For operational savings, the Birmingham region offers:

• Annual corporate income tax credit up to 5 percent of a company's capital investment for 20 years for qualifying projects
• The abatement of the non-education portion of a company's ad valorem taxes
• The abatement of the non-education portion of a company's ad-valorem taxes on personal property for up to 10 years.

For easy cost effective start, the Birmingham region offers:

• The abatement of the non-education portion of a company's sales tax on the purchase of construction materials for new buildings
• The abatement of the non-education portion of a company's use tax on the purchase of manufacturing equipment
• A state site preparation grant program to reduce site development cost
• Personal assistance to secure all business, construction and environmental permits
• Temporary office space at below market rates with necessary business services
• A customized program for relocating executives and key personnel
• Various building occupancy alternatives, including purchase, lease and lease purchase options
• Assistance with a thorough evaluation of all finance options, including industrial revenue bonds which offer long-term financing at (or below) prime, as well as all other federal, state and private funding options.

Workforce Training

• Free employee recruiting, screening, and training to ensure the appropriate labor mix for a quick and productive start-up through AIDT

New Incentives Target “Knowledge Based” Projects

Enhances the Birmingham Region for Corporate Development Key components of Alabama’s newly passed knowledge based incentives legislation have special relevance to the Birmingham region’s existing economic strengths, such as fostering the development and expansion of corporate headquarters, regional back-office operations and biotechnology research. Moreover, the incentives provide a platform to strengthen the region’s technology economy, hence software production and data processing, services and hosting.

In many respects, the Birmingham economy played a crucial role in the development of the incentives legislation. The high growth components of the region’s economy were analyzed, which helped determine the economic “targets” for the incentives. The premise of this legislation is to provide a tool to enhance the region’s economic dynamics for the 21st Century.

The new Knowledge Based incentives will position Alabama’s largest and most diverse economy for the next wave of economic development. The new incentives extends the Capital Investment Tax Credit, tax abatements and workforce training for new and expanding establishments that are primarily engaged in the following:

Target Components of Knowledge Based Incentives Legislation

• Corporate Headquarters (national, regional or state)
• Data Processing, data services and web hosting (NAICS 51821)
• In-bound customer call centers (NAICS 561442)
• Computer software publishing or publishing and reproduction (NAICS 511210)
• Telecommunication services, including internet, cable and telephone (NAICS 517110)
• Research and development in the physical, engineering, and life sciences (NAICS 54171)
• Physical, chemical, and other analytical testing services (NAICS 541380)
• Administration and operations of space flights, research, and exploration (NAICS 927)

Source: Michael Shattuck, MDB

I. Alabama Capital Investment Tax Credit

Description: This important incentive that helped create Alabama as the new automotive manufacturing center now applies to new and expanding knowledge based projects (as outlined on the first page of this summary). The incentive utilizes an annual corporate income tax credit to assist in offsetting capital investment associated with the project. The capital credit is an annual income tax credit equal to 5% of a projects capital cost each year for a 20-year period. For banks, this credit applies to the Financial Institution Excise Tax (FIET).

Lease: If the qualifying headquarters, data processing, call center is leasing as opposed to building a new facility, the lease may be characterized as an operating lease, in which the capital cost shall include the net present value of the payments made by the investing company.

Eligibility: New operations or expansion of existing operations involving new capital investment of $2-million, 50 new employees, an average $15-per hour minimum wage (excluding benefits); $12-per hour in less developed counties of Metropolitan Birmingham (TBD).

II. Tax Abatements

Description: Cities, counties and public industrial authorities in Metropolitan Birmingham may grant abatements of property taxes, sales and use taxes, and mortgage and recording taxes on property acquired to establish or expand a qualifying knowledge-based development project.

Eligibility: Tax abatements are at the discretion of the local governing jurisdiction for which the project is located.

III. Workforce Training

Description: AIDT (Alabama Industrial Development Training) will develop and implement a comprehensive training program based upon client specifications.

AIDT services include:

• Program development
• Applicant recruitment and screening
• Pre-employment training
• Post employment training
• Mobile training units
• Leadership development