The bill HB399 amends the Code of Alabama 1975 to update tax abatement regulations for data processing centers and industrial or research enterprises. Key changes include limiting the maximum exemption period for tax abatements to 20 years starting January 1, 2027, and requiring the collection of state noneducational ad valorem taxes and sales and use taxes on specific purchases made by large data processing centers from that date. The bill also introduces new definitions, such as "data processing center" and "industrial or research enterprise," while deleting outdated language to streamline the legal framework. Additionally, it specifies that no abatement of noneducational ad valorem taxes shall extend beyond the date the private use industrial property is placed in service, and it allows for the abatement of construction-related transaction taxes on necessary equipment.

Furthermore, HB399 expands the definition of "industrial or research enterprise" to include research and development facilities, renewable energy facilities, and tourism destination attractions. It establishes new thresholds for capital investments in data processing centers, with varying exemption periods based on the amount invested. The bill also clarifies the criteria for granting tax abatements, emphasizing that approvals will only take effect upon the adoption of a resolution by local governing bodies. Notably, it deletes the requirement for certain approvals previously mandated in Section 40-9B-5(b), thereby streamlining the process for granting tax abatements. Overall, the bill aims to enhance Alabama's ability to attract and retain data processing centers while ensuring a balanced approach to tax incentives.

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
Enrolled: 40-9B-3, 40-9B-4, 40-9B-4, 40-23-35