SB253 Alabama 2017 Session

Summary

Primary Sponsor

Clay Scofield

Republican

Session

Regular Session 2017

Title

Alabama Renewal Act, new qualified broadband telecommunication network facilities, provided for, nonrefundable, transferable income tax credit, provided for, certain exemptions provided for, certain earned, unused credits, authorized to be carried forward, process for claiming and transferring credit and exemptions provided for, act repealed following close of certain fiscal year, Sec. 40-18-415.1 added; Sec. 40-18-416 am'd.

Summary

The bill would expand the Alabama Renewal Act to reward private broadband investment in rural areas with a 10% transferable income tax credit, a 10-year property tax exemption, and a sales tax exemption for equipment, plus local-approval requirements and a sunset repeal after fiscal year 2025.

What This Bill Does

Creates a new qualified broadband network facilities category and defines rural areas. Provides a nonrefundable, transferable income tax credit equal to 10% of new investment in these facilities, plus a 10-year ad valorem tax exemption and a sales/use tax exemption for related equipment. Caps total credits at 20 million dollars per year (18 million for rural projects, 2 million for others) and sets per-taxpayer limits (750,000 dollars for 10/1 speed tiers, 1.4 million dollars for 25/3 speed tiers). Allows credit and exemptions to be carried forward up to 19 years and transferred to other taxpayers, with a formal certification and transfer process involving state agencies. Requires local governments to approve county/municipal exemptions within 60 days, and ties credits/exemptions to the operator rather than contractors. Establishes a sunset repeal after fiscal year 2025, with conditions, and creates a certification pathway through the Department of Agriculture and Industries and the Department of Revenue.

Who It Affects

• Operators (entities operating qualified broadband network facilities): eligible to claim the 10% income tax credit and 10-year tax exemptions, subject to caps and transfer rules.
• Parent companies or majority-owned subsidiaries of operators: eligible to claim the credits on behalf of the operator via pass-through if the investment qualifies, with transfer and certification mechanisms.
• Contractors, vendors, and service providers: generally cannot claim credits or exemptions, but may be eligible for refunds of state sales, use, or ad valorem taxes paid on qualified facilities if handled through the operator.
• Local governments (counties and municipalities): must consider and approve exemptions within 60 days of application for the local portion of ad valorem and related taxes.
• Rural areas and Alabama consumers: potential access to faster broadband service due to incentivized investment in rural broadband networks.
• State tax filers (through the transfer/allocation process): credits are nonrefundable but transferable, and may be carried forward and allocated to partners or transferees.

Key Provisions

• Defines QUALIFIED BROADBAND NETWORK FACILITIES and RURAL AREAS, with service speeds of at least 10 Mbps down/1 Mbps up in rural areas (post-2016 investments).
• Provides a nonrefundable, transferable income tax credit equal to 10% of the operator’s new investment in qualified facilities, including purchase, construction, installation, and present value of lease payments; subject to per-project and annual caps.
• Exempts qualified facilities from state ad valorem tax for 10 years from in-service date and from state sales and use taxes on equipment and materials; local ad valorem and certain local taxes may also be exempt with local government approval.
• Caps: up to $20,000,000 in total credits per tax year; $18,000,000 for rural area projects and $2,000,000 for projects not in qualifying rural areas; per-taxpayer credit caps of $750,000 (10/1 speeds) or $1,400,000 (25/3 speeds).
• Credit carryforward allowed for up to 19 years if not fully used in the year earned; credits are transferable, but can only be used by the transferee once transferred; transfers require a $1,000 per transferee transfer fee and a written transfer agreement.
• Certification process: operator must obtain certification from the Department of Agriculture and Industries; certification is then used by the Department of Revenue and local governments to recognize credits/exemptions.
• Operators (not contractors) must initiate and benefit from the credits; provisions allow pass-through of credits to partners or owners in partnerships/LLCs.
• Repeal/sunset: the bill provides for repeal of the act after fiscal year 2025 (with conditions), and modifies existing renewal act provisions to reflect staged repeal timelines for related sections.

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

Subjects

Revenue Department