Section 40-1-50
Reporting requirements of state agencies administering economic tax incentives.
(a) For the purpose of this section, the term economic tax incentive shall mean any tax credits, deductions, exemptions, abatements, preferential rates, or rebates given as an economic incentive. For the purpose of this section, the term economic incentive shall mean an inducement provided by the government, where the government promises to forgo tax revenues to which it is otherwise entitled or to provide some other benefit to an individual or an entity and in exchange the individual or entity promises to take specific action that contributes to economic development. In order for the Legislature to get accurate and complete information regarding the costs and benefits of economic tax incentives, each state agency that administers an economic tax incentive shall annually report the information required herein to the Legislature.
(b) The head of each state agency that administers any economic tax incentive shall prepare and submit to the Legislature a report regarding each economic tax incentive that the agency administers as set forth in the schedule provided by the Alabama Department of Revenue pursuant to subsection (f)(2) no later than the second Legislative day of the Regular Session beginning in the 2018 Regular Session of the Legislature and each year thereafter. The report shall include an assessment of each economic tax incentive based on the following criteria:
(1) Whether or not each economic tax incentive has been successful in meeting the purpose for which it was enacted, in particular, whether each economic tax incentive benefits those originally intended to be benefited, and if not, those who do benefit.
(2) Whether or not the state receives a positive return on investment, specifically the direct and indirect impact on state and local tax revenues, from the business or industry for which the economic tax incentive is intended to benefit and any other economic benefits produced by such tax incentive.
(3) The economic results of each economic tax incentive, taking into account the extent to which the incentive successfully changes business behavior, and the unintended or inadvertent effects, benefits, or harm caused by the economic tax incentive, including whether the economic tax incentive conflicts with other state laws or regulations.
(c)(1) Nothing in this section shall be construed to require the disclosure of proprietary or trade secret information that has been submitted to any state agency with respect to an economic tax incentive.
(2) Nothing in this section shall be construed to supercede any provision with respect to the confidentiality of taxpayer records.
(d) Each state agency required to submit a report pursuant to the provisions of this section may request from any other state or local agency, official, recipient of funds, or the Alabama Department of Revenue, any information necessary to complete the required report. Any such agency, official, or recipient shall comply with this request.
(e) For purposes of this section, the term state agency shall mean any office, department, board, commission, institution, or division within the executive branch of state government, excluding the Alabama Department of Revenue. Administration of an economic tax incentive shall be evidenced by a legal requirement or authorization to undertake any of the following actions for purposes of administration of the tax incentive:
(1) Promulgation of rules or regulations; in cases where more than one agency has rulemaking authority, the report shall be prepared collaboratively.
(2) Determination, review, or confirmation of eligibility or qualifications.
(3) Entering into a contract with an entity for purposes of a tax credit.
(4) Facilitating economic tax incentives by distributing funds to non-state agencies.
(5) Conducting oversight or substantial administrative functions for an economic tax incentive when the public purpose associated with the economic tax incentive is within the core mission of the agency.
(f)(1) The Department of Revenue shall develop a format for reports required herein. The format shall be made available to all state agencies for use in preparation of their required reports.
(2) The Department of Revenue shall prepare, every four years, a four-year schedule of the economic tax incentives to be reported to the Legislature beginning with the 2018 Regular Session of the Legislature.
(3) The Department of Revenue shall provide state agencies with any tax information necessary to complete the required report relating to an economic tax incentive of such agency.
(g) The House Ways and Means Committees and the Senate Finance and Taxation Committees referred to in this subsection as committees, shall conduct hearings on the reports every odd-numbered year, to be concluded thirty days before the beginning of the Regular Session of the Legislature. The committees shall analyze and consider each economic tax incentive and shall provide a recommendation to modify, discontinue, or take no action with respect to each economic tax incentive.
(Act 2016-389, §1.)