HB654 Alabama 2010 Session

Summary

Primary Sponsor

Thad McClammy

Democrat

Co-Sponsor

Greg Wren

Session

Regular Session 2010

Title

Municipal taxation, sales and use tax, levy in settlement of a boundary dispute at different rates, sharing of revenue pursuant to contract, Secs. 11-51-200, 11-51-202, 11-102-1, 11-102-2, 11-102-5 am'd.

Summary

The bill would let municipalities set different sales and use tax rates in designated areas inside their borders to settle boundary disputes with neighboring municipalities that have overlapping police jurisdiction, and to share tax revenues from those areas through contracts.

What This Bill Does

It authorizes municipalities to levy sales and use taxes at different rates in designated areas within their corporate limits to settle disputes over boundaries or territory with municipalities that have overlapping police jurisdictions. It also allows sharing of sales and use tax revenues collected in those designated areas and permits municipalities to enter revenue-sharing contracts for those revenues. The act amends several code sections to implement these powers and sets rules for contract duration, renewal, and approvals, while clarifying that joint tax-levying authority is not granted except as provided, and that nothing in the act allows cross-municipality control of another municipality’s powers.

Who It Affects

• Municipalities with boundary disputes and overlapping police jurisdictions: gain authority to levy taxes in designated areas and to share revenues with neighboring municipalities under contracts.
• Residents and businesses in designated areas: may experience different tax rates within the same municipality and be affected by revenue-sharing agreements between municipalities.

Key Provisions

• Allows a municipality to levy sales and use taxes at different rates in designated areas within its corporate limits to settle boundary or territorial disputes with a neighboring municipality that has overlapping police jurisdiction.
• Allows sharing of sales and use tax revenues collected within designated areas and enables revenue-sharing contracts between municipalities, including approval requirements by each sharing municipality.
• Amends Sections 11-51-200, 11-51-202, 11-102-1, 11-102-2, and 11-102-5 to implement these authorities and sharing arrangements.
• Contracts must be in writing; standard contracts may last up to three years (perpetual duration permitted for certain revenue-sharing arrangements under 11-102-1), with renewal allowed for up to three years.
• Designated areas may be created through annexation, and tax rates within those areas may be the same or different from other parts of the municipality, as part of a revenue-sharing agreement.
• If a contract includes joint exercise of powers, it must specify purpose, termination, budgeting, financing, and property disposal terms; no party may incur debts on behalf of others.
• Nothing in this act authorizes joint exercise of the power to levy taxes or to zone real property, except as authorized by statute; counties and municipalities may contract to zone flood-prone areas or share revenues as allowed.
• The act becomes effective immediately upon passage and approval by the Governor.

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

Subjects

Municipalities