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This is a draft of a possible ballot initiative on Corporate 
Welfare. A similar bill may be drafted for introduction in 
Congress.  The idea is to turn the tables on the 
reactionaries, recast the political debate, and reclaim for 
progressives the leadership in the populist tide that is 
sweeping the country.  The Purpose section of the draft 
borrows some phrases from the RepublicansU social welfare 
reform bill.  Please send comments and suggested revisions 
ASAP.  

Discussion draft of 3/1/95
Comments to Robert Benson
Professor of Law, Loyola Law School, Los Angeles
(Tel. 213/736-1094. Fax 213/380-3769)



AN ACT TO END CORPORATE WELFARE ABUSE

The People of the State of California do enact as follows:

Section 1.  The Business and Professions Code, Division 7 
(General Business Regulations), Part 2 (Preservation and 
Regulation of Competition) is amended to add a new Chapter 8, 
to read: 



Chapter 8

CORPORATE WELFARE RESPONSIBILITY ACT



Section. 17400.  Short Title

	This Act shall be known as the Corporate Welfare 
Responsibility Act.


Section 17401.  Purpose

	The People of the State of California find that honest 
and self-reliant businesses are the foundation of a 
successful free-market economy.  The People are concerned 
that the extensive government handouts of taxes and other 
public resources to business for many purposes have become a 
system of corporate welfare.  The People are concerned that 
this system is not only rewarding socially and 
environmentally destructive corporate behavior but is 
producing generations of illegitimate entrepreneurs dependent 
upon the public dole rather than upon their own initiative.  
It is the purpose of this Act to help, cajole, lure or force 
corporations to end their welfare dependency.  It is further 
the purpose of this Act to recover for the People the 
resources that are rightfully theirs.  



Section 17402.  CitizensU legal actions against corporate 
welfare abusers

	Any citizen of this state may bring an action in 
superior court against any domestic or foreign corporation 
doing business in California for a judicial declaration that 
the corporation is a welfare abuser. 



Section 17403.  Penalties 
	
 	(a)  Reimbursement to the public treasury.  Upon a 
finding by the court  that the corporation is a welfare 
abuser, the court shall order the corporation to reimburse 
the public treasury for the dollar value of tax and other 
benefits that were gained at the expense of the public 
because of the abuse.  Interest at the rate of ten percent 
per year from the time the benefits accrued shall be added to 
the dollar value.  
	
	(b)  Three strikes and out of the state.  Upon a finding 
that the corporation has been declared a welfare abuser three 
times by final judgments against it, the court may revoke the 
corporationUs privilege to do business in this state.  


Section 17404.  Conduct constituting corporate welfare abuse

	The court shall find that a corporation is a welfare 
abuser if, after trial, clear and convincing evidence 
establishes that the corporation has engaged in any of the 
following conduct:  

	(a)  Corporate community abandonment.  For purposes of 
this Act, Rcorporate community abandonmentS means accepting a 
public financial incentive to locate or expand business 
operations in a California community and then, at any  time 
within seven years after accepting the incentive, causing a 
net loss of jobs or corporate assets at that location through 
transfer to a different community in or out of California.  
RPublic financial incentiveS means any grant, loan, loan 
guarantee, or bond made available by any public agency 
organized under state law.   It also means any tax incentive 
authorized by any provision of state law, which, by 
exemption, exclusion, deduction, allowance, credit, 
preferential tax rate or other device, reduces the amount of 
tax revenues that would otherwise accrue to the public 
treasury.  

	(b)  Corporate free-riding on public infrastructure.  
For purposes of this Act, Rcorporate free-riding on public 
infrastructureS means paying less than the fair share of 
taxes for expenditures on fire and police protection, 
schools, roads and other public improvements.  The fair share 
is that amount needed to cover expenditures directly 
attributable to the corporationUs presence.  

	(c) Corporate looting of natural resources.  For 
purposes of this Act, Rcorporate looting of natural 
resourcesS means paying less than fair market value for 
water, land, minerals, oil or gas sold or leased to the 
corporation by any public agency organized under state law.  
This subsection applies only to agreements entered into after 
the effective date of this Act.  

	(d)  Corporate taking of public property without paying 
just compensation.  For purposes of this Act, Rcorporate 
taking of public property without paying just compensationS 
means corporate actions anywhere within the worldUs biosphere 
that damage the global commons without just payment.  RThe 
global commonsS means the property that is the common 
heritage of all humankind and is necessary for survival  of 
future generations, specifically, the oceans, water supplies, 
biodiversity of plant and animal life, topsoil, primary 
forests, wetlands, the atmospheric ozone layer, and the 
atmosphere affecting  global climate change.  It shall not be 
a defense to this Act that any of this property is in private 
ownership,  since all of the property is declared by this Act 
to be subject to the public trust doctrine which does not 
permit its destruction even by its temporary private owners.   
	
	 In fashioning an equitable order for reimbursement of 
the public treasury under this subdivision, the court shall 
consider that the affected public is global and includes 
future generations.  The court shall therefore direct 
reimbursement to a fund that it finds, in its discretion, 
will be likely to repair damage to the global commons and to 
benefit the broadest possible class of the affected public.  
To this end, the court may direct reimbursement to non-
profit, non-governmental public interest organizations whose 
principal purposes are to halt destruction of all or part of 
the global commons.  The court may also direct reimbursement 
to international funding agencies created under the authority 
of the United Nations Framework Convention on Biological 
Diversity, the Montreal Protocol on Substances that Deplete 
the Ozone Layer, and the United Nations Framework Convention 
on Climate Change.  

	(e)  Subsidized corporate pushing of harmful products.  
For purposes of this Act, Rsubsidized corporate pushing of 
harmful productsS means taking a state tax deduction for 
advertising expenses for any of the following: guns, tobacco 
products, beef products, energy from nuclear, fossil-fuel or 
other non-renewable sources, and automobiles rated at less 
than 40 miles-per-gallon combined city-highway fuel 
efficiency by the United States Environmental Protection 
Agency.  


Section 17405.  Severability

	If any part or application of this Act is declared 
invalid or unconstitutional by a court of law, that part or 
application shall be severed from the whole and the rest of 
the Act shall remain in effect.