General Assembly Raised Bill No. 5460
February Session, 2020 LCO No. 2359
Referred to Committee on FINANCE, REVENUE AND
BONDING
Introduced by:
(FIN)
AN ACT CONCERNING THE INTERSTATE COMPACT TO PHASE OUT
CORPORATE GIVEAWAYS.
Be it enacted by the Senate and House of Representatives in General
Assembly convened:
1 Section 1. (NEW) (Effective from passage) The interstate compact to
2 phase out corporate giveaways is hereby entered into and enacted into
3 law, subject to the provisions of section 2 of this act. The compact is as
4 follows:
5 ARTICLE I
6 MEMBERSHIP
7 Any state of the United States and the District of Columbia may
8 become a member of this compact by enacting this agreement in
9 substantially the following form.
10 ARTICLE II
11 DEFINITIONS
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12 As used in this compact, unless the context clearly indicates
13 otherwise:
14 (1) "Corporate giveaway" means any company-specific or industry-
15 specific disbursement of funds via property, cash or deferred or reduced
16 tax liability by a state or local government to a particular company or
17 industry;
18 (2) "Member state" means any state or the District of Columbia that
19 has enacted a statute agreeing to this compact;
20 (3) "Company-specific tax incentive" means any change in the general
21 tax rate or valuation offered or presented to a specific company that is
22 not available to other similarly-situated companies;
23 (4) "Company-specific grant" means any disbursement of funds via
24 property, cash or deferred tax liability by a state or local government to
25 a particular company; and
26 (5) "Located in any other member state" means any corporate
27 headquarters, office space, manufacturing facility or other real estate
28 development that is physically located in another member state,
29 whether or not the company has other property in the member state.
30 ARTICLE III
31 FINDINGS
32 The member states find that:
33 a. Corporate giveaways are among the least effective uses of taxpayer
34 dollars to create and maintain jobs;
35 b. Local and state leaders are in a prisoners' dilemma where it is best
36 for all to create a level playing field for all employers without any
37 corporate giveaways, but each level of government has an incentive to
38 subsidize a company, generating a race to the bottom;
39 c. Governments should attract and retain companies based on general
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40 conditions, including, but not limited to, modern infrastructure, an
41 educated workforce, a clean environment and a favorable tax and
42 regulatory climate, not based on a specific grant for a particular
43 company;
44 d. Corporate giveaways fuel business inequality as only the largest
45 businesses receive the vast majority of these funds;
46 e. A reasonable first step in phasing out corporate giveaways is an
47 anti-poaching agreement among state governments prohibiting state
48 company-specific tax incentives and state company-specific grants as an
49 inducement for entities to relocate existing facilities; and
50 f. Creating a national board of gubernatorial appointees charged with
51 finding consensus around improvements to this agreement over time in
52 a phased approach will assist state and local governments in escaping
53 from the prisoners' dilemma and implementing a level playing field for
54 all employers.
55 ARTICLE IV
56 ANTI-POACHING PROHIBITION
57 Each member state is prohibited from offering or providing any
58 company-specific tax incentive or company-specific grant to any entity
59 for a corporate headquarters, manufacturing facility, office space or
60 other real estate development located in any other member state as an
61 inducement to relocate to the offering member state.
62 ARTICLE V
63 EXCLUSIONS
64 Workforce development grants that train employees are not subject
65 to this agreement. Company-specific tax incentives or company-specific
66 grants from local governments are not subject to this agreement. State
67 company-specific tax incentives or state company-specific grants to
68 entities for corporate headquarters, manufacturing facilities, office
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69 space or other real estate development located within its own state are
70 not subject to this agreement.
71 ARTICLE VI
72 WITHDRAWAL
73 Any member state may withdraw from this agreement with six
74 months' notice and shall do so in writing to the chief executive officer of
75 every other member state to the agreement.
76 ARTICLE VII
77 ENFORCEMENT
78 a. The chief executive officer of each member state shall enforce this
79 compact.
80 b. A taxpaying resident of any member state has standing in the
81 courts of any member state to require the chief law enforcement officer
82 of that member state to enforce this compact.
83 ARTICLE VIII
84 NATIONAL BOARD TO DRAFT SUGGESTED IMPROVEMENTS
85 OVER TIME TO THE AGREEMENT
86 a. A national board of the agreement to phase out corporate
87 giveaways is established by this agreement. Each chief executive officer
88 of each member state shall appoint one member to the board. The board
89 shall accept appointees from nonmember states that wish to appoint a
90 member of the board.
91 b. The purpose of the board is to publish suggested revisions to this
92 agreement in December of every year to continue to phase out those
93 forms of corporate giveaways that the board finds reasonable to include
94 as suggested revisions to the agreement for member states to consider
95 implementing.
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96 c. The board shall convene at least annually, elect officers from its
97 membership, establish rules and procedures for its governance and
98 publish a report in December of every year that includes suggested
99 revisions and improvements to this agreement. The board shall collect
100 testimony from all interested parties, including organizations and
101 associations representing state legislators, taxpayers and subject matter
102 experts on how the agreement can be improved and strengthened.
103 ARTICLE IX
104 CONSTRUCTION AND SEVERABILITY
105 a. This compact shall be liberally construed so as to effectuate its
106 purposes. If any phrase, clause, sentence or provision of this compact,
107 or the applicability of any phrase, clause, sentence or provision of this
108 compact to any government, agency, person or circumstance is declared
109 in a final judgment by a court of competent jurisdiction to be contrary
110 to the Constitution of the United States or is otherwise held invalid, the
111 validity of the remainder of this compact and the applicability of the
112 remainder of this compact to any government, agency, person or
113 circumstance shall not be affected.
114 b. If this compact is held to be contrary to the constitution of any
115 member state, the compact shall remain in full force and effect as to the
116 remaining member states and in full force and effect as to the affected
117 member state as to all severable matters.
118 Sec. 2. (NEW) (Effective from passage) The interstate compact to phase
119 out corporate giveaways under section 1 of this act shall take effect upon
120 the adoption of said compact by two or more states. The Secretary of the
121 Office of Policy and Management shall certify to the Governor and the
122 General Assembly, in accordance with the provisions of section 11-4a of
123 the general statutes, that two or more states have enacted the interstate
124 compact to phase out corporate giveaways into law.
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This act shall take effect as follows and shall amend the following
sections:
Section 1 from passage New section
Sec. 2 from passage New section
Statement of Purpose:
To adopt the interstate compact to phase out corporate giveaways.
[Proposed deletions are enclosed in brackets. Proposed additions are indicated by underline, except
that when the entire text of a bill or resolution or a section of a bill or resolution is new, it is not
underlined.]
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