HB523 By Representative Scott RFD Ways and Means Education Rd 1 12-APR-16

SYNOPSIS: Under existing law, governmental bodies of municipalities, counties, and public industrial authorities may grant abatements of taxes or property to certain private enterprises and businesses.

This bill would require governmental bodies of municipalities, counties, and public industrial authorities that grant abatements of taxes or property to submit to the Legislature a report on these abatements every year.

A BILL TO BE ENTITLED AN ACT

Relating to tax abatements; to add Section 40-96-14 to the Code of Alabama 1975; to require governmental bodies of municipalities, counties, and public industrial authorities that grant abatements of taxes or property to submit to the Legislature a report on these abatements every year.

BE IT ENACTED BY THE LEGISLATURE OF ALABAMA:

Section 1. Section 40-96-14 is added to the Code of Alabama 1975, to read as follows:

§40-96-14.

(a) In order for the Legislature to get accurate and complete information regarding the costs and benefits of economic tax incentives, the governmental body of each municipality, county, and public industrial authority that grants abatements under this chapter, no later than the second Legislative day beginning in the 2017 Regular Session of the Legislature and every year thereafter, shall provide to the Legislature a report assessing each abatement based on the following criteria:

(1) Whether or not the abatement has been successful in meeting the purpose for which it was enacted, in particular, whether the abatement benefits those originally intended to be benefited, and if not, those who do benefit.

(2) Whether or not the governmental body receives a positive return on investment, specifically the direct and indirect impact on local tax revenues, from the business or industry for which the abatement is intended to benefit and any other economic benefits produced by the abatement.

(3) The economic results of each abatement, taking into account the extent to which the abatement successfully changes business behavior, and the unintended or inadvertent effects, benefits, or harm caused by the abatement.

(c)(1) Nothing in this section shall be construed to require the disclosure of proprietary or trade secret information that has been submitted to any governmental body with respect to an abatement.

(2) Nothing in this section shall be construed to supersede any provision with respect to the confidentiality of taxpayer records.

(d) Each governmental body required to submit a report pursuant to the provisions of this section may request from any other state or local agency, official, recipient of funds, or the Alabama Department of Revenue any information necessary to complete the required report. Any such agency, official, or recipient shall comply with this request.

(f)(1) The Department of Revenue shall develop a format for reports required herein. The format shall be made available to all governmental bodies for use in preparation of their required reports.

(2) The Department of Revenue shall provide governmental bodies with any tax information necessary to complete the required report relating to an abatement granted by the governmental body.

Section 2. This act shall become effective immediately following its passage and approval by the Governor, or its otherwise becoming law.

Economic Development

Tax Abatements

Industrial Development

Industrial Development Authority

Legislature

Counties

Municipalities

Taxation

Code Added