HB 293 — Relating to port credits; to amend Sections 40-18-401 and 40-18-403, Code of Alabama 1975, to expand the cap of the port credit and to expand tax incentives for businesses and enterprises who increase their cargo volume through Alabama public ports.

HB293 INTRODUCEDENROLLED MSFCHW-1MSFCHW-3 By Representatives Brown, Stringer, Lipscomb, Marques, Givens, Holk-Jones, Clarke, Kirkland, Travis, Starnes, Jones, Hassell, Shirey, Hulsey, Collins, Pringle, Drummond, Bracy, Wilcox, Lomax RFD:

11-Apr-23 2023 Regular Session Page 0 MSFCHW-1HB293 01/16/2023Enrolled RAEnrolled, (F)An RAAct, 2023-993 2Relating 4to SYNOPSIS:port credits;

Underto existingamend law,Sections an40-18-401 incomeand tax40-18-403, Code of Alabama 1975, to expand the cap of the port credit isand allowedto expand tax incentives for certainbusinesses portand activities.enterprises who increase their cargo volume through Alabama public ports.

This bill would revise the structure of the amounts of the credits that may be claimed and expand the credit to allow port users to claim a jobs tax credit if the user increases their cargo base volume.

A BILL TO BE ENTITLED AN ACT Relating to port credits;

to amend Section 40-18-403, Code of Alabama 1975, to expand tax incentives for businesses and enterprises who increase their cargo volume through Alabama public ports.

SectionSections 40-18-401 and 40-18-403, Code of Alabama 1975, isare amended to read as follows:

"§40-18-403"§40-18-401 (a) IfThe approved by the commission, a port credit isprovided allowed,for in anSection amount40-18-403 equalis tocreated fifty dollars ($50) per TEU, three dollars ($3) per net ton, four cents ($0.04) per Page 1 HB293 INTRODUCED kilogram for air freight, or two dollars and ninety-one cents ($2.91) per VEU, multiplied by thethis followingthearticle cargo volume calculated from subdivisions (1) and (2)is asallowed followsupon multipliedstrict bycompliance thewith appropriate amount shown in the tableprovisions inherein. subsection (b):

(b) Prior to the allowance of the port credit, an application shall be filed with the commission, on a form promulgated by the commission.

(1) The application shall be filed by the port facility user desiring to claim the credit.

(2) The commission shall establish deadlines for applications.

Such applications shall solicit whatever information the commission deems important to its determination of whether granting a port credit will create new, high paying jobs in the state, bring substantial capital to the state, increase the usage of a port facility, promote the development of clusters of businesses in the state, or promote the economic development efforts of the state.

Page 1 HB293 Enrolled (3) Upon review of the applications, the commission may approve such applications as shall result in port credits being awarded so as not to exceed twelve million dollars ($12,000,000) twenty million dollars ($20,000,000) for the life of the program, and shall not exceed five million dollars ($5,000,000) in a fiscal year.

(4) The commission shall charge application fees to offset the costs of administration of this article.

(c) Prior to claiming a port credit, the company shall submit to the Department of Commerce a certification containing information adequate to prove that the company is entitled to the credit.

Following such examination as it deems necessary, the Department of Commerce may certify the information and deliver the same to the Department of Revenue.

Thereafter, the Department of Revenue shall allow the tax credit.

(d)(1) Nothing in this article shall be construed to constitute a guarantee or assumption by the state of any debt of any company nor to authorize the credit of the state to be given, pledged, or loaned to any company.

(2) Nothing in this article shall be construed to make available to any company any right to the benefits conferred by this article absent strict compliance with this article.

(3) Nothing in this article shall be construed to change or lessen the requirements for claiming jobs act incentives under the Alabama Jobs Act, Section 40-18-370, et seq.

Companies claiming the jobs act incentives must strictly comply with the Alabama Jobs Act.

Page 2 HB293 Enrolled (4) All filings made by a private party with the commission or any department of state government shall be made using forms adopted by the commission or department.

Any such filing shall be treated as a tax return, subject to penalties imposed by the Department of Revenue.

(5) Nothing in this article shall be construed to limit the powers otherwise existing for the Department of Revenue to audit and assess any company claiming a port credit." "§40-18-403 (a) If approved by the commission, a port credit is allowed, in an amount equal to fifty dollars ($50) per TEU, three dollars ($3) per net ton, four cents ($0.04) per kilogram for air freight, or two dollars and ninety-one cents ($2.91) per VEU, multiplied by the following the cargo volume calculated from subdivisions (1) and (2) as follows multiplied by the appropriate amount shown in the table in subsection (b):

Increase in Kilogram cargo volume TEU Net Ton for Air VEU over base Freight cargo volume under 4.99 $50 $3 $0.04 $2.91 percent Page 3 HB293 Enrolled 5 to 14.99 $75 $4.5 $0.06 $4.37 percent 15 to 24.99 $100 $6 $0.08 $5.82 percent 25 percent $125 $7.5 $0.1 $7.28 or greater (b)(c)The (c) The commission shall decrease the amount of the port credit to ensure that the anticipated revenues for the port facility and state will exceed the amount of the port credit sought.

The port credits shall only be available to the extent that a port facility user ships more than 105 percent of its cargo volume from the Page 2 HB293 INTRODUCED 12-month period immediately preceding the port facility user's application.

In any one year, if the port Page 4 HB293 Enrolled credit exceeds the amount of tax liability, the port user may carry forward the unused port credit.

(e)(e)To Subjectthe toextent approvalthat by the commissionport providedcredit inis Sectionutilized 40-18-401,by any business or enterprise which has increased its cargo volume during the previousport 12-monthuser periodor by a percentagetransferee abovecompany, itsno basededuction cargofor volumethe trafficrelated andexpenses is Page 3 HB293 INTRODUCED qualified to claim a job credit under Article 16, Chapter 18, Title 40, shall be allowedallowed. an additional jobs credit provided in Section 40-18-375(a), on the wages paid to its Alabama Resident employees during the prior year.

The(f)For amountany ofcompany which enters into an economic development project agreement with the creditstate, canthe beproject seenagreement inmay provide for an allocation to the tablecompany below:of any port credits which have not been allocated pursuant to this article.

Percentage Increase Amount of Job Credit 5-14.99% 0.5% 15-24.99% 1% 25-34.99% 1.5% 35% or higher 2% (d)(f) To the extent that the port credit is utilized by the port user or by a transferee company, no deduction for the related expenses shall be allowed.

(e)(g) For any company which enters into an economic development project agreement with the state, the project agreement may provide for an allocation to the company of any port credits which have not been allocated pursuant to this article.

Page 4 HB293 INTRODUCED (4) Port credits may not be used until the Department of Commerce has received satisfactory proof that the capital Page 5 HB293 Enrolled investment and job creation requirements have been satisfied.

(6) Allocations shall not exceed the per unit amounts stated in subsection (b) one hundred dollars ($100) per TEU, three dollars ($3) per net ton, four cents ($0.04) per kilogram for air freight, or two dollars and ninety-one cents ($2.91) per VEU.VEU..

Page 56 HB293 Enrolled ________________________________________________ Speaker of the House of Representatives ________________________________________________ President and Presiding Officer of the Senate House of Representatives I hereby certify that the within Act originated in and was passed by the House 17-May-23, as amended.

John Treadwell Clerk Senate 01-Jun-23 Passed Page 7