SB567 Alabama 2012 Session

Updated Feb 27, 2026

Notable

Summary

Primary Sponsor: J.T. WaggonerSenator
Republican
Session: Regular Session 2012
Title: Counties, certain counties who have filed Chapter 9 bankruptcy may levy and collect certain taxes, financial advisory committee established
Summary: SB567 would let financially distressed Alabama counties that have filed Chapter 9 bankruptcy levy limited additional taxes, with oversight and a financial advisory committee, under strict caps and conditions.
What This Bill Does
It authorizes eligible counties to levy extra taxes beyond existing ones (up to 1% sales and use tax or up to 0.5% privilege license tax) for defined periods while under Chapter 9 relief. It requires a public hearing and public notice before imposing any new tax, including posting the proposed ordinance on the county website or newspaper notices and courthouse postings. It sets a revenue cap so first-year revenue from the new tax, added to other such taxes, cannot exceed 20% of the county's largest annual expenditures from the three prior fiscal years. It creates a five-member financial advisory committee to review finances, with members appointed by the Governor, the Speaker, the President Pro Tempore, and the State Treasurer, who must have specific qualifications and serve without pay, dissolving upon certain bankruptcy outcomes. It restricts use of proceeds (e.g., not to pay certain non-recourse or restricted-source debts) and provides for termination of the tax authority upon bankruptcy events, while allowing counties to continue collecting already authorized taxes and keep proceeds. It also allows counties to adopt necessary ordinances or regulations to implement the taxes, with the act taking effect immediately.

Who It Affects
Counties in Alabama that have filed for relief under Chapter 9 of the U.S. Bankruptcy Code (Order for Relief) and may levy additional taxes under this act.
Residents and businesses in those counties who would be subject to the new taxes (sales, use, and privilege license taxes) and who are affected by public hearings, notice requirements, and oversight by a financial advisory committee.

Key Provisions
Authorizes eligible counties to levy additional taxes beyond existing ones, specifically sales and use taxes up to 1% or privilege license taxes up to 0.5%, for defined periods while under Chapter 9 relief.
Requires a public hearing and public notice before the levy of any additional tax, including posting the text on the county website or advertising in a newspaper and posting notices at the courthouse.
Imposes a revenue cap: estimated first-year revenues from the new tax, plus other added taxes, may not exceed 20% of the county's largest annual expenditures from the three fiscal years preceding the petition for relief.
Establishes a five-member financial advisory committee to review the county’s finances; members are appointed by the Governor, the Speaker, the President Pro Tempore, and the State Treasurer, with specified education/experience requirements and no compensation; committee dissolves after certain bankruptcy outcomes.
Prohibits using tax proceeds to pay certain non-recourse debts or debts payable from restricted sources.
Authority to initiate levies terminates upon specified bankruptcy events, but counties may continue collecting already authorized taxes and retain proceeds collected before termination.
Allows counties to adopt ordinances, resolutions, or regulations necessary to implement the taxes, consistent with state law.
Act is effective immediately and includes severability and standard legal provisions.

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