HB572 Alabama 2010 Session

Summary

Primary Sponsor

Mike Hill

Republican

Session

Regular Session 2010

Title

Oil and gas, severance tax, local governmental entities prohibited from levying tax on oil or gas severed on which state severance taxes have been paid, Sec. 40-20-2 am'd.

Summary

HB572 would restrict local governments in Alabama from imposing any local taxes on oil and gas that have had state severance taxes paid, tightening the existing prohibition with specific exceptions.

What This Bill Does

If enacted, the bill amends the state law to bar counties, cities, towns, and municipalities that receive a share of severance tax proceeds from levying any local tax, fee, license, or charge related to the production, treatment, processing, ownership, sale, storage, purchase, marketing, or transportation of oil or gas that have severance taxes paid to the state. Offshore production remains exempt from this restriction, and ad valorem taxes on property remain allowed. Local taxation limits apply to those entities that receive severance tax shares; localities that do not receive a share are not bound by this restriction. The bill does not change the overall severance tax rates themselves, only the ability of local governments to tax oil and gas activities.

Who It Affects

• Counties, cities, towns, and municipalities in Alabama that receive a share of severance tax revenues, who would be prohibited from imposing any local taxes on oil or gas production and related activities (except ad valorem taxes on property).
• Oil and gas producers, owners, and operators in the state, who would be protected from new local taxes related to production, treatment, processing, ownership, sale, storage, or transportation of oil or gas (with offshore production largely exempt).

Key Provisions

• Amends Section 40-20-2 to prohibit local governments from establishing, levying, imposing, or collecting any tax, fee, license, or charge related to the production, treating, processing, ownership, sale, storage, purchase, marketing, or transportation of oil or gas, on which severance taxes have been paid to the state.
• Offshore oil and gas production remains exempt from the local tax limitation, and the restriction does not apply to offshore production.
• Ad valorem taxes on property remain allowed for local governments, even where the local tax limitation applies to other oil/gas-related taxes.
• The limitation applies to counties, cities, towns, and municipalities that receive a share of severance tax revenue; it does not apply to those that do not receive such a share (in regard to offshore production, which remains governed by existing rules).
• Effective date: the act becomes law on the first day of the third month after passage and Governor approval.

AI-generated summary using openai/gpt-5-nano on Feb 25, 2026. May contain errors — refer to the official bill text for accuracy.

Subjects

Oil and Gas