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House of Representatives
Session of 2021 - 2022 Regular Session


Posted: February 19, 2021 10:24 AM
From: Representative Christopher M. Rabb and Rep. Sara Innamorato
To: All House members
Subject: Prohibiting Company-Specific Corporate Giveaways
Elected officials are increasingly participating in bidding wars where they commandeer taxpayer dollars to woo big businesses, such as Amazon or Walmart, to locate or stay in their respective states. Despite widespread recognition that corporate welfare is an extremely poor use of public resources, state officials continue to fall for this scheme for fear of losing out on the prospect of securing “good jobs”. This race to the bottom disproportionately benefits the biggest corporations, at a time when local business owners and vulnerable workers and families are struggling due to the pandemic.
To combat this, this legislation would enter Pennsylvania into a legally-binding agreement with like-minded states to eliminate specific taxpayer-funded subsidies for any corporation seeking to move to or from a participating state.
This interstate compact would both save Pennsylvania taxpayers money and prevent Pennsylvania jobs from being poached away by other states. It would create the Company-Specific Tax Incentives Prohibition Board, which would serve as the governing body for all matters relating to the operation of the interstate compact and would be responsible for publishing suggested revisions to the compact in December of each year. And it would implement a set of measures bringing transparency and accountability to a policy area lacking both, which consistently gives corporate actors more power to extract resources from our state.
Items exempt from the compact include workforce development grants to train employees, company-specific tax incentives or grants from local governments, retroactive incentives, and state tax incentives or grants to entities with corporate headquarters, offices, manufacturing facilities, or real estate developments already located within its own state with the goal to stay within or expand in that state.
The obligation not to offer a subsidy only applies to other states in the compact, so this will never put Pennsylvania at a competitive disadvantage. It will instead end the cycle in which corporations use threats to relocate – which are oftentimes just fiction – to unfairly benefit from our economic development programs.
For decades, rich corporations have pitted states against each other in order to receive billions of public dollars. It is time for us to take a stand and denounce this practice by allowing Pennsylvania to join other states, including West Virginia, Illinois, Arizona, Connecticut, Rhode Island, and New York, in prohibiting company-specific tax incentives. 
By supporting this bill, you will affirm the promotion of fair competition and protection of the economic well-being of our commonwealth.

Introduced as HB873