SB240 Alabama 2023 Session

Summary

Primary Sponsor

Bobby D. SingletonSenator

Democrat

Session

Regular Session 2023

Title

Relating to taxation; to amend Sections 40-9F-31, 40-9F-33, and 40-9F-38, Code of Alabama 1975, to increase the amount of tax credits that may be provided in a tax year; to allow rehabilitation credits to be tied to the year in which the reservation is allocated; to provide for additional rehabilitation credit allocations; to further provide for the membership of the Historic Tax Credit Evaluating Committee and the factors considered by the committee; and to make nonsubstantive, technical revisions to update the existing code language to current style.

Summary

SB240 would expand and reorganize Alabama's historic preservation tax credits by increasing annual reserves, changing when rehab credits are earned, expanding oversight, and clarifying transfer rules.

What This Bill Does

It raises the annual cap on reserved historic tax credits from $20 million to $40 million and sets generous year-by-year caps through 2027 with a total reservation limit of $200 million during specified periods. It changes rehabilitation credits to be tied to the year a reservation is allocated (not when the rehab is placed in service) and allows additional rehab credit allocations. It expands the Historic Tax Credit Evaluating Committee members and evaluation factors, and it establishes transferability and related procedures so credits can be bought and sold with rules on value, documentation, and use by transferees. It also sets aside a portion of credits for smaller counties and prohibits credits for certain end uses through 2027, while updating language for clarity and style.

Who It Affects

• Property owners, developers, and investors undertaking certified historic rehabilitation projects, who would see higher annual credit reserves, new timing rules for when credits are earned, and expanded transfer options.
• The Alabama Historical Commission, Department of Revenue, and the Historic Tax Credit Evaluating Committee, which would gain expanded membership, new evaluation criteria, and additional rules for allocating and transferring credits.

Key Provisions

• Increase the annual aggregate of tax credits that may be reserved by the Alabama Historical Commission from $20,000,000 to $40,000,000 per year.
• Allow rehabilitation tax credits to be tied to the year in which the reservation is allocated (instead of the year the rehabilitation is placed in service) and provide for additional rehabilitation credit allocations.
• Establish and expand the Historic Tax Credit Evaluating Committee, including specific state officials and lawmakers as members and requiring consideration of defined evaluation factors (e.g., community value, return on investment, geographic distribution, project readiness, local support, leverage, and job creation).
• Maintain and apply current per-structure credit caps (e.g., up to $5,000,000 for non-residential types and $50,000 for certified historic residential structures) and continue the 25% state credit share for qualified rehabilitation expenditures.
• Make credits transferable and assignable with verifiable transfer statements; require transfers to occur at no more than 85% of present value, prohibit re-transfer, and require the transferee to use the credit in the year of allocation or placement in service.
• Create a county-based set-aside where 40% of annual credits are reserved for projects in counties with population under 175,000; unallocated funds may revert for other projects if not used by a deadline.
• Prohibit reserving credits for end uses deemed disqualifying for 2023-2027 and implement nonsubstantive, technical updates to current law language.

AI-generated summary using openai/gpt-5-nano on Feb 22, 2026. May contain errors — refer to the official bill text for accuracy.