HB441ENROLLED
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HB441
SQG2585-2
By Representative Garrett
RFD: Ways and Means Education
First Read: 11-Apr-24
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First Read: 11-Apr-24
Enrolled, An Act,
Relating to the Growing Alabama Act, the Innovating
Alabama Act, the Alabama Jobs Act, and Innovate Alabama; to
amend Sections 40-18-376.4, 40-18-417.2, 41-10-801, 41-10-804,
and 41-10-842, Code of Alabama 1975; to provide for eligible
census tracts under the federal New Markets Tax Credit
program.
BE IT ENACTED BY THE LEGISLATURE OF ALABAMA:
Section 1. Sections 40-18-376.4, 40-18-417.2,
41-10-801, 41-10-804, and 41-10-842, Code of Alabama 1975, are
amended to read as follows:
"§40-18-376.4
(a) This section shall be applicable to an
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
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(2) A jobs credit against utility taxes, in an annual
amount up to 4 percent of the wages paid to Alabama resident
employees during the prior year.
(3) The investment credit provided in Section
40-18-376(a) shall have an incentive period not to exceed 15
years.
(c) An "underrepresented company" is any company that
meets all the criteria in 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) as those
communities were identified as of January 1, 2015, or in such
a community identified thereafter , has fewer than 10 employees
at the time the project agreement is executed, and has average
gross revenues of less than five 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."
"§40-18-417.2
(a)(1) A local economic development organization that
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(a)(1) A local economic development organization that
owns a site may apply to the Department of Commerce for
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 that, 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 that
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) as those
communities were identified as of January 1, 2015, or in such
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communities were identified as of January 1, 2015, or in such
a community identified thereafter .
(2) An economic development organization may apply to
the Department of Commerce for funding to undertake the
construction, maintenance, promotion, operation, management,
leasing, and subleasing of an agricultural center that
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 impact report on the agricultural
center.
(b) The application shall include quotes for the
completion of the work, following compliance with the
procedures set forth by the Department of Economic and
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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)."
"§41-10-801
For the purposes of this article, the following terms
shall have the following meanings:
(1) ASPIRING ALABAMIAN. A person who has less than one
hundred thousand dollars ($100,000) of household net worth and
who satisfies at least one of the following criteria:
a. The person has a principal residence in a community
eligible for investment through the federal New Markets Tax
Credit program under 26 U.S.C. § 45D(e)(1) as those
communities were identified as of January 1, 2015, or in such
a community identified thereafter .
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a community identified thereafter .
b. The person owns at least a majority interest in a
business located in a community eligible for investment
through the federal New Markets Tax Credit program under 26
U.S.C. § 45D(e)(1) as those communities were identified as of
January 1, 2015, or in such a community identified thereafter .
c. The person does not hold, and is not actively
pursuing, a baccalaureate degree or does not have a parent or
legal guardian who holds a baccalaureate degree.
d. The person has at least one parent who does not have
a high school diploma or its equivalent.
(2) BOARD. The governing board of the corporation.
(3) CORPORATION. The Alabama Innovation Corporation
created by this article as an authority organized as a public
corporation having a legal existence separate and apart from
the state and any county, municipality, or political
subdivision.
(4) ECONOMIC DEVELOPMENT AND INNOVATION ENTITY.
a. A nonprofit corporation that possesses all of the
following characteristics:
1. Is organized as a nonprofit corporation exempt from
federal income tax under Section 501(c) of the Internal
Revenue Code of 1986, as amended.
2. Has a record of, or can demonstrate that it is
capable of, serving the entire state on matters involving
economic development.
3. Has a record of, or can demonstrate that it is
capable of, managing startup competitions or related
programming designed to foster an innovation-based economy.
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programming designed to foster an innovation-based economy.
4. Has received, or is eligible to receive, grant
funding from the state or from federal or private sources.
b. In determining whether a nonprofit corporation
qualifies as an economic development and innovation entity,
the board may attribute to the nonprofit corporation the
experiences of its officers, staff, and directors with other
nonprofit corporations.
(5) ELIGIBLE INVESTMENTS. All of the following:
a. Demand deposits (interest bearing) in federally
insured banks, and interest bearing deposits, whether or not
evidenced by certificates of deposits, in federally insured
banks; provided, however, that the deposits plus interest
shall be fully secured by obligations described in paragraphs
b. and c., to the extent that the deposits plus interest
exceed insurance available from the Federal Deposit Insurance
Corporation, or from any agency of the United States of
America that may succeed to the functions of the Federal
Deposit Insurance Corporation.
b. Bonds, notes, and other evidences of indebtedness
that are direct obligations of the United States of America or
that are unconditionally guaranteed as to both principal and
interest by the United States of America.
c. Bonds, debentures, notes, or other evidences of
indebtedness issued or guaranteed by any federal agencies or
government sponsored enterprises authorized to issue their own
debt instruments including, without limitation, to any of the
following: Federal Farm Credit Bank, Federal Intermediate
Credit Banks, the Export-Import Bank of the United States,
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Credit Banks, the Export-Import Bank of the United States,
Federal Land Banks, the Federal National Mortgage Association,
the Governmental National Mortgage Association, the Federal
Financing Bank, Federal Banks for Cooperatives, Federal Home
Loan Banks, Federal Home and Loan Mortgage Association, or the
Farmers Home Administration.
d. Repurchase agreements with federally insured banks
or with government bond dealers reporting to and trading with
the Federal Reserve Bank of New York, provided that the
repurchase agreements are secured by obligations described in
paragraphs b. and c.
e. Interest-bearing time deposits, whether or not
evidenced by certificates of deposit, in savings and loan
associations: (i) the deposits of which are insured to the
maximum extent possible by the Federal Savings and Loan
Insurance Corporation or any agency of the United States of
America that may succeed to its functions; and (ii) the
principal office of which is located in the state. The
deposits plus interest shall be secured by obligations
described in paragraphs b. and c., to the extent that the
deposits plus interest exceed insurance available from the
Federal Savings and Loan Insurance Corporation or from any
agency of the United States of America that may succeed to the
functions of the Federal Savings and Loan Insurance
Corporation.
f. Other legal investments which the corporation
determines will have the effect of growing an innovative
economy.
(6) FUND. The Alabama Innovation Fund.
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(6) FUND. The Alabama Innovation Fund.
(7) SMALL BUSINESS INNOVATION RESEARCH. The grants and
programs defined in 15 U.S.C. § 638(e)(4).
(8) SMALL BUSINESS TECHNOLOGY TRANSFER RESEARCH. The
grants and programs defined in 15 U.S.C. § 638(e)(6).
(9) STEM. Science, technology, engineering, and
mathematics."
"§41-10-804
(a) The board shall have all of the powers necessary to
carry out and effectuate the purposes of this article. The
foregoing sentence shall be construed broadly, so that the
failure to state a power of the board shall not be considered
a limitation upon the board, so long as the board shall find
that the power is necessary to allow the board to fulfill the
purpose of the corporation, as provided by this article. In
the event that the board should determine to add one or more
powers, they may do so by amending their application of
formation. Without limiting the generality of the foregoing,
the board shall have and exercise all of the following powers:
(1) Recognize that the economy of today will not exist
tomorrow and implement policies that help this state, and
residents of this state, embrace that future.
(2) Take actions to make this state a hub for
technology, innovation, and entrepreneurship by partnering
with the private sector, state agencies, and state policy
makers to develop and implement programs and policies that
will lead to a more robust and inclusive economy for this
state.
(3) Support, financially and otherwise, the
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(3) Support, financially and otherwise, the
establishment or growth, or both, of all of the following:
a. Marketing and branding the state including, but not
limited to, the state's business climate, the state's tax
rates and structures, the state's innovation-focused
incentives and abatements, the state's business related
programs, and the state's innovation and entrepreneurial
ecosystems.
b. Pursuing and supporting commercialization,
entrepreneurship, research and development, and technology
transfer facilities, funding, incentives, partnerships, events
and programs, including, but not limited to, all of the
following:
1. Creating, operating, and supporting accelerator or
similar programs , including, but not limited to, university
and corporate focused accelerator or similar programs.
2. Developing programming, incubators, and accelerators
that serve this state's startups and their founders, and
disseminating both in person and online.
3. Creating, operating, and supporting industry focused
research and development centers established by public
universities in collaboration with existing industry in
Alabama.
c. Incentivizing and providing funding to innovative
businesses or programs that support innovation in this state's
economy, including, but not limited to, the following:
1. Assisting recipients of Small Business Innovation
Research and Small Business Technology Transfer Research
funding.
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funding.
2. Encouraging pre-seed, seed, venture capital, and
private equity funding activity in this state.
3. Supporting community development financial
institutions that serve residents of this state.
4. Supporting qualified STEM teachers and technology
staff teaching and working in rural or otherwise
under-performing or under-resourced schools in this state.
d. Engaging in rural initiatives that support
innovation, including, but not limited to, the creation,
operation, and support of entrepreneurial centers, and
marketing rural quality of life and recreational
opportunities.
e. Creating, operating, and supporting research and
development of a 21st-Century transportation system that
reflects emerging technologies and multi-modal concepts.
f. Attracting, recruiting, and retaining skilled
workers, STEM workers, and other in-state and out-of-state
two-year and four-year college, university, and community
college graduates, and engaging in other innovation focused
workforce development activities.
g. Supporting businesses owned or led, or both, by
aspiring Alabamians.
h. Supporting businesses headquartered in census tracts
that satisfy the definition of "low income communities " found
in 26 U.S.C. § 45D(e) as those communities were identified as
of January 1, 2015, or in such a community identified
thereafter.
(4) Adopt, alter, and repeal bylaws for the regulation
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(4) Adopt, alter, and repeal bylaws for the regulation
and conduct of the corporation's affairs and business, and for
the implementation of this article.
(5) Take actions as may be necessary or convenient to
accomplish any purpose of the corporation, or to exercise any
power of the corporation.
(6) Make and enter into contracts, leases, and
agreements, and take other actions as may in its judgment may
be necessary or desirable to accomplish any purpose, and to
exercise any power necessary for the accomplishment of the
purposes of the corporation or incidental to the powers
expressly set forth in this article.
(7) Appoint, employ, and contract with employees,
agents, advisors, consultants, and service providers ,
including, but not limited to, attorneys, accountants,
financial experts, and other advisors, consultants, and agents
as may in its judgment may be necessary or desirable to
accomplish any purpose of the corporation or incidental to the
powers expressly set forth in this article, and to fix the
compensation of those persons.
(8) Manage, invest, and expend capital from the fund,
as provided in Section 41-10-806, and to provide for the
indemnification of directors.
(9) Use the financial resources of the corporation to
purchase, lease, or otherwise acquire real and personal
property, and to use, develop, operate, lease, or convey those
properties, as may in its judgment may be necessary or
desirable to accomplish any purpose of the corporation or
incidental to the powers expressly set forth in this article.
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incidental to the powers expressly set forth in this article.
(10) Lend its credit to, or grant public monies and
things of value in aid of or to, any individual, firm,
corporation, or other business entity, public or private, as
may in its judgment be necessary or desirable to accomplish
any purpose of the corporation or incidental to the powers
expressly set forth in this article.
(11) Promote and solicit taxpayer donations for tax
credits that promote innovation in the state.
(12) Take any action necessary to exercise its rights
or fulfill its obligations relevant to the corporation under
state law.
(b) The board shall create an advisory committee which
shall provide information and make recommendations to the
board concerning the implementation of this article. The
advisory committee shall have no legal authority or other
responsibility over the actions of the corporation. The board
shall coordinate its appointments to assure the advisory
committee membership is inclusive and reflects the so that
diversity of racial, gender, race, and geographical areas,
urban, rural, and economic diversity of the is reflective of
the makeup of this state. The members of the advisory
committee shall serve at the pleasure of the board. The board
shall appoint one member of the advisory committee to serve as
the chair of the advisory committee, and meetings of the
advisory committee may be called by its chair or by the board.
Members of the advisory committee may participate in a meeting
of the committee in person, by means of telephone conference,
video conference, or other similar communications equipment so
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video conference, or other similar communications equipment so
that all individuals participating in the meeting may hear
each other at the same time. Participation by any such means
shall constitute presence in person at a meeting for all
purposes, including for purposes of establishing a quorum, and
the affirmative vote of a majority of the members in
attendance shall be necessary for any action of the advisory
committee. The committee and its members shall not be subject
to Chapter 25 or 25A of Title 36 nor Section 36-12-40.
(c) The board may enter into agreements with one or
more economic development and innovation entities to exercise
all powers of the corporation, if the agreement does both of
the following:
(1) Requires regular reporting to the corporation by
the economic development and innovation entity.
(2) Allows for the overhead costs of the economic
development and innovation entity to be reimbursed or
otherwise paid only if directly related to the fulfillment of
the agreement, as determined by the corporation.
(d)(1) The board may make, enter into, and execute
contracts, agreements, and other instruments with, accept aid
and grants from, and cooperate with, any other person or
entity, including, but not limited to, all of the following:
a. The United States of America, the state, or any
agency, instrumentality, or political subdivision of either.
b. For profit or nonprofit private entities.
c. Public bodies, departments, or authorities ,
including, but not limited to, the executive departments of
the state, to act on behalf of the board in carrying out
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the state, to act on behalf of the board in carrying out
functions which the board determines are consistent with the
corporation's powers.
(2) Without limiting the foregoing, the corporation may
enter into an agreement with the Alabama Department of
Economic and Community Affairs pursuant to which the
corporation may exercise all rights, powers, and obligations
of the department relating to opportunity funds under Sections
40-18-6.1 and 41-10-46.01. Project agreements under Section
40-18-6.1, shall not be required to comply with Section
40-18-6.1(c). Project agreements under Sections 40-18-6.1 and
41-10-46.01 include investments in qualified opportunity zones
as defined in 26 U.S.C. § 1400Z-1 and low-income communities
as defined in 26 U.S.C. § 45D(e) as those communities were
identified as of January 1, 2015, or in such a community
identified thereafter .
(e) The corporation shall be, and shall operate as, a
public corporation and shall have a legal existence separate
and apart from the state and any county, municipality, or
political subdivision.
(f) Members of the board shall be subject to Chapter 25
of Title 36, but the corporation shall not be deemed to have
statewide jurisdiction for purposes of Section 36-25-14. For
the purposes of Chapter 25 of Title 36, the corporation shall
not be deemed a business, and a public official or public
employee holding a position with the corporation is not
precluded from taking official actions affecting the
corporation so long as there is no impermissible personal
gain. The board shall be subject to Chapter 25A of Title 36."
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gain. The board shall be subject to Chapter 25A of Title 36."
"§41-10-842
(a) An economic development organization may apply to
Innovate Alabama for Innovating Alabama tax credits to
undertake any of the following projects:
(1) 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 that earn or
reasonably expect to earn at least 75 percent of their
revenues from sources described in Section 40-18-376.3(c)(1).
(2) The creation, operation, or support of programs
designed to provide funding, workforce development, or other
resources for an innovative company that meets either of the
following criteria:
a. 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) as those
communities were identified as of January 1, 2015, or in such
a community identified thereafter , predominantly conducting an
activity in an innovative industry, has fewer than 15
employees at the time the funding agreement is executed, and
has average gross revenues of less than one million dollars
($1,000,000) in the company three years prior to the execution
of the funding agreement.
b. The company is a for-profit business that is
headquartered in Alabama, predominantly conducting an activity
in an innovative industry, has fewer than 75 employees at the
time the funding agreement is executed, and that is at least
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time the funding agreement is executed, and that is at least
51 percent owned and controlled by one or more individuals who
are United States Citizens and who are women or African
American. As used in this subdivision, an innovative industry
includes advanced manufacturing, aerospace, agriculture,
bioscience, biotechnology, electronics, energy and natural
resources, engineering, life sciences, and information
technology industries, and any other innovative industry as
determined by Innovate Alabama in its sole discretion.
(b) 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.
(c) 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 (b)."
Section 2. This act shall become effective on June 1,
2024.
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2024.
________________________________________________
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 30-Apr-24.
John Treadwell
Clerk
Senate 08-May-24 Passed
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