§ 40-9B-4 — Authorization of Abatement

Alabama § 40-9B-4

• Jurisdiction: Alabama
• Title 40: Revenue and Taxation
• Ch. 9B: Tax Incentive Reform Act of 1992

Text

(a) Noneducational ad valorem taxes, construction related transaction taxes, except those local construction related transaction taxes levied for educational purposes or for capital improvements for education, and mortgage and recording taxes, or payments required to be made in lieu thereof, and in the case of a qualifying industrial or research enterprise described in Section 40-9B-3(a)(10)e. which is owned by an entity organized under Chapter 6 of Title 37, or by an authority both organized and existing pursuant to Chapter 50A of Title 11, and subject to the payments required to be made in lieu of ad valorem, sales, use, license, and severance taxes imposed by Section 11-50A-7, in addition to the foregoing, all other ad valorem taxes, or payments required to be made in lieu thereof, imposed by the state, counties, municipalities, and other taxing jurisdictions of Alabama, may be abated with respect to private use industrial property and security documents and other recordable documents associated therewith as provided in this chapter.
(b) No abatement of noneducational ad valorem taxes, other ad valorem taxes, or payments required to be made in lieu of the foregoing, may exceed the maximum exemption period. No further abatement with respect to the same private use industrial property may be granted unless there is a major addition to the property, in which event abatement may be granted only with respect to the noneducational ad valorem taxes, and in the case of a qualifying industrial or research enterprise described in Section 40-9B-3(a)(10)e. which is owned by an entity organized under Chapter 6 of Title 37, or by an authority both organized and existing pursuant to Chapter 50A of Title 11, and subject to the payments required to be made in lieu of ad valorem, sales, use, license, and severance taxes imposed by Section 11-50A-7, in addition to the noneducational ad valorem taxes, with respect to all other ad valorem taxes, or payments required to be made in lieu thereof, imposed by the state, counties, municipalities, and other taxing jurisdictions of Alabama, on the major addition by complying with the procedures set forth in this chapter. Notwithstanding the immediately preceding sentence, with respect to a data processing center, an abatement of noneducational ad valorem taxes, other ad valorem taxes, or payments required to be made in lieu thereof, shall apply to all real and personal property comprising a data processing center, the costs of which may be capitalized for federal income tax purposes, acquired at any time during the applicable maximum exemption period, including, but not limited to, computers, software licensed for use at the qualifying data processing center, equipment supporting computing, networking, or data storage; cooling systems, cooling towers, and other temperature infrastructure; power infrastructure for transformation, distribution, or management of electricity used for the maintenance and operation of a data processing center, including, but not limited to, exterior dedicated business-owned substations, backup power generation systems, battery systems, and related infrastructure; and any other equipment necessary for the maintenance and operation of a data processing center.
(c) An abatement of construction related transaction taxes, or payments required to be made in lieu thereof, shall apply only to tangible personal property and taxable services incorporated into a private use industrial property, the cost of which may be added to capital account with respect to the property, determined without regard to any rule which permits expenditures properly chargeable to capital account to be treated as current expenses. No abatement of construction related transaction taxes, or payments required to be made in lieu thereof, shall extend beyond the date the private use industrial property is placed in service; provided, however, that an abatement of construction related transaction taxes, or payments required to be made in lieu thereof, for a data processing center shall apply to all taxable services and acquisitions of real and personal property comprising the data processing center, the costs of which may be capitalized for federal income tax purposes, occurring at any time during the applicable maximum exemption period, including, but not limited to, computers, software licensed for use at the qualifying data processing center, equipment supporting computing, networking, or data storage; cooling systems, cooling towers, and other temperature infrastructure; power infrastructure for transformation, distribution, or management of electricity used for the maintenance and operation of a data processing center, including, but not limited to, exterior dedicated business-owned substations, backup power generation systems, battery systems, and related infrastructure; and any other equipment necessary for the maintenance and operation of a data processing center. No further abatement may be granted for construction related transaction taxes, or payments required to be made in lieu thereof, with respect to the private use industrial property unless incurred in connection with a major addition, in which event only construction related transaction taxes, or payments required to be made in lieu thereof, that may be added to capital account with respect to the major addition, determined without regard to any rule which permits expenditures properly chargeable to capital account to be treated as current expenses, may be abated by complying with the procedures set forth in Act 92-599 as amended, and as amended by Act 2008-275. Except in the case of a qualifying industrial or research enterprise described in Section 40-9B-3(a)(10)e. which is owned by an entity organized under Chapter 6 of Title 37, or by an authority both organized and existing pursuant to Chapter 50A of Title 11, and subject to the payments required to be made in lieu of ad valorem, sales, use, license, and severance taxes imposed by Section 11-50A-7, no local construction related transaction taxes levied for educational purposes or capital improvements for education, or payments required to be made in lieu thereof, may be abated.
(d) Mortgage and recording taxes with respect to mortgages, deeds, and documents relating to issuing or securing obligations and conveying title into or out of the public authority or county or municipal government with respect to a private use industrial property may be abated by complying with the procedures set forth in this chapter.
(e) An abatement under this section may be granted only with respect to private use industrial property that has not previously been placed in service by the private user who is applying for the abatement or by a person who is a related party, as defined in 26 U.S.C. §267, with respect to such private user.
(f)(1) For a qualifying industrial or research enterprise described in Section 40-9B-3(a)(10)e., which is owned by a utility described in Section 37-4-1(7)a., and which is a coal gasification or liquefaction project or an advanced fossil-based generation project, as such terms are defined in Section 40-18-1, or which utilizes hydropower production, an abatement under this section shall be in an amount equal to 100 percent of the state noneducational ad valorem taxes owed for plant, property, and facilities for the maximum exemption period, and in an amount equal to 50 percent of the state construction related transaction taxes. The abatement shall not be subject to the procedures in Section 40-9B-5 or 40-9B-6.
(2) For a qualifying industrial or research enterprise described in Section 40-9B-3(a)(10)e., which is owned by a utility described in Section 37-4-1(7)a., and which is a project using an alternative energy resource the abatements for which are not provided in subdivision (1), an abatement under this section shall be in an amount equal to 100 percent of the state noneducational ad valorem taxes owed for plant, property, and facilities for the maximum exemption period, and in an amount equal to 50 percent of the state construction related transaction taxes. The abatement shall not be subject to the procedures in Section 40-9B-5 or 40-9B-6.
(3) For a qualifying industrial or research enterprise described in Section 40-9B-3(a)(10)e., which is owned by an entity organized under Chapter 6 of Title 37, an abatement under this section shall be in an amount equal to 100 percent of the ad valorem taxes owed for plant, property, and facilities for the maximum exemption period, and in an amount equal to 100 percent of the construction related transaction taxes. An abatement of ad valorem taxes levied or imposed by counties or municipalities may be granted as provided in subsection (h). An abatement of the construction related transaction taxes imposed by the governing body of a county pursuant to authority conferred under Article 1 of Chapter 12 of Title 40, or any general, special, or local act of the Legislature, and such transaction taxes imposed by the governing body of a municipality pursuant to authority conferred under Article 3 of Chapter 51 of Title 11, or any general, special, or local act of the Legislature, and all transaction taxes imposed by any other local taxing jurisdiction of Alabama may be granted as provided in subsection (h). The abatement shall not be subject to the procedures in Section 40-9B-5 or 40-9B-6.
(4) For a qualifying industrial or research enterprise described in Section 40-9B-3(a)(10)e., which is owned by an authority both organized and existing pursuant to Chapter 50A of Title 11, and subject to the payments required to be made in lieu of ad valorem, sales, use, license, and severance taxes imposed by Section 11-50A-7, an abatement under this section against the payments required to be made in lieu of taxes imposed by Section 11-50A-7, shall be allowed in an amount equal to 100 percent of the payments required to be made in lieu of ad valorem taxes owed for plant, property, and facilities for the maximum exemption period, and in an amount equal to 100 percent of the payments required to be made in lieu of the construction related transaction taxes, including, without limitation, payments required to be made in lieu of all transaction taxes imposed by the governing body of a county pursuant to authority conferred under Article 1 of Chapter 12 of this title, or any general, special, or local act of the Legislature, all transaction taxes imposed by the governing body of a municipality pursuant to authority conferred under Article 3 of Chapter 51 of Title 11, or any general, special, or local act of the Legislature, and payments required to be made in lieu of all transaction taxes imposed by any other taxing jurisdiction of Alabama. The abatement of such payments required to be made in lieu of local taxes may be granted as provided in subsection (h). The abatement shall not be subject to the procedures in Section 40-9B-5 or 40-9B-6.
(5) For a qualifying industrial or research enterprise described in Section 40-9B-3(a)(10)e., which is owned by a utility described in Section 37-4-1(7)a., the abatement for state noneducational ad valorem taxes provided in subdivision (1) or (2) of this subsection, shall be equal to 100 percent of the state noneducational ad valorem taxes owed for plant, property, and facilities for the maximum exemption period if the industrial or research enterprise is located in either of the following:
a. Any area designated or created as an enterprise zone by law or that is governed by the Alabama Enterprise Zone Act.
b. 1. Any Alabama county which is considered to be less developed. A county is considered to be less developed if it has been found to be less developed by the Alabama Department of Labor 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, and which finding shall be made not later than January 1 of each year thereafter.
2. A county shall be found to be less developed if it is ranked as the forty-fifth through sixty-seventh county, inclusive, using the following factors:
(i) Percent change in population over the most recent five-year period.
(ii) Personal per capita income in the last calendar year for which data are available.
(iii) The average percent employed over the last 12 months for which data are available.
3. The factors used in ranking counties shall be weighted in the following manner:
(i) Percent change in population (25 percent).
(ii) Personal per capita income (25 percent).
(iii) Average percent employed (50 percent).
(6) a. To the extent that a plant, property, or facility described in Section 40-9B-3(a)(10)e., is owned in whole or in part by one or more private users listed hereinafter in subparagraph c., including, but not limited to, ownership as tenants in common, joint tenants, or owners of an undivided interest, then each private user shall be entitled to the abatement allowed under this section with a percentage limitation equal to the ownership interest percentage of the private user multiplied by the percentage limitation found in this subsection applicable to the private user for the tax, or payment in lieu of tax, in question.
b. To the extent that a plant, property, or facility described in Section 40-9B-3(a)(10)e. is owned by a private user which is itself owned in whole or in part by one or more of the entities listed hereinafter in subparagraph c., then the private user shall be entitled to the abatement allowed under this section with a percentage limitation equal to the sum, for all owners, of the ownership interest percentage of each owner multiplied by the percentage limitation found in this subsection applicable to the owner for the tax, or payment in lieu of tax, in question.
c. The entities listed in this subparagraph c. are:
1. A utility described in Section 37-4-1(7)a.
2. An entity organized under Chapter 6 of Title 37.
3. An authority both organized and existing pursuant to Chapter 50A of Title 11 and subject to the payments required to be made in lieu of ad valorem, sales, use, license, and severance taxes imposed by Section 11-50A-7.
(7) No abatement for mortgage and recording taxes, local noneducational ad valorem taxes, or local noneducational construction related transaction taxes shall be granted to a qualifying industrial or research enterprise described in Section 40-9B-3(a)(10)e., owned by a utility described in Section 37-4-1(7)a., except upon the approval of the abatement by the governing body of the county or municipality as provided in subsection (b) of Section 40-9B-5.
(g) The abatements of ad valorem taxes and payments in lieu thereof allowed by amendments to this section by Act 2008-275 shall become effective for projects for which statements of intent are filed after December 31, 2011. No ad valorem taxes, or payments in lieu thereof, shall be abated for periods prior to January 1, 2012. The other abatements allowed by amendments made to this section by Act 2008-275 shall become effective after December 31, 2011.
(h) For a qualifying industrial or research enterprise described in Section 40-9B-3(a)(10)e., the approval of the abatement of a specific ad valorem tax or construction related tax levied or imposed by a county or municipality, or payments required to be made in lieu thereof, shall take effect only upon adoption of a resolution by the governing body of that county or municipality approving such abatement or abatements.

Legislative History

(Acts 1992, No. 92-599, p. 1239, §4; Act 2008-275, p. 402, §4; Act 2012-210, p. 351, §2.)