Illinois General Assembly - Full Text of HB0095
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Full Text of HB0095  102nd General Assembly




State of Illinois
2021 and 2022


Introduced 1/14/2021, by Rep. Michael Halpin


New Act

    Creates the Company-Specific Subsidy Interstate Compact. Enters into the compact, which may be entered into by any state and the District of Columbia, in which each member state agrees to not offer company-specific subsidies for companies currently located in or considering locating in the member state, including, but not limited to, for corporate headquarters, manufacturing facilities, office space, or other real estate developments. Excludes existing company-specific subsidies (until terms change, are renewed, or are reenacted) and workforce development grants. Creates the Interstate Company-Specific Subsidy Board upon the second member state entering into the compact. Provides for withdrawal of a member state with 6-months' written notice. Defines terms.

LRB102 04010 AWJ 14026 b






HB0095LRB102 04010 AWJ 14026 b

1    AN ACT concerning State government.
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
4    Section 1. Short title. This Act may be cited as the
5Company-Specific Subsidy Interstate Compact Act.
6    Section 5. Execution of compact. The Company-Specific
7Subsidy Interstate Compact is hereby enacted into law and
8entered into with any state or the District of Columbia which
9legally joins in substantially the following form:

11    The contracting states agree that:

13    Any state of the United States and the District of
14Columbia may become a member state of this compact by enacting
15this compact.

17    As used in this compact:



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1    "Company-specific grant" means a disbursement of funds by
2property, cash, or deferred tax liability by the state
3government or any subdivision of the state government to a
4particular company.
5    "Company-specific subsidies" means company-specific
6grants or company-specific tax incentives.
7    "Company-specific tax incentive" means a change in the
8general tax rate or valuation offered or presented to a
9specific company that is not available to other
10similarly-situated companies, including, but not limited to, a
11tax incentive that is part of a special agreement negotiated
12with an official of the state or an official of any subdivision
13of the state government.
14    "Workforce development grants" means grants that train

17    The member states find that:
18        (1) state governments are caught in a race to the
19    bottom offering ever-larger company-specific tax breaks or
20    grants in an attempt to lure large companies to stay or
21    relocate in their state despite overwhelming evidence that
22    the company-specific tax breaks are neither an efficient
23    use of public dollars nor a determining factor in a
24    company's eventual decision where to locate;



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1        (2) state governments in the aggregate spend tens of
2    billions annually on company-specific subsidies;
3        (3) spending those economic development dollars on
4    universal infrastructure such as transportation or
5    education that benefits all employers, not just the few
6    large for-profit companies that negotiate a special
7    subsidy, is a far superior use of state budget resources;
8        (4) the ability of the world's most profitable
9    companies to set off a bidding war, often in secret,
10    between states to package the largest subsidy imaginable
11    in order to lure the company to that state demonstrates
12    the inherently weak bargaining position of states in any
13    company-specific subsidy negotiation, which drives up the
14    prices of these subsidies;
15        (5) providing special subsidies for one company puts
16    all the competitors to that company at a disadvantage
17    since they must pay the full tax rate or operative without
18    the benefit of the subsidy, which further exacerbates the
19    largest companies getting even greater market share than
20    they otherwise would if all companies paid the same tax
21    rate;
22        (6) it would be far superior for all employers if
23    states competed for companies based on their overall
24    economic condition that all employers enjoyed, including
25    taxes, infrastructure, workforce, and regulations, and not
26    on a company-specific subsidy package which only benefits



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1    a small number of the wealthiest companies;
2        (7) despite widespread recognition of the wasteful
3    nature of these company-specific subsidies, no one state
4    is able to unilaterally end the practice as doing so is
5    perceived to put that state at a competitive disadvantage
6    to other states; and
7        (8) in order to set a level playing field and abolish
8    the practice of company-specific subsidies, states should
9    enter into an agreement not to engage in the practice that
10    becomes binding for any companies located in any state
11    that is a member of the agreement, especially among
12    neighboring states, until all 50 states and the District
13    of Columbia are able to join the agreement.

15    Each member state agrees to not offer company-specific
16subsidies for companies currently located in or considering
17locating in the member state, including, but not limited to,
18for corporate headquarters, manufacturing facilities, office
19space, or other real estate developments.

21    Existing company-specific subsidies are not impacted by
22this agreement, since this agreement is not retroactive,



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1except that any changes to the terms, including renewals or
2reenactments, of any existing company-specific subsidies are
3to be considered new company-specific subsidies and not
4permitted under this agreement.
5    Workforce development grants are not subject to this
6agreement since the company receiving the grant may benefit,
7but the employees receiving the training are the largest

10    A member state may withdraw from this agreement with
116-months' written notice to the chief executive officer of
12every other member state to the agreement.

14    The Interstate Company-Specific Subsidy Board is
15established upon the second member state entering into this
16compact. Each member state shall appoint 5 members to the
17Board: one from the chief executive officer; one each from the
18majority leader of each legislative chamber; and one each from
19the minority leader of each legislative chamber. If a member
20state does not have a bicameral legislature, then that member
21state shall determine how the 4 appointments by its
22legislative leaders shall be made. The Board shall convene at



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1least annually, elect officers from its membership, and
2establish rules and procedures for its governance.
3    The purpose of the Board is to determine how this
4agreement can be improved and strengthened by collecting
5testimony from all interested parties, including
6representatives of member states; organizations and
7associations representing state legislators; taxpayers; and
8subject matter experts. The Board may draft and disseminate
9suggested revisions to this agreement from time to time.