Senate adopts changes to tax‑increment law to aid large '21st‑century' manufacturing zones

The Alabama Senate adopted Senate Bill 370 on March 31, 2026, a revision of the state’s tax‑increment financing laws intended to help local governments recruit and site major manufacturing investments.

Sen. Livingston, who carried the measure, said the bill permits a "major 21st‑century manufacturing zone" — defined in statute as at least 250 contiguous acres suitable for automotive, aerospace, semiconductor, biomedical and related manufacturing — to be included in a tax increment district regardless of the district's size. He explained the change allows the ad valorem tax increments collected in the district to reimburse public entities (or public utilities) for costs incurred acquiring land or for public infrastructure that enable a large industrial site to develop.

"This is a pretty simple little bill," Livingston said on the floor, adding the approach had been used in Huntsville and that it helps communities attract industry by enabling tailored financing for land assembly and infrastructure. The bill updates code sections in title 11 (11‑99‑2, 11‑99‑4, 11‑99‑5 and 11‑99‑6) and expands the definition of eligible project costs to include pre‑creation land acquisition when the local governing body has recited its intent to reimburse those costs from future tax increments.

The rules committee reported and a floor amendment from Sen. Livingston was adopted. The Senate approved the bill by roll call.

What it changes: Local governments that designate a qualifying "major 21st‑century manufacturing zone" may form or amend tax increment project plans and use future tax increments to reimburse acquisition and infrastructure costs tied to development in that zone. The bill also keeps statutory processes for public hearings, project plans, durations and notice to deferred tax recipients.

Next steps: The bill passed the Senate and will proceed to the House for concurrence or further action.