SB197 By Senator Whatley RFD Agriculture, Conservation and Forestry Rd 1 18-FEB-20

SYNOPSIS: This bill would establish an income tax credit for eligible taxpayers who incur costs for the construction, acquisition, or installation of a qualified storm shelter, as defined.

A BILL TO BE ENTITLED AN ACT

Relating to taxation; to provide an income tax credit for the construction, acquisition, or installation of a qualified storm shelter.

BE IT ENACTED BY THE LEGISLATURE OF ALABAMA:

Section 1. (a) As used in this act, the following terms shall have the following meanings:

(1) MANUFACTURED HOME. Any structure built to the Manufactured Home Construction and Safety Standards that displays a red certification label on the exterior of each transportable section.

(2) PRIMARY RESIDENCE. Any manufactured home or single family residence building that is the legal residence of the taxpayer and is used for purposes of the taxpayer's income tax calculation.

(3) QUALIFIED STORM SHELTER. A storm shelter or safe room to which all of the following apply:

a. The design is capable of withstanding an EF5 tornado.

b. The shelter or room is placed in service as an attachment to the taxpayer's primary residence, or on the same lot or parcel as the residence, and no other qualified storm shelter is attached to the residence or on the lot.

c. The shelter or room meets or exceeds the most recent Federal Emergency Management Agency minimum criteria for the design, construction, and operation of residential safe rooms.

d. The shelter or room is built on the site of the taxpayer's primary residence or is manufactured offsite and installed on the site of the taxpayer's primary residence.

(4) SINGLE FAMILY RESIDENCE BUILDING. A structure designed according to the International Residential Codes or its predecessor codes.

(b)(1) An Alabama income tax credit is established for eligible taxpayers who incur costs for the construction, acquisition, or installation of a qualified storm shelter in the state. Except as provided in subdivision (2), the tax credit shall equal three thousand dollars ($3,000) or 50 percent of the total cost of the construction, acquisition, and installation of the qualified storm shelter, whichever is less.

(2) When a person incurs the cost to construct, acquire, or install a qualified storm shelter on a property owned by another person, the person shall be eligible for a tax credit equal to four thousand five hundred dollars ($4,500) or 75 percent of the total cost of the construction, acquisition, and installation of the qualified storm shelter, whichever is less.

(3) The tax credit must be taken in the earliest tax year in which the shelter was placed into service.

(c) The tax credit issued under this act may not decrease a taxpayer's tax liability to less than zero. The tax credit is not refundable or transferable. The taxpayer applying for the tax credit shall apply for the tax credit for the year in which the storm shelter was acquired, constructed, or installed.

(d) The Department of Revenue shall grant the tax credit against the state income tax that is due by the taxpayer holding the tax credit certificate issued under subsection (f) in the amount stated on the tax credit certificate. The department may audit and reassess any credit improperly obtained by the taxpayer, in accordance with the Alabama Taxpayers' Bill of Rights and Uniform Revenue Procedures Act under Chapter 2A of Title 40, Code of Alabama 1975.

(e) The tax credit authorized by this act is limited to an aggregate amount of two million dollars ($2,000,000) annually.

(f) Prior to claiming the income tax credit authorized under subsection (b), the taxpayer shall apply for the certification of the credit with the Alabama Emergency Management Agency by providing the documents reflecting the costs for construction, acquisition, or installation of the qualified storm shelter, along with the necessary documents to show that the storm shelter meets the qualifications of a qualified storm shelter as provided under this act. The Alabama Emergency Management Agency shall review the documents and provide certification to the taxpayers who meet the qualifications of the qualified storm shelter. The certification shall also include the total qualifying cost of construction, acquisition, and installation of a qualified storm shelter. In the event the reservations of tax credits equal the total amount available for reservations during the tax year, all eligible taxpayers with applications then awaiting approval or thereafter submitted shall be notified by the Alabama Emergency Management Agency that no additional tax credits shall be granted during that tax year.

(g) The Alabama Emergency Management Agency shall prepare a report detailing the number of qualified storm shelters constructed, acquired, and installed and the amount of tax credits claimed under this act. The information on the report shall be consistent with the information required under Section 40-1-50, Code of Alabama 1975, and rules adopted by the Department of Revenue. Information provided under this section is exempt from the confidentiality provisions of Section 40-2A-10, Code of Alabama 1975, and shall be provided by the Alabama Emergency Management Agency to the Legislature in accordance with Section 40-1-50, Code of Alabama 1975, and rules adopted by the Department of Revenue.

(h) The Alabama Emergency Management Agency may adopt rules necessary to implement and administer this act.

(i) The tax credit allowed under this section shall be effective January 1, 2021, for the 2021 taxable year, and shall continue through the 2024 tax year, unless continued by an act of the Legislature.

Section 2. 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

Storm Shelters