HB252 Alabama 2018 Session

Summary

Primary Sponsor

Connie C. Rowe

Republican

Session

Regular Session 2018

Title

Economic development, tax credits for investments in rural growth funds auth., administered by the Dept. of Commerce, Ala. Agribusiness and Rural Jobs Act

Summary

HB 252 would create the Alabama Agribusiness and Rural Jobs Act to offer state premium tax credits to investors who fund certified rural growth funds that invest in rural businesses and agribusinesses, administered by the Department of Commerce.

What This Bill Does

It establishes a certification program for rural growth funds and sets caps on total investment authority ($100 million) and investor contributions ($80 million). It requires an application process with a $15,000 fee and specific information, then awards tax credit certificates to investors if funds are approved. Investors receive nonrefundable credits against their state premium tax liability, allocated 20% per year from the second through the sixth anniversaries, with a 10-year carryforward limit, and credits can’t be sold except to an affiliate with state tax liability. The act imposes investment, reporting, and compliance rules on funds, allows revocation of credits for noncompliance, and provides an exit path for funds after seven years with specified distribution triggers to the Department of Revenue/Finance; it also authorizes rulemaking and coordination with other state agencies and notes credits’ effect on Education Trust Fund distributions.

Who It Affects

• Investors with Alabama state premium tax liability who invest in certified rural growth funds; they would earn nonrefundable tax credits against their premium tax liability, claimed over years 2–6 and potentially carried forward for up to 10 years.
• Rural growth funds and rural businesses in Alabama that receive investments; they must meet program criteria, file required reports, and are subject to revocation or exit rules if they fail to comply, with funds needing to ensure in-state rural investments and job creation metrics.

Key Provisions

• Creates the Alabama Agribusiness and Rural Jobs Act to provide tax credits for investments in rural growth funds administered by the Department of Commerce.
• Defines key terms (rural growth fund, rural business, rural agribusiness, rural area, investment authority, investor contribution, and state premium tax liability).
• Establishes a certification process for rural growth funds starting September 1, 2018, including required materials (investment authority, licenses, prior rural investments, job projections, revenue impact assessment, investor affidavits) and a nonrefundable $15,000 application fee.
• Caps: total investment authority at $100 million and total investor contributions at $80 million; if requests exceed caps, awards are reduced proportionally.
• Tax credits: earned against state premium tax liability, equal to investor contributions, available 20% per year from the second through the sixth anniversaries; nonrefundable; cannot be sold except to an affiliate with state tax liability; carryforward up to 10 years.
• Credits used against the Education Trust Fund distribution reduce that distribution under rules to be adopted by the Department of Finance.
• Revocation and exit: funds must invest 100% of authority in-state with at least 50% in rural agribusiness within 2 years and maintain 100% investment until the seventh anniversary; exit after the seventh anniversary with specified payout conditions based on job creation metrics; revocation of tax credits for noncompliance.
• Reporting: funds must file annual and, at the outset, initial reports detailing investments, beneficiaries, jobs, and financial statements, plus a compliance fee; department may require additional information.
• Departmental authority: the Department of Commerce may adopt rules, issue forms, and coordinate with other state agencies; requires notification to the Department of Insurance for allocated credits; provides for rulemaking to ensure diversity and inclusivity.
• Effective date and scope: credits apply to tax returns due on/after January 1, 2018; act becomes law on the first day of the third month after passage/governor approval.

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