Establishes the economic transparency and accountability act for the purpose of providing transparency to taxpayers for all development subsidies provided to corporations.
NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A7096
SPONSOR: Kim TITLE OF BILL: An act to amend the economic development law, in
relation to the economic transparency and accountability act
PURPOSE OR GENERAL IDEA OF BILL:
To amend the economic development law by enacting the "Economic Trans-
parency and Accountability Act" through the addition of a new article
23.
SUMMARY OF PROVISIONS:
Section one sets the title as the "Economic Transparency and Account-
ability Act".
Section two sets the definitions for terms "corporate parent", "date of
subsidy", development subsidy", "full time job", "granting body", "local
government unit", "part-time job", "pip':ect site", "property-taxing
entity", "recipient corporation", "state agency, and "temporary job".
Section three sets a cap of $6,000 in development subsidies given for
each qualifying job created by a recipient corporation.
Section four outlines the annual reporting and disclosure requirements
for each recipient corporation receiving corporate subsidies.
Section five details the duties and responsibilities of government enti-
ties associated with corporate subsidies.
Section six outline the reporting and disclosure requirements for prop-
erty tax reductions and abatements in relating to the government enti-
ties that levy such taxes.
Section seven sets the job creation standards that recipient corpo-
rations must meet to receive corporate subsidies.
Section eight sets the job quality standards that recipient corporations
must meet to receive corporate subsidies.
Section nine sets the auditing requirements, penalties, and disclosure
requirements for government entities and recipient corporations associ-
ated with corporate subsidies.
Section ten sets the public disclosure requirements for all information
relating to this legislation.
Section eleven outlines the civil actions available to taxpayers in the
event of noncompliance with this legislation's requirements.
Section twelve outlines the obligations the department of taxation and
finance in relation to economic development budget expenditures.
Section thirteen sets the severability for individual section of this
legislation in relation to legal judgments.
JUSTIFICATION:
The Economic Transparency and Accountability Act (ETA) introduces
accountability and public disclosure requirement for any corporate pack-
ages. Multi-national corporations and companies seeking special tax
incentives, or and public money in the name of economic development, can
no longer do so without disclosing information and data relating to the
costs, benefits, and results of such deals. This legislation provides a
roadmap towards greater accountability and transparency, especially in
relation to company-specific corporate subsidies.
"Any job is a good job" is no longer a sufficient rationale for corpo-
rate subsidies. For companies seeking taxpayer-funded financial assist-
ance, the jobs that they offer to provide must meet acceptable basic
standards. Some of the criteria that apply include competitive wage
levels, availability of health insurance, and full-time hours. This bill
also mandates a $6,000 cap on the amount of government subsidies given
for each job created. A recent audit of 170 "Megadeals" showed that the
average cost per job for such company-specific corporate subsidies was
$456,000. Such astronomical costs refute any notion of these deals as
sensible investments of taxpayer money or affordable plans for "economic
stimulus".
In order for taxpayers to track the progress and outcome of corporate
subsidy deals, extensive reporting and disclosures for such agreements
is mandatory. This bill requires all corporate subsidies given to the
state be disclosed on a public database. From there, corporate perform-
ance reports will be generated with the following: a summary of the
number of jobs required by the terms of the subsidy deal; the actual
number of jobs created or lost in comparison to previous years; and a
breakdown of the kind of jobs, whether full-time, part-time, temporary,
or otherwise, that were created or offered by wage group.
If a corporation or company that receives a subsidy package does not
meet the promises it made as part of its deal or agreement with New
York, or fails to comply by the requirements of this bill, withholding
of additional state funds and recapture of previously given development
subsidies by the State of New York may occur.
PRIOR LEGISLATIVE HISTORY:
This is a new bill.
FISCAL IMPLICATIONS FOR STATE AND L(CAL GOVERNMENTS:
To be determined.
EFFECTIVE DATE:
This act shall take effect on the one hundred eightieth day after it
shall have become law and apply to all agreement s made, renewed, or
amended after such date.
