HB293INTRODUCED
Page 0
MSFCHW-1
By Representatives Brown, Stringer, Lipscomb, Marques, Givens,
Holk-Jones, Clarke, Kirkland, Travis, Starnes, Jones, Hassell,
Shirey, Hulsey, Collins, Pringle, Drummond, Bracy, Wilcox,
Lomax
RFD: Ways and Means Education
First Read: 11-Apr-23
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8 MSFCHW-1 01/16/2023 RA (F) RA 2023-99
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SYNOPSIS:
Under existing law, an income tax credit is
allowed for certain port activities.
This bill would revise the structure of the
amounts of the credits that may be claimed and
expand the credit to allow port users to claim a jobs
tax credit if the user increases their cargo base
volume.
A BILL
TO BE ENTITLED
AN ACT
Relating to port credits; to amend Section 40-18-403,
Code of Alabama 1975, to expand tax incentives for businesses
and enterprises who increase their cargo volume through
Alabama public ports.
BE IT ENACTED BY THE LEGISLATURE OF ALABAMA:
Section 1. Section 40-18-403, Code of Alabama 1975, is
amended to read as follows:
"ยง40-18-403
(a) If approved by the commission, a port credit is
allowed, in an amount equal to fifty dollars ($50) per TEU,
three dollars ($3) per net ton, four cents ($0.04) per
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kilogram for air freight, or two dollars and ninety-one cents
($2.91) per VEU, multiplied by the following the cargo volume
calculated from subdivisions (1) and (2) as follows multiplied
by the appropriate amount shown in the table in subsection
(b):
(1) The port user's cargo volume in the 12-month period
for which the commission has granted approval for the port
user to claim the port credit, minus
(2) The port user's base cargo volume.
(b) Port credit amount.
Increase in
cargo volume
over base
TEU Net Ton
Kilogram
for Air
Freight
VEU
under 4.99
percent
$50 $3 $0.04 $2.91
5 to 14.99
percent
$75 $4.5 $0.06 $4.37
15 to 24.99
percent
$100 $6 $0.08 $5.82
25 percent
or greater
$125 $7.5 $0.1 $7.28
(b) (c) The commission shall decrease the amount of the
port credit to ensure that the anticipated revenues for the
port facility and state will exceed the amount of the port
credit sought. The port credit may be conditioned on whatever
requirements the commission shall impose. The port credits
shall only be available to the extent that a port facility
user ships more than 105 percent of its cargo volume from the
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12-month period immediately preceding the port facility user's
application. Moreover, the port credit shall only be available
to the extent a port facility user ships more than 10 TEUs,
for cargo measured by TEU, more than 75 net tons, for cargo
measured by net ton, more than fifteen thousand (15,000)
kilograms for air cargo measured by kilograms, or more than
400 VEUs, for cargo measured by VEU.
(c)(d)The following methods may be used to realize the
port credit:
(1) The port credit may offset the tax levied by this
chapter, but not below zero. The port credit may also offset
the estimated payments of the tax levied by this chapter, but
not below zero. In no event shall the port credits be allowed
to reduce any estimated payment of the tax levied by this
chapter before October 1, 2016. In any one year, if the port
credit exceeds the amount of tax liability, the port user may
carry forward the unused port credit. No carryforward shall be
allowed for more than five years. Rules similar to those used
for Section 40-18-15.2 shall be applied.
(2) A company may assign and convey a port credit to
another company if substantially all of the assets of the
company are assigned and conveyed in the same transaction.
Proof of such transfer shall be submitted to the Department of
Revenue.
(e) Subject to approval by the commission provided in
Section 40-18-401, any business or enterprise which has
increased its cargo volume during the previous 12-month period
by a percentage above its base cargo volume traffic and is
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qualified to claim a job credit under Article 16, Chapter 18,
Title 40, shall be allowed an additional jobs credit provided
in Section 40-18-375(a), on the wages paid to its Alabama
Resident employees during the prior year. The amount of the
credit can be seen in the table below:
Percentage Increase Amount of Job Credit
5-14.99% 0.5%
15-24.99% 1%
25-34.99% 1.5%
35% or higher 2%
(d)(f) To the extent that the port credit is utilized
by the port user or by a transferee company, no deduction for
the related expenses shall be allowed.
(e)(g) For any company which enters into an economic
development project agreement with the state, the project
agreement may provide for an allocation to the company of any
port credits which have not been allocated pursuant to this
article. Allocations made pursuant to this subsection shall
meet all of the following requirements:
(1) Allocations shall be made by the Governor and
approved by the commission.
(2) Allocations for a project shall not exceed three
million dollars ($3,000,000).
(3) Allocations shall be granted only to a new
warehouse or distribution facility which commits to investing
at least twenty million dollars ($20,000,000) at a single site
and to creating 75 net new jobs in Alabama.
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(4) Port credits may not be used until the Department
of Commerce has received satisfactory proof that the capital
investment and job creation requirements have been satisfied.
(5) Any port credit granted by this procedure shall not
be granted for more than a 3-year period.
(6) Allocations shall not exceed one hundred dollars
($100) per TEU, three dollars ($3) per net ton, four cents
($0.04) per kilogram for air freight, or two dollars and
ninety-one cents ($2.91) per VEU.
(7) Anticipated revenues for the state shall exceed the
port credit granted, and the project agreement shall provide
for recapture of all or part of the port credit should the
company default on its obligations in the project agreement."
Section 2. The provisions of this act shall be
effective for all tax years beginning after December 31, 2023.
Section 3. This act shall become effective January 1,
2024, following its passage and approval by the Governor, or
its otherwise becoming law.
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