HB804 Alabama 2010 Session

Summary

Primary Sponsor

Richard Lindsey

Democrat

Session

Regular Session 2010

Title

New Markets Development Program, established, income tax credit for certain qualified active low-income community businesses, Alabama Development Office to implement

Summary

HB804 would create the Alabama New Markets Development Program, offering a state income tax credit for investments in qualified active low-income community businesses, administered by the Alabama Development Office.

What This Bill Does

It establishes a program that provides a state tax credit for qualified equity investments in eligible low-income community businesses for a defined period. The Alabama Development Office would certify eligible investments and allocate credits to taxpayers, with a $12 million annual cap and a $10 million aggregate investment limit per qualified business. Credits are nonrefundable and paid over seven credit allowance dates (8% for the first four dates, 7% for the fifth, 6% for the sixth, and 5% for the seventh). Investments must use at least 85% of the purchase price for qualified low-income investments in Alabama within 12 months, and there are recapture and forfeiture rules if job creation or reinvestment standards are not met.

Who It Affects

• Taxpayers subject to Alabama state taxes who invest in qualified equity investments and may claim the associated tax credits (subject to the $12 million annual cap).
• Qualified active low-income community businesses and the qualified community development entities that invest in them, including the Alabama Development Office's administration role and requirements for job/payroll standards and reporting.

Key Provisions

• Establishes the Alabama New Markets Development Act and the Alabama New Markets Development Program.
• Provides a state tax credit for qualified equity investments in qualified active low-income community businesses (QALICBs), with a $12,000,000 annual cap and a $10,000,000 per QALICB aggregate investment limit across affiliates.
• Credits are paid over seven credit allowance dates: 8% for the first four dates, 7% for the fifth date, 6% for the sixth date, and 5% for the seventh date.
• Investment must meet criteria including that 85% of the purchase price is used to make qualified low-income investments in Alabama within 12 months.
• Credit is nonrefundable, but may be allocated through pass-through entities and carried forward if not fully used in a year.
• The Department of the Alabama Development Office certifies eligible investments and sets eligibility, with a $5,000 nonrefundable application fee and a process for simultaneous receipt dates and proportional certification when multiple applications are received.
• There are recapture and forfeiture provisions: credits can be recaptured if federal credits are recaptured, if the issuer redeems or repays before the seventh anniversary, or if reinvestment standards are not met; forfeiture of 6th and 7th credit amounts if the standards are not met by the fifth anniversary.
• The Department of Revenue may conduct examinations and the departments will issue rules and advisory letters; certification and monitoring are tied to job/payroll creation standards set by the department.
• Effective date: immediate upon passage and governor approval.

AI-generated summary using openai/gpt-5-nano on Feb 25, 2026. May contain errors — refer to the official bill text for accuracy.

Subjects

New Markets Development Program