Standards for approval of qualified railroad rehabilitation expenditures; application for tax credits; completion of project; tax credit certificate; fees; annual report.

(a) By December 1, 2019, the Department of Commerce shall develop standards for the approval of qualified railroad rehabilitation expenditures for which a tax credit is being sought. The standards shall consider the availability of additional public or private funding for the project, the expected completion time of the project, and the anticipated impact of the project on usage of the railroad infrastructure.

(b) Prior to beginning any qualified railroad rehabilitation work, the eligible taxpayer shall submit an application and rehabilitation plan to the department and an estimate of the qualified railroad rehabilitation expenditures under the rehabilitation plan; provided, however, the eligible taxpayer, at its own risk, may incur qualified railroad rehabilitation expenditures no earlier than six months prior to the submission of the application and rehabilitation plan.

(c) The department shall review the application and rehabilitation plan to determine if the information contained therein is complete. If the department determines that the application and rehabilitation plan are complete, the department shall reserve, for the benefit of the eligible taxpayer, an allocation for a tax credit as provided in this chapter and shall notify the eligible taxpayer in writing of the amount of the reservation. The reservation of tax credits does not entitle the taxpayer to an issuance of tax credits until the owner complies with all other requirements of this chapter for the issuance of the tax credits. Reservations of tax credits shall be issued by the department within a reasonable time from the filing of a completed application and rehabilitation plan. Any application disapproved by the department shall be removed from the review process, and the department shall notify the taxpayer in writing of the decision to remove the application. A disapproved application may be resubmitted, but shall be deemed to be a new submission and may be charged a new application fee. 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 department that no additional tax credits shall be granted during that tax year. The applications shall remain in active status from the date of the original application and shall be considered for recommendations of tax credits in the event that additional credits become available due to rescission by the department or when a new tax year's allocation of tax credits becomes available.

(d) Following the completion of a qualified railroad rehabilitation project, the eligible taxpayer shall notify the department that the rehabilitation has been completed and shall certify the qualified railroad rehabilitation expenditures incurred with respect to the rehabilitation plan. Within 90 days after receipt and approval of the foregoing documentation from the eligible taxpayer, the department shall issue a tax credit certificate in an amount equivalent to the amount of the qualified railroad rehabilitation expenditures incurred with respect to the rehabilitation plan as certified by the taxpayer, not to exceed the amount of the tax credit reservation issued for the project.

(e) In order to obtain a credit against any state income tax due that is specified in this chapter, an eligible taxpayer shall file the tax credit certificate with the taxpayer's Alabama state tax return. The tax credit certificate shall satisfy all requirements of the Department of Revenue pertaining to the eligibility of the person claiming the credit. All information submitted to the Department of Revenue by taxpayers claiming or seeking certification of a credit shall be subject to the confidentiality provisions of Section 40-2A-10.

(f) For processing the taxpayer's application for a tax credit, the department may impose an application fee equal to one percent of the qualified rehabilitation expenditures, not to exceed a fee equal to ten thousand dollars ($10,000). Any fees collected by the department under this subsection shall be deposited in the State Treasury to the credit of the department and all such funds are to be appropriated to the department to defray the expenses incurred in carrying out this chapter.

(g) The department shall report to the Legislature in the third year following passage of this chapter, and annually thereafter, on the overall economic activity, usage, and impact to the state from the rehabilitation of railroad infrastructure for which tax credits have been allowed. The information in the reports shall be consistent with the information required by the Legislature pursuant to, and shall be provided by the department to the Legislature in accordance with Section 40-1-50, and rules adopted thereunder. Information provided pursuant to this section is exempt from the confidentiality provisions of Section 40-2A-10.

(Act 2019-459, §3.)