Senate Bill 111 Alabama 2026 Session

Summary

Primary Sponsor

Chris ElliottSenator

Republican

Session

2026 Regular Session

Title

Prepare Alabama Investment Program established, tax credits for donations to trade schools and trade programs authorized

Summary

SB111 would create the Prepare Alabama Investment Program to fund local trade schools and programs and provide tax credits to donors supporting those programs.

What This Bill Does

It creates the Prepare Alabama Investment Program and a board within the Department of Workforce to oversee it. It authorizes a tax credit for donations to eligible trade schools, trade programs, or community development foundations that support workforce development, reducing a donor's state tax liability. Donated funds would be used for construction, development, and maintenance of trade facilities and programs, with rules for eligibility, reporting, and preapproval. It also sets an annual statewide credit cap, specifies who can claim credits and how they are claimed, and outlines the implementation timeline (rules by 2027, credits available 2027–2031).

Who It Affects

• Donors (individuals, married couples, pass‑through entities, and corporations) may claim credits against their state taxes for qualified donations, subject to per‑payer limits and a statewide cap; credits are non‑transferable and may be carried forward.
• Eligible entities (public/private trade schools, trade programs, or community development foundations) can receive qualified donations, must meet eligibility criteria, develop a five‑year plan, report to the board, and use funds for workforce instruction and facility needs.

Key Provisions

• Establishes the Prepare Alabama Investment Program Board within the Department of Workforce and defines its composition (Governor or designee, Commissioner of Revenue or designee, President Pro Tempore of the Senate or designee, Speaker of the House or designee, and two EDPA representatives) and duties.
• Defines eligible entities as public/private trade schools or programs or community development foundations and requires a written five‑year plan and annual reporting to remain eligible.
• Provides tax credits for donations: individuals can claim 100% of qualified donations up to $15,000 (single) or $30,000 (married); pass‑through entities, LLCs, or professional corporations can claim up to $450,000; corporations can claim up to $500,000 per year with credits tied to donations or tax liability, as specified, and claimed on a pro rata basis where applicable.
• Imposes an annual statewide credit cap of $25,000,000 for qualified donations and requires preapproval by the Department of Revenue for each donation.
• Credits may begin January 1, 2027 (for the 2027 tax year) and may not be claimed after tax year 2031; unused credits may be carried forward for up to three years and are non‑transferable.
• Requires rules to implement the act, with the Department of Revenue issuing credits and coordinating with the board; credits will be awarded in the order requested and will not reduce distributions to the Alabama Special Mental Health Trust Fund.
• Annual reporting by both the board and the Department of Revenue to the Legislature, detailing eligible entities, donations, and credits claimed for the preceding year; eligible entities must report donations to the Department within 30 days of receipt.
• Eligible entities may retain up to 3% of qualified donations as a solicitation or management fee, with total fees capped at 3% of donations received in a calendar year.
• Funds donated to eligible entities may be used for operating expenditures and maintenance, capital upgrades, and other program needs to support workforce training.

AI-generated summary using openai/gpt-5-nano on Feb 12, 2026. May contain errors — refer to the official bill text for accuracy.

Subjects

Taxation & Revenue