Lawsuit over Tax Credits in Alabama Being Determined by Judge

Lawsuit over Tax Credits in Alabama Being Determined by Judge



A law that awards tax credits to foreign industries that puts up factories in Alabama, including the first Chinese plant in the state, is presently facing a legal challenge from the Alabama Education Association. This can potentially result in the Legislature passing the measure for a second time to eliminate any questions on its legality.

The new law was among the three measures providing tax breaks passed by the Legislature in June. All three are facing legal challenge in a Montgomery court by two members of the AEA, Tuscaloosa County teacher Sheila Hocutt-Remmington and DeKalb County teacher Anita Gibson. They argue that all three measures are unconstitutional because the legislation was passed first in the Senate, while the Constitution of Alabama requires revenue measures to be passed by the House first.

The two Republican chiefs of the  Alabama Legislature, Senate President Pro Tem Del Marsh of Anniston and House Speaker Mike Hubbard of Auburn, said that they hope to get all the three measures passed again in the coming 2012 session to remove any legal questions raised by the AEA. According to Hubbard, this time the House will act first. He also said that the tax credit measures for new plants will be a vital part of the GOP’s agenda to generate more jobs.

The funding and revenue manager, Susan Kennedy, said Tuesday that she did not believe the legislators understood the fiscal impact of the new measures when they approved them, and AEA would welcome another opportunity to try to defeat the legislation in the coming legislative session which will start Feb 7.