HB333 Alabama 2017 Session

Summary

Primary Sponsor

Ken Johnson

Republican

Session

Regular Session 2017

Title

Natural gas, compressed and liquefied, use in motor vehicles, standardized system for collection of excise taxes, civil and criminal penalties, distrib. of proceeds for highway purposes, Secs. 40-17-168, 40-17-168.1 to 40-17-168.19, inclusive, added; Secs. 40-17-160, 40-17-161, 40-17-165, 40-17-167 am'd.

Summary

HB333 creates a centralized tax system for using compressed natural gas (CNG) and liquefied natural gas (LNG) as motor fuel, with new licenses, bonds, rates, and penalties, replacing older decal-based requirements.

What This Bill Does

The bill adds a new Article 3B to standardize how Alabama collects excise taxes on CNG and LNG, defines key terms, and sets enforcement rules. It starts with a reduced tax rate and then gradually increases the rate over time, tying future changes to gasoline and diesel rates. It requires public sellers and fleet producers to collect and remit taxes, obtain licenses, post bonds, and file monthly reports, while giving individual CNG producers an annual per-vehicle fee; it also allows exemptions for certain entities and establishes penalties for noncompliance. The legislation also outlines recordkeeping, refunds, and how revenue is distributed to the state, and it notes that local funding impacts are addressed under the constitutional amendment exemptions.

Who It Affects

• Public sellers of CNG/LNG and fleet producers: must obtain licenses, collect and remit the excise tax, post bonds, and file monthly reports; face civil and criminal penalties for violations; and may deduct tax for exempt entities.
• Personal producers of CNG (individuals who install CNG systems): must pay an annual per-vehicle fee, file required applications, and comply with reporting and penalties; fund-raising and license rules do not require bonds for individuals.

Key Provisions

• Creates Article 3B starting with Section 40-17-168 to establish a standardized motor fuel tax collection system for CNG and LNG.
• Defines terms such as COMPRESSED NATURAL GAS, LNG, GGE, DGE, PUBLIC SELLER, and FLEET PRODUCER for tax purposes.
• Imposes a reduced excise tax rate of $0.08 per GGE or DGE beginning October 1, 2018, increasing to $0.13 per GGE/DGE on October 1, 2023; by 2028, CNG and LNG taxes align with gasoline and diesel rates respectively.
• Public sellers and fleet producers must collect and remit the tax, file monthly returns, and maintain licenses; a minimum bond of $25,000 (or twice the average monthly tax liability) is required; bond amounts reviewed every five years.
• Personal producers must pay an annual application fee of $100 per vehicle (with timing rules) and may be subject to penalties; fleet producers and public sellers have different licensing requirements.
• Exempt entities (e.g., federal, state, local governments, schools) may license and have deductions for taxes paid, but refunds are not available for these exemptions.
• Civil penalties start at up to $10,000 for first violations and increase for subsequent violations; criminal penalties include Class A misdemeanor and Class C felony for certain tax-related offenses.
• All tax revenues are deposited to the State Treasury and distributed per applicable law; the department may adopt rules and forms to enforce the article.
• The bill includes provisions for licensing, bonding, recordkeeping, discontinuance, and potential license cancellation for noncompliance.

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

Subjects

Oil and Gas