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Anti-Piracy Laws
Almost all federal economic development programs now have anti-piracy provisions, which bar aid to a company that is relocating from one state to another. A number of states have enacted similar measures. A California law, for example, prohibits public agencies from providing any form of assistance to auto dealerships or large-scale retail stores relocating from one city to another in the same market area. A Michigan law allows a city to veto a property tax abatement provided by another city when it's used to move a business from the former city to the latter. Currently, however, there are no restrictions on local or state subsidies used to lure businesses across state lines.
RULES:
Alabama
In 1987, the state of Alabama enacted a law denying enterprise zone tax breaks and other benefits to companies relocating from other parts of the state.
California
Enacted in 1999, this law prohibits a redevelopment agency, city, or county from providing any form of financial assistance to an automobile dealership or big box retailer, or a business entity that sells or leases land to an automobile dealership or big box retailer, that is relocating from one community to another community within the same market area.
Gary, Indiana
Gary's law is considered to be among the strongest accountability and anti-piracy ordinances in the country. It includes strict job creation and job quality standards and prohibits the city from giving incentives to any company relocating jobs into Gary from outside the city limits.
Michigan's Act 198
A Michigan city can veto a property tax break given to a corporation by another city if the company intends to transfer employees from the former city to the latter.
New Mexico
In 1993, the state of New Mexico enacted a law denying enterprise zone tax breaks and benefits to companies relocating from other parts of the state.
Puerto Rico
The Commonwealth of Puerto Rico has taken the unusual step of enacting legislation to deter job piracy from other locations in the U.S. A company applying for a tax exemption must disclose whether its proposed facility will adversely affect workers in other parts of the United States. If so, the governor can deny the application.
Wisconsin
Wisconsin bars municipalities from using industrial development bonds to finance projects that will result in job losses elsewhere in the state, unless the company meets certain requirements.
More:
- Good Jobs First has extensive resources to help grassroots organizations and policymakers ensure that economic development subsidies are accountable and effective.
- No More Candy Store: States and Cities Making Job Subsidies Accountable [PDF] - Good Jobs First's original compilation of grassroots remedies for corporate welfare abuses, such as money-back guarantee "clawbacks," requirements that subsidized companies pay fair wages and benefits, rules for full disclosure, environmental protection and "anti-piracy" safeguards.
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