HB567 Alabama 2025 Session

Summary

Primary Sponsor

Margie WilcoxRepresentative

Republican

Session

2025 Regular Session

Title

Class 2 municipalities, tax increment districts further provided for

Summary

HB567 would let Class 2 municipalities include up to 50% of their total equalized taxable property value in tax increment districts, aligning them with Class 3 municipalities.

What This Bill Does

It raises the cap for Class 2 municipalities from 10% to 50% of total equalized taxable property value that can be placed in tax increment districts. It keeps the rule that at least 50% of a district's area must be blighted or meet economic development criteria. It preserves district duration rules (up to 30 years, or up to 35 years for certain districts with enhanced use lease areas or Major 21st Century Manufacturing Zones) and excludes military reservation properties from the aggregated value. It maintains public hearing and notice requirements, project-planning processes, and adds an advisory board option involving the public entity and deferred tax recipients.

Who It Affects

• Class 2 municipalities (cities) in Alabama, because they would be allowed to include up to 50% of the municipality's total equalized taxable property value in tax increment districts.
• Property owners and taxpayers within Class 2 municipalities that have or may have tax increment districts, since tax revenues may be redirected to fund district projects and they participate in planning and notification processes.

Key Provisions

• Increase the cap for Class 2 municipalities on the aggregate value of property that can be included in tax increment districts from 10% to 50% of the municipality's total equalized taxable property value.
• Set duration rules: most districts may last up to 30 years; districts with at least 50% by area blighted/economically distressed and with an enhanced use lease area or Major 21st Century Manufacturing Zone may last up to 35 years.
• Exclude equalized taxable property located within military reservations (ceded to the United States) from the aggregated value.
• Maintain public hearing and notice requirements, including publishing notices and notifying deferred tax recipients, and require project plans that describe boundaries, costs, financing, relocation plans, and related details.
• Allow an advisory board to be formed by mutual agreement, comprising representatives from the public entity and deferred tax recipients, with a majority from the public entity's governing body.
• Effective date: October 1, 2025.

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

Subjects

Counties & Municipalities