Amendment vs bill Ways and Means Education Amendment TS2Q95-1 vs Introduced

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HB443 INTRODUCED 755PVE-1 By Representative Garrett RFD:
TS2Q95-1 :
Ways and Means Education First Read:
5/16/2023 :
09-May-23 2023 Regular Session Page 0 755PVE-1 04/18/2023 SS (F)SS 2023-1604 2 4 SYNOPSIS:
SS AMENDMENT TO HB443 1ST WAYS AND MEANS EDUCATION AMENDMENT TO HB443 OFFERED BY REPRESENTATIVE DRUMMOND 2 4 Replace line 182 on page 7 with the following:
This bill would change the reporting date requirements of state agencies that administer economic tax incentives and establish sunset provisions and reporting guidelines for economic tax incentives.
of the Legislature, all new tax credit legislation 9 Replace lines 206 through 208 on page 8 with the following:
A BILL TO BE ENTITLED AN ACT Relating to economic tax incentives;
(3) A statement establishing the limit on the amount of tax credits that may be provided during any applicable period of the tax credit.
to amend Section 40-1-50, Code of Alabama 1975;
Replace lines 211 through 213 on page 8 with the following:
to change the reporting date requirements of state agencies which administer economic tax incentives;
(5) A statement limiting the transfer or sale of tax.
to align committee schedules to review state agency reports;
Replace lines 218 through 222 on page 8 with the following:
to establish sunset dates for tax incentive programs;
taxpayers claiming a new tax credit must report the amount of the tax credit claimed by the taxpayer Page 1 TS2Q95-1 :
to establish future sunset dates for extended tax incentive programs;
5/16/2023 :
and to provide required guidelines for all new incentive legislation.
SS AMENDMENT TO HB443 1ST WAYS AND MEANS EDUCATION AMENDMENT TO HB443 OFFERED BY REPRESENTATIVE DRUMMOND as otherwise required or in accordance with the taxpayer's regular tax reporting duties to the Department of Revenue.
BE IT ENACTED BY THE LEGISLATURE OF ALABAMA:
(c) The term tax credit as used in this section shall mean a credit allowed against the amount of tax imposed by Chapter 16, Chapter 18, or Chapter 21 of Title 40.
Section 1.
Page 2
Section 40-1-50, Code of Alabama 1975, is amended to read as follows:
"§40-1-50 (a) For the purpose of this section, the term economic tax incentive shall mean any tax credits, deductions, Page 1 HB443 INTRODUCED exemptions, abatements, preferential rates, or rebates given as an economic incentive.
For the purpose of this section, the term economic incentive shall mean an inducement provided by the government, where the government promises to forgo tax revenues to which it is otherwise entitled or to provide some other benefit to an individual or an entity and in exchange the individual or entity promises to take specific action that contributes to economic development.
In order for the Legislature to get accurate and complete information regarding the costs and benefits of economic tax incentives, each state agency that administers an economic tax incentive shall annually report the information required herein to the Legislature.
(b) The head of each state agency that administers any economic tax incentive shall prepare and submit to the Legislature a report regarding each economic tax incentive that the agency administers as set forth in the schedule provided by the Alabama Department of Revenue pursuant to subsection (f)(2) no later than the secondfirst Legislative day of the Regular Session beginning in the 20182024 Regular Session of the Legislature and each year thereafter.
The report shall include an assessment of each economic tax incentive based on the following criteria:
(1) Whether or not each economic tax incentive has been successful in meeting the purpose for which it was enacted, in particular, whether each economic tax incentive benefits those originally intended to be benefited, and if not, those who do benefit.
Page 2 HB443 INTRODUCED (2) Whether or not the state receives a positive return on investment, specifically the direct and indirect impact on state and local tax revenues, from the business or industry for which the economic tax incentive is intended to benefit and any other economic benefits produced by such tax incentive.
(3) The economic results of each economic tax incentive, taking into account the extent to which the incentive successfully changes business behavior, and the unintended or inadvertent effects, benefits, or harm caused by the economic tax incentive, including whether the economic tax incentive conflicts with other state laws or regulations.
(c)(1) Nothing in this section shall be construed to require the disclosure of proprietary or trade secret information that has been submitted to any state agency with respect to an economic tax incentive.
(2) Nothing in this section shall be construed to supercede any provision with respect to the confidentiality of taxpayer records.
(d) Each state agency required to submit a report pursuant to the provisions of this section may request from any other state or local agency, official, recipient of funds, or the Alabama Department of Revenue, any information necessary to complete the required report.
Any such agency, official, or recipient shall comply with this request.
(e) For purposes of this section, the term state agency shall mean any office, department, board, commission, institution, or division within the executive branch of state Page 3 HB443 INTRODUCED government, excluding the Alabama Department of Revenue.
Administration of an economic tax incentive shall be evidenced by a legal requirement or authorization to undertake any of the following actions for purposes of administration of the tax incentive:
(1) Promulgation of rules or regulations;
in cases where more than one agency has rulemaking authority, the report shall be prepared collaboratively.
(2) Determination, review, or confirmation of eligibility or qualifications.
95 (3) Entering into a contract with an entity for purposes of a tax credit.
(4) Facilitating economic tax incentives by distributing funds to non-state agencies.
(5) Conducting oversight or substantial administrative functions for an economic tax incentive when the public purpose associated with the economic tax incentive is within the core mission of the agency.
(f)(1) The Department of Revenue shall develop a format for reports required herein.
The format shall be made available to all state agencies for use in preparation of their required reports.
(2) The Department of Revenue shall prepare, every four years, a four-year schedule of the economic tax incentives to be reported to the Legislature beginning with the 2018 Regular Session of the Legislature.
(3) The Department of Revenue shall provide state agencies with any tax information necessary to complete the Page 4 HB443 INTRODUCED required report relating to an economic tax incentive of such agency.
(g) The House Ways and Means Committees and the Senate Finance and Taxation Committees referred to in this subsection as committees, shall conduct hearings on the reports every odd-numbered year, to be concluded thirty days before the beginning of the Regular Session of the Legislature.The House Ways and Means Education Committee and the Senate Committee on Finance and Taxation - Education shall conduct joint hearings on the tax expenditure report every odd-numbered year to be concluded by the 10th legislative day of the regular session of the Legislature.
The committees shall analyze and consider each economic tax incentive and shall provide a recommendation to modify, discontinue, or take no action with respect to each economic tax incentive." Section 2.
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The Brownfield Development Tax Abatement Act, Chapter 9C, of Title 40, commencing with Section 40-9C-1, Code of Alabama 1975, is repealed effective December 31, 2028, unless extended by an act of the Legislature prior to that date for no more than five additional years.
Section 3.
The Rural Physician Tax Credit, Article 4A, commencing with Section 40-18-130, Chapter 18, of Title 40, Code of Alabama 1975, is repealed effective December 31, 2028, unless extended by an act of the Legislature prior to that date for no more than five additional years.
Section 4.
The Coal Production Tax Credit, Article 8, commencing with Section 40-18-220, Chapter 18, of Title 40, Code of Alabama 1975, is repealed effective December 31, 2028, Page 5 HB443 INTRODUCED unless extended by an act of the Legislature prior to that date for no more than five additional years.
Section 5.
The Reemployment Act of 2010, Article 10, commencing with Section 40-18-270, Chapter 18, of Title 40, Code of Alabama 1975, is repealed effective December 31, 2028, unless extended by an act of the Legislature prior to that date for no more than five additional years.
Section 6.
The Full Employment Act of 2011, Article 11, commencing with Section 40-18-290, Chapter 18, of Title 40, Code of Alabama 1975, is repealed effective December 31, 2028, unless extended by an act of the Legislature prior to that date for no more than five additional years.
Section 7.
The Veterans Employment Act, Article 13, commencing with Section 40-18-320, Chapter 18, of Title 40, Code of Alabama 1975, is repealed effective December 31, 2028, unless extended by an act of the Legislature prior to that date for no more than five additional years.
Section 8.
The Irrigation Equipment Tax Credit, Article 14, commencing with Section 40-18-340, Chapter 18, of Title 40, Code of Alabama 1975, is repealed effective December 31, 2028, unless extended by an act of the Legislature prior to that date for no more than five additional years.
Section 9.
The Entertainment Industry Incentive Act of 2009, Article 3, commencing with Section 41-7A-40, Chapters 7A, of Title 41, Code of Alabama 1975, is repealed effective December 31, 2028.
Prior to the repeal of the incentive, the Department of Commerce shall report to the Legislature beginning in 2023 and annually thereafter, regarding the Page 6 HB443 INTRODUCED entertainment industry incentives, in accordance with Section 40-1-50.
Section 10.
The Alabama Enterprise Zone Act, Article 2, commencing with Section 41-23-20, Chapter 23, of Title 41, Code of Alabama 1975, is repealed effective December 31, 2028, unless extended by an act of the Legislature prior to that date for no more than five additional years.
Section 11.
The repealing of the incentives listed in Sections 2 through 10 shall only affect the availability of the tax credits after December 31, 2028, and shall not cause a reduction or suspension of any credits awarded on or prior to December 31, 2028.
Section 12.
(a) Beginning in the 2024 Regular Session of the Legislature, all new economic tax incentive legislation shall include the following:
(1) For every bill enacting a new tax credit, a tax credit performance statement which must state the legislative purpose for the new tax credit.
The tax credit performance statement must indicate one or more of the following as the legislative purpose of the new tax credit:
a.
Tax credits intended to induce certain designated behavior by taxpayers.
b.
Tax credits intended to improve industry competitiveness.
c.
Tax credits intended to create or retain jobs.
d.
Tax credits intended to reduce structural inefficiencies in the tax structure.
e.
Tax credits intended to provide tax relief for Page 7 HB443 INTRODUCED certain businesses or individuals.
(2) A statement providing that new tax credits shall expire on the first day of the calendar year following the calendar year that is five years from the effective date of the tax credit.
With respect to any new property tax exemption, the exemption does not apply to taxes levied for collection beginning in the calendar year following the calendar year that is five years from the effective date of the tax credit.
(3) A statement establishing the annual limit on the amount of credits or incentives that may be provided during any annual period.
(4) A statement limiting the number of years for carryforward of unused credits to no more than five years.
(5) A statement limiting the transfer or sale of credits to only one transaction after filing paperwork and a filing fee with the Department of Revenue.
(6) A statement requiring pre-certification of all income and financial institutions excise tax credits by the Department of Revenue before they can be claimed.
(b) For tax years beginning after December 31, 2024, taxpayers claiming a new tax credit preference must report the amount of the tax preference claimed by the taxpayer to the Department of Revenue as otherwise required by statute or determined by the department as part of the taxpayer's regular tax reporting responsibilities.
Section 13.
This act shall become effective on the first day of the third month following its passage and Page 8 HB443 INTRODUCED approval by the Governor, or its otherwise becoming law.
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