Tax Credit for Use of Port Facilities.

Ala. Code tit. 40, ch. 18, art. 18

in effect

Ala. Code § 40-18-400 Definitions.

40-18-400. Definitions. For the purposes of this article, the following words and phrases shall have the following meanings: (1) BASE CARGO VOLUME. The greater of the following: a. One hundred five percent of the cargo volume of a port facility user in the 12-month period immediately preceding the application. b. Ten TEUs for cargo measured by TEU, 75 net tons for cargo measured by net ton, or 400 VEUs for cargo measured by VEU. (2) CARGO VOLUME. The total amount of noncontainerized general cargo or containers, measured in TEUs, in net tons, in kilograms, or in VEUs transported by way of a waterborne ship, air cargo aircraft, or railroad through a port facility; provided that such cargo shall be owned by the port facility user at the time the port facility is used. (3) COMMISSION. The Renewal of Alabama Commission created by Section 40-18-402. (4) COMPANY. Anyone or anything which has the powers to conduct the activities required to claim the port credit. (5) INLAND PORTS. Physical sites located away from traditional land, air, and coastal borders with the vision to facilitate and process international and domestic trade through strategic investment in multi-modal transportation assets and by promoting value-added services as goods move through the supply chain. (6) PORT FACILITY. Any type of deep draft ship terminal facility located within this state’s ports of entry, including publicly owned inland ports, through which cargo is transported by way of a waterborne ship, air cargo aircraft, or railroad, to or from destinations inside or outside this state and which handles cargo owned by third parties in addition to cargo owned by the port facility’s owner. (7) PORT CREDIT. The credit provided for in Section 40-18-403. (8) PORT FACILITY USER. A company engaged in manufacturing, warehousing, or distribution which uses a port facility. (9) TEU. A “20-foot equivalent unit” volumetric measure based on the size of a container 20 feet long by eight feet wide by eight feet, six inches high. (10) VEHICLE. Any motorized vehicle as defined in Section 32-1-1.1. (11) VEU. A “Vehicle Equivalent Unit” volumetric measure of one cubic meter. (Act 2016-102, p. 148, §2; Act 2021-2, §1.)

Ala. Code § 40-18-401 Applications; Construction of Article.

40-18-401. Applications; Construction of Article. (a) The port credit provided for in Section 40-18-403 is created by this article and is allowed upon strict compliance with the provisions herein. (b) Prior to the allowance of the port credit, an application shall be filed with the commission, on a form promulgated by the commission. (1) The application shall be filed by the port facility user desiring to claim the credit. (2) The commission shall establish deadlines for applications. Such applications shall solicit whatever information the commission deems important to its determination of whether granting a port credit will create new, high paying jobs in the state, bring substantial capital to the state, increase the usage of a port facility, promote the development of clusters of businesses in the state, or promote the economic development efforts of the state. (3) Upon review of the applications, the commission may approve such applications as shall result in port credits being awarded so as not to exceed twelve million dollars ($12,000,000) for the life of the program, and shall not exceed five million dollars ($5,000,000) in a fiscal year. (4) The commission shall charge application fees to offset the costs of administration of this article. (c) Prior to claiming a port credit, the company shall submit to the Department of Commerce a certification containing information adequate to prove that the company is entitled to the credit. Following such examination as it deems necessary, the Department of Commerce may certify the information and deliver the same to the Department of Revenue. Thereafter, the Department of Revenue shall allow the tax credit. (d)(1) 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. (2) Nothing in this article shall be construed to make available to any company any right to the benefits conferred by this article absent strict compliance with this article. (3) Nothing in this article shall be construed to change or lessen the requirements for claiming jobs act incentives under the Alabama Jobs Act, Section 40-18-370, et seq. Companies claiming the jobs act incentives must strictly comply with the Alabama Jobs Act. (4) All filings made by a private party with the commission or any department of state government shall be made using forms adopted by the commission or department. Any such filing shall be treated as a tax return, subject to penalties imposed by the Department of Revenue. (5) Nothing in this article shall be construed to limit the powers otherwise existing for the Department of Revenue to audit and assess any company claiming a port credit. (Act 2016-102, §2.)

Ala. Code § 40-18-402 Renewal of Alabama Commission.

40-18-402. Renewal of Alabama Commission. (a) There is hereby created the Renewal of Alabama Commission. (b) The commission shall be comprised of all of the following persons: (1) The Director of Finance, or his or her designee. (2) The Secretary of Commerce, or his or her designee. (3) The Chair of the House Ways and Means Education Committee, or its successor committee, if any, or his or her designee. (4) The Chair of the Senate Finance and Taxation Education Committee, or its successor committee, if any, or his or her designee. (5) Three persons appointed by the Governor, at least one of whom shall be a resident of an area of the state the source of whose primary power supply is the Tennessee Valley Authority or its lawfully authorized distributor. (6) One person appointed by the Speaker of the House, who shall be an employee, board member, or trustee of an Alabama public community college or four-year institution of higher education. (7) One person appointed by the President Pro Tempore of the Senate, who shall be an employee or a board member of an Alabama public school system providing K-12 education. (c) All persons appointed to the commission shall have one or more of the following qualifications: (1) Members must be knowledgeable in the management of money and finance. (2) Members must have experience in international trade. (3) Members must have experience as chief executive officers, chief financial officers, or other executive level management roles in businesses in this state which employ Alabama residents. (d) (1) All appointing authorities shall coordinate their appointments so that diversity of gender, race, and geographical areas are reflective of the makeup of the state. (2) No person appointed to the commission shall serve a term longer than four years. Persons may serve consecutive subsequent four-year terms. (e) The Secretary of Commerce, or his or her designee, shall be the chair of the commission and shall preside over all meetings of the commission. The commission may elect such other officers as it may find necessary or desirable. The commission shall have a board secretary to keep minutes of its proceedings. No officer of the commission other than the chair need be a member of the commission. (f) No member of the commission shall vote or participate in any matter in which the member or a family member of the member has any financial gain or interest. (g) Members of the commission shall serve without compensation. (h) The commission shall meet at the call of the chair or any majority of members thereof at least two times annually. (i) The commission shall adopt its own rules of procedure for the transaction of its business, and a majority of the members present shall constitute a quorum for the purpose of transacting or performing authorized duties. Meetings of the commission are subject to Chapter 25A of Title 36. In order to balance the privacy needs of companies with openness to the public, the commission may use code names in its deliberations about various applicants and in the minutes of its proceedings. (j) The Department of Commerce shall provide administrative and staffing support for the commission. The Department of Revenue shall disclose to the commission whatever information it may possess which would allow the commission to fulfill this article. The information shall only be disclosed and discussed in a closed session. The Department of Revenue may require members of the commission to execute confidentiality agreements before the disclosure of information. (k) The commission shall make an annual report on the use of funds pursuant to this article. Such report shall be made 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. Any publicly available version of the report may redact information which the Department of Commerce believes would place the state at a competitive disadvantage. (l) The commission and the Department of Commerce and Department of Revenue are authorized to adopt rules as necessary to implement and administer this article and Article 19. (m) Members of the commission shall be public officials for purposes of the ethics laws in Chapter 25 of Title 36. (Act 2016-102, §2.)

Ala. Code § 40-18-403 Port Credits.

40-18-403. Port Credits. (a) If approved by the commission, a port credit is allowed, in an amount equal to the cargo volume calculated from subdivisions (1) and (2) as follows multiplied by the appropriate amount shown in the table in subsection (b): (1) The port user’s cargo volume in the 12-month period for which the commission has granted approval for the port user to claim the port credit, minus (2) The port user’s base cargo volume. (b) Port credit amount. Increase in cargo volume over base cargo volume | TEU | Net Ton | Kilogram for Air Freight | VEU Under 4.99 percent | $50 | $3 | $0.04 | $2.91 5 to 14.99 percent | $75 | $4.5 | $0.06 | $4.37 15 to 24.99 percent | $100 | $6 | $0.08 | $5.82 25 percent or greater | $125 | $7.5 | $0.1 | $7.28 (c) The commission shall decrease the amount of the port credit to ensure that the anticipated revenues for the port facility and state will exceed the amount of the port credit sought. The port credit may be conditioned on whatever requirements the commission shall impose. The port credits shall only be available to the extent that a port facility user ships more than 105 percent of its cargo volume from the 12-month period immediately preceding the port facility user’s application. Moreover, the port credit shall only be available to the extent a port facility user ships more than 10 TEUs, for cargo measured by TEU, more than 75 net tons, for cargo measured by net ton, more than fifteen thousand (15,000) kilograms for air cargo measured by kilograms, or more than 400 VEUs, for cargo measured by VEU. (d) The following methods may be used to realize the port credit: (1) The port credit may offset the tax levied by this chapter, but not below zero. The port credit may also offset the estimated payments of the tax levied by this chapter, but not below zero. In no event shall the port credits be allowed to reduce any estimated payment of the tax levied by this chapter before October 1, 2016. In any one year, if the port credit exceeds the amount of tax liability, the port user may carry forward the unused port credit. No carryforward shall be allowed for more than five years. Rules similar to those used for Section 40-18-15.2 shall be applied. (2) A company may assign and convey a port credit to another company if substantially all of the assets of the company are assigned and conveyed in the same transaction. Proof of such transfer shall be submitted to the Department of Revenue. (e) To the extent that the port credit is utilized by the port user or by a transferee company, no deduction for the related expenses shall be allowed. (f) For any company that enters into an economic development project agreement with the state, the project agreement may provide for an allocation to the company of any port credits that have not been allocated pursuant to this article. Allocations made pursuant to this subsection shall meet all of the following requirements: (1) Allocations shall be made by the Governor and approved by the commission. (2) Allocations for a project shall not exceed three million dollars ($3,000,000). (3) Allocations shall be granted only to a new warehouse or distribution facility that commits to investing at least twenty million dollars ($20,000,000) at a single site and to creating 75 net new jobs in Alabama. (4) Port credits may not be used until the Department of Commerce has received satisfactory proof that the capital investment and job creation requirements have been satisfied. (5) Any port credit granted by this procedure shall not be granted for more than a 3-year period. (6) Allocations shall not exceed the per unit amounts stated in subsection (b). (7) Anticipated revenues for the state shall exceed the port credit granted, and the project agreement shall provide for recapture of all or part of the port credit should the company default on its obligations in the project agreement. (Act 2016-102, p. 148, §2; Act 2021-2, §1; Act 2023-419, §1.)

Source: Alabama Legislature (alison.legislature.state.al.us)URL: https://alison.legislature.state.al.us/code-of-alabamaFetched: 10/20/2026