SB78 Alabama 2019 Session

Updated Feb 26, 2026

Notable

Summary

Primary Sponsor: Arthur OrrSenator
Republican
Session: Regular Session 2019
Title: Innovation Act, established, tax credits for qualified research expenses, authorized under certain conditions, tax credits authorized to offset certain taxes under certain conditions, to further provide for the allocation and transferability of certain tax credits under certain conditions, Sec. 40-18-390 added
Summary: Enacts the Alabama Innovation Act to create a state grant program and fund to encourage in-state research and development by eligible Alabama entities.
What This Bill Does
Establishes the Alabama Research and Development Enhancement Fund and a grant program administered by ADECA to fund qualified research expenses in Alabama. Eligible Alabama research entities (universities, university-affiliated foundations, public colleges, publicly-owned hospitals, and certain qualifying nonprofits) can apply for grants to support in-state research projects, with grants not exceeding 20% of the total funds available in a given year. The grant amount is calculated using a formula based on prior-year contract and consortium research expenses in Alabama, with certain adjustments and priorities set by ADECA. The program is funded by Legislature appropriations and gifts, requires annual reporting, and is overseen by the Alabama Research and Development Enhancement Oversight Committee; rules are to be written within 90 days, and the program takes effect for the fiscal year ending September 30, 2020.

Who It Affects
Alabama research entities (universities, hospital, and qualifying nonprofit organizations) that conduct qualified research in Alabama, who may apply for grants to support their in-state research expenses.
Business enterprises that contract research with Alabama research entities, whose qualified research expenses in Alabama can influence grant amounts and who benefit from the program's funding incentives.

Key Provisions
Creates the Alabama Innovation Act and the Alabama Research and Development Enhancement Fund in the State Treasury; funds come from legislative appropriations and gifts/grants; unspent funds carry over to the next year; administrative costs must not exceed 3% of the total appropriation for the program.
Defines Alabama Research Entity to include public/private universities, university research foundations, public two-year colleges, publicly-owned hospitals, and certain 501(c)(3) nonprofits that primarily conduct research in Alabama and have most property/payroll in Alabama.
Specifies Approved Activity (industry activities eligible for grants) using a NAICS-based list and includes biofuel production and certain state economic development targets.
Clarifies Qualified Research, Consortium Research Expenses, and Contract Research Expenses (expenses must occur in Alabama for the research to count toward grant eligibility).
ADECA is charged with establishing and administering the grant program, with rules to begin within 90 days and grant applications accepted during a defined annual window; awards are announced within 90 days after the filing window ends.
Grants to individual entities are limited to the lesser of 20% of the total funds available for the year or a formula-based amount calculated from prior-year contract and consortium research expenses in Alabama (with specified adjustments using the prior three years).
Provisions for determining grant awards include a pro rata distribution if applications exceed available funds, with unapproved applications kept in order and later approved if more funds become available.
An Oversight Committee is established to supervise compliance and progress, ensure diversity, and require quarterly and annual reporting on grant activity and impact on Alabama R&D, with non-publication of project details without permission.
Effective date is the fiscal year ending September 30, 2020; the act repeals conflicting laws and becomes law upon governor’s 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: Taxation