H. B. 2600


(By Delegates Fleischauer, Captuo, C. White,

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.