The House of Representatives passed a package of economic bills Thursday morning that extend tax breaks to the coal industry and aircraft parts manufacturers.

 

Republican sponsors touted the bills as job creators that would lead to economic development in the state, but Democrats claimed the legislation would take money away from state schools.

 

The coal mining bill, sponsored by Bill Roberts, R-Jasper, allows coal companies to apply for abatements on sales, use, mortgage, deed and non-educational property taxes, and allows companies to take advantage of an income tax capital credit. The credit allows businesses that make an investment of at least $1 million to claim five percent of their taxes against their income tax for up to 20 years.

 

Coal companies already qualify for tax credits for alternative coal plants, such as coal gasification, or for technology that would reduce carbon emissions. The bill passed would apply to all coal company investments.

 

"We in the coal mining areas depend on coal mining in state as a source of employment," said Roberts, who said many of the jobs were high-paying. "We're hoping to incentivize additional coal mining operations in the area."

 

The Legislative Fiscal Office's note to the bill did not include a cost estimate to the Education Trust Fund, which gets about 56 percent of its revenue from income taxes. Rep. Patricia Todd, D-Birmingham, cited that fact in opposing the bill, and also said the state should not be paying to subsidize coal mine owners.

 House committees Wednesday passed a package of economic development bills, including a pair that would give the governor more power in awarding a particular tax incentive.

 

 The legislation, sponsored by Rep. Barry Mask, R-Wetumpka, would allow qualifying companies to apply for incentives that allow them to retain up to 90 percent of taxes withheld for employees to either start new projects or retain employees. 

 

 The company would have to invest at least $500,000 if the project is in an area governed by the Alabama Enterprise Zone Act, or $2,000,000 outside one. The governor would be able to approve the project based on written

recommendations from the directors of the Alabama Development Office and the Alabama Department of Finance -- both appointed by the governor -- without calling a special session of the state Legislature. Companies that qualify would not be eligible for a capital credit for the project. 

 

 Mask said the bill was needed to give the state an edge in recruiting businesses. 

 

 "We have lost some significant projects in Alabama in the last 18 months," he said. "We need this bill to compete."

The legislation had the support of representatives from Manufacture Alabama and the BCA, but was criticized by Henry Mabry, executive secretary of the Alabama Education Association.