MODEL BILLS

Job Piracy Cease Fire Act

Summary: The Job Piracy Cease Fire Act is designed to stop the expensive and wasteful race to the bottom of jurisdictions competing to steal jobs from one another.

See our IdeaLog discussion of the Job Piracy Cease Fire concept here. It’s loosely based on the concept of Missouri Senate Bill 635 and the 2019 joint executive order agreement between Missouri and Kansas. See also legislation backed by the Coalition to Phase Out Corporate Tax Giveaways.

Arguments against using government subsidies to steal existing jobs from other jurisdictions are laid out in The Job Creation Shell Game: Ending the Wasteful Practice of Subsidizing Companies that Move Jobs From One State to Another, Good Jobs First, 2013, and Ending Job Piracy, Building Regional Prosperity, Good Jobs First, 2014.

SECTION 1. SHORT TITLE

This Act may be cited as the “Job Piracy Cease Fire Act.”

SECTION 2. FINDINGS AND PURPOSE

(A) FINDINGS—The [legislature/council/commission] finds that:

1. Economic development subsidies are intended to create new jobs within a jurisdiction. But states and localities have spent billions of dollars in subsidies to lure existing jobs from other jurisdictions. This simply shifts money from governments to private businesses without creating any overall benefit to American taxpayers.

2. Economic development authorities already recognize that it is simply wasteful to pay for job relocations. In 40 states, at least one major subsidy program prohibits subsidies for existing jobs that are being moved within state borders. (Note: for a list, see pages 41-47 here.)

3. It is unfair to existing businesses already within a jurisdiction to tilt the playing field by subsidizing their potential competition. Government dollars would be better spent creating conditions that help existing employers and employees.

4. Any state or locality can and should declare a cease fire in the battle over existing jobs. If jurisdictions mutually agree that they won’t steal jobs from each other, the money can be focused on real economic development—the creation of high-quality new jobs.

(B) PURPOSE—This law is enacted to stop the waste of taxpayer dollars and help level the economic playing field among businesses.

SECTION 3. STOPPING JOB PIRACY

After section XXX, the following new section XXX shall be inserted:

(A) DEFINITIONS – In this section:

“Economic development subsidy” means any expenditure of public funds by, or loss of public revenue from, a particular state or local government which benefits a particular company or business with the purpose of persuading that company or business to bring jobs to that state or locality. Economic development subsidies include, but are not limited to, bonds, grants, loans, loan guarantees, enterprise zone or empowerment zone incentives, fee waivers, land price subsidies, matching funds, tax abatements, tax exemptions, and tax credits.

(B) JOB PIRACY CEASE FIRE

1. No economic development subsidy shall be awarded to any company for relocating jobs to [this jurisdiction] from a state, city, county or other jurisdiction that has adopted, by legislation or executive order, its own Job Piracy Cease Fire Act.

2. The director of the [department of economic development] shall maintain and make available to the public a list of jurisdictions where a Job Piracy Cease Fire Act is currently in force.

SECTION 4. EFFECTIVE DATE

This Act shall take effect on July 1, XXXX.