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HB517 ENROLLED
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HB517
YM4Z522-3
By Representatives Lomax, Whitt, Paramore, Crawford, Reynolds,
Rigsby, Crow, DuBose, Ingram
RFD: Ways and Means Education
First Read: 26-Feb-26
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First Read: 26-Feb-26
Enrolled, An Act,
Relating to career and technical education; to enact
the Talent Readiness and Industry Needs (TRAIN) Act; to
authorize businesses to partner with eligible educational
institutions to provide career and technical education
instruction to students; to provide state income and financial
institution excise tax credits to employers that loan
qualified employees to serve as instructors in career and
technical education programs at eligible educational
institutions or make donations to eligible educational
institutions for curriculum advancement and supplementing
salaries; and to establish a workforce teaching certificate
and a streamlined process for qualified employees to obtain a
certificate to teach a designated career and technical
education program at an eligible educational institution.
BE IT ENACTED BY THE LEGISLATURE OF ALABAMA:
Section 1. This act shall be known and may be cited as
the Talent Readiness and Industry Needs (TRAIN) Act.
Section 2. The Legislature finds that Career and
Technical Education (CTE) plays a vital role in preparing
students for in-demand careers across a range of industries
including manufacturing, information technology, construction,
and skilled trades. Many school districts across the state
face challenges in recruiting and retaining qualified CTE
instructors due to certification barriers, regional shortages,
and competition with private-sector wages. The involvement of
current industry professionals in the classroom could provide
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current industry professionals in the classroom could provide
students with direct exposure to up-to-date, real-world
knowledge and practices, thereby improving educational
outcomes and workforce readiness. The Legislature also finds
that public-private partnerships between schools and industry
are essential to closing the skills gap and ensuring that
education aligns with the evolving needs of the economy. The
TRAIN Act would provide an opportunity for the private sector
to partner with eligible educational institutions to provide
CTE instruction to students and provide for industry
professionals to obtain CTE certification. Therefore, it is
the intent of the Legislature to establish a targeted income
tax credit to incentivize employers to loan qualified
employees to serve as instructors in CTE programs at eligible
educational institutions in order to promote workforce
development and economic growth.
Section 3. For the purposes of this act, the following
terms have the following meanings:
(1) ALABAMA COMMUNITY COLLEGE. Any public two-year
institution of higher education under the control of the Board
of Trustees of the Alabama Community College System.
(2) COMMUNITY DEVELOPMENT FOUNDATION. An Alabama
nonprofit corporation that is organized under 26 U.S.C.
§501(c)(3) and functions as a community organization that
provides, develops, and oversees workforce training curriculum
in a particular community in the state or has an expertise in
a designated CTE program.
(3) DEPARTMENT. The State Department of Education.
(4) DESIGNATED CTE PROGRAM. A career and technical
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(4) DESIGNATED CTE PROGRAM. A career and technical
education program for grade 9 or higher at an eligible
educational institution in a high-demand sector. The
high-demand sectors eligible for this designation shall be
reviewed and approved annually by the Executive Committee of
the Alabama Workforce Board, which shall provide notice to the
Department of Workforce and the department regarding its
approval or denial by March 31 of each year to be eligible for
the next academic year.
(5) ELIGIBLE EDUCATIONAL INSTITUTION. An Alabama
community college, a local education agency, a public high
school, or a community development foundation.
(6) EMPLOYER. A corporation, partnership, limited
liability company, or other business entity registered to do
business in this state and in good standing with the
Department of Revenue.
(7) PUBLIC HIGH SCHOOL. A public secondary school
operated by a local education agency in this state that
provides instruction in any grade from 9 through 12 that
offers an approved career and technical education program as
recognized by the department.
(8) QUALIFIED EMPLOYEE. An individual employed by an
employer who:
a. Possesses a Bachelor's degree or other certification
or experience or combination thereof equivalent to those
accepted by the department;
b. Has not less than three years of occupational
experience or appropriate industry-recognized certification in
a relevant field corresponding to a designated CTE program;
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a relevant field corresponding to a designated CTE program;
c. Has a history of positive performance reviews from
his or her employer; and
d. Has successfully passed a criminal history
background check and meets any other screening requirements of
the eligible educational institution.
A qualified employee will not be a public employee or a
loaned employee for purposes of the Alabama Ethics Act.
(9) SALARY. The actual wages or compensation paid by an
employer to a qualified employee during a teaching assignment.
(10) TEACHING ASSIGNMENT. The agreed-upon period during
which a qualified employee is loaned by an employer to an
eligible educational institution to serve as an instructor in
a designated CTE program, provided that the assignment shall
consist of weekly in-person attendance at the school and no
less than 300 hours of direct instruction to students within
an academic year or another minimum time requirement
established by the department.
(11) WORKFORCE TEACHING CERTIFICATE. A temporary
teaching certificate issued to a qualified employee that
authorizes the employee to teach a designated CTE program at
an eligible educational institution and may be treated as a
renewable certificate by the department.
Section 4. Creation of the TRAIN Credit; Eligibility.
(a) There is hereby created a tax credit that an
employer may apply against any of the following:
(1) To offset the income taxes levied in Chapter 18 of
Title 40, Code of Alabama 1975.
(2) To offset the state portion of the financial
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(2) To offset the state portion of the financial
institution excise tax levied in Chapter 16 of Title 40, Code
of Alabama 1975.
(b)(1) The amount of the tax credit shall equal the
portion of the qualified employee's salary paid by the
employer for time directly attributable to the teaching
assignment in the applicable tax year, subject to the
limitations provided in this section.
(2)a. Notwithstanding subdivision (1), a taxpayer may
claim a tax credit to offset eligible taxes for donations to a
community development foundation to support a designated CTE
program or to supplement the salaries of instructors who teach
a designated CTE program.
b. For any donation made to a community development
foundation to supplement the salary of an instructor to teach
a designated CTE program, the instructor must teach a minimum
number of hours in the classroom, as determined by an Alabama
community college, a local education agency, or a public high
school.
(c) Subject to the provisions of this act, an employer
shall be eligible to claim a credit if it meets all of the
following conditions:
(1) The employer enters into a memorandum of
understanding (MOU) or other agreement between the eligible
educational institution and the employer that outlines the
conditions under which a qualified employee with a workforce
teaching certificate or other teaching certificate would be
authorized to participate in a teaching assignment in a
designated CTE program. Each MOU or agreement between an
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designated CTE program. Each MOU or agreement between an
employer and an eligible educational institution, at a
minimum, shall include all of the following:
a. The name of the qualified employee and a description
of the designated CTE program in which instruction will occur.
b. The duration of the teaching assignment, including
total instructional hours and term or terms covered.
c. A statement confirming that the employer will
continue to pay the qualified employee's full salary and
benefits during the teaching assignment. A qualified employee
is not entitled to any compensation from an eligible
educational institution, but the institution may elect to
compensate a qualified employee in whatever manner it deems
appropriate.
d. A certification by the employer that the qualified
employee has passed, or will pass prior to beginning the
teaching assignment, all background screening requirements as
required by the eligible educational institution.
e. The method of verifying attendance, instructional
hours, and program completion for purposes of credit
certification.
f. A provision authorizing the department to inspect
records and verify compliance.
g. A provision acknowledging that noncompliance with
any of these requirements may result in recapture of the tax
credit, as provided in this act.
h. A statement that the employer shall maintain
workers' compensation and general liability coverage for the
qualified employee during the teaching assignment.
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qualified employee during the teaching assignment.
i. A statement regarding liability for actions
performed by the qualified employee in furtherance of the
teaching assignment.
(2) The employer has received a TRAIN Act credit
reservation certificate from the department for an approved
agreement with an eligible educational institution.
(3) The employer continues to pay the qualified
employee's full salary and benefits during the teaching
assignment.
(4) The eligible educational institution provides the
qualified employee with the classroom space, equipment, and
other instructional materials required to conduct the teaching
assignment unless otherwise agreed to in the MOU.
(d) To the extent that a tax credit is used by an
employer, the employer shall not be allowed any deduction that
would have otherwise been allowed for the employer's payment
of the qualified employee's salary or for donations to an
eligible educational institution. Credits may only be claimed
by the employer and may not be assigned or transferred to any
other taxpayer, provided the credit issued to a parent or
holding company may be claimed by the subsidiary, provided
both parent or holding company and subsidiary are filing as
part of an Alabama consolidated return, as defined under
Section 40-18-39, Code of Alabama 1975.
(e) In no event shall the credit cause a taxpayer's tax
liability to be reduced by more than 50 percent. Unused
credits may be carried forward for no more than five years but
shall not be transferable.
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shall not be transferable.
(f) In the event that a teaching assignment is not
completed in full, the credit shall be prorated and available
to the employer only for the portion of the salary paid for
services actually rendered by the qualified employee and
accepted by the eligible educational institution. If an
agreement is terminated by the eligible educational
institution, the Department of Revenue, after consultation
with the department, may disallow the credit in its entirety
for that tax year.
(g) The tax credits may be claimed beginning January 1,
2027.
(h) The statewide annual aggregate of tax credits
allowed under this section shall not exceed ten million
dollars ($10,000,000), provided that credits claimed by
entities making donations to community development foundations
may not exceed four million dollars ($4,000,000) in any single
calendar year.
(i) Notwithstanding any other provision of this act,
the total amount of credit that may be reserved and claimed by
any single taxpayer shall not exceed two hundred fifty
thousand dollars ($250,000) in a calendar year. The department
shall ensure that no credit reservation certificate is issued
that would cause a taxpayer to exceed this limitation.
Section 5. Forms; Construction of Article; Rulemaking
Authority.
(a) All findings and applications made with any
department of the state government shall be made using forms
adopted by the department. The filing shall be treated as a
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adopted by the department. The filing shall be treated as a
tax return, subject to penalties imposed by the Department of
Revenue.
(b) Nothing in this article shall be construed to
constitute a guarantee or assumption by the state of any debt
of any company nor to authorize the credit of the state to be
given, pledged, or loaned to any company.
(c) Nothing in this article shall be construed to make
available to any taxpayer any right to the benefits conferred
by this article absent strict compliance with this article.
(d) Nothing in this article shall be construed to limit
the powers otherwise existing for the Department of Revenue to
audit and assess a taxpayer claiming the credit.
(e) The department is authorized to work with the
Department of Revenue and the Department of Workforce to adopt
rules as necessary to implement and administer this article.
Section 6. Administration.
(a) The Department of Revenue may adopt rules and
regulations for implementation and enforcement.
(b) The department shall establish a process to approve
agreements, and the Department of Revenue shall allow tax
credits in accordance with the following:
(1) Upon receipt of an executed agreement, the
department shall issue a TRAIN Act credit reservation
certificate to the employer.
(2) The certificate shall state the maximum amount of
credit reserved for the employer and the corresponding
teaching assignment, which may span multiple tax years.
(3) Tax credits reserved by certificates issued in a
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(3) Tax credits reserved by certificates issued in a
prior calendar year shall count against the cap for the
calendar year in which the certificate was issued.
(4) The department shall track credit reservations by
taxpayer and shall deny or reduce any requested reservation
that would cause the taxpayer to exceed the per-taxpayer
limitation established in Section 4(i).
(c) The department, in consultation with the Department
of Workforce and the Executive Committee of the Alabama
Workforce Board, shall administer the process for approving
designated CTE programs that are eligible for participation
under this act, pursuant to the annual sector approvals
provided in Section 3(3).
(d) In order to claim a tax credit, a taxpayer must
file the appropriate forms with the Department of Revenue and
provide a copy of its TRAIN Act credit reservation
certificate, documentation of the agreement, proof of salary
payments made during the tax year for which the credit is
claimed, proof of donations to a community development
foundation made pursuant to this act for the tax year for
which the credit is claimed, and any other information
required by the Department of Revenue.
(e) The department, with information from the
Department of Revenue as requested, shall submit an annual
report by the third legislative day of each regular session of
the Legislature to the Governor, the Speaker of the House of
Representatives, the President Pro Tempore of the Senate, and
the Legislative Fiscal Officer summarizing:
(1) The number of tax credits approved and claimed;
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(1) The number of tax credits approved and claimed;
(2) The number of employers, qualified employees, and
institutions participating;
(3) Geographic distribution; and
(4) Program outcomes.
(f) No later than July 1, 2031, the department shall
submit to the Governor and the Legislature a report evaluating
the effectiveness of the TRAIN Act, including data on
participation, geographic distribution, and workforce
outcomes, and shall include recommendations as to whether the
program should be extended, modified, or allowed to expire.
Section 7. The tax credits provided in this article
shall not be available for employers as described in this
article, for which agreements are not approved on or prior to
December 31, 2031, unless the Legislature enacts legislation
to extend the date. This shall only affect the availability of
credits for applications not approved on or prior to December
31, 2031, and shall not cause a reduction or suspension of any
credits awarded on or prior to December 31, 2031.
Section 8. Certification Process.
(a) In order to support statewide workforce development
initiatives, it is necessary to establish a streamlined
process by which private sector employees may teach a
qualified CTE program at an eligible educational institution.
(b) The department, in consultation with the Department
of Workforce, is authorized to adopt the rules and criteria
for the establishment and issuance of a workforce teaching
certificate that would authorize a qualified employee to serve
as a classroom teacher at an eligible educational institution
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as a classroom teacher at an eligible educational institution
while still employed and paid by a private sector employer.
(c) The workforce teaching certificate shall authorize
a qualified employee to engage in the following:
(1) To accept a teaching assignment, serve as a
classroom teacher, and provide direct instruction for a
qualified CTE program.
(2) To enter grades, maintain instructional records,
and perform duties customarily exercised by full-time
instructors, subject to approval by an eligible educational
institution.
(3) Other duties as determined by the eligible
educational institution.
(d) A qualified employee may not receive a workforce
teaching certificate until after he or she has successfully
passed a criminal history background check and obtained
clearance from the department in accordance with the
requirements of Section 16-22A-5, Code of Alabama 1975.
(e) The department may terminate an individual's
workforce teaching certificate at any time for cause. An
eligible educational institution may terminate an agreement
with an employer that is entered into in accordance with the
requirements of this act at any time if the qualified
employee:
(1) Has his or her workforce teaching certificate
terminated;
(2) Does not comply with the requirements of the
agreement; or
(3) Does not conduct the teaching assignment at the
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(3) Does not conduct the teaching assignment at the
expected level of performance.
(f) The department shall develop and administer a
training program that must be taken and passed by a qualified
employee prior to the issuance of a workforce teaching
certificate and that individual beginning a teaching
assignment. The training program shall be offered online. The
training program should be limited in scope and duration, and
the program's instructional time should not exceed what is
reasonably necessary to conduct a teaching assignment. The
training program could include the entry level occupational
proficiency assessment that is approved by the department, if
applicable, but it must provide targeted instruction in: (i)
classroom management; (ii) basic instructional methods; (iii)
student safety and legal compliance; and (iv) grading
standards and assessment fundamentals.
(g) The department is authorized to set the term of a
workforce teaching certificate and the process by which a
certificate may be renewed or terminated.
(h) The holder of a workforce teaching certificate
shall not be personally liable for acts or omissions
undertaken in performance of assigned instruction or
supervisory duties. This protection shall not apply to
willful, wanton, or intentional acts of misconduct, and shall
be administered consistent with Section 16-28C-4, Code of
Alabama 1975.
(i) Neither the department nor an eligible educational
institution shall be liable for any acts of the qualified
employee.
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employee.
Section 9. This act shall become effective on October
1, 2026.
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1, 2026.
________________________________________________
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 05-Mar-26, as amended.
John Treadwell
Clerk
Senate 08-Apr-26 Amended and Passed
House 09-Apr-26 Concurred in Senate
Amendment
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