Revision: May 7, 2018, 12:46 p.m.
SB 564-FN-A - VERSION ADOPTED BY BOTH BODIES
SENATE BILL 564-FN-A
SPONSORS: Sen. Bradley, Dist 3; Sen. Avard, Dist 12; Sen. Carson, Dist 14; Sen. Cavanaugh, Dist 16; Sen. D'Allesandro, Dist 20; Sen. Gannon, Dist 23; Sen. Innis, Dist 24; Sen. Soucy, Dist 18; Sen. Watters, Dist 4; Rep. Azarian, Rock. 8; Rep. Hinch, Hills. 21
COMMITTEE: Ways and Means
This bill establishes exemptions from the business profits tax and the business enterprise tax for qualified regenerative manufacturing businesses. The bill also provides for a workforce development program for such businesses administered by the business finance authority.
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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Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.
26Apr2018... 1535h 18-2919
STATE OF NEW HAMPSHIRE
In the Year of Our Lord Two Thousand Eighteen
Be it Enacted by the Senate and House of Representatives in General Court convened:
1 Purpose and Intent Statement. The general court intends that this act be liberally construed and applied to promote the following underlying purposes and policies:
I. The general court recognizes that:
(a) New and emerging technologies in the late 20th and early 21st centuries have resulted in the creation of entire new industries within the United States and that those technologies have been the primary drivers of economic development during that period.
(b) When such industries are created, they tend to grow in geographic concentrations, create additional opportunities for new businesses of all varieties, and boost the overall economy of the states in which they appear.
(c) Regenerative manufacturing, the creation of new tissue for medical purposes, is an example of an emerging technology that will change current medical practice, advance the health of the citizens of New Hampshire and the United States, and create a new industry.
(d) New technologies require substantial investments in research and development in order to become economically viable, and therefore often require support during this process that other industries do not require.
(e) The government of the United States and companies within New Hampshire have already begun investing time and resources into the advancement of regenerative manufacturing in the state, making it uniquely suited to New Hampshire and the most likely of all emerging industries to replicate here the successes seen elsewhere.
II. The general court therefore declares:
(a) It is the public policy of the state of New Hampshire to advance the study and practice of regenerative manufacturing within the state.
(b) This public policy will advance the public interests of the state and its citizens by:
(1) Providing new, high paying jobs, both in the field of regenerative manufacturing and in other fields that support that industry and those who engage in it.
(2) Attracting highly skilled professionals who will raise their families in the towns and cities of the state.
(3) Fostering the development of a new industry that will grow and advance in New Hampshire.
(4) Contributing to the sciences within the state and improving its reputation as a place that fosters science and technology.
(5) Increasing tax revenues by attracting and generating new businesses and property owners that otherwise would not have located in New Hampshire.
(c) The intent of this act is to achieve this public interest by:
(1) Making New Hampshire a more attractive place for new businesses to begin studying regenerative manufacturing.
(2) Attracting companies that are already engaged in the study of regenerative manufacturing into the state.
(3) Supporting any current New Hampshire company that wishes to enter the field of regenerative manufacturing.
2 New Paragraph; Business Profits Tax; Definition of Qualified Regenerative Manufacturing Company. Amend RSA 77-A:1 by inserting after paragraph XXIX the following new paragraph:
XXX.(a) "Qualified regenerative manufacturing company'' means any business organization which meets each of the following requirements at all times during the entire taxable year:
(1) It files with its return for the taxable year an election to be a qualified regenerative manufacturing company in accordance with RSA 77-A:5-c or has made such election for a previous taxable year; and
(2) At least 75 percent of its business activities over the course of the tax year meet the requirements for an active regenerative manufacturing business, or, in the case of a subsidiary located in New Hampshire, 75 percent of that subsidiary’s business activities meet the requirements for an active regenerative manufacturing business.
(b) For purposes of this paragraph, the term “regenerative manufacturing” means any aspect of the manufacturing of blood, tissues, tissue constructs, and organs for the purpose of researching, diagnosing, treating, or curing any disease or injury, such as (1) cell collection, culture and scale-up, (2) biomaterial selection and scale-up, (3) tissue process automation and monitoring, (4) tissue maturing, and (5) tissue preservation and transport.
(c) For purposes of this paragraph, the term “active regenerative manufacturing business” means the conduct of any business activity the primary focus of which is any one or more of the following areas:
(1) Performing research relating to regenerative manufacturing;
(2) Performing regenerative manufacturing activities;
(3) Researching, developing, manufacturing, or supplying technical services in support of regenerative manufacturing, such as process engineering, automation, facility set-up, and distribution services;
(4) Researching, developing, manufacturing, or supplying technologies utilized in regenerative manufacturing, such as cellular and non-cellular source materials, tools, equipment, reagents, and other supplies; and
(5) Performing any activity necessary to bring a product created through regenerative manufacturing to market, including but not limited to seeking patents, regulatory approval, performing clinical trials, and sales.
3 New Paragraph; Business Enterprise Tax; Definition; Qualified Regenerative Manufacturing Company. Amend RSA 77-E:1 by inserting after paragraph XIV the following new paragraph:
XIV-a. "Qualified regenerative manufacturing company'' means any business enterprise which is a qualified regenerative manufacturing company as that term is defined under RSA 77-A:1, XXX at all times during the entire taxable year.
I. "Business organization'' means any enterprise, whether corporation, partnership, limited liability company, proprietorship, association, business trust, real estate trust or other form of organization; organized for gain or profit, carrying on any business activity within the state, except such enterprises as are expressly made exempt from income taxation under the United States Internal Revenue Code as defined in RSA 77-A:1, XX. Each enterprise under this definition shall be subject to taxation under RSA 77-A:2 as a separate entity, unless specifically authorized by this chapter to be treated otherwise, such as, but not limited to, combined reporting. Trusts or foundations treated as grantor trusts under section 671 of the United States Internal Revenue Code shall be included in the return of their owners, and such owners shall be subject to the tax thereon to the extent such owners would be considered a business organization hereunder notwithstanding the existence of the trust or foundation. The use of consolidated returns as defined in the United States Internal Revenue Code as defined in RSA 77-A:1, XX is not permitted. Notwithstanding any other provision of this paragraph, an enterprise shall not be characterized as a business organization and shall be excluded from taxation at the entity level if it elects to be treated as a qualified investment company as defined in RSA 77-A:1, XXI or if it elects to be treated as a qualified regenerative manufacturing company as defined in RSA 77-A:1, XXX. A partnership, limited liability company, estate, trust, or foundation except grantor trusts pursuant to section 671 of the United States Internal Revenue Code, "S'' corporation, real estate investment trust, or any other such entity, other than an organization electing to be treated as a qualified investment company as defined in RSA 77-A:1, XXI or an organization electing to be treated as a qualified regenerative manufacturing company as defined in RSA 77-A:1, XXX whose net income is reportable by the true owners either directly or indirectly shall be subject to tax at the entity level, and no part of such earnings or loss shall be included in the calculation of the gross business profits of the owners of such entity.
III. "Business enterprise'' means any profit or nonprofit enterprise or organization, whether corporation, partnership, limited liability company, proprietorship, association, trust, foundation, business trust, real estate trust or other form of organization engaged in or carrying on any business activity within this state, except such enterprises as are expressly made exempt from income taxation under section 501(c)(3) of the United States Internal Revenue Code to the extent such enterprise does not engage in any business activity constituting unrelated business activity as defined by section 513 of the United States Internal Revenue Code. Each business enterprise under this definition shall be subject to the tax imposed under RSA 77-E as a separate entity except that trusts and foundations treated as grantor trusts under section 671 of the United States Internal Revenue Code shall be included in the return of their owners, and such owners shall be subject to the tax thereon to the extent any such owners would be considered a business enterprise hereunder notwithstanding the existence of the trust or foundation. The use of consolidated returns as defined in the United States Internal Revenue Code or of combined reporting is not permitted. Notwithstanding any other provision of this paragraph, an enterprise shall not be characterized as a business enterprise and shall be excluded from taxation at the entity level if it is a qualified investment company as defined in RSA 77-E:1, XIV or if it is a qualified regenerative manufacturing company as defined in RSA 77-E:1, XIV-a.
77-A:5-c Election and Reporting for Qualified Regenerative Manufacturing Companies.
I. Business organizations shall file an election with the commissioner to be a qualified regenerative manufacturing company with respect to any taxable period on a form prescribed by the commissioner at any time on or before the fifteenth day of the third month immediately following the end of such taxable period. Such an election shall be effective for the taxable period of the qualified regenerative manufacturing company for which it is made and for all succeeding taxable periods until such election is terminated as provided in this section.
II. The election to be a qualified regenerative manufacturing company shall expire for taxable periods beginning after December 31, 2027. No subsequent election may be made after the expiration of an election, with respect to either the business organization or the active regenerative manufacturing business conducted by such business organization or any successor business organization.
III. Every business organization electing treatment as a qualified regenerative manufacturing company shall, with respect to each taxable period, file a report, in accordance with such rules or forms as the commissioner may prescribe, setting forth the following:
(a) The names, addresses, and federal taxpayer identification numbers of the holders of any equity interests in such qualified regenerative manufacturing company.
(b) The name, address, and federal taxpayer identification number of the manager of such qualified regenerative manufacturing company.
(c) The amount of the income received and expenses incurred by the qualified regenerative manufacturing company for the tax period.
(d) Notwithstanding any other provision of this section, a qualified regenerative manufacturing company shall be deemed to have satisfied the reporting requirements of this section if it files with the commissioner a copy of its federal income tax return, as filed with the Internal Revenue Service.
IV. Such report or copy of the federal income tax return shall be filed at any time on or before 30 days following the filing of the federal income tax return with the Internal Revenue Service. Any qualified regenerative manufacturing company which fails to timely file the report as required by this section shall pay a penalty equal to $100 for each day such report is not filed, unless an extension has been granted by the commissioner. In no event shall the monetary fine imposed by this paragraph exceed $5,000. A qualified regenerative manufacturing company notified by the department that such report is overdue by more than 50 days shall have 30 days from the date of such notification to file the delinquent report.
V. The qualified regenerative manufacturing company shall be subject to the provisions of RSA 77-A:11 and RSA 77-E:10. The commissioner is authorized to audit and enforce such provisions with any of the powers granted under this chapter and RSA 77-E.
VI. The election provided for in paragraph I may be terminated as follows:
(a) By revoking said election by consent of the majority of the members, partners, or shareholders of the qualified regenerative manufacturing company, or by determination of the manager of the qualified regenerative manufacturing company. Such revocation must be filed with the department on or before the fifteenth day of the third month of the taxable period to be effective for such period. Any revocation filed after the fifteenth day of the third month of the taxable period shall be effective for the following tax period; or
(b) Whenever the company ceases to satisfy the requirements for qualification as a qualified regenerative manufacturing company as provided in RSA 77-A:1, XXX.
VII. Notwithstanding any provision of law to the contrary, the Advanced Regenerative Manufacturing Institute, Inc., a New Hampshire non-profit formed to advance the regenerative manufacturing industry and as of the effective date of this paragraph is operated out of Manchester, New Hampshire, is deemed a “qualified regenerative manufacturing company” as that term is defined in RSA 77-A:1, XXX.
REGENERATIVE MANUFACTURING WORKFORCE DEVELOPMENT PROGRAM
162-S:1 Declaration of Need and Purpose. It is declared that there is a statewide need for the preservation and development of a skilled workforce for the betterment of the economy of the state and its inhabitants. It is the purpose of this chapter to provide for the development, attraction, and retention of skilled, qualified, and productive workers within the state who will be capable of supporting the preservation, establishment, and redevelopment of business and industry, preserving or increasing the social welfare or economic prosperity of the state or its political subdivisions, and promoting the general welfare of the state's citizens. It is further declared that the business finance authority (hereinafter the "authority"), acting pursuant to the powers granted in this chapter shall be regarded as performing an essential governmental function in carrying out the provisions of this chapter.
162-S:2 Acquisition of Student Loans of Qualified New Hampshire Employees.
I. The business finance authority, as established and authorized under RSA 162-A (hereinafter the "authority"), may expend or loan money upon such terms and conditions as prescribed by the authority to acquire loans or other evidences of education indebtedness incurred by persons for the purpose of financing postsecondary education and to provide for deferment or forgiveness of repayment of such education indebtedness pursuant to a program or programs established by the authority and approved by the governor and council pursuant to this chapter.
II. In granting deferment to any loan or other evidence of education indebtedness incurred by persons for the purpose of financing postsecondary education, the authority shall cause no interest to accrue to the principal of the loan during any period of deferment it offers.
III. Any student indebtedness that may be subject to a program or programs established by the authority under this chapter shall meet the following minimum requirements.
(a) The person shall have achieved academic requirements such as graduate degrees or other evidence of academic achievement as has been determined by the authority;
(b) The person shall be employed to perform primarily active regenerative manufacturing business activities as that term is defined in RSA 77-A:1, XXX and the principal office at which such person is employed is located within New Hampshire;
(c) The person is employed by a member of the Advanced Regenerative Manufacturing Institute, Inc., a New Hampshire non-profit formed to advance the study of regenerative manufacturing and as of the effective date of this chapter operated out of Manchester, New Hampshire; and
(d) No forgiveness of such student indebtedness shall be effected unless the person shall have been employed to perform primarily active regenerative manufacturing business activities at a location within New Hampshire for a minimum period of 5 years.
IV. Prior to the expenditure or loan of any money under this section, the authority shall enter into one or more agreements with any person obligated to make payments under education indebtedness to provide for the conditions on which the expenditures, deferments, or forgiveness will be made, the terms of repayment of such expenditure or loan, the time and manner of such repayment, the form and amount of security if any, to be pledged to the authority for such repayment, and such other provisions as the authority may determine are necessary or desirable.
V. The authority, to further its education indebtedness loan programs pursuant to this chapter, shall have the power to:
(a) Determine the nature of education indebtedness programs for eligible persons, including how such loans may be acquired, the mechanisms for deferral of payment or forgiveness with respect to such education indebtedness;
(b) Enter into contracts with employers of persons who are subject to the programs established under this chapter to assist in the administration of such programs;
(c) Enter into contracts for the administration or servicing of education indebtedness acquired pursuant to the programs established under this chapter;
(d) Receive and accept from any public agency or any other source loans, grants, guarantees, or insurance with respect to education indebtedness and the programs established under this chapter;
(e) Establish guidelines governing the actions of the authority with respect to the programs established under this chapter; and
(f) Exercise all powers incidental and necessary for the performance of the powers listed in this paragraph.
162-S:3 State Regenerative Manufacturing Workforce Development Fund Established.
I. There is established within the authority a state regenerative manufacturing workforce development fund, which shall be held by the authority apart from all of its other funds. Annual state appropriations and other funds from state or federal sources, and any gifts, grants, or donations, shall be credited to the fund. The state regenerative manufacturing workforce development fund shall be administered by the authority and shall be used for the sole purposes of carrying out the purposes of RSA 162-S:2. The authority shall invest the fund in accordance with RSA 6:8. Any earnings on fund moneys shall be added to the fund. All moneys in the fund shall be nonlapsing and shall be continually appropriated to the fund for the purpose of providing regenerative manufacturing worker educational debt relief as provided in this section.
II. The authority may create subfunds or trusts of the state regenerative manufacturing workforce development fund, which shall be held by the authority apart from all of its other funds, which may be deemed irrevocably pledged to secure the repayment of state workforce development bonds issued under RSA 162-S:4. If such a pledged amount or amounts are called upon to be honored, the authority shall draw upon such fund for the purpose of honoring such pledge.
162-S:4 Issuance of Bonds.
I. The authority may issue bonds pursuant to this section which shall be obligations of the authority and not general obligations of the state, except as provided in RSA 162-A:17. Such bonds may be issued from time to time consistent with the purposes and provisions of this chapter to make expenditures under RSA 162-S:2, to pay or refund any bonds issued pursuant to this section or interest thereon, or to pay the costs and expenses of the authority. The principal of, and premium, if any, and interest on all bonds shall be payable solely by the authority in accordance with the provisions of this chapter. The bonds shall be issued by the authority in such amounts as the board shall determine, not exceeding in the aggregate at any time $5,000,000. Bonds of each issue shall be dated, shall bear interest at such rate or rates, including rates variable from time to time as determined by such index, banker's loan rate or other method as may be determined by the authority, and shall mature at such time or times as may be determined by the authority, except that no bonds shall mature more than 30 years from their date of issue. Bonds may be made redeemable before maturity either at the option of the authority or at the option of the holder, or upon the occurrence of specified events, at such price or prices and under such terms and conditions as may be fixed by the authority prior to the issuance of the bonds. The authority shall determine the form and details of the bond. The bonds may be sold in such manner, either at public or private sale, for such price, at such rate or rates of interest, or at such discount in lieu of interest as the authority may determine.
II. Every bond shall be signed on behalf of the authority by 2 persons designated by the authority. One person shall be a member of the board who is also the chairperson of the board, or the vice chairperson of the board, or the treasurer of the authority, or an assistant treasurer of the authority. The other person shall be any member of the board or the executive director of the authority. The signatures may be manual or facsimile but at least one signature on every bond shall be manual, unless the bond bears a manual authentication or certification by a bank, trust company or other financial institution, in which case both signatures on behalf of the authority may be facsimile. Interest coupons, if any, shall bear the facsimile signature of one of the persons signing the bond on behalf of the authority. Bonds shall also bear the seal of the authority or a facsimile of the seal. Bonds executed as provided in this paragraph shall be valid notwithstanding that any or all of the persons whose signatures appear on the bond shall have ceased to hold office before delivery of and payment for the bond.
III. Any bonds issued under this chapter may be issued pursuant to and entitled to the benefits of a security document between the authority and a corporate trustee, which may be any trust company or bank having the powers of a trust company within or without the state, or by a security document directly between the authority and the purchasers of the bonds. Such security document shall be in such form and executed in such manner as may be determined by the board. Such security document may include the mortgage, pledge, or grant of a security interest in any property of the authority and may pledge or assign, in whole or in part, the revenues held or to be received by the authority, any contract or other rights to receive the revenues, whether then existing or thereafter coming into existence and whether then held or thereafter acquired by the authority, and any proceeds thereof. Such security documents may contain provisions for protecting and enforcing the rights, security, and remedies of the bondholders as may, in the discretion of the board, be reasonable and proper and not in violation of law. Such security documents may include provisions defining defaults and providing for remedies in the event of defaults, which may include the acceleration of maturities and the enforcement of any mortgage, pledge or security interest, and covenants setting forth the duties of, and limitations on, the authority in relation to the custody, safeguarding, investment, and application of moneys, the issue of additional or refunding bonds, the fixing, revision and collection of fees and other revenues, the use of bond proceeds, the establishment of reserves, the acquisition of any property or interest therein or undertaking of any project, any contracts relating thereto and subsequent amendments of such provisions and contracts. It shall be lawful for any bank or trust company to act as a depository or trustee of the proceeds of bonds, revenues, or other moneys under a security document and to furnish such indemnification or to pledge such securities and issue such letters or lines of credit or credit facilities as may be required by the authority acting under the paragraph. Any such security document may set forth the rights and remedies of bondholders and of the trustee and may restrict the individual right of action by bondholders.
IV. Any bonds issued under authority of this chapter may be issued pursuant to lines of credit or other banking arrangements under such terms and conditions not inconsistent with this chapter, and under such agreements with the purchasers or makers thereof, as the board may determine to be in the best interests of the authority. In addition to other security provided herein or otherwise by law, bonds issued by the authority under this section may be secured, in whole or in part, by insurance or by letters or lines of credit or other credit facilities issued to the authority by any bank, trust company or other financial institution, within or without the state, and the authority may make any pledge, mortgage, assignment or security interest in respect of its property and revenues as security for the reimbursement by the authority to the issuers of such letters or lines of credit, insurance or credit facilities, or any payments made thereunder.
V. Any mortgage, pledge or security interest made by the authority under this chapter shall be valid and binding and shall be deemed continuously perfected for the purposes of RSA 382-A and all other laws from the time when the mortgage, pledge, or security interest is made. The property or revenues so mortgaged, pledged, or subjected to a security interest then held or thereafter acquired or received by the authority shall immediately be subject to the lien of such mortgage, pledge, or security interest without any physical delivery or segregation thereof or further act. The lien of such mortgage, pledge, or security interest shall be valid and binding against all parties having claims of any kind in tort, contract, or otherwise against the authority, irrespective of whether such parties have notice thereof. No such property or revenues may be used in a manner inconsistent with the terms governing such mortgage, pledge, or security interest. Any agreement by which a pledge or security interest in personal property is created under this chapter shall be filed or recorded in the records of the secretary of state. Any mortgage or other agreement by which a security interest in real property is created under this chapter shall be filed with the register of deeds for the county in which such property is located.
VI. Any owner of a bond issued under the provisions of this section and any trustee under a security document securing the same, except to the extent the rights given in this paragraph may be restricted by such security document, may bring suit upon the bonds and may, either at law or in equity, by suit, action, mandamus, or other proceeding for legal or equitable relief, protect and enforce any and all rights under the laws of the state granted hereunder or under such security document, and may enforce and compel performance of all duties required by this chapter or by such security document to be performed by the authority or by any director or officer of the authority.
VII. The authority may issue refunding bonds for the purpose of paying any bonds issued under the provisions of this section at or prior to maturity or upon acceleration or redemption. Refunding bonds may be issued at such times prior to the maturity or redemption of the bonds being refunded as the board may determine. The refunding bonds may be issued in sufficient amounts to pay or provide the principal of the bonds being refunded, together with any redemption premium thereon, any interest accrued or to accrue to the date of payment of such bonds, the expenses of issue of the refunding bonds, the expenses of redeeming the bonds being refunded, and such reserves for debt service or other expenses from the proceeds of such refunding bonds as may be required by a security document securing the bonds. The authorization and issue of refunding bonds, the maturities and other details thereof, the security therefor, the rights of the holders thereof, and the rights, duties and, obligations of the authority in respect to the same shall be governed by the provisions of this chapter relating to the issue of bonds other than refunding bonds insofar as the same may be applicable.
VIII. Any debt service fund or debt service reserve fund established in connection with the issuance of bonds under this chapter shall be kept separate from other moneys of the authority. All proceeds of any bonds issued under this chapter, together with the income derived therefrom, shall be expended without further authorization or appropriation as provided for in the security document with respect to such bonds.
IX. Moneys in any fund or account created under the provisions of this chapter, subject to the terms and provisions of any security document applicable thereto, may be invested. Except as otherwise provided by any such security document, obligations so purchased as an investment of money in said fund or account shall be deemed at all times to be part of said fund or account, and the interest thereon and any profit arising from the sale thereof shall be credited to said fund or account, and any loss resulting on their sale shall be charged to said fund or account, respectively.
X. 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.
XI. Bonds issued under this section and their transfer and income, including any profit made on their sale or transfer, shall at all times be exempt from all taxation by or within the state.
XII. Notwithstanding any of the provisions of this chapter or any recitals in any bonds issued under this section, all such bonds shall be deemed to be investment securities under RSA 382-A.
XIII. No bonds or other obligations shall be issued except after the governor and council, or their designee, after hearing, shall have found that:
(a) The proposed issuance will serve a public use and provide a public benefit.
(b) The proposed issuance is within the policy of, and the authority conferred by, this chapter.
(c) The proposed issuance 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.
(d) The proposed issuance will promote the orderly development of business activities, create or preserve employment opportunities, or protect the physical environment.
(e) Adequate provision has been or will be made for the payment of the principal of, or interest on, any obligations issued by the authority to finance such loan programs.
(f) Adequate provision has been made for the payment of the reasonable expenses of administration of the loan programs as are necessitated by the programs.
162-S:5 Reporting and Approval Regarding Workforce Development Program. The business finance authority shall undertake to design the terms, conditions, and provisions of the regenerative manufacturing workforce development program authorized by this chapter. The authority shall deliver to the fiscal committee of the general court a report on the progress of its efforts to develop such terms, conditions, and provisions every 6-month period following the effective date of this chapter. Prior to taking any action to implement a final workforce program pursuant to this chapter, the authority shall first present the program to the fiscal committee of the general court and receive the approval of such committee.
71-C:2 Tax Expenditures Specified. Tax expenditures include, but may not be limited to, the community development finance authority investment tax credit as computed in RSA 162-L:10; the economic revitalization zone tax credit as computed in RSA 162-N:6; the research and development tax credit under RSA 77-A:5, XIII; the Coos county job creation tax credit under RSA 77-E:3-c; the education tax credit as computed in RSA 77-G:4; [and] the weighted apportionment factors under RSA 77-A:3, II(a); and the exemption for qualified regenerative manufacturing companies allowed under RSA 77-A:1, I and RSA 77-E:1, III.
SB 564-FN-A- FISCAL NOTE
AS AMENDED BY THE HOUSE (AMENDMENT #2018-1623h)
FISCAL IMPACT: [ X ] State [ ] County [ ] Local [ ] None
Estimated Increase / (Decrease)
[ X ] General [ X ] Education [ ] Highway [ ] Other
This bill establishes a Business Profits Tax and Business Enterprise Tax exemption of 100 percent for certain Qualified Regenerative Manufacturing Companies in NH for taxable periods beginning after December 31, 2017. The bill also establishes the Regenerative Manufacturing Workforce Development Program and State Regenerative Manufacturing Workforce Development Fund to be administered by the Business Finance Authority.
The Department of Revenue Administration states Qualified Regenerative Manufacturing Companies in NH need to file an election with the Department for the 100 percent exemption from the Business Profits Tax and Business Enterprise Tax in a taxable period at any time on or before the 15th day of the third month of such taxable period. This election would expire on the last day of the taxable period of the business organization that includes December 31, 2027. No subsequent election may be made after the expiration of an election. Every business organization electing treatment as a Qualified Regenerative Manufacturing Company needs to file a report with the Department for each taxable period with certain required information or a copy of federal income tax return. Failure by a Company to file timely will result in a penalty of $100 for each day late up to a maximum amount of $5,000. The Department is unable to determine the fiscal impact of the proposed exemption program as it has no information on how many new taxpayers will result from the bill or the future amount of business taxes that would be exempted. Additionally, the Department is unable to predict any fine revenue resulting from this bill as it has no means to determine if the required reporting will be filed late or the number of days a report would be late.
The Department of Revenue Administration states it will need to update all necessary tax return forms and electronic management systems related to this bill, however the Department is able to administer this bill without any additional costs.
The Business Finance Authority states it is not able to determine the fiscal impact of the this bill on the Authority.
Department of Revenue Administration and Business Finance Authority