2024 -- S 2342

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LC003568

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     STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2024

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A N   A C T

RELATING TO TAXATION - AGREEMENT TO PHASE OUT CORPORATE INCENTIVES

COMPACT ACT

     

     Introduced By: Senator Samuel W. Bell

     Date Introduced: February 12, 2024

     Referred To: Senate Finance

     It is enacted by the General Assembly as follows:

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     SECTION 1. Title 44 of the General Laws entitled "TAXATION" is hereby amended by

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adding thereto the following chapter:

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CHAPTER 72

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AGREEMENT TO PHASE OUT CORPORATE INCENTIVES COMPACT ACT

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     44-72-1. Membership.

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     Any state of the United States and the District of Columbia may become a member of this

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agreement/compact by enacting this agreement in substantially the following form.

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     44-72-2. Definitions.

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     As used in this chapter:

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     (1) "Facility" means, but is not limited to, a headquarters, warehouse, outlet, affiliate,

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office, or production facility of a company.

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     (2) "Party state" means a state that has enacted a statute agreeing to this compact.

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     (3) "Political subdivision" means governmental branches, departments, agencies, counties,

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municipalities, special districts, as well as other governmental entities and quasi-governmental

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entities created by the authorization of law.

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     (4) "Subsidy" means an economic benefit, direct or indirect, granted by a state government

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or any political subdivision, including, but not limited to, direct grants, tax consideration, favorable

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bonding status, special district status, or any other benefit that has the effect of reducing

 

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governmental costs for a venture or class of ventures compared to others similarly situated, with

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the primary purpose or substantial effect of encouraging or maintaining within a state or political

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subdivision's borders particular or specific classes of ventures in which private persons have a

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substantial financial or ownership interest.

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     44-72-3. Anti-poaching prohibition.

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     When two (2) or more states have passed and signed the compact, the party state

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governments, or any political subdivision, shall not give a subsidy to a private enterprise for the

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purpose of selectively supporting a specific industry or company, or to entice a specific industry or

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company to relocate an existing facility from one party state to another party state or open a new

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facility.

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     44-72-4. Compact administrator and exchange of information.

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     (1) The governor of each party state or the governor's designee is the compact

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administrator.

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     (2) The compact administrator of each party state shall maintain an accurate list of all party

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states.

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     (3) The compact administrator of each party state shall furnish to the compact administrator

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of each other party state any information or documents that are reasonably necessary to facilitate

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the administration of this compact.

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     44-72-5. Enforcement.

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     The attorney general of each member party state shall enforce this compact. A taxpaying

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resident of any member party state has standing in the courts of any member party state to require

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the attorney general of that member party state to enforce this compact.

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     44-72-6. Construction and severability.

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     This compact shall be liberally construed in order to effectuate its purposes. If any phrase,

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clause, sentence or provision of this compact, or the applicability of any phrase, clause, sentence

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or provision of this compact to any government, agency, person or circumstance is declared in a

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final judgment by a court of competent jurisdiction to be contrary to the constitution of the United

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States or is otherwise held invalid, the validity of the remainder of this compact and the applicability

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of the remainder of this compact to any government, agency, person or circumstance shall not be

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affected. If this compact is held to be contrary to the constitution of any member party state, the

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compact shall remain in full force and effect as to the remaining member party states and in full

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force and effect as to the affected member party state as to all severable matters.

 

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     SECTION 2. This act shall take effect upon passage.

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EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N   A C T

RELATING TO TAXATION - AGREEMENT TO PHASE OUT CORPORATE INCENTIVES

COMPACT ACT

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     This act would establish a compact agreement among at least two (2) states to prohibit the

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selective use of subsidies to an existing specific industry or company, entice relocation from one

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state to another state or to open a new facility.

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     This act would take effect upon passage.

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