Now that the Alabama Special Session is done and ARPA funds have been allocated, leaders can focus on the 2023 regular session that begins on Tuesday.
Speaker of the House Nathaniel Ledbetter explained that the Alabama Jobs Act would be one of their first priorities.
“(The Alabama Jobs Act) is going to be priority No. 1 coming back after break. I think you’ll see a big push for that,” Ledbetter stated. “They’ve been very positive for our state. We’ve seen the job growth has been tremendous because of it. We’ve looked at the numbers; we got a return on the investment of 173% over a 20-year period.”
Ledbetter believes legislation on this needs to be done quickly.
The Alabama Jobs Act, created in 2015 and set to expire this year, has netted $256.8 million in incentives, Secretary of Commerce Greg Canfield reported in 2022. This amount outpaced the department’s benchmark of $164.6 million.
The Joint Study Commission on Renewing Incentives has discussed extending the Jobs Act through 2028 with a higher payout cap. Legislation has not been filed yet.
The Jobs Act created two separate incentives: The Alabama Jobs Credit and Alabama Investment Credit. The Jobs Credit gives companies cash rebates on their previous year’s payroll for qualified employees, and companies can get higher rebates if they locate in rural parts of the state or hire veterans.
The Investment Credit addresses a company’s capital investment and can be applied to several taxes, including income. Companies can receive incentives for up to 10 years.
The incentives are currently capped at $350 million annually .
Canfield said the Jobs Act has helped the state recruit 217 projects creating more than 38,000 jobs, and he believes the $350 million cap should be increased.
Canfield discussed on Twitter how rural areas have benefited from the Jobs Act as much as urban areas. “We are going to continue to build on that success,” Canfield stated.
“Alabama has led the Southeast in economic development, job creation, and industrial recruitment for roughly 20 years, and much of that success is the result of the incentives we offer,” Lt. Governor Will Ainsworth told Alabama Daily News on Thursday. “If we are going to continue that incredible success for decades to come, our incentives must remain competitive with those offered by our sister southeastern states, and this proposal does just that in a conservative, common sense manner. The pay-as-you-go package we have crafted also ensures taxpayers are protected from companies that are unable to fulfill their commitments.”
Other recommendations from the task force in December included:
- Extending both the Alabama Jobs and Growing Alabama incentives until July 31, 2028.
- Making constructing, owning, and operating renewable energy generation a qualifying project under the Jobs Act. According to the commission, more industries want to use renewable energy sources, including solar, and Alabama’s rural communities, with large amounts of available land, are well-positioned to supply it.
- Allowing the State Industrial Development Authority to create “brownfield redevelopment zones” to provide liability protections for owners who remediate former industrial sites. The authority should also be authorized to issue tax credits to owners who contribute brownfield property to SIDA for redevelopment.
- Making information on all past and future recipients of Jobs Act incentives publicly available, on a rolling basis, after a final project agreement has been executed between the state and the private company.
- Increasing the state’s supply of shovel-ready mega sites available for large industries by increasing funding for the Growing Alabama Credit, which allows local economic development organizations to leverage state funds to build industrial parks or other job-attracting sites. Alabama income taxpayers can receive tax credits for donations they make to economic development organizations. Banks and insurance companies can also donate and receive the credits against their financial institution’s excise tax and insurance premiums tax. The credit is now capped at $20 million.
Several lawmakers agreed that focusing on the Jobs Act is a priority for the Legislature.
“When we come back, the economic incentive package to me is the No. 1 priority,” Rep. Marcus Paramore stated. “I want to make sure that gets done, make sure it gets out, make sure we can continue to recruit good businesses and good high-quality jobs for our constituents.”
Rep. Phillip Ensler said, “But as with any bill, I want to look at the details, and having it done in a way that is equitable and making sure that we’re doing it in a way where the numbers of it make sense.”
Lawmakers will meet for three legislative days next week, Tuesday through Thursday.
