Senate Bill No. 181
(By Senators Rowe, Hunter and Kessler)
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[Introduced January 11, 2002; referred to the Committee
on Economic Development; and then to the Committee on
Finance.]
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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 fifty 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
thirty-five 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
thirty-five 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 three, 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 three,
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 four, 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 four, 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 the 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 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 three, 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 four,
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 five,
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 four, 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
article 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 the costs and
subtract that amount from the projected wage. If the amount
resulting from the 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 the 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 (8), 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 the 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.