Struck = removed from the bill ·
added = the amendment's new text.
SB299AHK4S7-1 ENROLLED: RUOCMN-3 By Senator Orr RFD:
Conference5/10/2023 Committee: on SB299 First Read:
09-May-23KHF 2023AMENDMENT RegularTO SessionSB299 Page1ST 0FINANCE AND TAXATION EDUCATION AMENDMENT TO SB299 EnrolledOFFERED Enrolled,BY AnSENATOR Act,ORR 3Replace Relatingline to56 theon Coalpage Production2 Taxwith Credit;the following:
toDecember amend31, Section2028, 40-18-220,unless Codeextended ofby Alabamaan 1975,act toof allow the creditLegislature prior to bethat claimeddate againstfor bothno incomemore andthan utilityfive servicesadditional taxes;years.
Prior to allow the creditsrepeal to be earned by all persons that increase their production of coalthe minedincentive, in Alabama from the priorPage year;1
to allow any unused credits to be carried forward for no more than five years;
to establish sunset dates for tax incentive programs;
to establish future sunset dates for extended tax incentive programs;
and to provide required guidelines for all new incentive legislation.
BE IT ENACTED BY THE LEGISLATURE OF ALABAMA:
Section 1.
Section 40-18-220, Code of Alabama 1975, is amended to read as follows:
"§40-18-220 (a) For the tax years beginning on and after January 1, 1995, every personcorporation, whether a "subchapter S" corporation, as defined by the 1995 Internal Revenue Code, or not, foreign or domestic, that is doing business in Alabama, as a producer of coal mined in Alabama, shall be allowed a coal production credit to be used as provided in subsection (b)against the tax imposed by Section 40-18-2, in the amount of one dollar ($1) per ton of increased production of coal over the previous year's production of coal as set out herein below.
Such tax credit shall be based on coal produced after January 1, 1995, provided the coal was mined in Alabama as certified by the producer of the coal.
The amount of the total Page 1 SB299 Enrolled of credit in any one year shall be based on the number of tons of Alabama coal produced by the personcorporation in the year which exceeds the number of tons of Alabama coal produced by the personcorporation in calendar year 1994.
In the event a personcorporation did not produce Alabama coal during calendar year 1994, such personcorporation must establish a base year by producing Alabama coal for 12 consecutive months.
Thereafter, such personcorporation shall be eligible for the tax credit as specified hereinabove over the base year production.
(b) The coal production credit described in subsection (a) shall be used as follows:
(1) To offset the income taxes found in this chapter, or as an estimated tax payment of income taxes;
(2) To offset the taxes imposed by Sections 40-21-82 and 40-21-102;
or (3) To offset some combination of the foregoing, so long as the same credit is used only once.
(c)(1) The coal production credit may be claimed as a credit against the taxes in subsection (b) that are actually paid.
In any one year, if the credit exceeds the amount of taxes that are owed by the person, the person may carry the credit forward.
No carryforward shall be allowed for more than five years.
Rules similar to those used for Section 40-18-15.2 shall be applied.
Page 2 SB299 Enrolled (2) A person that is taxed as a flow-through entity may allocate the coal production credit among some or all of the owners in any manner specified, regardless of whether the allocation follows rules similar to 26 U.S.C.
§ 704(b) and the regulations thereunder.
The owners may then use their allocated share of the coal production credit to offset any of the taxes listed in subsection (b), as provided in subdivision (1).
This subdivision shall be liberally construed to apply to multiple levels of companies, to allow the coal production credit to be used by those persons bearing the tax burdens of the production of coal in Alabama, and such companies shall include, but shall in no way be limited to, flow-through entities, employee stock ownership plans, mutual funds, real estate investment trusts, and it shall also apply to offset the income tax liability of employee/owners of a flow-through entity owned by an employee stock ownership plan trust.
(3) Prior to claiming the coal production credit as provided in subdivision (c)(1), the person producing Alabama coal shall submit to the Department of Revenue a certification as to the amount of increased production of coal for the calendar year over the previous year's production of coal.
Following such examination as it deems necessary, the Department of Revenue shall allow the coal production credit.
Page 3 SB299 Enrolled (d) The coal production tax credit shall be subject to the reporting requirements of Section 40-1-50.
Section 2.
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, 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, Page 4 SB299 Enrolled 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, unless extended by an act of the Legislature.
Prior to the repeal of the incentive, the Department of Commerce shall report to the Legislature beginning in 2023 and annually thereafter, regarding the 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.
Page 5 SB299 Enrolled Section 12.
(a) Beginning in the 2024 Regular Session of the Legislature, all new tax credit 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 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 limit on the amount of tax credits that may be provided during any applicable period of the tax credit.
Page 6 SB299 Enrolled (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 tax credits.
(b) For tax years beginning after December 31, 2024, taxpayers claiming a new tax credit must report the amount of the tax credit claimed by the taxpayer in accordance with the taxpayer's regular tax reporting duties to the Department of Revenue.
The amount of the tax credit claimed shall be considered as confidential taxpayer information, and the Department of Revenue shall not be required under this section to disclose confidential information.
(c) The term tax credit as used in this section shall mean a credit allowed against the amount of tax imposed by Chapter 16 or Chapter 18 of Title 40.
Section 13.
The provisions of this act are severable.
If any part of this act is declared invalid or unconstitutional, the declaration shall not affect the part which remains.
Section 14.
This act shall become effective on the first day of the third month following its passage and approval by the Governor, or its otherwise becoming law, except that Section 1 shall become effective for tax years beginning on or after January 1, 2023, immediately following its passage and approval by the Governor, or its otherwise becoming law.
Page 7 SB299 Enrolled ________________________________________________ President and Presiding Officer of the Senate ________________________________________________ Speaker of the House of Representatives SB299 Senate 18-May-23 I hereby certify that the within Act originated in and passed the Senate, as amended.
Senate 06-Jun-23 I hereby certify that the within Act originated in and passed the Senate, as amended by Conference Committee Report.
Patrick Harris, Secretary.
House of Representatives Amended and passed:
01-Jun-23 House of Representatives Passed 06-Jun-23, as amended by Conference Committee Report.
By:
Senator Orr Page 8