For the purpose of this article, the following words and phrases shall have the following meanings:
(1) ADECA. The Alabama Department of Economic and Community Affairs.
(2) ALABAMA RESEARCH ENTITY. One or more of the following:
a. A public or private university in the state.
b. A university research foundation affiliated with a public or private university in the state.
c. A public two-year college in the state.
d. A publicly owned hospital in the state.
e. An entity duly formed, domiciled, or qualified to do business in the state that meets each of the following criteria:
1. Is exempt from federal income tax under Section 501(c)(3) of the Internal Revenue Code of 1986, as amended.
2. Is predominantly engaged in research and non-commercial development activities undertaken for the purpose of discovering information that is technological or biotechnological in nature, involves a process of experimentation, and the application of which is intended to be used in the development of a new or improved product, service, or treatment.
3. Has its headquarters and principal place of business in the state.
4. Has, or is anticipated to have, at least 75 percent of its property and payroll in Alabama, using the property and payroll factor calculations found in Title 40.
(3) APPROVED ACTIVITY. The conduct of an activity that is predominantly any one or more of the following:
a. Described by NAICS Code 1133, 115111, 2121, 22111, 221330, 31 (other than 311811), 32, 33, 423, 424, 482, 4862, 48691, 48699, 48819, 4882, 4883 (other than 48833), 493, 511, 5121 (other than 51213), 51221, 517, 518 (without regard to the premise that data processing and related services be performed in conjunction with a third party), 51913, 52232, 54133 (if predominantly in furtherance of another activity described in this article), 54134 (if predominantly in furtherance of another activity described in this article), 54138, 5415, 541614, 5417, 55 (if not for the production of electricity), 561422 (other than establishments that originate telephone calls), 562213, 56291, 56292, 611512, 927, or 92811.
b. The production of biofuel as such term is defined in Section 2-2-90(c)(2).
c. A target of the state’s economic development efforts pursuant to either of the following:
1. The Accelerate Alabama Strategic Economic Development Plan adopted in January 2012 by the Alabama Economic Development Alliance, created by Executive Order Number 21 of the Governor on July 18, 2011, or any amended version or successor document.
2. A type listed in a regulation adopted by the Department of Commerce.
(4) CONSORTIUM RESEARCH EXPENSES. Any amount paid or incurred by any Alabama research entity for qualified research, but not including any expenses for research activities performed outside Alabama.
(5) CONTRACT RESEARCH EXPENSES. Any amount paid by a business enterprise to an Alabama research entity, other than an employee of the research entity, for qualified research, but not including either of the following:
a. Consortium research expenses.
b. Expenses for research activities performed outside Alabama.
(6) NAICS CODE. Any sector, subsector, industry group, industry, or national industry of the 2012 North American Industry Classification System, or any similar classification system developed in conjunction with the United States Department of Commerce or Office of Management and Budget.
(7) QUALIFIED RESEARCH. The meaning given in 26 U.S.C. § 41(d), if conducted in Alabama in pursuit of an approved activity. In applying any terms in 26 U.S.C. § 41, "qualified research" shall have the meaning given herein.
Last modified: May 3, 2021