Tax Incentive Evaluation Law: Alabama

Fact Sheet May 26, 2016 Read time:

Projects: Economic Development

This page is no longer being updated. As of June 15, 2017, newer tax incentive evaluation fact sheets are available here.

To ensure that economic development tax incentives are achieving their goals effectively, many states have approved laws requiring regular, rigorous, independent evaluations of these programs. For a list of states that have passed evaluation laws since the start of 2012, click here.

Alabama

S.B. 208, enacted May 12, 2016

What it does

Requires evaluation of all major tax incentives
State agencies are responsible for evaluating the tax incentives that they administer. The Alabama Department of Revenue will develop four-year evaluation schedules so that lawmakers regularly receive information on the results of different incentive programs.
Sets standards for economic analysis
Each evaluation will determine whether an incentive has achieved its specific policy goals. To measure economic impact, evaluations will consider whether incentives have successfully encouraged businesses to create jobs or make investments that they would not otherwise have made.

Requires evaluation of all major tax incentives

State agencies are responsible for evaluating the tax incentives that they administer.

The Alabama Department of Revenue will develop four-year evaluation schedules so that lawmakers regularly receive information on the results of different incentive programs.

Sets standards for economic analysis

Each evaluation will determine whether an incentive has achieved its specific policy goals.

To measure economic impact, evaluations will consider whether incentives have successfully encouraged businesses to create jobs or make investments that they would not otherwise have made.

Excerpt from Alabama’s law: Legislators use evaluations to make policy recommendations

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.