Bill Text - HB605 (2011)

Authorizing the business finance authority to establish a New Hampshire innovation business job growth program.


Revision: July 18, 2011, midnight

CHAPTER 261

HB 605 – FINAL VERSION

15Mar2011… 0494h

05/11/11 1727s

22June2011… 2401CofC

2011 SESSION

11-0840

05/04

HOUSE BILL 605

AN ACT authorizing the business finance authority to establish a New Hampshire innovation business job growth program.

SPONSORS: Rep. Garcia, Rock 4; Rep. Beattie, Hills 17; Rep. Oligny, Rock 8; Rep. Moran, Hills 18; Rep. Avard, Hills 20; Rep. Stepanek, Hills 6; Sen. White, Dist 9; Sen. Stiles, Dist 24

COMMITTEE: Ways and Means

ANALYSIS

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Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.

15Mar2011… 0494h

05/11/11 1727s

22June2011… 2401CofC

11-0840

05/04

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:

261:1 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 an innovation business job growth program to increase the supply of venture capital to the economy of the state. The program is intended to promote investment in qualified venture capital funds by guaranteeing or insuring portions of the principal of investments in such funds and through direct investment in qualified venture capital funds by the authority. Creation of the program is intended to improve access by innovative businesses in this state to venture capital funds, and to create or preserve employment opportunities for the state’s citizens. The program shall be known as the “New Hampshire innovation business job growth program.”

II. The authority is authorized to apply for and accept grants from the federal government and sources other than the state of New Hampshire that will assist in carrying out the purposes of this section. The authority shall establish a fund to be known as the New Hampshire innovation business job growth fund which shall be established exclusively for the purpose of receiving, holding, and investing all such moneys or grants consistent with the purposes of this section, including any investment income earned with respect to such moneys or grants. The authority shall maintain the fund and all moneys, grants, and investment income earned thereon separate and distinct from all other moneys of the authority.

III. Upon approval by the authority’s board of directors, the authority may apply funds maintained in the New Hampshire innovation business job growth fund to provide guarantees of the principal of investments in qualified venture capital funds and to invest directly in qualified venture capital funds that by contract agree to invest such principal in New Hampshire within 60 months of the receipt of the guarantees. The authority’s board of directors shall approve such application of funds after making all of the following findings:

(a) The proposed application or investment will serve a public use and provide a public benefit;

(b) The proposed application or investment is within the policy of, and the authority conferred by, this section;

(c) The proposed application or investment will preserve or increase the social welfare or economic prosperity of the state and one or more of its political subdivisions, and will promote the general welfare of the state’s citizens; and

(d) The proposed application or investment will promote the orderly development of business activities, create or preserve employment opportunities, or protect the physical environment.

IV. Qualified venture capital funds are those funds that have by contract with the authority’s board of directors agreed to invest, no later than 60 months after the execution of the guarantee or investment, the amount of the guaranteed or invested principal in businesses whose primary operations are located in New Hampshire and that, in opinion of the board:

(a) Will maintain a periodic presence in the state;

(b) Will build linkages to, and accept referrals from, 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 accounts in the state;

(d) Express a commitment to seek investments in businesses in this state that meet its investment criteria;

(e) Demonstrate the ability to successfully manage rapid portfolio company growth leading to excellent returns on invested capital; and

(f) Will insure that funds will be invested solely in companies operating in New Hampshire and that such funds will be used solely for New Hampshire operations.

V. The application or investment of funds pursuant to this section shall be evidenced by written agreement entered into by the authority, other parties, and qualified venture capital funds with respect to such application or investment.

VI. All gains and losses shall be maintained in the New Hampshire innovation business job growth fund, the balance of which shall be continually reinvested in the innovation business job growth program.

VII. The authority shall establish such policies and procedures as it shall determine necessary to carry out the purposes of this section.

261:2 Effective Date. This act shall take effect 60 days after its passage.

Approved: July 13, 2011

Effective Date: September 11, 2011

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