Alabama legislation would give lucrative tax breaks to banks, insurance companies
MONTGOMERY, Ala. - If proposed legislation working its way through the state Senate and House is approved and finds its way to the desk of Gov. Don Siegelman, banks and insurance companies-and hopefully state-chartered credit unions-in the Camellia State will receive lucrative excise tax credits already available to other businesses in the state. Identical bills H.B. 345 and S.B. 292 introduced by state Rep. John Hawkins (R-Birmingham) and state Rep. Rodger Smitherman (D-Birmingham) would provide banks and insurance companies a credit against the state financial institution excise tax liability levied "against net income generated by or arising out of a project undertaken by new businesses in the state or the expansion of existing businesses in the state" after Dec. 31, 2001. Specifically, the bills would allow the state to forgive excise taxes paid annually by financial companies up to an amount equal to 5% of the money invested in qualifying projects for each year for 20 years. Existing law allows for certain incentives to be offered to companies that locate a new business or expand an existing business in Alabama. Industry advocates say the legislation could make it easier for Alabama to recruit out-of-state financial operations. There is no visible opposition to the legislation, the Associated Press reported. At press time, H.B. 345 and S.B. 292 were in the House Ways and Means General Fund and the Senate Industrial Development and Recruitment Committees, respectively. Vicki Williams of the Alabama Credit Union League said the league was aware of the legislation and was following its progress closely. It is the league's view, she said, that state-chartered credit unions would be covered under any definitions of the law, based the general definition of a financial institution in subdivision of Section 40-16-1 of the Code of Alabama. At press time, Williams said Will McCarty, director of government affairs, planned to meet with Hawkins in Montgomery the week of March 13.