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HB359 ENROLLED
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HB359
XD5I9E7-2
By Representative Whitt
RFD: Economic Development and Tourism
First Read: 29-Jan-26
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First Read: 29-Jan-26
Enrolled, An Act,
Relating to the Sweet Home Alabama Tourism Investment
Act; to amend Sections 40-18-470, 40-18-471, 40-18-472, and
40-18-473, Code of Alabama 1975, to provide further for
definitions; to provide further for a supplemental tax rebate;
and to require certification of project costs.
BE IT ENACTED BY THE LEGISLATURE OF ALABAMA:
Section 1. Sections 40-18-470, 40-18-471, 40-18-472,
and 40-18-473, Code of Alabama 1975, are amended to read as
follows:
"§40-18-470
(a) This article shall be known and may be cited as the
Sweet Home Alabama Tourism Investment Act.
(b) For purposes of this article, the following words
and phrases have the following meanings:
(1) APPLICANT. Any corporation, limited liability
company, partnership, sole proprietorship, business trust, or
other legal entity authorized to do business in the State of
Alabama.
(2) APPROVED COMPANY. Any company approved for tax
rebates for operating a certified tourism destination project.
(3) APPROVED COSTS. Costs relating to the following:
a. Land acquisition.
b. Construction.
c. Engineering.
d. Design.
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d. Design.
e. Costs of contract bonds and insurances.
f. Installation of utilities paid by the applicant,
including project-specific off-site extensions.
(4) BOARD. Alabama Tourism Advisory Board established
pursuant to Section 41-7-3.
(5) CAPITAL INVESTMENT. All costs and expenses incurred
by the incentivized company in connection with the
acquisition, construction, installation, and equipping of a
qualifying project, if such costs are required to be
capitalized for purposes of the federal income tax, determined
without regard to any rule that permits expenditures properly
chargeable to a capital account to be treated as current
expenditures. However, any project involving the extraction of
natural resources shall not be included as a capital
investment expenditure.
(6) CERTIFIED TOURISM DESTINATION PROJECT.
a. A certified tourism destination project must conduct
an activity specified in subparagraphs 1. through 8.
1. A qualifying project that has seventy-five million
dollars ($75,000,000) of capital investments may be considered
a mega project.
2. A qualifying project may be a tourist destination
attraction with a minimum private investment of not less than
fifty million dollars ($50,000,000).
3. A qualifying project may be a tourism attraction
with a minimum private investment of thirty-five million
dollars ($35,000,000) located within an entertainment
district . The attraction must be open to the public at least
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district . The attraction must be open to the public at least
five days per week, serve food and beverages, and provide live
entertainment at least three nights per week.
4. A qualifying project may be a resort development
with a minimum investment of thirty-five million dollars
($35,000,000) and consist s of a hotel with a minimum of 200
guest rooms and or 200 units that may be used for vacation
rental . The development must also include guest amenities such
as restaurants, golf courses, spas, entertainment activities,
and other amenities.
5. A qualifying project may be a tourism destination
attraction with a minimum investment of thirty-five million
dollars ($35,000,000) located within a historic district where
the district is listed in the National Register of Historic
Places.
6. Retail related to a qualifying project must consist
primarily of upscale brands or their equivalent. Retail
activities not eligible for a rebate include the following:
A.i. Department stores.
B.ii. Convenience stores.
C.iii. Grocery stores.
D.iv. Liquor and tobacco stores.
E.v. Discount stores.
F.vi. Multiplex theaters.
G.vii. Facilities that perform cleaning, repair, or
alteration services.
H.viii. Facilities that perform personal salon services
such as tanning, nail, and beauty.
7. A qualifying project may be any combination of
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7. A qualifying project may be any combination of
qualifying tourist attractions, hotels, marinas, and resorts
with a minimum private investment of thirty-five million
dollars ($35,000,000) in land, buildings, architecture,
engineering, fixtures, equipment, furnishings, amenities, and
other related approved soft costs.
b. Projects that cannot be certified as an eligible
certified tourism destination project include the following:
1. Expansions of any existing projects previously
approved that are not equal to the lesser of 75 percent of the
original capital investment or thirty-five million dollars
($35,000,000).
2. Facilities that are primarily developed for retail
sales that are not certified as a resort development. Pro
shops, souvenir shops, gift shops, concessions, and similar
retail activities may not be included within the definition of
a "tourism destination project. "
(7) COMPLETION DATE. A date by which the approved
company shall have completed the tourism destination project.
The completion date must occur within three years of the date
of the financial incentive agreement unless an extension is
granted by the board. Completion date is the date the project
is placed in service and is generating revenue.
(7)(8) DEPARTMENT. The Alabama Tourism Department.
(8)(9) PROJECT. Any land, building, or other
improvement, and all real and personal property, whether or
not contiguous and whether or not previously in existence, if
in Alabama and if deemed necessary or useful in connection
with certified destination projects.
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with certified destination projects.
(9)(10) QUALIFYING PROJECT. Any project to be
undertaken by an approved company that is deemed a certified
tourism destination project.
(10)(11) TOURISM DESTINATION ATTRACTION. Tourist
attractions that qualify include the following:
a. Theme parks.
b. Water parks.
c. Entertainment parks or outdoor adventure parks.
d. Cultural or historical interpretive educational
centers or museums.
e. Motor speedways.
f. Indoor or outdoor entertainment centers or
complexes.
g. Convention centers.
h. Professional sports facilities.
i. Attractions created around a natural phenomenon or
scenic landscape.
j. Waterfront marina facilities, including, but not
limited to, indoor marine vessel storage, restaurants, and
marine sales and service.
k. Aquariums."
"§40-18-471
(a) Prior to the allowance of a tax rebate on
transactional taxes, an application shall be filed with the
tourism department in the manner established by the
department.
(b) The tourism department shall adopt standards to be
used by the Alabama Tourism Advisory Board for the review and
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used by the Alabama Tourism Advisory Board for the review and
approval of certified tourism destination projects for which a
tax rebate for transactional taxes is sought pursuant to
Section 40-18-473 .
(c) The tourism department shall establish deadlines
for applications. Applications shall solicit whatever
information the department deems important to its
determination of authorizing a tax rebate."
"§40-18-472
(a) In order for an applicant that proposes a
certified tourism destination project to be an approved
company, the board shall make both of the following findings:
(1) That the project is in fact a certified tourism
destination project.
(2) That the amount of tourism rebates sought are
exceeded by anticipated revenues for the state, including
income, property, business privilege, utility, gross receipts,
and sales, and use tax revenues that are generated by the
economic activity resulting from the project.
(b) The Alabama Tourism Advisory Board shall review
qualifying projects meeting the criteria established pursuant
to Section 40-18-473 and approve eligible projects for tax
rebates. Upon a determination that all program requirements
are met, the board shall issue an Alabama Tourism Advisory
Board Act Certificate. Each certificate shall include the
amount of the approved project costs, the maximum rebate
available, and the rebate term of 10 years from the completion
date or the date on or which five million dollars ($5,000,000)
of the approved project costs has been rebated to the
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of the approved project costs has been rebated to the
applicant, whichever threshold is met first."
"§40-18-473
(a) A tax rebate from taxes generated within the
tourism destination attraction by the certified tourism
destination project over a 10-year period from the
commencement of operation, which must occur after June 15,
2023, in the amount of up to five million dollars ($5,000,000)
may be claimed. No approved company may receive more than one
million dollars ($1,000,000) in tourism rebates in a calendar
year.
(b)(1) The tax rebates authorized by this article are
limited to an aggregate amount for all certified tourism
destination projects of ten million dollars ($10,000,000)
annually with 10 percent set aside annually for certified
tourism destination projects located in targeted or jumpstart
counties.
(2) An approved company with a certified tourism
destination project may be granted a tax rebate on any
combination of the state and local sales and use taxes,
lodging taxes, or other transactional taxes generated by or
arising within the tourism destination project after June 15,
2023.
(3) An approved company shall have no obligation to
refund or otherwise return any amount of taxes authorized for
rebate to the persons from whom the taxes were collected.
(4) Rebates authorized under this article shall be for
up to 10 years, commencing on the date the tourism attraction
opens for business, which must occur after June 15, 2023, and
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opens for business, which must occur after June 15, 2023, and
begins to collect taxes generated by, or arising within, the
tourism destination project.
(5) Tax rebates may be a combination of state and local
retail sales tax, state and local lodging taxes, and any other
taxes generated by, or arising within, the tourism destination
project after June 15, 2023. The municipality or the taxing
district where the tourism destination project will be located
must support and approve the facility. The approval must be in
the form of a resolution of the governing authority
acknowledging support of the project and acknowledging that a
portion no less than 20 percent of the tax rebates will be
comprised of municipal taxes.
(6) The Alabama Department of Revenue, in consultation
with the Alabama Tourism Department, shall adopt rules and
require the filing of a rebate form designed by the Alabama
Department of Revenue to reflect the intent of this article.
To begin the rebate process, once project phases open for
business after June 15, 2023, the approved company must
provide a listing of all sales tax accounts and account
numbers related to the project. The Alabama Department of
Revenue will provide these accounts and will begin making the
required diversions into the Tourism Project Sales Tax
Incentive Fund the month following notification. Rebate
payments from the fund will be made each January and July to
the approved company.
(7) No tax rebate shall be granted to an approved
company during a tax year that the approved company is
simultaneously receiving any other state tax incentive
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simultaneously receiving any other state tax incentive
associated with any individual tourism attraction project.
(8) Any tax rebate shall be first applied to any
outstanding tax obligation of the approved company that is due
and payable to the state.
(9) Rebates under this article shall be made without
interest.
(10) Tax rebates authorized under this article are
transferrable to future owners of the qualifying tourism
destination project.
(11) The tax rebate allowed under this article shall be
effective beginning August 1, 2023, for projects placed into
service after June 15, 2023 , and shall continue through July
31, 2028, unless continued by an act of the Legislature.
(12) Tax rebates for certified tourism destination
projects are to be administered by the Alabama Department of
Revenue.
(c) Notwithstanding the ten million dollar
($10,000,000) annual aggregate cap on tax rebates allowed, the
board may approve an annual onetime one-time designation of an
additional two million five hundred thousand dollars
($2,500,000) in tax rebates for one project per calendar year
with a minimum capital investment amount of seventy-five
million dollars ($75,000,000) . Additionally, a company that is
awarded the supplemental rebate may claim up to seven million
five hundred thousand dollars ($7,500,000) in total, up to one
million five hundred thousand dollars annually ($1,500,000)
and is not subject to the caps otherwise provided for in this
article.
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article.
(d) Within three months after the completion date, the
approved company shall document the actual cost of the project
through certification of the costs by an independent certified
public accountant acceptable to the board.
(e) For purposes of determining whether a project has
met the minimum capital investment requirements, only bona
fide, third-party, arms-length capital expenditures shall be
included. The certification of project costs required under
this subsection shall expressly verify all of the following:
(1) Each cost included in the capital investment
calculation represents an actual expenditure paid to an
independent, third-party vendor not related to the applicant,
developer, or any affiliate thereof.
(2) No cost included in the calculation consists of any
payment, fee, or charge paid directly or indirectly to the
project developer, any member, partner, shareholder, manager,
officer, affiliate, parent entity, subsidiary, or any entity
under common ownership or control, including, but not limited
to, developer fees, consulting fees, project-management fees,
internal labor allocations, overhead charges, reimbursed
salaries, or similar related-party payments.
(3) All costs included are properly capitalizable under
the Internal Revenue Code and represent legitimate project
expenditures necessary for the acquisition, construction, or
completion of the certified tourism destination project.
(4) Any related-party transactions, if disclosed, are
excluded from the capital investment amount used to determine
eligibility for the supplemental rebate or any other
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eligibility for the supplemental rebate or any other
investment-based incentive threshold. "
Section 2. This act shall become effective immediately.
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Section 2. This act shall become effective immediately.
________________________________________________
Speaker of the House of Representatives
________________________________________________
President and Presiding Officer of the Senate
House of Representatives
I hereby certify that the within Act originated in and
was passed by the House 10-Feb-26.
John Treadwell
Clerk
Senate 26-Feb-26 Passed
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