SB243INTRODUCED
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SB243
JPI9MFN-1
By Senator Weaver
RFD: Fiscal Responsibility and Economic Development
First Read: 18-Mar-25
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5 JPI9MFN-1 03/17/2025 KHF (F)KHF 2025-1292
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First Read: 18-Mar-25
SYNOPSIS:
Under existing law, the state has established research
and development corridors and grants as well as various tax
abatements and incentives that include references to the now
outdated Accelerate Alabama Strategic Economic Development
Plan. These laws also include references to the 2012 North
American Industry Classification System (NAICS) Codes used to
classify business establishments by industry sector.
This bill would remove references to the Accelerate
Alabama Strategic Economic Development Plan and align relevant
sections with the provisions of the Alabama Jobs Act.
This bill would also update NAICS Codes used to
classify business establishments by industry sector, bringing
them in line with the latest updates released in 2022.
A BILL
TO BE ENTITLED
AN ACT
Relating to economic development; to amend Sections
11-66A-2 and 41-23-252, regarding research and development
corridors and grants, and Sections 40-9B-3, 40-9G-1,
40-18-372, regarding tax abatements and incentives; to remove
references to the outdated Accelerate Alabama Strategic
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references to the outdated Accelerate Alabama Strategic
Economic Development Plan; and to update NAICS Code references
to the latest updated released in 2022.
BE IT ENACTED BY THE LEGISLATURE OF ALABAMA:
Section 1. Sections 11-66A-2, 40-9B-3, 40-9G-1,
40-18-372, and 41-23-252, Code of Alabama 1975, are amended as
follows:
"§11-66A-2
(a) The Legislature finds and determines the public
good, welfare, and economy of the state are best served by
providing and encouraging the development, growth,
improvement, and support of new and creative economic
opportunities for existing and future qualified enterprises to
establish and continue projects in this state for innovative
processes and products. These include specifically those
business sectors expressly identified in Accelerate Alabama
2.0, the strategic economic development plan developed by the
Department of Commerce.
(b) In furtherance of subsection (a) the legislative
intent and public purpose of this chapter is:
(1) To provide authority to municipalities for the
creation of research and development corridors with corporate
authority and power to provide, in the discretion of the
corridors, its resources; and
(2) To provide authority to public entities to provide
public resources to, or for the benefit of, corridors."
"§40-9B-3
(a) For purposes of this chapter, the following words
and phrases mean:
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and phrases mean:
(1) ABATE, ABATEMENT. A reduction or elimination of a
taxpayer's liability for tax or payments required to be made
in lieu thereof. An abatement of transaction taxes imposed
under Chapter 23 of this title, or payments required to be
made in lieu thereof, shall relieve the seller from the
obligation to collect and pay over the transaction tax as if
the sale were to a person exempt, to the extent of the
abatement, from the transaction tax.
(2) ALTERNATIVE ENERGY RESOURCES. The definition given
in Section 40-18-1.
(3) CONSTRUCTION RELATED TRANSACTION TAXES. The
transaction taxes imposed by Chapter 23 of this title, or
payments required to be made in lieu thereof, on tangible
personal property and taxable services incorporated into an
industrial development property, the cost of which may be
added to capital account with respect to the property,
determined without regard to any rule which permits
expenditures properly chargeable to capital account to be
treated as current expenses.
(4) DATA PROCESSING CENTER. An establishment at which
not less than 20 new jobs are located, the average annual
total compensation, including benefits, of such new jobs to be
not less than forty thousand dollars ($40,000) and such
establishment is engaged in the provision of complete
processing and specialized reports from data, the provision of
automated data processing and data entry services, the
provision of an infrastructure for hosting or data processing
services, the provision of specialized hosting activities, the
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services, the provision of specialized hosting activities, the
provision of application service provisioning, the provision
of general time-share mainframe facilities, the provision or
operation of computer equipment or enabling software for the
processing, storage, backup, retrieval, communication, or
distribution of data, or some combination of the foregoing,
without regard to whether any other activities are conducted
at the establishment.
(5) EDUCATION TAXES. Ad valorem taxes, or payments
required to be made in lieu thereof, that must, pursuant to
the Constitution of Alabama of 19012022, as amended,
legislative act, or the resolution or other action of the
governing board authorizing the tax, be used for educational
purposes or for capital improvements for education and local
construction related transaction taxes levied for educational
purposes or for capital improvements for education.
(6) HEADQUARTERS FACILITY. Any trade or business
described in NACIS Code 551114, at which not less than 50 new
jobs are located.
(7) HYDROPOWER PRODUCTION. The definition given in
Section 40-18-1.
(8) INDUCEMENT. Refers to an agreement, or an
"inducement agreement," entered into between a private user
and a public authority or county or municipal government
and/or a resolution or other official action, an "inducement
resolution," "inducement letter," or "official action" adopted
by a public authority or county or municipal government, in
each case expressing, among other things, the present intent
of such public authority or county or municipal government to
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of such public authority or county or municipal government to
issue bonds in connection with the private use property
therein described. Notwithstanding any provision in this
chapter to the contrary, neither an inducement nor a request
for inducement shall be required to apply for, grant, or
receive any abatement of taxes allowed to be abated under this
chapter.
(9) INDUSTRIAL DEVELOPMENT PROPERTY. Real and/or
personal property acquired in connection with establishing or
expanding an industrial or research enterprise in Alabama.
(10) INDUSTRIAL OR RESEARCH ENTERPRISE.
a. Any trade or business predominatelypredominantly
consisting of any one or more of the following:
1. 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), 512215122, 513, 517, 518 (without
regard to the premise that data processing and related
services be performed in conjunction with a third party),
5191351929, 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.
2. A target of the state’s economic development efforts
pursuant to either of the following:
(i) The Accelerate Alabama Strategic Economic
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(i) 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; or
(ii) A type listed in a regulation adopted by the
Department of Commerce, other than a regulation submitted as
an emergency rule.
Notwithstanding the foregoing, the activities described
in this definition shall not predominantly concern farming
activities involving trees, animals or crops, nor the retail
sale of tangible personal property or services. This provision
shall not be deemed to exclude customer service centers or
call centers otherwise allowed or provided for herein.
b. With respect to abatements granted in accordance
with Section 40-9B-9, and only with respect to such
abatements, "industrial or research enterprise" means any
trade or business described in NAICS Code 493, 488310, or
488320, when such trade or business is conducted on premises
in which the Alabama State Port Authority has an ownership,
leasehold, or other possessory interest and such premises are
used as part of the operations of the Alabama State Port
Authority.
c. "Industrial or research enterprise" includes the
above-described trades and business and any others as may
hereafter be reclassified in any subsequent publication of the
NAICS or similar industry classification system developed in
conjunction with the United States Department of Commerce or
Office of Management and Budget.
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Office of Management and Budget.
d. "Industrial or research enterprise" also includes
any underground natural gas storage facility which is located
in the Gulf Opportunity Zone, as that phrase is defined in the
Gulf Opportunity Zone Act of 2005, developed from existing
geologic reservoirs, including, without limitation, salt
domes, and placed in service on or before December 31, 2013.
e. "Industrial or research enterprise" also includes
any plant, property, or facility that meets both of the
following:
1. It produces electricity from:
(i) Alternative energy resources and has capital costs
of at least one hundred million dollars ($100,000,000); or
(ii) Hydropower production and has capital costs of at
least five million dollars ($5,000,000).
2. All or a portion of the plant, property, or facility
is owned by one or more of the following:
(i) A utility described in Section 37-4-1(7)a. ,
(ii) An entity organized under the provisions of
Chapter 6 of Title 37 ,.
(iii) An authority both organized and existing pursuant
to the provisions of Chapter 50A of Title 11 and subject to
the payments required to be made in lieu of ad valorem, sales,
use, license, and severance taxes imposed by Section 11-50A-7 ,
or.
(iv) An entity in which one or more of the foregoing
owns an interest.
f. "Industrial or research enterprise" also includes
any headquarters facility.
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any headquarters facility.
g. "Industrial or research enterprise" also includes
any data processing center.
h. "Industrial or research enterprise" also includes
any research and development facility.
i. "Industrial or research enterprise" also includes
any renewable energy facility.
j. "Industrial or research enterprise" also includes
any tourism destination attraction.
(11) MAJOR ADDITION. Any addition to an existing
industrial development property that equals the lesser of: 30
percent of the original cost of the industrial development
property or two million dollars ($2,000,000). For purposes of
this subsection, the original cost of existing industrial
development property shall be the amount of industrial
development property with respect to which an abatement was
granted under this chapter when the property was constructed,
or if the existing industrial development property was
constructed before January 1, 1993, the maximum amount that
would have been allowed if the provisions of this chapter had
applied at the time it was constructed. Only property that
constitutes industrial development property shall be taken
into account in making the determination in the previous
sentence. Major addition shall include any addition costing at
least two million dollars ($2,000,000) which constitutes an
industrial or research enterprise, regardless of whether added
to an existing industrial development property.
(12) MAXIMUM EXEMPTION PERIOD. Except as provided in
Section 40-9B-11, a period equal to the shorter of:
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Section 40-9B-11, a period equal to the shorter of:
a. Either of the following:
1. Twenty years from and after: (i) Thethe date of
initial issuance by a county, city, or public authority of
bonds to finance any costs of a private use property, or (ii)
Ifif no such bonds are ever issued ,; the later of: A. Thethe
date on which title to the property was acquired by or vested
in the county, city, or public authority ,; or B. Thethe date
on which the property is or becomes owned, for federal income
tax purposes, by a private user ; or.
2. Exclusively with respect to one or more private
users of a data processing center, the following:
(i) A period of 10 years from and after the date on
which private use property is or becomes owned, for federal
income tax purposes, by such private user or users (including
the lessor and any lessee with respect to co-location
centers), if the aggregate capital investment in the data
processing center by such private user or users does not
exceed two hundred million dollars ( $200,000,000) within 10
years from the date on which a private user commences the
acquisition, construction, and equipping of the data
processing center ,.
(ii) A period of 20 years from and after the date on
which private use property is or becomes owned, for federal
income tax purposes, by such private user or users (including
the lessor and any lessee with respect to co-location
centers), if the aggregate capital investment in the data
processing center by such private user or users exceeds two
hundred million dollars ($200,000,000) but is not greater than
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hundred million dollars ($200,000,000) but is not greater than
four hundred million dollars ( $400,000,000) within 10 years
from the date on which a private user commences the
acquisition, construction, and equipping of the data
processing center , or.
(iii) A period of 30 years from and after the date on
which private use property is or becomes owned, for federal
income tax purposes, by such private user or users (including
the lessor and any lessee with respect to co-location
centers), if the aggregate capital investment in the data
processing center by such private user or users exceeds two
hundred million dollars ($200,000,000) within 10 years from
the date on which a private user commences the physical work
of constructing and equipping the data processing center and
exceeds four hundred million dollars ( $400,000,000) within 20
years from the date on which a private user commences the
acquisition, construction, and equipping of the data
processing center.
For purposes of this subparagraph 2., a private user's
aggregate capital investment in a data processing center shall
include all real and personal property comprising a data
processing center, the costs of which may be capitalized for
federal income tax purposes. In no event shall abatements of
construction related transaction taxes or noneducational ad
valorem taxes granted for a data processing center apply
beyond the expiration of the applicable maximum exemption
period; or.
b. The period ending on the date on which the property
has ceased, for 6six consecutive months, to be used in the
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has ceased, for 6six consecutive months, to be used in the
active conduct of an industrial or research enterprise.
(13) MORTGAGE AND RECORDING TAXES. The taxes imposed by
Chapter 22 of this title.
(14) NAICS CODE. Any sector, subsector, industry group,
industry or national industry of the 20122022 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.
(15) NONEDUCATIONAL AD VALOREM TAXES. Ad valorem taxes,
or payments required to be made in lieu thereof, imposed by
the state, counties, municipalities, and other taxing
jurisdictions of Alabama that are not required to be used for
educational purposes or for capital improvements for
education.
(16) PERSON. Includes any individual, partnership,
trust, estate, or corporation.
(17) PRIVATE USER. Any individual, partnership, or
corporation organized for profit that is or will be treated as
the owner of private use property for federal income tax
purposes, any entity organized under Chapter 6 of Title 37,
and any authority both organized and existing pursuant to
Chapter 50A of Title 11 and subject to the payments required
to be made in lieu of ad valorem, sales, use, license, and
severance taxes imposed by Section 11-50A-7.
(18) PRIVATE USE INDUSTRIAL PROPERTY. Private use
property that also constitutes industrial development
property.
(19) PRIVATE USE PROPERTY. Any real and/or personal
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(19) PRIVATE USE PROPERTY. Any real and/or personal
property which is or will be treated as owned by a private
user for federal income tax purposes even though title may be
held by a public authority or municipal or county government;
any real and/or personal property which is owned by any entity
organized under Chapter 6 of Title 37; and any real and/or
personal property which is owned by any authority both
organized and existing pursuant to Chapter 50A of Title 11,
and subject to the payments required to be made in lieu of ad
valorem, sales, use, license, and severance taxes imposed by
Section 11-50A-7.
(20) PUBLIC AUTHORITY. A corporation created for public
purposes pursuant to a provision of the Constitution of
Alabama of 19012022, or a general or local law that authorized
it to issue bonds, the interest on which is exempt from the
Alabama income tax, as in effect on May 21, 1992.
(21) PUBLIC INDUSTRIAL AUTHORITY. A public authority
authorized to issue bonds to acquire, construct, equip, or
finance industrial development property.
(22) RENEWABLE ENERGY FACILITY. Any plant, property, or
facility that either:
a. Produces electricity or natural gas, in whole or in
part, from biofuels as such term is defined in Section
2-2-90(c)(2) or from renewable energy resources as such term
is defined in Section 40-18-1(30) with the exception that
hydropower production shall be excluded from such definition;
or
b. Produces biofuel as such term is defined in Section
2-2-90(c)(2).
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2-2-90(c)(2).
(23) RESEARCH AND DEVELOPMENT FACILITY. An
establishment engaged in conducting original investigations
undertaken on a systematic basis to gain new knowledge or
applying research findings or other scientific knowledge to
create new or significantly improved products or processes, or
both.
(24) STATEMENT OF INTENT. A written statement of intent
to claim an abatement provided in this chapter, or to petition
for local tax abatement, relating to an industrial or research
enterprise described in paragraph e. of subdivision (10)e.of
this subsection that is filed with the Department of Revenue
at any time prior to the date on which the industrial or
research enterprise described in paragraph e. of subdivision
(10)e. of this subsection is placed in service in accordance
with such procedures and on such form or forms as may be
prescribed by the Department of Revenue. Such statement of
intent shall contain a description of the industrial or
research enterprise described in paragraph e. of subdivision
(10)e. of this subsection ; the date on which the acquisition,
construction, installation, or equipping of the industrial or
research enterprise described in paragraph e. of subdivision
(10)e. of this subsection was commenced or is expected to
commence; the actual or, if not known, the estimated capital
costs of the industrial or research enterprise described in
paragraph e. of subdivision (10)e. of this subsection ; the
number of new employees to be employed at the industrial or
research enterprise described in paragraph e. of subdivision
(10)e. of this subsection ; and any other information required
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(10)e. of this subsection ; and any other information required
by the Department of Revenue.
(25) TOURISM DESTINATION ATTRACTION. a. 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. The term shall include, but not be 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.
b. A tourism destination attraction shall not include a
facility primarily devoted to the retail sale of goods; a
shopping center; a restaurant; a movie theater; a bowling
alley; a fitness center; a miniature golf course; or a
nightclub. Provided, however, that the capital costs of the
construction of a tourism destination attraction may include
the capital costs associated with the construction of any
retail establishment, restaurant , or other portion of the
tourism destination attraction. The term also does not include
any gaming facility or establishment that the Secretary of the
Department of Commerce deems to be serving the local
community.
(b) The abatements of ad valorem taxes, and payments in
lieu thereof, allowed by amendments to this section by Act
2008-275 shall become effective for projects for which
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2008-275 shall become effective for projects for which
statements of intent are filed after December 31, 2011. No ad
valorem taxes, or payments in lieu thereof, shall be abated
for periods prior to January 1, 2012. The other abatements
allowed by amendments made to this section by Act 2008-275
shall become effective after December 31, 2011.
For a qualifying industrial or research enterprise
described in Section 40-9B-3(a)(10)j., the approval of the
abatement of a specified ad valorem tax or construction
related tax levied or imposed by a county or municipality, or
payments required to be made in lieu thereof, shall take
effect only upon adoption of a resolution by the governing
body of that county or municipality approving such abatement
or abatements."
"§40-9G-1
For purposes of the chapter, the following words and
phrases shall have the following meaningmeanings:
(1) APPROVED ACTIVITY. The conduct of an activity that
is predominantly 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), 512215122, 513, 517, 518 (without
regard to the premise that data processing and related
services be performed in conjunction with a third party),
5191351929, 52232, 54133 (if predominantly in furtherance of
another activity described in this chapter), 54134 (if
predominantly in furtherance of another activity described in
this chapter), 54138, 5415, 541614, 5417, 55 (if not for the
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this chapter), 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. 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 new
or significantly improved products or processes.
d. 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. A target of the state's economic development efforts
pursuant to either of the following:
(i) 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; or
(ii) A type listed in a regulation adopted by the
Department of Commerce, other than a regulation submitted as
an emergency rule.
Notwithstanding the foregoing, an approved activity
shall not predominantly concern farming activities involving
trees, animals, or crops, nor the retail sale of tangible
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trees, animals, or crops, nor the retail sale of tangible
personal property or services. This provision shall not be
deemed to exclude customer service centers, call centers , or
headquarters otherwise allowed by this subdivision.
(2) COMPANY. Anyone or anything which has the powers to
own a project and have employees.
(3) NAICS CODE. Any sector, subsector, industry group,
industry or national industry of the 20122022 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.
(4) QUALIFYING PROJECT. Any project a. that proposes to
invest in capital expenditures that equal or exceed two
million dollars ( $2,000,000) as part of any addition,
expansion, improvement, renovation, re-opening, or
rehabilitation of a facility, or replacement of any existing
equipment or tangible personal property; b. that predominantly
involves an approved activity; and c. for which no project
agreement has been entered into with the Governor for the
provision of other incentives.
(5) UTILITY TAXES. The taxes imposed by Sections
40-21-82 and 40-21-102."
"§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,
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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), 512215122, 513, 517, 518 (without
regard to the premise that data processing and related
services be performed in conjunction with a third party),
5191351929, 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 the term is defined in
Section 37-16-3, 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. In the case of an electric provider that is
also a tax-exempt organization under the Internal Revenue
Code26 U.S.C. § 501, 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
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modification, expansion, or upgrade to transmission or
distribution systems that is required to accommodate the
interconnection of renewable energy generation.
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 new
or significantly improved products or processes.
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.
f. 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. A type listed in a rule adopted by the Department of
Commerce, other than an emergency rule.
Notwithstanding the foregoing, a qualifying project may
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 the
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establishment serving the local community. However, if the
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.
(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."
"§41-23-252
For the purpose of this article, the following words
and phrases shall have the following meanings:
(1) ADECA. The Alabama Department of Economic and
Community Affairs.
(2) ALABAMA RESEARCH ENTITY. One or more of the
following:
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following:
a. A public or private university in the state in
partnership with a private sector applicant.
b. A university research foundation affiliated with a
public or private university in the state in partnership with
a private sector applicant.
c. A public two-year college in the state in
partnership with a private sector applicant.
d. A publicly owned hospital in the state in
partnership with a private sector applicant.
e. An entity duly formed, domiciled, or qualified to do
business in the state in partnership with a private sector
applicant and that meets each of the following criteria:
1. Is exempt from federal income tax under Section26
U.S.C. § 501(c)(3) of the Internal Revenue Code of 1986 , as
amended.
2. Is predominantly engaged in research and
non-commercialnoncommercial development activities undertaken
for the purpose of discovering information that is
technological or biotechnological in nature, involves a
process of experimentation, and the application of which is
intended to be used in the development of a new or improved
product, service, or treatment.
3. Has its headquarters and principal place of business
in the state.
4. Has, or is anticipated to have, at least 75 percent
of its property and payroll in Alabama, using the property and
payroll factor calculations found in Title 40.
(3) APPROVED ACTIVITY. The conduct of an activity that
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(3) APPROVED ACTIVITY. The conduct of an activity that
is predominantly 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), 5122151222, 513, 517, 518 (without
regard to the premise that data processing and related
services be performed in conjunction with a third party),
5191351929, 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 the term is defined in
Section 2-2-90(c)(2).
c. A target of the state's economic development efforts
pursuant to either of the following:
1. 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.
2. A type listed in a regulation adopted by the
Department of Commerce.
(4) NAICS CODE. Any sector, subsector, industry group,
industry, or national industry of the 20122022 North American
Industry Classification System, or any similar classification
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Industry Classification System, or any similar classification
system developed in conjunction with the United States
Department of Commerce or Office of Management and Budget.
(5) QUALIFIED RESEARCH. The meaning given in 26 U.S.C.
§ 41(d), if conducted in Alabama in pursuit of an approved
activity. In applying any terms in 26 U.S.C. § 41, "qualified
research" shall have the meaning given herein."
Section 2. This act shall become effective on June 1,
2025.
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