2023 -- H 5319

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LC000649

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     STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2023

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A N   A C T

RELATING TO TAXATION - AGREEMENT TO PHASE OUT CORPORATE INCENTIVES

COMPACT ACT

     Introduced By: Representatives Place, and Rea

     Date Introduced: February 01, 2023

     Referred To: House Finance

     It is enacted by the General Assembly as follows:

     SECTION 1. Title 44 of the General Laws entitled "TAXATION" is hereby amended by

adding thereto the following chapter:

CHAPTER 71

AGREEMENT TO PHASE OUT CORPORATE INCENTIVES COMPACT ACT

     44-71-1. Membership.

     Any state of the United States and the District of Columbia may become a member of this

agreement/compact by enacting this agreement in substantially the following form.

     44-71-2. Definitions.

     As used in this chapter:

     (1) "Facility" means, but is not limited to, a headquarters, warehouse, outlet, affiliate,

office, or production facility of a company.

     (2) "Party state" means a state that has enacted a statute agreeing to this compact.

     (3) "Political subdivision" means governmental branches, departments, agencies, counties,

municipalities, special districts, as well as other governmental entities and quasi-governmental

entities created by the authorization of law.

     (4) "Subsidy" means an economic benefit, direct or indirect, granted by a state government

or any political subdivision, including, but not limited to, direct grants, tax consideration, favorable

bonding status, special district status, or any other benefit that has the effect of reducing

governmental costs for a venture or class of ventures compared to others similarly situated, with

the primary purpose or substantial effect of encouraging or maintaining within a state or political

subdivision's borders particular or specific classes of ventures in which private persons have a

substantial financial or ownership interest.

     44-71-3. Anti-poaching prohibition.

     When two (2) or more states have passed and signed the compact, the party state

governments, or any political subdivision, shall not give a subsidy to a private enterprise for the

purpose of selectively supporting a specific industry or company, or to entice a specific industry or

company to relocate an existing facility from one party state to another party state or open a new

facility.

     44-71-4. Compact administrator and exchange of information.

     (1) The governor of each party state or the governor's designee is the compact

administrator.

     (2) The compact administrator of each party state shall maintain an accurate list of all party

states.

     (3) The compact administrator of each party state shall furnish to the compact administrator

of each other party state any information or documents that are reasonably necessary to facilitate

the administration of this compact.

     44-71-5. Enforcement.

     The attorney general of each member party state shall enforce this compact. A taxpaying

resident of any member party state has standing in the courts of any member party state to require

the attorney general of that member party state to enforce this compact.

     44-71-6. Construction and severability.

     This compact shall be liberally construed in order to effectuate its purposes. If any phrase,

clause, sentence or provision of this compact, or the applicability of any phrase, clause, sentence

or provision of this compact to any government, agency, person or circumstance is declared in a

final judgment by a court of competent jurisdiction to be contrary to the constitution of the United

States or is otherwise held invalid, the validity of the remainder of this compact and the applicability

of the remainder of this compact to any government, agency, person or circumstance shall not be

affected. If this compact is held to be contrary to the constitution of any member party state, the

compact shall remain in full force and effect as to the remaining member party states and in full

force and effect as to the affected member party state as to all severable matters.

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     SECTION 2. This act shall take effect upon passage.

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EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N   A C T

RELATING TO TAXATION - AGREEMENT TO PHASE OUT CORPORATE INCENTIVES

COMPACT ACT

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     This act would establish a compact agreement among at least two (2) states to prohibit the

selective use of subsidies to an existing specific industry or company, entice relocation from one

state to another state or to open a new facility.

     This act would take effect upon passage.

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