2015 Efforts

The Council continues to monitor legislation that falls under the Fix it Five Areas of policy concern: (1) promote and facilitate access to capital, (2) promote state level funding for innovation, (3) support for STEM education and workforce development, (4) attention to a competitive tax climate (5) attention to a non-burdensome regulatory environment.

 

Updated December 2015

Michellineby Michelline Dufort, NHHTC, Director of Business Relations

As the NH High Tech Council prepares for the 2016 New Hampshire legislative session, the Council continues to stay active in federal policy through our national partners, the Technology Council of North America (TECNA) and CompTIA. The priority policy areas are no surprise, they much mirror the areas that we watch and weigh in on the state level. The areas include: monitoring tax and regulatory issues, support of innovation measures and support for measures that build a tech workforce and legislation that positions the tech industry for growth.

Key issues include the Internet Tax Freedom Act (ITFA), which banned federal, state and local governments from taxing Internet access charges, as well as from assessing multiple or discriminatory taxes on electronic commerce. Since its initial introduction, ITFA has been extended six times, the last time to December 2015. There is a movement being led by our national partners to make the ITFA permanent. Read here to learn more.

There are a group of tax provisions – referred to as “tax extenders” – that have typically been extended on a temporary basis (one or two years) over the last 20 plus years and are geared to help both tech and small businesses. They include the R&D tax credit, bonus depreciations and small business expensing. In July, the Senate Finance Committee passed tax extenders and the House is still considering permanent extensions. As those deliberations continue, it is expected for the current scenario, that the extenders will once again be retroactively reinstated for 2015 by the end of the session. Read here to learn more about the tax provisions and the status.

The STEM educational front is being taken seriously on a national level as the STEM Education Bill was recently signed into law by President Obama. The legislation establishes a definition for STEM education, specifically incorporating computer science among science, technology, engineering and math subjects, for the purposes of providing funding opportunities that support STEM education through federal agencies like the National Science Foundation (NSF), U.S. Department of Energy and NASA.

The Council has a strong and on-going relationship with our NH senatorial offices, both when they are in district and as a voice in DC. Support of new and emerging technologies is a major area of interest, and we are proud to report that Senator Jeanne Shaheen (D-NH) co-sponsored the Small Business Broadband and Emerging Technology Enhancement Act of 2015 which seeks to better assist small business customers in accessing broadband technology. This act confirms that the Senator supports the development of IT training programs that will empower the small business ecosystem; a key issue for technology.

Senator Kelly Ayotte (R-NH) not only supported the R&D tax credit extensions in the extenders packages in 2012, 2013 and 2014, she was also a co-sponsor of the bipartisan Small Business Tax Certainty and Growth Act of 2015 (S. 1141), which includes the permanent 179 expensing provision. The bill would amend the Internal Revenue Code to be more business friendly and also encourages Congress to undertake comprehensive tax reform to make the tax system fairer and simpler and to promote economic growth.

Updated July 29, 2015

The NH House and Senate adjoined on June 24th however they will come back into session on September 16th for a one day veto session.  2015 was an active session with over 900 Legislative Service Requests submitted.  Of the 902 bills introduced, 283 were passed and will become law.  The Governor has vetoed 11 bills including the State budget and appropriation bills.  The State’s operating budget was highly contested throughout the session between the Governor and the House, between the Governor and the Senate, and between the House and the Senate.  In the end both Chambers agreed to a biennium budget that was passed and, as promised, the Governor immediately vetoed.  The outstanding contentious issues include a decrease in business taxes, creation of a tax “loop-hole”, unfunded state employee raises and not renewing Medicaid expansion.  Legislators are expected to work into the fall to reach a compromise budget bill.  In the meantime a Continuing Resolution was passed to keep the Government running past the June 30th expiration of the prior budget.

 There were 20 bills of interest to the NHHTC. We actively lobbied seven bills, passively lobbied five bills and actively monitored the remaining eight bills. The detailed Final 2015 Legislative Status Report:

Bill/Action Level Title & Summary Sponsors Committee Status Notes
Area 1 – Access to Capital
HB327

Action 1

Relative to investment crowd-funding Rep. Pamela Tucker House:

Commerce & Consumer Affairs

 

Senate:

RETAINED Bill allows non-accredited lower level NH financial investment to NH businesses via crowd fund
SB88

 

Action 2

 

LAW

Establishing a committee to study public partnership for intermodal transport Sens. Lasky, Martha Fuller Clark, Rep. M. O’Brien Senate: Transport

 

House: Public Works and Highways

6/29 SIGNED INTO LAW Study funding mechanisms for (public/private partnerships).

Shows   opposition that there are other ways to fund rail

Area 2 – State support of Innovation
SB63

 

Action 2

 

LAW

This bill decreases the number of members of the board of directors for the New Hampshire rail transit authority and establishes an advisory board. Amendment also

 

Sens. Lasky, Watters, Fuller Clark; Reps. M. O’Brien, Soucy, Cohen, P. Brown

 

 

Senate: Trans

House: Transport

6/26 SIGNED INTO LAW

 

8/25/15 in effect

Feds require a restructure before funding is met
HB170

 

LAW

Action 3

Relative to the advisory committee on international trade Rep. Pamela Tucker House: Commerce and Consumer Affairs

 

Senate: Commerce

5/5   SIGNED INTO LAW

7/4/15 – in effect

DRED to report by Jan 15 annually impact of advisory committee and the promotion of trade
XXSB180

 

Action 2

Relative to the innovation business job growth program Sen. Martha Fuller Clark, Stiles. Rep. Schroadter Senate: Finance

 

 

 

KILLED

Allows the business finance authority to connect w private sector fund managers, adds Alpha Loft and “angel risk capital individuals”, and adds language to target new groups to state
SB215

 

Action 3

 

Establishing an option to rebate the Research and Development Tax credit against the BPT (LFS) Sen. Lou D’Allesandro, David Watters, Jeb Bradley Senate:

Ways & Means

 

 

 

 

 

3/5 – Laid on the table

 

 

 

 

 

Establishing an option to take a rebate of 65% up front versus the tax credit against the BPT. A way to give startups capital up front option
 

Action 2

Note on Rail – there are bills around the restructuring of the Rail Authority, but not a “rail” bill per se. The Governor did include $4m in her budget for further study. Issued an overall statement on the tech support items in the budget, including the rail study
Area 3 – Support for STEM and Higher Education
HB676

 

Action 2

IS THIS AN ISSUE FOR 2016

Establishing a science, technology, engineering and mathematics scholars program Reps. Neal Kurk, Rick Ladd, Mary Gile, Barbara Shaw, Karen Umberger, Sens. John Reagan, Nancy Stiles House:

 

Education

 

Senate:

 

2/18 – Laid on the table

Scholarships to those who commit to stay and work 5 years
HB301

 

Action 3

Allowing a parent to withdraw their student from pupil identification and DOE database Reps. Ferreria, Seidel; Sen. Avard House:

Education

2/10 –Retained in committee
Area 4 – Business Taxes
SB1

 

 

Action 3

 

IN BUDGET

Reducing the Rate of the Business Profit Tax (‘friendly amendments” of date change to 12/31/15 and rate change to 7.95% in second tier on horizon) Sens. Bradley, Boutin, Forrester, Cataldo, Reagan, Little, Birdsell, Sanborn, Avard, Stiles, Daniels,

Morse, Carson, Watters;

Reps. Chandler, Major, Kurk, Flanagan

 

Senate: Ways & Means

 

 

PART OF BUDGET, NOW VETOED

Reducing the BPT from 8.5% to 8.25% as of Jan 1 2016 and to 8% as of Jan 1, 2018
SB2

 

 

IN BUDGET

Reducing the rate of the Business Enterprise Tax Sens. Sanborn, Daniels, Bradley, Birdsell

 

Senate Ways & Means

 

 

PART OF BUDGET, NOW VETOED

 

Reduces the BET from .75% to: .725% as of Jan 1, 2016; .7% as of Jan 1, 2017 and; .675% as of Jan 1, 2018
HB386

 

Action 3

Reducing the rate of Business Profit Tax (from 8.5 to 7%) Reps. James Spillane, Josh Moore, Joe Duarte, Keith Murphy, Kyle Tasker, Joe Duarte, Carol McGuire, Daniel Itse House:

 

Senate:

3/3 Retained in committee

 

6/2 Work Session

Reduces rate of BPT from 8.5% to 7% as of July 1 2015
SB6

Action 1

 

IN BUDGET

Increasing the Research and Development tax credit against the Business Profit Tax ($2m to $7m) Sens. Jeb Bradley, Sharon Carson, Bette Lasky, Chuck Morse, David Watters, Jeanie Forrester, David Boutin, Andrew Hosmer, Gerard Little, William Infantine, Gene Chandler Senate:

 

Ways & Means

 

House:

 

PART OF BUDGET, NOW VETOED

 

This is a priority issue we can get behind in the future, TBD

 

HB668

Action 3

Relative to expense deductions under the business profits tax Rep. Laurie Sanborn House:

Ways & Means

 

Senate

2/10- Retained in committee

 

6/2 Sub-Committee Work Session

Bill allows a business to calculate expense deductions as defined by Internal Revenue Code section 179, but not to exceed $100,000 per calendar year under the business profits tax
SB217

Action 1

 

 

FOR 2016?

Establishing a job creation tax credit against the Business Enterprise Tax Sens. Nancy Stiles, Sharon Carson, Jeb Bradley, Gerald Little, David Watters, David Pierce, Sam Cataldo, Dan Feltes, Rep. Kenneth Weyler Senate:

Ways & means

 

:

 

3/5 -Laid on the table

Jobs created through start-up, relocating to NH OR expanding by 25% – BET credit.   We have an opportunity to influence this on behalf of members
SB201 Increasing the annual limit on the CDFA tax credit Sens. Kelly, Feltes, Watters Rep. Ames Senate:

Ways & Means

 

3/5- Laid on the table

Increases the annual limit on the amount of new investment tax credit against business taxes for contributions to the CDFA from $5m to $8m

 

Area 5 – Business Regulations
XXXHB318

Action 3

 

Establishing a committee to study state laws and rules affecting New Hampshire businesses Rep. William Infantine House:

 

Commerce & Consumer Affairs

 

 

 

KILLED

Establishes a committee to study state laws and rules affecting NH businesses
XXXHB319

Action 3

Establishing a committee to study effects of making changes to certain NH tax laws Rep. William Infantine House:

House Ways & Means

 

Senate:

 

 

KILLED

Establishes a committee to study effects of making changes to NH tax laws, establishing a tax credit for venture capital companies, reducing the rates of the BPT and BET
XXXHB365

 

Action 3

Prohibiting an employer from using credit history in employment decisions.

 

Reps. Robert CushingKatherine RogersLarry ConverseAndrew WhiteAndrew O’HearneDouglas LeyJeffrey GoleyLatha Mangipudi, Sen. Martha Fuller Clark, Dan Feltes

 

House:

Labor, Industrial

 

Senate:

 

 

KILLED

Establishes the Employee Credit Privacy Protection Act which prohibits employers from using credit history in employment decisions
SB223

 

 

Action 1

Relative to the name availability for business organizations Sen. Woodburn, Daniels, Sanborn, Senate:

 

Commerce

 

House: Commerce and Consumer affairs

 

ENROLLED, waiting for SIGNATURE

Bill will modify name standards language to be less subjective
SB266

 

Action 1

Securities Modernization Act Prime: Sen. Little Senate:

Commerce

 

House: Commerce and Consumer Affairs

 

Committee of Conference Report: ADOPTED

 

A comprehensive effort to overhaul the state’s securities law languages

 

Updated June 5, 2015

See below to view the priority bills that the Government Affairs Committee, and ultimately the Council’s board of directors approved.

SBIReducing the Rate of the Business Profit Tax
Reduces the BPT from the current rate of 8.5% to 8.3% at the end of 2015, to 8.1% at the end of 2017 and an eventual rate of 7.9% by December 31, 2019.

The GAC recommends this as an Action 3 bill since many businesses are able to avoid the BPT. It has largely been considered a ‘companion bill’ to SB2, as well as SB6.   The GAC felt it does fall under the Fix it Fix area of business taxes, and supports the measured ramp down over a three year period. 92% of survey responders supported this measure.

SB1 was passed out of the Senate Ways & Means Committee on a vote of 3-2 with amended changes. It was passed by the full senate on a partisan vote of 14-10, and was quickly laid on the table. The proposal re-appeared during the senate budget writing process, with a reduction of the BPT from 8.5% to 8.3% in 2017, and to 7.9% by 2010.

SB2Reducing the rate of the Business Enterprise Tax
This bill would reduce the BET from its current rate of .75% to .725% at the end of 2015, .7% at the end of 2017 to an eventual .675% as of Dec 31, 2019.

The GAC recommends this as an Action 1 support since it, too, falls under the Fix it Fix area of business taxes.  There is measured ramp down over a three year period. 92% of survey responders supported this measure.

SB2 was passed out of the Senate Ways & Means Committee with Amendment and was passed by the Senate on a partisan vote of 14-10, and was quickly laid on the table. The bill re-appeared during the senate budget writing process, and the reduction is now proposed to reduce the BET from 0.75% to 0.725% in 2017, eventually to 0.675% by 2020.

SB6Increasing the Research and Development tax credit against the Business Profit Tax ($2m to $7m)
This proposal would increase the total cap on the tax credits given to businesses for research and development from the current $2 million to $7 million.

The GAC recommends Action 1 support on this issue since it applies to many high tech companies and consistently the state has met the cap. 90% of survey respondents support this measure.

The Senate unanimously passed SB 6, but the bill was tabled right after passage, awaiting budget deliberations, in which the Senate budget version proposed a delay in the increase until 2017.

SB217: Establishing a job creation tax credit against the Business Enterprise Tax
This is not a new concept, and SB217 is this legislative session’s attempt to find a way to incentive job growth among both existing businesses and new businesses. For each “net new job” hired, the business shall be allowed a tax credit in the amount of either $750 or $1,000 depending upon the percentage the employee’s wage is greater than current state minimum wage. This would apply to jobs created through start-up, relocation to NH OR expansion of existing businesses. The GAC recommend Action 1 support of this bill. 95% of survey respondents agree.

The bill passed the Senate Ways & Means Committee with an amendment that covers existing businesses job creation. It was passed in the Senate on 3/5 and was then tabled, where it remains.

SB223Relative to the name availability for business organizations
This bill would modify name standards language to be less subjective. Currently the language for registration at the SOS office includes “likely to be confused with or mistaken for’. The bill proposes to remove that language to make name filing more clear-cut around existing business names.

The GAC recommends Action 1 support of this bill. This bill came out nice and clean from the Commerce on a bi-partisan 5-0 vote, as well as the full Senate on a 24-0 vote. It was passed out of the House’s Commerce and Consumer Affairs on a vote of 15-4, and passed the full House on June 3. It now will head to the Governor’s desk.

SB266Securities Modernization Act
SB 266 seeks to modernize New Hampshire’s securities regulations.  It cleans-up the text of the securities law, eliminating numerous outdated and confusing provisions, and substitutes clear language that is more closely-aligned with current practices and regulatory policies.    The bill focuses on investor protection and reducing hurdles for businesses trying to raise the capital they need to grow and create jobs.   NH’s current securities regulation act is based on the 1956 Model Securities Act.  SB266 would repeal the existing laws in entirety and replace it with a NH version of the Revised Uniform Securities Act (RUSA).  17 other states have adopted a version of RUSA. The GAC recommends Action 1 support of this bill. 86% of respondents agree.

This 176 page bill was passed by the Senate Commerce Committee on 3/19, and ought of the full Senate with an Amendment on 3/26. Its time in the House has been a bit more bogged down, and after it was assigned to a sub-committee of the House Commerce and Consumer Affairs Committee, and had five work sessions, it was passed out of the Committee on a vote of 15-6 with amended language that would reduce the fees that the secretary of state’s office receives from the creation of companies and the registration of securities. While the entire committee is in agreement about the value of the bill, and how it will better position New Hampshire for entering and establishing companies, the difference of opinion lies in the reduction of those fees, which are reportedly less than other states, but would be a $1million reduction in our state’s budget. It is passed the full House on June 3, and is now headed to a Committee of Conference, and hopefully the Governor’s desk.

Commuter Rail
The Governor’s office and various business organizations, specifically the Manchester and Nashua Chambers of Commerce, have supported commuter rail as a key way to improve access to the entire region and provide new transportation and housing opportunities in order to support the workforce.

Earlier this year, the Capital Corridor Rail Study released recommendations that the issue be further studied.  The Council has been consistently supportive of the notion of commuter rail. The GAC recommends support of further study.

The Governor’s budget proposal included a $4 million expenditure for the environmental and engineering assessment that the project requires to move forward. Both the House and Senate version of the budgets did not include those funds. The leading proponents of the project recognize that the issue is “marathon, not a sprint” and that great progress has been made in educating policy makers on the issue; an issue they are dedicated to continuing to advocate.

 

Updated March 31, 2015

The high tech sector is quite diverse, made up of companies from large employers perhaps in the business of supplying our defense efforts…or providing the latest software solutions or mired in the health technology business to companies on the other end of the spectrum; it is also fueled by start-ups that possess the latest and greatest idea that very well may be the next big thing. Our members are technologists, engineers, innovators and employers. The one thing they have in common is a willingness to leap and launch, grow and employ. They also have the willingness to do so here in New Hampshire. For those reasons, our public policy approach is always cognizant of the need for a custom approach, and the need to hit one main qualifier; what makes sense for the tech business owner and operator in New Hampshire.

As a result, our “Fix it Five” model focuses on five distinct areas: (1) creating better access to capital; (2) supporting access to state level funding for innovation; (3) supporting STEM education in higher education in order to fuel workforce development; and (4) concern about taxation and (5) concern about regulatory matters. 

We approach each of these areas separately; but never in a vacuum. Just as a tech business owner or operator must take each part of their business head-on without discounting another area as dispensable.  A CEO must make sure all aspects of the business are getting consistently tuned up, and not at the expense of the other. Beware of the operator who claims that, ‘this is the year we are going to only pay attention to human resources, forget all that production and marketing fluff.”

We do our best to model the good operator approach by monitoring, supporting (and yes fighting) policymaking that affects all five policy areas. It’s never in a vacuum, and never with the approach that one policy area trumps all others.  Because of this, we do find ourselves in an interesting middle ground at times. Our members do indeed support cutting business taxes; it makes a difference in their margins so they may invest more back into the business, but at the same time, workforce development is never far from any operator’s mind.  There are proposals out there on both sides of the aisle that touch each policy area, and we will continue to support good policy, and to act as a source of information about our industry.

Of course, whatever proposals are on the table are wrapped with one central issue; the current process on the 2016-2017 biennial budget. The Governor’s budget proposal included a number of line items that support the tech sector; this is an area her administration has consistently been supportive of. Included in the Governor’s proposal are a variety of proposed education, workforce, and economic development proposals such as: an increase of $13 million over the biennium compared to FY 2015 for the University System of New Hampshire; a $6.5 million increase over the biennium compared to FY 2015 for the state’s community college system; increased funding for Small Business Development Centers; additional funding for education and accelerator programs at business incubators; funding for a STEM specialist at the Department of Education to modernize the state’s STEM education efforts; and, the expansion of a pilot program between the bureau of adult education and the community college system to help adults enhance their skills prior to attending community college.  A common theme is STEM, and to view the Council’s official policy statement on STEM initiatives. See below to view the report on the Governor’s Task Force on Science, Technology, Engineering and Math Education Task Force (STEM).

See below to view the priority bills that the Government Affairs Committee, and ultimately the Council’s board of directors approved.

SBI: Reducing the Rate of the Business Profit Tax
Reduces the BPT from the current rate of 8.5% to 8.3% at the end of 2015, to 8.1% at the end of 2017 and an eventual rate of 7.9% by December 31, 2019.

The GAC recommends this as an Action 3 bill since many businesses are able to avoid the BPT. It has largely been considered a ‘companion bill’ to SB2, as well as SB6.   The GAC felt it does fall under the Fix it Fix area of business taxes, and supports the measured ramp down over a three year period. 92% of survey responders supported this measure.

SB1 was passed out of the Senate Ways & Means Committee on a vote of 3-2 with amended changes. It was passed by the full senate on a partisan vote of 14-10. After being referred, and passed out of the Finance Committee, the bill is on the Senate Calendar for this week.

SB2: Reducing the rate of the Business Enterprise Tax
This bill would reduce the BET from its current rate of .75% to .725% at the end of 2015, .7% at the end of 2017 to an eventual .675% as of Dec 31, 2019.

The GAC recommends this as an Action 1 support since it, too, falls under the Fix it Fix area of business taxes.  There is measured ramp down over a three year period. 92% of survey responders supported this measure.

SB2 was passed out of the Senate Ways & Means Committee with Amendment and was passed by the Senate on a partisan vote of 14-10. It was referred and passed out of the Senate Finance Committee and is on the Senate Calendar for this week.

SB6: Increasing the Research and Development tax credit against the Business Profit Tax ($2m to $7m)

This proposal would increase the total cap on the tax credits given to businesses for research and development from the current $2 million to $7 million.

The GAC recommends Action 1 support on this issue since it applies to many high tech companies and consistently the state has met the cap. 90% of survey respondents support this measure.

The Senate unanimously passed SB 6, but the bill was tabled right after passage, awaiting budget deliberations. Previously, Governor Maggie Hassan has supported increases in the R&D tax credit, although in her budget address this year she supports the concept, she did stay away from endorsing this particular increase.

SB217: Establishing a job creation tax credit against the Business Enterprise Tax
This is not a new concept, and SB217 is this legislative session’s attempt to find a way to incentive job growth among both existing businesses and new businesses. For each “net new job” hired, the business shall be allowed a tax credit in the amount of either $750 or $1,000 depending upon the percentage the employee’s wage is greater than current state minimum wage. This would apply to jobs created through start-up, relocation to NH OR expansion of existing businesses.

The GAC recommend Action 1 support of this bill. 95% of survey respondents agree.

The bill passed the Senate Ways & Means Committee with an amendment that covers existing businesses job creation. It was passed in the Senate on 3/5 and was then tabled.

SB223: Relative to the name availability for business organizations

This bill would modify name standards language to be less subjective. Currently the language for registration at the SOS office includes “likely to be confused with or mistaken for’. The bill proposes to remove that language to make name filing more clear-cut around existing business names. The GAC recommends Action 1 support of this bill.

This bill came out nice and clean from the Commerce on a bi-partisan 5-0 vote, as well as the full Senate on a 24-0 vote. It’s now queued up for the House and will be heard in the Commerce and Consumer Affairs Committee after Crossover.

SB266: Securities Modernization Act
SB 266 seeks to modernize New Hampshire’s securities regulations.  It cleans-up the text of the securities law, eliminating numerous outdated and confusing provisions, and substitutes clear language that is more closely-aligned with current practices and regulatory policies.    The bill focuses on investor protection and reducing hurdles for businesses trying to raise the capital they need to grow and create jobs.   NH’s current securities regulation act is based on the 1956 Model Securities Act.  SB266 would repeal the existing laws in entirety and replace it with a NH version of the Revised Uniform Securities Act (RUSA).  17 other states have adopted a version of RUSA.

The GAC recommends Action 1 support of this bill. 86% of respondents agree.

This 176 page bill was heard in the Senate Commerce Committee on 3/19.  The committee appeared be to be open to the notion and work done behind the bill, but did not move forward on voting since the Chair, Sen. Russell Prescott, wanted to take time to read through the entire bill before bringing it up for a vote.

Commuter Rail

The Governor’s office and various business organizations, specifically the Manchester and Nashua Chambers of Commerce, have supported commuter rail as a key way to improve access to the entire region and provide new transportation and housing opportunities in order to support the workforce.

Earlier this year, the Capital Corridor Rail Study released recommendations that the issue be further studied.  The Council has been consistently supportive of the notion of commuter rail. The GAC recommends support of further study.

The Governor’s budget proposal includes a $4 million expenditure for the environmental and engineering assessment that the project requires to move forward.

STEM and workforce development efforts

A leading concern for our members and the high tech industry overall is the development of a skilled and educated workforce. The tech sector expects to grow 6% over the next five years and with 78% of companies already experiencing a moderate or significant shortage of skilled workers, and 55% of companies planning to need to hire for new positions in the next year, this is an immediate and consistent concern.

The Council has consistently supported strong curriculum standards, such as the Common Core State Standards, and any measures that promote the best education delivery system to best serve the overarching workforce development needs. The Council also believes in the appropriate oversight of those administrative units, and an evaluation system that bests demonstrates to potential businesses and employers the quality of education in New Hampshire.

We strongly support the development of STEM programs, and any policy that allows for innovation in that area, and appropriate collaboration between education and high tech businesses to fill that pipeline of skilled and prepared workers.

The GAC recommends that the Council continue supporting valid STEM efforts.

Governor’s Budget Proposal

“Supporting a more innovative economic future” is highlighted as a priority in Gov. Maggie Hassan’s proposed $11.5 billion 2016-2017 biennial budget.

Included within the Governor’s budget are a variety of proposed education, workforce, and economic development proposals such as: an increase of $13 million over the biennium compared to FY 2015 for the University System of New Hampshire; a $6.5 million increase over the biennium compared to FY 2015 for the state’s community college system; increased funding for Small Business Development Centers; additional funding for education and accelerator programs at business incubators; funding for a STEM specialist at the Department of Education to modernize the state’s STEM education efforts; and, the expansion of a pilot program between the Bureau of Adult education and the Community College System to help adults enhance their skills prior to attending community college.  The GAC recommends that the Council continue acting as an education source on the tech sector and support any initiative that soundly supports high tech businesses.

The House is now preparing its own budget proposal; reportedly some of these measures are not making the cut in their version.

 

Updated March 5, 2015

The Council Support of Business and Innovation Friendly Policies

Here is what we know of the high tech sector in New Hampshire: our sector employs nearly 44,000 people, contributes nearly $3 billion to the state’s GDP in salaries alone due to the higher than average pay in the sector, but the overall economic impact of the sector is much, much higher. High tech businesses are major taxpayers in terms of the business enterprise tax, business profits tax and local property taxes.

Perhaps the NH Center for Public Policy upon conducting a study about the state’s economy said it best, “Advanced manufacturing and high technology businesses are the leading drivers of New Hampshire’s economy. Jobs in this sector pay higher wages and export products from the state to other areas of the nation and the world, effectively transferring outside money into the state’s economy. For these reasons, this sector is the strongest engine of economic activity in New Hampshire.”

It’s also for these reasons that the Council continues to advocate for policies that support the sector’s main areas of concern for further growth and prosperity: (1) promote and facilitate access to capital, (2) promote state level funding for innovation, (3) support for STEM education and workforce development, (3) attention to a competitive tax climate (4) attention to a non-burdensome regulatory environment.

As the NH legislature heads towards Crossover later this month (the time when senate bills head to the house and vice versa), we continue to monitor and weigh in on the bills that the NH High Tech Council deemed as falling under our priority policy areas. Many of those are coming to head this week.

SB1 – Reducing the Rate of the Business Profits Tax and SB2 – Reducing the Rate of the Business Enterprise Tax – These companion bills were both passed by the Senate Ways and Means Committee and are now being taken up by the full Senate. SB1 and SB2 would incrementally reduce the business profits tax and business enterprise tax to 7.9 percent and 0.675 percent, respectively, part of a strategy by Republican leadership to help reduce the cost of doing business in New Hampshire and create a business friendly climate. The cuts would affect returns ending on or after Dec. 31, 2015. The BPT, now at 8.5 percent of all profits, would drop to 8.3 percent this year, 8.1 percent in 2017 and 7.9 percent in 2019. The BET, now at 0.75 percent of wages, dividends and interest, would go to 0.725 percent in 2015, 0.7 percent in 2017 and 0.675 in 2019. The Council has consistently been supportive of any efforts to improve NH’s business climate, and our statement is that we support these measures, as long as not at the expense of other economic development measures or workforce development measures. Both bills were moved on to Finance today after being heard in the Senate.

SB6Increasing the Research & Development Tax, introduced by Senate Majority Leader Jeb Bradley (R-Wolfeboro), this proposal would increase the total cap on the tax credits given to businesses for research and development from the current $2 million to $7 million. The Senate unanimously passed SB 6, but the bill was tabled right after passage, awaiting budget deliberations. Previously, Governor Maggie Hassan has supported increases in the R&D tax credit, although in her budget address this year she supports the concept, she did stay away from endorsing this particular increase. The bill was laid on the table last week, which means we can expect to see it later within the Senate budget.

SB217Job Creation Tax Credit: Proposed by Sen. Nancy Stiles (R-Hampton) this bill would allow businesses to defer BET taxes on the wages from any new jobs created. The bill was written, and amended, to reflect either jobs created through a new, or existing business, and would allow for $750 to $1,000 for each qualified tax credit employee.  This concept has been introduced in previous legislatures, and the Council supports the notion. The current version has opened questions on fairness and administration of the credit, and as it was laid on the table, it may not make it through this year, but certainly one to watch.

SB201New Investment Tax Credit: This bill would increase the annual limit on the amount of new investment tax credit against business taxes for contributions to the community development finance authority. The Tax Credit Program is actually very simple; businesses that donate to a CDFA-approved project can get at least 75% of that contribution back in the form of a state business tax credit. Currently, the annual cap on the new investment tax credit is $5 million and this would raise the cap to $8 million. The impetus behind the bill is to encourage investment in businesses. The bill was passed out of the Senate Commerce Committee and headed to the full Senate on March 5, after passing on a VV it was moved to table.

SB215Research and Development Tax Credit Rebate Option: In a further research and development tax credit, this bill would allow businesses to take their research and development tax break up front, in a cash rebate, at a rate of 65%, versus taking the credit at a later date against the business profits taxes.  This would apply to businesses that do not exceed $70 million in gross income, and caps the rebate at $32,500 annually. Passed out of the Senate Ways & Means Committee, it headed to the full Senate where it was laid on the table by a voice vote. This bill came about via a concept by one of our members, and was taken up by the Live Free and Start council, an initiative of Governor Maggie Hassan.

SB223Name Availability for Businesses: This bill would modify the name availability standard as business register with the NH Secretary of State office. Currently, when business go to register their name as they incorporate, the language says that a company cannot register with a name that is the same as or undistinguishable from another existing company. It also states, however that the name cannot be confused with or mistaken for an existing company. Many feel that the last part of that statement is subjective and confusing for registering companies, and that removing the language would simplify the process and clarify the available names. The Council support this, and any measure that eases and clarifies the way of doing business. The bill was passed out of the Senate Commerce Committee and on March 5 was passed in the Senate on a vote of 24-0.

SB266Adoption of the Uniform Securities Act: With a heavy hit list of sponsors from both sides of the aisle, this late file bill was a collaborative undertaking with a variety of legal minds working to introduce a proposal to update the state’s current securities laws. NH’s current securities regulation act is based on the 1956 Model Securities Act. Although our statute started as a uniform law, it has been amended over the years a number of times. The minds working together to modernize this act are proposing to repeal the 1956 model in its entirety and replace it with a NH version of the Revised Uniform Securities Act (RUSA) from 2005. The Revised Uniform Securities Act (RUSA) is a model statute designed to guide each state in drafting its own state securities law, and has been adopted in 17 states. Overall, the proposal makes NH a more friendly place for businesses and investors as it cleans-up the text of the securities law, eliminated numerous outdated and confusing provisions, and substitutes clear language that is more closely-aligned with current practices and regulatory policies.   The Council supports these efforts and will deliver testimony on March 10. If you are interested in learning more about this issue and contributing your voice, please let Michelline Dufort know at Michelline@cooksonstrategies.com.

HB327Crowdfunding Investment: This bill would set a legal framework for the creation of equity based funding in our state for credited, and uncredited investors, so NH citizens could invest in NH businesses. There are safeguards written into the bill’s language; investment is capped at $5,000 per individual if either the annual income or the net worth of the investor is less than $100,000; or for investors with net worth over $100,000, the cap is ten percent of the annual income or net worth of the investor, with a ceiling limit of $100,000.

According to proponents of the bill, 13 states have passed similar legislation to allow for crowd-funding investment, and 13 states have pending legislation in this area. Sponsored by Rep. Pamela Tucker (Greenland, R) this bill was referred to the House Consumer and Commerce Committee, and was taken up in Executive Session in Committee March 3 where it was retained in committee.