HB23 Alabama 2016 1st Special Session Session

Summary

Primary Sponsor

Ken Johnson

Republican

Session

First Special Session 2016

Title

Natural gas, compressed and liquefied, used as motor vehicle fuel, decals from Liquefied Petroleum Gas Board extended to May 1, 2017, suspension of motor fuel tax extended, Sec. 40-17-167 am'd.

Summary

HB23 replaces the decal system for natural gas fuels with a uniform tax system for CNG and LNG, while setting licensing, reporting, and penalties for fuel suppliers, fleet producers, and personal producers in Alabama.

What This Bill Does

It establishes a uniform motor fuel tax for compressed natural gas (CNG) and liquefied natural gas (LNG) using a per-vehicle energy-equivalent basis (GGE for CNG and DGE for LNG) equal to the current motor fuel tax. It creates a new Article 3B to govern collection, reporting, and enforcement, including civil and criminal penalties for violations and rulemaking authority. It requires public sellers and fleet producers to obtain licenses, post bonds, file monthly tax returns, and remit taxes; personal producers must register, pay annual per-vehicle fees, and may face penalties for noncompliance; exemptions and deductions are provided for certain government and educational entities.

Who It Affects

• Public sellers of CNG/LNG and fleet producers in Alabama, who must collect the tax, obtain licenses, post bonds, file monthly returns, and remit taxes.
• Personal producers of CNG/LNG and individual vehicle owners using CNG or LNG, who must register, pay annual fees or taxes, and are subject to penalties and enforcement for noncompliance.

Key Provisions

• Eliminates the LPG/Natural Gas decal and motor fuel tax suspension system and replaces it with a uniform tax on CNG (by GGE) and LNG (by DGE) equal to the current motor fuel tax.
• Creates Article 3B (Section 40-17-168 and following) to govern collection, reporting, and enforcement of CNG/LNG taxes, including defined terms (GGE, DGE, etc.) and rulemaking authority.
• Public sellers and fleet producers must obtain licenses, pay an initial license fee ($50) and location fees ($25 per additional location), post bonds (minimum $25,000 or twice average monthly tax liability; reviewed every five years), and file monthly tax returns with required information.
• Personal producers must register (account number), pay an annual per-vehicle fee ($200; $100 if becoming a producer after mid-year), and have no bond requirement; penalties apply for late registration or failure to pay.
• Licensed entities may deduct taxes for exempt entities (e.g., federal government, counties, municipalities, certain school systems) on monthly returns; exemptions do not authorize refunds; and the department requires monthly reporting of disbursements and exemptions.
• Violations can lead to civil penalties (e.g., up to $10,000 for first offenses) and criminal penalties (Class A misdemeanor or Class C felony for more serious evasion or fraud), with authority to cancel licenses for noncompliance.
• Proceeds from the tax are to be distributed and used in the same manner as other motor fuel taxes, with appropriation for administration costs; the act includes severability, repeal of conflicting laws, and a staggered effective date (Oct 1, 2016 for initial provisions; Oct 1, 2017 for remaining sections).
• The bill is stated to be outside the local 2/3 vote requirement under Amendment 621 due to specific exceptions related to the act.

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