Ala. Code § 40-18-417 Short Title.
40-18-417. Short Title.
This article shall be known and may be cited as the Growing Alabama Act.
(Act 2021-2, §2.)
Growing Alabama Act
Ala. Code tit. 40, ch. 18, art. 19A
in effectAla. Code § 40-18-417.1 Definitions.
40-18-417.1. Definitions.
For the purposes of the Growing Alabama Act pursuant to this article, the following words and phrases have the following meanings:
(1) CAPITAL IMPROVEMENTS. Construction and rehabilitation expenses of a capital nature at an inland port or intermodal facility, the dredging of waterways in the immediate vicinity of an inland port, and the expansion of onsite storage facilities at an inland port or intermodal facility.
(2) ECONOMIC DEVELOPMENT ACTIVITIES. Activities and initiatives that enhance the use of, and flow of goods through, an inland port or intermodal facility.
(3) ECONOMIC DEVELOPMENT ORGANIZATION. A local economic development organization or a state economic development organization.
(4) GROWING ALABAMA CREDIT. The credit provided for in Section 40-18-417.4(a).
(5) INDUSTRY or BUSINESS. An entity that would conduct at a site an activity that is primarily described in Section 40-18-372(1).
(6) INLAND PORT. Any port on a navigable river away from traditional land, air, and coastal borders.
(7) INTERMODAL FACILITY. Any facility that interconnects two or more different modes of air, rail, or road traffic serving multiple customers, and which involves storage facilities.
(8) LOCAL ECONOMIC DEVELOPMENT ORGANIZATION. Organizations that are determined by the Department of Commerce to meet both of the following criteria:
a. The organization is an Alabama entity not operating for profit, including, but not limited to, a municipality or county, an industrial board or authority, a chamber of commerce, or some other foundation or Alabama nonprofit corporation charged with improving a community or region of the state.
b. The organization has a record of supporting or otherwise participating in economic development in some part of this state.
(9) RENEWAL OF ALABAMA COMMISSION. The Renewal of Alabama Commission created by Section 40-18-402.
(10) SITE. Real property owned by one or more local economic development organizations and intended for use by an industry or business.
(11) STATE ECONOMIC DEVELOPMENT ORGANIZATION. An organization that is determined by the Department of Commerce to be an Alabama entity not operating for profit which is charged with improving the state or a region of the state and has a record of supporting or otherwise participating in economic development in the state.
(Act 2021-2, §3; Act 2021-423, §3; Act 2023-34, §2; Act 2026-533, §1.)
Ala. Code § 40-18-417.2 Applications.
40-18-417.2. Applications.
(a)(1) A local economic development organization that owns a site, either solely or jointly with other local economic development organizations, may apply to the Department of Commerce for funding to solve an inadequacy involving the site. For sites with multiple owners, all owners shall submit a joint application as co-applicants. The application 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 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 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 investments that 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 each applicant or co-applicant 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).
(f) If the site is owned by one or more economic development organizations, the application provided in subsection (a) must be jointly submitted by all economic development organizations. Each co-applicant must submit the conflict of interest policy referred to in subsections (d) and (e).
(Act 2021-2, §4; Act 2023-34, §2; Act 2024-441, §1; Act 2026-533, §1.)
Ala. Code § 40-18-417.3 Approval of Applications; Agreements.
40-18-417.3. Approval of Applications; Agreements.
(a) Following a review, if the Department of Commerce approves the application provided in Section 40-18-417.2(a), it shall forward the application to the Renewal of Alabama Commission.
(b) The Renewal of Alabama Commission shall consider the application and shall approve it if the commission deems it worthy of approval. As to improvements at industrial sites, the commission shall give preference to sites with at least 1,000 acres of available space. As to applications for projects located in communities which have the potential to provide additional funding separate from the Growing Alabama Credits, the commission shall take into consideration whether the separate funding is to be provided to the project that is the subject of the application. Meetings of the commission are subject to Chapter 25A of Title 36. Notwithstanding the foregoing, the commission may meet by telephone or some other telecommunications device so long as members of the public are allowed the opportunity to listen to or otherwise observe the commission’s deliberations.
(c) The approval of an application by the commission shall specify the amount of money which the economic development organization is allowed to receive so that it can complete the work specified in the application.
(d) Following approval by the commission, the Department of Commerce shall enter into an agreement with all applicants or co-applicants. The agreement shall require all co-applicants to be jointly and severally liable for the proper disposition of funds and for the submission of all required reports and financial reviews. The agreement shall also do all of the following:
(1) Require the economic development organization to use funding received as a result of this law only for the purposes approved by the commission as expressed in the agreement.
(2) Require the economic development organization to make periodic reports, not more often than annually, to the Department of Commerce and the commission, as required by the commission, on the disposition of the funds. As to a project described in Section 40-18-417.2(a)(1), the report shall include information on the marketing of the site and the ultimate use of the site until such time as the economic development organization makes a final report. As to a project related to inland ports or intermodal facilities as described in Section 40-18-417.2(a)(1)d. or a project related to an agricultural center as described in Section 40-18-417.2(a)(2), the report shall include an economic impact report.
(3) Require the economic development organization to provide a review of its financial accounts as directed by the Renewal of Alabama Commission.
(e) For any approved applications, the Department of Commerce shall notify the Department of Revenue of the information specified in subsection (c).
(f) The Department of Commerce shall publish on its website a list of all approved applications and a list of the economic development organizations that made the approved applications.
(Act 2021-2, §5; Act 2023-34, §2; Act 2026-533, §1.)
Ala. Code § 40-18-417.4 Scope and Use of Growing Alabama Credits.
40-18-417.4. Scope and Use of Growing Alabama Credits.
(a) A taxpayer is allowed a Growing Alabama Credit to be applied against all of the following:
(1) To offset the income taxes levied in this chapter, or as an estimated tax payment of income taxes.
(2) To offset the state portion of the financial institution excise tax levied in Chapter 16.
(3) To offset the insurance premium tax levied by subsection (a) of Section 27-4A-3.
(4) To offset state license taxes levied by Article 2 of Chapter 21.
(b) In no event shall the Growing Alabama Credit cause a taxpayer’s tax liability to be reduced by more than 50 percent. Unused credits may be carried forward for no more than five years.
(c) Growing Alabama Credits shall be granted to taxpayers using an online system administered by the Department of Revenue. The online system shall allow taxpayers to agree to make a cash contribution to an economic development organization which was approved by the Renewal of Alabama Commission, as provided in Section 40-18-417.3. The online system shall ensure that credits are not granted for contributions to an economic development organization in excess of the amounts approved by the Renewal of Alabama Commission, as provided in Section 40-18-417.3.
(d) The cumulative amount of funding approved pursuant to this section shall not exceed twenty million dollars ($20,000,000) in a calendar year for calendar years ending prior to January 1, 2024, which amount shall increase to twenty-three million dollars ($23,000,000) for the calendar year ending December 31, 2024, twenty-six million dollars ($26,000,000) for the calendar year ending December 31, 2025, twenty-nine million dollars ($29,000,000) for the calendar year ending December 31, 2026, thirty-two million dollars ($32,000,000) for the calendar year ending December 31, 2027, and thirty-five million dollars ($35,000,000) for calendar year ending December 31, 2028.
(e) The Renewal of Alabama Commission shall reserve at least 25 percent of the amounts specified in subsection (d) for projects located in targeted or jumpstart counties as defined in Section 40-18-376.1. In the event applications are not received and credits are not allocated for projects in these areas by the close of the second quarter of the program year, the funds may revert for allocations of other project applications.
(f) To the extent that a Growing Alabama Credit is used by a taxpayer, the taxpayer shall not be allowed any deduction that would have otherwise been allowed for the taxpayer’s contribution. Credits may only be claimed by the donating taxpayer and may not be assigned or transferred to any other taxpayer. For purposes of this section, a donating taxpayer includes a taxpayer who is a shareholder of an Alabama S corporation or a partner or member of a subchapter K entity that made a contribution to an economic development organization which was approved by the Renewal of Alabama Commission.
(g) The Department of Finance shall adopt rules to ensure that the Growing Alabama Credit in no case would reduce the distribution for the Alabama Special Mental Health Trust Fund by using any unencumbered funds.
(Act 2021-2, §6; Act 2021-423, §4; Act 2023-34, §2; Act 2023-512, §1.)
Ala. Code § 40-18-417.5 Site Preparation or Public Infrastructure Work; Reports.
40-18-417.5. Site Preparation or Public Infrastructure Work; Reports.
(a) Upon receipt of funding provided by the tax credit process in Section 40-18-417.4, the economic development organization shall proceed with the work that was specified in the application required by Section 40-18-417.2.
(b)(1) As to a project described in subdivision (a)(1) of Section 40-18-417.2, the economic development organization shall report to the Department of Commerce upon the completion of the site preparation or public infrastructure work, upon the transfer of the site to an industry or business, and at other times as may be required or requested by the Department of Commerce.
(2) As to a project described in subdivision (a)(2) of Section 40-18-417.2, the economic development organization shall report to the Department of Commerce upon the completion of the work and at such times as may be required or requested by the Department of Commerce.
(c) The Department of Commerce shall make an annual report on the use of funds pursuant to Act 2021-2 to the Chair of the House Ways and Means Education Committee, the Chair of the Senate Finance and Taxation Education Committee, and the members of the Joint Legislative Advisory Committee on Economic Incentives established by Section 40-18-379, at the times, and in the manner, requested by the committee.
(Act 2021-2, §7.)
Ala. Code § 40-18-417.6 Forms; Construction of Article; Rulemaking Authority.
40-18-417.6. Forms; Construction of Article; Rulemaking Authority.
(a) All filings and applications made with any department of the state government shall be made using forms adopted by the department. The filing shall be treated as a tax return, subject to penalties imposed by the Department of Revenue.
(b) Nothing in this article shall be construed to constitute a guarantee or assumption by the state of any debt of any company nor to authorize the credit of the state to be given, pledged, or loaned to any company.
(c) Nothing in this article shall be construed to make available to any taxpayer any right to the benefits conferred by this article absent strict compliance with this article.
(d) Nothing in this article shall be construed to limit the powers otherwise existing for the Department of Revenue to audit and assess a taxpayer claiming the Growing Alabama Credit.
(e) Nothing in this article shall be construed to change or lessen the requirements for claiming jobs act incentives under the Alabama Jobs Act in Article 16 of Chapter 18. Companies claiming the jobs act incentives must strictly comply with Article 16 of Chapter 18.
(f) The Department of Commerce and Department of Revenue are authorized to adopt rules as necessary to implement and administer this article.
(Act 2021-2, §8.)
Ala. Code § 40-18-417.7 Availability of Credits.
40-18-417.7. Availability of Credits.
The Growing Alabama Credits provided in this article shall not be available for qualifying applicants as described in this article, for which applications are not approved on or prior to July 31, 2028, unless the Legislature enacts legislation to extend the date. This shall only affect the availability of credits for applications not approved on or prior to July 31, 2028, and shall not cause a reduction or suspension of any credits awarded on or prior to July 31, 2028.
(Act 2021-2, §9; Act 2023-34, §2.)
Ala. Code § 40-18-417.8 Claiming of Credit by Subsidiary of Parent or Holding Company in Certain Circumstances.
40-18-417.8. Claiming of Credit by Subsidiary of Parent or Holding Company in Certain Circumstances.
(a) Notwithstanding subsection (f) of Section 40-18-417.4, for tax years beginning on or after January 1, 2021, the credit issued to a parent or holding company may be claimed by the subsidiary, provided both parent or holding company and subsidiary are filing as part of an Alabama consolidated return.
(b) The Department of Revenue may adopt rules for the
implementation and administration of this section.
(Act 2023-313, §1.)
Ala. Code § 40-18-417.9 Applicability of the Enhancing Economic Progress Act to Service Territories for Electric Suppliers.
40-18-417.9. Applicability of the Enhancing Economic Progress Act to Service Territories for Electric Suppliers.
In no event does Act 2023-34 authorize any electric provider to provide retail electric service outside of its electric service territory as determined under the applicable provisions of Chapter 14 of Title 37. Nothing in Act 2023-34 is intended to amend, repeal, enlarge, or otherwise affect Chapter 14 of Title 37.
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(Act 2023-34, §3.)
Source: Alabama Legislature (alison.legislature.state.al.us)URL: https://alison.legislature.state.al.us/code-of-alabamaFetched: 10/20/2026