HB257 - Alabama New Markets Development Act

• Establishes state income, financial institution excise, and premium tax credits for investments in qualified businesses located in low-income communities as defined by Internal Revenue Code Section 45D.

• Tax credits equal 0% in year one and 8.33% annually for the next six years (totaling 50% of the qualified equity investment purchase price) and are claimed on anniversary dates of the investment.

• Requires qualified community development entities to apply to the Alabama Development Office for certification; department has 60 days to approve applications and must begin accepting applications by September 1, 2012.

• Caps total tax credit allocation at $20,000,000 per tax year; department must recapture credits if federal credits are recaptured, if 85% of investment proceeds are not deployed to Alabama businesses within 12 months, or if investments are redeemed early.

• Excludes landfills and dumps from tax credit eligibility and becomes effective on the first day of the third month following passage and approval.