Economic development package clears first hurdles in Alabama Legislature
Lawmakers say the incentives will make Alabama more competitive with neighboring states
House Minority Leader Anthony Daniels, D-Huntsville and Rep. Danny Garrett, R-Trussville, stand during the State of the State address by Gov. Kay Ivey on Tuesday, March 7, 2023 in Montgomery, Ala. (Stew Milne for Alabama Reflector)
The Alabama Legislature approved several bills Thursday aimed at expanding existing incentives, providing money for industrial site development and expanding the availability of data on incentives.
The House approved four bills in the package, which has the backing of Gov. Kay Ivey and Democratic and Republican legislative leaders. The Senate approved two. The bills move to the other chambers for consideration.
Rep. Danny Garrett, R-Trussville, the chair of the House Ways and Means Education Committee and a sponsor of the legislation, said Alabama had to keep pace with other states that are offering more to companies.
“Other states surrounding us – Tennessee, Mississippi, Florida, Georgia – are all investing heavily in site development, hundreds of millions of dollars. In Alabama, we’re running low on development sites,” Garrett said.
HB 241, sponsored by Garrett, passed the House 105-0 vote. The bill 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.
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Garrett said that wages from the Jobs Act are projected to be 31% higher than the average wage in Alabama. The average wage in Alabama is $23 an hour, according to the U.S. Bureau of Labor Statistics, and the projected average pay for the jobs created by this bill is about $23.50 per hour, a difference of 50 cents per hour.
The bill also allows companies to sell up to five years’ worth of credits, an extension from three years’ worth of credits currently in law.
It also expands tourism language in the current Jobs Act and provides definitions about tourism opportunities. It provides incentive credit for effects generated and set a cap on those incentives.
An amendment offered by Rep. David Standridge, R-Hayden, would raise the population of a “targeted area” from 50,000 to 60,000. It passed on a 102-0 vote.
HB 257, also sponsored by Garrett, 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 expand the use of the funds to include site assessment and further development.
The bill also establishes mechanics to speed up the process of site development. A recommended supplemental fund bill by Gov. Kay Ivey would add another $10 million to this fund.
“This bill does not anywhere near fund the type of level of investment that we’re seeing for site development in other states, but it sets forth a mechanism and puts some additional funding in,” Garrett said.
HB 247, sponsored by House Minority Leader Anthony Daniels, D-Huntsville, would provide up to $25 million for tax credits for qualifying businesses. Under the bill, 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.
Daniels said that there is also focus on Historically Black Colleges and Universities (HBCUs) by engaging students in technology.
“The focus there is to engage our HBCUs community college, as well as four-year institutions as well as other institutions around their entrepreneurship and innovation,” Daniels said.
HB 240, sponsored by Rep. Cynthia Almond, R-Tuscaloosa, would require the Department of Commerce to publish the details of agreements with companies that receive the incentives on its website.
Some of the required information by the department are the name of the company, the estimated number of new jobs and the estimated value of the investment credit.
The Alabama Senate Thursday passed two of the proposals in the economic incentive package. SB 165, sponsored by Sen. Garlan Gudger, R-Cullman, is similar to Almond’s bill and would require the Department of Commerce to provide information on economic development projects, including investment, expected jobs created, and average wages. SB 151, sponsored by Sen. Arthur Orr, R-Decatur, to provide site assessment and development grants, is similar to HB 257. Both bills passed 30-0.
There was little discussion on the bills, but Sen. Merika Coleman, D-Pleasant Grove, asked about clawback provisions when a company may be found guilty of a crime. Coleman cited SL Alabama, a Hyundai supplier that the U.S. Department of Labor last year accused of violating child labor laws. Sen. Clyde Chambliss, R-Prattville, said provisions addressing that were in the House bill.
Senate President Pro Tem Greg Reed, R-Jasper, said after the Senate adjourned on Thursday that the state had been successful developing large sites of 1,000 acres or more. But he said resources would be needed for rural areas that might not have sites of that size.
“We need the 50-acre site, the 100-acre site, the two-acre site that’s going to be ready and available for development,” he said. “Those are going to be things that are important to do in the Seeds Act.”
Rep. Mary Moore, D-Birmingham, said that while she supports this act, she wants to see more economic incentives for underserved urban areas, and suggested area for improvement, such as making sure training centers, both in urban and rural underserved communities, are close to high schools to provide training for students who can’t afford trade school.
“It’s been quite a while since I had a program in north Birmingham for women who lived in public housing. That our junior college gave them skills and degrees to help them get jobs so they can move out of public housing and improve the quality of lives for their families,” she said. “And I think that we have to always keep that in the forefront when we are talking about growing Alabama.”
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