| 65 | + | An Act relating to public finance; creating the |
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| 66 | + | Corporate Welfare Prohibition Comp act Act; providing |
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| 67 | + | short title; providing intent; defining terms; |
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| 68 | + | prohibiting the provision of certain incentives upon |
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| 69 | + | the effectiveness of certain compact; requiring the |
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| 70 | + | Attorney General to enforce the provisions of this |
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| 71 | + | act; providing for standing to sue; requiring the |
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| 72 | + | Governor or a designee to be designated compact |
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| 73 | + | administrator; requiring administrator to provided |
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| 74 | + | certain information; requ iring administrator to |
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| 75 | + | maintain certain list; requiring the a dministrator to |
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| 76 | + | notify and petition c ertain delegation under certain |
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| 77 | + | circumstance; requiring the state to become party to, |
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| 78 | + | and bound by, certain compact under certain |
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| 79 | + | circumstance; providing for withdrawal from certain |
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| 80 | + | compact under certain circumstance; prohibiting |
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| 81 | + | withdrawal under certain c ircumstance; providing for |
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| 82 | + | noncodification; providing for codification ; and |
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| 83 | + | providing an effective date. |
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| 56 | | - | This act shall be known and may be cited as the “Interstate |
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| 57 | | - | Compact Prohibiting Compan y-Specific Subsidies Act”. |
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| 58 | | - | SECTION 2. NEW LAW A new section of law not to be |
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| 59 | | - | codified in the Oklahoma Statutes reads as follows: |
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| 60 | | - | The Legislature hereby finds and declares that for decades, |
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| 61 | | - | cities and states have been incentivized to pursue a “race to the |
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| 62 | | - | bottom”, rolling out increasingly lavish economic welfare policies |
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| 63 | | - | whenever multi-national corporations announce plans to move |
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| 64 | | - | locations, build new headquarters, or expand operations. |
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| 92 | + | This act shall be known and may b e cited as the “Corporate |
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| 93 | + | Welfare Prohibition Compact Act ”. |
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| 92 | | - | Incentivizing creates a harmful, zero -sum competition that arises |
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| 93 | | - | between states or municipa lities to aggressively bundle commercial |
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| 94 | | - | property tax abatements, job creati on tax credits, investment tax |
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| 95 | | - | credits, research and development tax credits , and customized job |
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| 96 | | - | training tax credits. This practice has grown to become a forty- |
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| 97 | | - | five-billion-dollar economic tax break industrial complex designed |
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| 98 | | - | to extract wealth and resou rces from the public for the |
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| 99 | | - | disproportionate benefit of corporations. An agreement between |
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| 100 | | - | states to prohibit com pany-specific subsidies would create a l evel |
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| 101 | | - | playing field by refusing to engage in the race to the bottom that |
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| 102 | | - | large corporations and their executives have come to rely on. |
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| 103 | | - | Cooperation between states that refuse to allow multi -national |
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| 104 | | - | corporations to play municipalities or states off one another will |
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| 105 | | - | end the enrichment of large companies at the expense of taxpayers |
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| 106 | | - | and end decades of wastefu l spending, which has not led to |
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| 107 | | - | meaningful economic benefits and benefited none but a few of the |
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| 108 | | - | wealthiest companies. |
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| 109 | | - | SECTION 3. NEW LAW A new section of law to be codified |
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| 145 | + | SECTION 2. NEW LAW A new section of law to be codified |
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| 112 | | - | As used in this act: |
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| 113 | | - | 1. “Company-specific subsidy” shall mean a: |
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| 114 | | - | a. company-specific tax incentive, including any change |
|---|
| 115 | | - | in the general tax rate or valuation offere d or |
|---|
| 148 | + | This Legislature finds that: |
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| 149 | + | A. The party states understand that subsidizing some business es |
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| 150 | + | at the expense of others is, over the long term, ineffective at best |
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| 151 | + | and harmful to the national economy and honest governance at worst. |
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| 152 | + | B. These policies are often enacted for the purpose of luring a |
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| 153 | + | company to relocate a headquarters or a part of a c orporate |
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| 154 | + | operation to a state. Yet these actions often preclude a healthier |
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| 155 | + | competition between states in which tax and regulatory barriers are |
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| 156 | + | lowered to benefit the general population and create a more |
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| 157 | + | favorable economic clima te for all businesses. |
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| 158 | + | C. These policies also lead to an inefficient distribution of |
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| 159 | + | resources among the states, leading to increased costs and |
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| 160 | + | inhibiting the ability of the nation to c ompete internationally as |
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| 161 | + | well as domestically. They also contribute to corruption and the |
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| 162 | + | loss of faith in the basic fairness of our political and economic |
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| 163 | + | system. |
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| 164 | + | D. Therefore, the party st ates agree that their state |
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| 165 | + | government, or any political subdiv ision, shall not provide a |
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| 166 | + | subsidy to a private enterprise for the purpose of selectively |
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| 167 | + | supporting a specific industry or company, or to entice a specific |
|---|
| 168 | + | industry or company to relocate a facility from one party state to |
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| 143 | | - | presented to a speci fic company by this state that is |
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| 144 | | - | not available to other similarly situated companies, |
|---|
| 145 | | - | and |
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| 146 | | - | b. company-specific grant, including any disbursement of |
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| 147 | | - | funds through property, cash, or deferred tax |
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| 148 | | - | liability by this state to a particul ar company. |
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| 149 | | - | The term company-specific subsidy does not include workforce |
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| 150 | | - | development grants that provide funds for the purpose of training |
|---|
| 151 | | - | employees; and |
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| 152 | | - | 2. “Member state” means any state, territory, or the District |
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| 153 | | - | of Columbia of the United States that ha s enacted this compact |
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| 154 | | - | legislation and has not withdrawn from or terminated the compact |
|---|
| 155 | | - | pursuant to Section 4 of this act. |
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| 156 | | - | SECTION 4. NEW LAW A new section of law to be codified |
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| 220 | + | another party state or open a ne w facility in a particular party |
|---|
| 221 | + | state. |
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| 222 | + | E. The party states also agree that once enough states with |
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| 223 | + | representation sufficient to constitute a three-fifths majority in |
|---|
| 224 | + | both Houses of the U.S. C ongress become party states, the party |
|---|
| 225 | + | states and their politic al subdivisions will cease and desist in |
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| 226 | + | providing any additional subsidies except to satisfy co ntractual |
|---|
| 227 | + | obligations agreed to prior to the effective date of this act. |
|---|
| 228 | + | SECTION 3. NEW LAW A new section of law to be codified |
|---|
| 159 | | - | A. Each member state is prohibited from offering or providing a |
|---|
| 160 | | - | company-specific subsidy to an entity whose headquarters, |
|---|
| 161 | | - | manufacturing facility, office space, or other real estate |
|---|
| 162 | | - | development is located or is considering a location or locating in |
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| 163 | | - | any other member state, or to incentivize an entity located in a |
|---|
| 164 | | - | member state to relocate its headquarters, manufacturing facility, |
|---|
| 165 | | - | office space, or other real estate development to its stat e. |
|---|
| 231 | + | As used in the Corporate Welfare Prohibition Compac t Act: |
|---|
| 232 | + | 1. “Party state” means a state that has enacted a statute |
|---|
| 233 | + | agreeing to this compact ; |
|---|
| 234 | + | 2. “Political division” means any branch, department, agency, |
|---|
| 235 | + | and any quasi-governmental entities of this state and of any |
|---|
| 236 | + | political subdivision of this state ; |
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| 237 | + | 3. “Subsidy” means an economic benefit, direct or indirect, |
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| 238 | + | granted by a state government or any political division including |
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| 239 | + | but not limited to direct grants, tax consideration, favorable |
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| 240 | + | bonding status, special district status, or any other benef it that |
|---|
| 241 | + | has the effect of reducing governmental costs for a venture or class |
|---|
| 242 | + | of ventures compared to others similarly situated, with the primary |
|---|
| 243 | + | purpose or substantial effect of encouraging or maintaining within a |
|---|
| 193 | | - | B. This compact shall not be retroactive and existing company - |
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| 194 | | - | specific subsidies shall not be prohibited by this compact. |
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| 195 | | - | C. A member state may withdraw from participating in this |
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| 196 | | - | compact by written notice to the compact administrator of each |
|---|
| 197 | | - | member state. The notice of withdra wal shall not become effective |
|---|
| 198 | | - | until ninety (90) days after the notice is given. The withdrawal of |
|---|
| 199 | | - | any member state shall not affect the validity of this compact as to |
|---|
| 200 | | - | the remaining participating member states. |
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| 201 | | - | D. If the board of compact administrators determines that any |
|---|
| 202 | | - | member state has at any time willfully violated any of the terms |
|---|
| 203 | | - | this compact or the established by laws, after notice and hearing as |
|---|
| 204 | | - | set forth in the bylaws, the board of compact administrators may |
|---|
| 205 | | - | terminate the member state from this compact. |
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| 206 | | - | E. This compact may be amended from time to time. Amendments |
|---|
| 207 | | - | shall be presented in resolution form to the chair of the boar d of |
|---|
| 208 | | - | compact administrators and shall be initiated by one or more member |
|---|
| 209 | | - | states. Adoption of an amendment shall require end orsement by all |
|---|
| 210 | | - | member states and shall become effective thirty (30) days after the |
|---|
| 211 | | - | date of the last endorsement. |
|---|
| 212 | | - | SECTION 5. NEW LAW A new section of law to be codified |
|---|
| 213 | | - | in the Oklahoma Statutes as Section 612 of Title 62, unless there is |
|---|
| 214 | | - | created a duplication in numbering, reads as follows: |
|---|
| 215 | | - | A. For purposes of administering the provisions of this compac t |
|---|
| 216 | | - | and to serve as a governing bo dy for the resolution of all matters |
|---|
| 295 | + | state or political subdivision ’s borders particular or specific |
|---|
| 296 | + | classes of ventures in which private persons have a substantial |
|---|
| 297 | + | financial or ownership interest. The economic benefits to private |
|---|
| 298 | + | enterprise from the following shall not be considered a subsidy: |
|---|
| 299 | + | a. benefits from the government ’s performance of |
|---|
| 300 | + | essential government functions including benefits from |
|---|
| 301 | + | the following: |
|---|
| 302 | + | (1) the party state’s or political division’s |
|---|
| 303 | + | provision and maintenance of public |
|---|
| 304 | + | infrastructure for general public benefit and for |
|---|
| 305 | + | actual public use, |
|---|
| 306 | + | (2) the party state’s or political division’s |
|---|
| 307 | + | performance of functions without which it would |
|---|
| 308 | + | cease to exist as a government al body, |
|---|
| 309 | + | (3) the retention of private enterprise to perform |
|---|
| 310 | + | functions of the type without which the party |
|---|
| 311 | + | state or the political subdivision would cease to |
|---|
| 312 | + | exist as a government body, and |
|---|
| 313 | + | (4) the procurement of supplies and services from |
|---|
| 314 | + | private enterprise for the party state’s or |
|---|
| 315 | + | political subdivision ’s ordinary business |
|---|
| 316 | + | operations, |
|---|
| 317 | + | b. benefits from lower taxes and less regulation |
|---|
| 318 | + | including benefits from the following: |
|---|
| 244 | | - | relating to the operation of this compact, a board of compact |
|---|
| 245 | | - | administrators is hereby established as follows: |
|---|
| 246 | | - | 1. The board shall be composed of one representative from each |
|---|
| 247 | | - | of the member states to be known as the comp act administrator and |
|---|
| 248 | | - | the compact administrator of this state shall be the Lieutenant |
|---|
| 249 | | - | Governor; |
|---|
| 250 | | - | 2. The compact administrator shall serve and be subject to |
|---|
| 251 | | - | removal in accordance with the laws of the state he or she |
|---|
| 252 | | - | represents. A compact administrator may provide for the discharge |
|---|
| 253 | | - | of his or her duties and the performance of his or her function as a |
|---|
| 254 | | - | board member by an alternate. An alternate may not serve unless |
|---|
| 255 | | - | written notification of his or her id entity has been given to the |
|---|
| 256 | | - | board; |
|---|
| 257 | | - | 3. The board shall convene at least once annually and shall be |
|---|
| 258 | | - | responsible for collecting testimony from interested parties |
|---|
| 259 | | - | including member states, organizations and associations, state |
|---|
| 260 | | - | legislators, taxpayers, and subject matter experts on how the |
|---|
| 261 | | - | compact can be improved and s trengthened; |
|---|
| 262 | | - | 4. Each compact administrator shall be entitled to one vote. |
|---|
| 263 | | - | No action of the board sh all be binding unless a majority of the |
|---|
| 264 | | - | total number of the votes by the board are cast in favor thereof. |
|---|
| 265 | | - | Action by the board shall be only at a meeting a t which a majority |
|---|
| 266 | | - | of the member states are represented; |
|---|
| 370 | + | (1) the general and uniform relaxation or repeal of |
|---|
| 371 | + | regulations, |
|---|
| 372 | + | (2) the general and uniform reduction or repeal of |
|---|
| 373 | + | taxes, assessments, or fees, |
|---|
| 374 | + | (3) the relaxation or repeal of special regulations |
|---|
| 375 | + | which, if not relaxed or repealed, would |
|---|
| 376 | + | otherwise subject specific individual s, entities, |
|---|
| 377 | + | or classes of individuals or entities to |
|---|
| 378 | + | regulatory burdens in excess of those imposed |
|---|
| 379 | + | generally and uniformly , and |
|---|
| 380 | + | (4) the reduction or repeal of special taxes, |
|---|
| 381 | + | assessments, or fees which, if not reduced or |
|---|
| 382 | + | repealed, would otherwise subject s pecific |
|---|
| 383 | + | individuals, entities, or classes of individuals |
|---|
| 384 | + | or entities to taxation, assessments, or fees in |
|---|
| 385 | + | excess of those imposed generally and uniformly ; |
|---|
| 386 | + | and |
|---|
| 387 | + | 4. “Facility” means real property that includes but is not |
|---|
| 388 | + | limited to a headquarters, w arehouse, outlet, affiliate, or |
|---|
| 389 | + | production operation of a company or entit y. |
|---|
| 390 | + | SECTION 4. NEW LAW A new section of law to be codified |
|---|
| 391 | + | in the Oklahoma Statutes as Section 612 of Title 62, unless there is |
|---|
| 392 | + | created a duplication in numb ering, reads as follows: |
|---|
| 294 | | - | 5. The board shall elect annually from its membership a chair |
|---|
| 295 | | - | and vice chair. The board shall adopt by laws not inconsistent with |
|---|
| 296 | | - | the provisions of this compact or the laws o f a member state for the |
|---|
| 297 | | - | conduct of its business and shall have the power to amend and |
|---|
| 298 | | - | rescind the bylaws; |
|---|
| 299 | | - | 6. The board may accept, for any of its purposes and functions |
|---|
| 300 | | - | under this compact, any donations and grants of monies, equipment, |
|---|
| 301 | | - | supplies, materials, and services, conditional or otherwise, from |
|---|
| 302 | | - | any state, the United States, or any governmental agen cy and may |
|---|
| 303 | | - | receive, utilize, and dispose of the same; |
|---|
| 304 | | - | 7. The board may contract with, or accept services or personnel |
|---|
| 305 | | - | from, any governmental or intergov ernmental agency, individ ual, firm |
|---|
| 306 | | - | or corporation, or any private nonprofit organization or |
|---|
| 307 | | - | institution; and |
|---|
| 308 | | - | 8. The board shall formulate all necessary procedures and |
|---|
| 309 | | - | develop uniform forms and documents for administering the provisions |
|---|
| 310 | | - | of this compact. All procedures and forms a dopted pursuant to board |
|---|
| 311 | | - | action shall be contained in a compact manual. |
|---|
| 312 | | - | B. The Office of the Attorney General is hereby designated as |
|---|
| 313 | | - | the agency responsible for per forming administrative and enforcement |
|---|
| 314 | | - | duties assigned to this com pact to abolish company-specific |
|---|
| 315 | | - | subsidies. |
|---|
| 444 | + | Notwithstanding any other provision of law to the contr ary, when |
|---|
| 445 | + | the number of states sufficient to satisfy the conditions outlined |
|---|
| 446 | + | in subsection E of Section 2 of this act agree to the compact, the |
|---|
| 447 | + | party state governments, and their political divisions, shall not |
|---|
| 448 | + | give a subsidy to a private enterprise for the purpose of |
|---|
| 449 | + | selectively supporting a specific industry or company or to entice a |
|---|
| 450 | + | specific industry or company to relocate an exi sting facility from |
|---|
| 451 | + | one party state to another party st ate or open a new facility. |
|---|
| 452 | + | SECTION 5. NEW LAW A new section of law to be codified |
|---|
| 453 | + | in the Oklahoma Statutes as Section 613 of Title 62, unless there is |
|---|
| 454 | + | created a duplication in numb ering, reads as follows: |
|---|
| 455 | + | A. The Attorney General shall enforce the provisions of the |
|---|
| 456 | + | Corporate Welfare Prohibition Compact Act. |
|---|
| 457 | + | B. A taxpaying resident of any party state has standing in the |
|---|
| 458 | + | courts of this state to require the Attorney General to enforce the |
|---|
| 459 | + | provisions of the Corporate Welfare Pr ohibition Compact Act. |
|---|
| 460 | + | SECTION 6. NEW LAW A new section o f law to be codified |
|---|
| 461 | + | in the Oklahoma Statutes as Section 614 of Title 62, unless there is |
|---|
| 462 | + | created a duplication in numb ering, reads as follows: |
|---|
| 463 | + | A. The Governor or a designee of the Governor shall be the |
|---|
| 464 | + | compact administrator. |
|---|
| 465 | + | B. The compact administrator shall maintain an accurate list of |
|---|
| 466 | + | all party states. |
|---|
| 343 | | - | SECTION 6. NEW LAW A new section of law to be codified |
|---|
| 344 | | - | in the Oklahoma Statutes as Section 613 of Title 62, unless there is |
|---|
| 518 | + | C. The compact administrator shall furn ish the compact |
|---|
| 519 | + | administrator of each par ty state any information or documents th at |
|---|
| 520 | + | are reasonably necessar y to effectuate the provisions of the |
|---|
| 521 | + | Corporate Welfare Prohibition Compact. |
|---|
| 522 | + | D. When the number of states sufficient to satisfy the |
|---|
| 523 | + | conditions outlined in subsection E of Section 2 of this act agree |
|---|
| 524 | + | to the Compact, the compact administrator of each party state shall |
|---|
| 525 | + | inform the party state ’s congressional dele gation, the president of |
|---|
| 526 | + | the senate, and the speaker of the house and shall request that |
|---|
| 527 | + | legislation that comports with the provisions of this C ompact be |
|---|
| 528 | + | introduced and passed by Congress as soon as possible and shall send |
|---|
| 529 | + | copies of these communications to the compact administrator of each |
|---|
| 530 | + | party state. |
|---|
| 531 | + | SECTION 7. NEW LAW A new section of law to be codified |
|---|
| 532 | + | in the Oklahoma Statutes as Section 615 of Title 62, unless there is |
|---|
| 346 | | - | This compact shall be liberally con strued to effectuate its |
|---|
| 347 | | - | purposes. If any phrase, clause, sentence, or provision o f the |
|---|
| 348 | | - | compact, or the applicability of any phrase, clause, sentence, or |
|---|
| 349 | | - | provision of this compact to any government, agency, person , or |
|---|
| 350 | | - | circumstance is declared in a final j udgment by a court of competent |
|---|
| 351 | | - | jurisdiction to be contrary to the Constitution of the United States |
|---|
| 352 | | - | or is otherwise held invalid, the validity of the remainder of this |
|---|
| 353 | | - | compact and the applicability of the remainder of this compact to |
|---|
| 354 | | - | any government, agenc y, person, or circumstances may not be |
|---|
| 355 | | - | affected. If this compact is held to be co ntrary to the |
|---|
| 356 | | - | constitution of any member state, the compact shall remain in full |
|---|
| 357 | | - | force and effect as to the remaining member states and in full force |
|---|
| 358 | | - | and effect as to the aff ected member state as to all severable |
|---|
| 359 | | - | matters. |
|---|
| 360 | | - | SECTION 7. NEW LAW A new section of law to be codified |
|---|
| 361 | | - | in the Oklahoma Statutes as Section 614 of Title 62, unless there is |
|---|
| 362 | | - | created a duplication in numb ering, reads as follows: |
|---|
| 363 | | - | This act shall take effect upon the adoption of the Interstate |
|---|
| 364 | | - | Compact Prohibiting Company -specific Subsidies by two or more member |
|---|
| 365 | | - | states and the Office of the Attorney General providing in a notice |
|---|
| 366 | | - | to the Lieutenant Governor that this contingency has been fulfilled. |
|---|
| 534 | + | A. When the number of states sufficient to satisfy the |
|---|
| 535 | + | conditions outlined in subsection E of Section 2 of this act agree |
|---|
| 536 | + | to the Compact this state shall become a party to the compact and |
|---|
| 537 | + | bound by its terms when it enacts a statute agreeing to the compact |
|---|
| 538 | + | and written notice of such enactment is received by the governor of |
|---|
| 539 | + | each other party state . |
|---|
| 540 | + | B. Before the number of states sufficient to satisfy the |
|---|
| 541 | + | conditions outlined in s ubsection E of Section 2 of this act agree |
|---|
| 394 | | - | SECTION 8. It being immediately necessary for the preservation |
|---|
| 395 | | - | of the public peace, health or safety, an emergency is hereby |
|---|
| 396 | | - | declared to exist, by reason whereof this act shall take effect and |
|---|
| 397 | | - | be in full force from and aft er its passage and approval. |
|---|
| 398 | | - | COMMITTEE REPORT BY: COMMITTEE ON FINANCE |
|---|
| 399 | | - | February 27, 2023 - DO PASS AS AMENDED B Y CS |
|---|
| 593 | + | to the Compact this state may withdraw from the Compact by |
|---|
| 594 | + | resolution or repeal of this act. Withdrawal by a party state shall |
|---|
| 595 | + | not affect the validity or applicability of the compact to states |
|---|
| 596 | + | remaining party to the compact. |
|---|
| 597 | + | C. This state or any party state shall not withdraw from the |
|---|
| 598 | + | Compact after the number of states sufficient to satisfy the |
|---|
| 599 | + | conditions outlined in subsection E of Section 2 of this act agree |
|---|
| 600 | + | to the Compact. |
|---|
| 601 | + | SECTION 8. This act shall become effective Nov ember 1, 2023. |
|---|
| 602 | + | |
|---|
| 603 | + | 59-1-998 QD 1/18/2023 4:54:30 PM |
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