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 <[email protected]> Sent: Wednesday, April 25, 2018 4:09 PM To: Stapler, Carol Subject: Re: SB 537 blurb lank you for being there. On Apr 25, 2018, at 3;22 PM, Stapler, Carol <carol.staplealeg.state.nh.us> wrote: 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... <SB 537 blurb.docx> REGULAR CALENDAR 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).