SB271 Alabama 2012 Session

Summary

Primary Sponsor

Cam Ward

Republican

Co-Sponsors

Gerald O. DialClay ScofieldPhillip W. WilliamsPaul BussmanGreg J. ReedScott BeasonDel MarshJ.T. WaggonerGerald H. AllenBryan Taylor

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

SB271 would create the Alabama Job Creation and Retention Act, letting the state award withholding tax incentives to approved companies for qualifying projects that create, expand, or retain jobs in Alabama.

What This Bill Does

The Alabama Development Office and the Director of Finance evaluate proposed qualifying projects and make a written recommendation to the Governor, who has final approval. If approved, the company signs a qualifying project agreement and may receive withholding incentives equal to a portion of the state income taxes withheld from eligible employees, with an overall cap equal to 100% of the project's capital costs. Incentive amounts depend on project type—1% to 90% for new or expansion projects, and 1% to 75% for retention projects—and can last up to 20 years. The act aims to be revenue-neutral and requires quarterly reporting and possible audits, with eligible employees receiving a personal tax credit equal to 100% of the incentives their employer retains.

Who It Affects

• Approved companies (and their related companies) that undertake qualifying projects in Alabama, who may receive withholding incentives after Governor approval and must meet minimum job and capital investment requirements and sign a qualifying project agreement; incentives can be recaptured if requirements aren’t met.
• Eligible employees at those companies, who would receive a state income tax credit equal to 100% of the withholding incentives the company retains from their wages.

Key Provisions

• Creates the Alabama Job Creation and Retention Act of 2012 and defines key terms (ADO, Approved Company, Qualifying Project, New/Expansion vs Retention Project, Capital Costs, Eligible Employees, Favored Geographic Area, etc.).
• Allows approved companies to retain a percentage of state income taxes withheld from eligible employees for qualifying projects; incentive percentages vary by project type (1%–90% for new/expansion; 1%–75% for retention).
• Sets a maximum total incentive of 100% of the capital costs of the qualifying project; the incentive period can be up to 20 years and is determined by the Governor with recommendations from the ADO Director and the Director of Finance.
• Requires minimum capital costs for retention projects ($2,000,000 outside favored areas; $500,000 in favored areas) and allows the Governor to determine if a project is new/expansion or retention as part of approval.
• Provides a personal tax credit to eligible employees equal to 100% of the withholding incentives paid to them by their employer.
• Requires quarterly reporting and verification of eligible employees and payroll; allows audits by the Department of Revenue; potential recapture if terms aren’t met.
• Authorizes rulemaking and forms by the ADO, Department of Revenue, and Department of Finance to implement the act; includes revenue-neutral intent and repeal of conflicting laws.
• Effective date contingent on passage, Governor’s approval, and constitutional amendment ratification; if the amendment is not ratified, the act becomes void.

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

Subjects

Economic Development