Alabama House committee approves economic incentive package

Four bills packaged as an economic incentives for the state passed the House Ways and Means Education committee on voice votes Wednesday.

The bills would expand existing incentives, provide money to develop industrial sites and address reporting requirements for incentives.

“Certainly, things have changed. Our economy has changed. Other states are doing these changes – it’s time we do this,” said Rep. Danny Garrett, R-Trussville, the chair of the committee.

Garrett said that the economy has improved significantly in the eight years that the Alabama Jobs Act passed in 2015, and that the joint bodies of the Legislature, along with the governor, recommended that the state renew the economic incentives.

HB 241, sponsored by Garrett, would extend the Alabama Jobs Act, set to expire this year, to 2028 and raise money available under the act from $350 million to $475 million over the next five years.

Companies would be able to receive investment credits for full-time employees. The bill would also add renewable energy generation to the list of eligible projects.

It would also expand tourism language in the current Jobs Act, as Garrett said that it has vague definitions about tourism opportunities. It would provide incentive credit for effects generated and set a cap on those incentives.

“My understanding is that there’s been only one use of that credit,” he said. “And so it’s not really effective in what we want to do.”

The committee approved a Garrett-backed amendment that would cap incentives at $10 million. He said that since the tourism section is “expensive,” he feels it needs to be further vetted. The amendment passed on a voice vote.

“I’m not comfortable at this point in recommending all that, but I think what we need to do is preserve the bones of this bill – structure this bill – and move it upstairs and let the Senate take some more time discussing it,” he said.

A second Garrett-sponsored bill, HB 257, would create a site development grant funding program to encourage the purchasing of new sites to meet demand. It would maintain the existing annual cap of $2 million for site development, but also expands the use of the funds to include site assessment and further development. It also establishes mechanics to speed up the process of site development. The bill passed on a voice vote.

House Minority Leader Anthony Daniels, D-Huntsville, introduced HB 247, which would rename the Alabama Innovation Corporation as Innovate Alabama and provide up to $25 million for tax credits for qualifying businesses. The legislation says the credits could be used to offset up to 50% of a taxpayer’s liability. 

The bill would also require businesses receiving incentives to move into the state within a year and require most top executives and employees to reside in Alabama.

HB 240, sponsored by Rep. Cynthia Almond, R-Tuscaloosa, requires the Department of Commerce to publish the details of agreements with companies that receive the incentives on its website. The department would have to include the name of the company, the estimated number of new jobs and the estimated value of the investment credit.

The Fiscal Division of the Legislative Services Agency currently provides reports on individual incentives, but not details about companies receiving them.

Commerce Secretary Greg Camfield said Wednesday he would have been against the transparency and reporting guidelines a decade ago, but that now supports them.

“This bill is really about trust in providing information to the public – to the taxpayer – so that they can see what offers we’re making and what agreements we’ve entered into,” Camfield said.

The bills move to the House of Representatives.