra authority with their name on it. We object to a few specific provisions: It puts state agencies in competition with each other and removes some key safeguards that are in place and would permit BFA to issue bonds in an are that they don't have expertise at this time. Section 1 creates a new BFA chapter. The definition of project is extremely broad contrary to the agreement we made regarding expansion. It encompasses any type of project, anywhere with no limitations. It should be matched up to what it is now. BFA has argued that the definitions are the same, but that is not true. BFA lanes would go out of state, directly competing with us. We run a lean shop with the best deals for our clients. We don't want to confuse the market place. We feel strongly that the definition of project has to be in line with BFA current authorities. Bonds proceeds can be only issued for out of state. Section 5.1 and 10.1 provide for approval of bonds by the governor and not gov and council. We think that is a significant oversight. Both Housing Finance and HEFA include langause to require a state nexxus to benefit the state. In the BFA language there is no tie in. We have never heard of having an agency to be required to sign a contract for 3 years with a mgt. company. We would be happy to draft appropriate language. Q; Luneau: Could a similar structure be extended to BFA? A: Absolutely. The very last section of the BFA statute requires to enter into a 3 year mgt contract to manage the company. Q: Hunt: Change to may ok? A: The have the authority already, but by including it you give it as a requirement. Is it good state policy to require a term of contract and that it be the 3 year term? Q: Butler: in the sections you support would it require significant changes in your mgt methods now? A: I would be foolish to claim we wouldn't need to hire anyone else. But as an initial matter, we have the nexxus requirement we would be dealing with an entity that already touches NH somehow. Our staff is lean and mean, but we function well. Our Ex Dir holds the office of secretary. It is mandated. We are self supporting and our fees pay for staff. Q: Costable: How are you connected to rating agencies and your activity? A: Yes, we have a lot of experience with rating agencies and many of our bonds are rated. Some bends are not rated if small group of purchasers. In the public domain would have to be rated. At a minimum should have some quality of rating anyway, but tough to consider. if NH name is on the deal it must be connected to NH and have some oversight. Q: Ferreira- 11 states have this multi-jurisdictional authority? A: Wisconsin, CO, AZ we are active in.
Mary McLaughlin- NH HEFA- Supports I am familiar with bond financing. TD bond bank. All board members have first hand knowledge. We offer a bond financing workshop yearly to help them understand tax exempt bonding. The staff is committed to hand holding so the borrowers receive the lowest cost financing for their project. We receive current ratings and economic impacts on those institutions.
John Ruth- CTBH Partners, LLC- Supports I am a registered municipal advisor. I am in favor for 2 reasons: Increase choice of conduit borrowers for my clients. NH competes against Wisconsin and CO. I would like to see the fees return to NI-I. My concerns that they wouldn't be able to finance NH when they have a choice to finance anything BUT NH. A minimum rate for borrowers should not be included in legislation. Certain investors want high yield and should not be restricted. It would impact some companies located in NI-I. Extraterritorial would expand fees and agency activities. It would build expertise through working the transactions. Page 4 SB 537 Commerce
More transactions will build that depth to created more experienced team. The elimination of volume cap for borrowers would be a game changer. The conduit borrowers that require volume cap is a state level restriction. If that falls away, they could consolidate their issuance under on bond. Q: Luneau: All 3 should stay in their lane? A: The borrower should have a choice. I am still comparing to other state issuers. If they have to stay in their lane it is still good and an expansion. It should not be required. Q; Butler: Why should it not be required? A: I am only concerned with my clients- the organizations that borrow money. The company with only out of state operations is good. A multi-jurisdictional operations should not be penalized for having a NH operation.
**Dean Christon- NHHA- Ex Dir — Supports We are concerned with the definition of project. We have worked with BFA on this. There was a sentence added that is confusing and want it removed. Otherwise we are ok with it. Q; Butler:- The definition of project includes housing outside the state, etc. Why doesn't that worry you relative to negative impact on NHHFA vs. BFA? A: I would not be threatened. WE discussed their goals BFA, and there are some gray area activity, and in state we have overlapping projects, but we want to keep BFA from moving outside their lanes into an area not within their expertise. Any fee income by NHFIA, via bonds, is by statute to the trust fund. This is an opportunity to generate income for the trust fund. Q: Butler: Why is NHHA not as threatened. A: There is language between BFA and NHHA who must give written consent to work together.
Brian McMillin- President New Gate Housing and Alliant Capital- Supports Creating customer choice will allow the choice of bond issuer and financing structure to promote an improved affordable housing. Competition improves the market place. The programs can be complimentary. BFA to issue bonds nationwide would offer New Gate and other Mass. Developers choices close to home. A single issuer in several states is a handy one stop shop. We support the BFA model. Q; Butler: Does Mass offer this kind of out of state financing? A: Not to my knowledge.
Gary Piontknowski- Consultant- Supports I looked at 60 properties in NI-I. My clients business employs 130 people. I was referred to BFA, bought a building in Derry, NH and the company moved to NH. They have now hired 75 people in NH. 95% of renovations done by local contractors. I am so impressed with how NH was willing to bring this company to NH. We are looking to build a rehab center here. We support what BFA is doing here. We rebuilt the San Amena building in Derry.
* * *Kris Moussette of Hinckley, Allen and Snyder- Supports Antonio Martene- NHBFA We believe BFA can write bonds for out of state and non profits projects.
James Key-Wallace- BFA- Additional comment The types of projects are the same we have been doing now. Blue Sheet: See names Hearing Ended: 12:55 SIGN UP SHEET
To Register Opinion If Not Speaking
Bill # Date 4—(0—(1 Committee
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(check one) Name Address Phone Representing Pro Con
.2 P itgiOy NaAta .1--116 - laKk SO 44- ( t./ Bonnie S. Payette 54 South State Street Executive Director P.O. Box 2110 Concord, NH 03302-2110 phone: 603-224-0696 fax: 603-224-3058 email: [email protected] New Hampshire House of Representatives www.nhhefe.com Commerce and Consumer Affairs Committee RE: SB537 Dear Chairman Hunt and Commerce and Consumer Affairs Committee, Thank you for the opportunity to testify at the hearing on April 10th and outline the New Hampshire Health and Education Facilities Authority's concerns regarding SB537 as submitted. To recap, NH HEFA is in support of extraterritorial financing, however, we maintain our concern with the definition of "Project" in the Business Finance Authority (BFA) portion of the bill. When the Business Finance Authority, Housing Finance Authority and Health and Education Facility Authority were established, they were empowered to serve specific sectors of our State economy. Business Finance Authority, to foster economic development and create employment in NH, Housing Finance Authority to promote, finance and support affordable housing, and New Hampshire Health and Education Facilities Authority to lower the cost of health and education by providing low cost funding options to not-for-profit health and education institutions. We were established to provide expertise and build relationships with experts in our industry. The success of our State's finance authorities requires different expertise at many levels including our board and counsel. Additionally, buyers of the bonds, rating of the institutions, investment bankers, security required, measurement of financial success, etc., are all different for each authority and the industry served. Until 1995, the BFA could only issue bonds to support specific types of for-profit businesses and industries including "commercial facilities." In 1995, their statute was amended to permit the BFA to finance "commercial facilities" that were owned or operated by non-profit organizations, but no other non-profit facilities. Since that time, the BFA has only issued 13 (as presented at the hearing) bonds for non-profit organizations. In 2013, the G&C advised the BFA that it should limit its financing to for profit organizations and since that time the BFA has not financed any new non-profit projects. The definition of "Project" in Section 2 VII of the proposed new BFA statute uses very broad language that would substantially expand the scope of the BFA's out-of-state bond issuing powers to include projects and facilities that are not now described in RSA 162-1:2 I through XIV. In particular, it would permit the BFA to finance non-profit facilities of all types, instead of just "commercial facilities." This proposal is meant to simply expand the BFA's existing powers to include out-of-state issues. HEFA respectfully requests the subcommittee amend the definition of "Project" in proposed RSA 162- S:2 VII to read: VII. "Project" means any capital improvement, purchase of receivables, property, assets, commodities, bonds or other revenue streams or related assets, working capital program or liability or other insurance program for an Eligible Facility as defined in RSA 162-1:2.1, III-a, VII, VII-a, IX-a, IX-b, X-a, XII, XIII, and XIV that is located outside the state. NH HEFA has served the State of New Hampshire over the past 48 years issuing over $11.5 billion in financing strictly for 501(c)(3) non-profits in New Hampshire making us the Number 1 issuer of bonds in and for the State. The opportunity to expand our statute to allow us to finance outside of New Hampshire will enable us to continue serving our sector of the State economy. If you have any questions, please do not hesitate to contact me. Sincerely, Bonnie S. Payette Date: February 7, 1995 Time: 2:30 p.m. Room: 103, LOB The Senate Committee on Banks held a hearing on the following: SB 87-FN - AN ACT relative to the business finance authority. Members of Committee present: Senator Leo W. Fraser, Jr. Senator C. Jeanne ,Shaheen Senator Clesson J. Blaisdell Senator Carl R. Johnson Senator Frederick W. King Senator Fraser opened the hearing by calling on the prime sponsor of the bill, Senator Bruce Keough, as the first speaker. Senator Bruce W. Keough. D. 23: I feel fortunate to be more experienced in talking about this bill than most bills that you may hear me talk about. I served as a Director on the Business Finance Authority from 1991 until the time that the people in District 23 elected me to the Senate. During that period, the responsibilities of the Authority changed considerably. Prior to legislation that became effective in May of 1992, the Business Finance Authority basically functioned as the Industrial Development Authority which was responsible for issuing tax exempt bonds and industrial revenue bonds. In light of the banking crisis that we had in the early 1990's, I think the legislature acted wisely in creating several new programs and incorporating them in a new Business Finance Authority to address the need to get capital lending on its feet again in this state. By my estimation, (and I think an objective estimation), the Authority has done a very good job in implementing those programs. Close to fifty million dollars has gone out through the biggest lending program which is the Guaranteed Asset Program of the Authority. Another twenty million dollars has been guaranteed under the Capital Access Program which is geared toward small businesses - That represents about three hundred and ninety two (392) small businesses. I think that it is worth noting that with about eighty five million dollars in guarantees that have gone out, the losses have been limited to about seven thousand dollars - which I think is quite remarkable and was put up against the performance of any commercial lending institution. 2 I believe that the reason that is true is that the Board of the Authority is a very independent board — made up of men and women from business There is representation on the board from the legislature. In my time on the board, I can say that lending decisions were never confused with political decisions. In fact, politics didn't really enter into the credit analysis and the credit decisions of the board. I think that the record speaks for itself with the wisdom of the legislature had in structuring it that way. I think that in every year since, the Authority has been giving us new responsibilities. Its been back to request changes to the enabling legislation on various programs. Some of those changes have become necessary just in the course of doing business and realizing that the documents didn't work perfectly the first time; others have become necessary because the market has actually changed and people running the authority see demand for new kinds of loans and less demands for loans that were popular in the past.. The bill that you have before you today addresses both needs. In summary, it clarifies that in the course of making guarantees, the Authority can accept equity securities as part of a collateral package. The legislature, again, I think wisely said that the Business Authority should not be in the business of investing equity or taking equity positions in companies. This doesn't attempt to give the Authority that ability. It merely says that in the case, for example, where a company which is to pledge stock as collateral for a loan being guaranteed by the Authority It could do that. Senator Leo W. Fraser, Jr., D. 4: Would the Authority insist on some sort of collateral? Senator Bruce W. Keough, D. 23: The Authority, for the most part, guarantees loans that are made by private lending institutions. It does, however, have collateral requirements in most of the programs. But, the collateral would be initially pledged to a lending institution that is directly making the loan. The Authority would be an indirect beneficiary of that collateral package. A second thing that the bill does is it reallocates ninety five million dollars in existing guarantee authority among the programs to meet the demands of the market place today. I think that whenever the legislature sets up new programs, you can take an educated guess as to where the demand is going to be. The benefit of actually going out there and operating for several years, has given rise to the need to reallocate some of those levels. Thirdly, it allows for loans to be advertised over a twenty year period in the guaranteed asset program intends to be the biggest loans. The fifty million dollars that's gone out under the Guarantee Asset Program is through seventeen loans. With some of the restructurings that are going on in companies today in New Hampshire Particularly, where the FDIC is involved The Authority can play a much more effective role if it can participate in refinancing real estate loans as well. The bill establishes a new program to provide seventy five percent (75%) 3 guarantees for working capital loans. Working capital loans, particular among smaller companies, is what they really need. There are a lot of small companies that come to the authority looking to participate in some of the programs and find that they don't have hard assets to meet the collateral requirements of some of the other programs. So, I think that the changes that would enable the authority to make more working capital loans would directly benefit smaller businesses that the Authority is currently not getting to. Finally, there is a technical change that will allow the Authority to "pool" together industrial revenue bonds that will benefit small manufacturing companies. The issuance of industrial revenue bonds require a fair amount of legal contractual work and they tend to have to be a certain size or they can't justify the additional expense of getting all of these parties involved. They can then be sold as a group into the secondary market. I think that manufacturing companies could benefit from industrial revenue bonds which we sorely need in the state. I think that anything we can do to support the manufacturing sector of our economy is something that we ought to do. Senator Clesson J. Blaisdell. D. 10: We could do this with the staff that we have. Am I right? So, it isn't going to cost a lot more for a new staff? Senator Bruce W. Keough, D. 23: That's my understanding, Senator. I don't think that there is anything that asks for an additional appropriation in here and anticipates Senator Clesson J. Blaisdell, D. 10: That's always a question that is asked Whether or not there is going to be additional staff. Senator Leo W. Fraser. Jr., D. 4: Brian Gottlieb, representing the BIA isn't going to speak but he wanted to be recorded in favor of Senate Bill 87. Jack Donovan. Executive Director — Business Finance Authority; Ray Smith, who is the Chairman of the Business Finance Authority is also in attendance and will be available for questions. Let me just indulge you with a couple of things, here. One is kind of a summary of some of the changes to legislation (SEE ATTACHMENT_171), Secondly, I have a summary of what the BFA has accomplished to date. (SEE ATTACHMENT /1). Senator Keough eluded to some of that information. There is also a brief brochure that lists the programs and includes some descriptive information. It also has a list of the board members. (SEE CORRESPONDING BANKS FOLDER). As Bruce pointed out, the changes that we have before you are part of an ongoing adjustment process that has been occurring with the program of bills since it was originally passed on May 15, 1992. We were back in 1993 with some minor changes to kind of fine tune the programs. Last year, we were back with a bill that actually died in committee. The changes that you have in front of you really fall into three basic areas: One is a number of clarifications in existing legislation. Inevitably, when 4 you get involved in these things, you find that things aren't clear and the territory we started treading on People felt very uncomfortable without any clear legislation. Secondly, is the additional fine tunings of the program. Finally, the Working Capital Guarantee Program The basic changes of the reference sections are included on the summary changes sheet which I gave you. Sections one and two — Equity Securities — is not clear that we have the ability to hold equity in the case where Three, five and six....I would take out "Subordinate Limitations." I don't want that to imply that we should change.... Currently, the original legislation included specific limitations for each program in terms of how much guarantee authority could be used for those. We're asking that those problematic limitations are taken out — that the BFA Board of Directors be given flexibility to move the ninety five million dollars of guarantee authority (which they are allocated by the state) to move that around to meet specific needs. We're not asking for any increase in guarantee authority or any additional exposure for the BFA. We have a ninety five million dollar cap of authority — instead of allocated programs specifically in the legislation which would give the board the flexibility to move it to meet changing business needs. What we have found over the last year or so is that recently, the Small Business Administration, consolidated a variety of different working capital line guarantee key programs that get into one: so called the Greenline Program. It is very sophisticated and essentially is limited to larger banks. The typical community bank can no longer participate in that. What you are finding is that increasingly, small businesses are having trouble getting working capital loans. Under the current program, we are unable to address these situations. What we propose is that we set up a new program — sort of a working capital program that would allow us to work with all the banks in the state — to guarantee loans. These are seasonal lines of credit for little businesses that need to borrow less than a million dollars. Senator Leo W. Fraser, Jr.. D. 4: So, right now, that ninety five is all "pigeonholed" for setting up the programs What you are suggesting is that you have the authority to use the ninety five at your own discretion so long as it is in the parameters of three, six and eight. Jack Donovan; Exactly. The Working Capital Guarantee Program will work much like our others. We have a very small staff. We aim to keep it that way. Most of our programs operate through existing banks. You go to your bank; the bank makes the underwriting decision They make the decision to issue the credit — subject to getting the guarantee They come to us — The loan committee and the full board have to approve it. So, it is a "two step" 5 process. Basically, it is not the state getting involved in making lending decisions. The bank has to make the initial decision. So, the Working Capital Guarantee Program will work in the same manner - banks originate the deals - make the decision - apply to us for the guarantee. That's the way it will work. It will require no new staff. Senator Frederick W. King, D. 1: Do you have any policy decision about the maximum amount of money you would loan Jack Donovan; Five million dollars. Senator Frederick W. King, D. 1: Is it being raised because of this bill? Jack Donovan: . No, that is an internal policy - that five million dollars, as a practical matter We didn't want to get too concentrated. A typical credit size is significantly smaller. I would add, Senator, that all the guarantees....There's fees involved for them. Typically, there's an annual fee in each case Senator Frederick W. King, D. 1: Do you take a secondary position on these loans? Jack Donovan: Not normally, no. The deal on bank guarantees is that there is no preferential collateral which means the bank can't take....Typically, we share with the bank in a first position...There may be some exceptions to that, on a case by case basis. That is not traditional. We try to get first position. Senator Leo W. Fraser, Jr., D. 4: Is it a fair statement that the BFA has been faced with the situations since its inception where - in certain programs, with the ninety five million guarantee - you had money that you couldn't use, but there are other requests that you couldn't fulfill because that particular program had been exhausted? Jack Donovan: We haven't reached that position yet, Senator. But, we're getting near that. Senator Leo W. Fraser, Jr., D. 4: Does your board feel that they need flexibility with the entire ninety five million? Rev Smith: I am the Chairman. What the flexibility allows us to do is to meet the needs of the community in certain categories. I think that as Jack said, for instance, the SBA "piggyback" program was allocated at thirty million dollars and we have only done a million and a half. So, we had, in terms of our allocation, about twenty eight point five million dollars that we would not have been able to use in other programs if we don't have the flexibility to move that around. When the original limitations were set, they were set before we ever got into any of these programs. So, we didn't know What happened was that we tried to make some estimations or the legislature tried to make some estimations as to where those funds would be used. We were "off target" in some places. 6 For instance, the SBA Program - there is not another state in the union that has been approved to do that program in conjunction with the SBA. We're the first ones to be able to do that and it took well over a year in order to get that done. We could have tied up, in effect, twenty eight and a half million dollars that we couldn't get out to the public for their financing needs. It should be pointed out that we do have adequate reserves for any losses. We did issue twenty five million dollars worth of bonds. The proceeds of those bonds were allocated to loan loss reserves. So, should losses occur, it would not come directly back to the general fund to come out of those reserve accounts that have already been established. Senator Leo W. Fraser, Jr., D. 4: If I recall correctly, that loan loss reserve account was set up by statute as well, wasn't it? Ray Smith: That's correct and that works well. I think that the reserve requirements there make sense. Jack Donovan: There was a reference made to commercial facilities. Sections 11 to 15 - Commercial Facilities - refer to a piece of legislation that came in last year. The way that it works now is that the BFA can issue taxable bonds for a commercial facility in a so-called redevelopment area. It is not defined in the statute what a redevelopment area is. All it says is that the Housing Authority sets it up. Senator Leo W. Fraser. Jr.. D. 4: You still haven't defined what a redevelopment area is. Jack Donovan: No, we're going to take out "redevelopment." We're going to take out any reference The statute takes out any reference to a redevelopment area which simply defines a commercial facility is any facility which is used in a trade or business....(Section 12 - "Definition Changed." - Page 7) of the bill "Commercial facility shall be an eligible facility and means any facility which is used in a trade or business " The rest of this next section is all taken out...... "Whether (then, go to the bottom) or not such business is operated for profit." The clarification for "for profit o•eration" was in as s•ecifically for , th s Stslxammatmu. .ere is some question about on what basis the ownership will be hanea ftw li be run. Senator Leo W. Fraser. Jr., D. 4: Your abstract here is not what the bill says. Jack Donovan: Effectively, that is what it gets... Senator Leo W. Fraser, Jr.. D. 4: The bill is fine.... Jack Donovan: What I am trying to do is clarify what the intent was that we're trying to get. This will allow us to do commercial facilities more broadly. Senator Leo W. Fraser. Jr.. D. 4: Some place in the statute, I am not sure, I think there was some language in there about discussing with the Redevelopment Authority In conjunction with loan guarantees - is there 7 language in there to that effect? In your evaluating the prospects of a loan, one of the issues that you have to take into consideration is something to do with the redevelopment in that area. Maybe I am not expressing myself correctly, but it seems like we had something about counseling with redevelopment authorities and that sort of thing. Jack Donovan; Well, we have a program that works specifically in conjunction with local development groups including redevelopment authorities. We are going to look for local approval. We're not going to go in and do it... We're going to want approval. Senator Leo W, Fraser, Jr. D, 4: My question is very simple By eliminating this language, we're not going to defeat the purpose of consulting with local redevelopment authorities if in fact, there is a local Jack Donovan: No. In fact, the group pushing this is the local developer Section 16 allows for the pooling and guaranteeing of industrial revenue bonds. This is what was so controversial. We're given seventy five million dollars on an annual basis by the federal government Tax Exempt Bond Authority. Prior to 1986, that authority was used to help small manufacturers do expansions. In 1986, the federal tax law changed a couple of things. First, the tax rates came down so there was less interest in tax exempt debt. A lot of restrictions were placed on who qualified as a small manufacturer. This capital expenditure' definition and others We "wrestled" for a number of years trying to figure out how do we help provide tax exempt damages cheaper to small manufacturers. We have been relatively successful over the last six to eight months in doing direct placements of debt. They get approval from us for a tax exempt bond and then they place it with a variety of different entities. Those direct placements are available only on the larger size bond issue - typically a million and a half - two million dollars minimum, and they also got to be about ten million dollars minimum sales and extremely credit worthy to qualify. What we want to do is help the guy who needs a half million or a million dollars to do an expansion, etc. How do we go out and help those people? As Senator Keough eluded, the legal and the accounting costs is the same on a five hundred thousand dollar issue as it is on a five million dollar issue. So, the idea would be that we would work with banks, they would bring them together, use part of our ninety five million dollars to guarantee these issues so that we could sell them on a secondary market What it will do is give the small manufacturer that needs a half million or a million dollars access to the same financing. Senator Leo W. Fraser, Jr., D. 4: The IRB....Would that eliminate it from all those five hundred thousand You wouldn't require a letter of credit? Jack Donovan: Well The current statute says that we have to be able to post a separate letter of credit. To get a letter of credit, you normally have to have at least three years audit. Most of the small people that you 8 deal with don't meet those standards. They are not using those advanced accounting systems and requirements, so they can't qualify for a lot of credit. Plus, you duplicate the cost twice. We're saying, let's just eliminate that requirement. Senator Leo W. Fraser. Jr., D. 4: So, it would be in your judgment then about whether you require this additional paper. Jack Donovan: It would be in our judgment. Well, you're right. We have final approval. Ray Smith: We would approach our guarantee on the loan to exactly the way that we do under the asset base guarantee program today. The only thing that it would do would be allow the business owner to obtain tax exempt financing. We would plan on taking six or seven of these and pooling them in one bond and then sell that bond. But, the marketability of that bond would be enhanced by the limited guarantees on the loans within that bond. Senator Leo W, Fraser. Jr.. D. 4: There is no question that you're filling a need with the working capital loan guarantee program I guess that what might be most troublesome would be to give you total flexibility on how you allocate your ninety five million dollars in the loan guarantee fund. Jack Donovan: We could discuss that if you have concerns about the working capital piece and you don't want that to be too large a section or something. Ray Smith: I think that it would be a very easy process for us to hold a public hearing on an annual basis before those were established. We do hold public hearings now and we reallocate any other tax exempt carry overs and we could institute the public hearing process right into an annual allocation of these funds. Or, a change in the allocation of the funds, depending on the needs. Senator Leo W. Fraser. Jr.. D. 4: Would it be appropriate to put that right into the proposed legislation? Ray Smith: Absolutely. I wouldn't see a problem with that at all. Senator Leo W. Fraser. Jr,, D, 4: I think that I would personally be more comfortable if that could be done. We're really going from "zero" to "ninety five thousand dollars" with a "stroke of a pen." And, that (I would think) would make some people nervous. Not so much here in the Senate where there is implicit confidence in the whole BFA program But, when you get over to the House and they are going to do a far more in depth study of these various changes, it would be nice if we had that "safety valve" built into an amendment. There would be one less question for someone over there to ask. I would be more comfortable if you and Senator Keough would arrange to get an amendment to address having a public hearing before you start reallocating those funds. It probably will be an immeasurable assistance to you. Is there anyone else who wishes to speak to this bill? Seeing none, I will close this hearing. Hearing closed at 3:12 p.m. Respectfully submitted, Rosalie Brooks Patch, Secretary Amendment to SB 87 - FN (Proposed before the Senate Banks Committee) Amend the bill as follows: 1. Add a new section .17 to read as follows: 17 Require, Public Hearing on Allocations of Contingent Credit. Amend RSA 162-A:19, I to read as follows: I. Promptly after the beginning of each calendar year the authority shall conduct a public hearing regarding the use of any available contingent credit limit under RSA 162-A:22 and regarding the allocation of such available contingent credit limit among uses authorized by this chapter. Such a hearing may be held before a hearing officer appointed by the authority who shall make a report of the hearing to the board before any final action is taken by the authority that uses a portion of the contingent credit limit. 2. Redesignate section 17 of the bill as section 18 and amend such section to read as follows: 19 Effective Date. This act shall take effect upon its passage [60 days after its passage]. SENATE BILL 87 -FN An Act Amending the Business Finance. Authority Enabling Legislation Summary of Changes Sections 1 and 2. Equity Securities. Clarifies that the BFA can acquire and hold equity securities to secure repayment of obligations. Allows the BFA to enter into agreements which provide for returns to the authority based upon the economic performance of borrowers or lenders. Neither of these changes permit the BFA to engage in venture capital. Sections 3,5 and 6. Elimination of Subordinate Limitations. The BFA has $95 million in total State guarantee authority. These sections eliminate subordinate program limitations to provide the BFA Board of Directors the flexibility to move the $95 million in guarantee authority to meet business credit needs. The changes involve no additional exposure for either the BFA or State. Section 7. Principal Reduction. Changes the maximum permissable amortization time for a Guarantee Asset Program loan from 12 to 20 years. This change will enable the BFA to more easily include real estate loans in the GAP program. Section 8. Working Capital Loan Guarantee Program. Establishes a new program to provide guarantees of up to 75% for working capital loans. This program will fill a gap created by the SBA's consolidation of its various working capital programs into the Greenline Program, which is only available to larger, asset-based lenders. The BFA guarantees of these working capital loans will fall within the authority's $95 million overall cap. Sections 11 to 15. Commercial Facilities. These sections grant the BFA the power to issue revenue bonds to finance commercial facilities and related costs outside of redevelopment project areas. These projects will be financed by taxable bonds which are not an obligation of the BFA or the State. Section 16. Industrial Development Revenue Bonds. Repeals the requirement that IRBs guaranteed by the BFA also be supported by a separate bank letter of credit. This change will enable the BFA to provide smaller and newer manufacturers with access to IRB financing by combining the bonds, guaranteeing them and selling the bonds in the secondary market. The BFA guarantees of these bonds will fall within the authority's overall $95 million cap. B F-A BUSINESS FINANCE AUTHORITY OF THE STATE OF NEW HAMPSHIRE Date of Report: January 2, 1995 Summary of Program Implementation Original Enabling Legislation Effective: May 15, 1992 Program Objective: To establish credit enhancement mechanisms targeted to correct practical obstacles that prevent New Hampshire businesses from obtaining financing. Programs Authorized: Capital Access Program- BFA-financed reserve for small business loans; self administered by banks. Guaranteed Asset Program- BFA guarantees up to 90% repayment of loans with 125% collateral coverage. Aid to LDO Program- BFA loans to support local development organization business initiatives. Loan Purchase Program- BFA purchases existing loans from LDO's to make new LDO loans possible. SBA "Piggyback" Program- BFA provides additional guarantee over SBA maximums.on SBA 7A loans. Programs Implemented: Capital Access Program- Twenty-six participating lenders; 392 small business loans with principal amount of $19,237,574; 2,151 jobs impacted. Guaranteed Asset Program- Thirteen loans approved with principal amount of $49,200,000; 2,577 jobs impacted; program has been used to finance New Hampshire businesses out of FDIC/BONHAM; four guarantees released because of improved performance of companies. Aid to LDO Program- First 3 loans with principal amount of $2,276,000 approved in 1994; 54 jobs preserved, 56 jobs created. Two additional projects pending. FINANCING FOR NEW HAMPSHIRE'S FUTURE 4 PARK STREET • SUITE 302 CONCORD. NEW HAMPSHIRE 03301-6313 • 603-271-2391 FAX 603-271-2396 • TOO Access: RELAY NH 1-800-735-2964 - Page 2 - Loan Purchase Program- Four loans approved for purchase with total principal amount . of $4,337,188; 3 businesses and 932 jobs impacted. SBA ''Piggyback' Program- First such program in nation; SBA/BFA agreement signed 9/28/93; 5 loans closed with principal amount of $6,205,000; 225 jobs impacted. Performance Summary: All programs implemented. $81,255,762 in total program loans approved. 416 New Hampshire businesses assisted. 5,995 New Hampshire jobs impacted. Total losses to date - 1 for $7,000. Proposed 1995 Legislative Changes: Pooled IRB Program - BFA would be authorized to combine industrial bonds for small manufacturers, guarantee them, and sell the bonds on the secondary market. Working Capital Guarantee Program- BFA would be authorized to guarantee up to 75Z of qualifying bank working loans. Modeled after our successful Guaranteed Asset Program. CMC1C:\BFAVROGRAM.SUM WADLEIGH, STARR & PETERS, P.L.L.C. WILLIAM C. TUCKER Attorneys At Law CITRISTINE GORDON EUGENE M. VAN LOAN III, Of Comae! TODD J. HATHAWAY JOHN E, PRIBERG, Sr. 95 Market Street STEPHEN .1. JUDGE JAMES C. WHEAT Manchester, New Hampshire 03101 ALISON M. MINTJTELLI RONALD J. LAJOIE Telephone (603) 669-4140 MICHAEL J. TIERNEY KATHLEEN N. SULLIVAN, Of Counsel PIERRE A, CHABOT JEFFREY H, KARLIN Facsimile (603) 669-6018 DONNA J, BROWN DONALD J. PERRAULT, Or Counsel JOSEPH G. MATTSON WWW.WADLBIGHLAW.COM MARC R. SCIIEER CHRISTOPHER P, MCCOWN GREGORY G. PETERS ABBY TUCKER ROBERT E. MURPHY, Jr. Serving New Hampshire since 1899 STEPHEN M. BENNETT, Of Catiiisel FRANK P. SPINELLA, Jr, ALLISON M, FUSCO DEAN B. EGGERT STEPHEN N. ZAHARTAS MICHAEL R. MORTIMER Direct Dial: (603) 206-7200 ALYSIA M. CASSOTIS KATHLEEN C. PEAHL ELIZABETH E. EWING RICHARD THORNER [email protected] RODIN D. MELONE CHARLES F. CLEARY DANIEL M. COURTER JOSHUA P. LANZETTA April 16, 2018 Bonnie Payette, Execute Director New Hampshire Health and Education Facilities Authority 54 South State Street Concord, New Hampshire 03301 RE: Business Finance Authority of the State of New Hampshire ("BFA") Issuance of Bonds for Not-for-Profit Entities Dear Bonnie: You have forwarded me the March 8, 2018 opinion letter of Chris A. Moussette of the Hinckley Allen law firm addressed to James T, Wallace, Executive Director of the BFA, which provides the opinion that the BFA has the power to issue bonds for the benefit of not-for-profit entities. You have asked me to review this letter and RSA 162-I which authorizes the BFA to issue revenue bonds and provide my thoughts on the issue. Although it is clear that RSA 162-1:2.11I-a, provides that the BFA may issue bonds for a "commercial facility" which term includes "any facility which is to be used in a trade or business, whether or not such business is operated for profit." I believe there is substantial doubt as to whether the BFA can finance all projects undertaken by a not-for-profit as I believe many do not involve a "trade or business." For example: • Is a dormitory a trade or business? • Is a college athletic field or gymnasium a trade or business? • Is a college cafeteria a trade or business? • Is a school science lab or classroom constitute a trade or business? • Does a not-for-profit continuing care retirement community which provides elderly housing, assisted living services, and nursing care a trade or business? • Does a Hospital parking garage which charges no fees constitute a trade or business? • Is an operating room or a cancer center a trade or business? I for one would have great difficulty in providing an opinion that any of the foregoing are commercial facilities which are used in a trade or business, WADLEIGH, STARR & PETERS, P,L.L.C. April 16, 2018 Page 2 Certainly there may be activities which a not-for-profit may undertake which fall into the "commercial" or trade or business category. For instance, a childcare facility or nursery school operated by a not-for-profit could be considered to be a trade or business. If one looks at a municipal zoning ordinance, the distinction between uses which consAtute a trade or business and uses which do not becomes clearer. Zoning ordinances often categorizes uses into several general categories such as residential, agricultural, commercial, industrial, service, and institutional. The uses which are generally listed under institutional category are those which are typically undertaken by a not-for-profit such as churches, educational facilities, and medical facilities which uses normally thought of as involving a trade or business are found under the commercial, industrial, or service categories. It is also interesting to look at RSA 1624:1, the "Declaration of Need and Purpose" section of the Statute. This section lists a large number of developmental needs in the State including industrial facilities, pollution control facilities, commercial facilities in redevelopment project areas, water powered electric generation facilities, aircraft hangars, railroad facilities, small scale power facilities, commercial fishing vessels and related shore side facilities and interstate energy pipeline facilities. Clearly absent from the listed facilities are those typically undertaken by a not- for-profit such as educational facilities and medical facilities. Certainly, if a not-for-profit were to develop a small skill power facility, the BFA would have the authority to finance it through the issuance of a bond. Of further interest is the February 7, 1995 testimony of Jack Donovan, former Executive Director of BFA, before the Senate Committee on Banks, with respect to Senate Bill 87 which amended the BFA statute in several respects. Regarding the definition of commercial facility and the proposal to take the term "redevelopment" out of the definition, Mr. Donovan stated: The clarification for "for profit operation" was put in as specifically for this one circumstance. There is some question about on what basis the ownership will be handled and how it will be run. Consequently, it appears that the phrase "whether or not operated for profit" was put in to address one specific situation where the ownership of a project to be financed had not yet been determined. Although the BFA may have issued bonds for not-for-profit institutions in the past, I believe its ability to do so is very limited and that there is a significant doubt as to whether it has the authority to finance facilities such as hospitals, schools, and colleges. Sincerely, f tif b/c_ ie6 William C. Tucker /sos G:11:1540001544831Payette041618.docx 8o Lyme Road Tel: 603 643-8900 KENDAL at Hanover Hanover, New Hampshire Fax: 603 643-7099 Together, transforming the experience of aging.* 03755-1218 www.kah.kendal.org April 8, 2018 Bonnie Payette Director of Operations and Finance New Hampshire Health and Education Facilities Authority 54 South State Street PO Box 2110 Concord, NH 03302-2110 Dear Bonnie, This letter is to reaffirm to you my respect, admiration, and high regards that I hold for the New Hampshire Health and Education Facilities Authority (NHHEFA). Over the twenty-seven plus years that I have been employed with Kendal at Hanover as the Chief Financial Officer and Associate Executive Director/Chief Financial Officer, I cannot say enough about the respect that I have gained over the years for your organization's knowledge, expertise, and in particular, the ease in which I have found in partnering and working with you and your staff through the numerous financings that our organization has undergone. Over the years, NHHEFA has always been responsive to our needs and concerns as a regulatory body for Continuing Care Retirement Communities (CCRCs) for the State of New Hampshire. If there are other individuals Bonnie that have an interest in reaching out to me on the positive role that NHHEFA has played in the life of Kendal at Hanover, please let me know. Sincerely, Brent B. Edgerton Associate Executive Director/CFO Kendal at Hanover is a not-for-profit continuing care retirement community serving older adults in the Quaker tradition. 30 School Street Tilton, N.H. 03276 TILTON (603) 286-4342 Fax: (603) 286-3137 PH SCHOOL www.tiltonschool.org April 9, 2018 To Whom It May Concern: The purpose of this letter is to attest to the excellent and important services rendered by New Hampshire Health and Education Facilities Authority (" the Authority") to the industry it serves. Tilton School, a 501 (c)3 secondary, private school, just completed a refinancing of its tax-exempt bond issue in late December 2017 . At the time of the refinancing, the tax laws were undergoing continuous changes that may have seriously impacted the non-profit industry. Throughout the refinancing process, the Authority was key in organizing, managing and assembling a team of very knowledgeable professionals consisting of the Bond Counsel, the Authority Counsel, the School's Counsel and the Bank Counsel. This team of professionals worked through some very complex issues that impacted our school's unique financing needs, seeking solutions for many problems and always keeping the best interests of Tilton School as the client in mind. The Authority managed the whole process, expeditiously and efficiently, keeping the schedule on time , holding all interested parties accountable for work progress up to the deliverance of a very favorable tax-exempt bond for Tilton School before year's end. As the Chief Financial Officer of Tilton School for nearly twenty years, I have had the distinct pleasure of working with the Authority on several other occasions. Beyond the original bond offering (2006) and refinancing process, I have always found the Authority to be a valuable resource and partner to Tilton School. They have offered seminars that bring understanding of the tax- exempt bond market and have been accessible for training and mentoring of our Finance Committees and Board of Trustees on the process of the tax- exempt market. They have provided guidance and due diligence well beyond the bond offering, through the life of the bond on all the nuances of compliance, requisitioning of funds and financial oversight, etc. Additionally, the Authority offers Capital Appreciation Notes and Direct Loans with favorable rates which has helped Tilton School tremendously. The work that New Hampshire Health and Education Facilities Authority does on behalf of its clients is exemplary. Tilton School has been the benefactor of many of these services. Please feel free to call or email with any questions or comments you may have in regards to the support the Authority provides its clients: (603) 286-1722; [email protected]. Sincerely, Eiizal5eth A. Sheehan Director of Finance & Operations easterseals New Hampshire April 9, 2018 To Whom It May Concern: On behalf of Easter Seals New Hampshire, Inc., l want to express our sincere appreciation for being able to work directly with NH HEFA on bond financing projects. Clearly the level of service, knowledge, expertise and efficiency throughout all interactions with NH HEFA has been and is superb. We have worked with NH HEFA for over 14 years, have done two fairly large tax- exempt bond deals, each with its own nuances. NH HEFA's role and guidance were invaluable, guiding us every step of the way through their highly organized process, and staff that helped us to understand the complex requirements of tax-exempt financing and streamlining processes to make it easy for us to manage. Easterseals NH relies on our ongoing relationship with NH HEFA, and as such we fully support and endorse NH HEFA's continuation as it exists. Sincerely, Elfin Treanor Senior Vice President and Chief Financial Officer 555 Auburn Street • Manchester, NH 03103 • 603.623.8863 • Fax 603.625.1148 www.eastersealsnh.com/nh 1, The Mental Health Center 401 Cypress Street. of Greater Manchester Manchester, NH 03103 www.rnhcgm.orp, 13: 603.668,4111 al F: 603.669.1131 April 09, 2018 Bonnie S. Payette Executive Director New Hampshire Health and Education Facilities Authority P.O. Box 2110 54 South State Street Concord, NH 03302-2110 RE: NH-HEFA Bond Issuance for the MHCGM Purchase of 2 Wall St. July 2017 Dear Bonnie, Please know that I am long past due in congratulating you in taking on your new role at NH-HEFA as Executive Director upon the retirement of David Bliss. I'm not sure if I ever shared with you my trepidation the day that Jeffrey Seifert, Regional VP of TD Bank brought me to your office. The thought of constructing the financial plan for The Mental Health Center of Greater Manchester (MHCGM) to purchase a 9.5 Million dollar office building was daunting to say the least! However, 60 minutes after meeting you and David, I knew that we could achieve our goal and begin to build an asset for our organization, an asset that would work to sustain our mission to the Manchester community in the years to come. As you may remember, M:EICGM was faced with the need to relocate about 30,000 SF of leased Class B office space that had been home to 3 clinical programs for over 15 years. Our goal was to position MHCGM to improve the location and the environment of care for our patients while simultaneously reducing our monthly expenses. In the summer of 2015, MHCGM entered into a 10 year lease for 35,000 SF in a 65,000 SF Class A office building in downtown Manchester. This lease came with an option to buy the entire building with parking capacity for 225 cars. The option to buy was only able to be consummated at the end of the initial lease year (June 2017) and at a predetermined price of 9.5 Million dollars. The lease alone achieved our goals of enhancing our location and our environment of care and with favorable terms, we immediately lowered our monthly expenses. In the short term, we were paying less money for a far better space! However, the key to long term stability and economic prosperity for MHCGM would come if the economics of purchasing the building could be well understood and managed. The guidance that I receive from you and David set us on a clear path with identifiable milestones, which included the determination process to understand if preset price was reasonable and secondarily, how MHCGM could assemble the appropriate financing to purchase the building considering the complications that although MHCGM, a nonprofit, would own 100% of the building it would only occupy 60% of the building while the remaining percentage of occupancy would be leased by for profit entities. The expert consensus from NH-HEFA, TD Bank and Wadleigh Law, MHCGM was to assemble a 3 tiered financing plan: 20% cash down payment; 20% commercial bank loan and 60% tax exempt bond through NH-HEFA. So in fact, it was just about a year ago that you worked with us to assemble the "Dream Team" of NH-HEFA, TD Bank, along with the law firms of Devine Milimet, Hawkins, Delafield & Wood, Solloway & Hollis and Wadleigh Law. This team provided me with many lessons in timely project management, positive communication and a level of exemplary professional diligence. Truthfully, I believe the financial success for so many healthcare and education organizations has come as the direct result of the extreme level of expertise and positive collaborative relationships that NH-HEFA has so very dutifully cultivated over the years. We here in NH are so very, very fortunate to have an organization like NH-HEFA to turn to when the stakes are so high in terms of needed growth combined with financial stability to ensure that education and healthcare is available in a robust fashion for the citizens of this Granite State. So here is the rest of the story that you made happen for the people of Manchester: Upon the successful purchase of 2 Wall St. in downtown Manchester NH on 07/31/17 for the predetermined price of 9.5 million dollars, The Center inherited a wonderful group of tenants including: American Heart Association C.B. Richard Ellis Charles Schwab GSA Dept. of Defense Genoa Healthcare Hair Club Kleinfelder Northeast, Inc. Network-4-Health Senator Jeanne Shaheen Although prior to the purchase of 2 Wall St., MHCGM owned well over 100,000 SF of space, performing the property manage function for others in a Class A setting is not a usual and customary service of MHCGM. Recognizing this, we issued an RFP to bring onboard a reputable property management firm. Upon executing the process we now have an excellent partner in CP Management. Side by side with CP Management we have created a positive neighborhood culture in the building as evidenced by drop in breakfast and lunchtime gatherings, along with a monthly newsletter, so that the tenants know each other and are aware of scheduled maintenance, improvements and news of additional tenants. Since taking ownership of the building in August of 2017, we have added 2 new tenants leaving only 5.3% of the building vacant. We have the remaining space in the hands of a 3rd party broker. On the economic front, thanks to your efforts and expertise, MHCGM is saving nearly $125,000 in occupancy costs for the programing that we moved into 2 Wall St. We have added to the vitality of our downtown by bringing in nearly 150 new workers and foot traffic of nearly 300 people per day! I I That is 450 people per day who are taking advantage of the merchants in our downtown....all while creating more cash flow for the honorable mission of MHCGM, to empower individuals to achieve recovery, develop resilience and promote personal as well as community wellness through an accessible, comprehensive, integrated and evidence-based system of mental health care. On behalf of the patients, their families and the employees of MHCGM we thank you ever so much! Sincerely, iII Rider President/CEO New Hampshire Housing Dean J.Christon Executive Director Bringing You Home [email protected] April 10, 2018 The Honorable John Hunt, Chair House Commerce and Consumer Affairs Committee Legislative Office Building, Room 302 Concord, NH 03301 Subject: SB 537 — conferring extraterritorial financing powers on the New Hampshire business finance authority Dear Chairman Hunt: I am writing to express the thoughts of New Hampshire Housing regarding SB 537, which would create a National Finance Authority within the Business Finance Authority (BFA) to engage in bond financing of development projects outside the boundaries of the State. We are generally supportive of the approach taken in this legislation, and we specifically support section 14 of the bill, providing New Hampshire Housing with similar extraterritorial authority. Our principal concern with SB 537 pertains to the definition of "project" on page 2 of the bill. We had agreed with the BFA on language, but at the Senate Commerce Committee executive session an amendment was proposed by others that changed this definition to add a new final sentence. This sentence, which purports to provide borrowers with flexibility, only adds confusion. It makes it unclear how the different financing authorities of the State would interact and collaborate on these matters. Because the Senate Commerce Committee was under deadline for action, they were unable to address the substance of this issue. We have a long history of working cooperatively with the BFA, and we fully anticipate that our two organizations can develop systems to ensure that financing proposals anticipated by this legislation would be addressed expeditiously, while also protecting the interests of New Hampshire and its citizens. We respectfully urge your committee to amend the bill by striking the last sentence of the definition of "project," found on page 2, lines 15 through 17. This would restore the definition to what the BFA and New Hampshire Housing had agreed. The proposed amendment is attached. New Hampshire Housing Finance Authority 32 Constitution Drive Bedford, NH 03110 Moiling Address: P.O. Box 5087 Manchester, NH 03108 (603) 472-8623 TDD: (603) 472-2089 www.GoNewHampshireHousing.com www.nhhfa.org SB 537 OBJECTIONS OF NEW HAMPSHIRE HEALTH AND EDUCATION FACILITIES AUTHORITY ("HEFA") TO SECTION 1 OF THE BILL RELATED TO THE BUSINESS FINANCE AUTHORITY ("BFA") Core Objections: 1. The definition of "Project" in Section 2 VII of the proposed new BFA statute uses very broad language that would substantially expand the scope of the BFA's out-of-state bond issuing powers to include projects and facilities that are not now described in RSA 162-1:2 I through XIV, and that would overlap the powers of HEFA. In particular, it would permit the BFA to finance non-profit facilities of all types, instead of just . "commercial facilities", as it is currently limited. This proposal is inconsistent with understanding that the Amendment would simply expand the BFA's existing powers to include out-of-state issues. (Acceptable definition of "Project" attached.) 2. The definition of "Project" is inconsistent with what HEFA understands to have been the agreement reached between BFA and HFA with respect to the BFA's powers to issue housing bonds. 3. Section 5 V of the proposed new BFA statute incorrectly infers that the proceeds of BFA bonds issued under this new chapter may be spent on in-state projects. That is not consistent with the agreement of the parties that the new legislation would be limited to out-of-state bonds. (Acceptable version of Section 5 V attached.) Other provisions of concern that should be considered: A. Sections 5 1 and 10 I of the proposed new BFA statute provide that only the Governor must approve the new out-of-state bonds. This would bypass the current process by which the Governor and Executive Council must approve all BFA bond issues, and in the process, find that the proposed project would benefit the State. B. There is no requirement in the proposed new BFA statute that there be any connection to or benefit to the State of New Hampshire as a result of the issuance of bonds for out-of-state projects. C. Section 12 of the proposed new BFA statute includes an ill-advised and unheard of requirement that the BFA must enter into a 3-year agreement with a third party firm to manage the new out-of-state bond program. {C1769964.2) ACCEPTABLE REVISIONS TO PROPOSED BFA AMENDMENT TO SB 537 SUBMITTED BY HEFA A. Amend the definition of "Project" in proposed RSA 162-S:2 VII to read: VII. "Project" means any capital improvement, purchase of receivables, property, assets, commodities, bonds or other revenue streams or related assets, working capital program or liability or other insurance program for an Eligible Facility as defined in RSA 162-1:2.1, ill-a, VII, Vika, IX-a, IX-b, X-a, XII, XIII, and XIV that is located outside the state. B. Amend proposed RSA 162-S:5 V to read: V. The proceeds of a bond issued under this chapter may only be used to finance or refinance one or more projects located outside of the state. C. Proposed amendments to address concerns A-C on the prior page can be provided upon request. [C1769964.2 A 51,;tu, Sti MA 02109 .1775 HINCKLEY ALLEN . .311 345 99000 f• 617 345 9020 March 8, 2018 James Key-Wallace, Executive Director NH Business Finance Authority 2 Pillsbury Street, Suite 201 Concord, NH 03301 Dear James: You have asked whether the Business Financing Authority of the State of New Hampshire (the "BFA") can issue bonds for the benefit of non-profit businesses in the State of New Hampshire (the "State"), such as hospitals, schools, colleges and other organizations described in Section 501(c)(3) of the Internal Revenue Code of 1986, as amended, under its existing statutory authority in RSA Chapter 162-I (the "BFA Statute"). In our opinion, the BFA does have authority under the BFA Statute to issue bonds for the benefit of non- profit businesses. The authority for this conclusion is found on the face of the BFA Statute, which is clear and unequivocal in this regard. Under Section 162-1:3 of the BFA Statute, the BFA has the authority to issue bonds to pay "project costs". Under Section 162-1:2.IX, "project costs" are "any costs or expenses reasonably incidental to a project...." [Emphasis added.] Section 162-1:2.VIII in turn defines a "project" as "the creation, establishment, acquisition, construction, expansion, remodeling or replacement of an eligible facility, or of one or more structural or operational components of an eligible facility, financed by the issue of bonds under this chapter." [Emphasis added.] Finally, Section 162-1:2.111-a provides that a "commercial facility shall be an eligible facility and means any facility which is to be used in a trade or business whether or not such business is operated for profit." [Emphasis added.] The New Hampshire legislature added the definition of "commercial facility" to the BFA Statute in 1981 and in 1995 the legislature rewrote the definition, adding the clause "whether or not such business is operated for profit". Thus, for more than 20 years, the New Hampshire Legislature has contemplated that it would be within the authority of the BFA to issue bonds to support the development of capital assets and facilities by non- . ALBANY o• aosToN P. HARTFORD > MANCHESTER II. NEW YORK ► PROVIDENCE HINCKLEY. ALLAN E SNYDER UP, ATTPRNEYS AT LAW 57531142 v2 James Key-Wallace, Executive Director March 8, 2018 Page 2 profits. In fact, on numerous occasions in the past, the BFA has issued bonds for just these purposes. For example, we and our colleagues at our processor firm Palmer & Dodge LLP (and at its successor firms through merger), and at least one other bond counsel firm, have approved the issuance of BFA bonds for numerous non-profit business, including, but not limited to the following publically offered bonds: (1) Elliot Hospital - $130,000,000 Business Finance Authority Revenue Bonds, Elliot Hospital Obligated Group Issue, Series 2009A; (2) Huggins Hospital - $15,000,000 Business Finance Authority of the State of New Hampshire First Mortgage Revenue Bonds, Huggins Hospital Issue, Series 2009; $10,000,000 Business Finance Authority of the State of New Hampshire Variable Rate Demand Revenue Bonds (Huggins Hospital Issue) Series 2007; (3) Valley Regional Hospital - $26,260,000 Business Finance Authority of the State of New Hampshire (Valley Regional Hospital Issue) Series 2008; (4) Littleton Regional Hospital - $30,000,000 Business Finance Authority of the State of New Hampshire Variable Rate Demand Revenue Bonds (Littleton Regional Hospital Issue) Series 2007; (5) Monadnock Community Hospital - $20,230,000 Business Finance Authority of the State of New Hampshire Variable Rate Demand Revenue Bonds (Monadnock Community Hospital Issue) Series 2007; (6) Student Conservation Association - $2,600,000 Business Finance Authority of the State of New Hampshire Variable Rate Demand Revenue Bonds (The Student Conservation Association, Inc. Issue — Series 2007); (7) Senior Housing of NH - $22,595,000 Business Finance Authority of the State of New Hampshire Fixed Rate Revenue Bonds (Senior Housing of New Hampshire, Inc. Project), Series 2007A, Series 2007B and Series 2007C (Federally Taxable); (8) Alice Peck Day - $15,365,000 Business Finance Authority of the State of New Hampshire Revenue Bonds (Alice Peck Day Health Systems Obligated Group Issue) Series 2007A and Series 2007B (Federally Taxable); $19,120,000 Business Finance Authority of the State of New Hampshire Revenue Bonds (Alice Peck Day Health Systems Obligated Group Issue) Series 1999 and Series 1999B; Ir. ALBANY I. BOSTON ► cortcoRD Y HARTsoRc.o. NEW YORK P. PROVIDENCE . ALLEN 3 SNYDER LIP .%TTORNEY•5 57531 142 v2 James Key-Wallace, Executive Director March 8, 2018 Page 3 (9) Metro Health Foundation - $10,000,000 Business Finance Authority of the State of New Hampshire Health Care Facility Revenue Bonds (Metro Health Foundation, Inc. Project) Series 1998A and $1,850,000 Business Finance Authority of the State of New Hampshire Health Care Facility Revenue Bonds (Metro Health Foundation, Inc. Project) Series 1998B; (10) Seacoast Health - $6,455,000 Business Finance Authority of the State of New Hampshire Variable Rate Demand Bonds, Series 1998A (Foundation for Seacoast Health) and $8,340,000 Business Finance Authority of the State of New Hampshire Variable Rate Demand Revenue Bonds, Series 1998B (Taxable) (Foundation for Seacoast Health); Remarketed in 2012; (11) Wentworth Home - $14,000,000 Business Finance Authority of the State of New Hampshire Revenue Bonds (The Mark H. Wentworth Home Issue) Series 2006; (12) Cottage Hospital - $7,600,000 Business Finance Authority of the State of New Hampshire Variable Rate Demand Revenue Bonds (Cottage Hospital Issue — Series 2005); and (13) Proctor Academy - $6,000,000 Business Finance Authority of the State of New Hampshire Revenue Bonds Proctor Academy Project 1998 Series A. Please do not hesitate to contact me if you, or anyone else with whom you are discussing this issue, have any follow-up questions or would like to discuss this further. Very truly yours, 1(111 1117L Kris A. Moussette KAS:kj1 b ALBANf 1.• BOSTON I. CONCORD P. HARTFORD I. NEW 'YORK PROVIDENCE SP4mErt AT ri..)RNErr: AT LAW 57531142 v2 Page 1 of 11 SB 537 - AS AMENDED BY THE SENATE 03/21/2018 1107s 2018 SESSION 18-2886 05/03 SENATE BILL 537 AN ACT conferring extraterritorial financing powers on the New Hampshire business finance authority. SPONSORS: Sen. Innis, Dist 24; Sen. Carson, Dist 14; Sen. Fuller Clark, Dist 21; Sen. Gannon, Dist 23; Sen. Giuda, Dist 2; Sen. Reagan, Dist 17; Sen. Soucy, Dist 18; Sen. Watters, Dist 4; Rep. Williams, Hills. 4; Rep. Hunt, Ches. 11 COMMITTEE: Executive Departments and. Administration AMENDED ANALYSIS This bill confers extraterritorial financing powers on the business finance authority. The bill establishes the national business authority as a component of the business finance authority and authorizes it to issue bonds and undertake development projects outside the state of New Hampshire. Explanation: Matter added to current law appears in bold italics. Matter removed from current law appears Matter which is either (a) all new or (b) repealed and reenacted appears in regular type. 03/21/2018 1107s 18-2886 05/03 STATE OF NEW HAMPSHIRE In the Year of Our Lord Two Thousand Eighteen AN ACT conferring extraterritorial financing powers on the New Hampshire business finance authority. Be it Enacted by the Senate and House of Representatives in General Court convened: 1 New Chapter; Extraterritorial Financing Powers of the New Hampshire Business Finance Authority. Amend RSA by inserting after chapter 162-R the following new chapter: CHAPTER 162-S EXTRATERRITORIAL FINANCING POWERS OF THE NEW HAMPSHIRE BUSINESS FINANCE AUTHORITY 162-S:1 Declaration of Policy. It is declared that the policy of the state of New Hampshire to promote itself as an effective location for private enterprise, and therefore the policy of the state of New Hampshire is to provide for the establishment, support, preservation, and redevelopment of business and industry, whether or not operated for profit, located outside the state of New Hampshire. It is further declared that the performance of the powers conferred on the business finance authority as set forth in this chapter shall be regarded as performing an essential governmental function in carrying out the policy set forth in littp://www. gencourt.state.nh.us/bi ll_statu s/billText. aspx? sy=20 1 8 &id=1 902&txtFonnat=h... 4/1 8/2018 Page 2 of 1 1 this section and by the carrying out of the powers set forth in the following provisions of this chapter. The purpose of this chapter is to expand and not to limit the existing powers of the business finance authority in order to carry out this policy. 162-S:2 Definitions. Unless the context otherwise clearly requires, in this chapter: I. "Authority" or "national finance authority" means the business finance authority acting pursuant to this chapter and operating under the name "national finance authority". II. "Business finance authority" means the New Hampshire business finance authority created pursuant to RSA 162-A. III. "Bond" means any bond, note, or other obligation evidencing indebtedness issued or entered into or acquired or incurred by the authority under this chapter, including any certificate of participation or lease or lease-purchase, installment sale, or other financing agreement, and any refunding bond or other indebtedness with respect to a bond or any other evidence of indebtedness issued by the authority or another party. IV. "Designated member" means the executive director of the business finance authority and the 4 members of the board of directors of the authority appointed pursuant to RSA 162-S:3, II. V. "Executive board" means the executive board of the national finance authority, whose designated members collectively shall have and carry out the powers conferred on the business finance authority in this chapter. VI. "Participating institution" means any project owner, co-owner, operator, sponsor, or other party which, pursuant to the provisions of this chapter, undertakes the financing and construction or acquisition of a project or undertakes the refunding or refinancing of bonds relating to a project as provided in and permitted by this chapter. VII. "Project" means any capital improvement, purchase of receivables, property, assets, commodities, bonds, or other revenue streams or related assets, working capital program, or liability or other insurance program, located outside of the state. The term "project" shall include any housing facility, located outside the state, for students, faculty, or staff affiliated with an educational institution and any housing facility, including without limitation any senior living, assisted living, or nursing home facility, used or operated by or for the benefit of any hospital, health care, senior care, or senior living institution in connection with the carrying out of hospital, health care, senior care, or senior living services, but shall not include any housing, housing project, or any other facility that may be financed by the New Hampshire housing finance authority under RSA 204-C without the written consent of the New Hampshire housing finance authority's executive director or designee. Notwithstanding anything in this definition or chapter to the contrary, the participating institution shall be afforded the ability to use whichever authority it chooses in writing. VIII. "Revenue" means all moneys and fees received from participating institutions or any other source with respect to a project or otherwise for services provided by or on behalf of the authority. IX. "State" means the state of New Hampshire. 162-5:3 Establishment of the Authority; Membership; Meetings; Reporting. I. The national finance authority is hereby established within and as a component Unit of the business finance authority for the purpose of exercising the powers, duties and responsibilities conferred by this chapter. While acting pursuant to this chapter, the business finance authority shall operate under the name "national finance authority". Subject to the provisions of this chapter, the authority shall be governed by the designated members as provided in paragraph II. The authority shalt not be separate from the business finance authority but through its executive board shall exercise all powers and take all actions pursuant to this chapter on behalf of the business finance authority. http://www.gencourtstate.nh.us/bill_status/billText.aspx?sy=201 8&- id= 1 902&txtFormat—h... 4/1 8/20 1 8 Page 3 of 11 II. All of the powers of the authority are vested in the executive board of the authority, comprising 5 members, one of whom shall be the executive director of the business finance authority serving ex officio and 4 of whom shall be current members of the board of directors of the business finance authority who have been appointed by the chairman of the business finance authority. Of the 4 initial appointed members of the executive board of the authority, one shall be appointed for a term ending on November 3, 2019, one shall be appointed for a term ending on November 3, 2020, one shall be appointed for a term ending on November 3, 2021, and one shall be appointed for a term ending on November 3, 2022. Successors to those initial executive board members whose terms expire each year shall be appointed by the chairman of the business finance authority, each of whom shall be a current member of the board of directors of the business finance authority and each whom be appointed for a term of 3 years. An appointed member may continue to serve until a successor is appointed and so long as such appointed member is a member of the board of directors of the business finance authority. The term of an appointed member of the executive board shall terminate at the time such appointed member ceases to be a member of the board of directors of the business finance authority. If a vacancy occurs in the membership of the appointed members of the executive board, the chairman of the business finance authority shall appoint a successor to complete the remainder of the unexpired term of the appointed member leaving such vacancy. Any appointed member of the executive board shall be eligible for re-appointment. Members of the executive board shall not receive compensation for serving in such capacity, but shall be entitled to reimbursement for any expenses actually incurred in connection with such service, if the executive board shall determine that such expenses shall be reimbursed and there are unencumbered funds of the authority available for such purpose. III. The members of the executive board shall elect one of its members as chairperson of the executive board and another as vice chairperson of the executive board, and shall also elect a secretary of the executive board, who need not be a member of the executive board. Notwithstanding any provision of RSA 162-A or RSA 162-I to the contrary, 3 members of the executive board shall constitute a quorum for any meeting of the authority under this chapter, and the vote of a majority of the members of the executive board constituting a quorum present and voting shall be a prerequisite to any action taken by the authority. A vacancy in the membership of the executive board shall not impair the right of a quorum to exercise all the powers and perform the duties of the authority under this chapter. Notwithstanding RSA 91-A or any other law to the contrary, members of the executive board shall be permitted to participate in meetings of the authority by telephone or video conference, provided that any member so participating shall be able to be heard by and to hear every other member of the executive board participating in the meeting and, unless the authority meeting is a nonpublic session being conducted pursuant to RSA 91-A:3, shall be' able to hear and be heard by all members of the public attending the meeting, and provided further that the meeting is held at a physical location available to the public and identified in the notice of the meeting. Voting members participating by telephone or video conference shall be treated as present at the meeting for all purposes, including the establishment of quorum. IV. Any action taken by the authority under this chapter may be authorized by resolution at any regular or special meeting, and each such resolution shall take effect immediately and need not be published or posted. V. The business finance authority, acting pursuant to its general powers set forth in RSA 162-A and RSA 162-I, shall have the power to establish rules, requirements, and procedures with respect to the operations and activities of the authority pursuant to this chapter. Such rules shall be subject to the requirements of RSA 162-A:28. http://www.geneourt.state.nh.us/bill_status/billTextaspx?sy=20 I 8 & id= 1 902&txtFormat=h... 4/1 8/20 1 8 Page 4 of 11 VI. Upon dissolution of the authority, subject to the adequate provision for the payment of its bonds, including interest on the bonds, and the performance of its contractual obligations, the property and other net assets of the authority shall remain with or be transferred to the business finance authority. 162-S:4 Powers of the Authority. Subject to the powers of the business finance authority established under RSA 162-S:3, V to establish rules, requirements, and procedures, the authority shall have all of the powers necessary or convenient to carry out the purposes and provisions of this chapter. In addition to all other powers conferred on the business finance authority under the laws of the state, the business finance authority, acting under this chapter by, through, and as the national finance authority, and further subject to the powers of the business finance authority established under RSA 162-S:3, V, shall have power to do any of the following in connection with bonds issued under this chapter: I. Adopt policies for the regulation of its affairs and the conduct of the business of the authority. II. Sue, with the approval of the business finance authority, and be sued in the name of the authority, and in such capacity to plead and be impleaded in judicial proceedings. III. Acquire, buy, own, operate, sell, lease as lessor or lessee, encumber, mortgage, hypothecate, pledge, assign, gift, or otherwise transfer any real, personal, tangible, intangible, or other property or interest in real, personal, or other property that is located outside of the state, either in the name of the authority or in the name of a partnership, trust, corporation, limited liability corporation, or other special purpose entity created by and under the control of the authority. IV. Enter into contracts relating to the issuance of bonds. V. Issue bonds or refunding bonds, subject to RSA 162-S:5 and RSA 162-S:10, to finance or refinance a project, including to fund a reserve fund or capitalized interest, payment of costs of issuance and other costs related to the financing or refinancing or credit enhancement, and enter into agreements related to the issuance of bonds, including liquidity and credit facilities, remarketing agreements, insurance policies, debt service guarantee agreements, letters of credit or reimbursement agreements, indexing agreements, interest rate swap agreements, currency exchange agreements, commodity swap agreements, other hedge agreements, and any other like agreements, in each case with such payment, interest rate, currency security, remedy, and other terms and conditions as the authority shall approve. VI. Retain or appoint such agents, finance professionals, and special advisors as the authority finds necessary or convenient and fix their compensation. VII. Accept gifts, loans, or other aid. VIII. Establish and collect fees, including charges to recover the administrative expenses of the authority, from participating institutions and other parties who benefit from the provision of services by the authority, or services provided by an outside entity on behalf of the authority. IX. Make loans to, lease real, personal, and other property from or to, or enter into any other kind of an agreement with a participating institution or other entity, in connection with the financing or refinancing of a project. X. Mortgage, pledge, or otherwise encumber the authority's property assigned to or transferred to it in connection with bonds or its interest, or any portion of its interest, in a project. XI. Assign or pledge any portion of its interest in projects, mortgages, deeds of trust, indentures of mortgage or trust, leases, purchase or sale agreements, other financing agreements, or similar instruments, bonds, notes, and security interests in property, of a participating institution, or contracts entered into or acquired in connection with bonds. XII. Issue, obtain, or aid in obtaining, from any person, any insurance or guarantee to, or for, the payment or repayment of interest or principal, or both, on any bond, loan, lease or other obligation http://www.gencourtstate.nh.us/bill_status/biliTextaspx?sy=2018&id=1902&tatFormat=h... 4/18/2018 Page 5 of 11 evidencing or securing such a bond, loan, lease or obligation that is issued, incurred, or entered into under this chapter. XIII. Apply on its own behalf or on behalf of a participating institution to any unit of government for an allocation of volume cap, tax credit, subsidy, grant, loan, credit enhancement or with respect to any other federal program or any program of any other unit of government in connection with the financing or refinancing of a project. XIV. Invest any bond proceeds or any money held for payment or security of the bonds, or any contract entered into under this chapter, in any securities or obligations permitted by the resolution, trust agreement, indenture, or other agreement providing for issuance of the bonds or the contract. XV. At the request of one or more participating institutions, combine and pledge revenues of 2 or more projects to the repayment of one or more series of bonds issued under this chapter. XVI. Purchase bonds issued by or on behalf of, or held by, any participating institution, any unit of government or a political subdivision, department, or authority thereof, such purchased bonds to be held by the authority or sold, in whole or in part, separately or together with other bonds issued by the authority. Notwithstanding anything in this chapter or in the laws of the state to the contrary, none of the earnings of the authority shall inure or be permitted by the authority to inure to the benefit of any private person. 162-S:5 Issuance of Bonds; Exemption from Taxation. I. The authority shall not issue bonds unless the issuance thereof shall have first been authorized by a bond resolution approved by the authority. Bonds issued pursuant to this chapter shall be designated and captioned as bonds of the national finance authority. Bonds may be issued under this chapter without obtaining the consent of the governor and council or of any department, division, commission, board, body, bureau, or agency of the state; and without any other proceedings or the happening of any conditions or things except those proceedings or the occurrence of those conditions or things that are specifically required by this chapter and by the provisions of the resolution authorizing the issuance of such bonds or the trust agreement securing the same. A bond issued under this section shall meet all of the following requirements: (a) The face of the bond shall include the date of issuance and the date of maturity. (b) The bond shall include the statements required under RSA 162-S:9, III and RSA 162-S:10, V. (a) The bond shall bear a rate of interest, either fixed or variable, except that any variable rate of interest shall be made subject to a maximum rate. (d) The bond shall specify when interest and principal shall be paid. (e) Bonds shall be executed in the manner provided in the resolution therefor and may be executed by one designated member, provided that such execution may be by facsimile so long as the bond is signed by an authentication agent appointed by the authority. (f) Bonds in a single issue may comprise a single denomination or 2 or more denominations. II. Notwithstanding paragraph I, as an alternative to specifying the matters required to be specified in the bond resolution pursuant to paragraph I, the resolution may specify designated members or officers or employees of the authority by name or position, to whom the authority delegates authority to determine which of the matters specified under paragraph I, and any other matters that the authority deems appropriate, for inclusion in the trust agreement, indenture, or other agreement providing for issuance of the bonds as finally executed, provided that a resolution approved by the authority under this section shall in all cases specify each of the following: (a) The maximum principal amount of bonds to be issued. (b) The maximum term of the bonds. http://www.geneourt.state.nh.us/bill_status/billTextaspx?sy=20 1 8 &id=1 902&txtFormat—h... 4/18/201 8 Page 6 of 11 III. A bond issued under this section may include, or be subject to, any of the following: (a) Mandatory, special, or optional redemption, or purchase in lieu of redemption, or tender, as provided in the resolution, and any notice of redemption with respect to any bond may be conditioned on the occurrence of such events as are specified by the authority in such notice. (b) A provision providing a right to tender. (c) A trust agreement or indenture containing any terms, conditions, and covenants that the authority determines to be necessary or appropriate, but such terms, conditions, and covenants may not be in conflict with the resolution. IV. The authority may purchase any bond issued under this section. Subject to the terms of any agreement with the bondholders, the authority may hold, pledge, resell, or cancel any bond purchased under this paragraph, except that a purchase under this paragraph will not cause the extinguishment of such bond unless the authority cancels the bond or otherwise certifies its intention that the bond be extinguished. V. The proceeds of a bond issued under this chapter may be used to finance or refinance die or more projects located outside of the state. VI. The exercise of the powers granted by this chapter shall be in all respects for the benefit of the people of the state, for the increase of their commerce, welfare, and prosperity, and for the improvement of their health and living conditions, and shall constitute the performance of an essential governmental function, and the authority shall not be required to pay any taxes or assessment upon or in respect of a project or any property acquired or used by the authority or under the jurisdiction, control, possession, or supervision of the same or upon the activities of the authority in the operation or maintenance of any project under the provisions of this chapter, or upon income or other revenues received therefrom, and any bonds of the authority issued under the provisions of this chapter, their transfer and the income therefrom, including any profit made on the sale thereof, as well as the income and property of the corporation, aie at all times exempt from taxation of every kind by the state and by the municipalities and. all other political subdivisions of the state. 162-S:6 Sale of Bonds. I. The sale of bonds under this section shall be conducted as provided in the resolution therefor or as directed by the person or persons to whom a delegation of authority has been made pursuant to RSA 162-5:5, II. II. A sale of bonds may be public or private, and bonds may be sold at- the price or prices, and upon the conditions, determined by the authority, and the authority shall give due consideration to the recommendations of the participating institution with respect to the project when determining the conditions of sale of bonds with respect thereto. III. If at the time of sale definitive bonds are not available, the authority may issue interim certificates exchangeable for definitive bonds. 162-S:7 Bond Security. I. The authority may secure bonds by a trust agreement or indenture or other agreement by and between the authority and one or more corporate trustees. Such trust agreement, indenture or other agreement may contain provisions for pledging properties, revenues and other collateral; holding and disbursing funds; protecting and enforcing the rights and remedies of bondholders; restricting individual rights of action by bondholders; and amendments, and any other provisions the authority determines to be reasonable and proper for the security of holders of bonds issued under this chapter or contracts entered into under this paragraph in connection with the bonds. http://www.geneourtstate.nh.us/bill_status/billText.aspx?sy=201 8ckid=1902&txtFormat=h.., 4/18/2018 Page 7 of 1 1 II. A pledge of property, revenues, or other collateral by the authority to secure the paythent of the principal or redemption price of, or interest on, any bonds, or any reimbursement or similar agreement with any provider of credit enhancement for bonds, or any swap or other agreement entered into in connection with bonds, is binding on the parties and on any successors. The collateral shall immediately be subject to the pledge, and the pledge shall constitute a lien and security interest which shall attach immediately to the collateral and be effective, binding, and enforceable against the pledgor, its successors, purchasers of the collateral, creditors, and all others, to the extent set forth, and in accordance with, the pledge document, irrespective of whether those parties have notice of the pledge and without the need far any physical delivery, recordation, filing, or further act. 162-S:8 No Personal Liability. No designated member, director, officer, employee, or agent of the authority, the business finance authority, or a business entity created under RSA 162-S:4, HI shall be liable personally on the bonds or any contract entered into by the authority or such business entity or subject to any personal liability or accountability by reason of the issuance of the bonds, unless the personal liability or accountability is the result of willful misconduct. 162-S:9 Bonds not Public Debt. I. Unless otherwise expressly provided in the resolution therefor, bonds of the authority shall be limited obligations of the authority payable solely from amounts received by or on behalf of the authority from revenues derived from the project to be financed or refinanced thereby, or from any contract entered into or investment made in connection with the bonds and pledged to the payment of the bonds. II. The state and the political subdivisions of the state are not and shall not be liable on bonds issued or any other contract entered into under this chapter, or for any other debt, obligation, or liability of the authority, whether in tort, contract, or otherwise. III. Bonds issued under this chapter are not a debt of the state or the political subdivisions of the state. No bond issued under this chapter shall obligate .the state, or any political subdivision approving a financing under RSA 162-S:10 to levy any tax or make any appropriation for payment thereof or with respect thereto. All bonds issued by the authority under this chapter are payable solely from the funds pledged for their payment in accordance with the trust agreement, indenture, or other agreement providing for their issuance. All bonds shall contain, on their face, a statement regarding the obligations of the state, the political subdivisions of the state, and the authority as set forth in this section. 162-S:10 Limitations. I. To the extent required by section 147(f) of the Internal Revenue Code of 1986, as amended, or by any applicable successor provision of federal tax law, the authority may not issue bonds to finance a project in any state or territory of the United States unless the governor, or his or her designee in compliance with applicable federal law, of the state of New Hampshire has approved the financing of the project following a hearing held by the authority and unless the state or a political subdivision within whose boundaries the project is to be located has approved the financing of the project; provided that an approval by a political subdivision under this paragraph may be made by the governing body of the political subdivision or by the highest ranking executive or administrator of the political subdivision. II. This chapter provides a complete alternative method, to all other methods provided by law, to exercise the powers authorized in this chapter, including the issuance of bonds, the entering into of contracts related to those bonds, and the financing or refinancing of projects. III. A project may be located outside of the United States and outside a territory of the United States, and the authority may issue bonds to finance or refinance such project, if at the time of issuance of such bonds the participating institution with respect thereto is incorporated and has its principal place of business within the United States or a territory of the United States. http://lAiNvw. geneourt. state. nh.us/bill_status/billTextaspx? sy=20 1 8&id=1902&txtFormat—h... 4/1 8/20 1 8 Page 8 of 11 IV. Any action brought to challenge the validity of the issuance of a bond under this chapter, or the enforceability of a contract entered into under this chapter, must be commenced in a court of competent jurisdiction in the state within 30 days of adoption by the authority of the resolution authorizing the issuance of the bond or the execution of the contract. V. Bonds issued under this chapter shall not be invalid for any irregularity or defect in the proceedings for their sale or issuance. All bonds shall contain, on their face, a statement that they have been authorized and issued pursuant to the laws of the state, and such statement shall be conclusive evidence of the validity of the bonds. 162-S:11 State Pledge. The state does hereby pledge to and agree with the holders of bonds issued under this chapter that the state shall not limit or alter the rights hereby vested in the authority to fulfill the terms of any agreements made with the holders of such bonds or in any way impair the rights and remedies of such holders until such bonds, together with the interest on them, with the interest on any unpaid installments of interest, and all costs and expenses in connection with any action or proceeding by or on behalf of such holders, are fully met and discharged. The authority is authorized to include this pledge and agreement of the state in any agreement with the holders of such bonds. 162-S:12 Selection of Authority Bond Program Administrator. Within 3 months after the initial designated members shall have been appointed pursuant to RSA 162-S:3, II, the business finance authority shall select a qualified firm to assist in the carrying out of the powers of the authority and the administration of the business of the authority conferred by this chapter. Such firm shall serve for a minimum term of 3 years. The selection of such firm shall be pursuant to a process approved by the board of directors of the business finance authority and such firm shall serve on such financial terms as shall be approved by board of directors of the business finance authority. At the conclusion of the initial term of service of such firm, the business finance authority shall determine whether, and on what terms, to engage any firm to provide any such services. 162-5:13 Rulemaking. I. The authority shall be exempt from the rules of any department, commission, board, bureau, or agency of the state except as otherwise provided in this chapter. II. The authority shall be exempt from the provisions of RSA 541-A and may adopt rules in accordance with its own procedures to facilitate, implement, and carry out the powers, duties, and purposes of the authority enumerated in this chapter and such other and additional powers and purposes as shall be conferred upon it by the legislature. The authority shall file in the office of legislative services a copy of all existing rules adopted by the authority. Any rule adopted after the effective date of this section or any amendment or repeal of any existing rule shall be filed in the office of legislative services within 7 days of such adoption, amendment, or repeal. 2 New Subparagraph; New Hampshire Health and Education Facilities Authority; Definition of Project. Amend RSA 195-D:3, II by inserting after subparagraph (b) the following new subparagraph: (c) Subject to RSA 195-D:9 and RSA 195-D:21, a project, or any portion thereof, may be located within or outside the state. 3 New Hampshire Health and Education Facilities Authority; Definition of Institution for Postsecondary Education or Higher Education. Amend RSA 195-D:3, V to read as follows: V. "Institution for postsecondary education or higher education" means an educational institution [cituated within the ctato] which by virtue of law or charter is a public or other nonprofit educational institution empowered to provide a program of education beyond the high school level and awards a bachelor's or graduate degree or provides a program of not less than 2 years' duration which is accepted for full credit toward a bachelor's degree. Said definition shall include the university system of New hap://www.geneourt.state.nh.us/bill_status/billText. aspx?sy-201 8 Scid=1 902&txtFormat=h... 4/1 8/20 1 8 Page 9 of 1 1 Hampshire or any of its components when revenue bonds are to be issued for the acqUisition, construction, renovation or refinancing of any structure designed for use as a dormitory or other housing facility, dining hall or other food service facility, student union, bookstore, or other revenue-producing facility of the university system of New Hampshire or any of its components, which revenue bonds are to be secured by the pledge of the revenue from such revenue-producing facilities, but not by the full faith and credit of the university system, any of its components, or the state of New Hampshire. 4 New Hampshire Health and Education Facilities Authority; Definition of Hospital. Amend RSA 195-D:3, VU to read as follows: VII. "Hospital" means any nonprofit hospital [located within and incorporated under the lawc of the ctatc which is licensed by the department of health and human cerviceed licensed in the state in which the hospital is located. 5 New Hampshire Health and Education Facilities Authority; Definition of Institution Providing a Health Care Program. Amend RSA 195-D:3, WIT-a to read as follows: "Institution providing a health care program" means a not-for-profit or charitable institution, public or private, which is exempt from federal taxation pursuant to section 501 of the Internal Revenue Code of 1986, as amended, and which is either licensed •] to provide any health care service or function or [ provides a program involving or otherwise related to the delivery of healthcare by institutions or professionals [licensed by the ctatc of New Hampshire], whether in the form of treatment, education, the provision or delivery of health care services or otherwise. 6 New Hampshire Health and Education Facilities Authority; Definition of Nursing Home. Amend RSA 195-D:3, XII to read as follows: XII. "Nursing home," notwithstanding any other provision of law to the contrary, means any nonprofit or charitable institution or organization, public or private, which is exempt from federal taxation pursuant to section 501 of the United States Internal Revenue Code of 1986 as amended, and which is engaged in the operation of, or formed for the purpose of operating, a facility in which nursing care, sheltered care, intermediate care, life-care or continuing care, and medical services are prescribed by or performed under the general direction of persons licensed to practice medicine or surgery [in New Hampchirc], and in whole or in part is, or shall be upon completion, licensed as a residential care facility under RSA 151:2, (e) or licensed as a nursing home under the laws of New Hampshire or licensed by the state in which it is located. 7 New Hampshire Health and Education Facilities Authority; Definition of Institution for Secondary Education. Amend RSA 195-D:3, XIV to read as follows: XIV. "Institution for secondary education" means a nonprofit institution for education, which [ic located within the ctate and which]: (a) Provides a program of education [within the etato] which is preparatory for postsecondary or higher education; or (b) Is a residential facility which is licensed as a group home or child care institution by the [department of health and human ccrviccc pursuant to -SA 170 E] state within which it is located. 8 New Hampshire Health and Education Facilities Authority; Definition of Home Health Care Provider. Amend RSA 195-D:3, XVI. to read as follows: XVI. "Home health care provider" means a home health care provider as defined in RSA 151:2-b which offers, and is licensed under RSA 151:2, I(b) or by the state within which it is located to offer health care services and which is a nonprofit or charitable institution or organization, public or private, which is http://www.geneourtstate.nh.us/bill_status/billText.aspx?sy=201 8 &id=1 902&txtFormat=h... 4/1 8/201 8 Page 10 of 11 exempt from federal taxation pursuant to section 501 of the United States Internal Revenue Code of 7 986 as amended. 9 New Hampshire Health and Education Facilities Authority; Definition of Ambulatory Care Clinic. Amend RSA 195-D:3, XVII to read as follows: XVII. "Ambulatory care clinic" means any nonprofit or charitable institution or organization, public or private, which is exempt from federal taxation pursuant to section 501 of the United States Internal Revenue Code of 1986 as amended, and which is engaged in the operation of, or formed for the purpose of operating, an ambulatory health care facility in which health care services are offered to the public on an outpatient basis by or under the direction of licensed physicians [licenced by the ctate of New 1-iampshi-r-o] and licensed health care professionals. 10 New Paragraph; New Hampshire Health and Education Facilities Authority; Definition of Affiliate Added. Amend RSA 195-D:3 by inserting after paragraph XVIII the following new paragraph: XIX. "Affiliate" means any entity which controls or is controlled by, or is under common control with, another entity. For purposes of this definition, an entity controls another entity When the first entity possesses or exercises directly, or indirectly through one or more other affiliates or related entities, the power to direct the management and policies of the other entity, whether through the ownership of voting rights, membership, or the power to appoint members, trustees, or directors, by contract or otherwise. 11 New Paragraph; New Hampshire Health and Education Facilities Authority; Bonds of the Corporation. Amend RSA 195-D:9 by inserting after paragraph VIII the following new paragraph: IX. The proceeds of revenue bonds issued under this section may be used for a project in this state or another state, provided that if the proceeds of the bond are used for a project any portion of which is located in another state, the participating institution or affiliate shall (i) be organized under New Hampshire law; (ii) have a facility located in New Hampshire; or (iii) provide or plan to provide an educational program or health care program or services in this state. 12 New Hampshire Health and Education Facilities Authority; Procedure Before Issuance of Bonds. Amend RSA 195-D:21, I and II to read as follows: I. In the case of undertaking a project, the construction and acquisition of such project will enable or assist a participating educational institution to provide education [within the state] or a participating health care institution to provide health care facilities [ . - - and II. Such project to be undertaken or a project to which the refinancing of existing indebtedness relates will be leased to, or owned by, a financially responsible participating institution [within the ctate] or an affiliate thereof; and 13 New Hampshire Health and Education Facilities Authority; Procedure Before issuance of Bonds. Amend RSA 195-D:21, VII and VIII to read as follows: VII. In the case of undertaking a project, the construction and acquisition of such project or projects serves a need presently not fulfilled in providing education or health care facilities [within the ctate] and is of public use and benefit; and VIII. In the case of refinancing of existing indebtedness, such refinancing will assist the participating institution in either lowering the cost of providing education or health care facilities [within the state] or such refinancing is in connection with a project being provided by the participating institution. 14 New Hampshire Housing Finance Authority; Authority to Issue Bonds. Amend RSA 204-C:8, XXVI-a and XXVI-b to read as follows: XXVI-a. Finance, on such terms and conditions as the authority may determine, by the issuance of bonds or otherwise, homes for persons with disabilities without regard to any other requirement of this chapter http://www.gencourt.state.nh.us/bill_status/bil1Textaspx?sy-2018&id=1902&txtFormat=h... 4/18/2018 Page 11 of 11 relating to the making or purchasing of loans or• mortgage loans or to the requirements of RSA 204-C:11 if the authority finds that such financing would result in a public benefit;[ and] XXVI-b. Make loans, on such terms and conditions as the authority may determine, by issuance of bonds or otherwise, secured by homes owned by the elderly without regard to any other requirements of this chapter relating to the making or purchasing of loans or mortgage loans if the authority finds that such financing would result in a public benefit; [and] XXVI-c. Issue bonds, without regard to any other requirements of this chapter, for housing, housing projects, or any other facility located outside of the state that could be financed by the authority if..it were located within the state, if the authority finds that such financing would result in a public benefit to the state or its citizens, provided that no such bonds shall be considered an obligation or pledge of the faith and credit of the state; and 15 New Subparagraph; Administrative Procedure Act; Exceptions; Business Finance Authority. Amend RSA 541-A:21, I by inserting after subparagraph (ii) the following new subparagraph: OD RSA 162-S, relative to the extraterritorial financing powers of the business finance authority. 16 Effective Date. This act shall take effect upon its passage. http://www.geneourt.state.nh.us/bill_status/billText.aspx?sy-20188thd=190286txtFormat=h... 4/18/2018