Harper recently introduced House Bill 352, which is directed at companies that receive taxpayer-funded incentives for local economic development projects. Companies that fail to provide promised jobs or services would have to pay the governments, state or local, an amount proportional to how far they fall short of the project goal.
“If we’re giving public funds to a business and they renege, it should be a little painful,” Harper said.
The bill doesn’t spell out a specific repayment formula. Harper said he wanted to create a framework that would still allow governments to negotiate with companies on a case-by-case basis.
Harper, a Republican, was elected in November to the newly redrawn House District 57 covering Rio Rancho.
He said he was alarmed by news last year that the state’s contract with solar panel manufacturer Schott Solar PV had no clawback provisions and the state lost $15.94 million in grants when the company closed its Mesa del Sol plant, laying off 250 workers.
Harper’s district also includes the Hewlett-Packard customer support center in Rio Rancho’s City Center. HP received about $2.2 million in land and infrastructure incentives from the city, promising it would have 1,350 employees by the end of 2012.
Instead, it had 860 employees and confirmed last month that 200 of those jobs would be cut by Oct. 31.
The clawback provision in HP’s project participation agreement with the city will require the company to repay about $71,000 if HP averages 700 employees in Rio Rancho this year.
“The HP clawback wasn’t anything more than a slap on the wrist,” Harper said.
The bill ensures that calculation of the clawback amounts would take into account the jobs or other contributions the company made to the community.
“I’m glad to see he’s trying to make it fair. It looks like it’s business-friendly while trying to hold companies accountable,” Mayor Tom Swisstack said.