Illinois General Assembly - Full Text of SB0674
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Full Text of SB0674  102nd General Assembly

SB0674 102ND GENERAL ASSEMBLY

  
  

 


 
102ND GENERAL ASSEMBLY
State of Illinois
2021 and 2022
SB0674

 

Introduced 2/25/2021, by Sen. Ram Villivalam

 

SYNOPSIS AS INTRODUCED:
 
New Act

    Creates the Phase Out Corporate Giveaways 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 not to offer or provide any company-specific tax incentive or company-specific grant to any entity for a corporate headquarters, manufacturing facility, office space, or other real estate development located in any other member state as an inducement for the corporate headquarters, manufacturing facility, office space, or other real estate development to relocate to the offering member state. Defines terms. Excludes: (1) workforce development grants that train employees; (2) company-specific tax incentives or company-specific grants from local governments; and (3) specified company-specific tax incentives or company-specific grants related to companies already within the member state. Creates the Phase Out Corporate Giveaways Board and provides for membership and meeting requirements. Provides for withdrawal of a member state with a 6-month written notice to each member state's chief executive officer. Contains construction and severability provisions.


LRB102 15822 AWJ 21190 b

FISCAL NOTE ACT MAY APPLY

 

 

A BILL FOR

 

SB0674LRB102 15822 AWJ 21190 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 Phase
5Out Corporate Giveaways Act.
 
6    Section 5. Execution of compact. The Phase Out Corporate
7Giveaways 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:
 
10
"PHASE OUT CORPORATE GIVEAWAYS INTERSTATE COMPACT
11    The contracting states agree that:
12
ARTICLE 1: MEMBERSHIP
13    Any state of the United States and the District of
14Columbia may become a member state of this compact by enacting
15this compact.
16
ARTICLE 2: DEFINITIONS
17    As used in this compact:
18    "Corporate giveaway" means any company-specific grant or
19company-specific tax incentive.
20    "Company-specific grant" means any disbursement of funds
21via property, cash, or deferred tax liability by the state
22government to a particular company.

 

 

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1    "Company-specific tax incentive" means any change in the
2general tax rate or valuation offered or presented to a
3specific company that is not available to other
4similarly-situated companies.
5    "Located in any other member state" means physically
6located in another member state, whether or not the company
7has other property in the member state.
8    "Member state" means any state or the District of Columbia
9that has entered into this compact.
10
ARTICLE 3: FINDINGS
11    The member states find that:
12        (1) corporate giveaways are among the least effective
13    uses of taxpayer dollars to create and maintain jobs;
14        (2) local and state leaders are in a prisoners'
15    dilemma where it is best for all to create a level playing
16    field for all employers without any corporate giveaways,
17    but each level of government has an incentive to subsidize
18    a company, which generates a race to the bottom;
19        (3) governments should attract and retain companies
20    based on general conditions (including, but not limited
21    to, modern infrastructure, an educated workforce, a clean
22    environment, and a favorable tax and regulatory climate)
23    that are not based on a specific grant for a particular
24    company;
25        (4) corporate giveaways fuel business inequality as
26    only the largest businesses receive the vast majority of

 

 

SB0674- 3 -LRB102 15822 AWJ 21190 b

1    these funds;
2        (5) a reasonable first step in phasing out corporate
3    giveaways is an anti-poaching agreement among state
4    governments prohibiting state company-specific tax
5    incentives and state company-specific grants as an
6    inducement for entities to relocate existing facilities;
7    and
8        (6) creating a national board of gubernatorial
9    appointees charged with finding consensus around
10    improvements to this compact over time in a phased
11    approach will assist states in escaping from the
12    prisoners' dilemma and implementing a level playing field
13    for all employers.
14
ARTICLE 4: POACHING PROHIBITION
15    Each member state is prohibited from offering or providing
16any company-specific tax incentive or company-specific grant
17to any entity for a corporate headquarters, manufacturing
18facility, office space, or other real estate development
19located in any other member state as an inducement for the
20corporate headquarters, manufacturing facility, office space,
21or other real estate development to relocate to the offering
22member state.
23
ARTICLE 5: EXCLUSIONS
24    The following are not subject to this compact:
25        (1) Workforce development grants that train employees
26        (2) Company-specific tax incentives or

 

 

SB0674- 4 -LRB102 15822 AWJ 21190 b

1    company-specific grants from local governments.
2        (3) State company-specific tax incentives or state
3    company-specific grants to entities with corporate
4    headquarters, office space, manufacturing facilities, or
5    real estate developments already located within its own
6    state with the goal to keep within the member state or
7    expand within the member state the in-state facility or
8    development.
9
ARTICLE 6: WITHDRAWAL
10    Any member state may withdraw from this compact with
116-months' written notice to the chief executive officer of
12every other member state to the compact.
13
ARTICLE 7: ENFORCEMENT
14    The attorney general of each member state shall enforce
15this compact.
16    A taxpaying resident of any member state has standing in
17the courts of any member state to require the attorney general
18of that member state to enforce this compact.
19
ARTICLE 8: BOARD
20    The Phase Out Corporate Giveaways Board is established
21upon the second member state entering into this compact. Each
22chief executive officer of each member state shall appoint one
23member to the Board. The Board shall accept appointees from
24non-member states that wish to appoint a member of the Board.
25The purpose of the Board is to publish suggested revisions to
26this compact in December of every year to continue to phase out

 

 

SB0674- 5 -LRB102 15822 AWJ 21190 b

1those forms of corporate giveaways that the Board finds
2reasonable to include as suggested revisions to the compact
3for member states to consider implementing. The Board shall
4convene at least annually, elect officers from its membership,
5establish rules and procedures for its governance, and publish
6a report in December of every year that includes suggested
7revisions and improvements to this compact. The Board shall
8collect testimony from all interested parties, including
9organizations and associations representing state legislators,
10taxpayers, and subject matter experts, on how the compact can
11be improved and strengthened.
12
ARTICLE 9: CONSTRUCTION AND SEVERABILITY
13    This compact shall be liberally construed so as to
14effectuate its purposes.
15    If any provision of this compact, or the applicability of
16any provision of this compact to any government, agency,
17person or circumstance, is declared in a final judgment by a
18court of competent jurisdiction to be contrary to the
19Constitution of the United States or is otherwise held
20invalid, the validity of the remainder of this compact and the
21applicability of the remainder of this compact to any
22government, agency, person, or circumstance shall not be
23affected.
24    If this compact is held to be contrary to the constitution
25of any member state, the compact shall remain in full force and
26effect as to the remaining member states and in full force and

 

 

SB0674- 6 -LRB102 15822 AWJ 21190 b

1effect as to the affected member state as to all severable
2matters."