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A05249 Summary:

A05249 Actions:

A05249 Committee Votes:

A05249 Floor Votes:

There are no votes for this bill in this legislative session.

A05249 Memo:

NEW YORK STATE ASSEMBLY
MEMORANDUM IN SUPPORT OF LEGISLATION
 submitted in accordance with Assembly Rule III, Sec 1(f)



 
BILL NUMBER: A5249
 
SPONSOR: Kim

 
TITLE OF BILL:
 
An act to amend the state finance law, in relation to creating an inter-
state compact prohibiting company-specific subsidies
 
 
PURPOSE OR GENERAL IDEA OF BILL:
 
To amend the state finance law by enacting the "Interstate Compact
Agreement Prohibiting Company-Specific Subisidies" through the addition
of a new article 17.
 
 
SUMMARY OF SPECIFIC PROVISIONS:
 
Section one sets the title "Interstate Compact Agreement Prohibiting
Company-Specific Subisidies" and states the purpose of the agreement.

Section two sets the definitions for the terms "company-specific subsi-
dy", "by-laws", "compacting state", "board", "state", and "company".
 
Section three outlines the details and obligations of the compact as
well as any exceptions to the agreement.
 
Section four establishes the membership and composition of the board of
compact administrators as a governing body for the resolution of the
compact, and outlines the duties, powers, obligations, limitations, and
method of appointment for compact administrators.
 
Section five establishes the methods by which states will be able to
enter, leave, or be removed from the compact.
 
Section six establishes the methods by which the compact may be amended.
 
Section seven outlines the construction and severability of the compact
in relation to the constitution of other states or governing bodies.
 
Section eight establishes the methods of execution of certain adminis-
trative duties and expenses.
 
Section nine sets forth the effective date.
 
 
JUSTIFICATION:
 
For decades, cities and states have been incentivized to pursue a "Race
to the Bottom", rolling out increasingly lavish economic welfare poli-
cies whenever multi-national corporations announce plans to move
locations, build new headquarters, or expand operations.  Corporate
executives then sit back and wait as different regions jostle to offer
them the best corporate subsidies package. What transpires next is a
harmful, zero-sum competition between municipalities to aggressively
bundle commercial property tax abatements, job creation tax credits,
investment tax credits, R&D tax credits, and customized job training tax
credits. This practice has grown to become a $45 billion economic tax
break industrial complex designed to extract wealth and resources from
the public for the disproportionate benefit of corporations.
 
 
The End of Corporate Welfare Act of 2019 calls for an end to this
"bidding war" by banning the use of company-specific corporate welfare
incentives between cities and states. It would create a level playing
field by refusing to engage in the race to the bottom that large corpo-
rations and their executives have come to rely on.  Cooperation between
cities and states that refuse to engage in the extortion of local
resources will end the enrichment of large companies at taxpayers'
expense, and return greater agency, wealth, and independence to communi-
ties.
 
Such an interstate agreement will eliminate secretive, opaque negoti-
ations between government officials and corporate executives, which have
time and again transferred billions to corporations with little to show
in return. Multi-national corporations can no longer play municipalities
off one another when all cities and states band together and refuse to
participate in the race to the bottom. This act will end decades of
wasteful spending, which have by and large not led to meaningful econom-
ic benefits and benefited none but a few of the wealthiest companies.
 
 
PRIOR LEGISLATIVE HISTORY:
 
This is a new bill.
 
 
FISCAL IMPLICATIONS:
 
This act will save taxpayers of New York billions of dollars.
 
 
EFFECTIVE DATE:
This act shall take effect immediately.

A05249 Text:

 
                STATE OF NEW YORK
        ________________________________________________________________________
 
                                          5249
 
                               2019-2020 Regular Sessions
 
                   IN ASSEMBLY
 
                                    February 8, 2019
                                       ___________
 
        Introduced  by  M.  of A. KIM, STECK, BURKE -- read once and referred to
          the Committee on Economic Development
 
        AN ACT to amend the state finance law, in relation to creating an inter-
          state compact prohibiting company-specific subsidies
 
          The People of the State of New York, represented in Senate and  Assem-
        bly, do enact as follows:
 
     1    Section 1. The state finance law is amended by adding a new article 17
     2  to read as follows:
     3                                 ARTICLE 17
     4                       INTERSTATE COMPACT PROHIBITING
     5                         COMPANY-SPECIFIC SUBSIDIES
     6  Section 250. Short title; purpose.
     7          251. Definitions.
     8          252. Compact.
     9          253. Establishment of the board.
    10          254. Entry into compact, withdrawal and termination.
    11          255. Amendments to the compact.
    12          256. Construction and severability.
    13          257. Administration; expenses.
    14    §  250.  Short  title; purpose. This article shall be known and may be
    15  cited as the "Interstate compact prohibiting company-specific subsides".
    16  The purpose of this compact is, through means of joint  and  cooperative
    17  action among the compacting states, to eliminate company-specific subsi-
    18  dies.
    19    § 251. Definitions. As used in this compact, unless the context clear-
    20  ly  indicates  otherwise,  the  following terms shall have the following
    21  meanings:
    22    1. "Company-specific subsidy" shall mean company-specific  tax  incen-
    23  tives  including any change in the general tax rate or valuation offered
    24  or presented by the state to a specific company that is not available to
    25  other similarly situated companies and company-specific grants including

         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD08668-01-9
        A. 5249                             2
 
     1  any disbursement of funds, property,  cash  or  deferred  tax  liability
     2  offered  by  the state to a specific company. The term "company-specific
     3  subsidy" shall not include workforce  development  grants  that  provide
     4  funds for the purpose of training employees.
     5    2.  "By-laws"  mean  those  by-laws  established  by the board for its
     6  governance or for  directing  or  controlling  the  board's  actions  or
     7  conduct.
     8    3.  "Compacting  state" means any state which has enacted this compact
     9  legislation and which has not withdrawn or been terminated  pursuant  to
    10  section two hundred fifty-four of this article.
    11    4.  "Board" means the "Interstate compact prohibiting company-specific
    12  subsidies board" established by the compact.
    13    5. "State" means any state, district or territory of the United States
    14  of America.
    15    6. "Company" means any proprietorship,  partnership,  corporation,  or
    16  limited liability company.
    17    § 252. Compact. 1. The compacting states hereby create and establish a
    18  compact  to  prohibit  all  company-specific  subsidies. Such compacting
    19  states shall not provide any company-specific  subsidy  to  any  company
    20  whose headquarters, manufacturing facilities, office space or other real
    21  estate  developments  are  located  in their state or to incentivize any
    22  company to locate their headquarters, manufacturing  facilities,  office
    23  space or other real estate developments in their state.
    24    2. Existing company-specific subsidies shall not be prohibited by this
    25  compact,  however,  any modification to the terms of any existing compa-
    26  ny-specific subsidy shall be considered a new  company-specific  subsidy
    27  and shall not be permitted under the terms of the compact.
    28    § 253. Establishment of the board. 1. For the purpose of administering
    29  the  provisions of this compact and to serve as a governing body for the
    30  resolution of all matters relating to the operation of this  compact,  a
    31  board  of  compact  administrators  is established.   The board shall be
    32  composed of one representative from each of the compacting states to  be
    33  known  as  the compact administrator. The compact administrator shall be
    34  appointed by the governor of each participating state  and  shall  serve
    35  and be subject to removal in accordance with the laws of the state he or
    36  she represents. A compact administrator may provide for the discharge of
    37  his  or her duties and the performance of his or her function as a board
    38  member by an alternate. An alternate shall  not  be  entitled  to  serve
    39  unless written notification of his or her identity has been given to the
    40  board.
    41    2. The board shall convene at least once annually and shall be respon-
    42  sible  for  collecting  testimony from interested parties including, but
    43  not  limited  to,  compacting  states,  organizations  and  associations
    44  representing  state legislators, taxpayers and subject matter experts on
    45  how the compact can be improved and strengthened.
    46    3. Each member of the board of compact administrators shall  be  enti-
    47  tled  to  one  vote. No action of the board shall be binding unless at a
    48  meeting at which a majority of the total number of the board's votes are
    49  cast in favor thereof. Action by the board shall be only at a meeting at
    50  which a majority of the compacting states are represented.
    51    4. The board shall elect annually from  its  membership  a  chair  and
    52  vice-chair.
    53    5.  The board shall adopt by-laws not inconsistent with the provisions
    54  of this compact or the laws of a compacting state for the conduct of its
    55  business and shall have the power to amend and rescind its by-laws.
        A. 5249                             3
 
     1    6. The board may accept for any of its purposes  and  functions  under
     2  this  compact  any  and  all  donations and grants of monies, equipment,
     3  supplies, materials and services  conditional  or  otherwise,  from  any
     4  state,  the  United  States or any governmental agency, and may receive,
     5  utilize and dispose of same.
     6    7.  The board may contract with, or accept services or personnel from,
     7  any governmental or intergovernmental agency, individual, firm or corpo-
     8  ration, or any private nonprofit organization or institution.
     9    8. The board shall formulate  all  necessary  procedures  and  develop
    10  uniform  forms  and  documents  for administering the provisions of this
    11  compact. All procedures and forms adopted pursuant to board action shall
    12  be contained in a compact manual.
    13    § 254. Entry into compact, withdrawal and termination. 1. This compact
    14  shall become effective at such times as it is adopted in a substantially
    15  similar form by two or more states.
    16    2. (a) Entry into the compact shall be made by resolution of ratifica-
    17  tion executed by the authorized officials  of  the  applying  state  and
    18  submitted to the chair of the board.
    19    (b)  The  resolution shall substantially be in the form and content as
    20  provided in the compact manual and shall include the following:
    21    (i) A citation of the authority from which the state is  empowered  to
    22  become a party to this compact; and
    23    (ii)  An agreement of compliance with the terms and provisions of this
    24  compact.
    25    (c) The effective date of entry shall be  specified  by  the  applying
    26  state  but shall not be less than sixty days after notice has been given
    27  by the chair of the board of the compact administrators.
    28    3. A compacting state may withdraw from participating in this  compact
    29  by  official  written notice to each participating state, but withdrawal
    30  shall not become effective until ninety days after the notice  of  with-
    31  drawal is given. The notice shall be directed to the compact administra-
    32  tor  of  each  compacting state. No withdrawal of any state shall affect
    33  the validity of this compact as to the remaining participating states.
    34    4. If the board determines that any compacting state has at  any  time
    35  violated  any of the terms or by-laws of the compact, then, after notice
    36  and hearing as set forth in the by-laws, may terminate such  state  from
    37  the compact if a willful violation has been found.
    38    §  255. Amendments to the compact. 1. This compact may be amended from
    39  time to time. Amendments shall be presented in resolution  form  to  the
    40  chair  of  the board of compact administrators and shall be initiated by
    41  one or more participating states.
    42    2. Adoption of an amendment shall require endorsement by  all  partic-
    43  ipating  states and shall become effective thirty days after the date of
    44  the last endorsement.
    45    § 256. Construction and severability. This compact shall be  liberally
    46  construed so as to effectuate the purposes stated herein. The provisions
    47  of  this  compact shall be severable and if any phrase, clause, sentence
    48  or provision of this compact is declared to be contrary to the constitu-
    49  tion of any compacting state or of the United States, or the applicabil-
    50  ity thereof to any government, agency,  individual  or  circumstance  is
    51  held invalid, the validity of the remainder of this compact shall not be
    52  affected  thereby. If this compact shall be held contrary to the consti-
    53  tution of any compacting state, the compact shall remain in  full  force
    54  and effect as to the remaining states and in full force and effect as to
    55  the participating state affected as to all severable matters.
        A. 5249                             4
 
     1    §  257.  Administration;  expenses. 1. The comptroller of the state of
     2  New York shall furnish to the appropriate authorities of the  compacting
     3  states  any  information or documents reasonably necessary to facilitate
     4  the administration of this compact.
     5    2.  The  compact  administrator from this state is not entitled to any
     6  additional compensation for his or her service as such but  is  eligible
     7  for  reimbursement  for  expenses incurred in connection with his or her
     8  responsibilities as compact administrator in the same manner as expenses
     9  incurred in connection with other responsibilities of his or her  office
    10  or employment.
    11    §  2.  This  act shall take effect upon the adoption of the interstate
    12  compact prohibiting company-specific subsidies by two  or  more  states;
    13  and provided further that the comptroller of the state of New York shall
    14  notify  the  legislative bill drafting commission upon the occurrence of
    15  such adoption of the  interstate  compact  prohibiting  company-specific
    16  subsidies  by  two or more states in order that the commission may main-
    17  tain an accurate and timely effective data base of the official text  of
    18  the  laws  of  the  state  of  New  York in furtherance of effecting the
    19  provisions of section 44 of the legislative law and section 70-b of  the
    20  public officers law.

A05249 LFIN:

 
NO LFIN

A05249 Chamber Video/Transcript: