SB138 By Senator Dial RFD Finance and Taxation Education Rd 1 09-FEB-17

SYNOPSIS: Under existing law, the state levies an income tax upon every resident of the state and upon every nonresident who receives income from an Alabama source. A taxpayer is allowed certain standard deductions, personal exemptions, and tax credits in computing his or her income subject to the tax.

This bill would provide an income tax credit to a volunteer firefighter who is on the active roster of a state certified volunteer fire department or a combination fire department in the state and who obtains a minimum number of annual training hours under certain conditions.

This bill would impose record keeping requirements on a volunteer firefighter who qualifies for the income tax credit and would provide the Department of Revenue with rule-making authority to implement this bill.

This bill would provide penalties for knowingly falsifying training hours in order to receive the income tax credit.

Amendment 621 of the Constitution of Alabama of 1901, now appearing as Section 111.05 of the Official Recompilation of the Constitution of Alabama of 1901, as amended, prohibits a general law whose purpose or effect would be to require a new or increased expenditure of local funds from becoming effective with regard to a local governmental entity without enactment by a 2/3 vote unless: it comes within one of a number of specified exceptions; it is approved by the affected entity; or the Legislature appropriates funds, or provides a local source of revenue, to the entity for the purpose.

The purpose or effect of this bill would be to require a new or increased expenditure of local funds within the meaning of the amendment. However, the bill does not require approval of a local governmental entity or enactment by a 2/3 vote to become effective because it comes within one of the specified exceptions contained in the amendment.

A BILL TO BE ENTITLED AN ACT

Relating to income tax; to provide an income tax credit to volunteer firefighters who obtain a minimum number of annual training hours under certain conditions; to provide record-keeping requirements; to authorize the Department of Revenue to adopt rules; to provide penalties; and in connection therewith to have as its purpose or effect the requirement of a new or increased expenditure of local funds within the meaning of Amendment 621 of the Constitution of Alabama of 1901, now appearing as Section 111.05 of the Official Recompilation of the Constitution of Alabama of 1901, as amended.

BE IT ENACTED BY THE LEGISLATURE OF ALABAMA:

Section 1. For the purposes of this act, the following terms shall have the following meanings:

(1) COMBINATION FIRE DEPARTMENT. A fire department that has on its active roster both volunteer firefighters and paid firefighters.

(2) DEPARTMENT OF REVENUE. The Alabama Department of Revenue.

(3) TAXPAYER. As defined by Section 40-18-1 of the Code of Alabama 1975.

(4) TRAINING HOURS. Credit hours obtained by a volunteer firefighter by doing either or both of the following:

a. Participating in and receiving organized training through a class approved for use in the fire service and emergency medical services training to be used in providing services as a volunteer firefighter.

b. Instructing an organized training class approved for use in the fire service and emergency medical services training to be used in providing services as a volunteer firefighter.

(5) VOLUNTEER FIREFIGHTER. Any person who is any of the following:

a. A firefighter on the active roster of a certified volunteer fire department as provided by Section 9-3-17 of the Code of Alabama 1975.

b. An unpaid firefighter on the active roster of a combination fire department covered by Section 9-13-17 of the Code of Alabama 1975.

c. An unpaid firefighter on the active roster of a combination fire department not covered by Section 9-3-17 of the Code of Alabama 1975, but the combination fire department is recognized by Insurance Services Office, Inc.

Section 2. (a) A volunteer firefighter who obtains a minimum of 30 training hours in one calendar year and who is a taxpayer may claim a credit against the tax imposed on him or her by Section 40-18-2 of the Code of Alabama 1975, for the same year he or she obtained the required number of minimum training hours as provided by this subsection.

(b) The income tax credit provided by this section shall be in the following amounts:

(1) A volunteer firefighter shall be allowed a credit of two hundred fifty dollars ($250) per year.

(2) A certified volunteer firefighter shall be allowed a credit of five hundred dollars ($500) per year.

(3) A volunteer firefighter I or II shall be allowed a credit of seven hundred fifty dollars ($750) per year.

(c)(1) A taxpayer who qualifies for the income tax credit provided by this section shall be required to keep in his or her possession a certified copy of the training hours that qualify him or her for the income tax credit provided by this section.

(2) Upon the request of the Department of Revenue, a taxpayer shall provide to the Department of Revenue a certified copy of the training hours that qualify him or her for the income tax credit provided by this section.

(3) The Department of Revenue may adopt rules to implement this act.

(d) Any taxpayer who knowingly falsifies his or her training hours to qualify for the income tax credit provided by this section or any person who knowingly falsifies the training hours of another taxpayer so that the taxpayer can qualify for the income tax credit provided by this section shall be guilty of a Class A misdemeanor.

Section 3. Although this bill would have as its purpose or effect the requirement of a new or increased expenditure of local funds, the bill is excluded from further requirements and application under Amendment 621, now appearing as Section 111.05 of the Official Recompilation of the Constitution of Alabama of 1901, as amended, because the bill defines a new crime or amends the definition of an existing crime.

Section 4. This act shall become effective on the first day of the third month following its passage and approval by the Governor, or its otherwise becoming law.

Taxation

Tax Credits

Volunteer Firefighters

Revenue Department

Crimes and Offenses

Taxpayers

Misdemeanors