HB28 Alabama 2015 2nd Special Session

Summary

Primary Sponsor

Mac McCutcheon

Republican

Session

Second Special Session 2015

Title

Taxation, levy of index gasoline tax and index diesel tax, authorized, Secs. 40-17-370 to 40-17-373, inclusive, added; Sec. 40-17-325 am'd.

Summary

HB28 would create the FAIR Act to index gasoline and diesel taxes with a base five-cent per gallon increase and potential annual two-cent adjustments tied to fuel prices, starting in 2016, to fund transportation infrastructure.

What This Bill Does

It creates an indexing system for gasoline and diesel taxes with a base five-cent per gallon tax and potential additional two-cent yearly increases based on a price comparison formula. Annual adjustments are capped so total increases cannot exceed 15% of the current-year price, and calculations are performed by the Department of Revenue with results posted by May 31 each year. The indexing rules would take effect October 1, 2016 (other provisions become law on enactment), and the new rates would apply to the existing motor-fuel tax structure, with net proceeds first covering collection costs and the remainder distributed to transportation infrastructure funds under existing law.

Who It Affects

• Drivers and other consumers who purchase gasoline and diesel would face higher per-gallon taxes due to the base index and potential annual increases.
• The Department of Revenue, fuel distributors, gas stations, and other taxpayers would be responsible for calculating, collecting, reporting, and distributing the indexed taxes and related data.

Key Provisions

• Establishes the Funding Alabama's Infrastructure Responsibly (FAIR) Act, adding Article 13 to Chapter 17 of Title 40 to authorize gasoline and diesel tax indexing.
• Imposes an initial five-cent per gallon index tax on gasoline and diesel starting in 2016, designated as the index gasoline tax and index diesel tax.
• Allows annual two-cent index adjustments based on a formula comparing current-year fuel prices to base prices (with CPI adjustments) and capped so increases cannot exceed 15% of the current price; adjustments take effect September 1 each year and results are posted by May 31.
• Net proceeds from the indexed taxes are first used to cover cost of collection, then distributed to transportation-related funds according to existing statutes; the base motor-fuel tax rates are adjusted to include the indexed taxes (gasoline total of 18 cents per gallon and diesel total of 19 cents per gallon); Section 2 of the act becomes effective October 1, 2016, with other provisions taking effect upon enactment.

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