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Proposal to merge health/education financing authority into business finance authority draws questions about process and liability
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Summary
SB56 would fold the New Hampshire Health and Education Facilities Authority (HEFA) into the Business Finance Authority (BFA) to consolidate conduit-bond issuance and achieve operational savings; BFA representatives said outstanding conduit bonds remain borrower liabilities and the merger is voluntary with board support.
The House committee heard SB56, a bill to consolidate the New Hampshire Health and Education Facilities Authority into the Business Finance Authority, with testimony from James Key Wallace, executive director of the BFA.
Wallace said the two quasi‑state agencies provide similar conduit‑bond issuer services for nonprofits, health systems and higher‑education borrowers. He described the proposal as voluntary and board‑supported, intended to create operational efficiencies (shared IT, underwriting, auditors) and to allow New Hampshire HEFA staff to focus on serving borrowers while using the BFA’s administrative backbone.
Members asked about financial exposure and the treatment of existing conduit bonds. Wallace stressed conduit bonds are not liabilities of HEFA or the state and remain repayment obligations of borrowers; those existing bond obligations would be carried into the combined entity. He described the BFA’s revenue model as fee‑for‑service (guarantee fees, issuance fees) rather than taxpayer funding.
Representatives also asked whether processes will be harmonized, whether nonprofits will know where to go for services, and whether co‑location of staff is planned. Wallace said processes will be run in parallel for an initial transition period, with an intent to adopt the most efficient procedures and preserve borrower‑facing options; colocation was a likely but not required step.
The committee did not take action and closed business for the day.
