Tennessee lawmakers have unveiled a new system of checks and balances on industries that trade promises of jobs for tax breaks.
It was the Republican Leader in the House of Representatives who introduced the audit plan. Gerald McCormick carries the governor’s legislative package in the House, so his proposal to keep big job-creators honest carries a lot of weight.
He attached amendments to an administration tax bill that would for the first time require recruited industries to prove their job-creating record.
Republicans have been increasingly critical of industry-recruiting deals which took place in the last few months of the Bredesen administration. McCormick says it is time to create a system to track the actual return for state incentives.
“The commissioners of ECD and Revenue have the ability and the responsibility to audit these companies, have the ability, and the responsibility, to audit these companies, and really make sure they actually invest the money, and hire the people, that they said they were going to, when they cut the deal to get their tax breaks.“
It would be the first time the department of Economic and Community Development would have to double-check on such promises.
The House has taken the lead on this bill. The Senate version is to be vetted by the Senate Finance Committee Wednesday.
McCormick says the new bill makes the responsibilities of state employees who do the recruiting clear and makes the whole recruiting system more “consistent.”
“Part of it has to do also with ‘clawback’ provisions, so that companies that come in and take advantage of our tax incentives actually have to fulfill their promises. Otherwise they lose their tax incentives.”
The bill is HB 1995 McCormick/SB 1518 Norris.