H. B. 2600
(By Delegates Fleischauer, Captuo, C. White,
Staton, Poling, Martin and Hubbard)
[Introduced March 1, 2001; referred to the
Committee on Industry and Labor, Economic Development and
Small Business the Finance.]
A BILL to amend chapter five-b of the code of West Virginia, one
thousand nine hundred thirty-one, as amended, by adding
thereto a new article, designated article two-b, relating to
the accountability for economic development assistance act;
findings and purpose; definitions; disclosure of state tax
expenditures; disclosure of property tax reductions and
abatements; standardized applications for on-budget
development assistance; on-budget development assistance
disclosure; and job creation and quality standards.
Be it enacted by the Legislature of West Virginia:
That chapter five-b of the code of West Virginia, one thousand
nine hundred thirty-one, as amended, be amended by adding thereto
a new article, designated article two-b, to read as follows:
ARTICLE 2B.
ACCOUNTABILITY FOR ECONOMIC DEVELOPMENT ASSISTANCE.
§5B-2B-1. Short title.
This act shall be called the "Accountability for Economic
Development Assistance Act."
§5B-2B-2. Findings and
purpose.
The Legislature finds that, despite an increase in spending
for the purpose of economic development, in both on-budget and
off-budget expenditures, the real wage levels of the state's
average working families have suffered twenty years of decline and
stagnation.
The Legislature also finds that when workers receive low
wages, such jobs often impose hidden taxpayer costs upon the
state's citizens, in the form of medicaid benefits, food stamps,
earned income tax credits and other forms of assistance programs
provided to the working poor and their families.
Therefore, in order to insure that the state's economic
development resources are achieving their desired effect of raising
living standards for the state's working families, the Legislature
finds that it is necessary to collect and analyze additional
information and to enact certain safeguards in its development
assistance.
§5B-2B-3. Definitions.
As used in this article:
(1) "Corporate parent" means any person or legal entity,
organization, business, partnership, group or corporate entity
recognized by law, or combination thereof, that possesses, owns or controls an interest greater than 50 percent of the recipient
corporation.
(2) "Date of assistance" means the date upon which a granting
body transmits the first dollar value of development assistance to
a recipient corporation.
(3) "Development assistance" means any form of public
assistance including both on-budget and off-budget assistance,
including tax expenditures, made for the purpose of stimulating
economic development of a given corporation, industry, geographic
jurisdiction, or other subset of the state's economy, including but
not limited to industrial development bonds, training grants,
loans, loan guarantees, enterprise zones, empowerment zones, tax
increment financing, grants, fee waivers, land price subsidies,
infrastructure whose principal beneficiary is a single business or
defined group of businesses at the time it is built or improved,
matching funds, tax abatements, tax credits and tax discounts of
every kind, including corporate income, personal income, sales,
use, raw materials, job creation, industrial investment, excise,
utility, inventory, accelerated depreciation and research and
development tax credits and discounts.
(4) "Full-time job" means a job in which the new employee
works for the recipient corporation at a rate of at least 35 hours
per week.
(5) "Granting body" means any public entity within the state, including local governments, regional development organizations,
state and local public corporations, the West Virginia Development
Office and any other state government department or agency which
provides development assistance.
(6) "In effect" refers to any calendar year within the
duration of the development assistance, including but not limited
to the duration of any loan, loan guarantee, tax credit or tax
credit carryforward, property tax reduction or abatement, or tax
increment financing. For one-time forms of development assistance
such as grants and land price subsidies, "in effect" refers to a
period of not less than five years from the date of assistance.
(7) "Part-time job" means a job in which the new employee
works for the recipient corporation at a rate of less than 35 hours
per week.
(8) "Property-taxing entity" means every entity in the state
which levies taxes upon real property or personal property,
including cities, counties or school districts.
(9) "Small businesses" means those corporations whose
corporate parents, and all subsidiaries thereof, employed fewer
than an average of twenty full-time equivalent employees or which
had gross receipts of less than one million dollars in all United
States jurisdictions during the calendar year for which disclosure
is required.
(10) "Specific project site" means that distinct operational unit to which any development assistance is applied.
(11) "Temporary job" means a job in which the new employee is
hired for a specific duration of time or season.
(12) "Value of assistance" means the face value of any and all
forms of development assistance, as defined in this section, such
as a bond amount.
§5B-2B-4. Disclosure of state tax expenditures.
Beginning the first day of July, two thousand two, and for
each succeeding year, the state department of tax and revenue
shall provide a detailed tax expenditure budget to the Legislature,
derived from state income tax filings for the previous calendar
year. The disclosure report shall provide, but not be limited to,
the following data:
(1) The dollar amount of tax expenditures made by the state,
in the form of uncollected revenues, for each individual tax credit
provided by the state, including credits for the wages of certain
qualified employees, enterprise zones, empowerment zones, tax
increment financing, grants, matching funds, tax abatements, and
tax credits and tax discounts of every kind, including corporate
income, personal income, sales, use, raw materials, job creation,
industrial investment, excise, utility, inventory, accelerated
depreciation and research and development tax credits or discounts.
(2) For each of the above-mentioned tax expenditures, except
as specified in subdivision (3) of this section, an itemization of the name of each individual corporate taxpayer which claimed the
credit of any value equal to or greater than five thousand dollars,
and the specific dollar amount credited to the corporation's tax
liability under that credit for that year.
(3) Credits claimed by individual corporations of less than
five thousand dollars may not be itemized as required in
subdivision (2) of this section. Instead, in reporting credits for
each tax expenditure, the department of tax and revenue shall
aggregate all claims of less than five thousand dollars and report
them as a single nonspecified group, with the number of claimants
stated.
(4) Notwithstanding any provision of this code to the
contrary, all data produced by the department of tax and revenue
and received by the Legislature in compliance with this section
shall be considered public records subject to the provisions of
article one, chapter twenty-nine-b of this code.
§5B-2B-5. Disclosure of property tax reductions and abatements.
(a) On or before the first day of April, two thousand two, the
state department of tax and revenue shall propose rules for
legislative approval in accordance with the provisions of article
three, chapter twenty-nine-a of this code implementing a
standardized disclosure registry for use by all property-taxing
entities. The form shall require, but not be limited to, the
following data:
(1) The name of the property owner;
(2) The address and description of the property;
(3) The date upon which any individual property tax reduction
or abatement first took effect;
(4) The date upon which any individual property tax reduction
or abatement is scheduled to expire;
(5) The rate or schedule of each individual property tax
reduction or abatement for the period between the date it took
effect and the date it is scheduled to expire;
(6) The entity's aggregate foregone revenue for the calendar
year as a result of each property tax reduction or abatement;
(7) A compilation and summary of the entity's total foregone
revenue as a result of all property tax reductions or abatements,
including a summary of foregone revenue for each kind of reduction
or abatement; and
(8) The respective shares of the entity's property tax
revenues in the reported year which went to each designated public
agency, including, but not limited to, school boards, general
funds, public safety, fire department, park districts and general
administration.
(b) Beginning the first day of April, two thousand three, and
for each year thereafter, every property-taxing entity in the state
shall employ this standardized registry to report to the state
department of tax and revenue all property tax reductions or abatements which had effect during the previous calendar year.
(c) The state department of tax and revenue shall, by the
first day of June, two thousand three, and for each year
thereafter, compile and publish all data in all of the disclosure
registries in both written and electronic form.
(d) If a property-taxing entity fails to comply with
subsection (b) of this section, the state department of tax and
revenue shall within ten working days of the filing deadline notify
the state development office of such failure. Upon receipt of such
notice, the state development office shall suspend within three
working days any current development assistance activities under
its control in the property-taxing entity's jurisdiction, and shall
be prohibited from completing any current development assistance or
providing any future development assistance in the noncompliant
jurisdiction unless and until it receives proof from the state
department of tax and revenue that the property-taxing entity has
complied with subsection (b) of this section.
(e) In the event any of the state's various agencies fails to
enforce subsection (c) or (d) of this section, any person who paid
personal income taxes to the state in the calendar year prior to
the year in dispute shall have standing to sue to compel the state
to enforce. The court shall award a taxpayer plaintiff who
prevails reasonable attorney's fees and costs in any such
enforcement action.
(f) Notwithstanding any provision of this code to the
contrary, all data generated in compliance with subsections (a) and
(b) shall be
considered public records subject to the provisions of
article one, chapter twenty-nine-b of this code.
§5B-2B-6. Standardized applications for on-budget development
assistance.
(a) On or before the first day of April, two thousand two, the
state development office shall propose rules for legislative
approval in accordance with the provisions of article three,
chapter twenty-nine-a of this code creating a
standardized
application form for on-budget development assistance for use by
all granting bodies. The form shall require, but not be limited to,
the following data:
(1) An application tracking number which is specific to both
the granting agency and to each application;
(2) The name, street and mailing addresses, phone number and
chief officer of the granting body;
(3) The name, street and mailing addresses, phone number and
chief officer of the corporate parent of the applicant corporation;
(4) The name, street and mailing addresses, phone number,
four-digit SIC number, and chief officer of the applicant
corporation at the specific project site for which development
assistance is sought;
(5) The applicant corporation's total number of employees at the specific project site on the date of the application, broken
down by full-time, part-time and temporary;
(6) The total number of employees in the state of the
applicant corporation. S corporate parent, and all subsidiaries
thereof, as of the thirty-first day of December of the year
preceding the date of application, broken down by full-time,
part-time and temporary;
(7) The kind of development assistance and value of assistance
being applied for;
(8) The number of new jobs to be created by the development
assistance, broken down by full-time, part-time and temporary;
(9) The average hourly wage to be paid within one year of
hiring to the new employees, broken down by number of full-time,
part-time and temporary employees, and broken down by wage bands as
follows: $6 or less an hour, $6.01 to $7 an hour, $7.01 to $8 an
hour, $8.01 to $9 an hour, $9.01 to $10 an hour, $10.01 to $11 an
hour, $11.01 to $12 an hour, $12.01 to $13 an hour, $13.01 to $14
an hour, and $14.01 or more per hour;
(10) For applicant project sites located in a metropolitan
statistical area, as defined by the United States Census Bureau,
the average hourly wage paid nonmanagerial employees in the
applicant's industry in the state, as most recently provided by the
U.S. Bureau of Labor Statistics to the two or three-digit SIC
number specification, as available.
(11) For applicant project sites located outside of
metropolitan statistical areas, the average weekly wage paid in the
county, as most recently reported by the U.S. Department of
Commerce in its county business patterns reports.
(12) The nature of employer-paid health care coverage to be
provided within ninety days of hiring to the employees filling the
new jobs, including any costs to be borne by the new employees;
(13) A list of all other forms of development assistance the
applicant corporation is seeking for the specific project site, and
the name or names of the granting body or bodies from which that
development assistance is being sought;
(14) A narrative, if necessary, describing how the applicant's
use of the development assistance may reduce employment at any site
in any United States jurisdiction controlled by the applicant
corporation or its corporate parent, including but not limited to,
events such as automation, consolidation, merger, acquisition,
product line movement, business activity movement or restructuring
by either the applicant corporation or its corporate parent.
(15) Individual certifications by the chief officers of both
the applicant corporation and the granting body as to the accuracy
of the application, under penalty of perjury.
(b) Beginning the first day of April, two thousand three,
every granting body in the state, jointly with applicant
corporations, shall fill out the standardized application form as prescribed in subsection (a) of this section each time a
corporation applies for development assistance.
§5B-2B-7. On-budget development assistance disclosure.
(a) Beginning the first day of February, two thousand four,
and for each year thereafter, every granting body in the state
shall submit to the state development office copies of all the
standardized application forms for development assistance, as
specified in section six of this article, that it has received in
the previous calendar year. Upon each form, the granting body
shall designate whether the development assistance is pending, was
approved, or was not approved, and for those applications that were
approved, the date of assistance if the date of assistance occurred
in the previous calendar year.
(b) For those applications that were approved but for which
the date of assistance did not occur in the same calendar year,
each granting body shall report in its next subsequent first of
February annual report to the state development office the relevant
dates of assistance.
(c) For each development assistance application that was
approved, and for which the date of assistance has occurred in a
reporting year, each granting agency shall submit to the state
development office a progress report, which shall include, but not
be limited to, the following data:
(1) The application tracking number;
(2) The name, street and mailing addresses, phone number and
chief officer of the granting body;
(3) The name, street and mailing addresses, phone number,
four-digit SIC number, and chief officer of the corporation at the
specific project site for which the development assistance was
approved;
(4) The kind of development assistance and value of assistance
that was approved;
(5) The applicant's total level of employment at the specific
project site on the date of the application and the applicant's
total level of employment at the specific project site on the date
of the report, broken down by full-time, part-time, and temporary,
and a computation of the gain or loss in each category;
(6) The number of new jobs the applicant corporation stated in
its application would be created by the development assistance,
broken down by full-time, part-time and temporary;
(7) The total level of employment in the state of the
applicant's corporate parent, and all subsidiaries thereof, as of
the thirty-first day of December of the year preceding the date of
application and the total level of employment in the state of the
applicant's corporate parent, and all subsidiaries thereof, as of
each thirty-first day of December up through the reporting year,
broken down by full-time, part-time and temporary, and a statement
of the gain or loss in each category from the earliest reported year to the most recent;
(8) The average hourly wage paid as of the thirty-first day of
December of the reporting year to employees filling the new jobs at
the specific project site, broken down by full-time, part-time and
temporary;
(9) The nature of employer-paid health care coverage being
provided within ninety days of hiring to the employees filling the
new jobs, including any costs being borne by the new employees;
(10) A narrative, if necessary, describing how the recipient
corporation's use of the development assistance during the
reporting year has reduced employment at any site in any United
States jurisdiction controlled by the applicant or its corporate
parent, including but not limited to events such as automation,
consolidation, merger, acquisition, product line movement, business
activity movement, or restructuring by either the applicant or its
corporate parent; and
(11) Signed individual certifications by the chief officers of
both the applicant corporation and the granting body as to the
accuracy of the progress report, under penalty of perjury.
(d) The granting body and the state development office shall
have full investigative authority to verify the applicant's
progress report data, including but not limited to inspection of
the specific project site and analysis of tax and payroll records.
(e) By the first day of June, two thousand three, and by the first day of June of each year thereafter, the state development
office shall compile and publish all data in all of the development
assistance progress reports in both written and electronic form.
(f) Notwithstanding any provision of this code to the
contrary, every aspect of all development assistance applications,
progress reports, and the state development office's compilation of
applications and progress reports shall be
all
considered public
records subject to the provisions of one, chapter twenty-nine-b of
this code.
(g) If a granting body fails to comply with subsections (a),
(b) and (c) of this section, the state development office shall,
within ten working days of the first day of February filing
deadline, suspend any current development assistance activities
under its control in the granting body's jurisdiction, and shall be
prohibited from proceeding with any current or future development
assistance activities under its control in the granting body's
jurisdiction, unless and until it receives proof that the negligent
granting body or recipient corporation has complied with
subsections (a), (b) and (c) of this section.
§5B-2B-8. Job creation and job quality standards.
(a) In considering development assistance applications, all
granting bodies shall perform two analyses concerning the projected
wages and benefits. All granting bodies shall compare the
aggregate projected wage, as specified under subsection (a), section six of this article, with existing wages, as specified and
defined under subdivisions (10) and (11) of that subsection (a).
To derive the aggregate projected wage, the granting body shall
compute the weighted hourly average wage for all new employees,
including full-time, part-time and temporary employees. If the
aggregate projected wage is less than eighty-five percent of
existing wages, the application shall be denied. For small
businesses, if the aggregate projected wage is less than
seventy-five percent of existing wages, the application shall be
denied In considering development assistance applications, all
granting bodies shall perform a second wage computation to consider
the value of health care coverage provided to full-time employees,
as specified in subdivision (12), subsection (a), section six of
this article. If the applicant corporation is not providing health
care coverage to full-time employees, the granting body shall
subtract one dollar and fifty cents per hour from the projected
wage. If the recipient corporation projects some health care costs
to be borne by the new full-time employees, the granting body
shall, based on data from the applicant corporation, estimate the
hourly cost to the new full-time employee of such costs and
subtract that amount from the projected wage. If the amount
resulting from such subtraction is less than eighty percent of
existing wages as specified and defined under subdivisions (10) and
(11), subsection (a), section six of this article, the application shall be denied. For small businesses, if the amount resulting
from such subtraction is less than seventy percent of existing
wages, the application shall be denied.
(b) Granting bodies shall perform a third eligibility
analysis. In considering development assistance applications, all
granting bodies shall divide the value of assistance, as defined in
subdivision eight, section three of this article, and specified in
subdivision (7), subsection (a), section six of this article, by
the number of projected full-time jobs, as defined in subdivision
(8), subsection (a), section six of this article. If the resulting
sum exceeds thirty-five thousand dollars, the application shall be
denied.
(c) A granting body's requirement under subsection (a) of this
section may be waived in a bona fide collective bargaining
agreement that covers employees at the specific project site of the
applicant corporation, but only if the waiver is explicitly set
forth in such collective bargaining agreement in clear and
unambiguous terms. Unilateral implementation of terms and
conditions of employment by either party to a collective bargaining
agreement may not constitute, or be permitted, as a waiver of
subsection (a) or (b) of this section.
NOTE: The purpose of this bill is to create the
Accountability for Economic Development Assistance Act. When
government subsidies are given to businesses, the bill requires disclosure of state tax expenditures, and disclosure of property
tax reductions and abatements. The bill further provides for
standardized applications for on-budget development assistance; on-
budget development assistance disclosure; and job creation and
quality standards.
This article is new; therefore, strike-throughs and
underscoring have been omitted.
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