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HB190 ENGROSSED
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HB190
6YEMF31-2
By Representative Baker
RFD: Ways and Means Education
First Read: 13-Jan-26
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HB190 Engrossed
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First Read: 13-Jan-26
A BILL
TO BE ENTITLED
AN ACT
Relating to the Railroad Modernization Act of 2019; to
amend Sections 37-11C-4 and 37-11C-6, Code of Alabama 1975, to
extend the current per mile credit amount; to extend the
current annual cap on income tax credits; and to extend the
sunset date.
BE IT ENACTED BY THE LEGISLATURE OF ALABAMA:
Section 1. Sections 37-11C-4 and 37-11C-6, Code of
Alabama 1975, are amended to read as follows:
"§37-11C-4
(a) For tax years beginning after December 31, 2019,
through December 31, 2022, there is a credit allowed against
the state income tax levied by Section 40-18-2 equal to 50
percent of an eligible taxpayer's qualified railroad
rehabilitation expenditures. The tax credit allowed under this
section may not exceed three thousand five hundred dollars
($3,500) multiplied by the number of miles of railroad track
owned or leased within the state by the eligible taxpayer at
the close of the taxable year.
(b) For tax years beginning after December 31, 2022,
through December 31, 2027, there is a credit allowed against
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through December 31, 2027, there is a credit allowed against
the state income tax levied by Section 40-18-2 equal to 50
percent of an eligible taxpayer's qualified railroad
rehabilitation expenditures. The tax credit allowed under this
section may not exceed four thousand one hundred dollars
($4,100) multiplied by the number of miles of railroad track
owned or leased within the state by the eligible taxpayer at
the close of the taxable year.
(c) For tax years beginning after December 31, 2027,
through December 31, 2032, there is a credit allowed against
the state income tax levied by Section 40-18-2 equal to 50
percent of an eligible taxpayer's qualified railroad
rehabilitation expenditures. The tax credit allowed under this
section may not exceed four thousand one hundred dollars
($4,100) multiplied by the number of miles of railroad track
owned or leased within the state by the eligible taxpayer at
the close of the taxable year.
(c)(d) There is created within the Education Trust Fund
a separate account named the Railroad Rehabilitation Income
Tax Credit Account. The Commissioner of Revenue shall certify
to the state Comptroller the amount of income tax credits
under this section, and the state Comptroller shall transfer
into the Railroad Rehabilitation Income Tax Credit Account
only the amount from sales tax revenues within the Education
Trust Fund that is sufficient for the Department of Revenue to
use to cover the income tax credits for the applicable tax
year. The commissioner shall distribute the funds in the
Railroad Rehabilitation Income Tax Credit Account pursuant to
this section.
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this section.
(d)(e) The entire tax credit may be claimed by the
taxpayer in the taxable year in which the qualified railroad
rehabilitation expenditures are completed and placed into
service. Where the taxes owed by the eligible taxpayer are
less than the tax credit, the eligible taxpayer may be
entitled to claim a refund for the difference.
(e)(f) For the calendar years 2020, 2021, and 2022, the
aggregate amount of all tax credits that may be reserved in
any one of such years by the department upon certification of
rehabilitation plans shall not exceed three million seven
hundred thousand dollars ($3,700,000) plus any amount of
previous reservations of tax credits that were rescinded
during the tax year. However, if all of the allowable tax
credit amount for any tax year is not requested and reserved,
any unreserved tax credits may be utilized by the department
in awarding tax credits in subsequent years , ; provided,
however, that in no event shall a total of more than eleven
million one hundred thousand dollars ($11,100,000) be reserved
by the department during the period of August 1, 2019 , through
August 1, 2022. For purposes of this chapter, "tax year" shall
mean the calendar year.
(f)(g) For the calendar years 2023 through 2027, the
aggregate amount of all tax credits that may be reserved in
any one of such years by the department upon certification of
rehabilitation plans shall not exceed four million five
hundred thousand dollars ($4,500,000) plus any amount of
previous reservations of tax credits that were rescinded
during the tax year. However, if all of the allowable tax
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during the tax year. However, if all of the allowable tax
credit amount for any tax year is not requested and reserved,
any unreserved tax credits may be utilized by the department
in awarding tax credits in subsequent years ;, provided ,
however, that in no event shall a total of more than
twenty-two million five hundred thousand dollars ($22,500,000)
be reserved by the department during the period of August 1,
2022, through August 1, 2027. For the purposes of this chapter
"tax year" shall mean the calendar year.
(h) For the calendar years 2028 through 2032, the
aggregate amount of all tax credits that may be reserved in
any one of such years by the department upon certification of
rehabilitation plans shall not exceed four million five
hundred thousand dollars ($4,500,000) plus any amount of
previous reservations of tax credits that were rescinded
during the tax year. However, if all of the allowable tax
credit amount for any tax year is not requested and reserved,
any unreserved tax credits may be utilized by the department
in awarding tax credits in subsequent years, provided that in
no event shall a total of more than twenty-two million five
hundred thousand dollars ($22,500,000) be reserved by the
department during the period of August 1, 2027, through August
1, 2032. For the purposes of this chapter "tax year" shall
mean the calendar year.
(g)(i) Tax credits granted to a partnership, a limited
liability company, S Corporations, trusts, or estates shall be
claimed at the entity level and shall not pass through to the
partners, members, or owners.
(h)(j) All or any portion of the income tax credit
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(h)(j) All or any portion of the income tax credit
authorized under this section may be transferable and
assignable by written transfer agreement and subject to any
notice and verification requirements to be determined by the
Department of Revenue. Any tax credits transferred shall be at
a value of at least eighty-five 85 percent (85%) of the present
value of the credits. However, once a credit is transferred,
only the transferee may utilize the credit and the credit may
not be transferred again. An eligible transferee of the credit
may use the amount of credits transferred to offset any income
tax due under Chapter 18 of Title 40. The department, by rule,
shall adopt a written transfer agreement form. The transfer
statement form shall include the name and federal taxpayer
identification number of the transferor and each transferee
listed therein along with the amount of the tax credit to be
transferred to each transferee listed on the form. The
transfer statement form shall also contain such other
information as the department may from time to time reasonably
require. For each transfer, the transferor shall file with the
department: (1) a completed transfer statement form; (2) a
copy of the executed written transfer agreement; and (3) a
transfer fee payable to the department in the amount of one
thousand dollars ($1,000) per transferee listed on the
transfer statement form. Within 30 days after the department's
receipt of the fully executed written transfer agreement, the
department shall issue a tax credit certificate to each
transferee listed in the agreement in the amount of the tax
credit so transferred. Such The certificate shall be used by
the transferee in claiming the tax credit. The department may
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the transferee in claiming the tax credit. The department may
adopt such additional rules as are necessary to permit
verification of the ownership of the tax credits but shall not
adopt any rules that unduly restrict or hinder the transfer of
the tax credits."
"§37-11C-6
The tax credit allowed under this chapter shall be
effective for the 2020 tax year and shall continue through the
20272032 tax year , unless extended by act of the Legislature ."
Section 2. This act shall become effective on June 1,
2026.
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2026.
House of Representatives
Read for the first time and referred
to the House of Representatives
committee on Ways and Means
Education
................13-Jan-26
Read for the second time and placed
on the calendar:
1 amendment
................29-Jan-26
Read for the third time and passed
as amended
Yeas 103
Nays 0
Abstains 2
................12-Feb-26
John Treadwell
Clerk
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