House Bill 626 Alabama 2026 Session

Summary

Primary Sponsor

Andy WhittRepresentative

Republican

Session

2026 Regular Session

Title

Tax increment districts, Major 21st Century Manufacturing Zone allowed to be located within a tax increment district without regard to size of district and further provides for use of ad valorem tax revenues collected within a district

Summary

Allows a Major 21st Century Manufacturing Zone to be located inside a tax increment district regardless of the district’s size and lets district tax revenues be used to reimburse land acquisition costs within the zone before the district is created.

What This Bill Does

It rewrites tax increment financing rules to permit a Major 21st Century Manufacturing Zone to sit inside a tax increment district regardless of the district’s size, and it lets ad valorem taxes collected in the district be used to reimburse public land acquisition costs within the zone before the district’s creation. It also sets criteria for what qualifies as a Major 21st Century Manufacturing Zone (at least 250 contiguous acres, site suitability for automotive or related industries, and at least $100 million in planned capital expenditure). The bill outlines how districts are created and funded, including project plans, relocation provisions, tax increments, and a 30-to-35-year duration depending on district type, and updates related definitions and procedures.

Who It Affects

• Local governments (cities and counties) that create or manage tax increment districts, who gain the ability to include a Major 21st Century Manufacturing Zone regardless of district size and to structure funding for zone projects.
• Deferred tax recipients (taxing authorities that will receive ad valorem tax flows within the district), who must be notified and may participate in discussions about the project plan and boundaries.
• Public entities and developers involved in financing, building, or operating projects in the district, who would use tax increments to pay project costs and may issue tax increment obligations.
• Property owners and residents/businesses within the district, who could be affected by changes in tax base, displacement provisions, and relocation plans under project implementation.
• State and local tax authorities (e.g., Department of Revenue and assessors), who administer valuation, notice, reporting, and tax distribution.
• Other local stakeholders, including advisory boards formed by mutual agreement, and parties involved in zoning, master plans, and infrastructure changes.

Key Provisions

• Allows Major 21st Century Manufacturing Zone to be located within a tax increment district regardless of the district’s size.
• Authorizes ad valorem tax revenues collected within the tax increment district to reimburse costs incurred by a public entity to acquire land within the Major 21st Century Manufacturing Zone prior to the district’s creation.
• Defines Major 21st Century Manufacturing Zone as at least 250 contiguous acres with site suitability for automotive, aviation, medical, pharmaceutical, semiconductor, computer/electronics, energy conservation, cyber technology, or biomedical facilities, and with anticipated capital expenditure of at least $100 million.
• Sets district duration rules: up to 30 years if 50% or more of district property is blighted/economically distressed, or up to 35 years if there is an enhanced use lease area or identified Major 21st Century Manufacturing Zone (subject to amendments).
• Requires a formal process to create a TID including public hearings, notices to deferred tax recipients, a defined boundary description, and a detailed project plan with costs, financing, and maps.
• Establishes the Tax Increment Fund to collect and pay for project costs and debt, with rules for reinvestment, distribution after debt is paid, and potential transfers to other governmental bodies.
• Provides for relocation and displacement plans as part of project plans and requires feasible relocation/compensation for affected individuals and businesses.
• Introduces a rebuttable presumption that property acquired or leased within a year before district creation was intended for the district, which can be overcome with proof of other purposes.
• Allows for advisory boards to be formed by mutual agreement to guide district actions.
• Updates for related definitions (blighted/economically distressed areas, enhanced use lease areas, deferred tax recipients) and alignment with the broader tax increment financing framework.
• Effective date: immediate.

AI-generated summary using openai/gpt-5-nano-2025-08-07 on Mar 17, 2026. May contain errors — refer to the official bill text for accuracy.

Subjects

Economic Development