HB293ENROLLED
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MSFCHW-3
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
2023 Regular Session
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Enrolled, An Act,
Relating to port credits; to amend Sections 40-18-401
and 40-18-403, Code of Alabama 1975, to expand the cap of the
port credit and 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. Sections 40-18-401 and 40-18-403, Code of
Alabama 1975, are amended to read as follows:
"§40-18-401
(a) The port credit provided for in Section 40-18-403
is created by this article and is allowed upon strict
compliance with the provisions herein.
(b) Prior to the allowance of the port credit, an
application shall be filed with the commission, on a form
promulgated by the commission.
(1) The application shall be filed by the port facility
user desiring to claim the credit.
(2) The commission shall establish deadlines for
applications. Such applications shall solicit whatever
information the commission deems important to its
determination of whether granting a port credit will create
new, high paying jobs in the state, bring substantial capital
to the state, increase the usage of a port facility, promote
the development of clusters of businesses in the state, or
promote the economic development efforts of the state.
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(3) Upon review of the applications, the commission may
approve such applications as shall result in port credits
being awarded so as not to exceed twelve million dollars
($12,000,000) twenty million dollars ($20,000,000) for the
life of the program, and shall not exceed five million dollars
($5,000,000) in a fiscal year.
(4) The commission shall charge application fees to
offset the costs of administration of this article.
(c) Prior to claiming a port credit, the company shall
submit to the Department of Commerce a certification
containing information adequate to prove that the company is
entitled to the credit. Following such examination as it deems
necessary, the Department of Commerce may certify the
information and deliver the same to the Department of Revenue.
Thereafter, the Department of Revenue shall allow the tax
credit.
(d)(1) Nothing in this article shall be construed to
constitute a guarantee or assumption by the state of any debt
of any company nor to authorize the credit of the state to be
given, pledged, or loaned to any company.
(2) Nothing in this article shall be construed to make
available to any company any right to the benefits conferred
by this article absent strict compliance with this article.
(3) Nothing in this article shall be construed to
change or lessen the requirements for claiming jobs act
incentives under the Alabama Jobs Act, Section 40-18-370, et
seq. Companies claiming the jobs act incentives must strictly
comply with the Alabama Jobs Act.
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(4) All filings made by a private party with the
commission or any department of state government shall be made
using forms adopted by the commission or department. Any such
filing shall be treated as a tax return, subject to penalties
imposed by the Department of Revenue.
(5) Nothing in this article shall be construed to limit
the powers otherwise existing for the Department of Revenue to
audit and assess any company claiming a port credit."
"§40-18-403
(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
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
cargo volume
TEU Net Ton
Kilogram
for Air
Freight
VEU
under 4.99
percent
$50 $3 $0.04 $2.91
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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
(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
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
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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)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.
(f)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.
(4) Port credits may not be used until the Department
of Commerce has received satisfactory proof that the capital
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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 the per unit amounts
stated in subsection (b) 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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________________________________________________
Speaker of the House of Representatives
________________________________________________
President and Presiding Officer of the Senate
House of Representatives
I hereby certify that the within Act originated in and
was passed by the House 17-May-23, as amended.
John Treadwell
Clerk
Senate 01-Jun-23 Passed
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