HB364 Alabama 2012 Session

Summary

Primary Sponsor

Elwyn Thomas

Republican

Co-Sponsor

Steve McMillan

Session

Regular Session 2012

Title

Severance tax on sand, gravel, etc., Revenue Department to provide county commissions with information regarding levy, collection, and distribution, audits authorized, civil penalties, counties authorized to collect, Secs. 40-13-51, 40-13-53, 40-13-54, 40-13-55, 40-13-56, 40-13-57, 40-13-58 am'd

Summary

HB364 updates Alabama's severance tax on materials like sand and gravel, clarifying definitions, tax collection, exemptions, and how revenue is allocated to counties, with the Department of Revenue sharing tax records with county commissions.

What This Bill Does

The bill defines key terms (such as severed material, operator, producer, and purchaser) and specifies exemptions. It sets a tax of 10 cents per ton on severed material sold as tangible property, with possible higher rates for certain naturally occurring unprocessed sand as allowed by local law, and outlines who pays the tax and when it is due. It requires the Department of Revenue to allocate tax revenues to the county where the material was severed or processed and to provide relevant records to the county, and it establishes a quarterly remittance system to counties with specified uses. It also creates reporting, interest, and penalty rules for late payments and limits administrative costs to 1.5% of quarterly revenues.

Who It Affects

• Producers/Operators and Purchasers of severed materials: they are responsible for collecting or paying the severance tax, maintaining exemption documentation, and filing required returns.
• County and Municipal Governments and local residents: counties receive tax revenue for road work, economic development, and related projects, with portions potentially allocated to municipalities and exclusive use in certain counties (e.g., Franklin County for economic development).

Key Provisions

• Defines terms such as borrow pit, operator, producer, purchaser, and severed material; clarifies exemptions (e.g., lime/limestone for agriculture or pollution control, rock dust, chert, and certain uses) and certain inter-entity transfers.
• Imposes a 10-cent-per-ton severance tax on severed material sold as tangible property, with potential higher rates for naturally occurring unprocessed sand as allowed by local law; tax collection mechanics specify whether the producer or purchaser is liable at sale or delivery.
• Requires the Department of Revenue to administer the tax and allocate funds to the county where severed material was severed or processed; makes records available to county commissions upon request.
• Adopts a first-in, first-out inventory method for tax allocation and requires monthly/quarterly reporting; provides for a 20th/21st day delinquency cycle with interest and penalties, and limited penalties until rules are in place.
• Remits tax revenues quarterly to the county severed material tax fund; at least 75% must be used for county roads, local economic development, public transit, or related projects; 25% to municipalities within the county; Franklin County receives dedicated economic development funding; administrative costs capped at 1.5% of quarterly revenues.

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

Subjects

Taxation