Alabama 2025 Regular Session

Alabama House Bill HB435 Compare Versions

Only one version of the bill is available at this time.

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1	1	HB435INTRODUCED
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3	3	HB435
4	4	6YUR21Z-1
5	5	By Representative Whitt
6	6	RFD: Commerce and Small Business
7	7	First Read: 18-Mar-25
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12	12	5 6YUR21Z-1 03/18/2025 KHF (L)KHF 2025-1313
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14	14	First Read: 18-Mar-25
15	15	SYNOPSIS:
16	16	Under existing law, the state has established research
17	17	and development corridors and grants as well as various tax
18	18	abatements and incentives that include references to the now
19	19	outdated Accelerate Alabama Strategic Economic Development
20	20	Plan. These laws also include references to the 2012 North
21	21	American Industry Classification System (NAICS) Codes used to
22	22	classify business establishments by industry sector.
23	23	This bill would remove references to the Accelerate
24	24	Alabama Strategic Economic Development Plan and align relevant
25	25	sections with the provisions of the Alabama Jobs Act.
26	26	This bill would also update NAICS Codes used to
27	27	classify business establishments by industry sector, bringing
28	28	them in line with the latest updates released in 2022.
29	29	A BILL
30	30	TO BE ENTITLED
31	31	AN ACT
32	32	Relating to economic development; to amend Sections
33	33	11-66A-2 and 41-23-252, regarding research and development
34	34	corridors and grants, and Sections 40-9B-3, 40-9G-1,
35	35	40-18-372, regarding tax abatements and incentives; to remove
36	36	references to the outdated Accelerate Alabama Strategic
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66	66	references to the outdated Accelerate Alabama Strategic
67	67	Economic Development Plan; and to update NAICS Code references
68	68	to the latest updated released in 2022.
69	69	BE IT ENACTED BY THE LEGISLATURE OF ALABAMA:
70	70	Section 1. Sections 11-66A-2, 40-9B-3, 40-9G-1,
71	71	40-18-372, and 41-23-252, Code of Alabama 1975, are amended as
72	72	follows:
73	73	"§11-66A-2
74	74	(a) The Legislature finds and determines the public
75	75	good, welfare, and economy of the state are best served by
76	76	providing and encouraging the development, growth,
77	77	improvement, and support of new and creative economic
78	78	opportunities for existing and future qualified enterprises to
79	79	establish and continue projects in this state for innovative
80	80	processes and products. These include specifically those
81	81	business sectors expressly identified in Accelerate Alabama
82	82	2.0, the strategic economic development plan developed by the
83	83	Department of Commerce.
84	84	(b) In furtherance of subsection (a) the legislative
85	85	intent and public purpose of this chapter is:
86	86	(1) To provide authority to municipalities for the
87	87	creation of research and development corridors with corporate
88	88	authority and power to provide, in the discretion of the
89	89	corridors, its resources; and
90	90	(2) To provide authority to public entities to provide
91	91	public resources to, or for the benefit of, corridors."
92	92	"§40-9B-3
93	93	(a) For purposes of this chapter, the following words
94	94	and phrases mean:
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124	124	and phrases mean:
125	125	(1) ABATE, ABATEMENT. A reduction or elimination of a
126	126	taxpayer's liability for tax or payments required to be made
127	127	in lieu thereof. An abatement of transaction taxes imposed
128	128	under Chapter 23 of this title, or payments required to be
129	129	made in lieu thereof, shall relieve the seller from the
130	130	obligation to collect and pay over the transaction tax as if
131	131	the sale were to a person exempt, to the extent of the
132	132	abatement, from the transaction tax.
133	133	(2) ALTERNATIVE ENERGY RESOURCES. The definition given
134	134	in Section 40-18-1.
135	135	(3) CONSTRUCTION RELATED TRANSACTION TAXES. The
136	136	transaction taxes imposed by Chapter 23 of this title, or
137	137	payments required to be made in lieu thereof, on tangible
138	138	personal property and taxable services incorporated into an
139	139	industrial development property, the cost of which may be
140	140	added to capital account with respect to the property,
141	141	determined without regard to any rule which permits
142	142	expenditures properly chargeable to capital account to be
143	143	treated as current expenses.
144	144	(4) DATA PROCESSING CENTER. An establishment at which
145	145	not less than 20 new jobs are located, the average annual
146	146	total compensation, including benefits, of such new jobs to be
147	147	not less than forty thousand dollars ($40,000) and such
148	148	establishment is engaged in the provision of complete
149	149	processing and specialized reports from data, the provision of
150	150	automated data processing and data entry services, the
151	151	provision of an infrastructure for hosting or data processing
152	152	services, the provision of specialized hosting activities, the
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182	182	services, the provision of specialized hosting activities, the
183	183	provision of application service provisioning, the provision
184	184	of general time-share mainframe facilities, the provision or
185	185	operation of computer equipment or enabling software for the
186	186	processing, storage, backup, retrieval, communication, or
187	187	distribution of data, or some combination of the foregoing,
188	188	without regard to whether any other activities are conducted
189	189	at the establishment.
190	190	(5) EDUCATION TAXES. Ad valorem taxes, or payments
191	191	required to be made in lieu thereof, that must, pursuant to
192	192	the Constitution of Alabama of 19012022, as amended,
193	193	legislative act, or the resolution or other action of the
194	194	governing board authorizing the tax, be used for educational
195	195	purposes or for capital improvements for education and local
196	196	construction related transaction taxes levied for educational
197	197	purposes or for capital improvements for education.
198	198	(6) HEADQUARTERS FACILITY. Any trade or business
199	199	described in NACIS Code 551114, at which not less than 50 new
200	200	jobs are located.
201	201	(7) HYDROPOWER PRODUCTION. The definition given in
202	202	Section 40-18-1.
203	203	(8) INDUCEMENT. Refers to an agreement, or an
204	204	"inducement agreement," entered into between a private user
205	205	and a public authority or county or municipal government
206	206	and/or a resolution or other official action, an "inducement
207	207	resolution," "inducement letter," or "official action" adopted
208	208	by a public authority or county or municipal government, in
209	209	each case expressing, among other things, the present intent
210	210	of such public authority or county or municipal government to
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240	240	of such public authority or county or municipal government to
241	241	issue bonds in connection with the private use property
242	242	therein described. Notwithstanding any provision in this
243	243	chapter to the contrary, neither an inducement nor a request
244	244	for inducement shall be required to apply for, grant, or
245	245	receive any abatement of taxes allowed to be abated under this
246	246	chapter.
247	247	(9) INDUSTRIAL DEVELOPMENT PROPERTY. Real and/or
248	248	personal property acquired in connection with establishing or
249	249	expanding an industrial or research enterprise in Alabama.
250	250	(10) INDUSTRIAL OR RESEARCH ENTERPRISE.
251	251	a. Any trade or business predominatelypredominantly
252	252	consisting of any one or more of the following:
253	253	1. Described by NAICS Code 1133, 115111, 2121, 22111,
254	254	221330, 31 (other than 311811), 32, 33, 423, 424, 482, 4862,
255	255	48691, 48699, 48819, 4882, 4883 (other than 48833), 493, 511,
256	256	5121 (other than 51213), 512215122, 513, 517, 518 (without
257	257	regard to the premise that data processing and related
258	258	services be performed in conjunction with a third party),
259	259	5191351929, 52232, 54133 (if predominantly in furtherance of
260	260	another activity described in this article), 54134 (if
261	261	predominantly in furtherance of another activity described in
262	262	this article), 54138, 5415, 541614, 5417, 55 (if not for the
263	263	production of electricity), 561422 (other than establishments
264	264	that originate telephone calls), 562213, 56291, 56292, 611512,
265	265	927, or 92811.
266	266	2. A target of the state’s economic development efforts
267	267	pursuant to either of the following:
268	268	(i) The Accelerate Alabama Strategic Economic
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298	298	(i) The Accelerate Alabama Strategic Economic
299	299	Development Plan adopted in January 2012 by the Alabama
300	300	Economic Development Alliance, created by Executive Order
301	301	Number 21 of the Governor on July 18, 2011, or any amended
302	302	version or successor document thereto; or
303	303	(ii) A type listed in a regulation adopted by the
304	304	Department of Commerce, other than a regulation submitted as
305	305	an emergency rule.
306	306	Notwithstanding the foregoing, the activities described
307	307	in this definition shall not predominantly concern farming
308	308	activities involving trees, animals or crops, nor the retail
309	309	sale of tangible personal property or services. This provision
310	310	shall not be deemed to exclude customer service centers or
311	311	call centers otherwise allowed or provided for herein.
312	312	b. With respect to abatements granted in accordance
313	313	with Section 40-9B-9, and only with respect to such
314	314	abatements, "industrial or research enterprise" means any
315	315	trade or business described in NAICS Code 493, 488310, or
316	316	488320, when such trade or business is conducted on premises
317	317	in which the Alabama State Port Authority has an ownership,
318	318	leasehold, or other possessory interest and such premises are
319	319	used as part of the operations of the Alabama State Port
320	320	Authority.
321	321	c. "Industrial or research enterprise" includes the
322	322	above-described trades and business and any others as may
323	323	hereafter be reclassified in any subsequent publication of the
324	324	NAICS or similar industry classification system developed in
325	325	conjunction with the United States Department of Commerce or
326	326	Office of Management and Budget.
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356	356	Office of Management and Budget.
357	357	d. "Industrial or research enterprise" also includes
358	358	any underground natural gas storage facility which is located
359	359	in the Gulf Opportunity Zone, as that phrase is defined in the
360	360	Gulf Opportunity Zone Act of 2005, developed from existing
361	361	geologic reservoirs, including, without limitation, salt
362	362	domes, and placed in service on or before December 31, 2013.
363	363	e. "Industrial or research enterprise" also includes
364	364	any plant, property, or facility that meets both of the
365	365	following:
366	366	1. It produces electricity from:
367	367	(i) Alternative energy resources and has capital costs
368	368	of at least one hundred million dollars ($100,000,000); or
369	369	(ii) Hydropower production and has capital costs of at
370	370	least five million dollars ($5,000,000).
371	371	2. All or a portion of the plant, property, or facility
372	372	is owned by one or more of the following:
373	373	(i) A utility described in Section 37-4-1(7)a. ,
374	374	(ii) An entity organized under the provisions of
375	375	Chapter 6 of Title 37 ,.
376	376	(iii) An authority both organized and existing pursuant
377	377	to the provisions of Chapter 50A of Title 11 and subject to
378	378	the payments required to be made in lieu of ad valorem, sales,
379	379	use, license, and severance taxes imposed by Section 11-50A-7 ,
380	380	or.
381	381	(iv) An entity in which one or more of the foregoing
382	382	owns an interest.
383	383	f. "Industrial or research enterprise" also includes
384	384	any headquarters facility.
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414	414	any headquarters facility.
415	415	g. "Industrial or research enterprise" also includes
416	416	any data processing center.
417	417	h. "Industrial or research enterprise" also includes
418	418	any research and development facility.
419	419	i. "Industrial or research enterprise" also includes
420	420	any renewable energy facility.
421	421	j. "Industrial or research enterprise" also includes
422	422	any tourism destination attraction.
423	423	(11) MAJOR ADDITION. Any addition to an existing
424	424	industrial development property that equals the lesser of: 30
425	425	percent of the original cost of the industrial development
426	426	property or two million dollars ($2,000,000). For purposes of
427	427	this subsection, the original cost of existing industrial
428	428	development property shall be the amount of industrial
429	429	development property with respect to which an abatement was
430	430	granted under this chapter when the property was constructed,
431	431	or if the existing industrial development property was
432	432	constructed before January 1, 1993, the maximum amount that
433	433	would have been allowed if the provisions of this chapter had
434	434	applied at the time it was constructed. Only property that
435	435	constitutes industrial development property shall be taken
436	436	into account in making the determination in the previous
437	437	sentence. Major addition shall include any addition costing at
438	438	least two million dollars ($2,000,000) which constitutes an
439	439	industrial or research enterprise, regardless of whether added
440	440	to an existing industrial development property.
441	441	(12) MAXIMUM EXEMPTION PERIOD. Except as provided in
442	442	Section 40-9B-11, a period equal to the shorter of:
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472	472	Section 40-9B-11, a period equal to the shorter of:
473	473	a. Either of the following:
474	474	1. Twenty years from and after: (i) Thethe date of
475	475	initial issuance by a county, city, or public authority of
476	476	bonds to finance any costs of a private use property, or (ii)
477	477	Ifif no such bonds are ever issued ,; the later of: A. Thethe
478	478	date on which title to the property was acquired by or vested
479	479	in the county, city, or public authority ,; or B. Thethe date
480	480	on which the property is or becomes owned, for federal income
481	481	tax purposes, by a private user ; or.
482	482	2. Exclusively with respect to one or more private
483	483	users of a data processing center, the following:
484	484	(i) A period of 10 years from and after the date on
485	485	which private use property is or becomes owned, for federal
486	486	income tax purposes, by such private user or users (including
487	487	the lessor and any lessee with respect to co-location
488	488	centers), if the aggregate capital investment in the data
489	489	processing center by such private user or users does not
490	490	exceed two hundred million dollars ( $200,000,000) within 10
491	491	years from the date on which a private user commences the
492	492	acquisition, construction, and equipping of the data
493	493	processing center ,.
494	494	(ii) A period of 20 years from and after the date on
495	495	which private use property is or becomes owned, for federal
496	496	income tax purposes, by such private user or users (including
497	497	the lessor and any lessee with respect to co-location
498	498	centers), if the aggregate capital investment in the data
499	499	processing center by such private user or users exceeds two
500	500	hundred million dollars ($200,000,000) but is not greater than
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530	530	hundred million dollars ($200,000,000) but is not greater than
531	531	four hundred million dollars ( $400,000,000) within 10 years
532	532	from the date on which a private user commences the
533	533	acquisition, construction, and equipping of the data
534	534	processing center , or.
535	535	(iii) A period of 30 years from and after the date on
536	536	which private use property is or becomes owned, for federal
537	537	income tax purposes, by such private user or users (including
538	538	the lessor and any lessee with respect to co-location
539	539	centers), if the aggregate capital investment in the data
540	540	processing center by such private user or users exceeds two
541	541	hundred million dollars ($200,000,000) within 10 years from
542	542	the date on which a private user commences the physical work
543	543	of constructing and equipping the data processing center and
544	544	exceeds four hundred million dollars ( $400,000,000) within 20
545	545	years from the date on which a private user commences the
546	546	acquisition, construction, and equipping of the data
547	547	processing center.
548	548	For purposes of this subparagraph 2., a private user's
549	549	aggregate capital investment in a data processing center shall
550	550	include all real and personal property comprising a data
551	551	processing center, the costs of which may be capitalized for
552	552	federal income tax purposes. In no event shall abatements of
553	553	construction related transaction taxes or noneducational ad
554	554	valorem taxes granted for a data processing center apply
555	555	beyond the expiration of the applicable maximum exemption
556	556	period; or.
557	557	b. The period ending on the date on which the property
558	558	has ceased, for 6six consecutive months, to be used in the
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588	588	has ceased, for 6six consecutive months, to be used in the
589	589	active conduct of an industrial or research enterprise.
590	590	(13) MORTGAGE AND RECORDING TAXES. The taxes imposed by
591	591	Chapter 22 of this title.
592	592	(14) NAICS CODE. Any sector, subsector, industry group,
593	593	industry or national industry of the 20122022 North American
594	594	Industry Classification System, or any similar classification
595	595	system developed in conjunction with the United States
596	596	Department of Commerce or Office of Management and Budget.
597	597	(15) NONEDUCATIONAL AD VALOREM TAXES. Ad valorem taxes,
598	598	or payments required to be made in lieu thereof, imposed by
599	599	the state, counties, municipalities, and other taxing
600	600	jurisdictions of Alabama that are not required to be used for
601	601	educational purposes or for capital improvements for
602	602	education.
603	603	(16) PERSON. Includes any individual, partnership,
604	604	trust, estate, or corporation.
605	605	(17) PRIVATE USER. Any individual, partnership, or
606	606	corporation organized for profit that is or will be treated as
607	607	the owner of private use property for federal income tax
608	608	purposes, any entity organized under Chapter 6 of Title 37,
609	609	and any authority both organized and existing pursuant to
610	610	Chapter 50A of Title 11 and subject to the payments required
611	611	to be made in lieu of ad valorem, sales, use, license, and
612	612	severance taxes imposed by Section 11-50A-7.
613	613	(18) PRIVATE USE INDUSTRIAL PROPERTY. Private use
614	614	property that also constitutes industrial development
615	615	property.
616	616	(19) PRIVATE USE PROPERTY. Any real and/or personal
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646	646	(19) PRIVATE USE PROPERTY. Any real and/or personal
647	647	property which is or will be treated as owned by a private
648	648	user for federal income tax purposes even though title may be
649	649	held by a public authority or municipal or county government;
650	650	any real and/or personal property which is owned by any entity
651	651	organized under Chapter 6 of Title 37; and any real and/or
652	652	personal property which is owned by any authority both
653	653	organized and existing pursuant to Chapter 50A of Title 11,
654	654	and subject to the payments required to be made in lieu of ad
655	655	valorem, sales, use, license, and severance taxes imposed by
656	656	Section 11-50A-7.
657	657	(20) PUBLIC AUTHORITY. A corporation created for public
658	658	purposes pursuant to a provision of the Constitution of
659	659	Alabama of 19012022, or a general or local law that authorized
660	660	it to issue bonds, the interest on which is exempt from the
661	661	Alabama income tax, as in effect on May 21, 1992.
662	662	(21) PUBLIC INDUSTRIAL AUTHORITY. A public authority
663	663	authorized to issue bonds to acquire, construct, equip, or
664	664	finance industrial development property.
665	665	(22) RENEWABLE ENERGY FACILITY. Any plant, property, or
666	666	facility that either:
667	667	a. Produces electricity or natural gas, in whole or in
668	668	part, from biofuels as such term is defined in Section
669	669	2-2-90(c)(2) or from renewable energy resources as such term
670	670	is defined in Section 40-18-1(30) with the exception that
671	671	hydropower production shall be excluded from such definition;
672	672	or
673	673	b. Produces biofuel as such term is defined in Section
674	674	2-2-90(c)(2).
675	675	309
676	676	310
677	677	311
678	678	312
679	679	313
680	680	314
681	681	315
682	682	316
683	683	317
684	684	318
685	685	319
686	686	320
687	687	321
688	688	322
689	689	323
690	690	324
691	691	325
692	692	326
693	693	327
694	694	328
695	695	329
696	696	330
697	697	331
698	698	332
699	699	333
700	700	334
701	701	335
702	702	336 HB435 INTRODUCED
703	703	Page 13
704	704	2-2-90(c)(2).
705	705	(23) RESEARCH AND DEVELOPMENT FACILITY. An
706	706	establishment engaged in conducting original investigations
707	707	undertaken on a systematic basis to gain new knowledge or
708	708	applying research findings or other scientific knowledge to
709	709	create new or significantly improved products or processes, or
710	710	both.
711	711	(24) STATEMENT OF INTENT. A written statement of intent
712	712	to claim an abatement provided in this chapter, or to petition
713	713	for local tax abatement, relating to an industrial or research
714	714	enterprise described in paragraph e. of subdivision (10)e.of
715	715	this subsection that is filed with the Department of Revenue
716	716	at any time prior to the date on which the industrial or
717	717	research enterprise described in paragraph e. of subdivision
718	718	(10)e. of this subsection is placed in service in accordance
719	719	with such procedures and on such form or forms as may be
720	720	prescribed by the Department of Revenue. Such statement of
721	721	intent shall contain a description of the industrial or
722	722	research enterprise described in paragraph e. of subdivision
723	723	(10)e. of this subsection ; the date on which the acquisition,
724	724	construction, installation, or equipping of the industrial or
725	725	research enterprise described in paragraph e. of subdivision
726	726	(10)e. of this subsection was commenced or is expected to
727	727	commence; the actual or, if not known, the estimated capital
728	728	costs of the industrial or research enterprise described in
729	729	paragraph e. of subdivision (10)e. of this subsection ; the
730	730	number of new employees to be employed at the industrial or
731	731	research enterprise described in paragraph e. of subdivision
732	732	(10)e. of this subsection ; and any other information required
733	733	337
734	734	338
735	735	339
736	736	340
737	737	341
738	738	342
739	739	343
740	740	344
741	741	345
742	742	346
743	743	347
744	744	348
745	745	349
746	746	350
747	747	351
748	748	352
749	749	353
750	750	354
751	751	355
752	752	356
753	753	357
754	754	358
755	755	359
756	756	360
757	757	361
758	758	362
759	759	363
760	760	364 HB435 INTRODUCED
761	761	Page 14
762	762	(10)e. of this subsection ; and any other information required
763	763	by the Department of Revenue.
764	764	(25) TOURISM DESTINATION ATTRACTION. a. A commercial
765	765	enterprise which is open to the public not less than 120 days
766	766	during a calendar year and is designed to attract visitors
767	767	from inside or outside of the State of Alabama, typically for
768	768	its inherent cultural value, historical significance, natural
769	769	or man-made beauty, or entertainment or amusement
770	770	opportunities. The term shall include, but not be limited to,
771	771	a cultural or historical site; a botanical garden; a museum; a
772	772	wildlife park or aquarium open to the public that cares for
773	773	and displays a collection of animals or fish; an amusement
774	774	park; a convention hotel and conference center; a water park;
775	775	or a spectator venue or arena.
776	776	b. A tourism destination attraction shall not include a
777	777	facility primarily devoted to the retail sale of goods; a
778	778	shopping center; a restaurant; a movie theater; a bowling
779	779	alley; a fitness center; a miniature golf course; or a
780	780	nightclub. Provided, however, that the capital costs of the
781	781	construction of a tourism destination attraction may include
782	782	the capital costs associated with the construction of any
783	783	retail establishment, restaurant , or other portion of the
784	784	tourism destination attraction. The term also does not include
785	785	any gaming facility or establishment that the Secretary of the
786	786	Department of Commerce deems to be serving the local
787	787	community.
788	788	(b) The abatements of ad valorem taxes, and payments in
789	789	lieu thereof, allowed by amendments to this section by Act
790	790	2008-275 shall become effective for projects for which
791	791	365
792	792	366
793	793	367
794	794	368
795	795	369
796	796	370
797	797	371
798	798	372
799	799	373
800	800	374
801	801	375
802	802	376
803	803	377
804	804	378
805	805	379
806	806	380
807	807	381
808	808	382
809	809	383
810	810	384
811	811	385
812	812	386
813	813	387
814	814	388
815	815	389
816	816	390
817	817	391
818	818	392 HB435 INTRODUCED
819	819	Page 15
820	820	2008-275 shall become effective for projects for which
821	821	statements of intent are filed after December 31, 2011. No ad
822	822	valorem taxes, or payments in lieu thereof, shall be abated
823	823	for periods prior to January 1, 2012. The other abatements
824	824	allowed by amendments made to this section by Act 2008-275
825	825	shall become effective after December 31, 2011.
826	826	For a qualifying industrial or research enterprise
827	827	described in Section 40-9B-3(a)(10)j., the approval of the
828	828	abatement of a specified ad valorem tax or construction
829	829	related tax levied or imposed by a county or municipality, or
830	830	payments required to be made in lieu thereof, shall take
831	831	effect only upon adoption of a resolution by the governing
832	832	body of that county or municipality approving such abatement
833	833	or abatements."
834	834	"§40-9G-1
835	835	For purposes of the chapter, the following words and
836	836	phrases shall have the following meaningmeanings:
837	837	(1) APPROVED ACTIVITY. The conduct of an activity that
838	838	is predominantly any one or more of the following:
839	839	a. Described by NAICS Code 1133, 115111, 2121, 22111,
840	840	221330, 31 (other than 311811), 32, 33, 423, 424, 482, 4862,
841	841	48691, 48699, 48819, 4882, 4883 (other than 48833), 493, 511,
842	842	5121 (other than 51213), 512215122, 513, 517, 518 (without
843	843	regard to the premise that data processing and related
844	844	services be performed in conjunction with a third party),
845	845	5191351929, 52232, 54133 (if predominantly in furtherance of
846	846	another activity described in this chapter), 54134 (if
847	847	predominantly in furtherance of another activity described in
848	848	this chapter), 54138, 5415, 541614, 5417, 55 (if not for the
849	849	393
850	850	394
851	851	395
852	852	396
853	853	397
854	854	398
855	855	399
856	856	400
857	857	401
858	858	402
859	859	403
860	860	404
861	861	405
862	862	406
863	863	407
864	864	408
865	865	409
866	866	410
867	867	411
868	868	412
869	869	413
870	870	414
871	871	415
872	872	416
873	873	417
874	874	418
875	875	419
876	876	420 HB435 INTRODUCED
877	877	Page 16
878	878	this chapter), 54138, 5415, 541614, 5417, 55 (if not for the
879	879	production of electricity), 561422 (other than establishments
880	880	that originate telephone calls), 562213, 56291, 56292, 611512,
881	881	927, or 92811.
882	882	b. The production of biofuel as such term is defined in
883	883	Section 2-2-90(c)(2).
884	884	c. The conduct of original investigations undertaken on
885	885	a systematic basis to gain new knowledge or the application of
886	886	research findings or other scientific knowledge to create new
887	887	or significantly improved products or processes.
888	888	d. The national or regional headquarters for a company
889	889	that conducts significant business operations outside the
890	890	state and that will serve as the principal office of the
891	891	company's principal operating officer with chief
892	892	responsibility for the daily business operations of the
893	893	company.
894	894	e. A target of the state's economic development efforts
895	895	pursuant to either of the following:
896	896	(i) The Accelerate Alabama Strategic Economic
897	897	Development Plan adopted in January 2012 by the Alabama
898	898	Economic Development Alliance, created by Executive Order
899	899	Number 21 of the Governor on July 18, 2011, or any amended
900	900	version or successor document thereto; or
901	901	(ii) A type listed in a regulation adopted by the
902	902	Department of Commerce, other than a regulation submitted as
903	903	an emergency rule.
904	904	Notwithstanding the foregoing, an approved activity
905	905	shall not predominantly concern farming activities involving
906	906	trees, animals, or crops, nor the retail sale of tangible
907	907	421
908	908	422
909	909	423
910	910	424
911	911	425
912	912	426
913	913	427
914	914	428
915	915	429
916	916	430
917	917	431
918	918	432
919	919	433
920	920	434
921	921	435
922	922	436
923	923	437
924	924	438
925	925	439
926	926	440
927	927	441
928	928	442
929	929	443
930	930	444
931	931	445
932	932	446
933	933	447
934	934	448 HB435 INTRODUCED
935	935	Page 17
936	936	trees, animals, or crops, nor the retail sale of tangible
937	937	personal property or services. This provision shall not be
938	938	deemed to exclude customer service centers, call centers , or
939	939	headquarters otherwise allowed by this subdivision.
940	940	(2) COMPANY. Anyone or anything which has the powers to
941	941	own a project and have employees.
942	942	(3) NAICS CODE. Any sector, subsector, industry group,
943	943	industry or national industry of the 20122022 North American
944	944	Industry Classification System, or any similar classification
945	945	system developed in conjunction with the United States
946	946	Department of Commerce or Office of Management and Budget.
947	947	(4) QUALIFYING PROJECT. Any project a. that proposes to
948	948	invest in capital expenditures that equal or exceed two
949	949	million dollars ( $2,000,000) as part of any addition,
950	950	expansion, improvement, renovation, re-opening, or
951	951	rehabilitation of a facility, or replacement of any existing
952	952	equipment or tangible personal property; b. that predominantly
953	953	involves an approved activity; and c. for which no project
954	954	agreement has been entered into with the Governor for the
955	955	provision of other incentives.
956	956	(5) UTILITY TAXES. The taxes imposed by Sections
957	957	40-21-82 and 40-21-102."
958	958	"§40-18-372
959	959	A qualifying project must be found by the Secretary of
960	960	Commerce to conduct an activity specified in subdivision (1)
961	961	and to meet the minimum standard set forth in subdivision (2).
962	962	(1) A qualifying project must predominantly conduct an
963	963	activity that is any one or more of the following:
964	964	a. Described by NAICS Code 1133, 115111, 2121, 22111,
965	965	449
966	966	450
967	967	451
968	968	452
969	969	453
970	970	454
971	971	455
972	972	456
973	973	457
974	974	458
975	975	459
976	976	460
977	977	461
978	978	462
979	979	463
980	980	464
981	981	465
982	982	466
983	983	467
984	984	468
985	985	469
986	986	470
987	987	471
988	988	472
989	989	473
990	990	474
991	991	475
992	992	476 HB435 INTRODUCED
993	993	Page 18
994	994	a. Described by NAICS Code 1133, 115111, 2121, 22111,
995	995	221330, 31 (other than 311811), 32, 33, 423, 424, 482, 4862,
996	996	48691, 48699, 48819, 4882, 4883 (other than 48833), 493, 511,
997	997	5121 (other than 51213), 512215122, 513, 517, 518 (without
998	998	regard to the premise that data processing and related
999	999	services be performed in conjunction with a third party),
1000	1000	5191351929, 52232, 54133 (if predominantly in furtherance of
1001	1001	another activity described in this article), 54134 (if
1002	1002	predominantly in furtherance of another activity described in
1003	1003	this article), 54138, 5415, 541614, 5417, 55 (if not for the
1004	1004	production of electricity), 561422 (other than establishments
1005	1005	that originate telephone calls), 562213, 56291, 56292, 611512,
1006	1006	927, or 92811.
1007	1007	b. The production of biofuel as such term is defined in
1008	1008	Section 2-2-90(c)(2).
1009	1009	c. A renewable energy generation facility that is owned
1010	1010	by one or more electric providers, as the term is defined in
1011	1011	Section 37-16-3, for providing electric service at retail in
1012	1012	Alabama. For purposes of this subdivision, an "electric
1013	1013	provider" shall also include an authority as defined in
1014	1014	Section 11-50A-1. In the case of an electric provider that is
1015	1015	also a tax-exempt organization under the Internal Revenue
1016	1016	Code26 U.S.C. § 501, notwithstanding Section 40-18-376(b)(3),
1017	1017	any investment credit may be transferred for the entire term
1018	1018	of the project agreement, as approved by the Governor. A
1019	1019	"renewable energy generation facility" as used in this
1020	1020	subdivision shall include any tangible property that is part
1021	1021	of renewable energy generation, including any addition,
1022	1022	modification, expansion, or upgrade to transmission or
1023	1023	477
1024	1024	478
1025	1025	479
1026	1026	480
1027	1027	481
1028	1028	482
1029	1029	483
1030	1030	484
1031	1031	485
1032	1032	486
1033	1033	487
1034	1034	488
1035	1035	489
1036	1036	490
1037	1037	491
1038	1038	492
1039	1039	493
1040	1040	494
1041	1041	495
1042	1042	496
1043	1043	497
1044	1044	498
1045	1045	499
1046	1046	500
1047	1047	501
1048	1048	502
1049	1049	503
1050	1050	504 HB435 INTRODUCED
1051	1051	Page 19
1052	1052	modification, expansion, or upgrade to transmission or
1053	1053	distribution systems that is required to accommodate the
1054	1054	interconnection of renewable energy generation.
1055	1055	d. The conduct of original investigations undertaken on
1056	1056	a systematic basis to gain new knowledge or the application of
1057	1057	research findings or other scientific knowledge to create new
1058	1058	or significantly improved products or processes.
1059	1059	e. The national or regional headquarters for a company
1060	1060	that conducts significant business operations outside the
1061	1061	state and that will serve as the principal office of the
1062	1062	company’'s principal operating officer with chief
1063	1063	responsibility for the daily business operations of the
1064	1064	company.
1065	1065	f. A target of the state’s economic development efforts
1066	1066	pursuant to the Accelerate Alabama Strategic Economic
1067	1067	Development Plan adopted in January 2012 by the Alabama
1068	1068	Economic Development Alliance, created by Executive Order
1069	1069	Number 21 of the Governor on July 18, 2011, or any amended
1070	1070	version or successor document thereto.
1071	1071	g. A type listed in a rule adopted by the Department of
1072	1072	Commerce, other than an emergency rule.
1073	1073	Notwithstanding the foregoing, a qualifying project may
1074	1074	not engage predominantly in farming activities involving
1075	1075	trees, animals, or crops, and a qualifying project may not
1076	1076	engage predominantly in the retail sale of tangible personal
1077	1077	property or services, and may not be a shopping center,
1078	1078	restaurant, movie theater, bowling alley, fitness center,
1079	1079	miniature golf course, nightclub, gaming facility, or
1080	1080	establishment serving the local community. However, if the
1081	1081	505
1082	1082	506
1083	1083	507
1084	1084	508
1085	1085	509
1086	1086	510
1087	1087	511
1088	1088	512
1089	1089	513
1090	1090	514
1091	1091	515
1092	1092	516
1093	1093	517
1094	1094	518
1095	1095	519
1096	1096	520
1097	1097	521
1098	1098	522
1099	1099	523
1100	1100	524
1101	1101	525
1102	1102	526
1103	1103	527
1104	1104	528
1105	1105	529
1106	1106	530
1107	1107	531
1108	1108	532 HB435 INTRODUCED
1109	1109	Page 20
1110	1110	establishment serving the local community. However, if the
1111	1111	excluded activities are not the predominant activity at the
1112	1112	project, and if the project is otherwise a qualifying project,
1113	1113	then the project agreement may provide that the capital
1114	1114	investment may include costs related to excluded activities
1115	1115	that are ancillary to the primary business conducted as part
1116	1116	of the project. This provision shall not be deemed to exclude
1117	1117	customer service centers, call centers , or headquarters
1118	1118	otherwise allowed by this subdivision.
1119	1119	(2) A qualifying project shall create a significant
1120	1120	number of new jobs for the area in which the qualifying
1121	1121	project shall be located. Absent a finding of extraordinary
1122	1122	circumstances by the Secretary of Commerce, a qualifying
1123	1123	project shall employ either of the following number of new
1124	1124	employees:
1125	1125	a. Any number of new employees, for a qualifying
1126	1126	project in which the predominant activity involves chemical
1127	1127	manufacturing, data centers, renewable energy generation,
1128	1128	engineering, design, or research, metal/machining technology ,
1129	1129	or toolmaking; or
1130	1130	b. At least 50 new employees, for all other qualifying
1131	1131	projects."
1132	1132	"§41-23-252
1133	1133	For the purpose of this article, the following words
1134	1134	and phrases shall have the following meanings:
1135	1135	(1) ADECA. The Alabama Department of Economic and
1136	1136	Community Affairs.
1137	1137	(2) ALABAMA RESEARCH ENTITY. One or more of the
1138	1138	following:
1139	1139	533
1140	1140	534
1141	1141	535
1142	1142	536
1143	1143	537
1144	1144	538
1145	1145	539
1146	1146	540
1147	1147	541
1148	1148	542
1149	1149	543
1150	1150	544
1151	1151	545
1152	1152	546
1153	1153	547
1154	1154	548
1155	1155	549
1156	1156	550
1157	1157	551
1158	1158	552
1159	1159	553
1160	1160	554
1161	1161	555
1162	1162	556
1163	1163	557
1164	1164	558
1165	1165	559
1166	1166	560 HB435 INTRODUCED
1167	1167	Page 21
1168	1168	following:
1169	1169	a. A public or private university in the state in
1170	1170	partnership with a private sector applicant.
1171	1171	b. A university research foundation affiliated with a
1172	1172	public or private university in the state in partnership with
1173	1173	a private sector applicant.
1174	1174	c. A public two-year college in the state in
1175	1175	partnership with a private sector applicant.
1176	1176	d. A publicly owned hospital in the state in
1177	1177	partnership with a private sector applicant.
1178	1178	e. An entity duly formed, domiciled, or qualified to do
1179	1179	business in the state in partnership with a private sector
1180	1180	applicant and that meets each of the following criteria:
1181	1181	1. Is exempt from federal income tax under Section26
1182	1182	U.S.C. § 501(c)(3) of the Internal Revenue Code of 1986 , as
1183	1183	amended.
1184	1184	2. Is predominantly engaged in research and
1185	1185	non-commercialnoncommercial development activities undertaken
1186	1186	for the purpose of discovering information that is
1187	1187	technological or biotechnological in nature, involves a
1188	1188	process of experimentation, and the application of which is
1189	1189	intended to be used in the development of a new or improved
1190	1190	product, service, or treatment.
1191	1191	3. Has its headquarters and principal place of business
1192	1192	in the state.
1193	1193	4. Has, or is anticipated to have, at least 75 percent
1194	1194	of its property and payroll in Alabama, using the property and
1195	1195	payroll factor calculations found in Title 40.
1196	1196	(3) APPROVED ACTIVITY. The conduct of an activity that
1197	1197	561
1198	1198	562
1199	1199	563
1200	1200	564
1201	1201	565
1202	1202	566
1203	1203	567
1204	1204	568
1205	1205	569
1206	1206	570
1207	1207	571
1208	1208	572
1209	1209	573
1210	1210	574
1211	1211	575
1212	1212	576
1213	1213	577
1214	1214	578
1215	1215	579
1216	1216	580
1217	1217	581
1218	1218	582
1219	1219	583
1220	1220	584
1221	1221	585
1222	1222	586
1223	1223	587
1224	1224	588 HB435 INTRODUCED
1225	1225	Page 22
1226	1226	(3) APPROVED ACTIVITY. The conduct of an activity that
1227	1227	is predominantly any one or more of the following:
1228	1228	a. Described by NAICS Code 1133, 115111, 2121, 22111,
1229	1229	221330, 31 (other than 311811), 32, 33, 423, 424, 482, 4862,
1230	1230	48691, 48699, 48819, 4882, 4883 (other than 48833), 493, 511,
1231	1231	5121 (other than 51213), 5122151222, 513, 517, 518 (without
1232	1232	regard to the premise that data processing and related
1233	1233	services be performed in conjunction with a third party),
1234	1234	5191351929, 52232, 54133 (if predominantly in furtherance of
1235	1235	another activity described in this article), 54134 (if
1236	1236	predominantly in furtherance of another activity described in
1237	1237	this article), 54138, 5415, 541614, 5417, 55 (if not for the
1238	1238	production of electricity), 561422 (other than establishments
1239	1239	that originate telephone calls), 562213, 56291, 56292, 611512,
1240	1240	927, or 92811.
1241	1241	b. The production of biofuel as the term is defined in
1242	1242	Section 2-2-90(c)(2).
1243	1243	c. A target of the state's economic development efforts
1244	1244	pursuant to either of the following:
1245	1245	1. The Accelerate Alabama Strategic Economic
1246	1246	Development Plan adopted in January 2012 by the Alabama
1247	1247	Economic Development Alliance, created by Executive Order
1248	1248	Number 21 of the Governor on July 18, 2011, or any amended
1249	1249	version or successor document.
1250	1250	2. A type listed in a regulation adopted by the
1251	1251	Department of Commerce.
1252	1252	(4) NAICS CODE. Any sector, subsector, industry group,
1253	1253	industry, or national industry of the 20122022 North American
1254	1254	Industry Classification System, or any similar classification
1255	1255	589
1256	1256	590
1257	1257	591
1258	1258	592
1259	1259	593
1260	1260	594
1261	1261	595
1262	1262	596
1263	1263	597
1264	1264	598
1265	1265	599
1266	1266	600
1267	1267	601
1268	1268	602
1269	1269	603
1270	1270	604
1271	1271	605
1272	1272	606
1273	1273	607
1274	1274	608
1275	1275	609
1276	1276	610
1277	1277	611
1278	1278	612
1279	1279	613
1280	1280	614
1281	1281	615
1282	1282	616 HB435 INTRODUCED
1283	1283	Page 23
1284	1284	Industry Classification System, or any similar classification
1285	1285	system developed in conjunction with the United States
1286	1286	Department of Commerce or Office of Management and Budget.
1287	1287	(5) QUALIFIED RESEARCH. The meaning given in 26 U.S.C.
1288	1288	§ 41(d), if conducted in Alabama in pursuit of an approved
1289	1289	activity. In applying any terms in 26 U.S.C. § 41, "qualified
1290	1290	research" shall have the meaning given herein."
1291	1291	Section 2. This act shall become effective on June 1,
1292	1292	2025.
1293	1293	617
1294	1294	618
1295	1295	619
1296	1296	620
1297	1297	621
1298	1298	622
1299	1299	623
1300	1300	624