Revision: Jan. 28, 2011, midnight
HB 605 – AS INTRODUCED
HOUSE BILL 605
This bill authorizes the business finance authority to establish a New Hampshire innovation business job growth program, the purpose of which shall be to promote investment in venture capital funds that evidence a commitment to providing venture capital to New Hampshire businesses.
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Explanation: Matter added to current law appears in bold italics.
Matter removed from current law appears [
in brackets and struckthrough.]
Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.
STATE OF NEW HAMPSHIRE
In the Year of Our Lord Two Thousand Eleven
AN ACT authorizing the business finance authority to establish a New Hampshire innovation business job growth program.
Be it Enacted by the Senate and House of Representatives in General Court convened:
1 New Section; Business Finance Authority; Innovation Business Job Growth Program. Amend RSA 162-A by inserting after section 13-c the following new section:
162-A:13-d Innovation Business Job Growth Program.
I. The authority may establish and administer a venture capital investment program, known as the innovation business job growth program, to increase the supply of venture capital to the economy of the state by improving access by innovative businesses in this state to venture capital funds. Investment performance of the program may be partially guaranteed by any means legally available to the authority as an incentive for participants to join the program. This section shall not mandate or require any investment by the participant or give the participant any economic development responsibilities; its sole responsibility shall be to safeguard, invest, and increase participant assets consistent with its fiduciary duty to its members or shareholders.
II. The goal of the program shall be to attract more venture capital to innovative businesses in this state by providing the participant with an incentive to invest in high-quality venture capital funds that evidence both a commitment to seeking investments in the state and the ability to produce favorable returns to minimize the risk of drawing on the authority's investment guarantee resources. Consistent with this investment goal, the participant may, in the exercise of its discretion and consistent with its fiduciary duties to the beneficiaries of the participant, apply to the authority for approval under the program for proposed investments in venture capital funds. The authority may approve a proposed venture capital fund investment under the program if it determines that the venture capital fund will give strong consideration to investing in businesses in the state. In making this decision, the authority shall consider whether the venture capital fund:
(a) Will maintain at least a periodic presence in the state;
(b) Will build linkages to, and accept referrals from, at least some of the organizations promoting the state's innovation economy, including the authority, the Small Business Development Corporation, the university of New Hampshire Green Launching Pad, the department of resources and economic development, the New Hampshire Innovation Commercialization Center, the university system of New Hampshire, and other venture capital investors within the state;
(c) Will actively invest in companies establishing their first payroll account, or start-up companies;
(d) Will actively prospect for investments in the state;
(e) Expresses a commitment to seek investments in businesses in this state that meet its investment criteria; and
(f) Demonstrates the ability to successfully manage rapid portfolio company growth leading to excellent returns on invested capital.
III.(a) The participant may not invest directly in individual businesses under this program but may invest only in venture capital funds that are managed to best achieve the purpose set out under paragraph II.
(b) The participant may cooperate with the authority and other organizations promoting the state's innovation economy by encouraging participating venture capital funds to consider investments in the state consistent with their investment strategies. The participant may at any time be relieved of this obligation by releasing the authority from its obligations under all outstanding guarantees issued under the program.
IV. The authority shall adopt rules, under RSA 162-A:28, relative to:
(a) The application process.
(b) Criteria for evaluating program applicants.
(c) Participation requirements.
(d) Procedures for program administration and oversight, including reporting and auditing requirements.
2 Effective Date. This act shall take effect 60 days after its passage.None