2020 -- H 7404 | |
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LC003603 | |
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STATE OF RHODE ISLAND | |
IN GENERAL ASSEMBLY | |
JANUARY SESSION, A.D. 2020 | |
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A N A C T | |
RELATING TO TAXATION | |
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Introduced By: Representatives Place, Filippi, Lyle, Newberry, and Quattrocchi | |
Date Introduced: January 31, 2020 | |
Referred To: House Finance | |
It is enacted by the General Assembly as follows: | |
1 | SECTION 1. Title 44 of the General Laws entitled "TAXATION" is hereby amended by |
2 | adding thereto the following chapter: |
3 | CHAPTER 70 |
4 | AGREEMENT TO PHASE OUT CORPORATE GIVEAWAYS ACT |
5 | 44-70-1. Membership. |
6 | Any state of the United States and the District of Columbia may become a member of this |
7 | agreement/compact by enacting this agreement in substantially the following form. |
8 | 44-70-2. Definitions. |
9 | As used in this chapter: |
10 | (1) "Company-specific grant" means any disbursement of funds via property, cash or |
11 | deferred tax liability by the state government to a particular company. |
12 | (2) "Company-specific tax incentive" means any change in the general tax rate or |
13 | valuation offered or presented to a specific company that is not available to other similarly- |
14 | situated companies. |
15 | (3) "Corporate giveaway" means any company-specific or industry-specific disbursement |
16 | of funds via property, cash or deferred or reduced tax liability by a state or local government to a |
17 | particular company or industry. |
18 | (4) "Located in any other member state" means any corporate headquarters, office space, |
19 | manufacturing facility or other real estate development that is physically located in another |
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1 | member state, whether or not the company has other property in the member state. |
2 | (5) "Member state" means any state or the District of Columbia that has enacted a statute |
3 | agreeing to this compact. |
4 | 44-70-3. Findings. |
5 | The member states find that: |
6 | (1) Corporate giveaways are among the least effective uses of taxpayer dollars to create |
7 | and maintain jobs; |
8 | (2) Local and state leaders are in a prisoners' dilemma where it is best for all to create a |
9 | level playing field for all employers without any corporate giveaways, but each level of |
10 | government has an incentive to subsidize a company, generating a race to the bottom; |
11 | (3) Governments should attract and retain companies based on general conditions |
12 | (including, but not limited to, modern infrastructure, an educated workforce, a clean environment, |
13 | and a favorable tax and regulatory climate), not based on a specific grant for a particular |
14 | company; |
15 | (4) Corporate giveaways fuel business inequality as only the largest businesses receive |
16 | the vast majority of these funds; |
17 | (5) A reasonable first step in phasing out corporate giveaways is an anti-poaching |
18 | agreement among state governments prohibiting state company-specific tax incentives and state |
19 | company-specific grants as an inducement for entities to relocate existing facilities; |
20 | (6) Creating a national board of gubernatorial appointees charged with finding consensus |
21 | around improvements to this agreement over time in a phased approach will assist state and local |
22 | governments in escaping from the prisoners' dilemma and implementing a level playing field for |
23 | all employers. |
24 | 44-70-4. Anti-poaching prohibition. |
25 | Each member state is prohibited from offering or providing any company-specific tax |
26 | incentive or company-specific grant to any entity for a corporate headquarters, manufacturing |
27 | facility, office space or other real estate development located in any other member state as an |
28 | inducement for the corporate headquarters, manufacturing facility, office space or other real |
29 | estate development to relocate to the offering member state. |
30 | 44-70-5. Exclusions. |
31 | Workforce development grants that train employees are not subject to this agreement. |
32 | Company-specific tax incentives or company-specific grants from local governments are not |
33 | subject to this agreement, and state's company-specific tax incentives or state company-specific |
34 | grants to entities for corporate headquarters, office space, manufacturing facilities or real estate |
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1 | developments located within that specific state are not subject to this agreement. |
2 | 44-70-6. Withdrawal. |
3 | Any member state may withdraw from this agreement with six (6) months' notice and |
4 | shall do so in writing to the governor of every member state. |
5 | 44-70-7. Enforcement. |
6 | The attorney general of each member state shall enforce this compact. A taxpaying |
7 | resident of any member state has standing in the courts of any member state to require the |
8 | attorney general of that member state to enforce this compact. |
9 | 44-70-8. National board to draft suggested improvements over time to the |
10 | agreement. |
11 | A national board of the agreement to phase out corporate giveaways act is established by |
12 | this agreement. The governor of each member state shall appoint one member to the board. The |
13 | board shall accept appointees from non-member states that wish to appoint a member of the |
14 | board. The purpose of the board is to publish suggested revisions to this agreement in December |
15 | of each year to continue to phase out those forms of corporate giveaways that the board finds |
16 | reasonable to include as suggested revisions to the agreement for member states to consider |
17 | implementing. The board shall convene at least annually, elect officers from its membership, |
18 | establish rules and procedures for its governance, and publish a report in December of each year |
19 | that includes suggested revisions and improvements to this agreement. The board shall collect |
20 | testimony from all interested parties, including organizations and associations representing state |
21 | legislators, taxpayers and subject matter experts on how the agreement can be improved and |
22 | strengthened. |
23 | 44-70-7. Construction and severability. |
24 | This compact shall be liberally construed so as to effectuate its purposes. If any phrase, |
25 | clause, sentence or provision of this compact, or the applicability of any phrase, clause, sentence |
26 | or provision of this compact to any government, agency, person or circumstance is declared in a |
27 | final judgment by a court of competent jurisdiction to be contrary to the constitution of the United |
28 | States or is otherwise held invalid, the validity of the remainder of this compact and the |
29 | applicability of the remainder of this compact to any government, agency, person or circumstance |
30 | shall not be affected. |
31 | If this compact is held to be contrary to the constitution of any member state, the compact |
32 | shall remain in full force and effect as to the remaining member states and in full force and effect |
33 | as to the affected member state as to all severable matters. |
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1 | SECTION 2. This act shall take effect upon passage. |
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LC003603 | |
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EXPLANATION | |
BY THE LEGISLATIVE COUNCIL | |
OF | |
A N A C T | |
RELATING TO TAXATION | |
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1 | This act would create an agreement to limit corporate giveaways. |
2 | This act would take effect upon passage. |
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LC003603 | |
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