Be it enacted by the Legislature of this state:

Section 1. Findings and Purpose.

The legislature finds that community benefits agreements with community organizations or other third parties detract from the stated purpose of economic development incentives, each of which are already intended to benefit a defined community and to incentivize employers to contribute to this state’s overall economic health. Accordingly, as part of its economic development policy, the legislature intends to fully preserve the purpose and effect of economic development incentives by conditioning the receipt of such incentives upon an employer’s refusal to enter into agreements with third parties seeking to benefit from the same economic development incentives.

Section 2. Definitions.

A. “Community benefits agreement” means a written agreement, memorandum of understanding, side letter, or other enforceable arrangement entered into in connection with the project for which the economic development incentive is provided between an employer and a community group, labor organization, nonprofit, or other third-party acting on behalf of or in coordination with a community group, labor organization, or nonprofit other than the state or a political subdivision thereof, that:

1. Contractually binds the employer to provide payments, donations, services, amenities, or mitigation measures to a community group or organization as consideration for support of, withdrawal of opposition to, or agreement not to oppose, the project;
2. Establishes, certifies, or licenses employment standards of any type or form, including wage and hour criteria, for employees or workers performing work on the project; or
3. Provides for or requires the employer to utilize a trade union or other unionized workforce where the employees collectively bargain with employers for wages, hours, or working conditions, for work performed on the project. The term does not include an ordinary commercial agreement for the purchase, sale, lease, financing, construction, or provision of goods or services, or a settlement agreement, unless the agreement otherwise establishes employment criteria or labor-related conditions for work performed on the project.

B. “Economic development incentive” means any tax credit, tax deduction, grant, or loan offered on a conditional basis by this state or any political subdivision thereof to any employer for the purpose of attracting or retaining the employer’s presence in this state;

C. “Employer” means any business entity that voluntarily pursues economic development incentives authorized under this title or enters into an agreement with this state or any political subdivision thereof, including any county or municipal government, for the purpose of receiving those incentives.

D. “Labor organization” means an employee representation committee, organization, or union in which employees participate and which exists for the purpose, in whole or in part, of dealing with an employer concerning employee wages, rates of pay, hours of work, other forms of compensation, grievances, labor disputes, or other conditions of employment.

Section. 3. Economic Development Incentive Eligibility.

A. To be eligible for an economic development incentive, an employer must not enter into a community benefits agreement or any other agreement that is substantially similar in purpose and effect to a community benefits agreement, unless the obligation or condition is expressly required by applicable law.

B. The prohibition set forth in this section applies only to obligations or conditions relating to work performed or services provided on the project for which the economic development incentive is provided and do not apply to agreements or transactions unrelated to that project or to the employer’s other operations.

C. A person or entity may report any suspected violation of this section to the [insert state agency or attorney general]. Upon receiving a report pursuant to this subsection, the [state agency or attorney general] shall determine whether a violation has occurred by obtaining a written statement and documentation from the employer sufficient to evaluate whether the reported conduct constitutes a violation of this section. It is a breach of the economic development incentive agreement entered into between the state or political subdivision thereof and the employer for the employer to refuse to provide the written statement. If it is determined that an employer has violated this section, written notice of the [state agency’s or attorney general’s] findings shall be provided to the employer, and the [state agency or attorney general] shall initiate proceedings to recover the full value of applicable economic development incentives.

Section 4. Applicability.

A. This act applies prospectively to all economic development incentives awarded, entered into, renewed, or modified on or after the effective date of this act.

B. This act does not apply to economic development incentives with a value of less than $250,000.