An amendment that would have increased the essential private investment needed to qualify for new Alabama tourism incentives failed in a Senate committee Wednesday morning.
House Bell 241 By State Representative Danny Jarrett (R-Trousville) It will extend sunset dates to 2028 and increase incentive caps on the Alabama Jobs Act and the Alabama Growth Act. The legislation will also allow new tourism incentives to be offered to qualified projects with investments of at least $35 million.
State Senator Arthur Orr (R-Decator), chair of the Department of Finance and Tax Education, attempted to amend legislation to raise the minimum investment to $50 million.
“It raises the bar for projects to qualify,” Orr said. “Right now, you see the bottom line is $35 million… that would work out to $50 (million) dollars. The reason for that is because this is not for any hotel that’s on a lake or a river or the coast or somewhere. We need To make sure it’s a private, nice, resort-type area if we’re going to put school kids’ money in for that to really drive tourism and make it a destination.”
“The tourism component is the catalyst for the first impression,” Orr said at a meeting of the Finance and Tax Education Committee on Wednesday.
“We’ve never, as far as I know, offered any kind of incentive with tourist-type destinations,” he said. “That’s why, in my opinion, we have to start with a high bar maybe and then see how that affects the market and then revisit it in time and if we need to adjust it obviously we can.”
Orr added, “I have a problem when we start spending money on education – we need to have a high standard in my opinion.”
“Now, I’m one vote. That’s what I think we need to do to start on a safer level and then, as I said, if we need to make changes, we’ll make changes.” “We need to see some serious investment coming in to help make it a destination. If you look at construction costs today, $35 million including land… I hate to pick names and call it a Hampton Inn, but the Hampton Inn is $30 million for the take.” Or bid, and then you draw the price of the land.Is that something we want to subsidize?Now, it must be on a river or a lake or something.There must be some other attraction.It can’t be on the side of a highway, but if we have High quality tourist points, we need a decent bar there.”
Sen. Garlan Goodger (R-Coleman) “His concern is that $50 million in the private investment world is too much.”
State Senator Pro Tim Greg Reed (R-Jasper) said at the meeting that the tourism component was his idea because “tourism is one of the largest industries that we have in Alabama, and so the fact that we could look for a small opportunity within that package to be able to offer some level of Promoting one of the largest industries we have in the state which I just thought was a good focus and a good idea.”
“How do we end up getting down to the specifics of the numbers… I hear what the chief[Orr]says. I think there’s validity there,” Reid said. “My whole goal with this in trying to make sure this was part of the package was just to be able to Recognizing that we have a huge industry here that we want to encourage and provide some level of minimum incentive. Obviously, if you’re getting a million dollars and you have a $50 million project, it’s not going to make anyone decide whether or not to do their project, but it does give some incentive and some encouragement from the state of Alabama.”
Senate Minority Leader Bobby Singleton (D-Greensboro) said the amendment would “kill any potential tourism investment” in his district.
“While I respect what you’re trying to do, I know that when I look at my area… some of you may not think that nobody ever wanted to come to West Alabama[and]want to do anything, but that would kill any potential tourism investment.” “Even with land in my area, it probably won’t get to $60 million if they’re trying to do something in the area. It doesn’t give me a chance across the state. In Huntsville or Mobile and these other areas might give you a chance to do those things, but for the rest of us, it might It doesn’t give us that opportunity to bring in and invite someone who wants to make these investments. They’ll go where they can invest and maybe get incentives. If the incentive cap is too high and they want to invest $35 million, they can’t get stimulus from the end of the state.”
Singleton said, “I respect what you’re doing but at the end of the day I think it kind of kills the qqindustry in the country.”
“I know you said let’s do it high first and see do we need to go back low but at the end of the day it kills my district if someone wants to get in and invest. Hampton Inn is like a Marriott to me.” If I can have a 50 job, it’s Like 2000 for me. We don’t have any incentives for 50 jobs versus 2,000 jobs, so I think it has something to do with discrimination against certain parts of the state that can’t get those investments when the standards are set so high.”
Under the legislation, eligible tourism-related businesses will be restricted to tax deductions of $1 million per calendar year. Attractions eligible for the program include theme parks, water parks, amusement parks, museums, motor highways, professional sports facilities, natural or scenic attractions, waterfront marine facilities, and aquariums.
The amendment failed by a vote of 6 to 9 and the legislation passed committee without a unanimous amendment. The legislation will be voted on by the Senate on Thursday. The House passed it unanimously last week. Kay Ivey said at a breakfast meeting of the Montgomery County Chamber of Commerce on Wednesday that she hopes to sign the multi-legislation stimulus package into law by the end of the week.
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