HB57

ENGROSSED

A BILL TO BE ENTITLED AN ACT

To enact the Alabama Veterans and Targeted Counties Act; to add provisions to the Alabama Jobs Act proposed by HB 58 of the Regular Session of 2015 of the Alabama Legislature; to define the term “targeted county”; to require that the Secretary of Commerce make certain findings as to whether a project is a qualifying project and whether a company is an approved company when the project is to be located in a targeted county; to provide that a qualifying project in a targeted county could receive incentives if it created at least 25 new jobs; to allow a 4 percent jobs credit for qualifying projects located in targeted counties; to allow an additional 5 years in the incentive period for the investment credit in certain cases; to provide an additional jobs credit of 0.5 percent of wages paid to veterans in certain cases; to provide for audits of companies claiming the Jobs Act Incentives; to create the Accelerate Alabama Fund; to allow the fund to be funded by the issuance of bonds secured by targeted county financing agreements, any other funds available to the authority, or money appropriated to such fund; to allow the State Industrial Development Authority to make loans to local entities to fund site preparation and other expenses for projects that will provide employment opportunities in the targeted area; to limit the value of loans allowed by such fund; to allow various entities to accept loans from such fund and to provide security for repayment of each loan; to require annual reports to the legislature on the operations of such fund; to authorize entry into agreements for the operation of such fund; to make legislative findings; to provide for the promulgation of regulations; to add a new Article 2B to Chapter 10 of Title 41, Code of Alabama 1975; to provide for the severability of invalid provisions; to provide for the repeal of conflicting laws; to provide for an effective date.

BE IT ENACTED BY THE LEGISLATURE OF ALABAMA:

Section 1. This act shall be known and may be cited as the “Alabama Veterans and Targeted Counties Act”.

Section 2. The legislature makes the following findings:

(a) Certain targeted counties in the state face challenges in their efforts to improve their economies in terms of personal income, job creation, average wages and strong revenue bases which provide much needed community services.

(b) Scarce economic development prospects and persistent unemployment and underemployment that exist in many targeted counties present serious threats to the safety, health and welfare of the residents of targeted counties.

(c) The economic well-being of the citizens of the state will be enhanced by the increased development and growth of targeted counties in Alabama.

(d) It is in the best interests and a public purpose of the state to provide enhanced incentives in targeted counties.

(e) It is in the best interests and a public purpose of the state to establish a program that will provide loans to qualifying borrowers in targeted counties to foster economic development and job creation by facilitating the location and expansion of economic development projects in targeted counties.

(f) The loans and incentives provided in this act will allow the state to encourage the creation of new jobs that may not otherwise exist within Alabama and its targeted counties.

Section 3. New Sections 40-18-376.1 and 40-18-376.2 are added to Article 16 of Chapter 18 of Title 40, Code of Alabama 1975, which article is proposed by HB 58 of the Regular Session of 2015 of the Alabama Legislature. Said Sections 40-18-376.1 and 40-18-376.2 shall read as follows:

§ 40-18-376.1.

(a) The provisions in this section shall apply to any “targeted county,” a term defined in this article to mean any Alabama county that has a population of 25,000 or less, as determined by the Commissioner of Labor as of each January 1 using the most current data available from the United States Departments of Labor or Commerce, the United States Bureau of the Census, or any other federal or state agency or department.

(b) In making the findings required by Section 40-18-373(a), a company that proposes a qualifying project in a targeted county shall be an approved company for purposes of this section only if the Secretary of Commerce makes the additional finding that the qualifying project will increase the economic diversity of, or otherwise benefit, the targeted county.

(c) For purposes of determining in Section 40-18-372(b)(2) whether a qualifying project may receive the Jobs Act Incentives, a project to be located in a targeted county shall employ at least 25 new employees, absent a finding of extraordinary circumstances by the Secretary of Commerce.

(d) If the qualifying project is located in a county which is deemed to be a targeted county on the date the project agreement is executed, the following shall be applicable:

(1) The jobs credit provided in Section 40-18-375(a) shall be 4.0 percent of the wages paid to eligible employees during the prior year; and

(2) The investment credit provided in Section 40-18-376(a) shall have an incentive period of 15 years, but only if the qualifying project is expected to sell the majority of its output or services to a business located in Alabama that is described in Section 40-18-372(a), so that the transit distance for the output or services shall be less than 50 miles.

(e) Each year, the incentives in subsection (d) may be extended to no more than two qualifying projects not in targeted counties. Such incentives shall be granted in project agreements executed by the Governor on the recommendation of the Secretary of Commerce.

§ 40-18-376.2.

(a) The provisions in this section shall apply to any incentivized company that employed, in the prior year, at least 12 percent of its eligible employees as veterans who received an honorable or general discharge. The calculation of the percentage of eligible employees who are veterans shall be made using the method provided in a project agreement.

(b) Any incentivized company described by subsection (a) shall receive an additional 0.5 percent jobs credit provided in Section 40-18-375(a) on the wages paid during the prior year to eligible employees who are veterans.

(c) No incentivized company claiming the credit provided by subsection (b) shall also claim the credit provided by Article 13 of this Chapter 18 for any portion of the project.

(d) The Department of Labor shall periodically verify the actual number of veterans employed by the incentivized company and the wages of the veterans during the relevant year. If the Department of Labor is not able to provide the verification utilizing all available resources, it may request any additional information from the incentivized company as may be necessary.

Section 4. A new Article 2B is added to Chapter 10 of Title 41, Code of Alabama 1975, to read as follows:

§ 41-10-45.1. The following words and phrases shall have the following meanings when used in this article:

(a) AUTHORITY. The State Industrial Development Authority, a public corporation of the state, organized and existing under Articles 2, 2A and 2B of this Chapter.

(b) DEPARTMENT. The Alabama Department of Commerce.

(c) ELIGIBLE BORROWER. A municipality, county, industrial development authority organized under Chapter 92A of Title 11, industrial development board organized under Article 4, Chapter 54 of Title 11, or nonprofit organization organized to foster economic development and described in Section 501(c) of the Internal Revenue Code of 1986, as in effect from time to time.

(d) ELIGIBLE EXPENSES. Expenses relating to land acquisition, site preparation or development, building improvements, building construction, building renovations, infrastructure, and any other real or personal property deemed necessary or useful in connection therewith.

(e) ELIGIBLE PROJECT. A project located in a targeted county that, when completed, will provide employment opportunities within one or more targeted counties. An eligible project shall be the subject of a project agreement, abatement agreement or similar agreement between the company and any of the state or an eligible borrower.

(f) FUND. The Accelerate Alabama Fund.

(g) MAXIMUM LOAN AMOUNT. For any project anticipated to create more than 25 new jobs, $2,000,000, and in all other cases, $1,000,000.

(h) PROJECT OBLIGATIONS. The meaning in Section 41-10-44.2(8).

(i) QUALIFYING BORROWER. An eligible borrower selected by the authority to receive a loan.

(j) QUALIFYING EXPENSES. The eligible expenses permitted to be financed by the loan pursuant to the targeted county financing agreement.

(k) QUALIFYING PROJECT. An eligible project selected by the authority to receive a loan from the fund to finance its qualifying expenses.

(l) TARGETED COUNTY. Any Alabama county that is described by Section 40-18-376.1(a).

(m) TARGETED COUNTY FINANCING AGREEMENT. Any agreement entered into between the authority and a qualifying borrower pertaining to a loan from the fund including, without limitation, a loan agreement, trust indenture, security agreement, reimbursement agreement, guarantee agreement, bond or note, ordinance or resolution, or similar instrument. A targeted county financing agreement may contain, in addition to financial terms, provisions relating to the regulation and supervision of the qualifying project and other provisions as the authority may determine.

§ 41-10-45.2.

(a) There is created the “Accelerate Alabama Fund,” which may consist of monies appropriated or otherwise made available by the legislature in any manner, proceeds of project obligations issued by the authority, and monies from any other source designated for deposit into such fund, but not including monies subject to a constitutional designation for some other purpose. Unexpended amounts remaining in the fund at the end of each fiscal year of the state shall not lapse into the State General Fund. Any investment earnings or interest earned on amounts in the fund and all loan payments of principal and/or interest shall be deposited to the credit of the fund.

(b) In addition to the purposes for which the authority may issue project obligations, the authority is hereby authorized to issue project obligations to provide money for the fund. Project obligations shall be issued as provided in Section 41-10-44.6, subject, however, to the following:

(1) Project obligations may also be payable solely from revenues and receipts of the authority derived from a targeted county financing agreement, from any other source described in Section 41-10-45.4(a), or from any combination thereof; and

(2) Project obligations may be secured by a pledge of, or security interest in, any revenues, collateral or other security described in Section 41-10-45.4(a), from any other source permitted by law, or from any combination thereof.

(c) In addition to the purposes for which the authority may use the proceeds of project obligations pursuant to Section 41-10-44.7, the proceeds of project obligations issued to provide money for the fund remaining after adequate provision for the payment of the expenses of issuance may be deposited in the fund and used as provided in this article.

(d) In addition to the purposes for which the authority may refund project obligations pursuant to Section 41-10-44.10, the authority may issue project obligations to refund project obligations issued to provide money for the fund. Refunding project obligations shall be issued as provided in Section 41-10-44.10, subject, however, to the following:

(1) Refunding project obligations may also be payable solely from revenues and receipts of the authority derived from a targeted county financing agreement, from any other source described in Section 41-10-45.4(a), or from any combination thereof; and

(2) Refunding project obligations may be secured by a pledge of, or security interest in, any revenues, collateral or other security described in Section 41-10-45.4(a), from any other source permitted by law, or from any combination thereof.

§ 41-10-45.3.

(a) The authority may provide loans to an eligible borrower to pay for all or part of the eligible expenses of a qualifying project pursuant to a targeted county financing agreement. A loan may have a maturity or maturities not exceeding 20 years from its date, may bear interest or be interest free, may not exceed the maximum loan amount, and may contain terms not in conflict with the provisions of this article, all as the governing body of the authority may provide in the proceedings pursuant to which the loan is authorized to be issued. The authority may provide, in its discretion, that the loan shall bear interest at a rate or rates fixed at the time of the issuance thereof, or at fixed rates which may be changed from time to time during the term of the loan in accordance with an objective procedure determined by the authority at the time of the issuance of the loan, or at a floating rate or rates, and the authority may also provide, in its discretion, that interest on the loan may be payable in cash or in kind at fixed intervals, through one or more payments which reflect compound interest computed at specified intervals on accrued but unpaid interest, through a discount in the sales price for the loan equivalent to compound interest on the loan for all or part of the term thereof, or through any combination of the foregoing methods. The proceeds derived from the loan shall be used solely for the purpose specified in the targeted county financing agreement.

(b) The authority shall determine the form and content of loan applications, targeted county financing agreements and loan obligations, including the term and rate or rates of interest. The loan application must include a description of the eligible project, the estimated cost of the project for which assistance is requested and any other information required by the authority.

(c) The authority may not issue project obligations to provide money for the fund in excess of $20,000,000.

(d) The authority may:

(1) Require a qualifying borrower with an outstanding loan to submit to the authority information relevant to the loan; and

(2) Require a qualifying borrower with an outstanding loan to submit financial reports.

(e) The authority may refinance any loan previously made to a qualifying borrower.

(f) The treasurer of the state may invest the money in the fund not currently needed to meet the obligations of the fund under this article. The treasurer of the state may contract with investment management professionals, investment advisors and legal counsel to assist in the management of the fund and may pay from the fund the state expenses incurred under those contracts.

§ 41-10-45.4.

(a) In order to provide for the repayment of a loan by a qualifying borrower for a project, the qualifying borrower is hereby authorized and empowered to do and perform any one or more of the following:

(1) To obligate itself to pay to the authority at periodic intervals a sum sufficient to repay the authority loan according to the terms thereof;

(2) To levy, collect and pay over to the authority and to obligate itself to continue to levy, collect and pay over to the authority the proceeds of any fee, charge, license, permit, tax, or other source of revenue;

(3) To undertake and obligate itself to pay its contractual obligation to the authority solely from the proceeds from any one or more of the sources specified in paragraph (2), or to impose upon itself a general obligation pledge to the authority additionally secured by a pledge of any one or more of such sources;

(4) To obligate itself to continue to levy and collect such revenues, fees and charges in such amounts as shall be required by the authority;

(5) As evidence of its obligation to repay any loan made by the authority, to issue its bonds, warrants or other obligations;

(6) As security for its obligation to repay any loan made by the authority, to contract for letters of credit in favor of the authority, to execute and deliver mortgages on any of its property in favor of the authority, to obtain and provide guaranties of its obligation to the authority, or to provide any other security as may be requested by the authority; and

(7) To enter into such agreements, to perform such acts and to delegate such functions and duties as its governing body shall determine to be necessary or desirable to enable the authority to fund a loan to the public body to aid it in the construction or acquisition of a project.

(b) The authority may pledge any of the foregoing as set forth in subsection (a) to repayment of project obligations or refunding project obligations.

(c) In the event of default, the authority may accelerate all principal and interest on any loan and utilize any other available remedies under state law.

§ 41-10-45.5.

(a) The authority shall make an annual report to the legislature as to the loans granted during, or outstanding at the end of, each fiscal year. The report shall be due on the fifth legislative day of each regular session and shall state, for each qualifying project, the county in which it is located, the name of the qualifying borrower, the outstanding principal amount of the loan and the maturity date of the loan.

(b) Nothing in this article shall be construed to constitute a guarantee or assumption by the state of any debt of any qualifying borrower nor to authorize the credit of the state to be given, pledged or loaned to any qualifying borrower.

§ 41-10-45.6.

(a) The department and the authority may enter into contracts and other agreements in connection with the operation of the fund, including but not limited to agreements appointing the department as the agent of the authority for administration of the fund and the lending program authorized hereby.

(b) The department shall promulgate regulations to implement and administer the provisions of this act and to administer the fund in accordance with applicable law.

Section 5. If a court of competent jurisdiction adjudges invalid or unconstitutional any clause, sentence, paragraph, section, or part of this act, such judgment or decree shall not affect, impair, invalidate, or nullify the remainder of this act, but the effect of the decision shall be confined to the clause, sentence, paragraph, section, or part of this act adjudged to be invalid or unconstitutional.

Section 6. All laws or parts of laws which conflict with this act are repealed.

Section 7. Following its passage and approval by the Governor, or its otherwise becoming law, this act shall become effective on the same date that HB 58 of the Regular Session of 2015 of the Alabama Legislature should become effective. In the event that HB 58 of the Regular Session of 2015 of the Alabama Legislature is not enacted, then this act shall become null and void.

Economic Development

Veterans

Labor Department

Employment

State Industrial Development Authority

Popular Names

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