SB242 Alabama 2010 Session

Summary

Primary Sponsor

Bobby D. SingletonSenator

Democrat

Session

Regular Session 2010

Title

Tourism, economic incentives for development and promotion of, Alabama Tourism Development Finance Authority established, allowable sales tax formula established, Alabama Tourism Development Act

Summary

The bill creates a state authority to provide incentives and support for developing and promoting tourism attractions in Alabama, including sales tax refunds for approved projects.

What This Bill Does

It establishes the Alabama Tourism Development Finance Authority within the Bureau of Tourism and Travel to review, approve, and finance tourism attraction projects. It authorizes sales tax refunds (inducements) for eligible projects, with a 10-year term and a cap of 25% of approved costs, using a scheduled refund based on costs and actual tax liability. It requires independent econometric analysis showing a net positive impact on the state, sets project thresholds and performance criteria (e.g., cost over $1 million, at least 35% non-resident visitors), and imposes reporting, compliance, and enforcement measures, including potential refunds clawbacks and penalties for noncompliance. It also restricts gambling-related activities and outlines the approval process, extension options, and operational requirements for projects.

Who It Affects

• Approved companies (and their lessees): may receive a 10-year sales tax refund and other incentives for a tourism attraction project, but must meet standards, provide data, undergo audits, and face penalties or clawbacks if they fail to comply.
• State and local governments and taxpayers: potential changes to state and local revenues due to sales tax refunds and infrastructure spending, with oversight by the Department of Revenue, Bureau of Tourism and Travel, and the new Authority.

Key Provisions

• Section creates the Alabama Tourism Development Finance Authority within the Bureau of Tourism and Travel; seven resident members representing state offices, with a chair from Finance, and reimbursement for expenses; five-member voting requirement for actions.
• Defines key terms: Approved Company, Eligible Company, Approved Costs, Tourism Attraction, Entertainment Destination Center, Theme Restaurant Destination Attraction, and Tourism Attraction.
• Inducement (sales tax refund) program: eligible projects may receive tax refunds for up to 10 years, capped at 25% of approved costs, with annual refunds based on a schedule (first 5 years: up to 2.5% of costs or 50% of actual tax liability; years 6-7: up to 2.5% or 75% of liability; years 8-10: up to 2.5% or 100% of liability). Refunds not accruing interest and subject to a cap over 10 years.
• Public infrastructure and restrictions: refunds may be tied to public infrastructure needs related to the project; certain types of projects (e.g., retail malls, purely recreational facilities, or non-tourism-focused lodging) are restricted or limited.
• Approval process and standards: Bureau of Tourism and Travel sets standards; independent econometric consultant analyzes whether the project meets criteria (e.g., attracts at least 35% non-resident visitors, costs >$1,000,000, operational days at least 100 per year, positive net state impact). Final approval rests with the Authority and is final with no appeal.
• Extension and cost verification: extensions up to three years may be granted for certain projects (not exceeding six years from final approval), with conditions including spending requirements and a fixed scope; costs must be verified by independent CPA within three months after completion.
• Reporting and compliance: approved companies must periodically certify compliance, with annual reports and Department of Revenue audits; noncompliance leads to partial refunds, clawbacks, penalties, and a priority lien for recovery.
• Other requirements and restrictions: no use of eminent domain for projects; gambling and gaming activities are not authorized; public hearings are required for preliminary approvals; the act becomes effective after local government approval in the affected area and approval by the Governor.

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

Subjects

Tourism