HB21 Alabama 2011 Session

Updated Feb 27, 2026

High Interest

Summary

Primary Sponsor: Paul DeMarco
Republican
Session: Regular Session 2011
Title: Private corporations, railroads, canals, constitutional provisions in Article XII, Constitution of Alabama of 1901, amended and repealed, Sections 229, 240 (Recompiled Constitution of Alabama of 1901 as amended), am'd., Sections 230, 231, 232, 233, 234, 236, 237, 243, 244, 245, 246 (Recompiled Constitution of Alabama of 1901, as amended), repealed, const. amend.
Summary: HB21 would amend Alabama’s Constitution to move private-corporation regulation to general laws, impose a franchise tax on doing business, and repeal many existing private-corporation and railroad provisions.
What This Bill Does
It rewrites Section 229 to require general laws for organizing, dissolving, and regulating corporations and to create a state franchise tax on the privilege of doing business; it adds protections exempting certain nonprofit and Home Owners' Loan Act associations from that tax on withdrawable shares. It adds Section 240 to allow corporations to sue and be sued like natural persons and to limit stockholder liability to unpaid stock. It repeals numerous sections (230, 231, 232, 233, 234, 236, 237, 243, 244, 245, 246) related to private corporations and railroads/canals, while leaving other sections (235, 238, 239, 241, 242) unchanged.

Who It Affects
Private corporations and other entities: would be governed by general laws rather than charter-specific rules and would be subject to a new franchise tax.
Benevolent, educational, or religious organizations and certain Home Owners' Loan Act associations: would be exempt from the franchise tax on withdrawable or repurchasable shares.
Stockholders of private corporations: would no longer face personal liability beyond their unpaid stock.
Corporation charters: could be amended, altered, or repealed under general laws rather than through existing charter provisions.

Key Provisions
Section 229 amended to require general laws for organizing, dissolving, and regulating corporations; introduces a franchise tax on the privilege of doing business, with exemptions for specified nonprofit and Home Owners' Loan Act associations; authorizes charter amendments under general laws.
Section 240 amended to establish corporate rights to sue and be sued like natural persons and to limit stockholder liability to unpaid stock.
Repeals Sections 230, 231, 232, 233, 234, 236, 237, 243, 244, 245, and 246 of Article XII (private corporations and railroads/canals).
Sections 235, 238, 239, 241, and 242 are stated as not being changed by the bill.

AI-generated summary using openai/gpt-5-nano on Feb 24, 2026. May contain errors — refer to the official bill text for accuracy.
Subjects: Constitutional Amendments