Revision: Jan. 14, 2020, 3:04 p.m.
SB 683-FN - AS INTRODUCED
2020 SESSION
20-3006
05/04
SENATE BILL 683-FN
SPONSORS: Sen. Fuller Clark, Dist 21; Rep. Lovejoy, Rock. 36
COMMITTEE: Education and Workforce Development
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ANALYSIS
This bill establishes the New Hampshire innovation program and New Hampshire innovation fund in the department of business and economic affairs. The purpose of the program is to increase funding for research and development intensive start-up companies located in New Hampshire. The bill also makes an annual appropriation of $5,000,000 to the fund.
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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Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.
20-3006
05/04
STATE OF NEW HAMPSHIRE
In the Year of Our Lord Two Thousand Twenty
Be it Enacted by the Senate and House of Representatives in General Court convened:
1 New Sections; Department of Business and Economic Affairs; New Hampshire Innovation Program. Amend RSA 12-O by inserting after section 21 the following new sections:
12-O:21-a New Hampshire Innovation Program Established.
I. There is hereby established in the department of business and economic affairs a New Hampshire innovation program. The purpose of the program shall be to provide early stage capital for research and development intensive start-up businesses and develop a stronger, more resilient innovation economy in New Hampshire. The program shall be administered by the commissioner of the department of business and economic affairs in conjunction with the New Hampshire Research and Industry Council and the New Hampshire Established Program to Stimulate Competitive Research (NH EPSCoR).
II. The program shall offer a menu of specific, targeted funding mechanisms for research and development intensive start-up businesses to:
(a) Provide funding to increase the number and competitiveness of proposals submitted by New Hampshire companies to the federal Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) programs.
(b) Match grants for SBIR/STTR Phase 1 awardees so they can develop their business while advancing their technology, including hiring employees, securing office space, and hiring legal and business expertise.
(c) Establish a risk pool to leverage funds provided by the business finance authority for low interest bridge loans for SBIR/STTR Phase 2 awardees so they can accelerate their growth in New Hampshire.
(d) Increase support for the innovation research center, established at the university of New Hampshire pursuant to RSA 187-A:30, to increase the number of grants awarded and subsequent state return on investment from this program.
(e) Match support for federal grants that accelerate development and retention of talent, workforce, and acquisition of critical research and development infrastructure assets that lead to new research and development-based company formation.
III. The New Hampshire Research and Industry Council, with the support of NH EPSCoR, shall administer the innovation program’s application and approval processes in consultation with the commissioner, manage the annual investment portfolio, and evaluate investment performance. An organization may apply for funding under this section pursuant to the procedures established by the council. The council shall assign preference to grant applications that:
(a) Increase New Hampshire's competitiveness through innovation.
(b) Attract talent to New Hampshire.
(c) Target existing industrial-cluster strength, potential growth, and research capacity.
(d) Target areas of strategic priority as determined by the council and the department of business and economic affairs.
(e) Qualify for available matching funds from federal, private, or other sources.
(f) Provide assurance that companies will remain in New Hampshire.
IV. Beginning July 1, 2022, and annually thereafter, the council shall conduct a survey of all organizations which receive grants under this section to evaluate the return on investment from the state’s funding support. The council shall develop and distribute a survey instrument to all organizations that have received grant funding under this section. The survey shall, at a minimum, collect the following information for each organization that receives grant funds under this section:
(a) Number of grants obtained.
(b) Total funding from grants, loans, private capital and other investments.
(c) Amount of federal funds obtained.
(d) Number of employees.
(e) Number of jobs created as a result of funding received under this section.
(f) Number of disclosures, provisional and full patents filed.
V. The council shall collect the completed surveys and submit them to the commissioner of the department of business and economic affairs. Any organization which fails to timely submit a completed survey shall not be eligible to obtain additional funding under this section.
VI. Beginning July 1, 2023 and every 4 years thereafter, the council shall commission a comprehensive, independent review of the New Hampshire innovation program and the current state of the New Hampshire technology-based economy to guide changes in programs and investments to ensure a vibrant innovation economy.
VII. Administrative costs shall not exceed 8 percent of annual fund expenditures.
12-O:21-b New Hampshire Innovation Fund; Annual Appropriation.
I. There is hereby established the New Hampshire innovation fund, which shall be kept distinct and separate from all other funds. The fund shall be nonlapsing and continually appropriated to the commissioner of the department of business and economic affairs for the purpose of administering the New Hampshire innovation program established in RSA 12-O:21-a.
II. The sum of $5,000,000 is appropriated annually to the department of business and economic affairs for deposit in the New Hampshire innovation fund established in paragraph I for the purpose of administering the program and awarding grants for research and development pursuant to RSA 12-O:21-a. The governor is authorized to draw a warrant for said sum out of any money in the treasury not otherwise appropriated.
2 New Subparagraph; Dedicated Funds; New Hampshire Innovation Fund. Amend RSA 6:12, I(b) by inserting after subparagraph (358) the following new subparagraph:
(359) Moneys deposited in the New Hampshire innovation fund, established in RSA 12-O:21-b.
3 Effective Date. This act shall take effect July 1, 2020.
20-3006
1/8/20
SB 683-FN- FISCAL NOTE
AS INTRODUCED
FISCAL IMPACT: [ X ] State [ ] County [ ] Local [ ] None
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| |||
| Estimated Increase / (Decrease) | |||
STATE: | FY 2020 | FY 2021 | FY 2022 | FY 2023 |
Appropriation | $0 | $5,000,000 | $5,000,000 | $5,000,000 |
Revenue | $0 | $0 | $0 | $0 |
Expenditures | $0 | Indeterminable Increase | Indeterminable Increase | Indeterminable Increase |
Funding Source: | [ X ] General [ ] Education [ ] Highway [ ] Other | |||
METHODOLOGY:
This bill establishes the New Hampshire Innovation Program within the Department of Business and Economic Affairs (DBEA) to provide early stage capital for research and development intensive start-up businesses. The program shall be administered by DBEA in conjunction with the New Hampshire Research and Industry Council (Council) and the New Hampshire Established Program to Stimulate Competitive Research (NH EPSCoR). The bill makes an appropriation of $5 million annually to the DBEA, assumed to begin July 1, 2020, for deposit into a new dedicated New Hampshire Innovation Fund for the purpose of administering the program and awarding grants for research and development. The fund shall be nonlapsing and continually appropriated.
The program shall offer targeted funding to increase the number and competitiveness of proposals submitted by New Hampshire companies to the federal Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) Programs and match grants awarded; establish a risk pool to leverage funds provided by the Business Finance Authority for low interest bridge loans for SBIR/STTR awardees; increase support for the Innovation Research Center at UNH (NHIRC) to increase the number of grants awarded and state return on investment from the program; and match support for federal grants.
The Council, with the support of NH EPSCoR, shall administer the grant application and approval process in consultation with the Commissioner of the DBEA, manage the annual investment portfolio and evaluate investment performance. Grants will be allocated based on preference for projects that: increase the State’s competitiveness through innovation, attract talent, target existing industrial-cluster strength, have potential growth and research capacity, target areas of strategic priority, qualify for available matching funds from federal, private or other sources, and provide assurance that companies will remain in New Hampshire. The Council shall develop an annual survey of all organizations receiving grants beginning July 1, 2022. Any organization that fails to timely submit a completed survey shall not be eligible to obtain additional funding. The Council shall commission a comprehensive, independent review of the New Hampshire Innovation Program beginning July 1, 2023 and every 4 years thereafter. Administrative costs shall not exceed 8 percent of annual fund expenditures.
The DBEA indicates the Council manages the investment portfolio and assumes it will coordinate with the Council to budget administrative costs not to exceed 8% of the annual expenditures for grants, but it is unclear if investment income is included in this calculation. The DBEA cannot estimate the number of grant applications or a cap on grant funds allocated for any approved project or category. The processing of submitted survey information and resulting initiatives may require further work by the DBEA. The DBEA anticipates the need for at least one person to administer the fund. It is unclear if the cost of this position is to be included in the 8% administrative cost. The number of such position(s) and classification of the duties will need to be further identified.
The DBEA states it is assumed that the increased support for NHIRC will be in addition to the existing $275,000 annual appropriation provided to NHIRC under a cooperative agreement between DBEA and NHIRC. This agreement is approved biannually by the Governor and Council.
The University System of New Hampshire states the Council will realize an increase in pass through revenues for program grants up to a maximum of $5 million, less $400,000 for administrative expense (8 percent of $5 million). NHIRC may receive a portion of such funds to distribute to grant recipients through their program, with such revenue and expense dependent on the allocation of available funds from the Council.
AGENCIES CONTACTED:
Department of Business and Economic Affairs and University System of New Hampshire