HB475 Alabama 2019 Session

Summary

Primary Sponsor

Danny GarrettRepresentative

Republican

Session

Regular Session 2019

Title

Commerce, Alabama Rural and Agribusiness Jobs Act

Summary

HB 475 would create the Alabama Rural and Agribusiness Jobs Act to certify growth funds and provide state premium tax credits to investors in those funds to promote rural and agribusiness growth.

What This Bill Does

The act sets up a process for certifying growth funds by the Department of Commerce and authorizes tax credits for investors in those funds. It defines how credits are earned and used, including that credits equal the investor's contribution, are usable starting in year three, are non-refundable, and can be carried forward up to 10 years. It also requires funds to invest mainly in Alabama growth businesses (100% in-state, with at least 50% in agribusiness), establishes funding caps and reporting requirements, and lays out rules for exiting the program and revoking credits if funds don’t follow the rules.

Who It Affects

• Taxpayers with Alabama state premium tax liability who invest in certified growth funds and can claim a tax credit against their premium taxes.
• Growth funds and growth businesses located in rural Alabama (growth zones and agribusiness sectors) that participate in the program, including the requirements to apply for certification, invest according to rules, and report to the Department of Commerce.

Key Provisions

• Creates the Alabama Rural and Agribusiness Jobs Act and defines key terms such as growth fund, growth business, growth zone, agribusiness, high wage employment position, and investment authority.
• Establishes a certification process for growth funds by the Department of Commerce starting September 1, 2019, including required applications, evidence of licenses, investment history in non-metropolitan counties, a business plan with revenue impact, investor affidavits, and a $20,000 non-refundable filing fee.
• Sets a cap: no more than $15,000,000 in tax credits may be issued in any one year; if applications exceed the cap, investment authority and investor contributions are prorated.
• Requires growth funds to have at least 75% of their investment authority funded by investor contributions and at least 10% from affiliates; investments must be 100% in-state (50% in agribusiness) and maintained for specified periods, with rules on reinvestment.
• Provides tax credits to investors equal to their investor contribution; credits are non-refundable, usable starting in the taxable year containing the third anniversary of the closing date, and may be carried forward up to 10 years; credits cannot be transferred except to certain affiliates.
• Allows the department to revoke tax credit certificates if funds do not meet in-state investment requirements or other conditions, with procedures to reallocate investment authority and credits to other funds or applicants.
• Permits growth funds to exit the program after seven years if criteria are met; after exit, distributions to equity holders are restricted until cumulative growth investments reach at least 150% of the investment authority, and the fund must continue reporting.
• Imposes annual reporting requirements by growth funds, including details of investments, jobs created/retained, salaries, and a $5,000 annual reporting fee; the Department may adopt implementing rules and forms.
• Applies to tax years beginning on or after January 1, 2021, with the act becoming effective after the governor’s approval and publication.

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

Subjects

Commerce Department