Alabama state legislature approves new Alabama Development Fund
The legislation provides funding for rural development, international business development offices, global marketing, quality-of-place initiatives, and infrastructure improvement programs.
The new Alabama Development Fund, which was approved by the state legislature, is structured as a “pay-for-play” funding source, meaning that the revenues generated will directly support the expansion of existing economic development initiatives while also allowing for the creation of several new programs. Among those are funding for rural development, international business development offices, global marketing, quality-of-place initiatives, and infrastructure improvement programs.
The fund will be supported by a carve-out of 0.75 percent from the State Sales Tax Abatements and 1 mill from the State Property Tax Abatements.
These revenues, which would no longer be abatable, will flow directly into the fund, generating an estimated $24 million annually from sales tax and $4.5 million from property tax based on past years’ data. This model provides a sustainable funding mechanism that does not require additional taxpayer burden but rather reallocates a portion of incentives that were previously forgone entirely.
By leveraging these resources, Alabama will be able to fund initiatives that directly contribute to economic growth, job creation, and improved community infrastructure. More importantly, it ensures that rural communities—often left behind in traditional economic development strategies—receive equitable access to these resources.
The Alabama Development Fund officially launches on October 1, 2025 and will be managed by the Department of Commerce.
Like what you've read?
Forward to a friend!