SB593 Alabama 2010 Session

Summary

Primary Sponsor

Hank Sanders

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

SB593 would create the Alabama New Markets Development Program, offering tax credits to investors in qualified active low-income community businesses, to be run by the Alabama Development Office.

What This Bill Does

Establishes a new program and allows tax credits for qualified equity investments or long‑term debt in qualified active low‑income community businesses for a defined period. The credit amount follows an eight-percent rate for the first four credit dates, then seven, six, and five percent for later dates, with an annual cap of $12 million in credits and a per‑business investment limit of $10 million. Credits are nonrefundable and transferable among pass‑through entities, but unused credits can be carried forward; there are recapture and forfeiture rules if job/payroll standards or investment requirements aren’t met, and the program is administered by the Alabama Development Office with an application process that includes a $5,000 nonrefundable fee.

Who It Affects

• Investors/taxpayers who purchase qualified equity investments or provide long‑term debt to qualified community development entities, as they would be eligible to claim tax credits (subject to caps, transfer rules, and potential recapture).
• Qualified active low‑income community businesses that receive qualifying investments or loans, as they would gain capital, must meet job and payroll standards and may be subject to certification, reporting, and compliance requirements to retain credits.

Key Provisions

• Creates the Alabama New Markets Development Program to provide tax credits for investments in qualified active low‑income community businesses and assigns administration to the Alabama Development Office.
• Defines applicable percentages for credits: 8% for each of the first four credit allowance dates, 7% for the fifth, 6% for the sixth, and 5% for the seventh.
• Imposes an annual cap of $12,000,000 in total tax credits and a per‑business cap of $10,000,000 in qualified investments (counted with affiliates).
• Credits are nonrefundable and may be allocated to partners or shareholders of pass‑through entities; credits can be carried forward if not used in a given year.
• Establishes eligibility criteria for qualified equity investments and qualified community development entities under IRS Section 45D; requires that at least 85% of cash purchase price be used for qualified low‑income investments within 12 months of issuance.
• Requires application to the department with a $5,000 nonrefundable fee; the department reviews and certifies qualified investments and sets job/payroll creation standards.
• Includes recapture and forfeiture provisions if federal credits are recaptured, if the issuer redeems principal early, or if the 85% reinvestment requirement isn’t met; imposes a 90‑day cure period for noticed deficiencies.
• Gives the Department of Revenue authority to recapture credits if conditions are not met and to conduct examinations; provides for rulemaking and advisory letters limited to specified facts.

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