HB160 Alabama 2012 Session

Updated Feb 27, 2026

Notable

Summary

Primary Sponsor: Barry Mask
Republican
Session: Regular Session 2012
Title: Economic Development, tax incentives for certain qualifying projects developing or expanding in state, job creation, retention component, Alabama Development Office and Finance Director to recommend to Governor to approve the project, Alabama Job Creation and Retention Act
Summary: HB160 creates the Alabama Job Creation and Retention Act to provide withholding tax incentives to qualifying companies for creating, expanding, or retaining jobs in Alabama, under Governor approval and state agency oversight.
What This Bill Does
It allows approved companies to retain a percentage of state income taxes withheld from eligible employees for qualifying projects. The Alabama Development Office and the Department of Revenue implement the program, with the Governor granting final approval based on written recommendations from the ADO Director and the Director of Finance. Incentives vary by project type and location (new/expansion vs. retention; favored vs. non-favored areas) and can range from 1% to 90% of withheld taxes, with a retention project range of 1% to 75%, for up to 20 years, and a cap that total incentives not exceed 100% of the project’s capital costs. The act includes quarterly reporting, potential audits, job retention requirements, and safeguards such as no debt guarantees and a prohibition on employment discrimination; an employee tax credit equals 100% of the incentives their employer retains.

Who It Affects
Approved companies (and their related companies) and their eligible employees who may receive withholding incentives based on project type, size, and location; they must enter a qualifying project agreement and meet minimum job creation/retention and capital investment requirements, with retention projects requiring ongoing employee retention for five years.
State and taxpayers, as the program relies on government approvals, revenue estimates, and caps to protect public finances; the act aims to be revenue-neutral, requires oversight and verification, and includes provisions that incentives cannot exceed capital costs or prejudice employee rights.

Key Provisions
Approval process: A company becomes an 'Approved Company' only after written recommendations from the ADO Director and the Director of Finance and explicit Governor approval; the Governor may consider criteria the state deems appropriate.
Incentive structure: For new/expansion projects, 1% to 90% of state income taxes withheld from eligible employees; for retention projects, 1% to 75%; geographic area and employee counts determine exact percentages; incentive period up to 20 years and total incentives capped at 100% of capital costs.
Employee credit: Eligible employees receive a state income tax credit equal to 100% of the withholding incentives retained by their employer.
Retention requirements: Retention projects must maintain at least 80% of the initial eligible employees (67% in favored areas) for five years; retention projects require approval from the State Industrial Development Authority.
Reporting and compliance: Approved companies must quarterly certify actual eligible employees and payroll; the Department of Revenue and Department of Industrial Relations verify and may audit for compliance.
Other safeguards: No debt guarantees; act is subject to repeal or modification if conflicts arise; effective immediately upon passage and Governor approval, contingent on constitutional amendment ratification; no racial discrimination in employment.

AI-generated summary using openai/gpt-5-nano on Feb 24, 2026. May contain errors — refer to the official bill text for accuracy.
Subjects: Economic Development