What's happening
This bill creates an interstate compact prohibiting states from offering company-specific subsidies to attract or retain businesses.
Why it matters
Aims to end the "race to the bottom" among states. by stopping the use of targeted tax breaks, grants, or other incentives to lure specific companies, which often pits states against each other and can drain public resources without guaranteeing broader economic benefits.
Levels the playing field for local businesses and taxpayers. by ensuring that government support is not concentrated on high-profile, relocating companies, but instead treats all businesses with the same rules, potentially fostering a healthier business environment.
Establishes a multi-state governing board. to oversee and enforce the compact, creating a formal mechanism for states to collectively monitor compliance, amend the agreement, and resolve disputes—making the policy more robust than unilateral state action.
Contains provisions for entry, withdrawal, and amendment. that make the compact flexible and adjustable as more states join or as policy needs evolve, but also ensures that changes require unanimous consent, reinforcing the seriousness and stability of the agreement.
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Who cares
Companies seeking state incentives
Participating states would be barred from offering company-specific tax breaks or grants for existing locations or to attract headquarters, factories, offices or other real estate developments.
Businesses with existing subsidy agreements
Existing subsidies would remain allowed, but any modification to their terms would count as a prohibited new subsidy.
Employers seeking workforce training grants
Grants to train employees would be excluded from the compact’s definition of company-specific subsidies.
New York governor and comptroller
The governor would appoint the state’s compact administrator, while the comptroller would provide information and documents needed to administer the compact.
Headline styles
Stop Company-Specific Subsidies
Plain English, a few words. Used as the page title.
Sponsors
1 Co-sponsor
History
- Referred to finance
- Referred to finance
Companion bill
The same bill in the other chamber. A bill becomes law when one version passes both houses and the governor signs it, so either number can carry it.
Ban Company-Specific Subsidies
In Assembly Committee · Economic Development · Sponsor Ron Kim
Full text
4 pagesUnderlined is new[Struck] is removedOfficial text on nysenate.gov ↗
STATE OF NEW YORK
3061
2019-2020 Regular Sessions
IN SENATE
February 1, 2019
Introduced by Sen. SALAZAR -- read twice and ordered printed, and when printed to be committed to the Committee on Finance
AN ACT to amend the state finance law, in relation to creating an interstate compact prohibiting company-specific subsidies
The People of the State of New York, represented in Senate and Assembly, do enact as follows:
Section 1. The state finance law is amended by adding a new article 17 to read as follows:
ARTICLE 17
INTERSTATE COMPACT PROHIBITING
COMPANY-SPECIFIC SUBSIDIES Section 250. Short title; purpose.
251. Definitions.
252. Compact.
253. Establishment of the board.
254. Entry into compact, withdrawal and termination.
255. Amendments to the compact.
256. Construction and severability.
257. Administration; expenses.
§ 250. Short title; purpose. This article shall be known and may be cited as the "Interstate compact prohibiting company-specific subsides". The purpose of this compact is, through means of joint and cooperative action among the compacting states, to eliminate company-specific subsidies.
§ 251. Definitions. As used in this compact, unless the context clearly indicates otherwise, the following terms shall have the following meanings:
1. "Company-specific subsidy" shall mean company-specific tax incentives including any change in the general tax rate or valuation offered or presented by the state to a specific company that is not available to 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
S. 3061 2
any disbursement of funds, property, cash or deferred tax liability offered by the state to a specific company. The term "company-specific subsidy" shall not include workforce development grants that provide funds for the purpose of training employees.
2. "By-laws" mean those by-laws established by the board for its governance or for directing or controlling the board's actions or conduct.
3. "Compacting state" means any state which has enacted this compact legislation and which has not withdrawn or been terminated pursuant to section two hundred fifty-four of this article.
4. "Board" means the "Interstate compact prohibiting company-specific subsidies board" established by the compact.
5. "State" means any state, district or territory of the United States of America.
6. "Company" means any proprietorship, partnership, corporation, or limited liability company.
§ 252. Compact. 1. The compacting states hereby create and establish a compact to prohibit all company-specific subsidies. Such compacting states shall not provide any company-specific subsidy to any company whose headquarters, manufacturing facilities, office space or other real estate developments are located in their state or to incentivize any company to locate their headquarters, manufacturing facilities, office space or other real estate developments in their state.
2. Existing company-specific subsidies shall not be prohibited by this compact, however, any modification to the terms of any existing company-specific subsidy shall be considered a new company-specific subsidy and shall not be permitted under the terms of the compact.
§ 253. Establishment of the board. 1. For the purpose of administering the provisions of this compact and to serve as a governing body for the resolution of all matters relating to the operation of this compact, a board of compact administrators is established. The board shall be composed of one representative from each of the compacting states to be known as the compact administrator. The compact administrator shall be appointed by the governor of each participating state and shall serve and be subject to removal in accordance with the laws of the state he or she represents. A compact administrator may provide for the discharge of his or her duties and the performance of his or her function as a board member by an alternate. An alternate shall not be entitled to serve unless written notification of his or her identity has been given to the board.
2. The board shall convene at least once annually and shall be responsible for collecting testimony from interested parties including, but not limited to, compacting states, organizations and associations representing state legislators, taxpayers and subject matter experts on how the compact can be improved and strengthened.
3. Each member of the board of compact administrators shall be entitled to one vote. No action of the board shall be binding unless at a meeting at which a majority of the total number of the board's votes are cast in favor thereof. Action by the board shall be only at a meeting at which a majority of the compacting states are represented.
4. The board shall elect annually from its membership a chair and vice-chair.
5. The board shall adopt by-laws not inconsistent with the provisions of this compact or the laws of a compacting state for the conduct of its business and shall have the power to amend and rescind its by-laws.
S. 3061 3
6. The board may accept for any of its purposes and functions under this compact any and all donations and grants of monies, equipment, supplies, materials and services conditional or otherwise, from any state, the United States or any governmental agency, and may receive, utilize and dispose of same.
7. The board may contract with, or accept services or personnel from, any governmental or intergovernmental agency, individual, firm or corporation, or any private nonprofit organization or institution.
8. The board shall formulate all necessary procedures and develop uniform forms and documents for administering the provisions of this compact. All procedures and forms adopted pursuant to board action shall be contained in a compact manual.
§ 254. Entry into compact, withdrawal and termination. 1. This compact shall become effective at such times as it is adopted in a substantially similar form by two or more states.
2. (a) Entry into the compact shall be made by resolution of ratification executed by the authorized officials of the applying state and submitted to the chair of the board.
(b) The resolution shall substantially be in the form and content as provided in the compact manual and shall include the following:
(i) A citation of the authority from which the state is empowered to become a party to this compact; and
(ii) An agreement of compliance with the terms and provisions of this compact.
(c) The effective date of entry shall be specified by the applying state but shall not be less than sixty days after notice has been given by the chair of the board of the compact administrators.
3. A compacting state may withdraw from participating in this compact by official written notice to each participating state, but withdrawal shall not become effective until ninety days after the notice of withdrawal is given. The notice shall be directed to the compact administrator of each compacting state. No withdrawal of any state shall affect the validity of this compact as to the remaining participating states.
4. If the board determines that any compacting state has at any time violated any of the terms or by-laws of the compact, then, after notice and hearing as set forth in the by-laws, may terminate such state from the compact if a willful violation has been found.
§ 255. Amendments to the compact. 1. This compact may be amended from time to time. Amendments shall be presented in resolution form to the chair of the board of compact administrators and shall be initiated by one or more participating states.
2. Adoption of an amendment shall require endorsement by all participating states and shall become effective thirty days after the date of the last endorsement.
§ 256. Construction and severability. This compact shall be liberally construed so as to effectuate the purposes stated herein. The provisions of this compact shall be severable and if any phrase, clause, sentence or provision of this compact is declared to be contrary to the constitution of any compacting state or of the United States, or the applicability thereof to any government, agency, individual or circumstance is held invalid, the validity of the remainder of this compact shall not be affected thereby. If this compact shall be held contrary to the constitution of any compacting state, the compact shall remain in full force and effect as to the remaining states and in full force and effect as to the participating state affected as to all severable matters.
S. 3061 4
§ 257. Administration; expenses. 1. The comptroller of the state of New York shall furnish to the appropriate authorities of the compacting states any information or documents reasonably necessary to facilitate the administration of this compact.
2. The compact administrator from this state is not entitled to any additional compensation for his or her service as such but is eligible for reimbursement for expenses incurred in connection with his or her responsibilities as compact administrator in the same manner as expenses incurred in connection with other responsibilities of his or her office or employment.
§ 2. This act shall take effect upon the adoption of the interstate compact prohibiting company-specific subsidies by two or more states; and provided further that the comptroller of the state of New York shall notify the legislative bill drafting commission upon the occurrence of such adoption of the interstate compact prohibiting company-specific subsidies by two or more states in order that the commission may maintain an accurate and timely effective data base of the official text of the laws of the state of New York in furtherance of effecting the provisions of section 44 of the legislative law and section 70-b of the public officers law.
Reflowed for reading: line numbers and page breaks removed. Cite the official text.
Sponsor's memo
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 the bill
This bill aims to create a mechanism for collaboration by a collection of states joining into a compact focused on enacting an inter-state compact to eliminating and prohibiting company-specific corporate welfare.
Summary of specific provisions
Section 1: The state finance law is amended by adding a new article 17 which creates the Interstate Compact Prohibiting Company-Specific Subsi- dies. This section provides technical definitions, provides the mission and operations of the compact, sets forth the composition of the member- ship of the board administering the compact, its bylaws and the process by which the compact's members will operate and be administered.
Section 2: Provides for the effective date of this act. This act shall take effect upon the adoption of the interstate compact prohibiting company-specific subsidies by two or more states; and provided further that the comptroller of the state of New York shall notify the legisla- ture bill drafting commission upon the occurrence of such adoption of this compact by two or more states.
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 State billions of dollars by preventing corporate giveaways.
Effective date
This act shall take effect immediately and as defined in Section 2.
Summaries, headlines and scores are AI-generated from the official bill text. How we score bills. Source: NYS Open Legislation.