State Business Investment Act

Task Forces: Federalism, Homeland Security and International Relations

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Summary

The State Business Investment Act prohibits state entities from providing economic incentives to companies associated with foreign countries defined as “disqualified entities” under the Act. This could include those restricted from purchasing agricultural land in this state; the list of persons determined to be foreign adversaries by the secretary of commerce of the United States under 15 C.F.R. 7.4; the terrorist exclusion list compiled by the Secretary of State of the United States in consultation with the Attorney General of the United States under 8 U.S.C. 1182; the list of countries determined by the Secretary of State of the United States that have repeatedly provided support for acts of international terrorism under 50 U.S.C. 4813(c) and 22 U.S.C. 2780(d); the list of individuals and entities designated by, or in accordance with Executive Order 13224, issued by the President of the United States on September 23, 2021, or Executive Order 13268, issued by the President of the United States on July 2, 2002.

Model Policy

BE IT ENACTED BY THIS STATE’S LEGISLATURE:

Section 1. Definitions. As used in this section:

(a) “Economic development assistance” has the same meaning as in the relevant section of the Revised Code.
(b) “Incentive” means any state tax credits, grants, loans, subsidies, economic development assistance, financial assistance or funding of any kind from this state, a state agency, a state taxing authority, a program funded by state appropriations and administered by a state or local agency, or nonprofit corporation.
(c) “Foreign country of concern” means:

  1. a country with a government that is prohibited from purchasing or otherwise acquiring agricultural land in this state;
  2. the list of persons determined to be foreign adversaries by the secretary of commerce of the United States under 15 C.F.R. 7.4;
  3. the terrorist exclusion list compiled by the Secretary of State of the United States in consultation with the Attorney General of the United States under 8 U.S.C. 1182;
  4. the list of countries determined by the Secretary of State of the United States that have repeatedly provided support for acts of international terrorism under 50 U.S.C. 4813(c) and 22 U.S.C. 2780(d);
  5. the list of individuals and entities designated by, or in accordance with Executive Order 13224, issued by the President of the United States on September 23, 2021, or Executive Order 13268, issued by the President of the United States on July 2, 2002.

(d) “Disqualified entity” means:

  1. A foreign country of concern or any agency or government instrumentality of a foreign country of concern;
  2. Any entity that is directly or indirectly owned, controlled, or directed by any such country, agency, or government instrumentality. For the purpose of division (A)(5) (b) of this section, “owned, controlled, or directed by” means possessing the power to direct or cause the direction of the management or policies of an entity, whether through ownership of securities, by contract, or otherwise. A person that directly or indirectly has the right to vote twenty-five per cent or more of the voting interests of the entity or that is entitled to twenty-five per cent or more of its profits is presumed to control that entity.
  3. Any entity whose principal place of business is located within a foreign country of concern or that is organized under the laws of such country or any political subdivision thereof.

Section 2.

  1. Neither the state, the nonprofit corporation formed under the relevant section of the Revised Code or any of its subsidiaries shall award an incentive to a disqualified entity. Before awarding any incentive, the state, corporation,,or subsidiary shall require the recipient or applicant to provide an affidavit signed under penalty of perjury attesting that the recipient or applicant is not and does not represent a disqualified entity.
  2. Any state agency, the nonprofit corporation formed under the relevant section of the Revised Code or any of its subsidiaries that awards incentives shall adopt rules to administer this section, including rules establishing the form for the affidavit required under division (B)(1) of this section.
  3. Nothing in this section shall be construed to prohibit, restrict, or otherwise impair the authority of a municipal corporation, including a city or village to establish, approve or administer economic development incentives under its lawful authority, including provisions of this state’s Constitution, provided that such incentive are not funded by state appropriations.

Section 3. This act shall be known as the State Business Investment Act.