The bill SB265 Engrossed amends the Code of Alabama 1975 to enhance tax abatements for data processing centers and qualifying industrial or research enterprises. It establishes a maximum exemption period of 20 years for these tax abatements, effective January 1, 2027, while also mandating the collection of state noneducational ad valorem taxes and sales and use taxes on specific purchases made by large data processing centers. The bill introduces new definitions and classifications, including "major additions" to existing properties, and modifies the maximum exemption periods based on capital investments, with specific thresholds set at $200 million and $400 million. Additionally, it clarifies that existing abatements granted prior to January 1, 2027, can extend up to 30 years for significant investments.

Key changes include the insertion of provisions that define the scope of tax exemptions and the types of purchases subject to taxation, while deleting outdated language to streamline the legal text. The bill also specifies that tax abatements for data processing centers with a peak demand of 100 megawatts or greater will not extend beyond the date the property is placed in service. Furthermore, it outlines the distribution of funds collected from taxes, including allocations to the State General Fund and the Department of Human Resources, while increasing annual funding for state parks maintenance. The act is set to take effect on June 1, 2026, and aims to incentivize economic development and job creation in Alabama.

Statutes affected:
Introduced: 40-9B-3, 40-9B-4, 40-9B-4, 40-23-35
Engrossed: 40-9B-3, 40-9B-4, 40-9B-4, 40-23-35