SB164INTRODUCED
Page 0
76W3VE-1
By Senators Reed, Weaver, Williams, Chesteen, Price, Allen,
Butler, Jones, Gudger, Waggoner, Kelley, Chambliss, Hovey,
Sessions, Bell, Shelnutt, Scofield, Melson, Singleton,
Livingston, Hatcher, Stewart, Figures, Orr, Smitherman,
Coleman-Madison
RFD: Finance and Taxation Education
First Read: 04-Apr-23
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9 76W3VE-1 04/03/2023 KHF (F)KHF 2023-1272
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SYNOPSIS:
Under existing law, the Alabama Jobs Act
provides certain incentives to allow the state to
foster economic development through the recruitment of
quality projects and the expansion of existing
businesses within Alabama.
Under existing law, the Growing Alabama Act
provides a tax credit to eligible taxpayers who make
contributions to economic development organizations for
approved qualifying projects.
This bill would allow Alabama Jobs Act economic
development programs to continue through July 31, 2028,
ensuring economic growth, workforce development, and
job creation. This bill would increase the current
annualized cap each year for five years allowing
Alabama to be more competitive for larger economic
development projects. This bill would allow the
investment tax credit transfer time to increase to five
years allowing incentivized companies the ability to
better realize credits for development projects.
This bill would allow Growing Alabama Act
programs to continue through July 31, 2028, and
increase the annual cap to allow greater expansion of
economic development programs. This bill would transfer
certain programs under Growing Alabama Act to Innovate
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Alabama for continued growth and support.
This bill would allow the Alabama Data Center
Processing Economic Incentive Enhancement Act incentive
to continue through July 31, 2028.
A BILL
TO BE ENTITLED
AN ACT
Relating to the Alabama Jobs Act and the Growing
Alabama Act; to amend Sections 40-18-370, 40-18-372,
40-18-374, 40-18-375, 40-18-376, 40-18-376.1, 40-18-376.2,
40-18-376.3, 40-18-376.4, 40-18-377, 40-18-378, 40-18-382,
40-18-383, 40-18-417.1, 40-18-417.2, 40-18-417.3, 40-18-417.4,
40-18-417.7, and 40-9B-4.1, Code of Alabama 1975, to extend
the Alabama Jobs Act sunset date to July 31, 2028; to increase
the annualized cap on outstanding Alabama Jobs Act incentives
by twenty-five million dollars each year for five years up to
four hundred seventy-five million dollars; to increase the
investment tax credit transfer time to provide that the first
five years of the investment credit may be transferred by the
incentivized company and applied by another person or company
under the Alabama Jobs Act; to extend the Growing Alabama Act
sunset date to July 31, 2028, to increase the annual cap on
funding approved pursuant to the Growing Alabama Act to
thirty-five million dollars; to remove certain programs from
the Growing Alabama Act for the transfer to Innovate Alabama.
BE IT ENACTED BY THE LEGISLATURE OF ALABAMA:
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Section 1. This act shall be known and cited as the
Enhancing Economic Progress Act.
Section 2. Sections 40-18-370, 40-18-372, 40-18-374,
40-18-375, 40-18-376, 40-18-376.1, 40-18-376.2, 40-18-376.3,
40-18-376.4, 40-18-377, 40-18-378, 40-18-382, 40-18-383,
40-18-417.1, 40-18-417.2, 40-18-417.3, 40-18-417.4,
40-18-417.7, and 40-9B-4.1, Code of Alabama 1975, are amended
to read as follows:
"§40-18-370
(a) This article shall be known and may be cited as the
Alabama Jobs Act.
(b) The Legislature makes the following findings:
(1) The economic well-being of the citizens of the
state will be enhanced by the increased development and growth
of employment within Alabama.
(2) It is in the best interests of the state to provide
certain incentives to allow the state to foster economic
development through the recruitment of quality projects and
the expansion of existing businesses within Alabama.
(3) The incentives provided for in this article do not
raise any taxes for any individuals or businesses in Alabama
under state law.
(4) The incentives provided in this article will allow
the state to encourage the creation of new jobs that may not
otherwise exist within the State of Alabama.
(5) The incentives provided in this article will
increase revenues for the state without increasing taxes.
(6) The Constitution of the State of Alabama grants the
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Legislature the authority to approve and authorize exemptions,
exclusions, deductions, and credits from taxation in order to
define the net proceeds of any tax payable under state law.
(7) The Constitution of the State of Alabama was
framed, and the laws of the state were enacted, with the goal
of protecting, encouraging, and developing individual
enterprise.
(8) The incentives provided in this article will not
decrease the salary paid to any education personnel.
(9) The powers to be granted and the purposes to be
accomplished by this article will create an environment for
the recruitment of quality projects and the expansion of
existing businesses within Alabama.
(10) Economic development through tax and financial
incentives benefits the citizens of the state and is a public
purpose of the state.
(c) In addition to the definitions found at Section
40-18-1, the following words and phrases shall have the
following meanings:
(1) APPROVED COMPANY. Any company determined by the
Secretary of Commerce and the Governor to meet the criteria
provided in Section 40-18-373.
(2) CAPITAL INVESTMENT. All costs and expenses incurred
by the incentivized company in connection with the
acquisition, construction, installation, and equipping of a
qualifying project, if such costs are required to be
capitalized for purposes of the federal income tax, determined
without regard to any rule that permits expenditures properly
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chargeable to a capital account to be treated as current
expenditures. However, for any project involving the
extraction of natural resources, the capital investment shall
not include the costs of acquiring land, land recording fees,
architectural and engineering services, environmental studies
and environmental mitigation.
(3) COMPANY. Anyone or anything which has the powers to
own a project and have employees.
(4) ELIGIBLE EMPLOYEES. Those employee positions set
forth in a project agreement that will be the result of new
jobs created by or through a qualifying project.
(5)(4) EMPLOYEES. Some or all of those persons employed
and residing in Alabama Persons employed in full-time positions
created by or through a qualifying project :
a. Who are being paid directly by an approved company,
related company, common paymaster, or joint venturer, or
leasing company for working at a qualifying project ; and
b. Whom the approved company, related company, common
paymaster, or joint venturer or leasing company identifies as
its employees to the U.S. Internal Revenue Service, the
Department of Revenue, or the Department of Labor on returns
or reports filed with the foregoing, including, but not
limited to, IRS Form 941;Form A-6, Form A-1, Form A-2,
UC-CR-4, and UC-10-R. and
c. Who are assigned to a qualifying project for a
period of at least one year.
(6)(5) INCENTIVE PERIOD. The period or periods of time
during which an incentivized company can receive one or more
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of the jobs act incentives.
(7)(6) INCENTIVIZED COMPANY. An approved company and
any related company that are allowed to claim one or more of
the jobs act incentives as provided for in the project
agreement.
(8)(7) INVESTMENT CREDIT. The annual incentive provided
in Section 40-18-376.
(9)(8) JOBS ACT INCENTIVES. The jobs credit and the
investment credit as authorized and provided for in this
article.
(10)(9) JOBS CREDIT. The annual incentive provided in
Section 40-18-375.
(11)(10) NAICS CODE. Any sector, subsector, industry
group, industry or national industry of the 2012 North
American Industry Classification System, or any similar
classification system developed in conjunction with the United
States Department of Commerce or Office of Management and
Budget.
(12)(11) PROJECT. Any land, building, or other
improvements, and all real and personal properties, whether or
not contiguous and whether or not previously in existence, if
in Alabama and if deemed necessary or useful in connection
with an activity listed in Section 40-18-372(1).
(13)(12) PROJECT AGREEMENT. The agreement entered into
between an approved company and the Governor establishing the
terms and conditions for the provision of the jobs act
incentives, as provided for in Section 40-18-374.
(14)(13) QUALIFYING PROJECT. Any project to be
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undertaken by an approved company that satisfies Section
40-18-372.
(15)(14) RELATED COMPANY. Any company that is under
common ownership, management, or control with a company or an
approved company, as the case may be Any entity that owns,
directly or through one or more entities, a 50 percent or
greater interest in the capital or profits of another .
(15) RENEWABLE ENERGY GENERATION. Energy derived from
biomass, geothermal, hydrogen, hydropower, marine energy,
solar, or wind.
(16) UTILITY TAXES. The taxes imposed by Sections
40-21-82 and 40-21-102.
(17) WAGES. Total wages of an employee (including gross
wages, salaries, overtime and bonuses), defined by reference
to Section 25-4-16(b), without application of Sections
25-4-16(b)(1), 25-4-16(b)(2)a., 25-4-16(b)(3), and
25-4-16(b)(4).
"§40-18-372
A qualifying project must be found by the Secretary of
Commerce to conduct an activity specified in subdivision (1)
and to meet the minimum standard set forth in subdivision (2).
(1) A qualifying project must predominantly conduct an
activity that is any one or more of the following:
a. Described by NAICS Code 1133, 115111, 2121, 22111,
221330, 31 (other than 311811), 32, 33, 423, 424, 482, 4862,
48691, 48699, 48819, 4882, 4883 (other than 48833), 493, 511,
5121 (other than 51213), 51221, 517, 518 (without regard to
the premise that data processing and related services be
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performed in conjunction with a third party), 51913, 52232,
54133 (if predominantly in furtherance of another activity
described in this article), 54134 (if predominantly in
furtherance of another activity described in this article),
54138, 5415, 541614, 5417, 55 (if not for the production of
electricity), 561422 (other than establishments that originate
telephone calls), 562213, 56291, 56292, 611512, 927, or 92811.
b. The production of biofuel as such term is defined in
Section 2-2-90(c)(2).
c. A renewable energy generation facility that is owned
by one or more electric providers, as such term is defined in
Section 37-16-3(10), for providing electric service at retail
in Alabama. For purposes of this subdivision, an "electric
provider" shall also include an authority as defined in
Section 11-50A-1(1). In the case of an electric provider that
is also a tax-exempt organization under the Internal Revenue
Code, notwithstanding Section 40-18-376(b)(3), any investment
credit may be transferred for the entire term of the project
agreement, as approved by the Governor. A "renewable energy
generation facility" as used in this subdivision shall include
any tangible property that is part of renewable energy
generation, including any addition, modification, expansion,
or upgrade to transmission or distribution systems that is
required to accommodate the interconnection of renewable
energy generation.
c.d. The conduct of original investigations undertaken
on a systematic basis to gain new knowledge or the application
of research findings or other scientific knowledge to create
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new or significantly improved products or processes.
d.e. The national or regional headquarters for a
company that conducts significant business operations outside
the state and that will serve as the principal office of the
company’s principal operating officer with chief
responsibility for the daily business operations of the
company.
e.f. A commercial enterprise which is open to the
public not less than 120 days during a calendar year and is
designed to attract visitors from inside or outside of the
State of Alabama, typically for its inherent cultural value,
historical significance, natural or man-made beauty, or
entertainment or amusement opportunities, including, but not
limited to, a cultural or historical site, a botanical garden,
a museum, a wildlife park or aquarium open to the public that
cares for and displays a collection of animals or fish, an
amusement park, a convention hotel and conference center, a
water park, or a spectator venue or arena.
f.g. A target of the state’s economic development
efforts pursuant to the Accelerate Alabama Strategic Economic
Development Plan adopted in January 2012 by the Alabama
Economic Development Alliance, created by Executive Order
Number 21 of the Governor on July 18, 2011, or any amended
version or successor document thereto.
g.h. A type listed in a regulation adopted by the
Department of Commerce, other than a regulation submitted as
an emergency rule.
Notwithstanding the foregoing, a qualifying project may
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not engage predominantly in farming activities involving
trees, animals, or crops, and a qualifying project may not
engage predominantly in the retail sale of tangible personal
property or services, and may not be a shopping center,
restaurant, movie theater, bowling alley, fitness center,
miniature golf course, nightclub, gaming facility, or
establishment serving the local community. However, if such
excluded activities are not the predominant activity at the
project, and if the project is otherwise a qualifying project,
then the project agreement may provide that the capital
investment may include costs related to excluded activities
that are ancillary to the primary business conducted as part
of the project. This provision shall not be deemed to exclude
customer service centers, call centers or headquarters
otherwise allowed by this subdivision (1).
(2) A qualifying project shall create a significant
number of new jobs for the area in which the qualifying
project shall be located. Absent a finding of extraordinary
circumstances by the Secretary of Commerce, a qualifying
project shall employ either of the following number of new
employees:
a. Any number of new employees, for a qualifying
project in which the predominant activity involves chemical
manufacturing, data centers, renewable energy generation,
engineering, design, or research, metal/machining technology
or toolmaking; or
b. At least 50 new employees, for all other qualifying
projects."
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"§40-18-374
(a) An incentivized company may claim either or both of
the jobs act incentives, to the extent provided in the project
agreement.
(b) In order for an incentivized company to claim the
jobs act incentives, the Governor and the incentivized company
shall execute a project agreement. The agreement shall contain
all of the following:
(1) The name of the incentivized company;
(2) The location of the qualifying project;
(3) The activity to be conducted at the qualifying
project;
(4) The jobs act incentives to be granted and the order
in which they shall be claimed ;
(5) The capital investment to be made at the qualifying
project;
(6) The time period for the capital investment to be
made at the qualifying project;
(7) The number of eligible employees at the qualifying
project;
(8) The anticipated wages to be paid to or for the
benefit of eligible employees during the incentive period for
the jobs created;
(9) The dates or conditions that shall begin the
running of the incentive periods for applicable jobs act
incentives;
(10) The lengths of the incentive periods for the jobs
act incentives;
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(11) Any annual or aggregate limitations on the amount
of either or both of the jobs act incentives that can be
claimed during an incentive period;
(12) Provisions governing the recapture of all or part
of the jobs act incentives awarded to the qualifying project,
should the approved company default on its obligations in the
project agreement;
(13) Whether the project agreement may be assigned by
the approved company to some other purchaser, assignee, or
successor;
(14) Any other terms, conditions, and limitations that
this article or the Governor may require for an incentivized
company to qualify for and receive a jobs act incentive; and
(15) Any other terms the parties deem necessary or
desirable.
(c) The Governor may decrease the amounts and durations
of the jobs act incentives to ensure that the anticipated
revenues for the state will exceed the amount of tax
incentives sought."
"§40-18-375
(a)(1) If provided for in the project agreement and in
accordance with the terms therein, the incentivized company is
allowed a jobs credit against utility taxes, in an annual
amount equalup to 3 percent of the wages paid to eligible
Alabama resident employees during the prior year. The
incentive period shall be not exceed 10 years.
(2) If the incentivized company is engaged in
pharmaceutical, biomedical, medical technology or medical
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supplies manufacturing, or its related research and
development activities, the incentivized company is allowed a
jobs credit against utility taxes, in an annual amount equalup
to 4 percent of the wages paid to eligible Alabama resident
employees during the prior year. The incentive period shall
benot exceed 10 years. This applies to companies that
predominantly conduct an activity described by NAICS code
3254, 339112, or 339113, to include related research and
development.
(b) The project agreement shall provide that one of the
following methods shall be used to realize the benefits of the
jobs credit:
(1)a. As further provided in the project agreement, the
The jobs credit may be paid to the incentivized company as a
refund out of utility taxes during the incentive period,
regardless of the amount of utility taxes actually paid by the
incentivized company.
b. For each year of the incentive period for the jobs
credit, the incentivized company shall submit to the
Department of Commerce a certification as to the wages paid to
eligible employees during the prior year. 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 calculate the correct refund and issue it directly to
the incentivized company.
(2)a. The jobs credit may be claimed as a credit
against utility taxes actually paid until the effective date
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of this act, after which time the provisions of subdivision
(b)(1) shall control and the offset provided in this
subdivision shall cease unless the provisions stated in
subdivision (b)(1) are explicitly stated in the project
agreement that was executed prior to the effective date of
this act. In any one year, if the credit exceeds the amount of
taxes that are allowed to be offset by the project agreement
and that are owed by the incentivized company, the
incentivized company may carry the credit forward, to the
extent allowed in the project agreement. No carryforward shall
be allowed for more than five years. Rules similar to those
used for Section 40-18-15.2 shall be applied.
b. Prior to claiming the jobs credit as provided in
this subdivision, the incentivized company shall submit to the
Department of Commerce a certification as to the wages paid to
eligible employees during the prior year. Following such
examination as it deems necessary, the Department of Commerce
may certify the information and deliver same to the Department
of Revenue. Thereafter, the Department of Revenue shall allow
the jobs credit.
(c) The realization methods in subsection (b) shall not
create debts of the state within the meaning of Section 213 of
the Official Recompilation of the Constitution of Alabama of
1901, as amended 2022.
(d) The Department of Finance shall adopt rules to
ensure that the credit in no case would reduce the
distribution for the Alabama Special Mental Health Trust Fund
by using any unencumbered funds ."
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"§40-18-376
(a) If provided for in the project agreement, the
incentivized company is allowed an investment credit in an
annual amount equalup to 1.5 percent of the capital investment
incurred as of the beginning of the incentive period, to be
used as follows:
(1) To offset the income taxes found in this chapter,
or as an estimated tax payment of income taxes;
(2) To offset the financial institution excise tax
found in Chapter 16;
(3) To offset the insurance premium tax levied by
Section 27-4A-3(a), or as an estimated payment of insurance
premium tax;
(4) To offset utility taxes;
(5) To offset state license taxes levied by Article 2
of Chapter 21; or
(6) To offset some combination of the foregoing, so
long as the same credit is used only once.
The incentive period shall begin no earlier than the
placed-in-service date. The incentive period shall be not
exceed 10 years. Should only some portion of a tax year be
included in the incentive period, the amount of the investment
credit shall be prorated on a daily basis.
(b) A project agreement may specify any one or more of
the following methods by which the investment credit shall be
realized by the incentivized company, so long as a credit is
not utilized more than once:
(1)a. The investment credit may be claimed as a credit
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against the taxes in subsection (a) that are actually paid. In
any one year, if the credit exceeds the amount of taxes that
are allowed to be offset by the project agreement and that are
owed by the incentivized company, the incentivized company may
carry the credit forward, to the extent allowed in the project
agreement. No carryforward shall be allowed for more than five
years. Rules similar to those used for Section 40-18-15.2
shall be applied.
b. Prior to claiming the investment credit as provided
in this subdivision, the incentivized company shall submit to
the Department of Commerce a certification as to its capital
investment as of the dates specified in the project agreement.
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 investment credit.
(2) The project agreement may authorize an incentivized
company that is taxed as a flow-through entity to allocate the
credit among some or all of the owners in any manner
specified, regardless of whether the allocation follows rules
similar to 26 U.S.C. § 704(b) and the regulations thereunder.
The owners may then use their allocated share of the
investment credit to offset any of the taxes listed in
subsection (a), as provided in subdivision (1). This
subdivision shall be liberally construed to apply to multiple
levels of companies, to allow the investment credits to be
used by those persons bearing the tax burdens of the
qualifying project, and such companies shall include but shall
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in no way be limited to flow-through entities, employee stock
ownership plans, mutual funds, real estate investment trusts,
and it shall also apply to offset the income tax liability of
employee/owners of a flow-through entity owned by an employee
stock ownership plan trust.
(3) All or part of the first three years The Secretary
of Commerce may recommend to the Governor that the
incentivized company be granted transferability of the
investment credit may be transferred by the incentivized
company and applied by another person or company as follows:
a. A transfer of the credit shall be made by written,
notarized contract.
b. No such transfer shall occur before the contract is
approved by the Secretary of Commerce. In determining whether
to approve any transfer, the Secretary shall make all of the
following findings:
(i) That any for up to the first five years. Any
investment credit transferred shall be at the value of at
least 85 percent of the value of the credit. Any one year’s
investment credit will shall not be purchased by more than
three transferees, unless such limitation is found by the
Secretary of Commerce to unnecessarily to limit the class of
potential transferees ;.
(ii) That the proposed transfer will enhance the
economic benefits of the qualifying project; and
(iii) That the transfer is at a value of at least 85
percent of the present value of the credits.
Upon making affirmative findings on the criteria set
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forth above, the Secretary of Commerce shall recommend to the
Governor that the transfer should be approved. Information
about the proposed transfer shall be forwarded to the
Governor, and the Governor may include provisions about the
transfer in the project agreement, or in an amendment thereto
executed by the Governor and the incentivized company.
c. If a transfer is approved, the incentivized company
shall submit to the Department of Commerce the following:
(i) Certifications as to its capital investment as of
the dates specified in the project agreement. Following such
examination as it deems necessary, the If approved by the
Governor, transferability shall be allowed in the project
agreement, subject to any notice and verification requirements
determined by the Department of Commerce. Prior to any
transfer, the investment credit shall be certified by the
Department of Commerce may certify the information and deliver
the same to the Department of Revenue pursuant to paragraph
(b)(1)b. of Section 40-18-376 .
(ii) Certified information about the transfers,
including identifying information about the transferees and
the amount of credit each transferee should claim. Following
such examination as it deems necessary, the Department of
Commerce may certify the information and deliver the same to
the Department of Revenue.
d. Upon receipt of the certifications from the
Department of Commerce as required by paragraph c., the The
Department of Revenue shall adopt a transfer statement form to
be filed by the transferor in a manner prescribed by the
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Department of Revenue. The transfer statement form shall
include the name and federal taxpayer identification number of
the transferor and each transferee listed therein along with
the amount of the tax credit to be transferred to each
transferee listed on the form. The transfer statement form
shall also contain such other information as the Department of
Revenue may reasonably require. For each transfer of a credit,
the incentivized company shall file with the Department of
Revenue, and a copy to the Department of Commerce, (1) a
completed transfer statement form; (2) a copy of the
investment credit certification issued by the Department of
Commerce; and (3) a copy of the executed transfer agreement.
Filing of the executed transfer agreement with the Department
of Revenue shall perfect such transfer to the respect to such
transferee and the Department of Revenue shall thereafter
allow the appropriate amount of the investment credit to
offset the tax liability of the transferee for any of the
taxes listed in subsection (a) and, for any project agreements
entered into after January 1, 2021 only, state license taxes
levied by Article 2 of Chapter 21. In any one year, if the
investment credit exceeds the amount of taxes that are allowed
to be offset and that are owed by the transferee, the
transferee may carry the credit forward for five years. A
transferee may not make a subsequent transfer of the credit.
The Department of Revenue may adopt rules necessary to
implement and administer the transfer provisions as provided
in this act.
e. If a credit is transferred, an incentivized company
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that is later determined by the Secretary of Commerce to have
defaulted under the project agreement shall be liable for the
underpayment of tax attributable to the credit and for
penalties and interest thereon. Unless the purchase of the
credits is determined to have been made in a fraudulent
manner, or is a transfer in anticipation of bankruptcy,
insolvency, or closure, a transferee shall not be liable for
the unpaid tax attributable to the credit, or for penalties or
interest thereon.
(c) The realization methods in subsection (b) shall not
create debts of the state within the meaning of Section 213 of
the Official Recompilation of the Constitution of Alabama of
1901, as amended 2022.
(d)(1) To the extent the investment credit is used to
offset a financial institution excise tax liability, in making
the report required by Section 40-16-6(d), the financial
institution receiving the investment credit shall not take
into account the qualifying project, and the Department of
Finance shall adopt rules to ensure that the credit in no case
would reduce the distribution for municipalities and counties.
(2) To the extent the investment credit is used to
offset an insurance premium tax liability, the Department of
Finance shall adopt rules to ensure that the credit would in
no case reduce the distributions to the Alabama Special Mental
Health Trust Fund by using any unencumbered funds .
(3) To the extent the investment credit is used to
offset liability for the tax imposed by Section 40-21-82 or
Article 2 of Chapter 21, the Department of Finance shall adopt
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rules to ensure that the credit in no case would reduce the
distribution for the Alabama Special Mental Health Trust Fund
by using any unencumbered funds ."
"§40-18-376.1
(a) As used in this section, the following terms shall
have the following meaning:
(1) JUMP START COUNTY. Any Alabama county which meets
all the following:
a. That does not qualify as a targeted county.
b. That has experienced negative population growth over
the last five years as determined by the Commissioner of Labor
as of each January 1 using the most current data available
from the United States Departments of Labor or Commerce, the
United States Bureau of the Census, or any other federal or
state agency or department.
c. Contains no more than two opportunity zones as they
existed on June 1, 2019.
(2) TARGETED COUNTY. Any Alabama county that has a
population of 50,000 or less, as determined by the
Commissioner of Labor as of each January 1 using the most
current data available from the United States Departments of
Labor or Commerce, the United States Bureau of the Census, or
any other federal or state agency or department.
(b) In making the findings required by Section
40-18-373(a), a company that proposes a qualifying project in
a targeted or jumpstart county shall be an approved company
for purposes of this section only if the Secretary of Commerce
makes the additional finding that the qualifying project will
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increase the economic diversity of, or otherwise benefit, the
targeted or jumpstart county.
(c) For purposes of determining in Section
40-18-372(2)b. whether a qualifying project may receive the
jobs act incentives, a project to be located in a targeted or
jumpstart county shall employ at least ten new employees and
shall involve, directly or indirectly, at least two million
dollars ($2,000,000) of capital, absent a finding of
extraordinary circumstances by the Secretary of Commerce.
(d) If the qualifying project is located in a county
which is deemed to be a targeted or jumpstart county on the
date the project agreement is executed, the following shall be
applicable:
(1) The jobs credit provided in Section 40-18-375(a)
shall be up to 4.0 percent of the wages paid to
eligibleAlabama resident employees during the prior year; and
(2) The investment credit provided in Section
40-18-376(a) shall have an incentive period of not to exceed
15 years.
(e) Each year, the incentives in subsection (d) may be
extended to no more than two qualifying projects not in
targeted or jumpstart counties. Such incentives shall be
granted in project agreements executed by the Governor on the
recommendation of the Secretary of Commerce."
"§40-18-376.2
(a) The provisions in this section shall apply to the
following:
(1) Any incentivized company that employed, in the
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prior year, at least 12 percent of its eligible employees as
veterans who received an honorable or general discharge. The
calculation of the percentage of eligible employees who are
veterans shall be made using the method provided in a project
agreement.
(2) Any incentivized company that employed eligible
employees by or through with a qualifying project located
within a former active duty military installation closed by
the Base Realignment and Closure process.
(b)(1) Any incentivized company described by
subdivision (1) of subsection (a) shall receive an additional
0.5 percent jobs credit provided in Section 40-18-375(a) on
the wages paid during the prior year to eligible Alabama
resident employees who are veterans.
(2) Any incentivized company described by subdivision
(2) of subsection (a) shall receive an additional 0.5 percent
jobs credit provided in Section 40-18-375(a) on the wages paid
during the prior year to its eligible Alabama resident
employees.
(c) No incentivized company claiming the credit
provided by subdivision (1) of subsection (b) shall also claim
the credit provided by Article 13 of this chapter for any
portion of the project.
(d) The Department of Labor shall periodically verify
the actual number of veterans employed by the incentivized
company described in subdivision (1) of subsection (a) and the
wages of the veterans during the relevant year. If the
Department of Labor is not able to provide the verification
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utilizing all available resources, it may request any
additional information from the incentivized company as may be
necessary."
"§40-18-376.3
(a)(1) This section shall be applicable to a technology
company so long as there is a project agreement which provides
that Alabama is or will become the company's headquarters, the
place of residence of its top three executives, and the place
of residence of at least 75 percent of its employees.
(2) In making the findings required by Section
40-18-373(1), a technology company that proposes a qualifying
project shall be an approved company for purposes of this
section only if the Secretary of Commerce makes the additional
finding that the qualifying project will increase the economic
diversity of, or otherwise benefit, the state.
(3) A qualifying project shall be deemed to be in
existence, notwithstanding the requirements of Section
40-18-372, so long as at least 10 new employees are employed
at the qualifying project, absent a finding of extraordinary
circumstances by the Secretary of Commerce.
(b) If provided for in the project agreement, the
following shall be allowed to any company which meets all the
criteria in subsection (a):
(1) A jobs credit against utility taxes , in an annual
amount equal up to 4 percent of the wages paid to
eligibleAlabama resident employees during the prior year. The
incentive period shall be not exceed 10 years.
(2) An investment credit as provided in Section
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40-18-376.
(c) A "technology company" is any company which meets
all the criteria in subdivision (1) or (2):
(1) A company that earns at least 75 percent of its
revenues from either of the following:
a. Activities within subsector 518; industry group
5112, 5121 (other than 51213), 5415, or 5417; or industry
51913 of the 2012 North American Industry Classification
System, or any similar classification system developed in
conjunction with the United States Department of Commerce or
Office of Management and Budget.
b. The use of technology to develop new coding or
processes for the creation or delivery of goods or services in
the following fields, or any additional activities determined
by the Secretary of Commerce to be beneficial to the
enhancement of businesses rooted in either of the following
fields:
1. Any of the fields of education, healthcare, energy,
agriculture, infrastructure, software, robotics, nutrition,
aerospace, automotive, or financial services.
2. Any fields related to science, technology,
engineering, or mathematics.
(2) A company that, for a fixed term, educates and
mentors early-stage technology companies recruited to a
location in Alabama, with the goal of accelerating the
companies' development and growth."
"§40-18-376.4
(a) This section shall be applicable to an
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underrepresented company, as defined in this section. In
making the findings required by Section 40-18-373(1), an
underrepresented company that proposes a qualifying project
shall be an approved company for purposes of this section only
if the Secretary of Commerce makes the additional finding that
the qualifying project will increase economic diversity and
will benefit the state.
(b) If provided for in the project agreement, the
following shall be allowed to any company which meets all of
the criteria in subsection (a):
(1) Absent a finding of extraordinary circumstances by
the Secretary of Commerce, a qualifying project shall be
deemed to be in existence notwithstanding the requirements of
Section 40-18-372 so long as 10 new jobs are created.
(2) A jobs credit against utility taxes, in an annual
amount equal up to 4 percent of the wages paid to
eligibleAlabama resident employees during the prior year.
(3) The investment credit provided in Section
40-18-376(a) shall have an incentive period of not to exceed
15 years.
(c) An "underrepresented company" is any company which
meets all the criteria in the following subdivision (1) or
(2):
(1) The company is a for-profit business headquartered
in a community eligible for investment through the federal New
Markets Tax Credit program under 26 U.S.C. § 45D(e), has fewer
than 10 employees at the time the project agreement is
executed, and has average gross revenues of less than five
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hundred thousand dollars ($500,000) in the company’s three
years prior to the execution of the project agreement; or
(2) The company is a for-profit business that is
independently owned and controlled and is at least 51 percent
owned and controlled by one or more underrepresented persons
or, in the case of a publicly-owned business, the company is a
for-profit business of which at least 51 percent of the stock
is owned and controlled by one or more underrepresented
persons and whose daily management and operations are under
the control of one or more underrepresented persons. As used
herein, an underrepresented person is a United States citizen
who is a woman or is African American."
"§40-18-377
(a) After its execution, the Department of Commerce
shall forward to the Department of Revenue a copy of any
project agreement that allows an incentivized company to claim
a jobs act incentive.
(b) Jobs act incentives shall not be considered
securities under Section 8-6-2(10).
(c) The acceptance of a tax credit under this article
shall constitute approval and written consent by the taxpayer
to disclose to the Secretary of Commerce the total tax
liability, net operating loss, amount of credit claimed,
recipient of the credit, and any transferor and transferee
information. The Department of Revenue shall disclose such
information to the Department of Commerce upon written request
by the Secretary of Commerce. The information shall be limited
to what is necessary to administer the provisions of this
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article. Upon receipt of this information, the provisions of
Section 40-2A-10 shall apply to the Department of Commerce and
its employees with respect to the use, dissemination, or other
handling of the information. "
"§40-18-378
(a) The Department of Labor shall periodically verify
the actual number of eligible employees employed at the
qualifying project and the wages of the eligible employees
during the relevant year. If the Department of Labor is not
able to provide the verification utilizing all available
resources, it may request any additional information from the
incentivized company as may be necessary. The Department of
Revenue may periodically audit any incentivized company to
monitor compliance by the incentivized company with this
article. Nothing in this article shall be construed to limit
the powers otherwise existing for the Department of Revenue to
audit and assess an incentivized company. The Department of
Insurance shall have similar audit rights over any
incentivized company that is subject to the insurance premium
tax.
(b) The project agreement shall include provisions for
the incentivized company to return any unearned credit
amounts.
(c)(1) An incentivized company shall be liable for any
unearned portion of the jobs credit or investment credit it
claims or transfers pursuant to this article. The jobs credit
will be considered unearned when the incentivized company
fails to pay the full amount of wages or create the full
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number of jobs upon which the credit was based and claimed.
The investment credit will be considered unearned when the
incentivized company fails to make the full capital investment
upon which the credit was based and claimed or upon which the
credit was valued and then transferred. The incentivized
company shall be liable for only that portion of the jobs
credit or investment credit that was unearned. Any credit
claimed by an owner of an incentivized company is deemed to
have been claimed by the incentivized company for purposes of
this subsection.
(2) The Secretary of Commerce may report to the
Department of Revenue any failure of an incentivized company
to meet the jobs, wage, or investment requirements specified
in the project agreement. The report will be made by March 31
of the year following the calendar year in which the failure
occurs and shall contain sufficient information for the
Department of Revenue to calculate the unearned portion of the
jobs credit or investment credit. The underpayment of the
applicable tax will be deemed to have occurred upon the filing
of the report. The report shall be treated as the filing of a
return by the incentivized company for purposes of any
applicable period of limitation.
(3) The Department of Revenue may assess an
incentivized company for any unearned portion of the
investment credit or jobs credit, with allowed interest and
penalties, pursuant to the terms of Chapter 2A or 29. The
liability shall be considered an underpayment of the tax
against which the respective credit was applied or refunded.
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(4) If more than one company is considered the
incentivized company under the terms of the project agreement,
each such company will be jointly and severally liable for any
liability associated with the unearned credit.
(d) Notwithstanding the provisions of subsection (c),
no credit authorized under this article shall be approved and
issued prior to the credit being earned. "
"§40-18-382
The incentives authorized by this article shall not be
available for qualifying projects for which project agreements
have not been executed on or prior to July 31, 20232028,
unless the Legislature enacts legislation to continue or
reinstate the incentives for new projects after that date. No
action or inaction on the part of the Legislature shall reduce
or suspend any incentive awarded pursuant to this article in
any past or future calendar year with respect to qualifying
projects for which project agreements have been executed on or
prior to July 31, 20232028, it being the sole intention of
this section that failure of the Legislature to enact
legislation continuing the incentives authorized by this
article for periods after July 31, 20232028, shall affect only
the availability of the incentives to qualifying projects for
which project agreements have not been executed on or prior to
July 31, 20232028, and shall not affect qualifying projects
for which project agreements have been executed on or prior to
July 31, 20232028."
"§40-18-383
(a) At no time prior to the calendar year ending
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December 31, 2020, shall the annualized balance of outstanding
jobs act incentives exceed $300 million, which amount would
increase to three hundred twenty-five million dollars
($325,000,000) for the calendar year ending December 31, 2021
and shall the annualized balance of the outstanding jobs act
incentives exceed three hundred fifty million dollars
($350,000,000) for the calendar year ending December 31, 2022 ,
which amount would increase to three hundred seventy-five
million dollars ($375,000,000) for the calendar year ending
December 31, 2023, four hundred million dollars ($400,000,000)
for the calendar year ending December 31, 2024, four hundred
twenty-five million dollars ($425,000,000) for the calendar
year ending December 31, 2025, four hundred fifty million
dollars ($450,000,000) for the calendar year ending December
31, 2026, and four hundred seventy-five million dollars
($475,000,000) for the calendar year ending December 31, 2027,
unless the Legislature enacts legislation to allow additional
jobs act incentives. Of the above annualized balance, twenty
million dollars ($20,000,000) shall apply to qualifying
projects located in targeted or jumpstart counties as
described in Section 40-18-376.1.
(b) Jobs act incentives shall not be available to any
project for which substantial construction activities have
begun by July 2, 2015.
(c)(b) Jobs act incentives under this article shall not
be available for any qualifying project unless at least 80
percent of the eligible employees created by the qualifying
project are employed full time."
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"§40-18-417.1
For the purposes of this article, the following words
and phrases shall have the following meanings:
(1) ACCELERATOR. A company that, for a fixed term,
educates and mentors early-stage technology companies
recruited to a location in Alabama, with the goal of
accelerating the companies’ development and growth.
(2)(1) CAPITAL IMPROVEMENTS. Construction and
rehabilitation expenses of a capital nature at an inland port
or intermodal facility, the dredging of waterways in the
immediate vicinity of an inland port, and the expansion of
onsite storage facilities at an inland port or intermodal
facility.
(3)(2) ECONOMIC DEVELOPMENT ACTIVITIES. Activities and
initiatives that enhance the use of, and flow of goods
through, an inland port or intermodal facility.
(4)(3) ECONOMIC DEVELOPMENT ORGANIZATION. A local
economic development organization or a state economic
development organization.
(5)(4) GROWING ALABAMA CREDIT. The credit provided for
in subsection (a) of Section 40-18-417.4.
(6)(5) INDUSTRY or BUSINESS. An entity that would
conduct at a site an activity that is primarily described in
Section 40-18-372(1).
(7)(6) INLAND PORT. Any port on a navigable river away
from traditional land, air, and coastal borders.
(8)(7) INTERMODAL FACILITY. Any facility that
interconnects two or more different modes of air, rail, or
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road traffic serving multiple customers, and which involves
storage facilities.
(9)(8) LOCAL ECONOMIC DEVELOPMENT ORGANIZATION.
Organizations which are determined by the Department of
Commerce to meet both of the following criteria:
a. The organization is an Alabama entity not operating
for profit, including, but not limited to, a municipality or
county, an industrial board or authority, a chamber of
commerce, or some other foundation or Alabama nonprofit
corporation charged with improving a community or region of
the state.
b. The organization has a record of supporting or
otherwise participating in economic development in some part
of this state.
(10)(9) RENEWAL OF ALABAMA COMMISSION. The Renewal of
Alabama Commission created by Section 40-18-402.
(11)(10) SITE. Real property owned by a local economic
development organization and intended for use by an industry
or business.
(12)(11) STATE ECONOMIC DEVELOPMENT ORGANIZATION. An
organization that is determined by the Department of Commerce
to be an Alabama entity not operating for profit which is
charged with improving the state or a region of the state and
has a record of supporting or otherwise participating in
economic development in the state."
"§40-18-417.2
(a)(1) A local economic development organization which
owns a site may apply to the Department of Commerce for
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funding to solve an inadequacy involving the site. The
application by the local economic development organization
shall include at least one of the following:
a. If there is a pending expression of interest about
the site from an industry or business, a list of the site
preparation or public infrastructure work needed to make the
site acceptable to the industry or business.
b. If the site has been offered to one or more
industries or businesses but the offer did not result in the
industry or business locating on the site, a list of the site
preparation or public infrastructure work which, if it had
been completed, would have made the site acceptable to the
industries or businesses.
c. If the site is an industrial or research park which
needs connections to interstates, highways, roadways, rail
systems, or sewer, fiber, electrical, gas, or water
infrastructure, a list of the site preparation or public
infrastructure work needed.
d. Capital improvements or economic development
activities at an inland port or intermodal facility, as
described in Section 40-18-417.1; provided that the
application is accompanied by an economic impact report on
such improvements or activities.
e. Any site improvement or public infrastructure work
in census tracts that meets the definition of low-income
communities pursuant to 26 U.S.C. § 45D(e).
(2) An economic development organization may apply to
the Department of Commerce for funding to undertake any of the
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following issues:
a. The creation, operation, or support of an
accelerator for technology companies, provided that the
application is accompanied by an economic impact report.
Technology companies shall include companies which earn or
reasonably expect to earn at least 75 percent of their
revenues from sources described in Section 40-18-376.3(c)(1).
b. Thethe construction, maintenance, promotion,
operation, management, leasing, and subleasing of an
agricultural center which includes a multi-use facility and
related commercial and noncommercial structures for livestock,
equestrian, small animal shows and events, spectator events,
trade shows, educational conferences, agricultural and
agricultural related industries, educational, demonstrational
or training purposes, educational and training conferences or
events, recreational vehicle rallies, recreational vehicle
multi-day parking, hosting of corporate and non-corporate
organization meetings, use as fair grounds, operation of
retail activities, and other events and facilities expected to
draw participants and spectators from states located across
the southeastern United States, with a projected total annual
economic impact upon completion of all phases of the
agricultural center of at least thirty-five million dollars
($35,000,000) and with the related and supporting
infrastructure and facilities having a projected capital
expenditure upon completion of all phases of the agricultural
center of at least one hundred million dollars ($100,000,000);
provided that the application is accompanied by an economic
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impact report on the agricultural center.
c. The creation, operation, or support of programs
designed to provide funding or other resources for businesses
that are described in Section 40-18-376.4(c).
(b) For any site preparation or public infrastructure
work provided in subdivision (a)(1), the The application shall
include quotes for the completion of the work, following
compliance with the procedures set forth by the Department of
Economic and Community Affairs, as if the organization were
disbursing state funds received from the department.
(c) The application provided in paragraph (a)(1) a. or
b. shall include an estimate of the number of jobs, wages, and
capital investment which would have been undertaken by the
industries or businesses referred to in paragraph (a)(1) a. or
b.
(d) The application provided in subsection (a) shall
include proof that the economic development organization has
in full force and effect a conflict of interest policy
consistent with that found in the instructions to Form 1023
issued by the Internal Revenue Service.
(e) The application provided in subsection (a) shall
include a notarized affirmation by an officer of the economic
development organization that the submission of the
application did not violate the conflict of interest policy
referred to in subsection (d)."
"§40-18-417.3
(a) Following a review, if the Department of Commerce
should approve the application provided in subsection (a) of
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Section 40-18-417.2, it shall forward the application to the
Renewal of Alabama Commission.
(b) The Renewal of Alabama Commission shall consider
the application and shall approve it if the commission deems
it worthy of approval. As to improvements at industrial sites,
the commission shall give preference to sites with at least
1,000 acres of available space. As to applications for
projects located in communities which have the potential to
provide additional funding separate from the Growing Alabama
Credits, the commission shall take into consideration whether
the separate funding is to be provided to the project that is
the subject of the application. Meetings of the commission are
subject to Chapter 25A of Title 36. Notwithstanding the
foregoing, the commission may meet by telephone or some other
telecommunications device so long as members of the public are
allowed the opportunity to listen to or otherwise observe the
commission’s deliberations.
(c) The approval of an application by the commission
shall specify the amount of money which the economic
development organization is allowed to receive so that it can
complete the work specified in the application.
(d) Following approval by the commission, the
Department of Commerce shall enter into an agreement with the
economic development organization which shall do all of the
following:
(1) Require the economic development organization to
use funding received as a result of this law only for the
purposes approved by the commission as expressed in the
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agreement.
(2) Require the economic development organization to
make periodic reports, not more often than annually, to the
Department of Commerce and the commission, as required by the
commission, on the disposition of the funds. As to a project
described in subdivision (a)(1) of Section 40-18-417.2, the
report shall include information on the marketing of the site,
and the ultimate use of the site until such time as it makes a
final report. As to a project related to inland ports or
intermodal facilities as described in paragraph (a)(1) d. of
Section 40-18-417.2 or a project related to a technology
company oran agricultural center as described in subdivision
(a)(2) of Section 40-18-417.2, the report shall include an
economic impact report.
(3) Require the economic development organization to
provide a review of its financial accounts as directed by the
Renewal of Alabama Commission.
(e) For any approved applications, the Department of
Commerce shall notify the Department of Revenue of the
information specified in subsection (c).
(f) The Department of Commerce shall publish on its
website a list of all approved applications and a list of the
economic development organizations that made the approved
applications."
"§40-18-417.4
(a) A taxpayer is allowed a Growing Alabama Credit to
be applied against all of the following:
(1) To offset the income taxes levied in this chapter,
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or as an estimated tax payment of income taxes.
(2) To offset the state portion of the financial
institution excise tax levied in Chapter 16.
(3) To offset the insurance premium tax levied by
subsection (a) of Section 27-4A-3.
(4) To offset state license taxes levied by Article 2
of Chapter 21.
(b) In no event shall the Growing Alabama Credit cause
a taxpayer's tax liability to be reduced by more than 50
percent. Unused credits may be carried forward for no more
than five years.
(c) Growing Alabama Credits shall be granted to
taxpayers using an online system administered by the
Department of Revenue. The online system shall allow taxpayers
to agree to make a cash contribution to an economic
development organization which was approved by the Renewal of
Alabama Commission, as provided in Section 40-18-417.3. The
online system shall ensure that credits are not granted for
contributions to an economic development organization in
excess of the amounts approved by the Renewal of Alabama
Commission, as provided in Section 40-18-417.3.
(d) The cumulative amount of funding approved pursuant
to this section shall not exceed twenty million dollars
($20,000,000) in a calendar year for calendar years ending
prior to January 1, 2023, and thirty-five million dollars
($35,000,000) in a calendar year for calendar years beginning
January 1, 2023. Of that amount, no more than four million
dollars ($4,000,000) of funding in the aggregate may be
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approved for accelerator programs as described in Section
40-18-376.3(c)(2).
(e) The Renewal of Alabama Commission shall reserve at
least 25 percent of the amounts specified in subsection (d)
for projects located in targeted or jumpstart counties as
defined in Section 40-18-376.1. In the event applications are
not received and credits are not allocated for projects in
these areas by the close of the second quarter of the program
year, the funds may revert for allocations of other project
applications.
(f) To the extent that a Growing Alabama Credit is used
by a taxpayer, the taxpayer shall not be allowed any deduction
that would have otherwise been allowed for the taxpayer's
contribution. Credits may only be claimed by the donating
taxpayer and may not be assigned or transferred to any other
taxpayer. For purposes of this section, a donating taxpayer
includes a taxpayer who is a shareholder of an Alabama S
corporation or a partner or member of a subchapter K entity
that made a contribution to an economic development
organization which was approved by the Renewal of Alabama
Commission.
(g) The Department of Finance shall adopt rules to
ensure that the Growing Alabama Credit in no case would reduce
the distribution for the Alabama Special Mental Health Trust
Fund by using any unencumbered funds."
"§40-18-417.7
The Growing Alabama Credits provided in this article
shall not be available for qualifying applicants as described
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in this article, for which applications are not approved on or
prior to July 31, 20232028, unless the Legislature enacts
legislation to extend the date. This shall only affect the
availability of credits for applications not approved on or
prior to July 31, 20232028, and shall not cause a reduction or
suspension of any credits awarded on or prior to July 31,
20232028."
"§40-9B-4.1
In no event shall any incentive provided in Act
2012-210 be available to any company filing an application
after July 31, 2028December 31, 2023, unless Act 2012-210 is
reauthorized pursuant to legislation in that year and once
every five years succeeding the 2024 reauthorization . Any
project granted an incentive prior to July 31, 2028December
31, 2023, shall be entitled to those incentives the incentive
pursuant to the project agreement regardless of whether Act
2012-210 is reauthorized."
Section 3. In no event does this act authorize any
electric provider to provide retail electric service outside
of its electric service territory as determined under the
applicable provisions of Chapter 14 of Title 37, Code of
Alabama 1975. Nothing in this act is intended to amend,
repeal, enlarge, or otherwise affect Chapter 14 of Title 37,
Code of Alabama 1975.
Section 4. This act shall become effective immediately
following its passage and approval by the Governor, or its
otherwise becoming law.
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