New Hampshire House panel mulls tweaking ARMI tax break bill
Requirement to be part of initiative may be removed from measure
A new idea is taking shape related to the proposed tax break for businesses opening up in New Hampshire to take part in the budding Advanced Regenerative Medicine Institute in Manchester: They won’t have to be a part of the institute to get one.
The requirement to join ARMI, the nonprofit headed by entrepreneur and inventor Dean Kamen, is currently written into Senate Bill 564, which would grant such businesses a decade of business tax exemptions. It also includes $5 million in student loan forgiveness for those working in the industry and staying in New Hampshire for five years.
During a Tuesday meeting, Kamen sold many of the members of the House Ways and Means Committee on the concept of helping make the Manchester Millyard the hub of a new industry, which involves engineering the growth of organs from a person’s own cells.
But some members of the panel group were sill uneasy about some of the law’s details, including the membership requirement.
“I’m very much in support of this project,” said Rep. Susan Almy, D-Lebanon. “I’m trying to figure out how to get to yes.”
Almy was talking about her concerns over the constitutionality of favoring one type of industry over another. The Senate shared those concerns and asked for an opinion from the attorney general’s office, which vouched for the project’s constitutionality, but some House committee members remained skeptical.
ARMI’s lobbying firm, Rath Young & Pignatelli, brought in former Associate Attorney General Richard Head to reassure them. Head said that the legislation, for the purpose of taxation, is allowed to single out a particular class if the public welfare will benefit, and that public welfare includes stimulating economic growth.
Head also said that the requirement to join a particular nonprofit organization met constitutional muster, since one of the ideas behind the effort is that ARMI members would share some intellectual property in order to build the “ecosystem” of a “Silicon Valley of regenerative medicine.”
When several committee members continued to express doubts, David Collins, the law firm’s point man on the project said that ARMI was considering supporting eliminating that requirement because of the committee’s concerns. But the organization won’t say for sure until next week.
“That would be very helpful,” said Rep. Richard Ames, D-Jaffrey.
“I agree,” said the committee’s chair, Rep. Norman Major, R-Plaistow. “ARMI is great, but it shouldn’t block other qualified companies from joining.”
However, Christopher Herbert, D-Manchester, a strong supporter of the project, said that perhaps the requirement should remain.
“I thought the idea of information-sharing was great,” he said. He added that if were “convinced that it would screw the whole thing up,” he would oppose taking the provision out.
But Collins said that ARMI didn’t think the requirement was that crucial “because most companies would join quite readily anyway because of Dean’s passion and vision for creating our own little Silicon Valley.”
That wasn’t the only detail to be ironed out, however.
The state Business Finance Authority, which would be issuing the $5 million bond to help regenerative manufacturing employees pay off their student loans, testified that it legally had to have a source of capital that would pay back that bond – either a legislative appropriation or some pool of private capital.
Some lawmakers wanted to know how and where the $80 million grant that ARMI won and $212.5 million in private capital that ARMI raised was being spent. When Collin said he wasn’t sure he could release company-specific information, Almy said she wanted a more general background, like how much was being spent on projects that were based out of state.
Then there was the question on how to determine whether the companies met the requirement that three-quarters of their activity was related to regenerative manufacturing.
Officials from the state Department of Revenue Administration testified that the agency would have to draft regulations on determining that by payroll or revenue information, or some combination of the two, and while it could do that, it would prefer more guidance in the law.
All this means that the House Ways and Means panel will be voting on at least one amendment before drafting a bill by the April 25 deadline to sending a recommendation to the full House. Otherwise the bill might have to wait until next year.
ARMI is urging quick passage to show state support and prevent other states from trying to lure the industry away from New Hampshire.