Alabama Administrative Code Chapter 305-5-3 — Alabama Enterprise Zone Act

305 Alabama Department of Economic and Community Affairs (Alabama Energy and Residential Codes Board)

Ala. Admin. Code r. 305-5-3-.01 Purpose

The purpose of this Act is "to stimulate business and industrial growth in the depressed areas of the state, both urban and rural areas, by the relaxation of certain governmental controls, by providing assistance to businesses and industries and by providing state and local tax and nontax incentives in these areas."

History

• Author: Wayne Bovis, Charles Reynolds.
• Authority: Code of Ala. 1975, §§ 41-23-1 through 41-23-7, 41-23-29(6).
• Filed January 22, 1988; effective February 26, 1988. Amended: Filed November 19, 1990; effective December 24, 1990.

Ala. Admin. Code r. 305-5-3-.02 Definitions

(1) "Council" means the Enterprise Zone Advisory Council, which shall be limited to 11 representatives serving at the pleasure of the Governor. The Council shall consist of members of the Alabama Development Office, Southern Development Council, Department of Industrial Relations, Department of Education, Alabama Highway Department, Department of Environmental Management, Department of Agriculture and Industries, Department of Revenue and other qualified individuals or organizations.

(2) "Department" means the Alabama Department of Economic and Community Affairs.

(3) "Governing Authority" means the governing body of a county or municipality.

(4) "Enterprise Zone" means a geographic area which is economically depressed, in need of expansion of business and industry and the creation of jobs and designated to be eligible for the benefits of this Act, and is a target by governments for development by providing tax and nontax incentives to private enterprise.

(5) "New Permanent Employee" means a full-time employee hired pursuant to this Act who remains employed with the firm for a minimum of nine months.

(6) "Rural Enterprise Zone" means an enterprise zone located in a non-MSA county as such is defined by the U.S. Bureau of the Census.

(7) "Urban Enterprise Zone" means an enterprise zone located in an MSA county as such is defined by the U.S. Bureau of the Census.

(8) "Committee" means a Legislative Oversight Committee, appointed by the Lieutenant Governor and the Speaker, consisting of three members from the House of Representatives and three members from the Senate appointed by the respective officers of each body.

(9) "Full-time Employee" means an employee working a minimum of thirty (30) hours per week and receiving appropriate company benefits.

(10) "Unemployable by Traditional Standards" means having no prior work history or job training, having a criminal record, excluding misdemeanors, or having a history of being unable to retain employment after gaining it.

(11) "Lacking in Basic skills" means the lack of a high school degree or a graduate equivalency diploma (G.E.D.) or having reading or computational skills at or below the eighth grade level based on a generally accepted standardized test such as the Test of Adult Basic Education (T.A.B.E.).

(12) "Private Employer" means a business or industry located in or locating in the boundaries of an enterprise zone and operating a private-for-profit-business.

(13) "Date of Endorsement" means the date that a company is endorsed by the appropriate local governing authority to apply for enterprise zone benefits and represents the initial date from which the company can participate in and accrue benefits from the program.

History

• Author: Wayne Bovis, Charles Reynolds.
• Authority: Code of Ala. 1975, §§ 41-23-1 through 41-23-7, 41-23-29(6).
• *Filed January 22, 1988; effective February 26, 1988.

Amended: Filed November 19, 1990; effective December 24, 1990.*

Ala. Admin. Code r. 305-5-3-.03 Criteria For Qualification

(1) A maximum of 27 enterprise zones may be established in Alabama. Each zone shall not exceed a maximum of 10,000 acres and shall have a maximum life not to exceed 15 years. A zone may have three zone divisions, all of which must be located within the jurisdiction of the approved governing authority. Any zone division above three must be approved by both the council and the Department. A minimum of 100 contiguous acres will be required for each division of the zone and the total acreage of the combined divisions of any zone cannot exceed 10,000 acres.

(2) At least one division of the zone must be designated in the application for approval to be considered by the Department. Any undesignated portion of the maximum of 10,000 acres allowed for zone designation may remain undesignated for a period not to exceed the remaining life of the involved zone which began at the date of designation of the zone by the Department and will end no later than 15 years from the date of designation of the zone by the Department. Each division of a designated zone must be approved by the Department.

(3) Eligibility shall be based on the following criteria:

(a) Unemployment - The rate of unemployment in the county over the 1985-86 period based on U.S. Bureau of Labor statistics average annual data for 1985 and 1986 on size of labor force and number unemployed in the county.

(b) Poverty rate - The percentage of the county population living in households with income levels under the poverty level as found by the 1980 U.S. Census of Population.

(c) Per capita income - Per capita personal income for the county as estimated by the U.S. Department of Commerce for 1984.

(d) Migration - The total percentage change in population in the county between the 1970 U.S. Census and the 1980 U.S. Census.

(e) Number of residents receiving public assistance The number of residents in the county receiving food stamps in 1984 as reported by the U.S. Department of Agriculture.

History

• Author: Wayne Bovis, Charles Reynolds.
• Authority: Code of Ala. 1975, §§ 41-23-1 through 41-23-7, 41-23-29(6).
• Filed January 22, 1988; effective February 26, 1988. Amended: Filed November 19, 1990; effective December 24, 1990.

Ala. Admin. Code r. 305-5-3-.04 Selection

Selection of enterprise zones shall be made by the Department, with input from the Advisory Council.

History

• Author: Wayne Bovis, Charles Reynolds.
• Authority: Code of Ala. 1975, §§ 41-23-1 through 41-23-7, 41-23-29(6).
• Filed January 22, 1988; effective February 26, 1988. Amended: November 19, 1990; effective December 24, 1990.

Ala. Admin. Code r. 305-5-3-.05 Incentives

Tax and nontax incentives may be available to private employers who are located in a designated enterprise zone and who comply with the provisions of the act. These incentives may take the form of the following:

(a) State income tax or corporate franchise tax credit.

(b) State income tax or corporate franchise tax credit for expenses for training new employees.

(c) State income tax or corporate franchise tax credit for new investments.

(d) Local tax credits.

(e) Regulation exemption.

(f) Employee training and technical assistance.

(g) Increased or specialized services provided by local government.

(h) Exemption from state sales and use tax.

(i) Certain exemptions from state income taxes.

(j) Certain exemptions from corporate franchise taxes.

History

• Author: Wayne Bovis, Charles Reynolds.
• Authority: Code of Ala. 1975, §§ 41-23-1 through 41-23-7, 41-23-29(6).
• Filed January 22, 1988; effective February 26, 1988. Amended: November 19, 1990; effective December 24, 1990.

Ala. Admin. Code r. 305-5-3-.06 Conditions

(1) In order to participate in Section 5 of the Act, a private employer:

(a) Must expand its labor force, or make a new capital investment or prevent a loss of employment to an existing business.

(b) May not have closed or reduced employment elsewhere in Alabama in order to expand into the enterprise zone.

(c) Must obtain an endorsement resolution approved by the appropriate local governing authority.

(d) Must be located in or locate within the boundaries of an urban or rural enterprise zone.

(e) Must generally fall into Standard Industrial Classification (SIC) Codes 20-42, 44-49, or consist of major warehousing and distribution centers, be a corporate or regional headquarters, or be a business having the prospect of significantly impacting the revitalization of a municipal urban enterprise zone without adversely affecting businesses in the city or county containing the zone. (Municipal urban enterprise zones are defined as those delineated enterprise zone areas lying inside the corporate limits of Mobile, Prichard, Montgomery, Birmingham and Gadsden.)

(2) In order to participate in Section 11 of the Act, a private employer:

(a) Must meet the requirements set forth in (1) (a) through (e) above, and

(b) Must give preference and priority to Alabama manufacturers, suppliers, contractors and labor, except where not reasonably possible to do so without added expense, substantial inconvenience, or sacrifice in operational efficiency.

(c) Must certify annually that at least thirty-five percent of their employees at the time of their employment are residents of the county hosting the enterprise zone or in the case of the cities of Birmingham, Montgomery and Prichard, residents of the city hosting the enterprise zone, and were receiving some form of public assistance prior to employment; or were considered unemployable by traditional standards or lacking in basic skills.

(3) In order to participate, an appropriate governing authority:

(a) Must submit a plan or explanation of a program to improve police protection within the zone.

(b) Must give priority to federal programs for use in enterprise zones.

(c) Must assist the Department in certifying eligibility of employers within enterprise zones.

(d) May authorize the Department to supersede certain specified local regulations and ordinances which may discourage economic development within the enterprise zone.

(e) May assist the Department in evaluating progress made in the enterprise zone.

History

• Author: Wayne Bovis, Charles Reynolds.
• Authority: Code of Ala. 1975, §§ 41-23-1 through 41-23-7, 41-23-29(6).
• Filed January 22, 1988; effective February 26, 1988. Amended: Filed November 19, 1990; effective December 24, 1990. Amended: Filed May 14, 1993; effective June 18, 1993.

Ala. Admin. Code r. 305-5-3-.07 Annual Report

The Department shall report annually to the Legislature and the Governor and provide an evaluation of the implementation of the enterprise zone law to include numbers of business activity, actual new income for the state after taxes and benefits pursuant to this act, number of new employees, cost to state for each new employee and state/local taxes generated.

History

• Author: Wayne Bovis, Charles Reynolds.
• Authority: Code of Ala. 1975, §§ 41-23-1 through 41-23-7, 41-23-29(6).
• Filed January 22, 1988; effective February 26, 1988. Amended: Filed November 19, 1990; effective December 24, 1990.

Ala. Admin. Code r. 305-5-3-.08 Powers And Duties Of The Department

The Department shall:

(a) Monitor the implementation and operation of the Enterprise Zone Act and evaluation of each enterprise zone.

(b) Assist the governing authority of an enterprise zone in obtaining federal assistance.

(c) Assist the governing authority of an enterprise zone in obtaining assistance from other departments of state government.

(d) Assist any employer or prospective employer within an enterprise zone in obtaining the benefits of any incentive or inducement program authorized by Alabama law.

(e) Submit an annual written report evaluating the effectiveness of the program and any suggestions for legislation to the Governor and the Legislature no later than the third day of each regular session.

(f) Promulgate rules and regulations to effectuate this act in accordance with the Administrative Procedure Act.

(g) Notify each legislator whose district includes any portion of an enterprise zone when such zone is designated.

History

• Author: Wayne Bovis, Charles Reynolds.
• Authority: Code of Ala. 1975, §§ 41-23-1 through 41-23-7, 41-23-29(6).
• Filed January 22, 1988; effective February 26, 1988. Amended: Filed November 19, 1990; effective December 24, 1990.

Ala. Admin. Code r. 305-5-3-.09 Enterprise Zone Procedures Manual

The enterprise zone procedures manual is incorporated as a rule and attached as a part of the body of the rules.

History

• Author: Charles Reynolds
• Authority: Code of Ala. 1975, §§ 41-23-1 through 41-23-7, 41-23-29(6).
• Filed November 19, 1990; effective December 24, 1990.
• Editor's note: Adopted as new rule by amendment of chapter.